The Corporate Social Responsibility Farce

"In this industry, the only reason to change is because someone has got a great cattle prod that keeps jabbing you in the rear end," said Bud Konheim, a garment executive in 1997.

Corporations in the garment industry with image problems spent nearly $14 million every working hour last year to change your mind about them. Some of the money, for example, is spent like the "hush money" which Nike gave to Jesse Jackson when he came back from Indonesia in 1996 talking "boycott." People in the industry acknowledge, when they're honest, that the default position of low-skilled manufacturing is exploitation and vicious cost-cutting.

Similarly, Francis Fukuyama describes the natural reaction of workers to Taylorist (low-skill assembly) production arrangements: "trade unions respond with demands that employers specify their duties...since (employers) could not be trusted to look out for the welfare of workers."

Searching through the vast output of "corporate social responsibility" initiatives, proposals and commentary, two things jump out: denigration of the idea of "union as solution" and a quite-small collection of promising ideas. Foremost among the latter is the suggestion by City University of NY business professor, Prakash Sethi that multinationals and their contractors need to make "restitution for years and years of expropriation of wages of workers who are at the bottom of the food chain and are least able to defend themselves." This simple idea could usher in a paradigm-shifting chain reaction. The big buyers would be moved beyond accepting blame to accepting responsibility - including financial liability - and courageous workers who stood up to abusive bosses would (better late than never) win cash-in-hand payments for tens of thousands of those cheated workers. Most importantly, perhaps, would be the resultant pressure on recalcitrant "host" governments that failed to protect workers in the first place.

Another idea worthy of further exploration is the approach of the Worker Rights Consortium, the only monitoring operation of any size that has remained out of the grasp of corporate overseers. (Small local operations such as Central American human rights groups COVERCO and EMIH do admirable work, but the impact is limited) The WRC has propounded a plan that would steer university bookstore buyers in the direction of "better" garment shops (college-logo apparel is a $2.3 billion industry). Though students have won agreements at more than two dozen schools, it is difficult for the WRC to recommend even a small number of "better" suppliers - mostly due to the lack of real collective bargaining.

Unsurprisingly, a "slowly, slowly" attitude prevails at the Fair Labor Association, another monitoring organization with colleges and universities as dues-paying members but with major funding from big apparel brands. Choosing his words carefully, Auret van Heerden, president and CEO of the FLA denounced the WRC's idea: "If they do choose to form a trade union, that usually involves a long process of recruiting members and building an organization. The negotiation and signing of a collective agreement is also a process that cannot be reduced to a requirement." [The Designated Suppliers Program would be imposed upon suppliers] "...in an undemocratic way without a minimum of consultation."

The key problem, of course, is that developing world workers see almost no examples of unions actually delivering some benefits or higher wages. They are justly reticent in joining. Also part of the explanation is the frequent closure of factories where workers have forced the bosses to the bargaining table, such as this case from the Dominican Republic.

Virginia Tech business professor, Rich Wokutch, invited me to debate Nike officials on the subject several years ago - my only face-to-face engagement since starting the Nike anti-sweatshop campaign in 1991. Nike's Amanda Tucker berated me with "unions are no panacea". Really, I wondered, how would anyone from Nike know whether unions were even the least bit helpful for workers?

One grim graphic in The Hartford Courant tells it all: the Mexican workers making a $38 UConn sweatshirt shared a mere 18 cents - and the university earned almost $2.50. Could this have been any lower ten years earlier, when the "sweatshop" story broke? How, then, did the big brands vault into the upper echelons of "responsible" corporations? And how can we anti-sweat activists have so pathetically little to show for fifteen years of cross-border organizing?

Just listen to The New York Times biz-pundit, Joe Nocera (nominated for '07 Pulitzer Prize): "Nike, which had been the subject of fierce criticism in the 1990s over the labor practices in the factories it engaged to make its goods, decided it made sense to go the other way completely."

Nocera doesn't say what the footwear/apparel giant actually did to "go the other way completely." A complete reversal would have meant abandonment of the "contracting-out" model - where mostly-Asian contractors cut costs to the bone to win orders - in favor of a commitment to own factories, set wage rates (or, collectively bargain!), limiting (rather than forcing) overtime and to pay attention to the abuse of vulnerable Asian migrant-laborers.

Instead, we have this business-as-usual, hyper-"transparent" April 2005 Nike press release: "...four noncompliance issues were identified as ongoing challenges, both in Nike's contract factory base and across the footwear, apparel and equipment industries: hours of work, freedom of association, wages and harassment." Confession may be good for the soul but it does little to ameliorate abusive practices at the hands of suppliers that are merely "monitored."

Compliance is really big business now, but what an infernally vague and opaque system! Businesses bought time - about the first three years - concocting standards and oversight processes. For the last three years, armies of these companies' consultants have been plaintively arguing at meetings around the globe that there were too many standards and processes.

Some business observers see the "compliance" house of cards about to tumble. A leading journal for purchasing and supply-management professionals put it this way:

A recent report found ethical buying codes have done little to improve factory conditions overseas. For a decade now, companies have relied on these codes and on-site audits, safe in the belief they are doing the best they can to improve conditions for workers in their supply chains. But research published in October threatens to strip firms of this refuge, exposing the reality that more must be done if they are to make a genuine difference. (Supply Management, April, 2007)

Not to worry, according to the "corporate social responsibility" industry. It sees nothing but more-profitable times ahead. According to CSRwire, "Corporate social responsibility shifted from the periphery to the mainstream in 2005; in 2006, it dominated headlines and catapulted into the heart of our collective consciousness."