Combatting the Business of Forced Labour in Global Supply Chains

By Genevieve LeBaron. Genevieve is Senior Lecturer in Politics at the University of Sheffield and Co-Chair of the Modern Slavery Working Group at Yale University. She currently holds a British Academy for the Humanities and Social Sciences Rising Star Engagement Award and a UK Economic and Social Research Council Future Research Leaders grant to investigate the global business models of forced labour.She has held visiting positions at Yale University, University of California, Berkeley, and the International Labour Organization. She is Founder and Editor of the Beyond Trafficking and Slavery section of openDemocracy.net. She recently gave a talk at SOAS as part of the Labour, Social Movements and Development Seminar Series. Follow her on twitter: @glebaron

The challenge of governing labor standards globally has never been greater. Incidents such as Apple’s detection of ‘bonded servitude’ at its major subsidiary factories in China; the discovery of slave labour in the Thai prawn industry, which supplies to Walmart, Tesco, and Costco; and the skyrocketing death rate for workers constructing stadiums for Qatar’s World Cup have drawn international attention to the severe labour exploitation that’s being fueled by discount-driven consumer markets.

Activists have become increasingly adept at linking severe labour exploitation back to the big brand corporations whose purchasing practices shape working conditions within global supply chains.  For instance, the Asia Floor Wage Alliance, in conjunction with local trade union and labour rights organizations, recently traced conditions at the Next Collections factory in Bangladesh— where workers were “routinely forced… into 14-17 hour shifts, seven days a week amounting to workweeks of over 100 hours” and paid poverty level wages of $0.20 to $0.24 USD— back to clothing manufacturer Gap.

Amidst calls for greater corporate accountability for labour standards, companies and governments have passed a flurry of initiatives intended to address and prevent modern slavery and forced labour in global supply chains.

On the government side, these include transparency legislation like the UK Modern Slavery Act and California Transparency in Supply Chains Act, which require some large manufacturers to disclose any voluntary measures they are taking to verify their supply chains against human trafficking and slavery.  On the corporate side, companies are investing in new social responsibility programs, and have expanded “ethical” auditing initiatives and NGO partnerships to monitor labor standards.

Yet, by most measures, and across many sectors and regions, labour exploitation remains endemic.  As I mentioned in my lecture at SOAS on 25 October 2016, I am in the midst of writing a new book (to be published by Polity next year) that will explain why these new governance measures are falling to protect the world’s workers. The answers are complex and vary across sector, supply chain, and governance initiative.  Here, I want to flag just one small but important part of the story, which relates to the problems of measuring the effectiveness of new legislation and private initiatives.

None of the new laws require companies to consistently report on a standardized and specific set of indicators (eg. the prevalence and known incidence of forced labour in their supply chains) or to provide straightforward and consistent information about whether the measures they are taking to combat exploitation are actually working.  Rather, under transparency law, companies can report on pretty much any aspect of their corporate social responsibility programs that they’d like.  And unsurprisingly, most companies have elected not to report information about the actual risks or patterns of forced labour, human trafficking, or modern slavery within their supply chains, nor on the progress they are (or are not) making towards combatting such practices.

According to one recent review of 230 company statements produced to comply with the UK Modern Slavery Act, “35% of statements say nothing on the question of their risk assessment processes, which is surprising for statements that are intended to be based around a due diligence approach.  Two-thirds do not identify priority risks, whether in terms of countries, supply chains or business areas.”  In short, under the new transparency legislation, companies are reporting, but they are reporting on vague and general issues related to social compliance rather than providing information on the real problems. As the recent review notes, “most statements do not go further than general commitments and broad indications of processes.”

Until companies are transparent about the risks of forced labour in their supply chains and provide baseline data about the scale of such risks, it won’t be possible to evaluate whether the measures they purport to be taking to address these risks are actually working.  Given the tenacity with which companies tend to triumph their successes, the lack of hard evidence confirming progress is suggestive of the opposite—that these new initiatives are doing little to alter the status quo.  The business of forced labour in global supply chains cannot be combatted without reliable and consistent information about the patterns of forced labour within global supply chains and the effectiveness of public and private governance efforts to combat them.

This piece was simultaneously published on OpenDemocracy.

Brewing Trouble in New York

By Kira Brenner. Kira studied the MSc in Labour, Social Movements and Development at SOAS in 2014-2015. She is now a PhD candidate in the Department of Development Studies, researching the Tunisian trade union movement since the Arab Spring. The views expressed in this article are Kira’s own, and don’t necessarily reflect the views of the SOAS Department of Development Studies.

I wake with a jolt at 3:30am. My two-model out of date iPhone, a relic of my previous life, blares a combination of its standard alarm and BBC World News. I stumble into the bathroom to shower, hoping that the hot water will wake me up. A little before 4 am, I walk out of my second-floor walk-up apartment, into the pitch black of northern Manhattan. I enter the tunnel that takes me to the station, which hasn’t had its lights repaired in years – a sign of the economic problems of the neighborhood – the florescent glow ebbing and flowing as I get further away from the street. I get to the platform. There’s a homeless man sleeping on the bench. I wait in my usual spot, so I’ll be closest to the exit in case the train is late this morning. New York, the city that never sleeps, isn’t so on top of it at this hour – the train never arrives at a consistent time, and the countdown clock can’t be trusted.

When it does arrive, I get in my usual carriage, and see the usual people. A young black woman in a Starbucks uniform, trying to stay awake despite the soothing rocking of the train. A Latino man in a Dunkin’ Donuts hat and shirt who is less successful at resisting sleep. A few others, wearing trademarked clothes that I, a white woman, have hidden under my coat. We, with the exception of the few drunk people stumbling home at closing time, are all service employees, all going to opening shifts somewhere downtown, where bankers and tourists don’t think twice about paying $6 for a latte – about what we each make in 45 minutes of slinging coffee or making sandwiches, before taxes.

