Codes of Conduct on the Road

to Implementation: The Dynamic of

Brand Demands, Factory Resistance,

and Rights of Workers

Philip S. Robertson Jr.

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Abstract

Codes of conduct have spread throughout the garment and textile export industry, setting
conditions for a variety of practices in the production process at the factory. Most
importantly, these codes prescribe a set out requirements for factories to respect labour
rights, such as freedom of association and right to collectively bargain, as well as ensure
compliance with at least the legal minimum for wages and conditions of work. Most codes
of conduct are based on international labour standards as defined by the Conventions of the
International Labour Organisation (ILO) and are divided between “multi-stakeholder”
codes, and corporate codes determined unilaterally by the international garment brand
company. While there are variations between codes, many of them are strikingly similar
and cover similar topics. While theoretically codes set up a “win-win” process for
workers, their employers, governments of garment exporting countries, international brands
and consumers, the reality is more complicated and so far the failures to achieve improved
labour rights outcomes through codes have result in efforts by various stakeholders to shift
blame to others. However, what is clear that the advent of free trade in the garment sector
as a result of the end of the Multi-fiber Agreement (MFA) and its distributive quota system
has placed international garment brands and their buyers in even a stronger position vis-à-
vis factory owners to insist on compliance with codes of conduct as a condition of doing
business. Since it is the brands that are the “owners” of many of the codes of conduct, the
result is free trade has set out potentially greater emphasis on labour rights, i.e. a positive
linkage at the factory level between free trade and labour. However, this linkage is
undermined by the continued emphasis of the brands on lower costs for production (in their
empowered positions as ‘price-makers’) and weaknesses and disputes over methods to
actually enforce codes of conduct. Therefore, measuring the actual impact of codes of
conduct on both workers’ rights, and on trade, remains a work in progress that is often
influenced by local conditions in the exporting country, and the predilections of key
stakeholders, such as the brands, in each particular situation.

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List of Abbreviations

AAMA

American Apparel Manufacturers Association

ACILS

American Center for International Labour Solidarity

AIP

White House Apparel Industry Partnership

BGMEA

Bangladesh Garment and Manufacturers Exporters Association

BKMEA Bangladesh

Knitwear

Manufacturers and Exporters Association

ETI

Ethical Trade Initiative

European

Union

FLA

Fair

Labour

Association

FWF

Fair Wear Foundation

ICFTU

International Confederation of Free Trade Unions

ILO

International Labour Organisation

MFA

Multi-Fiber

Agreement

NGO

Non-governmental

organisation

OSH

Occupational safety and health

SA-8000

Social Accountability 8000

SAI

Social Accountability International

SAAS

Social Accountability Accreditation Services

SCAT

Sustainable Compliance Assessment Tool

TCLR

Thai Center for Labour Rights

UDHR

Universal Declaration on Human Rights

United

Nations

UNICEF

United Nations Children’s Fund

UNIFEM

United Nations Development Fund for Women

United States of America

USAS

United Students Against Sweatshops

WRAP

Worldwide Responsible Apparel Partnership

WRC

Workers Rights Consortium

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Table of Content

Abstract ______________________________________________________________ C-1
List of Abbreviations ___________________________________________________ C-2

I. Introduction...............................................................................................................................................C-4

A. Framing the Issue -- The Promise and Practice of Codes of Conduct....................... C-4

C. Continued Controversies about Codes of Conduct and Labour-Trade Linkages ...... C-8

II. Dissecting Codes of Conduct – What do They Contain?............................................................C-11

A. International Human Rights and Labour Standards, ILO Conventions, and Codes of

Conduct ................................................................................................................... C-11

B. Multi-Stakeholder Codes of Conduct ...................................................................... C-14

1. Ethical Trading Initiative (ETI)........................................................................ C-14
2. Fair Labour Association (FLA) ........................................................................ C-16
3. Social Accountability – 8000 (SA-8000) ......................................................... C-17
4. Worker Rights Consortium (WRC).................................................................. C-19
5. Worldwide Responsible Apparel Production (WRAP).................................... C-20

C. Corporate Codes of Conduct – A Comparative Analysis – Gap vs. Wal-Mart ....... C-23

III. Some Analysis of Difficult Issues in the Implementation of Codes of Conduct..................C-25

A. Codes of Conduct on Wages and Hours of Work .................................................. C-25

B. Codes of Conduct: Difficulties in Monitoring Freedom of Association.......................................C-27

C. Code Monitors and Enforcement of Codes of Conduct.......................................... C-27

1. Direct-hire Brand Monitors ............................................................................. C-27
2. For-profit, private sector auditors.................................................................... C-30

IV. Conclusion – Growing Focus on Codes, but Uncertain Path Ahead .............................................C-31

Bibliography.................................................................................................................................................C-33

Appendix 1....................................................................................................................................................C-36

Gap Code of Vendor Conduct ................................................................................................................C-36

I. General Principle ..................................................................................................... C-36

II. Environment ............................................................................................................ C-36

III. Discrimination ........................................................................................................ C-36

IV. Forced Labour ........................................................................................................ C-36

V. Child Labour............................................................................................................ C-37

VI. Wages & Hours ...................................................................................................... C-37

VII. Working Conditions.............................................................................................. C-37

Factory:................................................................................................................. C-38
Housing (if applicable):........................................................................................ C-38

VIII. Freedom of Association....................................................................................... C-39

Monitoring & Enforcement .................................................................................. C-39

Appendix 2....................................................................................................................................................C-40

Wal-Mart Stores, Inc. Standards For Suppliers ................................................................................C-40

Researcher's CV _____________________________________________________C-45

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Codes of Conduct on the Road to Implementation:

The Dynamic of Brand Demands, Factory Resistance,

and Rights of Workers

I. Introduction

A. Framing the Issue -- The Promise and Practice of Codes of Conduct

More than ten years have passed since President Bill Clinton convened the White House
Apparel Partnership in an attempt to build greater social responsibility into the global
garment industry. Rocked by the August 1995 rescue of 72 Thai slaves in an El Monte,
California garment sweatshop, and the discovery in 1996 by the US Department of Labour
that famous celebrity Kathie Lee Gifford’s name brand was being produced in sweatshops
in Central America, the political leader of the world’s remaining super-power had called
together the partnership – composed of top officers of famous international apparel brands,
leaders of labour unions, and NGO champions of worker and human rights – to seek
solutions to the issue of labour rights abuses in global garment sourcing chains. At the core
of the Partnership’s deliberations was a new realisation that the old ‘business as usual’
arrangements of sub-contracting production overseas were about to change forever. It
would no longer be acceptable for a global apparel brand or retailer to avoid responsibility
when factories in far-off countries abused the workers making that brand’s products.
Consumers, industry analysts, the media, and the political leaders now demanded more.

Ultimately, while the Partnership reached agreement on a standard code of conduct,
negotiations finally broke down acrimoniously because of fundamental disagreements on
how the Apparel Partnership’s code of conduct would be monitored and enforced. In fact,
many issues related to code monitoring and approaches to ensure compliance still remain
unsettled – such as the roles and capacities of various stakeholders (local government
inspectors, representatives of the brand, the workers, commercial auditors, and international
advocates) to contribute to enforcement, appropriate remediation strategies and follow-up
methods, and degrees of obligation to remain engaged with troublesome factories that
violate the codes. Even today, the Fair Labour Association (FLA), which was formed from
the members of the Partnership who stayed when the split occurred over monitoring,
continues to be dogged by criticism of its code monitoring and compliance record.

Nevertheless, codes of conduct continue to be seen as important elements of the industry,
and since those early days, these codes have proliferated in many forms. Major garment
companies consider it de rigueur that they have their own code of conduct (which is widely
publicized to consumers) although the intensity and thoroughness with which they actually
monitor compliance with their company’s code varies. Multi-stakeholder codes have been
developed by US apparel importers; coalitions of trade unions, NGOs, and companies; for-
profit companies; and Governments of garment-producing countries (like Thailand with its
Thai Labour Standards – 8001 code). Even the United Nations itself has gotten involved
through the promulgation of ten principles in a UN Global Compact – though the lack of a

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credible monitoring system prompts critics to accuse the UN of allowing companies to
“blue-wash” their image through their association with the Compact.

Monitoring systems have similarly seen a diversity of forms, purposes, and personnel –
ranging from international brands that hire their own monitors based in the country of
production, to staff of multi-stakeholder codes compliance schemes, to commercial
auditors, ILO-employed monitors (as in Cambodia) and, in some cases, representatives of
the factory conducting what can euphemistically be called “self-monitoring.” Labour
unions and NGOs tend to focus on the role of the workers in the factory acting as
‘monitors’ who, through the support of their labour union and their own voice and efforts,
can prompt critical attention from outside to examine the record of treatment accorded the
workers by the factory management.

Codes of conduct promise much in theory. Scenarios for “win-win-win-win” are often
cited as a possible outcome from effective enforcement of a code of conduct. The
argument is that for workers, they win with more rights and better conditions at work. For
the employers, it is said that a code of conduct can contribute to higher levels of efficiency
and productivity through re-tooled production processes and happier, better motivated
workers. For the exporting country, code compliance can mean a reputation as a nation
with “clean production” supply chains that support implementation of the labour code and
other relevant regulations. Finally, codes of conduct can make final consumers satisfied
because they feel secure that the garment that they are wearing was not produced under
sweatshop conditions.

On the other hand, the major criticism is that codes of conduct effectively privatize a core
government function – the inspection and regulation of workplaces, and enforcement of the
labour law. But the problem is that all four Governments examined in this study arguably
have too few budgetary and personnel resources to adequately inspect their country’s
numerous workplaces. For example, in Thailand which has perhaps the most resource
among the four countries, research in the year 2000 found that more than one-third of all
enterprises inspected by Ministry of Labour inspectors were violating some aspects of the
labour law. Each general labour relations inspector was responsible for approximately
1,000 enterprises per year, while each occupational safety and health (OSH) inspector and
labour relations inspector was respectively responsible for 1,680 and 1,840 enterprises.

The Bangladesh factory inspection system has totally failed and the situations faced by the
labour inspectorates in Cambodia and Vietnam are better than Bangladesh only by a matter
of degree.
The substitution of the private sector for Government in enforcement of the labour law is
one of the fears often raised about codes of conduct by labour rights advocates, but there
appears to be little political will and few resources to systematically upgrade Government
labour inspection to the levels required for improved enforcement. So it should not be

See www.unglobalcompact.org for more information about the UN Global Compact. Critics use a

play on words, substituting “blue” (the color of the UN) for “white”, hence “blue-washing” instead

‘white-washing” (i.e. using the good image of the UN to give a semblance of respectability to corporate

behavior not deserving such respect).

In the year 2000, it was found that a total of 37.61% of the establishments inspected were breaching

some aspects of the labour laws

Brown, Andrew, Bundit Thonachaisetavut, and Kevin Hewison;

“Labour Relations and Regulation in Thailand: Theory and Practice”, Working Paper Series No. 27,

Southeast Asia Research Center, City University of Hong Kong, July 2002.

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considered surprising that codes of conduct have become the de facto enforcement
mechanisms in many sectors.

The governing dynamic of this process has been the clients (the international apparel brands
sourcing from garment factories) who set out the codes of conduct and systems for
compliance, using their economic leverage to ensure enforcement. Non-compliant
factories are ostensibly given the opportunity to bring their activities into line with the
provisions of codes of conduct through various processes of remediation (which also vary,
depending on the code of conduct and the brand’s compliance systems). The choice to
continue or terminate production orders sent to the factory ultimately rests with the
factory’s clients. In a number of cases, adverse publicity about labour rights abuses in
specific factories have prompted brands to “cut and run” (a term commonly used by NGOs
to describe a brand’s action to pull all orders from a factory so as to minimize perceived
damage to brand image), leaving factories and their workers in the lurch. Added to the mix
are a plethora of innovative, aggressive and committed global and national campaigners,
based in “clean clothes” NGOs

, consumer and student groups, and international trade

unions, who are savvy users of internet technology and media to bring pressure and demand
accountability from sweatshop factories and the brands who source from them. In the
balance of all these interactions is the ever-precious “image” and “logo” of the international
brand, which has often been built with investments of millions of dollars in advertising and
high-profile celebrity and sports figure endorsements. This brand image can be rapidly
undermined if a brand’s production is found being produced in a sweatshop where labour
rights abuses are prevalent, and the new global 24 hour news cycle widely reports the story.

B. The Multi-Fiber Agreement, Trade and Codes of Conduct – The Brands Ascendant

However, until three years ago, the issues of trade did not significantly enter into this
dynamic interaction on codes of conduct and labour standards between consumer, brand,
factory and workers, and global civil society.

The reason is that the Multi-Fiber

Agreement (MFA) was in effect until the end of 2004. When the MFA was originally
developed to allow garment importing countries to protect their markets by setting
numerical quotas per exporting country and per garment category, it was decried as an anti-
free trade mechanism. However, an unintended effect of those import quotas was to re-
distribute garment production throughout much of the developing world by giving
incentives for garment manufacturers to invest in other countries in order to expand
capacity beyond national garment quota caps. Some have characterized the MFA as trade-
distorting. The Fair Labour Association (FLA) noted that “during the over 30 years that it
was in effect, the MFA and its system of country-specific quotas strongly determined –
some would say skewed – patterns of trade and investment in textile and clothing. It led to
increased investment in countries that had little or no comparative advantage in textile and

Examples of some preeminent clean clothes NGOs include the Clean Clothes Campaign (CCC),

which is actually a network of national clean clothes NGOs in Europe which has its secretariat office in

the Netherlands, the Maquila Solidarity Network (MSN) based in Canada, and United Students against
Sweatshops (USAS) based in the U.S.

