Sweatshop Secrets of Success
Date: Tuesday, November 21 2006
You know its serious when its reported in Business Week. And while this is about American companies in China let's not forget that we have our own sweatshop companies here in Canada investing in Nicaragua and Haiti. Like Gilden Active Wear. They too use third-party codes of conduct.
"For more than a decade, major American retailers and name brands have answered accusations that they exploit "sweatshop" labor with elaborate codes of conduct and on-site monitoring. But in China many factories have just gotten better at concealing abuses. Internal industry documents reviewed by BusinessWeek reveal that numerous Chinese factories keep double sets of books to fool auditors and distribute scripts for employees to recite if they are questioned. And a new breed of Chinese consultant has sprung up to assist companies like Beifa in evading audits. "Tutoring and helping factories deal with audits has become an industry in China," says Tang, 34, who recently left Beifa of his own volition to start a Web site for workers.
Some American companies now concede that the cheating is far more pervasive than they had imagined. "We've come to realize that, while monitoring is crucial to measuring the performance of our suppliers, it doesn't per se lead to sustainable improvements," says Hannah Jones, Nike Inc.'s (NKE) vice-president for corporate responsibility. "We still have the same core problems."
This raises disturbing questions. Guarantees by multi-nationals that offshore suppliers are meeting widely accepted codes of conduct have been important to maintaining political support in the U.S. for growing trade ties with China, especially in the wake of protests by unions and antiglobalization activists. "For many retailers, audits are a way of covering themselves," says Auret van Heerden, chief executive of the Fair Labor Assn., a coalition of 20 apparel and sporting goods makers and retailers, including Nike, Adidas Group, Eddie Bauer, and Nordstrom (JWN ). But can corporations successfully impose Western labor standards on a nation that lacks real unions and a meaningful rule of law?"
[Proofreader's note: this article was edited for spelling and typos on November 22, 2006]