Beware - The MONITORS are watching - Click on eyeballs to return to top/index
PURPOSE: The purpose of this page is to study the ten or more perspectives on monitoring the sweatshop industries. Indeed monitoring has mushroomed into a multi-billion dollar industry. Why? Because corporations who subcontract to sweatshops need a prophylactic shield, a way to convince the public that brand-name corporations such as Nike, Reebok, Adidas, New Balance, etc. are not complicit with sweatshop practices.
Latest News Sep 28 2006 Inside Higher Ed is running a blog discussion on an article "Codes Don't Work" The discussion is the usual liberal conservative dabet. The article details the recent change in WRC (Workers Rights Consortium) strategy. The program to monitor ethics codes is shiffting to demands that codes be enforced with some level of wage standard. Argument ranges from how to do this, should one interfere with market forces, etc. At issue is the squeeze that corporations contracting sweatshops create. They squeeze the sweatshops forcing them to cheat on the worker wages, working conditions, etc. They they claim the goddess of market forces made them do it.
Read discussion between Sam Brown, Executive Director of FLA and Dr. David Boje, advisor to USAS of NMSU. Or see http://cbae.nmsu.edu/~dboje/usas/ (Press News).
Some History: In the 1980s and 1990s, accounting firms such as Ernst and Young and PriceWaterhouseCoopers did the lion's share of the business. But with repeated embarrassing expose after expose, of their shallow methods, the garment and campus apparel industry corporations began to hire consulting firms such as Global Alliance (GA) that could pass themselves off as "independent monitors." This was accompanied by the Fair Labor Association (FLA) strategy of accrediting consulting firms to be hired by corporations as "independent monitors." A slew of other monitoring-accreditors entered the marketplace to sell their consulting services to corporations. Are they really independent? Both GA and FLA have corporate board members from the industry that is to monitored. The corporations being monitor pay huge consulting fees to the the so-called "independent monitors."
There are independent monitors, but they are not organized, sanctioned, bought and paid for by corporations. This would be analogous to asking the murder to pick their own jury. Workers Rights Consortium (WRC) is one of a growing list of truly "independent monitors." Many of the non-governmental organizations indigenous to the countries where sweatshops are being contracted by the elite corporations of the First World are quite concerned about the duplicity that passes for monitoring. They are concerned that even enterprises such as SA8000 and ISO14000 are being co-opted into just another predatory corporate PR ruse. Unless rigorous academic study is undertaken, my fear is that monitoring is a sham.
Let me be specific. In the WRC critique of FLA are researchable claims:
FLA does not require the results of its monitoring to be made public.
FLA allows pre-announced factory visits.
FLA allows the corporations to submit a subset of factory contractors to be monitored.
FLA's executive director decides unilaterally which complaints from workers about a subcontract factory merit investigation.
FLA's model code of conduct does not support a 'living wage.'
FLA's governing structure (i.e. Board of Directors) is heavily influenced by the corporations that are to be monitored. Half the board are corporate members and 2/3rds majority is needed to change things.
FLA has ignored proposals for reform submitted by USAS chapters.
Source: FLA critique by USAS in PDF format.
FLA has launched an aggressive campaign to sign up universities, and to discourage WRC chapters. GA produce consulting reports that on the surface look scientific, with lots of numbers, but even a novice research methodologists would challenge their operationalizations, statistical procedures, sampling approach, and dispute the conclusions being drawn.
E.g. Boje, David M (2001a). Comparison of the Urban Community Mission (UCM) Survey Report
December 1999 to the Global Alliance, Center for Societal Development Studies (CSDS) 2000 study
I hope this web site will help you sort out the PR purposive confusion from the reality of "independent monitoring." There is a list of references at the end. We need more basic and rigorous academic research. This includes student class projects. For example, a friend writes:
"A good student project could involve going through the FLA list of "monitor" firms and tracing board interlocks and affiliations" (10/28/2001).
Thanks, David M. Boje, Ph.D. firstname.lastname@example.org
There are some wild claims out there: CLICK HERE - QUESTION: IS ATHLETIC APPAREL INDUSTRY MONITORING OF THEIR SUBCONTRACT FACTORIES, RELATED to NAZI MONITORING OF CONCENTRATION CAMPS? (opinions vary). And you will find that there are at least 10 points of view on what constitutes independent monitoring. We begin here, and move to ways to tell if monitoring is dependent or independent.
Figure One: Boje and Landrum March 16th, 2001 presentation to IABS (International Association of Business and Society) conference session "Global manufacturing and Responsible Business Practices of the Athletic & Campus Apparel Industry" (See Figure One as Slide).
First, monitoring codes and methods are proliferating and getting more complex each year of this young industry. Layers are stacking upon layers, as monitoring by internal corporate staff (self-monitoring) is layered over by consultant auditors (PWC, E&Y, etc.), third party accrediting agents such as FLA, skeptical NGO watch groups who monitor the monitoring, government agencies (Labor Department), and by Supermonitors who would add yet another transorganizational layer.
Second, it is harder to monitor the monitors effectively, and without a lot of research for consumers to know what verified and certified compliance monitoring really means. Monitoring and compliance means something quite different to various stakeholders in Figure One.
Third, points one and two combine to make monitoring a phenomenally complex process. Demands for rigor age growing, and paying for monitoring is not cheap, which can drive smaller concerns out of the game.
Fourth, monitoring extends from the corporate agents who have surveillance on the protest movements on and off the campus (some infiltrating groups just as in the days of government infiltration to monitor Vietnam and Civil Rights protestors). Corporations have set up "war rooms" to form profiles and dossiers on protestors, monitor web sites (I wonder), and dispatch police and corporate-security (sometimes the same) to dissude and arrest boycott participants who dare invade corporate soil.
Figure One suggests some ten perspectives that writers and apologists use in debates over monitoring. Transnational Athletic and Campus Apparel Corporations (i.e. "logo corporations") are embedded in a rapidly expanding web of surveillance (what Foucault calls a panopticon). You can click on each square on figure one to find out more. Here is a brief summary of ten perspectives that collide in the arena of monitoring.
(1). Logo corporations view themselves as victims of a network of student and union movements and advocacy groups who do not understand five basic economic principles, also known as "ethical utilitarianism":
First, the "inelasticity" of demand for athletic and campus apparel: consumers will not pay higher prices for goods that are monitored or which have a "no sweat" or "no child labor" label.
Second, the principle of economic progress. All economies, even those of the U.S. and U.K. went through stages of child labor, sweatshops, and violated ecological sustainability in order to achieve economic progress. These exploitations by transnational corporations are a necessary step to Third World economies achieving progress.
The argument that economies have always moved from sweatshops to manufacturing with subsequent good conditions is debunked in a classic book by the late Myron Weiner, "The Child and the State in India," subtitled "Child Labor and Education Policy in Comparative Perspective." (Expensive hardback edition in print; not so the paperback, unfortunately.) It shows that some nations in Asia (and elsewhere), and even states within India itself (Kerala), successfully favored primary education over child labor at an early stage of development, and with enviable results.
Third, managers are agents of capital, they have a fiduciary responsibility to manage corporate assets that improve owner equity positions.
Fourth, Nike, New Balance, Adidas, and Reebok are buyer-driven distribution chains selling footwear and apparel products that bear their name, but, for the most part, own no production supply chain facilities. They are just marketeers that design but do not make the logo products they order.
Fifth, the ethics of creative destruction. This is popular with Schumpter who sees downsizing and massive global employment restructuring as how the ground is tilled and out of the destruction, many get to find new opportunities.
(2). UNITE, USAS (WRC) and the Unions - all here contend that it is naive to think that corporately contracted monitoring will sustain the hard fought gains for human rights and collective bargaining that were achieved in the past century through protest and activism. WRC favors use of local NGOs to do the monitoring, but their nemesis FLA claims NGOs lack the technical expertise. This perspectives sees PWC and E&Y as well as GA as shilling for the logo corporations. The only independent monitor is a corporate adversary.
(3). Worker Empowerment - Mary Parker Follett said "workers must grow their own power" power is not something you delegate, share or give away. The worker grown their own power perspective is opposed by the HR worker empowerment perspective; See Boje, D. M. & Grace Ann Rosile (2001) "Where's the power in empowerment?" Also see examples of workers who have grown their own empowerment.
(4). ILO http://www.ilo.org is an transorganizational enterprise attempting to posit global and universal standards for corporate ethics. This includes the ILO program for the elimination of child labor. They have a rating system for assessing corporations. Others such as GRI have a rating systems on workplaces and disclosures. The GRI (of CERES) works cooperatively with corporations to adopt environmental and workplace standards.
(5). Local Dependency - The only thing worse than an exploitative job is no job at all. The pitch here is for "ethical relativism" and cultural sensitivity. It is argued that child and sweat labor are natural parts of certain economies, therefore "when in Rome, do as the Romans do." There are unseen consequences to First World bourgeoisie demands for monitoring. First, only major corporations can afford to do the monitoring which is a disadvantage to small business. Second, paying a living wage, it is argued, disrupts the local wage economy. Third, it is argued that working children is a part of family income means.
(6). Courts - let the lawyers and courts work it out. There are an increasing number of individual and class action cases, where citizens in Third World nations are suing logo corporations over bad working conditions and unsustainable business practices. But for many, getting access to an impartial court for a hearing is easier said than done (1). Nike was sued in California for false advertising in its claims about its overseas workplace conditions; the suit was thrown out, but is due to be heard once again. H.R. 460 has been introduced February 6, 2001 to require full disclosure of all factory locations, and includes provisions for class action suits if human rights, environmental, and other abuses are found.
(7). FLA (Fair Labor Associations and similar associations can certify monitors. For FLA, monitors need specialized training. Others such as ETI (Ethical Trading Initiative www.ethicaltrade.org) do not certify monitors, but do bring together as they put it, a wide range of organizations from all parts of society with the aim of helping to make substantial improvements to the lives of poor working people around the world. Corporations such as Body Shop, Safeway Stores, and Levi Strauss have combined with NGOs, Trade Unions and the uK government to create standards of corporate ethics. The ETI base Code includes (1) no forced or bonded labor or use of employment deposits, (2) right to collective bargaining, (3) safe and hygienic working conditions, (4) no child labor, (5) living wages, (6) no excessive working hours, (7) no discrimination, (8) regular employment, (9) no harsh inhumane treatment of workers. The FLA code, by contrast does not include living wages.
(8). Supermonitor is a proposal to develop a common data base and make appeals to a transorganizational overseers that would include WTO and World Bank along with the ILO, NGOs and trade unions. See supermonitor.
(9). Various consulting firms such as GA (Global Alliance), E&Y and PWC compete to be the monitors who contract with logo corporations to write the reports. These are corporate-cash, dependent monitors who issue reports to the corporations, often using guidelines negotiated with the logo corporations. The key issue here is do accounting and consulting firms have the requisite human rights experience to do monitoring? See more.
(10). TAMARA: Critical Postmodern. Tamara describes the theatrical performance of the various characters storming the stage to monitor, set standards, and be monitored. A critical postmodern take is mix of critical theory (there is a working condition out there) and postmodern theory (what we know about what is being monitored is mostly illusion and stage craft). Yet, there is hope because as Horkheimer, Marcuse and Adorno (Frankfurt School critical theorists) have argued sometimes even pretending to be some nouveau identity can trip one into learning to like the pretended character and role. For postmodernists the transorganizational theatrics is a matter of spectacle (de Bord). See more on Tamara and critical postmodern. Also look at transorganizational proposals by Habermas to revitalize the sphere of public discourse.
For an excellent point, counter-point debate from economists' perspective
CORPORATE CONTRACTED MONITORS: INTRODUCTION
As Figure One depicts, there are quite a variety of ethical perspectives on the issue of monitoring corporate and subcontractor behavior.
The more skeptical views (2, 3 & 10) hold that the Athletic and Campus Apparel industry has hidden behind a veil of secrecy subcontractor factories and logo corporations have hidden behind for so many years.
