The Fair Labor Association (FLA) is one of the best-known organizations supporting and promoting fair labor conditions inside factories. FLA’s Participating Companies include mostly apparel and footwear companies such as Adidas, HandM, Nike and Patagonia. This year, Apple signed on after it came under fire for the working conditions at Foxconn, the largest producer of Apple products. It is the aim of the FLA to identify root causes for the unsafe and unfair working conditions in factories. To that end, it is currently rolling out a Sustainable Compliance assessment methodology to improve conditions in factories from the core rather than with a Band-Aid approach.
Lo and behold, many of the solutions to address the root causes of factory violations lie in human resources policies and procedures. My column usually covers the sustainability-human resources connection played out in the United States. Today’s article looks at human resources policy as a contributor to improving the rights of workers globally. The FLA’s Sustainable Compliance assessment methodology will play a critical role in helping companies and other stakeholders ensure a holistic assessment approach that can sustain good working conditions over the long haul.
Empowered stakeholders recipe for comprehensive compliance
This new methodology underscores employee-responsive management systems and higher levels of worker engagement in the design, application and evaluation of human resource policies. FLA identified the functions essential to the employment lifecycle of a factory worker:
· recruitment, hiring and personnel development;
· health and safety;
· termination and worker retrenchment;
· compensation;
· hours of work;
· industrial relations;
· grievance system; and
· workplace conduct and discipline; and environmental protection.
Each employment function is analyzed through the lens of six management functions, namely policy and procedures; responsibility and accountability; review process; training; implementation; and communication and worker involvement. This methodology creates a standardized reporting tool that can produce scores for each of these employment and management functions, offering stakeholders the ability to benchmark, compare and track improvements.
These metrics give consumers and civil society organizations the tools to make better purchasing decisions and businesses the incentives to go beyond just rudimentary labor practice requirements. As Christine Bader recently wrote, while it’s positive many companies are being more transparent with their labor practices, how does a consumer really know what’s behind the product if “they aren’t part of the best-known (at least to me) certification schemes like the FLA, which has primarily large companies sign on (and pay) to have independent monitors inspect their factories.”
FLA is using the Sustainable Compliance assessment methodology in all factories visited for the 2012 independent external assessment cycle and beyond. It also plans to conduct worker surveys, or SCOPE Assessments, in a subset of the factories this year. The new tool’s protocol is centered around training FLA assessors to weed out the various facets of how a factory deals with and executes these crucial functions. It may look for the existence of an established policy, how thoroughly the policy is conveyed to workers and managers, how reliably the policy is applied, and what the policy’s impact on workers is.
FLA finds a strong recruitment function can improve worker conditions because many issues like hiring young workers or discrimination typically have a trail that leads back to the absence of a recruitment policy or poor enactment of such policies. For example, if a factory does not have an established age verification system, the factory risks non-compliance as a result of holes in the management system, regardless of whether the factory shows the assessor at the time of audit that they in fact do not have underage workers present. A traditional audit may only detect underage workers, but not necessarily avoid the factory committing this same violation down the road.
Worker health and safety game changer
Health and safety is another employment function that will see vast improvement using the new methodology. Let’s say in a traditional assessment, it is revealed that a factory worker is not wearing the appropriate hearing protection equipment in a high-noise area. The auditor might come to the hasty assumption that management is at fault for not providing the correct equipment. Upon further inspection, the auditor discovers management did provide equipment to the worker with written information emphasizing the importance of wearing it.
In contrast, utilizing the Sustainable Compliance methodology, an FLA assessor can get down to the heart of the matter to uncover that the written instructions were not in the worker’s native language, nor did they instruct how to use the equipment properly. Whereas a traditional audit may have marked this as a missing protective equipment violation, the new tool goes a long way toward helping guarantee workers’ future use of such equipment.
Rehabbing retrenchment and transforming termination
If workers don’t understand their legal entitlements, there is a high risk that they will not seek proper compensation or they will not receive the wages and benefits they are owed should a permanent layoff or retrenchment occur. Additional risks are posed to workers if factory management does not consult with them or with their union representatives about alternatives to avoid temporary or permanent layoffs or retrenchment, which arguably could result in poor labor relations at the workplace.
During conversations with factory management and a review of existing procedures, an assessor using FLA’s Sustainable Compliance methodology might discover that management does not see the need or the benefits of consulting with workers or their representatives regarding termination. In this case, the assessor might recommend the development of policies and procedures to ensure that workers or their representatives are consulted when layoffs or retrenchment are being considered, and that all workers and managerial staff are trained on the implementation of these procedures.
Compliance gets a mental health makeover
Your run-of-the-mill audit clearly has some gaps due to using what FLA deems an incomprehensive “checklist” methodology that may address negative labor practice indicators, but ignore the fundamental unsound practices themselves. This leaves room for the same violations to reoccur, which is indeed the definition of insanity — doing the same thing over and over again, but expecting different results.
FLA wants to help businesses get on the sane side of compliance and monitoring history, designing this new methodology to be the catalyst for a major paradigm shift in the social compliance world that steps away from one-off, short-term solutions and moves toward sustained progress in employment functions. Ultimately, FLA anticipates that the Sustainable Compliance assessment methodology will be the industry norm for social compliance monitoring.