forced labour, the code (which I'll refer to as. 'SOCOG's code') ..... t.html, Hong Kong, accessed 25 July 1999. ... Workers Organising Newsletter, vol. 15, no. 5, p.
Where’s the Umpire? The Code of Labour Practice for Goods Licensed to Carry the Logos of the Sydney Olympics and Paralympics Tim Connor, University of Newcastle There is a popular view that globalisation has lead to a 'race for the bottom' in terms of working conditions - with countries forced to compete on the basis of how brutally they repress workers’ rights. This is not true in all industries - in many, labour costs are a fraction of overall costs and are not the main factor driving investment decisions (Schoenberger, 1997:75). There are nonetheless some industries for which the popular view is not too far from the mark. Production which is labour intensive and which requires relatively low-skilled workers77 is increasingly being carried out in the 'Free Trade Zones'78 of Asia, Latin America and Eastern Europe,79 where it is the norm for workers to be forced to work long hours, to be paid barely enough to meet their needs and to be dismissed and either blacklisted or imprisoned if they try to form unions (AMRC, 1998). Industries where this type of production is common include toys, sport shoes and apparel. Many producers in these industries are seeking licenses to use the logo of the 2000 Sydney Olympic Games.
agreement had been reached with the Olympic and Paralympic organising committees (SOCOG and SPOC) on a code of practice covering the production of goods carrying that logo. As well as banning child labour and forced labour, the code (which I’ll refer to as 'SOCOG’s code') requires licensees to 'endeavour to provide workers with regular and secure employment,' ensure that working hours are not excessive, respect workers right to form unions and pay them enough 'to meet (their) basic needs and provide some discretionary income.'80 This paper will draw on research into the labour practice code of the US sportswear giant, Nike Inc., to demonstrate that unless there is rigorous monitoring, consumers can have no confidence in codes at all. It will then consider the systems in place for monitoring SOCOG’s code (such as they are) and suggest how they might be improved. Early in 1996 on a weeknight in the rainy season, a highland village near Banjaran in West Java, Indonesia received an unexpected visitor. Peter Hancock, a young Australian academic researching factory conditions, completed a fairly arduous walk from the nearest road, approached an older man in the village and asked where he might be able to find women who worked at Feng Tay,81 a nearby Taiwanese-owned factory which employed 7,000 people in the production of sport shoes for Nike Inc. The old man told him he had very little chance of seeing those women, as their families rarely saw them. They had left to go to the factory at 5am that
In February 1998 the Australian Council of Trade Unions (ACTU) announced that 77
Another important factor is the predictability of demand for a product. Products for which demand is highly unpredictable tend to be sourced close to markets so that orders can be quickly filled and transported to retail outlets. 78 These zones are also sometimes called 'Special Economic Zones' (SEZs) or 'Export Development Zones' (EDZs). 79 The rapid growth in imports from China is illustrative. Between 1996 and 1998 annual US imports from China rose from $US51 billion to $US71 billion, a 39% increase. The US imports five times as much by value as it exports to China and in 1998 the US trade deficit with China was $US57 billion and growing (US Census Bureau 1999). Most of this production occurs in the Special Economic Zones (SEZs) of China’s coastal regions, where workers’ rights are notoriously repressed (Chan 1996; AMRC & HKCIC 1997; Chan & Senser 1997a).
80
The standards required in SOCOG’s code compare favourably with the more rigorous international codes which companies have been willing to participate in – including the White House Apparel Industry Partnership Code of Conduct in the US (AIP 1997) and the Ethical Trading Initiative Base Code in the UK (ETI ). 81 Feng Tay owns a number of other large factories producing for Nike in Asia and South America and is one of Nike’s largest suppliers.
