Case Study - China

A major global retailer received a hotline allegation that there were underage workers at a factory of one of their suppliers in China. Kreller was asked to conduct a surprise audit utilizing their right to audit clause in their contract. Kreller conducted an audit at the company which included interviewing employees, touring the facility including the residential dormitories and obtaining copies of personnel records including resident identity cards. While we were provided many excuses (deaf/mute, sick, holiday) to deter our interviews we were able to convince several employees to open up and they confirmed the names of four underage workers from the personnel records. According to management, the employees were not at the factory that day as they were on "holiday" and would not return for a month. We requested to interview one employee we saw in the facility who looked particularly young. No personnel records could be provided for her by management and she indicated that she did not have her ID with her. For all employees who we either couldn’t interview or who didn’t have identification on them on the day of the interview, we requested the factory to send us copies of their identification documents. We conducted a comparison of the ID provided against the personnel records, compared the Chinese Zodiac Animals provided by the employee during the interview and conducted validation of their ID number configuration to determine which employees appeared to have fraudulent identification. Several employees’ records were found to have discrepancies. As a result of the investigation, the client discontinued their supplier relationship with the factory.