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BUSINESS
ETHICS
TOWARDS
HUMAN RIGHTS
Applied Management Project
(09-10T4AABSS000-6)

STUDENT ID: 0820255


M Sc International Business
Management
BUSINESS ETHICS TOWARDS HUMAN RIGHTS

Contents

Executive Summary.................................................................................................03

Chapter-1

Introduction..............................................................................................................04

1.1 Background of Business ethics..........................................................................04

1.2 Human Rights and its Standards........................................................................05

1.3 Human rights implementation in Businesses......................................................06

1.4 Objectives of the report.......................................................................................06

1.5 Structure of the report.........................................................................................07

1.6 Scope of the Project............................................................................................07

Chapter-2

Literature Review......................................................................................................08

2.1 Ethics in finance..................................................................................................08

2.2 Ethics in Human resource management.............................................................10

2.3 Ethics in Sales and Marketing.............................................................................11

2.4 Ethics in production.............................................................................................12

2.5 Ethics in property rights.......................................................................................13

2.6 Human Rights......................................................................................................15

2.7 Human rights for the workers...............................................................................16

2.7.1 Issues over the rights for workers.....................................................................18

Chapter-3

Case study on the clothing industry...........................................................................20

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3.1 General study on the clothing sector...................................................................20

3.1.1 Strategies in 1970’s..........................................................................................20

3.1.2 Structure of the clothing industry......................................................................21

3.2 Business ethics in the clothing industry...............................................................22

3.3 Employment in the clothing industry....................................................................23

Chapter 4

Analysis.....................................................................................................................25

Introduction on clothing industries.............................................................................25

4.1) Primark...............................................................................................................26

4.2) Levis Strauss & Co.............................................................................................28

4.2.1) Corporate social Responsibility of Levis Strauss.............................................30

4.2.2) Further analysis on the organisation strategies and the employment of workers
inside and outside of the home country.....................................................................31

4.3) A study on the other companies in clothing industry..........................................32

4.4) Employment for workers.....................................................................................33

Chapter - 5

Conclusion.................................................................................................................35

Chapter- 6

Recommendations.....................................................................................................37

References................................................................................................................39

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Executive Summary

The aim of this report is to enlighten the importance/relevance of upholding the


human rights standards for workers in the clothing industry. The report examines the
workers working within and outside of their home country while dealing with their
current issues. Analysis is carried on the ethics of business which includes the
human rights standards for the labours as well as the ethical values of the various
fields in business.

Initially, the concepts and theories of the business ethics are analysed as a part of
literature review with the help of books and websites as to understand them better.
The arguments of different authors are compared and analysed. This information is
applied to the current human rights, working standards of the workers and an
analysed data is retrieved in the form of reports which contain information with
respect to the major clothing companies in the world.

The later section of the report suggests important recommendations to be made for
improving the working standards as well as for improving the performance of the
company.

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Chapter-1

Introduction

This chapter gives an insight on the background of the ethics of business and the
human rights standards. A brief summary is specified on the implementation of
business ethics in clothing industry thereby specifying the gist on the report by taking
objectives, structure of the report into consideration. The scope of the project is also
mentioned to help notice the opportunities in accessing the information for the report.

1.1 )Background of Business Ethics

Business ethics has been into existence nearly three decades ago. It has been so
because of the unethical practices followed by few businesses. This was common at
the time of World War I and II where there were no rules and regulations on how to
run a business. Establishing a business was meant to earn money in the simplest
way rather than achieving appreciation in the society. People came to notice the
importance of ethical business practices as they have seen the worst nightmare from
greedy, cruel businessmen. The number of deaths in the world wars paved a path to
the need for ethical values. After the end of the world wars, the entire world was
called for peace by world nations. At this particular time, world nations created rules
to be followed for a better living. But the unethical practices in few businesses
continued in spite of having rules as there were loop holes in the system that is
established. The ethical practices were not spread throughout the world. There was
no awareness among businessmen in most of the countries on how to run a
business. In 1984, a major gas leakage has happened in Bhopal, India due to the
negligence of few higher officials. Hundreds of people lost their lives, thousands
suffered with disabilities. This incident shook the world. People came to know that a
small mistake in carrying a business would lead to a disastrous end. It not only does
affect the business but it has affects on the people involved in the business,
environment, health of the people etc. From then on, the businesses followed ethical
values which brought a change in the working style of the organisations.

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1.2 ) Human Rights and its Standards

Human rights are the rights which are entitled to the humans which allow them to live
in a society with their fellow people. These rights are applicable throughout the world
(which persists to all the humans in the world) but few rights vary from one country to
other country (depends on the state of the country). During the early nineteenth
century, the developed countries like Germany, United Kingdom, and France have
conquered most of the smaller countries and have ruled them by treating the people
in those countries as slaves. But for the 1st time in 1948, human rights were formed
and implemented.

“All human beings are born free and equal in dignity and rights. They are endowed
with reason and conscience and should act towards one another in a spirit of
brotherhood.” (Article 1,United Nations Universal Declaration of Human Rights,
1948).

These rights gave the people in the world the right to freedom, the right to speech,
the right to communicate, right to equality with different civilizations. The awareness
spread among all the people to respect each other which helped in development of a
better society. It has been six decades since the human rights have been into
implementation but still there are people who do not enjoy these rights. This practice
is mostly done in the under developed countries where people are not provided good
education and awareness on how to live in a society. They are being used as slaves
by the developed organisation which made them cornered in terms of living
standards in the under developed countries. Even though laws, legislation, human
rights standards are globalized, we find people who do not know what human rights
are.

1.3 ) Human rights implementation in Businesses

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Business is a trade which involves in providing services to the people in return for
money. A business would become successful when it is properly carried by the
management. It involves maintaining good relation with the employees and
customers. According to the human rights of the people, the employees must be
dealt with due respect and in return this is applicable to the employees also to treat
their higher officials with diligence. Usually, the labours in the industries establish a
union for themselves in electing a people as the leader for the union who will
communicate with the senior management to secure the rights of the labour. But few
businesses go against the rules to earn money. This generally happens in employing
child labour for the work as they are efficient and are paid low wages. Most of the
businesses which practice these activities are from the clothing industry as they
require a lot of labour to produce embroidery for the cloth.

1.4) Objectives of the Report

The major objective of this report is to examine “the relevance of upholding the
human rights for workers”. It does so by considering the human rights for the workers
in the clothing industry. For a better understanding, the report even considers few
objectives apart from the primary objective. They are as follows-

• Examining the common ethical values of businesses.

• Analysing the clothing industries which use labour to reduce the production
costs.

• Identifying the globalized organisations which have production plants


throughout the world.

• Examining whether the clothing industries are performing ethical business or


not.

• Understanding the importance of securing human rights for the working class.

