You are on page 1of 63

UNIVERSITY OF CAMBRIDGE THE JUDGE INSTITUTE OF MANAGEMENT STUDIES

BRAND IMAGE AND BUSINESS REALITY: ETHICAL PRACTICE STANDARDS ALONG SUPPLY CHAINS IN THE ATHLETIC BALL INDUSTRY

MANAGEMENT STUDIES

MPhil Dissertation

SUBMITTED BY AMBREEN WAHEED, MSC

SUPERVISED BY DR. JANE COLLIER

SEPTEMBER 1998

Ambreen Waheed, Cambridge 1998

Table of Contents
I. II. III. I. II. 1.1 1.2 1.3 1.4 2.1 2.2 2.3 2.4 2.5 3.1 3.2 3.3 3.4 3.5 4.1 4.2 4.3 4.4 4.5 4.6 5.1 5.2 5.3 5.4 ACKNOWLEDGEMENTS LIST OF TABLES LIST OF FIGURES ABSTRACT WORKING DEFINITIONS Rationale The Context The Case of the Athletic Ball Industry Sialkot, Hand-stitched Balls, and Social Audits Ethics in Society Ethics in Business What is an Ethical Business Organisation? Measuring Business Ethics and Social Responsibility Social Auditing and Brand Image Research Questions Approach The Investigative Process Data Collection and Tabulation Outline of Research Social Accountability Standards Codes of Conduct & Organisational Policies Advertising and Claims Interviews Questionnaires & Telephone Discussions Field Observations & Physical Verification The Supply Chain The Stakeholders Representation & Discussion of Findings Where the Brands Stand on Social Responsibility 3 4 4 5 6 7 8 8 10 11 12 15 17 19 21 21 23 24 26 27 27 28 28 29 30 32 33 34 51 53 55

1.0 INTRODUCTION

2.0 THEORETIC PERSPECTIVE

3.0 RESEARCH METHODOLOGY

4.0 DATA PRESENTATION

5.0 DATA ANALYSIS

6.0 CONCLUSION
6.1 Summary of Findings 6.2 The Last Word
.

VI. ENDNOTES VII. REFERENCES VIII. APPENDIX

57 R1 A3

2
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

I.

ACKNOWLEDGEMENTS

Work on this dissertation has brought me in touch with many people who have earned my gratitude. From the staff at the British Council and Lucy Cavendish College to newfound friends and the best neighbours one can have, encouragement of each one of these wonderful individuals enabled me to spend a most fulfilling year at Cambridge. I am indebted to my supervisor, my tutors, all members of the faculty I had the benefit of learning from, and my colleagues at the Judge Institute for enriching my educational experience and, indeed, my life. More specifically, I would like to record my sincere appreciation for the Sialkot Chamber of Commerce and Industry for facilitating my fieldwork in Sialkot-Pakistan and its surrounding villages. Representatives from Adidas, AliTrading, Capital, Fairtrade, ILO, Leatherware, Mitre, Moltex, Nike, Puma, Reebok, Save the Children, Saga, Sublime, Talon, UNICEF speaking for the Sialkot Partnership and their own organisations offered unfailingly co-operation, and were helpful without exception. I was impressed with their concern for the artisans of Sialkot and their future. It is inconceivable for me to have gone through the past year without my parents' prayers. But having Feroze, my seven-year-old and my husband always by my side remained my biggest source of strength and motivation. This effort is dedicated to them.

3
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

II.
Table 3 a Table 5 a Table 5 b Table 5 c Table 5 d

LIST OF TABLES
Outline of Research Information Requirements Social Auditing Variables & Brand Codes of Conduct Comparative Rating of Performance Variables Aggregate Ratings of Performance Variables Social Performance Through the supply chain page 26 page 36 page 37 page 38 page 52

III.

LIST OF FIGURES
Concentric Circles of Corporate Responsibility Why Businesses Choose Social Auditing The Athletic Ball Supply Chain Stakeholder Dynamics in the Ball Industry page 14 page 20 page 32 page 33

Fig.2 a Fig.2 b Fig.5 a Fig.5 b

4
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

IV.

ABSTRACT

Responding to widespread consumer concern about exploitative working conditions along supply chains of some of the most recognised sports brands, the international sporting goods industry adopted a Code of Conduct designed to ensure socially responsive sourcing. Meanwhile, in Sialkot, Pakistan source of 70% of the worlds hand-stitched athletic balls individual brands introduced ethical practice guidelines for their respective sub-contractors. Brand marketing messages claim success of the Sialkot Partnership. Consumers are assured that sub-contractors must prove compliance of these policy guidelines, but there is insufficient direct evidence to inform public opinion. This research applied established social responsibility performance criteria to key points in the supply chain of five global brands and one fair-trade organisation who source in Sialkot. It found that each brand possesses well-articulated policies on corporate responsibility and labour practice for manufacturers. These policies are conveyed to the consumer as part of the brands image. However, a look at the manufacturing end of the supply chain reveals that the essence of these Codes of Conduct are not well understood at the level where artisans hand-stitch the balls. The brands need to work harder with their manufacturers to encourage the attitude of corporate citizenship necessary for implementing socially responsive policy.

5
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

V.
-

WORKING DEFINITIONS
Athletic balls: Term applied to all inflatable balls used for competitive sports. Beneficiaries: Local people standing to gain from development interventions. Brand: Owners of brand names, who sub-contract manufacturing. Business Ethics: Body of knowledge devoted to moral aspect of transactions. Code of Conduct: Policy guidelines outlining best practices based on vision. Community: In this case, a socio-culturally-homogenous group living in a place. Corporate Citizenship: The extent of fulfilment of a companys social contract. Maker: The middleman responsible for dealing with home-based labour. Manufacturer: Sub-contractor often producing for many brands at once. Social Auditing: Evolving set of methods used to assess business responsibility. Social Responsibility: The social contract between business and society. Stakeholders: Anyone standing to gain or lose from a companys performance. Stitcher: Artisan who hand-stitches an athletic ball, often in a family setting. Supply Chain: From raw material to the retail shelf the journey of a product.

6
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

1.0 Introduction
1.1 RATIONALE Walk into a sports store in Britain. The soccer ball on the shelf, with the Brazilian team logo will most likely be made of Korean artificial leather laminated with Japanese textile and Malaysian rubber latex; stitched by a Pakistani artisan around an Indian bladder with a German design printed in American ink. Few sporting and leisure articles originate from a single source of materials or manufacture. They are usually commissioned from sub-contractors by marketing companies who own brand names familiar to the consumer. Brand company merchandisers must identify the most profitable sourcing arrangement for a particular article. Thus, an overwhelming proportion of athletic balls destined for retail in Europe or North America is assembled in South Asia with raw materials from the Pacific Rim. Tracking supply chains of leisure products has the potential to be studied at considerable depth, but can be an ambitious undertaking. Within the limitations of this research, therefore, it was necessary focus on a product that could serve an illustrative purpose without the need to unravel a complicated supply chain. The athletic ball was chosen, firstly, because no independent study of corporate responsibility in the athletic ball industry is available. Secondly, because the product received a lot of media attention especially in the months preceding the World Cup last summer. Thirdly, it is 18 months since major athletic ball brands joined their local subcontractors to introduce ethical sourcing practices to the hand-stitched ball industry. Fourthly, in Sialkot, east central Pakistan lives the worlds largest cluster of ball stitching artisans, making fieldwork relatively convenient. Fifthly, being home to the Sialkot Partnership, which accounts for 70% of the international soccer-ball businessi a representative sample is available. And finally, because the well-defined supply chain, between the buyer at a retail outlet in the West and the artisan commissioned by a local manufacturer in a developing country, allows a thorough study. This study coincides with the entry of Social Auditing technique into a mature phase represented by the introduction of standardised assessment toolsii. applicability of some newly developed tools is still under debate.
www.RBIpk.org

The crossCriticised for


7

Ambreen Waheed, Cambridge 1998

representing Western values, and being culturally unsuited to communities where they will most likely be employed, a field test in Pakistan provides an opportunity to further the dialogue on their value. 1.2 THE CONTEXT

The social responsibility debate arrived in the soccer arena in 1994 when human rights groups and the media accused major sporting goods brands of exploitative labour practices in poor countries. One media expose after another criticised some of the most recognised sports brands for creating enormous profit margins out of the misery of poverty-stricken Asians and Latin Americansiii. The soccer-ball industry came in for some of the strongest criticismiv. The Foul Ball Campaign called on soccer moms to boycott balls made by children in unacceptable labour conditions. When the brands said they had limited control over sub-contracting manufacturers in China, India, Pakistanv or Vietnam, they incriminated themselves even more. Parliamentary debates in the United Statesvi and in the European Parliament took notice and contemplated import embargoesvii on sporting goods produced by exploited labour. The picture was clouded by the reported denials of Pakistani officials viii and a visible defensiveness within its industryix. The media attention spurredx the World Federation of the Sporting Goods Industry (WFSGI) into adopting an Ethical Business Code of Conduct in July 1997 for its membersxi. Most WFSGI-member soccer brands source their hand-stitched athletic balls from Sialkot, Pakistanxii. As a result, brands and their manufacturing partners in Sialkot launched the Sialkot Partnership in February 1997, which aims to shift all athletic ball production by March 1999, to manufacturing units monitored by the International Labour Organisation (ILO). The Sialkot manufacturers are jointly funding for the ILO monitoring programme. 1.2 THE CASE OF THE ATHLETIC BALL INDUSTRY

Brands and manufacturers invariably refer to their role in the Sialkot Partnershipxiii, while some proclaim their success louder than others doxiv. Its supporters claim the project is a revolution in socially responsible sourcing, bringing together diverse agencies from the
8
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

UN system, government and the NGO sector in an intervention that leads to focused local development. Recognised by the Council on Economic Prioritiesxv, and Business for Social Responsibilityxvi in 1997, it could be a test case for similar interventions in other developing countries, and may become a precursor for an industry-wide social responsibility trendxvii. If we can confirm that the Sialkot project has appreciably improved the labour practice situation in the ball industry, prices of soccer balls have not increasedxviii, yet the local manufacturers still manage to remain profitable despite the added costs, there are lessons here for Social Audit practitioners. In the time it took to negotiate the Sialkot Partnership, the brands implemented their own sourcing guidelines for their manufacturers. Anticipating consumer concern, especially in a World Cup year they publicised their new sourcing policiesxix and the business standards and working conditions they guaranteedxx in Sialkot. It is easy to appreciate the pressure this entire situation put on the Sialkot manufacturers to adoptxxi brand guidelines and the WFSGI code unquestioningly. Membership of the Partnership expanded rapidly to almost 60% of the business community within the first three months. Ironically it is the rapid move away from the traditional ways of business that has kept the philosophy of corporate citizenship from permeating deeply. Only a handful of local manufacturers have demonstrated a verifiable commitment to ensure clean production processes and supplier arrangements. The rest do not appear completely convinced that good practice is good business over the long term. Amongst the 34 companies who have signed up for the Partnership, only one has established a separate corporate responsibility department, while fewer than 10 have designated social responsibility staff. Fortunately, because the few champions of the idea represent over half the exports from Sialkot, the idea has gained impressive momentumxxii, compared to other labour-intensive industries found all over Asia and South America. The ILOs intervention as the third party monitor has generally legitimised the industrys efforts and their claims now have greater credibility. Other high profile UN agencies, international human rights organisations and national social development NGOs are setting up in Sialkotxxiii. With the number of ILO-registered centres multiplying on target and the future of business with American and European clients tied firmly to the
9
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

Partnership, it seems social responsibility has come to stay in Sialkots athletic ball industry. Even if they cannot be credited with anything more than a timely response to a business threatxxiv, Sialkots business leaders are quickly realising how difficult it will be for them to back away from the standards they have set for themselves. 1.3 SIALKOT, HAND-STITCHED BALLS AND SOCIAL AUDITS

Whether this awareness has led to any meaningful attitude change among local businessmen is yet to be determined. Despite the apparent level of interest, they lack conceptual clarity about what social responsibility means for business. The capacity within the industry to promote such understanding is limited because the very manufacturers capable of disseminating social responsibility values learnt doing business in highly conscious consumer societies like Scandinavia and the USA are unwilling to share them with competitors. An accurate assessment of the attitudes and practices of local business leaders toward social responsibility can lead to a workable approach for building their awareness and understanding. A recognised yardstick is required. Consumer groups, trades unions, human rights advocates, development workers and stakeholders themselves, are all following developments in Sialkot for their own reasons. Especially so, when the brands claim elaborate controls on their product manufacturing arrangements, and guarantee the highest standards of ethical business. Thus, the athletic ball finds itself under scrutiny again: Are foul-balls still emerging from the depths of a brands supply chain? How true are claims of sourcing guidelines, codes of conduct and clean product? Again, an acceptable measuring tool is needed. In pace with the demand for socially acceptable products, recent strides in Social Auditing offer tools for assessing business leaders attitudes and practices regarding their social responsibility as well as sourcing for specific products. The Institute of Social and Ethical AccountAbility has created standard tools to help companies quantify their social performancexxv. The Council on Economic Priorities SA8000 standard is for companies who want third party social auditsxxvi. Business for Social Responsibility distributes a Social Responsibility Starter Kit for companies looking to set up an in-house audit capacity. The Ecumenical Council on Corporate Responsibility and its affiliatesxxvii have their own benchmarks for business performance.
10
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

This research seizes the opportunity to field-test a standard audit tool in Sialkots ball industry. It may help bring the corporate responsibility debate to Pakistan.

