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As the gradual phase-out of China’s apparel

export quotas under the Multi-Fiber

Arrangement brings a shift in international

garment production to China, ambivalence

over applying international codes of conduct

to China must come to an end, Katie Quan

writes. Labor abuses in China affect not only

domestic workers, but also workers in

Chinese immigrant communities abroad.

Introduction

Advocates of corporate social responsibility (CSR) in the U.S.

have been somewhat reluctant to enforce codes of conduct in

China, in spite of a general perception that there are many

violations of labor rights and labor standards. Most

corporations have relaxed the standards that they would apply

in other countries, with some formulating a policy of “parallel

means” as a substitute for enforcement of codes as normally

interpreted. Many labor rights activists have also been

equivocal on labor standards in China, and have waged

relatively few campaigns addressing the issue.

This reluctance is especially regrettable when evidence

indicates that CSR and codes of conduct can be a valuable tool

for workers to assert their rights. In the 2001 case of the

Korean-owned Kukdong factory in Mexico, for example,

workers used codes of conduct to leverage support from

students and consumers in Korea and the United States,

suggesting that workers elsewhere could similarly benefit

from effective implementation of codes of conduct.

The ongoing phase-out of apparel export quotas under the

Multi-Fiber Arrangement (MFA), accompanied by a general

assumption that a large portion of apparel production and jobs

will shift to China, is bound to bring greater scrutiny of labor

conditions in China. Under these circumstances, advocates of

CSR can no longer afford to be ambivalent about enforcement

of labor standards in China. The time has come to discuss the

value of corporate social responsibility, to address the

challenges to its implementation in China, and to formulate

strategies for engaging China in the worldwide movement

for corporate social responsibility.

This article briefly introduces the historical origins of the

movement for corporate social responsibility in the apparel

industry, and argues that the perceived obstacles to the imple-

mentation of CSR in China are not as great as they might seem.

The information in this paper was gathered from formal

research, as well as the authors’ personal observations as a

former garment worker, national officer of the garment and

textile workers’ union UNITE, and board director in anti-

sweatshop organizations such as Sweatshop Watch, the Worker

Rights Consortium, and the International Labor Rights Fund.

Background

During the 1990s, a number of high profile exposés of

sweatshop conditions caught worldwide attention. Millions

watched TV star Kathie Lee Gifford on national television as

she tearfully apologized for clothes bearing her label having

been made in sweatshops in Latin America.

Public attention

and outcry intensified when Thai women in a Los Angeles

suburb were discovered sewing for $.50 per hour behind

razor wire fences,

and when a Nike contractor was found to

have disciplined women workers in a Vietnamese factory by

forcing them to run circles in the sun until they fainted.

While workers were being mistreated and abused, the

corporations that manufactured and sold the products were

making huge profits and luring customers by advertising their

brands as being fashionable and sexy.

Ironically, it was

precisely this consumer engagement with branded products

that propelled the anti-sweatshop movement forward. While

corporations had long profited from sweatshop exploitation,

the 1990s brought the recognition that consumers who wore

a Nike swoosh or other logos were complicit in this

exploitation. Furthermore, consumers realized that they could

express their displeasure about sweatshops and support labor

rights through boycotts, leafleting, picketing and media

exposure against these brands.

Thus the movement for labor rights became a movement

for corporate social responsibility, resulting in the

establishment of voluntary “codes of conduct” for shoe and

apparel producers. Closely modeled on the labor standards

established in the International Labour Organization’s (ILO)

CHINA AND THE AMERICAN

ANTI-SWEATSHOP MOVEMENT

BY KATIE QUAN

CHINA RIGHTS FORUM

NO.1, 2003

core conventions, these codes generally set a minimum

standard for basic wages and working conditions in an attempt

to eliminate the worst forms of exploitation and ensure that

investment and development provide sustainable livelihood

for workers.

Another important driver of corporate social responsibility

is the sweat-free procurement movement, in which entities

such as governments and universities adopt purchasing

policies that require vendors to ensure that their products are

made in compliance with labor standards. This effort, led by

the United Students Against Sweatshops (USAS), has resulted

in more than 100 American universities adopting sweat-free

procurement policies and joining one or both monitoring

organizations: the Worker Rights Consortium and the Fair

Labor Association.