There are some exceptions, however, but mostly relating to countries with the most egregious records

of human rights abuses, such as Myanmar. Starting in 1996-97, the Free Burma Campaign and later the

US Campaign for Burma ran highly effective campaigns to stigmatize “Made in Burma” clothing in the
US, and with European allies like the Clean Clothes Campaign, which helped push for garment

companies producing in Myanmar to divest. Ultimately, human rights concerns have prompted the US

and other like-minded countries to pass legislation that bans all imports of goods made in Myanmar.

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clothing production, often by quota-seeking enterprises from highly competitive countries
that had exhausted their own quotas and were seeking new export platforms for textile and
clothing products.”

The Bangladesh garment industry originated in 1979 with South Korean investors setting
up factories to take advantage of the fact that Bangladesh, as a newly arising garment
exporting country, had not yet had a MFA quota imposed on it yet.

Similarly, the rapid

rise of Cambodia’s garment and apparel sector in 1994-1995 can be attributed to investors
from mainland China, Taiwan, South Korea, Malaysia and Thailand setting up factories to
take advantage of Cambodia’s then unrestricted ability (as a new garment exporting nation
not yet incorporated into the MFA) to export to the US.

While treatment of workers and

respect for codes of conduct were a factor in many brands’ sourcing decisions, the bottom
line was that availability of quota in a country was a pre-requisite. Where quota existed in
low-cost countries (like Bangladesh), there were strong incentives for manufacturers from
high production countries (which perennially filled their quotas) to either place orders or
invest in a factory directly. Countries which lacked backward and forward linkages in
garment production could still be competitive because they were guaranteed quota from the
US and the EU.

The phase out of the MFA was set over a ten year period between 1995 and 2005. As the
deadline for the end of the quota system approached, factory owners throughout Africa,
Latin America, and Asia viewed the new post-MFA market with trepidation because they
feared falling before a surge of garment exports from mega-producers like China. While
dire predictions of immediate massive waves of factory closures after the MFA phase-out
have not fully materialized, virtually all interlocutors involved in the garment industries in
the countries in this study (Bangladesh, Cambodia, Thailand and Vietnam) stated clearly
that global competition in the garment sector has intensified. An employer representative in
Bangladesh put it succinctly when she said “it’s a buyer’s world.”

The level of

competition is set to rise even further, when safeguard limits imposed in 2005 by the US
and the EU against China’s garment exports expire in early 2008.

At the most basic level, employers and government officials say there is a trend in which
the cost per garment being paid by buyers is decreasing while at the same time the
requirements imposed by buyers are increasing in a variety of areas – such as garment
design, use of chemical-free/safe materials, compliance with codes of conduct on rights of
workers and conditions of work, and implementation of more environmentally-friendly
production processes. Social/codes compliance officers working as staff of the brands, and
representatives of commercial audit firms often hired by brands to conduct compliance

Fair Labour Association, “Supply Chain Consolidation and Restructuring”,

http://www.fairlabour.org/supply_chain_consolidation_and_restructuring

Siddiqi, Hafiz G.A., The Readymade Garment Industry of Bangladesh, University Press Limited,

Dhaka, Bangladesh, 2004.

Cambodia emerged as a formally democratic nation in 1993 after UN organized and supervised

elections marked the end of a long national nightmare that included civil war, the devastation wrought
by the Khmer Rouge genocide, and invasion by Vietnam and ten years of continued intermittent fighting

and international isolation. For these reasons, Cambodia had never been given a US quota and new

investors producing garments with a “Made in Cambodia” could export as many garments as they could
produce.

Interview of ITD research team with Production Manager of factory in Dhaka, Bangladesh, who

insisted on anonymity as a condition of being interviewed because he feared possible retaliation from

brands who might not appreciate his frankness – November 17, 2007.

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inspections, quietly agree that this trend exists. Research by the Worker Rights
Consortium (WRC) found a precipitous decrease world-wide in prices that brands are
paying suppliers for varied garment products, ranging from cotton knit shirts, to pajamas, to
trousers. These price decreases occurred across a wide range of countries. For trousers,
WRC found that from 1994 to 2004 the factory-gate prices for exported trousers dropped
34% in China, 52% in Egypt, 45% in Bangladesh, 12% in Thailand, 31% in Russia, and
66% in Guatemala.

WRC discovered similar price decreases for many other types of

garments as well.

This above-mentioned trend is a clear indication that the biggest changes in the post-MFA
world are in the shift in the power-relations between the brands and the factory owners and
stakeholders in the national economies. With a truly global market to source from, buyers
are now in the driver’s seat for the industry, with greater power to unilaterally set the terms
of engagement with factories producing their goods. Since codes of conduct originate with
the buyers and compliance with the code is often set as a pre-condition to doing business
with the brand, it is clear that codes of conduct will take on increased importance in the
coming decade. Ironically, increased free trade and competition has served to increase the
importance of compliance with these same codes of conduct that factory owners and the
Government allies have previously disparaged and condemned as “non-tariff barriers”
(NTBs) to trade. While straight-forward competition on prices will no doubt continue to
drive many sourcing decisions – especially for mega-retailers (the so-called “big box”
hyper-marts) sourcing for their house brands -- garment manufacturers in various countries
are no longer be able to deny the importance of at least appearing to comply with codes of
conduct. For example, national employers associations such as the Bangladesh Garment
Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear
Manufacturers and Exporters Association (BKMEA) have already embarked on multi-
faceted public relations efforts to rebuff claims that their country’s ready-made garment
sector is somehow less compliant with social factors/codes of conduct than their
competitors.

C. Continued Controversies about Codes of Conduct and Labour-Trade Linkages

Since the days of the White House Apparel Partnership, one element that has not changed is
the acrimony between the stakeholders involved in the codes of conduct debate. Garment
factory owners complain about ever shrinking profit margins as buyers are able to
increasingly dictate price and terms to factories, and they demand the brands increase the
price paid per completed garment. The brands argue they are being held hostage to market
demand from consumers who want better, more fashionable and complicated designs, with
greater variety of fabrics and styles, but are not willing to pay more. Some of the brands
then point their fingers at the so-called “big boxes” or giant retailers like Wal-Mart and
Tesco who they claim are responsible for under-cutting the entire sector by driving retail
prices down to rock-bottom levels. Consumers blame both the factory owners and the
brands for failures to provide fair wages and decent working conditions (in line with their
codes of conduct) to workers in the garment production supply chains and, in the wake of
exposes about toys, children’s jewelry and other items from China, increase their demands
for safe products that are free from dangerous chemicals, dyes, and metals. Meanwhile,

Worker Rights Consortium (WRC), “Apparel Prices and Code Enforcement”, power point

presentation, see http://www.workersrights.org/UC05ApparelPricePressure.ppt year?

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little changes for garment workers who continue to face systematic retaliation when trying
to exercise their rights to freedom of association and collective bargaining, see the security
of their employment undermined by sub-contracting of work, and suffer regular violations
of the labour laws such as payment of sub-minimum wages, failure to compensate
overtime, denial of maternity and sick leave, and exposure to unsafe working conditions
that result in injuries and occupational disease. In the spirit of international labour
solidarity, international clean clothes campaigners and global trade unions take up the cause
of these workers and their unions but they are then accused by the factories owners and
government officials of garment-producing nations of trying to destroy their garment
industry. Meanwhile, demands by these campaigners that factories pay better wages, or
even “living wages”

, to workers are rejected out of hand by the factories, who say the

brands are not paying enough per piece to even consider this demand. So the cycle of
blame and finger-pointing comes full circle and continues on in endless iterations.

Nevertheless, the stakes are high for the brands, the garment manufacturers, and the
workers to ensure that codes of conduct work effectively to prevent work-place abuses,
maintain safer factories, and provide basic guarantees that products are safe to use by final
consumers. In 2007, the toy industry of China and their American and European corporate
clients learned the hard way how damaging a failure to effectively monitor production can
be. Mattel Corporation’s discovery that a number of its toys produced in China were
contaminated with lead paint (leading to recall of 21 million toys in August and September
2007 alone

) then followed similar discoveries by other major toy companies like Fisher-

Price leading to recalls of millions of toys that include popular items like Barbie and
Batman.

Increased scrutiny of many other of the ubiquitous Chinese-made toys filling the

retail shelves of giant retailers like Wal-Mart and Toys R Us has uncovered many other
toys, children’s jewelry, and other items with similar toxic components, leading to further
recalls, and a movement by consumers to search for alternative toys produced in Europe,
Canada and the United States. In reaction, China banned use of lead-based paints in
production of toys in September 2007 but US consumer patterns may be already changing
away from Chinese-made toys.

The challenge is now whether systems can be devised to ensure that the “win-win-win-win”
theory of codes of conduct actually works, thereby demonstrating a positive connection
between international free trade and the increased compliance with codes of conduct that
can improve the lives of workers and their families.

One on hand, codes of conduct are clearly now part of the main infrastructure of the
international garment sector. The prominence of codes as a condition of doing business has
been strengthened by the termination of the MFA. Since they are no longer worried about

The concept of the “living wage” calls for wages to be paid that are sufficient to adequately support

the food, housing, education and other key expenses of the life of a worker and his/her family as well as
provide the worker with some savings. This demand has been consistently pushed by organisations such

as the Clean Clothes Campaign, Workers Rights Consortium, United Students against Sweatshops,
national labour unions like UNITE HERE, and many other international labour campaigners, but it has

been fiercely resisted by both the global brands and the factories in their supply chains.

News Reports, “Mattel Apologizes to China Over Recall”, International Herald Tribune, September 22-

23, 2007

BBC News, “Third Recall for China-Made Toys”, September 15, 2007.

Abelson, Jenn; “Not Toying Around: Recalls Change Way Many are Shopping”, The Boston Globe,

December 8, 2007. http://boston.com/business/articles/2007/12/08/not_toying_around/

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MFA import quotas, international brands and intermediary agent/brokers now have greater
discretion and flexibility in placing orders and setting terms and conditions to which factory
owners must either accede or risk losing orders.

It is ironic that in this sense, greater free trade has introduced concepts of labour rights
conditionality through codes of conduct into contracting arrangements between buyers and
factory owners. Yet, at the global level, it can be seen that the linkage between labour
rights and trade remains more tenuous and less accepted by many Governments, as
demonstrated by the fate of the “social clause.” Trade unions, led by the International
Confederation of Free Trade Unions (ICFTU, now re-named ITUC – the International
Trade Union Confederation), campaigned for years for inclusion of a “social clause” which
would place ensuring respect for core labour standards (as defined by the ILO) in the
mandate of the WTO. Yet this proposal was ultimately deflected at the WTO Ministerial
Conference in Singapore in December 1996 (despite the support of the US under President
Bill Clinton, and the EU). While a paragraph was adopted in 1996 that recognized the
importance of international labour standards, the Conference rejected the use of labour
standards for “protectionist purposes” and agreed that the “comparative advantage of
countries, particularly low-wage developing countries, must in no way be put into
question.” The ILO and WTO were to continue existing collaboration. However, since
then, the social clause effort has lost even more ground, and it was ultimately excluded
from the negotiating agenda in the Doha Round.

Despite the relative ascendancy of codes of conduct, it is clear there remains significant
dissatisfaction of garment factory owners, and government authorities of garment exporting
countries, with linking labour rights and trade. Codes of conduct are frequently given lip
service as important tools for better outcomes for workers and factories, but compliance is
often undercut by a lack of enforcement mechanisms, and the ability to shift and move
garment orders. Codes of conduct have clearly worked in some high-profile cases, such as
Gina Form Bra in Thailand and BJ&B in the Dominican Republic

-- in which unions

overcame long anti-union campaigns with the assistance of international campaigners and
negotiated unprecedented collective-bargaining agreements providing for improved salaries
and benefits -- yet within three years of the settlement of the dispute, both factories shut
down as owners shifted production to lower-cost, non-union factories in other countries.

Accordingly, it is best to understand codes of conduct, and the connection they forge
between labour standards and trade, as a work in progress. Most observers agree that
codes of conduct are growing in importance but debate the nature and degree of their actual
impact in the lives of workers and the business interests of factory owners/employers in
garment exporting countries.

Peter

Bakvis and Molly McCoy, 2008. Core Labour Standards and International Organisations:

What Inroads Has Labour Made? Friedrich Ebert Stiftung Briefing Papers, No. 6/2008. Available from

www.fes.de/gewerkschaften

Clean Clothes Campaign, various reports on BJ&B, including “Sportswear Workers in the

Dominican Republic Need your Support”, “Background: Long Road to Compliance Ends

in…Closure?”, and

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II. Dissecting Codes of Conduct – What do They Contain?

A. International Human Rights and Labour Standards, ILO Conventions, and Codes of
Conduct

In order to understand the plethora of codes of conduct that have grown up over the past
decade, it is critical to first examine the international labour and human rights standards on
which many of the codes are based.

