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Redesigning Enforcement in Private Labor Regulation. Will it work?
Abstract
Private labor regulation emerged as an international governance tool to enforce international labor standards. More recently doubts have been expressed concerning the potential of these systems to effectively improve labor conditions in supply chains. The top-down auditing form of enforcing standards is considered not appropriate to enforce international labor standards. This article assesses whether the design of these systems can be strengthened in order to better enforce international labor standards. In this context, attention turns to systems which empower stakeholders such as complaint systems. The article discusses the possibilities and constraints of these systems.
... There is a widely recognized "enforcement gap" in transnational labour governance, reflected in a lack of effective legal mechanisms to hold private actors to account. Audits, in particular, are seen as a very weak means of ensuring compliance with standards (LeBaron and Lister 2015; Marx and Wouters 2016). As a result, there has been an increasing focus on enhancing accountability through differ ent means of implementation and enforcement of labour standards, often using public regulatory efforts to strengthen private regulatory initiatives (Bartley 2018;Locke, Rissing and Pal 2013;Fransen and Burgoon 2017). ...
... Accordingly, it is not possible to make generalizations about how they operate and their potential impacts. Marx and Wouters (2016) suggest that use of complaints mechanisms is often relatively infrequent and that outcomes may be affected by various political and economic factors, including the strength of the rule of law in particular countries, local labour market supply and demand, and the strength of sanctions available. However, in the general absence of detailed empirical studies investigating how complaints mechanisms operate in practice, these hypotheses remain largely untested (Marx and Wouters 2016;Landau and Hardy 2021). ...
... Marx and Wouters (2016) suggest that use of complaints mechanisms is often relatively infrequent and that outcomes may be affected by various political and economic factors, including the strength of the rule of law in particular countries, local labour market supply and demand, and the strength of sanctions available. However, in the general absence of detailed empirical studies investigating how complaints mechanisms operate in practice, these hypotheses remain largely untested (Marx and Wouters 2016;Landau and Hardy 2021). 4 This gap in the literature is perhaps unsurprising given that the vast majority of complaints mechanisms in private regulatory initiatives do not provide sufficient information to permit empirical study. ...
Can complaints mechanisms strengthen private labour regulation of GVCs? This article empirically investigates the results produced by the only complaints mechanism where outcomes can be verified from the complainant's perspective; the Fair Labour Association. It discovers that the vast majority of complainants find this complaints mechanism to be valuable. But the mechanism also has a number of significant limitations that seriously affect outcomes for workers. The study utilises the concept of ‘grounding’ to explore how the FLA complaints mechanism performs for workers in different contexts, unpacking it for the first time into three key dimensions; the national, the social and the corporate. The implications of these findings are then considered for complaints mechanisms in other GVCs.
... A third stream of research focuses on how standards are enforced. Here, a significant body of literature discusses the use of independent third-party auditing, highlighting the many deficiencies in the audit approach [20][21][22]. Other scholars have complemented this line of research by focusing on another enforcement tool, namely the use of complaint and grievance mechanisms by VSS to continuously monitor compliance with standards [10,21]. ...
... Here, a significant body of literature discusses the use of independent third-party auditing, highlighting the many deficiencies in the audit approach [20][21][22]. Other scholars have complemented this line of research by focusing on another enforcement tool, namely the use of complaint and grievance mechanisms by VSS to continuously monitor compliance with standards [10,21]. Concerning audits, studies focused on different aspects. ...
In this feature paper, we introduce voluntary sustainability standards (VSS) and canvas the research that has been conducted on VSS from different academic disciplines. We identify four main areas of research on VSS and explore them. First, we focus on research on the institutional design of VSS, which highlights the diversity among VSS. Next, we explore studies that try to assess the impact of VSS on key sustainability dimensions. Third, we zoom in on studies that analyse the uptake or adoption of VSS. Finally, we focus on the interaction between VSS and public policies. For each of the four areas, we summarise the main research findings and identify opportunities for future research.
... Significant attention in relation to assessing the credibility of VSS has focused on the use of audits as the main tool for conformity assessment. In this context, some deficiencies of independent third-party auditing were identified (LeBaron et al., 2017;Locke, 2013;Marx & Wouters, 2016;Renckens & Auld, 2022). Some relate to the quality of information collected, conflicts of interest, differential outcomes across auditing firms and the ad hoc nature of auditing. ...
Voluntary Sustainability Standards (VSS) are transnational governance instruments that can be leveraged to pursue sustainable development in global value chains. They have proliferated since the 1990s in terms of their number and the share of global production they govern. This paper shares some key insights arising from the considerable body of literature that has analysed the role of these instruments for sustainable production and trade. First, it introduces VSS, traces the evolution of their adoption and takes stock of the research on their sustainability impacts. Next, some major developments in the VSS realm are discussed, related to public policy and the emergence of national sustainability standards. The paper then zooms in on the challenges and limitations of VSS in transforming value chains towards sustainability, focusing on the shortcomings related to inclusiveness and the problems arising from their proliferation. The paper concludes by distilling recommendations on overcoming these challenges, especially in light of recent policy developments, and outlines what different stakeholders can do to make VSS more effective and inclusive instruments for sustainable value chains.
... Second, recursive features of governance increasingly become a source of legitimacy. Here governance process become more responsive to the specific and changing implementation contexts by introducing elements of regulator consultation or review (Halliday and Carruthers 2007;Halliday and Shaffer 2015;Marx and Wouters 2016;Malets and Quack 2017). Yet, most transnational governance arrangements still lack mechanisms for feedback from the weakest among their legitimacy audiences, such workers in Bangladesh factories or small companies in Africa. ...
How does governing work today? How does society (mis)handle pressing challenges such as armed violence, cultural difference, ecological degradation, economic restructuring, geopolitical shifts, global pandemics, migration flows, and technological change in ways that are democratic, effective, fair, peaceful, and sustainable? This book addresses this key question around the theme of ‘polycentrism’: i.e. the idea that contemporary governing is dispersed, fluctuating, messy, elusive, and headless. Chapters develop this notion of polycentrism from a broad spectrum of academic disciplines and theoretical approaches. Readers thereby obtain a full coverage of exciting new thinking about how today’s world is (mis)ruled. The book distinguishes four paradigms of knowledge about polycentric governing—organizational, legal, relational, structural—and pursues conversations across the divides that normally keep these approaches in separate research communities. These exceptional inter-paradigm exchanges focus especially on issues of techniques (how governing is done), power (what forces drive governing), and legitimacy (whether governing is rightful). Comparisons between the multiple perspectives on polycentric governing highlight, and help to clarify, the distinctive emphases, potentials, and limitations of each approach. In addition, combinations across the diverse theories generate promising novel avenues of thought about polycentrism. Through their engagement with the book, readers can develop their own understandings of governing today and thereby become more empowered political subjects.
