When is monitoring Dependent and when is it Independent? by David M. Boje, Ph.D.

Beware - The MONITORS are watching - Click on eyeballs to return to top/index

 
Page Born on: August 5, 1999

PURPOSE: The purpose of this page is to study the ten or more perspectives on monitoring the sweatshop industries. Indeed monitoring has mushroomed into a multi-billion dollar industry. Why? Because corporations who subcontract to sweatshops need a prophylactic shield, a way to convince the public that brand-name corporations such as Nike, Reebok, Adidas, New Balance, etc. are not complicit with sweatshop practices.

Latest News Sep 28 2006 Inside Higher Ed is running a blog discussion on an article "Codes Don't Work" The discussion is the usual liberal conservative dabet. The article details the recent change in WRC (Workers Rights Consortium) strategy. The program to monitor ethics codes is shiffting to demands that codes be enforced with some level of wage standard. Argument ranges from how to do this, should one interfere with market forces, etc. At issue is the squeeze that corporations contracting sweatshops create. They squeeze the sweatshops forcing them to cheat on the worker wages, working conditions, etc. They they claim the goddess of market forces made them do it.

Read discussion between Sam Brown, Executive Director of FLA and Dr. David Boje, advisor to USAS of NMSU. Or see http://cbae.nmsu.edu/~dboje/usas/ (Press News).

Some History: In the 1980s and 1990s, accounting firms such as Ernst and Young and PriceWaterhouseCoopers did the lion's share of the business. But with repeated embarrassing expose after expose, of their shallow methods, the garment and campus apparel industry corporations began to hire consulting firms such as Global Alliance (GA) that could pass themselves off as "independent monitors."  This was accompanied by the Fair Labor Association (FLA) strategy of accrediting consulting firms to be hired by corporations as "independent monitors." A slew of other monitoring-accreditors entered the marketplace to sell their consulting services to corporations.  Are they really independent? Both GA and FLA have corporate board members from the industry that is to monitored. The corporations being monitor pay huge consulting fees to the the so-called "independent monitors." 

There are independent monitors, but they are not organized, sanctioned, bought and paid for by corporations. This would be analogous to asking the murder to pick their own jury. Workers Rights Consortium (WRC) is one of a growing list of truly "independent monitors." Many of the non-governmental organizations indigenous to the countries where sweatshops are being contracted by the elite corporations of the First World are quite concerned about the duplicity that passes for monitoring.  They are concerned that even enterprises such as SA8000 and ISO14000 are being co-opted into just another predatory corporate PR ruse. Unless rigorous academic study is undertaken, my fear is that monitoring is a sham.

Let me be specific. In the WRC critique of FLA are researchable claims:

  1. FLA does not require the results of its monitoring to be made public.

  2. FLA allows pre-announced factory visits.

  3. FLA allows the corporations to submit a subset of factory contractors to be monitored.

  4. FLA's executive director decides unilaterally which complaints from workers about a subcontract factory merit investigation.

  5. FLA's model code of conduct does not support a 'living wage.'

  6. FLA's governing structure (i.e. Board of Directors) is heavily influenced by the corporations that are to be monitored. Half the board are corporate members and 2/3rds majority is needed to change things.

  7. FLA has ignored proposals for reform submitted by USAS chapters.

Source: FLA critique by USAS in PDF format.

FLA has launched an aggressive campaign to sign up universities, and to discourage WRC chapters. GA produce consulting reports that on the surface look scientific, with lots of numbers, but even a novice research methodologists would challenge their operationalizations, statistical procedures, sampling approach, and dispute the conclusions being drawn.

E.g. Boje, David M (2001a). Comparison of the Urban Community Mission (UCM) Survey Report December 1999 to the Global Alliance, Center for Societal Development Studies (CSDS) 2000 study

I hope this web site will help you sort out the PR purposive confusion from the reality of "independent monitoring." There is a list of references at the end.  We need more basic and rigorous academic research. This includes student class projects. For example, a friend writes:

"A good student project could involve going through the FLA list of "monitor" firms and tracing board interlocks and affiliations" (10/28/2001).

Please contribute.

Thanks, David M. Boje, Ph.D. dboje@nmsu.edu

There are some wild claims out there: CLICK HERE - QUESTION: IS ATHLETIC APPAREL INDUSTRY MONITORING OF THEIR SUBCONTRACT FACTORIES, RELATED to NAZI MONITORING OF CONCENTRATION CAMPS? (opinions vary). And you will find that there are at least 10 points of view on what constitutes independent monitoring. We begin here, and move to ways to tell if monitoring is dependent or independent.

Figure One: Boje and Landrum March 16th, 2001 presentation to IABS (International Association of Business and Society) conference session "Global manufacturing and Responsible Business Practices of the Athletic & Campus Apparel Industry" (See Figure One as Slide).

Several points.

First, monitoring codes and methods are proliferating and getting more complex each year of this young industry. Layers are stacking upon layers, as monitoring by internal corporate staff (self-monitoring) is layered over by consultant auditors (PWC, E&Y, etc.), third party accrediting agents such as FLA, skeptical NGO watch groups who monitor the monitoring, government agencies (Labor Department), and by Supermonitors who would add yet another transorganizational layer.

Second, it is harder to monitor the monitors effectively, and without a lot of research for consumers to know what verified and certified compliance monitoring really means.  Monitoring and compliance means something quite different to various stakeholders in Figure One.

Third, points one and two combine to make monitoring a phenomenally complex process. Demands for rigor age growing, and paying for monitoring is not cheap, which can drive smaller concerns out of the game.

Fourth,  monitoring extends from the corporate agents who have surveillance on the protest movements on and off the campus (some infiltrating groups just as in the days of government infiltration to monitor Vietnam and Civil Rights protestors). Corporations have set up "war rooms" to form profiles and dossiers on protestors, monitor web sites (I wonder), and dispatch police and corporate-security (sometimes the same) to dissude and arrest boycott participants who dare invade corporate soil.

Figure One suggests some ten perspectives that writers and apologists use in debates over monitoring. Transnational Athletic and Campus Apparel Corporations (i.e. "logo corporations") are embedded in a rapidly expanding web of surveillance (what Foucault calls a panopticon). You can click on each square on figure one to find out more. Here is a brief summary of ten perspectives that collide in the arena of monitoring.