2.0 Theoretic Perspective


2.1 ETHICS IN SOCIETY Ethics is the standard of what society considers right and wrong in terms of acceptable behaviour (Serwinek, 1996). While ethics is more easily defined as a term, its interpretation continues to be debated. The yardsticks that determine the values for a code of ethics for a society, for a culture, for a business all remain fairly general and may vary from one society to another. There is no dispute, however, that Ethics lies at the very centre of social equilibrium. The Encyclopaedic Dictionary of Business Ethics (Werhane and Freeman, eds. 1997) defines it as a planned attempt to follow societys norms, standards and expectations. Morality is the term that covers practices that may be considered right or wrong, the rules that govern those activities and the values that are followed in practice. Moral codes create a balance of power between segments of society, those that are influential and those comparatively vulnerable. By imposing restraint on one they empower the other. A society with no moral structure may seem attractive from the point of view of the individual. But without morality driving a legal system, and with the individual charged with adjudicating conflict, only the interest of the strongest would prevail. This environment of unrestrained self-interest with everyone pursuing their own interests would be no more than a state of war. Hobbes has called it the "state of nature" in which human nature tends to continuously test ethical limits. A societys moral values encourage individuals to put off their natural tendencies (Christensen, 1997), and help to adjust for this human failing. It is, perhaps for this reason that religions exhort their followers to rise beyond temptation in the pursuit of higher inclinations. On the other hand, there are those who have much greater faith in the inherent goodness of the human character and feel that, barring a few exceptions, every one would prefer to operate in an ethical environment (Daigneault, 1997).

11
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

Business is simply the extension of society (Evans, 1991), with the financial motive emphasised. Hence, the values of a society permeate the conduct of business within it. Societies are governed by a give-and-take ethic. The concepts of rights, privileges and duties construct the parameters of exchange, and the rules require that members of a society stay within them for it to retain a state of equilibrium. The currency of this social exchange is a system of rewards and punishments that accrue in response to how successful or unsuccessful a member is in meeting the demands of the required social trade-offs. For every member, however, right, privilege or duty constitute value measurements that can be graded to assess conformity with the societal ethos. With right being the counterweight or equaliser, a higher score entitles a member to more privilege, but may also demand greater duty. On the other hand when a member threatens the equilibrium by scoring low, privilege is withdrawn to the point where it can turn into sanctions or exclusion. Therefore, a definition of business ethics cannot be far removed from a societys articulation of its own values and principles. There is a strong tradition of business ethics throughout history (Werhane & Freeman, eds. 1998), though it has become a subject for academic debate only since the last quarter of a century. Platos famous saying about virtue being more profitable in the longer term shows how business ethics was a live issue at the time. Aristotles ethics of virtue is a charter for fairness, calling for moderation, eschewing either excess or deficiency in conduct. Artha or the pursuit of wealth in Hinduism has its own rules (Sethi & Steidlmeier, 1997). The ancient Japanese concept of kyosei collectivises social goals and aspirations (Di Norcia, 1998). Islam echoes the value of balancing the positive and negative qualities of human character for the overall benefit of society or Masalahah (Sachedina, 1997). Common to the Judeo-Christian tradition are justice, morality and higher motives as the foundations for the greater good that extends to business to form the basis of fair trade and profitability (Tamari, 1997). Even staying independent of purely religious or philosophical perspectives, there are arguments for ethical business behaviour (Daigneault, 1997)xxviii. Business activity, therefore, solidly fits into a societys moral fabric. In spite of the amount of discourse on the amorality of business, even the staunchest supporters of the point of view qualify their arguments with some moral justification. Adam Smith, oft
12
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

quoted for his free-market thesis, nonetheless argued for balancing the free market with social institutions and personal relationships. 2.2 ETHICS IN BUSINESS

The evolution of business ethics over the past centuries tends to coincide with the natural history of individual rights and empowerment, and more notably, the rise of environmental activism (Cannon, 1994). Leading from a stage in the last century, where the only requirement of business transactions was to stay clear of legal statute (Friedman, 1963), the field has grown now to require that a "fair deal" be achieved for everyone on both sides of the bargain. The present debate is characterised by two principal positions, with a number of middle-ground points of view (Gray, Owen and Maunders, 1997. According to the pristine capitalists (Gray, Owens and Adams, 1996) such as Friedman and Hetherington business is amoral and seeks only to achieve the highest possible economic benefits in a market unhindered by excessive government regulation. However, even staunch proponents of this utilitarian approach concede that in a human society, every action must have ethical undertones and be judged by moral yardsticks. On the other side of the divide are those who point out flaws in the amoral business argument. They point out that ends cannot be justified by the means. Every business decision is a moral decision since the motive and the way one goes about making a profit is essential to the legitimacy of that profit. Other points of view that challenge the pristine capitalist stance represent political ideologies that are opposed to business as the repository of enormous power. This includes proponents of socialism, human rights, radical feminism, and social ecology, who all believe for various reasons that the ideology of amoral capitalism is fundamentally flawed. In the middle ground of this debate are to be found those who feel that by accepting a minimal level of social responsibility businesses can get on with making their profits with less interference. This expedient view, when taken up with greater conviction may transform into the social contract point of view, which considers the existence of business a favour from the society, and hence must pay back by sharing profits for wider social benefit (Samuelson, 1986; Beauchamp & Bowie, 1988; Gray, Owen & Adams, 1997).
13
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

For two decades now, French has argued that corporations have the capacity to take moral responsibility for their actions much like adult human beings. Kerlin (1997), calls this legal fiction, pointing out that moral blame and punishment must ultimately go to the people who have influence on how members of a group behave. He asks if it is possible to shame an organisation? In short, while businesses may be amoral in the legal sense, they cannot remain untouched by societys moral expectations. Hence, although business cannot be termed as a moral persona, it is clearly a moral agent. Werhane (1984) differentiates the moral agency into primary and secondary categories. The individual retains the primary moral responsibility for decisions that affect those around, but when organisational decisions lead to policies or actions that have a wider impact, the individuals behind them tend to become indistinguishable from the corporate faade. Corporations are secondary moral agents unable to operate in a moral vacuum (Arkin, 1996). The collective responsibility of individual decision-makers cannot be confused with the organisations persona. Over the years businesses have increasingly begun to view ethical transactions as beneficial to the bottom-line (Matthews, 1988; IBM, 1992; Bolier, 1996; Logsdon and Burke, 1996; Hunter, 1996; Solomon, 1997; Pennington, 1997). It is easy to see how this is true in the information age, since a positive image for a business ensures customer loyalty it is a sure recipe for profitability.

Ed caio , H a h u t n e lt

En ir n e tP o e io v o m n r t ct n

Q a y Po u u lit , r d ct P fit ro s Jo s, S r ice b ev s

S feW r in Co d io s a o k g n it n
14
www.RBIpk.org

Lo l D v lo m n ca e e p e t

Ambreen Waheed, Cambridge 1998

Whether consumer-driven (Kaler & Chryssides, 1996) or led by an intrinsic need for moral behaviour (Post, 1996; Daigneault, 1997), todays business world is learning that individual values are less carefully separated from monetary gain. As a result there is an increasing tendency to apply morality to the conduct of business. Pope John Pauls Centisimus Annus (Green, 1997; Sethi, 1997) significantly indicates how the Catholic Church superimposes business and its moral values, justifying the pursuit of fair profits balanced by equitable distribution of the wealth created as a result. This changed attitude is perhaps a principal reason for the acceptance of corporate responsibility among modern business. Figure 2-a, from the Council on Economic Development illustrates how a business is placed in its social role. The phenomenal growth of multinationals, in size and influence, and their accumulation of vast resources (Gray, Owen & Adams, 1996) fuels arguments for greater accountability, and hence, social responsibility, to an increasingly aware consumer. Together with a heightened sensitivity about human rights and the environment, and issues of trade globalisation such as dumping and preferential tariffs, business finds itself in a position where it must please a more diverse audience than ever before. The decreasing capacity of businesses to control outsiders access to its information complicates the situation further. Much like an evolving organism reacting to external stimuli (Goodpaster in Werhane, 1997/85), the flow of information is compelling business to change forever (Kerlin, 1997). A time has come when business must rely more on the image it creates in the consumers mind (Baird, 1997) and be prepared to change company behaviour as a result (Carmichael et al, 1995). No longer can corporations be let off he hook simply by labelling them amoral. This means that societys expectations of a wider sharing of profits mount, and the vaguely articulated social contract between business and society gets more and more public attention (Samuelson, 1986). And, indeed, activists now have powerful arguments to oppose not

15
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

individuals who run the businesses, but the organisations as a wholexxix. The consumer argues that if business has privileges then it must have obligations to match. 2.3 WHAT IS AN ETHICAL BUSINESS ORGANISATION?

In broad terms, an ethical business can be defined as one which inspires trust because it is responsible, law-abiding, fair-trading, socially responsive, charitable, and puts values before profits (Appendix-I). Trust, in turn, depends on credibility, character, competence and service (Pennington, 1997) communicated clearly and effectively to the consumer (Elkington, 1997). Being human characteristics (Zadek, 1997), these values help the consumer link them to their mental image of a socially responsible business. People want to deal with a human organisation that treats its own well, is fair to deal with, and leaves a beneficial impact on its natural, social and commercial surroundingsxxx (Nolan, 1996; Elkington 1997). Fairness is the value that cuts across the conduct of business as a whole (Solomon, 1993). It applies to investors, owners, worker, suppliers, retailers, community, stakeholdersxxxi, and all participants in the market system. Often businesses try to sell themselves as fair businesses, and are prepared to bear the costs that help present them as such (Augustine, 1997). No doubt that customers are more likely to buy from companies that act ethically and rise above pure economic interest, but there are many who have traditionally doubted the motives of such organisations. It is not unusual for a business to use ethics merely for making their business activity credible, and therefore, more profitable (Solomon, 1993; Kaler & Chryssides, 1996). Being fair means being ethical, sensitive and responsible. Hence, businesses that

recognise their role as citizens and assume a responsibility to fulfil it can be termed 'ethical' or socially responsible organisationsxxxii (Werhane & Freeman, eds. 1997). A socially responsible business is more direct and proactive in anticipating its own role in its community, being alert to social change, and responding to society's new demands and concerns without deviating from its defined goal. Many successful models are now documented, where businesses have proven their social commitment to their stakeholders by allocating resources to charitable causes or initiating issue-specific programmes (Carmichael & Drummond, 1989; Makower 1994; Scott & Rothman 1994; Reder 1995;
16
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

Korten, 1996; Bolier 1996; Daigneault, 1997; Wernhane & Freeman, eds. 1997; Zadek, Pruzan & Evans 1997). From the many available definitions and literature describing its desired qualities, the attributes of a good corporate citizen (Mahoney, 1996; Warner, 1996; Werhane & Freeman, 1997; Daigneault, 1997) can be narrowed down to: 1. Disclosure; 2. Respect for people; 3. Human Rights and Labour Rights; 4. Employee Rights; 5. Fair business practices; 6. Environment; 7. Community involvement; 8. Political involvement. These characteristics appear in a large number of company codes of conduct, social audit tools and reports, and appraisal formats for various assessment programmes now in voguexxxiii. They are important indicators for assessing an organisations understanding of its own role and how it strives to deliver tangible programmes. 2.4 MEASURING ETHICS IN BUSINESS SOCIAL RESPONSIBILITY

