Abstract
AbstractThis article critically investigates the growing power and effectiveness of the ‘ethical’ compliance audit regime. Over the last decade, audits have evolved from a tool for companies to track internal organisational performance into a transnational governing mechanism to measure and strengthen corporate accountability globally and shape corporate responsibility norms. Drawing on original interviews, we assess the effectiveness of supply chain benchmarks and audits in promoting environmental and social improvements in global retail supply chains. Two principal arguments emerge from our analysis. First, that audits can be best understood as a productive form of power, which codifies and legitimates retail corporations’ poor social and environmental records, and shapes state approaches to supply chain governance. Second, that growing public and government trust in audit metrics ends up concealing real problems in global supply chains. Retailers are, in fact, auditing only small portions of supply chains, omitting the portions of supply chains where labour and environmental abuse are most likely to take place. Furthermore, the audit regime tends to address labour and environmental issues very unevenly, since ‘people’ are more difficult to classify and verify through numbers than capital and product quality.
Highlights
In June 2014, The Guardian ran a headline news story revealing the widespread use of ‘slavery’ and ‘human trafficking’ by employers in the Thai shrimp906 Genevieve LeBaron and Jane Lister industry.[1]
We synthesise across recent large-scale studies of audit ineffectiveness, as well as draw on original interviews with ethical auditors, retail buyers, consumer goods suppliers, non-governmental organisations (NGOs) representatives, and corporate social responsibility (CSR) managers and experts from the United Kingdom (UK), the United States (US), and China, as well as factory visits in and around the Pearl River Delta region of China.[10]
We argue that growing public and government trust in the metrics generated by audits ends up concealing real problems in global supply chains
Summary
In June 2014, The Guardian ran a headline news story revealing the widespread use of ‘slavery’ and ‘human trafficking’ by employers in the Thai shrimp. We argue that many audit systems are designed to be ineffective at detecting and communicating the environmental and labour abuses fundamentally associated with the global retail business model, and that powerful business interests leverage for their own gains highly strategic control over how and when audits are conducted, and what is evaluated In developing this argument, we synthesise across recent large-scale studies of audit ineffectiveness, as well as draw on original interviews with ethical auditors, retail buyers, consumer goods suppliers, NGO representatives, and CSR managers and experts from the United Kingdom (UK), the United States (US), and China, as well as factory visits in and around the Pearl River Delta region of China.[10]. We conclude by considering how, as NGO involvement is expanding political traction of social and environmental benchmarks verified through audits, the audit regime disguises a normative, market-based policy agenda in seemingly objective tools and metrics
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