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Control of Transnational Corporations over
Manufacturers
Many producers, like Bangkok Rubber Group, are
under the impression that they will pay major fines - in the order
of $US 5000 - for continued violation of codes of conduct. In
fact, the transnational companies do not impose any such punishment.
Rather, these companies use the threat of moving their production
to lower labor-cost countries, which producers generally take
to mean China or Vietnam, to obtain producer compliance. Further,
the producers are required to purchase materials, including the
shoe boxes, imported from specified companies, even if these materials
are available within the country at a lower cost.
Bangkok Rubber Group management is particularly
outspoken and critical about unfair relations with the transnational
footwear corporations. They believe that the transnational corporations
do not take adequate responsibilty for maintaining consistent
orders and for matching the requested production capacities of
the manufacturer. Particularly in the low season, when orders
can drop by 60%, manufacturers must maintain an idle staff. However,
during the peak season, although the production limit of the manufacturer
has been agreed, many of the transnational corporations' orders
are larger than the capacity of the producers. Thus, workers must
do overtime, in some cases more than 80 working hours per week,
to fill the order.
In December 1997, workers at the Sena manufacture
plant, a part of the Bangkok Rubber Group, called a strike for
two days because they did not want to work overtime anymore. They
had been forced to work overtime in excess of reasonable working
hours for several months. This is because Bangkok Rubber Sena
1 is the only manufacturer which produces vulcanize rubber soles
for Reebok, Nike, Adidas, Timberland, and its own brand name Pan.
[1] Because of this, they are always receiving
orders from customers that exceed the factory's capacity. Management
from both Reebok and the manufacturers has been heard to say "we
are a business and a business has to make a profit." For
the manufacturers and the transnational corporations, business
always comes before human rights.
In another case, the Reebok human rights department
learnt that Bangkok Rubber Group workers were working 80 hours
per week to fill a Reebok order. The producer said the workers
had to work excessive overtime because Reebok had placed an order,
which was beyond the capacity of the producer. The human rights
manager declared that, regardless of the demands of the order,
the producer would need to limit workers' hours to 60 hours per
week. In this situation, Reebok promotes two contradictory demands.
Reebok wants the manufacturers simultaneously to follow its code
of conduct and to fill the order. If transnational corporations
are serious about improving labor standards, then their human
rights coordinators need to be concerned with the demands that
the management places on the manufacturers not only with their
labor practices. The manufacturer can only provide adequate terms
of employment and conditions of work for their employees if it
has a more stable relationship with the transnational corporation.
Many transnational corporation managers and even some production
managers are sincere about improving the working conditions and
terms of employment of workers. The subcontracting system itself,
however, is exploitative and prevents such mangers from effectively
improving labor conditions and terms of employment.
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Footnotes:
- The Bangkok Rubber Group wants to create a market
in Asia for their own brand name Pan. As this athletic shoe
market in Asia is not yet strong, they have to do subcontracted
production for foreign footwear companies.
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