Global supply chains still full of sweatshops

In the early 1990s, sports apparel giant Nike became the “poster child” for sweatshops in its global supply chain – child labor, forced labor (mandatory overtime), wage theft, confiscation of migrant workers’ passports, sexual harassment of women workers, and unsafe and unhealthy working conditions.

Jump ahead 25 years, vast global supply chains with multiple tiers of international “brands,” contracted supplier factories, and numerous sub-contractors are now the norm for consumer goods sectors such as electronics, toys, apparel, home furnishings, food like fish and chocolate, sports shoes and equipment.  The corporate response to the anti-sweatshop campaigns that started with Nike has been the development of “corporate social responsibility” programs.  The CSR industry now involves thousands of corporate codes of conduct, tens of thousands of “third-party audits” of supply chain factories, and hundreds of annual conferences, books, magazines and web sites, and dozens of CSR consulting firms worldwide.  The global CSR industry is now a $80 billion a year industry.

So does this mean that sweatshops are now a thing of the past?  Unfortunately, no.  Every global supply chain is still full of sweatshops – defined as a workplace with multiple violations of labor and environmental laws, including regulations on wages and hours, workers compensation, harassment and discrimination, workplace health and safety, and environmental protection.  There have been some improvements over the last 25 years, but scratch the bright, shiny surface of the corporate CSR programs and glossy reports in any supply chain, and you will find they are still full of sweatshops.

How do we know this is the case?  There are four principal sources of information regarding global sweatshops:

  • News media reports about specific factories, companies or industries;
  • Reports from non-governmental organizations or NGOs dedicated to labor rights, women’s rights, child labor and anti-trafficking campaigns;
  • Reports by “multi-stakeholder initiatives” or MSIs that include companies, government agencies and non-governmental organizations; and
  • Reports from the corporate CSR departments themselves.

Today there is such a river of information on global sweatshops that it is hard to keep up, even for only one company or industry.  Perhaps the easiest, one-stop-shopping way to keep track of reports on sweatshops is the Business & Human Rights Resource Centre, an independent, UK-based center that tracks over 6,000 companies in over 180 countries.

Not only does the site publicize the score of new reports and articles that come out weekly, but it contacts the companies or “brands” involved for their explanation or response.  One simple way to stay on top of sweatshops is the Centre’s weekly update which provides links to the latest reports and corporate responses.

Otherwise keeping up with sweatshops involves keeping track of these four major sources of information:

News media articles:  These are published by a wide variety of newspapers, magazines and web sites, often related to specific events such as the annual reports on the global toy industry (80% of toys now made in China) at Christmas. An example of these articles is Maria Hengeveld’s report on Nike’s factories in Vietnam which appears on the Slate website.  The headline of Hengeveld’s article is

“Nike boasts of empowering women around the world; While the young women who make its products in Vietnam are intimidated, belittled and underpaid.”

Non-governmental organizations:  Over the last two decades, NGOs have produced a steady stream of reports on specific companies and countries which offer a continuous portrait of sweatshop conditions.  Among the many international and national organizations that regularly produce well-researched reports are the Clean Clothes Campaign; Good ElectronicsChina Labour Watch; International Labor Rights ForumSACOM – Students and Scholars Against Corporate Misbehaviour; Workers Rights ConsortiumAsia Monitor Resource Centre; and ANROEV - Asian Network for the Rights of Occupational and Environmental Victims.

Recent reports from these NGOs include the following:

Multi Stakeholder Initiatives:  MSIs arose in the 1990s after the reports of self-investigation by corporations were found to be self-serving.  At that point, government agencies and non-governmental organizations were incorporated into the MSIs to give the appearance of independence.  The brands, however, remain very influential members of the MSIs.  Many labor rights and community organizations consider MSIs to be still dominated by the companies involved and their investigations to be inadequate.  Nonetheless, MSIs such as the Fair Labor Association in the US and the Ethical Trading Initiative in the UK have produced reports that document sweatshop conditions in global supply chains. An example of the MSI reports is the FLA’s 2012 investigation of Apple’s supplier factories operated by Foxconn in China.

Corporate CSR Reports: Most corporations with global supply chains now issue yearly or biannual reports from their CSR departments on conditions in their supplier factories.  These slick reports uniformly “accentuate the positive” in the company’s supply chain, but a close reading of the CSR reports provides confirmation from the corporations themselves that a significant number of their supplier factories meet the definition of sweatshop and that sweatshop practices continue to flourish among their suppliers.  “Admissions against interest” is the legal terminology for the nuggets of information provided by the corporations themselves about working conditions in their own supply chain.

Recent examples where close examination of corporate CSR reports confirms sweatshops in the supply chain come from Nike and Apple.

Taken as a whole, these four sources of information paint a picture of global supply chains that documents while not every factory is a sweatshop, there are tens of thousands of sweatshop factories in supply chains around the world.

There are three reasons for the continuing scourge of global sweatshops:

First is the “sweatshop business model” that is dominant in every supply chain.  This model includes the “iron triangle” of sourcing which prioritizes the lowest possible cost, highest possible quality, and fastest possible delivery time above all other considerations.  At the same time there is a “race to bottom” in payments to supplier factories where the brands pay less every year for the same or higher quality goods, depriving supplier factories of the resources required to be anything other than a sweatshop.

Second is the fact that CSR monitoring has been completely ineffective in identifying and correcting illegal and unsafe conditions in supply chains.  The CSR audits are conducted by for-profit CSR consulting firms that have intrinsic conflict of interests, often unqualified auditors (especially in occupational health and safety), and frank corruption.  Ironically, the CSR industry itself is now contracting out factory inspections to local sub-contractors which have even greater conflicts of interest, lack of qualifications, and problems with corruption.

Third is the near-complete lack of genuine, meaningful participation by workers in developing, implementing and verifying the effectiveness of CSR programs at the factory level, including occupational health and safety programs.  Without the direct participation of workers, especially in the giant supplier factories in China which can have 30,000 or 40,000 workers in a single factory complex, it is not possible to establish programs that will actually create safe workplaces where labor laws and workers’ rights are respected.

All these issues have been and are examined in many of the news articles and NGO reports.  The phrase “worker empowerment” has now become part of the standard “buzz words” of corporate CSR programs.  Nonetheless, genuine worker participation remains the key and missing element for making real progress in ending sweatshops in global supply chains.

In the meantime, relentless pressure from workers, consumers, stakeholders and governments is required to improve working conditions that are illegal, immoral and just plain unacceptable.  Part of this process is staying abreast of the river of continuing reports and articles on supply chain factory conditions, and to draw lessons on what’s needed to bring an end to global sweatshops.

Garrett Brown is a certified industrial hygienist who worked for Cal/OSHA for 20 years as a field Compliance officer and then served as Special Assistant to the Chief of the Division before retiring in 2014.  He has also been the volunteer Coordinator of the Maquiladora Health & Safety Support Network since 1993.


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