Monthly Archives: July 2015

One more response to my article

In my Solutions Journalism network interview I said

I talked to someone at a well-known labor NGO about this and he said he has three staff members. The best way to stretch that into impact is to go after Apple, which can improve conditions for hundreds of thousands of employees with a snap of its fingers. Or at least that’s the perception. Individually it’s understandable. But collectively, it means no one is looking at where the worst violations are.

The next day I got an e-mail from Kevin Slaten, a Program Coordinator at China Labor Watch. He’s the guy I was talking about. Here’s what he said. 

I did not say that we just focus on Apple, Michael. We focus on companies that have major buying influence in a given factory or industry supply chain–which includes Apple, among many other buyers which CLW has reported on over the past 15 years. Look at CLW’s report database for a list of reports by industry and related brand companies.

While I understand the general point you are making–lots of manufacturing takes place in small firms–you failed to mention the sectoral (or even broad economic) pull-on effect from raising the bar among large groups of workers: it changes the expectations and demands of other workers. We talked explicitly about this logic. (An additional academic paper bearing out this point.)

For example, ever since the Yue Yuen show factory strike in April 2014, in which as many as 60,000 workers demanded arrears on years of unpaid insurance, workers all around the region (and even throughout China) have increasing protested over this exact issue. Workers’ consciousness has been shifted. 

Another example: when I did field work for my MA in NE China (on labor rights defense), workers in an industrial zone (with hundreds of thousands or millions of workers) from different companies would talk knowledgeably about their working conditions relative to the industry or region. This caused many people I interviewed to “vote with their feet” and find better work. It radicalized others to protest. 

To put it in the terms you used: workers in smaller and more abusive plants are more likely to protest or find a new job (starving the poorer plants of labor) if those workers believe that there are better conditions elsewhere. In this interview (and in your article) you focus on the concept of increasing amounts of products going to countries whose consumers seem to “care less” about sweatshops. Putting aside the factual accuracy of this statement for now (there have been lots of anti-sweatshop protests in Taiwan, HK, and elsewhere in E. Asia), it ignores the power of improving working conditions at key locations within an industry. 

Anyway, most of the above information is context. My reservation is with your characterization of our interview. Your description suggests that our organization just focuses on Apple; this is not an accurate characterization of the interview or CLW’s work.  

Sorry to Slaten for mischaracterizing our interview. He’s right, their reports offer a lot of nuance I didn’t capture in my piece. Go read ’em!

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So You Say You’re an Ethical Shopper

Tigray, Ethiopia. Photo by me.

Tigray, Ethiopia. Photo by me.

Here’s another follow-up to my article, originally posted on the Huffington Post.

So on Wednesday I wrote this article for Highline arguing that consumer movements are never going to end sweatshops. The worst conditions are in sub-contractors, small workshops and factories producing for emerging markets. We can lean on multinational corporations all we want, they don’t have the information or the power to ensure decent factories, and neither do we.

Since the article came out, much of the reaction has been two covers of the same song. Either ‘Well I buy my T-shirt from sustainable brands’ or ‘Well I only buy local.’

Let me be super clear about this, in words I might have minced in the piece itself: that is impossible. And pretending it’s not is exactly what keeps sweatshops from being solved.

First, your T-shirt. Let’s say it really was produced by an American company, made in the USA, by people earning a living wage, and that wasn’t just a marketing ploy to get you to pay more for it.

Congratulations. But just because something was sewn together in the United States doesn’t mean that’s where it’s actually from. The vast majority of the world’s textiles are produced in India and China. For my article I asked a CSR manager of an international brand—you don’t wear it, but you’ve heard of it—how they monitor textile factories. ‘Oh we don’t,’ she said. ‘No one does.’

And that’s not the last layer. Most of the world’s cotton is bought and sold like oil, a commodity, consolidated in huge markets in Dubai, zig-zagging through middlemen. It’s hard to find out what country it comes from, much less how it was produced. As the Environmental Justice Foundation puts it, ‘six of the world’s top seven cotton producers have been reported to use children in the field.’

Then there’s how it got to you. Shipping is one of the least scrutinized industries in the world. Boats are in international waters, employees work around the clock, they dump weird stuff into the ocean. Who’s going to stop them?

