Factory and Fire Safety in Bangladesh: Do Audits Help At All?

Submitted by Kelly Eisenhardt

By Kelly Eisenhardt

Anyone who keeps up with current events in the corporate social responsibility world is well aware of the tragedies that continue to affect the four million garment workers in Bangladesh.

In the last year, the fires at the Hameem, Tazreen, and Tung Hai factories have all resulted in the loss of many lives. With 26 deaths in Hameem, 117 deaths in Tazreen, and eight deaths in Tung Hai, Bangladesh’s people are calling for change.

Brands Held Accountable

As cries for change erupt, it is the overwhelming loss of life in the collapse of the eight-story Rana Plaza building in Dhaka though that is sending shockwaves through the local community and industries abroad. Over 1,100 people are dead and more potentially lost forever in the rubble. Search and rescue is over and negotiations for death payments and work loss have begun.

From all that has been written, we know brands are being held accountable. Factories are blaming brands and the Bangladesh government is doing too little, too late, while the Bangladesh people suffer and mourn.

How could such a tragedy have been prevented? For how long did such risk exist? Were there any tools, processes, or mechanisms in place that could have forewarned of the tragedies?

The Role of Audits in Preventing Disaster

And what about the audits that were done at these sites? Audits are being discounted as useless and as a waste of time by anyone willing to speak publicly. Knowing that audits have a crucial role in creating a baseline for measurement and future indicators, I decided it was time to interview one of the people in the heat of the debate.

Below is an excerpt from an interview with Avedis Seferian, CEO of WRAP (Worldwide Responsible Accredited Production), an independent, objective, non-profit team of global social compliance experts dedicated to promoting safe, lawful, humane, and ethical manufacturing around the world through certification and education.

Kelly Eisenhardt: As you know, this is a complex problem and many out there want to hold the brands almost solely responsible. What are your thoughts on that?

Avedis Seferian: Well, there’s a natural human inclination to try and assign blame to a specific factor to simplify things. There are a lot of stakeholders in this and it’s unfair to place all the blame on the brands. But looking at the brands, it’s fair to say there are ramifications to their approach. 

One thing that has clearly emerged is the need for them to ensure greater visibility into their supply chain. When you are so far down, the brand doesn’t always have control over where the order goes or how the requirements get met. As things stand, contractors may be the ones with the authority and decision-making power over a subcontractor. I think this will need to be evaluated more in the future.

Is it all bad auditing practices and are auditors to blame?

Audits are valuable and play a role but all stakeholders need to understand the limits of the role. Too many people expect more out of social audits than what they are meant to do. Audits are information-gathering mechanisms. You can only gather information within the scope of the audit. So blaming social auditors for some of these things is unfair.

Social auditors are not structural engineers, so social audits do not cover structural integrity checks on a building from an engineering perspective. Those who think poorly about social auditing practices are quarreling about desired outcomes and not about the audits themselves.

Audits are meant to set baselines and gather information against those. They are not, by themselves, tools for social advocacy. Nonetheless, they have certainly had an impact in raising awareness about those baselines. In fact, even the most ardent critics of social audits will have to recognize that, just as an example, incidences of child labor have declined within the global garment sector as the social audit industry has grown.

Re-evaluating How Audits Are Done

Do you see less audits being performed in the future or more? Should auditors be expanding the parameters of what is collected?

I certainly don’t see the audits becoming less important in the light of these tragedies, but there will be a necessary reevaluation of how they’re done.

It’s easy to draw a parallel with what happened to financial auditing in the wake of Enron. That auditing industry is not dead as a result, nor is it seen as a farce. It’s an important part of our economies and capitalist system. The fact that there were audit failures in Enron did not render the entire audit exercise moot.

Similarly, factories with problems do not render the social audit exercise itself useless. As I said earlier, an audit is an information gathering effort. In the past, the building’s structural integrity had not been part of the social audit; maybe in the future that will add another area of expertise to auditing.

From Audits To Action

But regardless of what information is gathered, the audit itself doesn’t change the factory; it’s what is done with the audit that matters. When brands get the audit results, they need to ask, “What are we going to do about it?” We all know factories are dynamic places; they will never be perfect environments. Good audits ask the question, “Is this the kind of factory that, when problems arise, has enough knowledge and capacity to solve the issue?”

That is what WRAP does.

We ask who manages social compliance, who is responsible, how are the plans executed, what is the process side? Thousands of things happen in a factory. You have to try and be satisfied that after you leave, the factory has to be able to take care of itself. That’s when an audit can be most useful – when it gives you insight into the facility’s management systems.

Collaborating On Audits

How can brands collaborate and share audits in the future regarding safety and social audit data?

We are seeing a growing trend in this director, but there are challenges to collaborating, with real questions and apprehensions remaining about who owns the information in the first place and some lingering concerns about where sharing information may cross the line into collusion and antitrust governance issues.

WRAP audit reports do not include pricing information or data that veer toward such violations. We strictly talk about health and safety, worker issues, and pre-competitive data. It is getting harder and harder to sustain a case against sharing, when the benefits of doing so are so evident: reduced audit burdens and, more importantly, reduced risk of tragic events happening. So we are certainly seeing a steady march toward more sharing.

In practice, it comes down to establishing trust.

Companies that share audits usually do not do so merely on an assessment of each other’s system; rather, they do so based on personally knowing each other. They know each other’s compliance teams, share factories, rub elbows at conferences and form relationships that allow trust to build.

No business worth its salt will simply take someone’s word and will always need to do its own verification. In reality, they won’t share simply due to similar systems, but by seeing such systems in action and knowing the personalities behind them. Obviously, it takes time to create a strong level of trust.

About the Author

Kelly Eisenhardt is executive director of environmental programs for Fair Factories Clearinghouse (FFC), a New York-based non-profit that uses technology to enable cost-effective, well-informed, ethical business transactions and continuous improvements in global workplaces. For more information, email her at kellyeisenhardt@gmail.com or visit www.fairfactories.org.