Justine Nolan is a former Director of the Workers Rights Program at
the Lawyers' Committee for Human Rights in New York, where her work
focused on the global enforcement of internationally recognised labour
rights, and was instrumental in the establishment of the Fair Labor
Association, an international organisation dedicated to protecting workers'
rights in the garment and footwear industries. She has also worked with
The Gap Inc and with the Thailand Urban Development Project on the issue
of labour conditions in factories and has published a number of articles
on the implementation of international labour standards. Justine will
speak about her experiences and the process of holding multinational
corporations responsible for human rights abuses.
Paper delivered on 5th September, 2002 at Monash University, Clayton
-
Based on an article by Michael Posner and Justine Nolan, (Lawyers
Committee for Human Rights) to be published in a forthcoming issue of
the Stanford Law Journal.
Can codes of conduct play a role in promoting workers rights?
In today's global economy, new mechanisms for protecting workers rights
and enforcing international labor standards are urgently needed. Multinational
companies in pursuit of cheap labor-especially in labor-intensive, low-wage
industries such as apparel and toys-now rely on complicated global webs
of contractors and suppliers for their manufacturing. Violations of
internationally recognized labor rights are common throughout this global
assembly line where no effective national or international framework
for addressing these issues exists.
National governments have the primary responsibility for protecting
human rights and ensuring that companies operating from or in their
jurisdiction do not breach those standards. However, countries where
human rights protections are most needed are often those least able
to enforce them. In some countries, like Haiti or Cambodia, while laws
may be on the books, governments devote few resources to enforcement.
In other countries, like China or Vietnam, laws severely restrict freedom
of association and preclude independent unions from operating. As a
result, conditions in factories in much of the world are virtually unregulated,
and violations of basic rights are endemic.
The growing chorus around the world about the downside of globalization
is, in significant part, a reaction to what people in many parts of
the world see as the unfair and unregulated conduct of multinational
companies. The WTO has become a symbol of the problem, but it is not
the place to start in the short term if one is building a practical
model of accountability to protect workers. Though the International
Labor Organization has developed a number of international conventions
on labor rights issues, most of these assume action by national governments
to regulate the practices of local employers. They have been less effective
in situations where a government is unable or unwilling to sanction
powerful commercial enterprises, which operate in other countries and
jurisdictions.
So the question is: what can be done-and where is the leverage to create
greater accountability? The void in enforcement of labor standards has
brought codes of conduct to the fore as an additional way of trying
to ensure accountability for workers' rights in the global economy.
This article examines the role of voluntary codes of conduct and certification
procedures in applying human rights norms to corporations (focusing
primarily here on labor rights issues); then discusses the characteristics
that are important from the perspectives of procedure and monitoring;
and finally considers whether there is any potential interplay between
private procedures and international, regional and governmental procedures.
Role of voluntary codes of conduct and certification procedures
Corporate codes of conduct and their certification procedures have
been referred to as the "third way" to promote international
labor rights, after government regulation and trade union organizing
and collective bargaining.(1) Promoting global accountability for labor
rights in today's borderless world means pursuing a multitude of methods
that involve an array of non-traditional actors and codes of conduct
present a necessary additional model for promoting corporate accountability.
Codes of conduct assume many forms and roles. One function is in setting
a standard to which companies publicly commit. Although codes are not
generally legally enforceable, they are backed by the reputation of
the company that adopts them, supported by the ever-present threat of
media exposure. As such, codes can be useful advocacy tools for monitoring
and assessing corporate performance, educating workers, mobilizing consumers
and investors and as a catalyst for debate about the need for stronger
government and intergovernmental enforcement of labor rights.
These considerations are particularly strong for companies who rely
heavily on the value of their brand to sell their product. Many of these
companies have become, in essence, marketing and distribution companies,
which directly produce very little of what is sold under their brand
name.(2) Protecting their brand name is critical to them, and as consumers
in the United States and elsewhere become better informed about these
issues, this creates possibilities to hold these companies accountable
for activities throughout their entire supply chain. In the last five
to ten years, aggressive campaigns in the United States by labor groups,
NGOs and student activists have created an environment where companies,
particularly brand focused companies, have felt compelled to take responsibility
for the labor practices of their principal contractors and suppliers.
As a result, in some cases 'voluntary' codes of conduct are not wholly
discretionary since they are sanctioned in varying measures by media,
consumer and investor pressure.(3)
Diversity of codes
The proliferation of codes of conduct in the last decade has meant
that hundreds of companies have now publicly committed to upholding
basic labor standards.(4) These codes address issues such as child and
forced labor, the right to organize, workplace health and safety conditions,
wage and overtime issues, discrimination and harassment and other persistent
problems. But codes of conduct cannot provide meaningful improvements
of working conditions unless they are effectively implemented and enforced.