• Rules and Regulations of various governments on the imports and exports of


clothing.

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• Differentiating the working conditions in developed and underdeveloped


countries

1.5) Structure of the Report

The report is therefore categorized into chapters starting with the introduction which
specifies in brief about the background of business ethics thereby analysing the inner
concepts and theories of ethical business using books, journals, and websites as a
part of literature review in the second chapter.

Third chapter constitutes to be the heart of the report as it contains analysed data on
the human rights, working standards of the workers in the clothing industry. As a part
of this, all the major companies of the clothing industry throughout the world are
considered.

Fourth chapter briefly concludes on the case study on the human rights of workers in
the clothing industry.

Fifth chapter thus suggests the recommendations which are necessary in helping to
reform the human rights for workers which would help them in freely performing their
tasks. Apart from this the limitations are also specified which will help in knowing the
backlogs in the report.

1.6) Scope of the Project

Unlike other projects or reports, this report does not have a limited scope as there
are numerous clothing industries which deal with the regular problems on the human
rights for their workers. Starting with the lately established companies to the recently
established companies, the information that is useful for the project is available and
accessible. The data collected from various sources needs to be analysed which
opens a new gateway to study information.

Chapter-2

Literature Review

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This chapter examines the theories about business ethics, human rights and its
standards. It provides a clear understanding on the concepts relating to the key
areas specified. The theories and concepts are explained from the compilation of
books, website, journals published by different authors through years. Much of the
information has been taken from the books and is structured in a proper way. Firstly,
business ethics is explained with the practices of ethics in various business fields.
There after human rights are discussed with the recent debates on the amendment
of human rights. As the report is aimed to analyse the importance of human rights for
workers in the clothing industry, a brief specification about the human rights for
workers is provided.

According to Andrew Crane (2007) “Business ethics is the study of business


situations, activities, and decision where issues of right and wrong are addressed.”

The author mentions the definition of business ethics in a precise way by pointing out
the study on the issues over right and wrong of any business activity, decision or
situations. Running a business requires intellectual ability to tackle the activities
associated with the business and the problems which occur through these activities
should be solved ethically i.e. no person should be affected from the decisions on the
problem. To understand the problems which persist with the activities of the
businesses, we need to know the activities of the businesses initially. A business has
many wings like the finance management, human resource management, sales and
marketing, production, property rights, technology. If all these activities function in a
proper way then a business is said to be successful with the ethics playing an
important role in these activities.

2.1) Ethics in Finance

John Raymond Boatright (1999) has specified the need for ethics in finances would
improve the functionality of the business as the finance holds a major part in the
operations of a business. Finance involves handling of money and so people who are
trustworthy need to be given the management but ethics is beyond trust. Corporate
financial managers are responsible for the myriad decisions from how best to invest
the capital in the further growth of the business. The awareness among financial

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managers on the ethical practices while handling the public finances improves the
trust on the financials there by helping the business to handle the ethical issues
easily. The general ethical issues which occur in finance said by Ronald F. Duska
(2002) are-

• Misrepresenting the financial products, including deceptive illustrations of


possible returns

• Concealing of risk factors, Withholding full disclosure

• Internal trading if the business is in a financial sector involving mutual funds,


selling financial instruments.

• Intentional misrepresentation, concealment, or omission of the truth for the


purpose of deception or manipulation to the detriment of a person or
organisation (Downes and Goodman, 1985)

After understanding the general ethical issues, we can understand how important
finance is to be ethical. Ethical issues in finances often occur which turn down the
entire economy of a country as the finance is the driving tool for any economy. Now a
day, money has become important for the human kind and to gain money, people are
turning to become cruel. In this way, handling finances will be a difficult task and to
be ethical is important for the success of the money. Some of the key points to
explain how ethical a company is, are-

• Financing in the ethical programs like supporting the child education, beating
the cancer, spreading awareness on the usage of eco friendly products. If a
company is multinational then people expect it to be ethical by at least lending
finances to support for causes.

• The company should be loyal to the customers in terms of returns. Charging


huge sum of money for the services would be unethical so the reduction of
costs on the services will help the company in its growth.

2.2) Ethics in Human Resource Management

Raising issues in HRM on the ethical practices will help to make the rights and well
being of the employees since the success or failure of the business depends on the

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ethical demands of the customers (Winstanley and Woodall, 2001).As the


organisation’s main source of productivity, HRM will weaken if it does not practise
ethically thereby depriving the credibility of the organisation. On the other hand
ethical practices will strengthen the agenda of the company and also increase the
reputation of the HR managers (Legge, 1998).

Recently, the importance of morality in HRM is recognised and attention is being paid
over the necessary changes in the organisation. One of the best examples for this is
the introduction of pay roll systems in place of paper work which allows the
employees to sign in on their own rather than relying on a person for their entry. The
major ethical concerns in HRM are depicted as follows-

• Insecurity and risk as the employers tend to shift these risks on to the
employees. The newly introduced pay roll, shift systems, flexible working
contracts are the primary indicators of the problems (Winstanley, 1996:6)

• The surveillance and control of employees (Winstanley, 1996:6).

• Deregulation and rhetoric, deceit in HRM will correspond to the doubtful


ethical standards.

Unethical practises in the HRM will show their affect in two ways- on the
organisation, on the customers. HRM is the main wing for any organisation as it
should recruit employees for the organisation and any unethical or illegal activity in
this process can damage the effectiveness of the organisation. One of such
processes includes the recommendations of candidates. If a candidate is
recommended by a senior level employee in the organisation then he shouldn’t be
given job without doing the background check on him. Blindly, employing him by the
HRM would affect the company. At present in the corporate world, this kind of
practise is often seen. Few of the HR managers even give away jobs to naive
employees in return for money. This method is said be to backdoor entry. This is
absolutely unethical in perspective of Human Resource Management. Also because
of this, the performance of the employed candidates affects the development and
services of the products thereby degrading the performance of the organisation.

2.3) Ethics in Sales and Marketing

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Marketing ethics has taken its shape in the 1990’s and has emerged as the most
important tool for the success of a business. According to the arguments of Milton
friedman and Ayn Rand it is said that ethics in marketing is just about maximizing
profits but on the other side authors argue that ethics in marketing is to capture the
customer base for the product/services of the business. The point of friedman is
inaccurate and managers often see a positive relation between enlightened self
interest and long term profitability (Smith and Quelch, 1993). But, De George(1993)
refers to friedman statement as “Myth of A moral Business”. In general both of the
arguments are true for their own reasons but the ethics in marketing is changing with
the change in the operating style of the business. Most of the general issues which
are concerned with the ethics of marketing are-

• Declaration on the fair treatment and pay for the employees. The terms and
conditions should be outright on the designation of the employee. The
employees should be given respect and be treated with dignity.

