Apparel industry tops social audit even amid a global decline

Exporters question effectiveness after facing eight inspections in just two weeks

Monira Munni | Published: August 24, 2024 22:29:35

The Bangladeshi readymade garment industry continues to undergo the highest average number of social audits, which assess labour and human rights risks, even as audits have declined in other surveyed countries including China, Vietnam, Turkey and India, according to a report by the International Trade Center (ITC).
The report said excessive auditing can lead to "fatigue" and "inefficiencies" in supply chains.
Audit fatigue may not only divert organisations from the primary goals of audits -- self-improvement, transparency and compliance -- but may also encourage them to view audits as routine tasks to be completed as quickly as possible, sometimes resorting to fraudulent practices, it added.
Local apparel exporters said social audits are frequently repeated throughout the year, often by the same auditors, collecting identical data to be provided to different customers.
This repetition consumes time and money and disrupts their production processes to accommodate audits as a means of verifying the data they have provided, they added.
Social auditing in supply chains is used to identify labour and human rights risks and ensure that suppliers satisfy global, regional or company standards of ethical labour and supply-chain practices.
"The decrease in social audits is also evident in countries where the Social and Labor Convergence Program (SLCP) operates. While adoption has increased, the average number of social audits has declined in all countries except Bangladesh, which also holds the highest average number of social audits among all SLCP countries," said the ITC report published last month.
The average number of social audits per facility in Bangladesh was 3.6 in 2021, rising to 3.7 in 2022 and then returning to 3.6 in 2023.
In China, the number was 3.1 in 2021, decreasing to 2.8 in 2023. Vietnam also experienced a similar downward trend, with an average of 3.2 audits in 2021 declining to 2.6 in 2023.
The average number of social audits in Turkey and India was 2.9 and 2.5 in 2021, respectively, and fell to 2.3 and 2.2 in 2023, according to the ITC report.
The research titled 'Navigating the Regulatory Landscape: Audit Fatigue in the Garment and Textile Industry' examines the SLCP as an example of how data alignment and reduced auditing can be achieved.
Of the 439 respondents who participated in this SLCP signatory survey, 83 per cent were from China, 72 per cent from Vietnam, 57 per cent from Bangladesh, and 49 per cent from Türkiye, followed by India 45 per cent, Indonesia 33 per cent, Pakistan 21 per cent, Sri Lanka 11 per cent and Thailand and Taiwan 9 per cent.
The SLCP provides tools to capture accurate data about working conditions in global supply chains. This multi-stakeholder initiative replaces the need for repetitive social audits by facilitating data sharing.
The average number of social audits across facilities using the Converged Assessment Framework (CAF) has decreased by 13 per cent in the past three years, falling from 3.1 in 2021 to 2.7 in 2023, according to the ITC report.
Conversely, certifications and standards among facilities using the CAF have increased by almost 9.0 per cent, rising from 2.3 to 2.5 in 2023, even though adoption has advanced in the past three years.
Facilities also admitted the impact of SLCP and the CAF in reducing social audits. A 2023 Manaus survey of 439 respondents found that the number of social audits at 33 per cent of facilities decreased since they started using SLCP.
Another study revealed that the potential annual cost savings for CAF users were estimated at $10 million to $25 million in 2019-2021. Based on an updated methodology, these savings are estimated to have reached $26 million for CAF users in 2023.
While talking to The Financial Express, Miran Ali, vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), mentioned that one of his factories recently underwent eight social audits within two weeks by different buyers requesting the same documentation.
"The cost of repetitive audits, in terms of both financial resources and human toll, is enormous," Miran Ali said, adding that a STAR Network analysis reveals a staggering annual expenditure that could be better allocated towards genuine improvements in working conditions and labour practices.
The STAR Network, established with the support of the GIZ FABRIC Project, brings together nine industry associations from Bangladesh, Cambodia, China, Myanmar, Pakistan and Vietnam.
As the spokesperson of the STAR Network, Mr Ali urged all stakeholders -- manufacturers, buyers, certifying bodies and governments -- to adopt a more unified approach to social and environmental compliance.
"By embracing shared audit frameworks and recognising each other's certifications, we can eliminate unnecessary redundancies and focus our efforts on genuine improvements to the lives of workers across the globe," he added.
munni_fe@yahoo.com