Wary Allies

Corporate codes of conduct offer a "third way" to promote labor rights in the global economy--a civil-society alternative to first-way government regulation or second-way trade-union organizing and collective bargaining. Supporters argue that such codes can harness the market power of informed consumers to halt abuses against workers in developing countries, given that national laws vary and governments cannot possibly inspect every workplace and prevent every abuse.

Like cereal boxes in a supermarket aisle, a daunting variety of codes have entered the public-policy marketplace in recent years. These are sponsored by nongovernmental organizations (NGOs) in the Fair Labor Association, the Worker Rights Consortium, the Ethical Trading Initiative, the Clean Clothes Campaign, the Rugmark Foundation, the Foulball Campaign, and Social Accountability 8000 (SA8000), a takeoff on the ISO 9000 manufacturing-quality standards. Members of these consortia include company officials, trade unionists, human rights activists, religious leaders, consumer and community organizations, student groups, and university administrators. The codes and their enforcement mechanisms are the result of extensive bargaining among the stakeholders; they are the successors of an earlier round of company-only codes of conduct proclaimed by Levi Strauss and Company, Reebok, Nike, Gap, and others. These internal corporate codes flunked the fox-in-the-chicken-coop test.

But like third-way politics generally, with its talk of putting a human face on free market efficiency, the substance behind the rhetoric of these codes is open to question. Is consumer consciousness enough to reward good corporate citizens and punish abusers of workers' rights? Can private policing, even by the best-intentioned NGOs, really raise labor standards in a sustained way? Unions are accountable to workers; but whom exactly do the NGOs represent? Will a rush to corporate codes of conduct undermine effective labor-law enforcement by governmental authorities and weaken workers' power in trade unions?

Unions and NGOs share a common desire to halt abusive behavior by multinational companies and a broader goal of checking corporate power in the global economy. A global supply chain of subsidiaries, contractors, subcontractors, and sub-subcontractors has taken shape in export-processing zones around the world. Employers in these enclaves exploit cheap, abundant, usually female labor in what is often called a global assembly line. Many of the factories serve household-name companies, whose image--conveyed by a logo, a slogan, or a famous spokesperson--is their strongest marketing tool. But image can also be an Achilles' heel if consumers are made aware of abusive practices in factories that produce the goods they purchase. Trade unions and NGOs have collaborated in consumer-awareness campaigns targeting Nike, Gap, Wal-Mart, Disney, Liz Claiborne, and other well-known firms, and personalities like Kathie Lee Gifford (with a big splash) and Michael Jordan (with barely a ripple).

Despite justifiable skepticism, many unions have supported the new movement for corporate codes of conduct. UNITE, the U.S. apparel and textile workers' union, first joined with the International Labor Rights Fund, the Lawyers Committee for Human Rights, the Consumer Federation of America, and other NGOs, along with a number of high-profile companies, in an effort called the White House Apparel Industry Partnership that was sponsored by the Clinton administration and then–Secretary of Labor Robert B. Reich. But UNITE pulled out of the partnership's Fair Labor Association when union officials thought the other participants were cutting a deal behind their backs--a deal they thought was a bad one, with weak enforcement measures.

Officials from UNITE and other unions still participate in the SA8000 program with representatives of the National Child Labor Committee and Amnesty International and with executives from Toys "R" Us, Avon Products, and the Dole Food Company. SA8000 cheerfully proclaims, "Being socially responsible is as easy as 1, 2, 3: adopt high standards, implement your policy, and measure your performance." British trade unions, NGOs, businesspeople, and government officials make up the Ethical Trading Initiative. A similar coalition comprises the Clean Clothes Campaign.

College students were prime movers behind the Worker Rights Consortium, which links trade unionists, firms, and universities in a code of conduct requiring labor-practice disclosure by factories that make goods bearing university names. Social "labeling" and product-specific codes for soccer balls, toys, coffee, carpets, and so on have also taken shape, usually with involvement by trade unions, NGOs, and corporations.

The Politics of Remote Control

The movement for codes of conduct is a peculiarly first-world phenomenon. Some advocates have been embarrassed by reports that codes long in the making at home took years to be translated into the languages of workers in developing countries covered by the codes. Even after they are translated, codes rarely are disseminated to workers.

