Kathie Lee Gifford changed everything. Whether she understood what was happening or not, her role in the 1995 Wal-Mart clothing sweatshop scandal was invaluable. “She was dragged into this thing kicking and screaming. But she really helped start the anti-sweatshop campaign. [In doing so,] she educated a country of 300 million people,” explained Charles Kernaghan, executive director of the National Labor Committee, a nonprofit watchdog group with a mission to protect the rights of workers around the world. Kernaghan’s group exposed the abuses occurring within the factory walls, and later would initiate an almost-obligatory United States corporate behavioral shift from simple, bottom-line profit and loss thinking, to an equation including worker/human rights, regardless of whether their geography placed them on American soil or not.
The “Kathie Lee incident” brought large-scale media attention to the issue of social responsibility with regard to safe and fair labor practices. But widespread irresponsibility continues to be an unfortunate byproduct of hard-and-fast globalization and international trade agreements currently fueling the fires of the overseas sweatshop production mentality. And it’s not only happening with soft goods. Offshore manufacturing facilities for toys, furniture and other hard goods are also guilty. Without a certifiable code of conduct or universal standardization, it becomes a very difficult task for both suppliers and distributors to guarantee to their end-buyers that their supply chains are both safe and fair.
YOU THOUGHT YOU HAD IT BAD, STEP INSIDE
THESE SHOES
In Kernaghan’s testimony against the Kathie Lee/Wal-Mart line, during the 1996 Democratic Policy Committee Congressional Hearings, he cited significant abuses occurring inside Global Fashion, the factory in Choloma, Honduras where Gifford’s clothing line was produced. The workers’ exploitation was ongoing, widespread and severe.
Just some of the maltreatment described in Kernaghan’s testimony as well as an additional account given by a Global Fashion employee was:
• An estimated 10 percent of the employees were children who were denied the ability to attend school.
• During peak seasons, workers were forced to work upward of 75 hours per week.
• Employees were paid base wages of 31 cents per hour (an hourly wage well below local government standards).
• They were subject to verbal, emotional, physical and sexual abuse as well as physical searches upon entering the facility.
• Bathroom privileges were limited to only twice per day.
• Armed guards surveilled workers during their shifts.
• They were provided no health benefits, sick days or vacation time.
Americans were appalled at the harsh conditions. Kathie Lee cried. With labor laws firmly in place in this country, abuses of this magnitude were unfathomable. Unfortunately, the lure of excessively cheap labor proved to be too enticing for America’s CEOs to pass up.
But consumer outrage during this early sweep of sweatshop exposés forced large American textile companies to take a look at the need for some sort of system of self-monitoring and factory auditing. Kernaghan explained the evolution: “I was actually at meetings where the
company said they knew they had to have some monitoring, some way to make their customers and the people purchasing their goods [feel] assured … that conditions were OK. They came up with this idea of a voluntary code of conduct, in that they would monitor themselves, because after all, who else could better monitor them but themselves?”
But when posed the question, “Do factory audits work?,” Kernaghan gave a
hesitant yes-and-no response. He explained, “Audits and monitoring limit abuses to a degree. Without these audits the message is, ‘We don’t care and the buyers don’t care. So, do what you gotta do. Just get it done and give us the cheapest price.’ A company that does not audit and monitor overseas factories is sending about the worst message you can send.”
ARE GOOD INTENTIONS
GOOD ENOUGH?
When it comes to how our industry is faring with sending a positive message
to distributors, full disclosure is making gains. Mary Ellen Pahlka, director of marketing for Bodek and Rhodes, Philadelphia, Pa., concurred with Kernaghan regarding recent inroads being made in terms of social responsibility in offshore manufacturing. “Ten years ago, none of us were even discussing this topic. Now many suppliers are publishing social responsibility statements in their catalogs. We have come a long way as an industry, but also have a long way to go,” stated Pahlka. Going one step further in support of social responsibility, Bodek and Rhodes has issued a public responsibility declaration, clearly stating its aspiration to be a leader in social accountability as well as an expectation of fair and ethical treatment of workers within the facilities of all its business partners.
Hard goods suppliers are also taking a closer look at their offshore manufacturers and are reacting to socially responsible calls to action. “We are making sure our factories are compliant,” stated Bonni Shevin-Sandy, president of Dard Designs, vice president of Dard Products, Evanston, Ill., though she affirmed it’s been a struggle. Only a small group (relatively speaking) of U.S. manufacturers has made the commitment to only utilize factories complying with fair labor practices. Because of this, several offshore facilities felt if they waited it out, the storm would die down and they could return to the status quo, no investment necessary, Shevin-Sandy said. “The factories that took this stance were the ones we had to move away from. I have personally been to the core factories quarterly, making the proper changes. I have scaled down from many factories to a few core factories that I partner with exclusively,” she added.
Over the course of the last decade, a variety of for-profit and nonprofit auditing agencies have begun filling the monitoring gap for both retail and promotional suppliers alike. Bodek and Rhodes follows guidelines established by W.R.A.P. (Worldwide Responsible Accredited Production), a leading independent, nonprofit organization dedicated to the certification of lawful, humane and ethical textile manufacturing throughout the world.
