Child Labor 2005 Report

The Apparel Industry and Codes of Conduct: Footnotes Chapter II

II. Codes of Conduct in the U.S. Apparel Industry


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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