How to ensure that this happens systematically is one of the key challenges
Part of that challenge is bound up in the fact that codes of conduct
vary from company to company and amongst industries. While many codes
are strong on more universally recognized labor rights, such as the
prohibition of forced labor and child labor, and freedom from harassment
and discrimination, the greatest differences are in standards on freedom
of association and wages. Different standards on freedom of association
are in part due to companies' practical concerns for their ability to
ensure compliance when producing in countries, like China or Vietnam,
where the rights of freedom of association and collective bargaining
are severely restricted. Similarly, there is little consensus and a
lot of debate about how to determine a standard floor for wages, particularly
in countries where national minimum wages are at or below subsistence
levels. In such cases, many companies prefer to adopt codes that simply
require compliance with national laws and argue that applying human
rights norms are not their business.(5) One challenge for activists,
workers and industry is to develop an environment where code standards
ratchet upward rather than accepting the standards of the lowest common
denominator.
Examples of codes and their certification procedures fall into several
categories of varying effectiveness.(6) Codes are most effective when
developed with wide support from industry, unions and NGOs. The first
category encompasses codes that are developed by companies for their
individual use. These may be developed for a variety of reasons - activist
pressure, brand preservation and/or recognition of their responsibility
to respect basic human rights. Such codes vary widely in the commitments
they offer to protect human rights and the language they use.(7) Some
will require compliance with the code from the company's subcontractors
and suppliers and others will remain quiet on this crucial issue.(8)
Such company specific codes have come under fire for both the lack of
consultation in the development of standards with stakeholders external
to the company and questions raised about the credibility of their internal
code-monitoring systems, due to lack of transparency and independence
In the wake of this failing, various industry or trade associations
grouped together to develop common standards and reporting mechanisms.
Examples of this second category include the International Federation
of Football Association's (FIFA) (1996) framework agreement to prevent
the use of child labor in the production of soccer balls (9) and the
more recent Worldwide Responsible Apparel Production (WRAP)(10) initiative
to monitor working conditions in apparel members' factories. Again these
closed-door initiatives have given rise to complaints about a lack of
transparency and independence in reporting mechanisms and raises questions
about the credibility of such standards when they are dictated solely
at the discretion of industry.
The development of a third category involving multi-stakeholder codes
and external monitoring initiatives, now lies at the heart of the corporate
accountability movement and will be the true test of the effectiveness
of codes and monitoring. These multi-stakeholder code and certification
initiatives involve an external party, such as an NGO, working in tandem
with industry to develop standards and reporting mechanisms to monitor
corporate compliance. The advantage of these efforts is the move to
standardize and develop consensus among a variety of stakeholders -
albeit on a limited basis initially - the basic principles for ensuring
greater respect of human rights in the workplace. Some of the better-known
initiatives in the apparel industry include the Fair Labor Association
(FLA)(1), Social Accountability International (SAI)(12), the Workers
Rights Consortium (WRC)(13), and the Ethical Trading Initiative (ETI)(14).
The fourth category involves codes developed by international institutions
with direct or indirect government involvement. Examples include the
OECD Guidelines on Multinational Enterprises (15) and the more recent
efforts by the United Nations to promote its Global Compact.(16) Such
codes are generally fairly broadly expressed and have limited reporting
and transparency mechanisms.
Characteristics of effective monitoring
While codes can set valuable standards, they are meaningless if they
are not implemented. Credible procedures for their monitoring and verification
are crucial. Yet there is no one way to do this and differing opinions
on how it should be achieved. Private monitoring efforts (as opposed
to government labor inspections) by groups as diverse as NGOs or commercial
auditing firms are a relatively recent phenomenon and the 'social' monitoring
industry is still in the early stages of evolution. This is reflected
in the diversity of current approaches to monitoring, particularly in
the apparel and footwear industries.
Almost all major apparel and footwear brands now outsource production
entirely to extensive networks of suppliers, contractors, subcontractors,
and sub-subcontractors. The supply chain is so extensive that some companies
claim ignorance of the exact makeup of their supply chain. These chains
are even more enigmatic in the apparel industry given the potential
mobility of production sites and wide range of producers.
As a result, the challenges to monitoring are great. The question is
who, how, what and where to monitor along the supply chain? Monitoring
initiatives have chosen various avenues for meeting these challenges
with some focusing on systematically monitoring and certifying factories,
others on monitoring entire supply chains, and still others on conducting
independent investigations and verification on a case-by-case basis.
Beyond these differences in approaches to monitoring, there are substantial
methodology questions involved. Such as, who should do the monitoring?
Are for-profit auditing firms appropriate inspectors of social conditions?
