1 Sri Ram Khanna, "Trends in US and EU Textile and Clothing
Imports," Textile Outlook International, January 1996, 80 [hereinafter
Trends in US and EU Textile and Clothing Imports].
2 According to Levi Strauss & Co., its "Global Sourcing
& Operating Guidelines," adopted in 1991, were the first ever developed.
3 This study focuses on the child labor issue,
although other labor standard aspects of code of conduct are also
controversial and require further review.
4 This study examines the foreign implementation of
codes of conduct, not domestic application -- although many companies
have similar policies for garment production and sourcing within the
United States.
5 Lance Compa and Tashia Hinchliffe-Darricarrere,
"Enforcing International Labor Rights Through Corporate Codes of
Conduct," Columbia Journal of Transnational Law 33 (1995), 663-668
[hereinafter Compa and Hinchliffe-Darricarrere].
6 The OECD Declaration and Decisions on International
Investment and Multinational Enterprises, 1991 Review (Paris:
Organization for Economic Cooperation and Development, 1992), 39.
7 See James Michael Zimmerman, Extraterritorial
Employment Standards of the United States: The Regulation of the
Overseas Workplace (New York: Quorum Books, 1992).
8 Development and International Economic Cooperation:
Transnational Corporations, U.N. Economic and Social Council, 2nd
Session, Agenda Item 7(d), U.N. Doc. E/1990/94 (1990), 1.
9 The OECD Declaration and Decisions on International
Investment and Multinational Enterprises, 1991 Review (Paris:
Organization for Economic Cooperation and Development, 1992), 39.
10 Tripartite Declaration of Principles Concerning
Multinational Enterprises and Social Policy, 2d ed., (Geneva:
International Labor Office, 1991)[hereinafter ILO Declaration of
Principles].
11 See Compa and Hinchliffe-Darricarrere at 670-71.
12 The Sullivan Principles, developed by the Reverend
Leon H. Sullivan in 1977, were aimed at U.S. corporations doing business
in South Africa within the apartheid legal system. They were intended to
apply pressure on the South African government to end apartheid by
promoting employment practices in U.S. corporations that ensured racial
equality. See Leon H. Sullivan, "The Sullivan Principles and Change in
South Africa," in Business in the Contemporary World, Herbert L. Sawyer,
ed., (1988), 175.
13 Named after Nobel Prize-winning human rights
activist Sean MacBride, the MacBride Principles were developed in 1984
by the Irish National Caucus to address allegations of anti-Catholic
discrimination in employment in Northern Ireland. See The MacBride
Principles (Washington, D.C.: Irish National Caucus, 1984), 2.
14 The Slepak Principles were issued in 1987 by the
Slepak Foundation. They were designed to apply to U.S. corporations
doing business in the former Soviet Union. See Jorge F. Perez-Lopez,
"Promoting Respect for Worker Rights Through Business Codes of Conduct,"
Fordham International Law Journal 17 (1993), 13.
15 Maquiladoras are plants that assemble parts and
components into a finished product for export. Maquiladoras are located
in Mexico, Central America and the Caribbean, and assemble U.S.-made
parts and components into finished goods that are exported to the United
States. The Maquiladora Standards of Conduct were issued in 1991 by the
Coalition for Justice in the Maquiladoras. See "Maquiladora Standards of
Conduct," in The CJM Newsletter (San Antonio, Texas: Coalition for
Justice in the Maquiladoras, 1992), 1.
16 In 1995, the Clinton Administration encouraged
U.S. corporations and organizations to develop their own voluntary codes
of conduct for their foreign operations based on a set of Model Business
Principles. See Model Business Principles (U.S. Department of Commerce
International Trade Information Center, 1995). See also "Administration
Releases Details on Voluntary Business Principles," Daily Labor Report,
no. 104 (May 31, 1995) A-4.
17 "The Business of Child Labour," Anti-Slavery
Reporter (London: Anti-Slavery International, July 1996) 6.
18 James Cox, "U.S. Retailers Put Pressure on Foreign
Factories," USA Today, September 4, 1996.
19 Robert D. Haas, "Ethics -- A Global Business
Challenge: Character and Courage," speech to the Conference Board, New
York City (May 4, 1994) Vital Speeches of the Day, 506, 507 (on file
with the International Child Labor Study).
20 Mary Scott, "Can Consumers Change Corporations?"
Executive female, May/june 1996, 43.
21 According to the International Mass Retailers
Association, companies should be good corporate citizens but the
responsibility for eliminating child labor lies not with corporations
but with local and U.S. governments -- "it's called law enforcement."
See International Child Labor Hearing, U.S. Department of Labor (June
28, 1996) (Statement of the International Mass Retailers
Association)[hereinafter Statement of IMRA].
22 Dominic Bencivenga, "Human Rights Agenda," New
York Law Journal (July 13, 1995) 5 (quoting Diane F.Orenlicher,
professor of international law at American University).
