When truth doesn't pay


After decade of activism, NGOs wonder what big-label confessions are worth

By Adria Vasil

Ten years after Nike and Gap first opened their factory doors to inspectors, after ten thousand corporate codes of conduct and armies of corporate responsibility specialists, are the workers of the world any better off?

It's a powerful opening question, one that Neil Kearney, general secretary of the International Textile, Garment and Leather Workers, poses to an auditorium of anti-sweatshop activists and a sprinkling of corporate reps May 18.

Wages are in some cases lower than they were 10 years ago. Workers are still being fired for trying to improve conditions. The only real improvements, he tells the Hart House gathering, have been in child and forced labour but even child labour, he says, is backsliding.

"Have all our efforts of the last 10 years been a waste of time and energy?"

Not everyone in the movement or the room can agree on an answer. Some argue that targeted corporations have indeed made significant changes thanks to the push for transparency. Others insist that anti-sweatshop orgs have spent too much time legitimizing what amounts to little more than corporate PR exercises.

Who's right?

Does forcing companies to come clean about their practices lead to better labour records? ***

It's always interesting when a corporation changes tactics mid-game. Like when major apparel and sportswear giants went from "We never hit those workers" to "Okay, so we've been a little abusive. Now what?" Most recently, Nike and Levi's switched gears again, finally revealing the locations of their factories last spring. "Our head of sourcing said transparency is no longer a competitive issue for us," states Caitlin Morris, Nike's director of compliance integration and collaboration, sitting on a corporate panel at the forum. Levi Strauss rep Anna Walker notes that its suppliers found that having their name on the jeans-maker's publicly available factory list was actually great advertising for them.

Putting out the list was also great publicity for the companies themselves. Mainstream media jumped on the story, churning out the kind of sunny press that sports shoe giants and apparel makers hadn't received in a decade. But divulging the details of what happens inside those factories is another matter.

That, it seems, isn't going to happen any time soon. Why the resistance? Beyond questionable corporate empathy for a factory's sullied reputation (getting a bad score sends out "stay away" signals, says one rep), Nike and friends give the same vague explanation they've given in the past:

"It's a competitive issue."

Hardly forthcoming .

Nonetheless, the level of honesty in the room over general ongoing labour rights problems is what sticks. Morris admits that, yes, after 10 years of monitoring, conditions in Nike supply factories still aren't too good. Gap's director of global partnerships, Lakshmi Bhatia, confesses that Gap's roughly 3,500 factories get a lot of Ds on company-financed auditor scorecards.

But by now the companies are well aware that truthfulness pays. Indeed, coming clean can even get you a higher grade. Levi's, Nike and Gap were clearly at the head of the class on Maquila Solidarity Network's (MSN) transparency report card last November.

No one got As or even Bs, but the three were leaps and bounds ahead of companies like Roots (which scored 24 out of 100), La Senza (which got a 22) and a slew of others that received flat-out zeros for keeping their lips sealed about their practices.

However, that simple report card revealed some divisions within the movement itself. While corporations felt the report was too harsh, some sweatshop activists complained that it was skewed to the companies' advantage.

They said it gave clothing makers points for, say, providing details about the monitoring of their supply chain, even if that supply chain is a tangle of sweatshops. Indeed, some argue that companies like Nike shouldn't be giv-en any credit at all, and they take exception to references to

Nike as a "former" foe.

To activist Jeff Ballinger, one of the first to shed light on the company's flagrant labour abuses in the early 90s and now the director of Press for Change, Nike is still the enemy. And he can be heard muttering as much in the audience. Ballinger, dressed in a cream-coloured suit, even leaps from his seat to interrupt Kearney's presentation and exclaim that Nike has had 18 years to fix the problem of forced overtime and has yet to do so. Admitting to it hasn't changed a thing.

In a phone conversion a few days later, Ballinger offers his thoughts on the efficacy of the disclosure approach. "It's as if George W. Bush were to say tomorrow, "I'm going to tell you where all the detention facilities are, but we're not going to stop it.' That's what the industry is saying: we're going to tell you little by little and tell you as little as we can."

Perhaps the most unwelcome of Ballinger's opinions is that the movement dropped the ball years ago. "We had such momentum, such a case was made against these companies. We had them in a corner and they got loose. Now they're all on the top tier in the CSR [corporate social responsibility] world even though they haven't changed their practices.

"Nike goes to every triple bottom line [profit, environment, society] conference, every sustainable development meeting with two or three people anywhere in the world, so of course they're looked at as the leaders."

If you want to take the transparency route, adds Ballinger, "I think there's a way to do it, but it's certainly not [by disclosing] how many factories you have and down what dirt road in Dacca the factory is."

MSN policy analyst Kevin Thomas disagrees. "[The disclosure of factory locations] gives us a way of actually linking with workers in countries where they're trying to improve conditions. Where companies have disclosed factories, it's been possible to make those links and make some improvements."

Transparency, he adds, might not be the answer, but it is an important tool. "It's an opening point, but it's only useful if people are prepared to use it, and that means not just the companies but social movements that want to pressure companies."

Of course, how you take on those companies is another matter. "The question is what's the most effective way to get those changes. It could be street protests and actions like that, but if there's another way to deal with it, we should be open to it."

Thomas notes that activists can acknowledge baby steps without saying that a company has learned to walk.

Despite their differences, Thomas and Ballinger agree they need government backup. That prospect sends an audible chill down corporate spines in the room.

None of them warm to the idea of regulatory action originating in the West, but all the reps seem to agree that foreign governments are failing to enforce whatever rules they do have on the books, but should be.

Yet as China country moves to draft a monumental new national labour law, corporations aren't exactly applauding. Rather, they're pressuring China to ditch regulatory laws in favour of voluntary guidelines for corporate social responsibility. \

According to Shanghai labour law professor Liu Cheng, last month the American Chamber of Commerce led over 20 human resource managers representing U.S. interests to crash a conference in China on the topic and threatened to withdraw capital if the draft law isn't revised.

The companies at last month's anti-sweatshop forum suggest that their tactics are now just the opposite: despite problems that might arise at the factory level, they actively foster labour law improvements in places like Bangladesh and Lesotho.

It's a welcome step, but it won't necessarily solve root problems stemming from corporate buying patterns and market pressures.

Says Harvey Chan, Mountain Equipment Co-op's manager of social compliance, in the afternoon panel on collaboration, "For the longest time we thought if a factory had the will it would solve [workplace abuses]. But there are macro externalities that are driving companies to be non-compliant."

Like sped-up fashion cycles cranking out 8 to 12 seasons of clothing, fining factories for delays and demanding ever lower prices for goods.

Morris says Nike is now trying to integrate the two halves of its schizophrenic structure: its ethical code and its sourcing team. "We're at phase one of getting sourcing to consider ethics." You'd assume someone would have thought of this long ago.

They're also in the midst of training auditors to be consultants rather than combative inspectors. And Gap, it seems, is doing the reverse. Its auditors are being taught to switch from good cop to bad cop. "We realized compliance auditors were being rewarded for having the best factories."

The result? Factories came up smelling like roses, masking hidden abuses. Now Gap rewards auditors who find the most problems.

But complications persist.

"Who audits the auditors? How do you get a perfect system?" And would a perfect system reap any fiscal rewards?

When Gap's labour record was at its worst, notes Bhatia, the chain's sales were at their peak.

Where, then, she asks, is the incentive for brands trying to improve themselves?

Perhaps, of course, people are just tired of khakis. Or maybe though less likely they're waiting for more proof that corporate honesty will set workers free.