• The ethical practices of product labelling. The first impression on the product
can be obtained by its label which explains the quality, cost, type of the
product. The best example would be that the labelling is user friendly which
can be easily disposable.

• The ethical declaration on the fair use of the product, the risks involved with it.
The health hazardous information should be specified while marketing the
product which will help the consumers in knowing the risks involved with it.

• The issues relating to the unethical tactics used for gaining competitive
advantage. The discounts which are offered on a product should be known
carefully as much of the discounts are not applicable on many products. They
are only specified to attract customers and grab the market share.

• Truthfulness in advertising the products. This is one of the best ways to


market a product but the product should be introduced in a proper way by
specifying all the pros and cons about the product. Representing the product
would be unethical. This would help the company to achieve sales and profits
but will ruin its reputation in the long run.

• Forthrightness in selling the products.

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An organisation can present itself in front of public with its services with the process
of marketing. Here what I have presented are the general unethical issues practised
by the organisations but the importance of practising ethically are not been known.
Any unethical or illegal activity would definitely fetch money in return but what is the
use of obtaining such money? In this process, the organisation which is unethical is
losing its position in the market. It’s better to be in the market for a long time by
satisfying the customers. This would help in the future growth (expansion) of the
organisation with a lot of appreciation and reputation. Also unethical practises are
against the law and order, if convicted then the entire organisation will be seized.
This would leave no space for the future establishment of a business.

2.4) Ethics in Production

Ethical issues in production are a very common thing which happens in a company.
This is so because of the resources which are required for the production of a
product are environmental, technological. It may have a direct/indirect affect on the
nature. For example, the production of cosmetics requires chemicals from the animal
pigments. This would affect the living of the animals and other than cosmetics,
medicines, pesticides are tested on plants and animals which needs to have a
license. Destroying environment for personal benefits would be unethical and in this
report we consider ethics in clothing industry and one of the concerns about the
production in clothing industry is that leather is being manufactured with the skin of
many animals. It is completely unethical and is against law to harm animals.

Apart from these issues, one of the other ethical issues in the production phase is
that during the production of products, gases released into the air from the factories
will affect the atmosphere. The waste that comes out of the factory will pollute the
water in the surrounding area. This generally happens with the chemicals factories
producing pesticides, insecticides etc.

Awareness programs are been in place to stop the


unethical activities of the industries but are not so effective in the developing nations.
Due to the strict law in the developed countries, businesses are restricted to use
limited resources or given permission to establish such businesses outside the cities.
All the factories in the clothing industry are situated outside the cities of developed
nations giving them the opportunity to produce in an open environment by which

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living people are not affected. By the same is not happening in the developing
nations. The unethical issues are becoming more as there is no proper political
support to abolish such practices. This is showing a direction to the businessmen in
the developed countries as they are finding it as an opportunity to gain more profits.
Not all the businessmen like to start a new business in developed countries as it
involves more costs, strict rules and regulations. For this reason, these businessmen
are establishing their factories in the developing countries like India, China as they
can take advantage of the loopholes in the system. This might be one of the reasons
for the establishment of factories in the developing countries apart from the low
production costs, cheap labour.

2.5) Ethics in Property Rights

According to Michael Benfield (1998) the code of ethics is changing with the change
in circumstances. For example, before 50 years abortion was illegal and after 30
years it has become legal in few countries and now it is legal to abort a child in most
of the countries. The ethical code in medicine 50 years ago is changed now for its
own reasons. The advancement in the technology and science has minimised the
barriers between good and bad, right and wrong. In the similar way the property
rights have been changed since its establishment.

After many considerations it is said that “property is not essentially a ‘right to a thing’,
but rather a separable bundle of rights subsisting between persons which may vary
according to the context and the object which is at stake”(Davis, 2007:20). This
bundle includes the rights to sell, buy, and lease a part of land. The rules and
regulations on the property rights vary in different countries but ultimately they
constitute in the development of the land (Cooter and Ulen, 1988). Property rights
explain the relation among human and not just about a thing. Some scholars argue
that rights impose duties on others and property rights ever conflict with other
protected interests. The ethics in the property rights emerges with the recognition of
the notion of the property (Singer, J. W. 2000). The property rights are classified into
two categories- intellectual property rights and ordinary property rights. Intellectual
property rights are different from the ordinary rights as they involve sole proprietor
ownership. Michele Boldrin and David K. Levine (2008) argue that “the government
does not ordinarily enforce monopolies for producers of other goods. This is because

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it is widely recognized that monopoly creates many social costs. Intellectual


monopoly is no different in this respect. The question we address is whether it also
creates social benefits commensurate with these social costs”.

The general procedure in obtaining property rights for a business is to buy a land or
building or manufacturing unit for the business. Ethics come in when the property is
properly used for the business purpose. For example: if a land is taken from the
landlord for a lease of 5 years, it should be maintained in a proper way rather than
treating it as if they own the land. The leaser/occupier should not sub-lease the land
for his own profits without the concern of the landlord. This generally happens when
the occupiers are politically influential/sound. Apart from the fixed assets/property of
a business, employees also become the property in a company which allows the
employer to have a right to dismiss, promote his employee. There are even few rights
which allow major companies to own their staff and specify the staff to work on
whatever the employer specifies.

These practices existed many centuries ago. Accordingly, “The


right of property in a slave is distinctly and expressly affirmed in the Constitution”.
(Roger B. Taney, 1857). There was no ethics in the practices that existed centuries
ago but recently with the ethical awareness among the civilization, the ownership on
civilization has been removed as a property owned by a business. The human rights
helped to provide equality and freedom to all the people which restricts the
employers in treating their employees as slaves. While in the under developed
countries, the lack awareness and proper law, constitution is still making the rich
people to indulge poorer in slavery.

One of the other properties of a business is that of the products it produces. They are
the real property of a company. Toyota iQ car is a property for Toyota company. So
property is ultimately the resource which is owned by the business for the business.
The common issues which still persist in the ethical practices over property rights
are-

• Intelligent employees are attracted from one company to work for another
company in return for higher income. This is mainly done to stab a good
business to beat the competition but this is unethical way of carrying a
business.
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• Manufacturing or producing a product without taking the permission from the


original designer or creator. This indirectly points out to stealing the ideas,
designs of a person and not crediting him for it. But when this is discovered
then the business has to face the law which would ruin its reputation.

• Copyright violation is another unethical practice which generally reserves the


right to not duplicate the original product. But, there are few industries like the
clothing industry, electronic industry, music industry in which copyright issues
are a common concern.

For example: China is famous for duplicating any kind of product like the
mobile phones, music players, gadgets which are of cheap quality and
resemble in the same way of the original product. Producing such products is
unethical in a business field even though they fetch you a lot of money.

