A Report On Human Rights Standards Business Essay Example

production of their supply chain. It also investigates the role that these retailers play in safeguarding human rights globally.

Contextual Details

Human rights are inherent and universal freedoms possessed by individuals, irrespective of any interference from governments or groups. Constitutional laws and organizations devoted to advocating for human rights guarantee the safeguarding of people's civil liberties.

The violation of human rights is unacceptable in any situation, regardless of the circumstances. However, due to rapid economic growth, multinational companies are becoming more prone to violating human rights due to increased international competition, unequal distribution of wealth, and inadequate national laws (Krage, 2007). The global economy is undergoing various changes that affect multinational investments, capital markets, technology, and business. Particularly, these changes impact companies, consumers, workers, and governments. Globalization has led to an interdependence in economic relations that has created more opportunities for advancements in business investment finance global production organization as well as increased social and political interaction among organizations and individuals worldwide (World Commission on the Social Dimension of Globalization,
2004). Unfortunately,
not all countries are progressing at the same pace or achieving the same outcomes.

This report, resulting from a literature review, examines how major clothing retailers uphold human rights standards in their day-to-day business activities. Specifically, it focuses on the trend among large clothing retailers operating in the United Kingdom. The multinational clothing retailers under investigation are Nike, Gap, Marks & Spencer, and Levi Straus. The objectives of this report are to explore the historical background of the textile sector's adherence to human rights and analyze the emergence of ethical concerns and the impact of Voluntary Labour Standards (Codes of Conduct) in the industry. To examine the role of

transnational apparel retailers in upholding human rights and the challenges they face, this section includes a literature review, analysis, and discussion (Misol, 2006; Christerson and Applelbaum, 1995; Hathcote and Nam, 1999).The literature review examines how different authors define human rights, ethics, and business ethics, which essentially refer to the same idea.

According to Rory Sullivan, human rights can be described as a universal moral right that applies to all employees regardless of their nationality. It aims to acknowledge and safeguard these rights in an unalterable manner (Sullivan). Boddy (2005) contends that human rights encompass fundamental freedoms and privileges for individuals, such as consent, privacy, freedom of speech, fair treatment, the right to life, and safety. The United Nations Universal Declaration for Human Rights (UDHR) incorporates economic, social, and cultural rights into the definition of human rights. This includes the right to employment, education, respect for culture, and a decent standard of living (Rude Mares). Conversely, Crane (2007) defines ethics as the examination of morality where reason is utilized to establish specific rules and principles determining what is deemed right or wrong in a given situation. These rules and principles are commonly known as ethical theories (Crane).

Fritz et Al (1999) and Hunt et Al (1989) defined ethical company as the rules that are positively related to employee's organisational commitment. According to Boddy (2005), ethics is the code of moral principles and values that guide people's actions, particularly in determining acceptable behavior that could potentially harm others. Taylor (1975) described business ethics as the business environment and the basis for making right decisions, principles, and laws that govern the interactions between different parties within an organization, such as

employees, customers, suppliers, and shareholders in determining what is right or wrong. The intensified competition due to globalization led clothing retailers and brand manufacturers to outsource their production to low-wage, economically less developed countries (Crewe, 2004; Klein, 2000). As a result, in the late 1980s and early 1990s, traditional European and U.S. garment and footwear companies started sourcing their products from developing countries (Jones, 2005).

The tendency of not following moral norms is especially visible in low-skilled industries like garment, footwear, and plaything industries (Christerson and Appelbaum, 1995; Hathcote and Nam, 1999). When facing competition, individuals are unable to comply with moral norms. As a result, they incur higher costs, making them worse off compared to their competitors. Such situations continually undermine adherence to moral norms. Through evolution, individuals who act "morally" will eventually be recognized.

Karl Marx and Max Weber shared a common understanding that the competitive market inhibits individuals from simultaneously adhering to moral principles and opportunistic behavior. While societal structures have evolved over time, ethical concepts and categories have largely remained unaltered. Many ethical principles continue to emphasize moderation, sharing, redistribution, and giving.

They advocate for selflessness and the prioritization of the common good. The pursuit of self-interest and individual benefits is often viewed as a harmful and immoral drive that needs to be controlled (Christoph, 2005). Consequently, globalization has contributed to numerous human rights violations within many multinational corporations (Misol, 2006). In their pursuit of maximizing profits, these corporations engaged in child labor exploitation and suppressed workers' rights in their supply chains. This generated a strong public outcry that served to increase global awareness regarding the protection and promotion of human rights in multinational

corporations.