... Workplace conditions in the fresh produce industry change very quickly to meet the demands of the just-in-time supply chain. However, as audits provide just a snapshot of conditions on given day, the pressure and the vulnerabilities this can create for workers, such as excessive enforced overtime, potentially without pay, and the increased use of temporary and sub-contracted labour, may not be captured (Marx and Wouters, 2016). There is also no requirement for audits to be unannounced but knowing the audit date gives suppliers the opportunity to prepare the working environment for inspection (Wilshaw, 2018). ...
... Using the CSR/SD boundary processes to mobilize such employees, therefore, requires the design of robust bottom-up mechanisms that allow their voices to be heard by those in the upper echelons of the hierarchy while ensuring that they are protected. This is consistent with the findings of studies on the factors contributing to the enhancement of private forms of labour governance, which point out how the design of appropriate "complaint mechanisms" to protect workers who voice concerns is essential (Marx and Wouters 2016). Studies of the factors hindering effective unionization, such as that by Louche, Staelens and D'Haese (2020) on the flower-cutting industry in Indonesia, offer a useful template for identifying organizational factors that can make CSR/SD initiatives accessible to those individuals along the supply chain whom such initiatives are supposed to serve. ...
This report sets out to analyse the emergence and distinctive impact of corporate social responsibility and sustainable development (CSR/SD) functions and professionals within organizations. By evaluating the literature on this topic, it seeks to clarify how leveraging the already established CSR/SD functions and professionals across organizations can contribute to the International Labour Organization’s (ILO) objective of achieving a future of work that provides decent and sustainable work opportunities for all.
... 594 For example, fires in Bangladesh and Pakistan occurred in factories that had been certified as meeting safety standards. 595 Additionally, "auditors may be implicitly or even explicitly encouraged not to detect incidents of forced labor". 596 Moreover, as Crane et al. observe, as auditors report directly to the commissioning client, potentially unlawful or criminal activity is not reported to the appropriate authorities if and when it is identified and disclosed during the auditing process. ...
This literature review focuses on the most influential and relevant developments in regulation and governance scholarship. In addition, it also draws on work undertaken in a
range of complementary disciplines and areas, including industrial relations, political
economy, labour economics, labour law and global labour studies. Among other things, we were asked to attempt to address the following questions:
- How can progress be made toward normative consistency across regimes of governance: international, regional and national; or, private and public?
- How can private and public governance best be combined so as to reinforce each other?
- What new institutions and modes of governance might be needed?
... This may be the case if auditors are competing in an "auditing market" where auditing companies with lower prices are more competitive and need to attract repeat customers to survive (Christmann & Taylor 2006). In such cases, the collusion of auditor and auditee interests can lead to ceremonial, symbolic, or superficial auditing processes (Moore et al. 2006;Boiral 2012;Locke 2013;Boström 2015;Marx & Wouters 2016). Evidence from the auditing literature confirms that auditing firms that compete for repeat customers may have financial conflicts of interest, and draws connections to a related intentional or circumstantial (because of low-balling time estimates) loss in auditing quality and oversight (Calegari et al. 1998;Makkawi & Schick 2003;Pierce & Sweeney 2004). ...
Voluntary Sustainability Standards have become a popular private governance framework for more sustainable agri‐food value chains. Yet, amid increasing concerns over the decoupling of standards and practices, it is still unclear to what extent agricultural standard requirements are implemented on the ground, and what may account for such differential implementation. This study employs a novel dataset of 659 Honduran coffee producers to examine this puzzle, focusing on the most widely used standards in the coffee sector (Common Code for the Coffee Community, Fairtrade, Fairtrade/organic, UTZ Certified, and Rainforest Alliance). It first presents results on implementation and behavioral change, based on matched groups of certified and non‐certified farmers, for eight representative social and environmental sustainability practices. Analyzing determinants of implementation success, it finds that the stringency of rules – if they are known by farmers – and the level of farm‐gate prices are significantly correlated with farmers’ performance and lower levels of decoupling across a majority of indicators. These results speak to the importance of supporting small‐scale actors’ awareness of and financial capacity to comply with proposed sustainability rules.
... Institutional design is defined as the rules establishing and governing an interaction between actors in a collaborative setting to achieve a specific policy goal. Significant research focuses on the design of how policy objectives are determined (agenda-setting and negotiation, monitored, implemented, and enforced) [5][6][7]. ...
Public-private partnerships for sustainable development have been in operation for several decades from the local to the international level [...]
... accountability, transparency, third party participation) of how private instruments arrive at conformity assessments with defined standards through audits (Locke, 2013). Within the field of labour rights, various scholars have identified weaknesses with VSS monitoring and auditing systems which place those systems' effectiveness in doubt (Berliner and Prakash, 2015;Marx and Wouters, 2016). ...
Global governance in its myriad forms and actor constellations has decisively demonstrated the potential for rule-making above the nation state to be liberated from the ‘iron cage’ of traditional intergovernmental forums and multilateral bureaucracy. To further investigate an increasingly complex global reality, we propose drawing on organisational theories and methods for penetrating the internal dynamics of global governance processes and outcomes. This article begins by mapping out the current use of organisational theories in global governance research. It then turns to exploring the potential for other areas of organisational theory and conceptual development to shed light on the governance dynamics and performance of voluntary sustainability standards (VSS), a significant site of transnational rule-making and experimentation by private actors. We highlight a paradigmatic shift from ‘arms-length’ to ‘embedded’ models of VSS monitoring and regulation, reflected in new modes of engagement and interaction between rule-makers and rule-takers. This new generation of embedded VSS governance is distinguishable by enhanced information provision, learning and knowledge creation. The implications of embedded governance for VSS monitoring and performance are explored with reference to the experience of the Fair Wear Foundation (FWF).
... The implementation of standards can be impeded by poor communication, support and enforcement (Miller and Williams, 2009, p. 100), which require not only organizational capacity but also political will (see Barrientos and Smith, 2007;Nelson and Tallontire, 2014). The auditing process can also present challenges (Davenport and Low, 2013): studies suggest that some standards cannot be evaluated in an annual audit, random samples are not necessarily representative, routinization may result in superficial auditing, remuneration arrangements may generate conflicts of interest, and process standards may be more difficult to evaluate than outcomes (Walgenbach, 2001; Barrientos and Smith, 2007;Boiral and Gendron, 2011;Marx and Wouters, 2015). These challenges may contribute, in part, to the finding that (even when living wages are mandated) producers do not always experience an increase in income (see, e.g., Francesconi and Ruben, 2014, on FI;Brandi, 2016, on RSPO). ...
