In the wake of the April 24 collapse of the Rana Plaza factory complex in Bangladesh that killed more than 1,100, there’s growing consensus that the system of third-party audits that multinationals rely on to monitor working conditions in plants is broken. Over the course of more than eight years working as director of corporate responsibility for Gap (GPS) and then Burberry Group (BRBY:LN), Sean Ansett says he realized that there were great limitations to audits. One big one, says Ansett, now a consultant in London, is that workers are often coached in how to answer questions from inspectors hired by Western brands and are unlikely to risk being fired by responding truthfully.
Kohl Gill, who worked briefly for the U.S. Department of State before becoming an entrepreneur, says there’s a better way to prevent future factory horrors. Gill’s three-year-old Silicon Valley startup, LaborVoices, makes it easy for factory employees to anonymously report on working conditions inside their factories by phone. Its voice recording systems poll workers in their native languages, aggregate their responses, and send them recordings with information about local support services, from health care to trade unions. “We connect with workers before issues become urgent,” says Gill, 36.
Gill, who got the idea for the service while on trade missions in Bangladesh and Sri Lanka, says his customers pay “much less” than the $4,000 to $7,000 a third-party factory audit generally costs. Companies that sign up for a subscription get access to an online dashboard displaying information on selected factories. The data are “anonymized, aggregated across workers, and vetted for accuracy,” says Gill, who has three employees plus a roster of consultants. “We provide a case management and escalation process [to alert them about] really urgent issues that have to be dealt with immediately,” such as child labor, forced labor, or fire safety.
To assure workers that their candor won’t bring repercussions, LaborVoices enlists local trade unions and nonprofits to get the word out about its mission. “In Bangladesh, the worker-management relationships are so degraded that introducing something from the employer’s perspective really isn’t effective,” says Gill. “You have to meet workers outside the factories and show [them] this isn’t just a tool for management.” LaborVoices, which launched its online dashboard service for companies last August, has only “a few” clients paying to monitor factories they contract with in India and the U.S., but Gill expects to add Bangladesh and China this year. LaborVoices, which he funded with his own money and $55,000 from outside investors, will have more than $500,000 in revenue this year, up from less than $100,000 in 2012.
Ansett, who advises Gill, says the startup is taking the right approach. “I think technology like this, enabling workers to have an ongoing conversation with Western brands, on their own terms or their own time, definitely leads to richer information,” he says.
A similar service called Labor Link has surveyed more than 20,000 workers in Brazil, China, India, Mexico, Peru, and Sri Lanka. Heather Franzese, the 37-year-old director of Good World Solutions, the Oakland (Calif.)-based nonprofit that is Labor Link’s parent, says she spent a lot of time in Asian factories during a two-year stint at Columbia Sportswear (COLM), and like Ansett found third-party audits largely ineffective. “I’d go to these industry meetings where brands are sitting together, furrowing their brows about how to improve factory working conditions, but there’s no meaningful channel for workers” to communicate, she recalls.
Labor Link, which started as a pilot program in Peru three years ago, now employs four employees at headquarters and six part-timers and consultants overseas. Like LaborVoices, the organization does not pay workers for the information it collects. The fees it charges companies start at $3,000 for a campaign at one site. The operation, whose clients include Marks & Spencer (MKS:LN), Cisco Systems (CSCO), and Patagonia, is supported in part by grants from donors.
Franzese and Gill both stress that their services are complements, not substitutes, for trade unions and vigilant government enforcement of labor laws and workplace safety codes. They’re also adamant that their models could change industries. “We have to have a level playing field, where people who are treating the workers well and people who are treating the workers poorly can be clearly identified as such,” says Gill. Says Franzese: “If you look at Bangladesh, if those workers, when they saw cracks in the walls, had a channel to report to the brands that were sourcing there [that there were unsafe conditions], there could’ve been a different outcome.”