AND

Employing indicators to assess an organisations commitment to its social duties is moving towards becoming a more exact science, following the demand (Zadek, 1997) for assessing the phenomenon in more quantifiable terms. The most commonly used term for it is Social Auditing (Blake, Fredrick & Myers, 1976). Theodore Kreps first used the term in 1940, who referred to it in terms of an accountability tool for businesses. Subsequently, in the early 1950s Howard Bowen used the same term implying it as a management tool. With the passage of time Social Auditing has come to mean something that is the barometer for assessing a business is in terms of its social responsibility. But there being still no agreement on the meaning of the term so far (Zadek, 1998), its basic concepts remain less tangibly articulated as opposed to the precision achieved by other management processes in general. The maturation of the definition of Social Auditing
17
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

has also overlapped debate on which exactly the stakeholders are for a business. In the 1960s George Goyder first added customers, suppliers and community into the general description of the term (Zadek, Pruzan & Evans, 1997). Today the stakeholders concern about corporate social responsibility is turning into a demand for monitoring companies performance (Blake, Fredrick & Myers, 1976). Zadek (1997) proposes the term Social and Environmental Auditing Accounting and Reporting (SEAAR). He defines it as 360 degree picture of how an organisation is doing in social and ethical terms in relation to its own aims Just like financial auditing looks at monetary transactions and environmental auditing looks at site-specific operationsxxxiv. The most commonly referred to indicators for a measuring how a business fares in its social responsibility fall broadly into those that have to do with people, and those that have to do with the environment. Seven conventions and recommendations of the International Labour Office (ILO) form the basis of international labour standardsxxxv. Ratified by UN member states, these lay out guidelines for legislation and national policy. ILO labour standards have traditionally provided labour unions, human rights groups and NGOs with yardsticks to measure labour standards in industry. Among the tools already developed to measure a companys level of social responsibility, those from the CEPxxxvi, CERES, and ECCR/ICCR/TCCR collaborating inter-faith agencies in Britain, the USA and Canadaxxxvii appear to have already gained some acceptance among business. These tools are grounded in the international human rights convention and are frequently echoed in company codes of conduct. The nineties were the beginning of the trend towards codification of ethical business conductxxxviii. Meanwhile, the number of companies embracing socially responsible visions and values continue to register appreciable growth, and there are discernible links between their social performance, their impact on stakeholders, and their financial performance. Makower (1994) is convinced that as the example of these companies becomes more firmly established, the overriding question will not be whether companies should adopt these policies and practices, but rather when, and how quickly, they should do so. Like cost accounting, marketing research, or any other tool of modern management, ethical investigation is also becoming increasingly useful to further the commercial aims of business (Kaler & Chryssides, 1996). The science is relatively new
18
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

and is still developing its language and practice, but still Social Auditing is becoming a useful tool. Proactive companies like The Body Shop or Reebok have enhanced their image, and their business, by presenting themselves for social audits. Other companies are all but scrambling to follow suit. A measure of this is the increasing number of companies who have adopted codes of conduct governing labour practices and acceptable business standards relating to health, safety and the environment. Figures from 1990 show 85 percent of major US firms have these codes of ethics (Berenbeim, 1987, 88, 91), followed by 51 percent companies in Germany, 41 percent in Britain, and 30 percent in France (Langlois & Schlegelmich, 1990 in Kaufer and Robertson, 1990). Yet, businesses attempting to implement ethical policies and then trying to measure their impact face many challenges. More and more people agree on the terminology of social auditing, but unsolved questions still remain. Even when quality standards are defined, who would lay them down best? Organisations like SGS and KPMG or those like Oxfam and Amnesty International? From where would they derive their legitimacy? Would an accountant do a better job than a social scientist? How much would a company pay for an acceptable social audit? And would it at all be practical for an organisation in business terms? (Zadek, 1997). It seems these and other similar questions face anyone contemplating a social audit. However, the case of ISO quality certification has Numerous promising parallels as far as documentation of standards is concerned.

examples are now being shared, and can help companies decide on an appropriate social audit process and measuring instruments that will become more accepted over time. 2.5 SOCIAL AUDITING AND BRAND IMAGE

Some internationally known businesses have invested significant time and resources into setting up social auditing and disclosure programmes. Among the most visible are The Body Shop, Ben & Jerrys Homemade Inc. and Traidcraft plc. The New Economics Foundation has begun an "Ethical Trading Initiative" with government support, which aims to improve work conditions for employees along supply chains. Asda, British Telecom, B&Q, Littlewoods and Sainsburys have joined up. In the USA, Business for Social Responsibility and the Social Venture Network have programmes to promote civic values among companies. The Council of Economic Priorities is promoting its SA8000 auditing system for businesses to adopt a standardised way of implementing and
19
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

documenting ethical practices, much like the ISO certification programmes.

Avon

Cosmetics, Otto-Versand and ToysRUs have already signed up (Supply Mgt, 1998). Why do businesses want badges of social responsibility? The immediate reason is because consumers are more aware, have higher expectations from business, and have access to more information they will buy from brands with a good image. In short, it does their bottom-line good. Another reason is that some businesses have adopted social responsibility as their special mark of identification and their business is tied to a green or a clean image. A select few are businesses run by idealistic individuals who feel running a socially responsible business is a better way of repaying society than private philanthropy. And yet others see this as a marketing opportunity too good to miss, in that they can identify with a current fad and benefit while it all lasts. And perhaps finally, there are free-rider (Sethi, 1989) business that reap dividends others investment in socially responsible programmes. Figure 2-b, below, (from Gray, Owens & Maunders, 1997) presents well the various reasons why a business would want to present itself for a social audit. Fig

Enhance the corporate image

Discharge of accountability

Enhance Corporate Image to Investors

CSR as extension of financial reporting to investors

Discharge of Accountability to Investors

20
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

3.0 Research Methodology


3.1 RESEARCH QUESTIONS Over 60 international brands source their hand-stitched balls in Sialkot, in addition to numerous non-brands xxxix. At least thirteen of the worlds most recognised brands soccer, handball, rugby, volleyball and beach-volleyball have a significant part of their manufacturing sources in and around the city. As the project zone for the Sialkot Partnerships International Child Labour Project, Sialkot is developing culture of dialogue in which the Chamber of Commerce & Industry has established a role for itself. Soccer balls are still handcrafted by artisans stitchers in small village workshops managed by middlemen called makers. Hence, Sialkot is the appropriate place for studying the brands at the remotest point of their supply chains. This study aims to compare the prevailing situation with brand and manufacturer claims. Six questions need answers for further analysis: i. ii. iii. iv. v. vi. Do acknowledged sporting goods brands recognise acceptable labour practice standards and do they have clearly articulated social responsibility policies? Does these policies conform to an accepted social responsibility standard, and are they applied in a measurable way at specific points in a brands supply chain? Is the application of these policies and standards relatively uniform at specific points along the supply chain? Are these policies transmitted to the end-user as a marketing strategy? Are these policies transmitted to sub-contractors at the end of the supply chain? Is there a measurable difference between a brands claims and reality, and does the perception of stakeholders conform to the declared application of these standards by the brands? 3.2 APPROACH A cohort of comparable retail brands from WFSGI member brands subscribing to the WFSGI Code of Conduct, sourcing a significant portion of their hand-stitched athletic balls from Sialkot, and members of the Sialkot Partnership, based on the following criteria:
21
www.RBIpk.org

The approach taken here:

Ambreen Waheed, Cambridge 1998

i. ii. iii. iv.

they enjoy widespread consumer recognition among a variety of markets; they represent the diversity of the global market in their origin and reach; they are often found on retail shelves at the same outlet; they lay a claim to ethical business practices in their public statements. Choose a product for each identified brand that is similar in terms of characteristics, price and quality.

i. ii. iii. iv.

Develop a framework for assessing ethical business practices applicable to the same point in each products respective supply chain. Points in the supply chain: retail outlet in a developed country; international brands management office in its home country; local sub-contractors office in developing country; artisans workplace or home-based workshop. Create an appropriate yardstick using the SA8000, including key areas of interest to the brands and their local sub-contractors, as reflected in their own respective policy documents.

Use this yardstick to compare each chosen brands actual performance at each identified point in the supply chain, against its official claims appearing in advertising and policy documents, and grade performance using a weighted grading system.

Apply a yardstick gleaned from the brands own policy documents, but based on a recognised social auditing standard to control for biases that could arise out of using a standard that the brands themselves may not use themselves.

Analyse findings in the context of the Sporting Goods Industrys Code of Conduct and the Sialkot Partnership, and consumer comment, and develop a realistic picture of how the brands and their local counterparts stand up to their own standards, as well as to their consumers expectations.
22

www.RBIpk.org

Ambreen Waheed, Cambridge 1998

Finally, the research aims to quantify the difference, if any exists, between claims in the brands public statements and present their score in such a way that it does not criticise, or praise any brand or its sub-contractor. The purpose of a graded analysis is simply to point out gaps that the brands themselves or their Sialkot counterparts may not be aware of. This may help lay the basis for discussions along the supply chain and lead to an improved overall performance on codes of conduct. (Note: along the way, it was decided to include a fair-trade organisation to the cohort. Comparing an organisation that is decidedly tilted towards giving a good deal to disadvantaged producers to corporations whose declared mission is to make a profit for their shareholders was considered a useful way to add depth to the analysis.) 3.3 THE INVESTIGATIVE PROCESS

Five internationally recognised brands who source their athletic balls in Pakistan were selected for this study. One fair-trade organisation was added to the list to enrich the analysis of value-driven business practice. Next, by conducting a parallel set of interviews and questionnaires for each of the chosen brands, six distinct portraits of social responsibility emerged from Sialkot. Since this is where each of the chosen brands source their product, this method is useful to draw conclusions regarding each brands ability to effectively transfer their respective corporate philosophy to their local sub-contractor. Data collected from the questionnaires and individual interviews was plotted under identified social responsibility indicators. Although this particular study stops short of it, the six portraits of brand/sub-contractor relationships in furthering claimed corporate responsibility ideals have the potential to be developed into independent case studies. Specific points along the supply chain of the chosen product retailer, brand HQ, manufacturer HQ, manufacturing unit, and artisan were subjected to the measurement tool. Supported by data from stakeholders, a graded score for each of the brands was used to generate a social responsibility profile for each brand at each identified level of its supply chain.

23
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

Comparing each profile to the brands own Code of Conduct and with any claims on record, an assessment of performance was made. A cross-comparison between brands and among their local counterparts is not the aim of this exercise, although it is possible at this stage. Tables and charts highlight comparative variations, within each brand, regarding adherence to their respective policy all through the supply chain. Statistical calculations, where used, serve to establish relationships between the various factors and variables. 3.4 DATA COLLECTION AND TABULATION Direct

Field methods were best suited for this investigative approach. Collecting of background information from available archival sources would support all fieldwork. observation of the processes involved at the manufacturing end, combined with ascertaining the presence or absence of defined policies and awareness about them among staff were undertaken. Individual interviews with representatives of the various stakeholders, including factory workers, community representatives, stitching subcontractors, plant supervisors, and head office staff of the various brands and their local manufacturers was the principal activity during the field work in Sialkot, Pakistan. Retailer representatives were contacted in Cambridge. In addition, questionnaires were sent to product managers and corporate responsibility personnel at the respective brands head offices, in Britain, Germany, and the USA, followed by telephone discussions. Prior to finalising the semi-structured interview instruments, a list of issues relevant to the industry were pre-tested at the international sports fair, ISPO 1998, in Munich. This methodology was chosen because, it balances field methods well with archival studyxl. Laboratory techniques and statistical manipulation seemed superfluous to the outcome of the research. Being the first field data collected from Sialkot, it adds further to original content among the existing data. Combined with the literature review and reading policy documents and media materials, the remote interviews through telephone and e-mail communication add a greater degree of control. An effort was made to bring together the advantages of direct observation supported by secondary data so as to be able to represent the real situation accurately. In choosing the most appropriate data collection methodsxli, it was felt that they help the
24
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

researcher in handling complexity, and be sufficiently flexible to secure a variety of interpretations. For this purpose it was decided to employee a wide range of interview tools, from structured and semi-structured to unstructured, in addition to the ongoing content analysis. The need to standardise this set of interviews and uncontrolled responses presented a challenge, countered to a large extent by keeping close to the SA8000 format and frequently using it as the touchstone during the open-ended interviews, organising interview notes and recording observations. Minimising bias proved the most difficult area to handlexlii despite the standardisation of the questionnaire using the SA8000. This research, therefore, tries to present observations as objectively as possible, and defines terms with reference to the task itself. Moreover, it is impossible to eliminate bias in a situation where highly competitive brands are identified by name. Their respective policies and marketing communications reflect built-in biases that arise out of rationalisation and a writing of history. Issues of anonymity and coverage were not relevant since the cohort was selected on the basis of their brand identity, and involved only six companies located in about a 35kilometre radius so that it was possible to schedule visits and interviews in the available time. In addition to its appropriateness to the approach adopted for this research, this method was also the most convenient in terms of the time and resources available. The decision to blend interview techniques also stemmed from the need to reflect the situation as accurately as possible. While head office people at the brands got semistructured interview forms, the forms used in Sialkot with the local sub-contractors served only to set the context of open-ended unstructured interviews that often lasted through up to three sessions. Direct observation was made during several visits to production facilities and village workplaces, sometimes escorted by a company representative. Another advantage of using the above methodology is the reliability that the chosen standardised tool, interview methodology, and multiple levels of analysis impart to the study. Perhaps a less tangible but strategic benefit of this study is that the use of this methodology has helped sensitise the local industry stakeholders to future efforts of a similar nature.
25
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

Based on a detailed assessment conducted, the following were chosen: 1. 2. 3. 4. 5. 6. 3.5


1. 2. 3. 4. 5.

