Child Labor Report 2005
E. Monitoring
U.S. corporations responding to the Department of Labor survey
described a variety of ways their codes of conduct were monitored. Several
of the respondents referred to "pre-contract" evaluation of prospective
contractors to identify and screen out potential violators of codes of
conduct. Others referred to active monitoring schemes conducted internally,
externally, and by outside auditors or NGOs. Still other respondents said
that monitoring of their codes of conduct is carried out through contractual
arrangements, whereby the contractor guarantees or certifies (in writing)
that the goods have been produced in accord with the child labor policy of
the importing firm.Information regarding the monitoring of codes of
conduct gathered by the Department of Labor during field visits is reported
in this section, clustered around the following issues:
- Are the labor standards components of the codes of conduct,
including child labor, monitored? How is the monitoring carried
out?
- Are foreign plants subject to on-site internal visits (i.e.,
visits by U.S. company personnel to subsidiaries and foreign
contractors), external visits (i.e., visits by U.S. importers and
foreign buyers/agents to foreign contractors) or auditor visits
(i.e., visits by paid auditors or consultants) to monitor their
production facilities? What is the purpose of such monitoring? Are
monitoring visits announced or unannounced?
- With whom do monitors speak during visits? Do they speak with
managerial personnel only, or do they also speak with workers? If
they speak with workers, where do they do it? Are managers present
when monitors speak to workers? Do monitors speak the native
language? Are interpreters used?
1.Monitoring for Quality
Monitoring of foreign producers - including plant visits - by
U.S. importers is a routine procedure in many industries. The
garment industry, where the appearance of a product and timeliness
of orders are critical, is well-known for the close monitoring of
foreign producers by importers and their agents.
a. Purpose of Monitoring
All 70 plants exporting garments to the United States visited by
Department of Labor officials confirmed that they are subject to
regular visits by their U.S. customers or their agents to verify
product quality and to coordinate production and delivery schedules.
About 90 percent of the companies visited stated that
monitors/inspectors verifying product quality generally also
examined working conditions in the plant, with emphasis on safety
and health issues (climate control, ventilation systems, fire
escapes, etc.). Among the exceptions were:
- In the Dominican Republic, Bonahan Apparel and
Hingshing Textile companies, located in Zona Franca Bonao,
received visits from their U.S. customers, including Chaus, Tuxedo
Junction, and Jacob Sigel. According to the companies'
administrator, Mr. Chunciob Lim, these visits were only related to
product quality and did not address working conditions.
- In India, Pankaj Enterprises (located in New Delhi) and
Chenduran Textiles, Poppys Knitwear, and Yavraj International
(located in Tirupur) stated that visits from U.S. customers or
their agents were focused exclusively on product quality. Zoro
Garments (located in Madras) stated that monitoring dealt only
marginally with working conditions and no checklist was used.
b. Previous Knowledge About Monitoring Visits
Whether monitoring visits are announced or unannounced differs
widely from company to company. In 41 of the companies interviewed
(58 percent), monitoring visits by the U.S. importer or its agent or
representatives were announced in advance, in 13 (18 percent) they
were unannounced, and in 16 (23 percent) there were both announced
and unannounced visits.
c. Pre-Contract Inspections
Consistent with the information provided by U.S. garment
importers (Chapter II), foreign producers interviewed that operate
as contractors indicated that, prior to receiving an order from a
U.S. corporation, they were subjected to qualification inspection,
which extended to working conditions. For example:
- In Guatemala, Dong Bang, located in Chimaltenango,
reported that JCPenney inspected their facilities - including
working conditions - prior to entry into a contract. Once they
became contractors, JCPenney had again conducted inspections and
given them written ratings based on a point system.
- Maquila Cardiz reported that JCPenney inspected its current
facility before it could change locations and made
recommendations for the new facility.
- Confecciones Caribe had been subjected to a pre-contract
inspection by JCPenney and received a point rating.
- A similar experience with the JCPenney point rating system was
brought up by management of Undergarment Fashions, a plant located
in the Zona Franca San Pedro de Macor's in the Dominican
Republic.