2.6) Human Rights

According to Jack Donnelly (2003), human rights are “the rights of men” meaning the
rights obtained by being born as a human. But what kind or rights are they? How do
they work or help a human in his life? The question to these answers will help in
understanding the importance of having human rights.

There are four primary dimensions for the practice of human rights-exercise,
enjoyment, respect, enforcement.

• Exercise: a right is exercised when the obligations of a duty-bearer are


activated who may either respect the right or violate it.

• Respect: the duty-bearer is given the right to respect which determines how to
behave within the society

• Enjoyment: the right is a freedom to do whatever a duty-bearer wants to until


and unless it is against the law and is questioned by another person

A human can use his rights in every aspect of his life and when ethics comes into
place then these rights should be used for good purposes rather than indulging in
bad activities. While utilizing the human rights, a person should also respect the law

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and constitution which have their set of rules which should never be crossed. A
human can’t oppose the law even though he can by utilizing his human rights. This
shows a clear picture that the rights given to the human are restrictive in few
situations. Ultimately, the law is the superior governance.

Jack Donnelly (2003) further specified in his book that the human rights are “equal
rights” either one is a black or other is white, he or she, the rights are applicable to
one and all who are born as a human being. They are also said to be “inalienable
rights” meaning the human is might be mentally retarded or with disabilities, human
rights are the same and they will have the right to hold human rights.

The responsibility in implementing the human rights has been taken by many
organisations throughout the world. Major of them are- United Nations Human Rights
Council established in 2005, United Nations Security Council, Council of Europe,
Association of Southeast Asian nations.

2.7) Human Rights for the Workers

These rights are also said to be labour rights which are meant to maintain a good
relation between the employer and the workers. They are practiced at the time of pay
negotiation, benefits, safe working conditions etc. These rights allow people to form
unions in the company to discuss about their problems. The main right which the
workers have is the right to work. It does not depend on the location in which they are
working but a worker is universally given the “right to work”. Apart from this a worker
is also given the “right to unionize” which means that a worker can form a union on
this own with the support of his fellow workers. (Core Labour Standards Handbook,
2006).

It was in 1833 when the England government had recognised the need for labor
rights. This was the age of industrialization and Karl Marx had called for the right for
workers. Further, International Labour Organisation was formed in 1919 to
standardise these rights and by December 10th 1948 the below rights are been
recognized.

Article 23

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1. Everyone has the right to work, to free choice of employment, to just and favorable
conditions of work and to protection against unemployment.

2. Everyone, without any discrimination, has the right to equal pay for equal work.

3. Everyone who works has the right to just and favourable remuneration ensuring for
himself and his family an existence worthy of human dignity, and supplemented, if
necessary, by other means of social protection.

4. Everyone has the right to form and to join trade unions for the protection of his
interests.

Article 24

1. Everyone has the right to rest and leisure, including reasonable limitation of
working hours and periodic holidays with pay.

(Source: The universal declaration of human rights, 1948)

Since its establishment, these rights are been continuing in the same way as they are
as they have been universally approved by all the workers. Apart from these articles,
there are several articles which mention about the right for workers but mean the
same. The implementation of these rights is been successful in developed countries
whereas in the developing countries, it has not yet been understood by the workers.
The awareness among the workers on their rights is less stressed in the developing
countries which make the naive workers to just obey the rules of his employer.
Whereas in developed countries like United Kingdom and America, the rights are
obey and utilized by the workers. The equal pay for all the workers does not exist in
the developing countries which explains us that the Human rights are not
implemented universally which should be overlooked again by the United Nations
General Assembly who framed the declaration.

2.7.1) Issues Over the Rights for Workers

The major issues which are still being debated are as follows-

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• The issue over the amount of time to work is still being a concern to the major
organisations in the developed countries. In the 19th century, the work period
was eight hours per day and later in 2000 France had established 35 hours
per week. The worker is given the right to ask for the over time from his/her
manager but the maximum work done should not cross 48hours per week.

• There was even movement from the labour to increase the minimum wage per
hour which is still under consideration by the governments. However there is
opposition to the increase from new economists as they consider the unskilled
and entry level workers. (Human rights watch, 1988)

• The most important issue regarding the workers is about the child labour.
Children are legally not allowed to work accordingly to the human rights but
due to the economic backlog, there are children who still work illegally.

• Discrimination in the work place is being treated as a crime but it still persists
when considering the wage gaps between the genders.

Human rights watch (1988) has even sorted out few issues which include- non
payment of wages, extended working hours, unsafe working environments leading to
injuries and death of the people.

The discrimination against the workers has been happening since ages and to sort
out the issues on Human rights for workers, the United Nations is focusing on the
awareness programs, by altering the rules in few countries and it is widening its
watch on the developing, underdeveloped countries with the help of media. Media is
the only medium to bring out the facts behind any situation. All the unethical
practises, violation of human rights of workers by the businesses are brought forward
by the media. When the news is spread throughout the globe it minimizes the scope
for further such incidents to happen. Now a day, all the businesses are conscious in
making their moves in front of media. There are a lot of issues on human rights in all
the countries but are not been brought forward. But this is done by media and is also
solving all the issues with the help of public which reduces the pressure on the
United Nations. The United Nations has also known a lot about various unethical
activities of businesses through media and is now concentrating to deal with all the
queries in the world.

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BUSINESS ETHICS TOWARDS HUMAN RIGHTS

Chapter-3

Case Study on the Clothing Industry

This chapter provides a general study on the clothing sector persisting throughout
the world. In this process, the strategies which the businesses in the clothing industry
use are explained briefly with the information provided on the structure of the clothing

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industry. A general analysis is also made on the implementation of business ethics in


the clothing industry and the necessary code of conduct is depicted which is
generally used by the clothing businesses. Also, employment in the clothing industry
is observed with respect to the human rights and a clear picture of the employment in
developed as well as developing countries is presented.

3.1) General Study on the Clothing Sector

Clothing sector is a labour based sector which allows unskilled people for the entry
level jobs. There is no need for any qualification in order to work in this sector. It has
been established centuries ago and since then it has been introducing variety of
clothes for the mankind. Rules and regulations have been introduced on the
functioning of clothing industries in the late eighteenth century. This mainly included
rules on the imports and exports of the manufactured goods. Recently in 2005, the
general rules have been liberalised according to the agreement on tariffs and trade.
This change had affected many industries in quite a large way. The primary means
for clothing industry is the textile industry. Both of them need to go hand in hand to
manufacture a finished product. On a whole, the Agreement on Textile and Clothing
regulates the businesses in the textile and clothing industries. Every country has got
the resources for the manufacture of clothes and the clothes with good quality
generally get exported to other countries.

