Index
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NEWSLETTER
21, May 2006
What is the BSCI and how does it
measure up?
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The Business Social Compliance
Initiative (BSCI) was set up in 2003 to represent
the interests of European companies coming under
scrutiny for the labour conditions at their
suppliers around the world.
The BSCI was founded by the Foreign Trade Association
(FTA), which represents the interests of importing
retailers in Europe. The FTA has a record of
lobbying strongly for free trade and was motivated
to set up the BSCI to preempt binding European
Union/government regulation on corporate social
responsibility in response to anti-sweatshop
campaigns.
The stated aim of the BSCI is to audit and
monitor the social performance of member companies'
suppliers and to do this by using one common,
voluntary system. The BSCI is largely for the
retail sector, but is open to importers and
manufacturers of consumer goods in Europe. Today,
Dutch, German, Swedish, Swiss and Finnish retailers
and brands dominate the BSCI's fiftyplus membership.
They include Lindex and KappAhl from Sweden,
Migros from Switzerland, Ahold and Vendex/KBB
from the Netherlands, plus KarstadtQuelle, Metro
and Otto from Germany. Two European retail associations,
the German Foreign Trade Association (AVE) and
Textilimportörema of Sweden, are also members.
The BSCI's current focus is on textiles, clothing,
shoes and toys - the areas of production most
under the spotlight from labour rights advocates.
The BSCI intends to broaden its scope in the
future.
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Weak Social
Audits No Help to Workers
Today, a decade after "social
auditing" got going, tens of thousands
of such audits are commissioned each year by
hundreds of brand-name companies and retailers.
A whole industry of commercial social auditors,
self-assigned experts, and quasi-independent
ethical enterprises has grown, touring supplier
factories to assess how well they are implementing
thousands of company codes of conduct.
A November 2005 report "Looking
for a Quick Fix: How Weak Social Auditing is
Keeping Workers in Sweatshops," published
by the CCC International Secretariat, assesses
this social auditing industry. It describes
the failure of the majority of social audits
carried out by multinational audit firms, including
those used by BSCI. It looks at the ways in
which factory owners prepare for audits, for
example, and how workers are largely ignored
by the auditors. Some 670 workers from over
40 factories in 8 countries testified that their
conditions do not meet the international minimum
standards outlined in the codes of conduct of
their buyers, many of whom are BSCI member firms.
The report concludes that "mainstream
social auditing consistently manages to miss
crucial violations of workplace rights, in particular
regarding what are described as 'intangible'
areas such as freedom of association, working
hours, abuse and harassment."
The non-specialist retail sector
(supermarkets, discount and department stores)
and mail order firms in particular are using
weaker methods of social auditing - the "quick
fix" approach. These methods are seriously
flawed and largely discredited not only by labour
rights advocates but also by those within the
industry with experience in this field. The
impact on working conditions is at best superficial
and, more worryingly, it could lead to a "lowering
of the bar."
The report can be downloaded
from the CCC website: www.cleanclothes.org/
publications/quick_fix.htm
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Code Weak on FoA
The BSCI has created its own code of conduct, along with
a procedure for assessing and improving supplier performance
against this code. The BSCI code refers to International
Labour Organisation conventions and United Nations declarations.
However, in the CCC's view the BSCI code has a major flaw:
it is ambiguous on freedom of association (FoA) and does
not explicitly state that the employer must respect workers'
right to form or join unions of their choice and to bargain
collectively. It only encou-rages members to strive to provide
workers with a living wage.
The BSCI recommends its code as a minimum. For best practice,
the BSCI currently recommends that its members seek certification
for their suppliers with the (stronger) SA8000 standard
of Social Accountability International (SAI).
Some Suppliers Audited
In principle all suppliers of BSCI members should be subject
to auditing, however currently in practice this is not the
case. Most BSCI member companies select suppliers to audit,
based on certain "risk" criteria.
Audits are conducted by companies that can provide evidence
of Social Accountability International (SAI) accreditation
and have a contract with the BSCI, laying down the terms
and conditions of the cooperation. Member companies and
suppliers can choose an auditor from a list of such commercial
auditors. If deficiencies are found during an audit, corrective
actions must be agreed upon (corrective action for non-compliance
with some issues are compulsory, but for others this is
only voluntary). The audit procedure is repeated every three
years, from the start of the initial audit.
Costs related to audits and any corrective measures are
to be negotiated between the BSCI member and its suppliers.
However, unequal power relations exist between buyers -
big international companies - and suppliers who are often
local production facilities. With little leverage to make
demands on their clients, suppliers are likely to bear the
overwhelming share of the costs, as well as the responsibilities
for improvements. In any case, from the CCC's perspective,
any system that is focused solely on auditing falls short.
For many years labour rights activists have criticised the
over-reliance on social audits in monitoring labour conditions,
for many reasons:
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While audits may be able to uncover violations
of codes that are quantifiable such as working hours
or pay levels; they are much weaker in revealing rights-based
requirements such as trade union freedoms to organise
without harassment.
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Audits often fail to identify or analyse
the causes of violations.