The sustainable development agenda has long been linked with social justice, income equality, and workers' rights. This article argues that voluntary sustainability standards-setting organizations (VSSSOs) can contribute to these goals by requiring employers to pay living wages and actively support collective bargaining. Examining the content of 25 voluntary sustainability standards (VSS) set by 16 systematically selected VSSSOs, this study finds that only 32% of VSS mandate a living wage, and only 16% rigorously support collective bargaining. It argues that supporting national minimum wages is helpful but not sufficient, examines sources of downward pressure on VSS, identifies potential explanations for variation among standards, and briefly describes a new initiative promoting living wage standards. While VSS are not a silver bullet for sustainable development or wage equity, VSSSOs are overlooking a significant opportunity to be a transformative part of a broader solution. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment
... For instance, scholars have debated the legitimacy, potential, and effectiveness of global governance initiatives to combat labor exploitation through company codes of conduct (Locke et al. 2009;Fransen 2011), ethical compliance auditing (Locke 2013), and other forms of inspection and monitoring (O'Rourke 2003). Another interlocking body of research has analyzed the capacity and effectiveness of global governance instruments designed to heighten labor standards and human rights within supply chains, such as the United Nations Global Compact (Marx & Wouters 2016). ...
A growing body of scholarship analyzes the emergence and resilience of forced labor in developing countries within global value chains (GVCs). However, little is known about how forced labor arises within domestic supply chains concentrated within national borders, producing products for domestic consumption. We conduct one of the first studies of forced labor in domestic supply chains, through a cross-industry comparison of the regulatory gaps surrounding forced labor in the United Kingdom. We find that understanding the dynamics of forced labor in domestic supply chains requires us to conceptually modify the GVC framework to understand similarities and differences across these contexts. We conclude that addressing the governance gaps that surround forced labor will require scholars and policymakers to carefully refine their thinking about how we might design operative governance that effectively engages with local variation.
Die Zielsetzung des vorliegenden Berichts ist, eine literaturbasierte Grundlage für ein zu entwickelndes Forschungskonzept zur Wirkungsforschung bezüglich des Arbeits-schutzes in Logistiklieferketten in Deutschland und den europäischen Anrainerstaaten zu schaffen. Besonders berücksichtigt sind als Auftraggeber-Branchen der Logistik Einzelhandel und Automobilindustrie. Die beiden zentralen Fragestellungen beziehen sich a) auf die Determinanten von Sicherheit, Gesundheit und Präventionskultur (Occupational Safety and Health, kurz: OSH) und b) die Strategien und Maßnahmen zur Steuerung und Förderung von OSH in (Logistik-) Lieferketten. Die generelle Vorgehensweise und Methodik sind jeweils identisch und orientierten sich am Vorgehen eines Rapid Reviews.
Purpose
A growing number of private, voluntary and mandatory sustainability standards have recently emerged. However, supply chain corruption practices as mechanisms to circumvent sustainability standards have also grown and occur regularly. This paper strives to elaborate theory on the intersection of institutional theory, business corruption and the sustainability standards literature by investigating factors that influence the emergence of supply chain corruption practices.
Design/methodology/approach
Based on secondary data, four in-depth case studies of supply chain corruption practices are investigated through the use of adaptive theory and the method of constant comparisons to elaborate theory on this important phenomenon.
Findings
The paper suggests that although sustainability standards can improve supply chain sustainability performance, if they are adopted only symbolically and not substantively, unanticipated outcomes such as supply chain corruption may occur. The study proposes a typology of supply chain corruption practices, further explores the symbolic adoption of sustainability standards in supply chains and proposes the novel construct of “social isomorphism for corruption.” Since focal companies play central roles in leading supply chain corruption practices, we reason that they can also play a pivotal role in preventing supply chain corruption practices by promoting the substantive adoption of sustainability standards across their supply chains.
Originality/value
This paper elaborates theory on the challenging phenomenon of corruption in supply chains by linking the supply chain management literature to the corruption and the sustainability discourses and offers important insights to aid our understanding on the topic. It generates six propositions and four contributions to the sustainable supply chain management theory, practice and policy.
This article provides a comparative assessment of the labor provisions in the United States–Mexico–Canada Agreement (USMCA) and the North American Free Trade Agreement. It also evaluates new labor‐related requirements incorporated in the rules of origin (ROO) rather than the labor chapter of the newer treaty. The ROO in the USMCA determine a labor value content requirement for passenger vehicles and light and heavy trucks. No previous free trade agreement mandates that a fraction of a product be made by workers earning a specific minimum wage to qualify for duty‐free access. The new clause has raised concerns about its enforceability, which this article explores. Private compliance initiatives are presented as a means to strengthen compliance with the new labor regime without disrupting existing regional production networks.
Interferences to supply chains, regardless of whether they are regular, unplanned or intentional, are progressively distorting supply chain execution. As such, risk mitigation in supply chains has received sufficient attention in the academic literature. However, there is scant research done on this topic within the African context, and none on the supply chain of electrical energy on that continent. In an effort to address this gap, this paper focuses on the supply chain department of Eskom, the primary utility company
of South Africa and one of the largest on the continent. Adopting a non-probability sampling approach utilising the purposive sampling technique to choose the sampling components from the target population, data were collected through semi-structured interviews as well as additional documentation in various forms. Data interpretation and codification thereof was done using ATLAS.ti 8 from which ten themes emerged,
which show that supply chain risks emanate from value streams, information and affiliations, supply chain activities, and external situations. The paper concludes by making recommendations based on the study that would broadly apply to supply chain risk management in other African utility companies.
Private governance channelled through social compliance programmes and gender initiatives of multinational companies (MNC) are ineffective in tackling gender discrimination in global value chains. The United Nations Guiding Principles on Business and Human Rights (UNGP) provide a public‐private governance framework to address human rights globally, including gender equality. This paper explores whether the UNGP can provide a more effective governance framework for addressing women workers' rights in global value chains. The paper argues that interlayered forms of governance (involving public, private and social actors) are critical to addressing gender discrimination and for advancing a gendered approach to human rights due diligence.
The brand-name fashion industry creates high levels of competition in developing countries, leading to labour exploitation and human rights abuse. The 2013 World Investment Report found that pushing prices down in global value chains has led to “significant negative social and environmental impacts”. In response, fashion corporations and retail giants introduced codes of conduct to address consumer concerns and stop any damage to brand reputation. Corporate Social Responsibility (CSR) has had some success in preventing child labour but little if any victory in allowing workers the right to organise and bargain collectively. In fact, CSR has been blamed for undermining the role of trade unions and privatising labour rights. In this article, I trace the history of CSR from shareholders to a human rights model. I highlight tensions between national accumulation policies, company profits, shareholders and CSR on the one hand, and migrant workers and human rights on the other.
