From the Executive Summary:

“Persistent problems have been documented in the effectiveness of social auditing and ethical certification schemes when it comes to preventing, detecting and addressing forced labour. Yet, companies continue to turn to these private tools to fulfil their duties under due diligence and transparency legislation, and as strategies to respond to pressure to detect such human rights violations and shield themselves from liability when it does occur. A growing body of academic research highlights the failures and flaws in social auditing and ethical certification, and that these systems fundamentally do not work to improve labour conditions over time.

Rather, social auditing and ethical certification systems have been found to sideline workers, unions, and local communities, providing unclear benefits for suppliers and producers while increasing their costs in order to comply. Crucially, social audit and ethical certification systems are rife with conflict of interest and circumvent the portions of supply chains where forced labour is most likely to take place. They outsource labour governance to for-profit actors who refuse to guarantee the quality and accuracy of their services, muddying the waters of accountability and responsibility for labour abuse and working conditions. Ultimately, these systems create an illusion of progress that fuels complacency and displaces effective solutions to address forced labour in supply chains. I

In recent years the social compliance industry has awoken to these limitations and there is growing discussion of the need to improve forced labour detection and remediation systems. To date, reform efforts have centred around improving ethical certification standards and audit methodologies on paper, but there is little evidence that incremental improvements are leading to meaningful change on the ground. These systems remain overwhelmingly flawed and limited…

While there is growing acknowledgement of the social compliance regime’s flaws, there has been less attention to how these gaps could be meaningfully addressed. With that in mind, this Brief explores: How can social auditing and certification be adequately regulated or reformed to play a role in eradicating forced labour? What is the potential to reinvest the cost of these mechanisms into more effective solutions?

Tackling these questions, the Brief maps out how monitoring tools would need to change to play a role in promoting labour standards. We stress the need to establish liability for auditors and certifiers that play a role in misleading consumers and policymakers—willfully or not—about labour practices and worksite conditions, including for the accuracy of their reports and the role they play in obscuring criminal practices.

Reforms proposed include increasing NGO and union involvement and disrupting financial conflict of interest by creating a pool of auditors that companies do not pay directly. We argue that more meaningful and promising third-party verification and monitoring systems are worker-led, and that funds spent on auditing and certification could be channelled into more effective worker-driven and state-led solutions.