Who's watching the shop floor
Tim Vickery Special to The Christian Science Monitor
Page: FEATURES, WORK & MONEY, Page 11
Graphic: PHOTOS: 1) FAIR LABOR? Workers in Hanoi, Vietnam, sew garments for
Hong Kong firms that export to the US. Conditions are hard to monitor. BY
RICHARD VOGEL/AP 2) END OF A SHIFT: Employees leave a textiles factory in
Phnom Penh, Cambodia, where child labor was allegedly used last year, but
denied by the government. A host of independent monitoring groups now give
US firms a chance to scrutinize their overseas suppliers. BY ANDY EAMES/AP
3) TRUTH IN

Everyone loves a bargain. And globalization brings more cheap goods to

stores across the United States each year.


Well over half of all US imports last year - valued at more than $750

billion - came from developing countries in Asia, Latin America, and

the former Soviet Union. Apparel, footwear, toys, and sporting

equipment account for a large portion of imports.


But does a "Made in Cambodia" label mean a 12-year old sewed that

shirt, or a mother of five worked a 14-hour shift for 20 cents an hour

to make that $120 pair of sneakers?


"At this moment, there is no way for the American consumer to know 100

percent that a particular garment is 'sweat free,' " explains Sam

Brown, executive director of the Washington-based Fair Labor

Association, one group working to improve overseas labor conditions.


A boom in private "social compliance" auditing may change that.


Surveys indicate US consumers are willing to pay more if retailers

guarantee their products are not made by children, and that most would

change brands to avoid goods made in "sweatshops," generally defined as

work situations in which workers are subject to exploitation.


But only 16 percent of US consumers in one recent survey indicated they

would make a "sweat free" guarantee their highest priority in

purchasing decisions. The rest said price or quality was king. "The

bottom line is, a lot of people would like to do the right thing, but a

lot of things get in the way," remarks Marsha Dickson, professor at

Kansas State University and author of a forthcoming study on labeling

and consumer preferences.


One of the greatest obstacles is the lack of labeling. Currently,

companies are not required to label their goods "sweat free," but

momentum is building for change.


A veritable cottage industry of social compliance auditors has sprung

up to help socially responsible companies verify conditions at supplier

factories and to help consumers know if the goods they buy are free of

labor abuses.


"The Holy Grail is proof of compliance, like a 'certified organic'

label," notes Matt Shapiro, spokesman for New York-based Social

Accountability International, one of the groups recently formed to help

police overseas factories.


The monitoring industry's prospects are so rosy that

PricewaterhouseCoopers (PwC), which audited 6,000 factories last year

for clients like Nike and Wal-Mart, plans to spin off its entire Global

Compliance practice to capitalize on market growth.


Other groups are ramping up as well. They will collectively face a

monumental beat. Consumers don't realize how many retailers are

supplied by goods made under questionable worker conditions, many

experts say.


"We only hear about the big ones," notes Leslie Burns, professor of

apparel merchandising at Oregon State University and a founding member

of the Consortium of Educators for Social Responsibility. "The majority

of companies are flying below the radar screen."


Worldwide, some 80,000 factories employing millions of workers feed the

US appetite for consumer goods. Wal-Mart alone buys from more than

20,000 factories around the world.


While some companies identify violations at their overseas factories on

their own, no single organization is capable of monitoring such a

massive effort.


For now, consumers cannot expect foreign governments to police firms.

Garment and footwear manufacturing is an economic lifeline for many

developing countries.


In Cambodia, for example, clothing accounts for 70 percent of exports.

Textile workers there sometimes make triple the nation's average wage,

which is about $280 a year.


Governments may readily adopt international labor standards to get

access to export markets, but neglect to enforce those laws for fear of

losing revenue.


Look for a 'code of conduct'


A consumer's first clue that a product might be sweat-free is whether

the company has a code of conduct. "A code acts like a lightning

conductor.... It means the company has to be responsive to criticism,"

explains Neil Kearney, president of the International Garment, Leather,

and Textile Workers Union, in a recent speech.


But a code of conduct alone is no guarantee that a company's products

weren't made in a sweatshop.


"They are really good standards," says Leila Salazar, director of

corporate accountability at Global Exchange, a San Francisco-based

watchdog group, "but we want to see a system that holds companies

accountable."


That's the rub. Companies that enforce their codes risk losing

suppliers. "Some factories think our standards are just too big of a

hassle," explains Vada Manager, director of global issue management at

Nike. "They would rather do business with less scrutiny." Since all

buyers do not insist that their suppliers adhere to company codes,

abusive, "bottom feeding" factories continue to operate.