The more conservative views charge the skeptics have it all wrong, and that logo corporations such as Reebok, Nike, New Balance and Adidas, as well as Disney, Gap and Wal-Mart are doing many things right (1, 5, 7, 9). Still others set themselves up to monitor the monitors (8). And the logo corporations have all kinds of concerns about how everyone except 7 and 9 do not understand basic economic theory. Everyone should retake economic 101, they say, and learn about elasticity, economic, progress, and economic history.
There is an undisputed link between monitoring and corporate power (and propaganda). Some forms of monitoring are PR devices, others are "independent" acts of surveillance over the ability of corporations to enact human rights and act in ways that are ecologically sustainable.
My hypothesis is monitoring serves as a way to keep young women workers from sharing their personal experience narratives of exploitative work directly with the public. Instead, expert monitoring consultants take on the role of omniscient narrator, writing tamer narratives, leaving out the women's voices, while padding the report with all manner of distraction and confusion.
Some History - The industry began it monitoring by hiring its own personnel (expatriates) to travel the globe and inspect plants. The industry was without Codes of Conduct and without external monitoring from the 1960s until about 1992 or 1993. Reebok issued its Code of Conduct in 1992. Nike says they issued theirs before anyone else. Adidas has a Code called "Standards of Engagement" that was drafted by around 1996. Until that time contractors made the goods and the Logo Corporations claimed their independence of all accountability for human rights issues. The limit of their responsibility was to make an announced, occasional plant tour.
The next level of monitoring is called a self- certification system, where the supplier provides a legally-binding (to who we do not know) certification that it is in compliance with their logo-corporation's Codes of Conduct. Corporations not in the public spot light still use this approach to monitoring.
Public pressure at the retail counter and the shareholder's meeting erupted in 1996 (Life Magazine Article) with the revelation that child labor (in soccer ball manufacture) and abuses to a mainly female workforce (in garment and sneaker work) was widespread in the athletic apparel and equipment industry. There was a call for independent monitoring of corporate claims about human rights. Corporate staff and self-certification programs were no longer viewed as adequate by the mid-1990s.
In the mid-1990s, corporations countered by seeking the contract services of mainly accounting firms (e.g. Ernst & Young, then PriceWaterhouseCoopers). The industry contracted their own choice of monitoring agents, (accounting consultants) who toured factories periodically. The demand for monitoring that was independent (of corporate payment) continued.
A new transorganizational consulting industry was born. During the mid 1990's several companies developed (compliance and assurance) auditing services to the Athletic and Campus Apparel industry, on a for-profit basis. These companies include accounting firms Ernst and Young (E&Y) and Price Waterhouse Coopers (PWC). The problems with for-profit auditing initiatives is the they are not independent of corporate influence. These firms give a contracted report to the Logo Corporation, which until 1997 was not ever distributed to the public. The E&Y report of a Vietnam factory, with the help of Dara O'Rourke, made its way to the Web and onto front page news. The call for independent auditing was stronger than ever. Nike responded by firing E&Y as their corporate monitors and the job went to PWC.
Corporations with global supply chains such as Nike and Gap are beginning to outsource more than factory production, they are subcontracting their corporate responsibility function to consulting companies such as Global Alliance for Workers and Communities (GA), accounting firms such as PriceWaterhouseCoopers (PWC), and trade groups such as Fair Labor Association (FLA) who provide on-the-ground monitoring (FLA), audits (PWC) or surveys and focus group studies (GA) of corporate codes of conduct.
Rick Little, for example, of International Youth Foundation, one of the Global Alliance (GA) partners, calls the strategy, “outsource corporate responsibility.” GA is a consulting firm masquerading as a Youth and Human Rights Organization. Point of fact, Rick Little emerges with no history in either field, and soon Nike executives (e.g. Maria Eitel) and other corporate executives populate the board of GA (after monetary donations). Last year, for example, Nokia and Lucent (both heavily dependent on Asian labor) contracted out their "corporate responsibility" to IYF to the tune of $15 million. Further, Nike contributed $7.6 million to GA, in appreciate for two corporate responsibility studies, Nike presents as monitoring reports of its commitment to fair labor practices. In short, GA is consultation for hire, doing focus group and survey reports that do not directly deal with worker-initiated concerns over working conditions, living wage, and right to organize. Instead, GA writes reports restating ILO national statistics, then supplements this with benign statements about worker interest in education and training, to demonstrate how socially responsible each corporation really is. "Most companies have become more strategic in their thinking about corporate social responsibility… We are moving beyond checkbook philanthropy from the CEO - what we call 'spray and pray'. Most business leaders now look at the business case " says Rick Little, chairman of the operating council of the GA (Skapinker, 2001).
Skapinker, Michael (2001) Philanthropy during a downturn. Financial Times April 27, 2001
Research Methodology continues to be the ground for critiquing the new transorganizational consulting.
Methodology is becoming stage craft, as spectacle of "junk science," practices by consulting firms masquerading as university- science. Other times it is more of a Tourist's show, with an exhibition of tours to factories, complete with photos and captions. When corporate-financed monitors do a factory tour and inspection, their visit is pre-announced, the questions they ask are pre-ordained, and there are numerous reports that monitors help the subcontract managers not get caught in any embarrassing acts. In short, monitoring is NOT independent of corporate hegemony and control.
For example, 1997 was a volatile year for monitoring. Nike contracted former US Ambassador Andrew Young to inspect and tour 12 plants in Indonesia, Vietnam and China. The ink was not yet dry on the report when everyone from cartoonist (Doonesbury) to every activist with a web address began to poke holes in their research methodology (spending only 4 hours per factory, use of corporate translators, interviews with workers in front of their managers, etc.).
In 1999, the consulting firm, Global Alliance (GA), explicitly financed by corporate interests set up shop to certify the standards of monitoring firms. Again the issue was to portray a better research methodology.
During the Mexico Strikes and efforts to organize an independent union in the midst of allegations of Code violations, a new player called, Verité came in with yet another transorganizational change methodology (See Mexico). Whereas, GA relies on survey and focus-group feedback reports to management, Verité's reputation is to work on more democratic relationships among stakeholders (community, government, workers, subcontractors, logo corporate management, NGOs, unions, etc.). The purpose is do action research on the transorganizational network. If this comes to pass, then monitoring will have reached a new threshold. So far, there is a report, a Nike response with promises to do better, and a follow-up study by a panel of lawyers (see FLA), that adds more confusion than clarity to the situation (which may be its purpose).
An more independent non-profit organization, Verité, which is reputed to have higher standards has been set up monitoring services to companies on a paid, contractual basis. What was their fee?
In 2001, Dara O'Rourke, once again did an exposé of shallow monitoring practices. He trailed PWC from country to country and discredited their methods, pointing out that the auditors were looking the other way, and in some cases helping the client cover it all up. The cry for independent auditing went through the roof this year. And now firms are looking to Verité and to GA to provide their monitoring. Currently O'Rourke contracts his consulting to transnational corporations, doing training to improve the work and safety conditions of subcontractors in Asia.
The current trend in monitoring is for the logo corporations to hire a monitor, the release findings that are critical their factory management's practices, while noting the trends toward improvement. But these are not independent monitoring efforts.
The industry has yet to enroll in SA8000 standards. Janneke van Eijk of the European Clean Clothes Campaign is a critique of SA800 (as is Hong Kong Christian group). he is concerned that SA8000 monitoring cannot simply be conducted on a periodic "spot check" basis and needs to involve the establishment of reliable, permanent mechanisms through which workers can report problems and grievances.
Supermonitors, the monitors of monitors has been proposed by Archon Fung, Dara O'Rourke, and Charles Sabel (2001) as the next logical step. A few perspectives in Figure One (2 and 10) dispute its ability to curb corporate ability to muddy the monitoring waters with junk science and pseudo certificates and some argue that that the consequences of monitoring get ignored (5) or courts can do it better (6). Do we really want the World Trade Organization (WTO) to be the supermonitor of monitoring? Where is the credibility or track record in enforcing higher labor or ecology standards?
What is Independent Monitoring?
Independent monitoring is defined here as making private (and secretive) factory spaces public and available for democratic reflection, debate and dialog. Thus far, the public is not told where the majority of the factory locations are, or the identity of the factory owners. Independent monitoring enacts a research methodology that is free from corporate control, finance, and influence in its design, training, data cleaning, report writing, and public dissemination. For the accounting industry auditors, the reports go to the corporation and no one else. FLA and GA are releasing reports, after the corporation drafts its PR responsorial. There are options:
For Amnesty International, independent monitoring involves the local community and the reports produced are independently verifiable. That means verifying the raw data, not what paid consultants says about it or carefully edited portions of reports transnational corporations choose to release to the public. This approach is more apt to include the "verbatim" personal experience narratives of working men, women, and children.
Amnesty International states:
All companies should establish mechanisms to monitor effectively all their operations' compliance with codes of conduct and international human rights standards. Such mechanisms must be credible and all reports must periodically be independently verifiable in a similar way to the auditing of accounts or the quality of products and services. Other stakeholders such as members of local communities in which the company operates and voluntary organizations should have an opportunity to contribute in order to ensure transparency and credibility.
Nike's response to this definition was to simulate credibility with a "Transparency 101" program of partial disclosure of selected reports of carefully edited segments of select factories audited by PWC. How transparent is a factory program, where the location of most of the 730 factories is kept secret? Nike also spends $7.6 million (and more in contributions) for Global Alliance, a consulting firm (not a Youth or Human Rights Organization) to do carefully controlled focus groups and multiple-choice surveys of workers that do not ask questions that divert attention from true worker-concerns. They also sponsor trips by sympathetic faculty and students to select factories, who will write apologetic reports that legitimate Nike PR. Adidas and Reebok sponsored and joined the Fair Labor Association (FLA) to choose monitors, it then subcontracts (pays) to audit select factories (e.g. Verité in Mexico February, Marcy, 2001).
When an industry uses model factories, on which to demonstrate its compliance to its own codes of conduct, rather than allowing independent NGOs and non-aligned academic researchers to draw random samples of the entire population of factories, we must be highly critical and skeptical of claims about transparency.
SPECTACLE of NAZI-TRANSPARENCY AT THERESIENSTADT CONCENTRATION/WORK CAMP
A spectacle is a staged theatrical performance by state or corporate power to legitimate their status quo. During World War II, the Third Reich evaded independent monitoring of the work and living conditions of its concentration camps, by allowing transparent inspection of selected "model camps." Theresienstadt: was the "Model" Ghetto, to resolve the outside pressure about rumors and allegations as to how the Nazis were resolving the Jewish Question.
The Nazis decided to let them visit one location that would prove to the Danes and to the world that Jews were living under humane conditions. But how could they change an overcrowded, pest infected, ill-nourished, and high mortality-rate camp into a spectacle for the world?
The propaganda PR was so convincing that "Many elderly actually paid large sums of money for a nice location within their new home" (Fritta). Indeed, just as Nike and the subs construct playgrounds in the inner-city (and in some model factory-locations), the Nazis made sure what the monitors would see on their monitoring tour: "all buildings and grounds along this route were to be enhanced by green turf, flowers, and benches. A playground, sports fields,and even a monument were added." (Fritta). The Nazis transformed (a portion of) Theresienstadt into a "model ghetto." To prepare for the monitoring inspections and VIP tours, the Nazis sent approximately 1300 Jewish men on two transports to Theresienstadt on November 24 and December 4, 1941.
These workers made up the Aufbaukommando (construction detail), later known in the camp as AK1 and AK2. There job was to make the camp presentable to the monitors and convince the Jews that it was a good camp to be sent to.
The Nazis, so clever at creating facades, didn't miss a detail. They erected a sign over a building that read "Boys' School" as well as another sign that read "closed during holidays." Needless to say, no one ever attended the school."
Could it be that Nike, Reebok, Adidas and New Balance are also clever in creating facades, erecting signs over their factory buildings, contracting monitoring reports, conducting transparency tours, and crafting press releases, that conditions in the majority of their factories may be far worse than the monitors have led us to believe?
