Offshoring, labour and a new leaf? (Editorial)

By
|Canadian HR Reporter|Last Updated: 07/28/2005

Long criticized for its culpability in overseas sweat-shop conditions and labour injustices, The Gap has faced its darker side. This month it issued a report on labour violations at factories contracted to make Gap clothing, along with a list of plants it has ceased doing business with.

Could this be the turning of a new leaf in global business? If so it’s good news for Canadian companies trying to compete in a global marketplace that doesn’t always abide by the same standards we do.

Employers that respect human rights and work to ensure the health and safety of the workforce shouldn’t be penalized in an international marketplace. While Canada needs to improve productivity, innovation and competitiveness, the competition shouldn’t be against nations allowing child and forced labour.

San Francisco-headquartered Gap Inc.’s first-ever “Social Responsibility Report” follows a Code of Vendor Conduct the firm created in 1996. The company has more than 3,000 Gap, Old Navy and Banana Republic stores in the United States, Canada, Europe and Japan. The Gap’s code prohibits business with factories that discriminate or use child or forced labour. The code also covers health and safety and workers’ freedom to unionize.

The 2003 report serves as a commentary on the state of overseas labour conditions in general. Adhering to its code, The Gap terminated business with 136 factories in China, southeast Asia, Europe and Russia.

In China, between 10 and 25 per cent of factories were found to use psychological coercion and verbal abuse. Evidence of physical abuse was noted at plants in South and Central America. About 90 per cent of factories worldwide failed to meet minimum labour standards the first time a Gap inspector made an annual visit.

The Gap’s new-found desire to shed its sweat-shop image and embrace corporate social responsibility can be traced to pressure from activist shareholders and pressure from customers. Hopefully, the Gap’s competitors, such as Wal-Mart, will take heed, or the factories the Gap has ended business with will simply be stitching clothes for someone else.

And this isn’t a problem unique to clothing and other retail products. The international charitable organization Oxfam just released a report noting that in addition to filling retail shelves in Europe and North America with cheap goods, oppressed workers are toiling away in the fields to give the developed world less expensive fruits and vegetables. While the Gap’s actions are a laudable step in the right direction, much more needs to be done. Activist and consumer pressure alone will not end poor working conditions.

Labour standards must be a part of international trade agreements, otherwise good intentions by the Gap will merely reward competitors. Canadian companies shouldn’t have to exploit workers in developing nations in order to keep up.

And as more professional, white collar work goes overseas, adding to an offshore labour boom, ensuring fair labour practices becomes essential. Pouring money into education, research and innovation won’t safeguard Canada’s economy against nations that oppress labour — agreements that block the international trade in such goods and services will. Until then shareholders, consumers and enlightened executives will have to hold the line on fair practices.

While offshoring can make good business sense, it shouldn’t be an excuse for abuse overseas.

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