Compliance Programs: Social Accountability Is A Good Place To Start
Throughout the past few years, I have had many conversations with companies who understand and use World Responsible Accredited Production (WRAP) and Fair Labor Association (FLA) certifications as their compliance programs. These companies are to be commended for making it a practice of using WRAP or FLA certifications as part of their factory qualification process, and on some level this makes sense. These are good programs, so why would you go through the trouble and expense of building your own compliance program when you can tout something that your factory has accomplished?
While these programs have merit, they just address one area of compliance—and they may not transfer through to your organization. While social accountability is a good place to start being compliant, these programs don't constitute a true compliance program. Here's why (but first, a little background):
Driven by the shoe and apparel industries, WRAP is a factory-level program that has been around since the late 1990s and could arguably be considered the predecessor to the Corporate Social Responsibility programs (CSRs) many Fortune 1000 companies now have in place. Most of these CSRs embrace the UN Global Compact's 10 principles in the areas of human rights, labor, the environment and anti-corruption. These principals are the primary factors being evaluated in social responsibility audits. FLA evolved out of a Presidential Roundtable, is somewhat similar in scope and has gained traction through the support of organizations such as Nike and Adidas who are heavily invested in social accountability efforts.
It's also common to run into companies who are using Social Accountability 8000 (SA8000) as their basis for social accountability audits. SA8000 has created standards for what a universally recognized social accountability audit should include.
So why are these programs only a good start instead of a complete solution? Well, WRAP and FLA, for instance, are generally factory-level certifications that focus solely on social accountability. In other words, if you are using only WRAP and FLA, you could very well be outsourcing your compliance program to your factories—giving them all the control while putting you at risk for any noncompliance.
The same approach is also being taken by hard goods companies when they refer to using a Disney or Coke certified factory. No doubt these audits imply a sense of the factory's capabilities in the areas of compliance, but this does not mean a comprehensive compliance program is in place. Rather, these factories have been audited to the specifications Disney or Coke have in place. As I've mentioned in a previous Compliance Chat blog post ("Picture Day" - Why Factory Audits Aren't Enough), there are many issues with using audits and only audits as your compliance program.
Social accountability requirements and regulations such as California Prop. 65 have been embraced and around long enough that they have almost become entry-level compliance standards. But the introduction of the Consumer Product Safety Improvement Act (CPSIA) as well as additional state-level product safety regulations changed the game. Social accountability is no longer enough. Today, having a comprehensive compliance program that not only includes product safety but also addresses your clients' corporate social responsibility needs is essential. You are making a major blunder if you outsource product safety, social accountability or any other aspect of compliance.
WRAP and FLA are great programs that address social accountability, and they are a good place to start the compliance journey. However, you must understand that they are a component addressing one area of a comprehensive compliance program, which should also include product safety, product quality, environmental stewardship and supply chain security.
If you have ever worked with any of the Fortune 1000 companies that have their own compliance teams, you realize they rarely outsource the responsibility for compliance to the factories that are manufacturing products on their behalf. Rather, they retain control to ensure the compliance standards they have set for themselves are truly being met. Learn from their best practices, and you'll be headed in the right direction.
Brent Stone is executive director - operations for Quality Certification Alliance (QCA), the promotional products industry's only independent, not-for-profit organization dedicated to helping companies provide safe products. A Six Sigma Black Belt, Stone has more than 25 years of in-depth supply chain management experience with extensive expertise in process design, development, improvement and management. He can be reached at firstname.lastname@example.org or visit www.qcalliance.org for more information.