"What many don't know is that within this serene facade lay a real concentration camp. With nearly sixty thousand Jews inhabiting an area originally designed for only seven thousand - extremely close quarters, disease, and lack of food were serious concerns." In September 1942, a crematorium was built to dispose of 190 corpses a day who succumbed to the toxic living conditions of the camp (See more on Theresienstadt by Bedrich Fritta)."Bedrich Fritta. Spectacle at Theresienstadt"
Lederer, Zdenek. Ghetto Theresienstadt. New York, 1983.
Schwertfeger, Ruth. Women of Theresienstadt: Voices From a Concentration Camp. New York, 1989.
Troller, Norbert. Theresienstadt: Hitler's Gift to the Jews. Chapel Hill, 1991.
Yahil, Leni. The Holocaust: The Fate of European Jewry. New York, 1990.
Monitoring is part of global theatrics. The attempt to make it seem that the global transnational corporation's supply chain is not subcontracting to sweatshops. An entire monitoring industry of accounting and consulting firms masquerades as independent auditors. And they audit corporately-orchestrated theater, a serene facade of transparency, while the conditions of the majority of factories is not part of the sample. As the theater is played out, more and more reports are written, but these seem only to confuse the basic issues.
The Kuk Dong Story: When the Fox Guards the Hen House
By David M. Boje, Grace Ann Rosile, & Miguel Alcantara Carrillo (2001) reviews the cascade of monitoring reports and counter-monitoring reports by ourselves and the Workers Rights Consortium (WRC) delegation. We conclude that when the women workers can tell their own stories, instead of having them filtered and rewritten (often edited out) by the paid monitors, then we will be getting to the heart of the matter: are these sweatshops? I have some questions to raise:
The first question is, does any of this corporate- contracted monitoring at all represent the Sprit of Amnesty International's definition of "independent" monitoring, the kind of indigenous (local community stakeholders), knowledgeable, on-going, not pre-announced, audits by knowledgeable people on the ground, living in these countries? Bernard (1997) says monitoring must be "Independent, institutional, indigenous, ongoing, trusted, transparent and knowledgeable" to test the claims of corporate codes of conduct (See also Avery, 1999).
Ultimately, of course, the most inexpensive, effective, efficient, and flexible method of “independent monitoring” is to engage the workers themselves, organized into their own organization (independent of the state and independent of the employer), which advocates on the workers behalf and which is linked to other worker rights and human rights organizations nationally and internationally - Bernard (1997).
What is the next level of escalation and rigor? The industry does not endorse the Worker's Rights Consortium (WRC) which relies on NGO (non-governmental organizations) to do what is considered "independent monitoring." FLA and WRC compete for enrollment of universities. Then comes H.R. 460 introduced February 6, 200, a full disclosure of all factory locations, and includes provisions for class action suits if human rights, environmental, and other abuses are found.
Can we compare the recent Global Alliance study to the one done by Urban Community Mission (UCM)?
I have just begun the analysis.
Comparison of the Urban Community Mission (UCM) Survey Report
December 1999 to the Global Alliance, Center for Societal Development Studies (CSDS) 2000 study.
By David M. Boje, Ph.D.
I conclude that the action research methodology of the UCM study goes further than the GA-CSDS study, in terms of (1) getting at workers concerns, (2) leaving the data in the words of the workers, and (3) a more revealing comparison of Nike-sneaker factories, with Nike-garment factories, and these contrasted empirically and qualitatively with the Bata (non-Nike) factories. Here we see the first comparative analysis of transnational and non-transnational subcontracted factory conditions, and comparisons between the sneaker and garment factories of Nike. The point is it is easy to make the research say what you want, when you camouflage the identity of the factories, lump apparel and sneaker factories (whose conditions are quite different) into the sample, without making analytic contrasts between firms, or with non-Nike firms. In short, the GA study is methodologically flawed (perhaps on purpose) to make conditions seem better than the UCM action research study findings (please note, both studies agree on quite a number of oppressive and problematic working conditions, and measure the same factories).
What are the Stages of Monitoring?
Bernard (1997) suggests these stages in the life cycle of the monitoring industry:
Damage Control (by partial denial, minimizing claims and taking the offense against critics)
Seek to reassert control over damaged corporate image.
Seek prestigious “cover,” to negate the critics and to give appearance of compliance and enforcement of the code of conduct and to give the appearance of independent review.
MONITORING IMPLICATION: "The last three points all deal with the crucial issue which brought us here today -- to share information and engage in a dialogue on how we might assure, that the campaign for human rights and dignity for workers does not fall victim to or become a captive of “corporate damage control.” As corporate damage control, we risk the same kinds of monitoring methodologies that the Nazi's used in Theresienstadt (see above), to reassure the public that all is well, and life in the camp is as good as life anywhere.
Which LOGO CORPORATIONS Use Which Monitors?
1999 Audit report is financials only till 1999.
According to the ADIDAS-US site, "Audits of our suppliers are conducted by regionally located adidas-Salomon personnel" (Adidas-US, as of March 3, 2001).
In 1999, ADIDAS hired its first Code of Conduct auditor. According to their annual report: "The program to ensure that the adidas-Salomon brand values are real and the Standards of Engagement are adhered to in the factories making adidas-Salomon products progressed rapidly in 1999. Action plans were developed with suppliers for the continuous improvement of factories around the world. At factories where the management has proved to be uncooperative business relationships have been closed.
"For the first time, independent external auditors have started checking the findings of internal audits, reducing even further the risk of unfair treatment of factory workers.
"Similar activities, which are required by the membership of the Fair Labor Association (FLA), will be conducted even more widely in 2000. The FLA is a collaboration between non-governmental organizations and companies, which adidas-Salomon joined in 1999.
"adidas-Salomon has also completed the 'Best Practice Standards' which define the environmental requirements for product materials. These Standards focus on making sure that products do not present a risk to consumers or to the environment and are even more stringent than international legal requirements (Adidas 1999 annual report).
ARE CODES DOING ANY GOOD? - "During the Sialkot visit [sub-contractor to Adidas] we also met people from the ILO who are working as program monitors of the ILO. They told us they do not know about codes" Others did know them (Maquiladora Solidarity Network).
New Balance uses SA8000 Monitors
New Balance has 5 U.S. factories with the rest produced elsewhere. For example,
SA 8000 Corporate Monitors Show up – The Workers Have No Idea What It Is - Representatives from the Council on Economic Priorities Accreditation Agency (CEPAA) SA 8000 monitoring program showed up at the Lizhan Factory and were introduced at a morning assembly. Afterwards the workers told our researchers that they had no idea what SA 8000 was. Some other workers said the SA 8000 people organized a few talks on Chinese labor laws, but no one paid much attention (NLCNET report).
Insan Hitawasana Sejahtera (IHS)
Reebok claims it "is the first company in the footwear industry to make public an in-depth, third-party critique of labor conditions in factories making its product. The study was conducted by Insan Hitawasana Sejahtera (IHS), a prominent independent research and consulting firm based in Jakarta, Indonesia.
Reebok subcontracts for athletic shoes in at least 40 contract production plants in South Korea, Indonesia, China, Thailand, Taiwan, and the Philippines. Reebok, like Nike does corporate hopscotch, moving its subcontracts from South Korea and Taiwan to China,
Indonesia, and Thailand in search of the lowest wages (D. Fisher, "Global Hopscotch." US News & World Report, June 5, 1995, pp. 43-45.).
What are the Codes?
Nike's code was drafted in 1992 U.S. State Department report to Congress on Human Rights highlights shoe factories' refusal to pay
Indonesia's minimum wage. There is also a strike at Sung Hwa. Nike responds by formulating "Code of Conduct and Memorandum of Understanding" for subcontractors.
Reebok's code was drafted in 1992.
Where is the Monitoring Activity?
First, WHO CERTIFIES, SETS STANDARDS, AND RATES CORPORATIONS and MONITORS?
FIRST THERE ARE THOSE WHO CERTIFY, RATE, OR ORGANIZE THE CORPORATIONS AND MONITORS:
American Apparel Manufacturers Association (AAMA) recently set up guidelines for companies to police their factories and suppliers. AAMA standards include some fundamental rights, but exclude freedom of association and collective bargaining.
Apparel Industry Partnership (AIP). After talks broke down, a handful of major corporate participants, including Nike, Liz Claiborne, Phillips Van Heusen and Reebok, agreed to establish a Fair Labor Association (FLA, see below).
Council for Economic Priorities (CEP) gives out several corporate ratings, including one for "disclosure." But the methodology for defining "disclosure" is, in my view, the most bizarre in the whole world. As they put it, "Disclosure grades are determined by the number of CEP surveys a company completes. A company returning surveys in all six issue areas (Note: Woman’s Advancement and Minority Advancement is a combined survey and Workplace Issues and Family Benefits is a combined survey), will receive the top grade for Disclosure." The grade for workplace is "evaluates general working conditions and the treatment of workers. This category is comprised of several indicators of performance, including various benefits, policies and programs offered to assist and enrich employees in their work, as well as their lives in general. Also, CEP evaluates safety conditions, training, and programs, for use as indicators of a worker's physical welfare in the context of potentially dangerous conditions. Overall, the category attempts to appraise a company's contributions to worker well-being via skills training and education, various health concerns, financial compensation, preparation for retirement, safety conditions, and assistance in the event that an employee is laid off." It is not at all clear if working conditions includes subcontract factory employees.
By these criteria companied get these grades:
Nike A for Disclosure. B for Workplace
Reebok A for Disclosure. A for Workplace
Disney F for Disclosure. C for Workplace
GAP F for Disclosure. Workplace was not rated
ETI - Ethical Trading Initiative www.ethicaltrade.org) do not certify monitors, but do bring together as they put it, a wide range of organizations from all parts of society with the aim of helping to make substantial improvements to the lives of poor working people around the world. Corporations such as Body Shop, Safeway Stores, and Levi Strauss have combined with NGOs, Trade Unions and the uK government to create standards of corporate ethics. The ETI base Code includes (1) no forced or bonded labor or use of employment deposits, (2) right to collective bargaining, (3) safe and hygienic working conditions, (4) no child labor, (5) living wages, (6) no excessive working hours, (7) no discrimination, (8) regular employment, (9) no harsh inhumane treatment of workers. The FLA code, by contrast does not include living wages.
Fair Labor Association FLA FLA is an outgrowth of the Clinton administration Apparel Industry Partnership Agreement, following the Kathie Lee Gifford scandal in 1996. It originally included corporate, NGO, government and union involvement, but the unions and NGOs bailed when the code failed to include right to bargain and living wage. The FLA certifies monitors and is funded by corporate money.
FLA Board of Directors includes Adidas, Nike and Reebok corporation executives, among others.
On January 23, 2001 the Fair Labor Association (FLA) announced that it had approved seven major brand-name apparel and sports shoe companies to participate in its monitoring program. Those companies now (August, 2001) include: Nike, Reebok (for footwear only), adidas-Salomon AG, GEAR For Sports, Levi Strauss & Co., Liz Claiborne, & Patagonia, Phillips-Van Heusen, Eddie Bauer, Gear for Sports,
and Polo Ralph Lauren
On April 5, 2001 The FLA Board of Directors announced that Phillips-Van Heusen Corporation and Eddie Bauer had been approved for membership in FLA's monitoring program, bringing the number of participating companies to nine.
FLA has approved new monitors: include Global Standards/Toan Tin in Vietnam; Intertek
Testing Services (ITS) in China, India, Indonesia, Korea, Malaysia, Taiwan
and Thailand; and Merchandise Testing Labs Brand Integrity (MTL) in China,
India, Indonesia, the Philippines, and Thailand.
The FLA had previously announced the accreditation of two southern NGOs and
one US non-profit monitoring organization, COVERCO in Guatemala, Phulki in
Bangladesh, and Verite in 14 countries (it is also accredited under the
SA8000 and WRAP code verification programs).
Doug Cahn, Reebok's vice president of human rights is an FLA director.