In many agro-food supply chains, certification has become an important means of reinforcing adherence to standards on process quality and acceptability, including the acceptability of labour practices across the supply chain, and communicating this to buyers and end consumers. Certification is a procedure by which a third party gives written assurance that a product, process or service is in conformity with certain standards. There is, however, growing concern that suppliers in some agro-food industries are becoming overburdened by certification schemes, process standards and corporate codes of conduct. With multiple overlapping and costly schemes weighing in particular on individual grower suppliers,
the reliability and added value of certification needs to be reassessed. Several frameworks are being considered to signal acceptable labour rights practices within food supply chains. There are currently
multiple methodologies with diverse scope and coverage for monitoring and reporting on rights and working conditions in agriculture. These methodologies are based largely on the voluntary certification standards set by individual firms and industries.
This paper presents the results of a comparative analysis of five leading global agro-food certification schemes that cover labour rights and protection, including for small farmers, as an integral part of their
certification scope.
This chapter will focus on social labelling schemes implemented by non-governmental organizations (NGOs), which are one form of private regulatory initiatives for the promotion of labour standards in global supply chains. From a theoretical perspective, these schemes are based on information asymmetries in terms of social conditions in production, which exist between consumers and producers. They aim to minimize this information asymmetry, as equal levels of information enable consumers to decide in favour of products made under good conditions over those made under bad conditions. However, in practice there remains an information asymmetry, primarily between the producers and the labelling NGOs, but inevitably being passed on to the consumers. This results mainly from a deficient oversight capacity of the implementing NGOs to ensure that their standards are met. Therefore, the effectiveness of the labelling schemes is limited. This will be shown by means of three existing schemes, namely GoodWeave, Fairtrade, and the Forest Stewardship Council (FSC). Hence, it will be argued that transparency with regard to the NGOs’ actual oversight capacity is necessary to make labelling schemes more effective. This might be achieved through a regulatory approach addressing the information provided by the labels. Furthermore, the International Labour Organization (ILO) could play a significant role by supporting labelling NGOs with necessary resources to strengthen their oversight capacity.
This article examines the neglected question of workers’ voice in the transnational governance of labour rights. While governance studies often neglect worker's agency and labour studies focus on strikes or collective bargaining, this article takes the theoretical lenses of recursivity to explore and compare new channels for worker participation that developed in the context of transnational governance schemes. Taking the example of the Fair Labor Association, a prominent multistakeholder initiative in the garment industry, the article distinguishes between three channels: workers’ surveys during audits, complaint procedures, and local grievance mediation. Despite the fact that such opportunities count as key innovations for the participation of labour in transnational governance, statistical and qualitative data from FLA's factory audits and self-conducted interviews show that locally situated actors, especially workers, are only occasionally able to make their voice heard in formally open channels. The article identifies two main sources of constraints: the first is workers’ lack of knowledge of these channels and distrust towards these procedures. This is tied, secondly, to the more fundamental problem that business continues to have interpretative power over the nature of the problems and solutions in transnational labour governance.
Since 2008, most bilateral and regional EU trade agreements contain so-called Trade and Sustainable Development chapters. Such sustainability chapters typically include commitments to core ILO labour rights and provide specific monitoring mechanisms to ensure compliance. Several observers however, have voiced concern about the enforcement potential of these provisions in practice, beyond legal and institutional reforms. As a means to overcome this compliance gap, this article explores how the inclusion of existing Voluntary Sustainability Standards (VSS) in trade agreements could potentially enhance the monitoring and enforcement of labour provisions in EU trade agreements. Based on experiences captured in a case-study on the functioning of the 2013 EU-Colombia Trade Agreement, we argue that linking VSS to labour provisions in trade agreements could significantly contribute to rendering these provisions more effective. Linking labour provisions to the monitoring and auditing mechanisms of accredited but independent VSS, we argue, could help close a regulatory gap, add credibility to the provisions and help overcome capacity challenges in the implementing countries. In turn, the integration of VSS in trade agreements offers public regulators the opportunity to demand a strengthening of the quality of VSS in terms of their design and procedures. 2
The International Labour Organization’s (ILO’s) Declaration on Fundamental Principles and Rights at Work is a “canon” in the global governance of labor rights. The ILO has its own implementation, monitoring, and enforcement system in place to foster compliance with the declaration. However, other transnational regulatory initiatives also integrate the declaration into their standards and procedures, leading them to become nondelegated intermediaries. We analyze and compare two such cases: the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises and the Fair Wear Foundation (FWF). The case studies show two distinct approaches, which differ significantly in operation and the involvement of other intermediaries. The two initiatives also differ in effectiveness. We suggest that this is related to how they involve different intermediaries and how they relate to the targets. The OECD involves few intermediaries, and these play passive roles with little interaction with targets, while the FWF involves many intermediaries, which play diverse roles and constantly engage targets.
Whether global rules and standards originate from a public intergovernmental body or from a private organization has significant implications for the applicability of international law such as WTO law. However, how sensible is this distinction between public and private? This paper argues that the distinction between public and private standards only makes sense if one looks at the legal status of specific standard-setting organisations. However, the distinction between public and private begins to blur and fade if one switches the unit of analysis. First, the paper shows that private standards are often based on internationally agreed (public) rules and norms. Second, the paper argues that governments on purpose or in the design of their policies take these private initiatives on board. Hence, they become an integral part of ‘public’ governance. These arguments are developed on the basis of an analysis of Voluntary Sustainability Standards (VSS).
As the world economy becomes increasingly integrated, companies can shift production to wherever wages are lowest and unions weakest. How can workers defend their rights in an era of mobile capital? With national governments forced to compete for foreign investment by rolling back legal protections for workers, fair trade advocates are enlisting consumers to put market pressure on companies to treat their workers fairly. In Beyond the Boycott, sociologist Gay Seidman asks whether this non-governmental approach can reverse the "race to the bottom" in global labor standards. Beyond the Boycott examines three campaigns in which activists successfully used the threat of a consumer boycott to pressure companies to accept voluntary codes of conduct and independent monitoring of work sites. The voluntary Sullivan Code required American corporations operating in apartheid-era South Africa to improve treatment of their workers; in India, the Rugmark inspection team provides 'social labels' for handknotted carpets made without child labor; and in Guatemala, COVERCO monitors conditions in factories producing clothing under contract for major American brands. Seidman compares these cases to explore the ingredients of successful campaigns, as well as the inherent limitations facing voluntary monitoring schemes. Despite activists' emphasis on educating individual consumers to support ethical companies, Seidman finds that, in practice, they have been most successful when they mobilized institutions-such as universities, churches, and shareholder organizations. Moreover, although activists tend to dismiss states' capabilities, all three cases involved governmental threats of trade sanctions against companies and countries with poor labor records. Finally, Seidman points to an intractable difficulty of independent workplace monitoring: since consumers rarely distinguish between monitoring schemes and labels, companies can hand pick monitoring organizations, selecting those with the lowest standards for working conditions and the least aggressive inspections. Transnational consumer movements can increase the bargaining power of the global workforce, Seidman argues, but they cannot replace national governments or local campaigns to expand the meaning of citizenship. As trade and capital move across borders in growing volume and with greater speed, civil society and human rights movements are also becoming more global. Highly original and thought-provoking, Beyond the Boycott vividly depicts the contemporary movement to humanize globalization-its present and its possible future. Copyright © 2007 by the American Sociological Association. All rights reserved.