Second, it is necessary to analyze and compare the different types of codes of conduct,
including the leading “multi-stakeholder” code of conduct systems, such as the Fair Labour
Association (FLA); Worldwide Responsible Apparel Partnership (WRAP); the Ethical
Trade Initiative (ETI); Social Accountability-8000 (SA-8000); Worker Rights Consortium
(WRC); and the Fair Wear Foundation (FWF). These efforts are supplemented by specific
multi-stakeholder projects, like the Joint Initiative on Corporate Accountability and Worker
Rights (the JO-IN programme)

which aim to build collaboration and participation

between various code monitoring systems.

Finally, it is important to analyze some of the major brands’ codes, which are specific to
that brand and where all the monitoring and compliance procedures for that code are
devised and implemented by the brand itself.

Many of the codes of conduct reference some or all of the core labour standards of the
International Labour Organisation (ILO) which are contained in eight Conventions. The
Conventions are the following: ILO Convention 29 (forced labour), 87 (freedom of
association), 98 (collective bargaining), 100 (equal remuneration), 105 (abolition of forced
labour), 111 (discrimination), 138 (minimum age for work), and 182 (worst forms of child
labour). An early “model code of conduct” developed by the International Confederation
of Free Trade Unions (ICFTU) was closely based on the provisions of these ILO core
conventions, reflecting organized labour’s concerns that codes were private sector vehicles
that could undermine labour standards and push the responsibility of labour law
enforcement from relevant government authorities to self-interested factory owners and
buyers representatives. Some codes of conduct, like SA-8000, call for companies to
comply with not only the core ILO conventions, but also with additional ILO Conventions,
including ILO Convention 135 (workers representatives), 155 (occupational safety and
health), 159 (vocational rehabilitation and employment/disabled persons), and 177 (home
work). Similarly, the Ethical Trade Initiative (ETI) states clearly that all of its work is
based on the “principle of incorporating internationally-agreed standards into codes of
labour practice.”

Fair Wear Foundation’s labour standards are explicitly “based on ILO

Conventions, including the so-called core conventions, and the UN’s Universal Declaration

For more information, see the JO-IN website at www.jo-in.org

Ethical Trading Initiative, “Purpose, Principles, Programme And Membership

Information”, from ETI website www.ethicaltrade.org

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on Human Rights.”

The model code promulgated by the Clean Clothes Campaign also

explicitly states that core ILO conventions must be observed.

For many stakeholders in organized labour, NGOs, student activist organisations and “fair
trade” and “clean clothes” consumer groups, their evaluation of the relative worth of a code
is directly related to its coherence with the ILO conventions. Not surprisingly, this view is
shared by many of the UN agencies and commissions such as UNIFEM, UNICEF and the
Office of the UN High Commissioner on Human Rights with mandates to promote and
uphold various human rights, child rights, women’s rights, and labour conventions.

Given the overwhelming international consensus about the importance of these
international standards, it is important to understand some of the key principles of the core
ILO conventions and UN human rights conventions which are directly relevant to any
assessment of the quality of a code of conduct.

A quick examination finds the following standards:

¾ Freedom of association and the right to collective bargaining (ILO Conventions 87

and 98), which are the core rights to form and join an organisation (invariably a
labour union) of one’s choice, as well as the right to not be compelled to join an
organisation, and to bargain collectively with an employer on matters relating to all
aspects of employment;

¾ No discrimination in employment (ILO Conventions 100 and 111), meaning equal

remuneration for men and women for work of equal value, and prohibiting all forms
of discrimination in “equality of opportunity or treatment in employment or
occupation”

based on race, color, sex, religion, political opinion, national

extraction or social origin, or other forms of “distinction, exclusion, or preference.”
However, most codes of conduct have updated their list of the various types of
discrimination which can be inflicted upon employees, making the anti-
discrimination clauses more comprehensive. For example, the WRC’s Model Code
of Conduct seeks to ensure that there is no discrimination on the basis of “gender,
race, religion, age, disability, sexual orientation, nationality, political opinion, or
social or ethnic origin.”

In most cases, this equates to a prohibition on discrimination in hiring and firing,
treatment at work, receipt of promotions or punitive treatments, and differences in
wages and benefits when performing work of equal value. This is connected to a
common requirement in codes that forbids any sort of harassment (physical or
verbal) of employees and requires that all workers be treated with “dignity and
respect”

Fair Wear Foundation, Fair Wear Principles and Policies, version May 2002, downloaded from Fair

Wear Foundation website at www.fairwear.nl

Clean Clothes Campaign, Code of Labour Practices for the Apparel Industry Including Sportswear,

February 1998, downloaded from www.cleanclothes.org

ILO Convention 111

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¾ No exploitation of child labour (ILO Conventions 138 and 182, where the age of a

child is understood to be not less than the age of completion of compulsory
schooling, and not less than 15 years of age;

¾ Employment is freely chosen (ILO Conventions 29 and 105), i.e. a basic prohibition

on all forms of forced or compulsory labour. Many codes of conduct further
specify this prohibition includes the use of any form of prison labour, indentured
labour, and bonded labour.

Some of the other ILO conventions that are raised to justify and underpin various aspects of
codes include ILO Conventions 26 and 131 (to justify payment of a “living wage”),
Convention 155 (healthy/safe conditions of work), Convention 1 (excessive working
hours), and others.

The ILO Declaration on Fundamental Principles and Rights at Work also plays an
important supportive role since it asserts that all member states of the ILO are considered to
be bound by the core ILO conventions (whether or not the member state in question has
ratified all the core conventions) as a condition of membership in the ILO. Since virtually
all codes of conduct require (at a minimum) that a company comply with the labour laws
and the international agreements entered into by the country in question, a logical argument
can be made that the ILO Fundamental Declaration extends the ILO core conventions to all
codes of conduct.

Another international convention that is often invoked by codes of conduct is the Universal
Declaration on Human Rights (UDHR) which is considered binding on all nations by virtue
of their membership in the United Nations and has developed the status of customary
international law. Specific sections of UDHR often cited as underpinning the codes of
conduct are Article 2 (non-discrimination), Article 4 (prohibition of forced labour), Article
20 (freedom of association), Article 23 (right to “just and favorable” conditions of work
and remuneration, and right to form a trade union), Article 24 (right to rest and “reasonable
limitation on working hours, and periodic holidays with pay”), and Article 25 (right to “a
standard of living adequate for the health and well-being of himself and his family”).

Beyond the principles and standards included in the ILO Conventions are additional
requirements that are frequently contained in codes of conduct. These include a
requirement that the manufacturer comply with all applicable national laws and regulations
in their operations.

In some codes, like WRC’s Model Code of Conduct, an additional

clause is added that where the standards under the code are different from, or conflict with,
the national law, a comparison process is called for with the “higher standard” prevailing.

ILO Convention 138 provides exemptions for states which provide justification for setting the

minimum age of employment at not less than 14 years and set such age in law, but the numbers of

countries that do so are a dwindling group and most codes of conduct focus their attention on age for
completion of compulsory education, or not less than 15 years.

A typical example is found in the WRC Model Code of Conduct, which states “Legal compliance:

Licensees must comply with all applicable legal requirements of the country(ies) of manufacture in

conducting business related to or involving the production or sale of Licensed Articles.” Another good
example is contained in the code of conduct of Phillips-Van Heusen, which declares “We expect our

vendors to be law abiding citizens and to comply with any and all legal requirements relevant to the
conduct of their business.” Virtually all codes of conduct contain such a legal compliance/lawfulness

provision, making any violation of the Labour Code an automatic violation of the brand company’s

code of conduct as well.

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Therefore, it is not surprising that many codes also contain explicit provisions that require
that a legally binding contractual relationship be established between the worker and the
employer. Codes of conduct invariably include language on guaranteeing a safe and clean
working environment, and setting other requirements regarding occupational safety and
health (OSH).

While there are a number of disputes between employers, brands/buyers, and workers about
provisions found in many codes of conduct that restrict the number of working hours and
overtime that a worker can toil during a week, there is little controversy over the concept
that workers shall receive one day off within a seven day period. A provision providing for
this “one day off in seven” standard is included in virtually all codes of conduct.

Occupational safety and health issues are frequently covered in codes of conduct by a
catch-all phrase obligating employers to provide “a safe and healthy working environment.”
Beyond this general requirement, there are significant variations in details and requirements
between various codes. As noted above, reference is often made in codes to ILO standards,
such as Convention 155. ILO Convention 155 requires employers to provide safe and
clean workplaces, which includes taking action to ensure dangerous materials (chemical,
biological, etc.) are used with appropriate precautions and that appropriate safety equipment
is provided to workers. Cooperative arrangements on OSH issues between workers and
employers are also required by this Convention.

B. Multi-Stakeholder Codes of Conduct

While it is not possible to cover all the multi-stakeholder codes in this paper, the list below
does include the major multi-stakeholder codes and monitoring systems, especially those
operating in the countries of Bangladesh, Cambodia, Thailand, and Vietnam.

1. Ethical Trading Initiative (ETI)

The ETI is a multi-stakeholder organisation established in the United Kingdom in 1998
with NGOs, trade unions, and employers as members that proclaims its purpose as
“working to promote and improve the implementation of corporate codes of practice which
cover supply chain working conditions.”

ETI has developed the “ETI Base Code” which

all its corporate members (amounting to 40 companies, including famous garment brands
like GAP, Marks and Spencer, as well as major retailers like ASDA [owned by Wal-mart],
Tesco, and others) must adopt as a condition of membership.

The “ETI Base Code” contains more prescriptive and detailed language than found in most
of the codes. For example, concerning forced labour, not only are the standard variations
forbidden, but the code also goes on to add that workers do not need to “lodge” deposits or
identity papers with their employer. The code’s section on child labour states that its
policies and procedures must be in line with ILO standards on child labour, but then adds
that children found working must be transitioned to go to school. The anti-discrimination
provisions are largely in line with other codes, but specific categories like “caste”, “marital

For more information, see ETI’s website at www.ethicaltrade.org

Information on objectives and purpose from ETI’s website, www.ethicaltrade.org

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status”, and “union membership” have also been added to the list of categories. “Harsh”
and “inhumane” treatment is prohibited against employees, and the usual list focused on
physical and verbal abuse also has the “threat of physical abuse” and “all forms of
intimidation” added to the forbidden acts.

Similarly, freedom of association includes not only the right to join or form trade unions,
but adds that an employer “adopts an open attitude” regarding unions and their activities
and permits the union representatives to conduct union representation activities in the
workplace. So-called “parallel means” are also required in countries which maintain legal
restrictions on the right of workers to form a labour union and freely associate. “Parallel
means” can take many forms but most commonly they are understood to entail the creation
of independent worker associations or workplace committees (which are not unions) freely
elected by workers in a secret vote. The resulting organisation is expected to be
empowered to bargain and conclude agreements with the employer regarding wages and
conditions of work.

In the section on OSH, “safe and hygienic working environment” is required by
“minimizing the causes of hazards inherent” in the workplace. Other requirements include
providing regular training on safety to workers, specifying access to clean toilets and
potable water, and ensuring senior management assigns a representative to handle OSH
matters.

ETI’s code explicitly calls for living wages

to be paid to workers, yet also contains the

formulation that wages must be in line with “national legal standards” or “industry
benchmark standards.” The code also explicitly requires provision of written information
about wages, and prohibits deductions of wages as a disciplinary action. Hours of work
are no more than 48 hours per week, 12 hours overtime maximum, and one day off in
seven.

Finally, the ETI code seeks that “to the extent possible” the work arrangements for
employees be “on the basis of recognized employment relationship” which is “established
through national law and practice.” Most interesting is the following clause, which deals
with a fundamental problem in the garment sector – contract work. The ETI requires that
employees benefit from obligations under labour and social security law, and not be
subjected to “labour-only contracting”, “sub-contracting”, “home-working arrangements”
or bogus “apprenticeship schemes” that only purport to teach skills. The clause also
outlaws “excessive use of fixed-term contracts of employment”, i.e. temporary, short-term
contracts (often without benefits of any kind) which are strung together over months or
years to keep the worker’s status subject to the whim of the employer. This is one of the
most explicit formulations of the code to dictate the form of hiring arrangement for workers
producing goods for the brands.

The most frequently seen language formulation on parallel means seen in many codes of conduct is as

follows: “Where the right to freedom of association and collective bargaining is restricted under law, the

employer facilitates, and does not hinder, the development of parallel means for independent and free
association and bargaining.” This section is from the Oxfam GB Ethnical Purchasing Policy, issued in

May 2002, but has been seen by the author in numerous other company codes.

In ETI’s code, living wages are defined in the code as “enough to meet basic needs and to provide

some discretionary income.”

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ETI requires all member companies to implement the ETI Base Code in all their supply
chains, conduct an annual self-assessment, and submit a yearly report to ETI on the
company’s compliance. The report is then reviewed by ETI staff, with feedback provided
to the company, and shared with other ETI member organisations. ETI has a progressive
system of engagement and enforcement of the obligations of its members, staring with
issuance of an “Improvement Letter” to a company member, and leading (if needed) all the
way up to suspension and exclusion from ETI.

2. Fair Labour Association (FLA)

The FLA is a multi-stakeholder organisation that originally grew out of the White House
Apparel Industry Partnership and in 1999 became an independent NGO headquartered in
Washington, D.C. Affiliated to the FLA are 205 universities and institutes of higher
learning, a limited number of NGOs and trade unions, and at least 21 major “participating
companies” that include major international brands such as Nike, Adidas, H & M, Liz
Claiborne, Phillips-Van Heusen, and Puma. The number of smaller companies/brands with
university licenses that are affiliated with the FLA run into the hundreds.