The payoff for logo corporations is once certified they can sew a label into their products saying they were made under fair conditions.
Charter Charter Document, Amended June, 1999.
Adidas joined in 1999 (Adidas 1999 Annual Report).
As of March 3, 2001, FLA had one certified monitor, Verité. Verité is accredited to monitor the full
FLA code in 14 countries -- Bangladesh, China (including Hong Kong and Macau), India, Indonesia, Malaysia, Mauritius, Mexico, Philippines, Saipan, Sri Lanka, Taiwan, Thailand, Turkey, and the USA.
Second approved monitor - The Guatemalan independent code monitoring group COVERCO has been accredited by the FLA as an external monitor for Guatemala. COVERCO retains ownership of the data and analysis and the right to make public key findings from its research and
Two other NGOs are accredited as FLA external monitors. Phulki, a Bangladesh-based NGO is accredited to monitor all the FLA code elements, except for Freedom of Association, in Bangladesh.
FLA, as of March 3, 2001 has 152 affiliated universities including New Mexico State U.
1999 (November 2) a subgroup of FLA after 2 years announced that they had come to an agreement-- however two unions (the garment workers' UNITE and the Retail, Wholesale and Department Store Union) and the ecumenical Interfaith Center for Corporate Responsibility refused to sign because of FLA's bias in favor of the companies.
(FLA) is seriously flawed on two fronts (See GE critique):
1.Its standards are too weak to guarantee real improvements in workers' lives.
it allows workers to be paid below poverty wages
it allows excessive hours of overtime it does not adequately uphold the right of workers to organize independent unions
2. Its monitoring system is not transparent nor sufficiently independent of the companies to be credible.
it requires only 10 percent of a company's factories to be monitored yearly
the companies can choose their own monitors
the companies have undue influence in picking which factories will be monitored
the government and foundations will be called upon to help subsidize the companies' monitoring system
vague mechanisms for getting input from workers and NGOs
it keeps important information from the consumer
Maquiladora Solidarity Network analyses of FLA monitoring.
March, 2001 report - Codes Memo 5
April, 2001 report Codes Memo 6
Global Reporting Initiative (GRI http://www.globalreporting.org). The GRI uses a global, voluntary, and multi-stakeholder process as the foundation for standardized (or uniform) corporate sustainability reporting. GRI issues CERES reports on specific corporations. The idea is to create a common framework of criteria for corporations to self-report and self-monitor their compliance. 21 companies did the 1999 pilot study of guidelines. CERES (Coalition for Environmentally Responsible Economies) is a coalition of pension funds, foundations, unions, and religious groups who work in partnership with corporations. See CERES principles. CERES does not at present formally "score" or otherwise rate compliance with the Principles. Nike Corporation advertises itself as a signator to the CERES principels since November 7, 2000. This is a voluntary commitment to continual environmental improvement. CERES principles include commitments to reduction of release of polluting substances, protection of habitats and biodiversity, reduction and safe disposal of waste, energy conservation, environmental restoration in case of damages and information disclosure.
International Labor Organization (ILO) does not certify, but instead oversees groups of monitors in big projects. ILO also has a rating system for corporate goodness.
ILO was established to set standards.
ILO for example organizes other monitors to assess child labor in Soccer Ball industry in Pakistan (ILOWATCH).
Sajhau, Jean-Paul (2000) "Business ethics in the textile, clothing and footwear (TCF) industries: Codes of conduct (ILO Working Paper International Labour Office Geneva). According to the report some Nike and Reebok "subcontractors do not respect the most elementary rights of their workers" (1). Report compares Nike, Reebok, Gap, Wal-Mart and other codes.
ILO report on voluntary codes: "Nike is another major MNE which has a code that is widely cited as an example of attempts by certain MNEs to use their influence to promote the observance of international labour standards, particularly in offshore production sites. While the provision of Reebok's Human Rights Production Standards cover the same social and Labour issues as the aforementioned codes, this company renown for its sports goods, also developed in consultation with members of the human rights community and Chinese manufacturers of athletic footwear, country specific guidelines - The Guiding Principles for Reebok Production In China.
Political and Economic Risk Consultancy, Ltd.- PERC - PERC produces a range of risk reports on the countries of Asia, paying special attention to critical socio-political variables like corruption, intellectual property rights risks, labor quality, and other systemic strengths and weakness of individual Asian countries.
The PERC report bases its findings on polls taken among some 700 expatriate business players operating in 12 Asian countries
Once again, Indonesia finds itself placed in the position of the second most corrupt country -- second only to Vietnam -- on a list of Asian countries published by the Political and Economic Risk Consultancy (PERC) group.
Vietnam and China, the report notes, were similarly beset by corruption. In both these countries, though, their governments were willing to acknowledge that corruption was extensive and that serious efforts had to be made to fight it.
No Sweatshop Information Campaign (NSIC) See NSIC for more on the No Sweatshop Information Campaign which accredits no sweat factories in Australia. So far only Australian Defence Apparel is accredited as meeting NSIC standards.
RESPONSIBLE SHOPPER Rating ServiceThis Rating Service is as bogus as they come - San Francisco-based Working Assets has teamed up with the Council on Economic Priorities to produce a "responsible shopper" web-site Guide for responsible shopping: http://www.responsibleshopper.org
Nike wins four stars for "Workplace" issues and five (highest possible) for "Disclosure" see comparison (press here) but if you look at their own list of dings (press here) you have to ask how is this "B" rating for Reebok & Nike possible?
For an activist group's critique of CEP's "independent factory monitoring" enterprise, see: http://www.china-labour.org.hk/9907e/e_sa8000.htm
Worldwide Responsible Apparel Production (WRAP), the global factory Certification Program - WRAP has accredited three monitoring firms; PriceWaterhouseCoopers (PWC), Intertek Testing Services and CSCC to perform compliance audits in dozens of countries around the world. The basis for the WRAP Certification Program is 12 core production principles based upon international standards that address labor practices, factory and environmental conditions, as well as customs compliance. These include no children under 14, no forced labor, freedom of association, but does not include living wage. After two years of development, the WRAP Certification Program announces the names of the independent Certification Board that will review the factory monitoring reports and grant the WRAP "good factory seal of approval" to qualified manufacturers. A total of ten individuals, six independents with no relationship to the apparel industry, and four leading industry executives, comprise the WRAP Certification Board. Over 290 apparel manufacturers in the U.S. have endorsed the program. The stated aim is to "raise production standards and eliminate, once-and-for-all, the bad 'sweatshop' type of operations from global manufacturing." WRAP sells independent monitoring certification courses to would-be monitors. (1 WRAP press release)
Self-Assessment and Monitoring
Handbook for factory owners is available in Spanish on its website:
www.wrapapparel.org/manuals/hndbk_span_2001.pdf You can learn more about how to
prevent the illegal shipment
of drugs with clothes exported from the factory than on how to ensure
respect for freedom of association.
WRAP update - Otto Reich is a well-connected corporate lobbyist representing liquor, tobacco, and arms industries. He's also a vice president of an apparel industry-created sweatshop "monitoring" group WRAP which is widely viewed as a dodge. And Reich is vice-chairman of the Worldwide Responsible Apparel Program, or WRAP, an apparel industry front group characterized as an artifice for clothing importers to avoid serious scrutiny of their factories in developing countries. On March 22, the Bush administration nominated Otto Reich, an inside player in the 1980s Iran-contra conspiracy, to the post of assistant secretary of state for western hemisphere affairs. This is the highest ranking U.S. administration official overseeing North and South America (source UN Ambassador John Negroponte)
WRAP critique Memo 6 April 7, 2001 "Who's who in WRAP?"
WRAP as of August, 2001 has certified 23 factories (including factories in US, Mexico
and Honduras), and has received applications for certification from 370
WRAP HISTORY - WRAP is a code monitoring and factory certification initiative of the American Apparel and Footwear Association (formerly American Apparel
How responsible is WRAP? See http://www.maquilasolidarity.org/resources/codes/memo8.htm#A for full report:
No information on certified factories and their locations
is publicly available.
Corporate members of the WRAP's Consejo Directivo include: Sara Lee
(Hanes, Leggs Playtex, Sara Lee, Bali, etc.), Vanity Fair (VF) Corporation
(Lee, Wrangler, Rustler, Riders, Britannia and Chic Jeans), Kellwood (which
produces private labels for Wal-Mart), and Gerber Childrenwear.
SECOND ARE THE MONITORING CONSULTANTS, the CASH-DEPENDENT MONITORS:
WHO ARE THE MONITORS? (CONSULTING FIRMS HIRED BY CORPORATIONS TO MONITOR). These "dependent monitors" compete among themselves to bid for corporate dollars. The reports go to the corporations, edited forms of the charts and graphs (in the name of proprietary corporate knowledge), with corporate apologetics go to the public. Others release just enough negative findings to buy public credibility. Which of the "dependent" monitors has a track record for advocating human rights or sustainability standards and which sell their services to the highest bidder?
List of DEPENDENT monitors:
Ernst & Young (E&Y) - October, 1994 - November 1997
1994 (October) Nike hires Ernst and Young to do "social audits," but does E&Y have any experience in "social" audits? And what does "social" mean, is it "human rights" "collective bargaining," or just consulting?
November 8, 1997 Nike Shoe Plant in Vietnam Is Called Unsafe for Workers
By STEVEN GREENHOUSE. This is the NY Times article that broke the E&Y audit story (press here) but you will need to get free subscription to enter site.
November 7, 1997 (press here) - Transnational Resource & Action Center---Corporate Watch--- FOR IMMEDIATE RELEASE: November 7, 1997 Secret Ernst & Young Audit of Nike in Vietnam Exposes Hazardous and Unjust Working Conditions: Accounting Firm's Labor and Environmental Auditing Competence Comes Under Fire as TRAC Independently Documents Even Worse Conditions Inside the Same Nike Factory Audit, TRAC Report and First Photos From Inside a Nike Vietnam Plant Available on Corporate Watch.
November 10, 1997 (press here) - SMOKE FROM A HIRED GUN: A Critique of Nike's Labor and Environmental Auditing in Vietnam as performed by Ernst & Young by Dara O'Rourke November 10, 1997 Transnational Resource and Action Center (TRAC)
The following year E&Y was no longer Nike's Auditor.
Global Alliance GA Global Alliance for Workers and Communities. GA is a controversial NGO/private sector initiative, involving the International Youth Foundation and the World Bank, in partnership with Nike and Gap (Maquiladora Solidarity Network, April, 2001). GA was launched in April 1999 by Nike, Mattel, the World Bank, the International Youth Foundation, the John D. And Catherine T. MacArthur Foundation and St. John's University. GA seeks to improve the workplace and build the life skills, vocational skills, academic skills, and confidence of young adult factory workers. The program is currently operating in Nike and Mattel factories. The first GA report is on Thailand and Vietnam and the second on Indonesia. Corporations pay for these reports and control the methodology from question design, training of data-collectors, vetoing what goes into the report, and tailoring the report for PR needs. Nike itself helped found GA with $7.8 million.
HISTORY of GA: "Got problems with NGOs? Start your own! That is exactly what Nike did with the Global Alliance for Workers and Communities. Rick Little, whose wobbly International Youth Foundation (IYF) was being weaned from mega-grantor,
the Kellogg Foundation, spotted the opportunity. Little`s new specialty became corporate responsibility, and soon after he convinced Nike to pledge seven million dollars to the Global Alliance, he talked Lucent and Nokia into outsourcing their responsibility management to IYF for another $15 million." (Source Jeff Ballinger, August, 2001 Behind The Label Op Ed piece).
GA First Study - "Global Alliance gives Asian workers a voice" Newly released data reveals first-ever look inside factories from workers' perspective. Press Release September 6, 2000 on the Global Alliance (GA) 1st Study Assessment Findings - Washington, D.C. - Amidst the debate about working conditions in overseas manufacturing facilities, the workers themselves finally get a voice with the release of a comprehensive independent assessment of 3,800 Nike footwear and apparel workers in Vietnam and Thailand. The survey was conducted by the Global Alliance for Workers and Communities (See Press Release).