The attention on companies adhering to human rights in their operations, particularly in terms of worker welfare and environmental protection, has been widely discussed due to the focus on self-regulation and corporate social responsibility. Academics, the media, and NGOs have shown interest in ethics for many years. Consumers and pressure groups also emphasize the significance of business ethics and call for more ethical practices from businesses. Throughout the early 1990s until now, ethical business has become a crucial part of corporate social responsibility by establishing minimum labor standards within supply chains. However, Blowfield (1999) argues that ethical business now encompasses broader standards that encompass environmental concerns as well.

Corporate social responsibility encompasses the implementation of core values such as avoiding human rights abuses, supporting workers' right to join or form labor unions, eliminating compulsory and child labor, and preventing workplace discrimination (Cavusgil, Knight, and Riesenberger, 2008). Reverend Leon Sullivan established guidelines for corporate social responsibility in 1999 that urged global companies to uphold the Global Sullivan principles. These principles aimed to promote economic, social, and political justice in business operations while advocating for human rights and equal opportunities throughout employment levels. The concerns surrounding child labor, physical and verbal abuse, and violations of core labor rights during the production of toys, soccer balls carpets, and clothing sparked a series of anti-sweatshop protests and media campaigns in the early 1990s (Varley, 1998). Notably in China - particularly for companies like Levi Strauss - attention was drawn to human rights abuses due to events like the Tiananmen Square massacre in 1989 and U.S.-China trade negotiations.

Bonacich and Appelbaum (2000) discussed protests against sweatshops that focused on human rights abuses,

specifically the use of child labor in Pakistan, India, Bangladesh, and Honduras for soccer ball production, carpet production, and garment production. In EI Monte, California in 1995, Thai immigrants were found working as indentured servants in an apartment complex sewing garments for major retailers like Montgomery Ward, Target, and Sears (Su 1997). The following year activists exposed the use of child labor in a Honduran factory producing clothing for Kathie Lee Gifford's line sold at Wal-Mart. A New York City sweatshop also involved in manufacturing Gifford's brand was implicated (Bonacich and Appelbaum 2000). Additionally, concerns were raised about violations of labor rights including physical abuse cases in Indonesia, El Salvador, and other developing regions.

During the early 1990s, militant groups accused companies like Nike, Wal-Mart, and the Gap of practices such as child labor and labor rights suppression. Initially, these companies denied any responsibility. Nike claimed to be concerned about subcontractor working conditions and wages. However, increased media scrutiny forced Nike to take action to protect their reputation.

Activists also accused multinational corporations of disregarding human rights by exploiting workers globally. This exploitation was evident through low wages and poor working conditions in factories located in developing countries. Examples included sweatshops in Asia and automobile workers in Mexico.

According to Jenkins et al.(2002), voluntary corporate codes of conduct emerged during the 1990s due to ongoing globalization processes. These initiatives were driven by two factors: global supply chains expanding beyond government control and the growing influence of corporate brands and reputations, which exposed large companies to potential negative publicity.The text discusses various topics including advancements in global communication that improve awareness of production conditions in other countries. It also

highlights the increasing significance of ethical performance by public companies for investors. Furthermore, it mentions different initiatives focused on labor and environmental concerns which fall under the category of 'ethical business'.

These early initiatives were crucial in promoting ethical business practices. They included various organizations such as the UK Ethical Trading Initiative (ETI), the Dutch Fair Wear Foundation, and the Fair Labour Association and Worker Rights Consortium in the USA. These organizations established minimum labor standards for manufacturers.

In addition to these organizations, there were labeling enterprises like the Kenya Flower Council that focused on industry-specific environmental and labor standards.

Furthermore, individual corporate enterprises also played a role in establishing minimal standards in supply chains (Blowfield, 1999).

According to Blowfield (1999) and Jenkins et al. (2002), these initiatives were developed within the framework of international standards such as the United Nations Global Compact. The Global Compact aimed to promote corporate citizenship in the global economy.

Despite organizational differences among existing ethical trading initiatives, most companies used a code of conduct as the primary tool for establishing workplace standards.

Pressure from anti-sweatshop groups, labor unions, shareholder activists, and consumer groups also played an important role in motivating companies to adopt labor standards.

The mention of "standards" in corporate codes refers to the incorporation of international conventions on child labor from organizations such as the International Labour Organization (ILO) and United Nations (UN). These references can be either explicit or implicit, by including the key provisions of these organizations' standards in the corporate codes. Some government initiatives have had a significant impact on business leaders, encouraging them to prioritize social issues. For instance, the French government urged greater respect for human rights in international

business and actively participated in studies and research conducted by the European Commission regarding social aspects of international subcontracting in sectors like Textile Clothing and Footwear (source). In 1996, President Clinton launched the White House Apparel Industry on Workplace Standard (AIP), aiming to establish standards and ensure that clothing and footwear were not produced under sweatshop conditions (Meyer and De Wit, 2004). The Clinton Administration also implemented the "No Sweat" campaign in the United States to combat sweatshops. Consequently, a Trendsetter List was created for Textile Clothing and Footwear sectors, recognizing efforts that complied with labor laws and respected human rights in production and sales activities while ensuring subcontractors adhered to these rights.