23 Recent Developments in the Clothing Industry
(Geneva: International Labor Organization, 1995) 7 [hereinafter Recent
Developments].
24 ILO Textile Report at 6.
25 Recent Developments at 7.
26 "Dynamic Change in the Garment Industry: How Firms
and Workers Can Survive and Thrive," (U.S. Department of Labor, Office
of the Chief Economist, 1996) 1 [hereinafter Dynamic Change in the
Garment Industry].
27 Jackie Jones, "Forces Behind Restructuring in U.S.
Apparel Retailing and its Effect on the U.S. Apparel Industry,"
Industry, Trade, and Technology Review (U.S. International Trade
Commission, 1995) 23 [hereinafter Forces Behind Restructuring].
28 Ibid.
29 Ibid.
30 Ibid.
31 Carol Warfield, Mary Barry and Dorothy Cavender,
"Apparel Retailing in the USA-Part I," Textile Outlook International
(March 1995) 38 [hereinafter Apparel Retailing in the USA - Part I]. See
also Forces Behind Restructuring at 23.
32 Trevor A. Finnie, "Outlook for the US Apparel
Industry," Textile Outlook International (November 1995) 92 [hereinafter
Outlook for the US Apparel Industry].
33 Dynamic Change in the Garment Industry at 2.
34 Ibid.
35 Kurt Salmon Associates, "No Quick Fix for '96,"
Bobbin, vol.37, no.4 (December 1995) 68 [hereinafter No Quick Fix]. See
also Outlook for the US Apparel Industry at 71.
36 Ibid.
37 Outlook for the US Apparel Industry at 71, 73;
Forces Behind Restructuring at 25.
38 Outlook for the US Apparel Industry at 82.
39 Ibid. at 77.
40 Jules Abend, "Private Labels, Brands Square Off,"
Bobbin, vol. 36, no. 10 (June 1995) 68.
41 Outlook for the US Apparel Industry at 84.
42 Forces Behind Restructuring at 26.
43 Apparel Retailing in the USA - Part I at 52.
44 Ibid.
45 American Apparel Manufacturers Association, News
Release, June 1996.
46 Focus: An Economic Profile of the Apparel Industry
(American Apparel Manufacturers Association, 1995) 3.
47 Dynamic Change in the Garment Industry at 2.
48 American Apparel Manufacturers Association, News
Release, June 1996.
49 Trends in US and EU Textile and Clothing Imports
at 80.
50 Apparel Retailing in the USA - Part I at 38-9.
51 Forces Behind Restructuring at 25.
52 Ibid.
53 Brenda A. Jacobs, "One From Column B: Choosing the
Right Trade Program," Bobbin, Supplemental Guide on How to do Business
in Latin America (1995) 2.
54 ILO Textile Report at 16.
55 Ibid. at 7, 21.
56 Ibid. at 7.
57 For example, a U.S. Embassy official who recently
toured a Cambodian garment factory found "problematic" working
conditions, including workers who appeared to be under age (but who
claimed to be above the minimum working age of 16) and forced,
unremunerated overtime. American Embassy-Phnom Penh, unclassified
telegram no. 2594, September 16, 1996.
58 Retailers' sales figures are total sales, not
limited to apparel sales.
59 Kurt Salmon Associates, Financial Profile for
Fiscal Year 1995 (July 1996). The Profile includes only those companies
that file public documents with the Securities and Exchange Commission
(SEC).
60 The three companies that did not respond are
County Seat, May Department Stores and Neiman Marcus Group.
61 These three companies are Kohl's Corporation, the
Marmaxx Group and Shopko Stores.
62 Stage Stores, Inc. ('Stage Stores') is the new
name of Specialty Retailers, to whom the original questionnaire was
sent.
63 Appendix C does not contain those policies that
respondents designated confidential.
64 International Child Labor Hearing, U.S. Department
of Labor (June 28, 1996)(Statement of Levi Strauss). Spiegel, Inc.
('Spiegel') and Liz Claiborne, while they do not have formal guidelines
for country selection, said in telephone interviews that they decided to
sever contracts with producers in Burma because of human rights
violations.
65 Neiman Marcus and May Department Stores did not
respond to the survey.
66 Kohl's Corporation responded to the survey but
regards all information provided as confidential.
67 Shopko Stores responded to the survey but regards
all information provided as confidential.
68 Dolgencorp, a Dollar General subsidiary that
imports apparel, responded on behalf of Dollar General.
69 There is no Federal Child Labor Act. Child labor
provisions of federal law are contained in the FLSA.
70 County Seat did not respond to the survey.
71 The Marmaxx Group (formerly known as TJ Maxx)
responded, but regards all information provided as confidential.
72 As noted earlier, child labor provisions of
federal law are contained in the FLSA.
73 Includes companies that subscribe to another
organization's code (that of an association or buyer).
74 Appendix F contains ILO Convention 138 on Minimum
Age for Employment -- the most commonly cited international standard on
child labor.
