"Social audits are not due diligence"

Anna Triponel

October 18, 2021
Our key takeaway: The gaps left by social audit systems in addressing human rights make such systems ineffective tools to meet mandatory due diligence legislation. Policymakers should build in approaches that emphasise systematic human rights risk assessment, engaging more deeply and meaningfully with stakeholders, creating strong grievance mechanisms and ensuring access to remedy for harms.

The Business & Human Rights Resource Centre (BHRRC) published ‘Beyond Social Auditing: Key Considerations for Mandating Effective Due Diligence’, a briefing note focusing on ways to effectively enforce and evaluate meaningful due diligence in legislation, in ways that go beyond social auditing:

  • Legislation should not rely on social audits to demonstrate compliance: The paper highlights the various gaps and pitfalls of reliance on social audits for “detecting, addressing and remediating human rights abuses,” and points out that—after several high-profile audit failures at Rana Plaza, the Brumadinho tailings dam, and rubber glove manufacturer Top Glove—”[g]overnments, and even auditors themselves, are starting to acknowledge the shortcomings of the model.” In short, the audit system with its current flaws cannot be relied upon to provide evidence of meaningful human rights due diligence to comply with mandatory due diligence laws.
  • Legislation should take a risk-based approach rather than an audit-driven approach: “Audit-driven approaches tend to focus on a company’s upper-tier suppliers, where there is clear contractual or commercial leverage; while social audits as part of commodity certification may cover lower tiers, here too problems of reliability and systemic limitations persist.” Conversely, a risk-based approach looks first at the risks and impacts on people, including the most vulnerable, and defines actions and priorities based on where those risks are greatest. Taking a risk-based approach also comes with a host of other crucial pieces that make up a robust human rights management strategy, such as “broader risk mapping, detailed human rights impact assessments, on-site relationship-building and, crucially, the involvement of local stake- and rightsholders.” Even if companies are initially unable to pinpoint suppliers deep in their supply chain, the risk-based process requires companies to build supply chain transparency to illuminate the blind spots that might otherwise be missed in social auditing.
  • Legislation should allow for safely engaging with stakeholders and ensuring access to remedy for harms: BHRRC points out that many social audit processes often do not engage “with (potentially) affected groups, workers, including local unions and worker-led organisations, and other relevant stakeholders (in particular marginalised groups and human rights, environmental and land defenders).” Stakeholder input should “inform all stages of the due diligence process (UNGP 18).” In terms of remedy, the “ultimate goal of due diligence is to prevent and address harm to people and the planet; this has to go hand-in-hand with remediation and reparation for individuals or groups where adverse impacts occur.” HRDD legislation should require companies to establish strong grievance mechanisms—something that many social audits and certification systems do not do. Notably, “‘Remediation plans’ in the audit context often do not even foresee remedy for specific individuals or groups who have already been harmed.”

For more, see Business & Human Rights Resource Centre, Beyond Social Auditing: Key Considerations for Mandating Effective Due Diligence (October 2021)

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