Sports footwear industry makes progress in eliminating sweatshops – UN report

4 February 2005

Thanks to intense consumer scrutiny, the sports footwear industry, often criticized for alleged violations of fundamental labour standards, has made greater progress in eliminating so-called sweat shops than the apparel and retail sectors, according to new report released by the United Nations labour agency today.

Thanks to intense consumer scrutiny, the sports footwear industry, often criticized for alleged violations of fundamental labour standards, has made greater progress in eliminating so-called sweat shops than the apparel and retail sectors, according to new report released by the United Nations labour agency today.

“Not surprisingly, progress is being made where serious efforts are being expended by buyer firms and where linkages between suppliers and buyers are the tightest,” says Ivanka Mamic, author of the study, an International Labour Organization (ILO) specialist in workplace relations and labour issues in global supply chains.

Such linkages are very tight between producers and multinational brands in the sports footwear industry, whereas progress has been spottier in the apparel sector and the retail sector, where in some areas even minimal compliance is not taking place.

The study – “Implementing Codes of Conduct: How businesses manage social performance in global supply chains” – is based on interviews with hundreds of managers, activists, government officials, factory workers and worker representatives and visits to over 90 enterprises and suppliers in the United States, Europe, China, Viet Nam, Thailand, Cambodia, Sri Lanka, Guatemala, Turkey and Honduras.

It says brand recognition and intense consumer scrutiny have led the sports footwear companies to develop more sophisticated approaches to code implementation and attributes the success of the industry to effectively applying financial and human resources to compliance efforts.

But the study also reveals that simply focusing on numbers does not reveal the entire picture. While a large compliance team can mean improved social performance of a firm’s supply base it also depends on the role that compliance staff play with suppliers.

Research indicates the need for multinational enterprises to move away from a “policing” model of compliance to a more consultative role with workers being empowered to oversee their own workplaces. This includes having a clear vision reinforced by top management commitment, effective training, and geographically dispersed teams able to provide hands-on assistance at the supplier level, the study says.

For example, one of the sports footwear and apparel companies studied reported having a dedicated team of over 100 people whose sole dictate was to oversee corporate social responsibility and code of conduct issues.

The study highlights the significant challenges facing the retail sector due to the extremely large and continually changing supply bases. In addition, the diversified mix of products handled by the retail sector results in difficulties identifying the entire supply chain.

In contrast to the footwear sector, for example, a major retailer with a continually changing supply base of over 5,000 factories told researchers it did not have a separate team responsible for supporting their compliance code. Instead, the study notes, it assigned this responsibility to the quality assurance department, asking 12 people there to spend 25 per cent of their working time on “ethical issues.”