Towards Better Work

Understanding Labour in Apparel Global Value Chains

A. Rossi, A. Luinstra, J. Pickles, A. Rossi, A. Luinstra, J. Pickles

• Publisher: Palgrave Macmillan
• Year: 2014
• ISBN:
  9781137377548
• Topic: Economía
• Subtopic: Política económica

Globalization of production has created opportunities and challenges for developing country producers and workers. This volume provides solutions-oriented approaches for promoting improved working conditions and labour rights in the apparel industry.

Part I

1

Re-embedding the Market: Global Apparel Value Chains, Governance and Decent Work¹

Frederick Mayer and John Pickles

Introduction

Much of the global economy is now organized in global value chains that span continents and connect producers and buyers across countries. This complex and dynamic structure of economic activity has rapidly spurred the productive capacity of developing and emerging economies. Economic globalization has created a great deal of wealth for some people in some regions of the world, but rapid economic growth has also been accompanied by the expansion of precarious forms of work, particularly at the margins of the new global economy, but also within core functions and companies. It has also led to pressure on labour in more traditional centres of production.

Our concern in this chapter is with the role of governance institutions in promoting decent work in apparel global value chains. By ‘governance’ we refer to those institutions that constrain or enable market actor behaviour – both in the public sphere, in the form of governmental policies, rules and regulations, and in the private sphere, in the form of social norms, codes of conduct adopted by businesses, consumer demand for social responsibility or other non-governmental institutions and social movements. We develop a very specific argument about the relationship between markets and governance. This argument builds on the work of Gereffi and Mayer, who theorized that globalization created a global ‘governance deficit’, to which states and societies responded by seeking to fill the gap with new governance capacities (Gereffi and Mayer 2006). Our analysis, like theirs, draws on Karl Polanyi’s concept of a ‘double movement’. In our reading, instead of focusing on the disembedding of markets from social control, we turn to the ways in which states and society are always engaged in struggles to re-embed market actors – in part – through new or renewed institutions of governance (Polanyi (1944) 2001). We see this process as a dynamic one of constant adjustment in which complex arrays of market actors respond to opportunities presented by the institutional environment, social actors respond by constructing new institutions to govern them, markets respond to the new institutional environments and so forth. There is nothing inevitable about the outcome of this on-going co-evolution, and the successful re-embedding of market institutions in forms of social regulation is not guaranteed, although it may happen both in the global North or South. Nor is it necessarily the case that this process of re-embedding will lead to coherent and integrated forms of state-led industrial policy, although in some parts of the global South state-led industrial policy seems to be increasingly on the agenda. Whatever the form such re-embedding takes, an important question concerns whether decent work and workers’ interests will be adequately promoted and protected in the emerging architectures in both the global North and South.

Apparel is particularly interesting as a case study; it is highly globalized and a major global employer. Apparel is also a sector in which there have been considerable challenges of governance failure and widespread recognition of predatory sourcing and production practices, whether in the 1911 Triangle Shirtwaist fire in New York City or in the 2012 Tazreen Fashions fire in Dhaka, Bangladesh (Pickles 2012a). Our purpose in this chapter is to explore the extent to which new and diverse governance structures are emerging in global value chains that may, in some measure, be contributing to possibilities for creating improved working conditions in apparel production. The rapid rise of highly flexible global production networks, often involving informal or non-standard labour arrangements, has left many workers outside the control of effective governance institutions to protect their interests. In response, some workers and their advocates have generated sufficient pressure that increasing numbers of lead firms and industry forums have responded by experimenting with a variety of private governance initiatives. These experiments are particularly important, but their reach remains uncertain because they are occurring at the very time that companies, non-governmental organizations (NGOs) and worker movements have also been questioning the limits of private governance approaches (such as corporate social responsibility – CSR – and in-house or third party monitoring). As a consequence, the role for public governance in emerging industrial countries may, again, be becoming more significant (see Palpacuer 2006, 2008).

In the conclusion we return to the idea of the double movement. We suggest ways in which this perspective opens, rather than closes, options for thinking about ethical sourcing initiatives and improvements in working conditions and labour rights.

Globalization and the governance deficit

Gereffi and Mayer (2006) argued that governance institutions vary along three dimensions. The first is the distinction between public and private governance. Public governance is imposed by the state. Equally important, however, are the private, non-state institutions, ranging from broad societal norms to collective bargaining agreements that also establish the context in which market actors operate.

The second relates to the function of governance – whether to facilitate, to regulate or to redistribute (or compensate). Facilitative governance enables markets to form, creates jobs, attracts investment and otherwise promotes economic activity. Regulatory governance constrains the behaviour of profit-seeking firms that might otherwise tend to exploit workers, leading to poor working conditions, lack of job security, constraints on worker organization and general downgrading of industrial relations systems and practices. Redistributive (or compensatory) governance seeks either to redress inequalities through progressive taxation and social services or to compel firms to offer more generous wages and benefits.

The third dimension is the scale of governance – whether local, national or international, whether firm- or industry-specific or more cross-cutting. Public governance is more developed at the level of the national state and is typically non-sectoral. Private governance, on the other hand, may transcend national boundaries and be organized along sector- or even firm-specific lines.

