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7. No Requirement for Auditors to Have Human Rights Competencies and Knowledge of the Local Context 

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A significant factor in audit effectiveness is the auditors' human rights competencies and their knowledge of the industry and local context. Without adequate training in human rights or the local context, an auditor may fail to distinguish “between an actual absence of violations and interviewees’ perception that violations were either inevitable or so common as to be normalized.”[1] Auditors who lack human rights training may conduct interviews with rights holders ineffectively or unethically.[2] The International Organization for Standardization’s (ISO) "Requirements for Bodies Certifying Products, Processes, and Services” (ISO 17065) highlights competence as a key requirement of a certification body “in terms of resources, personnel, and procedures to conduct certifications.”[3]
 
When an auditor does not speak the local language, interviewees are often reluctant to report issues, especially if the interpreter is sent by the company being audited rather than someone known by and trusted within the rights holders’ community.[4] In the case of migrant workers, certification schemes should not assume that migrants have a “good enough” proficiency in the local language or English. In such cases, the scheme should ensure that at least one of the auditors speaks the primary languages of the workers.
 
Furthermore, auditors who are unaware of the occupational hazards in a particular sector and geography may overlook known safety hazards.[5] Thus, schemes that do not require auditors to have human rights competencies or knowledge of the local context are more likely to fail to detect abuses.
 
Finally, investors should be alert to widespread unauthorized subcontracting, a circumstance where many abuses take place.[6] Auditors with weak human rights competencies may overlook this aspect in their audits or not know how to identify it.
[1] MSI Integrity, Not Fit-for-Purpose: The Grand Experiment of Multi-Stakeholder Initiatives in Corporate Accountability, Human Rights and Global Governance (July 2020), 129,
https://www.msi-integrity.org/wp-content/uploads/2020/07/MSI_Not_Fit_For_Purpose_FORWEBSITE.FINAL_.pdf.
[2] Genevieve LeBaron et al., Forced Labour Evidence Brief: Social Auditing and Ethical Certification (Re:Structure, July 2022), 9,  https://static1.squarespace.com/static/6055c0601c885456ba8c962a/t/62d746146f5dc5205a17621c/1658275349325/ReStructureLab_SocialAuditingandEthicalCertification_July2022.pdf.
[3] International Organization for Standardization, ISO/IEC 17065:2012 Conformity assessment — Requirements for bodies certifying products, processes and services (last reviewed in 2018), https://www.iso.org/standard/46568.html.
[4] MSI Integrity, Not Fit-for-Purpose: 129-131.
[5] Ilona M. Kelly et al., Fig Leaf for Fashion. How social auditing protects brands and fails workers (Clean Clothes Campaign, 2019), 73, https://cleanclothes.org/file-repository/figleaf-for-fashion.pdf/view.
[6] Aruna Kashyap, ‘Paying for a Bus Ticket and Expecting to Fly:’ How Apparel Brand Purchasing Practices Drive Labor Abuses (Human Rights Watch, April 23, 2019), https://www.hrw.org/report/2019/04/24/paying-bus-ticket-and-expecting-fly/how-apparel-brand-purchasing-practices-drive.
The following studies below underscore risks inherent in some social auditing schemes due to auditors' insufficient human rights competencies and weak understanding of the contexts:

  • A 2021 report by The European Center for Constitutional and Human Rights (ECCHR) and its partners concluded that auditors’ “lack of understanding of the human rights perspective in their own operations, and a lack of normative specifications in this regard led to mistakes in their work and probably directly contributed to human rights violations of others, in some cases with disastrous consequences.”[1]
  • A 2016 report by Amnesty International partly attributed failures of the Roundtable on Responsible Palm Oil (RSPO) to detect widespread human rights abuses in the palm oil industry to the audit teams’ lack of “specific expertise and experience of detecting labour rights abuses.”[2] In 2020, RSPO revised its RSPO Certification Systems to include annual training for auditors and freelancers involved in the certification process.
  • Researchers at Cornell University’s School of Industrial and Labor Relations studied thousands of audits conducted by “a major social auditor,” and found that visits by highly trained auditors led to significant improvements in wages and occupational health and safety scores and a decrease in incidences of child labor.[3]
 
The 2013 Rana Plaza factory collapse in Bangladesh illustrates the risk created when auditors overlook the local occupational health and safety (OHS) context. According to a Clean Clothes Campaign report, at the time of the collapse it was widely known at the time that government oversight of building safety was severely inadequate: extra floors were frequently added illegally, and earlier disasters- such as the Spectrum factory collapse in 2005.- had already exposed dangers. At Rana Plaza, additional floors were illegally constructed, and, according to the CCC, construction was ongoing even as the Phantom Apparels facility on the fourth floor was being audited. Both buildings were in Savar, a Dhaka area built on former swampland, and Bangladesh lacked sufficient building inspectors to ensure regular safety supervision.
 