2.Monitoring for Codes of Conduct
While monitoring for product quality, and even for health and
safety conditions, is customary in the garment industry, the field
visits by Department of Labor officials suggest that monitoring for
compliance with provisions of the codes of conduct of U.S. garment
importers dealing with other labor standards - and child labor in
particular - is not. Where it does occur, the degree to which such
monitoring extends to all labor standards addressed by the codes -
as opposed to exclusively safety and health issues - seems to vary
widely across suppliers. Foreign suppliers that are wholly owned by
a U.S. corporation, or contract directly with a U.S. corporation
with a presence abroad, seem to be subject to the most frequent and
most thorough monitoring of codes of conduct, including child labor
and other labor standards.
Monitoring for implementation of child labor provisions of codes
of conduct is a very challenging undertaking. As has been discussed
in Chapter II, the garment industry is made up of a complex chain of
actors, domestic and foreign.
- On the domestic front, there are apparel manufacturers (which
may be producers or buyers of cloth, contractors or
subcontractors, and also retailers of finished product), apparel
merchandisers, buying agents (which may be located domestically or
abroad), and retailers (which may be department stores, mass
merchants, specialty stores, national chains, discount, off-price
stores, etc.).
- On the foreign front, there are buying agents, company
representatives, wholly owned subsidiaries of U.S. companies,
U.S.- or foreign-owned contractors that have an established
relationship with a U.S. importer ("captive" contractors),
contractors which have relationships with more than one U.S.
importer, and subcontractors.
Implementation of the child labor policies of U.S. apparel
importers involves communication and interaction between many of
these actors. The very long chain of actors and transactions in U.S.
importers' procurement of foreign apparel products is illustrated in
Box III-7 with an example drawn from the field visit by the
Department of Labor to the Philippines. In the example, the
procurement/manufacturing process of apparel imported by a U.S.
retailer involved five different actors, each farther removed from
the U.S. importer.
Generally, the closer the relationship between a U.S. company
importing garments and the actual producer of the items, the greater
the ability of the U.S. company to influence labor standards,
including prohibitions on child labor, in the production process.
Conversely, the longer the chain of procurement/production (five
steps in the above example drawn from the Philippines), and the more
levels of buying agents, contractors, and subcontractors, the more
complex and challenging is the implementation of the labor standards
policies and the less the ability of the U.S. importers to influence
them.
BOX III -7
Organization of Production and Implementation
of Codes of Conduct:
An Example from the Philippines
U.S. retailer JCPenney has "Foreign Sourcing Requirments"
that apply to all of its suppliers. Among other provisions, the
sourcing requirments state that " JCPenney will not knowingly
allow the importation into the United States of merchandise
manufactured with illegal child labor." With regard to the
Philippines:
- JCPenney purchases infant and children's apparel
from Renzo, a U.S.-based importer. Pursuant to its sourcing
requirements, JCPenney requires Renzo to certify that its
imports are not made with child labor.
- Renzo imports from its Philippines agent, Robillard
Resources. Renzo communicates to Robillard the JCPenney
sourcing requirements and its obligations and requires
Robillard to sign a certificate that its products are not made
with child labor.
- Robillard purchases from a number of contractors in
the Philippines, one of which is Castleberry. Robillard
requires Castleberry to certify that its products are not made
with child labor. The owner of Robillard visits Castleberry
from time to time monitoring for quality control, but also for
compliance with the sourcing requirements. Occasionally, a
representative from JCPenney also visits.
- Contractor Castleberry does cutting, finishing, and
packing. its subcontracts sewing to about thirty plants.
- The thirty or so subcontractors who do the sewing
do not sign a certificate stating that no child labor has been
used, but are supervised by Castleberry line supervisors, who
are each responsible for several subcontractors. They spend
almost their entire time with the subcontractors.
