The Importance of Social Compliance Audits

In the world of manufacturing and trade, social compliance is essential for success so a social compliance audit is a wise investment.

When it comes to quality standards, social compliance is as important as the products being produced in your supply chain and says a lot about an import or export business or brand. But what does it actually mean and why do you need to take it seriously?

Health and safety in the workplace have always been important and in 2020, there’s no excuse for not complying with certain standards in a factories and places of work where manufacturing is being done. Equality and working conditions are also other aspects that need to be considered for a company to tighten its grip on social compliance and be successful.

What is social compliance?

Social compliance is the steps and measures a company takes to ensure the safety, equality, and fair treatment of its staff and employees, as well as the working conditions and awareness of the environment.

It is the consideration of the lives, communities and local area that exist around a business’ services and supply chain and distribution operations. A company, business, or brand has a responsibility to demonstrate the best practices in order to promote social compliance, and in turn their output will benefit. Social compliance is all about social responsibility, and every company wants to be a socially responsible and environmentally friendly one in 2020.

What is a social compliance audit?

A social compliance audit – also commonly known as a social audit or ethical audit – looks at more than just what’s being produced in your supply chain. Where an inspection might look at the quality of your products on the production line, a social compliance audit looks beyond that to assess the working standards of a factory. The company should prove that it conducts its business while complying with certain social and ethical responsibilities and abide by local laws. An audit looks at all these things and more to offer peace of mind for your supply chain operation. Social compliance audits are voluntary and a third-party quality assurance company can be contacted to conduct them at the client’s convenience.

How does a compliance audit differ?

A compliance audit is performed to ensure a company adheres to certain rules and regulations of local laws or of a specific agreement. They would usually be conducted by governments and authorities. A compliance audit can relate to employment law, conditions of a workplace, taxes, or various other factors depending on what industry the enterprise operates in. A compliance audit can be performed by a range of different parties, again, depending on the conditions of the situation and arrangement while the sector again will determine who carries out the process.

One thing that’s guaranteed is it will be carried out by a third party to ensure fair and honest results. There are many different reasons a compliance audit could be carried out or ordered. A company could have broken certain rules in the past, for instance, and will need to be checked to make sure they have straightened out their issues to stay in line with their current operations.

Why is social compliance important?

In 2020, it’s important for companies and organizations to be ethical, fair to their employees and clients, as well as aware of the world around them. Sustainability is important for any business and demonstrating good practices when it comes to waste, pollution and the environment should be par for the course.

What does a social compliance audit monitor?

Some of the issues an audit could uncover include unfair pay, harassment, bad health and safety, underage labor, excessive working hours, and many other factors that would be considered unacceptable.

When a social compliance audit is finished by an ethical auditor, a report will be issued which documents the findings and includes pictures. At HQTS, some of the things our social compliance audit monitors include the following:

  • Child labor laws
  • Forced labor laws
  • Discrimination laws
  • Minimum wage laws
  • Worker living standards
  • Working hours
  • Overtime wages
  • Social benefits
  • Safety and health
  • Protection of the environment

How to conduct a social compliance audit

The following is a typical social compliance checklist. In order to ensure your company meets the required standards, you can take these steps to get an idea about where you stand.

  1. Review your company’s code of conduct and its code of ethics.
  2. Define your company’s “stakeholders” by identifying every individual or group that is affected by the performance or success of your business.
  3. Identify the social needs that affect all of your company’s stakeholders, including clean streets, crime and vagrancy reduction.
  4. Devise a system for identifying social targets, gathering data on addressing an issue and implementing strategies to positively affect the situation and reporting the results of those efforts.
  5. Contract with an independent auditing firm that specializes in social responsibility programs; meet with representatives of the audit firm to discuss your efforts and your need for an independent review.
  6. Allow the auditor to complete the independent verification process and then compare his results with the internal observations of the functional group leading your social responsibility effort.

What happens if a company is non-compliant?

If a company fails a social compliance audit, there might be a period of time where they can’t operate in a certain way until the issue is resolved. The company will also need to demonstrate that it complies once everything has been straightened out too. Corrective action is taken when a company fails a social compliance audit and the history of a supplier or factory will be documented in reports to show that it has previously failed an audit.

About HQTS

HQTS provides a range of audits including retail hygiene, cold chain management, Hazard Analysis Critical Control Point, and manufacturing process supervision, to ensure you meet safety standards when it comes to food processing. With over 25 years of experience in quality assurance, the company is ready to help your business build meaningful and robust supplier relationships across Asia and beyond. Our many service locations are prepared to be your one-stop-shop for factory audits for your social compliance needs.