Global industrialization is the result of an integrated system of production and trade. Open international trade has encouraged nations to specialize in different branches of manufacturing and even in different stages of production within a specific industry. This process, fueled by the explosion of new products and new technologies since World War II, has led to the emergence of a global manufacturing system in which production capacity is dispersed to an unprecedented number of developing as well as industrialized countries (Harris, 1987; Gereffi, 1989b). The revolution in transportation and communications technology has permitted manufacturers and retailers alike to establish international production and trade networks that cover vast geographical distances. While considerable attention has been given to the involvement of industrial capital in international contracting, the key role played by commercial capital (i.e., large retailers and brand-named companies that buy but don't make the goods they sell) in the expansion of manufactured exports from developing countries has been relatively ignored.
This chapter will show how these ‘big buyers’ have shaped the production networks established in the world's most dynamic exporting countries, especially the newly industrialized countries (NICs) of East Asia. The argument proceeds in several stages. First, a distinction is made between producer-driven and buyer-driven commodity chains, which represent alternative modes of organizing international industries. These commodity chains, though primarily controlled by private economic agents, are also influenced by state policies in both the producing (exporting) and consuming (importing) countries.
Second, the main organizational features of buyer-driven commodity chains are identified, using the apparel industry as a case study. The apparel commodity chain contains two very different segments. The companies that make and sell standardized clothing have production patterns and sourcing strategies that contrast with firms in the fashion segment of the industry, which has been the most actively committed to global sourcing. Recent changes within the retail sector of the United States are analyzed in this chapter to identify the emergence of new types of big buyers and to show why they have distinct strategies of global sourcing.
Third, the locational patterns of global sourcing in apparel are charted, with an emphasis on the production frontiers favored by different kinds of US buyers. Several of the primary mechanisms used by big buyers to source products from overseas are outlined in order to demonstrate how transnational production systems are sustained and altered by American retailers and branded apparel companies.
A new global activism is shaming the world's top companies into enacting codes of conduct and opening their Third World factories for inspection. But before you run a victory lap in your new sweatshop-free sneakers, ask yourself: Do these voluntary arrangements truly help workers and the environment, or do they merely weaken local governments while adding more green to the corporate bottom line?
In this article we examine the transnational governance of sustainable biofuels and its coexistence with the WTO trade regime. The analysis of how the EU Renewable Energy Directive (RED) is shaping transnational biofuel governance shows deep and mutual dependence between public and private. The EU relies on a private system of compliance and verification. At the same time, private certification schemes are dependent on the incentives provided by RED to expand commercially. A second layer of hybridity in this governance system is that it is emerging in the shadow of the WTO. EU policy makers refrained from introducing binding requirements on social sustainability criteria in RED. It was left to private certifiers to fill this gap. This article also serves as an editorial introduction to the overall symposium on the ‘Transnational Hybrid Governance’ (THG) of sustainable biofuels. The three articles in the symposium analyse the complex making and mutual shaping of ‘sustainable biofuels’ and discuss the institutional features, processes, networks and socio-technical devices by which markets are organized and economic and political orders take shape.
Recent advances in the science and technology of global supply chain management offer near-real-time demand-response systems for decision-makers across production networks. Technology is helping propel "fast fashion" and "lean manufacturing," so that companies are better able to deliver products consumers want most. Yet companies know much less about the environmental and social impacts of their production networks. The failure to measure and manage these impacts can be explained in part by limitations in the science of sustainability measurement, as well as by weaknesses in systems to translate data into information that can be used by decision-makers inside corporations and government agencies. There also remain continued disincentives for firms to measure and pay the full costs of their supply chain impacts. I discuss the current state of monitoring, measuring, and analyzing information related to supply chain sustainability, as well as progress that has been made in translating this information into systems to advance more sustainable practices by corporations and consumers. Better data, decision-support tools, and incentives will be needed to move from simply managing supply chains for costs, compliance, and risk reduction to predicting and preventing unsustainable practices.
Available at: http//SSRN.com/abstract=2347166. This article demonstrates the value of studying interactions in transnational business governance (TBG) and proposes an analytical framework for that purpose. The number of TBG schemes involving non-state authority to govern business conduct across borders has vastly expanded in a wide range of issue areas. As TBG initiatives proliferate, they increasingly interact with one another, and with state-based and other normative regimes. The key challenge is to understand the implications of TBG interactions for regulatory capacity and performance – the most fruitful initial focus – and ultimately for the impacts of regulation on social and environmental problems. To gain purchase on these complex issues, the article develops an original framework that disaggregates the regulatory process, focusing on the points at which interactions may occur and suggesting, for each point, a series of analytical questions that probe the key features of TBG interactions.
Setting the Standard chronicles the emergence and implications of an ambitious experiment in civil-society-led global governance: the Forest Stewardship Council. The FSC was born in 1993 as a grassroots initiative to promote 'environmentally appropriate, socially beneficial, and economically viable manage of the world's forests' through an international system of forest certification.
The recent establishment of an FSC standard for British Columbia was achieved only after difficult and protracted negotiations at the regional, national, and global levels. Drawing on a pioneering case study of this negotiation process, Setting the Standard explores the challenges associated with implementing the FSC's global vision on the ground. It also undertakes a detailed comparative analysis of FSC standards and standard-setting processes elsewhere in Canada and in the United States and Europe, and grapples with the broader implications of the emerging FSC experience for global governance and regulation theory.
This article analyses accountability arrangements in the Forest Stewardship Council (FSC) and other organizations that set standards for certification and eco-labeling. It focuses on two types of accountability that are likely to be achievable and important to non-state standards organizations: control and responsiveness. In setting a global standard based on a multi-stakeholder governance structure, FSC established a model for other certification schemes, specifically within the forestry and fisheries sectors. By creating the Marine Stewardship Council (MSC), FSC-supporters exported the certification model to the fisheries sector. Industry-led forest certification schemes that were initiated to compete with FSC and offer an industry-dominated model have come to mimic procedural accountability arrangements initially established by their competitor. However, they have carefully filtered out the prescriptions that could reduce their influence in standard- setting processes. The article argues that while certification schemes could enhance control of corporate environmental and social performance, some of the industry-dominated schemes adopt popular and fashionable accountability recipes to divert criticism of their activities instead of acting responsively to external constituents such as environmental and social groups.