Occasionally, a production supervisor from Castleberry also
visits. Its is apparent that their primary interest is quality
control, but they also monitor compliance with other
standards, including child labor requirements. It is safe to
say, however, that none of these supervisors are familiar with
the code of conduct other than an understanding that they are
not supposed to allow child labor. Embroidery and "smocking"
(a form of very small and intricate pleating, sometimes
combined with embroideries) is subcontracted out to home
workers; some is done within the plants as well.
- Homework contracts - piece work contracts - are
made with heads of households. Children may help their parents
with some of the simpler embroidery and smocking and with the
trimming. This is not monitored by any company.
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a. Monitoring Methods
As discussed in Chapter II, U.S. companies utilize a variety of
means to monitor their codes of conduct or policies on labor
standards and child labor.
- Many companies use some form of active monitoring - which
might include site visits and inspections by company staff, buyer
agents or other parties - to verify that suppliers are actually
implementing the provisions on labor standards and child labor.
- Companies may also use contractual monitoring, whereby they
rely on the guarantees made by suppliers, typically through
contractual agreements or certification, that they are respecting
the U.S. company's policy and not using any child labor in
production. This latter form may be seen as self-certification.
- Some companies use a combination of the two forms of
monitoring, typically relying on contractual monitoring backed up
with visits and inspections.
All three of these monitoring strategies were found in the field
visits.
b. Active Monitoring
A few U.S. corporations - particularly manufacturers - tended to
have structured monitoring of all aspects of their codes of conduct
and subjected their foreign subsidiaries to such disciplines. Based
on the plant visits, instances of active monitoring by U.S.
corporations of their foreign subsidiaries include:
- In the Dominican Republic, Hanes Caribe (Zona Franca
Las Amricas) and Tejidos Flex (Zona Franca Santiago) were
subjected to structured monitoring.
- Both companies received periodic visits, sometimes as often
as every 2-3 weeks, by upper level managers and occasional
visits by Vice Presidents of Sara Lee Corporation.
- In Honduras, Fruit of the Loom owns five plants
(Confecciones Dos Caminos, 2 plants; Manufacturas Villanueva; El
Porvenir; and Productos San Jos). A Senior Vice President makes
monthly monitoring visits.
- In the Philippines, Levi Strauss regularly monitors its
subsidiary.
Some U.S. companies (manufacturers or retailers) that contract
directly with foreign suppliers also appear to play an active role
in monitoring their codes of conduct. In some instances, companies
interviewed said that the monitoring activities by the U.S. importer
covered all aspects of codes of conduct, including child labor
policies. Responses from others were less categorical, suggesting
that the emphasis of monitoring may have been only on safety and
health issues.
- In the Dominican Republic, Levi Strauss' contractors
received periodic visits to their facilities to monitor compliance
with all aspects of codes of conduct. Levi Strauss has an office
in Santiago which is responsible for overseeing its Dominican
operations.22
- Some companies also received visits by U.S. importers or
retailers. The General Manager of Undergarment Fashions, Inc.
(Zona Franca San Pedro de Macor's) stated that JCPenney makes
periodic monitoring visits to the company.
- EuroModa is a Honduran company producing shirts for
Oxford Industries, Tommy Hilfiger, May Department Stores, Dillard
Stores, JCPenney-Stafford Executive, Polo Boys and Brooks
Brothers. Oxford Industries monitors compliance with its
"Contractor Sourcing Policy"; May Department Stores and JCPenney
send their own inspectors for contract compliance; each label
owner will have someone make visits 2 or 3 times per year for
contract compliance.
- Also in Honduras, The Gap has a country representative
who makes weekly unannounced visits to KIMI, a contractor for The
Gap, to monitor compliance with all aspects of the Code of Vendor
Conduct.
- However, another Honduran company, Certified Apparel
Services, that produces for Wal-Mart, Sears, Mervyn's
(Dayton-Hudson), JCPenney, Target (Dayton-Hudson), Kmart and other
U.S. companies with codes of conduct, stated a regional
representative of JCPenney made one announced visit regarding
compliance with its code of conduct. Wal-Mart also made one
announced visit to determine compliance with its code. According
to this company, there is no systematic verification of compliance
with codes of conduct by purchasers.