How can more non-profit and local groups be empowered to independently
monitor factory conditions? What should be monitored? Is the code of
conduct enough? How much should monitoring also verify compliance with
local labor law and ILO conventions? How regularly should monitors visit
factories? How many announced and unannounced visits to a factory are
appropriate? How should a monitor establish their independence? When
should monitoring reports be confidential for the workers, unions, management
and companies, and when should they be made public? What should the
relationship between a monitor, unions, management and workers consist
of? There remains a long list of important and still unanswered questions
on this topic.
In the absence of any standardized monitoring protocols, there are
four crucial characteristics that monitoring procedures should incorporate
in order to be credible:
- Applying measurable, meaningful standards
- Independence of monitors
- Transparency in reporting
- Incorporation of a local NGO and union dimension
With the incorporation of these four components, monitoring can potentially
be an effective tool for building the visibility of labor rights and
increasing corporate accountability.
Measurable, meaningful standards
A major challenge to the credibility of private monitoring initiatives
is applying a consistent and credible standard both to ensure consistency
in what is being monitored and to the monitoring procedures themselves.
Without at least an industry-wide standard, monitors assessing a factory
where a number of brands are producing are often challenged to monitor
a variety of codes simultaneously along with assessing compliance with
local labor laws and international conventions. In the absence of universally
accepted standards, what often results is a haphazard composite of standards
a monitor chooses to verify that will change depending on the preferences
of the company and the country in which the manufacturing takes place.
Arguably, at a minimum ILO's (1998) Declaration on Fundamental Principles
and Rights at Work should form the basis against which conditions are
measured. The Declaration proclaims four basic principles drawn from
core ILO conventions as applicable to all nations, regardless of their
level of economic development:
- freedom of association and the effective right of collective bargaining;
- the prohibition of forced or compulsory labor;
- the effective abolition of child labor; and
- the elimination of discrimination with respect to employment or
occupation.
The declaration is applicable to all members of the ILO, regardless
of whether or not they have ratified the "seven fundamental ILO
conventions"(17) that correspond to these principles. These seven
treaties reflect merely the most basic principles of labor rights-a
number of other conventions cover issues such as health and safety in
the workplace. However, while applicable to member states these standards
do not directly obligate the activities of corporations. In addition
these conventions are fairly broadly expressed and often need further
clarification in relation to specific labor conditions on the ground.
The Declaration and conventions per se, are not presented in language
that allows them to be readily measured in quantifiable and objective
terms thus they are interpreted in codes which may vary in the manner
in which they present them.
Without standardized monitoring methodology, it is particularly difficult
to assess the credibility and accuracy of monitor findings in the absence
of a recognized procedure for monitoring different aspects of codes.
The vagueness of codes often means that they are open to interpretation
and verified according to that monitor's specific methodology. As a
result, there are few meaningful measures that can be compared to other
brands and monitor findings.(18) A significant challenge in the next
few years is to transform the vague standards of disparate corporate
codes into industry standards that can be used to specifically measure
performance on a comparable basis across products, companies and countries.
One recent example of the increased demand for this type of standardized
measurement (in this case on a country by country basis rather than
company specific) is the action taken by the California Public Employees'
Retirement System (CalPERs) to restrict its investments in emerging
markets. One major factor in the CalPERS analyis was countries' performance
on workers rights issues. This involved comparing 27 countries based
on factors such as their ratification of ILO conventions, strength of
domestic labor laws, institutional capabilities to enforce those laws,
and effectiveness in practice in addressing workers rights.(19)
Independence
Independence of monitors from the companies and facilities that they
are inspecting is vital. The difficulties in monitoring recently experienced
by some groups, raises questions about the accuracy of their findings
and strengthened the case for independent monitors whose allegiances
are not with the company but rather with the workers.(20) The ideal
independent monitors may in many situations, be local non-profit groups
who are familiar with local dynamics of the country or locale of the
factory, who speak the languages of workers and management and who are
able to monitor factories on a more consistent and regular basis. However
codes can be complicated instruments that cover a diverse range of subjects
and an organization who is adept at interviewing and gaining the trust
of workers may not have the requisite experience to audit a factories
health and safety performance.
Furthermore, independence of monitors is not solely independence from
companies, but also from other important players, particularly government,
unions, and advocacy groups. Independent monitors have the unique task
of actively defining their work as distinct and different from the work
of unions, their local labor ministries or departments, and activists.
If they fail to do this, they risk impeding the work of these other
agents or becoming substitutes for them. If anything, monitoring must
be an additive and be complementary to and reinforce the work of these
agents.
Independence in monitoring has also played into questions about how
the monitors should be paid. Should companies pay the monitors directly?
