How should I record and manage factory conditions?

Do Chinese factories have labor unions and does the government keep records of complaints from workers for a specific factory? Our company wants to make sure that the suppliers comply with local and international law (regarding forced labour for ex, working time) and we think our social audit might be not be enough to find out the real situation.


Factories over a certain size are required to have a labor union. But the unions here are very different than the concept in N. America or Europe. They are not very adversarial and don’t really serve as collective bargaining tool to represent the workers and gain concessions from factory boss. They may offer suggestions and complaints, but that doesn’t mean management is forced to take the advice.  Because they don’t have much power in the relationship (more and more power each year, but still not powerful like a French union) it is rare they would go outside to the government to express a complaint. Disgruntled employees may go to the government as individuals, but very rare that the union leader would make the complaint. So if you are trying to understand how your supplier treats their staff, talking to the union rep or local government would most likely not give you a good snap shot of what is happening since the union, government and factory owners are often working in a close and mutually benefiting relationship.

Social Audits only cost a few 100 USD and are a great tool at catching any big red flags- forced labor, dangerous work conditions. I would agree with you that a social audit might not be enough to find out the real situation in terms of wages paid and hours worked. For example, when your auditors arrive, even if un-announced, the line workers know that the factory management is watching what they say to the auditors. They may have even been training what to say to auditors.

The only tool I know to really understand what is happening inside the factory is to take a look from the inside of the factory. In other words, go undercover to get the truth.  Many buyers don’t realize there are investigators who for a reasonable fee can discretely conduct business intelligence. They interview staff in private after work and sometimes even go into the factory undercover as foreign buyers or Chinese employees.  The best part is that the factory doesn’t even know they are being watched and you get the real take on the situation.

References is the company I use for investigations and due diligence. is the firm I recommend for social audits. Readers may contact me if you would like me to make an introduction.

Wishing you successful China sourcing!

Question answered by Mike Bellamy, host of “Ask the Experts” at the China Sourcing Information Center.

Mike Bellamy is an Advisory Board Member & Featured Blogger at the not-for-profit China Sourcing Information Center ( He is also the author of, “The Essential Reference Guide to China Sourcing” ( and founder of PassageMaker Sourcing Solutions ( )

Leave a Comment