Monitoring International Labor Standards Summary of Domestic Forums (2003) / Chapter Skim
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4 Employers
4 Employers
Pages 28-40
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From page 28... ...
Gregg Nebel represented adidas-Salomon; Robert Zane represented Liz Claiborne, Inc.; Marcela Manubens, Phillips-Van Heusen; Anna Walker, United States Council for International Business; Roger McDivitt, Patagonia; Tom DeLuca, Toys "R" Us; and Debbie O'Brien, Business for Social Responsibility. ADIDAS-SALOMON AG Gregg Nebel, presenter In 2001, the adidas-Salomon company (AS)
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From page 29... ...
In an ideal world, all suppliers would build compliance with international labor standards (ILS) into their overall business plans, but because the reality is different, AS monitors its suppliers through a review process conducted by both internal and external auditors.
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From page 30... ...
Another difficult challenge concerns transparency, both with respect to guidelines for suppliers and the reporting of results of the monitoring process. For AS, a transparent reporting process, which includes an annual report on social and environmental affairs, and the higher level of expectations that it brings mean that it has no choice but to allocate scarce resources to remedial actions, and this opens the company to potential legal liabilities.
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From page 31... ...
However, this is not the case for clothing sold by LC because it refuses to sacrifice human decency in order to get a more competitive price. The company sources products from 275 factories in 35 countries; like other apparel companies, it does not have a financial stake in these facilities and thus is not able to exert pressure through a direct ownership position.
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From page 32... ...
Ms. Manubens recalled that there has been great progress in improving the application of core labor standards in the apparel industry over the past decade.
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From page 33... ...
for the problem of core labor rights violations in developing countries; this is not only factually incorrect but counterproductive. The vast majority of foreign direct investment takes place between industrialized countries.
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From page 34... ...
Companies can exert only so much pressure along their supply chains, and the effectiveness of the pressure is inversely related to the size and complexity of the supply chain. In addition, the overwhelming majority of workplaces with abysmal labor rights compliance records will not be affected by the efforts of MNCs, no matter how conscientious and successful.
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From page 35... ...
Ms. Walker argued that this is the ILO's most important work and that it should include not only help in the areas of administration and inspection, but also assistance in educating and training business in the details of labor laws and in the economic benefits that compliance offers.
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From page 36... ...
In the past, most reporting/monitoring systems in the apparel industry were structured to allow "plausible denial," but this has now changed. Patagonia's long-term relationships with its suppliers resulted in an informal and casual monitoring process, but this approach was found wanting, and the company now relies on internal and external monitoring.
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From page 37... ...
In the 1970s the most important factor was price; in the 1980s it was price plus quality; and in the 1990s social accountability was added to price and quality. This commitment to responsible management and the urge to be proactive in addressing issues of labor rights problems is made difficult by the fact that TRW's supply chain is very large and complex; 30,000 different products are produced by 3,000 suppliers in 30 countries.
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From page 38... ...
Other challenges faced by TRU include the lack of proper enforcement of labor laws by local and national governments and the pressure from governments on factory managers to ignore or bend certain labor regulations (those on overtime, for example) in order to avoid negatively influencing the country as a destination for foreign direct investment.
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From page 39... ...
Ms. O'Brien noted that it has been 10 years since Levi Strauss drafted the first code of conduct covering labor standards, and now there are more than 250 such codes adopted by major brand companies in the footwear, toy, and apparel industries.
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From page 40... ...
Finally, companies should pressure their home country governments to get involved, especially through trade agreements; one excellent example is the trade agreement between Cambodia and the United States, in which the United States has offered the incentive of increased trade if Cambodia respects internationally recognized workers' rights.
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