Social Accountability in
NOT JUST ETHICAL, BUT ECONOMICAL
BY TIM VICKERY
Everyone loves a bargain. Yet, as globalization grows,
scenes of child labor and other unconscionable human rights violations have made “sweatshop” a household word. Mention “social accountability audit” to U.S. executives who source goods in Central America and they may be seized by visions of activists picketing their headquarters, a surprise visit from 60 Minutes and stock price drops akin to a trap door opening underneath their desk chair. These days though, veteran managers at some of the most venerated U.S. brands and WORLD TRADE 100 companies are finding that ethical sourcing can be economical. “If you work with factories to make them better places of employment, quality improves, productivity goes up, there’s less waste and you retain workers longer,” says Amanda Tucker, director of business compliance at Nike, the athletic footwear and apparel manufacturer based in Beaverton, Ore. Suppliers realize tangible gains too. “The competitive advantages trickle down to the factories,” says Mary Howell, vice president of the 700-member American Apparel and Footwear Association based in Arlington, Va. “They attract more business by being a good employer.” Home to thousands of maquilas employing hundreds of thousands of workers and some of the best-respected rights monitoring groups, Central America is an incubator for socially responsible innovations in supply-chain management. 1
Preferential trade terms, free trade zones, geographic proximity, easy market entry and the low skill-levels required made apparel manufacturing a lifeline for Central American economies. “Apparel became the only sustainable income source after Hurricane Mitch,” says Stephen Jordan, head of corporate citizenship for the Association of American Chambers of Commerce in Washington, D.C. A 1999 Department of Labor report named Mexico the No. 1 source of U.S. apparel imports (50 percent greater than second-place China). The Dominican Republic ranked No. 4 behind Hong Kong, Honduras, Guatemala, and El Salvador occupied top spots as well. Apparel jobs can mean life and death to governments and workers alike. Activists say that dependency leads to exploitation. “It takes a worker in [the Dominican Republic] 6.6 minutes to make a sweatshirt that retails for $22.99 and they get only 8 cents,” says Charles Kernaghan, Director of the National Labor Committee, an advocacy group in New York. World Bank figures for 2000 show Dominicans’ per capita GDP equaled less than $6 per day and Hondurans earned less than half that amount. Therein lies part of the problem. Many governments adopted international labor standards to get access to the U.S. market, but commonly neglect to enforce those laws for fear of driving away U.S. buyers and (often) Asian factory owners. Sheer lack of resources and corruption play roles as well. Apparel and footwear brands aren’t alone. Experts say conditions in factories producing other consumer goods
Article 20. Social Accountability in Central America are sub-par, too. But as high profile, ubiquitous targets, apparel and footwear brands became Public Enemy No. 1 one in fair labor campaigns. “There’s an intimacy that’s not there with auto parts—even though workers making wiring harnesses are walking across the border to sell blood for food money,” says NLC’s Kernaghan. To defuse the charge of activist campaigns, scathing exposés and mounting consumer demands for sweat-free goods, Levi Strauss, Nike, The Gap, Liz Claiborne, Reebok and others who rely on tens of thousands of workers in thousands of factories, adopted voluntary codes of conduct, established internal monitoring teams, and spent millions of dollars on blue-chip auditors for reputation assurance. Despite the safeguards, embarrassing labor abuses continue to surface. “Let’s be real,” says Auret van Heerden, executive director of the Fair...