Fair Labor Association Research Articles

The value of complaints mechanisms in the private labour regulation of GVCs: A case study of the Fair Labor Association

Can complaints mechanisms strengthen the private labour regulation of global value chains (GVCs)? This article empirically investigates the results produced by the Fair Labor Association's (FLA) complaints mechanism, which alone allows outcomes to be verified from the complainant's perspective. Although the vast majority of complainants find this mechanism to be valuable, it also has a number of limitations that seriously affect outcomes for workers. The authors utilize the concept of “grounding” to explore how national, social and corporate dimensions affect the performance of the FLA complaints mechanism for workers. The implications of these findings are then considered for complaints mechanisms in other GVCs.

Implementing Ethical ‘Code of Work Ethics’: A Case Study of Apple and Foxconn Supply Chain

This study aims to find out Foxconn supply companies in increasing Apple production through forced labor carried out by workers who work at Foxconn without any guarantee of welfare and health and safety empowerment for their workers as well as guarantees of survival and a decent basic salary. This case study is strengthened by using the Global Production Network (GPN) theory, which relates to production networks across economic boundaries to the actors involved. Meanwhile, the role of the workforce is also involved in the GPN because as a supplier of labor it is not only involved in the interests of the company, but is also involved in the state structure and global capital structure. There is also an approach used by researchers using a qualitative research approach. The data used by the researcher is secondary data obtained from journals, official websites, report data, and several articles that have been validated. The implication of this research is to improve workers’ rights in a company under the protection of the Fair Labor Association. Companies are required to apply a Code of Work Ethics to their workers to improve the welfare of workers and build a better corporate image.

Jurisgenerative role of auditors in transnational labor governance

AbstractThis article builds on the model of regulatory intermediaries by incorporating insights from the field of legal hermeneutics about the process through which the meaning of a legal rule emerges. It describes how intermediaries can take on a jurisgenerative role in the development of legal rules through their interpretation of legal rules. This role is demonstrated through an analysis of social audits from Chinese and Vietnamese factories involved in the Fair Labor Association (FLA). The analysis illustrates how the integration of fundamental labor rights into the FLA's private Code of Conduct requires auditors to develop new interpretations of the Freedom of Association as a result of uncertainties and contradictions between legal requirements at various levels, as well as with the FLA's own rules. Through this empirical analysis, the article contributes to the literature by identifying regulatory intermediaries’ jurisgenerative capacities when they monitor fundamental labor rights referenced by private governance instruments. It further highlights why legal and regulatory governance scholars need to consider the transformative effects that transnational private labor governance may have on international labor law.

The enforcement of diverse labour standards through private governance

The effectiveness of private governance on global labour standards remains extremely difficult to assess, let alone measure. Debates surrounding relevant factors focus on two areas: contextual variables regarding social and economic upgrading, and firm-specific characteristics. This article contributes to both debates, looking at characteristics of buyer companies, while also taking institutional variables into account. It examines structural and environmental features of cases encoded in a data set derived from over 1000 audit reports compiled by the Fair Labor Association. Focusing on the apparel, sports- and footwear industry, the article highlights the importance of regulatory quality, economic performance and social freedom in sourcing countries for the success of private governance. The analysis statistically underlines the importance of public governance specifically for process rights, such as anti-discrimination and freedom of association. Complementarity between private and public governance programmes may therefore be particularly important for these standards.

Channels for Workers' Voice in the Transnational Governance of Labour Rights?

AbstractThis article examines the neglected question of workers’ voice in the transnational governance of labour rights. While governance studies often neglect worker's agency and labour studies focus on strikes or collective bargaining, this article takes the theoretical lenses of recursivity to explore and compare new channels for worker participation that developed in the context of transnational governance schemes. Taking the example of the Fair Labor Association, a prominent multistakeholder initiative in the garment industry, the article distinguishes between three channels: workers’ surveys during audits, complaint procedures, and local grievance mediation. Despite the fact that such opportunities count as key innovations for the participation of labour in transnational governance, statistical and qualitative data from FLA's factory audits and self‐conducted interviews show that locally situated actors, especially workers, are only occasionally able to make their voice heard in formally open channels. The article identifies two main sources of constraints: the first is workers’ lack of knowledge of these channels and distrust towards these procedures. This is tied, secondly, to the more fundamental problem that business continues to have interpretative power over the nature of the problems and solutions in transnational labour governance.