The Department of Labour, after identifying numerous violations of human rights and labor laws in the Textile Clothing and Footwear sectors, particularly in the outsourcing of clothing production, took steps to address the issue (http://www.ilo.org/public/english/dialogue/sector/papers/bzethics/bthics2.htm). In regards to child labor, the United States Government conducted three public hearings between 1994 and 1996 to address international child labor issues and the conditions faced by children in industries that exported products to the United States. Additionally, in May 1995, the Clothing Manufacturers' Association of the United States of America (employers) and the Amalgamated Clothing Textiles Workers' Union (workers) signed a national branch collective agreement. This agreement included a code of conduct for companies and their subcontractors, outlining minimum standards for wages, hours of work, forced labor, child labor, freedom of association, non-discrimination, and occupational safety and health.

Consumer associations and non-governmental organizations have made efforts to raise awareness about the importance of respecting human rights through a number of minimum regulations. Klein (1999) noted that

many companies have heavily invested in branding and reputation, making them vulnerable to high profile scandals and political pressures that could damage their reputation. Under such pressure, it is not surprising that companies have adopted voluntary standards to avoid criticism, preempt regulation, and demonstrate their social responsibility to consumers and investors. The decision to adopt such codes is primarily driven by the desired public image that companies want to project to their customers, employees, suppliers, and shareholders. An organization's public image is now seen as an asset that must be protected and maximized.

In the fabric and footwear sectors, a company's public image was particularly important and often determined a decision whether the public would purchase its goods. On these highly competitive markets, it was therefore important for a company to project a positive image and to maintain a good reputation over the long term. The United Nation Universal Declaration of Human Rights was adopted by the General Assembly in 1948 (Schulz, 2001).

The declaration states that no one shall be held in bondage or servitude, subjected to inhuman or degrading treatment or punishment, or subjected to arbitrary arrest, detention, or exile. Furthermore, it declares that everyone has the right to life, liberty, and security of person; is entitled to equal protection against any discrimination; and has the right to work, to freely choose employment, to just and favorable conditions of work, and to protection against unemployment as a result of discrimination.

The International Labour Organization (ILO) was established in 1919 as a tripartite organization of government, business, and union representatives from 174 countries. Since then, it has ratified 177 extended labor "conventions" or standards.

Seven of these human

rights are considered cardinal, addressing issues such as forced labor, freedom of association, the right to collective bargaining, equal pay for men and women, workplace discrimination, and the minimum age for employment (White and Taft, 2004). Organizations like Amnesty International and Human Rights Watch focus on human rights issues worldwide and work towards ensuring their protection and advancement. Amnesty International is an organization that was inspired by the United Nations' Universal Declaration of Human Rights, which was adopted by the General Assembly Resolution in 1948. Its protection and standardization of human rights were established in 30 articles that later formed the basis for policies and standards implemented by NGOs and other agencies to safeguard and promote fundamental rights.

The Social Accountability International (SAI), founded in 1977, is an organization that promotes workers' human rights worldwide. SAI's SA8000 standards are derived from the Universal Declaration of Human Rights and the International Labour Organization (ILO) convention. These standards aim to create a more humane workplace and provide additional benefits for both companies and their employees. Working under the SA8000 standards allows employees to benefit from improved opportunities for collective bargaining and union organization. Additionally, employees gain a better understanding of their rights, leading to a commitment to ensuring a better work environment. The SA8000 guidelines benefit companies as a whole by reinforcing company values and enhancing the company's reputation (Krage, 2007).

The International Labour Organization Declaration on Fundamental Principles and Rights at work, which were adopted in 1998, are a statement of commitment by governments, employers, and workers organizations to uphold basic human rights.

• One of the principles is freedom of association and the right

to collective bargaining.

The Voluntary Principles on Security and Human Rights were developed by governments of the U.S., UK, Norway, Netherlands, and NGOs who all share an interest in human rights and corporate social responsibility (voluntaryprinciple.org/participant). There are six principles that all participating agents have agreed upon in order to promote and protect human rights in transnational companies.

The six Voluntary Principles, as stated on their website, are as follows:

• Acknowledge that security is a cardinal demand;
• Understanding that authorities have the primary duty to advance and protect human rights, particularly those set forth in the Universal Declaration of Human rights.
• Stressing the importance of safeguarding the integrity of company forces and belongings.
• Taking note of the effect that companies' activities and decisions have on the local community.
• Understanding that useful, credible information is a major component of security and human rights.

