The Sweatfree Purchasing Consortium’s model Sweatfree Policy is designed to assist governmental entities in developing their own sweatfree policies. It is intended to alert governmental entities to issues that affect the procurement of apparel, textiles, and laundry services, and guide them as they develop policies governing those procurements. It is not intended to serve as an exhaustive treatment of requirements and rules for application. Rather, governmental entities should feel free to use it as a starting point for development of a specific policy that complies with their own policies, statutes and regulations.
The Consortium would like to acknowledge the research and drafting assistance of a team at the Harrison Institute for Public Law at the Georgetown University Law School and the support of the Kalmanovitz Initiative for Labor and the Working Poor. The policy background and analysis pieces that follow below are compiled largely from their reports to the Consortium, which remains solely responsible for the content.
Dozens of cities, states, and local government entities have adopted sweatfree procurement policies beginning as early as the late 1990s. While many governmental entities have borrowed language from one another, and a few are based on the SweatFree Communities model of 2008, there is a patchwork of policies across the country with varying standards and procedural requirements. A new model policy that can help harmonize standards will help facilitate compliance and help governmental entities reach their goal of purchasing apparel made in decent working conditions. For example, if governmental entities all used the same living wage standard or defined compliance with general labor standards, such as freedom of association, the same way, factories and manufacturers might be more willing or able to comply with the standards.
The Consortium’s new model is a pragmatic policy that recognizes legal constraints of public purchasing. Currently, many policies mandate immediate compliance with a set of labor standards; yet, bidders often cannot certify compliance. Instead, they can comply with procedural requirements related to transparency, monitoring, and remediation, and, over time, increase their capacity to monitor and verify compliance with labor standards in the supply chain. The Consortium’s new model reflects a shift to work with suppliers and build capacity down the supply chain to ensure decent working conditions.
Some current policies state a purpose to protect workers and influence markets in other countries, which may go beyond the professional mandate of purchasers and the legal authority of local jurisdictions. The Consortium’s new model policy suggests that governmental entities can state their objectives more narrowly in a way that conforms to their proprietary interest in preserving a competitive bidding process that is fair to all bidders and not undermined by those who cheat by violating domestic law or international standards of public morality. The findings in the new model policy provides a narrative of how some bidders use global supply chains to cheat—intentionally or not—and the purposes stress the need for labor standards that preserve the integrity of competitive procurement.
The authority of state and local governmental entities to enact any purchasing law is generally constrained by state competitive bidding laws. These laws require that government entities award contracts to the “lowest responsible bidder,” i.e., the one who bids the lowest price while conforming to the specifications required by the entity. Recent state court decisions have allowed purchasing entities to tailor the definition of a “responsible” bidder in order to protect the integrity of the bidding process by barring bidders who gain a competitive advantage from illegal conduct.
Illegal conduct includes violating domestic laws, including those that protect workers from sweatshop labor conditions. It also includes violating international norms of public morality (e.g., no slave labor). The theory is that contractors who use sweatshop labor gain an unfair price advantage and undermine competition. Thus, the primary purpose of the Consortium’s model policy is to protect the integrity of the procurement process from illegal competition, rather than ensure the efficacy of international labor standards or evaluate the morality of private market actors.
The main mechanism of enforcement in the model policy is to hold contractors to domestic laws and regulations in the countries in which they operate. Those laws are often comprehensive and tailored to local conditions. However, even though most countries have committed to implementing international labor standards, their laws do not always provide the level of worker protection that international standards do. The model policy therefore enforces international labor standards as well.
The standards in the model policy are general enough that they capture the widest possible swath of sweatshop labor practices, but also specific enough to be easily interpreted and enforced.
The most widely accepted international labor standards are the core labor principles promulgated by the International Labor Organization (ILO). They offer “the view from 35,000 feet” of labor rights. These principles are a set of rights first enumerated in the ILO’s Constitution and further enumerated in the eight Fundamental Conventions, which have been signed by many, but not all, nations. Additionally, the ILO’s 1998 Declaration of Fundamental Principles and Rights at Work obligates all ILO member states (183 of the 193 states recognized by the United Nations) to implement the standards, giving them significant legitimacy as international standards of public morality.
This legitimacy makes it possible to include the core labor standards in the Code. Unfortunately, there are several reasons these standards cannot be used alone, exactly as written. One major impediment is that the standards do not call on individual employers to adhere to a particular labor standard; rather they call on national governments to implement laws that uphold the standards. If challenged, a contractor could legitimately argue that the standards are not directed at it, and it need not comply with them.
A second issue is that the language in many of the standards is either vague or overly general. If an American court cannot determine the meaning of terms used in a law, or it finds that the person to whom the law applies (here, apparel suppliers) cannot do so, that court will likely invalidate the standard as unconstitutionally vague.
Finally, enforceability of the standards is critical to making them applicable. Purchasers must be able to verify that contractors are in compliance to include or exclude them from bidding or take action against an existing contractor that has lapsed. The language of the standards broadly lays out rights, but does not refer to specific points of compliance that a government or third-party monitors can specifically look at to determine compliance.
