PHL seen losing $500M in export sales for noncompliance with social practices (Business Mirror (Philippines))

FOREIGN buyers representatives are urging local exporters and manufacturers to brace themselves for a social compliance audit, saying the Philippines can lose as much as $500 million in potential export revenues yearly due to their noncompliance.

Foreign Buyers Association of the Philippines (Fobap) President Robert Young raised the urgency for local factories and subcontractors of garments, apparel, shoes, bags, furniture, housewares and gift items to comply with social practices required by most major importing countries.

Young noted that social compliance is imperative especially as the Philippines gains the interest of foreign buyers for export products with the granting of European Union Generalized System of Preferences (GSP)+ scheme to the country, the impending Trans-Pacific Partnership (TPP) and Asean integration and some free-trade agreements.

“As requirement of most major importing buyers, the goods should not be only of global quality standards, but must also be produced in a responsible and socially compliant factory and meeting the basic standards for human rights,” he said.

Young said the buyers will not place orders if Philippine factories are not socially compliant to the regulation of importing countries.

“Most major American and European chain stores and importing companies require corporate social responsibility audits. Its a shape up or ship out thing for Philippine exporters,” he said.

Young said in a statement issued by the Philippine Exporters Confederation Inc. that factories must comply with social practices if they intend to stay or increase their exports.

He said Fobap sourcing office members have been orienting and implementing the audit system based on international social compliant framework to the manufacturers and exporters all over the country for the past few years.

The audit system covers mainly areas of basic human rights, no-child labor policy, labor and management agreement practice, correct labor wages, observance of local laws, environmental friendly, among others.

“However, the sustainability of the practice is far from the ideal. Philippine factories have a record of not sustaining the compliance rules. They stop the practice once auditors are gone so buyers are transferring to more serious and honest countries like Malaysia, South Korea, etc,” Young added.

He said Fobap members have authorized auditors, some coming from American and European head offices; but some factories appoint local auditors like SGS and Intertek.