Sweatshop Reform:
Damage Control or Corporate Revolution?

By Emma De los Indios

NEW YORK, MAY 2005—An April 16th Independent (UK) piece by Maxine Frith called “The Ethical Revolution Sweeping Through the World's Sweatshops” makes reference to the changes over the last decade in the approaches of high-profile multinationals in the face of accusations that they source their products from sweatshops that abuse workers. While in the past, these accusations were either denied or ignored, companies like Nike and Gap are now taking steps to make the world—or their customers—know that they are being “socially responsible”. These initiatives include adopting codes of conduct, publishing social responsibility reports, and disclosing specific information about their supply chains.

Skeptics may argue that these measures are largely meant to do “damage control.” Apparel and sports brands that rely heavily on their images will invest in that which will boost their sales and not hurt their profit margins. While this perspective is mostly accurate, it is also the case that these companies are investing substantial sums in "compliance" departments and projects aimed at raising the labor standards in the factories they source from. Many are involved in training factory management and workforce on labor standards. Some, like the Gap, have even engaged local civil society and labor rights groups in their monitor and training activities. Corporate giants, it seems, are putting their money where their mouth is and starting to clean up their act.

Can we be witnessing a true change in the nature of the capitalist beast? Is there such a thing as capitalism with a human face? Is it possible that some of the largest and most profitable apparel companies in the world are genuinely as interested in workers' rights as they are than in making their billions in profits? Is this a hopeful sign that activists can put some breaks on the unbridled global power of the corporate steamroller?

Without going into a protracted discussion about the validity of this new wave of “corporate social responsibility”, which is very much is vogue these days (and not just in the developed world), the merits of these apparent efforts and accomplishments should be examined in a broader perspective. Are the efforts of these multinational corporations truly achieving better and sustainable working conditions for those who make their products? On a very small scale, the answer might be yes. But when placed in the context of the enormous challenge of improving conditions across vast, global supply chains, these changes are a mere drop in the bucket.

The Independent article, for example, mentions Gap canceling of contracts with 136 factories when it discovered abuses that included child labor, forced labor and 80-hour working weeks. But by “cutting and running” and taking their business elsewhere, the buyer companies are doing nothing to address, much less remediate, these abuses. A typical reason for “cutting and running”, furthermore, is worker organizing and agitation for better working conditions. Central America has been the scenario for several cases in which factories that have been abandoned by multinationals which, citing labor “unrest” or poor industrial relations, have pulled out their business once workers formed a union or even attempted to organize to demand working conditions.

Clearly, tragedies like last week's collapse of a garment factory outside Dhaka, Bangladesh that resulted in 78 dead do not need to happen, if local factories and the multinationals that source from them adhere to international labor and health and safety standards, and governments are willing and able to enforce them. But the limits of corporate social responsibility come to the foreground when one takes a step back and looks at the supply-chain model of production, and the North-South exploitative structure that supports it. Poor, debt-ridden countries like Guatemala and Bangladesh, aided by the quota system imposed by the now expired Multi-Fiber Agreement, rushed into this export-processing “maquiladora” model of development. But there's been no Industrial Revolution in these countries, and now that WTO rules have established a “free market” in the textile and garment industry, workers in these countries have few choices: either a low-paying, unstable job working long hours in poor conditions—or no job at all.

Until these very conditions are called into question, the root causes of sweatshops abuses will remain unaddressed.
Can multinational corporations do anything about this? Well, they could, but it would be so radical that it would go far beyond anything we know as "corporate social responsibility."

Brand companies could work with their suppliers to invest in infrastructure and production processes that meet international human rights and labor rights. They could agree to production schedules that don't put pressure on workers to meet impossibly high production quotas and to work incredibly long hours to do so. Companies could coordinate those production schedules with the other multinationals that source from the same supplier. They could pay higher prices for orders, so that managers can pay workers living wages. They could establish long-term, stable relations with their suppliers so that workers have job security. They could help create a safe, dignified working environment, where the entire gamut of workers' rights are respected, including the right to organize, choose their representatives and bargain collectively.

Finally, if multinational corporations were really interested in workers' rights, they would lobby for enforceable labor standards (including a living wage) in trade and investment agreements, so that no company could get a competitive advantage through super-exploitation of labor.

But that is not happening anytime soon. Until then, human rights activists and monitors need to continue pressing for systemic reform.

Emma De los Indios is an international labor-rights activist and educator living in New York City.

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