China has seen rapid economic growth in recent decades and will only continue to soar. Known today as the ‘global factory’ in the supply chain, China's manufacturing sector continues to expand at enviable rates. From half a world away, companies looking to protect their brand reputation are naturally concerned about suppliers being aligned with their values.
Corruption scandals, questionable labor practices, an historically lax regulations are all drivers behind the rise of Corporate Social Responsibility (CSR) awareness. In today's world of social media, one questionable practice of one supplier can cause PR scandals that result in damage to goodwill that can take decades to overcome. As a result, more and more companies are adopting CSR programs to protect their reputation. In addition to the development of a positive corporate image, keeping supply chains clean is simply the right thing to do.
Your first step in sizing up conduct is by conducting periodical CSR audits, which will measure a company’s success in developing and applying acceptable practices in the workplace. Audits are comprehensive and tackle big issues such as workplace safety standards, employee verification, worker rights, and much more.
Here are a few things professional inspectors look for when conducting a CSR audit in China.
Facility Heath and Safety Standards
General physical conditions: Walk through the entire facility – manufacturing area, warehouse, dormitories, cafeteria, etc. Can you see evidence of working conditions in support of well being? Chinese regulations require basic amenities – sufficient space, adequate ventilation, clearly marked and unobstructed emergency exits, accessible water sources, and sanitary working and living spaces. A professional audit should also confirm the building itself is in good structural condition.
Facility equipment: Is machinery is being safely operated and is regular maintenance is conducted to prevent injury due to equipment malfunctions?
Safety equipment: Is safety equipment such as fire extinguishers clearly marked, readily accessible, and regularly inspected? On top of that, are first aid kits fully stocked and located in each factory area?
Personal protective equipment: Are workers are being provided with adequate protective equipment before operating machinery that requires it?
Safety instruction and warning: Are measures taken to avoid accidents due to unmarked electrical wiring or unlabeled chemicals and the like?
Care for the People
Safety training: Do employees receive a general facility training before beginning work? Depending on the nature of the job, are employees trained on the specifics of their job in regards to safety? Is ongoing safety training and monitoring conducted on a regular basis to prevent mishaps due to complacency?
Health inspection: For employees exposed to hazards at the workplace, are regular health inspections conducted? How frequently? When was the last one, and what were the results?
Regulation and Documentation
Regulation: For every aspect of an audit, is the factory up to date on the laws? Do they have up-to-date copies of regulations and laws? Do they display evidence they are understanding and abiding by the requirements?
Documentation: In addition to understanding the requirements, can the factory prove compliance? Is the factory able to produce any papers necessary and can do so at any given moment? (These papers should prove a clean supply chain in matters of child labor, valid employment contracts, working hours, fair compensation, discrimination, disciplinary practices, and more.)
When doing an audit, CMD's professionals take time to confirm with workers themselves that actions actions go well beyond words . We conduct interviews with randomly selected workers across different departments at the factory to confirm what was uncovered with the audit aligns with what we're hearing on the shop floor.
If you have not yet performed a social responsibility audit, you could be exposed to risks. Recovering from PR nightmare can take decades. You’ve worked hard to build up your organization and its reputation. Don’t let a scandal topple your efforts.