Big audit firms as regulatory intermediaries in transnational labor governance (original) (raw)
Related papers
SSRN Electronic Journal, 2016
Worker rights advocates seeking to improve labor conditions in global supply chains have engaged in private political strategies prompting transnational corporations (TNCs) to adopt codes of conduct and monitor their suppliers for compliance, but it is not clear whether organizational structures established by TNCs to protect their reputations can actually raise labor standards. We extend the literature on private politics and organizational self-regulation by identifying several conditions under which codes and monitoring are more likely to be associated with improvements in supply chain working conditions. We find that suppliers are more likely to improve when they face external compliance pressure in their domestic institutional environment, when their buyers take a cooperative approach to monitoring, and when their auditors are highly trained. We find, further, that a cooperative approach to monitoring enhances the impact of auditor training, and that auditor training has a greater impact on improvement when coupled with a cooperative approach than with external compliance pressures. These findings suggest key considerations that should inform the design and implementation of monitoring strategies aimed at improving conditions in global supply chains as well as theory and empirical research on the organizational outcomes of private political activism for social change.
The Limits of Voluntary Governance Programs: Auditing Labor Rights in the Global Apparel Industry
2011
Corporations have increasingly turned to voluntary, multi-stakeholder governance programs to monitor workers' rights and standards in the global apparel industry. While much has been written on whether, in general terms, these Corporate Social Responsibility (CSR) programs are or are not effective, the literature has not fully explored under what conditions these programs fail and succeed. This paper argues that CSR effectiveness varies significantly depending on stakeholder involvement and issue areas under examination. Corporateinfluenced programs can be effective in detecting and remediating minimum wage, hour, and occupational safety and health violations because addressing these issues provides corporations with legitimacy and reduces the risks of uncertainty created by activist campaigns. Corporate-influenced programs, however, are less effective in ensuring workers' right to form unions, bargain, and strike because these rights are perceived as lessening managerial control. I explore this argument by first contrasting corporate and labor-influenced programs, and then analyzing 730 factory audits of the Fair Labor Association between 2002 and 2009. This analysis is complemented with a case study of Russell Athletic in Honduras. Since the 1990s, there has been a considerable shift toward voluntary, multi-stakeholder governance mechanisms to monitor compliance with labor standards and rights in the global economy (Fung et al. 2001; 2007; Rodríguez-Garavito 2005; Seidman 2007). These-Corporate Social Responsibility‖ (CSR) initiatives are a response to new challenges presented by economic globalization, notably corporate efforts to oversee the operations of increasingly-complex global supply chains. As media exposés and social movement activists highlight extreme labor abuses in factories producing for well-known global brands, corporations have been pushed to monitor their employment relations practices through multi-stakeholder programs. 1 The author thanks Dong Fang and Katherine Cornejo for their research assistance in coding FLA factory audits.
Transnational labor regulation -Where to next? Critical theoretical and policy interventions
Journal of Labor and Society , 2020
In this article, the Social Structures of Accumulation (SSA) theory is used to situate Transnational Labor Regulation (TLR) in a historically accurate and socially relevant context, account for global labor market segmentation, developments in trade relations, patterns of consumption, and-significantly-aversion to any form of labor regulation. Total subsumption of labor under capital is a feature of the current SSA, wherein facets of human existence are increasingly commodified. Within this context, regulation is marginalized and replaced by "labor governance" and stakeholder approaches, with a prospect of regimes where labor standards and workplace protections would no longer be a legal right but absorbed into corporate governance processes and managed as technical standards. Could the International Labor Organization (ILO) assist such an endeavor and called upon to draft corporate governance rules for supply chain management? Furthermore, theoretical, methodological and policy propositions are explored in this paper. Theoretically, macro-level SSA analyses can be complemented at the micro-level by the intersectionality discourse, to scatter the monistic level of analysis "worker." Methodologically, various approaches for doing research "from below" are reviewed. Our policy proposition centers on examining how labor regulation clauses could be incorporated to English (private) common law that governs supply chain relations.
Indiana Journal of Global Legal Studies, 2001
Through their attention to working conditions as labor rights, labor advocates seek to wrest protections for workers from corporate actors. At the same time, corporate actors, through their own codes of corporate conduct, publicize to consumers that they are acting voluntarily to ensure that workers in their global production chain enjoy certain rights. In both cases, these initiatives purport to contribute to improved regulation of the workplace. In this article, I posit that these initiatives are themselves emerging forms of labor regulation. I contend that as self-regulatory initiatives, they can best be understood through the lens of two key discourses: legal pluralism and economic globalization. These discourses cast light upon the specific nature of labor law, the limits to state regulatory action, and the ability of codes of corporate conduct to adapt to the logic of the new international division of labor.
