4INDUSTRIAL AND LABOR RELATIONS REVIEW wages and weak social and environmentalregulation to produce low-cost goods at theexpense of the local workers’ welfare. Nu-merous reports have described exploitative working conditions in global supply chainplants. Workers are paid only a few dollarsand required to work excessive hours, oftenin poorly lit and unsafe conditions.
In the wake of several well-publicizedscandals involving child labor, hazardous working conditions, excessive working hours,and poor wages in factories supplying majorglobal brands, multinational corporationshave developed their own “codes of conduct”
as well as a variety of “monitoring” mecha-nisms aimed at enforcing compliance withthese codes. In fact, given the limited ability of many developing country governments toenforce their own laws,
monitoring for com-pliance with codes of conduct is currently theprincipal way both global corporations andlabor rights non-governmental organizations(NGOs) address poor working conditionsin global supply chain factories. The logicbehind this model of “private, voluntary regulation” is that monitoring should provideinformation useful both to consumer groupsseeking to exert market pressure on globalbrands and to these same brands so that they can pressure their suppliers to improve fac-tory conditions.Given their widespread use, how effectiveare these monitoring systems? Aside fromproviding information about working condi-tions in various global supply chain factories,does this system actually promote change in working conditions? In other words, doesmonitoring lead to remediation in terms of improved working conditions and enforcedlabor rights? If so, under what conditions?Using a unique data set based on factory audits of working conditions in over 800 of Nike’s suppliers in 51 countries,
in this paper we seek to address those questions. We build on the results presented in thispaper, together with more intensive case study data collected as part of this project (Lockeand Romis 2007), to suggest a reframing of thedebate and the approach to monitoring andimproving labor standards in global supply chains. We suggest that what is needed is amore systemic approach, one combining ex-ternal (countervailing) pressure (be it fromthe state, or unions, or labor-rights NGOs) with comprehensive, transparent monitoringsystems and a variety of “management sys-tems” interventions aimed at eliminating theroot causes of poor working conditions. We ﬁrst present a highly synthetic reviewof the major debates about monitoring, andthen provide background on the athleticfootwear industry in general and Nike, Inc.in particular. The core empirical analysisfollowing those preliminaries addresses threequestions. First, how bad (or good) are work-ing conditions among Nike’s various suppli-ers? Second, what determines variation in working conditions among these suppliers?(In other words, what accounts for the greatly differing working conditions across factoriesproducing more or less the same productsfor the same brand?) And third, are work-ing conditions improving over time in thesefactories? We conclude by pondering thebroader implications of our ﬁndings for themore general debates over labor standardsin a global economy.
Monitoring: A Review of the Debates
Corporate codes of conduct and variousefforts aimed at monitoring compliance withthese codes have been around for decades. Whereas monitoring efforts began by empha-sizing corporate or supplier compliance withnational regulations and laws, over time they
See, for example, Verité (2004), Pruett (2005), andConnor and Dent (2006).
For a good description of this movement, see Jenkins(2001), Schrage (2004), and Mamic (2004).
For more on this, see Baccaro (2001) and Elliot andFreeman (2003).
This paper is part of a larger project organized by Richard Locke on globalization and labor standards. Inaddition to the data analyses presented in this paper,the research entailed ﬁeld research in China, Turkey,Mexico, Europe, and the United States as well as over200 interviews with factory managers, workers, NGOrepresentatives, union leaders, and Nike managers(both in the United States and abroad). We thankthe other project participants—Jonathan Rose, Jen-nifer Andrews, Dinsha Mistree, Rushan Jiang, MonicaRomis, and Alonso Garza—for their helpful commentsthroughout the project.