Private regulation of labor standards in global supply chains: Problems, progress and prospects.

Private Regulation of Labor Standards in Global Supply Chains

10.7591/cornell/9781501754517.001.0001 ◽

2021 ◽

Author(s):

Sarosh Kuruvilla

Keyword(s):

Supply Chains ◽

Codes Of Conduct ◽

Regulatory System ◽

Labor Standards ◽

Global Supply Chains ◽

Private Regulation ◽

Labor Conditions ◽

Voluntary Regulation ◽

Corporate Codes Of Conduct ◽

Multi Stakeholder

This book examines the effectiveness of corporate social responsibility on improving labor standards in global supply chains. The book charts the development and effectiveness of corporate codes of conduct to ameliorate “sweatshop” conditions in global supply chains. This form of private voluntary regulation, spearheaded by Nike and Reebok, became necessary given the inability of third world countries to enforce their own laws and the absence of a global regulatory system for labor standards. Although private regulation programs have been adopted by other companies in many different industries, we know relatively little regarding the effectiveness of these programs because companies don't disclose information about their efforts and outcomes in regulating labor conditions in their supply chains. The book presents data from companies, multi-stakeholder institutions, and auditing firms in a comprehensive, investigative dive into the world of private voluntary regulation of labor conditions. The picture painted is wholistic and raw, but it considers several ways in which this private voluntary system can be improved to improve the lives of workers in global supply chains.

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Introduction

10.7591/cornell/9781501754517.003.0001 ◽

2021 ◽

pp. 1-6

Author(s):

Sarosh Kuruvilla

Keyword(s):

Supply Chains ◽

Code Of Conduct ◽

Labor Standards ◽

Global Supply Chains ◽

Corporate Code ◽

Private Regulation ◽

Voluntary Regulation ◽

Labor Practices ◽

Global Corporations ◽

Improve Compliance

This introductory chapter provides a background of private regulation of labor standards in global supply chains. Over the past three decades, there has been a plethora of private, voluntary regulatory initiatives with regard to social (labor) and environmental issues. This proliferation has come about in part because of pressure from antiglobalizers calling for global governance, and consumer and activist movements calling for global corporations to be more socially and environmentally responsible. There are many different methods of private voluntary regulation for labor standards, but the most common is the private regulation model. It has three elements: setting of standards regarding labor practices in global supply chains through a corporate code of conduct generally based on the conventions of the International Labour Organization; “auditing” or “social auditing” that involves monitoring whether supplier factories comply with the code of conduct; and incentives for suppliers to improve compliance by linking future sourcing decisions to their compliance records (penalizing or dropping noncompliant suppliers and rewarding more compliant ones). The book looks at the current state and future trajectory of this form of private regulation.

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Has Private Regulation Improved Labor Practices in Global Supply Chains?

10.7591/cornell/9781501754517.003.0005 ◽

2021 ◽

pp. 79-111

Author(s):

Jinsun Bae

Keyword(s):

Supply Chain ◽

Supply Chains ◽

Time Frame ◽

Labor Standards ◽

Global Supply Chains ◽

Private Regulation ◽

Work Program ◽

Labor Practices ◽

Short Time ◽

Remarkable Progress

This chapter evaluates whether private regulation has brought about meaningful and sustainable improvements in labor standards and the lives of workers. It first looks at overall progress in terms of the number of violations recorded through more than twenty thousand reliable audits in multiple industries and countries over a seven-year period, before considering progress in specific factories that have been audited multiple times in India to see whether the improvement is being sustained. It appears reasonable to assume that a factory that is audited multiple times over a three-year period will register improvements (in terms of having fewer violations) after each audit. The data for these two examinations were provided by AUDCO, a global auditing company. The chapter then explores progress in specific factories, with data from the Better Work program. Finally, it examines the specific case of the supply chain of a global home products retailer, in which the factories have demonstrated remarkable progress in compliance over a short time frame.

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Field Opacity and Practice-Outcome Decoupling: Private Regulation of Labor Standards in Global Supply Chains

ILR Review ◽

10.1177/0019793920903278 ◽

2020 ◽

Vol 73 (4) ◽

pp. 841-872 ◽

Cited By ~ 3

Author(s):

Sarosh Kuruvilla ◽

Mingwei Liu ◽

Chunyun Li ◽

Wansi Chen

Keyword(s):

Supply Chains ◽

Working Conditions ◽

Quantitative Data ◽

Labor Standards ◽

Global Supply Chains ◽

Private Regulation ◽

Qualitative And Quantitative ◽

Sustainable Improvement ◽

Labor Practices ◽

Recent Developments

Although firms in diverse industries increasingly adopt private regulation of labor standards for workers in their global supply chains, growing scholarly evidence suggests that this approach has not generated sustainable improvements in working conditions for those workers. The authors draw on recent developments in institutional theory regarding the development of opaque institutional fields that cause the decoupling between practices and outcomes to develop a new explanation for the lack of sustainable improvement in labor practices in supply chains. Using qualitative and quantitative data from a global apparel supplier and a global home products retailer, they demonstrate the various ways in which opacity causes decoupling between private regulation practices of global firms and outcomes for workers in supply chains.

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