In capitalist countries, institutions of governance – facilitative, regulatory and redistributive – initially arose under the aegis of the state as defensive measures responding to pressure from organized labour against predatory forms of industrialization. The modern welfare states that later arose out of these struggles shared a common basic commitment to market capitalism coupled with labour and other regulation and various forms of social protection, as well as reasonably comparable wage rates and standards of living. Despite the absence of strong international regulatory and distributive institutions, common national level governance institutions allowed for the temporary stabilization of international commerce among developed countries, a system Ruggie called ‘embedded liberalism’ (Ruggie 1982).

Globalization destabilized this regime and its ‘virtuous circle’ of regulated exploitation and ‘shared’ surplus. In this post-Second World War regime the share of profits going to wages increased. With subsequent globalization of production, the share of profits going to wages has declined year over year. The liberalization of international trade, the de-regulation of emerging market economies and the opening of former closed economies in Central and Eastern Europe, China and South-East Asia rapidly expanded the global market to incorporate countries with not only lower wage rates and standards of living, but also very limited governance capacities. The expansion of production networks beyond national borders, with attendant integration of sourcing and supply chains, posed challenges for those interested in sustaining and expanding the hard-won regulatory protections that guaranteed some level of decent work and protected workers against predatory practices in global markets (Pickles and Smith 2010).

The spread of production to lower income economies meant that an increasing proportion of work for the global market took place in locations where governance capacities were weak, if developed at all. Indeed, to attract international investment, newly industrializing countries sought to make themselves more attractive by strengthening investment protections and other policies intended to promote industry, while at the same time deregulating and privatizing production. Special economic zones in emerging reform economies, such as Cambodia, China, Thailand and Viet Nam (as in their Latin American maquiladora equivalents in the 1980s and 1990s), represent an extreme form of this strategy (Arnold and Pickles 2011). Often situated in export-processing zones and dependent on migrant labour, they maintain low-cost, disciplined and often unregulated and illegal workers in a regime of what Pongsawat (2007), describing border production in Thailand, has called ‘partial border citizenship’.

At the global level, the strongest international institutions focused on market facilitation (most notably the International Monetary Fund (IMF) and the World Trade Organization (WTO), but also to a large extent the World Bank and the World Intellectual Property Organization). From the 1970s, the Bretton Woods institutions rapidly expanded their scope and reach, opening market access while resisting claims from trade unions and other non-state actors for embedded labour protections. Those institutions whose mission was labour protection – such as the ILO – were notably disadvantaged from the 1970s onwards, with the shift from tripartite forms of national industrial relations agreements to increasingly globalized, neoliberal policies of deregulation and market-driven mechanisms.

Gereffi and Mayer argue that this round of economic globalization created a global ‘governance deficit’, characterized by limited capacities in the emerging economies, weak international institutions, increasingly challenged institutions in advanced industrial countries and everywhere greater emphasis on facilitation than on regulation or redistribution. This deficit can be understood, in Polanyian terms, as a relative dis-embedding of the market from institutions of governance and enhanced opportunities for predactory behaviour.

The second movement: social responses to globalization and governance innovations

The story of the further disembedding of hard-won governance mechanisms with the expansion of global value chains has been well documented. The result has often been struggles over the appropriation and distribution of social surplus, what Gibson-Graham et al. (2000) call ‘class processes’, which in turn generate Polanyian-like counter-movements to re-embed the economy in practices and institutions of social regulation, as governments, NGOs, organized labour groups and other social actors strive to create new institutional arrangements to re-regulate product and workplace standards and worker rights in the global economy, what Vorley et al. (2007) have called ‘regoverning markets’ and Webster et al. (2008) referred to as ‘grounding globalization’.² Thus, for example, by the late 1990s, the dominance of the Bretton Woods institutions (and the Washington Consensus they seemed to represent in re-shaping global governance³) had generated strong counter-currents among anti-globalization, alter-globalization and global justice movements. Together with strong critiques of neoliberalism, these resulted in sustained efforts to change the ways in which the inter-governmental agencies dealt with labour and human rights issues. In 1999, oppositional movements poured onto the streets of Seattle in what became an iconic example of the struggle over global governance (repeated several times since, including at G8 meetings in Genoa, WTO meetings in Geneva, World Bank and IMF meetings in Washington, DC, and Summit of the Americas meetings in Miami and Quebec City). As Pigman (2005: 1) suggested:

the emergence of widespread, organized resistance to the discourse of neoliberal globalization at the end of the 20th and beginning of the 21st centuries indicates how the fruits of global trade itself have empowered effective strategies of resistance to the widening disparities of wealth and power that global markets have perpetuated. Global social movements have challenged the various institutions maintaining the parameters of the neoliberal global trade regime – the WTO, the IMF and World Bank, the OECD, the World Economic Forum – to ‘civilize’ world trade by re-embedding it within a sustainable global framework of human social relations.

As a consequence, it is crucial in analysing global value chains to assess the strategic importance of the social pressures unleashed by globalization and the proliferation of institutions and actors reacting to them. In some cases, these are currently driving innovations in governance – both changes in existing institutions and new forms of governance. In this way, states and international organizations, labo...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of Figures, Tables and Boxes
• Preface
• Notes on Contributors
• List of Abbreviations
• Introduction
• Part I
• Part II
• Conclusions
• Bibliography
• Index