Adidas Germany Fair-Trade Germany (NGO added for comparison) Mitre Britain Nike United States Puma Germany Reebok United States OUTLINE OF RESEARCH
Consumer Retailer Brands Marketing Office Manufacturer/Exporter Stitcher/artisan

I. Representative stakeholders to be contacted:

II. Points of comparison at specific points of the supply chain:


Corporate policy and implementation mechanisms Specific stakeholders (as below) Government policy and legislation Competitors policy and brand image Market share and brand image

Table 3-a

Representative Stakeholders CONSUMER

Focus Brand image Purchase decision shelf prices advertising/ marketing code of conduct employee rights integrity market ethics

Information needed Consumer interviews Retailers feedback Physical verification/ price list News paper/ media coverage examples code of conduct (written document) annual reports media responses employee policy implementation
26

RETAILER

BRAND

www.RBIpk.org

Ambreen Waheed, Cambridge 1998

Representative Stakeholders MANUFACTURER

Focus manufacturers own code of conduct availability and inclusion of brand codes of conduct acceptable international standards (SA8000) employee policy human rights community development initiatives

plans competitors views Information needed SA8000-based tool Records of implementation of code of conduct

STITCHER/ARTISAN

code of conduct annual reports reports of ethical initiatives media reports/ media coverage reports or views from ILO monitoring units, SCF, FIFA etc. reports of education, health, or other philanthropic initiatives reports on child labour, labour rights, health and safety interviews with supervisors interviews with artisans
27

www.RBIpk.org

Ambreen Waheed, Cambridge 1998

4.0 Data Presentation


4.1 SOCIAL ACCOUNTABILITY STANDARDS A composite variable list developed from the literature review forms the basis for the data collection tools within the parameters of this study (Appendix-II). This list also served as the benchmark for selecting the formal assessment tool. The literature reveals a number of social accountability tools that various businesses have either developed on their own. Others have evolved through the dialogue between academia, non-governmental agencies and business. Examples of the former include those used by Ben and Jerrys Homemade Inc. in the USA, The Body Shop plc. In Britain, and Sbn Bank in Denmark. The latter category includes the SA8000, and similar instruments created, or being developed by the ECCR/ICCR/TCCR and the Institute of Social and Ethical AccountAbility. Copies of the assessment tools used by The Body Shop and the Institute of Social and Ethical AccountAbility could not be made available. The CEPs guidelines on SA8000 were readily acquired, as was the ECCR/ICCR/TCCR tool. Examples from tools used by a number of companies other than those mentioned above were found in Accounting and Accountability by Gray, Owen and Adams (1996). Going through examples and case studies cited by Di Norcia (1998), Bolier (1997), Solomon (1997), Zadek, Pruzan & Evans (1997), Korten (1995), Reder (1995), Scott & Rothman (1994), and Carmichael and Drummond (1989) helped choose the best one for this study. The SA8000 was finally selected as the standard around which to adapt the measuring instrument for this research. The reason for this was its relevance to the environment of the study, its reliance on the ILOs internationally accepted labour practice standards, its relative comprehensiveness, and the ready availability of its detailed guidelines. Some elements from the ECCR benchmark were incorporated in the final version, along with relevant points from available brand Codes of Conduct (Table5-b). 4.2 CODES OF CONDUCT AND ORGANISATIONAL POLICIES

A variety of printed materials on their labour practice policies were provided by the brands themselves or their manufacturing partners in Sialkot. This included copies of the
28
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

Code of Conduct adopted by the World Federation of the Sporting Goods Industry (WFSGI), and its yearly and quarterly publications. The ILO provided a summary of the international labour conventions and a listing of ratifying countries. Organisational Codes of Conduct were acquired from Nike, Reebok, and Puma. Fair Trade, Mitre, Nike and Puma made available policy documents describing their respective company labour practice standards, and their expectations from the supply chain. There was considerable uniformity in the issues outlined in each of the documents, and all conformed closely to the ILO standards (Table 5-a). 4.3 ADVERTISING AND CLAIMS

Each of the WFSGI publications available, contains advertisements from international brands as well as local manufacturers. Among brand advertisements, Reeboks is the most specific in mentioning the companys social responsibility activities. This is also borne out by Reeboks labelling of every ball. Copies of the December 1997 news bulletin from the U.S. Sporting Goods Manufacturing Association (SGMA), and a flyer released on behalf of its member brands, both declare a commitment to the efforts by the Sialkot manufacturers to work with the ILO, UNICEF and Save the Children. Over 50 international brands have participated in releasing this pledge that describes their commitment to source athletic balls only from manufacturers participating in the Sialkot Partnership. Advertisements by Sialkot manufacturers are loudest in their claims to eliminate child labour. Most appear in the WFSGIs special newsletter editions one each in 1997 and 1998 devoted to child labour and labour practice issues. Some placed signs outside their stalls at the international sports exposition, ISPO, at Munich in August 1998. All the Pakistani manufacturers included in this research advertised in WFSGI publications. 4.4 INTERVIEWS Adidas, Mitre, Nike and Puma follow this marketing approach to a significantly lesser extent.

Each of the local manufacturers in Sialkot co-operated to the fullest possible extent when asked for interviews. Being open-ended and unstructured, the interviews demanded long
29
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

sessions. Chief Executives of every one of the seven manufacturing companies agreed to be available. Four chief executives from Capital, Leatherware, Moltex and Talon took time out for an average of two sittings each. Three being away from Sialkot (AliTrading, Saga and Sublime) were represented by company directors. Each of these gentlemen also instructed senior production and quality assurance staff to be available for site visits and detailed discussions. Each CEO interview took at least two sessions, the longest lasting three hours. Visits of plants and village-based workshops took as much as half a day including travel time. During the visits, there was no discernible attempt to manage events, and workers were allowed unhindered access to the researcher. Interviews were arranged through the Sialkot Chamber of Commerce. The ILO,

UNICEF and Save the Children, were included because of their membership of the Coordinating Committee of the Sialkot Partnership, and their implementation role in the social protection programme of the Sialkot Child Labour Project. Their views were used to countercheck the claims of the various brands and manufacturers and ensure a wider perspective. The co-operation extended during the visit reflected the pride that the local manufacturers have about what their industry is trying to achieve on a collective level. Appendix-III gives the list of interviewees. Questionnaires used appear in Appendix-IV. 4.5 QUESTIONNAIRES & TELEPHONE DISCUSSIONS

Being dispersed all over Europe and the USA, it was not possible to individually interview representatives of each brand. It was disclosed that, with the exception of Nike, all brands would be present in Munich to attend ISPO 1998. While in Sialkot, preparing for interviews with local manufacturers, it became apparent that many of them would be there as well. With the help of a European contact, present in Munich at the time, it was arranged to elicit responses from Adidas, Mitre, Puma and Reebok. This approach was not successful, partially because ISPO being a trade event few brands had the appropriate staff available, and partially because the absence of the researcher meant queries from respondents could not be completely answered. Except for Adidas, no brand returned a
30
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

completed questionnaire at ISPO. However, because names and contact addresses for the appropriate brand representatives were obtained there, ISPO proved a useful opportunity for sensitising the respondents. The persons identified are directly responsible for corporate responsibility issues in their ball sourcing work. As a result, they provided reliable information and candidly shared their views during telephone discussions and on e-mail. An added advantage to this approach turned out to be that the structured questionnaire transformed itself into a semistructured interview during the telephone interviews, becoming less rigid and allowing for a richer content. 4.6 FIELD OBSERVATION & PHYSICAL VERIFICATION

Field visits at the production end in Sialkot included factory sites and village workshops. Pre-stitching and post-stitching phases of ball production were observed in the factories. Here manufacturers produce the artificial leather laminate, cut it into panels, print designs, and punch stitching holes into the panels. These panels are then delivered to artisans who stitch the ball casings around a rubber bladder. The stitched balls are then returned to the factory where they are checked against the brands quality standards, cleaned, packaged and shipped out. Each of these local companies participating in this research is a signatory to the Atlanta Agreement and has opened its centres to ILO inspection. At the same time, each of the participating brands has signed the SGMA pledge to restrict sourcing to ILO-monitored manufacturers in Sialkot. The village-based centres vary in their size, arrangements and management structure. Except for Saga, which now employs artisans in fully owned and managed communitybased centres, all the others still work through the traditional sub-contracting system run by entrepreneurial middlemen who act as negotiators and agents for groups of independent artisans. The manufacturers arrive at an arrangement with the middlemen (called makers) who guarantees a steady stream of finished products through a network of village-based artisan groups in return for a negotiated piece-rate and a variable amount of cash as working advance to the workers called peshgi. With the
31
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

recent agreement with the ILO that demands the registering of verifiable workplaces for all local manufacturers, and moving 100% production to ILO-monitored centres by March 1999, there has been a move to formalise the manufacturer-maker-artisan relationship in terms of workplace standards acceptable to the ILO. While the financial arrangements have remained more or less intact, the manufacturers have made arrangements with their respective makers aimed at fulfilling the demands of the Atlanta Agreement. Another aspect of the field observation included visiting a number of retail stores that sell soccer equipment as part of their range, and eliciting responses to a brief open-ended questionnaire from staff as well as consumers present there (Appendix-IV/4). This exercise was undertaken to ascertain how much the retail end of the supply chain knows about what the brands themselves proclaim about their sourcing practices, and how much the customer is prepared to listen when making buying decisions. A total of 8 retail outlets were visited, four of which opted to withhold their names. Places visited included a Debenhams department store that stocked all chosen brands except Reebok and FairTrade, Sports Soccer and JJB Sports, each part of a retail chain, and JSB Sports, a privately owned sports shop in Cambridge. Each of these stocked all the chosen brands. None stocked the Fair Trade ball, but it was possible to have a telephone interview with Traidcraft plc, which sells Fair-Trade balls through their catalogue. A copy of the catalogue advertising the ball was made available.

32
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

5.0

DATA ANALYSIS

This research treats each brand and its manufacturer as one entity because they form different parts of the same supply chain. With the artisan at the end, they are inseparable from the point of view of the consumer. The local industry, raw material importers and suppliers, all identify the manufacturer with the brands it makes for. 5.1 THE SUPPLY CHAIN

Fig.5-a, below, shows the product supply chain for the athletic ball. The various
Fig.5-a

Retailer
Quality/CSR

Qu ality /CS R

Media
CSR

- CR initiativ cost e +p rofit +b rand im age +com petitiv edge e


Clean/quality product Price increase Low prices

Brand

Consumer
Quality/CSR

ar ke ts ha re /Q

ua li

ty

Monitoring agencies
ILO, SCF etc.

- price cut

Manufacturer Competition

-W ages/com pensation - overhead -W orker/ w elfare - CR initiative cost - Com unity w m elfare + big orders +reputation
Registered SC

+ com petitive edge


Fa cil itie s/w elf are

Go ve rn m

La

Wages/compensation/rights

/ re ws

gu

ns io lat

No child labor

en t

Subcontractor

Artisan

l ca Lo

m Co

ity un m

CSR SC

Corporate Social Responsibility Stitching Centres

Demand Directly Pressurized /Influenced by

stakeholders appear in relation to each other. The consumer and the media are the farthest removed from the artisan who actually stitches the ball, but have the greatest impact on the brands business. Ambiguity or mis-perception surrounding sourcing practices affecting the bottom line can be removed through better communication. There is a greater possibility that the existing situation will be out of context if information about the supply chain does not flow through its main stem. Alternate channels despite
33
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

appearing plausible may not be credible. For example, the competition may inject rumors, news of government awards or punitive action may bypass facts, citations for violations noted by monitors might have been long corrected, and media snapshot stories may ignore the big picture. A standardized Social Audit and disclosure is an appropriate tool for making verifiable information available within its correct context, and relevant to issues close to the various stakeholders. 5.2 THE STAKEHOLDERS

Fig.5-b, below, shows how major stakeholders influence a business in its social role. The arrows show the direction of influence and identify the stakeholder affected directly. The manufacturers position in the supply chain makes it highly vulnerable. On the one hand is pressure to keep prices low for the brand and on the other, to maintain an acceptable relationship with its workers and the community.