The Indonesia Study "The nefarious nature of Nike`s Global Alliance strategy was revealed in the February 2001 report about nine Nike contractors in Indonesia. The fifty-page Global Alliance report (accompanied by a 56-page "remediation plan" from Nike) failed to mention strikes, fired workers, wage cheating and, most importantly, the fact that no Nike shoe or apparel contractor in Indonesia was presently engaged in meaningful collective bargaining, even though independent unions have been legal in Indonesia for nearly three years. While admitting other serious wrongdoing, the aforementioned omissions do nothing to alter the perception that Nike has nothing but scorn for worker activists and truly representative, worker-controlled unions" (Source Jeff Ballinger, August, 2001 Behind The Label Op Ed piece).
Global Alliance progress report (July 2000) states that, of over 9,177 workers, 931 workers were personally asked questions, and 220 workers participated in focus groups and 34 key representatives from factories management, welfare community, union and clinic were interviewed.
Research into Nike's Global Alliance assessment study: Wages, Hours and Trade Union rights -- Still Missing (Clean Clothes Campaign, 15 Sept. 2000). This is a critique of the method and study design: "What's missing from the Global Alliance report are worker's opinions on issues relating to wages, hours of work, freedom of association and collective bargaining. "
Thai Labour Campaign - Lian Thai Industrial and the Global Alliance for Workers and Communities (Junya Yimprasert, Thai Labour Campaign, 8 Sep. 2000). This is a critique of the 1st GA study. This critique oints out the "Junk Science" activities, the tight corporate control by Nike and Global Alliance over the research process:
"The researchers refused to disclose any information on this research, claiming that as soon as they finished their work, the Global Alliance took all the primary sources data and all the files from their computers." and the surveys "did not provide much room for workers to give answers that would reveal labour violations related to freedom of association.
Answers only allowed respondents to reflect on their living conditions, health problems, and what workers want to do by marking fixed answers already included in the questionnaire." AND, "Since the workers had to give their names in the questionnaires, they did not dare to give criticisms. "
"To get the 'fair wages' that the Global Alliance talks about these women workers have to work overtime seven days a week."
Maria Eitel, Vice President Corporate Responsibility, Nike, Inc., United States is on the Board of Global Alliance. The approach is to conduct focus groups and surveys with workers and managers. (See article).
Jeff Ballinger adds Global Alliance is a "Public Relations firm responsible for this has also done work for NikeTown, (Michael) Jordan brand, Disney, Hasbro..." -- The implication is that the study group review the research methods and findings. See also Nike Site.
There is a September, 2000 critique of the Global Alliance methodology and findings available . The new study was conducted by Junya Yimprasert of the Thai Labour Campaign
According to the main report "In the Global Alliance study selected workers were asked to answer multiple choice questions. In this way, their priorities were suggested for them." Finally, after interviewing Luen Thai workers, the Thai Labour Campaign found that "...they felt that the questionnaires were guiding them and tried to encourage them to conduct activities at the community level.
The Global Alliance for Workers and Communities is not a factorymonitoring program. It represents an attempt by Nike and the Gap to respond to the controversy over factory conditions in a way that suits their agenda, rather than the rights-based approach advocated by activists.Tim Connor, Coordinator, The NikeWatch CampaignNikeWatch Site - http://www.caa.org.au/campaigns/nike/ Ker Conway, (Nike Board Member, first woman president of Smith College, and visiting professor in the program in Science, Technology and Society since 1985) and as most will remember, went to Indonesia and Vietnam just before a Nike shareholders' meeting when company was challenged by resolution from United Methodists. Based on her Nike-guided-tour, she told shareholders that workers were being well-treated.Two years later, she sat beside Phil Knight at his National Press Clubspeech, when he pledged "continuing improvements."Now, to raise money for MIT, she's credited with empowering Nike's workers with Nike's "Global Alliance" strategy.
"These days, Conway is taking her lifelong commitment to empowering women
outside the realm of academia. Still involved in women's education, she now
focuses on the Third World. She helped found Global Alliance, an affiliate of the International Youth Foundation (IYF), which uses worker surveys to learn what a predominantly female factory labor force needs to advance beyond factory work." (Source MIT Spectrum).
GA Second study - "Workers Voices" is a study of 4,450 workers in 9 factories in Indonesia is also getting great press. There is a need to compare study results to other studies looking at similar issues. For example, in the case of workers' opinions about unions, for example, the Press For Change (Jeff Ballinger) survey of October 1999 showed 6% favorable; Nike (and Reebok survey of 18 mos. ago) showed favorable numbers of 75 and 77%, respectively. That is one huge jump on worker satisfaction.
FINDINGS: 56.8% observed verbal abuse of co-workers;
13.7 % observed physical abuse;
25.7% observed unwanted sexual comments; and
15.8% observed unwanted sexual touching.
For a PDF download copy of the 100 plus page interim report: CSDS Center for Societal Development Studies Atma Jaya Catholic University, Jakarta Indonesia (2001) prepared for Global Alliance for Workers and Communities; An interim report workers’ needs and aspirations in nine Nike contract factories in Indonesia. Accessed March 9, 2001
The GA/CSDS (2001) report lists five "Independent Monitors and Research in Indonesia" on p. 39 of the interim report. This is a very questionable use of the term "independent.":
1. Amos Tuck School, Dartmouth College (August, 1998; August, 1999); Studied the adequacy of wages. Nike removed the study from its web site after the methodology was shown to be widely flawed (See Amos Tuck Study for Restored Reports). Any criteria for "independent monitoring" is violated since the two professors who designed and coordinated the Amos Tuck MBA study study teams, Mihaly, Gene & Massey, Joseph, do similar wage-adequacy paid consulting projects for Disney (e.g. Haiti and Disney).
2. Garrett Brown/Dara O'Rourke NGO Health & Safety Monitoring Training (June, 2000). Nike paid contract consultants to train local Indonesian NGOs on health and safety capacity building and monitoring. The problem with calling this "independent monitoring" is it is not monitorning of Codes of Conduct, it is training workers in how to assess toxicity in the workplace and it is paid for by Nike. Good things do result, but it is not "independent monitoring." For a copy of reports, see: O'Rourke, Dara and Garrett Brown (1999), "Beginning to Just Do It: Current Workplace and Environmental Conditions at the Tae Kwang Vina Nike Shoe Factory in Vietnam," report released March 14, 1999, available on the Internet.
(1) "Nike is in the process of replacing many hydrocarbon-based solvents, resins and adhesives with "water-based" materials containing lower levels of organic components. There is only a limited scientific literature on adverse health effects related to use of "water-based" materials, primarily concerning paints and dental products, so the hazards related to "water-based" materials are not well-known. "
LOHP - LABOR OCCUPATIONAL HEALTH PROGRAM UNIVERSITY OF CALIFORNIA AT BERKELEY In June, 2000, LOHP staff members Betty Szudy and Diane Bush conducted a
four-day training class in Jakarta, Indonesia for 25 Indonesian workplace safety activists. The LOHP trainers teamed up with co-instructors Garrett Brown from the Maquiladora Health and Safety Support Network, Dara O'Rourke from MIT, and Melody Kemp, an Australian occupational health specialist who has lived and worked in Indonesia. This team worked with an Indonesian workers' rights group called LIPS (Lembaga Informasi Perburuhan). The training sought to build participants' capacity to identify, evaluate, and develop action plans to correct workplace hazards
3. PWC Price Waterhouse Coopers (March, 1997 - ongoing); Independent Monitoring Services for Nike. PWC is a paid consulting firm that does pre-announced factory visits, asking questions that have been pre-arranged with management, and the reports are written in ways to enhance corporate image. See PWC section of this page
4. (E&Y Ernst & Young (October, 1994 - January 1997) Independent Monitoring Services for Nike says the GA report, but E&Y is like PWC, a paid consulting firm that does pre-announced factory visits, asking questions that have been pre-arranged with management, and the reports are written in ways to enhance corporate image. Nike released E&Y and hired PWC as a replacement, once the January, 1997 E&Y audit of a Vietnam factory show violations of the Code, Vietnam Law, and a flawed methodology - See E&Y section of this page.
5. Environmental Resource Management & The Gauntlet Group (November, 1998 - June, 2000). Executed on going workshops and testing on the Nike MESH (Management, Environment, Safety & Health) system for footwear factories to ensure factories have ISO 14001 systems in place.
2nd GA Study - February 27, 2001 - (Boston Globe, p. 21). To fix sweatshop conditions in factories, we must listen to workers By Dara O'Rourke, 2/27/2001 NIKE'S ADMISSION of sweatshop conditions in its factories in Indonesia last week was surprising and significant for two reasons: First because of how bad the conditions were, and second because Nike owned up to them... Nike's competitors are using these same garment factories to produce their products, often at the very same time... In my view, the Global Alliance's methodology is flawed in a number of ways: Workers were interviewed on site without labor unions or nongovernmental organizations present. Nonetheless, the report ironically points us in the right direction for finding solutions - to the workers themselves.... we need to create systems where workers and communities can speak in their own voices through their own independent organizations, so that we can hear directly from workers and communities impacted by our production. - To see PDF file of the - GA/CSDS (2001) interim report
February 27, 2001 - Jakarta Post - The Indonesian Footwear Association (Apresindo) was cautious on Monday in responding to reported labor abuses in Nike's Indonesian partner factories. Apresindo chairman Anton J. Supit said that as far as he knew Nike was quite strict on labor standards. "We want Global Alliance to be more transparent in its survey so as to ascertain whether verbal and physical abuse is rampant in the factories. And the factories should admit their wrongdoing if their workers have been abused," he said at a press conference here on Monday... He said Apresindo would support any measures taken to uphold the law and that legal proceedings should be taken against any companies found guilty of violating labor law, industrial relations norms and the applicable regulations.
March 4, 2001 -The New York Times HEADLINE: ON THE CONTRARY; Nike in Indonesia, Through a Different Lens BYLINE: By DANIEL AKST - AROUND our house, there were two big stories in the footwear business recently: Critics of Nike again walked all over the company because of conditions in Indonesian factories. And my son got new sneakers for $7. According to the Global Alliance study,
8 percent of workers reported receiving unwanted sexual comments and nearly 2.5 percent said they had received unwanted sexual touching on the job.... (while a) poll found that 31 percent of American women had experienced workplace harassment
55 percent of the Nike contract workers in Indonesia were happy with company medical clinics, while 45 percent were unhappy. Yet few American factories have company health clinics, and 42 million Americans lack health insurance.
Akst says "Nike has had to embrace the accusations of its accusers instead of boasting that, by contracting with factories employing more than a half-million workers in 55 countries, the company is running one of the world's most extensive international development programs. By hiring many women (83 percent of the workers in the Indonesian factories) Nike is giving them the economic power to help raise their often-lowly social status."
March 4, 2001- Ballinger reply to Akst "In fact, the determined activism of Indonesian Nike workers, local NGOs, independent unions and international supporters combined to raise the wages of all Indonesians by over 300% in the period 1991 to 1996 -- well before anti-sweatshop consciousness got hot in the U.S.
Boje Reply to Akst - That any of the women workers declared that 8 percent reported receiving unwanted sexual comments is remarkable for these reasons:
In the US before Anita Hill challenged Clarence Thomas on national TV, there were %50 fewer reports of sexual harassment in the work place. it took a national event everyone saw on TV to make sexual harassment at work discussable.
Author Robin Clair points out that the issue of sexual harassment was not a topic one discussed. Before Anita Hill and then Bill Clinton, people assumed it was either (a) not to be talked about, (b) not so serious, (c) just ignored it. After Anita Hill sexual harassment at work became the number on HR litigation issue.
Indonesian culture is not as open about discussing sexual harassment. It is therefore interesting that the Global Alliance report picks this issue, since obtaining reliable data in the most intensive study is considered all buy impossible.