Available at: http://ssrn.com/abstract=1403517. A new kind of international regulatory system is spontaneously arising out of the failure of international "Old Governance" (treaties and intergovernmental organizations) to adequately regulate international business. NGOs, business firms and other actors, singly and in novel combinations, are creating innovative institutions to apply transnational norms to business. These institutions are predominantly private, and operate through voluntary standards. We depict the diversity of these new regulatory institutions on the "Governance Triangle," according to the roles of different actors in their governance. To analyze this complex system, we adapt the domestic "New Governance" (NG) model of regulation to the international setting. "Transnational New Governance" (TNG) potentially provides many benefits of NG, and is particularly suitable for international regulation because it demands less of states and IGOs. However, TNG requires states and IGOs to act as orchestrators of the regulatory system, which currently suffers from a significant orchestration deficit. By expanding “directive” and "facilitative" orchestration, states and IGOs could strengthen high-quality private institutions, improve the international regulatory system and better achieve their own regulatory goals.
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Regulation by public and private organizations can be hijacked by special interests or small groups of powerful firms, and nowhere is this easier than at the global level. In whose interest is the global economy being regulated? Under what conditions can global regulation be made to serve broader interests? This is the first book to examine systematically how and why such hijacking or "regulatory capture" happens, and how it can be averted. Walter Mattli and Ngaire Woods bring together leading experts to present an analytical framework to explain regulatory outcomes at the global level and offer a series of case studies that illustrate the challenges of a global economy in which many institutions are less transparent and are held much less accountable by the media and public officials than are domestic institutions. They explain when and how global regulation falls prey to regulatory capture, yet also shed light on the positive regulatory changes that have occurred in areas including human rights, shipping safety, and global finance. This book is a wake-up call to proponents of network governance, self-regulation, and the view that technocrats should be left to regulate with as little oversight as possible. In addition to the editors, the contributors are Kenneth W. Abbott, Samuel Barrows, Judith L. Goldstein, Eric Helleiner, Miles Kahler, David A. Lake, Kathryn Sikkink, Duncan Snidal, Richard H. Steinberg, and David Vogel.
With the introduction of the Generalised System of Preferences (GSP), the European Union (EU) developed a trade policy tool which allows easier access to the EU economic zone for emerging and developing countries through granting tariff preferences for the importation of industrial and agricultural products. The aim of the regulation is to support developing countries in their efforts towards poverty reduction, good governance and sustainable development (BMWI 2013; CARIS 2010, p. 21). This ambitious goal is to be achieved, among others, through the so-called GSP+ which grants a selection of countries additional tariff preferences if they meet certain criteria. One of the preconditions is the ratification of fundamental international conventions covering human rights and labour standards, the appropriate use of environmental resources and good governance. However, although the regulation has had an impact on the legislative framework in partner countries, when it comes down to driving changes at the operational level and to improving the actual conditions of production in those countries; the approach still reveals weaknesses (CARIS 2010, p. 10).
Labor Rights and Multinational Production investigates the relationship between workers’ rights and multinational production. Mosley argues that some types of multinational production, embodied in directly owned foreign investment, positively affect labor rights. But other types of international production, particularly subcontracting, can engender competitive races to the bottom in labor rights. To test these claims, Mosley presents newly generated measures of collective labor rights, covering a wide range of low- and middle-income nations for the 1985–2002 period. This book suggests that the consequences of economic openness for developing countries are highly dependent on foreign firms’ modes of entry and, more generally, on the precise way in which each developing country engages the global economy. The book contributes to academic literature in comparative and international political economy, and to public policy debates regarding the effects of globalization.
This book examines and evaluates various private initiatives to enforce fair labor standards within global supply chains. Using unique data (internal audit reports, and access to more than 120 supply chain factories and 700 interviews in 14 countries) from several major global brands, including NIKE, HP, and the International Labor Organization's Factory Improvement Programme in Vietnam, this book examines both the promise and the limitations of different approaches to actually improve working conditions, wages, and working hours for the millions of workers employed in today's global supply chains. Through a careful, empirically grounded analysis of these programs, this book illustrates the mix of private and public regulation needed to address these complex issues in a global economy.
The expert contributors assess the state-of-the-art with regard to private regulation of food, natural resources and labor conditions. They begin with an introduction to, and discussion of, several leading existing private standards, and go on to assess private food standards and their legitimacy and effectiveness in the context of the global trade regime.
A new dialogue is beginning between students of international law and international relations scholars concerning compliance with international agreements. This article advances some basic propositions to frame that dialogue. First, it proposes that the level of compliance with international agreements in general is inherently unverifiable by empirical procedures. That nations generally comply with their international agreements, on the one hand, or that they violate them whenever it is in their interest to do so, on the other, are not statements of fact or even hypotheses to be tested. Instead, they are competing heuristic assumptions. Some reasons why the background assumption of a propensity to comply is plausible and useful are given. Second, compliance problems very often do not reflect a deliberate decision to violate an international undertaking on the basis of a calculation of advantage. The article proposes a variety of other reasons why states may deviate from treaty obligations and why in many circumstances those reasons are properly accepted by others as justifying apparent departures from treaty norms. Third, the treaty regime as a whole need not and should not be held to a standard of strict compliance but to a level of overall compliance that is "acceptable" in the light of the interests and concerns the treaty is designed to safeguard. How the acceptable level is determined and adjusted is considered.
This article seeks to shed light on a notion that is often considered essential in conferring global regulatory authority,
but is rarely defined in contemporary scholarship on global governance: the notion of legitimacy. The authors centre their
analysis on the value of democracy as one of the seminal determinants of the legitimacy of regulatory actors and the norms
they adopt. They further focus on the democratic legitimacy of norms adopted by global private actors. A specific breed of
such ‘private standards’ is studied, namely those addressing food safety. More in particular, the leading standard scheme
for good agricultural practices—GLOBALG.A.P.—is taken as a case study. The authors view democratic legitimacy in global governance
as a function of the ‘public accountability’ of the relevant regulatory actors, which comprises a prospective and a retrospective
dimension. Public accountability is analyzed as this link which unites, in a democratic fashion, a regulatory actor and its
public, i.e. the ensemble of the people who are affected by its regulatory activities. GLOBALG.A.P.’s standard-setting is
assessed in light of this analytical framework. The authors find that, while the accountability of GLOBALG.A.P. as a regulatory
actor in the field of food safety is satisfactory in respect of its internal members, additional efforts need to be made to
ensure stronger (democratic) accountability vis-à-vis its other—external—stakeholders, particularly those located in developing
countries.
