We help companies throughout the product supply chain create sustainable businesses.

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Whether it's an environmental or social responsibility issue, our team of professionals is ready to help your business. Please contact us to learn how we can help you.

 

In this newsletter edition, our Feature Article discusses the important corporate social responsibility topic of labor rights.

In our Ideas You Can Use Now section, we provide some tips about how to improve labor rights-focused supplier auditing and describe some other useful tools.

   

Finally, in the Calendar section, we suggest some sustainability-related events in the coming month or two that you might want to investigate.

 

Happy reading!   

 

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The issue of labor rights is currently at the forefront of the trend towards greater corporate engagement with, and responsibility for, product supply chains. There is no denying that it is extremely difficult for companies to ensure that labor rights standards are met throughout the various production stages of their goods. The supply chains of many Western companies can trace back to the developing world, where corruption and lack of transparency is often endemic. Furthermore, few supply chains contain any spare capital that could be used to fund additional worker rights initiatives. In the B2C arena, Western consumers are used to rock bottom prices and making goods more expensive in order to improve labor rights is not a feasible option in most cases. 

 

Currently there are two main tools that companies use to hold their suppliers accountable on issues of labor rights, though both have problems.

 

1) Self-assessment Questionnaires: Suppliers are generally required to periodically fill out a questionnaire stating that they are meeting labor rights benchmarks (i.e., adherence to the company's Code of Conduct/Ethics, which usually incorporates internationally-recognized labor rights standards). However, dishonesty can be a problem in this process, particularly with suppliers located in developing countries. Also, sometimes companies do not articulate the value to the supplier of being transparent in a way that incentivizes the supplier to make progress over time.

 

2) On-site Audits: In order to corroborate questionnaire responses, companies send auditors to check on labor conditions. However, we know that, in some cases, factory managers have institutionalized tactics for misleading auditors. Furthermore, auditors may be well known to factory managers and are sometimes complicit in corruption themselves.

 

Despite the problems with conventional auditing, and the various political, cultural, and economic difficulties relating to labor rights, companies should not lose confidence in their ability to enable improvements through (a) better auditing and (b) the use of new strategies.

 

Due to the problems with questionnaires and on-site inspections, some corporations and organizations are moving beyond conventional auditing. New approaches include:

• Engaging with suppliers. Going further than demanding standards and inspecting for compliance, some companies are seeking deeper engagement and working with their suppliers to find and help implement solutions to labor rights problems. Consider mentoring, connecting suppliers with resources or helping them achieve ISO2600 or similar certifications. 
• Partnering with civil society entities, such as NGOs and labor rights groups. These groups have experience in best practice auditing and in building labor rights improvements. Sincere partnering with these entities also can act as tangible evidence to the media and stakeholders that a company is attempting to enhance worker rights in their supply chain.
• Joining industry groups. As with other CSR issues in recent times, industry groups are exploring best practices for labor rights auditing and reporting. Membership also provides much more than auditing assistance. For example, the American Apparel and Footwear Association has been instrumental in representing the apparel industry as they explore solutions to social sustainability in the wake of the Bangladeshi Rana Plaza factory collapse in April, 2013.
• Using experimental tools, including mobile software applications that can help ensure that suppliers are not mistreating employees. 

>> Get in touch if you'd like more details; I would be happy to share more insights. Call me at 212-343-1006 or email me at robert@kuhnassociatesllc.com.

Ideas You Can Use Now!

Thanks for reading! Please contact us today to discuss anything you've read here, suggest a topic for a future Newsletter edition or learn how we can help you build a more sustainable business.

Call 212-343-1006 or email us at

info@kuhnassociatesllc.com for more information.

Sincerely,