FLA’s blog has moved!

Thank you for visiting FLA’s blog. Our blog is now located at www.fairlabor.org/blog.


Business Leaders Have a Role to Play in Ending Human Trafficking

Today, corporations and businesses are more aware about their role in eliminating human trafficking and exploitation. They adopt a corporate strategy to prevent exploitation, take measures to clean their supply chain, train their staff, share their expertise to support anti-trafficking projects, take part in community initiatives, contribute to awareness-raising campaigns, support shelters for victims and so on.  The Business Leader’s Award acknowledges the vision, creativity and contribution of businesses leaders in identifying, combating and preventing trafficking in persons.

The award is supported by the United Nations Global Compact, End Human Trafficking Now and the UN Global Initiative to Fight Human Trafficking, and FLA President & CEO Auret van Heerden serves on the advisory committee for the award.  Nominate a business leader at www.businessleaderaward.org.

TED Global: Making Global Labor Fair

Vodpod videos no longer available.

TED Global: Auret van Heerden, posted with vodpod


Ethical Fashion: Considering the Social Responsibility and Environmental Sustainability Implications of Design from Fiber to Consumer

Authored by Marsha Dickson, PhD

How many young fashion designers graduate and take their first jobs having had the opportunity to visit an apparel factory?  As a professor of fashion and apparel studies involved with several different design programs over the last two decades, my educated guess is that “virtually none” have had this experience.  This number is even smaller when asked if the apparel factory is in one of the developing countries where over 95% of clothing sold in the United States is manufactured.

Yet despite very limited exposure to the factory environment and the life of garment workers in developing countries, the day-to-day decisions that will be made by these designers–and their counterparts in product development, buying, and merchandising– will have significant impacts on workers in factories around the world.  And beyond the factory that is assembling garments, the choices they make will impact workers, their communities, and the environment throughout the supply chain.

Each step of the process of bringing apparel to market, from the growing or processing of fiber, through the manufacture of textiles and component parts, through completion of specialized finishing techniques, on to the point where the finished garments are shipped to a distribution center or retail store, and finally to the end consumer and how they use and care for their garments, carries risks to people and the environment.  A designer who has never visited a factory, observed the context of production in a developing country, or been educated on the varied risks present throughout the product lifecycle, will almost certainly make decisions that negatively impact people and the environment. Read the rest of this entry »

China Answers Global Crisis with New Labor Market Policies

Many countries have adopted plans designed to help their economies recover from the global financial crisis. Unfortunately, those have mostly concentrated on saving banks and companies on the one hand, and on stimulating consumption on the other. Amazingly, there has been relatively little emphasis on the labor market policies needed to save jobs and protect wages. One wonders who is meant to do all the consuming if unemployment keeps rising and wages keep falling (at least in real terms)?

The FLA has been drawn to the impact the crisis is having at the bottom-end of the global supply chain, far from the banks and brokerage houses where the crisis first erupted. The countries that make the consumer goods that our consumption-driven economic bubble fed on have experienced a tsunami of factory closures and layoffs. In an attempt to help buyers, suppliers and worker representatives deal with that tsunami, the FLA has been on the ground in a few locations convening meetings to see how governments, employers and trade unions can work together to handle retrenchments in a socially responsible way.

Recently, the FLA was in Guanzhou, China, where we conducted a meeting that brought together a major brand-name buyer, its local suppliers and representatives from the Ministry of Commerce, Ministry of Human Resources and Social Security and the All China Federation of Trade Unions (ACFTU) for this purpose. Read the rest of this entry »

Solving the Problem of Declining Wages

Many companies have internal audit teams that are truly dedicated to making human and labor rights a reality in their global supply chains, often by working with local civil society groups. So why are there still so many factories that do not pay the hourly minimum wage and work 60, 70 or more hours per week? The first reason is that they operate in jurisdictions where there is no culture of compliance. None of their competitors is paying the hourly minimum wage or sticking to the legal limits on working hours, so why should they? The second reason is that they can. These factories are invariably located in labor markets where there is an oversupply of labor and workers will line-up for jobs on terms and conditions below the legal minima. The third reason is that they face tremendous competition. Prices and lead-times are being constantly squeezed and the factory responds by working harder rather than smarter.

Some critics blame the multinational buyers for this situation. This is too simple an explanation. Those export factories were often not paying the minimum wage before the multinational buyer arrived on the scene and tried to implement its code of conduct and audits. Nor is this a function solely of global competition. The factories across the street supplying the domestic market in the U.S. are not respecting the labor laws either. Global competition is not helping and many foreign buyers are part of the problem, but they are not the problem.

Critics of codes of conduct have gone so far as to declare them a failure because after ten years of intense auditing, the minimum wage is still not being paid in many factories. This is like saying that the medicine is a failure because we still have illness. People get sick all the time, but we do not blame doctors for the sickness. We might criticize doctors for not treating the illness effectively enough, and particularly for not removing the root causes, but we cannot blame them for the existence of the malady. The same applies to social auditing. It is intended to take the temperature of the factory so that we can diagnose the illness and treat it. Like disease, some of the problems that social audits uncover are functions of broader social factors. Take real wages, for instance. Research shows that real wages have been declining all over the world relative to GDP, profits, and the cost of living. No single company, or even group of companies, can be held responsible for that macroeconomic condition, and no group of companies can change it on its own. Read the rest of this entry »

>Assessing the impact of the new China labor contract law (Part III)

>In a nutshell
The bottom line is that the China labor contract law will formalize protections for workers that were more or less intended ever since the 1995 Labor Law but which have never been implemented or enforced. Employers will now have to honor the minimum wage, overtime and holiday premiums, rest days and leave periods, and social security provisions that have been largely ignored to date. Unfair dismissals will be less likely and employers will have to pay severance in all cases. Will it improve wages and working conditions? Yes, but mainly in those companies that are able to raise their level of human resource management. What will the rest do? It is true that the law has been introduced very quickly and many will simply not have the time to ramp up their management systems. Some will move to Bangladesh, Vietnam or Cambodia. Some will hire labor lawyers to teach them all the loopholes, including the use of labor brokers and sub-contracting, both of which are tactics widely used in other countries with high social charges and inflexible labor contracts (such as Turkey, for example). Some employers will continue business as usual and hope that workers do not sue.

Cost impact
How will companies absorb the additional costs? It is likely that the low-margin, labor-intensive companies will move inland to cheaper parts of the country, or offshore. Most companies will think twice before adding workers and this is a major concern to the Chinese government for whom employment growth remains a major priority. The Chinese economy is expected to slow somewhat this year in line with the U.S. and EU and so the new law comes at a bad time for employment. Interestingly, both trade and labor officials expressed this concern to me and privately felt that the law went too far, given the state of the Chinese economy. This further demonstrates the extent to which the NPC drove this law, despite reservations by government and business.

For better or for worse?
It may turn out that a law which was designed to promote greater social harmony and cohesion, may (in the short term at least) generate unemployment and conflict over labor contracts. In the longer term, however, the law should lead to a more stable workforce and greater retention of workers. Employers will be able to invest in training and human resource development and move up the value chain, something the Chinese authorities have been urging them to do. This law may well prove to be the catalyst for a shift into more modern methods of management and a leap forward for the Chinese economy.

Auret van Heerden