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Path: Sourcing News & Advice
>> Import from
China Advice >> Social compliance audits in
factories: What you need to know

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Social compliance audits in factories: What you need to
know

Posted: December 03, 2014

by Adam Gilbourne

As corporations and businesses become larger and
more profitable, there is a growing focus on social responsibility in global
commerce. Customers and clients are also becoming much more socially aware and
it’s important that factories are maintaining the social rights of their
employees. This is where a social compliance audit comes in.

Social
compliance refers to the way in which a company treats its employees and
represents the minimum code of conduct when it comes to areas such as working
hours, working conditions and remuneration.

Social compliance audits are common in China to
ensure that a partner is abiding by its responsibilities to their business and
its employees. The audits are conducted by experienced professionals and are
conducted in line with the SA8000 standard, which is an international benchmark.
This standard takes a long-term view of social compliance and encourages
consistency. It encourages organisations to develop, maintain and apply socially
acceptable practices.

Generally, the
main areas that are investigated during a SA8000 social compliance audit
are:

Freedom of association – the right to join trade unions and bargain
collectively

Working hours – compliance with laws and industry standards regarding
maximum working hours

Discrimination – no discrimination when it comes to hiring, remunerating,
training, promotion and termination

Wages – remuneration should at least meet minimum legal wages with
appropriate overtime rates

Child labour – no use of children in the labour force or supporting this
practice

Forced labour – no compulsory labour, no salary withholding, and allowing
employees to terminate employment

Disciplinary practices – no abuse of employees

Health and safety – provide a safe and healthy workplace with medical
attention and hygiene standards

The social compliance audits are usually done
via a combination of thorough facility inspections and walkthroughs, detailed
documentation reviews and comprehensive interviews with employees and even
management.

Social compliance audits are therefore a good
way to ensure you are not contributing to environmental or social harm, even if
it is inadvertently. Because this is becoming such an important factor in China,
many factories have been known to employ consultants to help them pass audits
with minimal effort as they simply want to appear to be compliant rather than
actually maintain long-term compliance. However, it’s important to ensure that
real changes and consistent practices are implemented to create lasting
compliance. Regular audits and quality assurance checks will help ensure that a
culture of quick or temporary fixes is uncovered and hopefully rectified.

For many global businesses, integrating a social
compliance audit into the entire supply chain is a good practice as the risks of
being associated with a business or factory that does not meet these standards
can be very high. For example, you wouldn’t want to be listed on the China
Labour Watch list, which names and investigates businesses that employ factories
with poor standards. This can severely affect your supply chain and cause heavy,
lasting damage to your reputation. This is a concern that is not limited to just
large businesses but also smaller operators.

Conducting and
abiding by social compliance audits is the best way to ensure your operation and
its partners are doing things the right way.

Adam
Gilbourne is the founder of Easy Imex Ltd
and helps importers to source product & manage their supply chain in China.
He writes advice for importers on the Easy Imex blog. He lives full time in
Shanghai, China. You can contact him at [email-masked].

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