If so, does it reflect on their independence? While there is little
question about the fact that companies have an obligation to fully pay
for the service monitors provide, the question may be more one of perception
and thus in some cases payments for monitoring are channeled through
a third-party intermediary or paid into a general trust as per the Rugmark
model.(21)
Additional issues concerning independence include questions about how
monitors should be chosen. The FLA, for example, has been criticized
for the lack of independence in monitoring. Recently, however, the FLA
adopted substantial changes in its monitoring system. Whereas previously
the companies were able to select their inspector from a list of FLA
accredited monitors (which entail both international and local non-profit
groups), it is now established that the FLA as an independent third
party, will be responsible for selecting and paying the monitor.(22)
Transparency
Information is key to advancing workers' rights worldwide. But information
about factory locations and working conditions is scarce. A decade ago,
companies generally refused to disclose any information about their
supply chain practices and would not open the factory doors to external
observers. Gradually, this is changing albeit on a very limited basis
and still largely by brand focused companies, as companies responding
to immense public and consumer pressure begin to recognize that increased
transparency is a required part of business.(23)
Now, as many companies adopt code certification procedures and some
engage in multi-stakeholder monitoring initiatives, some companies have
not only begun to open their doors to external scrutiny, but have succumbed
to public reporting on their conditions and a few on disclosure on factory
locations. While these are important advances, it is so far only a drop
in the bucket to building transparency on labor conditions. Absent from
these advances are many of the largest retail companies who control
a significant portion of the industry's profits in apparel but are lagging
far behind on transparency advances or participation in multistakeholder
initiatives.
The nature of an unregulated, mobile supply chain, operating worldwide
in areas with weak labor enforcement and trade-union activity, makes
the pursuit of information particularly challenging. Information is
the engine behind the corporate accountability movement. By making labor
conditions publicly visible, greater transparency has the dynamic ability
to pressure companies to remedy their actions and in turn, build a common
floor for labor standards.
In light of this, the credibility of external monitoring today is in
many respects contingent on transparency in reporting. While advances
in transparency must come from the top by pushing for corporate disclosure,
they must also come from the bottom. The independent monitoring group,
COVERCO(24), in Guatemala has set an important precedent in setting
the terms for transparency in their monitoring contracts with Liz Claiborne,
Gap and, recently, the FLA. COVERCO considers it essential to set the
terms of any monitoring effort they undertake to ensure their ownership
of the information collected and their right to publish pertinent information
from monitoring reports.(25) The next logical step in transparency could
come from companies themselves, with businesses that have already undertaken
systematic monitoring programs disclosing the results of those programs
directly to the public.(26) The key element to watch for will be disclosure
as a matter of business routine, rather than only in response to a crisis
or specific criticism.
Incorporating a local NGO and union dimension
Meaningful engagement with local unions and NGOs-whether they be community-based
organizations, legal services organizations, womens' groups, labor rights
groups, religious groups-with a real interest in bettering working conditions
is essential to ensuring the credibility of monitoring procedures. The
right and ability of workers to organize is necessarily one of the most
fundamental issues that need to be focused on in advancing the workers
rights debate. The active involvement of unions and NGOs in all aspects
of workplace issues and improvements is absolutely essential to advancing
this right in real ways on the ground. These are the actors who are
intimately familiar with local dynamics and working conditions and who
are capable of ensuring that codes and monitoring bring real changes.
To date, these actors have often been left out of the code monitoring
equation-largely because codes and monitoring procedures have been conceived
in the North-but their inclusion is essential in order to democratize
regulation and enforcement.
The first important piece is by empowering more local NGOs to become
independent monitors. As it stands now, there are very few examples
of groups working in this capacity. To do this will require increased
information sharing, and assistance in building coalitions and increasing
the capacity of groups to undertake these activities. The Central American
experience of COVERCO in Guatemala, GMIES (27) in El Salvador, the Independent
Monitoring Team (EMI) in Honduras, and the newly formed coalition of
Central American and Dominican groups, the Regional Initiative for Social
Responsibility and Jobs with Dignity, is illustrative of how this process
can be set in motion in engaging new groups in monitoring.
Beyond becoming monitors themselves, there are various other important
roles that local NGOs and unions can and should play in global monitoring
initiatives. They can engage as local permanent watchdogs of ongoing
labor conditions in nearby factories and in a sense act as 'monitors
of the monitors'. This is a valuable role to play given that at present
most monitors are not locally based, but come in from the outside for
brief interludes a couple times a year. Conditions change so frequently
that it is crucial there are constant eyes on the ground monitoring
these developments and able to assess the validity of monitor inspections.
Similarly, local groups have a valuable role to play in publicizing
information to the outside world about problems in factories as they
arise. Many code certification initiatives include provisions for third-party
complaints, which are complaints lodged by anyone other than workers
or companies. Workers in these factories rarely have proper, confidential
channels for making complaints about their working conditions. Similarly,
there are few channels for the communication of complaints of labor
problems among key parties, such as unions, NGOs, companies, monitors,
factory management and retailers etc. Third-party complaint systems
can potentially serve as a useful tool for creating these kinds of channels
so that problems can be identified and addressed.