The Role of Beneficiaries in Transnational Regulatory Processes

The editors of this volume highlight the role of intermediaries, alongside regulators and targets, as a way to better understand the outcomes of regulatory processes. Here, we explore the benefits of distinguishing a fourth category of actors: the groups whose interests the rules are meant to protect, the (intended) beneficiaries. We apply that framework to nonstate regulation of labor conditions, where the primary intended beneficiaries are workers and their families, especially in poorer countries. We first outline the different ways in which beneficiaries can relate to regulators, intermediaries, and targets; we then develop conjectures about the effect of different relationships on regulatory impacts and democratic legitimacy in relation to corporate power structures, specifically those embedded in the governance of global supply chains. We illustrate these conjectures primarily with examples from three initiatives—Rugmark, the Fair Labor Association, and the Fairtrade system. We conclude that it matters whether and how beneficiaries are included in the regulatory process.

Theorization as institutional work: The dynamics of roles and practices

This study unpacks the construct of theorization – the process by which organizational ideas become delocalized and abstracted into theoretical models to support their diffusion across time and space. We adopt an institutional work lens to analyse the key components of theorization in contexts where institutional work is in transition from changing institutions to maintaining them. We build on a longitudinal inductive study of theorization by the Fair Labor Association – a private regulatory initiative that created and then enforced a code of conduct for working conditions in apparel factories. Our study reveals that when institutional work shifts from changing to maintaining an institutional arrangement of corporate social responsibility, there is a key change in how the Fair Labor Association theorizes roles and practices related to this arrangement. We observe that theorization on key practices largely remains intact, whereas the roles of different actors are theorized in a dramatically different manner. Our findings contribute to a better understanding of the work involved in the aftermath of radical change by demonstrating the relative plasticity of roles over the rigidity of practices.

Industry-Specific Multi-Stakeholder Initiatives that Govern Corporate Human Rights Standards Legitimacy Assessments of the Fair Labor Association and the Global Network Initiative

Multi-stakeholder initiatives (MSIs) are increasingly used as a default mechanism to address human rights challenges in a variety of industries. MSI is a designation that covers a broad range of initiatives from the very general (for example, the UN Global Compact) to those targeted at a single issue (such as child labor). Critics contest the legitimacy of the private governance model offered by MSIs. The objective of this paper is to assess the dominant approaches to business and human rights challenges and discuss their legitimacy generally and with respect to accountability and effectiveness specifically. We argue that one type of MSI, namely industry-specific MSIs have the potential to serve as a model for a democratically legitimate form of private governance. We analyze two industry-specific MSIs - the Fair Labor Association and the Global Network Initiative - to get a better understanding of how these MSIs formed, how they define and enforce standards, and how they seek to ensure accountability. Based on these empirical illustrations, we discuss the value of this specific MSI model and draw implications for the democratic legitimacy of private governance mechanisms.

Industry-Specific Multi-Stakeholder Initiatives That Govern Corporate Human Rights Standards: Legitimacy assessments of the Fair Labor Association and the Global Network Initiative

Industry-Specific Multi-Stakeholder Initiatives That Govern Corporate Human Rights Standards: Legitimacy assessments of the Fair Labor Association and the Global Network Initiative

The Role of NGOs in Ameliorating Sweatshop‐like Conditions in the Global Supply Chain: The Case of Fair Labor Association (FLA), and Social Accountability International (SAI)

AbstractOver the last 20+ years, globalization has made international trade and investment more efficient and productive. In the absence of coordinated global regulatory regimes, it has also made multinational corporations (MNCs) impervious to social concerns in the countries where they operate. There is considerable debate in the academic, political, and business arena as to the causes of the apparently inequitable distribution of benefits between labor and capital. Notwithstanding, the relative merits of this debate, and facing tremendous societal pressure, companies have adopted voluntary codes of conduct to ensure that workers making products for them in poor and developing countries are protected from hazardous working conditions and receive wages that meet local laws and market conditions. These codes, however, suffer from a lack of credibility and proof of substantive compliance. A new type of nongovernmental organization (NGO) has emerged that monitors a company's compliance with prespecified standards and provides assurance to the external stakeholders that the company has fulfilled its voluntary obligations. From an historical perspective, this has been an innovative phenomenon where the monitoring organization purports to act as an honest broker to ensure all concerned that the company/industry has fulfilled its obligations. In this article, we undertake a thorough examination of two such organizations, that is, Fair Labor Association, and Social Accountability International, that have played a pioneering role in bridging the gap between societal expectations and corporate performance. We examine their governance structures, operating procedures, monitoring standards, and public disclosure of findings, and above all, their success in improving the level of corporate compliance with their self‐created codes or standards. Unfortunately, our findings and conclusions are disappointing. In our view, the two groups have mostly failed to meet their avowed goals. Rather than using their NGO status to help companies improve their code compliance, they have suffered from managerial capture and have been reduced to corporate apologists.