176
subsistence levels,83 unconscionably long working hours84 and dangerous and sometimes abusive working conditions85 (Connor & Atkinson, 1996; AMRC & HKCIC, 1997; Chan, 1997; Nguyen, 1997; O'Rourke, 1997b; Hancock, 1998; Kernaghan, 1998). In December 1998 in Indonesia I met with workers from four different Nike suppliers (two garment factories and two shoe factories). The workers in the garment factories knew nothing about a code of conduct or any system for monitoring it. In the shoe factories workers told me that 'people from Nike in America' come to check on working conditions every four to six months but before they arrive factory managers hand out a list of questions which the auditors will ask and appoint selected workers to learn the answers the managers want them to give. No other workers are allowed to speak in the meetings - if they spoke freely they would be dismissed.
morning, and although it was now 8pm they were yet to return. He said the women were known in the village as 'Mereka pergi dan pulang seperti hantu dari pabrik Setan' (Walking ghosts who work in Satan’s factory) and if he wanted to speak to them he would have to become a ghost himself (Hancock, 1998:302). When he did manage to interview workers from the factory he discovered that Feng Tay ranked worst of all factories in the region in terms of pay, working conditions and staff turnover. Eighty per cent of the women interviewed were working in excess of 70 hours per week and many were being paid significantly less than the local minimum wage of $A3.75 a day. He also interviewed a former Feng Tay supervisor, who had resigned because his conscience would not let him continue to work there. He had been trained in the systematic verbal abuse of women working in the factory - using the Indonesian equivalent of phrases such as 'fuck you' and 'move you stupid bitch' (Hancock, 1998:3016).
My purpose here is not to vilify Nike. I could equally have cited research into labour conditions in factories producing for many 83
TNCs often complain that quoting wage levels in the currencies of 'developed' countries is misleading, since exchange rates mean that workers in the 'developing' world are able to live on wages that seem ridiculously low to consumers in industrialised countries when converted to, for example, US dollars. To counter this criticism, Ruth Rosenbaum has developed the Purchasing Power Index, which calculates how long it takes a worker to earn enough to pay for standard food items. The index shows, for example, that workers earning the legal minimum wage for foreign invested factories producing for companies like Nike in Vietnam must work for ten hours to be able to afford to buy one kilogram of chicken (ICCR 1998). See also (O'Rourke 1998). 84 Several reports on factories producing for Nike have found evidence of workers working between 72 and 84 hours a week during peak periods (Connor & Atkinson, 1996; AMRC & HKCIC, 1997; Nguyen, 1997). 85 Researchers have found many examples of extreme conditions, including exposure to carcinogenic gases at more than twenty times the legal limit in Vietnam (Ernst &Young, 1997; O'Rourke, 1997b), disproportionate and often violent punishments for small misdemeanors (AMRC & HKCIC, 1997; Hancock, 1997; Nguyen, 1997; IRRC, 1998:59) and widespread sexual harassment (Connor & Atkinson, 1996; Nguyen, 1997).
Nike had introduced its labour practice code of conduct four years earlier, in 1992. Initially the main means of verification was that suppliers had to provide signed statements guaranteeing that particular labour standards were being respected (IRRC, 1998:254). From 1994 the accounting firm Ernst & Young was employed by Nike to audit whether the code was being implemented by Nikes’ Indonesian suppliers (IRRC, 1998:271).82 Despite this, Nike’s code seems to have had no impact at all on conditions in the factory in Banjaran. Hancock’s findings are far from unusual. A number of reports into conditions in factories producing for Nike in China, Vietnam, El Salvador, Thailand and Indonesia, have revealed a pattern of wages at or below
82
Nike is also involved in several other monitoring initiatives, including the Apparel Industry Partnership’s Fair Labour Association (AIP, 1998) and the 'Global Alliance for Workers and Communities ' (see www.theglobalalliance.org). At the time of writing these initiatives are yet to be implemented so it is not possible to comment on their effectiveness.
177
other companies which have labour practice codes, including Adidas, the Gap, Van Heusen, Disney, Mattel and Toys R Us .86 In each case research indicates that those codes have done almost nothing to protect the rights of workers. Without rigorous and transparent monitoring by organisations workers have a reason to trust, codes of conduct are largely meaningless.
code there is a requirement of written confirmation from licensees that they will uphold the code - an approach which has proved useless as a means of monitoring other codes. Suppliers are also required to disclose relevant information to SOCOG and to allow SOCOG staff access to factories to make inspections. In response to my enquiries, Jim Sloman (SOCOG’s Deputy Chief Executive) was only willing to say that SOCOG staff have inspected some factories (Sloman, J. 1999, pers. comm., 9 Aug.). Despite repeated faxes and phone calls requesting more information, he has refused to indicate how many inspections have been made or how many are planned. He will not say whether staff visiting the factories have any expertise in labour issues or whether factory managers are warned in advance that an inspection is coming. He will not even reveal whether SOCOG has a list of all the addresses of factories covered by the code and if there is such a list he is certainly not prepared to make it public.