Advocacy also continues to be key. Beyond engagement in corporate code
initiatives, it is crucial that local governments are pressured to improve
their labor laws and enforcement capabilities. Local groups can use
codes of conduct and monitoring reports as leverage over inactive governments
and to challenge their commitment to enforcing labor standards when
companies may be doing more. National governments retain fundamental
responsibility for advancing labor rights and if codes or any other
commitments undertaken by companies can be used to facilitate this it
should be encouraged. Reform at a regulatory level for the enforcement
of workers rights is a long term goal- at regional, national and international
levels - and should be complementary to any efforts focusing on specific
corporate practices.
Finally, local NGOs and unions can also play a role in building the
capacity and knowledge of workers and management to ensure greater respect
for labor rights. Improving conditions inside factories first requires
that management and workers understand the legal and regulatory parameters
within which they work. NGOs and unions can conduct "know your
rights" training programs for workers and management under corporate
codes, national law and international conventions.
Potential interplay between private procedures and international,
regional and governmental procedures
Codes of conduct and monitoring schemes have developed in large part
as a response to the void in international and national enforcement
of labor standards. Yet activists cannot press for change in every industry
and at all times and it follows that as a long-term proposition, all
the relevant actors - industry, NGOs, unions along with government and
international institutions have to combine their efforts to work towards
effective national and international strategies to enforce labor standards.
Multinational intergovernmental institutions - notably the United Nations,
the World Trade Organization, the International Labor Organization -
need to work to strengthen their relationships, to coordinate and focus
their efforts and strategies for this purpose. However, the discussion
about the most effective approach to this issue is far from being settled,
and the seemingly inevitable reform of the major intergovernmental institutions
will take years to effect. The current political feasibility of establishing
international legally binding norms governing corporate conduct with
respect to human rights is doubtful. In the meantime new mechanisms
of private governance and certification can exist alongside and within
national and international efforts both binding and non binding, such
as the North American Free Trade Agreement or the OECD Guidelines Codes
of conduct and their certification procedures can provide an additional
level of scrutiny to draw attention to uneven standards and highlight
inadequate national and international enforcement mechanisms. They can
be used to highlight the disparity of standards between countries and
act as an impetus for the debate about the applicability of universality
of human rights, particularly workers rights.
With the rise of private governance initiatives, companies, unions
and NGOs have acquired invaluable expertise with respect to the actual
enforcement of labor rights. There is an opportunity for government
and inter-governmental initiatives to build on and draw from that experience
or even foster them. The example of the development of the Apparel Industry
Partnership, now the Fair Labor Association in the apparel and footwear
industries is indicative of the useful role government can play in encouraging
such efforts. It is also encouraging to note some recent initiatives
involving the ILO of how partnerships between local government or government
agencies, industry, union leaders and the ILO, can provide a strong
framework for tackling endemic labor problems. Its efforts to address
the problem of child labor in the soccer ball industry in Pakistan and
workers rights abuses in the apparel industry in Cambodia are indicative
of how public/private efforts can merge to create a stronger rights
enforcement regime.
Case study of the apparel industry: AIP/FLA
In recent years, consumers, human rights groups and labor organizations
have been at the forefront of demands for corporate accountability,
pressing U.S. multinational companies to take responsibility for the
conditions in which their contracted workers manufacture their products.
Many of these efforts, oriented toward individual companies, demand
stricter self-regulation by companies and monitoring of workplace conditions
by independent experts. Sometimes consumer boycott campaigns are launched.
While this movement has served as a catalyst for the proliferation of
new voluntary workplace codes of conduct, as noted above, these codes
vary widely in the degree of enforcement and monitoring and, ultimately,
meaningful protection for the workers themselves.
Apparel and footwear companies first began introducing internal codes
of conduct and accompanying internal compliance monitoring plans over
a decade ago, starting with Levis in 1991, and followed by other high
profile brands such as Nike, Reebok, Gap and Liz Claiborne shortly thereafter.
In the mid 1990's in the United States the profile of 'sweatshop practices'
employed by U.S. companies was on the rise. Accusations of the use of
child labor in Honduras and enslaved workers in El Monte, California
fueled the debate. In 1996 the Clinton Administration brought together
an informal group of apparel and footwear companies, labor unions, and
human rights, consumer and religious organizations called the Apparel
Industry Partnership (AIP). Through the AIP, these disparate groups
developed a code of conduct and monitoring principles aimed at establishing
a common industry standard to enforce labor rights. The AIP then began
to plan for a successor organization that would implement and monitor
the code of conduct.
