Can Collaborative Auditing Become a Reality?
The big talk in Ethical Sourcing circles right now is collaboration. Here's how it works. The customers (or brands) of a factory get together to conduct an audit. By collaborating, the brands minimize excessive audits in the same facility and better harmonize potentially conflicting demands. After all, a factory may be audited by half a dozen brands per annum and asked repeatedly by multiple sources to improve the same infraction. What a waste of time and money for the factory managers who must participate in each audit and for the brands to repeat each others work.
In addition to efficiency, collaboration in theory brings economies of scale. One customer conducting 5% of a factory's business has limited leverage. Six brands conducting 95% of the supplier's business has way more arm twisting force.
The collaboration movement in North America hovers around four initiatives: Fair Factory Clearing House, Fair Labour Association, NIKE & Levi's. There's a whole bunch of brand to brand (bilateral) projects but not at the attempted scale of the aforementioned. MEC is participating in the all of these and a handful of bilateral projects.
We've gotten some good traction on sharing and coordinating audits, which hopefully reduced wasted time on everyone's side. However, the big gain, to collaborate on making the factory better has not been that successful. Simply because US Anti Trust laws prevent us from working collectively on issues like motivating a factory to control excessive over time.
It's not uncommon for factory workers to be hunched over an assembly line for 60 - 70 hours a week. During high season (e.g., making Christmas merchandise), individuals may work even longer, up to 100 hours per week. To break this cycle, a factory and its customers need to plan orders concertedly. Brands need to realize their individual orders are not sacrosanct, transcending those of their peers or what's deemed reasonable working hours for workers. Factories need to set limits and plan more efficiently. Even assuming these somewhat "altruistic" feats are acceptable to the profit conscience parties involved, American anti-trust laws halt all of this from the get-go. Simply because sharing strategic information to collectively moderate the production of a factory (and hence reduce excessive overtime) can be construed as limiting a factory's access to its customers/markets. This is a big no-no to the "trust-busters" at DOJ.
Violating anti-trust laws in the US is the last headache we need. We can audit together to discover the infractions but we can't collaborate to remedy them. Or as my good colleague Troy from REI insightfully summed "we can't close the loop".
Closing the loop by reducing unhealthy long hours is really Mountain Equipment Co-op's goal. Co-auditing is the first step. Co-remediation is the final. Unfortunately, US Anti Trust laws have stymied the latter, even for a Canadian retailer like MEC.
Brands setting aside their competitiveness to work on factory audits are a smart move. We're reducing waste and achieving economies of scale. Whether this actually leads to more humane working hours remains to be seen.
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Harvey Chan is the Director of Ethical Sourcing for Mountain Equipment Co-op, a Canadian co-operative retailer of outdoor activity gear and apparel. Harvey's bio can be found here.
