Abusive Labor Practices and Solutions

Sweatshops, especially in the garment industry, have existed for decades. However, the presence of sweatshops at contractors of major U.S. apparel and footwear makers only caught the attention of the American public in the mid-1990s. Major publicity about two disturbing discoveries fueled this attention: slave-like conditions at a garment factory in El Monte, California in August 1995, and the revelation that entertainer Kathie Lee Gifford's line of apparel at Wal-Mart Stores was sewn by child laborers at a Maquiladora factory in Honduras.

A general shift in corporate consciousness in recent years resulted in many companies drafting Codes of Vendor Conduct for their domestic and overseas contract suppliers. The codes seek to assure fair labor practices in the workplace. These codes sound good on paper but are not adequately monitored or uniformly enforced by retailers. Those companies that do monitor their supply chain are generally not willing to share the results of their compliance efforts with stakeholders.

The best codes are based on the core conventions of the International Labor Organization, a UN agency promoting social justice and internationally recognized human and labor rights. Eight ILO conventions have been identified as fundamental to the rights of workers. They relate to freedom of association and the right to organize through collective bargaining, equal pay for men and women for work of equal value; and barring forced labor, child labor, and discrimination in hiring.

Despite some encouraging progress over the past decade, it is still unusual for most companies to monitor their supply chain in the absence of major public controversies. A study released by the non-partisan Investor Responsibility Research Center in 2004 demonstrates how far US companies have to go to achieve minimum compliance. Only 12% of S&P 500 companies have formal codes of conduct requiring their suppliers to address labor issues, the study found. Only 4% have codes that address the core issues considered fundamental rights by the ILO.

Transparency on Vendor Standards Compliance

Verifiable enforcement of corporate codes of conduct on labor practices can play a key role in mitigating some of the human cost of globalization by improving working conditions in supplier factories around the world. It can also serve to strengthen civil society in developing countries as properly implemented compliance programs help enforce basic standards despite weak laws or enforcement. For more information, click here.

As You Sow's leadership has helped to transform the quality of corporate reporting on vendor standards as reflected in the ground-breaking public reports on vendor standards compliance issued by Gap and Nike in 2004 and 2005 discussed below.

Strengthening the Auditing and Monitoring Process

Some companies have significantly increased their auditing of supply chain facilities using outside auditors from large commercial firms to perform "social audits" to monitor for vendor code compliance. Other firms have assembled their own in-house staff to perform these audits. But since reporting is voluntary it remains unclear how many companies outside of those who have been challenged by activist groups actually monitor their supply chains.

Social auditing of supply chains is still in its infancy. The act of auditing does not yet provide assurance that abusive working conditions will be discovered and addressed. As You Sow's program challenges companies that have not yet audited facilities to begin to do so and seeks to strengthen the approach of companies with existing auditing programs. For more information, click here.