In March, as the global fashion supply chain ground to a halt, factory owners raised the alarm about cancelled orders and missed payments. For their workers, it was a “disaster in the making,” said Scott Nova, executive director of Workers Rights Consortium, a labour rights organisation.
Manufacturers, feeling financial pressure as global demand for new clothing collapsed, pressed their employees, withholding billions of dollars in wages and laying off thousands of workers. Watchdog groups warn that child labour was likely to increase, and that factory owners will be tempted to eschew safety measures further to increase their bottom line.
There is growing concern no one would find out if they did. Safety precautions meant to prevent the spread of Covid-19 also sealed off some factories from outside observers hired by brands to ensure fair labour practises and safe workplaces. Virtual tours and online questionnaires replaced day-long visits, where auditors could check for everything from broken fire alarms to the use of child labour.
“In many cases, we’ve seen the inability of individuals to travel or even conduct on-site assessments,” said Kurt Kipka, vice president of the Apparel Impact Institute, an environmental agency tasked with helping brands scale sustainable initiatives. “There’s really foundational issues at play.”
The fashion industry has relied on private audits since at least the 1990s, when many large brands were found to be relying on sweatshop labour. A system of audits and certifications was created in response to consumer outrage. Since then, auditing has grown into a multi-billion dollar industry.
The system was far from perfect even before the pandemic: results can vary widely depending on which auditing firm brands choose, and are rarely shared with the public. Critics say brands use flawed audits to paper over larger problems within their supply chains as it would be difficult to sell clothing at rock-bottom prices without an army of low-wage workers toiling in harsh conditions.
Now, auditing firms are tasked with assessing companies’ supply chains from afar.
Sedex, an ethical trade membership organisation, has launched virtual assessment software for authorised auditing firms including Intertek, ALGI and Elevate Limited. Virtual audits consist of a livestream tour of all areas of the site using a smartphone or tablet, conducted by each firm’s auditors.
An accurate assessment of working conditions in a factory typically means building relationships over time with local labour organisations and garment workers inside. Otherwise, auditors may get an overly rosy view from employees coached or coerced by their managers.
“I think we have to be careful about not seeing the virtual assessment as a direct replication to an audit,” said Magali Martowicz, director of responsible sourcing at Sedex. “There will be some limitations, specifically around the engagement with workers.”
Auditing firms speak with suppliers and workers before sending questionnaires and opt for group interviews with workers to avoid suppliers targeting individuals. The company negotiates where the laptop used to conduct virtual interviews is placed, so factory managers can’t feed responses to workers from off-camera.
Auditing firms also speak with workers by phone, using aggregated results to avoid the possibility of tracing answers to individual employees.
As other firms look to adopt virtual auditing, there are growing concerns of an increasingly digital auditing system or no auditing system at all. Labour rights groups and environmental organisations have long questioned the efficacy of audits, arguing that a new system is needed to drastically overall current practises within the supply chain.
A report by the Clean Clothes Campaign, for instance, found that Bangladesh’s Rana Plaza had been assessed by several lead auditing agencies and found to be compliant using standard auditing methodology even weeks before the building’s collapse. Another recent study by Cornell University’s School of Industrial and Labor Relations focusing on apparel factories in China and India found that more than half of 31,652 audits in both countries over the course of seven years were falsified or based on unreliable information.
Auditors may be under-trained or lack the time necessary for looking into issues ranging from fire alarms to waste management protocols and child labour practises over the course of one visit.
“You have a system that was never designed to actually identify labour rights abuses and improve labour conditions,” said Nova of the Workers Rights Consortium. “The purpose of the auditing regime is to protect the reputation of the brand.”
Companies, auditing firms and suppliers all face the economic fallout from the pandemic and may start to rely on cheaper assessments that can be done digitally by third-party firms or internally. Activists worry this could be a permanent solution that would provide companies reputational safeguard with even less oversight than before.
“If companies find something that is cheaper, and they feel it does the same job, they will run with it,” said Christie Miedema, outreach coordinator for the Clean Clothes Campaign, a garment industry labour organisation.
Some argue the industry depends on auditing firms too much. Firms can only report transgressions and many companies hiring auditors aren’t looking for them to opine on increasing payments to factories or easing delivery times to improve material conditions of workers.
“In the end, the audit shouldn’t bear the burden it’s been made to bear,” said Jason Judd, executive director of Cornell University’s School of Industrial and Labor Relations New Conversations Project. “It’s just a tool for measuring, and then you have to figure out what to do with the result. It’s not an end in itself.”