ISO 14000 (ISO14001) - In 1998, Phil Knight made human and environmantal rights concessions in a speech to the National Press Club. One such concessions was to certify factories with ISO14000. According the the Global Alliance (GA) reports, several factories have been so certified. In the 1st GA report, a study of Nike factories in Thailand and Vietnam, ISO 14001 certification is discussed for Factory A in Bangcock: "After the adoption of ISO, the factory environmental conditions were improved, for example, chemical substances were replaced by water-based solutions." Factory C - "The factory has obtained ISO14000. There is a clear division between technical and personnel management, while the technical aspects of production are overseen by Korean managers, the personnel and manpower aspects are taken care of by Thai managers and Thai supervisors. There is a Korean manager in every unit, working together with their Thai counterparts."
Nike corporation grinds up shoes and reuses some of the components for athletic mats, which are donated to good causes. Call 1-800-352-NIKE and navigate deep into the menu for drop-off locations and a Reuse-A-Shoe program description. Next time you buy shoes, ask the store if they participate in any recycling programs.
Price Waterhouse Coopers PWC performs more than 6,000 factory inspections a year. PWC took over in 1998 as Nike auditor after November 1997 expose of E&Y. Reliability and Validity of PWC monitoring procedures have been called into question.
September 28, 2999 Dara O'Rourke, Assistant Professor MIT, a health and safety expert, released an extremely critical inside report on the labour monitoring methods of PricewaterhouseCoopers, PWC auditors failed to note, including use of hazardous chemicals and other health and safety problems, barriers to freedom of association and collective bargaining, violations of overtime laws, and timecards that appeared to be falsified.
(CCC) (NY Times) (CAA Update) (SW Update).
28 September 2000 - Putting the wolf in charge of the henhouse by Louis Proyect.
29-sep-2000 Auditors give sweatshops the blind eye - PWC, the world's largest factory-monitoring firm is alleged by O'Rourke, of having a pro-management bias. Auditing firms who monitor offshore factories do a shoddy job and overlook safety and wage violations, reports the New York Times.
October 2, 2000 - an article in the US magazine Business Week, the US retail giant Wal-Mart admitted
that its Kathie Lee label handbags had been made in Chun Si Enterprise Handbag Factory in
southern China. According to Wal-Mart, the factory had been inspected five times in 1999, four times by Cal Safety Compliance Corporation and once by PWC. While the auditors had reported that Chun Si was not paying legal overtime rates and was requiring excessive overtime, they apparently failed to uncover many of the most serious abuses. (CCC).
PriceWaterhouseCoopers (PWC) run about 5,000 audits in 1999, and estimates that 80% of the audits revealed substantial abuses, which is down from 90% over past several years (Logan).
Pricewaterhouse representative said local unions and non-governmental organizations were "counter- productive" to their monitoring (May 13, 1999).
SA8000 CEPAA- SA8000 (see below) -SA 8000 is sponsored by the Council on Economic Priorities and various auditing and manufacturing corporations.
Like the Fair Labor Association (FLA) and the Worldwide Responsible Apparel Production Certification Program (WRAP), SAI does not carry out code compliance verification or directly contract other organizations to do so; it accredits social auditing organizations, which then carry out audits of facilities seeking certification. Unlike the FLA, which certifies company brands, SA8000 certifies individual workplace facilities. See SAI Web Site : www.sa-intl.org.
As of August 2001, 72 facilities in 17 industries and 21 countries have been certified as being in compliance with the SA8000 standard. Twenty-one of the 72 certified facilities are apparel and textile factories, and 19 are toy factories. SAI lists certified factories on its website, but no information is available on facilities that failed to achieve certification. http://www.maquilasolidarity.org/resources/codes/memo8.htm#A CRITIQUE: According to LARIC, the SA8000 model reduces workers to objects of study "on a checklist" of northern-based commercial auditing firms. "All they can do in the whole SA8000 farce is complain to the auditors," says LARIC, "to whom workers' rights are no more than another business deal."...LARIC also points to the challenge "professional" auditors face in winning the workers' trust: "In China and other developing countries, a group of well-dressed visitors usually look like management to workers.Even if the team explain their position to the workers, it is difficult for workers to trust important-looking strangers and share their true feelings for fear of reprisal and dismissal, particularly in the absence of truly independent trade unions. If there are foreigners in the team, workers get even more wary since foreigners are usually seen as the plant's business buyers." http://www.maquilasolidarity.org/resources/codes/memo8.htm#A CRITIQUE - A damaging assessment of the SAI verification and certification scheme appeared in an article in the December 18 issue of the South China Morning Post, and it came from an unexpected source. The article quotes DNV's China head, Sangem Hsu Shuaijun, as saying, "You have in southern China all the factors working against the auditors… the multinationals, which want low labour costs; the factory managers, who don't like us because of fines for non-conformity; … the local Chinese Government … which wants this business and does not want it threatened… Right now, in labour-intensive industries in southern China, the SA8000 standard cannot be enforced effectively… The factories always find a way around the auditors." http://www.maquilasolidarity.org/resources/codes/memo8.htm#A As with the FLA and WRAP, auditors' reports are the sole property of the companies involved, unless auditors, NGOs or trade unions negotiate special conditions with companies. According to Levinson (2001) , "of 61 factories "certified" by SA8000, 34 of them are in China. In the SA8000 code there is very strong language about freedom of association. If any workers in those 34 factories were to try and exercise the rights spelled out in the code they would find themselves in jail or an insane asylum" (footnote #4).
"When thinking about the substantial losses that Nike has suffered over the past few years (a loss of 50% in its net profit for its financial period ending May 31, 1998 partly due to allegations of bad treatment in some of its Vietnamese assembly lines) one cannot help but think that it might be cost efficient to require SA8000 certification from its suppliers" (Chantal Plamondon July, 1999)
1999 - No Illusions: Against the Globally Cosmetic SA8000 by Labor Rights in China, Asia Monitor Resource Center, Hong Kong Christian Industrial Committee, and Hong Kong Confederation of Trade Unions. What's are the SA8000 problems?
The legitimacy of certified SA8000 auditors as arbitrators of social justice rests on shaky ethical grounds. The notorious Ernst & Young report clearly demonstrates this by creating a rosy picture of Nike's environmental practices in Vietnam (p. 11). Had it not been leaked to the public, who would have known? SA8000 is constructed as a way to polish tarnished transnational corporate images. so they can advertise them selves as certified and therefore better than their competitors (p. 12).
For monitors to be certified they attend a series of SA8000 training courses and become certified (after a time) as lead auditors. But there are no standards for how this auditing is to be conducted (p. 6).
Trainers for SA8000 (some of them) have no training in Human Rights and no background with NGOs (p. 7).
The SA8000 courses use trainers with a pro-management mentality; auditing is a business, and most of those certified are auditors for corporate accounting and auditing firms (p. 8).
There is no fixed rule for the composition of the auditing team.
The façade of public monitoring: A company can be SA8000 certified even though they violate 10 of the standards. (p. 9). This way a company can say its certified by continue not to be in compliance.
Standards are designed to be "flexible" and easily re-interpreted by corporations; The "truth" can be molded and shaped to fit corporate public relations interests.
With the shield of "commercial confidential" auditors only share data with corporations not even with NGOs subcontracted to do various pieces of an audit (p. 10). This places accountability and the power for information control in the hands of corporate executives, rather than in the arena of public debate.
SA8000 takes away the monitoring rights away from the workers and hands it to corporately-contracted and paid experts (p. 11).
Finally SA8000 is constructed to usurp the power of the State in monitoring and controlling corporate practices; one more apparatus of neo-liberalism economics like WTO, GATT, APEC, OECD, and MIA (p. 12).
- There is a complaint was from the Hong Kong Christian Industrial Committee (CIC), which charged that the SA8000-certified Chung Hoo Shoe Factory in Zhongshan, Guangdong, China was in violation of Chinese labour law. According to CIC, some workers were being paid less than the minimum wage.Other violations included: excessively long hours of work with no overtime pay, no days off for two to three month periods, illegal fines, inadequate food, excessively hot working conditions, and overcrowded and dangerous dormitory facilities.
Virtual corporations are forcing their sweatshop supply chain subcontractors to jump through linguistic hoops by purchasing a simple SA8000 certification program. The hardest part is not the inspection, which costs $10,000, it's contriving some quasi- government/non-government monitoring and inspection language.
March 16, 2001 THE SAIGON TIMES DAILY “Nguyen Quang Toan, director of the International Quality Center (IQC) and head of the Vietnam ISO Club, said, "Many Vietnamese enterprises, especially in the garment, footwear and seafood sectors, have lost out because of the lack of the system." … Project Manager Nguyen Thi Tuong Vi said SA 8000 accreditation was only awarded to companies using no child or forced labor, and which guaranteed equality and good working conditions for staff, and respected workers' rights, among others… To effectively integrate into the world economy, enterprises should obtain at least three certificates - ISO 9000, ISO 14000 (environment protection) and SA 8000, participants said.” Nguyen Quang Toan also told the meeting … “SA 8000 accreditation [can be obtained] as the fee is just US$10,000.”
World Federation of Sporting Goods Industry WFSGI is most interesting - It lists companies with a commitment to eliminate Child Labor from the Soccer Ball Industry. As if listing made it so...
"Independent" means "independent of corporate control, not hired by or funded by a subcontractor or logo corporation. The most independent is the mostly young women workers who are beginning to monitor and make changes. The next level of independence is when workers design their own surveys (action research) as in the LAIDS study, beyond that are special interest, advocacy groups from Unions, to USAS and individuals such as James Keady (See also monitors of monitors). When workers can grow their own empowerment and advocate for their human rights by possessing the knowledge to monitor then, there will be independent monitoring.
Chair, of Indonesian Centre for Labour Struggle (PPBI), founder of Indonesian trade union organization FNBPI (National Front for Workers’ Struggle in Indonesia. Her voice makes a difference. Heroine of the Indonesian Labor movement.
March 12, 2000 Dita Sari speaks out "My name is Dita Sari, and I am the chairperson of FNPBI (National Front for Indonesian Labor Struggles), a newly emerged trade union in Indonesia. I was released from prison just eight months ago, after being held for three years as a political prisoner."
1999 - March 24 - Reebok Calls on Indonesia to Release Labor Rights Activist; Reebok Leads Wage Increases among Manufacturers in Indonesia. STOUGHTON, Mass., March 24 /PRNewswire/ -- On the day before the presentation of the 1999 Reebok Human Rights Awards, the U.S.-based athletic footwear and apparel leader Reebok International Ltd. made public today a letter from Reebok CEO Paul Fireman to Indonesian President B.J. Habibie urging the release of imprisoned Indonesian labor rights activist, Dita Sari.
1999 (October 14) Dita Sari Tour of U.S. Dita Sari is the President of the recently formed Indonesian trade union organization FNBPI (National Front for Workers’ Struggle in Indonesia). She was jailed in 1996 for leading a strike of 20,000 workers and was released from prison only this past July after a long international publicity campaign. Dita toured with Indonesian activist, Haryanto, who worked at a Nike factory in Indonesia.
Amnesty International Alert Dita Sari, a workers' rights activist serving a five year sentence for her peaceful activities defending trade unions, human rights groups, women's rights groups and others, was released on 5 July 1999.
1999 Interview with Dita Sari by Emily Citkowski
National Front for Indonesian Workers' Struggle- When working women organize - Far Eastern Economic Review issue dated March 8, 2001 "Defiant Indonesian Labour Leader Forges Ahead By JOHN MCBETH IN JUMPER, SKIRT and sandals, Dita Sari looks more like a rural schoolteacher than a trade unionist. But working out of a converted house in the backstreets of east Jakarta, the 28-year-old former political prisoner and university drop-out is rapidly emerging as a key figure in Indonesia's fledgling labour movement as it struggles to emerge from three decades of stagnation and oppression... in 1996 when Sari was beginning a six-year jail term for organizing what was then an illegal strike in the Tandes industrial district of Surabaya, Indonesia's second-biggest city. Two years before, at the tender age of 21, Sari had formed the National Front for Indonesian Workers' Struggle in defiance of then-President Suharto's laws forbidding independent labour movements... In the end, Sari served only half of her sentence, thanks to the collapse of Suharto's New Order regime in mid-1998.