- In India, the Department of Labor officials found an
example of monitoring of codes of conduct by an outside monitor on
behalf of a U.S. importer:
- Triburg Consultants is an Indian company located near New
Delhi which implements the terms of engagement and quality
control requirements of U.S. garment importers. Triburg's
clients include The Gap (for the last 12 years), Liz Claiborne,
Banana Republic (The Gap), Polo Jeans, Sun Apparel of Texas, and
Ralph Lauren.
- Triburg administers Liz Claiborne's human rights guidelines:
it conveys the guidelines to the supplier company, discusses
them with the company, and confirms that the supplier abides by
the guidelines. Triburg also conducts surprise visits to monitor
compliance. Triburg hires a welfare officer to conduct programs
for the children of workers and check on wages, food subsidies,
and medical facilities.
While most monitoring visits by U.S. corporations or their agents
appear to be regularly scheduled or announced in advance, there are
some instances of unannounced visits:
- In Guatemala, a Department of Labor official was
consistently told that JCPenney conducted unannounced inspections
of contractors. Unannounced monitoring visits of contractors by
Kmart personnel were also reported by Dong Bang, a Korean-owned
facility located in Chimaltenango, and Confecciones Caribe, a
U.S.-owned company located in Mixco. According to Dong Bang
officials, Kmart personnel recently completed the second
unannounced visit to this plant in three months.
- In India, Triburg stated that it conducts surprise
visits on behalf of U.S. companies (particularly Liz Claiborne) to
monitor code compliance by contractors.
- In Honduras, it was reported that the Audits Department
of Warnaco audits contractors three times per year. These audits
are unannounced.
- Also in Honduras, weekly visits by the representative
of The Gap to KIMI are unannounced.
- However, in the Dominican Republic, Interamericana
Products (Zona Franca Santiago) stated that they had requested,
and Levi Strauss representatives had agreed, to stop making
unannounced visits to monitor compliance with codes of conduct.
Interamericana Products indicated that under the agreement Levi
Strauss would give at least a week's notice prior to any visits to
the plant.
c. Contractual Monitoring
There was also evidence from the field visits of numerous
instances of contractual monitoring of codes of conduct. Contractual
monitoring of codes of conduct is most prevalent in the case of U.S.
retailers which do not have a significant presence abroad.
In these situations, the burden of monitoring compliance with the
U.S. importer's child labor policies rests with the foreign agent,
contractor or subcontractor, typically through a self-certification
process. In these instances, the role of the U.S. importers in
monitoring compliance of their codes of conduct is minimal.23
For example:
- In Honduras, Fabena Fashions is required by Macy's and
Wal-Mart to sign a contract which includes a no child labor
clause.
- In India, Chenduran Textiles, located in Tirupur,
exports about one-half of its output to the United States. The
main U.S. customer is Tropic Textiles of New York City, a supplier
to Wal-Mart. Tropic requires Chenduran to certify that no slave
labor or child labor was used in the production of the goods
through a paragraph in the contract/bill of lading. Tropic accepts
Chenduran's self-certification of the clause and does not have any
in-country monitoring, education, implementation, or enforcement
programs.
- Also in India, Pankaj Enterprises, New Delhi, is an
exporter of mid-grade apparel items. Pankaj's U.S. buyers require
that no child labor be used in the manufacture of garments. Pankaj
buys fabric and guarantees that no child labor is used in the
production of garments through self-certification; there is no
monitoring from the importer or its agents.
d. Contractual and Active Monitoring
In some instances, U.S. importers use a combination of
contractual and active monitoring, using auditors from the U.S.
importer (or its agents) to verify compliance.
- In the Philippines, Liz Claiborne has a policy of
monitoring and supervising its contractors. Contractors must
certify that they are in compliance with the code of conduct. In
addition, they are subject to frequent visits from the Philippines
office of Liz Claiborne, which monitors implementation of the code
of conduct as well as quality control.
- Warnaco, which requires that contractors certify that child
labor has not been used, also audits suppliers in Honduras
for full compliance with its child labor policies, including age
verification.
