Independent third-party audits are essential for safeguarding the authenticity of, and credible claims made by, processing facilities, consumer brands and global initiatives. Still, an audit—and the overarching audit program—are only as reputable and effective as the individuals who conduct the actual audits. While auditor training and accrediting programs help to ensure a basic level of competence, these efforts are not sufficient on their own. If we want auditors that provide true worth, we need to value the auditors themselves. In addition, multiple accreditation requirements, which are meant to improve the quality of the audits, can sometimes increase the burden on auditors, some of whom do not reap any value besides “ticking the accreditation box.”
At a time when supply chain initiatives that rely heavily on audits to effect and measure change are proliferating, I feel that auditors may soon become the weakest link in our efforts to meet our goals of improving conditions down complex supply chains. Every program that relies on audits will need to be aware of the threats it faces if steps aren’t taken to proactively support the auditors themselves. Here are a few conditions I have seen, which have contributed to my perspective (note that these are not solely or directly attributed to my work under CFSP).
Auditing can be dangerous
As an auditor, I have traveled up to 30 hours (one way) to far-flung industrial cities where my team and I were exposed to physical, chemical and, at times, radioactive hazards at the facility. In addition to experiencing long journeys and exposure to risky conditions, auditors are often in the difficult position of informing facility management that they do not comply with the subject standard. This task can escalate to uncomfortable or disrespectful accusations, refusals to participate in the audit, or attempts at bribery. In extreme—but not unheard of—situations, the auditors’ safety can be threatened by the auditee (for example, the people being audited might keep the auditors locked up in the facility).
Commoditization by large consultancies
Over the past several years, large consultancy firms have expanded their services to include ethical or environmental auditing. In my opinion, they are not always placing value on the quality or—most importantly—the outcome of the audit. That is to say, they are turning audits and auditors into indistinguishable commodities, with an increasing focus on price point and volume as their most important performance indicator.
Some firms have openly shared that while they are not seeking to profit (and may even take a loss) by performing these audits, they instead view the audits as entry points into processing facilities or global brands, which can lead to opportunities to provide more profitable consultancy services. In addition, some large firms have full-time employees who must be billable, even at a loss, which leads them to conduct audits unprofitably. When larger firms charge less than their actual cost, the service itself is devalued, and clients expect lower prices for all audits. As a result, large firms are pushing out boutique firms that cannot afford to operate at a loss.
In addition, large firms often rely on untrained and inexperienced employees to conduct several audits a year—at times with insufficient direction or support from the home office. These auditors often know very little about the industry, processes and, to some extent, the audit protocols. Their lack of knowledge and experience will affect the quality of the audit.
Demanding more for less
As large firms drive audit costs down, I hear that brands and NGOs alike are expecting further reductions in audit costs. Many consultancy / audit firms and clients now assume that auditors do not get paid for travel time (even at a reduced daily rate). At the same time, these firms are driving down daily rates, increasing reporting complexity, and requiring additional accreditations (such as ISO), which do little to guarantee the quality of an auditor.
To expect auditors to meet increased demands and travel without appropriate compensation contradicts the very mission our industry efforts aim to achieve—to treat all workers with dignity!
Losing quality auditors
Many of the large and boutique audit firms draw from the same international pool of independent auditors. As a result, one auditor may conduct audits under one initiative for multiple audit firms (if allowed by conflicting interests). I have been speaking with several career auditors with decades of experience who are seeking alternative careers because of the direction in which auditing is heading. They no longer feel that making the sacrifices required by their roles as auditors makes sense or, even more importantly to most of them, creates enough value or impact to justify the personal costs (e.g. exhausting travel, time away from families). They feel that the audits—with the sterilization and standardization of protocols and checklist reports—are becoming an “exercise to tick the box” without leading to change.
Building an effective army of auditors
As I expressed in my last newsletter, I hope to see a shift away from initiatives that rely on “policing” audits, which focus on results or specific conditions in a facility, towards “enabling and empowering” models that include efforts to help facilities develop effective policies and supporting programs. We should take the opportunity to learn from experienced auditors who have years of experience interfacing directly with facility management and workers as we develop more improved, effective and empowering audit programs.
We must make every effort to maintain the effectiveness of audit programs as we increasingly rely on audits to encourage supply chain actors to implement more responsible sourcing practices. We should start with respecting, motivating and fairly compensating quality auditors.
Many auditors love—and believe in—what they do. We need to show them that we value their dedication and hard work, and willingness to take risks associated with their jobs.