UIA-AIJA
New York, February 15-16, 2013
An Update on CSR Challenges for Fashion Brand-Owners
Bruce Landay
New York, 1911
Triangle Shirtwaist Fire -- 146 Dead
2
Dhaka, 2012
Tazreen Fashion Fire -- 120+ Dead
(Hasan Raza/AP Photo)
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Who Is Responsible?
Delwar Hussein, the Owner?
• Tazreen Fashions Ltd. (subsidiary of the Tuba Group) built
its factory in 2009, apparently without regard to existing
Bangladeshi safety codes
• Textile warehouse located below production spaces
• Blocked emergency exits; no fire escapes or sprinklers
• Allegations that factory managers ordered workers to
ignore fire alarm
• Possible proximate cause: a short circuit
The Bangladeshi Authorities?
• Lax or corrupt enforcement
4
Who Is Responsible? (cont.)
The Buyers, like Wal-Mart and Li & Fung?
• Widespread safety problems, public
corruption and private compliance fraud in
Bangladesh have long been known
• Audits not effective (Wal-Mart gave Tazreen a
medium-risk, but passing, grade in a factory
audit as late as July 2011)
• Big buyers like Li & Fung and Wal-Mart
continued to order from Tazreen in 2012
5
Who Is Responsible? (cont.)
Consumers?
• As consumers, we are not unaware of the
problems in production of apparel in certain
developing countries.
6
Who Is Responsible? (cont.)
Everyone:
• Hussein had 20 years’ experience in the industry when he built his
firetrap
• Hussein, local authorities, foreign buyers and their audit teams all
knew that Bangladesh had a history of textile factory fires : at least
9 fires killing 293 workers between 2000 and 2006 (see,
Clothesource Comments Blog, Dec. 6, 2012, by Clothesource Ltd.
http://clothesource.blogspot.com/2012/12/why-blaming-buyerskills-garment-workers.html)
• Bangladesh is not unique. Only two months before the Tazreen fire,
September 12, 2012, nearly 300 workers were killed in the Ali
Enterprises factory in Karachi, Pakistan. As was the case in similar
tragedies, emergency exits were locked or obstructed. In August,
the Ali Enterprises factory had been given SA8000 certification by
Social Accountability International.
7
CSR
“Corporate Social Responsibility” represents
the enterprise’s effort to do business in a
more socially, environmentally and ethically
responsible manner.
8
Ancient History (early ’90s)
• Outsourcing of production leads to awareness of sweatshop conditions.
• Pressure from consumers, unionists, human rights activists, but also from
employees of brand-owners.
• Brand owners begin to adopt written standards for their third-party
suppliers (e.g., “codes of conduct”, “terms of engagement”).
• No serious enforcement or audit apparatus in place and uncertainty as to
how to accomplish.
• Little or no cooperation among brand owners or sharing of information.
• For third-party manufacturers who produce for multiple brand-owners, a
multiplicity of standards and procedures.
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The Middle Ages (now)
• Written policies now de rigeur, often supported by detailed
guidance manuals.
• Greater investment by brand-owners in CSR infrastructure,
including in-house compliance/audit teams and factory liaisons.
• Audits are still the most common enforcement tool. But consensus
is growing that a more holistic approach is required.
• Greater transparency. Brand-owners publish policies and guidance
materials, and often their list of producers, on line.
• Early movement toward inter-brand collaboration and
standardization to ease compliance costs for producers.
10
Proliferation of Organizations
(a non-exhaustive list)
•
•
•
•
•
•
•
•
•
Social Accountability International (SAI) – Publishes standards (SA 8000) and offers
certification program for producers
Business for Social Responsibility (BSR) – Apparel industry group whose goals
include adoption of standard CSR guidelines
Fair Labor Association (FLA) – Member companies commit to ten obligations,
including adoption of policies meeting or exceeding standards in FLA Workplace
Code of Conduct
Fair Factories Clearinghouse (FFC) – Promotes collaboration among suppliers and
purchasers
Worldwide Responsible Accredited Production (WRAP) – Offers certification for
producers under WRAP Principles
Workers’ Rights Consortium – Monitoring through university affiliates
Ethical Trading Initiative (ETI) – Member companies must adopt the ETI Base Code
UN Global Compact
Clean Clothes Campaign – Alliance of European labor organizations and NGOs
11
Foundation Documents
• Universal Declaration of Human Rights (1948)
• ILO Declaration on Fundamental Principles
and Rights at Work (1998)
• UN Global Compact – The Ten Principles
(2000)
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Universal Declaration of Human Rights
Article 23.