The Global Reporting Initiative (GRI) is a multi-stakeholder governed establishment that provides global standards for the promotion of sustainable development. Judy Henderson, immediate past-Chair, Board of Directors, says, "The GRI is a unique, multi-stakeholder organization founded on the strong belief that consistent, regular, and comparable reporting provides transparency and can be a powerful catalyst for improvement in performance" (globalreporting.org/AboutGRI). Approximately 1000 organizations in over 60 countries have established their commitment to the GRI reporting model. This reporting model guides corporations

and organizations in reporting their sustainability performance to promote company progress and improvement in all areas of concern.The coverage guidelines (globalreporting.org/Framework) offer a framework for collaborating organizations to voluntarily adhere to rules, advice, and standard disclosures. The UN's Global Compact serves as a voluntary guide to promote responsible corporate citizenship.

The main objectives of the UN's Global Compact are to promote its 10 rules in business activities worldwide and take actions to support United Nations goals ( hypertext transfer protocol: //www.unglobalcompact.org ). Launched in 2000 in New York City, this organization has participation from companies all over the world. Its primary agenda is to request and convince its members to uphold a set of core values that enhance the promotion of human rights within their areas of operation ( hypertext transfer protocol: //www.unglobalcompact.org ).

Adoption of Voluntary Labour Standards (Codes of Conduct) by Multinational Companies and their Impact

The quick spread of labour standards (codes of conduct) is driven by external pressures from media, activists, government, and consumers (Shaw, 1999).

According to Hughes (2005), multinational companies in the Textile Cloth and Footwear sectors have had to prioritize balancing low production costs, protecting their reputation, and meeting societal expectations to satisfy consumers and pressure groups. These companies have been compelled to adhere to labor standards. In 1995, "The Gap," an American clothing company with over 3,100 stores worldwide, faced allegations of poor working conditions in its supplier's mills in El-Salvador. The corporation was accused of various human rights violations, including physical abuse, verbal mistreatment, sexual harassment, and suppression of labor unions.

Gap Inc. faced criticism from both the media and human rights organizations, raising concerns about the company's practices. The protests

against Gap stores only stopped after the company agreed to the demands of anti-sweatshop activists (hypertext transfer protocol: //www.ilo.org/public/english/dialogue/sector/papers/bzethics/bthics2.htm). Additionally, in 1996, Nike, another American clothing company, also faced allegations of serious human rights abuses in its factories in Vietnam. There were reports of abuses, sexual harassment, and harsh working conditions within Nike mills. Furthermore, Nike was criticized for employing child labor in Cambodia to produce soccer balls.

The globalization of the economy has forced companies like Nike to increase production speed in order to remain competitive globally. However, this has come at the expense of lower human rights standards (Sullivan, 2003). Many multinational companies have adopted codes of behavior or codes of practice that outline the ethical standards of the organization. These codes may include general principles like non-discrimination and specific guidelines for socially responsible production and sales practices. Some codes explicitly reference International Labor Organization (ILO) Conventions, especially those related to human rights in the workplace. Others indirectly draw upon ILO Conventions as their foundation (Krage, 2007). It is argued that voluntary codes developed by intergovernmental organizations, such as the ILO, paved the way for subsequent unilateral actions by individual companies.

The United States has played a pioneering role in promoting labor standards and addressing human rights violations. According to the International Labour Organization (ILO), there has been constant pressure from activists to urge multinational companies to adhere to labor standards and combat human rights abuses [source: www.ilo.org]. In the late 1990s, Elliot and Freeman (2001) identified more than 40 anti-sweatshop organizations in the US alone. A comparison study by Langlois and Schlegelmilch (1990) found that the US had a head start in adopting

corporate codes earlier and on a wider scale than Europe. In contrast, Japanese multinational companies were slower and hesitant in adopting such codes.

Compared to the US, Europe and Japan were slower to adopt the tendency of using codifications of behavior in the Textile sector. However, there was an increasing focus on this issue at the central office of major European textile enterprises. In developing countries, only a few enterprises have implemented such codes. However, a growing number of production enterprises that operate under outsourcing agreements for industrialized nations must adhere to the codes established by those nations, which significantly impacts their activities. According to a 1996 study by the U.S. Department of Labor, 36 clothing manufacturers and retailers had implemented labor codes of behavior for their supply chains. This included companies that had faced scrutiny for sweatshop scandals, like Wal-Mart, Nike, the Gap, and Kellwood (the maker of Kathie Lee Gifford's line), as well as companies that had largely avoided activist attention, such as Fruit of the Loom, Jones Apparel, Talbots, and VF (maker of Lee, Wrangler, and other brands) (United States Department of Labor, 1996).have been produced in a manner that respects human rights. Consumer associations and non-governmental organizations have made efforts to raise awareness among consumers, public authorities, and businesses about the importance of following certain minimum rules regarding human rights. Global companies adopting a code of conduct aim to assure consumers that their products have been manufactured in a manner that complies with these rules.