3.1.1) Strategies in 1970’s

The establishment of major companies had led to the implementation of new


strategies which involved managing the textile as well as the clothing simultaneously.
The retailer indulged into these practices were in supply chain management is used
to carry on the proceedings. Wal Mart (world’s No.1 shopping mall) has used this
technique in expanding its services. Because of such a change, the need for workers
tremendously increased. This process ultimately reduced the production costs, and
the shifting was flexible enough. Through the supply chain, the businesses expanded
too many countries to capture the international markets.

3.1.2) Structure of the Clothing Industry

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BUSINESS ETHICS TOWARDS HUMAN RIGHTS

The sector is well known for its innovative, creative aspects. With the change in
science and technology, the industry is also being modifying itself with modern
technology which helps in producing high quality clothes. The structure of the
industry used to be precise but with all the changes in terms of technology, labour,
outsourcing, fashion in the recent years, it has become complex yet precise to
understand. Fashion is playing an important role in the present markets. With the
emergence of retailers, the industry has been divided into two major categories
consisting of businesses (Navaretti et al., 2001).

According to Gereffi (2001), “retailers accounted for half of total garment imports in
the European Union in the mid-1990s, a trend that probably has continued during the
second half of the 1990's”.

One of the two major segments in the industry is the fashion driven market which
involve in producing clothes designed from professional designers with well skilled
workers and is characterized by latest technology. The competitive advantage in this
market is the ability to put up innovative designs for the fashion lovers. These
markets exist in developed countries like America, England, and France in which
people encourage fashionable clothes with high quality.

On the other side of the industry, a market with mass production of clothes like t-
shirts, undergarments, uniforms exits. The quality of these products is relatively low
when compared with the other segment of the market. Talking about the scope the
mass production market has a lot of scope as their products are cheap and are
mandatory for the living of human. This type of market is generally found in the
developing countries like India, China, Turkey, Mexico having semi-skilled
employees. This market constitutes females workers as the major part and almost all
the finished goods are outsourced to various countries including the developed
countries. (Hildegunn Kyvik Nordås, 2004).

“Substantial changes in the retail sector have been observed during the past few
decades and modern retailing has been called "lean retailing" in a recent
comprehensive study” (Abernathy et al, 1999). Apart from the change in the
structure, the working style of the industry has also been changed due to which the
business ethics is being inappropriately practised. Unethical practices are dominating
the ethical practices is being brought into media often.

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3.2) Business Ethics in the Clothing Industry

For any business to be started, code of conduct is to be followed in running it


successfully. This code of conduct is a set of rules which restricts the business in
implementing unethical practices. Recently, the clothing industry has revised the
code of conduct and has standardised it. These codes directly or indirectly refer to
the standards of the International Labour Organisation regarding the human rights at
work, external trade partners, and labour legislation. One of the important codes to
be introduced which is being debated is the “ethical ranks” which would help the
enterprises in the developing countries as well as developed countries. These codes
are proposed and discussed with the employers and workers association and a
feasible solution is derived in introducing the concept of ethical ranks. The need for
this to take place is the dominance of the industries in the developed countries over
the production and supply in the developing country. The trade partners in the
developing countries for the industries in developed countries are always seen as the
suppliers who must follow the code for the order placed by a foreign company.

This one way approach is not ethical when compared to the


business in the developing countries so a standard code is required which would
reduce this approach and give a greater social dimension to the clothing industries
activities. At present the governments in the developing countries are encouraging
the people to promote ethical values and human rights at work. It is also spreading
awareness on the economic importance of providing decent working conditions. It
has not been much successful though but we can expect a good result within few
years. Much of the working style of businesses in the formal sector has been
adopting human rights at work, helping their workers in their daily needs. But in the
informal side, there is no change in the working style as it indulges people with
illiteracy and unskilled. Hopefully with the implementation of proper codes, the
working and living conditions of the workers would change.

3.3) Employment in the Clothing Industry

America and Europe are the two major continents where clothing industry has its
major activities. Italy is claimed to be the world best in the production of clothes.
According to the commission of the European communities or the union (2003), the
textile and the clothing industry accounts for only 7 percent of the employment in the

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entire manufacturing sector. But after the amendment in the general rules in 2005,
the European Union is thinking to employ 2.7 million in the textile and clothing sector.
According to the surveys conducted by the International Labour Organisation, the
employment in the textile as well as the clothing industry is considerably reducing
since 1995. This is mainly observed in the developed countries such as United
States, United Kingdom, France, Germany, Canada, and Italy and among the
developed countries only Spain and Portugal have managed to be having an
increase in the employment for workers. On the other side when survey is conducted
on the employment in the developing countries, it is found out that the employment
opportunities are increasing so do the employment for workers in India, China,
Mexico, Romania, Poland, and Morocco. Since 1995, these countries have shown a
progress in the employment for workers especially in the clothing sector.

From the surveys and the other data, it can be analysed that the this
situation were employment for workers has reduced in the developed countries and
is increasing in the developing countries has been existing due to the outsourcing of
the manufacturing and production of clothing. The businesses in the developed
countries is opting the developing countries for its manufacturing of products. For
example, Marks & Spencer (one of the leading retail group in Britain) has its clothing
manufacturers in South Africa. This is done to reduce the production costs and
improve the quality. Establishing a factory in the developed country requires a lot of
investment instead using the same investment would help in establishing a factory in
the developing country and importing the finished goods. This would also provide
feasible solutions to many issues regarding the profitability. As most of the
businesses in the developed countries had opted to use this practice, the factories
and employment in the developed countries have been reduced thereby increasing
the manufacturing units, employment for labour in the developing countries.

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Chapter 4

Analysis

This chapter analyses the strategies of the clothing organisations to prevent to the
violations of human rights and to practice ethical values. In this process, Primark and
Levis Strauss are been taken as an example and are evaluated. Apart from these
two organisations, few other smaller organisations are also analysed.

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Introduction on Clothing Industries

As we know clothing industry is old and traditional industry which has been running
successfully since centuries. But now the clothing industry has been changed
according to the tastes, cultures of new generations. In the present world the fashion
is given more importance as it produces innovative, creativity designer wears. The
clothing industry is now collaborating with fashion industry for the manufacturing of
cloths. In this process there are many clothing companies which are being
established every year as there is a lot demand for fashion. A part from the newly
established companies, the older companies which are established decades ago are
still surveying in the competitive world. The top fashion oriented companies which are
famous in the world are- Pepe jeans, Levis Strauss, wrangler, gap, Burberry are the
well established-old players in the market, while Abercrombie and Fitch, French
connection are the new players in the market. But these are only fashion oriented
companies; we also have sports oriented companies like Adidas Reebok, and Nike
which are very popular for sportswear.