After the Rana Plaza tragedy, media reports revealed that the auditor had given the factory complex a passing assesment under amfori’s Business Social Compliance Initiative (BSCI) and that the fact that the BSCI code of conduct did not cover building safety.[4] The Clean Clothes Campaign report asserts that “an auditor familiar with the Bangladeshi context should have been more attentive to these aspects” and recognized the need for further scrutiny.[5]
 
Investors should also be wary of compliance attestations issued by auditors not accredited by the relevant initiative or certification scheme. Researchers at the Helena Kennedy Centre for International Justice (Sheffield Hallam University) documented Volkswagen’s joint venture with SAIC, a Chinese state-owned automobile enterprise, at its Ürümchi plant located within the Xinjiang Uyghur Autonomous Region, amid mounting evidence of state-sponsored forced labor of Uyghur people. [6] Volkswagen contracted Löning, a German consultancy firm, to assess adherence to ILO conventions on forced labor and health and safety. Löning, which is not accredited to conduct SA8000 audits, reported using the SA8000 framework and found no indications of forced labor, - an outcome that most observers, including Löning’s own senior staff, did not find credible.[7] In fact, following a US government advisory on the risks of doing business in Xinjiang, social audit firms Bureau Veritas, TÜV SÜD, Sumerra, RINA, and Worldwide Responsible Accredited Production (WRAP) all withdrew from the region.[8]
 
→ Demonstrates: Reputational risk, operational risk, legal risk
[1] Claudia Müller-Hoff, Human rights fitness of the auditing and certification industry? A cross-sectoral analysis of current challenges and possible responses (ECCHR, Brot für die Welt, and MISEREOR, 2021), 19,  https://www.ecchr.eu/en/publication/human-rights-fitness-audits/.
[2] Amnesty International, The Great Palm Oil Scandal: Labour Abuses Behind Brand Names (November 30, 2016), 318,  https://www.amnesty.org/en/documents/asa21/5184/2016/en/.
[3] Jodi L. Short, Michael W. Toffel, and Andrea R. Hugill, “Improving Working Conditions in Global Supply Chains: The Role of Institutional Environments and Monitoring Program Design,” ILR Review 73, no. 4 (2020): 873-912,  http://journals.sagepub.com/doi/10.1177/0019793920916181.
[4] “Decade After the Rana Plaza, Safety Flaws Persist,” Human Rights Watch, April 17, 2023,  https://www.hrw.org/news/2023/04/17/decade-after-rana-plaza-safety-flaws-persist.; “BSCI 10th Anniversary Shame over Rana Plaza,” Clean Clothes Campaign, June 25, 2013,
https://cleanclothes.org/news/2013/06/25/bsci-10th-anniversary-shame-over-rana-plaza. This incident shone a spotlight on the inadequate coverage of salient risks in initiatives, an issue addressed in Flag No. 1.  
[5] Kelly et al., Fig Leaf for Fashion, 72-73.
[6] Laura Murphy and Nyrola Elimä, In Broad Daylight: Uyghur Forced Labour and Global Solar Supply Chains (Sheffield Hallam University, May 2021), https://www.shu.ac.uk/helena-kennedy-centre-international-justice/research-and-projects/all-projects/in-broad-daylight.; Laura Murphy et al., Driving Force: Automotive Supply Chains and Forced Labor in the Uyghur Region (Sheffield Hallam University, December 2022), https://www.shu.ac.uk/helena-kennedy-centre-international-justice/research-and-projects/all-projects/driving-force.
[7] Victoria Waldersee, “Senior staff at auditing firm distance themselves from audit of VW's China plant,” Reuters, December 13, 2023, https://www.reuters.com/business/autos-transportation/auditing-firm-distances-itself-duos-work-vws-china-plant-2023-12-13/.; Patricia Nilsson, “Staff rebel at consultancy behind VW review of Xinjiang rights abuse,” Financial Times, December 13, 2023,  https://www.ft.com/content/46b37a15-054e-4d40-b42b-f31a0e3a07c3. 
[8] “No Bar too Low: Social Auditing State-Sponsored Forced Labor,” Worker-Driven Social Responsibility Network, February 28, 2024, https://wsr-network.org/no-bar-too-low-social-auditing-state-sponsored-forced-labor/.
Investors can check the website of the initiative for whether it publishes the following information:
  • Specific auditor competency or training requirements, as well as continuing education requirements. The scheme should require that at least one auditor on the audit team:
    • Has training on salient human rights issues in the industry and knowledge of the local context. One well regarded analyst recommended the Certified Social Compliance Auditors (CSCA) scheme of the Association of Professional Social Compliance Auditors.[1]
    • Speaks the local language and the languages of migrant workers (who often do not speak the local language), or at a minimum, uses a qualified, independent interpreter.[2]
  • The name of the auditing firm.
  • The means the scheme has for ferreting out unauthorized auditors and the consequences when this is found.
Note that the failure to publish such information can be another Red Flag: See Red Flag 14 in Governance & Accountability).
 
