After the disastrous factory fires in Pakistan last year, a general review of the effectiveness of CSR approaches to supply chain and workers’ issues was needed. A new report by the US union body, AFL-CIO, shows how poorly current supply chain auditing is serving workers. The report is particularly critical of SA8000 and the Fair Labor Association, both of which are the mainstay of international brands trying to improve the treatment of workers by their suppliers.
So how should companies react? This is a wake up call – the companies that use supply chain auditing standards should ensure that the standards bodies honestly review their effectiveness, as the ETI courageously did some years ago. The results are unlikely to be comforting and may well lead to a modest rise in prices of the goods involved.
But the report also makes the point that both governments and unions need to be properly involved. The solution to a major social problem is unlikely to be the result of just one social actor – the companies – doing their own thing.