Pressure from

M arket B d ran
clean product C onsum satisfaction er Financial profit
Q uality Clean product

C petition om M ufacturer an
Rights and wages C ustom satisfaction er Q uality

B rand im age

C onsum er
Influenced by
M edia

W orker/com un m ity
H an rights organizations um

This study focuses on the manufacturers from two distinct but entwined perspectives. One sees the manufacturer as a representative of the brands professed ethical practices, and therefore an extension of the brands image. The other sees the manufacturer as an independent corporate player with responsibilities to its own community, as well as obligations as a trading partner with access to global markets. Fig. 5-b presents how a Social Audit process and the resulting information flows can
34
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

balance pressures among the various stakeholders and create a fairer environment for business transactions and community decisions. 5.3 REPRESENTATION & DISCUSSION OF FINDINGS

Elements from the SA8000, the ECCR Benchmark, and brand codes of conduct yielded a list of variables appropriate to the research (Appendix-II). These form the core of this investigation, being used to develop questionnaires and interview outlines, organise data, run comparisons and present findings. Tables 5-a and 5-b present how qualitative data have been weighted and quantified. Table 5-c presents aggregate numerical scores for the variables. The tables are followed by a descriptive analysis of each variable. Table 5-d ranks respondents by placing aggregate scores in value categories. Measurement Tools and Data Interpretation COMPARISON OF SOCIAL RESPONSIBILITY VALUES Table 5-a compares the social responsibility values found in the two Social Audit (SA) tools and the Social Responsibility (SR) policy documents of five athletic ball marketing brands. SR variables are listed down the left column with the brand codes and SA tools across the top. All variables that are mentioned in a brand policy document is marked with a in the corresponding box. By revealing the range of SR activity a brand is prepared to undertake, this shows how proactive a company is towards SR issues. This comparison also presents the ability of a measuring tool to assess the activities of business. COMPARISON OF SOCIALLY RESPONSIBLE ACTION Table 5-b weights the SR variables according to the extent they are implemented by the brands and their manufacturing partners. The variables appear in the left column with the businesses across the top. Each variable is weighted according to the level of its implementation by a business. implementation. The scale measures increasing levels of practical Categories exists for those respondents who are opposed to

implementing policy on a particular variable, those who are unaware or do not want to implement, and where there is insufficient information to determine a score. By showing
35
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

how far ahead a company is on implementing activities on a particular variable, it is possible to ascertain its commitment to invest in practical SR initiatives. SOCIAL RESPONSIBILITY SCORE CALCULATION Table 5-c presents an aggregate score calculated from the above findings. To minimise bias, all data have been triangulated from a variety of sources, including available documents, stakeholder feedback and personal observation (Appendix-IV). The score reflects a businesss proactive stance, and its level of commitment to specific SR actions. This way it is possible to assess the breadth and depth of socially responsible behaviour in terms of both policy and action. The aggregate score is calculated by combining the score for each variable from all sources. The numerical values are calculated by giving each positive finding a value of +1. No data is represented by a zero, and opposition to a value is expressed as 1. Where there are sub-variables, their mean represents the score for the particular variable, to the maximum value of +3. SCORE INTERPRETATION AND RANKING Table 5-d places a business in Di Norcias grid, according to its attained aggregate score. A businesss score reflects its attitude and practical initiatives towards socially responsible behaviour. This is evident from how proactive it is in choosing its sphere of SR activity, and how far ahead it is in practically implementing actions. Two characteristics determine where a business fits into the grid; voluntary participation and proactive attitude. Companies who are resistant to SR ideas fall in category I. Companies scoring higher on action fall in category II. Those with a higher score on the proactive attitude, fall in category III. Those scoring high on both fall in category IV.
IMPORTANT NOTE: The scores or ratings are not intended to compare the various companies or pass judgement. The scores simply reflect a quantification of the numerous observations recorded from a wide variety of stakeholders, and despite efforts to limit bias, cannot control for individual interpretation of open-ended questions. The following statement is included at the request of a respondent company: The participating companies have trusted the researcher with information not normally available beyond corporate boundaries. They retain their rights to their own corporate information and may consider it a breach of confidentiality if data or ratings from this research are quoted without the owners express consent. 36
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

Table-5-a
TCCRESSR/ Reebok Adidas Fair Trade Social Responsibility Measurement Variables Found in Standard Assessment tools and Brand codes of Conduct SA8000 Mitre Nike Puma

Child labor Do not employ children Do not engage in or support child labour Redemption of child labor Promotion of child education Exposure to hazard, unsafe or unhealthy situations Forced labor Prison labor Bonded labor Human Rights Discrimination Discrimination against Cast, race, origin, gender, etc. Harassment and threats Employee Rights Compensation Wages meet legal or industry minimum Sustainable community wages to meet basic needs Equal pay for work of equal value Working conditions Child care, elder care and community service Benefits and insurance Working hours Overtime according to law Maximum 60 hours per week Freedom of association Labor force representative of community where located Unions and right of collective bargaining Disciplinary practices Physical, sexual, psychological or verbal harassment/abuse Health and Safety Safe and healthy work environment Preventive measures First aid supplies Management systems Review adequacy, suitability, and continuing effectiveness of company's policy SA policy Social accountability policy documented and publicly available Internal compliance process of training onsite inspections and audits of suppliers Violations are effectively addressed SA preparation and conduction Accepts independent monitoring from NGOs, local communities, religious and HR, CR and labor groups. Disclosure Transparent. Result of internal and external monitoring available to public Ecosystem Company action do not damage global environment Physical infrastructure impact Social infrastructure impact Community involvement Contribute to improve community conditions Customers and consumers rights International standards for products and services Products meet customer requirement Ethical Marketing practices Fair trading practices Fair advertisement and labelling. Products with clear , specific warnings

37
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

38
www.RBIpk.org

Ambreen Waheed, Cambridge 1998 Table 5-b


+ ++ +++ x NI NA Aware of/ agree to Social Responsibility variable Planning to implement Social Responsibility variable Already implemented/ actively support or participate Unaware of or don't approve of SR variable Initiative has a negative effect on the SR variable Insufficient information to judge Not applicable

Scoring system adapted from the tool developed by Levi Strauss & Company (Makower,1994) Adidas Talon Sublime Ali trad Level of Action/Practical Implementation on Selected Social Responsibility Variables Reebok ++ +++ Capital Moltex x + +++ ++ x + ++ +++ +++ ++ x ++ ++ ++ + +++ +++ +++ x ++ ++ + ++ +++ +++ +++ + NI ++ ++ x + Fair T Mitre LW Nike Saga Puma + ++

Vision mission Statement Code of conduct Variable SA 8000 Child Labour Involve in elimination of child labor Engage in or support child education Remediation/rehabilitation of child labor Promotion of child education Exposure to hazardous and unhealthy situations Forced labor Prison labor Bonded labor Health and Safety Safe and healthy work environment Health and safety manager Clean Air, water, No exposure to hazardous, unsafe or unhealthy situations in or outside workplace Health and safety laws and systems to detect and respond to potential threats Freedom of association Labor force representative of communities in which operation is located Discrimination/ Human Rights Discrimination against Cast, race, national origin, gender, disability, political affiliation, union membership Disciplinary practices Declared position on equal opportunity No employee subject to physical, sexual, psychological or verbal harassment or Working hours Overtime according to law Maximum 60 hours per week Compensation Wages meet legal or industry minimum Pays sustainable community wages to meet basic needs Equal pay for work of equal value Benefits and insurance Working conditions Child, elder care and community service

+ ++

X +

x +

x +++

+ ++

++ +

x +

+++ ++ +++ +++

++ ++

+ + x x +

+++ ++ X X +

+++ +++ ++ ++ +

+++ x ++ + ++

+++ ++ x ++ +

+++ x + x +

+++ + x x x

+++ +++ +++ ++ x ++ ++ ++ + ++

+++ ++ + + ++

+++ + x ++ ++

+++ ++ ++ ++ ++

+++ +++ + x ++ +++ NI

+++ +++ ++ X ++ ++ X

+++ +++ ++ x ++ ++ x

+++ +++ ++ x ++ ++ +

+++ +++ ++ x + ++ +

+++ +++ ++ x ++ +++ ++

+++ +++ ++ x ++ x x

+++ +++ +++ +++ +++ +++ +++ x +++ +++ +++ ++ +++ ++

+++ +++ +++ +++ +++ +++ +++

+++ +++ ++ x ++ ++ x

+++ +++ ++

++

++

++

++

++

++

++

++

++

++ ++

++

++

++

x x

+ +++

+ ++

+ ++

+ ++

x x

+ ++

+++

++ ++

x x

++ ++

++ ++

+++ +++ +++ ++ NI + + +

+++ +++ +++ ++ NI + + x

+++ +++ +++ ++ NI x ++ x

+++ +++ +++ +++ NI + ++ x

+++ +++ +++ ++ NI ++ ++ +

+++ +++ +++ ++ NI + + x

+++ +++ +++ ++ NI + ++ x

+++ +++ +++ +++ +++ +++ +++ ++ NI +++ +++ +++ +++ +++ +++

+++ +++ +++ +++ NI ++ +++ x

+++ +++ +++ ++ NI x +++ X

+++ +++ +++ ++ NI ++ ++

39
www.RBIpk.org

Ambreen Waheed, Cambridge 1998


Fair T Adidas Sublime Talon Leatherware Nike Saga Puma Reebok + ++ x ++ ++ ++ NI x x ++ ++ x ++ x ++ +++ + x x + ++ x +++ +++ +++ +++ ++ x ++ +++ ++ x x +++ Moltex ++ x x x +++ +++ + ++ ++ + ++ x + ++ +++ +++ ++ -++ ++ ++ ++ x +++ + -+ + + x ++ + ++ +++ +++ ++ ++ ++ ++ + ++ + ++ +++ +++ ++ ++ ++ NI

Capital

Management systems Regular meetings Review Sources of information feedback mechanism Computerized Information system Social Auditing Own Social Auditing policy Onsite inspections internal Onsite inspections external Internal compliance Process of training and audits of suppliers Violations are effectively addressed Accepts independent monitoring from NGOs, local communities, religious and HR, CR and labor groups. Accepts independent monitoring from international agencies Familiarity with/implementation of social Auditing Standards Disclosure Transparent. Result of internal and external monitoring available to public Independent Company SA variables Leader ethical attitude Action for unethical behavior Feel obligation for workers Feel obligation for community Ecosystem Company action do not damage global environment Physical infrastructure impact Social infrastructure impact Community involvement Contribute to improve community Conditions Employer/worker support programs Free meals, child care centres, sports Safety procedures Credits, Insurance Education , sports, Customers and consumers International standards for products and services Products meet customer requirement Ethical Marketing practices fair trading practices Fair advertisement and labeling. Products with clear , specific warnings +++ +++ NI NI NI ++ +++ +++ ++ ++ ++ NI +++ +++ ++ ++ ++ NI +++ + +++ +++ +++ NI +++ +++ ++ ++ ++ NI +++ +++ + + + ++ +++ +++ + + NI + +++ +++ +++ +++ ++ +++ ++ ++ ++ ++ +++ +++ +++ +++ ++ ++ ++ +++ +++ x x x x x ++ x ++ ++ ++ ++ -x x X +++ ++ -+ + + ++ ++ -++ + + ++ + -+ ++ ++ ++ + -+ x x ++ + --++ x x ++ +++ +++ +++ --++ + + -+ + + +++ ++ -x x x ++ + -+ + + ++ ++ x NI + x x + x x ++ +++ x ++ + NI ++ x x ++ +++ + + NI NI ++ x ++ + x NA + ++ + + ++ x ++ +++ + ++ NI + ++ x ++ x x NI ++ x x x + x ++ +++ + + NI + ++ x +++ +++ +++ ++ +++ +++ ++ NI + NI +++ ++ ++ ++ ++ ++ ++ +++ ++ x x x x x ++ x x + ++ ++ + x ++ x NI +++ +++ x + + + ++ +++ + +++ ++ NI

++

++

Ali trad + x + x x + + x ++ x + x x x x

Table 5-b continued

Mitre

++

x + x

++ + x

+ + ++

++ +++ ++

x ++ ++

x x x

x + x

NI

++ +++ +++ ++

+ x + +

x x + ++

x x x x

x + ++ x

x x x

x ++ x x

x x x x

+++ +++ ++ ++ ++ +++ +++ +++

40
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

Table 5-c
Aggregate Score on Cumulative Performance* on SA Variables

Adidas

Fair trade

Mitre

Nike

Puma

Reebok

Sublime

Ali Trad

Leather Ware

Capital

Moltex

Saga

Talon

Code of conduct Child Labour Forced labor Health and Safety Freedom of association Discrimination/ Human Rights Disciplinary practices Working hours Compensation Management systems Social Auditing Disclosure Leader ethical attitude Ecosystem Community Involvement Employer/Worker Support program Customer and Consumer

2 2.0 3 0.6 6 3.0 7 1.4 0 0.0 2 2.0 0 0.0 3 3.0 7 1.2 2 0.5

1 1.0

1 1.0

3 3.0 8 1.6 6 3.0 7 1.4 0 0.0 2 2.0 3 1.5 3 3.0

2 2.0 8 1.6 6 3.0 6 1.2 1 1.0 2 2.0 3 1.5 3 3.0

1 1.0 5 1.0 6 3.0 9 1.8 2 2.0 2 2.0 0 0.0 3 3.0 7 1.3 7 1.8

1 1.0 5 1.0 6 3.0

3 3.0

3 3.0

3 3.0 9 1.8 6 3.0

2 2.0

3 3.0

1 1.0 8 1.6 6 3.0 8 1.6 2 2.0 2 2.0 3 1.5 3 3.0 8 1.2 2 0.5

6 1.0 11 2.2 6 3.0 6 1.2 1 1.0 2 2.0 4 2.0 3 3.0 7 1.2 1 0.3 6 3.0 5 1.0 0 0.0 2 2.0 3 1.5 3 3.0

8 1.8 11 2.2 6 3.0 6 3.0

8 1.6 11 2.2 6 3.0 6 3.0

4 0.8 15 3.0 10 2.0 15 3.0 1 1.0 2 2.0 3 1.5 3 3.0 2 2.0 2 2.0 5 2.5 3 3.0 1 1.0 2 2.0 3 1.5 3 3.0 1 1.0 2 2.0 4 2.0 3 3.0

6 1.2 12 2.4 1 1.0 2 2.0 0 0.0 3 3.0 0 0.0 2 2.0 4 2.0 3 3.0

7 1.2 10 1.7 10 1.7 1 0.3 3 0.8 1 0.8

8 1.3 15 2.5 14 2.3 11 1.8 2 0.5 8 2.0 5 1.3 0 0.0

8 1.3 10 1.7 5 1.3 9 2.3

6 0.8 10 1.3 0 0.0 1 0.3 1 0.3 2 2.0 3 0.8 0 0.0 3 1.0 4 1.3 0 0.0 3 0.8

9 1.0 11 1.3 11 1.3 0 0.0 4 1.3 5 1.7 1 1.0 0 0.0 2 2.0 7 2.3 3 1.0 1 1.0 3 0.8 1 1.0 4 1.3 3 1

5 0.6 10 1.1 20 2.5 18 2.3 10 1.3 0 0.0 0 0.0 3 1.0 0 0.0 2 0.5 1 1.0 1 0.3 3 1.0 0 0.0 2 2.0 5 1.7 5 1.7 1 1.0 1 1.0 5 1.7 6 2.0 1 1.0 1 1.0 1 0.3 4 1.3 0 0.0 3 0.8

9 1.1 15 1.9 14 1.8 1 1.0 2 0.7 3 1.0 1 1.0 0 0.0 2 2.0 5 1.7 6 2.0 2 2.0 5 1.3 1 1.0 2 0.7 4 1.3 1 1.0 6 1.5

2 2.0 0 0.0

0 0.0 10 2.5 11 2.8

8 1.3 12 2.0 12 2.0 15 2.5 12 2.0 11 1.8

9 1.5 15 2.5 16 2.7 15 2.5

6 1.0 14 2.3 12 2.0

NOTE: The first column under each company name represents the raw score on a particular variable. The second column gives the score which is the average of sub-variable scores.