In response to pressure from various stakeholders, many transnational businesses have developed codes of conduct and monitoring systems to ensure that working conditions in their supply chain factories meet global labor standards. Many observers have questioned whether these codes of conduct have any impact on working conditions or are merely a marketing tool to deflect criticism of valuable global brands. Using a proprietary dataset from one of the world's largest social auditors, containing audit-level data for 31,915 audits of 14,922 establishments in 43 countries on behalf of 689 clients in 33 countries, we conduct one of the first large-scale comparative studies of adherence to labor codes of conduct to determine what combination of institutional conditions promotes compliance with the global labor standards embodied in codes. We find that these private transnational governance tools are most effective when they are embedded in states that have made binding domestic and international legal commitments to protect workers' rights and that have high levels of press freedom and nongovernmental organization activity. Taken together, these findings suggest the importance of multiple, robust, overlapping, and reinforcing governance regimes to meaningful transnational regulation. Transnational corporations (TNCs) are under increasing pressure from consumers, shareholders, activists, and governments to manage their global supply chains in ways that are environmentally sustainable and socially responsible. Many businesses have developed private codes of conduct and monitoring systems to ensure that working conditions in their supplier factories meet global standards for protecting the rights of workers and their communities. Every Fortune 500 company in the United States has adopted a code of conduct for its suppliers (McBarnet, 2007), as have thousands of other global corporations, and many of these companies have retained private social auditors to verify compliance with the global standards embodied in their codes. For instance, Gap Inc. has retained social auditors to monitor suppliers' adherence † We gratefully acknowledge the research assistance of Chris Allen, John Galvin, Erika McCaffrey, and Christine Rivera and financial support from Harvard Business School's Division of Research and Faculty Development.
Research in the Sociology of Organizations, 2015
Corporate elites are increasingly held responsible for issues of sustainability including working conditions and workers' rights in global production networks. We still know relatively little about how they respond to concrete stakeholder initiatives aiming to restrict corporate voluntarism through transnational regulation. In this paper we report comparative findings on corporate legitimation strategies in response to requests by labor representatives to sign Global Framework Agreements (GFAs). These agreements are intended to hold multinational corporations (MNCs) accountable for the implementation of core labor standards across their supply chains. We propose to broaden management-focused
Governance gaps in eradicating forced labor: From global to domestic supply chains
Regulation & Governance
A growing body of scholarship analyzes the emergence and resilience of forced labor in developing countries within global value chains. However, little is known about how forced labor arises within domestic supply chains concentrated within national borders, producing products for domestic consumption. We conduct one of the first studies of forced labor in domestic supply chains, through a cross-industry comparison of the regulatory gaps surrounding forced labor in the United Kingdom. We find that understanding the dynamics of forced labor in domestic supply chains requires us to conceptually modify the global value chain framework to understand similarities and differences across these contexts. We conclude that addressing the governance gaps that surround forced labor will require scholars and policymakers to carefully refine their thinking about how we might design operative governance that effectively engages with local variation.
The Parallel Worlds of Corporate Governance and Labor Law
Indiana Journal of Global Legal Studies, 2006
This paper engages the concept of transnational law (TL) in a way that goes beyond the by now accustomed usages with regard to the development of legal norms and the observation of legal action across nation-state boundaries, involving both state and nonstate actors. The concept of TL can serve to illustrate a much further-reaching set of developments in norm creation and legal regulation. TL is here understood not only as a body of legal norms, but it is also employed as a methodological approach to illustrate common and shared challenges and responses to legal regulatory systems worldwide. In the case of corporate governance, TL captures the specific regulatory mix of formal, hard, public regulation, on the one hand, and of informal, soft, private regulation, on the othe; that characterizes the contemporary evolution ofcorporate governance norms. Corporate governance norms give testimony of an ongoing search for answers to persisting problems in the organization of the firm, the distribution of power between shareholders, stakeholders, and the firm, as well as the responsibility of the corporation to its environment while-at the same time-reflecting on fundamental changes of the nature of norm creation and legal interpretation. While this approach is likely already to undermine some of the contentions regarding a universal *Canada Research Chair in the Transnational and Comparative Law of Corporate Governance,