c.2013 New York Times News Service

c.2013 New York Times News Service

Inspectors came and went from a Wal-Mart-certified factory in Guangdong province in China, approving its production of more than $2 million in specialty items that would land on Wal-Mart’s shelves in time for Christmas.

But unknown to the inspectors, none of the playful items, including reindeer suits and Mrs. Claus dresses for dogs, that were supplied to Wal-Mart had been manufactured at the factory. Instead, Chinese workers sewed the goods — which had been ordered by the Quaker Pet Group, a company based in New Jersey — at a rogue factory that had not gone through the certification process set by Wal-Mart for labor, worker safety or quality, according to documents and interviews with officials involved.

To receive approval for shipment to Wal-Mart, a Quaker subcontractor just moved the items over to the approved factory, where they were presented to inspectors as though they had been stitched together there and never left the premises.

Soon after the merchandise reached Wal-Mart stores, it began falling apart.

Fifteen hundred miles to the west, the Rosita Knitwear factory in northwestern Bangladesh — which made sweaters for companies across Europe — passed an inspection audit with high grades. A team of four monitors gave the factory hundreds of approving check marks. In all 12 major categories, including working hours, compensation, management practices and health and safety, the factory received the top grade of “good.” “Working Conditions — No complaints from the workers,” the auditors wrote.

Ten months after that inspection, Rosita’s workers rampaged through the factory in February 2012, vandalizing its machinery and accusing management of reneging on promised raises, bonuses and overtime pay. Some claimed that they had been sexually harassed or beaten by guards. Not a hint of those grievances was reported in the audit.

As Western companies overwhelmingly turn to low-wage countries far away from corporate headquarters to produce cheap apparel, electronics and other goods, factory inspections have become a vital link in the supply chain of overseas production.

An extensive examination by The New York Times reveals how the inspection system intended to protect workers and ensure manufacturing quality is riddled with flaws. The inspections are often so superficial that they omit the most fundamental workplace safeguards like fire escapes.

And even when inspectors are tough, factory managers find ways to trick them and hide serious violations, like child labor or locked exit doors. Dangerous conditions cited in the audits frequently take months to correct, often with little enforcement or follow-through to guarantee compliance.

Dara O’Rourke, a global supply chain expert at the University of California, Berkeley, said little had improved in 20 years of factory monitoring, especially with increased use of the cheaper “check the box” inspections at thousands of factories. “The auditors are put under greater pressure on speed, and they’re not able to keep up with what’s really going on in the apparel industry,” he said. “We see factories and brands passing audits but failing the factories’ workers.”

Still, major companies including Wal-Mart, Apple, Gap and Nike turn to monitoring not just to check that production is on time and of adequate quality, but also to project a corporate image that aims to assure consumers that they do not use Dickensian sweatshops. Moreover, Western companies now depend on inspectors to uncover hazardous work conditions, like faulty electrical wiring or blocked stairways, that have exposed some corporations to charges of irresponsibility and exploitation after factory disasters that killed hundreds of workers.

The Rana Plaza factory collapse in Bangladesh, which killed 1,129 workers in April, intensified international scrutiny on factory monitoring, and pressured the world’s biggest retailers to sign onto agreements to tighten inspection standards and upgrade safety measures.

While many groups consider the accords a significant advance, some longtime auditors and labor groups voice skepticism that inspection systems alone can ensure a safe workplace. After all, they say, the number of audits at Bangladesh factories has steadily increased as the country has become one of the world’s largest garment exporters, and still 1,800 workers there have died in workplace disasters in the last 10 years.

“We’ve been auditing factories in Bangladesh for 20 years, and I wonder, ‘Why aren’t these things changing? Why aren’t things getting better?’” said Rachelle Jackson, the director of sustainability and innovation at Arche Advisors, a monitoring group based in California.

Factory monitoring companies have established a booming business in the two decades since Gap, Nike, Wal-Mart and others were tarnished by disclosures that their overseas factories employed underage workers and engaged in other abusive workplace practices.

Each year, these monitoring companies assess more than 50,000 factories worldwide that employ millions of workers. Wal-Mart alone commissioned more than 11,500 inspections last year. Spurred by heightened demand for monitoring, the share prices of three of the biggest publicly traded monitoring companies, SGS, Intertek and Bureau Veritas, have all increased about 50 percent from two years ago.

The inspections carry enormous weight with factory owners, who stand to win or lose millions of dollars in orders depending on their ratings. With stakes so high, factory managers have been known to try to trick or cheat the auditors. Bribery offers are not unheard-of. Often notified beforehand about an inspector’s visit, factory managers will unlock fire exit doors, unblock cluttered stairwells or tell underage laborers not to show up at work that week.

Greg Gardner, the president and chief executive of Arche Advisors, said Western retailers and brands often seek different levels of audits. Some, like Levi’s and Patagonia, want rigorous — and costly — audits, while others prefer limited, inexpensive audits that will not jeopardize relationships with favored suppliers.

Auret van Heerden, president and chief executive of the Fair Labor Association, a nonprofit group that Apple uses to monitor its Foxconn factories in China, said many inspectors were too rushed.

“Many are doing a factory a day, and many auditors, more than one factory a day,” he said. “They’re on a plane and going to a new city the next day. They don’t have much time to think about it or dwell on it.”