Wednesday, November 28, 2012

Being "in the sweatshop business"

Earlier today, I read an interesting article about the ethical dilemma ABC faces reporting about recent factory fires in Bangladesh, specifically because Disney products are produced in at least one of the factories and The Walt Disney Company is ABC's parent company. This dilemma is worthy of exploration. My primary objection is with the title "Reporting on Sweatshops When Your Boss is in the Sweatshop Business," because classifying any company as being "in the sweatshop business" makes assumptions about a company's business model and approach to overseas production and labor rights (none of which were discussed in the article).

Subsequent I had this twitter exchange with @AntDeRosa which, upon reflection, illustrates some of the issues I have been hearing from CSR and sustainability practitioners (@peterfhart is the author of the article).


(Full Disclosure: I spent a year working in Disney's International Labor Standards group, the group specifically tasked with defining, implementing, monitoring, and remediating labor conditions in factories producing Disney products. As a result, I know more about their specific operations than I am allowed to discuss on an open forum and I also have a soft spot for the people I worked with. Keep this in mind as you read.)

As with many companies that have a complex supply chain, Disney's ILS program has practical limitations.  As I tweeted and stated in an earlier post, it is impractical to audit 100% of the factories in a complex, global supply chain and it is nearly impossible to ensure desired conditions exists year-round, even after a successful remediation program. This is not an excuse for problems that exist, just a statement of reality. There are definitely shortcomings to Disney's approach to factory monitoring and remediation, none of which I would feel comfortable detailing here. I would also like to see Disney adopt a Human Rights Policy. That said, Disney does deserve credit for actions they have taken, for initiatives they participate in freely, and for a policy of pushing for improvement over "cutting and running". I won't defend Disney, specifically, any further. Everyone needs to make up their own mind as to whether a company is adequately addressing human rights and labor rights in their supply chain. My only hope is that you come to your conclusion based on evidence rather than inflammatory headlines.

Sweatshop, "Defined"

Another issue I have is the use of the word "sweatshop". Factory conditions overseas vary considerably, some are deplorable, others are disagreeable, and the rest fall somewhere in-between. To call them all "sweatshops" ignores the variation in conditions and the efforts made by companies, NGOs, trade organizations, and governments. The underlying truth is companies are cleaning up messes they made 25-30 years ago, when nobody cared about sweatshops or labor rights. Progress is slow, too slow, but progress is being made due largely to corporate sustainability initiatives, stakeholder focus on transparency, corporate-NGO-government partnerships/alliances, and responsible media reporting. If the goal is to fight for continuous improvement of labor conditions (and to move toward a human rights platform), we must also acknowledge that economic conditions in developing countries would be much worse if these factories disappeared. I don't expect people to stop using the word "sweatshop," but it should be used more responsibly.

Practitioner Concerns

The twitter conversation above also illustrates so many of the concerns I heard at the recent BSR Conference. Among them:
  • What do our stakeholders value more: transparency or results? 
  • What is the point of being transparent if it opens us up to attacks? 
  • Should we only publish our successes and keep our failures and lessons learned to ourselves to avoid attack and exploitation?
  • If we keep failures and lessons learned to ourselves, how do we then share them with competitors (and they with us)?
  • If we only publish our successes, then will our initiatives only be viewed through a PR lens? (specifically noted in one of @AntDeRosa's tweet above)
  • Doesn't this mean we need to also publish our failures and lessons learned - so we aren't accused of only seeking positive PR?
These are just a few of the questions asked and they illustrate the disconnect between the "world" of CSR and sustainability practitioners and the "outside world".  There is much work to be done here, by practitioners (to start, by better explaining their mission) and by the outside world (to start, by listening with a less cynical ear). Focus should be directed upon the companies that refuse to be transparent, refuse to acknowledge mistakes, refuse to commit to improvements. Also, when a company commits to transparency, to fixing mistakes, to improving conditions, they should be held to account. Name and shame the companies that cut and run, leaving others to clean up their messes.

"in the sweatshop business"

"If your products are made in a sweatshop, you are in the sweatshop business" as Anthony DeRosa tweeted to me... is this true? To be "in the sweatshop business" implies a company intentionally seeks factories with poor labor conditions, purposely keeps conditions at that level so to profit, and ignores any pleas for improvements. It also implies that this is a part of the company business model. If this were the case for Disney, perhaps I would not object. There are certainly companies out there that deserve this designation. Disney is not one of them.

As always, if you have any questions, concerns, or corrections to the above, please let me know.

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