The following post includes extracts from Rosey Hurst’s interview with Oliver Balch in Issue 2 of the Walter Scott Journal. For more information on the Walter Scott Journal, please visit www.walterscott.com
Years of treading factory floors have left Hurst with at least three abiding convictions. First, that global trade agreements are provoking a decline in working conditions, not an improvement. This verdict goes against the grain. Country leaders are quick to argue that trade accords will push producers to meet international labour standards. This is not a barefaced lie: dig through the small print and you’ll find abundant references to International Labour Organization (ILO) declarations and the like.
In Hurst’s experience, however, reality tends to tell a different story: “What we see with trade agreements is that they tend to mean that countries have better access to markets, which means there is more economic activity and therefore more jobs. That’s clearly true, but what isn’t true is that the quality of those jobs necessarily improves.”
She points the finger in part at a lack of willingness and/or capacity on the part of low-income countries to police labour standards.
The dynamics of competition represent Hurst’s second impediment to improved working conditions. Trade agreements typically benefit the owners of export businesses, she argues, but usually at the expense of labour. Global trade forces domestic manufacturers to compete in a wider marketplace, which should mean upping their game. Only it doesn’t. Instead, producers tend to cut corners and work employees harder.
“What is clearly happening across the world is that the first move employers make is not to say, ‘let’s provide better jobs so that our employees will be more productive’, says Hurst. “Rather, they squeeze their employees more, so we see longer working hours, more verbal abuse and so on.”
It’s not that brands have been sitting back doing nothing. Rather, it’s how they’ve been expending their energies that worries her. In the late 1990s, embattled retailers such as Nike and Gap began sending independent inspectors to survey their supplier factories and check for compliance. What began as an auditing trickle has since become a flood, spawning a global industry of clipboard-wielding compliance firms. Walmart alone conducted over 11,500 site audits in 2012.
Hurst isn’t against auditing per se. But its role and effectiveness need to be put into perspective, she says. Today’s “addiction to monitoring”, as she describes it, indicates that things are out of kilter. For starters, the accuracy of audit results is highly questionable, especially when undertaken by low-skilled local auditing firms. “People are very good at faking audits and auditors are often very poor and given to corruption,” she notes. A recent in-depth investigation by The New York Times backs her up. Among other steps, factory managers were regularly found to be unlocking fire exits or telling underage workers to take the day off in the run-up to audit visits.
Meanwhile, for those buying companies at the top of the supply chain, reputational risks are as real as ever. As urst notes, in the event of worker abuses hitting the headlines, “It’s not the greatest defence saying that ‘we audited the factory and it was fine’.”
Hurst isn’t for ditching monitoring altogether. But she’s a major advocate for doing it a whole lot better. One big improvement centres on data gathering. Hurst was instrumental in setting up the Supplier Ethical Data Exchange, or Sedex, in 2001. The non-profit initiative aims to collect compliance information in a single source, thus avoiding the costly “double counting” for which factory auditing is renowned.
Buyers also need to rethink what information they are asking for. At present, it’s fiendishly difficult to ascertain the relative significance of most audit data. How does take-home pay compare with a worker’s ability to meet his or her basic needs, for example? For workers stuck on low wages, what opportunities do they have to negotiate? How do employment conditions in China compare, in relative terms, with those in Turkey or Mexico?
If Hurst could have her way, though, she’d shift the whole tone of the supply-chain debate. We need far less talk about compliance, she insists. Rather, “productivity” must become the name of the game. Contented workers not only work harder, Impactt’s founder maintains, but are also less likely to up sticks and move on.
Monthly staff turnover in Asia’s manufacturing sector hovers around 10%, according to Hurst. “Imagine the chaos that would unleash in your office,” she says. And here we’re talking about factories trying to churn out thousands of T-shirts or mobile phones every day.
“The idea that you will save money if you offer good jobs is what it comes down to,” she observes. “If you pay people what they are worth in such a way that they can meet their needs, [and] if you offer them some form of respect in the workplace or the opportunity to be promoted, then you deal with a lot of these problems.”
The solutions ultimately lie in helping buyers and suppliers meet their business objectives by simultaneously helping workers meet theirs. So what are workers’ objectives exactly? Hurst narrows it down to three: “Obviously, they want money. But they also want respect … and they want a better life for their families.” Satisfy those objectives, and trade will undoubtedly become more ethical – and more economically viable into the bargain.
Rosey Hurst, Founder and Director of Impactt Limited