The auditor’s role in supply chain due diligence


As border issues remain unresolved, more instances are coming to light of migrant children working illegally in the United States.

A recent New York Times report detailed alleged examples of migrant children working for U.S. suppliers of well-known consumer products, including Oreos, Gerber baby snacks, and McDonald’s milk, in violation of child labor laws.

Social compliance audits have become a multibillion-dollar global industry, as corporations hire firms—sometimes confidentially—to perform hundreds of thousands of workplace safety inspections each year and solve potential public relations issues when supply chain or labor matters surface.

The NYT report’s focus was that private auditors from large firms failed and consistently missed child labor law violations. Auditors moved quickly and left before children arrived for overnight shifts, or they were not sent where minors worked. Children used fake identification; auditors came up against language barriers; or subsuppliers in the supply chain were not audited (e.g., a company obtains milk from a dairy farm processor; the auditors audit the processor but not the dairy that supplies the milk).

In their defense, the auditors responded that company management is responsible for enforcing standards and that an audit is a snapshot that does not guarantee full compliance with requirements or laws. They reported pressures to deliver light-touch findings from the firms that hired them or companies or suppliers that arranged and paid for the audits. Auditors were often required to announce inspections before they arrived, so factories “gamed” the results.

Who is responsible?

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