HEALTH & Corporate Social Responsibility
HEALTH & Corporate Social Responsibility
GSCP Equivalence Process
Shared Responsibility : Collaborating on Supply Chain Audits Benefits Everyone
Variations in social / environmental compliance standards, audit methodologies and requirements for auditing competence make it difficult for buying companies to trust and recognize each others’ schemes.
Shared responsibility : Globalization, with its volatile mix of economic opportunity and social disruption, has provoked many reports of exploitative working conditions in outsourced supply chain facilities. By Peter Burrows, Executive Director of Fair Factories Clearinghouse
Since the early 90s, companies have audited conditions in their supply chain to monitor worker health and safety, human rights, cargo security, and environmental issues. Developing comprehensive industry-wide compliance processes and tools for sharing audit information is difficult. Uncoordinated auditing of factories in the same locations has led to factory audit fatigue and excessive resources spent identifying not solving the issues. FFC, a non-profit founded in 2004, was created to help those sourcing in the same factories collaborate on improving ethical sourcing, monitoring factory conditions, and establishing clear corrective action plans. FFC offers software that enables its members to share information that ensures costeffective and well-informed ethical business transactions and improved workplaces globally.
From its inception, the FFC board concentrated on the compliance issues not yet tackled. While other organizations address audit harmonization, FCC focuses on the need for a system that offers sole responsibility for verifying conditions throughout supply chains, not a system merely based on factory-authorized audits of facilities. FCC extends this preference by broadening its solution with a multi-company collaboration environment that reduces audit fatigue, helps members increase their supply change coverage, and shifts attention toward factory capacity building. Among some FFC members, anonymity of the company and supplier relationship is important. The choice to associate a company name with a factory is entirely up to a member, who can elect to hide from the FFC community all factory relationships or hide them on a case-by-case basis. Around 40 percent of FCC members avoid public association of their name with their supply sources to protect new product development and contractual obligations or while familiarizing themselves with peer activity. ‘Hidden’ members can view posted audit information marked as open to all members sourcing in that factory, and may message members without disclosing their company name.
Global Social Compliance Programme founding members understood that such incomparability sustains confusion for suppliers and duplication in compliance monitoring, and may hinder collaboration. The GSCP Equivalence Process (EP) was therefore developed to overcome this by allowing organisations to benchmark their tools and processes against best existing practice as described in the GSCP Reference tools. These tools reflect a consensus-based interpretation of working and site-specific environmental requirements aiming at the greatest protection of workers and the environment in supply chains, and are available open source as a means to support upward convergence of approaches across sectors. The EP allows users – e.g. buying companies, initiatives, auditing bodies – to see where their
Additionally, FFC strives to help companies that are new to outsourced manufacturing. Many smaller members join simply to interact with more mature organizations. To address any potential anti-trust implications by information sharing, FFC offers one of the only compliance databases that sought and successfully received a US Department of Justice business review letter related to the design of its sharing platform.
Corporate commitment to social responsibility and the negative impact companies face when unacceptable factory conditions become public have pushed outsourced factory standards to its highest level ever. While companies often work together to harmonize audit approaches, the factory compliance landscape remains complex.
Extending data exchange across many organizations will require more harmonized approaches to factory compliance, and new international data exchange technical standards that can facilitate the exchange of audit information at the field-by-field data element level for proper data mapping. The FFC is represented in these multi-organization discussions and is providing the leadership on developing the technical data exchange standards.
Most companies cannot afford to inspect 100 percent of their supply chains and instead opt to focus on the greatest risks. To mitigate risks, factories need management systems and practices that ensure proper self-governance and sustainability.
For more information : www.fairfactories.org request a Go-to-Meeting software demonstration › at information@fairfactories.org, or contact › Peter directly at pburrows@fairfactories.org
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standards and tools stand vis-à-vis this commonly accepted, neutral reference – and, by triangulation, to understand how other organisations’ schemes compare to their own. This will provide the basis for further collaboration, creating the transparency required for organisations to trust others’ systems (e.g. ability to trust an auditing body’s competence by gauging its equivalence to the Auditing Competence Reference tool ; ability to trust and accept an audit report produced against a buying company’s requirements for social performance, etc.). The GSCP EP online platform is now available for use – join the effort towards harmonisation !
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More information on : www.gscpnet.com and www.gscpequivalenceprocess.com