Inspections were designed to help, but garment workers’ plight ‘worse than ever’

Promise of better working conditions and wages hasn’t led to change, investigation finds

Before auditors arrive to inspect the Honduran garment factory where Juan has worked for 13 years, managers distribute a script to workers detailing answers he and his colleagues are to recite if questioned about working conditions.

“The manager at the factory, over the loudspeaker, they make the announcement: ‘Hey, some auditors are coming to the factory in one or two weeks. So, please, say everything is OK.’ ”

Most often, the scripts aren’t even needed, he said.

When auditors approach workers, Juan said their questions aren’t about low wages, unpaid hours or inability to get time off — all pressing issues at the factory where he works.

“All the (auditor’s) questions are about production. Nothing about labour or human rights,” said the father of three in his 40s over the sound of crowing roosters outside his home as his kids played in another room. “Nothing changes after the auditor visits.”

Juan is among dozens of garment workers around the world interviewed over the past six months who say the auditing system designed to reassure consumers their clothes are ethically made is a fiction. The Toronto Star/ Global Reporting Centre investigation is not naming the workers, who fear retribution for speaking out.

Since global awareness of sweatshop conditions emerged in the 1990s, international brands have relied on a regime of spot checks by auditors — known as social auditing — to address issues ranging from human rights abuses to building safety.

But the promise of equitable working conditions and wages for those who make our clothes has been more a triumph of messaging than meaningful reform, according to the findings of a joint Toronto Star/Global Reporting Centre investigation in collaboration with University of Sheffield academics in the U.K.

Bonnie Nixon oversaw global worker production standards for several large U.S. companies before becoming an industry consultant and professor of supply chain sustainability at the University of California, Los Angeles.

Nixon said it’s a misconception among consumers that a social auditing certification means their clothing isn’t produced in exploitative conditions. What Nixon observed during her field work still haunts her, she said.

“It’s worse than it’s ever been ... We live in an extractive economy and we’re extracting from people.”

First-hand accounts of auditing manipulation were common in more than 50 interviews with garment workers around the world conducted by journalists and academics over the past six months.

“During the (auditor’s) visit day, all the necessary things would be put in place, soap at the sink, toilets will be cleaned, they would give us masks, everything seems in perfect position,” said a worker in his early 20s in Ethiopia.

“It is so that the owners could deceive the auditors. They even collect the soap after the inspection and things go back to usual.”

A woman in her 20s in Ethiopia described the consequences of speaking out.

“(Managers) warned us not to tell the truth about the company to the auditors because the auditors may shut down the company leaving all of us jobless,” she said. “I know some colleagues of mine who got terminated because they spoke the truth to the auditors.”

Genevieve LeBaron, a professor at the University of Sheffield who co-authored an academic study based on the interviews with garment workers, said social auditing hasn’t worked to make real change to what matters most to workers, including wages and restriction of movement.

“I think it’s failed miserably as a tool to promote labour standards,” LeBaron said. “On those indicators that matter the most, there’s almost no evidence that auditing has been helpful in any way in dealing with those problems.”

Eight years ago, as more than 1,100 bodies were still being exhumed from the rubble of a collapsed Bangladesh garment factory in 2013, major garment brands faced calls for better treatment of workers, including fair wages and better working conditions.

Bowing to public pressure, global brands doubled down on social auditing as part of their publicly stated social responsibility commitments.

Every day, an army of professional auditors — part of a $100 billion (Canadian) international industry — visit factory floors around the world. They fill out confidential reports noting compliances and flagging concerns to ensure working standards are met. But the candour and clarity of those reports and what the brands do with them is a private matter.

“(Auditing) was intended to fix the wrong problem,” said worker-rights advocate Greg Asbed.

“Their target was to calm the public outcry, not to put out the human rights crisis. Auditing is very effective at what it’s designed to do, which is to make the public feel better.”

Asbed founded an alternative model to address worker exploitation in the U.S. agriculture industry — one that replaces company-hired auditors with a code of conduct enforced by workers and retailers.

While most agree bringing auditors’ independent eyes and ears inside factories is an essential tool for industry oversight, the current model remains riddled with conflict of interest, lax penalties and easy manipulation, according to interviews with more than a dozen former auditors, researchers and industry insiders.

“If all (auditors) do is bring bad news and say, ‘Your supply chain is horrible, you get an F, the public should not buy your product, it’s not ethical,’ why would the company continue to pay them?” said Sarah Newell, a director with the Worker-Driven Social Responsibility Network, which is trying to shift industries away from top-down auditing approaches in favour of more worker-based partnerships.

New research out of Cornell University shows auditors are often fed “unreliable” information by factories. The data, provided to Cornell researchers by an unnamed “leading auditing company,” contain results from audits conducted between 2011 and 2017. Across 12 countries, apparel factories provided information to auditors that was not trustworthy 41 per cent of the time, according to researcher Sarosh Kuruvilla, whose new book “Private Regulation of Labor Standards in Global Supply Chains” details the research.

And the proportion was even higher in China, Ethiopia and India, where auditors were given “unreliable” information more than 50 per cent of the time.

Even industry leaders acknowledge the limitations of auditing.