But let’s pretend for a minute. Let’s say your T-shirt was produced in a decent factory, with decent textiles and decent cotton, that it came to you on a decent boat. Fine. That is one thing. Think of all of the stuff you buy. Your dental floss. Your furniture. That spatula you bought at the dollar store.

You can’t choose three or four products where’d like to avoid complicity in forced labor and low pay, and just decide not to worry about everything else. Your coffee might be fair trade, but what about the machine you’re brewing it in? Check the bottom, dude, I’ll bet five bucks it was made in China. Your car was welded together in Mexico, from iron ore mined in Brazil, smelted in Paraguay. The acetaminophen you take for a headache was produced by a company that keeps poor countries from producing generic medicines for its own people.

The point here is not to gloat, or to play the coastal-elite “I’m more ethical than you” game. The point is, you do not have the power or the information to implement your values. None of us want to promote sweatshops or poison tropical rivers. But we all do. No amount of label reading or better buying will escape this fundamental fact.

But that’s not the point either! The real question is, even we could buy ethical products, would that improve working conditions in the developing world?

In 1750, the Quakers concluded that slavery was an unjust institution and spent the next century advocating to abolish it. Imagine if, instead, they came up with a certification, a commitment that they wouldn’t buy clothes made from slave-picked cotton.

Think about what a gift that would have been to slave owners. All they had to do was rope off a section of their plantation, hire workers, then charge extra for ‘slave-free’ cotton. It would have been perfect: They make more money, get the Quakers off their back and, the best part, get to keep their slaves.

This is how we’ve spent the past 25 years: Instead of advocating to end the conditions that offend us, we’ve done exactly the thing that allows them to proliferate. Auditors told me that some factories in China are divided up with thick black curtains. Since brands only inspect the lines making their own products, suppliers can keep conditions however they want in the rest of their factories.

This is what you’re doing when you buy a fair trade T-shirt or an organic avocado: Concentrating your attention on the tiny corner of the global economy that is not shrouded to you. Instead of raising the floor, you’re raising the ceiling. Fair trade allows us to go around bad institutions and let the worst sweatshops remain, rather than take responsibility for the myriad ways in which we reward them.

“Many global actors assume there’s an institutional void, but there isn’t,” says MIT’s Matthew Amengual. “The state is involved. Positively or negatively, it’s there. Rather than transcending local institutions with global rules, we should be trying to work with them.”

What he means, and what I’ve seen again and again in the developing world, is that sweatshops don’t happen without the participation of their host governments, and they don’t get solved without them either.

One of the reasons India’s garment sector, to take just one example, is so exploitative is that only 2 percent of its textile factories use shuttle-less looms. Without equipment to make them more productive, the only way factories can compete is by extending shifts and keeping pay low. In China, 15 percent of textile factories have shuttle-less looms. The government provides loans and grants, it has deliberately invested in making small factories more productive. India’s own Ministry of Textiles boasts that its desperately poor workers are a competitive advantage: “Rising wages and cost of living in countries closely competing with India,” says the agency’s strategic plan, “provides a vast opportunity for India to capitalize.”

Domestic systems are decisive, and the lack of them can be devastating. Functioning courts, independent unions, empowered civil society, free media, this is the stuff that solves sweatshops, not companies with better CSR policies, not improving the performance of just a few factories. Comcast doesn’t treat you like shit because it’s an evil corporation, it does so because it’s a monopoly, because our government allows it to be one. Sweatshops happen for the same reasons.

Whenever I go on this little rant in front of my fair-tradey friends, they always give the same response: “Hey, it’s better than nothing.” I think that’s the worst argument ever, but for a second let’s entertain the possibility that it’s not. If that’s our only criteria, there’s a lot of other “better than nothing” stuff we could be doing instead. Give money to a NGO that helps register unions in the developing world. Sign a petition. Write your senator.

Our primary leverage over the developing world comes in the form of market access (bilateral trade agreements, TPP, the World Trade Organization) and financial instruments (the World Bank, the IMF, export credit). Companies lobby to protect their interests in these negotiations, and it’s about time we started doing it too.

These steps are small, slow, unlikely to leap us to instant improvements. But isn’t the argument of the boycotters “If everyone acted like me, things would get better”? Well if everyone put pressure on the institutions that can actually eradicate sweatshops, we might actually solve them. Otherwise, we’re just drawing the curtains.

