CSR: The Big Biz “Fix” for an Increasingly Lawless World

Just listen to NYTimes biz-pundit, Joe Nocera
(rumored for ’07 Pulitzer):

Nike, which had been the subject of
fierce criticism in the 1990s over the labor practices in the factories it engaged to make its goods, decided it made sense to go the other way completely.

Nocera doesn’t say what the footwear/apparel giant actually did to "go the other way
completely". A complete reversal would have meant abandonment of the "contracting-out" model – where
mostly-Asian contractors cut costs to the bone to win orders - in favor of a
commitment to own factories, set wage
rates (or, collectively bargain!), limiting (rather than forcing) overtime and
to pay attention to the abuse of vulnerable Asian migrant-laborers.   

Instead, we have this business-as-usual, hyper-“transparent” April 2005 Nike press release: “…four noncompliance issues were identified
as ongoing challenges, both in Nike's contract factory base and across the
footwear, apparel and equipment industries: hours of work, freedom of
association, wages and harassment.”
may be good for the soul but it does little to ameliorate abusive practices at
the hands of suppliers that are merely “monitored.”


Compliance is really big business now, but what an
infernally vague and opaque system! Businesses bought time – about the first three years - concocting
standards and oversight processes. For the last
three years, armies of these companies’ consultants have been plaintively
arguing at meetings around the globe that there were too many standards and
processes to reasonably guide suppliers. (And who is surprised that “compliance” professionals are implicated in
Siemens’ $500 million bribery fund and last month’s Morgan Stanley
insider-trading allegations?)

Some business observers see the “compliance” house of cards
about to tumble. A leading journal for
purchasing and supply-management professionals put it this way:

A recent report found ethical
buying codes have done little to improve factory conditions overseas.
For a
decade now, companies have relied on these codes and on-site audits, safe in
the belief they are doing the best they can to improve conditions for workers
in their supply chains. But research published in October threatens to strip
firms of this refuge, exposing the reality that more must be done if they are
to make a genuine difference. (Supply

Not to worry, according to the CSR “industry.” It sees nothing but more-profitable times
ahead: Corporate Social Responsibility (CSR) shifted from the periphery to
the mainstream in 2005; in 2006 it dominated headlines and catapulted into the
heart of our collective consciousness. (CSRwire)

Gaining decent wages for garment and shoe workers without unions?

“In this industry, the only reason to change is because
someone has got a great cattle prod that keeps jabbing you in the rear
end.” (Bud Konheim, garment executive,
1997) People in the industry
acknowledge, when they’re honest, that the “default position” of low-skilled
manufacturing is exploitation and vicious cost-cutting. Similarly, Francis Fukuyama (from the
political Right) describes the natural reaction of workers to Taylorist
production arrangements: “trade unions respond with demands that employers
specify their duties…since (employers) could not be trusted to look out for the
welfare of workers.”

Searching through the vast output of CSR-related
initiatives, proposals and commentary, two things jump out: denigration of the
idea of “union as solution” and a quite-small collection of promising
ideas. Foremost among the latter is the
suggestion by business professor, Prakash Sethi that multinationals and their
contractors need to make “restitution for years and years of expropriation of
wages of workers who are at the bottom of the food chain and are least able to
defend themselves.” This simple idea
could usher in a paradigm-shifting chain reaction. The big buyers would be moved beyond
accepting blame to accepting
– including financial liability – and courageous workers who
stood up to abusive bosses would (better late than never) win cash-in-hand
payments for tens of thousands of those cheated workers. Most importantly, perhaps, would be the
resultant pressure on recalcitrant “host” governments that failed to protect
workers in the first place.

Another idea worthy of further exploration is the approach
of the Worker Rights Consortium, the only monitoring operation of any size that
has remained out of the grasp of corporate overseers (small local operations
such as Central American human rights groups COVERCO and EMIH do admirable
work, but the impact is limited). WRC
has propounded a plan that would steer university bookstores in the direction
of “better” garment shops. Though
students have won agreements at more than two dozen schools, it is difficult
for the WRC to recommend even a small number of “better” suppliers – mostly due
to the lack of real collective bargaining.