Starting in

2006, the FLA also began encouraging supplier companies/factories to join the FLA, and at
the time of the writing of this paper, there was a total of four – Chengfeng Group (PR
China), Forward Sports, Ltd. (Pakistan), N.K. Apparel Co., Ltd. (Thailand), and Yee Tung
Garment Co., Ltd. (Hong Kong) – that have joined. Most informed observers expect that
the number of supplier companies/factories joining will continue to grow.

The FLA is overseen by a board of directors that is composed of equal numbers of
representatives from the universities, global brands/companies, and NGOs. Its code of
conduct consists of most of the major elements of a code, including standard provisions on
freedom of association and collective bargaining, forced labour, child labour, non-
discrimination, harassment and abuse of workers, and health and safety in the workplace.
The FLA code also requires that factory practices are in compliance with all applicable
national labour laws. Payment of wages and benefits are to be no less than that provided by
national law, or the “prevailing industry wage.” Interestingly, the FLA code includes a
loophole on the issues of hours of work by allowing the policy (48 hours maximum regular
working hours, maximum 12 hours of overtime) to be waived in cases of “extraordinary
business circumstances.” Overtime is to be paid at the premium rate specified in law,
unless there is no law regulating the rate paid for overtime – and then overtime pay is just
extra hours at the normal compensation rate.

In terms of monitoring, the FLA requires regular internal monitoring and then accredits
external monitoring organisations for work in specific countries. A certain percentage of

For more information, please see the FLA’s website at www.fairlabour.org

Brands producing university licenses goods are classified into four different categories (A, B, C, and

D) based on the companies revenue and degree of involvement in production of university goods. In
Category A, the companies are full participants, subjecting all the factories where they contract to the

FLA code and monitoring, whereas Category B licensees limit the FLA codes application to contracts
with facilities specifically making university goods. Categories C companies are subjected to

monitoring and verification in fewer facilities, and Category D only has to make a self-certification of

compliance and reveal the location of all production facilities where they have contracts.

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factories are randomly selected for external monitoring each year.

These external

monitors include not only the large for-profit professional monitoring companies (such as
Bureau Veritas, Cotecna Inspections, Societe General du Surveillance, and TUV Rhineland
Group) but also a number of NGO or multi-stakeholder groups like Fair Wear Foundation
and Thailand’s own Kenan Institute Asia (KIAsia). The FLA continues to be criticized by
progressive student groups in the US, especially the influential United Students against
Sweatshops (USAS), over its monitoring and verification schemes which USAS believes
are too beholden to for-profit companies, survey too few factories, and misses major
aspects of freedom of association.

The FLA has a “third party” complaints mechanism through which any person or group can
file a complaint with FLA against any facility that is manufacturing products for a FLA-
affiliated brand/company. The FLA procedure allows person(s)/group(s) filing a complaint
to request and receive confidentiality, i.e. protection from disclosure to the factory owner
and other authorities. The complaint is received and reviewed by FLA staff, and if they
believe that the complaint has merit, FLA staff will investigate and take steps to mediate
and try to solve the problem in coordination with the key stakeholders at the factory.

FLA is now touting what it calls FLA version 3.0 as a new approach to facilitating
sustainable factory compliance with codes of conduct. The problem FLA sees is that
periodic audits and inspections catch problems and violations of the code which are fixed at
that time, but which then revert back into non-compliance when the pressure is off and the
attention of code monitors and auditors is elsewhere. The new FLA approach is to work
with the factory and the brand sourcing from the facility, using a new assessment tool
(Sustainable Compliance Assessment Tool/SCAT) to identify weaknesses, gaps and
problems at the factory. FLA 3.0 places its primary focus on a few key areas and topics
that FLA knows from its experience are problematic in that region/country – meaning that
it’s not just another “top to bottom” code monitoring exercise. The result of the SCAT will
then be shared with the brand and the company, and a capacity building programme is
agreed to resolve the problem. Local factory management then contracts with a local
contractor or other organisation/NGO to carry out the trainings and other activities in
accordance with the plan. FLA calls this a “move from policing to coaching” which
attacks root causes for non-compliance with codes, and they argue this is a more sustainable
approach than the current model of monitoring and verification.

3. Social Accountability – 8000 (SA-8000)

SA-8000 is a voluntary labour standard with content closely modeled on the ILO core
conventions, the UDHR, and the UN Convention on the Rights of the Child. SA-8000 was
started in 1997 by Social Accountability International (SAI), which is a multi-stakeholder,
non-profit organisation based in New York City. An Advisory Board, composed of
representatives of NGOs, trade unions, Governments, and companies, advises on the
implementation of the code and reports to the SAI Board of Directors. As of June 30,

5% of the facilities of Category B companies and 10% of the pool of all facilities of Category C

companies are externally monitored each year.

FLA Watch, “Analysis of the Fair Labour Association’s Monitoring Activities”, downloaded from

website www.flawatch.org on 12/03/06.

For more information, please see SAI’s website at www.sa-intl.org

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2007, there were 1,373 SA-8000 certified facilities in 64 different countries – including 31
in Vietnam, 23 in Thailand, 2 in Bangladesh, and none in Cambodia.

SA-8000 contains quite detailed requirements, both in its code and the guide for the code’s
implementation. Child labour is covered in accordance with ILO Convention 138, but the
code also sets out detailed requirements for remediation if child workers are discovered,
and cites the sections on child education in ILO Recommendation 146 (supplementing ILO
Convention 138) as well as ensuring that children are not exposed to hazardous situations
“inside or outside” of work. Forced labour covers core concepts in the ILO conventions
while also prohibiting the lodging of deposits or identity papers when starting employment.
Concerning OSH, the same issues contained in the ETI code are also found in SA-8000,
indicating that there may have been some exchange and mixing between the two multi-
stakeholder groups looking at this important area of factory compliance. For freedom of
association and collective bargaining, the SA-8000 code establishes the right of workers to
establish the union of their choice and bargain collectively, for unions to have access to
workers in the workplace, and for facilitating parallel means to be set up in situations where
these rights are “restricted under the law.” Looking at the issue of discrimination, the SA-
8000 code goes beyond prohibiting discrimination against a wide range of groups (similar
to ETI code), and also requires factory management to “not interfere with the exercise of
rights…to observe tenets and practices, or to meet needs…” Sexually “coercive,
threatening, abusive, or exploitative” behavior is singled out and explicitly prohibited in all
its forms. Prohibitions are also extended to disciplinary procedures that include mental or
physical coercion, including verbal abuse. Language in SA-8000 on hours of work is
similar to other codes (standard 48 hours per week, additional 12 hours of overtime), as is
the section of the code dealing with remuneration (legal minimum wage with a hint of
possible consideration of the concept of a living wage, and prohibitions on illegal
deductions.)

Where SA-8000 breaks new and important ground in the world of codes of conduct is its
requirements (as part of the code) for management systems, and specifying in the code what
those systems should entail. Most other codes set out a separate set of guidance
documents, but in SA-8000, the critical principles are right in the code. These requirements
include a commitment by top management to comply with the code and regularly review
the results of implementation while ensuring the codes is integrated into corporate
planning. As part of the management response, factories are required to define the roles,
responsibility, and authority for the code and set out a system to control suppliers and sub-
contractors so as to ensure the code extends to cover their operations. Finally, the code
requires that factories set up systems to take remedial action when problems are found and
to facilitate external verification procedures to ascertain that compliance is being achieved.

SAI does not monitor or audit factories directly. Rather, it operates by accrediting
companies who can undertake SA-8000 audits at the factory. Only by passing such an
external audit conducted by an SA-8000 accredited company can a factory be certified as
being SA-8000 compliant. Many of the accredited auditors are for-profit external auditing
firms, such as Cal Safety Compliance Corporation, Intertek Testing Services, and Bureau
Veritas Certification. However, SAI does have a process to receive complaints from
“interested parties” who allege that an SA-8000 accredited factory is not following the

Document “FacilitiesByCountry063107.xls”, downloaded from the SAI website

(www.sa-intl.org) on December 15, 2007.

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code, but it requires a three-step process. First, the worker should file a complaint with the
management representative responsible for SA-8000 compliance (which for most workers
is non-starter). Second, the worker can complain about factory compliance failures to the
accredited factory auditor. Finally, only if the complainant is not satisfied with the
auditor’s response should the worker file a complaint with Social Accountability
Accreditation Services (SAAS).

However, from some of the cases filed, it appears some

complainants are able to skip steps in the process towards raising the grievance with SAAS.
More worrisome are the observations of Thai labour activists from the Thai Center for
Labour Rights (TCLR) and the American Center for International Labour Solidarity
(ACILS) – Thailand office who stated that the SA-8000 complaint review system is
extremely slow.

SAI is in the middle of a process to amend the SA-8000 code of conduct to update the code,
and the third edition of the code is expected to be promulgated no later than January 1,
2010.

4. Worker Rights Consortium (WRC)

The WRC is a multi-stakeholder NGO whose primary constituents are schools and
universities in the United States who issued licenses to apparel companies to produce
garments with the university’s logo. In late 2007, there are 176 universities who have
affiliated with WRC. The WRC’s governance body is composed of universities, academics
and labour union officials, and representatives of USAS. The board reflects WRC’s origin
as an organisation created by trade unions, NGOs, and progressive student organisations in
the US as an answer to the perceived weaknesses and failures in the FLA’s methods for
monitoring compliance with its code of conduct.

The WRC’s code is a model code for consideration and adoption by WRC’s university
members. However, WRC states that all university apparel licensees are required at a
minimum to “adhere to the principles set forth in the Code”, and the Code is the standard
against which WRC measures its findings when investigating complaints against a
licensee

or manufacturer.

For more information, please see SAAS website at www.saasaccreditation.org. SAAS started as a

department within SAI handling accreditation of monitors, but in 2007 it became an independent, not-
for-profit accrediting agency. Since the complaint system started in 1999, there have been a total of only

19 complaints filed with the SAAS. Two of those complaints involve factories in Thailand (one filed in
January 2006, the other filed in October 2006), and in both cases, the investigations are still ongoing.

Author’s phone conversations on February 17, 2008 with Rudy Porter, Country Director for

Thailand of the American Center for International Labour Solidarity (AFL-CIO), and on February 18,
2008 with Somsak Praiyoowong, the Coordinator of the Thai Centre for Labour Rights (TCLR).

Specific conversations revolved around the complaint to the SAI about violations of the SA-8000 code at

the Double Star Industry Co. in Thailand, where the President of the Double Star Democracy Union
filed a complaint with SAI on January 12, 2006. Despite SAI referrals to the commercial factory

monitor (Bureau Veritas) for additional monitoring, violations continued according to filings by the

union – and according to the SAI web-site and the TCLR, the complaints remain largely unresolved
today, more than 2 years after the initial complaint. For additional information on the complaint, see

www.saasaccreditation.org/complaint011.html

For more information, please see the WRC website at www.workersrights.org

In WRC parlance, the ‘licensee’ is a corporation (usually a major brand or buyer) that has signed a

contract with the university to produce goods with the university brand or logos.

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The WRC code sets out that wages and benefits are paid in accordance with national law,
but these are to be considered “as a floor” and this level should be sufficient to “provide for
the essential needs and establish a dignified living wage for workers and their families.”
Hours of work are set at the lesser of 48 hours of work per week, of the legal limits, with
the standard proviso that workers receive one day off in seven. Overtime is designated to
be paid at the legally established premium rate in the country of manufacture or at least 1.5
times the normal rate. Child labour is regulated in accordance with ILO Convention 138,
though there is additional language to compel consultation by licensees with local
Government and NGOs in the case that children are made unemployed (and suffer negative
impacts) by the implementation of the code. The WRC Code’s language on forced labour
and non-discrimination language is standard. Requirements on freedom of association and
collective bargaining state that these rights shall be recognized, and that harassment and
retaliation for exercising them shall be prohibited. The WRC code goes further than most
codes by also requiring that the factory withhold cooperation from state or other outside
agencies intent on using the “power of State” to frustrate unionization and requiring that
factories allow access to workers by union organizers and officials.

The WRC code contains extensive provisions on women’s rights, and OSH, beyond what is
usually seen in other codes. For women, specific requirements for equality in treatment and
pay are supplemented by provisions to protect maternity and reproductive rights of women,
including bars on pregnancy tests in hiring and compelling use of contraception, and
guaranteeing return to work at the same level of pay after maternity leave. On OSH issues,
the WRC requires compliance with whichever is the more protective of the following two
standards – either all national laws and regulations of the country where the factory is
located, or the very comprehensive US legal standard Title 29 of the Code of Federal
Regulations (CFR) as enforced by the US Occupational Safety and Health Administration
[OSHA]. Given the weakness of labour law in many developing countries where garments
are produced, this provision requires compliance with standards contained in US law.

