February 1, 2001
With Responses From
Feb 1, 2001
6 Min read time
Archon Fung, Dara O'Rourke, and Charles Sabel are to be commended for devising their creative "Ratcheting Labor Standards" (RLS), for attempting to add details and teeth to monitoring plans, for their focus on public disclosure, and for their thoughtful discussion of informal versus formal sectors and domestic versus export sectors. This is exactly the sort of new proposal that deserves broad discussion and might advance the work against corporate-led globalization. Without such concrete proposals we are unlikely to move beyond the current wave of scattered corporate codes of conduct, which are still in their early stages of experimentation.
We also need more such proposals on the table because we (individuals and groups, activists and scholars, North and South) need to learn how to discuss the advantages and disadvantages of any given proposal without turning disagreements into divisive debates. To be blunt, much of the debate about codes of conduct over the last few years has involved bickering among should-be allies. Case in point is the debate between proponents of the Fair Labor Association and the Workers' Rights Consortium, which involves a dispute over the merits of two plans, neither of which has been tested broadly in the field.
Let me take up the authors' call to engage in discussion about their proposal and share five questions that RLS raises for me. I pose these as food-for-thought—and not criticisms—to the authors and to other academics and activists working on proposals to make trade and investment more socially and environmentally responsible.
Rights or standards? Fung, O'Rourke, and Sabel propose using labor standards of varying stringencies to "secure the most ambitious feasible labor standards for workers given their economic development context … without imposing a uniform, and potentially protectionist, standard upon diverse contexts." My own view is that the only way to avoid charges of protectionism is not to rely exclusively on diverse and flexible standards but to have uniform rights that should be recognized whatever the context. In the 1980s, groups such as the International Labor Rights Fund sought to specify the relevant rights: they studied seventy years of International Labor Organization (ILO) deliberations during which employees, worker representatives, and governments negotiated over one hundred international conventions on labor. From these conventions, the Fund culled a list of six internationally agreed-upon core worker rights, including freedom of association and the right to collective bargaining. Using these basic labor rights avoids a major pitfall: having to determine which standards are appropriate for which corporations or which levels of development—a potentially messy judgment call.
Northern-based codes of conduct versus grassroots union activism? The other benefit of using core rights is that it clearly delineates a role for international solidarity and oversight through the RLS or any other mechanism that does not attempt to usurp the role of unions. This is not a frivolous concern: I once heard Kathie Lee Gifford say that the factories at which her signature line of clothes were made had to follow her code of conduct and therefore there was no need for unions. We should be pushing for freedom of association, for example, through codes of conduct and subsequent monitoring. But once that core labor right exists in a country, we should recognize that it is the role of unions to use their power (with international support, if requested) to ratchet up standards—to organize for higher wages, expanded benefits, etc. In this way, codes of conduct can support the growth and power of unions, but they cannot and should not be seen as a substitute for unions, in China or elsewhere.
Environment or labor? Is a labor code enough? Interestingly enough, the authors—at least some of whom have environmental expertise—focus on a labor code of conduct. And, indeed, the work on corporate codes of conduct thus far has been far too split with work on labor issues, on one hand, and separate work on environmental issues. The challenge, however, is to merge the two. In my view, work on advancing labor rights and standards through corporate codes is the more advanced of the two, given the existence of ILO-delineated core labor rights. We need a multilateral effort to delineate core environmental rights such as the "right to know." And then the challenge is for proposals and campaigns to more consistently merge social and environmental issues.
Who should be the umpire? Do we really want to give the World Bank new life—and an expanded mission—given its poor performance in reducing the economic, environmental, and social havoc that its loans often leave in their wake? Many of our allies in the campaign to change the global economy have spent decades campaigning against the World Bank; we will lose these groups and individuals (especially in the Third World) as supporters of broader corporate accountability if we disparage their decades of work. If we need a global umpire, I suggest we look not to the Bank, but instead to a reformed United Nations (including the ILO), which is potentially the most egalitarian of the international institutions.
Regulatory or voluntary? A major test of a proposal is its ability to move beyond "easier" countries and "better" companies in "easier" sectors. Thus far, the momentum for codes of conduct, for example, has largely been in the apparel, footwear, and toy sectors, and the codes focus primarily on sweatshop conditions. Campaigns that target corporations with some claim to social responsibility (e.g., Nike, Gap, Levi-Strauss, Starbucks) have been more successful in engaging the company. As the authors suggest, the reality is that the somewhat more socially responsible firms have been targeted since they are more likely to engage. This has led to the current, arguably perverse, situation in which the more responsible (but hardly perfect) companies have "voluntary" codes and thus are more vulnerable to criticism for noncompliance while the more egregious companies without codes have been more likely to escape unscathed. This trap seems inherent to almost any voluntary initiative.
How can the RLS proposal be implemented without falling into this trap? The authors suggest some vague regulation; but it is not clear how firms would be "required" to participate, nor how "sanctions" would work. In fact, the authors allude to weak regulations at best when they say that the World Bank might be willing to participate because it "may see the RLS as a lesser evil to the imposition of a social clause."
By whose authority are the RLS requirements set? Are firm-level incentives really enough to set off a "race to the top"? In addition, there is the "brand-name" recognition problem: How will voluntary attempts ever, for example, expand into sectors with no brand-name recognition, such as automobile parts or paperclips?
Yes, we should work on making a better mousetrap in terms of voluntary schemes—and this may be as far as we can hope to get during Bush II. In the end, though, voluntary codes will be most effective if they help stimulate stronger international regulations such as social clauses, and vice versa.
So, Fung, O'Rourke, and Sabel have started an excellent dialogue. I now look forward to the next round of debate. This is the time for those of us who support more environmentally and socially responsible globalization to work together against a common enemy: corporate-led globalization.
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February 01, 2001
6 Min read time