Workers' Rights and Labor Compliance in Global Supply Chains

Is a Social Label the Answer?

Jennifer Bair, Doug Miller, Marsha Dickson

• Publisher: Routledge
• Year: 2013
• ISBN:
  9781135012885
• Edition: 1
• Topic: Business
• Subtopic: Fashion & Textile Industry
• Index: Business

This book provides insight into the potential for the market to protect and improve labour standards and working conditions in global apparel supply chains. It examines the possibilities and limitations of market approaches to securing social compliance in global manufacturing industries. It does so by tracing the historic origins of social labelling both in trade union and consumer constituencies, considering industry and consumer perspectives on the benefits and drawbacks of social labelling, comparing efforts to develop and implement labelling initiatives in various countries, and locating social labelling within contemporary debates and controversies about the implications of globalization for workers worldwide. Scholars and students of globalisation, development, corporate social responsibility, human geography, labour and industrial relations, business ethics, consumer behaviour and fashion will find its contents of relevance. CSR practitioners in the clothing and other industries will also find this useful in developing policy with respect to supply chain assurance.

Part I
Introduction and Historical Overview

1 To Label or Not to Label

Is that the Question?

Jennifer Bair, Marsha A. Dickson and Doug Miller

Over the last two decades, a vibrant, interdisciplinary literature has debated the implications of globalization for economic development¹. In particular, scholars have investigated the consequences of trade liberalization and the internationalization of production for workers in global north and south alike. As the classic ‘starter’ industry for developing countries and the world’s most widely dispersed manufacturing sector, apparel production has long been at the center of the debate regarding the relationship between globalization and worker well-being. This volume reveals the intensity and plurality of this debate by providing an in-depth examination of one particular strategy for improving the well-being of workers in global supply chains. Specifically, the contributors to this collection weigh the possibilities and limitations of a ‘social label’ for securing a more ethical form of apparel production in the global economy.

Although the social label is currently enjoying a renaissance as a possible bulwark against a global ‘race to the bottom,’ the idea is far from novel. Defined as an attempt to provide consumers, via a physical mark, some assurance about the social conditions surrounding a product’s manufacture (Urminsky 1998), the social label originated in somewhat dubious circumstances in the United States during the latter half of the nineteenth century; both trade unions and the embryonic consumer movement viewed it as the principal means by which abusive labor conditions could be regulated through the power of the market. As we shall see, the social-label approach proved highly contentious from the outset, and now, more than a century later, this strategy has resurfaced in the form of new efforts to certify the social conditions under which particular products are manufactured. From proposals for a ‘Good for Development’ label (Ellis & Keane 2008) to demands for the introduction of a harmonized system requiring mandatory origin labeling for all clothing, shoes, and textile imports into the European Union,² to the launch of a full range of Fair Trade Certified™ clothing items,³ consumers are now faced with a veritable ‘label maze’ of garments bearing social or ‘eco’ marks, such as the Soil Association certified-organic label or the Forest Stewardship Council label.⁴

The reemergence of the social label is attributable to a range of factors. Foremost among these has been the inability of the international institutions to establish a global system for regulating the social dimension of global trade and production networks. The failure of the World Trade Organization (WTO) to include a social clause in trade agreements, and opposition to the International Labour Organization’s (ILO) efforts to introduce a unilateral system of social compliance, including a global social label,⁵ paved the way for a plethora of private initiatives addressing labor conditions in far-flung supply chains for light manufactures such as apparel and footwear (Chakravarthi 1997). Since the mid-1990s, these initiatives have evolved into a multi-million-dollar social-compliance industry. Corporate codes of conduct and private compliance programs, including auditing systems designed to monitor supplier performance, were originally developed as a risk-management tool in the wake of numerous sweatshop scandals involving contractors producing for well-known U.S. and European brands and retailers (Bartley 2005; Esbenshade 2004).

In recent years, the social-compliance industry has diversified into new initiatives that are based on a market differentiation logic that distinguishes them from the standard auditing model that most mass brands and retailers use to monitor their suppliers’ compliance with local labor laws and/or their own corporate codes of conduct. The goal of such programs is to develop a label that can provide an emerging group of ethically conscious consumers with credible assurances that labeled goods are produced in a manner consistent with certain social and/or ecological standards. Ideally, then, a social label would enable consumers to identify ethically produced products and services among all those offered in the market (Piepel 1999).