AND THEN THERE WERE MORE WOMEN VOICES - 2000- July-August - Indonesian labor activist Cicih Sukesih (left center), who was fired by Nike contractors after military threats failed to intimidate her (non-violence.org). As early as 1988, I saw a story in a Jakarta daily newspaper about a riot at a shoe factory where the Korean manager (producing for Nike and Reebok) had cut wages by two and a half cents a day. Police and Military have been helping to monitor workers "- Cicih Sukaesih, for example, reported that one soldier put a revolver on the table during questioning of her friend.
THEN THERE WERE MORE WOMEN VOICES October 1996 a group of workers at Feng Tay (a Taiwanese Nike factory) refused food for three days and worked without eating as they are not allowed out of the factory gates to buy food. For three days a group of young women worked 12 hour shifts without food in protest of their working conditions (Hancock, 1997).
Department of Labor (does its share of monitoring).
Asia Monitor Resource Center
444 Nathan Road, 8-B
Kowloon, Hong Kong
Phone: 011 852-2332/1346
Fax: 011 852-2385/5319
Hong Kong Christian Industrial Committee
3/F, 57 Peking Road, T.S.T. Hong Kong
Phone: 011 852-2366/5860
Fax: 011 852-2724/5098
June 1996 CHILD LABOR IN CHINA (Change HKCIC-)
September 1997 HKCIC's "Blood, Sweat & Shears
Working Conditions in Sports Shoe Factories in China Making Shoes for Nike and Reebok" By Asia Monitor Resource Centre and Hong Kong Christian Industrial Committee Hong Kong,
January 10, 1999 Labor Rights Violations at 12 China Factories producing for Disney.
We Protest against McDonald's Repudiation of Facts and its Responsibility by Hong Kong Christian Industrial Committee
After eight months of investigation, HKCIC researchers found that factory managers routinely violate both Chinese labor laws and Disney's own Code of Conduct for Manufacturers on wages, overtime and contract protections
June 1999 - No Illusions: Against the Global Cosmetics SA8000 by Labour Rights in China. HKCIC staff signed up for SA8000 audit training classes and were not impressed (LARIC),
In December, 1999 and March, 2000, the Hong Kong Christian Industrial Committee (HKCIC) interviewed workers at factories producing for Nike in China's Guangdong province. Their reports show that workers who make Nike products endure abusive and often illegal conditions (UNITE Report). Nike denies hearing about this research.
December 1, 2000 - Beware of Mickey: Disney Sweatshops in South China By the Hong Kong Christian Industrial Committee (See Maquiladora Solidarity site).
February 2000 - "Nike shows its commitment to human rights is genuine." e.g. "A big fire engulfed in the Sewon Shoes factory in 1995. After that, the Local Government Fire Service Department strongly criticized the factory in the local newspaper. Surprisingly, the labor compliance representative of Nike shared that he knew nothing about the condemnation from the
local government. Again, this is contradictory to Nike's claims of having close monitoring on and good communication with its subcontractors. " This issue contains a list of disclosed and undisclosed factory locations, pointing out that Nike is releasing location information only on the "model" factories. The report concludes "We believe that Nike has performed a public relation exercise through the media. "
"LAIDS" (Legal Aid for Industrial Disputes Settlement ) from 1992 to 1996 the AAFLI-supported "LAIDS" research team interviews workers. The LAIDS survey eventually interviewed 155,000 workers. Here is an summary of the history. At the end of 1992, 106 surveyors had interviewed over 23,000 workers in 163 companies about their wages and working conditions and disseminated information about trade union activities. In a number of surveyed plants, when workers found out their wages were not consistent with the legal minimum wage, successful strikes were carried out, resulting in salary increases to bring wages to the legally mandated minimal level (2). In 1995, LAIDS team interviews 550 workers at Nike-producing factory in Majalaya, W. Java. The total survey of around 11,000 workers performed by AAFLICIO found that only 11% of workers were covered by workers health insurance (LAIDS Survey 1994-95) (1).
The interesting research and social question is how does the LAID survey results of Athletic Apparel factory workers results and methodology compare to that of the Global Alliance surveys of workers in the same factories and countries?
House of Representatives - H. R. 460 (2001 H.R. 460; 107 H.R. 460; Retrieve Bill Tracking Report) has been proposed and introduced by Cynthia McKinney (D-GA) as of February 6, 2001. This bill would require nationals (e.g. Nike, Reebok, & New Balance) of the United States that employ individuals in a foreign country to provide full transparency and disclosure in all their operations (i.e. locations of all subcontractors). Here are the provisions of the first two sections of the bill:
SECTION 1. SHORT TITLE.
This Act may be cited as the "Transparency and Responsibility for United States Trade Health Act of 2001" or "TRUTH Act of 2001".
SEC. 2. TRANSPARENCY AND DISCLOSURE REQUIREMENTS FOR UNITED STATES NATIONALS IN FOREIGN COUNTRIES.
(a) Requirement. A national of the United States that employs 1 or more individuals in a foreign country, either directly or through subsidiaries, subcontractors, affiliates, joint ventures, partners, or licensees (including any security forces of the national), shall take the necessary steps to provide transparency and disclosure in all its operations, including the full public disclosure of the following:
(1) Information relating to location, address, and corporate name of all facilities abroad, including such information of all subsidiaries, subcontractors, affiliates, joint ventures, partners, suppliers, or licensees (including any security forces of the national).
(2) Applicable financial agreements, and investments of partners, suppliers, subsidiaries, contractors, and subcontractors of the national of the United States (including any security forces of the national).
(3) Worker rights practices and labor standards, including any complaints from employees and violations of local labor laws.
(4) Age, gender, and number of employees in each facility.
(5) Wages paid to employees, including policies on overtime pay.
(6) Working conditions based on current standards of the Occupational Safety and Health Organization for similar operations.
(7) Programs that educate employees about dangers and safety precautions of any chemical used in the workplace.
(8) Environmental performance, including toxic release inventory of all pollutants released into the local land, water, or air and disclosure of the amount of natural resources that are extracted, processed, or purchased abroad.
(9) The existence of security arrangements with state police and military forces or with third party military or paramilitary forces.
(10) The human rights policy of the national, any complaints received from local communities, and any human rights lawsuits filed against the national.
First issue is complaints to the SEC about Nike and other corporations advertising themselves as giving grants, but not giving any:
November 21, 1997 - The National Committee for Responsive Philanthropy - "For example, according to its most recent 990PF, Nike Corporation, which uses its PLAY foundation as a major advertising focus, awarded absolutely no grants through the PLAY foundation. Recently, on the day Nike released a new athletic shoe, Chicago Police reported 22 violent crimes in connection with the shoe. Thus, Nike's "sterling corporate citizen" advertising focus effects not only their sales, but also effects crime rates. Yet, neither private nor public agencies have the data necessary to adequately question these less than sterling corporate practices."
Second issue is Rule S7-25-97 which limits the ability of small share holders to make floor resolutions at shareholders meetings. Nike for example has blocked resolutions from its share holders:
January 5, 1998 - "...I am writing to express my opposition to rule S7-25-97 (the stockholder gag rule). It is outrageous to me, as an investor and stockholder, that efforts to obtain information from the companies in which I hold ownership should be limited by the SEC to protect these companies from stockholder scrutiny. Is the SEC out to protect the likes of Phillip Knight and Nike from bad publicity?
This is a disgusting manipulation of the regulatory process by corporations that
don't want the truth to come out, or that feel harassed because the questions stockholders ask are a source of embarrassment." (Similar Letter Dec 2, 1997; Similar letter Dec 4, 1997 on Nike and Disney; Similar letter Dec 11, 1997)
UCM Urban Community Mission (1999) “Cruel Treatment Working for Nike in Indonesia” UCM Survey Report, December 1999. Accessed March 9, 2001 (CLR short report). This is a partial summary. Download the complete document.
SHAREHOLDERS FOR JUSTICE - March 8, 2001 HEADLINE: Nike critic forms 'Shareholders for Justice' BYLINE: By WILLIAM McCALL, AP Business Writer DATELINE: BEAVERTON, Ore. A former soccer coach who claims pressure from Nike cost him his university job has purchased a share of the athletic shoemaker's stock to form "Nike Shareholders for Justice" and push investors to improve conditions at Third World factories. Jim Keady and another activist from the Living Wage Project announced the formation of the new group Thursday as part of International Women's Day, noting that nearly nine out of every 10 workers in Indonesian factories that produce Nike shoes are women.
REPORT - Asia Monitor Resource Centre and the Hong Kong Christian Industrial Committee Hong Kong, September 1997 Investigators found that practices and conditions at all factories in the survey systematically and grossly violated:
Nike's and Reebok's own codes of conduct
The Apparel Industry Partnership code of conduct
(Both Nike and Reebok belong to the AIP)
Chinese labor law
UNITE - Union of Needletrades, Industrial, and Textile Employees
Phoenix 1999 Article on New Balance with quotes from their CEO about charges New Balance is made in China, not USA.
Levinson response (2001) to supermonitoring proposal - "Firms do have a lot to lose if they are seen as sweatshop producers. The demand for goods produced under sweatshop conditions is inelastic. Thus, firms will go to great lengths—join the Fair Labor Associations (FLA) or Social Accountability International (SA8000), adopt codes of conduct, pay monitors to check their factories, increase their public relations efforts—to
avoid being perceived as a sweatshop producer. What firms will not do is grant workers basic rights to organize or change the sweatshop structure of the industry. This is because firms have limited ability to raise prices for products made under good conditions."
Workers Rights Consortium (WRC) was founded October 19, 1999. The Worker Rights Consortium (WRC) is a non-profit organization that supports and verifies licensee compliance with production codes of conduct. WRC is developing a network of local organizations in regions where licensed goods are produced. This network will allow the WRC to inform workers of their rights under applicable codes of conduct and will allow workers to report conditions securely and confidentially. WRC member schools are committed to a living wage, something the FLA is not.
As of March 7, 2001 WRC has 74 member colleges and universities.
April 20, 2000- Nike Chairman and CEO, Phillip Knight, withdraws a $30 million donation to the University of Oregon. Knight says he withdrew the donation because University of Oregon joined the Worker Rights Consortium (WRC Time Line).
WRC's Critique of FLA, Click Here for PDF copy.
MONITORS OF THE MONITORS
Monitoring the monitors falls to the loosely coupled global network of quite different individuals and groups in the anti-sweatshop movement. Solutions vary from local monitoring attempts in particular countries, special issue monitoring, to constructing global governing bodies, such as the supermonitor proposal.
Anti-Sweatshop Labor League ASSL
Feminists Against Sweatshops
Global Exchange 8 critiques of FLA CODE OF CONDUCT
allows poverty wages
allows excessive overtime
allows violations of workers' right to organize
biased sampling of factories
secret factory locations
Hearts and Minds - Anti-Sweatshop group
Just Do It Boycott Nike
Maquiladora Solidarity Network
NLC National Labor Committee (NLC) - The National Labor Committee (NLC) is a human rights advocacy group, dedicated to promoting and defending the rights of workers. Charles Kernaghan is the Executive Director
National Mobilization Against Sweatshops
National Retail Foundation
No Sweat - UK based with Nike and Gap coverage
Press for Change is run by Jeff Ballinger who works out of his basement, goes to Indonesia to work with the workers, and keeps on top of Nike to to make the changes that will improve worker safety, wages, and representation.
Supermonitors - Who are the supermonitors? The supermonitor is a umpire-governance body constituted by international organizations such as the WTO, World Bank and the ILO, together with NGOs and international confederations of trade unions. The approach is also known as "Ratcheting Labor Standards" (RLS). According to Funk, O;Rourke & Sabel (2001), RLS has two parts:
First, it would use monitoring and public disclosure of working conditions to create official, social, and financial incentives for firms to monitor and improve their own factories and those of their suppliers.