This project intends to analysis the business ethics in clothing industry so it is


necessarily important to understand weather the clothing companies are practicing
ethical values are not. With the emergence of fashion industry and increasing
demand for fashion wear all the clothing companies have diverted themselves in
producing fashion wear. Because of this the competition between the organizations is
increasing rapidly and most of the companies are indulging in unethical practices to
stay ahead in the competitions. Two of such organisations will be analysed further-

4.1) Primark:

Primark is one of the largest retail companies in United Kingdom with 138 stores
running throughout the country. It is famous for selling clothes with low price and
innovative and simple designs. Though it’s not a clothing based company, it has
become successful by outsourcing the production of its cloths to different countries.
These countries include mainly developing countries like India in which Primark has
its maximum suppliers. In 2008 an investigation carried by British broadcasting

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corporation (BBC the panorama) has revealed that the suppliers of the Primark are
practicing unethical activities such as employing child labour.

It started in 2008 when an investigative journalist of panorama- Dan MacDougal


visited Bhavansigar refugee camp (70miles north of Tirupur, south India) and found
out that Tamil children aged below 9 yrs are working for Primark garments in dark
rooms with no proper wages, no security. These children worked for the suppliers of
the Primark, but the Primark has no information on child labour. It was Dan
MacDougal (The Panorama) which revealed the situation persisting in Tirupur.
Primark has completely denied the fact that it was involved in employing child labour
but it’s the responsibility of the Primark to assign contracts to suppliers who perform
ethical business. The code of conduct of the supplier should be checked before
assigning the contracts. However, ultimately Primark will be bearing the blame over
the child labour. The Tirupur exporters association (TEA) in India have supported
Primark by justifying that the children who were found at the working site are just
helping their parents after school. It ultimately specified that ”There is no child labour
in tirupur”. This was completely denied by Mary, a psychologist in Indian NGO- SAVE
(social awareness and voluntary education). SAVE is the organisation is intended to
eliminate child labour and working in hand to hand with NGO since 1994. Mary
specified that the SAVE organisation will be raiding all the factories with an intension
to find out whether the business are practicing child labour or not. In such raids they
have found out that on an average 250-300 children are working per year within the
factories. She had questioned TEA on how there is no child labour in tirupur. She
expresses her views over this situation that she has been observing child labour
since years and many of the reputed organisations are denying this fact.(Ethical
consumer,2008)

Generally in India there is lot of corruption, this is helping the


bigger organisations to tackle allegations over their illegal practices. Primark might
have also done the same to acquire the support of the organisations to come out of
the scandal.

When we look at the above scandal we can observe that Primark is not involved as
the entire scandal rotates on its suppliers. It is necessarily important for Primark to
look into its suppliers while giving the contracts which it hasn’t managed properly.

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Geoff Lancaster (head of external affairs, Primark) claimed that it is impossible for
any organisation to handle its supply chain when it is outspread throughout world. In
addition, he specifies that his contractors might have subcontractors on which he is
unaware off. Geoff Lancaster might be true, Primark might not be aware of the
subcontractors but it should be responsibility to look into its supply chain as its a
reputed organisation. The truth in the words of Geoff Lancaster can be noticed when
we closely look into the working conditions of tirupur. Tirpur is a place having more
than 1000 exporters, 6000 factories and 5000 sub contractors. This is an open zone
for big retailers to give away their contracts. As this zone is especially reputed for
clothing sector, the retailer giving the contracts will not take the responsibility in
overseeing the manufacturing process as he believes in his suppliers. But these
suppliers may not handle the large orders from there retailers and they indulge in
subcontracting. Thousands of workers will be working under contractors as well as
the sub contractors and they will be under immense pressure in producing the
garments with in time. It’s the contractors and subcontractors who need to take care
on the safety and security of their employees. But in Tirupur this isn’t observe as
there are employees who even work 24hrs a day. According to Ruth Bergan (Home
workers worldwide) criticises that the pressure which is created on employees is due
to the mass ordering of the retailers. To reduce production cost and labour costs, big
organisations like Primark intent to approach suppliers in developing countries and
give out their mass order. The suppliers will have no choice rather than to process
this orders as they are economical poor background. Ultimately, the suppliers tend to
put pressure on their employees as there are no rules and regulations over the
working conditions of the employees. Unlike in western countries, Employees in
Tirupur are not paid either on hourly bases or a minimum wage.

By this we can conclude that there is some truth in the words of Geoff Lancaster that
Primark is unaware of its subcontractors but in illegal terms it needs to conduct a
background check of its suppliers as well as the employees working under its
suppliers. The end result of this scandal is that the Primark has sacked three of its
Indian suppliers. This created a sensation as many employees have lost their jobs. It
even affected Primark as its sales in that year have decreased. NGO’s like SAVE
have reacted strongly to the situation and blamed Primark for sacking the suppliers.
They expressed their views to re-employee the sacked suppliers so that the

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employees working under them will not be homeless. They felt that big organisations
should look into its suppliers before giving the orders as it might be a part of money
involved but it involves thousands of employees. There are no proper wages, no
security, and no safety provided by Primark so how will they have the right to make
their employees homeless. Sam Maher states that “if Primark is the ethical company
it claims to be, it would put more energy into ensuring these job were carried out in
decent conditions and for wages that provided a dignified standard living.” TEA has
already put in a clause that company like Primark have to share.

4.2) Levis Strauss & Co:

Levis Strauss & Co is a famous and well reputed organisation established in 1853 in
California. The organisation has become wanted for its wide range of denim jeans. In
its early stages it had just concentrated on the traditional clothing with the addition to
the normal denim jeans. It was in late 1920’s that the company actually started
introducing modern ware along with the continuation of its denim jeans. The
company has been the No.1 in America decades ago but now it lost its position in the
markets. During the 1960’s and 1970’s the growth of the company was enormous as
the younger generations went crazy for the varieties of denim jeans. The era was
named as “blue jeans craze” for the organisation. Through the years the organisation
had acquired many small, big firms such as Great Western Garment Co. From which
it had adapted to the use of “Stone Washing Technique” for its production.