The worst day I ever had at work started in the regular manner. Off the train, walk two blocks, change, clock in, find out what needs to be done. That day, what needed to be done was baking. We made these quiches in little boxes, using stale croissants, soup, and frozen egg whites. I used the last of the carton of egg whites, and went to the freezer to get some more. I opened the freezer and crouched down to reach them, always at the back on the bottom shelf, because that’s where it was coldest. As I grabbed a new carton, a tray of frozen rugalach that hadn’t been put away properly – because the top shelf was high and we “didn’t have room” for a stepstool – fell and hit me on the head. I don’t know how long I was knocked out for – not long enough for anyone to notice my absence from the front line. I came to, put the rugalach back in a better place, and told my manager. She offered me an ice pack. I suggested that I should go to the hospital, but she wouldn’t let me. I couldn’t leave without her permission – I’d be fired with cause, leaving me no recourse to even the slim unemployment benefits offered to low-wage workers[i]. She gave me a 10-minute break, and then it was back to making quiches and sandwiches.

Another girl I worked with got second degree burns all over her arms when an overfilled coffee carafe spilled all over her. That one they couldn’t ignore, and took her to the hospital. But they denied her worker’s compensation claim, and didn’t cover her emergency room bill. And when she needed time off work, away from hot liquids, they refused to pay her. That’s illegal under federal, state, and city law. But it’s rarely enforced, because the possibility of retaliation is very high.

But injuries like this happen all the time. I once pulled a tray of muffins out of the oven, and not having the proper safety equipment, the tray slipped. I heard a hiss and smelled burning flesh before I felt the pain. Probably a second degree burn. I still have an inch-long scar on my left arm, more than four years later. I have many others, but I can’t remember all of their origins. Is the one on my knuckle from the steam wand, or a hot pitcher, or the oven? Maybe some spilled boiling water? What about the one on my wrist? It became part of the daily experience, each shift ending by comparing battle scars with coworkers.

We weren’t paid well for this job. Our salaries started off a bit higher than the state minimum wage, which at that time was $7.25/hour, the same as the federal minimum wage, despite New York being the most expensive city in the country. My company had a wage increase schedule, with a potential of an extra $.25 twice a year, as long as you passed all your tests and didn’t call out sick too much. We were given no paid time off – no sick days, no holidays. Every day we didn’t work came out of our paychecks. I got all my raises, which amounted to an extra $20 a month and was actually really important to my life – it’s almost the cost of a weekly subway pass. But the pay certainly wasn’t enough to survive on in New York. We lived for holiday pay, the few days a year that our company was generous enough to pay time and a half. One year, the week of the Fourth of July, a federal holiday, we got a memo from HR. They had changed the recognized holidays, giving us our much-needed time and a half only on Thanksgiving, Christmas, and New Year’s Day. But the schedule for Independence Day had already been released, and they weren’t going to pay us for it. That’s wage theft. I called the state Department of Labor, and nearly had them open an investigation, but wanted to let my company do the right thing first. I told my district manager that what they were doing was illegal, and I’d confirmed it with the Department of Labor. She told me I was wrong, but the CEO was in town, and wanted to meet with some of the baristas, so we brought it up then. Our pay was corrected, and we got an awkwardly worded apology from HR, but the revised holiday schedule stayed in place.

The last straw for me came when they implemented new scheduling software, which was designed to reduce the number of breaks that we received. In New York, shift workers are entitled to one paid 15-minute break if a shift is less than 5.5 hours, and one 30 minute, unpaid break if it’s longer. No one wants to work a shift less than 6 hours, particularly when it takes about an hour of travel just to get there. Their new system had me, and nearly everyone else, working seven 5-hour shifts, which increased all of our travel time, but had us working fewer hours, and gave us no days off.

Despite all of this, my experience in low-wage work was better than most. I knew to call the Department of Labor because of my previous work as a union organizer, and I assumed that I wouldn’t face retaliation for bringing it up. I also had the decided advantage of being white. Both management and customers treated me better because of my skin. When I finally did leave for graduate school, many of my regular customers told me how happy they were for me, telling me that I was too smart to earn a living making their morning lattes. These were the same people who watched in awe as I walked a Belgian family through the menu in French, or sold tea in Arabic, but thought nothing of it when my black and brown coworkers did the same thing in Spanish. They knew that, for me, this job was just that – a job, a stopover on my way to better things. But for many others, this, or something similar, is how they will earn a living for the rest of their lives.

These jobs are challenging, exhausting, and often dangerous. Workers are given low wages, and companies turn huge profits on their backs. That’s why actions like the Fight for $15 are so important. In New York, wildcat strikes over pay and working conditions at fast food restaurants like McDonald’s finally spurred the legislature to act. On 31st December 2015, the minimum wage for fast food employees in New York City was raised to $10.50/hour. At the end of this year, it will be raised to $12/hour, and will increase $1.50/hour each year, until it reaches $15/hour in 2018. New York also passed a paid sick day ordinance, ensuring that people would no longer have to put their wages ahead of their health. More needs to be done on the issues of working conditions and general workplace safety, but this is a step in the right direction, and one brought about by workers banding together and demanding their rights.

 

[i] In most parts of the United States, workers are only eligible for unemployment benefits if they lose their jobs through “no fault of their own.” If you are fired for cause, these benefits are not accessible. Unemployment benefits also pay at a percentage of your previous income, meaning that low-wage workers are at a further disadvantage.

Active Students or Unaware Workers?

By Eva Herman. Eva studied the MSc in Labour, Social Movements and Development at SOAS part-time from 2013-2015. She now works at Middlesex University, assisting the Unpaid Britain research project, which investigates unpaid wages in Britain, and is funded by the Trust for London. The research project has a blog, which includes findings and reflections. The project can also be followed on Twitter and FacebookThe views expressed in this article are Eva’s own, and don’t necessarily reflect the views of the SOAS Department of Development Studies.

I chose to study Labour Social Movements and Development (LSMD) at SOAS after completing an undergraduate degree in Development Studies at the University of East Anglia. This course was, for me, the natural next step as throughout my undergraduate degree I discovered the most important thing to understand when it comes to development, economics or politics is work and change. As capitalist development has spread people have become increasingly dependent on work in order to survive. This spread of capitalism, however, has not come without altercations; the only way changes have occurred is through movements, as workers fight to better their conditions of work.

