Representative Chris Smith and Senator Jeff Merkley led a hearing this week on the effectiveness of social compliance audits in uncovering forced labor in supply chains in China. The hearing, titled “Factories and Fraud in the PRC: How Human Rights Violations Make Audits Impossible,” shed light on the shortcomings of social audits in identifying labor abuses in major industries.
In his opening statement, Representative Chris Smith criticized social audits as "another fig leaf…to signal their virtue to consumers [and] a near fiction when it comes to accurately portraying the state of labor in the People’s Republic of China." He emphasized the need for enforcement action against companies that mislead shareholders about forced labor in their supply chains.
Senator Jeff Merkley raised concerns about the reliability of audits in an environment where workers cannot speak freely and auditors face obstacles in obtaining necessary information. He stressed the importance of companies certifying that their products are free of forced labor and partnering with authorities to improve human rights conditions in China.
Thea Lee from the U.S. Department of Labor highlighted the challenges faced by workers in identifying and reporting labor abuses, especially in state-sponsored forced labor environments. She emphasized the Department's commitment to enforcing the Uyghur Forced Labor Prevention Act to protect workers' rights and ensure fair trade practices.
Adrian Zenz, from the Victims of Communism Memorial Foundation, provided detailed testimony on Volkswagen's complicity in forced labor and the limitations of social audits in uncovering such abuses. He called for legislation mandating disclosure of supply chains to prevent ties to forced labor.
Jim Wormington from Human Rights Watch highlighted the insufficiency of social audits in addressing the risk of forced labor, particularly in the car industry's aluminum supply chains. He urged companies to map their supply chains and disengage from sources linked to forced labor.
Scott Nova, Executive Director of the Worker Rights Consortium, criticized the failures of social auditing systems and called for regulatory oversight to hold auditors accountable for underreporting labor violations.
The hearing aimed to address the challenges of uncovering forced labor in supply chains in China and highlighted the need for greater transparency and accountability in corporate practices. The statements and recommendations made during the hearing can be accessed on the CECC's hearing webpage.
