Major Agreement On Sweatshop Monitoring

by Jim Lobe

The agreement, announced by the White House November 3, capped two years of negotiations between the companies -- including such major labels as Nike and Reebok -- rights and consumer groups, labor unions and the Clinton administration.

Under the 33-page accord, a new "Fair Labor Association" (FLA) would accredit independent firms to inspect labor conditions in overseas plants of participating companies. The FLA would publicly certify those companies that complied with a detailed code of conduct for the workplace.

The effort to reach an accord was launched by the White House in 1996 amid a spate of media reports about the use by some of the United States' best-known clothing manufacturers and retailers of sweatshop labor in Central America, the Caribbean, and South and East Asia.

Clinton created the White House Apparel Industry Partnership, a task force consisting of 18 clothing companies, labor unions, and consumer and rights groups. They quickly agreed on several elements of a workplace code of conduct, such as a maximum work week of 60 hours, and a minimum working age of 14.

More difficult was reaching an accord on the FLA's composition. Human rights groups and labor unions wanted to be in the majority of the new body's governing board, but the companies disagreed. The two sides finally settled on equal representation between companies and independent groups.

Negotiators reached deadlock, however, on more difficult issues which stalled progress for much of the past year and even brought the initiative to the brink of collapse.

These included the frequency and extent of monitoring; the obligations of companies doing business in countries which do not respect workers' rights to organize independent unions; and whether companies should be obliged to pay their workers a "living wage," as opposed to a legal minimum wage in countries where the legal wage is not adequate to cover basic living costs.

To overcome these thorny issues the companies and independent groups agreed on a series of compromises or, where compromises proved impossible, on steps to move the process forward.

Thus, the U.S. Department of Labor is being ordered to complete a study within six months of the "relationship between wages and basic needs of employees in the apparel and footwear industry around the world" to be reviewed by the new FLA to consider whether its workplace code of conduct should be amended.

"The idea is to continue the debate and keep these issues alive," said Michael Posner, director of the Lawyers Committee on Human Rights.

In countries that did not recognize workers' rights to association, the FLA would require companies to "promote and encourage positive change (and)... take steps to ensure that factory employees can exercise these rights without fear of discrimination of punishment."

These independent monitors will conduct periodic inspections of at least 30 percent of the plants used by participating companies abroad over a two-to-three-year implementation period. After that, the monitors would inspect from five to 15 percent of the companies' plants each year.

The FLA board would decide annually whether a participating company had complied with the code sufficiently to be certified. The decision would be based on the findings of the external monitors, the implementation of internal monitoring, and the way in which companies have responded to abuses and prevented their recurrence.

A major provision of the accord was designed to ensure that the FLA received reports about code violations from all credible sources. A process would be created by which parties or groups which were not part of the Association could bring abuses to its attention.

The new agreement followed other recent steps by apparel manufacturers to address consumer concerns over sweatshop labor. Last month, Nike Inc. announced that it would increase by some 22 percent the wages it paid for factory workers in Indonesia, where sweatshop conditions are expected to proliferate in the wake of the financial crisis. Earlier this year, the giant, Oregon-based corporation said it would no longer hire any workers under 16 years of age.

The American Apparel Manufacturers Association, whose members accounted for about 85 percent of the $100 billion of clothing sold in the United States each year, also announced a new code which it hoped to have monitored with the help of human-rights and other non-labor groups. It required companies to pay the legal minimum wage to workers, rather than the prevailing industry wage, which is usually higher, and is less strict than the FLA's code in other respects.

"The AMA's process is pretty much self-certifying," said Jim Silk, director of the Robert F. Kennedy Memorial Center for Human Rights, which, along with the Lawyers Committee and the International Labor Rights Fund, was the principal human-rights representative on the task force. "We have a much more credible (and) rigorous process."

Other core actors in the task force included Business for Social Responsibility, the National Consumers League, Nike, Reebok, Phillips Van Heusen, and Liz Claiborne.

The challenge ahead would be to persuade other companies to sign on and become participants in the scheme. "For this agreement to achieve its goals, a larger percentage of the industry must be encouraged to join to ensure that products are made in compliance with international labor standards," said Posner who called the accord "precedent-setting."

Silk agreed that the accord could become a model that could be applied to other manufacturing industries.