How Apple, and everyone, can solve the sweatshop problem

By Dan Viederman
February 29, 2012

Every few years brings us another sweatshop offender. In the 1990s it was Disney, and then Nike and Gap. The 2000s brought us Wal-Mart. The past few weeks Apple has been in the crosshairs.

One question is of paramount importance: How can we use this current public conversation to finally drive a different outcome? What must companies do so that 15 years after Kathie Lee Gifford tearfully became the first sweatshop poster child, workers who make and grow products for global consumers are paid fairly, protected from danger and free to advocate for themselves without fear of reprisal?

The good news is that these years of effort have created robust experience from which to identify what has gone wrong. The fundamental driver of “sweatshops” is that multinationals do not place value on good working conditions in their supply chains. This does not mean that a company doesn’t care about how those workers are treated, or that the company intends to act unethically or exploitatively. To the contrary, big companies require good conditions through vendor standards and “codes of conduct.” They build corporate responsibility departments whose staff have budgets to reduce the risk of bad working conditions at supplier factories and farms. But their work is much like the arcade game Whac-A-Mole: A problem arises in one factory that they take steps to fix, while other problems fester and ultimately break through the surface elsewhere.

For this to change, companies have to resolve the ways in which their business decisions actually drive irresponsible performance among their suppliers. Companies frequently speak with two voices when they talk to suppliers. Procurement officers responsible for ordering something from a supplier expect delivery of a quality good at a cheap price on a tight time frame. Corporate responsibility professionals embody the expectations that all those other business needs will be met, but in a responsible manner. Yet that responsibility gets ignored when a company makes last-minute design changes or increases order size. The supplier will still deliver a quality product on time, but will do so by keeping his employees at work overnight or for days on end. Without the ability to negotiate a higher price at the last minute, the supplier can’t pay the workers for their overtime without taking a loss himself. Thus responsibility is sacrificed by a company’s business decisions.

Instead, companies must learn to speak to their suppliers with one voice and reinforce that voice with action. Suppliers should get positive incentives in the form of higher prices, financial bonuses, long-term contracts or other benefits for maintaining good working conditions. In-house procurement and supply chain staff should be compensated more highly if they place orders with responsible suppliers. Taking these steps would allow businesses to integrate social responsibility with other business requirements like quality, price and delivery.

Workers must be part of this conversation as well. Line workers and harvesters are the best source of information about working conditions, no matter the industry. Only a worker can tell corporations with accuracy whether or not she is being paid according to her contract, whether she considers her work hours to be excessive, whether she is provided with drinking water and toilets during her long days, and whether she has been harassed or fired for “associating freely” by joining a union. By working with trade unions and NGOs, companies will learn what the reality is at their suppliers, providing an early warning when things go awry and a constituency that can help improve conditions.

To hold themselves accountable, companies need to communicate publicly what has changed as a result of their social responsibility efforts. Our recent survey of corporate responsibility reports captures a mind-numbing array of activities, but no analysis of what has been achieved. To its credit, Apple has demonstrated that communicating achievement is possible. The company remains the only multinational to quantify the impact of its supply chain social responsibility in dollar value for workers — disclosing that $6.7 million was returned to migrant workers who had been overcharged by unscrupulous labor contractors. This kind of disclosure leaves no doubt about its impact and stands in contrast to the usual corporate responsibility communication.

Fifteen years into the modern anti-sweatshop movement, poor conditions persist. It is time for companies and their suppliers to structure their business relationships so that good working conditions can be secured. The workers who make their products will benefit substantially if they do.

PHOTO: Local and mainland Chinese university students, in the role of Foxconn workers, lie on the floor as they act out being chemically poisoned during a street drama in Hong Kong, May 7, 2011. REUTERS/Bobby Yip


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