Reflections on SEDEX 2018: Feeding pigs without measuring them, or measuring them before we feed them?

We have suffered and complained, then complained some more, about a pre-occupation with compliance in responsible supply chains. I have personally witnessed hours of such complaining in the halls of responsible sourcing and ethical trade conferences over the past three years.

So it was refreshing to observe a change in tone and seriousness last week during the annual SEDEX conference, to which &Wider (as a provider of direct worker reporting) was invited as speaker and nominated award winner.

So what was the change? This time we witnessed action.

Trevor Waldock (Emerging Leaders) spoke of awakening and recognising the “amazing potential” of the individual worker as a leader: someone with “the ability to create a story that affects the thoughts, the feelings, the actions of other people”.

We value what we measure

Then the imposing figure of Marco Baren spoke of embarking on the new ‘tell-me-all-without-risking-punishment’ approach Philips has begun to trial across a group of 250 suppliers.

But few, painfully few people who were invited to present ideas and share experiences, spoke about the ‘A word’ (auditing). Yet in reality most if not all those attending were in some way involved (commissioning, completing, conducting, collaborating with those who do…) in auditing, not least of which SEDEX itself as as an audit-sharing platform.

So what does this audit-free new language mean for workers?

I believe it means a lot. It means that increasingly those who set the agenda and influence mainstream behaviour when it comes to responsible sourcing and responsible supply, are perceiving of compliance as a starting point, and measurable and continuous improvement in workers’ lives as the destination.

Our restlessness as a sector…should not be mistaken as a desire to rid our sector of auditing…

This is welcome news for those of us who believe that the future of responsible supply chains lies in better celebrating, better incentivising and yes, in better measuring, improvement in workers’ lives.

For after all, we value what we measure, do we not? Hence the need and the movement to work out how best to measure material improvement in workers’ lives. We at &Wider say that mobiles, rigorous survey design and carefully nurtured trust and response rates amongst workers, is rather important here.

But auditing and auditors are not synonymous with compliance. Our restlessness as a sector to aim well beyond the bare minimum, to clear and concrete change, should not be mistaken as a desire to rid our sector of auditing or auditors.

Even the vocal Mr Baren (Philips) conceded that we still need auditors. But what we wish these professionals to focus on and how we propose they will assist in monitoring and indeed, enabling continuous material improvement in workers’ lives, is the million dollar question. Perhaps this constitutes a worthy focus for next year’s SEDEX conference?

How we propose they assist in monitoring and enabling continuous improvement is the million dollar question

But what has all this got to do with weighing or feeding pigs?

Well, put it this way: a charming lawyer by the name of Avedis Seferian (WRAP) who participated in a panel on defining ‘beyond compliance’ asserted: “one does not fatten a pig by weighing it”. However, as Jonathan Ivelaw-Chapman (CEO, SEDEX) commented during his closing: one is wise to weigh the pig first before feeding it, for feeding a pig without weighing it is a dangerous omission.

Whether the traditional approach to auditing constitutes effective measurement or weighing here, or whether such requires additional verification or data – this is where direct and anonymous worker reporting has a role to play – was a subject which was touched on, but not emphasised quite as much as pigs and the strong impatient cry for progress!

How can workers breathe new life into auditing?

Direct worker reporting - enabling workers to report directly and regularly on their working conditions via their mobiles.

We have long been whining about the shortcomings of auditing – the obvious downsides of announced audits for transparency, the problems with falsification, follow-up, lack of anonymity and sample size when it comes to worker interviews, the conflict of interest with the supplier also being the auditor’s paymaster, and the inconsistent quality of auditors.

These limitations render auditing vulnerable as a single solution to monitoring social compliance and social impact along global supply chains.

But a widespread abandonment of the role of the auditor is not going to happen anytime soon. Most of the post-audit models currently out there also involve auditors.

Why?

Let’s face it, given the scale of the challenge (knowing what’s going on with working conditions along global supply chains, and finding and eradicating modern slavery and worker exploitation), we cannot abandon the one resource we have been developing since the 1950s.

But how can we supplement the role of the auditor or enhance audit effectiveness in our landscape?