Throughout the course we learnt about how structures, processes and patterns of labour/work changed and were developed over time. We started to understand the conflict that lies at the heart of this process and capitalism – the conflict between capital and labour. This conflict in essence stems from the need for capital to constantly make a profit (accumulate) and to maintain its competitive edge, while simultaneously the social cost of labour increases as workers fight for their rights and improved working conditions that in turn erode ‘the basis of capital accumulation’ (Chang 2009:163). To deal with this conflict, and avoid the increasing social costs of labour, capital needs to invent new mechanisms and regimes of production. This process is what Chang (2005) calls the movement of capital.  It implies not only the physical movement but also changes made in mechanisms of production and technology (Silver 2003 and Chang 2009). Hence we learnt how this process occurred over time globally, regionally and locally.

Throughout this learning process we debated and discussed the different issues.  Everyone brought different perspectives and ideas forward. We were encouraged to think for ourselves and develop our own arguments and ideas. We were also encouraged to be active, and to think and develop campaigns to fight for better rights for workers. This was encouraged through the course as we developed a campaign (our group was based on Domestic Workers Movements in the UK), as well as being active in SOAS-wide campaigns for the cleaners. We joined our lecturers on picket lines when they were on strike, and wrote letters and petitions to the vice chancellor in support of all the staff at the university. We did all of this without ever once looking at ourselves and considering our own identity, situation and rights as workers, or where and how we fitted in in the whole process.

Many of the students that I studied with including myself worked in order to be able support themselves through their studies. I worked both during my undergraduate (as a health care assistant and doing promotion) and as a postgraduate (as a waitress). I never, however, knew what my rights were as a worker; I knew I should be paid minimum wage but that was about it. I also never really looked into what my rights were; this was partly due to not seeing myself as a worker as work was not my main activity. On the other hand, I trusted that my employers knew the law and felt like they were doing me a favour by employing me in the first place. I was not the only one – as the postgraduate representative for Law and Social Sciences at SOAS, I had a few students come up to me and ask how they could get extensions as they could not afford to have time off work to complete assignments.  One of the students who asked me about this said that they had asked their employer whether they could get paid leave to do their exam, to which the employer replied ‘we are not a charity, are you trying to fleece us dry? You are a part-time worker and not entitled to holiday pay.’

Students’ lack of awareness regarding their rights at work, especially when it comes to holiday entitlements, is not uncommon, so much so that certain employers and sectors may employ students specifically to get their competitive advantage. I now work at Middlesex University as a research assistant investigating unpaid wages in the UK. One aspect of non-payment that we are interested in is the non-payment of holiday pay. An investigation into the Labour Force Survey (LFS) found that 3.7% of the workforce are full time students. They are, however, concentrated in certain sectors: food and beverage services activities (SIC 56) has the highest proportion of full time students, with 19.9%; second is sports, amusement and recreation (SIC 93), with 15%; and third is retail (SIC 47) with over 11%. For the purposes of this blog we will focus on hotels and restaurants as the majority of students in full time education work in this sector (56%). When it comes to payment or non-payment of holiday pay a very interesting pictures appears. It shows that 30.4% of full time students received no days of holiday pay and 39.4% of students didn’t know if they had received holiday pay or did not respond to the given question. This is even more shocking when compared to those who are not in full time education. Only 5% of these received no holiday pay. 17% didn’t know if they had received holiday pay or did not respond to the given question. 30% received between 20 and 25 days holiday pay and 29% received between 25 and 30 days paid holiday (see graph below). This, in essence, shows an indication of lack of awareness of students, but also how employers are able to take advantage of them.

evabloggraph

Key informants of the Unpaid Britain project revealed that some employers run a ‘don’t ask don’t get’ policy when it comes to the payment of holiday pay. Hence the employment of students who are often unaware of their rights at work and who may not see themselves as workers is an important mechanism for employers in certain industries to maintain a competitive edge. The project recently developed an Index of Employer Delinquency which measures which sectors are the most exploitative; the food and beverage service activities appears second on this index.

I still maintain that when it comes to development studies the most important thing to understand is work and change. What I have learnt from this whole experience, however, is that not only do we need to understand the mechanisms and processes that are happening around us, but we should also be aware of how we fit into them. As long as students stay unaware of their own rights and don’t see themselves as workers, sectors such as the food and beverage service activities will remain exploitative, as they will never be challenged. So what we need to learn from this is the next time an employer tells us students, ‘No, you do not get paid leave’, we will have to say that we know full well that by law we do!

References

Chang D., 2009. ‘Informalising Labour in Asia’s Global Factory’, Journal of Contemporary Asia 39(2), pp. 161–179.

Chang, D., 2005 ‘Global Supply Chain and the World of Capitalist Work’, Asian Labour Update 54, pp. 1-11.

Silver, B. J. 2003. Forces of Labor: Workers’ Movements and Globalization since 1870, Cambridge: Cambridge University Press.

Time to give up on Corporate Social Responsibility?

By Ilona Kelly. Ilona graduated from the MSc in Labour, Social Movements and Development at SOAS in  2012-2013. She is now the Campaigns Director at Labour Behind the Label, an organisation working to improve conditions and empower workers in the global garment industry. Find out more about Labour Behind the Label here and on Twitter @labourlabel. All the views expressed in this article are Ilona’s own, and don’t necessarily reflect the views of Labour Behind the Label, or of the SOAS Department of Development Studies.

When you think about corporate social responsibility (CSR), what comes to mind?

Perhaps images of young girls going to school in some war torn country, or something similarly endearing. I suspect your initial thoughts were not related to brand management. But perhaps they should be.

A survey published in 2007 found that 94% of European-based CEOs believe communication about CSR initiatives significantly impacts a firm’s reputation.

Little wonder then that CSR is increasingly incorporated into business models. I challenge you to find 10 major global companies who do not address CSR in some fashion.

With most companies, their brand is their business and as such CSR is a strategic necessity – a business imperative. CSR provides an avenue for companies to illustrate the high regard with which they uphold their responsibilities to society. Through CSR, companies can project a positive brand image, build a reservoir of social goodwill and increase their public legitimacy. Therefore, ultimately CSR is a tool – an implicit form of “global brand insurance” (Werther Jr. and Chandler, 2005) – through which companies can build their brand and more importantly minimise any potential damage to it when bad things happen. Not if, but when, since bad things happen all the time. Some things are truly horrific.

As in 2006, when the multinational oil company Trafigura exported their toxic waste instead of paying for its proper disposal, and this toxic waste was eventually dumped in the Ivory Coast, significantly affecting the health of tens of thousands of people.

