Checking off boxes on social and environmental compliances may no longer be sufficient for the fashion industry, where new legislation is incoming.
According to a report released Wednesday from the global labor research firm Business & Human Rights Resource Centre, additional legal actions may help to step up supply chain due diligence where voluntary, check-box social auditing measures fall short.
“Social audits have systematically failed to improve labor conditions in global supply chains,” wrote the report’s author Chara de Lacey, project manager for social audit accountability at Business & Human Rights Resource Centre. To that end, both the 2013 collapse of the Rana Plaza building in Bangladesh and the 2012 fire at Ali Enterprises factory in Pakistan were reportedly cleared by third-party social auditors prior to the disasters that collectively claimed thousands of victims.
De Lacey continued, “In many cases, social audits failed to detect human rights abuses, meaning that abuse persisted, unaddressed and unremedied. The inherent limitations of social audits include their ‘snapshot’ and ‘check-box approach’; the exclusion of workers in setting audit standards, and the structural inability of social audits to ensure workers can file complaints without fear of reprisal.”
The briefing outlines legal strategies for increasing accountability between brands, workers and especially social auditing firms that are the lifeblood of a burgeoning $300 million industry.
Strategies leverage tort law (for workplace negligence), contract law (for impacted workers to bring a claim for breach of contract against the social audit firm) and civil lawsuits under the U.S. Trafficking Victims Protection Reauthorization Act where victims of forced labor can sue social auditors for exploitation.
As the report mentioned, filing legal claims against social audit firms is, so far, a barely tested strategy in fashion. To date, only two legal claims have been brought forth but neither amounted to liability. One of which was a tort lawsuit filed in 2015 against a French auditing firm, Bureau Veritas, for its alleged part in Rana Plaza.
With the European Union’s Mandatory Human Rights and Environmental Due Diligence law on the horizon, the report increasingly calls for companies to take stock of their social auditing practices and for stakeholders to seize legal avenues for retribution.
“This means companies should make adjustments to their business model and practices if [human rights risks in their supply chains] are a root cause of abuse. Such laws mark a move away from the voluntary measures that have failed to improve conditions in global supply chains,” emphasized De Lacey.