(1) Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to
protection against unemployment.
(2) Everyone, without any discrimination, has the right to equal pay for equal work.
(3) Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an
existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.
(4) Everyone has the right to form and to join trade unions for the protection of his interests.
Article 24.
Everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holidays with
pay.
Article 25.
(1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family,
including food, clothing, housing and medical care and necessary social services, and the right to security in the
event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances
beyond his control.
(2) Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of
wedlock, shall enjoy the same social protection.
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ILO Declaration
[A]ll Members, even if they have not ratified the Conventions in question,
have an obligation arising from the very fact of membership in the
Organization to respect, to promote and to realize, in good faith and in
accordance with the [ILO] Constitution, the principles concerning the
fundamental rights which are the subject of those Conventions, namely:
(a) freedom of association and the effective recognition of the right to
collective bargaining;
(b) the elimination of all forms of forced or compulsory labour;
(c) the effective abolition of child labour; and
(d) the elimination of discrimination in respect of employment and
occupation.
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UN Global Compact
The Ten Principles
The UN Global Compact's ten principles in the areas of human rights, labour, the environment and anti-corruption enjoy universal consensus and are
derived from:
•
The Universal Declaration of Human Rights
•
The International Labour Organization's Declaration on Fundamental Principles and Rights at Work
•
The Rio Declaration on Environment and Development
•
The United Nations Convention Against Corruption
The UN Global Compact asks companies to embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights,
labour standards, the environment and anti-corruption:
Human Rights
Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and
Principle 2: make sure that they are not complicit in human rights abuses.
Labour
Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; and
Principle 6: the elimination of discrimination in respect of employment and occupation.
Environment
Principle 7: Businesses should support a precautionary approach to environmental challenges;
Principle 8: undertake initiatives to promote greater environmental responsibility; and
Principle 9: encourage the development and diffusion of environmentally friendly technologies.
Anti-Corruption
Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.
15
A Typical Brand-Owner’s (Nike’s)
Code of Conduct
“Our Code of Conduct binds our contract factories to
the following specific minimum standards. . . :
“EMPLOYMENT is VOLUNTARY
The contractor does not use forced labor, including
prison labor, indentured labor, bonded labor or other
forms of forced labor. The contractor is responsible for
employment eligibility fees of foreign workers,
including recruitment fees.”
http://www.nikebiz.com/responsibility/documents/Nike_Code_of_Conduct.pdf
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Code of Conduct (cont.)
“EMPLOYEES are AGE 16 or OLDER
Contractor’s employees are at least age 16 or
over the age for completion of compulsory
education or country legal working age,
whichever is higher. Employees under 18 are
not employed in hazardous conditions.”
http://www.nikebiz.com/responsibility/documents/Nike_Code_of_Conduct.pdf
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Code of Conduct (cont.)
“CONTRACTOR does NOT DISCRIMINATE
Contractor’s employees are not subject to
discrimination in employment, including hiring,
compensation, promotion or discipline, on the basis of
gender, race, religion, age, disability, sexual orientation,
pregnancy, marital status, nationality, political opinion,
trade union affiliation, social or ethnic origin or any
other status protected by country law.”
http://www.nikebiz.com/responsibility/documents/Nike_Code_of_Conduct.pdf
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Code of Conduct (cont.)
“FREEDOM of ASSOCIATION and COLLECTIVE
BARGAINING are RESPECTED
To the extent permitted by the laws of the
manufacturing country, the contractor respects the
right of its employees to freedom of association and
collective bargaining. This includes the right to form
and join trade unions and other worker organizations
of their own choosing without harassment,
interference or retaliation.”
http://www.nikebiz.com/responsibility/documents/Nike_Code_of_Conduct.pdf
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Code of Conduct (cont.)
“COMPENSATION is TIMELY PAID
Contractor’s employees are timely paid at
least the minimum wage required by country
law and provided legally mandated benefits,
including holidays and leaves, and statutory
severance when employment ends. There are
no disciplinary deductions from pay.”
http://www.nikebiz.com/responsibility/documents/Nike_Code_of_Conduct.pdf
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Code of Conduct (cont.)
“HARASSMENT and ABUSE are NOT
TOLERATED
Contractor’s employees are treated with
respect and dignity. Employees are not subject
to physical, sexual, psychological or verbal
harassment or abuse.”
http://www.nikebiz.com/responsibility/documents/Nike_Code_of_Conduct.pdf
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Code of Conduct (cont.)
