September 30, 2003

No one policy, voluntary or regulatory, will adequately address the problem of worker rights violations in the global garment industry or the lack of information available to consumers to make ethical choices. A combination of governmental regulations and incentives and voluntary initiatives will be needed to adequately address what is now widely recognized as a systemic problem. There are a number of policy options that would complement and reinforce the Ethical Trading Action Group’s (ETAG) proposal for factory disclosure regulations. Below we look at some of those options and how they could interact with ETAG’s proposal to provide consumers, shareholders, stakeholders, workers and governments with sufficient information and policy tools to seriously address the global problem of sweatshop abuses in the apparel industry.

1. Government-mandated corporate social and environmental reporting
Large public and private companies should be required, as part of their corporate-law reporting requirements, to produce annual social audits. Audit reports should include both information on the processes for ensuring compliance with ILO core conventions, as well as other appropriate standards, and the findings of those audits and corrective action taken.

2. Procurement Policy: Canadian federal, territorial and provincial governments should adopt procurement policies for all government departments, institutions and agencies that give preference in the purchase of apparel and other relevant products to companies that agree to meet with ILO core conventions, as well as other appropriate standards, and provide transparent annual public reports (or participate in multi-stakeholder code initiatives that provide such reports) on their processes and performance in ensuring compliance with ILO core conventions throughout their supply chains.

In Canada, the government of Manitoba has passed a ‘No Sweat’ procurement policy governing all apparel purchases, valued at between $1.3 and $1.6 million annually. The municipal governments of Vancouver and Toronto have also passed ‘No Sweat’ procurement policies. More information on ‘No Sweat’ procurement policies is available here.

3. Labour Rights Criteria: The Canadian government should adopt labour standards performance and reporting criteria for the granting of government loans, grants, overseas investment insurance or other benefits tied to overseas investment by Canadian companies. Companies that provide annual transparent public reports on their processes and performance in ensuring compliance with ILO core conventions in their wholly owned facilities and supply chains should be given preference for trade and investment support, including support from the Export Development Corporation (EDC), Program for Export Market Development (PEMD) or the Canadian International Development Agency (CIDA). The government should also provide public access to information on all forms of public support to Canadian companies related to foreign investment or offshore sourcing.

4. Capacity Building: Through CIDA and CIDA support channelled through Canadian non-governmental organizations, the government should provide increased support for capacity building for southern civil society organizations, labour organizations and ministry of labour inspectors, so they can more effectively engage with code monitoring and verification initiatives, as well as for worker rights training for local workers and management personnel by reputable southern human rights, women’s and labour organizations.

5. Trade Agreements: In the negotiation of bilateral and regional trade agreements with developing countries producing apparel and textile products for export to Canada, the government should adopt proposals that link the reduction or elimination of tariffs with progress in achieving compliance with ILO core conventions. Such proposals could also include provisions for development assistance to increase the capacity of ministries of labour to monitor and enforce national labour law, and for local non-governmental and labour organizations to monitor compliance with ILO core conventions. It could also include provisions for ILO-led monitoring of compliance with core conventions and public annual reports on progress in achieving compliance

A good example of such a trade agreement is the US-Cambodia Textile Agreement. That agreement offered increased market access for Cambodian textile products in exchange for efforts to comply with international labour standards. Compliance has been monitored by the International Labour Organization (ILO), and its annual progress reports are available to the public. More information on the Cambodia experiment is available here.