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Auditing can create a culture of cheating
by managements who need certification but are also trying
to keep down costs.
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Social auditors are often associated with
management and therefore lack the trust of workers during
interviews.
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It is commonplace for audit interviews to
be held inside the factory and workers are often instructed
on what they must say.
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Auditors often lack the knowledge of local
circumstances and therefore the capacity to establish
meaningful contacts with local trade unions and NGOs;
this is especially important when it comes to finding
effective corrective action.
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Companies that perform audits might be influenced
by business interests; they might not reveal damaging
information that could jeopardise their future contracts.
No Complaints Mechanism
for Workers
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"Business
Sweatshop Cover-up Initiative"?
About twenty representatives
of the Belgian and Dutch CCCs, together with
partners from India, Bangladesh, Pakistan, Turkey
and Macedonia, picketed the first major conference
of the BSCI in Brussels in November 2005.
They carried signs with slogans
such as "Business Sweatshop Cover-up Initiative"
and "Bad Social Compliance Initiative"
and distributed leaflets on the shortcomings
of the audit-based system. The peaceful picket
was held by the main entrance, and later in
the street, when BSCI had police come in to
remove the demonstrators.
Protesters also highlighted the
ongoing struggle for compensation by the victims
of the collapsed Spectrum sweater factory in
Bangladesh. Spectrum produced for several BSCI
member firms (see page 21). The CCC told the
press, "The Spectrum case demonstrates
not only the failure of the BSCI and their members
to ensure that the workers producing their products
have safe and healthy working conditions, but
also their failure to adequately respond when
workers rights are violated."
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A mechanism for handling complaints is essential
if working conditions are to be improved and workers'
rights respected. Workers and their organisations
must be able to supplement the "snapshot"
auditing that takes place once every three years,
and to do this without fear of retaliation. There
is no complaints mechanism associated with the BSCI
Code. No Independent Verification
According to the BSCI, its monitoring system is credible
because "the audits are conducted by external professionals
with a high level of expertise about the subject."
All audits are conducted by SAI-accredited auditors, including
from the big multinational audit firms such as SGS and ITS
Intertek.
However, the CCC believes that when a buyer hires an auditor
to monitor a workplace it is not very different to having
the work carried out by the buyers themselves. To be credible,
independent verification of the audits that buyers commission
(i.e. their internal monitoring) is necessary.
Recognising that company self-regulation is not good enough,
there are now a number of "multi-stakeholder initiatives"
(MSIs) involving business interests and trade unions and/or
NGOs. The aim of such MSIs is to develop more systematic
and effective approaches to code implementation, monitoring
and verification, as well as broader accountability to civil
society. However, BSCI has chosen to be separate from such
MSIs.
Lacks Stakeholder Involvement
Despite a lack of sufficient stakeholder input and participation
in decision-making, at times the BSCI portrays itself as
an MSI.
As well as local roundtables, the BSCI reports it is setting
up an Advisory Council of "stakeholders" whose
role will be to advise on BSCI systems and deal with complaints
arising from its auditing activities. The Advisory Council
is planned to include trade unions, NGOs, the European Commission,
and the ILO. The CCC, Oxfam and European Trade Union Federation:
Textile, Clothing and Leather (ETUF:TCL) have all been approached
to join, but have so far refused.
The Advisory Council and local roundtables are insufficient
to ensure the voices of workers and others are heard in
BSCI's processes. The Advisory Council will only meet once
or twice a year. Given the high-level of resources needed
to establish an effective complaints mechanism, this cannot
be seen as a serious attempt to handle complaints.
If BSCI and its member companies had decided to join an
existing MSI, not only would they benefit from earlier experiences,
they would also have a ready-made stakeholder dialogue to
engage in.
Initiative Not Transparent
The BSCI does not publish an annual report, or any summarised
data from its audit reports. Nor does it publish information
about its members such as the location of their suppliers,
the number of suppliers, or how many suppliers have been
audited or will be audited. So it is impossible to evaluate
what any individual BSCI member company is doing.
Even Advisory Council members will only receive samples
of audits, and they will be obliged to keep all information
they receive and the contents of their discussions strictly
confidential.
Questionable Credibility
A credible approach to code compliance requires quality
in-house monitoring, along with independent verification,
plus complaints procedures. Stakeholders must be represented
throughout all the key processes.
For these reasons, the CCC seriously doubts whether the
BSCI can deliver on its claims to have "more efficient
implementation procedures than other monitoring systems,"
or to be achieving "higher satisfaction for workers
and consumers," or that it "optimises working
conditions" (source: www.bsci-eu.org).
In the CCC's view, the BSCI represents an incomplete, minimalist
model for compliance with labour standards. It relies on
weak auditing, is not accountable to the public, and does
not involve key stakeholders. It is significantly weaker
than other monitoring and verification initiatives active
in the garment sector today. European retailers seeking
to take concrete steps to ensure respect for labour standards
in their supply chains will have to do much more than join
on to the BSCI if their commitment to workers' rights is
to be taken seriously.
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