24 November 2022
Fair wages and safe working conditions are not a given in many parts of the world. Social standards are intended to secure working conditions that are fit for human beings. Whether manufacturers adhere to them is scrutinised in so-called social audits. How do these audits work? And how can the auditors make sure that factories are not simply “prettified” for their visits? All these questions are addressed in this interview with Martin Saalmann from TÜV NORD CERT.
#explore: What are social standards exactly?
Martin Saalmann: Social standards were developed by the International Labour Conference run by UNO’s International Labour Organisation (ILO) with the aim of protecting the rights of working people and guaranteeing them a safe working environment consistent with human dignity. These criteria are reviewed in what are called social audits. These are concerned with occupational health and safety, fair pay and overtime, but their remit also includes child labour, discrimination and forced labour. International retailers like Walmart and Aldi require their suppliers in risk countries like India, Bangladesh, Vietnam and China to carry out these audits to ensure that their products are manufactured under fair conditions.
#explore: Exactly how does such an audit work?
Martin Saalmann: Most audits are commissioned via online platforms which cover the relevant standard. The advantage of this is that all wholesalers on this platform will then be able to see the results of an audit carried out on a producer and won’t have to commission their own individual audits. The wholesalers also set out the conditions under which the audit should be carried out – whether announced or unannounced. The vast majority of the audits are half-announced: the manufacturer to be audited is merely given the period in which the audit will take place. The auditors then visit the production site and get an impression of the situation: Are children working there? What occupational health and safety measures are being complied with? Are the workers wearing protective clothing? Are emergency exits unlocked and fire extinguishers always accessible? Are any chemicals used properly stored? The auditors then carry out interviews with the workers and check documents. Depending on the number of employees, this process takes between one and five days.
#explore: How can they be sure that the workers are being authentic and haven’t previously been influenced by their employer?
Martin Saalmann: The employees are selected at random by the auditors. They try to make the sample as representative as possible, including equal numbers of men and women, and ensure that vulnerable people, such as pregnant women or handicapped people, are represented. The number of interviews depends on the size of the company. As a rule, we conduct about 20 interviews. These interviews take place in a safe space – and always without managers in the room, of course. Afterwards, the auditors cross-check the interviewees’ statements with the information from the documents for possible discrepancies. So that the workers can speak freely and don’t need to worry about possible consequences, we pay strict attention to ensuring that their statements in the report can’t be used to identify them.
About
About Martin Saalmann: Martin Saalmann is the director of Social Audits at TÜV NORD CERT.
#explore: And how do you ensure that processes and workstations aren’t just prettified for the audit?
Martin Saalmann: To dress up working conditions discreetly is actually harder than you might think, especially for badly run companies. And the auditors all have a great deal of experience, which enables them to detect whether they are witnessing a real situation or one that has been beautified for the occasion. For manufacturers, this kind of audit will determine whether they will be allowed to produce for a big customer. This is why some companies try to fool the auditors into believing that they are complying with the requirements – for instance by double-entry accounting for time accounts. The auditors have to look very closely and tease out cross connections: are the figures consistent with what the staff say and the production conditions on the ground? This takes a lot of experience, knowledge, interviewing skill and transfer thinking, even under time pressure.
#explore: What do the auditors have to contribute from their side?
Martin Saalmann: They first have to complete various training levels and sit a number of exams before they can start working as lead auditors on their own authority. To keep their accreditation, they also have to do the corresponding training every year. Not only that, but their work is reviewed in regular monitoring sessions, in which a senior auditor might look over their shoulder as they carry out an audit, for instance. If there are specific grounds to suspect wrongdoing, shadow audits are carried out. After an audit, we will visit the company once again to reassure ourselves that the auditors are working carefully and independently.
#explore: What are the most common discrepancies that you come across during audits? And how do you proceed when you find them?
Martin Saalmann: The main problems are overtime, occupational health and safety and wages below subsistence level. In some countries, statutory minimum wages are often far below the level needed to sustain life. These discrepancies are noted down in the audit report, and the companies are required to implement the corresponding corrective measures. This is checked in the follow-up audit, or a certain period of grace is set for the implementation of these changes.
#explore: In 2023, the Supply Chain Act will come into force in Germany. Which companies will this affect, and would it be fair to say that it will effectively turn adherence to social standards into a duty?
Martin Saalmann: The idea behind the Supply Chain Act is to guarantee that duties of care under human rights law are observed in the supply chain. Companies with at least 3,000 staff – going down to 1,000 as of 2024 – will have to investigate their suppliers directly to determine the level of risk and, when it comes to indirect suppliers, will be forced to act if presented with evidence of wrongdoing. We assume that the cost of the audits will continue to increase in the coming years. In the next few years, we also anticipate the adoption of a supply chain law at EU level, which, after the first draft, will go even further than the German Supply Chain Act, since smaller companies too will have to include both direct and indirect suppliers in their duty of care. But the effect of the German Supply Chain Act will in all likelihood be felt beyond those companies with 3,000 or, as the case may be, 1,000 employees. Because these companies will also require their domestic or European suppliers to comply with the duties of care defined in human rights law.