“A brand paying an auditor to inspect a factory that the brand has an interest in doing business with, I do think this is a bit of the fox guarding the henhouse,”

said Avedis Seferian, president and CEO of one of the world’s largest factory certification firms, Worldwide Responsible Accredited Production (WRAP), which emerged in the late 1990s as an apparel-industry response to revelations of sweatshop conditions around the world.

“Even the harshest critics will admit that things are better today than they were … (But) I’m not going to pretend that it’s always working. I’m sure sometimes it doesn’t.”

WRAP has certified nearly 3,000 factories around the world based on 12 ethical principles, such as prohibiting forced labour and enforcing standards for health and safety.

In 2019, WRAP conducted 629 audits on its already-certified facilities to determine whether they remain in compliance. A third of those visits identified new problems requiring a “corrective action plan” or, in extreme cases, decertification, according to company data shared with this investigation.

Among those certified facilities where problems were found, the most common issues were related to health and safety violations, wages and security, the data show.

Nate Herman, senior vicepresident of policy for the American Apparel and Footwear Association, said social auditing has been improving since it launched in the 1990s and has helped reduce previously intractable problems like child labour.

But he said the majority of the American garment industry has come to realize that audits aren’t enough and has begun trying to address many longstanding worker issues.

“We realized when we looked at the audit results that the same issues kept coming up again and again, even though we put in a corrective action plan trying to address it,” he said.

One technique of audit manipulation includes “consulting firms” for hire in China that guarantee they can help factories pass their audits by providing scripts for workers to parrot, falsifying records and having their staff pose as factory

managers during inspections to better answer questions and concerns, the Cornell research found.

“These audit consulting companies actually provide all kinds of useful tips to the factories, but also show them how to successfully cheat,” Kuruvilla said. “And they make a living doing it.”

Andre Raghu was an executive at an international auditing firm who decided eight years ago that he’d had enough.

“I was part of the problem,” the former auditor recalls. “Over time, I just understood that a lot of things going wrong had a lot to do with the structure of the industry.”

Today, Raghu runs an auditorrating firm that has conducted more than 2,000 auditor assessments — including detailed interviews, background checks and skill testing — since 2017.

“Our mandate is to assess their ability based on the public interest and their ability to protect workers,” he said. “It isn’t a high pass rate.”

Of the auditors rated by Raghu’s firm since 2017, nearly 90 per cent “do not understand or acknowledge a duty of care toward workers,” according to company assessment data.

“You have people walking into factories and farms in the supply chain with blinders on,” said Raghu. “We can’t continue with this model.”

But while Raghu recognizes shortcomings in the garment oversight system, he also doesn’t believe it should be tossed out.

“If there was a button I could press to stop the industry of auditing, I would not press it,” Raghu said. “I would do everything I could to take the parts that work, acknowledge the things that do not work, and create an industry where workers get more value from the audit process.” During COVID restrictions, virtual factory audits have meant even fewer eyes on the ground to detect worker exploitation at a time when workers are facing deteriorating working conditions, said Rola Abimourched, a senior program director at the Worker Rights Consortium.

The pandemic made clear another problem: when brands put pressure on factories to pivot suddenly, or produce certain goods urgently, factory owners often responded by forcing workers to stay longer hours and fulfil impossible quotas, according to Human Rights Watch. With fewer auditors on the ground to spot check overtime and, in many factories, worker compensation tied to meeting quotas, the risk of exploitation increases.

Industry representatives say some brands have tried to repair the damage caused by their abrupt cancellation of orders earlier in the pandemic. The cancelled orders, many of which had already been sewn or shipped to North America, led some factories to reduce pay, forcing workers to cut back on meals or borrow money at exorbitant interest rates.

Retail sales dropped 80 per cent between March and April 2020, and 10,000 retail stores closed permanently, according to Herman, the apparel industry association executive.

“There were some incredibly bad decisions made at the beginning of COVID as people panicked,” Herman said. “I think they’ve come around to address that somewhat.”

Some brands adopted programs like cash support for workers and worker helplines, while others sent payments to factories upfront rather than waiting for orders to be shipped.

Cornell University’s Kuruvilla said factory managers told him they see duplicity from Western brands who emphasize stricter codes of conduct and standards for workers while simultaneously driving down the price they’re willing to pay for orders.

“They will tell you in no uncertain terms that ‘these guys are speaking out of both sides of their mouth, because if they want us to have these fantastic systems that are suitable for their countries, they need to pay more,’ ” he said. “‘These guys will squeeze us for more and more price and, at the same time, ask for tons and tons and tons of responsibility. Think again.’ ”

Nixon, the supply chains professor, said she remains deeply affected by her recollections of child labour and worker exploitation in factories around the world where she oversaw production for multinational companies.

But a major challenge is to convince a company’s top executives to be willing to look at the issues without flinching.

“You don’t really want to look under the hood,” she said. “You don’t really want to open the window because you’re not going to like what you see.”

Kelly Bennett is a freelance investigative reporter based in Hamilton. Reach her at kelly@kellyrbennett.com

Emma Jarratt is an investigative reporter in the GTA and the managing editor of Electric Autonomy Canada. Reach her at emmacrjarratt@gmail.com.