Governance and Public Policy: The Fair Labor Association (FLA) vs Nike Inc.

The presence of noncompliance of globally set standards in a supplier factory of Nike in India was identified by the Fair Labor Association. Nike, being a part of the association took drastic steps to develop and implement a policy framework in accordance to its own Code of Conduct. These initiatives led to an almost two years of monitoring and follow-up to register sufficient change in the labor practices of the factory. However, there are still some aspects that remained unaddressed by that time. The following sections provide a background into the issue with brief introductions of the organizations and the issues. The work done is described and analyzed. Insights are provided to conclude the case scenario.

Book Reviews

Roger R. Betancourt of University of Maryland reviews, “Cuban Economists on the Cuban Economy” by Al Campbell. The Econlit abstract of this book begins: “Twelve papers explore the perspectives of Cuban researchers on the Cuban economy. Papers discuss fifty years of revolution in the Cuban economy—a brief overview (José Luis Rodríguez); the evolution of Cuba's macroeconomy—from the triumph of the revolution through the Special Period (Oscar U-Echevarría Vallejo); Cuba's insertion in the international economy since 1990 (Nancy A. Quiñones Chang); medium- and long-range planning in Cuba—historical evolution and future prospects (Elena Álvarez González); creating a better life—the human dimension of the Cuban economy (Rita Castiñeiras García); fighting poverty—Cuba's experience (Ángela Ferriol); the Cuban population—major characteristics with a special focus on the aging population (Juan Carlos Alfonso Fraga); labor relations, labor rights, and trade unions—their history in Cuba (Alfredo Morales Cartaya); the evolution of international tourism in Cuba (Miguel Alejandro Figueras); tourism—natural product, source of exchange with the outside world, and ideological challenge (Alfredo García Jiménez); agriculture—historical transformations and future directions (Ángel Bu Wong and Pablo Fernández Domínguez); and expansion of knowledge-based economic sectors—the advantages socialism offers for Cuba (Vito N. Quevedo Rodríguez). Campbell is Professor Emeritus of Economics at the University of Utah.” Roger R. Betancourt of University of Maryland reviews, “Cuba under Raul Castro: Assessing the Reforms” by Carmelo Mesa-Lago and Jorge Perez-Lopez. The Econlit abstract of this book begins: “Assesses Cuba's reforms under Raúl Castro. Discusses Cuba's economic and social development, 1959–2012; the domestic economy, 2006–12; international economic relations, 2006–12; social welfare, 2006–12; the reforms, the national debate, and the Party Congress; and assessing the reforms—impact and challenges. Mesa-Lago is Distinguished Service Professor Emeritus of Economics and Latin American Studies at the University of Pittsburgh. Pérez-López is Executive Director of the Fair Labor Association in Washington, D.C.”

Socially Sustainable Supply Chain Management Practices in the Indian Seed Sector: A Case Study

Reputational risks because of child labor allegations drove Syngenta to forge for-profit and not-for-profit sector alliances with the Fair Labor Association, which was directed toward raising social standards in its Indian hybrid vegetable seed supply chain. This case study, informed by expert interviews and complementary document analysis, gives an account of various sustainable supply chain management (SCM) practices implemented by Syngenta and its partners in this pilot project. By being located in one specific industry and world region, this study contributes a piece of evidence to the neglected issue of how to include the social dimension of sustainability into SCM.

Small Business Implementation of CSR for Fair Labor Association Accreditation: The Case of Zephyr Graf-X

Small Business Implementation of CSR for Fair Labor Association Accreditation: The Case of Zephyr Graf-X

Corporate Social Responsibility and Freedom of Association Rights

Corporations have increasingly turned to voluntary, multi-stakeholder governance programs to monitor workers’ rights and standards in global supply chains. This article argues that the emphasis of these programs varies significantly depending on stakeholder involvement and issue areas under examination. Corporate-influenced programs are more likely to emphasize detection of violations of minimal standards in the areas of wages, hours, and occupational safety and health because focusing on these issues provides corporations with legitimacy and reduces the risks of uncertainty created by activist campaigns. In contrast, these programs are less likely to emphasize workers’ rights to form democratic and independent unions, bargain, and strike because these rights are perceived as lessening managerial control without providing firms with significant reputational value. This argument is explored by coding 805 factory audits of the Fair Labor Association between 2002 and 2010, followed by case studies of Russell Athletic in Honduras, Apple in China, and worker rights monitoring in Vietnam.

