An overwhelming 93.8% of all verified assessments of facilities include at least one non-compliance, and the average number of legal non-compliances per verified assessment stands at a high of 10.1, according to the 2023 Impact Report of the Social and Labor Convergence Program (SLCP).
- This was the final year of SLCP's first five-year strategic plan and the fifth year of implementation of the Converged Assessment Framework (CAF).
- Overall, legal non-compliances increased by 5% compared to the previous year. Health & Safety remains the section with the highest number of legal non-compliances.
- Small and medium enterprises (SMEs) have more legal non-compliances than large facilities.
THE OVERALL NUMBERS: Over the past five years, SLCP has grown twenty-fold in terms of adoption. By the end of 2023:
- 6.6 million workers were covered by SLCP assessments in 2023;
- SLCP is available in 62 countries and regions;
- 12,000+ facilities were registered in the Gateway;
- 9,230 assessments were carried out in 2023;
- 74 organisations had accepted the SLCP’s framework.
THE POSITIVE ELEMENTS: With 9,230 facilities having completed an assessment in 2023 alone, SLCP estimates that this unlocked savings of up to $26 million that can be reinvested in improving working conditions.
- By the end of 2023, 74 of the world's leading brands, retailers and standards holders publicly committed to accepting SLCP data instead of proprietary audit tools.
- It opens up the huge potential for a facility to share one social and labour data set with a large number of buyers, clients and partners, resulting in reduced audit fatigue, the report said.
NON-COMPLIANCE TRENDS: Legal non-compliances are assigned to a data point in SLCP's Data Collection Tool when the Verifier identifies that the facility's situation is not in line with local legal requirements. The verification summary in the assessment report provides an overview of the facility's legal non-compliances. Due to changes in the CAF versions, a sample of244 CAF keys were selected to complement the analysis to avoid underestimations.
- The average number of legal non-compliances in SMEs was higher than that of large facilities in 2023, and rose 7% from 2022. However, the proportion of facilities with at least one legal non-compliance remained the same for both facility types.
- In 2023, 92% of repeat users had at least one legal non-compliance, down 2 percentage points from 2022. Repeat users showed an average of 9.3 legal non-compliances, lower than the overall average of legal non-compliances. Although the level of legal non-compliances in repeat users remained the same as in 2022, the gap between repeat and new users increased moderately. [SLCP considers repeat users facilities that complete assessments in two consecutive years.]
The most frequent legal non-compliance data points in 2021 included:
- Working Hours: Are all overtime working hours in line with legal limits? 49.2% answered No.
- Working Hours: Are all legal overtime limits not being complied with? 47.4% answered No.
- Wages & Benefits: Are facility social insurance contributions (both calculations and types required) in line with legal requirements? 38.2% answered No.
- Health & Safety: Are legally required guards properly installed and maintained on all dangerous machinery and equipment? 27.5% answered No.
- Health & Safety: Are health checks of workers conducted in line with legal requirements? 17.2% answered No.
- Working Hours: Are the weekly rest days provided by the facility in line with legal requirements? 16.3% answered No.
- Health & Safety: PPE equipment and clothing provided is consistently and effectively used by workers? 16.7% answered No.
- Wages & Benefits: Is the facility collecting and forwarding workers’ contributions to social insurance in line with legal requirements? 15.7% answered No.
- Health & Safety: Are chemicals and hazardous substances stored in line with legal requirements? 13.9% answered No.
- Health & Safety: Are building/construction, structural safety and fire permits and certificates in line with legal requirements? 13.4% answered No.
CHALLENGES FOR SMES: SMEs have to overcome challenges while navigating the different requirements in terms of human rights due diligence (HRDD). Among them:
- The lack of knowledge of regulatory obligations and difficulty translating policy obligations into practice.
- The limited access to resources needed to adopt business practices that can support the implementation of due diligence.