On issues related to monitoring of the code, the WRC requires that all licensees disclose the
names, contact details, and locations of all facilities that produce university-licensed
products. On an annual basis, licensees/brands are also required to provide written
assurance that all the manufacturing facilities where they have contracted are in compliance
with the code of conduct, and give information about problems encountered and
remediation efforts undertaken during the past year to ensure continued compliance.
Verification of compliance with the codes are made direct responsibility of the licensees,
while universities are required to engage with licensees to ensure they undertake
appropriate remediation efforts to ensure compliance with the code. Finally, WRC has a
complaints procedure for parties alleging violation of the code in facilities producing
university licensed products. ,The WRC staff and partners undertake investigations of
complaints deemed to have merit and produce public reports of their findings which are all
posted on the WRC website.

5. Worldwide Responsible Apparel Production (WRAP)

WRAP began with the development and approval of the WRAP Principles by the American
Apparel Manufacturers Association (AAMA) in 1998. The Principles were developed in

For more information on WRAP, please see their website at www.wrapapparel.org

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response to supplier factories’ concerns expressed to the AAMA about multiple codes of
conduct creating contradictory demands for changes in apparel factories producing overseas
for the US market. The move to develop one code which is perceived as relatively more
“pro-business” than the other multi-stakeholder codes has been popular with 18 apparel
suppliers groups around the world which publicly endorsed WRAP. On its website, WRAP
promotes itself as “the most reliable yet economically efficient” of the codes of conduct.
WRAP is now taking a step further, and promoting what it calls a “Universal Code of
Ethical Conduct” to extend the WRAP principles to industries outside the garment and
apparel sector, especially to the electronics sector. WRAP as an organisation was
incorporated in 2000 and is located in the suburbs of Washington, D.C.

The WRAP Principles are more lenient than other codes of conduct in several areas.
Throughout the WRAP code there is a close link to national law and regulations and the
code requires little beyond what is in existing law. Therefore, it is not surprising that
WRAP lacks the details and comprehensive definitions contained in codes like SA-8000,
WRC, and ETI. For example, the WRAP code states that “Manufacturers of Sewn
Products will comply with laws and regulations in all locations where they conduct
business.”

Therefore, in the area of remuneration there is no talk of a living wage, and simply a
requirement to pay no less than the legally mandated minimum. On the sensitive issue of
hours of work, there is no numerical minimum allowed – and again, the factories simply
must follow the local law. The requirement to provide workers one paid day off in seven
days is not absolute, and can be disregarded “…as required to meet urgent business
needs.”

There is no discussion of overtime in the WRAP code, either in terms of

numerical limits or premium pay. On the right of the workers to organize and bargain,
WRAP refers to the “lawful rights” to freedom of association and collective bargaining –
but no reference is made to what should be done in circumstances in which the law restricts
these rights. Brief and general language on OSH, calling simply for “a safe and healthy
work environment”, contrasts with the specificity of other codes of conduct in this area of
compliance. Regarding harassment, factory owners are required to provide an
“environment free of harassment, abuse, or corporal punishment in any form” which could
technically cover verbal abuse, the most common form of harassment, but WRAP does not
single out verbal abuse – unlike most of the other codes, which do. However, to WRAP’s
credit, unlike other codes it does cover environmental issues, requiring factories to “comply
with environmental rules, regulations and standards applicable to their operations,
and…observe environmentally conscious practices…” Language on prohibition of forced
labour, child labour, and non-discrimination largely conform to ILO standards.

Finally, in perhaps the most telling indication that WRAP was developed by American
brands importing garments from overseas, the WRAP code requires the apparel
manufacturers to comply with all “applicable customs laws”, especially those dealing with
illegal transshipment of products, and maintain security procedures to keep terrorist and
contraband-related materials out of outbound shipments of garments.

WRAP’s compliance system is highly reliant on self-inspection by factories. When
seeking WRAP certification, the factories are required to take the first step by self-

Worldwide Responsible Apparel Production (WRAP), “Apparel Certification Program Principles”,

downloaded from www.wrapapparel.org

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assessing their progress and then mailing the completed assessment to WRAP headquarters.
After a factory communicates to WRAP its desire to become WRAP certified, and then
pays the registration fee, the factory receives from WRAP a self-assessment form and
monitoring handbook. The factory must complete the self-assessment, make adjustments in
it operations and procedures to comply with the code, and when it is confident it is
prepared, inform WRAP that the factory is ready to undergo a compliance audit. WRAP
then provides a list of WRAP-accredited external monitoring companies that can perform
the audit, and the factory chooses one and directly concludes a contract for auditing
services with that company. Following the factory audit, the monitoring company sends its
report to WRAP for review. At that point, either time-bound corrective measures are
ordered by WRAP and the factory must be re-inspected, or it passes and it is certified for
one year by WRAP. What is clear is that WRAP monitors are all involved from afar in the
accreditation process and must rely on written reports provided by self-interested parties --
the factory itself, which wants accreditation, and the for-profit auditing company hired off a
list which wants to earn continuing audit fees from WRAP certifications of the factory at
hand, and other factories in the future. It can be reasonably assumed that if a for-profit
audit company is too tough when certifying a factory and this becomes known in employer
circles, it is quite possible that audit company could be passed over in the future by other
factories seeking a WRAP audit.

WRAP has been consistently attacked by other monitoring systems, especially those with
labour and NGO stakeholders, as having a sub-standard code of conduct, failing to closely
monitor conditions in factories, and being non-transparent in its operations.

An excellent

example of WRAP’s monitoring failures is seen at the Gina Form Bra factory in Thailand,
where WRAP re-certified the factory as being compliant at the same time in 2001 that
management was running a comprehensive union busting campaign that ultimately became
the first case concerning violations of labour rights filed with the Thai National Human
Rights Commission.

While WRAP has credibility with some of the brands, especially

those from the United States, it has hardly reached its self-professed goal of making “its
programme the one audit that all parties feel confident in adopting.”

WRAP’s original

goal of replacing individual brands’ codes and audits (and thereby reducing the number of
external audits a factory might expect to deal with during a year) has largely not come to
fruition as major brands continue to insist on their own systems in addition to WRAP.

In conclusion, while there are differences between the codes of conduct promulgated by the
multi-stakeholder code organisations, it can be argued that with the significant exception of
WRAP, at the implementation level the similarities between the codes of multi-stakeholder
initiatives significantly outweigh their differences. The example of the Joint Initiative on
Corporate Accountability and Worker Rights is illustrative. A comparison of the codes of
each of the six participating organisations (Clean Clothes Campaign, WRC, FLA, ETI,

For example, in Thailand, factories seeking to be accredited by WRAP have no less than eight

different audit companies that they can chose from. In Bangladesh, there are nine audit firms

competing for WRAP audits. Vietnam has four audit firms that are accredited by WRAP to conduct
their audits. For more information, check the accredited monitors link on the WRAP website.

Maquila Solidarity Network, “Are Apparel Manufacturers Getting a Bad WRAP” in Memo: Codes

Update, Number 12, November 2002, found at www.maquilasolidarity.org

Philip S. Robertson Jr. and Somsak Plaiyoowong, “The Struggle of the Gina Workers in Thailand:

Inside a Successful International Labour Solidarity Campaign”, Working Paper no. 75, Southeast Asia

Research Center, City University of Hong Kong, November 2004.

Claim made on the WRAP website, located at www.wrapapparel.com

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SAI, and Fair Wear Foundation) shows the many similarities between the codes.

The six

organisations were subsequently able to develop a common code of conduct for their pilot
project in Turkey.

C. Corporate Codes of Conduct – A Comparative Analysis – Gap vs. Wal-Mart

Corporate codes of conduct, which are codes developed directly by a particular brand to
govern the conditions under which its branded apparel is produced, are widely varied.
Variation in the seriousness with which codes are implemented focus on the degree to
which a company is dependent on its brand or logo to sell its product and the amount of
time and advertising dollars the firm has spent to build up that brand’s logo and reputation.

An important point of comparison can be found by comparing the international brand that
many unionists and NGOs say is most attentive to codes of conduct concerns (GAP, Inc.)
versus Wal-Mart, a low-cost retail seller with large orders that has regularly been identified
by the same campaigners as one of the most inattentive or unconcerned businesses which is
willing to disregard labour rights and their code of conduct.

Copies of the GAP and Wal-

mart codes of conduct are included in the Appendix 1 and 2 respectively.

For brand-sensitive companies like Gap which have invested heavily in fostering a chic and
progressive image, their investment in a strict code and GAP staffed monitoring and
compliance systems is significant.

According to top management, socially responsible

production is directly connected to the success of their business.

So not surprisingly, GAP

gives an annual human rights award, produces and widely publicizes reports on social
compliance by the company, employs 90 code monitors around the world (including
persons in all four countries examined in this report), and is engaged with NGOs and trade
unions in various multi-stakeholder initiatives on codes of conduct. In Bangladesh and
Cambodia, GAP code compliance monitors are aggressive in investigation violations of the
GAP Code, and throughout the global sourcing chain, Gap has set up systems to allow for
complaints to be received about violations of the code.

On the other hand, super-retailer Wal-Mart relies on relatively more non-descript ‘house
brands’ like Faded Glory which have a less public profile (and hence are less vulnerable to
damage from bad publicity), and whose competitive focus on bottom-line low prices
encourage cutting costs in production processes. Not surprisingly then, Wal-mart has a less
stringent code and significantly less vigilant monitoring than Gap. Interviews with workers

Joint Initiative on Corporate Accountability and Worker Rights (Jo-In), “Variation between Draft Jo-

In Code and Codes of Conduct of Organisations Participating in the Joint Initiative”, available at
www.jo-in.org

For excellent critique of Wal-mart and its sourcing practices, see www.wakeupwalmart.com

For additional information on Gap and its work on social responsibility, see their website at

http://www.gapinc.com/public/SocialResponsibility/socialres.shtml

Robert Fisher, Chairman of the Board at GAP, states on page 8 of the GAP Inc. Social Responsibility

Report 2005-2006 that “At Gap Inc., we remain committed to delivering value to shareholders while
conducting business in a way that advances the rights of garment workers

around the world, lessens our impact on the environment, and provides a high quality of life for
employees and those people impacted by our business. Why? Simply put: its good business. Our social

responsibility program is critical for both our reputation and commercial success.” Report available on

World Wide Web at www.gapinc.com

C-24

representatives from three different union federations, labour NGOs, and even other
corporate monitors all revealed that the Wal-Mart monitoring office in Bangladesh was the
least responsive of any of the multi-national corporation compliance offices in Dhaka.

A quick comparison of these two corporate codes of conduct demonstrates the range of
requirements, systems, and monitoring required by the brands. The difference is mostly a
matter of degree, between using “should” vs. “shall” in establishing need for compliance,
the degree of specificity in the codes’ requirements, with some real differences in certain
code components. While complaints are often heard among factory owners about the
differing code requirements, key components of the corporate codes are quite similar. For
example, both Gap and Wal-Mart save their strictest language in outlawing any use of
forced labour or child labour. Both codes make continued reference to ensuring that, at a
minimum, all production is performed in compliance with all national laws and regulations
(though the elusive “local industry standards” are also mentioned). On discrimination, the
formulation of the requirement is different

but the meaning is largely the same.

Concerning freedom of association, there is more difference, with Gap being more forceful
in using words in its codes like “must not interfere” with workers’ rights to associate and
form unions, and reiterating that the decision to do so is solely the workers’ to make. Gap
also makes it explicit that factories producing Gap may not “penalize, restrict, or interfere”
with workers’ efforts to form a union. But a key word – “lawfully” organize and join
associations – in the Gap code parallels the relatively less sympathetic language in the Wal-
Mart code, which says “Suppliers will respect the rights of employees regarding their
decision of whether to associate or not to associate with any group, as long as such groups
are legal in their own country. Suppliers must not interfere with, obstruct or prevent such
legitimate activities.”

In fact, the major differences between these two codes only appear in a few key areas. Gap
includes an extensive section on factory working conditions that covers conduct towards
employees as well as health and safety issues, and another section on factory-provided
housing for workers. Gap also has a serious section of the code on environmental
compliance, including forcing factories to develop environmental plans, while the Wal-
Mart code only says that it “encourages” suppliers to reduce excess packaging and using
non-toxic and recycled materials. For Wal-Mart, sections of their code on immigration law
compliance, security of production and warehousing facilities (to prevent unauthorized
materials being smuggled in the shipment), and confidentiality of Wal-Mart designs and
products have no comparative section in the Gap code. A key substantive difference comes
on the issue of overtime – where Wal-Mart sets 72 hours a week as the maximum (and no
more than 14 hours a day), while Gap requires that the factory does not require “on a
regularly scheduled basis” to employ workers for more than 60 hours per week.

A representative of a major garment manufacturing group in Bangladesh which produces
and exports two million garments a month said that in his view, most of the corporate codes
of conduct are “largely the same” and that all of the brands have a code. He listed off some

Interviews conducted during research trip by author to Dhaka, Bangladesh – November 16-21, 2007.

Wal-mart’s code of conduct states that “All conditions of employment must be based on an

individual’s ability to do the job, not on the basis of personal characteristics or beliefs” and then goes on
to say that it “favors suppliers” who do not discrimination on the basis of a long list of characteristics.