Or, in 2012, when over 250 people died in the Ali Enterprises factory fire in Pakistan– many burning alive, behind barred windows and locked exits.

Or,  in March 2016, when Berta Cáceres, a Honduran indigenous and environmental rights campaigner, was gunned down just a week after she received threats for opposing the company Desarrollos Energéticos S.A. (DESA)’s hydroelectric dam project.

These examples are merely a snapshot of what can and does regularly happen. It is important not to dismiss them as one off actions by particularly vile companies. There are so many more examples – just ask the growing number of organisations working on corporate accountability. So many, in fact, that we have long since passed the point of emerging patterns of corporate behaviour and are living in times of systemic corporate abuse.

I would like to draw your attention to the word ‘communication’ in the survey I cited at the beginning of this article. As we all know there is a distinct difference between words and actions. Regardless of the original intentions of CSR, it is now a business in itself; the business of smoke and mirrors. Measures that would truly prevent human rights abuses – regulations – and hold companies accountable – criminal liability – are vigorously opposed and even blocked by companies.

What we are left with are meaningless and often ridiculous voluntary codes of corporate conduct coupled with shiny feel good CSR initiatives, distracting consumers from ongoing systemic human rights abuses. This is how H&M can profess a commitment to use natural resources responsibly and to engage in ethical business standards that respect human rights including living wages, freedom of expression, and collective bargaining. This is the epitome of meaningless CSR rhetoric. Meanwhile in reality, the textile industry is among the world’s leading polluters. Human rights abuses in the garment industry are endemic: poverty pay; hazardous working conditions; short-term contracts and other precarious working arrangements; sexual and other forms of workplace harassment. Unions are few and far between.

H&M is a leading global retailer in the industry and its chairman Stefan Persson – son of the company’s founder, Erling Persson – has become one of the world’s richest billionaires. Lest we forget, the clothes are cheap and this man is rich because of environmental and worker exploitation.

In 2013, H&M launched its garment collection initiative – a true testament to CSR’s theatre of the absurd. One of the great orchestrators of fast fashion – a relatively new sourcing model that produces more garments, more quickly, and at lower cost, causing the further denigration of working conditions in the global garment industry – is now encouraging consumers to bring their old clothes back to an H&M store. Their agenda should be crystal clear. Returning old used garments encourages the consumer to purchase new H&M garments. H&M is hoping that by making consumers feel good about ‘closing the loop’, they will continue to perpetuate this return-more-buy-more cycle, ensuring the company’s continued revenue growth, and consolidating H&M’s leading market position. I am at a loss in trying to understand how an increase in consumption can eventually lead to less waste. More is more in this regard, especially when H&M is only making some products with “at least 20 % recycled materials”. That leaves about 79% of new materials. Lest we forget, H&M and their fast fashion enterprise is the reason why there has been a huge increase in textile waste.

CSR is grounded in an implicit assumption that in business everybody can benefit – epitomised in the phrase “it’s a win-win”. With blinding bursts of smoke and meticulously constructed mirrors of altruism, CSR seeks to disguise the fact that business is the engine of capitalism and has an overriding profit incentive. Capitalism reinvents itself when it is threatened and there is a profit incentive to change. The exponential growth of CSR is part of this process.

There will never be a win-win with unregulated capitalism. Someone has to lose so that someone else wins, especially if they win big. This is why human rights violations have been, and continue to be, a direct and intended consequence of capitalism. These human rights violations vary in degree, from the most extreme – slavery, genocide – to the seemingly more acceptable labour abuses such as long working hours, low minimum wages, precarious work arrangements in unsafe environments. Capitalism in the United States, for example, was built on the US-Atlantic slave trade, and the US would not be the great power it is perceived to be today without this. Stefan Persson is one of the world’s richest people precisely because of the banal exploitation of garment workers around the world. Essentially, capitalist production and accumulation are inseparable from violence and exploitation, and no amount of CSR can change this reality.

And yet, the private sector continues to be perceived as an important and neutral stakeholder in the fight against poverty and other systemic human rights abuses. Private-public partnerships are increasingly the norm, and the UN even identified private financing as an essential element in ensuring the success of the UN sustainability goals. There is a clear problem here: namely the private sector is not a neutral actor – it is ruled by the drive for profit. Therefore letting business engage and lead such efforts puts them fundamentally at risk, particularly if they are in need of financing. Just as companies co-opted CSR into their business models, if given the opportunity companies will also co-opt the human rights and development agendas in order to perpetuate their power. The great expansion of CSR discourse reflects the speed with which its bandwagon has been barreling down the CSR path, marginalising alternative responses to corporate abuse: with every twist, navigation becoming ever more difficult, and with every turn, becoming increasingly difficult to turn around. We urgently need to pause, survey the landscape, and question the evolving role of business in international development and the fight for global human rights, spawned out of traditional CSR approaches. Thankfully we are presented with just such an opportunity.

In December 2015 a group of researchers identified 100 of the most pertinent research questions to “the post-2015 international development agenda”.  Among them are a whole range involving the private sector, including those which address the role of business in protecting human rights. While I am relieved to see this issue highlighted, I hope it doesn’t bear with it an implicit assumption that there should be a role for business in protecting human rights. That’s not to say business should not respect human rights. Of course it should, and the UN has said as much in its Guiding Principles on Business and Human Rights. However, we must be very wary of any role for business in the protection and promotion of human rights. The ruling classes do not seize and maintain power in order to feed the hungry and shelter the homeless (Eagleton, 2011: 39). Rather they are driven by the imperative of their own material self-interest, and if aiding the poor and powerless happens to be a convenient by-product, even better. The growing number of social projects initiated by some of the world’s billionaires speak to this point, and highlight the growing complexity of the CSR landscape.

Last year during the United Nations General Assembly, Bill Gates and Mark Zuckerberg announced their ambition and support towards the goal of universal Internet access by 2020. While this is a just and noble cause, what about the goal of universal access to safe water? According to Water.org, 1 in 10 people lack access to safe water and 1 in 3 or 2.4 billion people do not have access to adequate sanitation. What about the eradication of malaria? According to the World Health Organisation, malaria causes close to half a million deaths each year. I think we should seriously heed the prospect of every person on the planet having access to the Internet before water and sanitation or cures for malaria, tuberculosis and other treatable diseases. Or perhaps the hope is that a person can use the Internet to install a well, construct a toilet, and locate the nearest treatment center – just google it. Moreover, the real question is who should get to decide these priorities? And why do billionaires – the ruling class – get to pick and choose which issues get dealt with and which do not, and through which means?  At the risk of seeming trite, it’s not as if universal Internet access does not also benefit the founders of Microsoft and Facebook.