Good practice examples:
➔    The Forest Stewardship Council publishes the requirements for accredited certification bodies within its online document center. The Council requires that when a certification raises "questions related to indigenous or community rights and tenure issues, or has social high conservation values (HCV), then the team shall include expert(s) who have knowledge of these issues, appropriate language/dialect, and experience of interacting with indigenous peoples and communities in the region concerned.”[3]
 
➔    Some initiatives work with only one dedicated auditing body, which has a depth of expertise on the standard, the salient risks within the sector, and what to look for during inspections. Milk with Dignity (MD), a program dedicated to improving working conditions in dairy supply chains, has a Code of Conduct which specifies the Milk with Dignity Standards Council, an independent non-profit, as the auditor. Further, the Code of Conduct specifies that the MD Standards Council’s “sole function is oversight of the MD Program—working with farmers and farmworkers to understand, participate in and achieve compliance with the standards in the Code.”[4] As noted in Red Flag 8, however, having just one auditor may also entail risks.
 
➔    Electronics Watch’s Monitoring Policy designates local organizations and independent researchers as monitoring partners and requires that they: 1) possess expertise in labor rights, occupational health and safety, and monitoring methodologies; 2) be based in or near workers' communities; and 3) maintain established relationships with workers through educational or other service, enabling meetings under conditions that minimize fear of reprisals.[5]
[1] The Association of Professional Social Compliance Auditors (APSCA), which certifies that auditors have human rights competencies through its Certified Social Compliance Auditors (CSCA) scheme. “Competency Framework,” APSCA, accessed June 28, 2024,  https://www.theapsca.org/resources/competency-framework-d-011/.
[2] MSI Integrity, Not Fit-for-Purpose: The Grand Experiment of Multi-Stakeholder Initiatives in Corporate Accountability, Human Rights and Global Governance (July 2020), 129, https://www.msi-integrity.org/wp-content/uploads/2020/07/MSI_Not_Fit_For_Purpose_FORWEBSITE.FINAL_.pdf.
[3] “FSC-STD-20-001 - General requirements for FSC accredited certification bodies v4.0,” Forest Stewardship Council, 2016, https://connect.fsc.org/document-centre/documents/resource/280.
[4] “The Milk with Dignity Code of Conduct,” Migrant Justice, 2017, 
https://migrantjustice.net/sites/default/files/2018%20MD%20Code%20English%20%281%29.pdf.
[5] Electronics Watch, Electronics Watch Monitoring Methodology Guidance 1.0 (2020),  https://electronicswatch.org/electronics-watch-monitoring-methodology-guidance-1-0_2577562.pdf.
Does the scheme require auditors to have human rights competencies or training requirements?
❐  Yes 
❐  No
❐  Partially

Human rights competencies include, but are not limited to, knowledge of:
  • what constitutes a rights-based approach (transparency, identifying and centering the most vulnerable affected people, access to remedy, etc.)
  • the salient human rights issues and most vulnerable people in the industry
  • human rights risks in the local context
  • the local language(s) of the rights holders (workers and communities)
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