On the other hand, Dard Products has taken a slightly different route, actually setting up offices in Hong Kong in order to maintain standards set by STR (Specialized Technology Resources), an international service provider that works to ensure responsible corporate work sites. As Shevin-Sandy explained, about 78 percent of Dard Products’ offerings comes from China and just a few items from India, while the other 20 percent is made in union factories in
the United States. To maintain presence overseas, the company opened its own
Hong Kong office and hired an on-site managing director.
“My managing director, a Westerner, has now moved to Hong Kong to help the
factory … maintain the quality level that we require. I have a team of QC [quality control], who does above and beyond the factory’s [own] QC in the beginning, middle and end of the run, as well as use[s] STR for the final inspection,” she noted.
Though Kernaghan emphasized that, without being in the factory daily, 100 percent guarantees are an impossibility, retaining offices abroad can be an effective safeguard. However, when that’s not feasible, domestic measures are a step in the right direction, though not quite foolproof. With this knowledge, Pahlka explained Bodek and Rhodes has done everything possible stateside, on its side of the supply chain. “Since many of us suppliers are using more than an octopus of global sources, it has been difficult to wrap our arms around each of the manufacturing agents to ensure socially responsible workplaces and work forces. But using guidelines such as those established by W.R.A.P. … and clear communications of our intentions, we can finally ensure our part of the industry is manufactured with peace of mind in that regard.”
At a minimum, there is an upside to audit days. Kernaghan said, “Workers report that, when auditors show up, at least there is toilet paper, clean drinking water and a decent meal. And it is a sign that the supplier outsourcing the product cares. But monitoring has limits in a country like China. [There is] no free media, no strong civil society, no women’s rights groups, no human-rights groups, unions or concerned citizens. If [these elements aren’t in place], it’s like monitoring a well-run prison and the workers are terrified. The individual has absolutely zero rights.”
SO WHAT CAN AN OLD FASHIONED DO-GOODER DO?
Kernaghan advised distributors and suppliers to be more aware and ask questions. “The more questions asked, the more
serious the factory owners will take you. If in this questioning you show some kind of seriousness, that is going to register with them. They are still going to try to cheat the workers, but they are going to think twice about the really extreme stuff. Like, they won’t hire kids, they won’t have 19-hour shifts, they won’t cheat them their fair wages and they won’t have them handling toxic chemicals,” he affirmed.
When factory standards fall within suitable guidelines, there is nothing to hide. If you are outsourcing or distributing product from countries like China, Vietnam or Bangladesh—where there are significant violations—these are some of the important questions that require answers.
1) Does the supplier provide full public disclosure of names and addresses of the factories used to produce products?
2) Are, at minimum, the local labor laws being adhered to?
3) Can the manufacturer provide a guarantee there are no children working in
the factory?
4) Are worker wages up to standard with the local minimums?
5) Do the hours worked fall within the guidelines of local labor laws?
6) Do the dormitories provided meet local standards? Are they clean and decent?
7) Does the food provide adequate nutrition for workers?
SOMETHING’S GOTTA GIVE AND
IT’S GONNA
But there is a quandary that exists for American buyers throughout the supply chain—suppliers, distributors and end-users. If 80 percent of toys, sporting goods and the like are being produced in China, what are these buyers to do? In purchasing products, it is not that Americans collectively don’t care about the rights of others. “When [former] Labor Secretary Reiche posed the question, it was extraordinary, something like 65 percent of the American people are very concerned about child labor offshore and concerned about sweatshops. Eighty percent of people polled said, ‘Yes I’ll pay, I’ll pay 5 percent more on products if they give me a guarantee [they were] made under humane conditions,” Kernaghan said. He continued, “I think good intentions are there. I think the awareness is there. But then nothing is delivered. The social movement wasn’t strong enough to come up with viable alternatives.”
But presently, there is very important legislation that is already through the House and on its way to being passed. The bill was a collaborative effort on the parts of the National Labor Committee, Steel Workers of America and Senator Dorgan (D-N.D.). If passed, the bill would require compliance with World Trade Organization rules on nondiscrimination, and also ban the U.S. sale of any goods made overseas that do not adhere to core ILO (International Labour Organization) standards and to the local labor laws where the product
is manufactured.
If this legislation passes, the effects on the living conditions of factory and manufacturing workers worldwide, particularly in Third World nations, will be life-altering. And suppliers and distributors will be able to sleep a little easier at night. No more will it be acceptable for an employee to be beaten into faster production times, forced to work seven days a week for 15 hours a day under the threat of being fired, denied the right to use the bathroom, raped, stripped of a passport and left without country. Despite tough economic times, Kernaghan said, “We are still, even in a recession, the largest economy in the world. If the American people ever exercised their voice, it would be a powerful voice that could shape the global economy.” And with a more watchful eye and sweeping legislation, that voice will be heard. ,
