More Filipino manufacturers and exporters should make their operations socially compliant which is important as they expand in the local and international markets.
“Social compliance is now a global standard, and a responsibility both by the exporter and the importer… Today, it is a fundamental consideration when evaluating a factory’s ability to compete in the international market,” said Robert Young, trustee for the textile, yarn and fabric sector of the Philippine Exporters Confederation Inc. (PHILEXPORT) and president of the Foreign Buyers Association of the Philippines (FOBAP).
Young said social compliance refers to factories that maintain lawful, safe, and respectful working conditions; and have no negative impact to the environment.
He cited as an example contaminating-polluting water-air caused by indiscriminate disposal of waste materials, operating a factory where human rights are respected and workers are paid fairly, and where their safety and health are not put at risk.
“In today’s world of being politically correct, being inclusive, respectful of human rights, protecting the environment and sustainability, the matter how we operate our businesses, how we source raw materials, how we process products, and how we dispose of resulting waste materials, and how our business affect our workers, the general public, and environment, have become a central focus and concern by the global market,” he said.
As Filipino entrepreneurs export to the United States, Asia, Europe and other parts of the world, Young said foreign buyers are more concerned about maintaining the integrity and reputation of their company and brand.
“They want their brand and their reputation as a company to be associated only with positive, healthy, clean, safe and quality.
Maintaining integrity is key! For this reason, these companies make sure their products are produced only by factories that maintain lawful, respectful, safe working conditions,” he added.
Young said assessment or audits for social compliance can be performed by several parties, including laboratories, depending on the buyer or importers’ requirements.
“Those importers with designated buyer representative office may have in-house auditors as well as their own due diligence practice in qualifying deserving factories, an effort to protect the reputation of the company/brand they represent,” he said.
Young further said businesses dealing with several importing countries can be audited multiple times even if the standards are similar.
“Depending on audit results, a re-audit may be done in three and six months depending on the buyer’s policy. Generally, social compliance audit is conducted once your factory has been identified to qualify as a vendor prior to any actual order being awarded. There could be some exceptions and again, this may differ from customer to customer,” he said.