Factories and Fraud in the PRC: How Human Rights Violations Make Reliable Audits Impossible

Social compliance auditing and certifications of factories and supply chains in the People’s Republic of China (PRC) proliferated over the past 20 years as global brands and retailers sought to respond to concerns over human rights and environmental abuses in their supply chains. The Uyghur Forced Labor Prevention Act requires that supply chains be free of forced labor, yet companies are using social audits and certifications to help cover up rather than expose human rights abuses. The recent controversy over German automaker Volkswagen’s use of an auditing company to state that there was no forced labor at its factories in the Xinjiang Uyghur Autonomous Region (XUAR) is an emblematic case that raises questions about corruption, conflicts of interest, unreliability, and other problems with social audits, particularly those conducted in the XUAR, where state-sanctioned forced labor is endemic. The purpose of this hearing is to shine a light on abuses of third-party social audits and certifications in the PRC, and to determine what additional steps need to be taken to uncover human rights violations and labor abuses in supply chains in China.

This hearing builds on previous hearings hosted by the Congressional-Executive Commission on China (CECC), highlighting labor abuses in the PRC’s fishing and seafood processing industries and the complicity of corporations in forced labor. Witnesses will describe the connection between social audits and global brands and retailers in China, as well as the problems associated with social audits in the PRC, and offer recommendations on what more can be done to ensure supply chains are free of goods made with forced labor.

The hearing livestream is archived on the CECC’s YouTube channel.

Hearing transcript