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Codes of Conduct from the Manufacturers' Perspective
The producers are components of large business
groups which do not have a long-term commitment from the transnational
companies which give them orders. The absence of security in their
relationship between producers and transnational companies has
a detrimental effect on conditions of work in the subcontracting
factories. As there is no security in the order, the satisfaction
of the client, whether it be Reebok, Nike, Adidas, is the most
concern to the manufacturers. It is amazing to see how these manufacturers,
especially the Bangkok Rubber Group which produces for Reebok,
Nike, and Adidas, slavishly follow their customers' policies.
In the Bangkok Rubber Group, employers hand out
separate codes of conducts to the workers. Nike's code of conduct
is printed on a beautiful pocket size plastic-laminated card.
Workers are asked to bring the card to the factory every day so
that they might refer to them at any time. However, the principles
articulated are impossibly broad and vague. For example, Nike's
codes does not specify wages or working hours. Instead, the card
states that workers can ask for more detail from the managers
or its' representative. However, no contact information is provided
on the card.
Business is naturally dependent upon orders. As
orders are seasonal, there is great uncertainty in the production
volumes. Therefore, the producers are always eager to maximize
profit and get a quick return on investment. Unfortunately in
Thailand, because labor laws are not strong, the producers cut
costs at the risk of the workers to gain a competitive advantage.
Further, there is a lot of pressure from the transnational corporations
for the producers to both reduce the cost of the production and
to strictly follow the codes of conduct. Many producers feel that
they should not shoulder the majority of cost of implementing
codes of conduct. Without more commitment from the transnational
corporations, producers are not given incentives to invest in
their workers or to improve working conditions. Instead, transnational
corporations cut costs of production forcing the producer to reduce
the most flexible cost, labor costs.
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Bangkok Rubber Group workers trimming
outer-soles.
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The costs of the import materials around 60% of
the total cost to produce shoe with varying exchange rates. The
producer therefore has only 40% of the cost, made up of local
components, premises and labor where they can attempt to reduce
the costs of production. Unfortunately, this means cutting the
cost on the working environment and safety, denying workers personal
protective equipment, and cutting wages and welfare by manipulating
the few labor laws.
The management of transnational corporations says
that they care about the rights of their workers, whether they
be local or subcontracted. These transnational corporations maximize
profit by manufacturing in countries that have cheaper labor than
their own. Maximizing profit is fine, as long as it is not at
the expense of another rights. If the transnational corporations
are not prepared to absorb the cost of ensuring that the rights
of their subcontracted workers are not violated, there will not
be a stop to the exploitation of these workers. If transnational
corporations keep trying to squeeze every penny as they do now,
more and more major name brand products will be made in sweatshops
so that they can show their shareholders more and more profit.
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