“WORKING HOURS are NOT EXCESSIVE
Contractor’s employees do not work in excess of
60 hours per week, or the regular and overtime
hours allowed by the laws of the manufacturing
country, whichever is less. Any overtime hours
are consensual and compensated at a premium
rate. Employees are allowed at least 24
consecutive hours rest in every seven-day
period.”
http://www.nikebiz.com/responsibility/documents/Nike_Code_of_Conduct.pdf
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Code of Conduct (cont.)
“REGULAR EMPLOYMENT is PROVIDED
Work is performed on the basis of a
recognized employment relationship
established through country law and practice.
The contractor does not use any form of home
working arrangement for the production of
Nike-branded or affiliate product.”
http://www.nikebiz.com/responsibility/documents/Nike_Code_of_Conduct.pdf
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Code of Conduct (cont.)
“The WORKPLACE is HEALTHY and SAFE
The contractor provides a safe, hygienic and
healthy workplace setting and takes necessary
steps to prevent accidents and injury arising out
of, linked with or occurring in the course of work
or as a result of the operation of contractor’s
facilities. The contractor has systems to detect,
avoid and respond to potential risks to the safety
and health of all employees.”
http://www.nikebiz.com/responsibility/documents/Nike_Code_of_Conduct.pdf
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Code of Conduct (cont.)
“ENVIRONMENTAL IMPACT is MINIMIZED
The contractor protects human health and the
environment by meeting applicable regulatory
requirements including air emissions,
solid/hazardous waste and water discharge. The
contractor adopts reasonable measures to
mitigate negative operational impacts on the
environmental and strives to continuously
improve environmental performance.”
http://www.nikebiz.com/responsibility/documents/Nike_Code_of_Conduct.pdf
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Code of Conduct (cont.)
“The CODE is FULLY IMPLEMENTED
As a condition of doing business with Nike, the contractor
shall implement and integrate this Code and accompanying
Code Leadership Standards and applicable laws into its
business and submit to verification and monitoring. The
contractor shall post this Code, in the language(s) of its
employees, in all major workspaces, train employees on
their rights and obligations as defined by this Code and
applicable country law; and ensure the compliance of any
sub-contractors producing Nike branded or affiliate
products.”
http://www.nikebiz.com/responsibility/documents/Nike_Code_of_Conduct.pdf
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What Some Brand-Owners Are Doing
Company
CSR
Policy
Availabl
e OnLine
BSR
Timberlan
d
Nike
Adidas/
Reebok
Puma
FLA
FFC
ETI
UN
Global
Compact
American
Apparel
(does not
outsource)
Levi
Strauss
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Continuing Challenges
• “Audit fatigue”
• Auditor effectiveness (overcoming deception and worker
intimidation)
• Harmonization of standards among brand-owners
• Passing the audit vs. fulfillment of policy goals
• Need for holistic approach including guidance and support between
audits
• Local business and social culture
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Are Codes of Conduct Effective?
“The number of organizations becoming certified under SA8000 and
similar codes continues to rise, as additional codes governing working
conditions continue to emerge. At the same time, a fierce debate is raging
about whether these codes represent substantive efforts to improve
working conditions or merely symbolic efforts that allow organizations to
score marketing points and counteract stakeholder pressure by merely
filing some paperwork. . . . Until more rigorous evaluations are conducted,
these debates will continue unresolved. . . . This could help identify which
particular codes are best able to distinguish those organizations with
superior working conditions. Just as important, such evaluations might
shed light on which elements of the codes are most effective and which
types of monitoring systems represent best practices, and which areas are
most in need of improvement.”
Evaluating the Impact of SA 8000 Certification, M. Hiscox, C. Schwartz and M.
Toffel, from Social Accountability 8000: The First Decade – Implementation,
Influence and Impact, D. Leipziger, ed., Greenleaf Publishing 2009.
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What’s In It for the Brand-Owner?
“[A]voiding scandals is one thing: expecting commercial
rewards is another. . . . [B]usinesses need to be very clear
about what they're aiming for with ethical programmes. . . .
The crucial point about the ethics argument is understanding
what customers, staff and the wider world want from a
clothes brand. None will reward a business that overperforms
their expectations: but . . . some businesses can get ruined if
they underperform what even a small minority thinks it's got
the right to demand.”
Clothesource Comments Blog, Dec. 19, 2009
http://www.clothesource.net/go/news/the-twelve-probable-lawsof-apparel-sourcing-8-ethical-sourcing-has-to-be-properlyunderstood
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The Triangle Shirtwaist Factory occupied the top 3 Floors of The Brown
Building, 23-29 Washington Place, between Greene Street and Washington
Square East in Greenwich Village
(photo: Wikipedia, posted by “Beyond My Ken”)
31
Contact
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