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Continuing from the previous blog on the Congressional-Executive Commission on China (CECC) hearing earlier this week “Factories and Fraud in the PRC: How Human Rights Violations Make Reliable Audits Impossible.” While some criticism of social auditing is warranted (Scott Nova, Executive Director, Worker Rights Consortium gives numerous examples of why in his testimony that may actually be a little too critical), specifically in China auditors can’t be solely blamed. Pressure from the authoritarian Chinese government apparently is a problem as pointed out by Congressman James P. McGovern, a CECC Commissioner:

“Of 29 firms listed by Social Accountability International as qualified to conduct certification inspections of manufacturers in China, five have announced they will no longer conduct social audits in Xinjiang because conditions simply do not allow them to do so.”

Thea M. Lee, United States Department of Labor Deputy Undersecretary of Labor for International Affairs, went further in her statement:

“… auditor interviews with workers cannot be relied upon given pervasive surveillance, the threat of detainment, and evidence of workers’ fear of sharing accurate information. Moreover, auditors have reportedly been detained, harassed, threatened, or stopped at the airport. That is why dozens of major audit firms have not operated in Xinjiang for years; the fear of reprisal for both workers and auditors remains high. Social audits in China should not be seen as an authoritative source for companies reflecting on-the-ground human rights conditions. The business community needs to be aware that any audits, and frankly any business operations undertaken inside China, carry heightened labor and human rights risks.”

Nova said this:

“The answer with respect to auditing within the Xinjiang Uyghur Autonomous Region is simple: they can’t. In March 2020, I testified to this Commission that ‘No Uyghur worker in the XUAR can possibly feel safe speaking candidly… The only answer a worker can safely give to the question of whether her labor is voluntary is ‘yes’… At this point, no firm should be conducting audits in the XUAR. The only purpose audits can serve is to create the false appearance of due diligence and thereby facilitate continued commerce in products made with forced labor.’

… the Chinese government, in policy and practice, is actively seeking to undermine the ability of auditors to expose labor rights abuses at facilities in China producing for export.”

Having your life or safety put on the line because of audits is more serious in other countries than we Americans appreciate. As a consultant, I once had my safety seriously threatened because of one finding at a facility. Yet, even given the remote southwest US desert location, I was confident in the rule of law. I walked out of the closing meeting specifically designed to intimidate and wrote my finding as planned. The client’s Board of Directors backed me up as well and changes were made at the facility. But that approach won’t work in China. That reality must be recognized.

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The Editor

Lawrence Heim has been practicing in the field of ESG management for almost 40 years. He began his career as a legal assistant in the Environmental Practice of Vinson & Elkins working for a partner who is nationally recognized and an adjunct professor of environmental law at the University of Texas Law School. He moved into technical environmental consulting with ENSR Consulting & Engineering at the height of environmental regulatory development, working across a range of disciplines. He was one… View Profile