It is no accident that this upsurge of interest and activity around social compliance in the global apparel industry over the last decade and a half has been occurring alongside a far-reaching liberalization of the global-trading regime for textile and apparel products. In 1995, the Agreement on Textile and Clothing established a decade-long schedule for phasing out the Multi-Fibre Arrangement (MFA), a multilateral regime that had regulated trade in textile and apparel products since the 1960s. Under the auspices of the WTO, quotas on clothing were gradually eliminated over a 10-year period, with the final quantitative restrictions on textile and apparel imports lifted on January 1, 2005. The inauguration of quota-free trade was expected to create new pressures on apparel manufacturers, since suppliers in some developing countries that had benefited from the quota regime would now be forced to compete for import market share with lower-cost suppliers (Bair 2008).

The scenario that trade liberalization would provoke a ‘race to the bottom’ among suppliers brought the social dimension of apparel production even more strongly to the fore. Some analysts suggested that a positive record of labor compliance might provide exporting countries with a competitive advantage, assuming that a positive record could be made a criterion that potential clients (i.e., foreign retailers and brands) would consider, alongside price, quality, and lead time, when choosing where to place their subcontracting orders. Thus, the restructuring of the post-MFA apparel industry has heralded a new chapter in the history of social labeling, as national governments and trade associations have sought to rebrand their apparel sectors as part of a business-to-business competitiveness strategy. At the same time, there is increasing consensus that the extant model of social compliance via private audits has failed to significantly improve working conditions or deter labor-rights violations in global supply chains (Locke et al. 2007; Seidman 2007). And new, market-driven, consumer-oriented initiatives, such as the one that Fair Trade USA is developing (see Chapter 11) are furthermore crowding the social-compliance field.

This is the context in which a group of academics, activists and industry practitioners met to debate social labeling in the global apparel industry at the University of Northumbria, United Kingdom, in September 2010. The perspectives presented at the meeting were interdisciplinary, and the debates were sometimes contentious. The 15 chapters collected here, which include a mix of papers presented at the conference and several solicited afterward, represent the most comprehensive, critical, in-depth look at social labeling yet assembled. They provide a detailed understanding of the central role a wide range of actors—individual consumers, businesses, governments, trade unions, nongovernmental organizations, and others—play in creating a system of production and trade that advances the welfare of workers in developing countries. It sheds unprecedented light on the contradictions and challenges inherent in developing, and communicating to consumers, a system for guaranteeing the integrity of the working conditions and labor practices along geographically dispersed and organizationally complex global supply chains. In short, this collection enables a deeper understanding of the political, ethical, economic, and logistical issues we must confront if we are to meaningfully pursue a more just and equitable apparel industry.

The remainder of this introduction mirrors the organization of the volume, which is divided into four main sections. We discuss the main contours of each section and provide brief summaries of each chapter, thus providing the reader with some sense of the breadth and depth of this examination into the promises and perils of social labeling. Before proceeding, however, a more nuanced conceptualization of the term social labeling is in order. Most broadly, social labeling is the effort to provide consumers with information and/or assurances regarding the conditions under which a product (in this case, apparel) was manufactured. We would describe those social labels that appear directly on the product and target the end-consumer as primary social labels. Such marks usually take the form of a swing tag that is used to market an unsold garment and/or a label on the actual item (see Chapters 6, 11 and 14).⁶

Secondary social labels are business-to-business initiatives. These are generally mounted by national associations of manufacturers, sometimes with government support, to assure international buyers (e.g., retailers and brands) that the labor (or environmental) standards prevailing in that country’s apparel industry are high (see Chapters 3 and 5). However, secondary social labeling may take other forms, as in the case of public-procurement programs that seek to ensure that the uniforms of city or municipal employees are ‘sweat-free’ (see Chapter 13). Whether primary or secondary, social labels share the same goal, which is convincing the buyer—be it an individual consumer, a retailer, a university sourcing licensed apparel, or a local government—that the goods it orders will be produced under certain minimum standards. Table 1.1 provides an overview of some of the social labels this volume discusses.

