Private Regulation of Labor Standards in Global Supply Chains

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.

Introduction

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.

Causal Complexity

2021 ◽  
pp. 65-74
Author(s):  
Chunyun Li
Keyword(s):  
Supply Chains ◽  
Working Conditions ◽  
Codes Of Conduct ◽  
Global Supply Chains ◽  
Private Regulation ◽  
Institutional Conditions ◽  
Incentive Effects ◽  
Regulation Model ◽  
International Conventions ◽  
Causal Complexity

This chapter examines causal complexity. The determinants of improvement in working conditions in supplier factories in global supply chains are complex. The complexity arises from the interaction between heterogeneous actors (companies, auditing firms, suppliers) following a multiplicity of practices, combined with the effect of local institutional conditions and industry and workplace context. Along with the general lack of transparency in private regulation, this combination of causal factors leads to uncertainty with respect to cause–effect relationships. The central assumption of the private regulation model is that if standards are set by codes of conduct (whether based on international conventions or local laws), and if supplier factories comply with the codes, sweatshop conditions will be avoided and improvements will be made in the lives of workers in global supply chains. But this assumption may not be warranted; buyers and brands may not have the power to force suppliers to compel compliance. And within the businesses of most global buyers and retailers, sourcing may not be sufficiently well integrated with compliance, so the incentive effects of rewarding good factories that are making improvements in compliance are not realized in practice — even though such incentives are the very basis for the model of private regulation of first-tier supplier factories.

Practice Multiplicity in the Implementation of Private Regulation Programs

2021 ◽  
pp. 48-64
Author(s):  
Sarosh Kuruvilla
Keyword(s):  
Empirical Investigation ◽  
Codes Of Conduct ◽  
Labor Standards ◽  
Positive Outcomes ◽  
Private Regulation ◽  
Fundamental Cause ◽  
Diverse Individual ◽  
Multi Stakeholder

This chapter discusses practice multiplicity in the implementation of private regulation programs. As private regulation unfolded through the 1990s and early 2000s, the number of codes of conduct also proliferated — and there are now likely numerous different codes across different companies, each with some degree of variation. While codes relating to labor standards were initially quite diverse, individual company codes have gradually coalesced into multi stakeholder institution (MSI) codes or industrywide codes. Nevertheless, wide variations remain. All this variation is a problem: it “complicates the work that industry players have to do to implement policies” and “contributes to a sense of confusion among an external audience of consumers, governments, and activists groups.” This confusion and debate is the result of practice multiplicity and is a fundamental cause of the decoupling between private regulation policies and positive outcomes for workers. For a more detailed view of practice multiplicity in action, the chapter turns to an empirical investigation regarding multiplicity in the implementation of private regulation approaches by different companies sourcing from the same supplier.

Has Private Regulation Improved Labor Practices in Global Supply Chains?

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.

Freedom of Association and Collective Bargaining in Global Supply Chains

2021 ◽  
pp. 148-180
Author(s):  
Matt Fischer-Daly ◽  
Christopher Raymond
Keyword(s):  
Collective Bargaining ◽  
Supply Chains ◽  
Forced Labor ◽  
Labor Rights ◽  
Global Supply Chains ◽  
Decent Work ◽  
Freedom Of Association ◽  
Private Regulation ◽  
Global Citizens ◽  
Multi Stakeholder

This chapter addresses freedom of association (FOA) and collective bargaining (CB) in global supply chains. FOA and CB rights are internationally recognized as core and fundamental human rights of global citizens. Thus, in 1998 when the International Labour Organization recast its objectives to promote “decent work,” FOA and CB were among the “core labor rights,” along with the freedom from child and forced labor and freedom from discrimination. The chapter uses diverse datasets from brands, auditing firms, multi stakeholder institutions (MSIs), and Better Work to assess FOA and CB in the global apparel industry and substantiate the arguments. The breadth of the data permits systematic and comprehensive analysis of the incidence and nature of FOA violations and the influence of FOA and CB on overall labor standards in the industry. FOA and CB show great promise for improving compliance with codes of conduct overall — the expressed goal of private regulation — but FOA and CB are the least supported rights in current private regulation efforts. In other words, most companies with private regulation programs are eschewing the very rights that could potentially improve the functioning of their private regulation programs.

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

ILR Review ◽  
2020 ◽  
Vol 73 (4) ◽  
pp. 841-872 ◽  
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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