Their effectiveness is questioned by some, while others believe they are essential for protecting businesses and improving working conditions. Is it possible for them both to be correct?

According to an Associated Press report published in late December 2018, the Statesville, North Carolina-based supplier was sourcing apparel from a Chinese factory that was allegedly employing forced labor. As soon as the story made headlines, Badger immediately halted all orders from the Hetian Taida Apparel Co. manufacturing facility in China. This was followed by an investigation that resulted in the company terminating its relationship with Hetian and pledging to no longer source from China's Xinjiang region, where press reports indicated that more forced labor was taking place.

Despite taking swift action, Badger was immediately affected by the consequences. Clients with a high profile, such as colleges and universities, have pulled Badger apparel from campus stores and issued statements stating that they will no longer do business with the company. Although Badger claims that the factory produced only about 1% of its apparel, the company's name continues to appear in media reports about forced labor. Even more infuriating for the company is the fact that Badger executives claimed that the Hetian Taida facility had undergone an audit.

According to the cautionary tale, it is critically important to ensure that the factories that produce promotional products for businesses operate in an ethical manner. Numerous stateside companies in the promotional products and other industries have relied on factory audit services to ensure that their manufacturing facilities meet their social compliance standards over the last couple of decades. In spite of this, in the wake of a number of high-profile tragedies and exposés, an increasingly vocal contingent of critics is calling into question the veracity and efficacy of the audits in question.

One recent report from Brigham Young University found that factory audit services conducted in four Southeast Asian countries between 2003 and 2010 did not result in significant improvements in working conditions for employees.

Clean Clothes Campaign, a labor rights organization based in the Netherlands, took a tougher stance last September, releasing a study that claimed audits had "failed spectacularly" in their efforts to protect garment factory workers. Instead, according to the findings of the study, audits are merely a ruse for protecting a company's brand reputation. The report used the April 2013 collapse of the Rana Plaza factory building in Bangladesh as an example of what can happen when a factory building collapses. The tragedy claimed the lives of more than 1,100 garment workers who were working for low wages. According to the Clean Clothes Campaign, a factory audit conducted not long before the poorly constructed building collapsed failed to detect significant safety defects or the use of child labor in the factory. According to Kalpona Akter, founder of the Bangladesh Centre for Worker Solidarity, "It's shocking that no one – not a brand, not an auditing firm – has been held to account for the massive loss of life."

Is it possible to put faith in factory audits? Do they take steps to ensure that a supply chain is free of abuses? After all, it is not only the company's reputation that is at stake; it is also the lives of individuals.