- Macy's, Wal-Mart, and The Limited have checked personnel
records at Fabena Fashions to verify the age of workers.
- In India, Zoro Garments supplies 75 percent of its
production to the U.S. market. Zoro's major U.S. customers are
Rustic River, Quick Silver, Blue Print, and JCPenney (Phillips-Van
Heusen is a former customer).
- According to Zoro's management, occasionally representatives
from the U.S. customers have visited Zoro's factory to check on
quality control. Most of these visits were walk-throughs with
some general questions raised about the use of child labor, but
no checklist of requirements was administered.
- Two or three years ago, Phillips-Van Heusen raised the
subject of codes of conduct with Zoro's management and asked the
company to fill out a questionnaire. When Zoro was producing for
Phillips-Van Heusen, there was a clause in its contract related
to child labor.
- In El Salvador, Primo Industries, a contractor for Liz
Claiborne, Land's End, Polo and JCPenney, met with Liz Claiborne
several years ago to discuss and sign the Liz Claiborne code of
conduct. The plant manager told Department of Labor officials that
Liz Claiborne is "the toughest on child labor." He also said that
American inspectors visit the plant approximately twice a month to
check on quality control and see whether their rules and
regulations are being implemented.
3.Monitoring Procedures
Closely related to the above issues is how the monitoring of the
codes of conduct is undertaken, specifically whether workers and
members of the community in which plants are located are also
approached by the monitors, whether monitors are able to speak with
workers outside the presence of company officials, the ability of
monitors to speak the language of the host country and workers, and
the extent to which monitors are trained to review implementation of
labor standards.
Based on the field visits, it appears that most monitoring
conducted by U.S. corporations primarily covers quality control
issues. As such, there seems to be relatively little interaction
between, on the one hand, monitors, and on the other hand, workers
and the local community. It also appears that monitors have a
technical background in production and quality control and are
relatively untrained with regard to implementation of labor
standards.
Department of Labor officials found the following exceptions to
these generalizations, however:
- In the Dominican Republic, managers of plants
contracting for Liz Claiborne (Grupo M) and Levi Strauss (Grupo M,
Interamericana Products, and D'Clase Corporation) stated that
monitors routinely speak with workers inside the plant regarding
both product quality and working conditions. Monitors talk to
workers about their ages when appropriate.
- Mr. Roberto Rodr
guez of Hanes Caribe stated that internal
auditors from Sara Lee Corporation often meet with workers in
private.
- D'Clase Corporation stated that for a recent contract
negotiated with the Kellwood Corporation, an outside firm had
been hired by Kellwood to monitor compliance with quality and
labor standards matters. Monitors would be expected to talk to
the workers to verify age, among other matters.24
- The General Manager of Woo Chang Dominican Industry (Zona
Franca Bonao), a plant which sells to Samsung Corporation,
stated that when Samsung representatives visit the plant, they
ask the workers how they are being treated.
- In El Salvador, management of CTM Corporation, a
contractor to VF Corporation, indicated that the U.S. purchaser
monitors the facilities approximately every six months. In the
context of these visits, VF personnel review working conditions in
the plant, and check on child labor by looking around and asking
workers; occasionally they conduct private interviews with
workers.
- However, some workers at the same plant interviewed by the
Department of Labor officials said that the (foreign) monitors
do not speak with workers; they believe the monitors do not
speak Spanish.
- In Honduras, the country-based investigator for The Gap
said that he monitors implementation of the company's code of
conduct at different locations, saying that he talks to workers
during plant visits.
- In the Philippines, managers of two plants producing
for Nike (Mactan Apparel and Globalwear Manufacturing, Inc.) as
well as a representative from Nike stated that its auditors talk
to workers and inform them about its corporate code of conduct and
Filipino labor law.
- In contrast, workers interviewed outside the Sam Lucas plant
in Chimaltenango, in Guatemala, stated that they had never
seen an inspector talking to a worker. They could not be certain
that representatives from a U.S. corporation had ever visited the
plant.
Child Labor Report 2005 |