Until the 1980’s, Levis Strauss had no competition from other clothing organisations.
It had its varied way of manufacturing clothes which no other company came up with.
But it had started in 1990’s in the period which the clothing industry in America has
been driven with fashion and innovative new designer wares. Many new firms were
established which were competing with the well established firms and also the cheap
products were imported from other countries which attracted customers. This led to
the change in the strategies of Levis Strauss and the organisation had adapted to
outsource its production work to the other countries. In this process, the company
had to face difficulties as it has been accused of indulging in unethical practises. In
1991, the organisation has involved in a scandal in which its clothes were
manufactured in six factories situated in Northern Mariana Islands by Chinese labour
under “slavelike” condition according to the United States Department of Labour. It

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was even accused for paying fewer wages to the workers with 12-hour shifts every
day in a week. These practises were brought under the jurisdiction and the
organisation was ordered to pay a huge sum of penalty. Tan Holding Corporation a
Levis Strauss subcontractor was named after paying the largest fines in the US
history. $9 million was given as restitution to the employees. Immediately, Levis
Strauss claimed it had no knowledge on the procedures adapted by its
subcontractors and is entirely not involved in the unethical practises. This was a
surprise to all its customers as none of such scandals had taken place till then. The
movements on the human rights for workers by the private organisations were in full
flow during this period. An activist group named Fuerza Unida (United Force) was
revolting against the organisations which violated the human rights for workers and
treated the workers like slaves. The activists had targeted Levis Strauss for its
involvement in violating labor policies and protested with hunger strike, sit-ins in front
of the head quarters in San Francisco. In 1996, the company had to face heavy
financial problems involving in multi-billion dollar debt also leading to the left out
stock to be bought by the family members of the company. From this stage the fall of
the company has been observed leading to continuous losses for the consecutive
years. The company had even promised to pay out the dividends for its workers
worth $750million for the next six years but it had never done so.

4.2.1) Corporate Social Responsibility of Levis Strauss

Karl Schoenberger has analysed Levis Strauss on the basis of its corporate social
responsibility since it has grown as a multinational organisation and he feels that the
organisation was the first among several in framing the ethical, corporate social
responsibility rules. Until now, the report discussed about the unethical practises of
Levis in its 1990’s and the after affects it faced because of them. Now, the report
depicts the analysis on the causes of its unethical practises and the opportunities
created by Levis for its workers.

Since the establishment of the organisation, it was operated by the family members
of Levis and it continued for more than five decades. As a multinational organisation,

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it had planned to implement ethical practices involving human rights for its workers. It
was the first organisation to publish a statement that the organisation operates in an
ethical way without affecting its employees and its customers. In 1975, it had framed
a set of ethical guidelines in which it gave special importance to ethical values. Then
after it was the first organisation to implement the code of conduct on its international
business operations. Karl Schoenberger argues that the present situation of Levis
Strauss has been seen because of the inefficient capability of the management as it
has trusted its subcontractor in the manufacturing process. The company has also
faced few criticisms in not revealing its growth strategies to its shareholders which
made them believe that the organisation is indulging in unethical practises. But in
reality the company had no intension to indulge in activities which would ruin its
further growth. Karl Schoenberger strongly opposes the involvement of Levis Strauss
in all the scandals as he explains from his observations that all the multinational
companies are aiming to stay ahead in the market without concentrating on the
maximizing their profits. These companies have been in the market since decade
and had obtained a position for themselves and further the strategies of any of such
companies would be to maintain their position. To be ethical and loyal to its
customers, Levis Strauss has removed its operations from its factories in Burma in
1992 as it was accused of violating human rights. When all the other multinational
companies were expanding their services to all the major countries in the world in
1993, Levis Strauss was against this practice and it had withdrew its operations from
China as it found that major of the factories in china do not obey the code of conduct.
It even protected against the issue of contracts to such factories as it would be
unethical as these factories have no social responsibility. But the scandals had
affected the organisation so badly that it was unable to plan out new strategies as it
lack finances and in 1998 it had even taken the decision to not to divest from the
country. Ultimately, even though the organisation has tried hard to be ethical and
moral, the arising issues in the factories of the organisation are a perfect example of
the complexity in the modern manufacturing sector.

(Source: Compiled from Levi’s Children: Coming to Terms with Human Rights in the
Global Marketplace by Karl Schoenberger, 2000 published in Harvard Human Rights
Journal)

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4.2.2) Further Analysis on the Organisation Strategies and the Employment of


Workers Inside and Outside of the Home Country

As we know, Levis Strauss is a multinational company with its operations in all the
major countries. As it has been established in America, few of its production units
and its head quarters are established in the home country employing the workers
belonging to the same country. But some part of its work is being outsourced which
lead to the transfers of the employees working in America to the newly established
units. The outsourcing to developing countries like India, China indulged in the
activity of issuing contracts to the factories whereby it’s the responsibility of the
factories to employee the labour. The workers working in the factories in India are not
given opportunity to work in the factories in China as it involves huge costs. So the
practise of employing the workers belonging to the same country is often encouraged
by Levis Strauss.

After all the allegations, the organisation in 2002 had taken a decision to collaborate
with Wal-Mart (No.1 retail store) for the exclusive sale of its Signature Jeans until
2006. After the scandal in 1991, the organisation had not involved in further scandals
but it couldn’t gain back its previous legacy and had to face losses for nine times in
ten years. It had even sold away its subsidiary companies to clear its financial
problems. The organisation was not in to news involving in to bad practises through
the years until 2007. But again in 2007, it has been accused of violating the code of
the ethical trading Initiative. Ethical Trading Initiative (ETI) is a non-governmental
organisation which is a union of multinational companies having a disciplinary panel
which would analyse the ethical values of the companies. Levis Strauss has come
out of this organisation after refusing to implement “Living wage provision” of the
ETI’s base code. The panel had stated that it is very difficult to adapt to the change
which is obeyed by all the other member organisations but Levis had opposed, for
which it has been suspended.

For the first time in the entire century, the ethical ranking of Levis Strauss has
dropped from first to fifth place. It was because of the suspension of Levis Strauss
from ETI. Industry analysts argue that the living wage provision will eliminate the
discrimination against the garment workers explaining that amongst the workers, the
garment workers are paid with lesser wages and to eradicate this, a minimum wage

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BUSINESS ETHICS TOWARDS HUMAN RIGHTS

provision will be implemented. This is absolutely ethical and the protests against it
will be strongly opposed.

One of the good things when analysed the unethical side of Levis
Strauss is that it has not been accused of employing child labour which is also a
violation of human rights. Unlike, Primark, Gap, M&S and other companies, Levis
Strauss is better in this perspective.

4.3) A Study on the Other Companies in Clothing Industry

Apart from just Levis Strauss and Primark, there are several other clothing industries
in the world which are involving in the same kind of practices. In a recent study
conducted in 2009 by Labour Behind the Label, high street retailers including Tesco,
Asda, Levis Strauss, and John Lewis are being accused of exploiting the workers in
Asia. In 2007, living wage provision is being accepted by the organisations in the ETI
but in reality the companies are not following the base codes because of which the
clothing workers are not being paid the exact wage which is intended for the
improvement of their living conditions. The report stated that around 25 high street
retailers were graded between zero to five over their commitment towards the living
wage provisions to their workers and the result has come out to be in the following
way-

The lowest committed company is Levis Strauss which refused to pay the living
wages to its workers. Asda, Sainsbury’s stood in the next position with a 2/5 grade
and still remains to be below average. John Lewis had refused to take the survey but
the Labour Behind the Label had evaluated the organisation in terms of its policies
towards the human rights for workers. The result was the organisation had a very
disappointing approach towards the human rights for workers. The next position was
taken by Tesco as it has been graded 3/5 which was acceptable as the organisation
was trying hard to improve its workers conditions. In the same way, Primark and
M&S were also awarded 3/5. Beating all these companies are next, gap, new look
and monsoon who were given 3.5/5 which was appreciable when compared to
others.