The ILO recognized the lack of enforceability of the core labor standards when it developed compliance standards for its Better Work Program, a program for improving labor rights in the garment industries of developing nations. To address that need, it created a set of questions called the Compliance Assessment Tool (CAT), which translates the core labor principles into 314 individual points of compliance. These points are tied to specific acts (such as forbidding an employer to use union membership as a bar to hiring) and are therefore highly enforceable. The CAT offers the opposite of the 35,000-foot view—a microscopic one that focuses on specific acts of malfeasance by employers.
One problem with this approach is that a law with 314 points of compliance is unwieldy for both purchaser and contractor. Moreover, no list, no matter how detailed, can capture every possible act of malfeasance. Even holding a contractor to a list of 314 acts leaves open the possibility that it will comply with all and yet still be engaged in a different, heinous violation of workers’ rights.
One method of dealing with the complexity and narrow scope of the CAT standards is to make an assumption: there are some standards that indicate likely compliance with others. For example, if a contractor engages in collective bargaining, it is likely to also recognize a worker organization. A set of these “proxy standards” narrow the CAT standards to a much more manageable number.
If the core labor principles represent the broadest view of labor rights, and the CAT standards represent the narrowest view, there is a third possibility— an intermediate set of standards. To create a set of intermediate standards, the Consortium grouped the CAT proxy standards by underlying objective, which serves as the intermediate standard (e.g., prohibiting limitations on collective bargaining). The intermediate standards tell contractors what types of behavior are subsets of the greater principles, while not being focused exclusively on particular acts.
The model policy includes the CAT standards as examples of behavior that illuminates the intermediate standards. It has the benefit of requiring compliance with the intermediate standards and the specific CAT standards.
Including both levels is valuable because the two layers inform one another. The CAT standards illuminate the intermediate standards by example and provide significant guidance in their interpretation. The intermediate standards illuminate the underlying principle of the CAT standards. This creates a mutually reinforcing set of standards that is much more likely to survive a legal challenge.
For example, one intermediary standard provides that a contractor must not “Interfere with a workers’ organization or its efforts to organize employees.” This, on its face, is general enough to offer some question as to what behaviors might fit: would an employer who allows employees to meet during work hours but insisted that union meetings occur at the end or beginning of shifts, rather than in the middle, be “interfering”? Under the pure definition of “interference”, this could be construed as such. However, the four specific examples in the model policy suggest that the standard is meant to protect the right to discuss organizing and organizational issues without input by and out of earshot of the employer. Here, the employer is protecting that right and a court could make a reasonable determination that the employer is in compliance. The examples give the necessary guidance for a court to find violations.
Most nations have detailed labor laws that protect workers. The model policy requires contractors to fully comply with the laws in each nation where they operate. Ideally, those laws and regulations will provide the bulk of worker protection. The labor standards based on the ILO (International Labor Organization) fundamental principles deal with those situations where domestic laws are non-existent or insufficient to uphold that limited set of universal principles. In theory, all 183 member states of the ILO are committed to implementing laws that uphold the principles. However, nations vary widely in how they do this. This potentially places the standards in conflict with domestic laws in two important ways.
First, some nations do not protect workers to the level required by the ILO principles. For example, ILO fundamental principles require implementation of collective bargaining, yet several countries exclude entire categories of workers from it, such as public servants, agricultural workers, domestic workers and seafarers.
Second, some domestic laws actually contradict the ILO’s interpretation of the underlying core labor principles. For example, China and Vietnam, two of the world’s largest clothing producers, only allow workers to join approved workers’ organizations. The ILO standards require a contractor to bargain with any organization that workers create. Were a contractor to bargain with an unapproved organization as required, it would potentially violate domestic law. If it adheres to the domestic law, it violates the ILO standards and faces the loss of the contract.
The goal of this model policy is to allow for only the narrowest of exceptions to the labor standards and to do so in a straightforward way. The exception does not excuse a contractor from complying with the general principles of the labor standards, only specific acts that would cause it to violate domestic law. Thus a contractor operating in China or Vietnam must permit all activities related to freedom of association, a general principle, that are not prohibited by domestic law, and avoid practices that violate freedom of association unless it is mandated my domestic law.
Many governmental entities mandate a procurement living wage in conjunction with their sweatfree policies. This wage standard uses the U.S. Department of Health and Human Services poverty guidelines for a family of three to calculate a base hourly wage. An additional 20% of the wage is included as health or retirement benefits. The wage is then adjusted to the country of manufacture’s level of economic development by using the Purchasing Parity Power (PPP) index.
Unfortunately, very few global apparel factories meet the living wage standards one hundred percent. It is, therefore, necessary to create a standard to determine responsibility of bidders who may be partially in compliance or developing strategies to become compliant.
A wage ladder provides an alternative to immediate compliance with a full living wage, which few factories are presently willing or able to pay. A wage ladder charts factory wage levels relative to various wage standards such as the legal minimum wage, the prevailing wage, and different fractions of the living wage. By translating factory wages in different countries to the common PPP currency governmental entities can compare how well each factory compensates its workers and provide a preference to those that come closest to the living wage standard. Governmental entities can also use the wage ladder to create incentive to suppliers to improve wages during the course of a contract.