Creating a corporate code of conduct is an easy task. There are many
models - developed by individual companies or trade associations -
to draw upon. Monitoring and enforcement are much more complicated.
Yet all parties recognize that monitoring and enforcement are key to
the success of a code of conduct. Without credible monitoring and
enforcement, corporate codes of conduct are little more than
expressions of good intentions.
By far the most frequent
monitoring of foreign contractors that occurs in the industry is for
quality of product and scheduling coordination. All of the foreign
plants visited stated that they are visited by the representative of
a U.S. company, a buying agent, or someone else for these purposes.
Most (about 90 percent in the case of the plants visited by
Department of Labor officials) also monitor for safety and health
conditions. In far fewer instances is there any clear evidence of
monitoring of child labor policies contained in codes of conduct.
Apparel importers responding to the survey revealed that they use
several means to monitor their codes of conduct.
- Some companies use a form of active monitoring - by conducting
site visits and inspections by company staff, buyer agents or
other parties - to verify that suppliers are actually implementing
the provisions on child labor and other labor standards.
- Companies may also use contractual monitoring, whereby they
rely on the written guarantees made by suppliers, typically
through contractual agreements or certification, that they are
respecting the U.S. company's policy and not using any child
labor. This latter form of monitoring may be seen as
"self-certification," and is often the only type of monitoring
used by U.S. retailers who responded to the survey.
- Some companies use a combination of the two forms of
monitoring, typically relying on contractual monitoring backed up
with visits and inspections.
Generally, the closer the relationship between a U.S. company
importing garments and the one actually producing the items, the
greater the ability of the U.S. company to influence labor
conditions, including prohibitions on child labor. Conversely, the
longer the chain of production, and the more levels of contractors,
subcontractors and buying agents used, the more complex and
challenging is the implementation.
Plant visits (inspections) are one of the main monitoring
mechanisms of codes of conduct by U.S. garment importers. Visits are
most likely announced in advance, but sometimes are unannounced.
However, when checking for codes of conduct, monitors often do not
speak with workers - either inside or outside the worksite.
Among subcontractors, the evidence suggests that monitoring of
codes of conduct is spotty. This confirms statements from industry
representatives that U.S. importers exert less control over the
labor practices of subcontractors.
Many questions remain about the practice of contractual
monitoring. In some instances, contractual monitoring seems to be
tantamount to self-certification. If there is no active, on-site
monitoring to verify conditions, it is not clear that there is an
incentive to change behavior.
- Some U.S. companies - generally retailers - require a
contractor to sign a document ensuring that the clothing is not
produced with child labor. The U.S. company then points to a
signed contract/agreement with their overseas contractor or buyer
agent to show that no children have been used in garment
production. Implementation ends there - it is now the
responsibility of the contractor to adhere to the signed promise.
In many instances, the U.S. importer does not verify compliance
beyond checking that the signed contract/agreement is on file.
Many U.S. corporations have made it clear to suppliers that
willful violations of codes of conduct - including child labor
provisions - can lead to monetary penalties, cancellation of
contracts, or severing of a relationship. The main motivation for
compliance by foreign suppliers is the fear of losing access to the
U.S. market, a form of enlightened self-interest. A potential loss
of revenue from the lucrative U.S. market arguably far outweighs any
potential gain to be made by hiring lower-cost child labor.