(1). Logo corporations view themselves as victims of a network of student and union movements and advocacy groups who do not understand five basic economic principles, also known as "ethical utilitarianism":

(2). UNITE, USAS (WRC) and the Unions - all here contend that it is naive to think that corporately contracted monitoring will sustain the hard fought gains for human rights and collective bargaining that were achieved in the past century through protest and activism. WRC favors use of local NGOs to do the monitoring, but their nemesis FLA claims NGOs lack the technical expertise. This perspectives sees PWC and E&Y as well as GA as shilling for the logo corporations.  The only independent monitor is a corporate adversary.

(3). Worker Empowerment - Mary Parker Follett said "workers must grow their own power" power is not something you delegate, share or give away. The worker grown their own power perspective is opposed by the HR worker empowerment perspective; See Boje, D. M. & Grace Ann Rosile (2001) "Where's the power in empowerment?" Also see examples of workers who have grown their own empowerment.

(4). ILO http://www.ilo.org  is an transorganizational enterprise attempting to posit global and universal standards for corporate ethics. This includes the ILO program for the elimination of child labor. They have a rating system for assessing corporations. Others such as GRI have a rating systems on workplaces and disclosures. The GRI (of CERES) works cooperatively with corporations to adopt environmental and workplace standards.

(5). Local Dependency - The only thing worse than an exploitative job is no job at all. The pitch here is for "ethical relativism" and cultural sensitivity.  It is argued that child and sweat labor are natural parts of certain economies, therefore "when in Rome, do as the Romans do." There are unseen consequences to First World bourgeoisie demands for monitoring. First, only major corporations can afford to do the monitoring which is a disadvantage to small business. Second, paying a living wage, it is argued, disrupts the local wage economy. Third, it is argued that working children is a part of family income means.

(6). Courts - let the lawyers and courts work it out. There are an increasing number of individual and class action cases, where citizens in Third World nations are suing logo corporations over bad working conditions and unsustainable business practices. But for many, getting access to an impartial court for a hearing is easier said than done (1). Nike was sued in California for false advertising in its claims about its overseas workplace conditions; the suit was thrown out, but is due to be heard once again. H.R. 460 has been introduced February 6, 2001 to require full disclosure of all factory locations, and includes provisions for class action suits if human rights, environmental, and other abuses are found.

(7). FLA (Fair Labor Associations and similar associations can certify monitors. For FLA, monitors need specialized training. Others such as ETI (Ethical Trading Initiative www.ethicaltrade.org) do not certify monitors, but do bring together as they put it, a wide range of organizations from all parts of society with the aim of helping to make substantial improvements to the lives of poor working people around the world. Corporations such as Body Shop, Safeway Stores, and Levi Strauss have combined with NGOs, Trade Unions and the uK government to create standards of corporate ethics. The ETI base Code includes (1) no forced or bonded labor or use of employment deposits, (2) right to collective bargaining, (3) safe and hygienic working conditions, (4) no child labor, (5) living wages, (6) no excessive working hours, (7) no discrimination, (8) regular employment, (9) no harsh inhumane treatment of workers. The FLA code, by contrast does not include living wages.

(8). Supermonitor is a proposal to develop a common data base and make appeals to a transorganizational overseers that would include WTO and World Bank along with the ILO, NGOs and trade unions. See supermonitor.

(9). Various consulting firms such as GA (Global Alliance), E&Y and PWC compete to be the monitors who contract with logo corporations to write the reports. These are corporate-cash, dependent monitors who issue reports to the corporations, often using guidelines negotiated with the logo corporations. The key issue here is do accounting and consulting firms have the requisite human rights experience to do monitoring?  See more.

(10). TAMARA: Critical Postmodern. Tamara describes the theatrical performance of the various characters storming the stage to monitor, set standards, and be monitored.  A critical postmodern take is mix of critical theory (there is a working condition out there) and postmodern theory (what we know about what is being monitored is mostly illusion and stage craft). Yet, there is hope because as Horkheimer, Marcuse and Adorno (Frankfurt School critical theorists) have argued sometimes even pretending to be some nouveau identity can trip one into learning to like the pretended character and role.  For postmodernists the transorganizational theatrics is a matter of spectacle (de Bord). See more on Tamara and critical postmodern. Also look at transorganizational proposals by Habermas to revitalize the sphere of public discourse.

For an excellent point, counter-point debate from economists' perspective

 

CORPORATE CONTRACTED MONITORS: INTRODUCTION

As Figure One depicts, there are quite a variety of ethical perspectives on the issue of monitoring corporate and subcontractor behavior.

The more skeptical views (2, 3 & 10) hold that the Athletic and Campus Apparel industry has hidden behind a veil of secrecy subcontractor factories and logo corporations have hidden behind for so many years.

The more conservative views charge the skeptics have it all wrong, and that logo corporations such as Reebok, Nike, New Balance and Adidas, as well as Disney, Gap and Wal-Mart are doing many things right (1, 5, 7, 9). Still others set themselves up to monitor the monitors (8). And the logo corporations have all kinds of concerns about how everyone except 7 and 9 do not understand basic economic theory. Everyone should retake economic 101, they say, and learn about elasticity, economic, progress, and economic history.

There is an undisputed link between monitoring and corporate power (and propaganda). Some forms of monitoring are PR devices, others are "independent" acts of surveillance over the ability of corporations to enact human rights and act in ways that are ecologically sustainable.

My hypothesis is monitoring serves as a way to keep young women workers from sharing their personal experience narratives of exploitative work directly with the public. Instead, expert monitoring consultants take on the role of omniscient narrator,  writing tamer narratives, leaving out the women's voices, while padding the report with all manner of distraction and confusion.

Some History - The industry began it monitoring by hiring its own personnel (expatriates) to travel the globe and inspect plants. The industry was without Codes of Conduct and without external monitoring from the 1960s until about 1992 or 1993. Reebok issued its Code of Conduct in 1992. Nike says they issued theirs before anyone else. Adidas has a Code called "Standards of Engagement" that was drafted by around 1996.  Until that time contractors made the goods and the Logo Corporations claimed their independence of all accountability for human rights issues. The limit of their responsibility was to make an announced, occasional plant tour.

