National Catholic Register

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Multinationals Scrutinized for Treatment of Workers

SOME COMPANIES DRAW UP CONDUCT CODES

BY Art Babych

August 24-30, 1997 Issue | Posted 8/24/97 at 1:00 PM

 

Critics argue that without independent monitoring, sweat shop problem will remain

DAVID BROUGHT Goliath to his knees with a well-aimed stone from his slingshot, the First Book of Samuel tells us. But in today's high-tech global village, an army of consumer “Davids” is needed just to make trans-national corporations like the Gap, Starbucks, Wal-Mart, Nike, and Levi-Strauss sit up and take notice. Increasingly bombarded with petitions, protests, letters, and threats of boycotts however, the multinationals are doing just that.

And more and more corporate Goliaths are acceding to the demands of the Davids that the rights of workers not be sacrificed on the altar of profit.

Some corporations, Nike among them, have established codes of conduct to ensure workers are treated humanely. The Gap, after much public pressure, was one of the first Goliaths to agree to independent monitoring. Others, like Levi-Strauss and Nike, while among the first corporations to introduce codes of conduct, have steadfastly refused to allow for outside monitoring of their codes.

Among the Davids is Pope John Paul II, who, in his encyclical Sollicitudo Rei Socialis, wrote: “Solidarity helps us to see ‘the other’ not as a simple tool whose economic usefulness is to be exploited at low cost, until it has worn out, but rather as a ‘fellow human being,’ and ‘assistant’ that one must help to participate, on an equal footing with oneself, in the banquet of ‘assistant’ that one must help to participate, on an equal footing with oneself, in the banquet of life, to which all men have been equally invited by God.”

Multinational corporations, of course, have their sights set more on keeping shareholders happy than on “solidarity.” And when the bottom line is profit, it helps to have a source of cheap, non-unionized labor—people who will work long days, six days a week, earning less than the minimum wage and, perhaps best of all, won't complain.

But is cheap labor really cheap? In recent years, several well-publicized horror stories of human rights abuses, poverty wages, the use of child labor, and even torture in the factories of some sub-contractors in developing countries have cast the spotlight on deplorable labor practices that may have cost the companies millions of dollars in lost sales.

The industry is still reeling over the revelation last year that clothing sold by Wal-Mart and endorsed by TV personality Kathy Lee Gifford was made, much to the chagrin of Gifford herself, in U.S. and Honduran sweatshops. Damaging, too, was a 48 Hours report on CBS, showing that while Michael Jordan earned $20 million a year promoting Nike's swoosh label, factory workers in Asia earned 20 cents an hour, were forced to work overtime, and in some cases endured physical and sexual abuse.

For the past two years the Canadian Catholic Organization for Development and Peace (CCODP), the development arm of the Canadian Catholic bishops, has pressured Nike and Levi-Strauss to agree to independent verification of their codes of conduct. It's been unsuccessful to date— even with the support of about 230,000 Canadian consumers who sent cards to the two multinationals in support of the CCODP campaign.

Levi-Strauss claims it's being unfairly targeted and says opponents should go after the companies that have no code of conduct whatsoever. The corporation is controlled by the Haas family which, at an estimated net worth of over $12 billion, ranked seventh in Forbes magazine's latest list of the world's richest people.

Nike's response to the CCODP campaign and those of other international organizations was to get an evaluation of how its contractors are abiding by the company's code. It hired former U.N. Ambassador Andrew Young and his firm GoodWorks International to perform the task.

In June, after a four-month investigation in Vietnam, Indonesia, and China, Young concluded that Nike “is doing a good job in the application of its code of conduct.”

However, Young also said the Oregon-based company “can and should do better.”

He also called for external monitoring. Giving the phrase the widest possible interpretation, Nike is setting up a panel of “distinguished international citizens” and an ombudsman mechanism to ensure workers'rights are protected. It also has a monitoring contract with professional auditors Ernst & Young.

It's clear that for all the “external” monitoring, Nike intends to continue calling the shots, including choosing the people who will do the task. Company spokesperson Michelle McSorley says, however, that “these people have reputations as well and they're not about to kowtow to Nike.”

But outsiders argue that the monitoring system won't solve the “sweat shops” problem. “Ahired gun is a hired gun,” says Ken Whittingham, spokesman for the CCODP. Abused workers, he maintains, are not likely to complain to people paid by the company. And each time an abuse is reported, Nike argues it's an isolated case, added Whittingham.

But McSorley says: “When you have 500,000 people there are bound to be instances [of abuse] reported, but we won't tolerate that. We are doing things that are way above what our competitors are doing.”

In the larger picture, Nike and Levi-Strauss—and the CCODP—are only a few of the many players involved in the international struggle to define where the right of the multinationals to make huge profits ends and the right of workers not to be exploited begins.

Education—of corporations and consumers alike—is the area in which the definition is being honed. Companies concerned with their future can't help but be influenced by what the public thinks. And a survey, like the one last year which showed that 70 percent of Americans would refuse to buy a product if they knew it was made by exploited workers or child labor, sends trans-nationals a clear message.

Living in the information age, the public also has the means to be well-educated consumers. At one time they may have simply shaken their head at the $150 price-tag on a pair of child's Airmax shoes made by Nike. Now, many want to know where the product was made, by whom, and under what working conditions.

“What we wanted was to have a public debate,” says Carl Hetu, a CCODP animator in Ottawa. “The debate is occurring and I think that's healthy for everyone, especially for workers in the Third World. And maybe in the end they will get their just wage.”

If so, it will have taken the labors of countless Davids.

Art Babych is based in Ottawa, Canada.