By 2001, it had become clear to most parties involved that something radical was required to end these types of supplier abuses . Companies were being criticized remorselessly and yet had found that their efforts to make their suppliers adhere to national laws or codes of conduct were largely unsuccessful . In 2002, Gap Inc. was forced to withdraw contracts from more than 120 factories worldwide because of compliance- related issues. [19 ] Something more had to be done.
One of the first companies to accept the need for a more honest appraisal of supplier performance, was ironically Nike, so often vilified for its supply chain policies. In cooperation with the Global Alliance for Workers and Communities, they requisitioned a report on working conditions in nine Nike subcontractor factories in Indonesia. The results, openly published, were not good.
The report detailed a variety of labor problems, says Gary Gereffi, professor of sociology and director of the Markets and Management Studies Program at Duke University, including low wages , denial of the right to unionize, verbal and physical abuse by supervisors, sexual harassment , and forced overtime. The contents of the report are not surprising; similar findings were asserted throughout the 1990s.
What is new about this report, explains Gereffi, is that Nike paid for it, released it ” and can t deny it. Nike s response to these problems will set new benchmarks that other apparel and footwear companies must match or else risk incurring relentless scrutiny by industry critics . [20 ]
This admission by companies of their implied responsibility and their acceptance of the need to fund and support supplier monitoring was a watershed , and began a new era of openness in reporting. A good example of this new movement can be seen when garment and sporting goods companies such as Eddie Bauer, Liz Claibourne, Nike, Reebok, Adidas-Salomon, and Levi Strauss became members of organizations such as the Fair Labor Association (FLA), a coalition of unions, consumer groups, NGOs, activists, and universities that was founded in 2001 to help companies monitor global supply chains. Having audited almost 50 factories around the world, the FLA s first account, published in 2003, provided a new level of honesty that, although still highly critical of supplier activities, has actually reflected well, rather than ill, on most of the companies involved.
The companies deserve a lot of credit, says Michael Posner, an FLA board member and executive director of the Lawyers Committee for Human Rights, for trusting the public with the grit as well as the gloss . [21 ]
[19 ] See Our Program at www.gapinc.com/social_resp/sourcing/program.htm.
[20 ] Gary Gereffi, Ronie Garcia-Johnson, and Erika Sasser, The NGO-Industrial Complex, Foreign Policy, no. 125, July/August, 2001, at www.foreignpolicy.com. Copyright 2001, Carnegie Endowment for International Peace.
[21 ] Alison Maitland, Big Brands Come Clean on Sweatshop Labour, The Financial Times, June 10, 2003, and www.fairlabor.org.