The next level of monitoring is called a self- certification system, where the supplier provides a legally-binding (to who we do not know) certification that it is in compliance with their logo-corporation's Codes of Conduct. Corporations not in the public spot light still use this approach to monitoring.

Public pressure at the retail counter and the shareholder's meeting erupted in 1996 (Life Magazine Article) with the revelation that child labor (in soccer ball manufacture) and abuses to a mainly female workforce (in garment and sneaker work) was widespread in the athletic apparel and equipment industry. There was a call for independent monitoring of corporate claims about human rights. Corporate staff and self-certification programs were no longer viewed as adequate by the mid-1990s.

In the mid-1990s, corporations countered by seeking the contract services of mainly accounting firms (e.g. Ernst & Young, then PriceWaterhouseCoopers).  The industry contracted their own choice of monitoring agents, (accounting consultants) who toured factories periodically. The demand for monitoring that was independent (of corporate payment) continued.

A new transorganizational consulting industry was born. During the mid 1990's several companies developed (compliance and assurance) auditing services to the Athletic and Campus Apparel industry, on a for-profit basis. These companies include accounting firms Ernst and Young (E&Y) and Price Waterhouse Coopers (PWC). The problems with for-profit auditing initiatives is the they are not independent of corporate influence. These firms give a contracted report to the Logo Corporation, which until 1997 was not ever distributed to the public. The E&Y report of a Vietnam factory, with the help of Dara O'Rourke, made its way to the Web and onto front page news. The call for independent auditing was stronger than ever.  Nike responded by firing E&Y as their corporate monitors and the job went to PWC.

Corporations with global supply chains such as Nike and Gap are beginning to outsource more than factory production, they are subcontracting their corporate responsibility function to consulting companies such as Global Alliance for Workers and Communities (GA), accounting firms such as PriceWaterhouseCoopers (PWC), and trade groups such as Fair Labor Association (FLA) who provide on-the-ground monitoring (FLA), audits (PWC) or surveys and focus group studies (GA) of corporate codes of conduct.

Rick Little, for example, of International Youth Foundation, one of the Global Alliance (GA) partners, calls the strategy, “outsource corporate responsibility.”  GA is a consulting firm masquerading as a Youth and Human Rights Organization. Point of fact, Rick Little emerges with no history in either field, and soon Nike executives (e.g. Maria Eitel) and other corporate executives populate the board of GA (after monetary donations). Last year, for example, Nokia and Lucent (both heavily dependent on Asian labor) contracted out their "corporate responsibility" to IYF to the tune of $15 million.  Further, Nike contributed $7.6 million to GA, in appreciate for two corporate responsibility studies, Nike presents as monitoring reports of its commitment to fair labor practices.  In short, GA is consultation for hire, doing focus group and survey reports that do not directly deal with worker-initiated concerns over working conditions, living wage, and right to organize.  Instead, GA writes reports restating ILO national statistics, then supplements this with benign statements about worker interest in education and training, to demonstrate how socially responsible each corporation really is.  "Most companies have become more strategic in their thinking about corporate social responsibility… We are moving beyond checkbook philanthropy from the CEO - what we call 'spray and pray'. Most business leaders now look at the business case " says Rick Little, chairman of the operating council of the GA (Skapinker, 2001).

Research Methodology continues to be the ground for critiquing the new transorganizational consulting.

Methodology is becoming stage craft, as spectacle of "junk science," practices by consulting firms masquerading as university- science.  Other times it is more of a Tourist's show, with an exhibition of tours to factories, complete with photos and captions. When corporate-financed monitors do a factory tour and inspection, their visit is pre-announced, the questions they ask are pre-ordained, and there are numerous reports that monitors help the subcontract managers not get caught in any embarrassing acts. In short, monitoring is NOT independent of corporate hegemony and control.

For example, 1997 was a volatile year for monitoring. Nike contracted former US Ambassador Andrew Young to inspect and tour 12 plants in Indonesia, Vietnam and China. The ink was not yet dry on the report when everyone from cartoonist (Doonesbury) to every activist with a web address began to poke holes in  their research methodology (spending only 4 hours per factory, use of corporate translators, interviews with workers in front of their managers, etc.).

In 1999, the consulting firm, Global Alliance (GA), explicitly financed by corporate interests set up shop to certify the standards of monitoring firms. Again the issue was to portray a better research methodology.

During the Mexico Strikes and efforts to organize an independent union in the midst of allegations of Code violations, a new player called, Verité came in with yet another transorganizational change methodology (See Mexico). Whereas, GA relies on survey and focus-group feedback reports to management, Verité's reputation is to work on more democratic relationships among stakeholders (community, government, workers, subcontractors, logo corporate management, NGOs, unions, etc.).  The purpose is do action research on the transorganizational network. If this comes to pass, then monitoring will have reached a new threshold. So far, there is a report, a Nike response with promises to do better, and a follow-up study by a panel of lawyers (see FLA), that adds more confusion than clarity to the situation (which may be its purpose).

An more independent non-profit organization, Verité, which is reputed to have higher standards has been set up monitoring services to companies on a paid, contractual basis. What was their fee?

In 2001, Dara O'Rourke, once again did an exposé of shallow monitoring practices. He trailed PWC from country to country and discredited their methods, pointing out that the auditors were looking the other way, and in some cases helping the client cover it all up. The cry for independent auditing went through the roof this year. And now firms are looking to Verité and to GA to provide their monitoring. Currently O'Rourke contracts his consulting to transnational corporations, doing training to improve the work and safety conditions of subcontractors in Asia.

The current trend in monitoring is for the logo corporations to hire a monitor, the release findings that are critical their factory management's practices, while noting the trends toward improvement. But these are not independent monitoring efforts.

The industry has yet to enroll in SA8000 standards. Janneke van Eijk of the European Clean Clothes Campaign is a critique of SA800 (as is Hong Kong Christian group). he is concerned that SA8000 monitoring cannot simply be conducted on a periodic "spot check" basis and needs to involve the establishment of reliable, permanent mechanisms through which workers can report problems and grievances.

Supermonitors, the monitors of monitors has been proposed by Archon Fung, Dara O'Rourke, and Charles Sabel (2001) as the next logical step. A few perspectives in Figure One (2 and 10) dispute its ability to curb corporate ability to muddy the monitoring waters with junk science and pseudo certificates and some argue that that the consequences of monitoring get ignored (5) or courts can do it better (6). Do we really want the World Trade Organization (WTO) to be the supermonitor of monitoring? Where is the credibility or track record in enforcing higher labor or ecology standards?

What is Independent Monitoring?

Independent monitoring is defined here as making private (and secretive) factory spaces public and available for democratic reflection, debate and dialog.  Thus far, the public is not told where the majority of the factory locations are, or the identity of the factory owners. Independent monitoring enacts a research methodology that is free from corporate control, finance, and influence in its design, training, data cleaning, report writing, and public dissemination. For the accounting industry auditors, the reports go to the corporation and no one else.  FLA and GA are releasing reports, after the corporation drafts its PR responsorial.  There are options:

For Amnesty International, independent monitoring involves the local community and the reports produced are independently verifiable. That means verifying the raw data, not what paid consultants says about it or carefully edited portions of reports transnational corporations choose to release to the public. This approach is more apt to include the "verbatim" personal experience narratives of working men, women, and children.

Amnesty International states:

All companies should establish mechanisms to monitor effectively all their operations' compliance with codes of conduct and international human rights standards. Such mechanisms must be credible and all reports must periodically be independently verifiable in a similar way to the auditing of accounts or the quality of products and services. Other stakeholders such as members of local communities in which the company operates and voluntary organizations should have an opportunity to contribute in order to ensure transparency and credibility.

Nike's response to this definition was to simulate credibility with a "Transparency 101" program of partial disclosure of selected reports of carefully edited segments of select factories audited by PWC. How transparent is a factory program, where the location of most of the 730 factories is kept secret?  Nike also spends $7.6 million (and more in contributions) for Global Alliance, a consulting firm (not a Youth or Human Rights Organization) to do carefully controlled focus groups and multiple-choice surveys of workers that do not ask questions that divert attention from true worker-concerns. They also sponsor trips by sympathetic faculty and students to select factories, who will write apologetic reports that legitimate Nike PR. Adidas and Reebok sponsored and joined the Fair Labor Association (FLA) to choose monitors, it then subcontracts (pays) to audit select factories (e.g. Verité in Mexico February, Marcy, 2001). 

When an industry uses model factories, on which to demonstrate its compliance to its own codes of conduct, rather than allowing independent NGOs and non-aligned academic researchers to draw random samples of the entire population of factories, we must be highly critical and skeptical of claims about transparency. 

SPECTACLE of NAZI-TRANSPARENCY AT THERESIENSTADT CONCENTRATION/WORK CAMP

A spectacle is a staged theatrical performance by state or corporate power to legitimate their status quo. During World War II, the Third Reich evaded independent monitoring of the work and living conditions of its concentration camps, by allowing transparent inspection of selected "model camps." Theresienstadt: was the "Model" Ghetto, to resolve the outside pressure about rumors and allegations as to how the Nazis were resolving the Jewish Question.

The Nazis decided to let them visit one location that would prove to the Danes and to the world that Jews were living under humane conditions. But how could they change an overcrowded, pest infected, ill-nourished, and high mortality-rate camp into a spectacle for the world?

The propaganda PR was so convincing that "Many elderly actually paid large sums of money for a nice location within their new home" (Fritta).  Indeed, just as Nike and the subs construct playgrounds in the inner-city (and in some model factory-locations), the Nazis made sure what the monitors would see on their monitoring tour: "all buildings and grounds along this route were to be enhanced by green turf, flowers, and benches. A playground, sports fields,and even a monument were added." (Fritta). The Nazis transformed (a portion of) Theresienstadt into a "model ghetto."  To prepare for the monitoring inspections and VIP tours, the Nazis sent approximately 1300 Jewish men on two transports to Theresienstadt on November 24 and December 4, 1941. 

These workers made up the Aufbaukommando (construction detail), later known in the camp as AK1 and AK2. There job was to make the camp presentable to the monitors and convince the Jews that it was a good camp to be sent to.

The Nazis, so clever at creating facades, didn't miss a detail. They erected a sign over a building that read "Boys' School" as well as another sign that read "closed during holidays." Needless to say, no one ever attended the school."

Could it be that Nike, Reebok, Adidas and New Balance are also clever in creating facades, erecting signs over their factory buildings, contracting monitoring reports, conducting transparency tours, and crafting press releases, that conditions in the majority of their factories may be far worse than the monitors have led us to believe?

"What many don't know is that within this serene facade lay a real concentration camp. With nearly sixty thousand Jews inhabiting an area originally designed for only seven thousand - extremely close quarters, disease, and lack of food were serious concerns." In September 1942, a crematorium was built to dispose of 190 corpses a day who succumbed to the toxic living conditions of the camp (See more on Theresienstadt by Bedrich Fritta). 

"Bedrich Fritta. Spectacle at Theresienstadt"

Lederer, Zdenek. Ghetto Theresienstadt. New York, 1983.

Schwertfeger, Ruth. Women of Theresienstadt: Voices From a Concentration Camp. New York, 1989.

Troller, Norbert. Theresienstadt: Hitler's Gift to the Jews. Chapel Hill, 1991.

Yahil, Leni. The Holocaust: The Fate of European Jewry. New York, 1990.

Monitoring is part of global theatrics. The attempt to make it seem that the global transnational corporation's supply chain is not subcontracting to sweatshops. An entire monitoring industry of accounting and consulting firms masquerades as independent auditors.  And they audit corporately-orchestrated theater, a serene facade of transparency, while the conditions of the majority of factories is not part of the sample.   As the theater is played out, more and more reports are written, but these seem only to confuse the basic issues.

The Kuk Dong Story: When the Fox Guards the Hen House

By David M. Boje, Grace Ann Rosile, & Miguel Alcantara Carrillo (2001) reviews the cascade of monitoring reports and counter-monitoring reports by ourselves and the Workers Rights Consortium (WRC) delegation.  We conclude that when the women workers can tell their own stories, instead of having them filtered and rewritten (often edited out) by the paid monitors, then we will be getting to the heart of the matter: are these sweatshops? I have some questions to raise:

QUESTIONS

The first question is, does any of this corporate- contracted monitoring at all represent the Sprit of Amnesty International's definition of "independent" monitoring, the kind of indigenous (local community stakeholders), knowledgeable, on-going, not pre-announced, audits by knowledgeable people on the ground, living in these countries? Bernard (1997) says monitoring must be "Independent, institutional, indigenous, ongoing, trusted, transparent and knowledgeable" to test the claims of corporate codes of conduct (See also Avery, 1999).

