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Social Compliance: What's Next

By: Avedis Seferian, President & CEO
Mar 14

As any long-term practitioner can attest, social compliance has only grown in importance over the past decade. Between the risk-aversion incentive of avoiding the strong negative implications of bad working conditions in their supply chains, and the progressive incentive of engaging with their vendors in doing the right thing, more and more brands and retailers are paying greater attention to ensuring responsible manufacturing practices by their sourcing partners.

Over the years, this has generally taken the form of more buyers doing more social compliance audits (WRAP’s growth trajectory over the past decade reflects this fact; more than 100 buyers, covering the breadth of major brands and retailers all over the world, recognize WRAP as meeting their social compliance requirements). But the more enlightened buyers are starting to realize that while audits will always remain necessary, they are not - in and of themselves - going to be sufficient to address compliance issues. In fact, the increase in audits has resulted in the phenomenon of ‘audit fatigue’ in the manufacturing sector, which has led to a realization of the need for more collaboration in the sourcing community.

Against this background, I see the following 5 trends emerging in the social compliance arena (and I will add a few notes in each case to describe WRAP’s efforts with regards to that trend):

1) Increased focus on training

Buyers are paying increasing attention to training resources as a means of ensuring their suppliers receive the necessary information and skills to maintain the standards that will be expected of them. Many buyers are closely involved in training efforts, some through direct provision, but most through working with third parties - such as WRAP - to help supply the knowledge transfer to their vendors. Such training can take many forms, from general social compliance awareness sessions to specific topical courses (such as health and safety). WRAP is a recognized leader in the social compliance training arena. Over the past 5 years, we have developed an extensive profile of training courses and have become an IRCA (International Register of Certified Auditors) accredited training organization. Each year, we run dozens of social systems and internal auditor training courses and related seminars in countries around the world to educate workers, factory managers, government inspectors, and others about issues related to socially responsible manufacturing. In particular, we have been very active with regards to fire safety training, running a highly regarded course regularly in Bangladesh for the past two years (we also launched this course in Pakistan in December 2012 and in China in February 2013, and have plans to do so in India later in the year).

2) Harmonization attempts

The rise of audit fatigue has not gone unnoticed in the sourcing community. While attempts at establishing a single, universal code of compliance have not met with much success, there are several ongoing efforts at trying to harmonize audit protocols and increase the likelihood of sharing reports (and, therefore, decrease the number of audits necessary). WRAP already has the advantage of being the most accepted certification standard in the sewn manufacturing arena. More brands and retailers will accept a WRAP certificate as meeting their compliance requirements than any other program. But there is still room for further improvement and because of that, WRAP has always taken the approach of engaging in any major harmonization effort. The biggest of these in our arena is the Global Social Compliance Programme (GSCP), led by some of the world’s largest retailers. WRAP is actively involved with GSCP and is member of GSCP’s Partner Organization Network.

3) Moving up the supply chain

Most social compliance monitoring has so far been limited to first-tier suppliers only. However, more and more buyers are starting to move their compliance requirements further up the supply chain, to second-tier and beyond. WRAP is a facility-specific certification program, so is fully applicable at any production site, regardless of tier level. Several of our supporters have already started asking their lower-tier suppliers (e.g., mills and sundries) to go through WRAP certification as well.

4) More emphasis on environment

With the increasing awareness of the need for ecologically sustainable manufacturing, more attention is being paid to the environmental practices at facilities (an issue also being driven by sustained publicity campaigns from various activist organizations). In this regard, WRAP has actually been ahead of the curve all along. Going back to our formation, while most codes of conduct aimed at suppliers that developed at that time focused largely, if not solely, on labor compliance, the WRAP program has had a requirement covering environmental compliance since our inception.

5) Social compliance moving more mainstream

Most buyers continue to have separation between their compliance and sourcing departments (which can often be a source of consternation in terms of clarity of message to a vendor), but there is a definite trend towards making compliance more of a part of the mainstream sourcing process. One particularly common facet of this trend is that many buyers are starting to train their sourcing and QA people on compliance issues to enable greater awareness on their part when they visit factories.

Given our strong training reputation, WRAP has been the organization of choice for many of these buyers when it comes to providing that training to their sourcing staff, and we continue to be called upon by more and more brands and retailers who are recognizing the benefits of this approach.

As you can see from my comments under each of those trends, WRAP is fully engaged in keeping up with the changing climate of the compliance arena; in fact, we are very much ahead of the curve in the most important areas (chief among them being training). The result is that WRAP certification today carries a very strong value proposition and we are perfectly positioned to be an excellent partner to meet a buyer’s or a production facility’s supply chain social compliance management needs.

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