Discussion of Performance Variables


CODE OF CONDUCT Nike and Puma were the brands whose local counterparts were aware of their vision of trust and quality respectively. Among local manufacturers Saga promoted its vision of "share, care, dare", and Talon and Ali Trading emphasised their unwritten vision of quality. None of the manufacturers has its own code of conduct, except Saga that claims to be
41
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

working on one through an ongoing participatory process. Each manufacturer, however, is required to follow a code of conduct handed down by their contracting brand. This varies from bullet point, one-page versions as in the case of Nike and Puma, to more detailed policy statements for Adidas, Mitre, and Reebok. Fair-Trade have a detailed set of operational criteria that, according to them, form the code of conduct. Each of the codes of conduct, and the Fair-Trade criteria, emphasises nearly the same set of labour practice principles as found under the various ILO conventions. These areas include elimination of child- or forced labour, labour and employee rights, and responsibilities to the environment and the community. All brands have communicated their formal codes of conduct to their manufacturer in writing. Leatherware disclosed that although Mitre has not provided any written code of conduct, it has been conveyed verbally and through various business documents. In the case of Nike and Reebok, the codes are translated into Urdu and are accessible to literate workers. (Table 5-b) Regarding the implementation of the codes of conduct in a way that is visible, the results are highly variable. Saga/Nike appear farther ahead in establishing demonstrable systems that show that the code of conduct is being implemented. This may be so because they are relatively more willing to open up their modern plant and monitoring programme to outside scrutiny. There is a separate department to run a programme called SHAPExliii that is open to third party monitoring by a chartered accounting firm in addition to the ILO. This programme is implemented through groups of elected employees who document the quality of benefits and ensure a working environment standards. The two companies have health and education community projects with equal resource contributions. There is evidence of physical infrastructure and a management information system being created to match a set of written objectives. The Saga/Nike relationship may be taken as an example of how two companies of disparate size and focus can come together because of a shared view of business practice. Saga applies uniform standards to all client brands. Reebok has created significant physical infrastructure, backed by independent monitoring mechanisms to ensure that its code of conduct is followed to a verifiable level. As Moltex manufactures for a number of brands, its sets of arrangements for
42
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

Reebok are different for those that it has for other brands and make a useful comparison. Reebok balls are produced in an exclusive plant adjacent to the main factory that employs superior labour standards. Monitors hired by Reebok operate independently of Moltex management and ensure that the required standards are maintained. For the other brands Moltex relies on the traditional "maker" network and sources from village workshops registered with the ILO. While both arrangements are "clean" according to the evidence available, the difference may be illustrative of how a manufacturer will change its practices for a client brand keen to invest in promoting its labour practice standard, but retain existing practices where there is no pressure to change them. Of the contractors for Adidas, Mitre and Puma, none has advanced to the level of the two mentioned above. Each plan to gradually build up systems and invest in infrastructure better capable of fulfilling the claims made by their respective brand, but seem content with being members of the Sialkot Partnership. Adidas and Puma both have locally based quality inspectors, who are required to monitor labour practices by their respective sub-contractors also. Adidas is also establishing a permanent office in Sialkot. Sublime plans to construct purpose-built centres for ball production, offering better employee benefits. Others are opting for less expensive infrastructure. Capital provides resources to sub-contractors for upgrading existing production facilities. Leatherware has a phased programme under Mitre's ongoing supervision to bring production in line with guidelines. Ali Trading shows interest but cited resource constraints for not moving as rapidly as the other manufactures who have a larger turnover. Talon is working with Fair-Trade to standardise its labour practice mechanisms to the minimal requirements. This is perhaps the only case in Sialkot where the client pays a direct financial subsidy to the manufacturer over in addition to prevailing market prices. Fair-Trade has contracted a local NGO to support community credit and education initiatives, with the Pakistan office of Rugmark providing technical guidance. All local manufacturers are overwhelmingly preoccupied with child labour, as opposed to broader labour practice and ethical business standards. Apparently because of the controversy stirred by the "Foul Ball Campaign" in the USA and television coverage portraying the Pakistani industry as the villain. Manufacturers responses to questions about labour standards and business ethics show that these concepts are equated with
43
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

child labour. The codes of conduct, on the other hand, focus on general principles that included child labour as one among them. Moreover, except for Mitre who were accused of exploiting child workers in India, the others brands have faced criticism on labour issues others than child labour. Adidas is in litigation for exploiting prison labour in China, while Nike has faced strong criticism for poor labour conditions in it's Vietnam manufacturing arrangements. Except for Nike and Reebok, no brand has made any direct or indirect investments into mechanisms or infrastructure for cleaner sourcing. None of the brands or Fair-Trade have communicated their respective codes of conduct to the retailers asked. Store managers interviewed said they knew of the media's criticism of the brands' sourcing. However, the brands themselves had made no effort to reach the retailers or provide any information to help them with customer queries. The only exception was Nike who provided written materials on the company's labour practices in developing countries, possibly in anticipation of consumer concern. The consumers interviewed were also unaware of any labour practice or ethical business document made public by the brands. None had heard of any of the Pakistani manufacturers or Sialkot. Only one was aware of Pakistan as a source of balls, recalling a BBC television story around the World Cup. CHILD LABOUR All brands and their contracting manufacturers claim not to employ or engage child labour in their manufacturing units. The Sialkot Partnership is presented as evidence of this commitment. Puma and Reebok claim special care and assistance to children. None of the codes of conduct specifically focus on the rehabilitation of child workers who face loss of livelihoods as a consequence of the Sialkot project. Mitre claims credit for providing the impetus for work leading to the Atlanta Agreement, but is of the view that the rehabilitation and social aspects of child labour elimination should be dealt by welfare agencies. Reebok claims giving importance to children's education and rehabilitation, presenting its NGO-run school as proof. Local opinion leaders dispute this claim, saying the one school that does exist is far away from areas where children are likely to be exploited. rehabilitative function.
44
www.RBIpk.org

It has no specific activity that can plausibly serve a

Ambreen Waheed, Cambridge 1998

Capital and Sublime both claim that although there is no pressure from Adidas regarding education or any community focused programme, they are engaged in supporting basic education on their own because they feel it is their civic duty. Their education work does not target working children specifically. Sublime is directly involved in managing 21 primary schools and one girls high school under a family trust. Each of the local manufacturers claims to promote education by funding deserving students for college and university. Capital, Saga and Sublime have joined a number of other businesses in resourcing Sialkot's first "public school". Except for Nike and Reebok, no brand has expressed interest in local education projects. Saga and Nike claim to be finalising a community services programme to be run by an NGO. At present, however, this is limited to weekly mobile health clinics for women and children. Child care centres in each of the Saga facilities provide pre-school care and basic literacy to children of workers making Puma and Nike balls. Puma and Leatherware are interested to help local schools in future in a "fitting way". On the whole, the brands and their local partners appear serious about removing child labour from their production processes. The manufacturers have pooled about US$300,000 to pay ILO for managing an independent monitoring programme. FORCED LABOUR The available evidence excludes forced labour from Sialkot's ball industry. This may be why Adidas is said to be relocating significant business from China after facing criticism for using prison labour. Except for Mitre, the other brands source only in Pakistan. Field research over the past two years by Save the Children, ILO, the Human Rights Commission of Pakistan, and others has not substantiated use of working advances to force artisans to work for manufacturers. A 1997 Save the Children report suggests that the working advance, "peshgi", serves to strengthen the local cash economy, providing poor people who cannot put up collateral, access to capital. Regulated and made equitable this system could contribute to a sustainable local economic solution.

45
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

HEALTH AND SAFETY Adidas, Fair-Trade, Nike, Mitre, Puma and Reebok each has written policies on health and safety in the work environment that complement Pakistans workplace laws, except legal employment age. Despite the law allowing employment to 14 year-olds, the brands have set their own limit at 16 years. The most visible health and safety issues are:
1.

Fire protection. All factory sites visited have fire extinguishers as required by law, but there is a marked variation in the level of awareness and preparedness for an emergency. Only the new purpose-built plants have adequate fire exits. Among the stitching centres, only Saga and Moltex have fire equipment. All the others have neither equipment nor an adequate number of labelled exit routes. Saga has an in-house fire-fighting unit with a fire-truck and trained crew, who are said to conduct periodic fire drills under their SHAPE programme. No one else has designated fire wardens or awareness programmes or drills.

2.

Exposure to fumes and toxic chemicals. Of the processes involved, only two bring workers in contact with potentially hazardous chemicals or fumes. One is during lamination where artificial leather is bonded with fabric using natural latex. The high ammonia content of the solvent exposes workers to fumes over the entire shift. The other is during printing where ball panels are individually hand-screened, exposing the skin to carcinogenic dyes and inks, especially when being mixed without protective equipment. None of the factories visited has verifiable checks on safe handling of toxic chemicals. Safety instructions are limited to sporadic labelling, often in English, which is unintelligible to the workers. Mitre claims it has begun a phased process of upgrading health and safety conditions of it manufacturing partners. The manual on chemical handling it has provided to Leatherware and Saga, in addition to other workplace guidelines, has remained with managers so far. Saga displayed an Urdu Though translation that it plans to distribute among workers and supervisors.

every manufacturer expressed frustration with efforts to motivate workers to use masks and gloves, supposedly due the hot climate, there is no evidence of effective awareness building among the manufacturers. The brand guidelines are either non-specific or not followed up consistently.

46
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

3.

Ergonomics and Posture during work: Each of the factories visited has workstations at waist height. Routine work neither involves lifting heavy weights nor prolonged exposure to noise, particles or glare. In the stitching centres, however, artisans still sit on the floor or low stools, holding ball panels in wooden vices held between their knees. Complaints of back pain and strain on neck muscles are common due to the crouched position artisans retain for up to an hour at a time. Managers claim that the artisans are resistant to changing the workstation design, and did not accept benches in exchange for floor mats. This is understandable considering the "floor" culture of rural Pakistan. The ventilation and lighting is adequate, possibly because the centres shown were the best the manufacturers have. Again, there are stark differences among the conditions present in the various centres. Sagas nine purpose-built community centres and Sublimes soccer village facility are expansive in scale and their design has taken in account the requirements of the work. Reebok's monitors have had Moltex carry out structural changes to its new facility in response to workers complaints about inadequate light and ventilation. The other villagebased centres are either existing buildings or built in the local scale and tradition, although they do aim to fulfil the ILO's requirements and the brands' expectations.

4.

Use of safety equipment: in addition to handling chemicals and working with ammonia fumes, workers in the factories face another hazard that requires preventive measures. Ball panels are cut using hand-operated cutting presses without adequate safety features. Workers have been known to lose fingers while operating these presses, although it was not possible to meet anyone who had suffered as a result of working on these machines. Management representatives agreed that the threat is real, and there is an industry-wide move towards automated cutting presses that have safety features build in. Saga claims to have phased out all except a few of its hand-operated cutting presses. Even apart from the cutting presses, attention to safety equipment is not clearly visible. Management tend to blame workers for resisting attempts to introduce use of safety equipment, but it appears to be a low priority for them.

47
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

5.

Air-quality and ventilation: The manufacturers claim to have made considerable improvements in the air quality of their lamination and printing areas as a result of brand intervention. Every one of the factories visited has installed mechanical ventilation systems. Supervisors and managers all agree on the importance of air quality. However, none of them are familiar with any air quality standard or possess any instruments to measure air quality in their facilities.