In November 1998, a number of the AIP partners formed a new nonprofit
entity, the Fair Labor Association. Key provisions of the FLA agreement
and its Workplace Code of Conduct call for elimination in the workplace
of forced and child labor, harassment, abuse, and discrimination. The
code also enforces health and safety standards, recognizes the right
of employees to freedom of association and collective bargaining, sets
wage standards, imposes limitations on work hours, and establishes requirements
regarding overtime compensation. The FLA accredits monitors (including
nongovernmental organizations) to conduct independent inspections of
factories. Over time, it will assess companies for compliance with its
standards and serve as a source of information for the public about
working conditions.
The FLA represents a new model involving business, government, U.S.
universities (and their licensed companies) and nongovernmental organizations.
The U.S. government has also played an important role in initiating
and supporting the efforts of these groups. While the FLA is continuing
to evolve, it is an important example of how disparate groups can come
together and harnesses the combined power of government, business and
nongovernmental organizations to enforce labor rights.
Efforts to eliminate child labor in the soccer ball industry in
Pakistan
International organizations also have a valuable role to play in instituting
reforms where national governments may be less willing to take action.
This example of action taken in Pakistan of a consortium of organizations
illustrates the value of establishing multistakeholder partnerships
to address seemingly intractable labor problems.
In 1997, the ILO, UNICEF and the Sialkot Chamber of Commerce and Industry
(SCCI) signed a Partners' Agreement on a joint project to prevent and
eliminate child labor under the age of 14 in the football manufacturing
industry in Sialkot, Pakistan.(28) At that time, Sialkot was the center
of Pakistan's football-producing industry, producing nearly 75 per cent
of the world's hand-stitched soccer balls. At the time of the Agreement's
signing, almost 20 per cent of the workforce was made up of children.
The Sialkot Partners' Agreement followed a campaign by the International
Confederation of Free Trade Unions and the World Federation of Sporting
Goods, which includes more than 50 brand names, to highlight the International
Federation of Football Associations' (FIFA's) use of child labor in
the production of soccer balls.
The Agreement provides for soccer ball manufacturers; to establish
a comprehensive internal monitoring system, including training programs
for this purpose; agree to independent monitors to verify compliance;
and to work closely together with the ILO and other organizations in
a "Social Protection Program," to remove children from conditions
of Child Labor with the effort to provide such children with educational
and other opportunities. The Social Protection Program provides educational
opportunities and other support services to children and their families,
including non-formal education, vocational training and micro-credit
facilities. This aspect is handled by an NGO. The Agreement since formed
the basis for similar efforts in the carpet industry in Pakistan and
in the football-stitching industry in India.
While the project still has a long way to go in eliminating child labor
(29) it is also illustrative of how public/private efforts can be combined
to address abuses in the workforce. The efforts undertaken by the ILO
in Pakistan to initiate these measures were a step up from the more
traditional role it had often assumed in the past as an observer and
reporter of labor problems. Likewise, the role it has recently assumed
in Cambodia in monitoring apparel factories expands this role even further
and provides much needed support for both corporations and the Cambodian
government in addressing labor abuses in the local apparel industry.
Tackling problems in Cambodia's apparel factories
A constant criticism of the ILO since its inception has been its limited
ability to enforce compliance with its standards and its reluctance
to tackle hands-on monitoring at a corporate or factory specific level.
In Cambodia it has recently begun to explore an expansion of its more
traditional roles, by agreeing to monitor the U.S.-Cambodia Textile
Quota Agreement.(30) This agreement established in 1999 for a three-year
period and recently renewed, sets an export quota for garments from
Cambodia to the U.S. and provides for reduced tariff rates on U.S. exports
to Cambodia. Renewal of the agreement was conditioned on the improved
enforcement of labor standards in Cambodia's garment sector, promising
a possible 14% annual increase in Cambodia's export entitlements to
the U.S.
The agreement referred to the implementation of a program to improve
working conditions in the apparel industry, in accordance with international
labor standards as well as the Cambodian labor law.(31) The US-Cambodia
Agreement has been credited with creating a large increase in exports
to, and imports from, Cambodia. The value of textile and apparel imports
increased by almost 200% in the first two years of the Agreement. Furthermore
the labor incentives clause in the Agreement, has at least in part,
caused the growth in US purchasing from Cambodia to be accompanied by
improvements in working conditions for Cambodians.(32)
The ILO played a key role designing this project, in consultation with
the Cambodian Labor Ministry, the Garment Manufacturers Association
and the Cambodian trade union movement.(33) The ILO also assumed a groundbreaking
role as a factory-labor monitor of the trade agreement. The establishment
of both the initial agreement and monitoring program is also reflective
of the strength and voice of civil society in Cambodia. Labor abuses
have long been rampant in its apparel industry and there was a steady
push for efforts to address it by harnessing the power of unions, NGOs,
employers, government and the ILO. The results of the ILO's monitoring
efforts are reflected in First and Second Synthesis Report on the Working
Conditions Situation in Cambodia's Garment Sector, which were published
in November 2001 and April 2002 respectively.(34) Both reports indicate
that there continue to be a multiplicity of labor problems in Cambodia's
garment industry particularly with respect to overtime hours and payment
of wages, but the transparency of the findings and broad involvement
of factories in this monitoring effort continues to be encouraging.
