Workers Rights as Human Rights: Creating Ethical Supply Chains

1. Workers Rights as Human Rights:Creating Ethical Supply Chains Margaret Levi,*~ Anne Greenleaf,* and Milli Lake**Political Science, University of Washington ~U.S. Studies Centre, University of Sydney

2. What we knowabout creating ethical supply chains • Even powerful transnational corporations have difficulty obtaining vendor compliance to corporate codes of conduct • Historically, workers expanded their rights and protections through labor unions and labor parties • Direct or indirect consumer pressure is the most likely reason for shifts towards socially responsible corporate practice

3. We also know the following can help…. • National political institutions and direct investment • Strength and nature of laws in countries where production located • Laws in destination countries for export goods • Multi-stakeholder initiatives and independent monitoring • BUT debate over whether improvements in labor rights encourage or discourage business and economic development

4. Current Conditions in Honduras • Per capita GDP in 2010 was $2,026 USD. • The average wage for a maquila worker is an estimated $2,304 USD, 58% of estimated living wage • Third most impoverished nation in Western hemisphere

5. The Nike Case • January 2009: Two factories in Choloma, Honduras, declared bankruptcy. 1,800 workers lost their jobs and did not received their legally mandated severance pay when factory owners fled the country. • July 2010: Nike settles with CGT. The settlement includes $1.5 million USD emergency relief fund plus an additional year of national health care coverage, vocational training, and priority re-hiring.

6. The Russell Case • November 2008: Russell, a subsidiary of Fruit of the Loom, was confronted by workers for violations including union busting at its Honduran factories and illegal termination of 145 union supporters. • The settlement (2009): Russell reemployed 1,200 at a new factory, Jerzees Nuevo Dia, and recognized the union, SITRAJERZEESH. • SITRAJERZEESH negotiated hiring an additional 250 workers at Jerzees Nuevo Dia, a 19.5% wage increase, free transportation to and work, and subsidized lunches

7. Current Conditions in Guatemala • Per capita GDP in 2010 was $2,863 USD. • Maquila industry minimum wage is $3.70 USD per day. • The government estimates a basic living wage at $276 USD per month or enhanced living wage at $503 USD per month. • 4th highest chronic malnutrition rate in world

8. The Gear for Sports Case • November 2007: Estofel factory in Guatemala City declares bankruptcy. • Estofel owned by the Ghim Li Group, which subcontracted for Gear for Sports, which produces Champion brand university logo apparel under license from Hanes. • The settlement (2009): $535,000 USD shared by 871 former factory employees, approximately $600 USD per worker $600 USD equals almost 6 months wages

9. Key Findings • Negotiated settlements improved economic wellbeing of affected workers • Labor laws matter even where laws are unevenly or even infrequently enforced by local governments. • Transnational mobilization matters, but current burden on unions, NGOs, and activists too great. Labor Rights as Human Rights Margaret Levi margaret.levi@gmail.com

10. Recommendations • Further research • Quantitative on impact of labor rights on economic development • Qualitative to better assess what makes labor rights campaigns effective • Increased enforcement of national labor laws • New national laws to solve coordination problems for firms and campaigners Labor Rights as Human Rights Margaret Levi margaret.levi@gmail.com