Transnational private governance initiatives that address problems of social and environmental concern now pervade many sectors. In tackling distinct substantive problems, these programs have, however, prioritized different problem-oriented logics in their institutionalized rules and procedures. One is a “logic of control” that focuses on ameliorating environmental and social externalities by establishing strict and enforceable rules; another is a “logic of empowerment” that concentrates on remedying the exclusion of marginalized actors in the global economy. Examining certification programs in the areas of fair trade, organic agriculture, fisheries, and forest management, we assess the evolutionary effects of programs prioritizing one logic and then having to accommodate the other. The challenges programs face when balancing between the two logics, we argue, elucidate specific distributional consequences for wealth, power, and regulatory capabilities that private governance programs seek to overcome.
In this Article we examine the rapid emergence and expansion of a private-sector compliance and enforcement infrastructure that we believe increasingly may be providing a substitute for public and legal regulatory infrastructure in global commerce, especially in developing countries where rule of law is weak and court systems are absent or inadequate. This infrastructure is provided by a proliferation of performance codes and standards, and a rapidly growing global army of privately trained and authorized inspectors and certifiers that we call the "third party assurance industry." The growth in the third party assurance business has been phenomenal in the last decade. The business first developed to facilitate making and carrying out private contracts, but in recent years, assurance services are being deployed for purposes that are more appropriately seen as regulatory in nature. Third party assurance may thus be providing a new institutional structure through which private commercial exchange is being harnessed and regulated for essentially public purposes.
Recent struggles over corporate responsibility have fzreled the emergence of codes of conduct and a range of private voluntary compliance initi-atives. Some argue that these activities displace or "crowd otit" public regzllation and legal accountability. Analyzing the politics of the apparel industry in the 1990s, I show that the displacement hypothesis is partially supported but limited by an overly simplified conceptualization of the interactions between private regulation and pressures for pzrblic account-ability. The analysis suggests a difrerent approach, which highlights ways in which political conflict in organizational fields and path-dependent trajectories shape the conseqriences of private regtllation.
Land use is regulated through various mixes of command-and-control interventions that directly affect land use via land use restrictions, and other public interventions that indirectly affect land use via agricultural, forestry, trade or macro-economic policies. More recently, coalitions of public and private actors have designed market-based and/or demand-led policy instruments to influence land use—e.g., eco-certification, geographical indications, commodity roundtables, moratoria, and payments for environmental services. These innovative instruments fall along a continuum of state involvement and interact with traditional public forms of land use regulation, leading to “hybrid” interventions. This article reviews emerging evidence on the effectiveness of the main instruments used to promote sustainable land use, and explores interactions between the new demand-led interventions and formal regulatory public policies. Although there are still insufficient rigorous studies evaluating the effectiveness of hybrid instruments, available evidence suggests some positive direct and indirect benefits. Hybrid instruments combine elements from both private and public regulatory systems, in innovative and effective ways. We propose a typology to characterize potential interactions between instruments that regulate land use. It links various types of interactions—i.e., complementarity, substitution, and antagonism—to the various stages of regulatory processes—i.e., agenda setting, implementation, and monitoring and enforcement. We give examples of governments endorsing certifications or using certification to support their own policies; governments creating enabling conditions for hybrid instruments to mature, allowing for wider adoption; and private instruments reinforcing public regulations or substituting for missing or weak governance. In some cases, governments, NGOs and corporations compete and may hinder each other's actions. With favourable institutional and governance contexts, well-designed hybrid public-private instruments can be effective. More systematic evaluation could boost the effectiveness of instruments and enhance synergistic interaction with traditional public land-use policy instruments to achieve incremental benefits as well as longer-term transformative outcomes in land-use protection.
Certification is becoming an important global governance instrument. Several authors have discussed the legitimacy of these systems. This paper uses eco-labels as a specific case of certification systems and analyzes more than 400 eco-labels on three components related to legitimacy. It aims to expand current research in two ways: conceptually and empirically. Conceptually, the paper proposes a configurational approach to assessing legitimacy on the basis of the institutional design of certification systems. It is argued that, so far, most attention has gone to the decision-making processes in certification systems with regard to standard-setting and the processes of granting certificates and verification via conformity assessment. While important in assessing legitimacy, these elements should be complemented by accountability mechanisms that allow interested parties to hold organizations to account after a decision has been reached and to raise a dispute. Empirically, the paper makes use of the Ecolabel Index database, which contains data on more than 400 eco-labels operating worldwide. The paper uses the population of eco-labels as a case study to empirically explore and analyze the diversity of more than 400 eco-labels on different institutional components related to legitimacy. The paper shows that there is significant variation between eco-labels with regard to their institutional design, resulting in systems with a strong institutional design and systems with a weak institutional design.
Research has recognized that states enable or constrain private governance initiatives, but we still know too little about the interactions between private and public authority in the governance of various social and environmental problems. This article examines how states have responded to the emergence of forest and fisheries certification programs, and how state responses have influenced the subsequent development of these programs. It is argued that historical and structural differences in the management of forest and fisheries have resulted in divergent state responses to certification programs, but that both trajectories of interaction have led to a strengthening of the non-state program. The article draws upon these cases to inductively identify types of interaction between state policies and non-state certification programs, the causal mechanisms that shed light on interaction dynamics, and the conditions under which state involvement is likely to result in either strengthening or weakening of non-state programs.
This article provides an empirical analysis of orchestration – that is, the initiation, support, and embracement of private governance arrangements through public regulators – in the field of European Union biofuel governance. It examines the emerging sustainability regime and shows that orchestration has been extensively practiced. Regulators in the European Union have used a range of directive and facilitative measures to initiate and support private biofuel certification schemes and to incorporate them in their regulatory frameworks. This has given rise to a hybrid regime in which public and private approaches are closely intertwined. Discussing the benefits and complications of engaging with private biofuel sustainability governance, the article's findings point to a partial failure of orchestration in this policy area.
In recent years a startling policy innovation has emerged within global and domestic environmental governance: certification systems that promote socially responsible business practices by turning to the market, rather than the state, for rule-making authority. This book documents five cases in which the Forest Stewardship Council, a forest certification program backed by leading environmental groups, has competed with industry and landowner-sponsored certification systems for legitimacy. The authors compare the politics behind forest certification in five countries. They reflect on why there are differences regionally, discuss the impact the Forest Stewardship Council has had on other certification programs, and assess the ability of private forest certification to address global forest deterioration.
What happens when transnational private regulation of labor standards is put into practice on the factory floor? This article addresses this question with field research data on Vietnam’s apparel and footwear industries. The Vietnamese case shows that code enforcement and implementation are highly political processes fraught with conflicts and attempts at evasion. The consequences, moreover, contradict the conventional wisdom of low regulatory effectiveness; heightened legal awareness and strengthened labor law enforcement may result from these processes. This study illustrates two mechanisms (conflict and ritualistic compliance) that can raise the effectiveness of private regulation.