Conclusion
The strength and influence of voluntary codes of conducts is on the
rise but is still very dependent on significant investment being undertaken
in their monitoring and enforcement procedures. Codes are useful in
highlighting standards to be met but there must start to be greater
consistency in the principles they espouse and a stronger movement to
develop them in concert with a variety of stakeholders on an industry
basis rather than continuing the proliferation of internal company specific
codes. The adoption of codes and involvement in multistakeholder monitoring
mechanisms must also be taken up on a broader basis throughout a range
of industries and not just left to the brand focused companies to take
the lead.
Codes of conduct and monitoring mechanisms alone, cannot adequately
address the abuses rampant in many of these industries but they do have
a role to play in linking together diverse stakeholders from the local,
national and international scene to promote greater respect for labor
rights. While they should never detract from the responsibility of national
governments and international agencies to address these issues, they
are proving to be a useful advocacy tool for monitoring corporate performance
by maintaining pressure on companies to protect workers rights. The
challenge is for all stakeholders to combine forces to continue this
momentum so that the progress built up through the development of codes
and certification procedures can pave the way for the development of
eventual international legally binding norms to govern the behavior
of corporations and human rights.
1 Compa, Lance. "Wary Allies," The American Prospect. Vol.
12 no. 12, July 2-16, 2001.
2 Nike is now estimated to spend approximately $1 billion per year to
market their brand image; O'Rourke, Dara. Power-point presentation "Codes
and Monitoring in Global Supply Chains." February 7, 2002. Puebla,
Mexico.
3 Redmond, Paul. "Sanctioning corporate responsibility for human
rights," Alternative Law Journal. Vol. 27 no.1, February 2002.
4 Gordon K. and Miyake, M. "Deciphering Codes of Corporate Conduct:
A Review of their Contents." Working Papers on International Investment,
Number 1999/2. Organization for Economic Co-operation and Development.
November 1999.) This OECD study was the result of an investigation of
246 voluntary codes collected "from business and non-business contacts
which OECD Member governments helped identify" (pp8.). Out of this
set of codes, they found that 118 or 49% of them where issued by individual
companies (mostly multinationals), while 34% were industry and trade
association codes, 2% issued by an international organization, and 15
% by partnership of stakeholders (mainly ngos and unions) (pp. 9). Also
see Gereffi, Gary, et al. "The NGO-Industrial Complex." Foreign
Policy. P. 56-65 which refers to "Global Reporting Initiative,
estimates that more than 2,000 companies voluntarily report their social,
environmental, and economic practice and performance" (pp.57).
5 Compa L. and Hinchcliffe-Darricarrere, T. "Enforcing International
Labor Rights through Corporate Codes of Conduct", (1995) 33 Columbia
Journal of Transnational Law 663 at 686.
6 See Gereffi, Gary, et al. "The NGO-Industrial Complex."
Foreign Policy. P. 56-65 which refers to first (internal), second (industry),
third (external i.e. NGO) and fourth (government or multilateral) party
certification methods.
7 The Body Shop's Trading Charter (1994) specifically refers to their
commitment to respect human rights "as set out in the Universal
Declaration of Human Rights".
8 Gordon K. and Miyake, M. "Deciphering Codes of Corporate Conduct:
A Review of their Contents." Working Papers on International Investment,
Number 1999/2. Organization for Economic Co-operation and Development.
November 1999.) This study of 246 voluntary codes found that "41.2
percent of the codes dealing with labor issues mention obligations on
sub-contractors or other business partners" (Pp. 14). In 12 cases
the codes "threaten" to terminate the contract with the supplier
or contractor if their standard is not met throughout their supply chain
(pp. 26).
9 World Monitors; http://www.worldmonitors.com/showarticle.cfm?Key=1639
for information regarding the establishment of a new international monitoring
body for child labor in Sialkot, Pakistan.
10 http://www.wrapapparel.org/infosite2/index.htm
11 www.fairlabor.org
12 http://www.cepaa.org/
13 http://www.workersrights.org/
14 http://www.ethicaltrade.org/
15 Guidelines for Multinational Enterprises, in Organization for Economic
Cooperation and Development, Declaration on International Investment
and Multinational Enterprises. The Guidelines were first adopted in
1976. They are most easily accessed at http://www.itcilo.it/english/actrav/telearn/global/ilo/guide/oecd.htm#text.
Some background on the guidelines is provided at http://www.oecdobserver.org/news/fullstory.php/aid/446/The_trust_business.html.
