China Seeks to Develop Domestic Standard for Corporate Social Responsibility (CSR)

February 15, 2005

Many foreign companies sourcing products from China have sought to have their suppliers’ factories certified by independent bodies and NGOs as meeting basic international labor and environmental standards. These programs frequently have been part of a company’s global corporate social responsibility (CSR) efforts. (For an overview of the CSR issues as they relate to the supply chain in China, see this 2004 statement of findings (.pdf document) by the Kenan Institute China CSR Working Group.)
Among the many certification standards, and perhaps the best known, is SA8000.

The Chinese government’s certification authority has announced its intent to restrict accreditation of Chinese factories under those standards and delay further accreditation until the China State Standardization Management Commission (中国国家标准化管理委员会) reports on the feasibility of a domestic Chinese standard. A new notice (in Chinese) from the Certification and Accreditation Administration of the People's Republic of China (CNCA) to this effect means that research on a Chinese CSR standard will continue, but without a timetable for implementation of any eventual standard. While that research continues, foreign companies that have obtained labor and environmental certifications in China must report them to the CNCA. In the future, the CNCA will permit accreditation only when necessary for international trade.

Since SA8000 requires (consistent with the International Labor Organization's core labor standards) that workers enjoy the right to organize and bargain collectively, CNCA may intend to use the regulatory process to limit the use of this standard in China, where workers lack the right to form independent unions. CNCA may also hope to rebut the impression that foreign companies have only non-Chinese methods of certifying that China-based manufacturers make products at the expense of worker health, safety, and welfare. But the Chinese government risks arousing the same frustration previously found when it has attempted to mandate the use of a domestic standard. If it fails to grant approval of accreditation audits to foreign certification bodies relatively liberally, CNCA may incite a significant backlash from foreign companies that want accreditation for their suppliers without delay.