6.

Emergency medical care: Ball production processes can be divided into three; panel production, stitching and finishing. Medical emergencies that can potentially arise in the first include chemical ingestion or injurious contact with the skin or eyes, hand injury from cutting presses, or accidents involving electrical or moving machinery. In the second category, the most common are needle-pricks to fingers, or rarely, to the eye. The third category may present machine operation-related injuries while lifting or moving loads. In addition, accidents from slippery floors, falls from stairs or trauma resulting from transport-related injuries or fire hazards can potentially cause medical emergencies. Reportedly, the incidence of any of these is significantly low. However, each of the factories claim that workers have access to emergency medical care when needed. The artisans have no such arrangements, except at the Saga centres, which have full-time doctors and paramedics, Sublime, which has a mobile doctor service for workers, and Reebok, which provides workers medical cover through the government's Social Security department. Like other areas, the health and safety measures also vary significantly. Factories are better equipped than are village-based centres. The workplaces are generally clean but air quality is a significant issue. To a lesser degree are natural ventilation, sanitary toilets. None of the manufacturers has a designated health and safety manager. There is a need to bring village stitching centres up to acceptable standards, and the ILOs proposal to include health, safety and working environment conditions in their monitoring guidelines may be beneficial.

FREEDOM OF ASSOCIATION All brands recognise the right for workers to form unions, and to collective bargaining. They accept the idea of involving labour force representatives into decision-making.
48
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

Puma chose not to respond.

There are no organised labour unions in any of the

manufacturer's factories. With regard to the stitching centres, managers claim that since artisans are piece-rate sub-contractors they don not qualify as "employees" and hence do not fall under the freedom of association clause in Pakistani law. Reebok believes their group managers work as representatives, Adidas refers to the independent "maker" as a representative of the artisans, while Nike/Saga claims that its elected SHAPE representatives fall within the definition of labour force representatives. The Puma representative spends one hour every month meeting with artisans and workers to handle complaints through an established mechanism. Pakistani labour law empowers the artisans to organise and bargain collectively even when they are piece-rate sub-contractors. The "makers" who negotiate piece rates based on the seasonal market may well be playing this role. Though not a result of collective bargaining, the "makers" have been able to exploit the heightened sensitivity of the brands towards "clean" sourcing. The piece-rate has doubled over the past 18 months as a direct consequence of the attention that the industry has received from outside agencies. In addition, non-salary benefits such as free meals, transport and medical services have also increased appreciably during this time. DISCRIMINATION The brands all proclaim non-discriminatory policies. Nike, Puma and Reebok have a written stance on threats and harassment. There is no evidence of the manufacturers disregarding this policy. However, from the data available it is impossible to either dismiss or accept this claim. COMPENSATION The Pakistan government periodically fixes minimum wage levels xliv. Every brand and their manufacturer claim to pay accordingly, and workers agree. Fair-Trade, Nike, and Reebok expect their contractors to pay sustainable or living. It is important to note that a majority of the artisans are on contract, dont work for a continuous period of time, and may have other sources of income. Hence, it is not easy to determine whether wages declared are "living" wages. Ali Trading, Capital, Leatherware, and Sublime pay a cash piece rate to their artisans and claim that it is sufficiently high to cover costs of any
49
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

benefits. Moltex and Talon pay a cash piece-rate and add some benefits such as social security contributions and free or subsidised meals. Saga pays a monthly salary, bonuses and performance pay along with benefits that are the same for full-time and part-time employees, including child-care, healthcare, leisure facilities, commodity credit and community outreach services. Fair-Trade and Saga provide insurance and credit. Fairtrade has established a Trust managed by Talon into which a fixed amount per ball is deposited for community welfare. No other brand gets directly involved or expects their source to provide benefits beyond a fair piece-rate. Every manufacturer expresses an obligation towards their workers, but only Talon and Saga have social benefits in addition to salary. Moltex makes its makers pay the mandatory subscription to the government pension and social security fund, otherwise paid by the manufacturers themselves. WORKING HOURS In keeping with the demands of a seasonal trade populated by independent piece-rate contractors, working hours are flexible all over the industry, except where the artisans are employed. The factories observe a more fixed timetable, while the village stitching centres normally open between 6 AM to 5 PM. Artisans attend according to their convenience. Most leave on completing 3 or 4 balls, except when seasonal demand is high. The "maker" normally manages individual workload and negotiates compensation with the artisans. Legally mandated overtime is the norm for factory employees. There is no overtime for piece-rate artisans, but the industry-wide rates tend to increase during high season MANAGEMENT SYSTEMS While this SA8000 variable is not included in any of the brand codes of conduct, it determines whether a brand will choose to work with a local manufacturer. Although technically independent of them, the manufacturers accept technical or management advice from the brands. Adidas and Puma both have technical representatives based in Sialkot to oversee quality and social responsibility. Fair-Trade supervises Talon through the Rugmark Foundation. Mitre and Nike send representatives every few weeks to oversee their manufacturing. All manufacturers have computerised management Ali
50
www.RBIpk.org

information systems, albeit at variable levels of technological sophistication.

Ambreen Waheed, Cambridge 1998

Trading, Leatherware and Sublime have acquired ISO9000 certification. Moltex and Talon will consider it if their client demands it. Capital and Saga are content with their existing quality control systems.

SOCIAL AUDITING The concept is new to all manufactures except Saga, which has a separate department of corporate responsibility. All the others think that their employees and shareholders are the only stakeholders. All have internal monitoring teams for their own manufacturing or sub-contracting units. It is important to note that the primary focus of this monitoring is to avoid children being employed. However, in some instances, with the building of new manufacturing facilities, manufacturers are including clean and safe working environments as a priority. Only Saga has a policy on social responsibility and the elements of social auditing in its SHAPE programme. Every manufacturer has contributed to bring in ILO as independent monitors and opened its centres to their inspectors, but they concede that this is so because of the demands of the Atlanta Agreement. So far only Saga (Grant-Thornton) and Talon (Rugmark) have allowed in independent third party monitors in addition to the ILO. No independent social audit has been conducted for any of the manufacturers, although Saga claims to be on the verge of an environmental and social audit and is commissioning impact assessment studies of its community-based programmes. DISCLOSURE Among the manufacturers Ali Trading, Leatherware, Moltex, Saga and Talon claim to disclose results of management reviews to their employees. There is no evidence of such disclosure or of the companies sharing such information with other stakeholders, the local community or the public. A general hesitation to share company information with outsiders is visible. One of the respondents said why he did not allow his company to document information was that it could be used by competitors in ways harmful to his company. The general attitude does not seem conducive to open disclosure.

51
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

COMMUNITY INVOLVEMENT Adidas's code of conduct favours business partners who improve conditions in the countries and communities in which they operate, but according to their subcontractors in Sialkot they have made no direct contribution in this regard. Ali Trading, Capital, Leatherware and Moltex are not directly involved in any community programmes but prefer private philanthropy. Sublime's principal focus is only on education through the 21 community schools they support. Saga runs a weekly mobile clinic half-funded by Nike, and has built roads, schoolrooms, water channels and local parks. Talon is administering a trust fund for Fair-Trade. Nike sponsors an annual youth soccer tournament. Reebok is supporting a school for working children through a local NGO. All manufactures claim to create employment and therefore directly contribute to the cash income of local communities. This further leads to better quality of life and improved infrastructure for local communities. However, children can no longer help their parents, and may end up in other industries not well regulated like the ball industry. Woman artisans who constitute a sizeable percentage of the informal workforce are also being denied work opportunities as many cannot leave their household duties to work full-time in ILO registered stitching centres, or may not be able to leave home due to cultural compulsions. In response, some manufacturers have started women's-only centres. Adidas, Leatherware and Talon have organised women artisans through their existing "maker" networks and are providing facilities to them on the same lines as their all-male centres. Saga has begun a pilot project employing 400 women in a large multipurpose centre providing education and training programmes with NGO collaboration. Conservative members of the community feel it is encouraging women to break from their housebound tradition. Competitors say Saga will not be able to sustain the centre because of high overheads and low efficiencies. ECOSYSTEM The manufacturers claim that their products and manufacturing processes do not damage the environment. The typical athletic ball, made of synthetic leather, fabric and natural latex with traces of chemicals and polyester, is a non-hazardous product. Questions about the "recycle-ability" of the product were not answered with certainty, nor could claims about the waste material being easily incinerated be verified. The inks used for
52
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

printing cosmetic designs contain highly toxic chemicals, but the manufacturers claim that quantity used per ball is minute and they are imported and stored in environmentally safe containers. Nike has declared a ban on PVC in favour of greener materials from August 1998. The preceding sections give examples of some direct contributions by the manufacturers and their partner brands. The Sialkot partners also claim to have changed the social dynamics through their efforts to remove children from the workforce. Not all the effects have had a beneficial effect on family incomes, which will remain depressed until the Sialkot Project's social protection programmes show impact. CONSUMER AND CUSTOMER The brands ensure that only quality products that conform to defined standards prescribed by sports organisations like FIFA leave Sialkot. Since 1994, however, there has been an additional demand for "clean" products. The manufacturers have sought to meet this demand through the Sialkot Partnership. Though media stories have targeted brands first, the manufacturers have mostly faced the pressure. On the other hand consumer interest in investigating sources with any rigour has been significantly less than expected. The two principal determinants of buying decisions among the consumers and retailers interviewed are product price and special advertising promotions around sporting events. Of a sample of 8 sports retailers interviewed, including department stores, franchised chain stores or individually owned shops, only two reported consumer inquiries about brand sourcing over a year. More importantly, knowledge of source did not adversely affect the buying decision in both cases because the salespersons were able to satisfy the customer. Only one retailer remembered receiving literature on Nike's sourcing practices. When asked, children accompanying an adult to buy a ball confirmed they chose a brand because their favourite team or sportsman uses it. Adults, however, sometimes over-ruled children in favour of a substitute if the price was too high. This inquiry is illustrative of the quantum of impact brand sourcing has had on buying decisions for the average buyer. It can be investigated whether catalogue buyers and subscribers to fair-traded magazines have a greater appreciation of brand sourcing.

53
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

ETHICAL MARKETING PRACTICES Every company claims a child labour free product. It appears acceptable for their advertising to reflect their role in implementing the Atlanta Agreement. However, in the absence of independently verifiable social responsibility indicators, none of the brands would be justified in claiming a comprehensive social responsible stance, apart from the isolated examples seen above. Among the local manufacturers, Saga and Talon may be justified in making a limited claim to socially responsible behaviour. except for Talon. 5.4 WHERE THEY STAND ON SOCIAL RESPONSIBILITY No specific information on fair-trading and ethical marketing for any of the manufacturers was found

Social Performance through the Supply Chain (based on Di Norcia, 1998)


Nike Puma Ali Trading Adidas Sublime Fair Trade Talon Saga Capital Table 5 d Leatherware Reebok Moltex Mitre

I. Hostile Resistance II. Legalistic Compliance III. Accommodative Mediation IV. Leading Edge

    

  

  

Table 5-d categorizes socially responsible attitudes into four levels. Two characteristics determine where a business fits in the grid; voluntary participation and proactive attitude. The above rating reflects how advanced a business is in both. In addition Categories I and IV reflect a radical thinking, reflected by either a resistance to the idea or great enthusiasm for it. Categories II and III reflect mainstream thinking.

54
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

55
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

6.0 Conclusion
The aim of this research has been to apply an objective yardstick to determine what major brands do to promote their respective social responsibility policies, as opposed to what they like to say. By examining each identified point in the supply chain, this research has been able to assess social responsibility policy implementation in less visible points of the supply chain as compared to the more obvious ones. It has identified weak areas in the distant points of the supply chain, which may be hidden from the brands due to any number of reasons. This study has been an opportunity to independently field test the utility of a selected chosen assessment tool for a cottagebased production process, and record, perhaps for the first time, how stakeholders view a particular brand and its known stance on social responsibility. The results show the promise of further work in the future, and establish a basis for it in Sialkot-based industries. Apart from the customary shortage of resources, time and inconvenient interview schedules, this studys principal limitationxlv was the near complete lack of awareness regarding social responsibility concepts among the stakeholders in Sialkot. The general absence of earlier material made archival work a bigger challenge than expected. Another problem was the relative newness of the Social Audit tools and difficulty in acquiring a healthy variety from a large number of sources. The general tendency among brand and manufacturer representatives, and even social audit practitioners to be circumspect was an initial bottleneck, but once a certain level of confidence was achieved, candid sharing of views became one of the most satisfying achievements of the research. Although initially presenting itself as a limitation, being the first out in Sialkot has had its advantages too. When they arise, future opportunities for work in Sialkot or similar places will find the researcher better equipped, and thereby ready for an improved quality of output. 6.1
1.

SUMMARY OF FINDINGS Brand policies conform to acceptable standards of labour practice. Though they do not use Social Responsibility and Accountability terminology, the policies conform to recognised international principles. Both the brands and the manufacturers are
56

The six research questions led to the following findingsxlvi:

www.RBIpk.org

Ambreen Waheed, Cambridge 1998

serious about clearing their name.