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Some responses to my ‘Myth of the Ethical Shopper’ article

Dhaka, Bangladesh. Photo by me.

Dhaka, Bangladesh. Photo by me.

I’m working on a longer follow-up to respond to some of the reader responses to my article, but for now, I’ll quote some people who know way more about this topic than me, on what my article got right and wrong.

First up, here’s a note I got from one of the auditors I interviewed for the article:

One thing that I hear repeatedly nowadays is that we can’t forget the role of government. We focus on CSR and what companies should be doing but we can’t forget that companies are primarily acting on these issues because local governments are failing to uphold international obligations to protect human rights, to adhere to treaty obligations, and to enforce their own national legislation, which is often much stricter than anything in any buyer code of conduct.
In addition, we can’t be prescriptive about solutions. The West doesn’t have superior solutions. If we want to know what needs to be done, we need to talk to the rights-holders themselves to understand what they want and what they need. In other words, participatory solutions are critical and much more valuable than anything we can dream up in isolation. When communities are engaged holistically in developing solutions, they own that process and it can impact the outcomes much more positively than anything being imposed from the top down.

When considering the shift of consumer power away from the global North / West, we shouldn’t forget that there is still a lot of financial influence, via organizations such as the World Bank, regional development banks like ERDB, ADB, IADB, and of course investors like state funds and SRIs [socially responsible investors].

If you look at the numbers, there are trillions of dollars backed by SRIs alone. But more than that, financing options for many of these institutions are linked to ESG commitments [environmental, social and governmental]. Loans are routinely linked to compliance with things like IFC Performance Standards covering issues from environment and labor to community impact. Funding can be suspended or terminated for non-compliance. Complaint mechanisms allow communities or activists to lodge complaints with ombudsman offices, like those in the IFC and OECD.
Last year, I did an investigation into a land rights issue in Asia and found myself in the field alongside a regional investor who was also investigating the issue and working with their client to bring them into compliance.
And here’s one from Jason Hickel, a buddy of mine and an economics professor at LSE

What workers in the global South need is not better international labor standards, but rather the freedom to organize themselves and demand better standards for themselves.  You point out that Foxconn in Indiana is not a sweatshop. It’s not just because the US has good institutions; it’s because the US had a strong labor movement that won basic things like safety laws, weekends, the minimum wage, etc.

I think we have to ask ourselves why these same movements and institutions don’t exist in the global South.  And the reason, as far as I can tell, is that the governments of global South countries have been explicitly prevented from nourishing them.  The history of structural adjustment from the 1980s onward was a process of actively dismantling state institutions, forcing domestic economies open to the flux of global markets, and rolling back wages and labor standards. If global South countries did otherwise (if they bolstered state institutions, increased wages, etc), they could be sanctioned by the IMF, and have loan capital withdrawn.

Today, this pressure comes mostly in the form of investor-state dispute mechanisms, which are written into free trade agreements.  Through these mechanisms, multinational corporations have the power to sue sovereign states for introducing laws (like labor and safety laws) that compromise their expected future profits.  And then of course there’s the Doing Business rankings, which also actively pressure global South countries to deregulate.

I think another way to approach the issue is to ask why workers in sweatshops are willing to take jobs that are so terrible.  And the answer, of course, is that they have no other choice.  And, as a result, they have very little bargaining power.  Let’s go back to the US again.  Workers were able to successfully bargain for better conditions in factories because they had a real alternative: they could pick up land in the midwest on the cheap, and become farmers (and, later, they had a passable welfare state that allowed them the option of not taking dangerous jobs and still surviving).  If they didn’t have that option, chances are we wouldn’t have the weekend today.  The same can be said of global South countries.  The rise of sweatshops was preceded by a long process of dispossession, of actively kicking people off of their land (and then later dismantling what little welfare mechanisms existed).  Without any other options for survival, people are forced to accept sweatshops jobs.  This continues today in the form of land grabs; i.e., Fred Pearce’s book.

Voting power in the IMF and WB is still terribly, absurdly skewed [basically, rich countries get more voting power].  They keep making noises about changing this in response to outrage from developing countries, but the most they’ve managed is a little bit of window-dressing.

