The study, Implementing Codes of Conduct: How businesses manage social performance in global supply chains (Note 1), says brand recognition and intense consumer scrutiny have led the sports footwear companies analysed to develop more sophisticated approaches to code implementation. It attributes the success of the sports footwear industry to effectively applying financial and human resources to compliance efforts.
The study is based on interviews with hundreds of managers, activists, government officials, factory workers and worker representatives and visits to over 90 enterprises and suppliers in the US, Europe, China, Viet Nam, Thailand, Cambodia, Sri Lanka, Guatemala, Turkey and Honduras.
However, the study also reveals that simply focusing on the numbers does not reveal the entire picture. While a large compliance team can mean improved social performance of a firm’s supply base it also depends on the role that compliance staff play with suppliers. The research indicates the need for multinational enterprises to move away from a “policing” model of compliance to a more consultative role with workers being empowered to oversee their own workplaces.
This includes having a clear vision reinforced by top management commitment, effective training, and geographically dispersed teams able to provide “hands-on” assistance at the supplier level, the study says.
For example, one of the sports footwear and apparel companies studied reported having a dedicated team of over 100 people whose sole dictate was to oversee corporate social responsibility and code of conduct issues.
The study also highlights the significant challenges facing the retail sector due to the extremely large and continually changing supply bases. In addition, the diversified mix of products handled by the retail sector results in difficulties identifying the entire supply chain.
In contrast to the footwear sector, for example, a major retailer with a continually changing supply base of over 5,000 factories told researchers that it did not have a separate team responsible for supporting their compliance code. Instead, the study notes, it assigned this responsibility to the quality assurance department, asking 12 people there to spend 25 per cent of their working time on “ethical issues”.
“These numbers themselves reveal a telling story”, says Ivanka Mamic, the author of the study, an ILO official specializing in workplace relations and labour issues in global supply chains.
“Not surprisingly, progress is being made where serious efforts are being expended by buyer firms and where linkages between suppliers and buyers are the tightest.”
As such, the sports footwear sector, where linkages are very tight between producers and multinational brands, has seen more success than the apparel sector, where progress has been spottier, and the retail sector, where in some areas even minimal compliance is not taking place, the study says.
“With its tripartite structure, the ILO is uniquely positioned to play a critical role”, Ms. Mamic says, adding “most codes reference either directly or indirectly international labour standards, this makes the ILO an obvious forum for dialogue examining the increased use of codes of conduct in the workplace.”