Voluntary labour accords do little for global supply chain workers

by Stella Dawson
Friday, 7 June 2013 04:18 GMT

The tag on a pair of jeans by Wal-Mart's brand Faded Glory, which is made in Bangladesh, is shown after purchase from a Wal-mart store in Encinitas, California, on May 14, 2013. Wal-Mart said it would conduct in-depth safety inspections at all 279 Bangladesh factories with which it works and publicly release the names and inspection information. REUTERS/Mike Blake

Image Caption and Rights Information

WASHINGTON (Thomson Reuters Foundation) - Workers see limited improvements in working conditions from the voluntary accords that big corporations strike with global supply chain factories, highlighting the need for new approaches to raising health and safety standards, studies have found.

The April 24 collapse of a clothing factory in Bangladesh that killed 1,130 people - mostly low-paid seamstresses - has brought into stark relief the shortcomings of the private inspection model and voluntary compliance schemes used by major consumer companies such as Wal-mart, the Gap and Apple.

“What started out as hope has ended up in disappointment,” said Richard Locke, head of political science at the Massachusetts Institute of Technology. Locke has conducted five years of research on global brands including Nike, Hewlett-Packard and Coca-Cola in 14 countries and 120 supply chain factories.

“I continue to believe that corporations have a responsibility up and down the supply chain, but I have a renewed appreciation that the treatment of workers is a public - by that I mean government - responsibility. You cannot do one without the other,” Locke said on Wednesday at the launch of his new book “The Promise and Limits of Private Power: Promoting Labor Standards in a Global Economy”, which is based on the research.


His conclusions are similar to those reached by the U.S. labour federation the AFL-CIO, which said in a study released in April that the system of private programmes to regulate workplaces through inspections, audits and certifications is broken. It is a method widely adopted after child labour scandals at Central American factories that sourced clothing for Liz Claiborne and other internationally known brands.

As major corporations embraced voluntary codes of conduct to cover global suppliers in far-flung places. corporate social responsibility to monitor compliance ballooned into an $80 billion industry. Corporations outsourced monitoring to these social organizations, which rely on financing from the very corporations for whom they conduct inspections; they in turn often outsourced to local groups, the AFL-CIO said in its report “Responsibility Outsourced”.

The result can be highly compromised reports that fail to flag problems, it said. For example, nearly 300 workers died in a fire at a garment factory in Karachi on Sept. 11, 2012, three weeks after leading audit group Social Accountability International had given the factory a coveted certificate of compliance as a socially responsible workplace. Locked windows and barred exits kept workers from getting out, and others died jumping from the top of the four-storey building.


In his research, Locke analysed data from the reports on social audits of factories that supply global companies with footwear, sugar and consumer electronics.

He said he found that corporations would act on the most egregious violations, and there were some basic improvements in health and safety, but overall, corporations did no systematic review of the audits, and there was no evidence of sustained improvements.

“The point is that these improvements seem to have hit a ceiling,” he said.

Where monitoring can work, however, is when it is combined with technical assistance programmes to train managers on modern workflow, inventory control, personnel management and other techniques. If profits generated from increased productivity resulting from these improvements were shared and used to improve working conditions, output rose benefiting both the company and workers, he said.

The most successful such models are collaborative programmes involving governments, he said. For example in Cambodia, the International Labor Organization runs a Better Factories programme, which depends on buy-in from governments, corporations, employers and unions. It trains management in supervisory skills, advises on factory improvements and trains workers and manager on labour rights and responsibilities.

The ILO is expanding this model to Haiti, Jordan, Lesotho, Indonesia, Vietnam and Nicaragua. However, it is not without problems. Strikes and violent protests have been spreading in Cambodia this year where the 300,000 garment workers emboldened by a shortage of skilled workers are pressing complaints that companies have failed to raise wages sufficiently or improve safety.


The major problem Locke said he encountered at all the supply factories he studied was excessive work hours - and the responsibility cannot be solely laid at the feet of the suppliers. It is driven by the very short delivery schedules demanded by global corporations, he said.

When a new product is launched, sales are monitored hourly at corporate headquarters, and within hours new orders are transmitted to their global contractors, which must ramp up production instantly to meet very tight delivery schedules.

“You cannot just focus on the downstream producers. You have to look upstream at the pressures and practices of global brands,” Locke said.

Our Standards: The Thomson Reuters Trust Principles.