It’s also when charity becomes a matter of survival. Asian suspicions of short-term Western investors and speculators are growing, as are the dangers of social unrest. Even companies like Coca-Cola with old roots in Asia could find themselves scapegoats, and many want to make sure that they are seen as part of the solution. The American oil company UNOCAL, for example, is offering aid to Thai colleges hard hit by the economic downturn and is allowing Philippine employees to put off installment payments on company loans for six months.
At the same time, Western activists are pressuring multinationals to treat workers in Asia as they would employees in Peoria. Recent media exposes have targeted not only Nike but also a line of apparel endorsed by TV personality Kathie Lee Gifford, who said she had no idea her clothes were made in Honduran sweatshops. Nonetheless, the bad publicity has frightened firms into jumping on the good-citizenship bandwagon. Even the aggressive folk at Nike last month announced the new post of “vice president for corporate responsibility.”
Sure, it sounds like a fluff job, but Nike is not the only firm on the defensive. Many of its competitors have also adopted a code of conduct aimed at ensuring that their Asian factories are not dirty firetraps, working children 18 hours a day. In a survey of 341 companies to be published March 1, the New York-based Council on Economic Priorities found 70 that had adopted such rules. So far, many are just paper promises, but under a White House-sponsored Apparel Industry Partnership, manufacturers and their critics are hammering out standards on wages, hours, child labor and working conditions that will include monitors to ensure the standards are met.
Companies are now competing to appear more responsible than competitors, particularly in industries most often linked in the media to sweatshops: toys, apparel and sporting goods. In November, Mattel announced it would hire no contractor who employs children under 16, which is two years older than accepted international standards. Gymboree, which makes clothes for children under 8 years old, adopted a new foreign-labor code and hired auditors to enforce it last year. “The Kathie Lee Gifford debacle really got things moving,” says Gymboree executive Norman Osumi. “We wanted to have mechanisms in place before someone came after us.”
Will the corporate good-citizenship movement make a difference? Two years ago, sporting-goods manufacturers were embarrassed by revelations that 80 percent of all soccer balls were stitched in the town of Sialkot, Pakistan, often by children working for as little as 60 cents a day. Major manufacturers, from Nike to Mita, joined with critics to establish safe “child- free” factories, as well as schools for the kids and alternative sources of income for their parents. Last week they announced “significant progress” toward ending child labor in Sialkot.
But soccer balls are a special case. The industry’s concentration in Sialkot made it relatively easy to clean up, and bad publicity made it urgent. So far, the corporate-responsibility movement has followed the media spotlight, not the worst labor offenders. Sialkot is still home to surgical-instrument factories that employ children on machinery far more dangerous than needles used to stitch soccer balls.
Being a good citizen can be tricky. The pressure comes mainly from strong Western activists and weak local ones, while many Asian leaders see it as a foreign ruse to undermine their labor-cost advantages. Nike, for example, says it would like to raise wages for its 60,000 workers in Indonesia as the value of their currency plummets, but the government recently banned wage hikes as inflationary in this time of crisis. Nike is pondering alternatives–like more free meals–but the dilemma remains. It will be virtually impossible to be responsible in a way that satisfies everyone.
