Can Social Audits Work in China?
Since releasing our investigation, we’ve been asked repeatedly about the credibility of social audits, and we wanted to offer some resources that explain why social audits may be flawed, quite especially in the context of factories in China and even more so when they are used to identify state-sponsored forced labor involving North Korean or Xinjiang workers. Below are a variety of sources that help explain why these social audits have often failed to identify the pervasive use of these types of forced labor in China.
In December 2020, two shipments of clothes made at a factory in Dandong by North Korean workers were stopped at the port of Newark in violation of the Countering America’s Adversaries Through Sanctions Act, or CAATSA, which imposes heavy fines on companies that import products tied to North Korean labor. A representative of the clothing manufacturer protested the seizure and submitted two social audits as evidence that no forced labor existed at the plant. An administrative law judge subsequently denied their claim explaining that the social auditors who visited the plants likely made no effort to distinguish nationality so as to check for North Koreans, nor did the auditor speak Korean so as to interview any such workers.
In July 2021, the U.S. State Department said in a business advisory that social audits, especially in China, are inadequate for identifying forced labor because auditors are commonly detained or harassed, audits often rely on government translators, and workers face reprisals for reporting abuses. “China’s ongoing crimes against humanity and genocide in Xinjiang and the repressive and opaque environment in China presents extreme challenges to conducting human rights due diligence,” the advisory said.
In November 2023, Customs and Border Protection advised companies that a social audit can only be used as credible evidence clearing a company accused of forced labor if it was unannounced, addressed all indicators of forced labor, and conducted interviews in workers’ native languages. These conditions are rarely met for social audits conducted in China, according to various human rights groups such as the Worker Rights Consortium, which offered testimony before a Senate hearing in February 2023. The organization reported that social audits in China are typically arranged with the involvement of factory managers and local police, and held on factory grounds. Often it is the employer being audited that pays for the auditor, meaning that the auditor is likely to return a positive report. By relying on social audits, Scott Nova from the Worker Rights Consortium said in the testimony, brands have “made themselves a party to abuses of the Uyghur and other Turkic peoples.”
In January 2022, a law firm called Leigh Day filed a lawsuit in the U.K. against a British auditing firm called Intertek Group PLC for failing to identify forced labor in the global supply chain of British retailer Tesco.“The promise from corporations has been that self-policing through the social audit process effectively roots out dangerous and exploitative practices,” said Oliver Holland, a lawyer from Leigh Day, but “the reality is far from it.” Social audits are typically announced ahead of time, and companies can request new audits if they do not like the results they are given, Holland said. Factory managers can exclude mentions of minority workers such as North Koreans from the records that they turn over, according to a 2022 study from a collection of universities. They can also keep workers out of sight of the inspectors, and signs of forced labor such as debt bondage and document confiscation typically fall outside of the scope of the audits, the study said. Even if a migrant worker is chosen to be interviewed by auditors, they may have been coached by their company on what responses to give. The study concluded: “These systems create an illusion of progress that fuels complacency and displaces effective solutions to address forced labor in supply chains.”
For more information about some of the flaws found in social audits to the global seafood industry, see here.
Additional resources: