Taming the Global Supply Chain: A Statement of Principles

Judy Gearhart, executive director of the International Labor Rights Forum, on the International Labour Organization devoting part of its condition on promoting decent work in global supply chains.

The ILO debate should start with a clear understanding of what hasn’t worked. Put simply, decades of voluntary corporate social responsibility initiatives have failed to deliver living wages, safe factories, or effective protections for workers’ right to organize and bargain collectively. In the last ten years alone, more than 1,800 workers have died and thousands more have been injured as a result of catastrophic fires and factory collapses that all took place in facilities labeled “safe” by private social audits performed for major multinational apparel brands. The current regime of voluntary and confidential supply chain monitoring should be replaced with initiatives, like the Bangladesh Accord on Fire and Building Safety, where workers and their unions have a direct role in managing, implementing, and enforcing the relevant standards. Additionally, the Accord’s transparent inspection reports combined with buyers’ time-bound commitments to ensure safety reforms make it possible to hold brands legally accountable.

One issue that ILO delegates should discuss is how multinationals’ business practices, including rock-bottom prices for suppliers and fast production schedules, inevitably create labor rights violations on the factory floor. Large multinationals dominate global supply chains, using their considerable market leverage to demand low prices from their overseas suppliers. Desperate to maintain the global brands’ business, suppliers often squeeze workers and cut corners on safety to stay profitable. Rather than invest in ineffective audits, companies should pay prices to their suppliers sufficient to support living wages and adequate health and safety protections, as well as taxes that support the government regulators and inspectors who have the responsibility to protect workers’ rights.

Business analysts argue that regulatory reforms should be evaluated against the risk that some employers may be put out of business, causing a loss in jobs. But this analysis fails to consider that replacing many bad employers, each trying to underbid the others, with fewer good employers with better paid workers will in turn generate income and jobs as the workers themselves become able to invest in their communities. Taking such a high road approach to development is nearly impossible, however, when global buyers continually seek out countries with lower production costs.

Absolutely correct on all points. We simply have to start reining in corporate misbehavior in their supply chains, recognizing that it’s the brands and the western parent companies that hold the real power in these chains. Here is a rough sketch of 10 principles I would hold when it comes to regulating the global supply chain.

1) All workers have the right to a union or workplace organization of their choice, free from harassment by employers or from corporations higher on the supply chain.

2) All workers have the right to a safe workplace.

3) All workers have the right to be free from physical, sexual, and verbal abuse.

4) All workers have the right to a livable wage based on local conditions.

5) All communities near global factories have the right to be protected from pollution

6) Western companies must take legal responsibility for the conditions in their supply chains. Western countries need to pass legislation ensuring this.

7) Western companies must agree to legally binding codes around pollution in their supply chains.

8) Corporations must take legal responsibility to eliminate all child labor, prison labor, and coerced labor in their supply chains.

9) Workers in supply chains must have legal recourse to violations of the basic principles listed above. If that cannot happen in the courts of their home nations, it must happen within the home courts of the western companies. That legal recourse should include access to corporate information and include the possibility for financial compensation for suffering.

10) These laws and regulations must travel with companies, so that they cannot escape national law in order to create a race to the bottom. Rather, the new legal regime follows the company wherever it operates.

Obviously, these are vague and sketched out on the internet version of a cocktail napkin. But I think they are very solid principles that those of us fighting for global labor justice can agree to, in a general form. They provide a good set of talking points and goals moving forward. I will be talking about these points in much more detail in the coming weeks and months.