Workers unload coffee in Papua New Guinea. counterculturecoffee/Flickr. (CC 2.0 by-nc-nd)
BTS: Ben, you have done a huge amount of work on supply chains and their part in the structure of contemporary capitalism. Your recent books have also been very critical of the powers-that-be. What are your hopes for this year’s International Labour Conference? Will anything positive come out of it, from the perspective of workers’ rights?
BS: The institutional discourse about global supply chains – or, as they are sometimes called, ‘global value chains’ or ‘GVCs’ – is endorsed and promoted across a broad political spectrum. Institutions ranging from the World Bank to the International Labour Organisation all buy into it. And it is based upon ‘win-win’ assumptions about development.
The discourse holds that participation within GVCs can be good for transnational corporations (who are mostly located in the global north) and for supplier firms and their workers (who are mostly located in the global south). The idea is that if supplier firms and their workers can productively link up with ‘lead firms’ like Apple or Walmart, then everyone will benefit from raised competitiveness, profitability and development.
But the massive problem with this is that it ignores precisely how integration into GVCs is often predicated upon (and liable to reproduce) numerous forms of poverty. If you look at the global textile, food, and high-tech industries, for example, you’ll find huge labouring classes who are being paid less than their costs of subsistence. And often these workers need to work extremely long additional hours just in order to survive.
One of my hopes, therefore, is that somehow the ILO will recognise that the GVCs lauded by mainstream institutions like the World Bank or publications such as The Economist are not simply neutral systems of production. Rather, they systematically reproduce both enormous wealth for a tiny minority of the world’s population and widespread poverty for tens of millions of others. A better term would be ‘global poverty chains’ – and I’d love to see the ILC say that!
A better term would be ‘global poverty chains’ – and I’d love to see the ILC say that!
BTS: Well that would certainly be a novel departure! And I know that you’re far from the only person within the social justice or workers rights community who’d like to see it. But from a governance perspective, and assuming that the ILC doesn’t brand GVCs as GPCs, what do you think global supply chain governance should look like?
BS: Currently supply chains are governed by lead firms in order to guarantee product type, quality, timing of delivery, and above all price. Much academic and civil-society organisation research has documented how lead firms’ mega-profits are secured by the payment of poverty wages to workers under arduous and dangerous conditions.
But supply chains should be governed according to the principle of ‘just returns’. Under that principle workers would receive much higher wages and lead firms much lower profits. To achieve supply chain governance based on such a principle requires us to know exactly how much ‘value’ workers contribute to the final product. And this is an area where the ILO could make a useful contribution, since it is one of the few international institutions concerned with workers’ rights and with the research capacity to produce that kind of knowledge.
This, I believe, could form the basis of an alternative discourse about globalisation. It could be used as part of the political, educational, campaigning, and organisational strategies led by workers’ organisations to demand a greater share of the value produced.
BTS: Well I – and I suspect a lot of our readers – certainly like the sound of that! An ILO free of the shackles placed on it by governments and business organisations certainly could be a progressive force in the world. But more tangibly, if we think that businesses are practically responsible and so should be held responsible for things like working conditions, what can we do to promote their legal accountability in global supply chains?
Raking the coffees. Dennis Tang/Flickr. (CC 2.0 by-nc)
BS: The idea of corporate social responsibility (CSR) has gained a lot of ground over the last two decades. But under the pressure of continuous competitive capital accumulation, it is unlikely that corporations will ever self-regulate to the extent that they begin to sacrifice profits for workers’ betterment.
The best hope that workers have is thus for workers’ organisations to be clearly informed about how global supply chains work and about which strategies could pressurise corporations to concede better working conditions and higher wages. It is a question of struggle. And although the ILO could play a significant role in that struggle, this will only be possible if it formulates a more critical conception of GVCs.
For example, most of the main development institutions (including the ILO) argue that poor wages in poor countries persist because of low firm-level productivity. But this is just not true. Many industries in the global south have comparable levels of productivity to those in the global north, but they flourish because worker’s wages are only a fraction of those in the north. The problem is not profitability, but lead firms’ strategies of profit maximisation.
It is unlikely that corporations will ever self-regulate to the extent that they begin to sacrifice profits for workers’ betterment.
Significantly greater worker control over, or at least input into, the decision-making and management processes of production could contribute to the transformation of ‘global poverty chains’ into vehicles for genuine human development. But this would require quite a fundamental shift in the balance of class forces. And unfortunately, the ILO does not consider the shifting of class forces to be either a priority or a possibility. This is why it appeals to corporations and other international institutions for better corporate regulation, even if I suspect that this will generate little in terms of ameliorating workers’ conditions.
BTS: So, for you, the major goal has to be proactive worker organising as well as a strategy for pushing the ILO to back that?
BS: Absolutely. All too often the ILO harks back to a supposed golden age of corporatism, where states, firms, and trade unions agreed upon productivity targets, working conditions, and wages. But under contemporary globalisation this is just wishful thinking. It would be far better for the ILO to recognise the benefits of militant worker organising in pursuit of better conditions.
There are numerous cases of supposedly ‘progressive agreements’ designed to contribute simultaneously to firm-level competitiveness and better conditions for workers. One of them is the Better Factories Cambodia agreement, which sought to establish minimum conditions. But even with this agreement workers face extremely tough conditions in return for poverty wages.
So strong and militant trade unions and social movements are essential if workers are to realise any of the benefits of employment within GVCs. Without these, corporations will always seize the lion’s share of the value produced within them, leaving workers with as little as possible.
BTS: What is your view then on calls by certain unions or social movements for a binding international convention on corporate responsibility for labor standards in supply chains? Is that worth it? Or is it a waste of time?
In my view, the contemporary global balance of power – where corporations monopolise the majority of the value created within GVCs and where international institutions proclaim the virtues of a relatively free market system – suggests that any benefits to workers of a binding international convention will be relatively minimal.
My preference would therefore be for all of us (and especially the ILO) to try and mobilise public opinion about the exploitative, poverty-generating nature of GVC’s. It is crucial that we build an ideological campaign to legitimate a radically different conception of worker-influence within GVCs.
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