The Fair Labor Association and SA8000 have been fashioned and refined in Washington, D.C., and New York, not in Tegucigalpa and Jakarta. The Ethical Trading Initiative and the Clean Clothes Campaign are driven, respectively, from London and Amsterdam, not from São Paulo and Nairobi. The Worker Rights Consortium had to scramble to mend fences when claims of extensive consultation with developing-country NGOs amounted, under examination, to a few phone calls and e-mail exchanges.

Many in favor of codes adamantly oppose a monitoring role for international accounting firms or other corporate-oriented social auditors based in the United States and Europe. Others oppose oversight even by first-world NGOs and insist that only local NGOs should police codes of conduct.

Two mid-1990s cases well known among activists illustrate labor-NGO tensions and the less-than-ideal effects of "indigenous" monitoring. They involved the Mandarin International apparel factory (a supplier for Gap) in El Salvador and the Kimi factory (a source for J.C. Penney and other retailers) in Honduras. At first, when workers supporting unionization were fired, U.S. unions and NGOs launched publicity campaigns in the United States that helped get many workers' jobs back. These efforts also led to improvements in some of the worst working conditions, such as forced pregnancy testing, denial of bathroom privileges, and poor ventilation.

But follow-up monitoring by local NGOs sparked suspicions that the NGOs were supplanting the unions' role as worker representatives by discussing wages and working conditions with factory managers. Trade unionists were also worried that having NGOs apply codes of conduct exempted government labor inspectors from enforcing national labor laws.

At Mandarin the original union was challenged by a new, larger rival that it viewed as a company-sponsored ploy using codes of conduct as cover. Mark Anner, an American living in El Salvador who was trusted by everyone (he was nearly killed in a death-squad bombing of a union office several years earlier), became a de facto mediator working to disentangle proper roles for unions and NGOs at the factory before the monitoring program could get traction.

At Kimi a respected medical doctor with many years of experience fighting military abuses in Honduras investigated workers' complaints about wage violations and unfair treatment by supervisors. On paper this reflected the monitoring model most often promoted by NGO advocates in the first world: a local human rights advocate who speaks the language and is trusted by workers, not a remotely based NGO or a corporate accounting firm. First-world NGOs eagerly awaited the chance to launch a new pressure campaign based on findings by a "model" monitoring mechanism.

But this human rights leader had no experience in collective bargaining or in workplace issues. He emerged from a meeting with management agreeing that workers had to increase productivity and work more diligently before wages could be improved and supervisors could ease their discipline. Management snowed him with arguments that trade unionists are used to hearing and refuting but that were new and plausible to him. The union at Kimi then focused on the collective agreement and on enforcing local labor laws, not the code of conduct the company had agreed to follow. The Kimi factory closed last year.

Many trade unionists suspect that behind most corporate and some NGO enthusiasm for codes of conduct and related monitoring plans is an agenda to shove aside the organizing and bargaining roles of trade unions. Some believe that corporations that support codes of conduct really aim to put an end to strong, class-based workers' organizations that can back up their demands with the power to strike. Additionally, an over-reliance on voluntary codes would erode unions' ability to invoke government authority and enforcement muscle.

In short, a rush to corporate codes of conduct would allow powerful companies to avoid union organizing, enforceable collective agreements, and government regulation. The companies could deal instead with compromise-laden stakeholder codes or with scattered, small, often resource-starved NGOs. While NGO critics can mount ad hoc publicity campaigns about abuses at single factories, consumers soon grow confused about and tired of same-old, same-old horror stories.

To advance workers' rights in the global economy requires strong regulation and enforcement, nationally and internationally. Domestic labor-law reform is key. So is an expanded role for the International Labor Organization, as well as new labor-rights linkage to trade agreements. Trade sanctions against abusive countries and firms are an important tool. Workers' rights rely also on strong trade unions that can organize, bargain, and strike effectively.

Given unions' weak presence in the global assembly line and the rapid-response capabilities of many NGOs, codes of conduct are worthwhile. The challenge is to find the right balance. The institutional tensions and differences examined here complicate efforts by unions and NGOs to collaborate for social justice in the global economy. But problems should not block progress. These two communities still have more in common with each other than either has with corporations, governments, or international organizations that see free trade and free-flowing capital as the solution to low labor standards. At the same time, unions and NGO need to be clear-eyed about their differences and their proper roles as they navigate the opportunities and challenges that lie ahead.

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