Ultimately, of course, the most inexpensive, effective, efficient, and flexible method of “independent monitoring” is to engage the workers themselves, organized into their own organization (independent of the state and independent of the employer), which advocates on the workers behalf and which is linked to other worker rights and human rights organizations nationally and internationally - Bernard (1997).

What is the next level of escalation and rigor? The industry does not endorse the Worker's Rights Consortium (WRC) which relies on NGO (non-governmental organizations) to do what is considered "independent monitoring."  FLA and WRC compete for enrollment of universities. Then comes H.R. 460  introduced February 6, 200, a full disclosure of all factory locations, and includes provisions for class action suits if human rights, environmental, and other abuses are found.

Can we compare the recent Global Alliance study to the one done by Urban Community Mission (UCM)?

I have just begun the analysis.

Comparison of the Urban Community Mission (UCM) Survey Report December 1999 to the Global Alliance, Center for Societal Development Studies (CSDS) 2000 study. By David M. Boje, Ph.D.

I conclude that the action research methodology of the UCM study goes further than the GA-CSDS study, in terms of (1) getting at workers concerns, (2) leaving the data in the words of the workers, and (3) a more revealing comparison of Nike-sneaker factories, with Nike-garment factories, and these contrasted empirically and qualitatively with the Bata (non-Nike) factories. Here we see the first comparative analysis of transnational and non-transnational subcontracted factory conditions, and comparisons between the sneaker and garment factories of Nike. The point is it is easy to make the research say what you want, when you camouflage the identity of the factories, lump apparel and sneaker factories (whose conditions are quite different) into the sample, without making analytic contrasts between firms, or with non-Nike firms.  In short, the GA study is methodologically flawed (perhaps on purpose) to make conditions seem better than the UCM action research study findings (please note, both studies agree on quite a number of oppressive and problematic working conditions, and measure the same factories).

What are the Stages of Monitoring?

Bernard (1997) suggests these stages in the life cycle of the monitoring industry:

  1. Denial

  2. Blame Others

  3. Damage Control (by partial denial, minimizing claims and taking the offense against critics)

  4. Seek to reassert control over damaged corporate image.

  5. Seek prestigious “cover,” to negate the critics and to give appearance of compliance and enforcement of the code of conduct and to give the appearance of independent review.

MONITORING IMPLICATION: "The last three points all deal with the crucial issue which brought us here today -- to share information and engage in a dialogue on how we might assure, that the campaign for human rights and dignity for workers does not fall victim to or become a captive of “corporate damage control.” As corporate damage control, we risk the same kinds of monitoring methodologies that the Nazi's used in Theresienstadt (see above), to reassure the public that all is well, and life in the camp is as good as life anywhere.

 

Which LOGO CORPORATIONS Use Which Monitors?

ADIDAS uses Auditors: KPMG Deutsche Treuhand-Gesellschaft

1999 Audit report is financials only till 1999.

According to the ADIDAS-US site, "Audits of our suppliers are conducted by regionally located adidas-Salomon personnel" (Adidas-US, as of March 3, 2001).

In 1999, ADIDAS hired its first Code of Conduct auditor.  According to their annual report: "The program to ensure that the adidas-Salomon brand values are real and the Standards of Engagement are adhered to in the factories making adidas-Salomon products progressed rapidly in 1999. Action plans were developed with suppliers for the continuous improvement of factories around the world. At factories where the management has proved to be uncooperative business relationships have been closed.

"For the first time, independent external auditors have started checking the findings of internal audits, reducing even further the risk of unfair treatment of factory workers.

"Similar activities, which are required by the membership of the Fair Labor Association (FLA), will be conducted even more widely in 2000. The FLA is a collaboration between non-governmental organizations and companies, which adidas-Salomon joined in 1999. 

"adidas-Salomon has also completed the 'Best Practice Standards' which define the environmental requirements for product materials. These Standards focus on making sure that products do not present a risk to consumers or to the environment and are even more stringent than international legal requirements (Adidas 1999 annual report).

ARE CODES DOING ANY GOOD? - "During the Sialkot visit [sub-contractor to Adidas] we also met people from the ILO who are working as program monitors of the ILO. They told us they do not know about codes" Others did know them (Maquiladora Solidarity Network).

Nike did use E&Y, now uses PWC, GA, and most recently Verité. (See Mexico). Nike also uses the ISO 14000 environmental certification.

New Balance uses SA8000 Monitors

New Balance has 5 U.S. factories with the rest produced elsewhere. For example,

(NLCNET Report).

SA 8000 Corporate Monitors Show up – The Workers Have No Idea What It Is - Representatives from the Council on Economic Priorities Accreditation Agency (CEPAA) SA 8000 monitoring program showed up at the Lizhan Factory and were introduced at a morning assembly. Afterwards the workers told our researchers that they had no idea what SA 8000 was. Some other workers said the SA 8000 people organized a few talks on Chinese labor laws, but no one paid much attention (NLCNET report).

REEBOK has its Code of Conduct.,  Awards.

Insan Hitawasana Sejahtera (IHS)

Reebok claims it  "is the first company in the footwear industry to make public an in-depth, third-party critique of labor conditions in factories making its product. The study was conducted by Insan Hitawasana Sejahtera (IHS), a prominent independent research and consulting firm based in Jakarta, Indonesia.

Reebok subcontracts for athletic shoes in at least 40 contract production plants in South Korea, Indonesia, China, Thailand, Taiwan, and the Philippines.  Reebok, like Nike does corporate hopscotch, moving its subcontracts from South Korea and Taiwan to China,
Indonesia, and Thailand in search of the lowest wages (D. Fisher, "Global Hopscotch." US News & World Report, June 5, 1995, pp. 43-45.).

What are the Codes?

ADIDAS Code is Called STANDARDS OF ENGAGEMENT Expanded version.

Nike's code was drafted in 1992 U.S. State Department report to Congress on Human Rights highlights shoe factories' refusal to pay
Indonesia's minimum wage. There is also a strike at Sung Hwa. Nike responds by  formulating "Code of Conduct and Memorandum of Understanding" for subcontractors.

