labor rights

The International Labour Rights Forum (ILRF) and other partners have created a collaborative blog space, Labor is Not a Commodity, where groups focused on international labor rights issues can express themselves. The presidential elections and the state of the economy have brought labor issues to the forefront, with the Republicans honing in on Joe the Plumber as a representative of the common working man and the Democrats focused on lifting up the middle class. Bama Athreya, the Executive Director of the IRLF recently shared his thoughts in a post titled Of EFCA, ACORN and the Real America. Please read what our fellow bloggers have to say and let us know what you think.

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You might think that a luxury apparel company could afford to make sure that the workers in its supply chain are treated with a bit more class. However, the French company PPR apparently thinks this is a luxury.

PPR is the world’s third-largest luxury group and among other luxury brands, the group has a 99% stake in Italian luxury goods company Gucci Group. The group’s other activities include Conforama chain of household furniture and appliance stores, auto sales in Africa through CFAO, and the German athletic shoemaker PUMA.

The Clean Clothes Campaign (CCC) states that “reports from trade unions and NGOs from Eastern Europe and all across Asia confirm PPR’s practice of producing goods in workplaces that violate local and international labor laws, leading to a downward spiral in living standards for workers.”

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In a press release issued by Marriott International this past week, the company announced its has again been included as a company member of the FTSE4Good Index, an index that measures the performance of companies that meet globally recognized corporate responsibility standards. The press release states that Marriott’s commitment to social responsibility and community engagement is focused on five signature issues: Shelter and food, environment, readiness for hotel careers, vitality of children, and embracing diversity and people with disabilities.

This is all nice but does this really define whether a company is socially responsible?

Should a company be recognized for its social responsibility by doing things external to its core business? Can a company such as Marriott do charitable things while opposing worker organizing efforts, doing business in troubled parts of the world and committing unethical acts in the course of its normal business activities and get the moniker of “socially responsible”?

I think you, the reader, know where I’m going with this. I would answer these questions with a resounding NO!

What is a Socially Responsible Company?

This raises another related question about how companies claim that they are socially responsible, adopting codes of conduct and the like while acting entirely differently.

These are questions that get to the fundamental issue of corporate social responsibility. It’s not just about what you say you do but how you actually act as a corporate citizen around the world that counts as far as I’m concerned. In my opinion, a company should be evaluated not only for its policies – however it chooses to label those – but also how it acts day to day in its normal business activities.

In drawing an informed opinion about a company, several broad areas of inquiry emerge. Does a company conduct itself reasonably with respect to:

• the workers it employs around the world
• its investors as manifested in its corporate governance practices
• the local communities in which it operates
• how it conducts itself ethically in its domicile country and in other countries around the world
• the environment

I propose that these actual behaviors determine the worth of a company and its responsibility to all of its stakeholders. As I am fond of saying, you can put lipstick on a pig but at the end of the day, it’s still a pig. This is true also of companies adopting environmental, social and governance (ESG) policies when corresponding practices aren’t actually adhered to on a consistent basis.

The Social Responsibility Conundrum

This raises a number of questions of course. Fundamentally, how do we differentiate between companies that are bad actors and those that have passing problems with their ESG practices? I don’t think there is any clear-cut answer to this question. At least not yet. The problem is exacerbated by the fact that, in the investment world, clear cut answers to these sorts of questions are the norm and fuzzy answers to this question don’t fit well into their analysis. This forces analysts to look at assessment factors that can be quantified such as codes of conduct. Unfortunately, this doesn’t get us the best results or the right answers.

The challenge then is to develop a quantitative approach for what is basically a qualitative problem. This evaluation problem, which in my view is very subjective, must ultimately be forced into an objective matrix that can then be duplicated on a consistent basis.

Now that I have thrown down the gauntlet on this topic, I would like to hear from you, the reader, about how you would tackle this problem of assessment.

Any takers?

For my part, I will post several follow up articles in which I will try to tackle these questions. I look forward to hearing from you.

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It has been reported that Colombia President Alvaro Uribe will be in Washington DC on September 9th to do a tour of Congress and meet with the media to make his case for the Colombia-U.S. Free Trade Agreement (FTA). This will then be followed by a visit in New York for a meeting of the United nations later in the month.

According to Colombia Reports, this will be a last ditch effort by the Colombian President to secure Congressional support for the deal. However, this comes on the tail of yet another trade unionist killing in Colombia in recent days.

Labor leaders in both the U.S. and Colombia continue to resist efforts to secure the bi-lateral trade deal between the countries, believing that a completed deal will open up the flood gates of paramilitary killings of labor officials and workers attempting to seek collective bargaining rights in the workplace in the Latin American country. In addition, critics of the proposed trade deal point to the failure of the Uribe administration to bring paramilitary leaders and soldiers to justice for the decades long killing sprees.

On a related note, Dan Kovalik, writing for the Huffington Post noted what the Colombian press has been reporting that the Uribe administration has falsely claimed that former President Jimmy Carter has endorsed the FTA.

“PC [President Carter] has not yet adopted a public position. Uribe met with him during his recent visit to Atlanta. The media made its own interpretation. The Carter Center information office issued a clarification but it has not have [sic.] the same impact.”

This suggests that the Uribe administration’s apparently despirate attempts to gain passage of the FTA are unbound.   

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Rio Tinto Group, one of the world’s largest mining operations comprises dual-listed sister companies Rio Tinto Limited (in Melbourne) and Rio Tinto plc (in London). Although each company trades separately, the two Rio Tintos operate as one business. Rio Tinto mines coal (about 20% of sales), iron, copper, uranium, industrial minerals (borax, salt, talc), gold, and diamonds. It also produces aluminum products through Rio Tinto Alcan. The company has operations worldwide but operates primarily in Australia and North America (accounting for about 40% each). Subsidiaries include Kennecotts Energy, Minerals, and Copper.

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Toyota Motor Corporation is a leading auto maker. However, as a corporate citizen, the company poor and, in our opinion, poses serious human rights risk to investors.

It is Japan’s #1 carmaker. The company makes a hybrid-powered (gas and electric) sedan — the Prius — that is popular in US and European markets. Its gas-powered cars, pickups, minivans, and SUVs include such models as Camry, Corolla, 4Runner, Land Cruiser, Sienna, the luxury Lexus line, the Scion brand, and a full-sized pickup truck, the V-8 Tundra. Toyota also makes forklifts and manufactured housing, and offers consumer financial services. Toyota has already passed Chrysler and Ford and is closing in on General Motors. [click to continue...]

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See recent Reuters clip describing UFCW’s launch of its Tesco campaign in the U.S.

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According to the CtW labor federation, two workers have been killed at Cintas facilities in recent years while another was scalded over much of his body when a washer overflowed. The Occupational Health and Safety Administration, (OSHA), has found over 170 violations of health and safety standards at Cintas since January 1, 2003. Seventy violations were so grave that they could cause “death or serious physical harm.” OSHA assessed nearly $190,000 in initial penalties and found multiple violations in 31 of the 42 inspections in this time period – a 75% percent rate of failure by Cintas.

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Here at GIW, we follow several other blogs on labor and one of the most important blogs out there is Global Labor Strategies.

The people at GLS have published an important study called “Why China Matter: Labor Rights in the Age of GLobalization.”

We urge you to read this important report on this critical subject for Labor.

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