The WB still uses structural adjustment programs.  In the 1990s, they had to rhetorically back down from them because of the riots and global outcry, but all they really did is change the name to Poverty Reduction Strategy Papers. The main difference is that PRSPs must be drafted by the loan recipient, as opposed to the WB, but of course everyone knows the papers have to include structural adjustment if the loan is to be granted. The brilliance is that this allows the WB to evade liability for any disasters that might ensue as a result of the policies, since the recipient country technically offered to adopt structural adjustment policies voluntarily.

As for the WTO: it’s stalled, and for good reason… because global South countries refuse to bargain on unfair terms any longer.  But now bilateral trade agreements are proliferating as a way of getting around this.

And from a friend who works at an international institution working on private-sector human rights abuses:

You rightly criticise the auditing industry as fraught with design flaws and full of suppliers who have become highly adept at fooling the auditors. But at the same time, while it’s not a silver bullet, it is one of the best approaches a company has to the issue at the moment. Sure it doesn’t fix the extire global problem. But it fixes small corners of it, and it is those small corners that the company is most worried about, because its business touches upon them.

And yes, some things do get past auditors. But many violations are caught that way, and prevented too. I often compare it to checking my kids room after I’ve told them to clean it. Just the fact that they know it will be checked, means they do a sufficient job (although they still try to fool the auditor by kicking junk under the bed and stuffing it in the back of the closet).

So I wouldn’t be overly dismissive of supply-chain auditing, although I recognise it’s not a global solution, it’s just a band-aid. Because I want companies to keep doing it and to continue to try to perfect the practice (which today is more sophisticated, and includes supplier capacity building). This continued practice will help keep the pressure up, while at the same time, it will allow us to experiment at the micro-level with various good practices, which can then be exported into a global solution.

You are right in identifying the country-challenges in supply chains, like when you compared conditions in Mexico to China. But even those country-challenges can be changed by the pressure from big business. I remember speaking with [giant apparel company] about their experience in Pakistan. They told the Govt of Pakistan that they would not allow their suppliers or licencees to source from Pakistan because the labor conditions were so poor that [the company] couldn’t afford the risk.

So the Govt of Pakistan asked the ILO for help to improve their labor conditions so that they could attract the business. That’s definitely a dynamic we want to encourage with other big buyers. And it’s a dynamic which has a positive spill-over into the really critical aspect of the problem – those suppliers which are producing for the domestic market, rather than for the big Western buyers.

Also, if you’re interested in why Nike’s approach to its suppliers hasn’t improved conditions in them, check out this great Richard Locke lecture from a few years back.

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‘People want to know what works. But how do we write them in ways that don’t imply they’re generalizable?’

That’s me being interviewed by the Solutions Journalism Network. I’ve written like four articles for the internet, so I’m super qualified to talk about the state of journalism as a field and what it needs to do differently.

The nice thing about these post-game interviews is that you can include caveats and nuances that didn’t make it into the article. A lot of NGO friends of mine have been like, ‘dude, why the hatorade on advocacy NGOs?’

There’s no incentive for [advocacy NGOs] to go after the Li & Fungs of the world, or the smaller companies that no one has heard of. Most NGOs are under-resourced, they’re trying to have the biggest impact with few staff, little time and this huge mountain of terrible conditions they have to bring to the world’s attention.

I talked to someone at a well-known labor NGO about this and he said he has three staff members. The best way to stretch that into impact is to go after Apple, which can improve conditions for hundreds of thousands of employees with a snap of its fingers. Or at least that’s the perception. Individually it’s understandable. But collectively, it means no one is looking at where the worst violations are.

And some more on the Brazilian labor inspectors. I need to write something about this for work-work one of these days. For all the developing countries I’ve been to, I’ve never seen one that has even tried to build up its domestic systems like this.

Brazil used to have a quota system where inspectors were assessed and paid bonuses based on the number of workplaces they inspected. Just like corporate auditors, this gave them a checklist approach. They were literally going door to door, inspecting small workshops instead of big ones because they were quicker to inspect and that’s how you could meet your quota.

