The full report can be found here on our website: 41kb pdf)

EXECUTIVE SUMMARY

This report presents the first systematic public analysis of the monitoring methods employed by PricewaterhouseCoopers (PwC) to inspect factory labor practices around the world. The author accompanied PwC auditors on factory inspections in China and Korea, and evaluated PwC’s findings for a factory in Indonesia. In these inspections, PwC auditors found minor violations of labor laws and codes of conduct.

However, the auditors missed major labor practice issues. Auditors failed to note:

• Hazardous chemical use and other serious health and safety problems;
• Barriers to freedom of association and collective bargaining;
• Violations of overtime laws;
• Violations of wage laws;
• Timecards that appeared to be falsified.

  These omissions are due to problems in PwC’s monitoring methods. PwC auditors gathered information primarily from managers rather than workers, depending largely on data provided by management. Worker interviews were problematic. All interviews were conducted inside the factories. PwC auditors had managers help them select workers to be interviewed, had the managers collect their personnel files, and had them bring the workers into the office for the interviews. The managers knew who was being interviewed, for how long, and on what issues. PwC auditors conducted very limited inspections of health and safety conditions in the factories. The auditors failed to note a number of critical workplace health issues. The factory inspection reports PwC produced did not convey an accurate picture of the conditions in these factories.

  The reports are so condensed that they miss major issues and paint a false impression of a factory’s compliance with local laws. This analysis shows that PwC’s monitoring methods are significantly flawed. Universities and firms interested in auditing labor conditions in the factories producing their goods should consider other monitoring methods and should demand improvements in current monitoring schemes. Independent monitoring can play a positive role in improving factory conditions, but only if it is much more transparent and accountable, includes workers more fully, and can be verified by local NGOs and workers themselves.