GAP also refers to ability to do the job and not personal characteristics, but then goes on to specify that

discrimination cannot occur both in employment, and payment of wages and benefits

Wal-Mart Stores, Inc., Standards for Suppliers, downloaded from www.walmartstores.com

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of the key provisions of the codes that as Production Manager he had to pay attention to,
and noted that in these areas, the codes were quite alike: minimum age of work (set at 18
years of age per their policy), a limitation on working hours of ten per day with premium
wages (2 times) for overtime, one day off in seven, respect for OSH standards, maternity
leave and ‘festival allowance’ after a year of service. He added that some requirements,
like good lighting, access to clean water, and bathroom breaks, were just basic human
requirements that must be fulfilled as a matter of common sense. The critical issue for this
major garment producing group is compliance – as the Production Manager said, “we must
comply with the codes of conduct or we cannot compete. We must be socially compliant to
be in the game, and only then can we actually compete based on quality and price
factors.”

III. Some Analysis of Difficult Issues in the Implementation of
Codes of Conduct

For international labour unions and NGOs, who frequently drive the engagement agenda
with international brands on codes of conduct and compliance, there are many issues but
those with the greatest prominence are wages (especially the “living wage” concept) hours
of work, and the right of workers to empower themselves through organizing a union and
engaging in collective bargaining with their employer. Not surprisingly, these are some of
the most contentious issues for factory owners/managers (and their allies in government) in
garment-exporting countries – and therefore, these issues have proved particularly difficult
to monitor.

A. Codes of Conduct on Wages and Hours of Work

One of the important areas of disjuncture for codes of conduct concerns overtime work and
wages. While it is considered in all codes that overtime must be voluntarily agreed to by
the workers, most codes of conduct set a limit on the number of hours of overtime that an
employee can work in any given week. The most common formulation of both multi-
sector codes as well as the corporate codes devised by the brands is a limitation of 12
overtime hours in addition to the hours of the normal workweek, with a proviso that total
hours of work per week (regular hours and overtime) should not be more than 60 hours.
The original concept behind this limitation was that workers were being required to work
for far too many hours, and were accepting overtime because their wages were too low and
overtime is the only way for them to earn enough money to survive. A common
formulation of this requirement is found in the Fair Labour Association’s code of conduct,
which states:

“…employees shall (i) not be required to work more than the lesser of (a) 48 hours per
week and 12 hours overtime or (b) the limits on regular and overtime hours allowed by the
law of the country of manufacture or, where the laws of such country do not limit the hours
of work, the regular work week in such country plus 12 hours overtime.”

ITD Research team meeting with senior factory manager in Dhaka, Bangladesh, who requested

anonymity as a condition of the interview, November 17, 2007

FLA Workplace Code of Conduct, available at www.fairlabour.org/conduct

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However, when it comes to wages, these codes then shy away from requiring anything that
goes beyond the minimum wage required by the national law of the manufacturing country,
or the “prevailing industry wage” for which there has been no appreciable research done in
any of the four countries (or anywhere else) covered by this report. In fact, the “prevailing
industry wage” is little more than a ruse since it is largely undefined and rarely, if ever,
invoked. The result is that the codes of conduct have effectively limited the number of
hours for which a premium overtime wage can be earned, while doing little to adjust wage
scales upward to a level where 60 hours of work would be sufficient to provide workers
with the incomes they require to meet their needs. Given short lead times on apparel orders
and more complicated designs required by the brands, the result has been willful collusion
between workers seeking more overtime hours and employers needing more hours to
complete orders to find ways to obfuscate overtime hours in records and find other ways to
avoid complying with the overtime hour’s provisions of codes.

The proposed solution for this dilemma is the “living wage” concept, advocated largely by
the coalition of international trade union organisations and their NGO allies. Article 23 (3)
of the UDHR

is frequently cited as evidence that a living wage as a concept has support in

internationally accepted standards. This solution has been fiercely and continuously resisted
by the garment manufacturers and global apparel brands. As defined by the WRC, one of
the original proponents of the concept, a living wage is defined as: “A living wage is a ‘take
home’ or ‘net’ wage, earned during a country’s legal maximum work week, but not more
than 48 hours. A living wage provides for the basic needs (housing, energy, nutrition,
clothing, health care, education, potable water, childcare, transportation and savings) of an
average family unit of employees in the garment manufacturing employment sector of the
country divided by the average number of adult wage earners in the family unit of
employees in the garment manufacturing employment sector of the country.”

However, while consumers, labour unions and NGOs continue to press for living wages,
factory owners point to buyer practices that erode and limit profitability of factories,
undermine stability in production, and force cost-cutting that undermines demands to
provide higher wages and better working conditions to workers. Research commissioned
by the MFA Forum found that these buyer practices include the following: downward
pressure on prices offered to factories, sudden changes or cancellations or orders, increased
pressure for better quality, reduced time to produce orders, and a lack of stable relationships
between supplier and buyer. Any sort of progress on designing and implementing a living
wage will no doubt also require reform of some of these abusive buyer practices.

UDHR Section 23 (3) states that “Everyone who works has the right to just and favourable

remuneration ensuring for himself and his family an existence worthy of human dignity…”

Worker Rights Consortium Model Code of Conduct, available at www.workersrights.org - Please

provide full reference of web addresses that link directly to the document being referred to.

Also available at
http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1003&context=codes

Hurley, Jennifer and Naushaud Faiz, “Assessing the Impact of Purchasing Practices on Code

Compliance: A Case Study of the Bangladesh Garment Industry”, MFA Forum and GTZ, downloaded

from www.mfa-forum.net

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B. Codes of Conduct: Difficulties in Monitoring Freedom of Association

A fundamental problem that has plagued the codes monitoring industry is the inability of
private sector, for-profit monitors as well as brands’ own monitors to effectively monitor
and implement provisions on freedom of association and right to collectively bargain.
Factory owners often vet which workers speak to monitors. Furthermore, talking about
sensitive issues like unionization are difficult for workers (who are fearful of losing their
jobs, not trusting the code of conduct to protect them) to raise in the factory, meaning that
the monitor has to develop the trust of workers and conduct worker interviews outside of
the factory, after working hours. Most for-profit audit firms consider such interviews
beyond their remit as a factory auditor, and only a few of the most dedicated (and vigilant)
brand monitors will follow through to this level.

Another dilemma of codes is how they can operate in countries where the labour laws and
Government practices restrict or prohibit formation and operation of independent trade
unions, or otherwise are found to be systematically back-sliding on labour standards.
China, Vietnam and Lao PDR are all good examples of countries with problematic freedom
of association issues because they compel all labour unions in the country to affiliate to one
Government-controlled national labour congress. In this case, many of the codes require
the development of “parallel means”, i.e. creation of a system or structure within the
workplace that ostensibly allows workers to associate and collectively bargain, and to
represent and defend their exercise of the members’ rights from state or employer
interference or intimidation.

WRC’s Model Code of Conduct has an entire section on what it calls “Labour Standards
Environment” for use in countries where “law or practice conflicts with these standards.”
The code provides flexibility for universities which are members of WRC to refuse to
renew agreements with brands producing university-logo goods in factories in countries
where either progress in implementing labour standards is not being made or progress in
achieving labour standards is considered impossible by the WRC and the university. This
kind of country-wide ban by WRC and its affiliated-universities on production from a
particular country is being used in the case of Myanmar, where violations of human and
labour rights by the ruling military State Peace and Development Council (SPDC)
government are considered so systematic that it would be impossible to source production
there without violating the WRC code. While Myanmar is a clear-cut case which is now
fortified by a legal ban by the U.S. Government on imports made in Myanmar, these
country-wide provisions should be of concern to other countries, like Bangladesh, which
have a history of problematic implementation of labour standards.

C. Code Monitors and Enforcement of Codes of Conduct

1. Direct-hire Brand Monitors

In comparing corporate codes of conduct, what is clear is that the codes have far more
similarities than differences, even when they are promulgated by arguably very different
companies like Gap and Wal-Mart. Many of the apparent differences are simply in tone and
use of language, but the meanings are quite similar. Even many of the same loopholes that
provide flexibility for manufacturers -- like Gap’s “on a regularly scheduled basis”
language – are found in many other corporate codes of conduct.

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The real differences in codes are how they are monitored and enforced. It is the practice
and implementation of the code that the differences between the brands become apparent.
These differences between brands and the way that they monitor are not lost on workers
who, generally lacking leverage to bargain with employers, will seek whatever support they
can find. More effective monitors, like Gap, find that they receive more calls and
engagement with workers – while other brands, like Wal-Mart, receive few complaints
because the workers are not confident that any correction action will be taken.

Brands that are committed to ensuring social compliance understand that the approach
requires continuous engagement with factories to identify problems and remediate them,
using a “carrots and sticks” approach with factory management and building trust with
workers to serve as the “eyes and ears” of compliance. Invariably, such engagement
requires a direct sourcing relationship (i.e. not passing order through agents or other
middlemen), having an understanding of capacity of the factory and/or group to produce
orders (thereby avoiding giving an excess of orders that the factory will be tempted to sub-
contract to other potentially non-compliant factories), and ensuring that brand compliance
officers have either control or influence over a brand’s sourcing decisions.

The ability to move quickly and decisively, with backing of social partners, was
demonstrated clearly by Gap in October 2007 when media reports found orders from
GapKids diverted to a sub-contractor using child labour in India, creating a surge of internet
driven interest.

Gap had the structure in place to respond instantaneously, freezing the

order, investigating and uncovering the truth of the matter, and the credibility and
experience (through its previous work in code compliance and social responsibility) to
immediately turn the corner on the growing media storm. The issue was handled right at
the top of company, with the head of Gap North America stating clearly the result of the
Gap investigation, ensuring the order was cancelled and the product did not come into the
Gap sourcing chain, outlining the absolute prohibition on child labour in production, taking
responsibility and, in their own words, “addressing challenges like this head-on.”

The

result was that a major incident that could have significantly damaged another brand
became a “two-day wonder” as former UN High Commissioner Mary Robinson put it.

Within two weeks of the incident, Gap came out with a systematic plan that outlined
preventing a recurrence, taking care of the children involved in the incident, creating
systematic monitoring of embroidery in the informal sector, convening industry forums to
address the issue, and providing financial support to well-respected NGO partners to help
find solutions to child labour and unsafe working conditions in the Indian garment
industry.

On the other side of the coin is Wal-Mart. A clearly documented example of Wal-Mart’s
weak monitoring is the comprehensive investigation by WRC of Chong Won Fashion in the
Philippines, a major producer of garments for the Wal-Mart supplier ‘One Step Up’, which

McDougall, Dan; “Indian ‘slave’ children found making low-cost clothes destined for Gap”, The

Observer, October 28, 2007.

Gap, Inc., “Gap Inc. Issues Statement on Media Reports on Child Labour”, October 28, 2007, downloaded

from http://www.gapinc.com/public/Media/Press_Releases/med_pr_vendorlabour102807.shtml

Robinson chairs the Business Leaders Initiative on Human Rights, a forum which Gap, Inc. is active in, and

attributed Gap’s track record on social responsibility as giving it credibility to tackle an incident like this in
their supply chain.

Gap, Inc., “Gap, Inc. Works to Combat Child Labour in Garment Industry”, November 14, 2007,

downloaded from http://www.gapinc.com/public/documents/India_Fact_Sheet.pdf

C-29

found that Wal-Mart’s “Standard for Suppliers” was being systematically violated. In its
public report, the WRC stated,

“The WRC investigators found serious and ongoing labour rights violations at Chong Won, including
minimum wage violations, forced overtime, violations of workers’ right to unionize and bargain collectively,
and, of particular concern, collusion by factory management with government agents in violence against
workers engaged in a lawful and peaceful strike. Chong Won’s practices in these areas violate Filipino law,
university codes of conduct, and applicable corporate codes, including Wal-Mart’s “Standards for Suppliers.”
With respect to freedom of association, Chong Won’s misdeeds are among the most egregious and persistent
that the WRC has encountered. To date, the response of Wal-Mart and other buyers to the violations that have
been identified at Chong Won has been entirely inadequate.”

Wal-Mart’s local code compliance staff admitted to the WRC that their audits of Chong
Won had previously found violations of minimum wage laws and use of apprentice
workers, but the Wal-Mart staff apparently took no actions to correct the problems. Wal-
Mart also accepted at face value the creation of a bogus union body created by Chong Won
management to contest against the legally formed union in the factory and the WRC found
that Wal-Mart favored the management-created body. WRC provided clear and well-
documented evidence of Chong Won’s violations of Wal-Mart’s code and made multiple
entreaties to get Wal-Mart to take action, but ultimately reported that

“

Wal-Mart has failed

to take timely or effective action to compel Chong Won to act on the WRC’s
recommendations – or do anything else to correct the severe violations of worker rights that
have occurred.”

As a result of these and other exposes, Wal-Mart has become the premier example
commonly cited of an unconcerned global sourcing giant, willing to look the other way on
labour rights abuses and violations of its code of conduct in order to ensure low factory gate
prices. In 2005, it was sued in the US in a class-action suit filed by workers in its
suppliers’ factories from Bangladesh, Indonesia, China, Nicaragua and Swaziland who
claimed that Wal-Mart systematically failed to enforce its codes of conduct. A recent
study found that the number of factories in Wal-Mart’s supply chain that were rated as
having no or few violations of the codes of conduct declined from 21% in 2004 to 6% in
2006.

Whistle-blowers from within Wal-mart have alleged that sourcing demands for

timely production has created pressure to overlook violations of the company’s code of
conduct. James Lynn, a former senior Wal-Mart executive, documented in Central
America factories producing for Wal-Mart that compliance managers were pushing
subordinates to pass factories with problems. Lynn alleges he was dismissed for
documenting a pattern of abuses that included forced pregnancy tests, 24-hour work shifts,
extreme heat, pat-down searches, locked exits, and other violations of the labour laws.