Many companies have taken accountability into their own hands. Like

other industry leaders, Nike's team of compliance officers conducts

quarterly inspections to identify violations of its code. To add

external financial expertise and "reputation assurance" to its own

efforts, Nike hired PwC to inspect each of Nike's 780 suppliers last

year.


PwC's standard one-day audit includes an observation tour of the

factory, examination of payroll, tax records, and employee files, and

10 to 15 minute on-site interviews with approximately 25 workers and

managers.


Verite, a nonprofit organization that has done 500 audits, spends from

one to six days at each factory. They spend an hour interviewing 20 to

25 workers strictly off-site and with no managers present. Verite

consults the company's code, but requires its clients to adhere to

Verite's stricter standards. "We're motivated by remediation. We don't

audit for auditing's sake, but for the welfare of the workers," says

Mil Niepold, director of programs.


Some 10 other organizations conduct social compliance audits worldwide.


Nike insists that it has a zero-tolerance policy regarding labor

violations. "Our monitoring is the most rigorous you'll find in the

industry. We place no orders without vetting the supplier first,"

assures Mr. Manager.


But activists criticize Nike and others for failing to enforce

protections promised by their codes. "Most efforts around so-called

social-accountability monitoring are pretty serious scams," asserts Tom

Wheatley of the National Labor Committee, a worker-advocacy group in

New York.


Justine Nolan of the Lawyers Committee on Human Rights is more

sympathetic. "I think companies like Nike have their hearts in the

right place. But the more you stick your neck out, the more you get

criticized," she says.


Many companies find themselves in a Catch-22 position. Refusing to

publicly disclose audit findings calls into question a firm's

commitment to fix what's wrong.


"Until we are able to see what they're doing, it's hard to know what is

really going on. We have to open the lid and look inside," says

Massachusetts Institute of Technology Professor Dara O'Rourke, who has

observed inspections at more than 100 factories as part of his academic

research. "Independent monitoring can play a positive role in improving

factory conditions, but only if it is much more transparent and can be

verified by workers and local [nongovernmental organizations]."


A move by US Congress?


Congress may soon consider a "right to know" proposal that would

require US companies to report labor conditions to the American public

and to overseas workers.


Meanwhile, one of the first groups to standardize industry-wide codes

of conduct and hold companies accountable by monitoring auditors is the

Fair Labor Association (FLA). Members' fees fund FLA, and compliance is

voluntary. FLA has accredited two audit groups since 1998 (Verite and a

small Bangladeshi women's organization).


Officially, only FLA member companies and its governing board receive

audit reports. Critics claim such reporting allows companies to bury

damaging information. FLA Director Mr. Brown cites Nike's voluntary

publication of critical audit reports on its Indonesian and Mexican

factories as evidence of FLA members' commitment to transparency. "For

them to say 'we screwed up' is rare for politicians, business people,

kids, anybody," he says.


While experts praise disclosure as a positive step, remediation is

all-important. "Almost everyone has a code of conduct," Brown says.

"The question is, what do they do to fulfill their promise all the way

down to the factory floor?"


Another leader in the fair-trade movement is Social Accountability

International (SAI). Created by the Council on Economic Priorities, SAI

draws on established international workplace-quality standards to

measure social accountability.


Unlike FLA, SAI includes nonapparel manufacturers and also requires

that factories pay a "living wage" - enough for basic needs and some

discretionary spending.


SAI standardizes factory certification and focuses accountability

closer to production. Six SAI-accredited certification organizations

have approved 60 factories in 10 industries.


The newest entrant, Worldwide Responsible Apparel Production (WRAP) is

a brainchild of the American Apparel Manufacturers' Association. Also

focused on suppliers, WRAP does not require "living wage" payments.


According to its website, WRAP conducted pilot audits of 2,000

factories in the US, Mexico, and Central America. Three social auditing

firms hold WRAP accreditation.


The need to stick around


Another newcomer, part activist, part monitor, the Workers Rights

Coalition does no accreditation. Focusing on university licensees, WRC

conducts fact-finding investigations, training, and public education to

raise workers' awareness of their rights. A defining feature of WRC is

its policy of publicly disclosing results of all investigations. WRC

maintains independence by refusing funding from corporations.


But noting that Nike helped the WRC's first factory investigation,

Scott Nova, a spokesman for WRC, says "corporations are a crucial lever

for change. We have to work with them."


Boycotting a company's products is not the only way consumers can press

companies to be accountable.


The Interfaith Center for Corporate Responsibility and the Investment

Responsibility Research Center works with shareholders to influence

companies to improve labor conditions at overseas factories.


Each monitoring organization may focus on different links in the supply

chain, but all agree that an ongoing presence is critical.


"Monitoring is not just parachuting in and documenting problems. It has

got to be done on the ground," says Mr. O'Rourke of MIT.



(c) Copyright 2001. The Christian Science Monitor