Reebok's code was drafted in 1992.

Where is the Monitoring Activity?

ADIDAS - List of disclosed factory locations -- See ADIDAS

Nike - List of disclosed factory locations.

Reebok - List of disclosed factory locations. See Reebok

First, WHO CERTIFIES, SETS STANDARDS, AND RATES CORPORATIONS and MONITORS?

FIRST THERE ARE THOSE WHO CERTIFY, RATE, OR ORGANIZE THE CORPORATIONS AND MONITORS:

American Apparel Manufacturers Association (AAMA) recently set up guidelines for companies to police their factories and suppliers. AAMA standards include some fundamental rights, but exclude freedom of association and collective bargaining.

Apparel Industry Partnership (AIP). After talks broke down, a handful of major corporate participants, including Nike, Liz Claiborne, Phillips Van Heusen and Reebok, agreed to establish a Fair Labor Association (FLA, see below).

Council for Economic Priorities (CEP) gives out several corporate ratings, including one for "disclosure." But the methodology for defining "disclosure" is, in my view, the most bizarre in the whole world.  As they put it, "Disclosure grades are determined by the number of CEP surveys a company completes. A company returning surveys in all six issue areas (Note: Woman’s Advancement and Minority Advancement is a combined survey and Workplace Issues and Family Benefits is a combined survey), will receive the top grade for Disclosure." The grade for workplace is "evaluates general working conditions and the treatment of workers. This category is comprised of several indicators of performance, including various benefits, policies and programs offered to assist and enrich employees in their work, as well as their lives in general. Also, CEP evaluates safety conditions, training, and programs, for use as indicators of a worker's physical welfare in the context of potentially dangerous conditions. Overall, the category attempts to appraise a company's contributions to worker well-being via skills training and education, various health concerns, financial compensation, preparation for retirement, safety conditions, and assistance in the event that an employee is laid off." It is not at all clear if working conditions includes subcontract factory employees.

By these criteria companied get these grades:

Nike A for Disclosure. B for Workplace

Reebok A for Disclosure. A for Workplace

Disney F for Disclosure. C for Workplace

GAP F for Disclosure.  Workplace was not rated

 

ETI - Ethical Trading Initiative www.ethicaltrade.org) do not certify monitors, but do bring together as they put it, a wide range of organizations from all parts of society with the aim of helping to make substantial improvements to the lives of poor working people around the world. Corporations such as Body Shop, Safeway Stores, and Levi Strauss have combined with NGOs, Trade Unions and the uK government to create standards of corporate ethics. The ETI base Code includes (1) no forced or bonded labor or use of employment deposits, (2) right to collective bargaining, (3) safe and hygienic working conditions, (4) no child labor, (5) living wages, (6) no excessive working hours, (7) no discrimination, (8) regular employment, (9) no harsh inhumane treatment of workers. The FLA code, by contrast does not include living wages.

Fair Labor Association FLA FLA is an outgrowth of the Clinton administration Apparel Industry Partnership Agreement, following the Kathie Lee Gifford scandal in 1996. It originally included corporate, NGO, government and union involvement, but the unions and NGOs bailed when the code failed to include right to bargain and living wage. The FLA certifies monitors and is funded by corporate money.

FLA Board of Directors includes Adidas, Nike and Reebok corporation executives, among others. 

On January 23, 2001 the Fair Labor Association (FLA) announced that it had approved seven major brand-name apparel and sports shoe companies to participate in its monitoring program. Those companies now (August, 2001) include: Nike, Reebok  (for footwear only), adidas-Salomon AG, GEAR For Sports, Levi Strauss & Co., Liz Claiborne,  & Patagonia,  Phillips-Van Heusen, Eddie Bauer, Gear for Sports, and Polo Ralph Lauren

On April 5, 2001 The FLA Board of Directors announced that Phillips-Van Heusen Corporation and Eddie Bauer had been approved for membership in FLA's monitoring program, bringing the number of participating companies to nine. 

FLA has approved new monitors:  include Global Standards/Toan Tin in Vietnam; Intertek Testing Services (ITS) in China, India, Indonesia, Korea, Malaysia, Taiwan and Thailand; and Merchandise Testing Labs Brand Integrity (MTL) in China, India, Indonesia, the Philippines, and Thailand. The FLA had previously announced the accreditation of two southern NGOs and one US non-profit monitoring organization, COVERCO in Guatemala, Phulki in Bangladesh, and Verite in 14 countries (it is also accredited under the SA8000 and WRAP code verification programs).

FLA on Sweatshops

Doug Cahn, Reebok's vice president of human rights is an FLA director.

The payoff for logo corporations is once certified they can sew a label into their products saying they were made under fair conditions.

FLA HISTORY

Charter Charter Document, Amended June, 1999.

1998- Corporate Watch gave the 1998 "Sweatwash" award to the FLA (CW, Unite).

Adidas joined in 1999 (Adidas 1999 Annual Report).

As of March 3, 2001, FLA had one certified monitor, Verité. Verité is accredited to monitor the full
FLA code in 14 countries -- Bangladesh, China (including Hong Kong and Macau), India, Indonesia, Malaysia, Mauritius, Mexico, Philippines, Saipan, Sri Lanka, Taiwan, Thailand, Turkey, and the USA.

Second approved monitor - The Guatemalan independent code monitoring group COVERCO has been accredited by the FLA as an external monitor for Guatemala.  COVERCO retains ownership of the data and analysis and the right to make public key findings from its research and
monitoring.

Two other NGOs are accredited as FLA external monitors. Phulki, a Bangladesh-based NGO is accredited to monitor all the FLA code elements, except for Freedom of Association, in Bangladesh.

FLA, as of March 3, 2001 has 152 affiliated universities including New Mexico State U.

1999 (November 2) a subgroup of FLA after 2 years  announced that they had come to an agreement-- however  two unions (the garment workers' UNITE and the Retail, Wholesale and Department Store Union) and the ecumenical Interfaith Center for Corporate Responsibility refused to sign because of FLA's bias in favor of the companies.

(FLA) is seriously flawed on two fronts (See GE critique):

1.Its standards are too weak to guarantee real improvements in workers' lives. 