Direct worker reporting: the missing link

In walks direct worker reporting – enabling workers to report directly and regularly on their working conditions via their mobiles (aka worker voice).

Let’s refer to it here and elsewhere as direct worker reporting given that: workers have voices, and many confuse worker voice with worker representation or with worker testimony.

The term direct worker reporting simply states what these tools do – they enable reporting from workers directly. So, back to using direct worker reporting to enhance auditing.

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The audit ceases to be a one-size-fits-all and evolves into a more tailored and forensic process during which auditor and supplier use the direct worker reporting results as a means of discussing where improvements need to happen, and how soon.

This seems simple enough. However we have learnt that certain basic rules of engagement apply if an integrated audit-direct worker reporting model is to work well for workers, suppliers and buyers alike.

So, here they are:

  1. Deliver the results in advance to suppliers first. The diagnostic power of clear and simple direct worker reporting results landing on a supplier’s desk a few weeks prior to an audit visit means that the supplier can attempt to address some of the issues already, in preparation for the discussion with the auditor.
  2. Use the time set aside for the worker interviews to gather workers to discuss the results and make suggestions as to how best to address these promptly and in an affordable manner wherever possible.
  3. Use a before and after (or pre and post) approach. In other words, enable the workers to generate the first results prior to audit, and then another set of results after the audit. This allows the first set to function as a needs assessment for the supplier with support from the auditor, and the second set (and possibly a third) as a means of measuring the extent to which whatever changes have been made, have impacted on workers themselves.
  4. Use a long-after call cycle and its corresponding results to measure longer term impact of any changes introduced to address issues in the first set of results. Not all improvements feature immediately.
  5. Train the auditor to help the supplier to use the results as a means of prioritising what improvements to make, and to think through ways of sourcing suggestions (beyond the audit visit and worker discussion slot) regarding how any issues reported can best be addressed.

Integration model: the direct worker report alongside the audit

While there are a series of options available when it comes to combining direct worker reporting with auditing, from the above it will already be clear that we are in favour of granting both supplier and auditor access to the results to drive immediate improvements.

However some of our clients are interested in using direct worker reporting results as a source of verification – to test the accuracy of the audit picture. We advise against this approach. Why?

It pits the auditor and the supplier against the workers whenever results differ markedly. This is counter-productive because suppliers can be inclined to claim that the workers cannot be trusted to give an accurate account and vice versa.

On the other hand, integrating the results into the audit process can have the opposite effect – encourage the supplier to work with worker results and perceptions, and to draw on workers as a source of ideas when it comes to addressing issues they have identified.

Direct worker reporting and supplier rating

Direct worker reporting results can also be extremely useful as a source of insight in a supplier rating system.

This is a different model altogether, but again the same choice applies: to integrate such that workers’ results inform the rating, or to use them as a means of verifying or checking a supplier rating?

The latter suffers from the same shortcoming of potentially triggering further tension between workers and their employer, especially in those cases where the rating is higher and the worker reporting results show urgencies which challenge a high supplier rating or clean social bill of health.

About cost saving and caution

Finally, there is also potentially the cost-saving implication of using direct worker reporting to inform the audit interval between audits – longer for higher performing sites and shorter for lower performers.

However, when direct worker reporting is used in this way, we need to be extremely cautious about what direct worker reporting can cover and what it cannot and find another means of gathering these insights in the audit intervals.

For example, workers cannot adequately report on issues they don’t directly encounter in their working lives, such as management systems and governance, or whether health and safety standards are adequate (some workers have only ever experienced the realities on the site where they work) and environmental impact.

Some would argue that indeed in time workers will be able to report on even these indicators. But for now auditor oversight or some other means of verification (sensors in combination with photographic and other evidence) may be needed.

The worker-inclusive audit

In short, direct worker reporting can make a significant contribution to improving audit effectiveness and indeed to measuring and enhancing the impact of auditing.

But perhaps the contribution warrants a new term or even field. What about Worker-Inclusive Auditing? It has a nice ring to it, and underlines the centrality of the worker who works alongside the auditor rather than replacing her or him.

Rather than abandoning the audit model altogether at a time when we have no tried and tested alternative – let workers contribute to enhancing the quality of auditing.