How Apple, Foxconn, and others can address labor abuses in overseas factories

Why do we keep hearing about labor abuses in overseas factories like those of Apple-supplier Foxconn? Auditing and inspections are inadequate to solve the problem. Requiring companies to examine and publicly report on risks along their supply chains can help eliminate violations.

The New York Times? recent investigative report of poor working conditions at Apple supplier factories in China hit the airwaves with a bang. Shortly thereafter, The Guardian reported on abuses of workers producing sportswear in Bangladesh for Nike, Adidas and Puma. Though Mike Daisey?s account of Apple factory abuses has been exposed for containing fabricated details, the underlying story of deplorable labor conditions remains true.

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Accounts of labor rights abuses in overseas factories have been emerging since the mid-1990s, when Wal-Mart?s Kathie Lee Gifford clothing line was found to be using child labor, as were some of Nike?s contract factories in Asia, to take just two examples. Those early expos?s led multinational corporations to establish supply chain management systems, which in turn spawned a cottage industry of factory inspections.

So why do we keep seeing these stories, particularly among big brands that have been attempting to get a grip on their supply chains for years? One important reason is that, while auditing and inspections have called attention to the need for companies to address human rights abuses in their supply chains, these processes suffer from significant weaknesses and ? on their own ? do not solve the problem.

First, they do not address structural elements or root causes underlying labor violations. These include consumer demand for ever-better, ever-cheaper merchandise, and brands? drive to meet (and, yes, create) that demand. This demand translates into pressure on suppliers.

Buyer companies? sourcing practices (last-minute changes, cut-rate prices paid for items, unrealistically large orders in short timeframes) have been shown to exacerbate or even cause poor conditions and rights abuses in factories. Managers dare not refuse an order from a customer such as Apple or Nike.

Second, periodic inspections of the sort typically performed at these factories cannot catch or solve persistent and often ?invisible? problems. Issues such as discrimination, sexual harassment, or violations of a worker?s right to form or join a trade union are much harder to detect in planned inspections or drop-ins.

Further, the inspections cottage industry has fostered fraud among some factory managers (who might, for example, coach workers on what to say to auditors). The system has created a tick-box mentality among brands, who want to be able to check off ?inspection done,? when the situation on the shop floor is often too complicated to be captured accurately in spot checks.

Third, weak regulations in producing countries often led, in the first place, to multinational brands? decision to source from those countries. And these lax regulatory environments play a fundamental role in the perpetuation of serious labor rights violations in these factories.

So the blame for ongoing labor rights violations can be shared all around: among consumers, buyer companies, factories, and governments. All of the above has been known for several years, and recent news coverage underscores a number of these elements.

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