Amongst the licensees for the Sydney Olympics there are companies like Reebok, McDonalds and Mattel who have been found in the past to be sourcing products from exploitative factories.87 In 1997, research by two Hong Kong human rights groups found one Reebok supplier in Dongguan in China paid wages 25 percent below the Chinese legal minimum and required workers to put in a standard 72 hour week (AMRC & HKCIC, 1997). In another of Reebok’s Chinese suppliers the factory’s regulations made it clear that any workers found to be involved in union organising would be dismissed and handed over to the police (Kernaghan, 1998:55). Also in 1997, in a factory producing McDonalds Happy Meals Toys in Da Nong city, Vietnam over 200 workers fainted after being exposed to dangerous levels of the poisonous chemical solvent acetone (Kernaghan, 1998:55). The workers were being paid 10 cents an hour - well below the legal minimum for that region in Vietnam (Cox, 1998) (AWO, 1997). Four years earlier, on May 10, 1993, Thai workers at the Kader factory in Bangkok were making Mattel’s Cabbage Patch Kids dolls when they were caught in the world’s worst industrial fire. 188 workers were burned to death in a factory which had no fire alarms or extinguishers and lacked fire exits. When the fire started the workers were locked in to the factory in case they stole toys during the fire (ICFTU, 1994).
SOCOG negotiated the Code with the ACTU and NSW Labour Council, and SOCOG has made the names of thirteen licensees (but not the addresses of their factories) available to these peak union bodies. The ACTU has approached some of the licensees for factory addresses - while some have been willing to provide addresses, four have refused. The ACTU does not have the resources to check factories itself, but it is contacting local unions to see what they can find out (Matheson, A. 1999, pers. comm., 30 Aug.). This is useful where local unions have the time and the resources to help, but for production occurring in 'Free Trade Zones' from which unions have been vigorously excluded, and for production in countries like China where independent unions are illegal this sort of investigation will not be possible. In any case it is likely to be those licensees with the most to hide who will be the most reluctant to provide the ACTU with factory addresses.
What mechanisms are in place to ensure that this doesn’t happen for goods carrying the logo for the Sydney Olympics? In SOCOG’s 86
See the following websites http://www.globalexchange.org/economy/corporati ons/gap/overview.html , http://www.nlcnet.org/Campaign.htm 87 Reebok often sources from the same factories as Nike, with the same low wages and poor conditions (AMRC & HKCIC 1997; ICCR 1998).
The Textile, Clothing and Footwear Union (TCFUA) has a particular interest in the production of uniforms for Olympic officials and volunteers. The union has demanded that SOCOG reveal the addresses of the factories in Fiji, Malaysia and Indonesia where some of
178
the uniforms are being made.88 SOCOG has refused.
garment workers, even though several attempts have been made to start one (Nicole, R. 1999, pers. comm., 23 Aug.).
SOCOG has passed on to the Labour Council a copy of a report into conditions in those factories by Andrew McAllister, SOCOG's program manager for uniforms. This report has not been made public, but union officials who have seen it say it demonstrates very clearly why factory monitoring needs to be carried out by people with expertise in labour rights (ABC, 1999).89 Chris Christodoulou of the Labour Council has described the report as 'superficial' and 'heavily reliant' on information from the employers themselves. Christadoulou also suggests that McAllister does not seem to understand the term 'Freedom of Association'. Evidently the report deals with this aspect of the code by repeatedly stating in factory reports that: 'there is no compulsory unionism. Employees negotiate directly with the employer' (Labour Net, 1999b).