Here’s the thing – as seemingly great as it is for companies like H&M or individuals like Gates and Zuckerberg to give back, even when investing thousands and millions of dollars in various initiatives, they ultimately are not challenging the system that provided them with their excessive wealth and power. If anything they are strengthening it, as they are able to foster resources that the majority in class-society are shut out from, and are only accountable to themselves and their shareholders (Eagleton, 2011: 39). This is why upon closer inspection, CSR does not address power imbalances but rather affirms them. This is why workers are rarely asked what they want and need. This is why the poor are generally treated either with contempt or with paternalism. It is essential to remember that workers and the poor have agency. Only in affirming their agency and providing resources for the poor to assert their agency through exercising choice do we step on the path to a fair and just society. This would be true CSR. Everything else is an illusion – including the belief that we can harmoniously walk hand in hand with the private sector.

References

Eagleton, Terry, 2011. Why Marx Was Right, New Haven & London: Yale University Press.

Werther Jr., W.B., and Chandler, D. 2005. ‘Strategic Corporate Social Responsibility as Global Brand Insurance’, Business Horizons 48(4): 317-324.

Free Trade Zones: Who wins?

By Rosie Rawle. Rosie is currently studying the MSc Labour, Social Movements and Development part-time. The views expressed in this article are Rosie’s own, and don’t necessarily reflect the views of the SOAS Department of Development Studies.

In the tug of war over profits and terms of a new Free Trade Zone (FTZ), who wins? A flick through international relations theory would reveal two seemingly opposing sides – transnational companies (TNCs) at one end of the rope and states in the global south at the other. But are these the only players and can only one team win?

Against a backdrop of neoliberal deregulation and privatisation, it is often quoted that today’s engine of globalisation is the ‘new international division of labour’ (Frobel et al, 1981), a process wherein the reorganisation and relocation of production is bringing new industrial countries into the ‘global factory’ (Chang, 2005). FTZs epitomize such changes, each providing a ‘regulatory space in a country that is aimed at attracting export-oriented companies by offering these companies special concessions on taxes, tariffs and regulations’ (ILO, 2008). Indeed, their recent global proliferation has invited strong attention from a range of literature (FTZs totalled 79 in 1975, more than 3500 were recorded just over 30 years later).

Introducing Neoclassical Economic Geographers: “It’s all about business…”

It can appear that with 3500 zones to choose from and rocketing profit margins, some TNCs have more than the upper hand. Indeed for Neoclassical Economic Geographers, international business is equipped with the resources and technical division of labour to go ‘place shopping’, searching for countries that offer the most attractive combination of production and market conditions (Castree et al, 2004:75). They are able to move regardless of barriers of sovereignty and the will of southern governments (Dicken, 1998). In fact, for some, FTZ agreements firmly reflect the market’s grasp over the state (Cling, 2001; Khatik and Saxena, 2010). ‘Weak states’ in need of foreign investment and exchange will bend over backwards to create FTZs and lure in TNCs. Committing themselves to high set-up costs, expensive infrastructure, lost opportunities in tax revenues and creating displaced populations, states take high and costly risks to secure interest from international investors (Cling, 2001).

Furthermore, it is claimed that FTZs fail to significantly boost domestic economies and developmental goals. ‘Spill-overs’ occurring in the form of skills and technology can often remain strictly within the enclave, whilst investment in domestic inputs and wages remains relatively low (Warr, 1989). From this angle, FTZs are directed by international business, and act as a tool for the laissez-faire market to penetrate closed economies and freely manipulate state policy. Nevertheless, such claims are not free from criticism.

Introducing Developmental State Theory: “…the business of the state.”

In contrast, statist attitudes portray FTZs as the consequence of intervention in international market freedoms. Such views have recently been propelled by the rise of developmental state theory, emerging in response to East Asia’s miraculous growth period in the 1960s. Here it is recognised that owing to priorities, organisational arrangements and institutional links (Weiss, 2000), developmental states are able to control elements of business and avoid its capture, operating with ‘embedded autonomy’ (Evans, 1995).

For a range of Keynesians who turned to this model in the 1980s, FTZs have arisen through strategic design of the state. China’s government in particular has accordingly been able to utilise cheap labour as a comparative advantage over other East Asian states, attracting foreign investment and technology into specific zones, whilst maintaining control over the direction and type of development taking place (Bolesta, 2007; Wang and Bradbury, 1986; Ge, 1999). In turn, this has allowed the state to experiment with urban centres of liberal reform in a far more measured manner than those exposed to large-scale structural adjustment programmes in the 1970s (Bolesta, 2007). Dodging the vulnerability of reliance on international markets, scholars stress that states are able to reap much of the benefits, generating returns through employment and promotion of nearby local enterprises (Jayanthakumaran, 2003). In sum, for these writers, FTZs are the successful product, and deliberate intention, of developmental states.

Capital vs Labour

The above authors emphasis that TNCs, southern governments, and society are not necessarily on opposing teams. Preoccupied with these relations, however, the researchers neglect the issue of class. From a Marxist perspective, it can better be seen that ‘the distinction between society and the state conceals how bourgeois relations are present in both spheres’ (Cranston, 1969:74). The state is not a neutral, pluralist arbiter, but – with its capacity to set laws, alter the market, coerce and repress – is a tool for capitalist domination (Cranston, 1969). The goal of capital is to accumulate, using ‘spatial fixes’ to avoid contradictions of overaccumulation and rising costs of labour (Harvey, 1982). By its very nature, capital is destined to move, be that in the form of TNCs or otherwise.

Through collusion and competition, state and market capitalists often work with, rather than against, each other in an effort to secure the long-term reign of capital accumulation (Chang, 2013; Harvey, 1982; Massey, 1995). In constructing FTZs, this process occurs on all scales. For example, whilst regional state officials compete for the interest of TNCs (Wang and Bradbury, 1986), some will help elevate medium to large-scale domestic enterprises as key providers of inputs to the zones (Chan and Pun, 2010). Equally, international business owners will hire middle managers from domestic countries, but mainly from the middle to upper classes (Chan and Pun, 2010).

