Working with Asian Suppliers:
The CSR Challenges for
Norwegian Firms
Heather White
Founder and President, Verité
Verité
Challenges in Overseas Contracting
Relationships
• Arms length oversight
• Little bargaining power
• 3rd party ownership poses potential reputational
threat
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Role of Host Government - Uncertain
• Lack of government
enforcement
• Presence may be
antagonistic to
workers'
rights/protections
• May resent
interference posed by
outsiders’ codes
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Social Consequences of Global Outsourcing
• Persistent discussion of
‘living wage’
• Increase in prominence
for ‘fair trade’ goods
• Companies argue the
social benefit of job
creation and economic
activities
• Companies pondering
MFA-end impacts
• Possibility of downward
pressure on working
conditions due to
economic disruption
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Social Consequences of Global Outsourcing
• Companies at the
forefront of CSR are
engaging
discussion of the
social benefits of
their production
• Responses to ‘antiglobalization’ forces
require broad
conceptualization of
business’ role
• ‘Outsourcing’
debate has political
importance
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Globalization and CSR
The literature shows systematic
evidence of multinational
companies exposed by so-called
anti-sweatshop campaigns being
subsequently punished by the
market through sharp decreases in
share prices.
Responsibility Breeds Success, Development Outreach,
Nigel Twose and Ziba Cranmer, World Bank
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On Wall Street,
a Rise in Dismissals Over Ethics
New York Times
Published: March 29, 2005
By LANDON THOMAS Jr.
“With regulatory scrutiny heightened,
there has been a wave of firings as
corporations move to stop perceived
breaches of ethics.”
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Groups Influencing Social
Compliance





Consumers
Media
NGOs
Labor Unions
Students
Business partners
Investors (owners)
International
Organizations
Church/religious
groups
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Globalization and CSR
Verité
Trends in Social Compliance:
the Verité view
Collaboration
Accountability
Standardization
Worker
Empowerment
Transparency
Social Benefit
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The Case for Worker Empowerment
• Stakeholders’
push for SC
better
informed workers
• Greater awareness
 sustained SC
(or push from
below)
• Use of area-based
NGOs for
sustainability
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The Case for Worker Empowerment
• Workers are sharing
responsibility for social
compliance (even pushing
it and enabling it)
• Empowered workforce
sustains the workplace
 develops community
• Healthy community averts
economic displacements
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Movement Toward Standardization
• Factories with multiple
buyers
• Licensees or agents
serving multiple
brands with same info
• Shared auditing
• Cost reduction
• Minimize audit ‘fatigue’
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Standardization of Expectations
and Accountability
• Foundation of CoC is
universal
– Respect for human rights
– Int’l labor standards
– Coming together of governments
- - Nafta, Asean, APEC, USJordan trade
• Cooperation bet. brands
• Better info management
• Access to information
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More Collaborative Initiatives
Among Brands
• Standardization
–
–
•
•
•
•
•
Codes, tools, approaches
Industry wide initiatives
Common production
facilities  common
target audience
Cost reduction
Minimize audit ‘fatigue’
Minimize learning ‘fatigue’
Better protection for the
brands
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Role of Transparency in Reporting
• Vendor performance assessed on
facts, not only relationships
• Not just the product, but “HOW is it
made?”
• Demand to know common violations;
industry specific… Answers not only
WHO (factory) but WHAT (standards,
industry, etc.) and WHERE
(geographic location)
• More segmented reporting - includes country/regional
performance
• Legal changes requiring social
reporting
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Role of Transparency in Reporting
•
•
•
•
•
CalPERS
Users have ability to
validate and disseminate
reports
Growing number of
‘learned’ workers
Growing number of civil
society organizations
everywhere
Governance concerns
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‘If we hadn’t included
stakeholders in reviewing and
commenting on the report
prior to its release, we would
have had a very different
response.’
Dan Henkle, VP, Gap Inc.
Verité
Global Social Compliance in 2010
Collaboration
Accountability
Standardization
Greater influence
in business & broader
role in societal
development.
Worker
Empowerment
Transparency
Social Benefit
Verité
Fast Forward …
 Changing landscape of
liability  moving
from legal to moral
dimension
 Liabilities are not only
current  timeline
goes into the future and
into the past
 In 10 years, CSR will
play broader role in
how companies are
doing business
 And, CSR will need to
be seen as contributing
to social development,
not simply insulating a
brand
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Thank you!
Verité