Every day globalization provides stark reminders that economic efficiency is often accompanied by unconscionable brutality. Indeed, the business investments in poor countries that make possible higher quality goods at ever lower cost invariably bring with them a long train of well-documented abuses: child labor, poisoned environments, long and punishing work days, starvation wages, discrimination, sexual predation, and the suppression of freedom of expression and association.
These conditions -- sometimes recalling outright slavery and provoking moral outrage whenever they come to light -- underscore the need to improve, and effectively enforce, regulation of global labor markets. The crucial question is not whether to protect vulnerable workers, but how.
ILLUSTRATION: YUSHA
One response is to monitor and enforce uniform rules such as the "core" global labor standards recently adopted by the International Labor Organization (ILO). But can fixed regulations really keep pace with the never-ending changes in production within companies and across supply chains? Can one-size-fits-all rules really address labor conditions across the developing world and its often informal economies? For even in advanced countries, where bureaucracies work well, labor rules are being relaxed in favor of greater flexibility while the spread of work from home, and other forms of "sweated" labor, frustrates existing regulations.
Worse still, in countries where development is the central problem, uniform standards may have perverse effects. Banning child labor, for instance, may succeed in forcing children out of factories only to drive them deeper into poverty or into the sex industry. More broadly, fixed rules not only smack of trade protectionism, they are likely to make abuses harder to detect by encouraging businesses to go underground.
One alternative to conventional regulation is to mobilize public pressure on multinational companies to adopt voluntary codes of conduct for their global operations. The incentives are clear: around three-quarters of respondents in recent US opinion polls say that they would avoid retailers who sell garments made in sweatshops, and more than 80 percent would pay higher prices for clothes if they could be certain that the clothing was manufactured under decent conditions. Much of this holds true for European consumers.
Five recently established organizations -- "SA8000," the "Workers' Rights Consortium," and the "Fair Labor Association" in the US, the UK's "Ethical Trading Initiative," and Europe's "Clean Clothes Campaign" -- cater to this trend in ethical consumerism. These bodies design model codes of conduct -- often based on the ILO's core standards -- and advance third-party monitoring, employing accounting and consulting firms, local non-governmental organizations, and trade unions, to verify compliance.
Of course, this approach has limits. While voluntary codes generate de facto standards with which to criticize firms that maintain odious labor practices, public pressure may move only the most conscientious or publicly exposed firms to act responsibly. Moreover, their open character leaves such codes vulnerable to becoming mere public relations tools. An unscrupulous company, or one indifferent to its subcontractors' labor practices, need only adopt -- or affiliate with a standard-setting body that adopts -- a code emphasizing vague intentions to improve performance, and then retain pliant monitors to testify that its motives are sincere. How, then, can the promise of core labor standards be fulfilled without risking the unintended consequences of fixed regulations and the limits of voluntarism? We propose a strategy that deploys public power in a new way: to use "good" private actors -- those who successfully improve labor and other social conditions-to discipline "bad" producers. Unlike conventional regulation and voluntary codes, this strategy does not begin with standards, but with a demand for full public disclosure.
Firms would be required to reveal their workplace conditions, wage levels, workforce profiles, labor management systems, and similar elements of social performance within their global operations. Monitors, in turn, would rank the performance of firms and report these rankings -- along with the inspection and verifvication protocols used -- to a governing council.
Investor, consumer, and political pressures in this transparent environment would stimulate mutually reinforcing competition among firms in the formal economy and third-party monitors. Firms who believe that their labor practices are outstanding would seek out credible monitors to verify their accomplishments, while rigorous monitors would seek outstanding performers in order to hone their skills, build their reputations, and expand their influence.
A system like this will emerge from neither the conventional core standards approach nor the recent surge of voluntary activity around corporate codes of conduct. Instead, it depends upon the deliberate and forceful construction of framework institutions to establish a level playing field for social competition. Ideally, the governing council of this framework should be composed of international organizations, such as the UN, ILO, and World Bank, that can create a central body of research on the social performance of international business, ensure that monitoring data is comparable, and coordinate public dissemination of this information.
By creating a framework that opens both firms and monitors to public scrutiny, standards would emerge by comparing the best practices in similarly situated facilities.
A factory in Vietnam might be compared to one in Indonesia, but not to one in, say, Europe. The demanding standards that would emerge from this would not be protectionist but yet be feasible.
Over time, these standards could be steadily ratcheted up, as firms that depend on consumer loyalty seek to outperform their peers would compel suppliers and the suppliers of suppliers (many of whom may be in the informal economy), to follow suit. Meanwhile, by identifying the worst local performers, this framework will bolster enforcement by national regulatory agencies.
More ambitiously, these agencies might use the emerging standards to transform their own fixed-rule systems.
Archon Fung is professor of politics at the JFK School of Government, Harvard; Dara O'Rourke is professor of politics at MIT; and Charles Sabel is professor of law at Columbia University.
Copyright: Project Syndicate
The gutting of Voice of America (VOA) and Radio Free Asia (RFA) by US President Donald Trump’s administration poses a serious threat to the global voice of freedom, particularly for those living under authoritarian regimes such as China. The US — hailed as the model of liberal democracy — has the moral responsibility to uphold the values it champions. In undermining these institutions, the US risks diminishing its “soft power,” a pivotal pillar of its global influence. VOA Tibetan and RFA Tibetan played an enormous role in promoting the strong image of the US in and outside Tibet. On VOA Tibetan,
Sung Chien-liang (宋建樑), the leader of the Chinese Nationalist Party’s (KMT) efforts to recall Democratic Progressive Party (DPP) Legislator Lee Kun-cheng (李坤城), caused a national outrage and drew diplomatic condemnation on Tuesday after he arrived at the New Taipei City District Prosecutors’ Office dressed in a Nazi uniform. Sung performed a Nazi salute and carried a copy of Adolf Hitler’s Mein Kampf as he arrived to be questioned over allegations of signature forgery in the recall petition. The KMT’s response to the incident has shown a striking lack of contrition and decency. Rather than apologizing and distancing itself from Sung’s actions,
US President Trump weighed into the state of America’s semiconductor manufacturing when he declared, “They [Taiwan] stole it from us. They took it from us, and I don’t blame them. I give them credit.” At a prior White House event President Trump hosted TSMC chairman C.C. Wei (魏哲家), head of the world’s largest and most advanced chip manufacturer, to announce a commitment to invest US$100 billion in America. The president then shifted his previously critical rhetoric on Taiwan and put off tariffs on its chips. Now we learn that the Trump Administration is conducting a “trade investigation” on semiconductors which
By now, most of Taiwan has heard Taipei Mayor Chiang Wan-an’s (蔣萬安) threats to initiate a vote of no confidence against the Cabinet. His rationale is that the Democratic Progressive Party (DPP)-led government’s investigation into alleged signature forgery in the Chinese Nationalist Party’s (KMT) recall campaign constitutes “political persecution.” I sincerely hope he goes through with it. The opposition currently holds a majority in the Legislative Yuan, so the initiation of a no-confidence motion and its passage should be entirely within reach. If Chiang truly believes that the government is overreaching, abusing its power and targeting political opponents — then
RSS