  1. it allows workers to be paid below poverty wages 

  2. it allows excessive hours of overtime  it does not adequately uphold the right of workers to organize independent unions

2. Its monitoring system is not transparent nor sufficiently independent of the companies to be credible. 

  1. it requires only 10 percent of a company's factories to be monitored yearly 

  2. the companies can choose their own monitors

  3. the companies have undue influence in picking which factories will be monitored 

  4. the government and foundations will be called upon to help subsidize the companies' monitoring system

  5. vague mechanisms for getting input from workers and NGOs

  6. it keeps important information from the consumer

Maquiladora Solidarity Network analyses of FLA monitoring.

March, 2001 report - Codes Memo 5

April, 2001 report  Codes Memo 6

Global Reporting Initiative (GRI http://www.globalreporting.org). The GRI uses a global, voluntary, and multi-stakeholder process as the foundation for standardized (or uniform) corporate sustainability reporting.  GRI issues CERES reports on specific corporations.  The idea is to create a common framework of criteria for corporations to self-report and self-monitor their compliance. 21 companies did the 1999 pilot study of guidelines. CERES  (Coalition for Environmentally Responsible Economies) is a coalition of pension funds, foundations, unions, and religious groups who work in partnership with corporations. See CERES principles. CERES does not at present formally "score" or otherwise rate compliance with the Principles. Nike Corporation advertises itself as a signator to the CERES principels since November 7, 2000. This is a voluntary commitment to continual environmental improvement. CERES principles include commitments to reduction of release of polluting substances, protection of habitats and biodiversity, reduction and safe disposal of waste, energy conservation, environmental restoration in case of damages and information disclosure.

International Labor Organization (ILO) does not certify, but instead oversees groups of monitors in big projects. ILO also has a rating system for corporate goodness.

ILO was established to set standards.

ILO for example organizes other monitors to assess child labor in Soccer Ball industry in Pakistan (ILOWATCH).

Sajhau, Jean-Paul (2000)  "Business ethics in the textile, clothing and footwear (TCF) industries: Codes of conduct (ILO Working Paper International Labour Office Geneva). According to the report some Nike and Reebok "subcontractors do not respect the most elementary rights of their workers" (1). Report compares Nike, Reebok, Gap, Wal-Mart and other codes.

ILO report on voluntary codes: "Nike is another major MNE which has a code that is widely cited as an example of attempts by certain MNEs to use their influence to promote the observance of international labour standards, particularly in offshore production sites.  While the provision of Reebok's Human Rights Production Standards cover the same social and Labour issues as the aforementioned codes, this company renown for its sports goods, also developed in consultation with members of the human rights community and Chinese manufacturers of athletic footwear, country specific guidelines - The Guiding Principles for Reebok Production In China.

Political and Economic Risk Consultancy, Ltd.- PERC - PERC produces a range of risk reports on the countries of Asia, paying special attention to critical socio-political variables like corruption, intellectual property rights risks, labor quality, and other systemic strengths and weakness of individual Asian countries. 

The PERC report bases its findings on polls taken among some 700 expatriate business players operating in 12 Asian countries

Once again, Indonesia finds itself placed in the position of the second most corrupt country -- second only to Vietnam -- on a list of Asian countries published by the Political and Economic Risk Consultancy (PERC) group.

Vietnam and China, the report notes, were similarly beset by corruption. In both these countries, though, their governments were willing to acknowledge that corruption was extensive and that serious efforts had to be made to fight it.

No Sweatshop Information Campaign (NSIC) See NSIC for more on the No Sweatshop Information Campaign which accredits no sweat factories in Australia. So far only Australian Defence Apparel is accredited as meeting NSIC standards.

RESPONSIBLE SHOPPER Rating Service

This Rating Service is as bogus as they come -  San Francisco-based Working Assets has teamed up with the Council on Economic Priorities to produce a "responsible shopper" web-site Guide for responsible shopping:  http://www.responsibleshopper.org
Nike wins four stars for "Workplace" issues and five (highest possible) for "Disclosure"  see comparison (press here) but if you look at their own list of dings (press here) you have to ask how is this "B" rating for Reebok & Nike possible?

For an activist group's critique of CEP's "independent factory monitoring" enterprise, see:   http://www.china-labour.org.hk/9907e/e_sa8000.htm

Worldwide Responsible Apparel Production (WRAP), the global factory Certification Program - WRAP has accredited three monitoring firms; PriceWaterhouseCoopers (PWC), Intertek Testing Services and CSCC to perform compliance audits in dozens of countries around the world. The basis for the WRAP Certification Program is 12 core production principles based upon international standards that address labor practices, factory and environmental conditions, as well as customs compliance.  These include no children under 14, no forced labor, freedom of association, but does not include living wage. After two years of development, the WRAP Certification Program announces the names of the independent Certification Board that will review the factory monitoring reports and grant the WRAP "good factory seal of approval" to qualified manufacturers. A total of ten individuals, six independents with no relationship to the apparel industry, and four leading industry executives, comprise the WRAP Certification Board. Over 290 apparel manufacturers in the U.S. have endorsed the program. The stated aim is to "raise production standards and eliminate, once-and-for-all, the bad 'sweatshop' type of operations from global manufacturing." WRAP sells independent monitoring certification courses to would-be monitors. (1 WRAP press release)

See

Self-Assessment and Monitoring Handbook for factory owners is available in Spanish on its website: www.wrapapparel.org/manuals/hndbk_span_2001.pdf You can learn more about how to prevent the illegal shipment of drugs with clothes exported from the factory than on how to ensure respect for freedom of association.

 

SECOND ARE THE MONITORING CONSULTANTS, the CASH-DEPENDENT MONITORS:

WHO ARE THE MONITORS? (CONSULTING FIRMS HIRED BY CORPORATIONS TO MONITOR). These "dependent monitors" compete among themselves to bid for corporate dollars. The reports go to the corporations, edited forms of the charts and graphs (in the name of proprietary corporate knowledge), with corporate apologetics go to the public. Others release just enough negative findings to buy public credibility. Which of the "dependent" monitors has a track record for advocating human rights or sustainability standards and which sell their services to the highest bidder?