Like Nike in the 1990s, which was heavily attacked by unions and NGOs supporting
workers in the developing world, Wal-Mart’s name has become increasingly synonymous
with low-cost production under abusive conditions of work. No code of conduct can
reverse that image alone.

Worker Rights Consortium, “Worker Rights Consortium Assessment re: Chong Won Fashion, Inc. (The

Philippines) (Facility recently renamed “C. Woo Inc.”): Report of Findings and Recommendations”,
February 21, 2007, Washington, D.C.

Ibid.

International Labour Rights Fund, “Ethical Standards and Working Conditions in Wal-Mart’s Supply

Chain”, October 24, 2007, Washington, D.C.

“The Real Facts about Wal-Mart”, downloaded from www.wakeupwalmart.com. The case about

James Lynn was reported in the article “Wal-mart Sued by Fired Factory Inspector”, by Stephen

Greenhouse in the New York Times on July 1, 2005.

C-30

The problems faced by Wal-Mart have also been experienced by other global brands or
retailers sourcing from garment supply chains throughout the developing world.

Ultimately, for the sake of convincing consumers that a brand cares that their product is not
produced in sweatshops, most companies recognize they must promulgate and profess
adherence to a codes of conduct. But as the comparison between Gap and Wal-Mart shows,
the critical issue remains how a code of conduct is effectively monitored and regulated.
Gap has taken actions in consumer countries as well as in the countries of production that
have convinced consumers and worker advocates that they are serious in ensuring
implementation of their code. On the other hand, Wal-Mart’s actions at their headquarters
and in the field have continually called into question their commitment to effective codes
enforcement.

2. For-profit, private sector auditors

While there are obviously a range of other brands that fall between the positive and
negative extremes of Gap and Wal-Mart, drawing out the differences between the two
companies is useful to indicate the differences that exist between brands that take the most
direct approach – hiring their own brand compliance officers.

However, there are other options which are also employed and no analysis of the role of
codes of conduct in global trade issues would be complete without discussing these actors.
Many brand/buyers require regular audits of their supplier factories to be done, using
private auditing firms who receive fees (often from the factory, not the brand) to conduct
the audit. The gamut of such firms is impressive e.g. world-wide firms including Bureau
Veritas, SGS, Intertek Group, Moody International, TUV, and others, and they are
supplemented by many other for-profit monitoring and audit firms working at the regional
and national levels. Many of the major multi-stakeholder code monitoring schemes, like
the FLA, WRAP, and SA-8000, also remain dependent on auditing reports compiled by
these for-profit auditors.

But when examining the monitoring industry, there are issues that have been continuously
raised about these for-profit auditors since the days of the White House Apparel Industry
Partnership which still remain unresolved.

The first is the quality of the monitoring, and the continued failure of for-profit monitors to
identify a number of fundamental issues involved in monitoring for labour standards
compliance. Freedom of association and the right of workers to form associations of their
own choosing are at the top of the list, but other issues that involve developing relationships
of trust and engagement with workers to develop adequate sources of information (such as
discovering sexual harassment, discrimination, abuses in recruitment practices, etc) also
suffer under the factory-bound, time-limited corporate compliance audit process. While
fire safety and occupational safety may improve, and compliance with environmental
standards may increase, many corporate audits are announced and management can
manipulate access to workers to ensure that workers who have been briefed on what to say
(from the management perspective) are interviewed by the auditors.

The second issue is encapsulated in the old saying that “he who pays the piper calls the
tune.” Often it is the factory that must pay, and they are the ones who are local and are
likely to have a previously existing, developed relationship with the auditors. Of course,

C-31

such services are not inexpensive and the auditing firm is aware of the source of money and
the likelihood of future business from the factory if the audit goes well. While the ETI
Basic Code recognizes this problem by including in its “Principles of Implementation”
document that “Negotiations with suppliers shall take into account the costs of observing
the code”, most other codes do not.

In most cases, the cost of becoming compliant with the code lies with the manufacturer and
this is a source of bitter complaints by factories producing for multiple brands, each with a
different code of conduct for which an audit must be conducted. A senior management
representative operating in a multi-factory garment group in Dhaka, Bangladesh stated he
was expected to pay between $US 2000 to $4000 for each audit of a factory to bring it in to
certification with a brand’s code.

In cases where factories are receiving orders from many

different brands, this can be a major burden. While some brands are reportedly starting to
combine efforts on inspections, the Economist still reports that “surveys suggest that a
typical garment factory may expect to be inspected 25 times a year.”

Even new

approaches must ultimately be paid for out of the factory owners’ pockets. For example,
the new FLA 3.0 sustainable compliance programme requires the brand to pay for each
factory they designate to enter the FLA 3.0 programme, but once the needs survey for the
factory is completed using the Sustained Compliance Assessment Tool (SCAT), all follow-
on activities in capacity building and remediation must be paid for by the factory.

A third way for monitoring is the use of formal mechanisms to receive complaints from
interested parties, such as those created by WRC, FLA, and SA-8000, and other codes. The
brand monitors on the ground in countries of production ostensibly serve as avenues for
complaints from workers and other interested parties as well. Yet these systems depend on
a level of organisation and mobilization by workers and their allies, as well as knowledge
of their rights under the applicable codes of conduct.

IV. Conclusion – Growing Focus on Codes, but Uncertain Path
Ahead

The conclusion that can be drawn is that while the codes of conduct have been increasingly
prevalent and more sophisticated, the systems for ensuring compliance still lag behind, and
very greatly among the individual buyers/brands and the multi-stakeholder initiatives.
Increased competition following the phase-out of the MFA has made global textile and
apparel markets more competitive for orders, and expanded the power that buyers have to
impose conditions – including compliance with codes on conduct – over the factories in
their supply chain. No longer is it sufficient to merely have a code, translate it into the
local language, and require that the factory manager ensure it is hung on the factory wall.
Compliance with codes of conduct are now clearly an important element in the sourcing
decisions of international brand. Management of garment factories in Bangladesh,
Cambodia, Thailand and Vientam who ignore this new reality in ability to export do so at
their own significant risk.

Interview with Production Manager of major garment producing group in Dhaka, Bangladesh, on

November 17, 2007. Source insisted on anonymity.

Economist, “A Stitch in Time: How Companies Manage Risks to their Reputation”, January 19, 2008

For more details about FLA 3.0, see www.fairlabour.org

C-32

Looking at codes of conduct from the perspective of linking labour rights to trade, there is
no escaping the conclusion that codes have helped deepen the link and compelled factory
owners and government authorities in garment-exporting countries to give labour issues
(under the broader rubric of “social compliance” which encompasses all the issues covered
by the codes) more serious consideration. Yet unlike the “Social Clause” which was
classified by many developing countries as a protectionist trade barrier when it was
broached at the WTO Ministerial Conference in 1996, codes of conduct have not been seen
as ‘trade barriers’, but rather as a new ‘condition of doing business’, implemented at a
contract by contract, buyer-producer level. As codes of conduct grow in importance and
breadth – creating winners and losers in global production in garments -- it will be
illuminating to see whether this characterization of codes of conduct in non-trade terms
continues.

C-33

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C-34

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138, 155, 182, various years [online]. [Accessed 2007]. Available at World Wide

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at World Wide Web at www.labourights.org

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Nations Pay. Los Angeles Times. January 16.

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Destined for Gap. The Observer. October 28.

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December 2007]. Available from World Wide Web: www.sa-intl.org

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Limited, Dhaka, Bangladesh, 2004.

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2007]. Available from World Wide Web: www.un.org

US Department of Labour, “Apparel Industry Partnership’s Agreement”, April 14, 1997.
BAKVIS, P., M. MCCOY, 2008. Core Labour Standards and International Organisations:

What Inroads Has Labour Made? Friedrich Ebert Stiftung Briefing Papers, No.

6/2008. Available from www.fes.de/gewerkschaften

WICK, I., 2003. Worker’s Tool or PR Ploy: A Guide to Codes of International Labour

Practice. Friedrich Ebert Stiftung, 3

Revised Edition, 2003.

Worker Rights Consortium, Model Code of Conduct, [online]. [Accessed December 2007].

Available from World Wide Web: www.www.workerrights.org

C-35

Worker Rights Consortium, The Impact of Substantial Labour Cost Increases on Apparel

Retails Prices, PPR dated 11.10.05, [online]. [Accessed December 2007]. Available

from World Wide Web: www.workerrights.org

Worker Rights Consortium, “The Designated Suppliers Programme – Revised”, [online].

[Accessed December 2007]. Available from World Wide Web:

www.workerrights.org

Worker Rights Consortium, Worker Rights Consortium Assessment re Chong Won

Fashion, Inc. (Facility recently renamed “C. Woo Inc.”) – Report of Findings and

Recommendations, February 21, 2007, [online]. [Accessed December 2007].

Available from World Wide Web: www.workerrights.org

World Trade Organisation and International Labour Organisation, Trade and Employment:

Challenges for Policy Research, 2007.

Numerous documents consulted on the following websites:

Clean Clothes Campaign – www.cleanclothes.org
Ethical Trade Initiative – www.ethicaltrade.org
Fair Labour Association – www.fairlabour.org
Gap – www.gapinc.com
Maquila Solidarity Network – www.maquilasolidarity.org
SA-8000 – www.sa-intl.org
Wal-mart – www.walmartstores.com
Worldwide Responsible Apparel Production – www.wrapapparel.com
Worker Rights Consortium – www.workerrights.org

Company codes of conduct examined from the following companies:

Adidas

Arcadia

Dayton Hudson Stores

Dillard Department Stores

Federated Department Stores

GAP

Penney

Jones Apparel Group

Levi Strauss & Company

Liz

Claiborne

Montgomery

Ward

Nike

Nordstrom

Oxford

Industries

Phillips

Van

Heusen

Sears, Roebuck & Company

The Limited

Corporation Wal-Mart

Stores

Warnaco

C-36

Appendix 1

Gap Code of Vendor Conduct

This Code of Vendor Conduct applies to all factories that produce goods for Gap Inc. or
any of its subsidiaries, divisions, affiliates or agents (“Gap Inc.”).

While Gap Inc. recognizes that there are different legal and cultural environments in which
factories operate throughout the world, this Code sets forth the basic requirements that all
factories must meet in order to do business with Gap Inc. The Code also provides the
foundation for Gap Inc.’s ongoing evaluation of a factory’s employment practices and
environmental compliance.

I. General

Principle

Factories that produce goods for Gap Inc. shall operate in full compliance with the laws of
their respective countries and with all other applicable laws, rules and regulations.

A. The factory operates in full compliance with all applicable laws, rules and regulations,

including those relating to labour, worker health and safety, and the environment.

B. The factory allows Gap Inc. and/or any of its representatives or agents unrestricted

access to its facilities and to all relevant records at all times, whether or not notice is
provided in advance.

II. Environment

Factories must comply with all applicable environmental laws and regulations. Where such
requirements are less stringent than Gap Inc.’s own, factories are encouraged to meet the
standards outlined in Gap Inc.’s statement of environmental principles.

A. The factory has an environmental management system or plan.
B. The factory has procedures for notifying local community authorities in case of

accidental discharge or release or any other environmental emergency.

III. Discrimination

Factories shall employ workers on the basis of their ability to do the job, not on the basis of
their personal characteristics or beliefs.
A. The factory employs workers without regard to race, color, gender, nationality, religion,

age, maternity or marital status.

B. The factory pays workers wages and provides benefits without regard to race, color,

gender, nationality, religion, age, maternity or marital status.

IV. Forced

Labour

Factories shall not use any prison, indentured or forced labour.
A. The factory does not use involuntary labour of any kind, including prison labour, debt

bondage or forced labour by governments.

B. If the factory recruits foreign contract workers, the factory pays agency recruitment

commissions and does not require any worker to remain in employment for any period
of time against his or her will.

C-37

V. Child

Labour

Factories shall employ only workers who meet the applicable minimum legal age
requirement or are at least 14 years of age, whichever is greater. Factories must also comply
with all other applicable child labour laws. Factories are encouraged to develop lawful
workplace apprenticeship programmes for the educational benefit of their workers,
provided that all participants meet both Gap Inc.’s minimum age standard of 14 and the
minimum legal age requirement.

A. Every worker employed by the factory is at least 14 years of age and meets the

applicable minimum legal age requirement.

B. The factory complies with all applicable child labour laws, including those related to

hiring, wages, hours worked, overtime and working conditions.

C. The factory encourages and allows eligible workers, especially younger workers, to

attend night classes and participate in work-study programmes and other government-
sponsored educational programmes.

D. The factory maintains official documentation for every worker that verifies the worker’s

date of birth. In those countries where official documents are not available to confirm
exact date of birth, the factory confirms age using an appropriate and reliable
assessment method.

VI. Wages

Hours

Factories shall set working hours, wages and overtime pay in compliance with all
applicable laws. Workers shall be paid at least the minimum legal wage or a wage that
meets local industry standards, whichever is greater. While it is understood that overtime is
often required in garment production, factories shall carry out operations in ways that limit
overtime to a level that ensures humane and productive working conditions.

