Collaboration in a Competitive Environment

There are many ways in which brands can collaborate (without falling foul of anti-trust legislation) to create sustainable improvements in global supply chains.

Where multiple brands source from the same factories, you could align your codes, and collaborate on audits. There is little reason for each of the brands sourcing from the same supplier/factory to do their own audit, if they can accept just one audit done by a good quality auditor. This is a win-win solution for both suppliers and brands. Suppliers do not have to deal with the pressures of multiple audit teams visiting the factories at very regular intervals, while brands can cut down on their audit staff and expenses.

This collaboration could result in a much needed improvement in audit quality. Everyone knows that the average audit is typically just a couple of days long, and it is very hard to uncover violations of FOA and discrimination in that time frame. Moving to one VERY ROBUST audit spanning a much longer period will improve audit quality.

The “holy grail” of collaboration in a competitive environment would involve just ONE globally accepted industry standard, ONE globally accepted audit tool, and one (very high) standard for auditor training and certification. None of these exist today.

Collaboration in a competitive environment is not new in the industry. Both the Accord and the Alliance evidence inter-brand collaboration to different extents. Other voluntary industry-wide coordination efforts (such as Better Work) are gaining ground. SAC has recently called for industry wide collaboration on these matters. The World Economic Forum goes a step further in its recent white paper (Nov. 2015) advocating “shared responsibility” in which local and global businesses, international organizations, unions and foundations need to work together, focusing on transparency, in attempting to solve human rights challenges. Shared responsibility requires the adoption of “industry-wide” systemic approaches, gaining visibility through increased transparency, and generating cooperative approaches based on a more equitable sharing of responsibility for action amongst key stakeholders. We feel that such collaboration is a surer way to prevent a race to the bottom, and is crucial to efforts to introduce fair or living wages in supply chains. And such collaboration is inevitable where sectoral bargaining occurs (likely in Cambodia). Thus, there seems to be convergence regarding the need for more collaboration.