List of DEPENDENT monitors:

Ernst & Young (E&Y) - October, 1994 - November 1997

 

Global Alliance GA Global Alliance for Workers and Communities. GA is a controversial NGO/private sector initiative, involving the International Youth Foundation and the World Bank, in partnership with Nike and Gap (Maquiladora Solidarity Network, April, 2001). GA was launched  in April 1999 by Nike, Mattel, the World Bank, the International Youth Foundation, the John D. And Catherine T. MacArthur Foundation and St. John's University. GA seeks to improve the workplace and build the life skills, vocational skills, academic skills, and confidence of young adult factory workers. The program is currently operating in Nike and Mattel factories. The first GA report is on Thailand and Vietnam and the second on Indonesia.  Corporations pay for these reports and control the methodology from question design, training of data-collectors, vetoing what goes into the report, and tailoring the report for PR needs. Nike itself helped found GA with $7.8 million.

HISTORY of GA: "Got problems with NGOs? Start your own! That is exactly what Nike did with the Global Alliance for Workers and Communities. Rick Little, whose wobbly International Youth Foundation (IYF) was being weaned from mega-grantor,
the Kellogg Foundation, spotted the opportunity. Little`s new specialty became corporate responsibility, and soon after he convinced Nike to pledge seven million dollars to the Global Alliance, he talked Lucent and Nokia into outsourcing their responsibility management to IYF for another $15 million." (Source Jeff Ballinger, August, 2001 Behind The Label Op Ed piece).

GA First Study - "Global Alliance gives Asian workers a voice"  Newly released data reveals first-ever look inside factories from workers' perspective. Press Release September 6, 2000 on the Global Alliance (GA) 1st Study Assessment Findings -  Washington, D.C. - Amidst the debate about working conditions in overseas manufacturing facilities, the workers themselves finally get a voice with the release of a comprehensive independent assessment of 3,800 Nike footwear and apparel workers in Vietnam and Thailand. The survey was conducted by the Global Alliance for Workers and Communities (See Press Release).

The Indonesia Study "The nefarious nature of Nike`s Global Alliance strategy was revealed in the February 2001 report about nine Nike contractors in Indonesia. The fifty-page Global Alliance report (accompanied by a 56-page "remediation plan" from Nike) failed to mention strikes, fired workers, wage cheating and, most importantly, the fact that no Nike shoe or apparel contractor in Indonesia was presently engaged in meaningful collective bargaining, even though independent unions have been legal in Indonesia for nearly three years. While admitting other serious wrongdoing, the aforementioned omissions do nothing to alter the perception that Nike has nothing but scorn for worker activists and truly representative, worker-controlled unions" (Source Jeff Ballinger, August, 2001 Behind The Label Op Ed piece).

Global Alliance progress report (July 2000) states that, of over 9,177 workers, 931 workers were personally asked questions, and 220 workers participated in focus groups and 34 key representatives from factories management, welfare community, union and clinic were interviewed.

Research into Nike's Global Alliance assessment study: Wages, Hours and Trade Union rights -- Still Missing (Clean Clothes Campaign, 15 Sept. 2000). This is a critique of the method and study design: "What's missing from the Global Alliance report are worker's opinions on issues relating to wages, hours of work, freedom of association and collective bargaining. "

Thai Labour Campaign - Lian Thai Industrial and the Global Alliance for Workers and Communities (Junya Yimprasert, Thai Labour Campaign, 8 Sep. 2000). This is a critique of the 1st GA study. This critique oints out the "Junk Science" activities, the tight corporate control by Nike and Global Alliance over the research process:

  1. "The researchers refused to disclose any information on this research, claiming that as soon as they finished their work, the Global Alliance took all the primary sources data and all the files from their computers."  and  the surveys "did not provide much room for workers to give answers that would reveal labour violations related to freedom of association.

  2. Answers only allowed respondents to reflect on their living conditions, health problems, and what workers want to do by marking fixed answers already included in the questionnaire." AND, "Since the workers had to give their names in the questionnaires, they did not dare to give criticisms. "

  3. "To get the 'fair wages' that the Global Alliance talks about these women workers have to work overtime seven days a week."

Maria Eitel, Vice President Corporate Responsibility, Nike, Inc., United States is on the Board of Global Alliance. The approach is to conduct focus groups and surveys with workers and managers. (See article).

Jeff Ballinger adds Global Alliance is a "Public Relations firm responsible for this has also done work for NikeTown, (Michael) Jordan brand, Disney, Hasbro..." -- The implication is that the study group review the research methods and findings. See also Nike Site.

There is a September, 2000 critique of the Global Alliance methodology and findings available . The new study was conducted by Junya Yimprasert of the Thai Labour Campaign

According to the main report   "In the Global Alliance study selected workers were asked to answer multiple choice questions. In this way, their priorities were suggested for them."  Finally, after interviewing Luen Thai workers, the Thai Labour Campaign found that "...they felt that the questionnaires were guiding them and tried to encourage them to conduct activities at the community level.
The Global Alliance for Workers and Communities is not a factory
monitoring program. It represents an attempt by Nike and the Gap to respond to the controversy over factory conditions in a way that suits their agenda, rather than the rights-based approach advocated by activists. 
Tim Connor, Coordinator, The NikeWatch Campaign
Ker Conway, (Nike Board Member, first woman president of Smith College, and visiting professor in the program in Science, Technology and Society since 1985) and as  most will remember, went to Indonesia and Vietnam just before a Nike shareholders' meeting when company was challenged by resolution from United Methodists.  Based on her Nike-guided-tour, she told shareholders that workers were being well-treated.
Two years later, she sat beside Phil Knight at his National Press Club
speech, when he pledged "continuing improvements."
 
Now, to raise money for MIT, she's credited with empowering Nike's workers with Nike's "Global Alliance" strategy.

"These days, Conway is taking her lifelong commitment to empowering women
outside the realm of academia. Still involved in women's education, she now
focuses on the Third World. She helped found Global Alliance, an affiliate of the International Youth Foundation (IYF), which uses worker surveys to learn what a predominantly female factory labor force needs to advance beyond factory work." (Source MIT Spectrum).

 

GA Second study - "Workers Voices" is a study of 4,450 workers in 9 factories in Indonesia is also getting great press. There is a need to compare study results to other studies looking at similar issues. For example, in the case of workers' opinions about unions, for example, the Press For Change (Jeff Ballinger) survey of October 1999 showed 6% favorable; Nike (and Reebok survey of 18 mos. ago) showed favorable numbers of 75 and 77%,