Book Review Symposium

Book Review Symposium

Working Hours in Supply Chain Chinese and Thai Factories: Evidence from the Fair Labor Association's ‘Soccer Project’

AbstractThis article examines the determinants of working excessive hours, defined as working in excess of 60 hours per week or for more than six consecutive days, in Chinese and Thai supply chain factories. We use a matched employer–employee dataset collected from 15 Chinese and Thai footwear and sporting apparel supply chain factories, which supply international brands. Matched employer–employee data allow us to examine the effect of worker and firm characteristics on hours worked. We find that in addition to the demographic and human capital characteristics of workers, firm‐level characteristics and worker awareness of how to refuse overtime are important in explaining variation in hours worked.

Ethical fashion project: partnering with industry

This article shares a platform of apparel design that considers ethical implications within the product development process, which were incorporated into a senior level apparel design course during Spring 2009 and expanded upon inSpring 2010. In a problem-based learning format, students were challenged to develop ethical fashions from design development through final fashion garment in collaboration with the Fair Labor Association (FLA), Gildan Activewear and El Instituto Politecnico Centroamericano (IPC) in Honduras. The project demonstrates a broad range of considerations that should go into designing and producing a garment that is defined as ‘ethical’, including choice of materials that benefit the environment, choice of suppliers with verifiable fair labour practices, and responsible interactions and exchanges between the buyers/designers and suppliers. Use of communication and apparel industry-specific technology was essential in this project with international partners.

Four Key Trade Union Movements in Puebla, Mexico 2001-2008: A Comparative Analysis of the Efficacy of Non-Governmental and Inter-Governmental Complaint Mechanisms in Addressing Worker Rights Issues in Mexico’s Garment Manufacturing Industry

Workers in Mexico increasingly turn to international mechanisms for redress of worker rights violations and support for organization of free trade unions. Between 2001 and 2008, indigenous and women workers in the garment manufacturing industry in the state of Puebla, Mexico utilized several non-governmental mechanisms such as corporate codes of conduct, the Ethical Trading Initiative (ETI), the Worker Rights Consortium (WRC), the Fair Labor Association (FLA) and Verite as well as inter-governmental mechanisms such as the North American Agreement on Labor Cooperation (NAALC or NAFTA labor side agreement) and the International Labor Organization Committee on Freedom of Association to improve working and living conditions and establish independent trade unions. This paper conducts a comparative analysis of the efficacy of these mechanisms under a single analytical framework, and contextualizes these modern movements in the history of the garment industry and development of labor law and culture in Mexico. While none of the mechanisms were utilized fully or achieved ideal outcomes, non-governmental mechanisms were more responsive to and effective in addressing workers’ complaints than inter-governmental mechanisms. Entrenched wealthy elites, charro (“ghost”) unions and protection contracts are obstacles to achieving workers’ rights and freedom of association in Puebla and to the sustainability of Puebla’s garment industry. While the ILO was more effective than the NAALC institutions, lack of genuine representativity in Mexico’s corporatist labor culture hinders implementation of the ILO’s Decent Work Agenda in Mexico. Business relationships in Puebla’s garment manufacturing industry may implicate corporate governance norms and the Foreign Corrupt Practices Act (FCPA), but application of the FCPA will not solve all the problems raised in workers’ complaints. The paper concludes that an Ombudsman or Special Rapporteur mechanism housed in the Inter-American Commission for Human Rights (IACmHR) may be the most effective tool to address the complex business, corporate governance, economic, social, racial and human rights problems raised in Puebla’s garment manufacturing industry. The IACHR was partially effective in protecting labor rights activists in Puebla from violence, but more robust utilization of the IACHR would better improve working conditions and the overall sustainability of Puebla’s garment industry.

The limits of corporate responsibility standards

I explore the limits of corporate responsibility standards – for example Social Accountability 8000 (SA 8000), the Global Reporting Initiative, the Fair Labor Association workplace code – by looking at these initiatives through Derrida's aporias of justice as set out in ‘Force of Law: The “Mystical Foundation of Authority”’. Based on a discussion of SA 8000, I uncover the unavoidable aporias that are associated with the use of this standard. I contribute to the literature on corporate responsibility standards in general and SA 8000 in particular by showing (a) that attempts to standardise corporate responsibility can only be successful insofar as we recognise that compliance with SA 8000's rules requires a ‘fresh judgement’ every time they are applied, (b) that SA 8000 should not be pushed down the supply chain as such coercion does not require a truly responsible decision by suppliers and eventually leads to moral mediocrity and (c) that the necessarily time‐consuming reflections about the singular contexts within which SA 8000 is applied challenge the urgent need for implementing this standard. I discuss the implications of my analysis of SA 8000 for corporate responsibility standards in general.