Then, in the early 2000s, the government launched this big campaign to eradicate child labor. The inspectors pushed back, like ‘we’re never going to actually end child labor doing inspections this way.’ They were able to switch from quantitative to qualitative assessment methods, and they started prioritizing workplaces according to risk. They also started bringing in all these other government agencies. A weapon the academics talk about a lot is deferred prosecution agreements, where prosecutors tell farms ‘fix this by the time we get back, or we’ll take you to court.’ That threat of litigation is a huge reason why businesses fall into line.

And this is why solutions have to be domestically owned. The effectiveness of the inspectors comes from their mandate, their budget and their support from high-level politicians and the population. You can’t manufacture that from outside. And it’s not going to last if it’s not locally embedded.

And, if you’ve ever met me in real life, I’ve probably mentioned this within like six minutes: There’s no such thing as a good or a bad idea, only how it’s applied.

In development, we have a ton of ideas that aren’t world-changers, but provide modest gains if you roll them out right. Microcredit went through this lifecycle where when we first found out about it, it was going to SAVE THE WORLD. Then all these other NGOs jumped on the bandwagon and they didn’t know what they were doing and the results faltered. Then microcredit became A USELESS SCAM.

In the last few years, microcredit has levelled out to just this one tool among many that works under certain circumstances but not others. In a lot of places, it works really well, but it’s not the shortcut we thought it was. I actually consider that a huge success, but imagine pitching that to your editor.

There’s hella more at the link!

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‘We are not going to shop ourselves into a better world’

Warehouse in Kampala. Photo by me!

I’ve been working on this article, in my head at least, since probably 2007, when I started working in CSR, consulting companies on how to reduce their human rights impacts. The conclusion I came to, that everyone in my field seems to come to eventually, was that companies don’t matter. What matters is the environments where they operate.

One little story that didn’t make it into the article:

Here’s a World Bank profile of a Vietnamese Nike factory. In 1997, 84 percent of workers had nose and throat infections, mostly from failing to wear masks when they were working at dyeing stations. Nike, scrambling to respond to the decade-long boycott campaign against it, started delivering worker training, posting hazardous-material info in the break rooms, issuing a monthly health newsletter. By 1998, infections were down to 20 percent.

Huge success story, right? Well … hmmm. The same investigation found that managers were dumping wastewater in the local river, transferring the health risks to the entire population downstream. When the case came to light, they hired the son of the local Communist Party chairman to negotiate the terms of the settlement. The company was never punished.

In that story is everything that consumer boycotts have achieved. It’s not nothing that the factory improved its health and safety practices. In another study, a Cambodian manager grumbled to investigators that “Nike is so much stricter about everything.” Props to Nike, seriously.

But you see this with almost all of these company efforts: The gains inside the factories are dwarfed by the impacts outside of them. Colluding with political officials, poisoning local communities, these are exactly the kinds of things that audits can’t find, that companies can’t fix, that consumers can’t keep track of.

A few months ago I made that video about Uganda. In 2007, the Industrial Court, the place where workers go to file complaints, lost its mandate. It wasn’t renewed until this year. That means that for eight years, labour inspectors couldn’t levy fines against companies that were breaking the law. Workers couldn’t take their bosses to court for failing to pay back wages. I see this again and again in the developing countries I go to for work: Institutions are there on paper, but absent in practice.

Another little point that that didn’t make it into the article:

Sweatshops don’t happen without the participation of their host governments, and they don’t get solved without them either. One of the reasons India’s garment sector is so informal, so exploitative, is that only 2 percent of its textile factories use shuttle-less looms. In China, it’s 15 percent, boosted by government loans, grants, more than a decade of cajoling its factories to move up the value chain.

India’s own Ministry of Textiles boasts that its desperately poor workers are a competitive advantage: “Rising wages and cost of living in countries closely competing with India,” says the agency’s strategic plan, “provides a vast opportunity for India to capitalize.”

If we’re going to solve sweatshops, we need to consider why they are there, why they endure. We need to stop trying to vote with our wallets, and start voting with our votes.

Thanks to everyone I interviewed for this article! All of the ideas in it, especially the smart ones, are not mine, they’re all taken from the work of researchers and inspectors and CSR folks who have thought about and done this a lot longer than I have. I’m gonna write some follow-up posts highlighting their work.

Also, I have the best editors. As you can tell from the un-edited snips above, I need them!

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