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.