2006: Year in Review
Happy New Year! 2006 was a busy year in the world of ethical trade and responsible sourcing. Looking back, there have been some big headline events during the year, impacting workers, consumers, and brands from Jordan to Europe, from the U.S. to China. Here’s a brief summary of some of the pivotal developments from 2006:
The National Labor Committee made headlines around the world with their expose on the conditions of foreign imported workers in Jordan and potential violations of the US-Jordan Free Trade Agreement clause on labor standards. Congress even introduced an anti-sweatshop bill that would prohibit the import, export, or sale of sweatshop goods in the U.S. (this bill remains in committee, however, and will most likely stay there). In Jordan, the Ministry of Labor quickly responded to the damaging report by shutting down the worst offending factories and enlisting help from the ILO to improve training of their labor inspectors.
Meanwhile, in Bangladesh, more fatal fires plagued the garment industry there, with hundreds injured in related stampedes. General unrest in export industries led to full scale rioting and the closure of entire free trade zones. Some factories were burned, others looted or severely damaged. Ensuing talks dragged on for months, but finally resulted in garment workers winning a wage increase that was 10 years overdue.
In China, the top legislature received nearly 200,000 comments during the first round of public comment on a controversial draft labor contract law. While supporters praise the increased protections for workers, opponents, mainly U.S. business interests in China, bemoan the loss of flexibility in the employment environment, as the law would make it much harder to dismiss low performing workers. The law is again undergoing a public comment period. In the meantime, China continues to struggle with a worker shortage now going on three years. Affected cities continue to raise wages in the hopes of attracting workers. Separately, the Communist Party union, the All China Federation of Trade Unions (ACFTU) determined to force up to 60% of foreign companies operating in China to unionize, starting with Wal-Mart.
Other noteworthy events: An ILO report noted a worldwide decline in child labor. The ILO also called for the strengthening of labor inspection worldwide. The United Nations launched responsible corporate investing principles. Oxfam pushed sportswear firms to uphold worker rights. A report on the Mexico electronics industry disclosed serious labor rights abuses. Wal-Mart recently won a ruling on foreign workers, after being sued for failure to uphold the rights of workers employed by their overseas suppliers. Reebok, H&M, and Timberland all issued detailed reports on their monitoring efforts. Nike put worker rights over production needs when they cancelled a contract with one of their largest soccer ball suppliers, triggering a global soccer ball shortage.
And finally, 2006 was also the big year for coverage of the old news of factory cheating. Our news database shows 3 such articles in 2004, 4 in 2005, and a whopping 7 in 2006, crowned with the year-end BusinessWeek cover story, "Secrets, Lies, and Sweatshops." Never mind that even the small Los Angeles factories had a culture of cheating long before I started working as a monitor in 1997; for some this continues to be a revelation. Here’s a new flash, folks: it’s been happening for over a decade! The cheat sheets, the coaching, the techniques have all been done before – and it continues to happen from the U.S. to India. This leads into an important new development in responsible sourcing and a topic for next week’s blog: What to expect in 2007.
