Codes of Conduct: Challenges and Opportunities for Workers' Rights

THE GLOBAL ECONOMY HAS BROUGHT NEW CHALLENGES AND OPPORTUNITIES TO THE struggle of workers; the movement toward company codes of conduct and workplace monitoring present both. (1) Although it is a new phenomenon for private enterprises to investigate labor conditions, U.S. companies have long adopted codes of conduct that regulate the operations of their production facilities abroad. Concern over the behavior of multinational corporations in developing countries, where such corporations sometimes influence national politics, destroy the environment, and perpetuate labor violations, is longstanding. In many areas, efforts have been made to rein in abuses through the use of voluntary standards. These agreements have not always had significant effects, but there are recent signs of hope in the apparel industry that such pledges can be leveraged to improve working conditions and workers' right to unionize. Codes and monitoring, originally used by apparel companies to protect their reputations, have become tools of labor union campaigns that involve worker and consumer organizing. Codes governing transnational companies' activities in foreign countries were first introduced 30 years ago, as global production began to expand. The mid-1970s saw the promulgation of multilateral codes through the United Nations Commission on Transnational Corporations, the Organization for Economic Cooperation and Development (OECD), and the International Labor Organization (ILO). These bodies developed broad codes that dealt with limiting corporations' involvement in local politics, labor conditions, and environmental and safety issues (Cavanagh, 1997; Compa, 1995). However, President Reagan blocked negotiations on the U.N. code; the other two, although adopted, did not involve enforcement mechanisms and failed to have much impact. Moreover, pushed by International Monetary Fund (IMF) and World Bank policies, developing countries that had been instrumental in promoting such codes began to view multinational corporations less as unwanted intruders and more as coveted investors. The establishment of private codes that focused on specific countries or industries marked subsequent years. In the late 1970s and the 1980s, there was a proliferation of codes promoted by individual governments, civil rights activists, environmental groups, and other nongovernmental organizations, rather than intergovernmental institutions. The most well-known codes, and for some observers the most successful, were those targeting transnational companies' participation in and support of the apartheid system in South Africa, such as the Sullivan Principles (Varley, 1998). Other codes focused on religious minorities in Northern Ireland, environmental safety, and forced labor in specific countries. With few exceptions, these accords did not attract many signatories (Compa, 1995; Cavanaugh, 1997; Varley, 1998). In the 1990s, apparel manufacturers began to adopt individual company codes to protect themselves from growing criticism about the labor conditions in their contracting factories abroad. The apparel industry has historically relied on a contracting system that has allowed brand-name companies to eschew legal liability for the working conditions of those who actually sew their garments. With the globalization of production, this disjuncture between profit-makers and workers was widened by distance, anonymity, and increasing layers of middlemen. Moreover, workers were now not only divided by workplace, but also by borders, language, and history. A race to the bottom ensued with brand-name companies using these divisions and their own unrestricted mobility to play workers (and countries) against each other. These factors, along with a more generalized attack on workers' rights, has made unionization in the garment industry nearly impossible. Yet in the last few years, we have seen some impressive victories in export-processing zones in Mexico, the Dominican Republic, and Indonesia. …