Today corporate social responsibility has become an

integral part of doing business in the apparel industry, with

almost all large corporations adopting codes of conduct and

establishing internal or external programs for monitoring

contractors. While monitoring compliance with codes of

conduct cannot be regarded as a substitute for government

enforcement of law and union organizing, it is fair to say that

the movement for corporate social responsibility has in a

relatively short period of time given rise to a new dimension

of corporate governance in the global economy.

The case of a group of workers at the Korean-owned

Kukdong factory in Puebla, Mexico provides an example of the

potential effectiveness of properly implemented codes of

conduct.A manufacturer of fleece garments for Nike, Reebok,

and other major sportswear brands, Kukdong employed 900

workers, mainly women from the villages surrounding Puebla.

In January 2001, 850 workers went on strike over the firing of

several workers who had complained about spoiled food in

the cafeteria and a decrease in pay. Lacking support from the

fraudulent “company” union, CROC, the workers reached out

to USAS and the Worker Rights Consortium (WRC), an

independent non-governmental organization that monitors

university licensed products for codes compliance. A WRC

investigation substantiated the workers’ claims,

and after its

report was made public, Nike persuaded Kukdong to reinstate

the workers and remedy the other complaints.

The reinstated workers continued to organize within the

plant, and established an independent union called SITEKIM,

which management eventually agreed to recognize over

CROC. Following negotiation of a collective bargaining

agreement, wages have risen by 40 percent, and SITEKIM has

gone on to organize other factories.

The Kukdong example demonstrates that in an otherwise

labor-hostile environment such as Mexico, international

consumer action and strong worker organization can help

transform codes of conduct into important tools for workers

to assert their rights.

CORPORATE CITIZENSHIP AND HUMAN RIGHTS

Garment workers in a sit-in-protest at a Guangzhou factory owned by a Hong Kong company. Photo: Reuters.

CSR and American Perception of China

While cases such as that of Kukdong graphically illustrate the

importance of CSR and codes of conduct, anti-sweatshop

activists continue to display considerable hesitation and

equivocation as they wrestle with implementing CSR in China.

In the words of the late activist Trim Bissell of the Campaign

for Labor Rights, China has become a “planetary black hole”

attracting global production with its cheap labor, but “the anti-

sweatshop movement has been without a China strategy.”

For example, in January 2000, the University of California

(UC) announced that it would not allow any university-

licensed products to be produced in countries that do not

allow freedom of association and collective bargaining, in

effect banning products made in China. According to UC

spokeswoman Mary Spletter, “It is a statement that the

University of California will not tolerate inhumane work

conditions, wherever they occur.”

Some anti-sweatshop activists at UC supported the ban,

given ample evidence of labor and human rights violations in

China. But others opposed it for a variety of reasons: 1)

procurement bans hurt workers, and worker advocates should

instead pressure corporations to correct labor conditions; 2)

the ban was unlikely to be effective, since UC’s relatively small

purchasing share would not change corporate investment or

Chinese government behavior; and 3) the ban would not

strengthen worker organizing, since there are not many NGOs

inside mainland China to support workers.

The upshot is

that to date there has been no official ban on UC licensed

products made in China.

This inability to come to a unified position on labor

standards concerning China echoed previous discussions in

the Apparel Industry Partnership (AIP) in the mid-90s and in

the Worker Rights Consortium (WRC) in 2000. During AIP’s

initial discussion of which codes to adopt, key actors

acknowledged fundamental concerns with freedom of

association and China’s intolerance of independent unions. But

the matter was never resolved, since the AIP’s key actors were

willing neither to negotiate lesser standards for freedom of

association, nor to immediately confront companies with a

demand that they withdraw their considerable investments

from China.

The AIP’s successor, the Fair Labor Association,

has developed “Special Country Guidelines” to deal with

countries such as China where laws conflict with codes.

During discussions about pilot projects in the Worker Rights

Consortium in 2000, researchers raised the issue of studying

violations of labor rights in China, but again that discussion

was tabled because the task seemed too enormous for a

fledgling organization.

