Social Compliance Audits in Factories – What You Need to Know

As corporations and businesses become larger and more profitable, there is a growing focus on social responsibility in global commerce. Customers and clients are also becoming much more socially aware and it’s important that factories are maintaining the social rights of their employees. This is where a social compliance audit comes in.

You can see here other articles related to how to import from China, the importance of sourcing agents and sourcing companies, how to manufacture in China or how to import furniture from China.

Social compliance refers to the way in which a company treats its employees and represents the minimum code of conduct when it comes to areas such as working hours, working conditions and remuneration.

Social compliance audits are common in China to ensure that a partner is abiding by its responsibilities to their business and its employees. The audits are conducted by experienced professionals and are conducted in line with the SA8000 standard, which is an international benchmark. This standard takes a long-term view of social compliance and encourages consistency. It encourages organisations to develop, maintain and apply socially acceptable practices.

Generally, the main areas that are investigated during a SA8000 social compliance audit are:

• Freedom of association – the right to join trade unions and bargain collectively
• Working hours – compliance with laws and industry standards regarding maximum working hours
• Discrimination – no discrimination when it comes to hiring, remunerating, training, promotion and termination
• Wages – remuneration should at least meet minimum legal wages with appropriate overtime rates
• Child labour – no use of children in the labour force or supporting this practice
• Forced labour – no compulsory labour, no salary withholding, and allowing employees to terminate employment
• Disciplinary practices – no abuse of employees
• Health and safety – provide a safe and healthy workplace with medical attention and hygiene standards

The social compliance audits are usually done via a combination of thorough facility inspections and walkthroughs, detailed documentation reviews and comprehensive interviews with employees and even management.

Social compliance audits are therefore a good way to ensure you are not contributing to environmental or social harm, even if it is inadvertently. Because this is becoming such an important factor in China, many factories have been known to employ consultants to help them pass audits with minimal effort as they simply want to appear to be compliant rather than actually maintain long-term compliance. However, it’s important to ensure that real changes and consistent practices are implemented to create lasting compliance. Regular audits and quality assurance checks will help ensure that a culture of quick or temporary fixes is uncovered and hopefully rectified.

For many global businesses, integrating a social compliance audit into the entire supply chain is a good practice as the risks of being associated with a business or factory that does not meet these standards can be very high. For example, you wouldn’t want to be listed on the China Labour Watch list, which names and investigates businesses that employ factories with poor standards. This can severely affect your supply chain and cause heavy, lasting damage to your reputation. This is a concern that is not limited to just large businesses but also smaller operators.

Conducting and abiding by social compliance audits is the best way to ensure your operation and its partners are doing things the right way.

See 6 crucial steps for sourcing a good factory in China.