The shift of economic production from higher labour standard regimes in the global North to lower standard regimes in the South is undermining enforcement of global labour standards. Responding to criticisms from the ‘anti-sweatshop’ movement, consumers and governments, many transnational corporations (TNCs) have adopted codes of conduct to regulate labour standards in their supplier factories. Non-governmental organizations (NGOs) are increasingly used to monitor compliance with these codes. This article analyses the monitoring effectiveness of three kinds of such ‘third party’ NGOs. It concludes that major monitoring deficiencies reflect, first, significant organizational weaknesses of the NGOs and their dependence on TNCs for whom they monitor; second, powerful limits imposed on NGO effectiveness by corporate restructuring and market competitiveness; and third, inadequate pressures from anti-sweatshop movements, consumers and governments. These constraints suggest that this NGO-centred, ‘soft law’ policy approach is ‘too weak for the job’.
Systems of private regulation based on certification have recently emerged to address environmental issues in the forest products industry and labor issues in the apparel industry. To explain why the same regulatory form has emerged across these fields, the author uses a historical and comparative case study approach, closely examining early moments and paying attention to “roads not taken.” Two types of factors led to the initial emergence of private certification: (1) social movement campaigns targeting companies and (2) a neo-liberal institutional context. The analysis shows specific ways in which these factors led states, nongovernmental organizations, and companies to build or support certification associations.
Why have systems of "transnational private regulation" recently emerged to certify corporate social and environmental performance? Different conceptions of institutional emergence underlie different answers to this question. Many scholars argue that firms create certification systems to solve problems in the market-a view rooted in a conception of institutions as solutions to collective action problems. The author develops a different account by viewing institutions as the outcome of political contestation and by analyzing conflict and institutional entrepreneurship among a wide array of actors. Using a comparative case study design, the analysis shows how these arguments explain the formation of social and environmental certification associations. Both theoretical approaches are needed, but strong versions of the market-based approach overlook an important set of dynamics that the author calls the "political construction of market institutions." The analysis shows how both problem solving in markets and political contention generate new institutional forms.
Obra que reconstruye el origen y evolución de las actuales redes transnacionales que, con la utilización de las nuevas tecnologías informativas como recurso organizador y aglutinador, han logrado constituirse en movimientos más o menos presionadores en la defensa de los derechos humanos, de la protección ambiental y de una mayor equidad de género, entre otros.
Corporate codes of labour practice have proliferated as a result of trade union and ngo campaigns against poor labour conditions in global production. Analysis of global production systems highlights the complexity of commercial networks and the wider social and institutional environment in which codes operate. It posits tensions between a corporate approach focusing on compliance with outcome standards and a civil society approach focusing on process rights. A detailed study of codes operated by companies in the UK Ethical Trading Initiative finds that codes have led to improvements in outcome standards but little change in process rights for workers. The authors conclude that corporate codes have a role to play in improving labour standards, but are currently doing little to challenge existing commercial practices or embedded social relations that underpin poor labour standards in global production systems.
The rise of China as the global factory raises challenges for many developing countries and their producers. The football-manufacturing sector is a case in which China has emerged as a global player. It is also a sector where compliance with international labour standards is considered critical. Leading international brands dominate the industry and control the global value chain for sports goods. In this article, we explore the relationship between the rise of China and international labour standards and consider how labour standards have affected the geography and organization of global football production. We draw on evidence from three of the main production locations – China, Pakistan and India. It appears that compliance with labour standards not only has different implications for the three production locations, but also that compliance alone is an insufficient basis for competing against China.
What role can private voluntary regulation play in improving labor standards and working conditions in global supply chain factories? How does this system relate to and interact with other systems of labor regulation and work organization? This paper seeks to address these questions through a structured comparison of two factories supplying Nike, the world’s largest athletic footwear and apparel company. These two factories have many similarities - both are in Mexico, both are in the apparel industry, both produce more or less the same products for Nike (and other brands) and both are subject to the same code of conduct. On the surface, both factories appear to have similar employment (i.e., recruitment, training, remuneration) practices and they receive comparable scores when audited by Nike’s compliance staff. However, underlying (and somewhat obscured by) these apparent similarities, significant differences in actual labor conditions exist between these two factories. What drives these differences in working conditions? What does this imply for traditional systems of monitoring and codes of conduct? Field research conducted at these two factories reveals that beneath the code of conduct and various monitoring efforts aimed at enforcing it, workplace conditions and labor standards are shaped by very different patterns of work organization and human resource management policies.
Private, voluntary compliance programs, promoted by global corporations and non-governmental organizations alike, have produced only modest and uneven improvements in working conditions and labor rights in most global supply chains. Through a detailed study of a major global apparel company and its suppliers, this paper argues that this compliance model rests upon misguided theoretical and empirical assumptions concerning the power of multinational corporations in global supply chains; the role information (derived from factory audits) plays in shaping the behavior of key actors (i.e., global brands, transnational activist networks, suppliers, purchasing agents, etc.) in these production networks; and the appropriate incentives required to change behavior and promote improvements in labor standards in these emergent centers of global production. We argue that it is precisely these faulty assumptions and the way they have come to shape various labor compliance initiatives throughout the world - even more than a lack of commitment, resources, or transparency by global brands and their suppliers to these programs - that explains why this compliance-focused model of private voluntary regulation has not succeeded. In contrast, this paper documents that a more commitment-oriented approach to improving labor standards co-exists, and in many of the same factories, complements the traditional compliance model. This commitment-oriented approach, based upon joint problem solving, information exchange, and the diffusion of best-practices, is often obscured by the debates over traditional compliance programs but it exists in myriad factories throughout the world and has led to sustained improvements in working conditions and labor rights at these workplaces.
This project evaluates the factors driving improvement of industry-sponsored private regulatory standards under conditions of competition in three-country contexts between 1995 and 2005. The paper provides a comparative analysis of regulatory competition in forestry in the USA, Sweden and Finland. While previous research has identified the importance of transnational supply chain pressure and of NGOs' direct targeting campaigns in diffusing and upgrading standards, this paper stresses the role of public comparison and environmental benchmarking that contributed to an upgrading of industry standards via competition between the Forest Stewardship Council and rival industry-sponsored schemes. The paper explores how transnational and national actors created important moments of public comparison in which substantive as well as accountability standards were ratcheted up while they diffused more broadly across industry. This project evaluates the role of environmental benchmarking in constructing and contesting the legitimacy of private regulation. © The Author 2009. Published by Oxford University Press and the Society for the Advancement of Socio-Economics. All rights reserved. For Permissions, please email: [email protected]
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