The lack of an official relationship between the American

Federation of Labor – Congress of Industrial Organizations

(AFL-CIO) and the All China Federation of Trade Unions

(ACFTU) may be another factor in the reluctance to address

labor standards in China.Anti-sweatshop activists dedicated to

building strong unions have faced the equally unattractive

alternatives of either bolstering the ACFTU, with whom there

is no relationship, or aiding the formation of independent

unions that might be persecuted. The AFL-CIO unions finally

initiated campaigns against sweatshop labor in the spring of

2000 in an effort to block renewal of China’s Most Favored

Nations trading status, but their depiction of the abuse of

Chinese workers caused some union leaders and members to

engage in racist demagoguery against China,

and may have

led to an even greater reluctance to address the China issue.

It should be noted that not all anti-sweatshop activists share

this reluctance and equivocation. Some labor groups and

NGOs such as Global Exchange and the International Labor

Rights Fund have attempted to address labor standards in

China, but on a scale that is much smaller than similar efforts

in countries such as Mexico,Thailand, or Indonesia.The most

well known exception is the Hong Kong-based Labor Rights in

China group, which has consistently exposed labor rights

violations in Chinese workplaces and advocated for

independent unions.

Even taking these exceptions into account, the general

reluctance and equivocation that dominates the approach to

labor standards in China creates the real risk that CSR advocates

will create a double standard between countries where codes

such as freedom of association can be more easily

implemented, such as Mexico, and those where such standards

cannot easily be implemented, such as China.

Such a double standard has already been formally proposed

by the World Federation of the Sporting Goods Industry in the

form of a theory of “parallel means,”

which allows the

following of different roads to move in the same direction.

What this theory fails to recognize is that internationally

recognized core labor standards are meant to be uniformly

applied to all countries; otherwise “double” effectively negates

the very meaning of “standard.” Secondly, sometimes the

means are just as important as the end. This is especially the

case with codes such as freedom of association, where the

right of workers to engage in the process of organizing and

expressing their concerns can be even more important than

the actual result they achieve.

MFA Phase-out and China

Regardless of the vacillation of NGOs, labor standards in China

are likely to come under sharper focus with the scheduled

phase-out of apparel export quotas under the Multi-Fiber

Arrangement in 2005, which is expected to bring a shift in

production from many different countries to a few large ones,

especially China.

Around the world, garment workers and their advocates are

bracing for the kind of widespread job dislocation and

depression of wages that previous trade deregulation has

caused.After passage of the North American Free Trade

Agreement (NAFTA) in 1995, more than 760,000 jobs were

lost in the U.S.,

decimating the garment industries in

California and causing widespread unemployment among

low-wage immigrant Chinese and Latin American women.

Researchers are still trying to predict the outcome of the

phase-out of the MFA worldwide, but there seems to be

general consensus that China will end up with a propor-

tionately greater share of the apparel production market.

If more production does go to China, leaving workers in

CHINA RIGHTS FORUM

NO.1, 2003

other countries to face job loss and economic depression, then

there is bound to be closer scrutiny of China’s labor standards

and practices.Workers losing their jobs will want to know that

there is at least a minimum floor on exploitation and that

workers in the receiving country have the right to organize

and negotiate for improved working conditions. This scrutiny

will allow Chinese labor to take advantage of internationally-

recognized standards to raise the value of their own labor

market and build a sustainable living. Thus the reluctance to

deal with labor standards in China will probably soon be

replaced with considerable urgency in dealing with those

same issues, and labor standards will certainly be addressed.

Resolving Challenges to CSR

Detailed discussion of enforcement of codes of conduct in

China is best left to those practitioners who have already

engaged in it, or researchers who have studied it closely.

However, there are a couple of concerns from the viewpoint of

the Chinese American community and the global anti-

sweatshop movement that I would like to raise here.

The first concern is that labor practices in China have an

enormous influence on labor practices in Chinese American

immigrant communities, and when those practices violate

American labor law it not only hurts the workers, but is

shameful and embarrassing to all Chinese Americans. During

the past decade or so, there has been a widespread practice of

“late payment,” or paying the workers several weeks or

months after the pay is due—a system that exploits people in

their deepest economic vulnerability.There have also been

numerous cases of overtime hours worked without overtime

premium pay, and some cases where Chinese workers have

been smuggled into the U.S. illegally, forced to pay tens of

thousands of dollars to their smugglers, and made to sleep at

their sewing machines at night.

In August 2001, a San Francisco garment factory known as

Wins of California closed down abruptly while owing 200

workers fourteen weeks of back pay, totaling around one

million dollars.