2.

Successful implementation of brand codes of conduct, matched with their ready acceptance by the manufacturers, has improved prevailing labour conditions. This has reduced consumer and media pressure on the industry. Without the brands critical support during negotiations, in funding research, and with drafting the partnership agreement document, the local manufacturers would not have been able to cope. Despite scepticism about the motives of both parties, the Sialkot Partnership is a timely response with potentially far-reaching effects for the ball industry;

3.

Application of social responsibility policies is not uniform along the supply chain. The gap is most significant at the two ends the artisan and the retailer. Effective awareness-raising to promote corporate citizenship values must be a high priority. Because of the global spread of the supply chain, and a marked variation in laws, enforcement mechanisms, and cultural conditions at different points of the supply chain, building understanding is critical. policies; Social Audits and disclosure would strengthen information flow along the supply chain and ensure uniform application of

4.

Brand labour practice reality deviates considerably from their consumer image. Despite their efforts to work with manufacturers in improving social performance standards, the brands existing knowledge about social auditing as a management tool and how to implement it is sparse. Nevertheless, there is interest in learning about, and utilising standard social auditing tools, even if the present focus on child labour seems narrow. The brands were more proactive when there was a threat from consumers and the media, but have become complacent. Their reluctance to become involved in local social programmes and a low priority to womens and family livelihood issues is bound to have a slowing down effect on their manufacturers soon.

5.

Manufacturers labour practices have improved only due to brand pressure and need to be sustained over the long term. They are still not convinced of the value-added benefit of corporate social responsibility. The best examples of corporate citizenship
57

www.RBIpk.org

Ambreen Waheed, Cambridge 1998

are actually driven by motivated individual manufacturers, and fuelled by their willingness to invest in local facilities and welfare. Moreover, with a few notable exceptions, the brands have not been able to raise their buying prices, leaving manufacturers with a greater economic burden. Unless consumers can be convinced that they are equal partners in the social contract, the sustainability of responsible sourcing programmes may not be guaranteed.
6.

Child labour is over-emphasised as compared to overall socially responsible corporate behaviour. Even though the ILO monitoring programme has increased awareness about positive labour practices, it is still seen as a way to get children out of the industry and not linked to socially responsible behaviour. The ILO needs to broaden its mandate beyond child labour to include corporate social responsibility, and assume a leadership role in sustaining momentum among local manufacturers. However, the monitors are themselves unaware of Social Responsibility concepts and issues relevant to it.

6.2

THE LAST WORD

The short answer to the research question is that, yes, the social responsibility image of the brands is at variance with their labour practice at the extreme ends of the supply chain. Not discounting the efforts made by the Sialkot partners, there are still some gaps in how individual brands and their manufacturers have geared up for implementing verifiable corporate responsibility policies. The most visible cause of this is that the seriousness and quantum of consumer mobilisation in demanding clean sourcing is not effectively conveyed all the way to the ends of the athletic ball supply chain. It is also true that such consumer demand may be more pronounced in some markets, and take a longer time to build up in others. It is the brands responsibility to ensure that its ethical values permeate all the way down its sourcing mechanisms. At the same time, the manufacturer being an independent corporate player cannot be excused from similar obligation to its own consumer, i.e., the brand. In the interest of fairer business, consumer awareness can be hastened by using the electronic media more effectively, and by conducting credible social audits followed by disclosure and cross-level training for stakeholder groups.
58
www.RBIpk.org

Ambreen Waheed, Cambridge 1998

This research concludes that despite the variance found between brand policy standards and their implementation, creating an enabling environment for corporate social responsibility in Sialkot is itself an act of responsible corporate citizenship. The critical need now is to sustain the gains made over the past 18 months
and develop effective, viable and culturally consistent models of ethical business and labour practice in Sialkot. The Sialkot Partnership must be strengthened to perform a permanent leadership role in disseminating corporate citizenship values. It is essential, therefore, that the brands commit resources for the benefit of Sialkots artisans and their communities. This they can do either by manipulating their cost/price structures and trusting their manufacturing partners to invest the additional revenues into civic interventions. Or they can create local trusts, letting specialised non-profit agencies manage them within clearly defined mandates. There are many examples to learn from even within Sialkot. The stakes have been raised. It is again up to the brands to wield their considerable influence on manufacturers as well as consumers to make the gains of the Sialkot experience a lasting example of global corporate citizenship. Will they take up the challenge? +

59
www.RBIpk.org

Ambreen Waheed, Cambridge 1998


xlvii

60
www.RBIpk.org

VI.

ENDNOTES

Formed in February 1997, the Sialkot Partnership claims to be committed to social responsibility and good labour practice. 55 major international brands have pledged o source only from 34 of key manufacturers who are monitored by the ILO, accounting for 70% of Pakistans export production. . ii SA8000, SEAAR, CERES, ECCR
iii

"Human Development Report". United Nations Development Program, 1996, 1997. Congressional Record, US Congress, September 1996. 70% of the worlds soccer balls are estimated to originate in Pakistan. Report of US Congress debate on plight of 3-year bonded labourers stitching balls in Sialkot The Sanders Amendment called for banning imports from countries unable to satisfy US Customs on fair labour practices. Pakistan named target country. Lasi, G.Akbar, Minister for Labour at the time, declaring that there was no child labour in Pakistan. Carried by national newspapers through 3rd week of August 1996, and subject of foreign media comment. Interview with President and Executive of Sialkot Chamber of Commerce, reported by Save the Children Report, July 1996 by M. Scott and F.H. Shah.

iv

vi

vii

viii

ix

The Way Forward. Proceedings WFSGI Conference, Verbier, 1995. Formation of Committee on Ethics & Fair Trade (CEFT), and papers suggesting ways of cleaner sourcing.
xi

Report in the World Federation of the Sporting Goods Industry (WFSGI) Bulletin, mid-year issue, 1997. Khan, M.H, Head of Monitoring, Saga Sports, Sialkot. Interview. Briggs, J.A., Jr. The Partnership to End Child Labour in Sialkot, Soccerline. 24 December, 1997. Programme aims to place 100% ball production under ILO monitoring. Children will be removed into rehabilitation programmes run by UNICEF, Save the Children Fund, Pakistan Bait-ul-Mal (National Welfare Trust), and the Sialkot Chamber of Commerce & Industry. Mitre, Nike and Reebok were the first to implement labour practice guidelines with manufacturers in Sialkot. WFSGI News Bulletin, vol:3 1997. Business for Social Responsibility Annual Convention, Los Angeles, November 1997. Representatives from the Partnership were on a panel to respond to questions on the Sialkot experience. Shah, F.H., Director, Saga Sports, Sialkot, & former chair Sialkot Partnerships Project Implementation Team. Interview Javed, N., Director, Sublime Sports, Sialkot. Interview: Traditional buyers of souvenir balls, like Pizza Hut or Coca Cola decided against using balls from Sialkot, causing loss of business. Reebok/Moltex label every ball guaranteed made without child labour, by their Human Rights Program. FairTrade/Talon also label balls produced through their sub-contractor system. Advertisements in WFSGI Handbook and Bulletins; personal interviews with Brands & Manufacturers. Hussain, S.A., CEO, Leatherware, Sialkot. Interview

xii

xiii

xiv

xv

xvi

xvii

xviii

xix

xx

xxi xxii

BBC/Lloyd-Roberts, S, documentary on Sialkots ball industry on Newsnight, 16 May 1998.


xxiii

Until mid-July 1998, Sialkot had offered office space to ILO, UNICEF, Save the Children, Pakistan Baitul-Mal (National Welfare Trust), National Rural Support Programme, Punjab Rural Support Programme, All-Pakistan

Federation of Trade Unions, Bunyad Literacy Community Council, Sudhaar, Society for the Advancement of Higher Education, apart from high profile visitors from UKs DfID, the US Department of Labour, Foul-Ball Campaign, AFL/CIO, association of Swedish Trade Unions, ITGLWU, Mercy Corps International, Human Rights Commission of Pakistan, Pakistan Institute of Labour Research and numerous media representative
xxiv

Zakauddin, K, CEO, Capital Sports Corp., & SCCI representative on the Sialkot Partnerships Programme Coordination Committee.
xxv

Zadek, S, P.Pruzan and R. Evans, Building Corporate Responsibility, Earthscan, 1997.


xxvi

Matthews, V., The Financial Times, London 12, December 1997. Avon Cosmetics, Toys R Us, Otto-Versand are the first to sign on to SA8000 social audit standard.
xxvii

Principles for Global Corporate Responsibility Ecumenical Council for Corporate Responsibility (ECCR), UK, Task Force on the Churches and Corporate Responsibility (TCCR), Canada, Inter-faith Center on Corporate Responsibility (ICCR) US, 1998. Bench Marks for Measuring Business Performance.

Principles for Global Corporate Responsibility (TCCR) Canada, (ECCR) UK, Inter-faith Council on Corporate Responsibility (ICCR) US, 1998. Bench Marks for Measuring Business Performance.
xxviii

Diagneaults 5 imperatives for CSR: 1. Moral; everyone wants to operate in an environment of integrity 2. Pragmatic; its good business 3. Legal; because getting caught has a price 4. Perceptual; being seen as ethical pays 5. Change; where values provide a constant.
xxix

Kunz, M., Director Fair-Trade, a German NGO sourcing soccer balls from Talon, Sialkot, and respondent to the research. Interview.
xxx

Includes: 1. Cultural sensitivity 2. Natural resource conservation 3. Waste-management 4. Safeguards 5. Impact on local animal and plant life In addition, cross-cutting categories: 1. Indicators for adherence to the norms of civil society 2. Health and safety 3. Service 4. Help to the needy
xxxi

Stakeholders extend beyond the corporation's shareholders, its employees or customers, to any person, community or interest group, whose quality of life is actually or potentially affected by an organisations actions.

xxxii

Corporate Responsibility categories: 1. Economic: selling goods and services at a fair price, making a legitimate profit according to norms of acceptable behaviour without harm to anyone 2. Legal: obeying the law and creating policies and structures to ensure the health and safety of workers and consumers, and environmental pollution 3. Ethical: fulfil expectations of society, based on the commonly understood precepts of fairness and justice, and exhibit moral values in business dealings 4. Discretionary (philanthropic): performing voluntary and non-codified actions meaningful to it, dictated by the discretion of the organisation Broad CSR values: xxxiii Disclosure: whereby a corporation presents for public scrutiny not only its financial status but information that reflects its commitment to improve the quality of life or its stakeholders 2. Employee Rights: where access to the benefits that the corporation has the power to dispense, are within reach of anyone regardless of gender, age, or personal persuasion 3. Fair business practices: where the principle of fair-play and justice underpins all business transactions of a corporation and a conscious effort is visible to adhere to a set of moral guidelines

4. Community involvement: where a discernible level of participation is present at the level of the community within which a business operates, in decision-making as well as accountability 5. Environment: where concrete steps to safeguard, conserve and protect it match an acceptable level of awareness about a companys impact on its physical environment 6. Human and Labour rights: where the basic human values form the basis of corporate policy and there is evidence of adhering to laws that guarantee them 7. Political involvement: where there is freedom to associate with groups espousing any moral perspective on life and social issues, without fear of sanctions or organisational reprisals 8. Respect for people: where the fundamental rights of a person dictate measures for performance and productivity and do not extend human capacity beyond limits.
xxxiv

Zadek, S., AccountAbility Quarterly, summer 1997. The Fundamental Human Rights Conventions of the ILO. Handout, ILO/SAAT. New Delhi

xxxv xxxvi

CEPs SA 8000, is a certification system with 9 areas for evaluating businesses. The accreditation process will be managed by recognised monitoring agencies, such as, Societe Generale Surveillance (SGS), while certification will be awarded by CEPAA.
xxxvii xxxviii

van Luijk, H., Business Ethics in Europe chapter in the Encyclopaedic Dictionary of Business Ethics, Werhane & Freeman, eds. p 75. Scott, M. & F.H. Shah. Report on the Football Industry in Sialkot, Save the Children UK. 1996. Baseline data on Sialkots soccer-ball industry and its socio-cultural context. Child, J., Un-sourced class handout, 20 October, 1997. Describes in a continuum the progress of research from being highly realistic, (but) uncontrolled to highly artificial, (but) controlled. Ibid. Comparative characteristics of various data collection methods. Additional information in chapter 6.0- Conclusion, page 52. Cross-reference. Safety, Health, Attitude, People, Environment; adapted from a Nike factory inspection tool.

xxxix

xl

xli

xlii

xliii xliv

Punjab Labour Department, Minimum Wage Board, notification of July 1997: 1. unskilled Rs.1,950 /month 2. semi-skilled Rs.2,025 /month 3. skilled Rs.2,300 /month 4. highly skilled Rs.2,520 /month
xlv

Additional information on Limitations in chapter 3.0-Research Methodology, page 24. Bullet Summary of issues raised be stakehlders in the appendix-VI

xlvi xlvii