The Limits of Voluntary Governance Programs: Auditing Labor Rights in the Global Apparel Industry

Abstract

Corporations have increasingly turned to voluntary, multi-stakeholder governance programs to monitor workers‘ rights and standards in the global apparel industry. While much has been written on whether, in general terms, these Corporate Social Responsibility (CSR) programs are or are not effective, the literature has not fully explored under what conditions these programs fail and succeed. This paper argues that CSR effectiveness varies significantly depending on stakeholder involvement and issue areas under examination. Corporateinfluenced programs can be effective in detecting and remediating minimum wage, hour, and occupational safety and health violations because addressing these issues provides corporations with legitimacy and reduces the risks of uncertainty created by activist campaigns. Corporate-influenced programs, however, are less effective in ensuring workers‘ right to form unions, bargain, and strike because these rights are perceived as lessening managerial control. I explore this argument by first contrasting corporate and labor-influenced programs, and then analyzing 730 factory audits of the Fair Labor Association between 2002 and 2009. This analysis is complemented with a case study of Russell Athletic in Honduras. Since the 1990s, there has been a considerable shift toward voluntary, multi-stakeholder governance mechanisms to monitor compliance with labor standards and rights in the global economy (Fung et al. 2001; 2007; Rodriguez-Garavito 2005; Seidman 2007). These ―Corporate Social Responsibility‖ (CSR) initiatives are a response to new challenges presented by economic globalization, notably corporate efforts to oversee the operations of increasingly-complex global supply chains. As media exposes and social movement activists highlight extreme labor abuses in factories producing for well-known global brands, corporations have been pushed to monitor their employment relations practices through multi-stakeholder programs. 1 The author thanks Dong Fang and Katherine Cornejo for their research assistance in coding FLA factory audits. Research for this paper was supported by an Alfred P. Sloan Industry Studies Fellowship.

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