The. OECD guidelines may be appreciated as a comprehensive instrument
for corporate behavior that enjoys the broad endorsement of governments
as well as social partners. However, the language is often too broad
and lacks details. For instance, the Guidelines merely "encourage"
the disclosure of ethical standards, which is subject to "due regard...
of costs, business confidentiality and other competitive concerns."
Moreover, there is no effective mechanism to ensure enforcement of the
standards.
16 www.unglobalcompact.org
17 The seven are: Forced Labor Convention (No. 29); Freedom of Association
and Protection of the Right to Organize Convention (No. 87); Right to
Organize and Collective Bargaining Convention (No. 98); Equal Remuneration
Convention (No. 100); Abolition of Forced Labor Convention (No. 105);
Discrimination (Employment and Occupation) Convention (No. 111); and
Minimum Age Convention (No. 138).
18 O'Rourke, Dara, Charles Sabel and Archon Fung. "Ratcheting Labor
Standards: Regulation for Continuous Improvement in the Global Workplace."
May 2, 2000. http://web.mit.edu/dorourke/www/PDF/RLS21.pdf
19 http://www.calpers.ca.gov/invest/emergingmkt/verite.pdf (accessed
March 29. 2002).
20 An illustrative example is provided by the recent experience of auditing
firm PriceWaterhouse Coopers which recently bowed out of the 'social
monitoring' industry after being subject to intense criticism about
their approach.
21 http://www.rugmark.org/
22 See http://www.fairlabor.org/html/FLA_PR_April_2002.html for a summary
of the changes established by the FLA in April 2002. Major changes are
focused on increasing the effectiveness, independence, and transparency
of the monitoring process. All monitoring by independent external monitors
will be unannounced and the FLA will select the facilities to be monitored
and contract with and pay accredited monitors to conduct these audits
The FLA also committed to publicly disclose facility specific information
on each facility that is independently externally monitored. Information
to be disclosed on its website will include the name of the company,
the nature, size, and country/region of the facility, the identity of
the monitor, the date and length of the monitoring visit, summaries
of compliance found and non-compliance found, a summary of remediation
instituted, and the status of the remediation.
23 See for example the factory disclosure database of the Workers Rights
Consortium at http://www.workersrights.org/fdd.asp and that of the Fair
Labor Association at http://www.fairlabor.org/html/disclosure_db.asp
24 The Commission for the Verification of Corporate Codes of Conduct;
www.coverco.org
25 Maquila Solidarity Network. "Memo: Codes Update Number 9,"
November 2001. www.maquilasolidarity.org
26 This has only occurred in a few very limited cases so far. One example
is the 1999 report released by Reebok International - Peduli Hak ("Caring
for Rights"), examining conditions for workers in two Indonesian
factories producing Reebok brand footwear. See; http://www.reebok.com/Reebok/US/HumanRights/text-only/history/
27 Grupo de Monitoreo Independiente de El Salvador, GMIES; www.gmies.org.sv
28 The Agreement is available at http://www.itcilo.it/english/actrav/telearn/global/ilo/guide/ilosoc.htm
29 The Pakistan Newswire reported March 15, 2002 that while violations
of labor regulations in manufacturing center of Sialkot has been on
the increase, "officers and functionaries of labor department appear
to be silent spectators and quite indifferent to the situation."
World Monitors; http://www.worldmonitors.com/showarticle.cfm?Key=1958
(accessed March 28, 2002).
30 See, for instance, the press release of January 7, 2002, by the office
of the U.S. Trade Representative and also http://www.lchr.org/labor_new/fr.htm
31 Article 10B of the U.S.-Cambodia Textile Agreement
32 In his testimony to the US Senate Committee on Finance on June 26.
2001, Mark Levinson, Director of Policy and Research at UNITE (Union
of Needletrades, Industrial and Textile Employees) stated that "labor
activists in Cambodia report that the Agreement in responsible for opening
some space for workers and unions to assert their rights."
33 The project aimed to provide assistance in the drafting of new laws
and regulations; increase awareness of workers' rights among both workers
and employers; support and strengthen workers and employers, and their
organizations, to realize these rights; and support and strengthen government's
enforcement capacity.
34A copy of the reports can be found at at http://www.ilo.org/law/english/dialogue/index.htm
and http://www.ilo.org/law/english/dialogue/cambodia.htm under the
chapter "Featured sites". Also see the ILO press release at
http://www.ilo.org/law/english/bureau/inf/pr/2001/50.htm#note1.
