Can Business Voluntarily Eliminate Sweatshops?

When scandals about sweatshops erupted seemingly out of nowhere in 1995, allegations of filthy, unsafe, near-slavery working conditions hit everyone from Disney to Wal-Mart and the Gap. Suddenly a new issue was on the American agenda: Were companies responsible for far-off suppliers who violated human rights? The public says yes. And business -- a few businesses, anyway -- have begun saying, help us do something about it. In 1992, Levi Strauss had to create its own code of conduct, and in 1995, The Gap had to pioneer the process of independent monitoring. But now, two new organizations have been created that give companies access to both a uniform code of conduct, and standardized independent monitoring. Both are entirely voluntary. And both are just getting started, so results are too early to evaluate. Whether the voluntary route will truly work is anybody's guess. But it is a step and a hopeful one.* The Fair Labor Association (FLA) is the most high-profile of the two groups, because of its White House origins. This new nonprofit has grown out of the Apparel Industry Partnership (AIP), created by President Clinton in mid-1996. It will focus only on the apparel and footwear industries--where most scandals occurred. Its code sets minimum standards in areas such as child and forced labor, freedom of association, wages, safety, and hours of work.Companies can become members of the FLA--and be entitled to display its service mark-- when their suppliers are certified as in compliance with the code. Certification requires internal monitoring of all facilities, plus independent monitoring of 30 percent of facilities initially, and 10 percent annually thereafter. In the group's first five years, companies will be reimbursed for up to half the cost of external monitoring--"so that independent monitoring is indeed independent," said Linda Golodner, AIP member and president of the National Consumers League. "Who controls what, who pays for what, it's a delicate balance," she said.Golodner said the budget will be $1.8 million, with funding from member companies, foundations, and the government. The FLA governing board will have six industry members, and six members from non-governmental organizations (NGOs), plus a neutral chairperson. Currently, unions are not part of the FLA, having dropped out in November 1998--protesting, in part, the lack of a living wage requirement. The code requires companies to pay the local minimum wage or the prevailing wage, whichever is higher.Golodner emphasized that the FLA will certify companies or brands, not factories. Firms that have committed to be part of the FLA include Liz Claiborne, Nike, Reebok, Phillips-Van Heusen , Kathie Lee Gifford, Patagonia, and L.L. Bean. So far, Golodner said more than 50 colleges and universities had also expressed interest; they will require licensees who produce college-logo goods to join FLA.* Social Accountability 8000 (SA8000)--an international standard that is modeled on quality standards (ISO 9000) and environmental management systems (ISO 140000)--was launched in early 1998 by the 30-year-old Council on Economic Priorities, publisher of the Shopping for a Better World guides. Though it's drawn less press attention than the FLA, SA8000 is in some ways more rigorous and more grounded in management reality. Its social standards are similar to FLA's, but do require a living wage. "We call it compensation to meet basic needs," said Alice Tepper Marlin, CEP executive director. "Our freedom of association and hours provisions are also stronger." SA8000 is applicable to all industries, and was even tested in 1998 in agriculture."Certification by SA8000 is facility by facility," said Marlin. The Council on Economic Priorities Accreditation Agency--a $1.2 million nonprofit, separate from CEP--trains and certifies auditors, who then certify factories. When a factory falls short, the auditor issues a "corrective action request," and issues a certificate when corrections are complete. "On average for China," Marlin said, "factories had to make 50 corrective actions." By contrast, she added, "FLA is counting audits, it's not counting how many meet the standard." Once a factory is certified to SA8000 in a full audit, it must have a followup audit every six months.Three firms have been certified to audit for SA8000: SGS, DNV, and BVQI. Nine factories--including three Avon plants--have so far been certified. Companies working toward certification include Toys R Us, OTTO-Versand, Eileen Fisher, We Europe, Coop Italia, and Sainsburys. Overall, CEPAA Executive Director Eileen Kaufman said companies desiring supplier certification represent $75 billion in sales.The two systems are "not necessarily in competition," Marlin stressed. "There are conversations going on, and there's a possibility of strategic partnership." She hopes companies don't use the differences as an excuse to wait for the dust to settle. "It's better to go with one program than do nothing," she said. "Every day, children are in bonded labor. You can't wait. A lot of people are suffering."Contact: CEPAA, 30 Irving Place, New York, NY 10003; phone 212/358-7697; web The FLA has no office yet. See web sites or Or contact: Linda Golodner, National Consumers League, 1701 K St. NW, Suite 1200, Washington, DC 20006; phone 202/835-3323.

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