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Human Resources

Tackling International Data Exchange

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In today’s global economy, the supply chains of brands and retailers can stretch far and wide and include outsourced manufacturing in dozens of countries.

Outsourcing of manufacturing does not absolve responsible companies from making sure that this contracted work is performed in ways that protect the health, safety and human rights of workers, and to ensure that manufacturing processes do not further harm the environment. The reputation of brands and retailers can be irreparably damaged by allegations of “sweat shop” abuse or careless oversight of harmful manufacturing processes.

Forward-thinking brands and retailers have developed comprehensive corporate social responsibility programs that include inspecting and monitoring outsourced factories: Many of these companies have joined various multi-stakeholder groups to work with other brands and retailers to help create sustainable improvements in outsourced factory practices.

One of the major barriers to faster progress in achieving outsourced factory improvements is the free flow of information about factory conditions among all of the brands and retailers sourcing products from the same place. There is no shortage of reasons why this data exchange does not yet exist: Approaches to factory auditing have not been harmonized, and the free-flow exchange of factory audit information faces legal, ownership, anti-trust and confidentiality issues.

The current landscape of audit software tools falls into the classical islands of automation realm — being useful for their primary purpose of helping companies manage their own compliance work, but less useful when trying to collaborate with others. Even if these stand-alone databases could talk to one another, there are no recognizable international technical standards that could facilitate the exchange of this audit information at the field-by-field data element level that would support proper data mapping.

I first became aware of the need for these sorts of standards through my work with Reebok and adidas Group. In my capacity as executive director of the nonprofit Fair Factories Clearinghouse (FFC), I asked ARTS to take on the development of these audit technical standards. As a longtime ARTS board member, I believe that the ARTS methodology of involving retailers and software companies in the development of industry standards is critical to tackling a new data exchange issue this complex.

The ARTS audit exchange team has begun its work, and the international support behind this long-overdue data exchange issue has been gratifying. In addition to FFC, other important nonprofit organizations have joined the ARTS audit exchange team, including Washington D.C.-based Fair Labor Association (FLA), London-based Supplier Ethical Data Exchange (Sedex) and Brussels-based Business Social Compliance Initiative (BSCI). In addition, this initiative has been closely linked to the Paris-based Global Social Compliance Programme’s Expert Working Group on data sharing. Collectively, these nonprofits represent the corporate social responsibility needs of thousands of retailers and suppliers.

ARTS’ unique approach to developing technical standards can help this newly created international coalition create a new data exchange technical standard that can go a long way to improving worker conditions in outsourced manufacturing, tightening up supply chain security and protecting the environment from harmful manufacturing practices.

The next face-to-face meeting of this work group will take place at the ARTS Quarterly Meeting, November 7-9 in Delray Beach, Fla., and we hope to release the first version of this standard at the NRF Annual Convention & EXPO in January.