The pandemic has weakened China’s economy.

Locally recurring coronavirus epidemics and related lockdowns weaken the development prospects for the world’s second largest economy. For this reason, nearly a quarter of European companies operating in China are considering relocating their investments outside the country.

According to a report published by the European Union Chamber of Commerce in China, around 23 percent of companies that responded to the survey are thinking of moving their current or planned investments out of China. The survey was conducted at                                          the end of April 2022, while the Shanghai lockdown and restrictions related to the epidemic disrupted business operations.

Foreign companies felt the effects of the Covid restrictions much more strongly: industrial companies operating in China in the period from January to April 2022 recorded a decrease in profit by 16.2 percent. The sector of private Chinese companies also faced a loss of 0.6 percent.

On the other hand, state-owned enterprises recorded an increase in profits of 13.9 percent during this time. To sum things up, the crisis caused by the COVID-19 pandemic plays a key role in making the decision to relocate production from China to Europe. Strict restrictions and a lockdown were introduced in China, which resulted in stopping work in factories and at the same time disrupting global supply chains. All of this has caused major disruptions to world trade. After the pandemic, there was also an increase in production and supply prices.

This trend is also confirmed by the Bank of America Report. The pandemic has disrupted supply chains in 80% of sectors, thus forcing 75 percent companies to take steps to consider relocating production. The pandemic and the resulting crisis have thus proved how important
it is for many companies and countries to become economically independent of China.

Why is Poland an attractive place to move production to from China?

First of all, belonging to the European market and Schengen zones makes Poland attractive due to logistics and timely delivery. The transfer of production from China to Poland and other Central European countries also allows for a much faster response to market changes, as well as to customer needs and changing trends. This gives the opportunity to supply the necessary products to specific factories located in Europe much faster. In addition, production in European countries allows us to maintain the highest standards, confirmed by appropriate safety certificates of manufactured products.

We are here to support you.
If you are looking for support in the control of deliveries from CEE countries, please contact:
office@pro4b.com

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A social audit is an evaluation of a company’s employment practice. During the audit the corporate social responsibility (CSR) mission, policies, code of conduct, records, social impacts are reviewed to find out more ways they can impact society. In majority cases (it depends on the standard) employees are interviewed to confirm the conformity in practice, this part of the audit is invaluable and adds value to the overall assessment.

Social auditing is extremely important because it provides information on how well a corporation is keeping the balance between making profits and social responsibility.

At the end all nonconformities found, shall be addressed and necessary actions have to be  taken to resolve them.

It is an assessment of how well the corporation is achieving its goals or benchmarks for social responsibility. Many times the CSR is misunderstood with only actions supporting the local environment or natural environmental protection or charity work, when it is more about the fair treatment of their employees and through the whole supply chain than outside environment.

A social audit is a way for a business to work out if the actions being taken are being positively or negatively received and relates that information to the company’s overall public image. It is also the way of corporate supply chain management and their CSR activity monitoring.

In the era of corporate social responsibility, corporations are often expected to deliver value to consumers and shareholders furthermore as meet environmental and social standards. Social audits on the one hand can help companies create, improve, and maintain a positive promotional material image on the other hand reduces negative impacts on earnings from bad press, share pricing, local environment and the consumers.

The social audits are performed against:

• Local labour law
• Local remuneration law
• Local health & safety law, work environment
• Local environmental protection law
• Client/Corporate code of conduct (ordered the audit)
• Clients’ special requirements with regard to the:
  • business continuity plan,
  • continuous improvement,
  • corruption policy,
  • subcontracting policy,
  • transparency within the organization,
  • community initiatives,
  • diversity within the workplace,
  • accounting and promotion transparency

The social audit is:

1. Multi-Perspective

Takes into account the commitment of all interested parties including NGO’s.

2. Comprehensive

Assess and present a report on all aspects of the organization’s work,   performance and compliance.

3. Regular

Repeated on the regular basis, focusing more on systematic improvement than punishing the manufacturer.

4. Comparative

This provides a way, whereby, the organization can compare its own performance annually and against appropriate external norms or benchmarks and supply for comparisons with organizations doing similar work and reporting in a similar fashion.

5. Verification

This ensures that the social accounts are audited by a suitably experienced person or third party company with no vested interest within the organization.

6. Disclosure

This ensures that the audited accounts are disclosed to stakeholders and therefore the wider community within the interests of accountability and transparency.

The benefits of a social audit are:

1. Mitigate the risk of business performance

It becomes a way to measure and evaluate corporate social responsibility to take mitigation steps against related risks, such as risks to its reputation, share pricing.

2. Gaps awareness

Management can identify gaps between performance and corporate social responsibility objectives

3. Allow continuous improvement

Companies can develop measures and set targets to improve corporate social performance, either from improving past performance or benchmarking with the industry’s best-performing companies.

4. Meet interested parties expectations

Implementing improvements which helps the company meet stakeholder expectations, enabling it to build a good relationship with them in the long term.

5. Achievements and management tools transparency

Publishing audit reports leads to better information transparency and accountability, improving the company’s public image.

6. Attract consumers

Improved transparency and accountability towards social responsibility attract more business customers and consumers as they increasingly make their purchasing decisions based on ethical factors

The limitations of social auditing are:

1. The EU Regulations with regards to data disclosure

Auditors’ access to data and information, is often limited, but experienced auditing company has their own lawful methods to get the necessary information not breaking the low at the same time

2. Conflict of interest assurance

Auditors shall be independent, risk of interest have to be excluded, otherwise results can be biased and not adequate to the existing situation

3. Audit organization within the organization

Strategic persons shall be present and available during the audit to allow auditors to confirm the compliance otherwise the situation will generate to many questions mark,

4. Investment in the SCR program

Auditing company have to be ready to invest financial and manpower resources  in order to be prepared for the audit, participate in the audit and implement corrective action after the audit

5. Consumer choices

Social responsibility may not be the only reason consumers buy company products, or suppliers sell inputs to companies, but for price reason

There are a growing number of corporates, brands and retailers now using Social Audits Programs  to step up their ethical business practices. Social audits are developing together with the market changing needs and will have to adopt to the stakeholders expectations. the companies are required to undertake meaningful ongoing due diligence, adapted to local contexts and with workers at the centre, rather than simply an in-and-out audit approach.

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