Policy paper

Liability of Social Auditors in the Textile Industry

Policy paper

Due to the outsourcing of production in the textile industry since the 1990s and the increased emphasis on labor and human rights, international retailers have been requiring audit certificates from factory owners as a precondition for a commercial relationship. In the absence of effective factory inspection by state authorities, which often lack adequate resources or the political will to conduct inspections, the monitoring of the labor, health and safety situation at workplaces has thus been conducted by private audit firms.
Disasters ranging from the factory fires at Ali Enterprises in Pakistan and Tazreen in Bangladesh to the collapse of the Rana Plaza building have, however, tragically revealed a number of flaws in the current practice of private certification: independent and diligent audits seem rare and require, at best, a sort of "checklist compliance." Certifiers financed by the very same businesses they have to assess are bound by contradictory incentive structures. Ultimately, certificates generate a high level of trust while incurring almost no legal risk.
Despite notorious shortcomings, the continuing practice of social audits is too often understood as a means to monitor working conditions effectively. Social audits are thus part of the problem rather than a solution, providing minor remedies while upholding a neo-liberal framework and legitimizing endemic features of global supply chains.