Closer to home, Debbie Carstens of the Fair Wear Campaign in NSW is extremely concerned that clothes bearing Olympic logos may be being made by home workers in Australia under exploitative conditions. She points out that the NSW Government has a relatively strong purchasing code protecting the employees of the Government’s textile, clothing and footwear suppliers - but this code has not been extended to cover SOCOG’s purchases (Carstens, D. 1999, pers. comm., 13 Aug.).91 As it stands then, SOCOG is refusing either to make public the addresses of factories producing goods carrying Olympic logos, or to reveal the extent and nature of the factory monitoring being undertaken. In these circumstances, consumers can have no confidence at all that goods carrying Olympic logos are being made in decent and humane conditions. It is likely that a considerable proportion of such products are being made according to the exploitative and repressive work practices currently the norm in the global toy and clothing and footwear industries.
The Sun Herald visited one of the Fijian factories producing Olympic uniforms last week and found that workers were only being paid $1 an hour and were not unionised, but otherwise reported favourably on the factory (O'Rourke, 1999). The reporter spoke to the factory manager but does not seem to have spoken to any of the workers. According to Raijieli Nicole of the Fiji Women’s Rights Movement, garment workers are the lowest paid manufacturing workers in Fiji. She also claims to have considerable anecdotal evidence of exploitative conditions in the industry.90 She says there is no union for Fijian
If SOCOG were genuinely committed to ensuring its code of practice was implemented, the committee would put in place a rigorous and transparent monitoring system, involving unannounced factory visits by local organisations with a demonstrated commitment to labour rights. At the very least, SOCOG should make public the addresses of all factories covered by the code. This would cost SOCOG nothing and it would make it possible for the media and interested parties to
88
The TCFUA has learned that the clothing manufacturer Bonds will be producing 130,000 pairs of trousers and skirts and 7,000 blazers in Fiji, 15,000 business shirts in Indonesia and 60,000 nylon jackets in Malaysia (Tubner, B. 1999, pers. comm., 13 Aug.). 89 Given that SOCOG is refusing to let current union officials participate in monitoring, the TCFUA has argued that a good compromise would be for Anna Booth, formerly of the TCFUA but now on SOCOG’s board, to investigate conditions in the Fijian factories (Labour Net, 1999a). SOCOG considered this option but quickly decided against it when Pacific Dunlop (which owns Bonds) objected (Evans, 1999). 90 Research in 1996 by my colleague Matthew Phillips into clothing factories in Fiji found that
conditions varied considerably from factory to factory but in some factories machinists were paid less than $1.15 an hour and workers were expected to work in excess of 60 hours a week. (Phillips, 1996). 91 This code requires TCF suppliers to make details of all factory registration numbers as well as worksheets and other information available to the government department making the purchase. Even this code of practice leaves monitoring up to the individual government department, however, and it is unclear whether any monitoring is taking place (NSWDPWS, 1998).
179
travel to those factories and find out from workers themselves what conditions are like. This in turn would put powerful pressure on licensees to meet the standards laid down in SOCOG’s code. It would be a clear demonstration, even to cynics like myself, that sport can play a useful and important role in promoting human rights.
Connor, T. & Atkinson, J. (1996). 'Sweating for Nike - A Report on Labour Conditions in the Sport-shoe Industry', Community Aid Abroad's site http://www.caa.org.au/campaigns/nike/sw eating.html, Melbourne, accessed 5 July 1999. Cox, S. (1998). 'The Secret Life of Toys', Georgia Straight, 5-12 Nov. Ernst &Young (1997). 'Ernst & Young Environmental and Labor Practice Audit of the Tae Kwang Vina Industrial Ltd. Co., Vietnam', Transnational Resource and Action Centre web site http://www.corpwatch.org/trac/nike/ernst/ audit.html, San Francisco, accessed 3 Apr. 1998. ETI (1999). 'Learning from Doing Review', Ethical Trading Initiative web site http://www.eti.org.uk/briefings/framesets/f _page.html, London, accessed 20 Aug. 1999. Evans, M. (1999). 'SOCOG secrecy fires union', Sydney Morning Herald, Aug. 28. Hancock, P. (1997), Women Workers in Nike Factories in West Java, Briefing Paper, Community Aid Abroad, Melbourne. Hancock, P. (1998). Industrial Development in Indonesia: Development for Whom? A Case Study of Women Who Work in Factories in Rural West Java, PhD Thesis, Edith Cowan University, Perth. ICCR (1998). Footwear Manufacturing FactFinding Report - Nike and Reebok Plants in Indonesia, Vietnam, China, Interfaith Center for Corporate Responsibility, New York. ICFTU (1994). From The Ashes - A Toy Factory Fire in Thailand, An Expose of the Toy Industry, Brussels. IRRC (1998). The Sweatshop Quandary Corporate Responsibility on the Global Frontier, ed. P. Varley, Investor Responsibility Research Center, Washington DC. Kernaghan, C. (1998). Behind the Label 'Made in China', National Labor Committee, New York. Labour Net (1999a). 'Former union leader to investigate SOCOG uniforms', Workers' Online web site http://www.labor.net.au/workers/magazine /27/news5_socog.html, Sydney, accessed 20 Aug 1999.