75 In a clause Sara Lee Corporation ('Sara Lee')
provided from an agreement with a former buyer agent, however, Sara Lee
required compliance with national laws on child labor. Furthermore, a
Sara Lee supplier in the Dominican Republic (BRATEX Dominicana) provided
a Department of Labor official with Sara Lee's "Supplier Selection
Guidelines," which state that Sara Lee will not procure goods or
services from firms employing workers under age 15.
76 This is the standard contained in Warnaco's
Business Partner Terms of Engagement, which is used only for
contractors' facilities. For its wholly owned plants, Warnaco indicated
that it uses U.S. labor standards with respect to all aspects of labor
law excluding wages.
77 Report on Labour Standards in the Asia-Pacific
Region (Canberra: Government of Australia Tripartite Working Party on
Labour Standards, February 1996) 75-76.
78 The code is called "Labor and Environmental
Principles to be Observed by the Members of the Apparel and Textile
Industry Commission of the Association of Exporters of Non-Traditional
Products," and was developed by the Apparel and Textile Industry
Commission (VESTEX). VESTEX recently retained the services of an outside
auditing firm to monitor compliance of member companies with the code.
Any manufacturer may choose to adopt the code, but is responsible for
paying to be audited.
79 Levi Strauss Form 10-K report to the Securities
and Exchange Commission (February 21, 1996) at 11.
80 International Child Labor Hearing, U.S. Department
of Labor (June 28, 1996)(Statement of Jeff Ballinger, Press for Change).
81 International Child Labor Hearing, U.S. Department
of Labor (June 28, 1996)(Statement of the Interfaith Center on Corporate
Responsibility)[hereinafter Statement of ICCR].
82 Statement of IMRA.
83 The following companies indicated that they use
internal staff to monitor for compliance: Federated, Fruit of the Loom,
The Gap, Hartmarx, JCPenney, Jones, Kellwood, Kmart, Land's End, Levi
Strauss, The Limited, Liz Claiborne, Mercantile Stores, Nike, Nordstrom,
Oxford, Phillips-Van Heusen, Russell, Salant, Sara Lee, Sears, Spiegel,
Talbots, Tultex Corporation, VF Corporation, Wal-Mart, Warnaco,
Woolworth Corporation.
84 These companies are: Dillard Department Stores,
Dollar General, Dress Barn, The Gap, JCPenney, Jones, Kellwood, Land's
End, The Limited, Mercantile Stores Company, Nordstrom, Phillips-Van
Heusen, Sara Lee, Spiegel, Stage Stores, The Talbots, Venture Stores, VF
Corporation and Woolworth Corporation.
85 According to AMC, its retail shareholders includes
such other stores as Bloomingdale's, Saks Fifth Avenue, Dayton Hudson,
Bradlee's, Marshall's, Target and Filene's Basement.
86 Kellwood indicated that it may expand its
monitoring to use another Big Six accounting firm in the future.
87 Statement of ICCR.
88 See Bob Herbert, "In Deep Denial," The New York
Times, October 13, 1995. See also National Labor Committee press
releases of October 18, 1995, November 21, 1995 and December 16, 1995.
89 Interfaith Center on Corporate Responsibility,
"Independent Monitoring Working Group Progress Report," (April 19, 1996)
[hereinafter ICCR report].
90 Statement of ICCR. According to Mark Anner, of the
Center for Labor Studies (CENTRA), who coordinates the NGO monitoring
team, the experience has been very positive, with most problems already
resolved at the Mandarin plant. He expressed concern, however, regarding
the long-term sustainability of NGO monitoring since the monitors are
all volunteers (with full-time jobs elsewhere) and raise their own
budget.
91 Fruit of the Loom also requires access to
subcontractor facilities used.
92 These companies are Federated, Fruit of the Loom,
The Gap, Land's End, Levi Strauss, Liz Claiborne, Montgomery Ward, Nike,
Oxford, Phillips-Van Heusen, Price/costco, Salant, Sara Lee, Spiegel, VF
Corporation, Wal-Mart and Warnaco. Several other companies, including
Dillard and JCPenney, indicated that they seek out suppliers with
established reputations for quality that comply with all applicable
laws, but did not state that they conduct on-site evaluations.
93 These auditors are based in the region where they
work. While they are specially trained in enforcing Levi Strauss'
"Guidelines," they also do work pertaining to quality control and
sourcing activities.
94 Richard Rothstein, "The Starbucks Solution: Can
Voluntary Codes Raise Global Living Standards?," The American Prospect
27 (July/aug. 1996) 36 - 37.
95 Most also indicated that, should they receive
notification by a governmental authority of a violation, they would
cooperate and act immediately.
96 Kellwood reported that it suspected child labor in
a facility that it subsequently decided not to use as a source.
97 Phillips-Van Heusen reported that its quality
control staff has in most cases discovered the child workers.
98 According to Kmart, this last provision was added
by its new Chief Executive Officer.
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