1 A Historical Overview of the Social Label

As noted above, experiments in social labeling are not new, even if the highly globalized nature of today’s apparel industry introduces new challenges for those advocating such an approach. A recurrent theme between the supporters and detractors of the market-oriented approach to social labeling concerns the issue of worker versus consumer agency, and the degree to which consumer power can bridge the terrain between the market and the world of work. Ross, in Chapter 2 of this volume, provides a historical overview of the origins of the social label in the U.S. trade-union movement and questions the theory of consumer sovereignty that underlies it. In Ross’s view, the social-labeling strategy, and the consumer-sovereignty paradigm on which it rests, transfers power and agency to some actors—namely, consumers and internal or third-party auditors and, centrally, to the brands and retailers themselves who contract or outsource production—over others, most obviously, regulatory officials, direct employers, and workers, their organizations and their allies.

Ross provides a historical overview of the United States’ experiment in social labeling that dates from the turn of the twentieth century. On the one hand, his account reveals the tensions that existed between the ‘union label’ that was promoted by organized labor and the ‘white label’ that Florence Kelley’s National Consumers’ League developed. Yet this distinction between workers and consumers should not be overstated. After all, the power of the consumer was also keenly observed by the Knights of Labor, and in the formation of ‘label leagues’ and the appointment of ‘label agents’ responsible for ‘label agitation’ within trade unions, there was a genuine sense that this device could not only hold the worst excesses of capitalism in check, but could also deploy the purchasing power of trade unionists into a form of moral control over production (see Glickman 1997). In this sense, advocates of the labeling approach within the labor movement agreed with Kelley, to some extent, that the sole emphasis was ‘no longer on production or exchange but upon consumption’ . . . with the consumer ‘the real maker of goods’ (1897: 33–34).

However, this emergent ‘ethical consumerism’ was at the outset saddled with a failure to acknowledge the absence of any transmission mechanism between the market and the workplace. In short, while the buying public (including trade-union members) could generate pressure for change via their own purchasing preferences, they did not have the capacity to bring about change at the point of production, since this is the jurisdiction of employers, trade unions and labor administrations. Secondly, and crucially, the middle-class nature of the emerging ethical consumerist movement during the Progressive era obscured the class implications of market-oriented initiatives; supporters failed to see that that shoppers differed in their ability and willingness to exercise consumer power. As Frank has argued, ‘Working class women were less likely than middle class women to ‘buy union,’ in part because they had to stretch their budgets and time to do so, and also because they had been alienated from their husband’s union activities’ (1994: 243, Boyle 1903.)

The social/union label as it emerged at the turn of the century thus had a twofold function: first, to provide industrial governance by controlling the manufacture of goods in union-organized workplaces where working conditions could be regulated by collective bargaining and, second, to mobilize the power of labor and the wider public in the market as consumers.⁷ It must be recognized that, from the beginning, the union label constituted an (albeit voluntary) enforcement tool, as trade unions sought to defend workplace institutions and norms that had been negotiated with an employer. Writing about the union label in 1912, P.H. Shevlin enumerated a set of expected trade-union workplace norms, some of which are not dissimilar from the content of today’s corporate and multistakeholder codes of conduct:

(a) The assurance that the work is done under sanitary conditions. (b) The assurance of the payment of a reasonable . . . and steadily improving wage. (c) The assurance of reasonable hours . . . of labor. (d) The assurance that child labor, the menace as well as the disgrace of modern civilization, has not entered into the product. (e) The assurance that so long as the intense and deplorable and inequitable forms of competition, as evidenced in our present-day industrialism, shall make it necessary for woman to earn her bread in shop and factory, she shall continue to enjoy economic equality with h...

Table of contents

• Cover Page
• Half Title page
• Title Page
• Copyright Page
• Contents
• List of Figures
• List of Tables
• Part I Introduction and Historical Overview
• Part II Social Labels in Comparative Perspective
• Part III Consumer and Business Perspectives on Social Labeling
• Part IV Contemporary Debates and Controversies
• Contributors
• Index