The Chinese immigrant workers had not

previously complained to the authorities about their lack of

pay because this practice is common both in China and in

Chinatowns. The authorities might never have known that this

illegal practice was taking place if the employer had not closed

her plant; even the paid factory monitor was not initially aware

of it.The workers were eventually compensated through a

special government fund more than a year later, but this

employer continues to deny wrongdoing and operates other

businesses in the Chinese community in spite of having

treated employees in a way that most Americans would

consider outrageous and disgraceful.

This same employer tried to force her way into a meeting

that Sweatshop Watch and other worker advocates convened at

the garment workers’ union building in September 2001,

claiming that unions are financed by the government, and as a

taxpayer she had the right to attend the meeting.When I told

her that in America unions are not financed by the

government but only by workers’ dues she left the union hall,

but this experience brought home that she believed, as

undoubtedly many workers did, that the union was financed

by the government as it is in China. This perception has made

it difficult for union organizers to organize Chinese immigrant

workers, and has taken a great deal of effort to dispel.

The second concern relates to the interpretation and

implementation of freedom of association, perhaps the most

important code for union activists. The interpretation follows

the ILO’s Convention #87:

“Workers and employers, without distinction whatsoever, shall

have the right to establish and, subject only to the rules of the

organisation concerned, to join organisations of their own

choosing without previous authorisation…The public

authorities shall refrain from any interference which would

restrict this right or impede the lawful exercise thereof”.

As the Kukdong case illustrates, the right of workers to

form unions of their own choice is crucial when existing

unions do not fairly represent them. But we have seen ample

evidence that independent unions in China are not welcome,

with some leaders of independent unions being detained

CORPORATE CITIZENSHIP AND HUMAN RIGHTS

Photo:Reuters.

without trial.

For advocates of corporate social responsibility

this means that Chinese workers have no voice in workplace

affairs if their union does not speak for them.

Technically speaking, the official requirement that unions

must receive approval from the ACFTU does not constitute a

ban on independent unions; but the question is what criteria

are used to approve certain unions rather than others. Thus the

issue may not necessarily be with the law, but rather with the

implementation of that law. If in practice only ACFTU affiliates

are approved, that indicates that independent unions are

prohibited. But if non-ACFTU unions are also approved, that

implies an acceptance of independent unions.

This is not to suggest that Chinese workers should form

millions of independent unions in their workplaces; in fact

quite the opposite. In America, the vast majority of trade

unionists do not advocate the formation of unions

independent of the AFL-CIO either, since this weakens the

voice of the union movement. Independent unions that

operate outside the AFL-CIO mainstream, or that have broken

away from the mainstream, tend to be small, weak and

unsupported in times of need. At the same time, almost all

American trade unionists would uphold the option of workers

to form these independent unions, in case existing unions do

not fairly represent their workers. The option of forming

independent unions serves as a check and balance, a constant

reminder to the mainstream union movement that they must

either serve the workers or face a possible challenge from

independent unions.

Strategically, those who have been serious about reform

within the U.S. labor movement have worked from the inside.

These efforts culminated in the 1995 election of John Sweeney

as AFL-CIO president, and have led to many progressive

policies and programs introduced during his tenure. In the

same way it is possible that activists within China’s trade union

movement are also working to make the movement more

democratic and powerful.

From the point of view of an American anti-sweatshop

activist, freedom of association, including the right to form

independent unions, needs to be upheld as a safeguard against

inadequate representation by existing unions.At the same

time, because the overwhelming majority of the workforce in

China belongs to the ACFTU, it makes strategic sense to work

within the existing union structure to address democratic

representation and labor policies from within.

Conclusion

Discussion of CSR and China is long overdue. Although some

advocates of CSR have been reluctant to broach the subject, the

likely shift in world production of apparel to China following

the complete phase-out of the MFA makes confrontation of

these issues urgent today.

Examples such as Kukdong show that codes of conduct can

effectively improve working conditions under the right

circumstances.While there are many challenges to CSR in

China, solutions may not be elusive as they seem, as long as

the parties involved bring a sincere commitment to improving

conditions for workers. The kind of dialogue and engagement

taking place today is critical for the process of such problem-

solving to begin.

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13. http://www.fairlabor.org/html/amendctr.html#countryguidelines

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