References ABC (1999). 'Union seeks inspection of Olympic uniform manufacturers', Australian Broadcasting Corporation News Online - Bi-daily bulletin mailing list , Aug. 27. AIP (1997). 'Report of the Apparel Industry Partnership', The Corporate Examiner, vol. 25, no.9, pp. 3-5. AIP (1998). 'Charter Document - Fair Labor Association. Preliminary Agreement November 2, 1998', Lawyer's Committee for Human Rights web site http://www.lchr.org/media/sweatshop.htm, New York, accessed 8 August 1999. AMRC (1998). We in the Zone, Women Workers in Asia's Export Processing Zones, Asia Monitor Resource Centre. AMRC & HKCIC (1997). 'Working Conditions in Sports Shoe Factories in China - Making Shoes for Nike and Reebok', Asia Monitor Resource Centre & Hong Kong Christian Industrial Committee http://www.globalexchange.org/economy/ corporations/nike/NikeReebokChinaRepor t.html, Hong Kong, accessed 25 July 1999. AWO (1997). 'McDonalds in Vietnam', Asia Workers Organising Newsletter, vol. 15, no. 5, p. 4. Chan, A. (1996). 'Boot camp at the shoe factory - where Taiwanese bosses drill Chinese workers to make sneakers for American joggers', Washington Post, 3 Nov. Chan, A. (1997). 'Forget confucius. China’s economic miracle is a triumph of military discipline, not Eastern religion - just do it', Sydney Morning Herald, 22 Feb. Chan, A. & Senser, R. A. (1997a). 'China's troubled workers', Foreign Affairs, vol. 76, no. 2, pp. 104-17.
180
Labour Net (1999b). 'SOCOG eyes wide shut on Games gear', Workers Online Issue No 28 - 27 Aug. http://www.labor.net.au/workers/magazine Sydney, accessed Accessed 30 Aug. 1999. Nguyen, T. (1997). 'Nike Labor Practices in Vietnam', Vietnam Labor Watch web site http://www.saigon.com/~nike/report.html, New York, accessed 4 May 1998. NSWDPWS (1998). 'Code of Practice on Employment and Outwork Obligations for Textile Clothing and Footwear Suppliers', New South Wales Department of Public Works and Services' web site http://www.dpws.nsw.gov.au/Policies/Out Working/owcode.html, Sydney, accessed 20 Aug. 1999. O'Rourke, D. (1997b). 'Smoke From A Hired Gun: A Critique Of Nike's Labor And Environmental Auditing In Vietnam As Performed By Ernst & Young', Transnational Resource and Action Centre web site http://www.corpwatch.org/trac/nike/trac.ht ml, San Francisco, accessed 30 July 1998. O'Rourke, D. (1998). 'Comments on the Vietnam Section of the Tuck School Report: 'Nike, Inc.: Survey of Vietnamese and Indonesian Domestic Expenditure Levels'', Transnational Resource and Action Center web site http://www.corpwatch.org/trac/nike/tuck.h tml, San Francisco, accessed 3 Apr. 1998. O'Rourke, J. (1999). 'Anger at SOCOG's 'secret' clothing factory', Sun-Herald, 29 Aug., pp. 6-7. Phillips, M. (1996). Regionalism, the state and the firm, Honours Thesis, University of Newcastle, Australia, Newcastle. Schoenberger, E. (1997). The Cultural Crisis of the Firm, Blackwell, Cambridge, Mass. US Census Bureau (1999). 'International Trade Statistics', US Census Bureau web site http://www.census.gov/foreigntrade/sitc1/, Washington, accessed 20 April 1999.
181