As authors suggest, the practice maintains a constant system of unchanging winners (capital) and losers (labour). For labour, this entails deepening sequences of exploitation, directed by policy and market pressures. Whilst regional governments uproot collective livelihoods, (Banerjee-Guha, 2008), national development programmes encourage rural-urban migration, each producing large pools of surplus labour that keeps employee turnover high and urban wages low. Meanwhile, TNCs control labour-related expenses and pressure suppliers in the zones to reduce production time, thus perpetuating strict managerial systems of discipline over the daily lives of workers (Chan and Pun, 2010). Furthermore, it is the most vulnerable in society that are preyed upon by capital. As seen in the mainstream media, FTZs are commonly populated by young, female workers, organised along lines of ethnicity, caste, and class. From this, it would appear that capital wins.

Nevertheless, I have a pressing message: labour should not be assumed a subordinate fate. Crystalised in the writings of Herod (1997a, 1997b, and 2001), labour is an actor with potential, an ability to resist, and, furthermore, an ability to rework the dynamics of capital and restructure its spatial configurations. For just one example, look to the recent success made in Honduras, as workers in FTZs galvanised to force Fruit of the Loom factories not to move, but reopen, and negotiate a cross-company policy for union recognition as a means to equalise conditions across space (Anner and Hossain, 2014). Such a case demonstrates that whilst capital is pulling hard on one end of the rope, labour at the other can from time-to-time gain the upper hand.

References

Anner, M. and Hossain, J. 2014. Multinational Corporations and Economic Inequality in the Global South: Causes, Consequences, and Countermeasures. Paper Prepared for the 9th Global Labour University Conference [Online] Available at: http://www.global-labour-university.org/fileadmin/GLU_conference_2014/papers/Anner.pdf (accessed 3.3.16)

Banerjee-Guha. S., 2008. Space relations of capital and significance of new economic enclaves: SEZs in India. Economic and Political Weekly 43 (47) pp. 51-59

Bolesta, A. 2007. China as a Developmental State. Journal of Economics 5 pp. 201-211

Castree, N., Coe. N. M., and Samers, M. 2004. Spaces of Work: Global Capitalism and Geographies of Labour. London: SAGE Publications Ltd.

Chan, J. and Pun, N. 2010. Suicide as Protest for the New Generation of Chinese Migrant Workers: Foxconn, Global Capital, and the State, The Asia-Pacific Journal, 8(37): 2.

Chang, D. O. 2005 Neoliberal Restructuring of Capital Relations in East and South-East Asia, in A. Saad-Filho and D. Johnston (eds.) Neoliberalism: A Critical Reader. London: Pluto Press.

Chang, D. 2013. Labour and the ‘Developmental State’: A Critique of the Developmental State Theory of Labour, in Fine, B., Saraswati, J. and Taasci, D. (eds.) Beyond Developmental State: Industrial Policy into the Twenty-First Century. London: Pluto

Cling, J. p. 2001. Export Processing Zones: A Threatened Instrument for Economy Insertion? Development et insertion international: Document de travail DIAL. Paris: DIAL and University of Paris

Cranston. M., 1969.  John Locke and Government by Consent, in. Thomson, D. (ed.) Political Ideas. Middlesex: Pelican Books

Dicken, P. 1998. Global Shift. London: Paul Chapman

Evans, P. 1995. Embedded Autonomy: States and Industrial Transformation. Princeton NJ: Princeton University Press.

Frobel, F., Heinrichs, S., and Kreye, O. 1981. The New International Division of Labour. Cambridge: Cambridge University Press

Ge, W. 1999. Special Economic Zones and the Opening of the Chinese Economy: Some Lessons for Economic Liberalisation. World Development. 27 (7) pp. 1267-1285

Harvey, D. 1982. The Limits to Capital. Oxford: Basil Blackwell

Herod, A. 1997. From a geography of labour to a labour geography: labour’s spatial fix and the geography of capitalism. Antipode 29 (1) pp. 1-31

Herod, A. 2001. Labour geographies. New York: Guilford Press

ILO. 2008. Economic Processing Zones -Symbols of Exploitation and Development Dead-End. Brussels: International Confederation of Free Trade Union

Jayanthakumaran, K,. 2003. Benefit-Cost Appraisals of Export Processing Zones: A Survey of the Literature. Development Policy Review. 21 (1) pp. 51-65

Massey, D. 1973. Towards a critique of industrial location theory. Antipode. 5 pp. 33-39

Wang, J. and Bradbury, H. 1986. The Changing Industrial Geography of Chinese Special Economic Zones. Economic Geography. 62 (4) pp. 307-320

Warr, P. 1989. Export Processing Zones: The Economics of Enclave Manufacturing. World Bank Research Observer. 4 (1) pp. 65-87

Weiss, L. 2000. Developmental States in Transition: adapting, dismantling, innovating, not ‘normalising.’ Pacific Review. 13 (1) pp. 21-55

Keep calm and let the students disrupt injustice: a response to Achille Mbembe

By Jared Sacks. Jared is a freelance journalist and writer from South Africa and founder of a children’s non-profit organisation. He is currently studying the MSc Labour, Social Movements and Development programme at SOAS. The views expressed in this article are Jared’s own, and don’t necessarily reflect the views of the SOAS Department of Development Studies. Twitter: @jaredsacks1 Medium: @jaredsacks

This article originally appeared on The Daily Vox.

As township struggle seeps into elite spaces such as the university, many privileged academics and university managers have become terrified of what they perceive as ‘uncivil’ protest. Jared Sacks responds to Professor Achille Mbembe’s recent criticisms of student politics.

A few months ago, I read the famous exchange of letters between Theodor Adorno and Herbert Marcuse. The debate was sent to me by a professor at the School of Oriental and African Studies (SOAS), University of London. He meant to challenge me, and my fellow protesters,  to think more deeply while we sat in occupation of the university’s premier corporate events room: The Brunei Suite.

Our occupation began in response to the university’s plan to cut 184 courses as part of a £6.5 million restructuring. Britain is currently in the throes of massive academic austerity cuts that have resulted in student fees being raised to over £9,000 per year from being free as recently as 1998. Yet, SOAS’s proposed new cuts are entirely unnecessary: the university has generated significant surpluses during five out of  the six past years. Moreover, without new cuts at the national level (for the time being at least), management cannot in fact justify the massive cuts to this tiny specialist university.