A. Workers are paid at least the minimum legal wage or the local industry standard,

whichever is greater.

B. The factory pays overtime and any incentive (or piece) rates that meet all legal

requirements or the local industry standard, whichever is greater. Hourly wage rates for
overtime must be higher than the rates for the regular work shift.

C. The factory does not require, on a regularly scheduled basis, a work week in excess of

60 hours.

D. Workers may refuse overtime without any threat of penalty, punishment or dismissal.
E. Workers have at least one day off in seven.
F. The factory provides paid annual leave and holidays as required by law or which meet

the local industry standard, whichever is greater.

G. For each pay period, the factory provides workers an understandable wage statement

which includes days worked, wage or piece rate earned per day, hours of overtime at
each specified rate, bonuses, allowances and legal or contractual deductions.

VII. Working

Conditions

Factories must treat all workers with respect and dignity and provide them with a safe and
healthy environment. Factories shall comply with all applicable laws and regulations
regarding working conditions. Factories shall not use corporal punishment or any other
form of physical or psychological coercion. Factories must be sufficiently lighted and
ventilated, aisles accessible, machinery maintained, and hazardous materials sensibly stored
and disposed of. Factories providing housing for workers must keep these facilities clean
and safe.

C-38

Factory:

A. The factory does not engage in or permit physical acts to punish or coerce workers.
B. The factory does not engage in or permit psychological coercion or any other form of

non-physical abuse, including threats of violence, sexual harassment, screaming or
other verbal abuse.

C. The factory complies with all applicable laws regarding working conditions, including

worker health and safety, sanitation, fire safety, risk protection, and electrical,
mechanical and structural safety.

D. Work surface lighting in production areas—such as sewing, knitting, pressing and

cutting—is sufficient for the safe performance of production activities.

E. The factory is well ventilated. There are windows, fans, air conditioners or heaters in all

work areas for adequate circulation, ventilation and temperature control.

F. There are sufficient, clearly marked exits allowing for the orderly evacuation of workers

in case of fire or other emergencies. Emergency exit routes are posted and clearly
marked in all sections of the factory.

G. Aisles, exits and stairwells are kept clear at all times of work in process, finished

garments, bolts of fabric, boxes and all other objects that could obstruct the orderly
evacuation of workers in case of fire or other emergencies. The factory indicates with a
“yellow box” or other markings that the areas in front of exits, fire fighting equipment,
control panels and potential fire sources are to be kept clear.

H. Doors and other exits are kept accessible and unlocked during all working hours for

orderly evacuation in case of fire or other emergencies. All main exit doors open to the
outside.

I. Fire extinguishers are appropriate to the types of possible fires in the various areas of

the factory, are regularly maintained and charged, display the date of their last
inspection, and are mounted on walls and columns throughout the factory so they are
visible and accessible to workers in all areas.

J. Fire alarms are on each floor and emergency lights are placed above exits and on

stairwells.

K. Evacuation drills are conducted at least annually.
L. Machinery is equipped with operational safety devices and is inspected and serviced on

a regular basis.

M. Appropriate personal protective equipment—such as masks, gloves, goggles, ear plugs

and rubber boots—is made available at no cost to all workers and instruction in its use
is provided.

N. The factory provides potable water for all workers and allows reasonable access to it

throughout the working day.

O. The factory places at least one well-stocked first aid kit on every factory floor and trains

specific staff in basic first aid. The factory has procedures for dealing with serious
injuries that require medical treatment outside the factory.

P. The factory maintains throughout working hours clean and sanitary toilet areas and

places no unreasonable restrictions on their use.

Q. The factory stores hazardous and combustible materials in secure and ventilated areas

and disposes of them in a safe and legal manner.

Housing (if applicable):

A. Dormitory facilities meet all applicable laws and regulations related to health and

safety, including fire safety, sanitation, risk protection, and electrical, mechanical and
structural safety.

B. Sleeping quarters are segregated by sex.

C-39

C. The living space per worker in the sleeping quarters meets both the minimum legal

requirement and the local industry standard.

D. Workers are provided their own individual mats or beds.
E. Dormitory facilities are well ventilated. There are windows to the outside or fans and/or

air conditioners and/or heaters in all sleeping areas for adequate circulation, ventilation
and temperature control.

F. Workers are provided their own storage space for their clothes and personal

possessions.

G. There are at least two clearly marked exits on each floor, and emergency lighting is

installed in halls, stairwells and above each exit.

H. Halls and exits are kept clear of obstructions for safe and rapid evacuation in case of

fire or other emergencies.

I. Directions for evacuation in case of fire or other emergencies are posted in all sleeping

quarters.

J. Fire extinguishers are placed in or accessible to all sleeping quarters.
K. Hazardous and combustible materials used in the production process are not stored in

the dormitory or in buildings connected to sleeping quarters.

L. Fire drills are conducted at least every six months.
M. Sleeping quarters have adequate lighting.
N. Sufficient toilets and showers or mandis are segregated by sex and provided in safe,

sanitary, accessible and private areas.

O. Potable water or facilities to boil water are available to dormitory residents.
P. Dormitory residents are free to come and go during their off-hours under reasonable

limitations imposed for their safety and comfort.

VIII. Freedom of Association

Workers are free to join associations of their own choosing. Factories must not interfere
with workers who wish to lawfully and peacefully associate, organize or bargain
collectively. The decision whether or not to do so should be made solely by the workers.

A. Workers are free to choose whether or not to lawfully organize and join associations.
B. The factory does not threaten, penalize, restrict or interfere with workers’ lawful efforts

to join associations of their choosing.

Monitoring & Enforcement

As a condition of doing business with Gap Inc., each and every factory must comply with
this Code of Vendor Conduct. Gap Inc. will continue to develop monitoring systems to
assess and ensure compliance. If Gap Inc. determines that any factory has violated this
Code, Gap Inc. may either terminate its business relationship or require the factory to
implement a corrective action plan. If corrective action is advised but not taken, Gap Inc.
will suspend placement of future orders and may terminate current production.

C-40

Appendix 2

Wal-Mart Stores, Inc. Standards For Suppliers

Wal-Mart Stores, Inc. (“Wal-Mart”) is successful by adhering to three basic beliefs since its
founding in 1962:

1. Respect for the Individual
2. Service to our Customers
3. Strive for Excellence

Wal-Mart strives to conduct its business in a manner that reflects these three basic beliefs
and expects its suppliers to adhere to these beliefs in their contracting, subcontracting, and
other business relationships. Additionally, because the conduct of Wal-Mart’s suppliers can
be attributed to Wal-Mart and its reputation, Wal-Mart requires its suppliers, and their
contractors, to meet the following standards, and reserves the right to make periodic,
unannounced inspections of suppliers’ facilities and the facilities of suppliers’ contractors
to ensure suppliers’ compliance with these standards:

Compliance with applicable laws and practices: Suppliers shall comply with all local
and national laws and regulations of the jurisdictions in which the suppliers are doing
business as well as the practices of their industry. Should the legal requirements and
practices of the industry conflict, suppliers must, at a minimum, be in compliance with the
legal requirements of the jurisdiction in which they are operating. If, however, the industry
practices exceed the country’s legal requirements, Wal-Mart will favor suppliers who meet
such industry practices.

Wal-Mart expects its suppliers to comply with the following conditions of
employment:

Compensation: Suppliers shall fairly compensate their employees by providing wages and
benefits which are in compliance with the local and national laws and regulations of the
jurisdictions in which the suppliers are doing business, or which are consistent with the
prevailing local standards in the countries, if the prevailing local standards are higher.

Hours of Labour: Suppliers shall maintain reasonable employee work hours in compliance
with local standards and applicable laws of the jurisdictions in which the suppliers are
doing business. Suppliers’ employees shall not work more than 72 hours per 6days or work
more than a maximum total working hours of 14 hours per calendar day (measured
midnight to midnight). Supplier’s factories should be working toward achieving a 60-hour
workweek. Wal-Mart will not use suppliers who, on a regularly scheduled basis, require
employees to work in excess of the statutory requirements without proper compensation as
required by applicable law. Employees should be permitted reasonable days off (at least
one day off for every seven-day period) and leave privileges.

Forced/Prison Labour: Forced or prison labour will not be tolerated by Wal-Mart.

Child Labour: Wal-Mart will not tolerate the use of child labour. Wal-Mart will not accept
products from suppliers or subcontractors who use child labour. No person shall be
employed at an age younger than the legal minimum age for working in any specific
jurisdictions. In no event shall suppliers or their subcontractors employ workers less than
14 years of age.

C-41

Discrimination /Rights: All conditions of employment must be based on an individual’s
ability to do the job, not on the basis of personal characteristics or beliefs. Wal-Mart favors
suppliers who do not discriminate on the basis of race, color, national origin, gender, sexual
orientation, religion, disability, and other similar factors.

Freedom of Association and Collective Bargaining: Suppliers will respect the rights of
employees regarding their decision of whether to associate or not to associate with any
group, as long as such groups are legal in their own country. Suppliers must not interfere
with, obstruct or prevent such legitimate activities.

Immigration law and compliance: Only workers with a legal right to work shall be
employed or used by a supplier. All workers’ legal status, must be validated by the Supplier
by reviewing original documentation (not photocopies) before they are allowed to
commence work. Procedures which demonstrate compliance with these validations must be
implemented. Suppliers must regularly audit employment agencies from whom they obtain
workers to monitor compliance with this policy.

Workplace Environment: Factories producing merchandise to be sold by Wal-Mart shall
provide adequate medical facilities and ensure that all production and manufacturing
processes are carried out in conditions that have proper and adequate considerations for the
health and safety of those involved. Wal-Mart will not do business with any supplier that
provides an unhealthy or hazardous work environment or which utilizes mental or physical
disciplinary practices.

Security: Suppliers will maintain adequate security at all production and warehousing
facilities and implement supply chain security procedures designed to prevent the
introduction of non-manifested cargo into outbound shipments (e.g. drugs, explosives bio-
hazards and/or other contraband). Additionally, each production and warehousing facility
must have written security procedures and maintain documented proof of the adequate
controls implemented to guard against introduction of non manifested cargo.

Concern for the Environment: We encourage suppliers to reduce excess packaging and to
use recycled and nontoxic materials.

Right of Inspection: Wal-Mart or a third-party designated by Wal-Mart will take certain
actions, such as inspection of production facilities, to implement and monitor these
standards.

Confidentiality: Suppliers shall not disclose to others and will not use for its own purposes
or the purpose of others any trade secrets, confidential information, knowledge, designs,
data, skill, or any other information considered by Wal-Mart as “confidential”. The
“Standards for Suppliers” must be posted in a location visible to all employees at all
facilities that manufacture products for Wal-Mart. If you know of a violation of these
standards by a supplier, factory, or Wal-Mart associate, please call 1-800-WM-ETHIC (1-
800-963-8442). Alternatively, write to: Wal-Mart Stores, Inc., Wal-Mart Ethics Office, 702
SW 8

St., Bentonville, AR 72716-0860 or e-mail to:

ethicalstnds@wal-mart.com

C-42

Researcher's CV

PHILIP S. ROBERTSON JR

Mobile: (66-85) 060-8406

Email: Reaproy@gmail.com

Founder and Director, Asia Human Rights and Labour Advocates (AHRLA),
2005-present

Founded and lead regional consulting group specializing in human rights, labour
rights and trade unionism, human trafficking, migration, and HIV/AIDS.

Regional Technical Advisor, Migration and Workers Rights, Southeast Asia
Regional Cooperation in Human Development (SEARCH),
2005-present
Serve as advisor to the Task Force on ASEAN Migrant Workers and senior technical
staff on regional human rights and labour rights project funded by CIDA

Expert on Human Rights and Peace appointed by Mahidol University Council,
2005-present

Elected National Committee Chair, Democrats Abroad Thailand (USA),
Bangkok, Thailand, 2005-present.

Programme Manager, UN Inter-Agency Project on Human Trafficking in the
Greater Mekong Sub-region (UNIAP), Bangkok, Thailand, 2004-2005
Directed UN inter-agency project involving 6 national governments, 11 UN and inter-
governmental agencies, and 7 international/regional NGOs on human trafficking, led
Secretariat that facilitated and launched the Coordinated Mekong Ministerial
Initiative against Trafficking (COMMIT) regional process of six Mekong Governments.

Mainland SE Asia Director, American Center for International Labour
Solidarity (ACILS), AFL-CIO, Bangkok, Thailand, 1998-2003
Directed Bangkok office of AFL-CIO promoting capacity building and technical
support to trade unions and labour-support NGOs in Burma, Cambodia, Lao PDR,
Malaysia and Thailand.

Vietnam Laureates Project, Robert F. Kennedy Center for Human Rights,
Washington, DC, 1997

Johns Hopkins University, School of Advanced International Studies (SAIS),
M.A. International Economics and Social Change & Development, 1997,
Washington, DC

Asian-American Free Labour Institute (AAFLI), Washington, DC, 1994-95

Population and Community Development Association (PDA), Bangkok,
Thailand, 1993-1994

International Rescue Committee/Joint Voluntary Agency (JVA), Thai-Lao
Border, 1990-1992

U.S. Foreign Affairs Committee, Subcommittee on Asian and Pacific Affairs,
U.S. House of Representatives, Washington, DC, 1988-1990

Trinity College, B.A. History, 1987, Hartford, CT.

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