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An undisrupted status quo? Voices from the supply chain revisited

Not much has changed since the ILO began to discuss decent work in supply chains 12 months ago.

"La Constancia" by Regina Giménez, a tribute to the Catalan labor union that called a general strike in 1913 in protest of the conditions for female and child workers in the textile industry. latitudes-flickr/Flcikr. (CC BY-NC-ND 2.0)

Last June marked the first time that global supply chains (GSCs) were discussed at the International Labour Conference, the International Labour Organisation's flagship annual event. At the time, some wondered whether the simple fact that GSCs were an item on the ILO’s agenda constituted a victory in itself, while others remained unconvinced of the feasibility of meaningfully re-charting globalisation's current path.

Since then, calls for greater accountability and labour standards have only increased. For example, Human Rights Watch sent an open letter last April with over 70 organisational signatories to the European Commission, demanding that they impose greater transparency measures in the garment supply chain. In May the G20 Labour and Employment Ministers issued the 2017 LEMM Declaration, an important – though arguably small – step towards promoting sustainable supply chains.

But despite ongoing discussions about the need to end exploitative practices in supply chains, there remains substantial resistance to binding standards at the international level, including to an ILO convention on decent work. And needless to say, the working conditions for the vast majority of supply chain workers remain unchanged. In light of this undisrupted status quo, we talked with expert voices from global supply chains to understand why this is the case and how to move forward.

Invisible and unequal relationships

GSCs are not neutral systems of production. The combination of a cost minimising strategy with free moving capital – the core of any GSC – creates a race to the bottom for supplier firms, as they must constantly prove themselves to be the cheapest in order to survive. To do this they must, by any way possible, reduce the price of production, and especially the price of labour.

Workers willing to work for rock bottom wages must not only be found, but kept in that state of need.

“Supply chains exists because [corporations] are seeking the most vulnerable and the most marginalised workforce, so they can cut costs,” said Sanjiv Pandita, the Asia regional representative for Solidar Suisse Hong Kong. "They are looking for young women from the rural areas in Cambodia and Bangladesh and Vietnam, whether they are working in electronics or the garment sector". It is a system that depends on and reproduces global inequality, as workers willing to work for rock bottom wages must not only be found, but kept in that state of need.

In what is already an asymmetrical labour relationship, workers are further limited by the multiple layers of sub-contracting that characterise most modern supply chains. These distance workers from the lead firms, obscure abusive labour practices, and make redress even more difficult.  As Cathy Feingold, the international director of the AFL-CIO, the largest trade union federation in the United States, contended: “it is very hard for workers to have any kind of power, when they don’t really know who they are working for and what kind of power they have in negotiating with those employers.”

Anannya Bhattacharjee, international coordinator of the Asia Floor Wage Alliance and local trade unionist in India, echoed this point. “A lot of people may think that the immediate employer is the factory, which is the case, but the principal employer is not the factory manager. It’s the factory manager’s boss, who is the brand and the retailer.”

If the brands and retailers are at the top of the pyramid, migrant workers are at the bottom, says JJ Rosenbaum, the current Robina Fellow at Yale Law School’s Schell Center for International Human Rights: “Migrant workers are often at the bottom of supply chains of major multinational corporations", she said, "and traditional notions of freedom of association and collective bargaining are often times leaving them out.”

When ‘transparency’ is not enough to overcome opacity

These arguments are often met with calls for greater transparency in supply chains. The policy response, however, typically puts the onus on corporations to disclose labour abuses and leaves the remedies to company discretion. Two relatively recent examples of transparency legislation in action – the Modern Slavery Act in the UK (2015) and the California Transparency Act (2010) – operate on this model, and have so far failed to reduce exploitation in supply chains.

At the same time that monitoring for corporate exploitation is being left to those selfsame corporations, pressure on major supplier countries to maintain the status quo reduces the space for democratic organising, Pandita said, and frequently causes "the government to defy their own constitution” in the hopes of achieving export-oriented growth. In doing so, states abrogate their responsibility to “create an atmosphere that not only allows businesses to operate but allows the workers to get their due rights,” added Uma Rani, a senior development economist at the ILO.

How can we hold both states and corporations accountable for respecting workers’ rights at both national and international levels?

"The only structure that can protect workers is unionisation, Bhattacharjee said. "Workers have to unionise in order to then hold all the parties accountable". Furthermore, in an age where supply chains crisscross the world, “the only way to bargain with brands is to bargain globally.” Feingold reiterated the point. “We need transnational bargaining, we need new forms of thinking regionally about sectoral bargaining ... and we need to go towards corporate accountability that is binding", Feingold said". Those are the pieces that we need to be looking at in terms of the labour movement, building power from the ground up, and then shaping things from above with the global architecture”. 


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