March 2001 Insights Issue #36

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Consensus or conflict: what's in a code?

The increasing dissemination of information through new technologies and the media which made possible the growth of global brands, has also brought issues of workers' rights and conditions in the south into consumer political consciousness in the north. Demands that transnational producers take greater responsibility for the rewards and conditions of those who contribute their labour to the global production chain have intensified over the past decade, just as national governments have become less able or willing to regulate the activities of companies engaged in international business.

What are appropriate responses to demands for increased corporate responsibility? Voluntary Codes of Conduct (VCCs) commit companies to respect basic labour rights anywhere along their global production chain. Southern and northern NGOs, women's groups, international organisations, trade unions and business associations have welcomed codes. Is there consensus amongst different stakeholders that codes can ensure that gains from globalisation are not obtained at the expense of workers and communities?

Will different stakeholder organisations see eye to eye in the development of codes of conduct? Not necessarily:
Branded manufacturers and retailers want to protect their image and reputation.
Trade associations and employer organisations may see codes as a way to pre-empt more stringent regulation.
Trade unions seek to protect the interests of their members.
NGOs have broader development goals, or hone in on issues such as the rights of the child.

Is consensus possible? Looking at 20 codes, research at the Universities of East Anglia and Leeds examined their social dimension as they affect shop-floor workers in developing countries and found that VCCs:

• differ depending on who initiated and formulated them: codes originating from trade associations are less likely to reflect the immediate concerns of shop floor workers than those by labour unions or NGOs.

• often fail to cover the basic elements in the ILO's Core Labour Standards, and vary considerably in coverage and content

• mostly cover formal sector factory workers and exclude home workers or piece rate workers

• often apply to female-dominated sectors such as garments, whilst public pressure is more concerned with child labour - women's specific concerns such as sexual harassment (covered by under a third of codes) reproductive health (covered in a tenth), and provision of health services (covered in one) are thus often excluded from codes in which women and their representative organisations are not directly involved

• fail to provide for adequate inspection and monitoring of implementation.

What are the implications for policy? To be effective, NGO-initiated codes need to gain acceptance from business and trade unions whilst to achieve legitimacy, business-initiated codes need to obtain NGO support. The two sides need to work together but NGOs must be aware of the interests of different stakeholders and avoid being co-opted by other agendas. Further implications include:

• Codes could improve working conditions but should not be seen as a substitute for other forms of action, such as the enforcement of national labour legislation and organisation by workers.

• Adequate inspection and independent monitoring is essential to ensure that codes have a real impact on working conditions.

Rhys Jenkins
School of Development Studies
University of East Anglia
Norwich
NR4 7TJ
UK
R.O.Jenkins@uea.ac.uk

Ruth Pearson
Centre for Development Studies
POLIS
University of Leeds
Leeds
LS2 9JT
UK
R.Pearson@leeds.ac.uk

See also:

New Hope or False Dawn: Voluntary Codes of Conduct, Labour Regulation and Social Policy in a Globalising World
Global Social Policy Volume1/1 by Ruth Pearson and Gill Seyfang (forthcoming, 2001)