The three-day workshop, to be hosted at the Rockefeller Foundation Bellagio Center (Lake Como, Italy, July 3-5, 2013), focuses on “Achieving Workers’ Rights in the Global Economy.” The workshop will bring together 23 participants, including academics with expertise on global labor issues; businesses and business coalitions that have moved to implement corporate social responsibility programs; nongovernmental organizations charged with monitoring, enforcement, and compliance; international labor governance bodies such as the International Labor Organization; and representatives of labor from the Global North and South. The workshop will be organized so as to encourage discussion and debate among the participants. Its objective is to achieve a degree of common understanding (and hopefully some consensus) regarding how workers’ rights globally can be best achieved, including the kinds of metrics than can be employed to monitor and evaluate successful compliance throughout global supply chains.
The most important players in the global economy today are transnational corporations with global supply chains. Their highly competitive pricing strategies frequently result in strong costcutting measures, which are then transmitted throughout their supply chains. This all too often results in harsh working conditions and low wages at every point along the supply chain, from the Asian, African, or Latin American factory to checkout counter. The legal, moral, and economic status of those who work in this new system has become a flashpoint for controversy and concern.
As a consequence, many transnational enterprises have moved to a model of self-regulation, establishing corporate social responsibility (CSR) departments, consulting with academics and government regulators, and partnering with nongovernmental organizations concerned with labor and environmental rights. Such business activism has been prodded by an increasingly engaged consuming public which sees the production and sale of products that meet minimal standards of environmental sustainability and worker living standards as a marketing plus.
During the last decade, firms have made some progress in terms of marketing environmentally sustainable products. Far less has been done, unfortunately, to insure that the workers who manufacture those goods enjoy such basic rights as a fair wage, safe working conditions, and the right to collectively bargain and form independent unions if they so choose. Leading corporations such as Nike, The Gap, and Wal-Mart have adopted codes of conduct that direct their suppliers to behave according to ethical business practices, while signaling their customers that such practices are reflected in their products. The growing interest in equitable business practices is reflected in the large number of non-governmental organizations and institutions that have been created in recent years, as well as the theoretical and empirical attention that has been given to these issues in the scholarly literature and in business school curricula.
All of these developments signal a growing public and industry awareness of the importance of socially responsible business practices. This awareness stems from several sources: genuine humanitarian concern; the recognition that ethical, ecologically-sustainable practices can open up new market opportunities; fear that embarrassing revelations concerning pollution or sweatshop production might hurt brand image; and the desire to cut costs through greater ecological efficiency (when, for example, green technologies reduce fossil fuel consumption). We have reached a time where the policing of supply chains – at least on the environmental side – has come to be regarded as legitimate by a growing segment of the business community. In the most widely discussed example (because of its enormous potential impact), Wal-Mart in 2009 notified its approximately 100,000 global suppliers that they would henceforth be required to estimate and report their carbon footprint and other ecological costs. Such data would then form the basis for a “sustainability index” that could then be reported on the product’s label or price tag, giving consumers more environmental information and choice about the products they buy. Since Wal- Mart is the world’s largest retailer (indeed, the world’s largest corporation, based on total revenues), this could have considerable impact on Wal-Mart’s ecological footprint.
Since relatively little progress has been made when it comes to workers’ rights, wages and hours, and health and safety, an opportunity now exists within these global supply changes to make similar inroads on the labor side as well. Currently, businesses that adopt fair labor standards typically do so by promulgating codes of conduct for their supply chains. Yet these codes seldom call for the kind of transparency and independent monitoring that critics believe would enable the results to be effectively evaluated. Indeed, Wal-Mart’s effort to improve the environmental side of its supply chair points to a dilemma on the labor side: any costs incurred by Wal-Mart’s suppliers, in an effort to reduce their ecological impact score, might well be passed down their own supply chains, if only because Wal-Mart has not indicated that it would be willing to absorb any higher environmental costs to its suppliers by raising its retail prices to accommodate these efforts. At the bottom of the supply chain, factory workers and farm laborers often pay the price for any downward cost squeeze.
In addition to businesses, nongovernmental organizations are highly active in this area – some working with corporations to provide a variety of monitoring services for purposes of self enforcement – others as independent monitors (or, more often, industry watchdogs) that are highly critical of business’ ability to self-regulate. Examples of the former include the Global Social Compliance Program, Veritas, and PwC, a separate legal entity of PriceWaterhouseCoopers International. Examples of the latter are numerous: the Worker Rights Consortium, the Fair Labor Association, Maquila Solidarity Network, and the International Labor Rights Forum.
Finally, there is some governmental action, although its effectiveness remains unclear. The International Labor Organization has negotiated and adopted a series of conventions which establish labor standard benchmarks. Most of these have been adopted by countries at both ends of the supply chain, although both the United States and China remain outliers, with the U.S. adopting but two of the ILO’s eight core labor conventions. Moreover ILO conventions lack any enforcement mechanism, and so in practice they are frequently abridged. The UN Global Compact, described below, represents another international step in the direction of business self-regulation. International trade agreements can in theory embody labor standards, although it is unclear the degree to which these would be sustainable under WTO free trade requirements; for the United States, at least, enforceable labor standards have not been seriously considered in such compacts. However, we do point to one potentially useful development. The California Transparency in Supply Chains Act (SB 657), which took effect on January 1, 2012, “requires companies to report on specific actions taken to eradicate slavery and human trafficking in their supply chain” by indicating the extent to which they engaged in third-party verification, independent (and unannounced) auditing, supplier certification, internal accountability, and training. While this act involves self-reporting, its human trafficking provisions provide a possible window for assessing supply-chain compliance with labor standards in those large retailers doing business within the state.
The goal of this workshop is to assemble a broad, cross cutting group of stakeholders to discuss the issues outlined above. We will see if some agreement can be reached to develop a system of codes of conduct that are measurable, verifiable, and enforceable. During the workshop representatives of the different stakeholder groups – academic experts, businesses, NGOs, international labor governance bodies, and labor unions – would identify common interests, share methodologies and approaches, identify relevant research, and develop a way forward. Participants will be asked to prepare some written comments before the workshop, both as a guide to discussion and for possible inclusion in any edited book that might result.
The workshop will be hosted at the Rockefeller Foundation Bellagio Center on Italy’s lovely Lake Como. Participants should arrive at Milan’s Malpensa International Airport July 2. They are expected to remain the full three days of the workshop (July 3-5, 2013) and then depart for the airport or other location on July 6. With the exception of travel to and from Milan, Italy, the Bellagio Center will cover all expenses: lodging and meals at the Center, as well as transportation between Milan’s Malpensa Airport and Bellagio, roughly 50 miles away. Should you accept our invitation, please let us know if your business or organization cannot cover the cost of travel to Milan.
The Bellagio Center is described at http://www.rockefellerfoundation.org/bellagio-center/. The accommodations, dining, and service are legendary. We are hopeful that the pleasant surroundings, far from our routine concerns, will contribute to an atmosphere of openness and problemsolving that will benefit from the differing perspectives of workshop participants. The workshop agenda will provide for extensive open discussion.
We are in the process of firming up the list of 23 participants. Please let us know whether or not you can commit to attend; your participation will help make the workshop a success.