(Source: Rebecca Smithers (2009), High street retailers accused of exploiting


workers in Asia )

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4.4) Employment for Workers

Until the recent recession in 2007, the world had seen a sharp increase in the
economies of the developed, developing nations. According to a report published in
2005 by the International Labour Organisation, it was observed that the improvement
in the economy of countries is not improving the employment opportunities. Around
half in the 2.85 billion workers are living on less than $2 per day which is below the
poverty line. The number of unemployed people had rose to a record high of 191.8
million in spite of the growth in the economies rising by 4.3%. According to Juan
somavia, the director of International labour organisation- the unemployment
problems are increasing year by year and the economies are not concentrating on
providing jobs for the unemployed or increasing wages by utilizing the growth. This is
mainly observed in the developed countries like Latin America, Caribbean where the
unemployment rose by 1.3 million which is more than half of the entire global rise. In
2004 the unemployment rate was 7.3% which was steady since the two years but in
2005 it rose to 7.6% recording the highest in the world. In central and eastern
Europe, the unemployment rate was 9.5% in 2004 and increased to 9.7% in 2005. In
sub- Africa the unemployment rate remained 9.7% but the worst affected are the
middle-east and North Africa were unemployment was 13.2%.Out of all these, Asia
remained to be the lowest in the unemployment rate with just 3.8% and that of
britain’s was 5%. On a whole the entire unemployment rate in the developed
countries was 6.3%.

When analysing all the factors which lead to this situation, we can
observe that the practise of outsourcing a part of work to the developing countries by
the developed nations is one of the main reasons. Because, this is creating an
opportunity to the developing countries in Asia to employ more labour for carrying the
work. With the IT industry booming throughout all the countries, the employment of
professional people with good academics is given more importance than the workers.
In reality, the workers are paid less wages when compared to people with
professional qualifications. Due to this the need for workers in the developed
countries is coming down as most of the organisation’s production work is carried in
the developing countries. It is also stated that the service industry is growing rapidly
through the years and is expected to overtake the agricultural sector and this is been
observed as only 5% of people work on lands in developed countries. While this is

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expected to be one of the reasons, the other is the increase in population in the
African countries. The ratio of employment to population is also falling rapidly. Even
the report shows that the unemployment rate is increasing drastically in the
developed countries while the situation is reversed in the developing countries.

(Source: Ashley Seager (2006), Global Jobless rise hampers efforts to cut poverty)

Chapter - 5

Conclusion

This chapter gives a brief conclusion on the entire report keeping in mind of the
research and analysis on the human rights for workers.

From the entire research on the clothing industry and the implementation of the
human rights for workers, ethical activities I hereby conclude that the ethics in

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BUSINESS ETHICS TOWARDS HUMAN RIGHTS

business is being overseen by the businessmen and the same is continuing in the
clothing industry. This is because of the increase in competition, greed for money. If
one organisation is performing the unethical activity then their competitors are doing
the same to gain profits. This is being spread in all the organisations throughout all
the industries because of which the customers are paying heavy prices in contrary
companies like Primark are defending themselves from not indulging in violating the
human rights but because of the cheap clothes produced by them, its competitors
like Asda, Tesco are doing the same which is degrading the quality of the clothes by
wasting a lot of resources for their manufacturing. The hard work of the workers is
lost in reality as these cheap clothes are used and thrown in the developing
countries. While the smaller companies are degrading the quality of clothing, the
multinational companies are not paying proper wages to their employees. This tells
us that whoever is involved with the clothing is being suffered except few customers
who do not bother how their clothes are made. Due to the process of outsourcing, the
employees in the outsourcing countries are being unethically treated which is not
being noticed in the developed countries. The emergence of media has helped in
controlling the system to some expect as it had brought awareness on the misuse of
clothes.

On the positive side, the employment opportunities in the developing nations like
India, China, and Philippines have increased in the garments industry which is
ultimately improving the economies of the developing countries rather than the
developed countries. The wages that their employer pays may be less but it is
accepted by workers as its better to earn something rather than being unemployed.
There are no revolts carried on by the workers against the factories till now but the
workers are expressing their intension when they are questioned. All the scandals
are brought forward by the media. This shows the media is having more corporate
social responsibility than the clothing industries. Not only the new organisations
which are established recently but also the older organisations which are established
centuries ago are being indulged in all these scandals.

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BUSINESS ETHICS TOWARDS HUMAN RIGHTS

Chapter- 6

Recommendations

This chapter suggests few recommendations observed by the author during the
process of the research and analysis on the organisations in the clothing industry.

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BUSINESS ETHICS TOWARDS HUMAN RIGHTS

After analysing the industry by taking into consideration of all the multinational
companies, I feel that the at present system in the existing clothing industry should
change and in this process I suggest few changes based on my observations-

• Companies need to regulate the employment of workers in their factories.


Clauses should be mentioned in the agreement between the multinational
organisation and the factories involving the regulation of the employment for
workers. For example: A clause specifying that people should have a
minimum qualification before applying for the employment in factories will
minimize the risk and will restrict the violation of human rights.

• Shift system should be introduced in the factories as the workers are being
worked for more than 12hours per day. With a shift system in place, a day can
be divided into 3 shifts each shift having 8 hours with a certain number of
workers in each shift according to the factory conditions. This procedure will
improve the productivity and will lead to the expansion of its services as the
production is being carried out throughout the day.

• As the multinational companies are spending costs on outsourcing their work


to the unknown factories in developing countries, I would suggest them to
acquire a factory and run the factory according to their rules and regulations.
This would improve the situation of the workers as the management will be
aware of the working conditions in its own factories.

• To abolish the child labour, the multinational companies should introduce a


system in which the workers are given additional amount with their wages for
the education of their children. Awareness programs should be in place where
the workers will be taught about the importance of education for their child’s
future. The intension behind these programs is that the parents should use
the additional money only for the education of their children rather than
utilizing it for their own purpose.

• The government in the developed countries should look into the unethical
practises of the organisations and strict rules should be implemented on the
procedure of outsourcing their work. Organisation’s license should be
cancelled if the organisation is proved to be unethical. Because of this the

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BUSINESS ETHICS TOWARDS HUMAN RIGHTS

organisations will move in the right path following the rules and regulations
leading to the ethical business.

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