Second, it would create an easily accessible pool of information with which the best practices of leading firms could be publicly identified, compared, and diffused to others in comparable settings"
Fung, Archon, Dara O'Rourke, and Charles Sabel (2001) "Realizing Labor Standards How transparency, competition, and sanctions could improve working conditions worldwide." The authors conclude, "Nike's recent series of labor initiatives, each of which was superior to its predecessor, illustrates how social and competitive pressure can generate continuous improvement in labor performance."
A Better Mousetrap Robin Broad. Broad argues that supermonitoring merits discussion, but "Do we really want to give the World Bank new life—and an expanded mission." Monitoring the companies in athletic apparel and toys who claim codes of conduct, lets players without code escape.
Some Up, Some Down Pranab Bardhan "The
transnational enterprise in a poor country, or all the horror stories about its working conditions and wage levels that outrage consumers in rich countries, is usually, though not always, an island of relatively "decent work" (to use a phrase popular in ILO documents) in an ocean of "indecent" and brutal work conditions in the rest of the economy. " "... the glow of moral
comfort enjoyed by the consumer in rich countries who scrupulously looks for the "no-child-labor-used" label or certification is largely illusory" since in other parts of the country labor conditions worsen.
Wishful Thinking Mark Levinson. Levinson argues that the supermonitoring proposal is overly simplistic and flawed in several ways. (A.) consumer demand for good and bad conditions is asymmetric and demand for goods produced under sweatshop conditions is inelastic and consumer demand for non-sweatshop good is elastic: price increases generate sharp drops in demand; (B.) The logo corporation incentives are stacked in favor of seeking monitors that are corporate-friendly while monitors have incentive to be friendly since they are well paid; (C.) logo corporations do not want to disclose, and whatever ratcheting has come from Herculean efforts by USAS, WRC, and other campaigns demanding disclosure; (D.) logo corporations locate most often in countries (e.g. China) without the right to organize, whose government have political incentives and economic incentives, and ; (E.) WTO, NAFTA, World Bank, and IMF operate according to a deeply unbalanced set of ground rules that protect property rights but not human rights.
The View from the Tropics Kaushik Basu. Basu argues that as a practical proposal, supermonitoring is flawed. (A.) relies too heavily on social sanctions and citizen action. (B.) the approach hence creates a competitive advantage for large firms who can demonstrate monitoring and by make it virtually impossible for small producers to get certification (e.g. Reebok in Pakistan Soccer industry); (C.) social sanctions have also been the basis of witch-hunts and the persecution of harmless behavior that happens to deviate from the mainstream; so first world moral boycotts in the First World, for example, can drive the incomes of many workers down to zero (what is worse for a
worker than being exploited is not being exploited); (D.) instead of mass consumer action and public opinion, take the corporations to court; (E.) In the age of global mobile capital, developing countries hesitate to take action to raise labor standards for fear of driving capital away to another developing country; (F.) Even though it runs on the principle of one- country- one- vote, the "green room" where the agenda is set is, in practice, controlled by industrialized nations.
Unions and the State David Moberg - (A.) Supermonitoring should be used to strengthen unions and governmental regulation, not replace them with what ultimately would be a relatively weak, inadequate, and privatized regulatory system; (B.) some universal standards can be applied without waiting for supermonitoring, such as child or forced labor, racial discrimination, and the prohibition of exposure to toxic workplace chemicals; (C.) Companies in question are not struggling efforts run by entrepreneurs in poor countries, so the enforcement of reasonable minimum or living wage standards based on a country's development is requisite; (D.) While ownership of factories has become decentralized, ultimate control over the global chain of production has become ever more centralized; make those dominant corporations legally responsible for every infraction of labor rights at every stage of production, even if they are not the owner and direct employer in every workplace. (E.) history suggests that monitors—like today's financial auditors—will feel strong pressure to collaborate with businesses that employ them and that corporations will be motivated to do only what little they must in order to avoid bad publicity.
Educating Workers Heather White - Verité, executive director. "I would like to propose a global worker education initiative in all developing countries that produce for Western markets. Until workers are in a position to advocate for themselves, possessing complete knowledge of their legal rights and entitlements, they will be overly dependent on outside auditors to initiate improvements in the workplace, which may or may not happen."
Human Development Guy Standing, not representing his ILO job says supermonitoring must pass the realism test (A.) e.g. I recall visiting a US multinational in a Malaysian export-processing zone. It was exposing thousands of teenage women to conditions that the manager readily admitted were causing long-term ill health. e.g. Go to the favelas of Sao Paulo or the lanes in the slums of Ahamedebad, where labor relations are harder to monitor than implied by the authors; (B.) What is missing is the voice of the workers to pressure managers to make feasible changes and to give them knowledge of what to do; (C.) With flexible practices, statutory regulations and monitoring procedures are harder to operate than with mass production or when production is less dispersed (D.) Unintended consequences of supermonitoring would be driving practices underground. (E.) Funds could do more good if just given to vulnerable workers so that they could bargain better, or opt out; (F.) Supermonitoring is vague on principles, although "sanctions" and "transparency" are called principles. Surely, the basic principles of RLS should be equity, equality, democracy, and accountability; (G.) There are "certifying agencies," "regulatory agencies," and "umpire organizations," as well as "compliance monitoring agreements" and "third-party social auditing." The language is at best paternalistic. (H.) There is also a moral hazard in the proposals. We are told, "A firm would select a monitor from among NGOs or auditing companies who provide this service." How cozy. One reads of consultancy firms offering themselves as "social inspectors." Do they have a track record of being advocates of labor standards?
Monetize Labor Practices (Let Courts Decide)- Ian Ayres (A.) The notion of what would constitute fair working conditions is not adequately defined (B) His suggestion, firms that disproportionately manufacture in developing countries should be encouraged to disclose point-of-purchase information about the average hourly labor costs of manufacturing particular goods.
Fung, O'Rourke, and Sabel Respond
What happens when we compare two monitoring studies of mostly the same Nike factories in the same country, i.e. Indonesia? In making this comparison, the BATA shoe factory has many working conditions that are better than Nike shoe factories in the same industry in the same country. There are still horror stories, but Nike is no "oasis."
SUBS BEING MONITORED
The global supply chain network is increasingly multi-tiered with nations specializing in low-tech, mid-tech, and high-tech factory production. The multi-tiered supply chains are subcontractors to transnational global corporations which call themselves "virtual corporations." Virtual here refers to centralizing marketing and R&D while subcontracting production. The veil of the "virtual corporate" image is being pierced, and the public is demanding that the subs be monitored and the so-called "virtual corporation" become accountable for factory working conditions. University students and professors, for example, want to know the working conditions under which campus apparel is produced. Relations between the production workplace and the marketplace of consumption have traditionally been separated (Marx noted this in Das Capital more than a century ago). With postmodern consumer movements and advocacy groups becoming loosely networked into the kinds of actions we witnessed in Seattle and the WTO, the veil of the "virtual corporate" facade is being pierced. The result is the first world space of consumption is interpenetrating with the third world space of production (See Boje, 2001 The Tamara of the Athletic Apparel Industry connecting postindustrial supply chain to postmodern consumer).
When the June, 1996 issue of Life magazine carried an article about child labor in Pakistan, monitoring was in...
SGA Sports makes the Nike Soccer balls 1,
MONITORS IN THE NEWS
ARE CHILDREN STILL MAKING SOCCER BALLS? - Next week, 15 monitors overseen by the International Labor Organization will begin monthly inspections on motorbikes to more than 140 centers across Sialkot where leather is stitched into balls. The centers were set up to move the work to sites where monitoring could take place. To ensure that children aren't stitching, Pakistani manufacturers who supply the balls to U.S. companies must name their stitchers and account for production from each center. (See November, 1997- "Monitors Scan Pakistan for child-labor soccer balls." (Nando Times) NEW YORK (November 12, 1997 3:41 p.m. EST http://www.nando.net) -- Fifteen monitors will begin crisscrossing a region of Pakistan next week to ensure children aren't making soccer balls anymore, a coalition of sporting goods makers and child advocacy groups said... Up to 10,000 Pakistani children have been reported stitching balls in home and small shops, receiving little pay for working up to 10 hours a day. Seventy-five percent of the world's $1 billion soccer ball industry is in Pakistan, mostly in Sialkot).
November 10, 1997- "Nike Tracks Across the Globe" is a series of articles for the Oregonian by Jeff Manning. It shows the interplay between activists and Nike around who is going to tell what story to the public about Nike and Labor.
"Nike Tracks Across the Globe" - 450,000 workers power the athletic shoe maker's machine, but the opportunity to better themselves comes at a cost (click here) for Oregon Live article and photos.
"Huge subcontractors find they must dance the tune Nike calls Suppliers are dependent on - and increasingly monitored by - the footwear and apparel giant By Jeff Manning of The Oregonian staff (Click here).
"Nike battles back, but activists hold the high ground" - The sneaker maker tries to repair its reputation as critics press on in the public relations fight By Jeff Manning of The Oregonian staff (press here).
WHAT DO WE DO ABOUT MONITORING?
General Overall Principles of Independent Monitoring (from Bernard, 1997).
Monitoring must be independent of business and the government.
Monitoring must be ongoing, not ad hoc, nor simply a publicity, celebrity visit.
Monitoring must have an indigenous component.
Monitoring groups must be trusted by the workers and with a track record within the
Transparency needs to be written into any monitoring agreement so that the monitors have the right to communicate information without corporate pre-screening or control.
GOOD REFERENCE ARTICLES ON MONITORING
Ballinger, Jeff (Spring, 1999). Taking On the Global Market Machine Time to Gear for a Revolution in Workers' Rights
Bernard, Elaine (1997). PRESENTATION TO THE INDEPENDENT MONITORING: A FORUM sponsored by the National Labor Committee April 4, 1997, Queens College, New York. Bernard is Executive Director Harvard Trade Union Program. Bernard's web site.
Boje, David M., Grace Ann Rosile, & J. Dámaso Miguel Alcantara Carrillo(2001b). The Kuk Dong Story: When the Fox Guards the Hen House
Boje, D. M. (2001c). Pistol Pete and sweatshop apparel in the New Mexico State Bookstore October 8th Opinion Column in the Round Up campus newspaper of New Mexico State University.
Boje, D. M. (2001d). Reply to Sam Brown "Clarifying Misguided FLA Monitoring Claims" dated October 27, 2001.
Bob Jeffcott and Lynda Yanz (2000, Maquila Solidarity Network) Voluntary Codes of Conduct: Do they Strengthen or Undermine Government Regulation and Worker Organizing?
Boje (2001) Tamara Manifesto. Tamara: Journal of Critical Postmodern Organization Science. (Vol 1 (1): 15-24.
ILO (2000) - Labour Practices in the Footwear, Leather, Textiles and Clothing Industries Report for discussion at the Tripartite Meeting on Labour Practices in the Footwear, Leather, Textiles and Clothing Industries Geneva, 16-20 October 2000
Maquiladora Solidarity Network analyses of FLA and GA monitoring.
March, 2001 report - Codes Memo 5
April, 2001 report Codes Memo 6
August, 2001 report Codes Memo 8
Research into Nike's Global Alliance assessment study: Wages, Hours and Trade Union rights -- Still Missing (Clean Clothes Campaign, 15 Sept. 2000)
Harvey, Pharis J. "DEVELOPING EFFECTIVE MECHANISMS FOR IMPLEMENTING LABOR RIGHTS IN THE GLOBAL ECONOMY by (source).
Haufler, Virginia Comparing Private Sector Initiatives:
Labor Standards, Information Privacy and Environmental Management. Carnegie Discussion Paper #2
O'Rourke, Dara (1997) " Smoke from a Hired Gun," report by , Transnational Research and Action Center (TRAC), 10 November, 1997. This report is on file at ILRF and also available at TRAC's Corporate Watch website www.corpwatch.org
VanEijk, Janneke, "Comments on the Guidance Document for Social Accountability 8000," Clean Clothes Network, December 1997.