Bangladesh second in ethical auditing practices in supply chain: survey

Bangladesh has come second on a list comparing ethical auditing practices of major countries undergoing industrialisation, that too during the 2020 pandemic period, according to a first quarter report by supply chain compliance solutions provider QIMA released last week.

The Hong Kong-based entity cited good practices by local suppliers in the global supply chain for the country's placement.

In the ethical auditing survey, which mainly focuses on health and safety, hygiene, waste management, child labour, working hours, benefits and labour practices, Taiwan scored the highest.

Vietnam came in third, followed by Thailand, Pakistan, Turkey, China, India and Brazil.

Even though China landed a better year than anticipated, the pandemic gave a powerful boost to the long-term trend of shifting buying volumes to its regional competition, said the QIMA, derived from "Quality Inspection Management".

The demand for inspections and audits in Southeast Asia rose 19 per cent year-on-year across the board in 2020.

As a whole, this region recorded double-digit expansion in inspection and audit demand starting from July, buoyed by buyers looking for alternatives to China both in the short and long term, as well as by massive orders for personal protective equipment (PPE).

Meanwhile, recovery was markedly slower in South Asia, including Bangladesh, and rose only by 2.6 per cent year-on-year, a fraction of the double-digit year-on-year growth recorded in 2019.

The region's manufacturers had a hard time coming back from the collapse in April and May, made catastrophic by the combination of regional lockdowns and demand decimated by lockdowns in the West.

The continuing waves of quarantine measures and unprecedented number of people working from home in the West have already been reflected in the changing consumer habits, in turn impacting global trade flows.

Keeping up with fashion trends and updating wardrobes has clearly slipped down on the list of consumer priorities.

Demand for textile, apparel and footwear inspections decreased 11 per cent year-on-year globally, having remained in a slump across the board since March, bar a brief rebound in September and October.

The intertwined challenges of the Covid-19 pandemic have strongly exacerbated human rights risks in global supply chains.

Issues range from increased vulnerability to modern slavery and child labour (resulting from high poverty risks caused by mass job losses), to labour violations in factories and less scrutiny on non-virus related safety measures due to health and safety resources being stretched thin.

The QIMA ethical audit data collected at reopened factories as well as in the course of remote audits paint an alarming picture for critical non-compliances.

Some of the most pressing issues are in the area of working hours and wage compliance. For instance, in China, 14 per cent of factories audited were given a failing grade due to critical violations in the area of working hours and wages.

Examples of violations include sanitation duties being imposed as unpaid overtime, as well as workers being pushed to work excessive hours to meet tight schedules for high-demand goods, such as PPE.

Almost a year into the Covid-19 crisis, uncertainty and disruption continue dominating global trade.

In 2021, global sourcing is liable to remain at the mercy of the pandemic, emphasising the importance of supply chain agility and efficiency for the continued survival of any business.

Looking back at a year of truly unprecedented disruption to global sourcing, the QIMA's 2020 data paints a picture of increasingly diversified supply chains, changing consumer habits and an alarming spike in ethical risks, the QIMA said.