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Bravo to Richard Locke for pinpointing the limitations of private, voluntary labor regulation and suggesting a new way forward. Recent deadly fires in Bangladeshi and Pakistani apparel factories, which were subject to codes of conduct or international certification, illustrate the failure of private, voluntary efforts to eliminate basic safety threats. Locke also shows how sophisticated auditing and capability-building projects are undermined by sourcing practices and technocratic conceptions of upgrading. But one can go further in diagnosing these problems and assessing governments’ roles.
Many of the pitfalls Locke documents reflect a deeper but largely ignored problem with expectations for corporate social responsibility (CSR). Volunary programs tend to ask for improved conditions within factories but bracket what goes on outside the factory walls. This includes upstream ordering practices and the impact of the host country on factory conditions. Little attention is paid to the rights and status of workers in particular places and the movement of orders from one place to another. Where firms produce is important but rarely part of the formalistic way in which social responsibility is evaluated. Brands and retailers in some industries, especially apparel, move their orders among countries, shifting from Mexico and Central America to China, and then back-and-forth between Asian countries as wages fluctuate. More are going to Bangladesh and Pakistan, where working conditions are dire and regulation is minimal. The rapid movement of orders has damaged many local organizing efforts. Perversely, brands have been praised for their CSR programs while simultaneously gravitating toward settings where their codes of conduct are extremely difficult to implement.
If we want the private sector—whether on its own or nudged by public policy—to uphold labor standards, then we must be more attentive to the places where goods are produced and demand more patient forms of production. A “slow goods” movement would involve both fewer changes to the products themselves, as Locke suggests, and a lower likelihood of firms fleeing countries where reforms are underway. Some countries in Latin America and Asia have improved labor inspection and laws, made space for unions, and helped workers learn their rights, but these reforms are at best ignored and at worst diluted by the current practice of CSR.
Even firms praised for responsibility flee countries where reforms are underway.
The dual challenge is to encourage private regulation to recognize national differences and to create public policy that effectively governs global supply chains. Locke stresses the latter but does not consider how some public policies reproduce rather than correct the errors of private, voluntary initiatives. The Environmental Protection Agency’s voluntary programs, for instance, often have more carrots than sticks or rely on ineffectual commitments by firms. The 2010 California Transparency in Supply Chains Act pressures retailers and manufacturers to address human trafficking in their supply chains, but the law only requires firms to report on their risk-assessment methods. It does not penalize the sale of goods connected to human trafficking or require firms to report on the locations of their suppliers, despite clear evidence in State and Labor Department reports that the risks are greater in some places and for some products. In effect, this is a case of public policy promoting the same kind of narrow CSR that Locke has found to be lacking, even if well meaning.
A new regime to combat illegal logging provides a more promising model. Growing from an EU project to improve forest law enforcement in developing countries, the new timber regime allows for hard penalties against companies in the European Union or United States if their suppliers violate laws in the countries they source from, requires these companies to exercise due diligence in tracking their supply chains, and seeks to improve timber licensing systems in tropical timber-exporting countries. Here, public policy leverages private risk assessment but also wields a sizable stick and prioritizes domestic legal compliance.
Many question the calls for greater state involvement, including whether they clash with World Trade Organization (WTO) rules. There is no doubt that the WTO limits the range of regulatory options, but it also contains largely untested exceptions for the protection of human health and “public morals” and to prevent the exploitation of prison labor. And the WTO does not prohibit bilateral projects to upgrade labor law and enforcement capacity, as some trade agreements have done. Hopefully, Locke’s findings will spur a new round of debate about states’ roles and capacities and help to get past technocratic, de-contextualized views of CSR.
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