That is, they cannot justify the cuts except through the use of garnished PowerPoint presentations that easily mislead those of us untrained in tricks of mathematical misrepresentation.

And so, dozens of students occupied the Brunei Suite – the logic being that disrupting this lucrative venue for the university would not only force the administration into negotiations with students and workers, but also assert the primacy of the university community in the face of top-down managerialism.

In his analysis of the debate between Adorno and Marcuse, Achille Mbembe passes over an important insight to be drawn from the exchange: the positionality of the two philosophers. It is certainly problematic to fetishise positionality – a concept speaking to the effect that identity has on our ability to see and understand things from other perspectives. Yet, Adorno is quite clear about why he is so perturbed by the student protests:

“After all, I have to look out for the interests of the Institute—our old Institute, Herbert—and these interests would be directly endangered by such a circus, believe me: the prevailing tendency to block any subsidies coming to us would grow acutely.”

In other words, Adorno has positioned himself within the university management – a role the places his managerial responsibilities and, in particular, the need for funding, at the core of his anxieties. It is therefore unsurprising that this intellectual would pledge his allegiance to the institution rather than threaten his life’s work to back the students.

This is not to say that identity is something essentialist; that one cannot ally oneself with the oppressed against one’s self-interest. Indeed, Marcuse, through taking theory and practice seriously, is at least able to challenge his own prejudices – that of his position above the students in the hierarchical university, and perhaps that of his age as well.

Adorno laments the student’s challenge to his academic authority: “Here in Frankfurt, and certainly in Berlin as well, the word ‘professor’ is used condescendingly to dismiss people”. But one might also ask, what gives Adorno the right to demand respect from students merely due to his title rather than earning respect through his actions? When the students chose to take Adorno’s institution on directly through occupation, were they not also asserting their equality – an implicit critique of the problematic dichotomy between student and teacher?

In reality, actions, however problematic, speak louder than theory.

Peppered through Adorno and Marcuse’s letters, therefore, is the question of privilege. Common to such privilege is disdain for the unpalatable tactics of resistance of from below. This was the case during our protest at SOAS where a range of upper-management and academic deans publicly denounced the tactic of occupation as disruptive and undemocratic. They also, however, implicitly exposed their own privilege and career interests.

The same is true in the aftermath of the massive #RhodesMustFall and #FeesMustFall mobilisations in South Africa which has incurred its own backlash. As township struggle seeps into elite spaces such as the university, many privileged academics and university managers have become terrified of what they perceive as ‘uncivil’ protest. Their middle class sensibilities instead being accustomed only to ‘official’ and ‘sophisticated’ forms of power and violence – that of economic exploitation, structural racism, and the militarisation of space.

In fact, the student disorder is nothing compared to the vicious repression that VC Pretorius sanctioned at the University of the Western Cape, the mass arrests of hundreds of peaceful protesters at the University of Johannesburg, or the violent displays of masculine authority which VC Habib currently has on display at Wits University.

Absurdly, one of the key contentions in the debate between Adorno and Marcuse is who would meet whom in their respective favourite Swiss resort towns. While the dispute has much to do with Adorno’s failing health, the fact that such a preoccupation exists, juxtaposed with talk of the ‘fascist’ vs ‘transformative’ tendencies of the student protests, reminds us just how entrenched privilege remains even when directly challenged.

Our challenge then, is to recognise our own position and then act within the composition of forces struggling for control of these institutions. Just as the youth of ’68 had much to teach the old philosophers caught off guard by the student uprisings, the youth of today have laid bare privilege for all to see. Whether it is the patriarchy of the male-dominated academy, the racism of the colonial university, or the violent authoritarian practices of the vice chancellors, we all owe a debt to the students, as well as the non-academic and academic workers who have join them in struggle.

This is the real lesson that Adorno and Marcuse can teach us – though perhaps it is only visible if one reads between the lines from a student-activist perspective.

Will the TPP be good for workers in Vietnam?

By Joe Buckley. Joe studied the MSc Labour, Social Movements and Development programme at SOAS from 2012-2013. He is currently a PhD candidate in the Development Studies Department at SOAS, researching labour informalisation in Vietnam. The views expressed in this article are Joe’s own, and don’t necessarily reflect the views of the SOAS Department of Development Studies.

International trade deals are often condemned because of the effect they will have on workers’ wages, conditions, and bargaining power. In America, Democrat party members and trade unionists are currently campaigning against the Trans-Pacific Partnership (TPP), a trade deal concerned with different matters of economic policy, such as lower trade tariffs and investor-state dispute settlements, and involving 12 countries, including Vietnam[i]. The final text of the deal was agreed in October 2015, and, having previously been secret, was made public in November 2015 (United States Trade Representative, 2015a).

The argument against the TPP in America is that the deal will take American jobs and exert a downward pressure on the wages and conditions of jobs that remain (see for example, Gerard, 2015). However, the impact that the TPP will have on workers in Vietnam, has attracted much less attention. Some observers argue that the TPP will be good for Vietnamese workers as the government has agreed to allow independent trade unions for the first time. This article will examine such claims.

Currently, there are no independent unions in Vietnam. The Vietnam General Confederation of Labour (VGCL) is a state-led union, constitutionally obliged to support the Communist Party and, despite some changes in recent years, is a long way from genuinely representing workers (Pringle and Clarke, 2011). Partly due to the union’s failure to represent and fight for workers, all strikes are technically illegal wildcat strikes, and collective bargaining mechanisms and labour arbitration councils are ineffective. Furthermore, there is no independent voice representing labourers in the national policy sphere, such as during annual minimum wage negotiations.

It is in the context of this low bar that some argue the TPP will be good for workers in Vietnam. As part of the agreement, all parties have committed to the following labour stipulations: the formation of independent trade unions and collective bargaining processes; an end to forced labour and child labour; ‘acceptable’ minimum wages, hours of work, and health and safety; and the prevention of the degradation of labour in Export Processing Zones (United States Trade Representative, 2015b). Additionally, Vietnam has signed a further agreement, detailing how it will achieve these labour protections (United States Trade Representative, 2015c).

