There's a pretty disturbing article on the front page of today's NYT (below the fold) that details the problems with the system many retailers and brands use to inspect the factories that make their goods. A months-long investigation by the Old Grey Lady revealed that this system has a ton of holes in it--some of them potentially deadly.
The inspections are often so superficial that they omit the most fundamental workplace safeguards like fire escapes. And even when inspectors are tough, factory managers find ways to trick them and hide serious violations, like child labor or locked exit doors. Dangerous conditions cited in the audits frequently take months to correct, often with little enforcement or follow-through to guarantee compliance.Possibly the most egregious recent case is one of the most recent incidents responsible for the recent focus on factory safety. Last November, 112 people died in a fire at the Tazreen factory, which made clothes for Walmart and other Western retailers. It turns out that just before the fire, a Walmart contractor hired UL Inspection Services to inspect the factory. While the inspectors were told to check for the proper number of fire extinguishers and smoke detectors on each floor, they weren't required to check for fire escapes and fireproof stairways. The factory had neither. If it had, by all accounts a lot of lives would have been saved.
Dara O’Rourke, a global supply chain expert at the University of California, Berkeley, said little had improved in 20 years of factory monitoring, especially with increased use of the cheaper “check the box” inspections at thousands of factories. “The auditors are put under greater pressure on speed, and they’re not able to keep up with what’s really going on in the apparel industry,” he said. “We see factories and brands passing audits but failing the factories’ workers.”
Part of the problem is that retailers and brands often want different levels of audits. A number of companies prefer limited audits--as little as six hours in some cases--so as not to jeopardize relationships with their suppliers. And many of the people conducting them get bare-bones training. By comparison, OSHA regulations require inspectors to have three years of training.
Under these circumstances, it's inevitable serious problems can get missed. Case in point--the Rosita Knitwear factory in northwestern Bangladesh, which makes sweaters for several European retailers. Only ten months after the factory was given a clean bill of health from SGS, one of the largest inspection firms, the workers ransacked the factory, accusing their bosses of reneging on numerous problems and alleging security guards had molested them. In response, the factory's owners brought in a nonprofit inspection firm, Verité, to find out what was going on. Over three days, Verité found a staggering litany of problems that SGS had missed in its one-day review--including verbal abuse by management, frequent shortchanging of wages and workers being beaten for protesting conditions. Verité's CEO, Daniel Viederman, is a severe critic of "check the box" inspections, saying--rightly--that they can miss larger problems.
The current system also makes it very easy to cheat. All too often, inspectors get bribed to overlook red-flag conditions. Managers have been known to unlock fire exits and tell underage workers to stay home when they know the inspectors are coming.
One of the more egregious practices, though, not only shortchanges workers, but customers as well. Back in 2011, Walmart discovered that several Christmas pet specialty items made for Quaker Pet Group were falling apart. It turned out that the Chinese factory that said it had made those items hadn't actually made them. Rather, they had actually been made by another Chinese factory that hadn't gone through Walmart's certification process. Walmart only found out about this illegal subcontracting in March 2013, via its global ethics hotline. However, Quaker still remains a Walmart supplier.
Contrast that with how Nike handled reports that kids as young as five years old were making soccer balls at a Pakistani factory--in some cases working 11-hour shifts. Nike also found out that many of the workers were taking their work home with them. In response, Nike ordered its main Pakistani contractor to consolidate its work in a single factory and set up a system where elected worker representatives can speak up about problems. A Nike spokesman said that the child-labor episode proved "monitoring alone isn't enough." If only other companies shared the same attitude.