What Happens in a Social Compliance Audit?

Source: <https://blog.qima.com/ethical-audit/social-compliance-audit-explained> Published: Oct 11, 2022 Categories: Ethical Audits, Social Responsibility, Supplier Audits

You can find out whether or not your supplier acts responsibly with a social compliance audit.

What is a Social Compliance Audit?

A social compliance audit (also known as an ethical audit) is an examination of an organization that assesses whether or not it behaves in a socially responsible manner. By inspecting an external production house, factory, farm or packaging facility, it is possible to verify whether it complies with certain ethical responsibilities.

How is a Social Compliance Audit Conducted?

Standards include:

• Sedex Members Ethical Trade Audit (SMETA)
• amfori Business Social Compliance Initiative (BSCI)
• International Labour Organisation (ILO) Ethical Trading Initiative (ETI)
• Responsible Jewelry Council (RJC) accredited audit
• Initiative for Compliance and Sustainability (ICS) audit
• Higg Facility and Social Labor Module (FSLM)

The 5 Key Stages of a QIMA Best-in-Class Ethical Audit

1. Opening Meeting

Audits may be scheduled ahead of time or conducted unannounced.

2. Factory Tour

Auditors inspect the entire facility including production area, warehouse, canteen, and dormitories if applicable.

Checklist items:

• Sufficient space to work and move around
• Adequate ventilation
• Easily accessible emergency exits
• Access to personal protective equipment
• Emergency response plan

3. Documentation Review

Thorough investigation of employment records regarding:

• Payment amounts and conditions
• Working hours including overtime
• Disciplinary action
• Child labor, forced labor
• Discrimination
• Health and safety

4. Employee Interviews

Randomly selected employees are interviewed in complete privacy about hiring/firing policies, working hours, conditions, pay, child labor, forced labor, and health and safety.

5. Closing Meeting

Auditors meet with management to discuss findings, non-compliance issues, and introduce a Corrective Action Plan (CAP).

Major Issues Auditors Look For

• Use of child labor
• Use of forced or compulsory labor
• Physical abuse of workers
• Major health and safety violations
• Bribery and corruption

Why Do Large Brands Need Social Compliance Audits?

25% of exports to the UK come from countries with high or severe threat rating for forced labor use (BSI Supply Chain Risk Insights Report). Worker’s rights violations reached a seven-year high in 2020 (ITUC).

Regulatory Pressure

• Germany: Supply Chain Due Diligence Act (2021)
• EU: EU Supply Chain Law proposal (2022)
• UK: Modern Slavery Act
• US: Uyghur Forced Labor Prevention Act (2021)