Unsurprisingly, a “slowly, slowly” attitude prevails at the
Fair Labor Association, another monitoring organization with colleges and
universities as dues-paying members, but with major funding from big apparel
brands. Choosing his words carefully,
Auret van Heerden, president and CEO of the FLA denounced the WRC’s idea:

“If they do choose to form a trade union, that usually
involves a long process of recruiting members and building an organization. The
negotiation and signing of a collective agreement is also a process that cannot
be reduced to a requirement.” (The Designated Suppliers Program would be
imposed upon suppliers) “in an undemocratic way without a minimum of


The key problem, of course, is that developing world workers
see almost no examples of unions actually delivering some benefits or higher
wages. They are justly reticent in

Reduced to its’ most elemental, the reasoning is something
like this:


“You must show them the gula.”


“Gula” means sugar in Bahasa Indonesia. These were the words of the governor of S.
Sumatra province when the head of Indonesia’s official union came on
a “recruitment drive” in the late-1980s. One former-military Suharto-appointee to another, the message was clear
– you just have to give workers some
reason for joining!

While suppliers may claim to buyers, then, that the workers associational rights are (somewhat)
respected, they have done everything in their considerable collective power to
thwart actual bargaining. Recently, in Thailand and the Dominican Republic (there are other cases)
workers did win reasonable gains,
only to see the factories closed.


What do the brands say? Let’s start with Bono’s mini-brand.

Denigrating the “union solution” was explored HERE by
Tim Newman (EDUN: “unions are more of an American structure”). I heard similar noises almost a decade ago in
a debate organized by business professor, Richard Wokutch. Nike’s Amanda Tucker berated me with “unions
are no panacea”. (Really, I wondered,
how would anyone from Nike know whether unions were even the least bit helpful for workers?) More recently, the “external affairs
director” of the Nike-funded (now defunct) Global Alliance for Workers and
Communities put it this way, “…the ‘culturally imperialist’ assumption that the
form of politicized trade unionism and adversarial industrial relations
prevalent in North America is directly transferable to, and desirable in Asia.”


The very fact that earlier this month workers in Vietnam overrode the government-controlled, phony trade union in yet another strike at
a Nike-producing factory speaks volumes: these workers aren’t getting paid enough and are demanding attention
that CSR in any of its various forms is not going to provide!

Dr Liu Kaiman, of the Institute of
Contemporary Observation in Shenzhen,
China: "The retailers and
their suppliers are playing an elaborate game. They only want to reassure
customers, not to improve conditions."


So, what about the customers? They do seem to be reassured. That’s the sole reason that workers continue to face abusive conditions. It’s a big subject and I’ll be back in a
couple of weeks to delve into that – along with some long-overdue “what can be
done” ideas.

*Click HERE to read about the fast-growing $31.7 billion corporate responsibility industry catering to the corporate self-regulation crowd

More about Jeff:
Appeared as an expert commentator on global political economy on
NBC, CBS, ABC, PBS and CNN. Also appeared in documentaries by Japan's NTK, UK's Channel Four and ARTE
(French/German). Published in Harper's, NY Daily News, The Wall Street Journal, Dissent,
Brown Economic Review and Los Angeles Times.



re: CSR: The Big Biz “Fix” for an Increasingly Lawless World

Jeff Ballinger is a pioneer in the campaign against global sweatshops. Two decades ago, Jeff, convinced that it is important to name names and to concentrate on big names, started identifying Nike for its gross violations of the human rights of workers. At the time, even some front-line fighters for worker righs disagreed -- they said Wny pick on Nike -- everybody is doing it! But Jeff was right, and as others followed, Nike was put on the defensive, and took the code of conduct route.
So I am now looking forward to Jeff's current ideas on how the campaign for worker rights can succeed.
Bob Senser