Georgia Sexton · 12 February 2024

Colleen Vien for Commercial Baking – Social Compliance 101

APSCA President & CEO, Colleen Vien, featured in the February | Q1 2024 issue of Commercial Baking with her piece titled ‘Social Compliance 101’. 
To read the magazine article, please click here and head to page 101. 

The word “auditing” conjures up images of accountants peering over financial records or maintaining quality assurance standards such as ISO 9001. However, social compliance auditing is neither of these. Instead, it independently assesses an organization’s compliance with its social and ethical responsibilities, health and safety regulations, and labor laws.

These types of audits are conducted across multiple industries in more than 100 countries, potentially anywhere there are workers. They occur not only in sophisticated manufacturing environments such as toys, automobiles, electronics and consumer products, but also in highly regulated environments like commercial bakeries and other food production facilities, as well as in agriculture, fishing, textiles, apparel and footwear.

In its simplest form, a social compliance audit is an in-person audit of a work site or facility, where an auditor who has been specifically trained on areas such as labor rights, local laws, occupational health and safety (OHS), business ethics, and management systems verifies that the company is respecting the human rights of workers.

There are many players, roles and responsibilities within the ecosystem of social compliance auditing that affect when, where, why and by whom an audit is conducted. This includes brands and retailers who request social audits of their suppliers as a condition of doing business. These parties may also dictate the depth and scope of the audit, based on the level of services they commission.

Industry standard practice indicates that effective consideration generally requires a minimum of one day on-site for small facilities with fewer than 100 workers. For larger facilities with more workers, two or more days are required on an incremental basis, based on the number of workers and the physical size of the facility.

During the audit, the auditor observes both working and environmental conditions as part of OHS practices at the facility, including production areas and any other relevant areas frequented by workers such as residential, recreational or cafeteria areas, or an employee health center.

The auditor also reviews processes and records, conducts management interviews and speaks with workers confidentially about social compliance issues and working conditions. The auditor may also take photos of the facility and photocopies of policies or records.

At the end of the audit, the social compliance auditor issues the facility the first draft outcome, including any areas of non-compliance. A severity scale is assigned to non-compliance to guide the facility in the timing of remediating or correcting any issues.

The auditor also sends a written report to the organization paying for the audit, which is typically the facility itself, one of its customers or another entity. In some cases, this may revise compliance, non-compliance and/or change the severity of a non-compliance based on the detailed post-visit review of auditor notes and supporting materials such as documents or photos collected during the on-site audit.

Social compliance auditors must be part private investigator or investigative journalist, part psychologist or therapist, part occupational engineer, and part labor lawyer. They need to be capable of building rapport and trust with workers in order to get them to let their guard down and share details of their actual work experience.

Through their work, social compliance auditors have helped combat employee exploitation and identify forced labor. Highlighting the need for action, the International Labor Organization estimates that in 2021, 28 million people worldwide were subject to forced labor.

New directives such as enhanced human rights due diligence and restrictions on imports of goods made from child or forced labor have made the work of these auditors more important than ever.

Audit firms are responsible for ensuring they have enough qualified auditors to meet the business needs of their clients. Brands need to be cautious in selecting audit firms and determining the right depth and scope of audit for their supply chains, based on a thorough risk assessment. The adage “you get what you pay for” is critically important. Before contracting with an auditing firm, companies should have a clear understanding of what the audit will cover.

To prepare for a social compliance audit, companies should always be thinking about possible hidden risks in their operations that can be addressed through a continuous improvement plan focused on the social aspects of their business.

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