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Primark case highlights auditor dilemma

It’s hard to have too much sympathy with one of the UK’s biggest discount retailers, but the recent experience of Primark and the controversy surrounding their somewhat dubious supply chain practices merely illustrates the potential pitfalls of global sourcing in such a highly competitive industry.

Panorama discovered that suppliers in Indian had sub-contracted work to home workers – a practice that had escaped the attention of those who audit the company’s factories in India.

However, it’s unlikely that Primark – who subsequently dumped the suppliers following the BBC investigation – is alone in falling victim to this kind of sub-contracting, which begs the question of whether the role of the supply chain auditors should be expanded.

As the procurement functions in the western world grow ever-more demanding then so the pressure on suppliers in the developing world grow. And tighter deadlines and order turnaround times in the current economic climate have inevitably placed suppliers, many of whom cannot afford to lose valuable business, in a difficult position.

Few would argue that auditors have a duty to look beyond the factories that supply some of the world’s most powerful companies, but how they gain access to the somewhat murkier world of sub-contracting remains to be seen.

And until they find a way, ethical sourcing concerns will abound.

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