Commentators have argued that these reforms are evidence that the deal ‘will help workers in Vietnam pursue their rights’ (Malinowski, 2015). Nhung points to four positive things the TPP deal will give labourers in Vietnam: better working conditions; reduction in the over-exploitation of women; freedom of association; and greater skills and knowledge (Lao Động Việt, 2015a). There is also hope that independent trade unions, even if just at the factory level initially, would inevitably lead to democratisation in Vietnam, similar to the Solidarity movement in Poland.

The VGCL’s position on the TPP’s labour stipulations, according to the organisation’s vice president, Mai Đức Chính, is that Vietnam’s laws are consistent with the commitment to end forced and child labour, and that the country has already been implementing an action plan to this end and will continue to do so. He also asserts that the law is already adequate with regards to minimum wages, hours of work, and health and safety. Regarding the right to form independent unions, Chính says that workers will have the right to form and join organisations in their workplace, but must then choose to join the VGCL or register with authorised state agencies. After completing a process ‘specified in legal texts’, workers’ organisations will have ‘some’ autonomy, in accordance with International Labour Organisation (ILO) regulations and Vietnamese law (in Lao Động, 2015).

This somewhat vague interpretation seems different to the intended meaning of the agreed labour reforms, and perhaps suggests that Vietnam is trying to reinterpret the stipulations – something observers are wary of. While the Free Vietnam Labour Federation, an organisation which campaigns for labour rights and freedoms in Vietnam, including independent unions, welcomes the labour regulations in the TPP agreement, they express concern that they won’t be enforced properly (Lao Động Việt, 2015b)[ii]. Indeed, it is by no means certain that genuine reforms will occur. Tùng, Đức and Trội argue that the Vietnamese government has systematically ignored labour rights violations, and refused to implement policies to protect workers; therefore ‘promises of future reforms by the Vietnamese government should not be trusted’ (2015: 1).

Such a scenario is not without precedent. It has been argued that Vietnam could conceivably make promises to create independent unions, but then ‘forget’ after the TPP comes into effect, as happened when Vietnam became a member of the United Nations Human Rights Council (UNHRC) and the World Trade Organisation (WTO) (Anon.,2015). Alternatively, Vietnam may establish ‘fake’, nominally independent, trade unions that would nevertheless be controlled by the Communist Party – like the current situation of religious organisations in Vietnam (ibid).

Furthermore, the reason that Chính mentions ILO regulations is because the labour reforms to which Vietnam has agreed in the TPP are not new – they are the same as those in the ILO’s 1998 declaration on Fundamental Principles and Rights at Work. Vietnam, as a member of the ILO, has already had to agree to these conditions, so ‘its agreement to abide by the TPP’s labour regulations is just a re-affirmation of old commitments and is not tantamount to a new concession’ (Hiệp, 2015: 10) – commitments which are regularly violated. There is, therefore, good reason to believe that Vietnam will not implement the reforms to which it has signed up. Indeed, the Director of the Worker Research Institute claims that the country already meets the labour requirements (Thọ, in Hạnh, 2015)!

Critics also argue that the labour agreements are unenforceable. If and when Vietnam breaks the labour regulations, the TPP will already have become trade policy, with no enforcement mechanisms to solve the situation, or to pressure Vietnam into making the previously promised changes (Calmes, 2015Anon., 2015). If this happens, the positive labour reforms so flaunted by the TPP’s cheerleaders will have had no positive impact on Vietnamese workers.

Although the labour regulations may be unenforceable, one aspect of the TPP agreement does have enforcement mechanisms – the investor-state dispute settlement, which allows for companies to sue governments, if the government acts in a way that seems to damage the company. This behaviour has precedents. Chapter 11 of the North American Free Trade Agreement (NAFTA)[iii] details investor-state dispute settlements, which are similar to those in the TPP. Companies have used this to sue governments – Mexico has had to pay over $204 million of public money in compensation to corporations, while Canada has paid nearly $130 million (Sinclair, 2015: 29). No American company has ever lost a case. As part of a separate trade deal that also had an investor-state dispute settlement, the French company Veolia sued Egypt for raising the minimum wage (Ebehardt, 2014: 6). The power of corporations to sue Vietnam, then, threatens to greatly weaken workers. Companies generally want low wages and a flexible workforce, so if the Vietnamese government did decide to enact policies to strengthen labour – such as a big increase in the minimum wage[iv] – companies may sue, forcing the country to pay compensation and reverse policies. Even if independent unions were allowed, how much power would they really have to struggle for policy changes in the face of this corporate power?

Finally, the entire aim of the TPP is to allow more liberalised and freer investment – intensifying a process that has been occurring in Vietnam since the mid-1980s. Evidence from around the world shows that this leads to less secure work, with the loss of social protections and non-wage benefits, and increases in subcontracting and short-term employment (Chang, 2009Standing, 2009). The 30 year process of labour informalisation in Vietnam, then, is set to continue and intensify under the TPP. Work will become even less secure, and, without powerful independent workers’ organisation to slow or stop the process, there is no regulation in the TPP agreement to give labourers’ ‘decent work’, to use the ILO’s common phrasing (ILO, 2015).

So, will the TPP be good for workers in Vietnam? It doesn’t look like it. The deal contains provisions for labour rights, but these seem unenforceable, in contrast to the very much enforceable rights of corporations to sue governments. There are also few provisions to protect workers against the next wave of informalisation and flexibilisation that they are about to experience. Very precarious labourers on the extreme end of the informalisation spectrum – the huge bulk of people working as street vendors, motorbike taxi drivers, or daily casual hired hands – are not even considered in the TPP labour chapter. What will happen to them?

References


Footnotes

[i] In addition to the USA and Vietnam, these are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, and Singapore.

[ii] Not to be confused with the Lao Động newspaper. Lao Động Việt is the shorthand name of the Free Vietnam Labour Federation, an independent organisation, while the Lao Động newspaper is one of two official newspapers of the state trade union, the VGCL.
[iii] A 1994 agreement between Canada, Mexico and the United States.

[iv] The system that determines minimum wage levels is already weak. A body comprised of the Ministry of Labour, The VGCL, and the pro-investor Vietnam Chamber of Commerce and Industry negotiate between them, heavily leaned on by organisations such as the American and European Chambers of Commerce in Vietnam.