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Can Corporate Codes of Conduct Promote Labor Standards?
Evidence from the Thai Footwear and Apparel Industries

Codes of Conduct

Each of the transnational footwear manufacturers subcontracting production in Thailand has a code of conduct, a set of labor standards to which producers are expected to adhere. These corporations have persuaded some labor activists in non-governmental organizations that codes of conduct have been effectively implemented and have greatly improved labor conditions. More than any other major sporting goods manufacturer, Reebok prides itself on its human rights advocacy. Reebok has underwritten Amnesty International's Human Rights Now! campaign and is a founding member of Business for Social Responsibility and the Partnership for Responsible Global Sourcing of the Council of Economic Priorities. In 1992, Reebok devised and began to implement a code of conduct.

Similarly, Nike prides itself on being a founding member of the Global Alliance for Workers and Communities and of US President Clinton's Apparel Industry Partnership Initiative. Further, Nike advertises that the monitoring of its code of conduct is independent. As the excerpt from the Nike attempt below demonstrates, such codes covers a range of categories. (See Appendix 1 for the full Nike code of conduct and Appendix 2 for Reebok's).

Nike Labor Practices ("SHAPE")
Safety: The worker has a workplace where safety is paramount - in equipment, training, management and work practices.
Health: The worker has access to proper food and water, to a work environment that is healthy, and to proper medical care.
Attitude: The worker is managed in a manner that is characterized by dignity and respect for the individual, and appreciation of the culture.
People: Management treats the worker like a valued asset: with vocational and personal training, recreation programs and on-site services.
Environment: The factory seeks to minimize environmental impact, and emphasize environmental safety.

Many labor activists have little confidence in these codes of conduct, largely because enforcement is voluntary and generally internally monitored. Information on cases of violations is kept within the company. According to Bandit Thanachaisetthavut, Director of the Arom Pongpangan Foundation,

only if international standards guarantee the bargaining power of workers will there be serious support for workers' rights by the government. [Otherwise] codes of conduct can be violated and misused by the employer. [1]

According to Lae Dilokwidhayarat, Director of the Center for Labor Development and Management and Associate Professor of Economics at Chulalongkorn University,

codes of conduct are [based on] double standards: the western standard of production and the local sub-standard labor conditions. To solve the problem, it is necessary to build a structure that allows government authorities to react fairly to both the management and the workers. … At present, this structure favors management. [2]

Jaded Chaowilai, a labor activist who coordinates the labor section of the Friends of Women Foundation, reports that

Reebok invited many labor-related NGOs [non-governmental organizations] in Thailand for discussion and is offering financial support to these groups. We have talked with Reebok twice, but we are still not sure what Reebok hopes to achieve by funding NGOs. … Reebok spoke about its code of conduct and how it is being implemented and the way in which NGOs could help. But the reality is that the Reebok's code of conduct is not truly effective. There are still many problems in its system, especially with regard to the use of subcontractors. [3]

According to a union member from the Lian Thai factory, "the Nike [pocket size laminated card] looks beautiful and has good words printed on it, but it is not very specific." [4] Many workers feel that the codes are useless, and the translation below suggests why.

The Nike SHAPE Laminated Card
(Translated from the Thai version)

Nike and your employer agree to work together to follow Nike's SHAPE regulations that are posted in the factory and which guarantee that you will receive fair treatment. The details are

  • factories are to implement programs that benefit worker's health and safety;
  • workers are to be paid a fair wage and provided with good benefits;
  • workers' right to freedom of association must be recognized and respected;
  • pay and promotion will be based solely on a person's ability; and
  • regulations concerning working days and hours are to be followed.

Please contact the manager or staff representative for more information.

In order to understand why corporate codes of conduct enjoy such little credibility among labor scholars and workers, it is necessary to examine labor processes in the industry and the relationship between the transnational corporations and their subcontracted producers.

 

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Footnotes:

  1. interview, 10 December 1998.
  2. interview, 26 August 1998.
  3. Jaded Chaowilai, interview, 17 November 1998.
  4. Lian Thai is an old apparel factory, established in 1972 and located in the suburb of Bangkok. It is owned by a Hong Kong businesswoman. The union was formed in 1983. The minimum wage is 162 baht in this area.