Posts Tagged ‘Supply Chains’

Union officials Joe and Jane congratulate managers Zanko and Anthony on the arrival of the new, safer stock picker, driven by Dave.

Union member Dave showcases the newly-arrived, safer stock picker. Union officials Joe and Jane and managers Zanko and Anthony all worked to this moment.

Here are two of my colleagues at a furniture distribution centre in Western Sydney. The photo is for an article in the next edition of the union journal about an innovative safety improvement that resulted from constructive collaboration between the union and site management.

The picker in the photo is the first of its kind. It is designed to lift goods up to 8 metres off the ground. The operator walks out of the cage onto the platform where he or she moves goods on and off the shelves. A harness is provided so they can’t fall but that’s only half the problem: if you place too many goods on the platform, the weight can tip the whole picker. Sadly one of these officials has dealt with a situation where exactly that happened, resulting in the death of a worker who fell onto a concrete floor.

The good news is that the hazard was raised with site management who accepted that it was a legitimate concern and set about working with Toyota to devise this first-of-its-kind picker that automatically measures the weight on the platform and sounds an alarm if load limits are approached.

I post this on here because the Murdoch-dominated press coverage of unions in Australia is so overwhelmingly negative that it’s worth remembering what the real work of unions looks like on a day to day basis.

I might also add that fresh data out of the UK shows that, in recent years, rises in union density are associated with rises in productivity.

The happy picker operators at this site are in no doubt why that is so.



IKEA at Tempe near Sydney’s International Airport

As Western children play today amidst all those shreds of Christmas paper wrapping and, no doubt, many adults queue up to return or exchange unwanted gifts, I wonder how many of them pause to think that IKEA, that friendly, funky store would have so many labour rights issues?

Workers in IKEA Turkey for example, report being intimidated when they attempt to join the local union, Koop-Is Sendikasi especially after a union activist on the site was sacked.

Interestingly the countries where IKEA management play by the rules are mostly in Northern Europe while the reported problem locations are found in an arc through Southern and Eastern Europe. This is in line with the predictions of Geert Hofstede’s Power-Distance Index (PDI) as they are all countries with a high PDI score; in other words, where workers tend to believe management are inherently unjust and, conversely, where management tend to believe their role requires them to get their hands dirty (I provide this as a possible explanation, not as an excuse).

The problematic sites are:

  • Portugal
  • Spain
  • Italy
  • Greece
  • Turkey
  • Czech Republic
  • Russia

The retail global union federation, UNI, has made IKEA a focus company for a co-ordinated campaign amongst affiliates and in countries where there is no strong retail/warehouse union. UNI spokesman Alke Boessiger said:

To us it is clear that all workers at all IKEA workplaces are equal and have the right to the same good working conditions and the same rights to become a union member and negotiate a collective agreement

To its credit, IKEA appears to be heeding the “reputational challenge” that all of this presents and is in discussions with UNI about addressing them.

Here is UNI’s Research Brief and below is their video explaining the goals of the campaign:

You can follow the latest on this campaign at

Global Village

Global Village (Photo credit: dou_ble_you)

1962 was a remarkable year. Times began a’changin’.

It was the year of the Cuban Missile Crisis, the year in which Pope John XXIII convened the Second Vatican Council, and the year both the Beatles and Rolling Stones emerged onto the scene.

Meanwhile on the U.S. West Coast a little-known athlete named Phil Knight penned a paper as part of his MBA studies with the unremarkable title Can Japanese Sports Shoes Do to German Sports Shoes What Japanese Cameras Did to German Cameras?

The idea born in that paper became Nike and in 2012, fifty years on, Phil Knight is still the company’s president. He is also America’s 14th richest man.

The strategy of moving production to the lowest-cost countries has bedeviled the labour movement since it began to catch on in the 1980s and 1990s, playing workers in one country off against those in another. To date, no counter-strategy has had the clarity of Knight’s simple idea. It’s like Berlin’s metaphor of the fox and the hedgehog: activists (the fox) devise endless strategies to attack companies (the hedgehog) which evade new labour regulations simply by relocating yet again. There’s not much doubt who has the upper hand.

When will labour really get global?

The ‘official’ centre of the labour movement is the ITUC in Brussels, orbited by the seven global union federations. Their strategy relies heavily on Global Framework Agreements and ratifying of ILO core conventions. The jury is still out on their effectiveness.

However the labour movement is just too widespread to be able to fit under one organisational banner. There are other labour groups around. There is even another rival global body hanging around, the WFTU.

LabourStart is the closest thing there is to an ‘unofficial’ labour hub, and it will be holding its 2012 global solidarity conference in Sydney from 26-28 November.

Generally the LS vision follows a flux and transformation approach, being more of a forum in which ideas can emerge and be shared rather than attempting to direct or guide the process. This conference is going to depart from that slightly and will give activists across many disciplines an opportunity to work together with specific global campaign goals. The meta-issue with Nike and friends is Capital Mobility and it is not the only one that will be on the table. Insecure Work and dealing with Authoritarian States are also going to be tackled.

Here’s hoping for some exciting new ideas that we might see emerge.

Deutsch: Kreuzwinkelständer der Modekette KiK

Deutsch: Kreuzwinkelständer der Modekette KiK (Photo credit: Wikipedia)

A couple of weeks ago we saw the tragic death of at least 250 Pakistani apparel workers in an unregulated factory, the worst such disaster in history.

It later emerged that this factory was supplying garments to the European market including Germany’s KiK.

It also emerged that this very factory was audited by RINA (Registro Italiano Navale Group) at the behest of New York-based Social Accountability International (SAI) just a short while before the fire occurred, and certified as meeting the SA8000 standard as a fair and safe supplier.

SA8000 is a voluntary standard promoted by SAI as a means of ensuring that suppliers are ethical. No one would suggest that it is anything but sincere but this incident makes a mockery of it.

When interviewed by Al Jazeera, SAI’s Executive Director didn’t seem particularly upset or contrite about the incident either:

True, if the deaths were anyone’s fault it was the negligent factory owners (who are now on murder charges). Plus, if you look narrowly at the auditing aspect, it’s more RINA’s fault than SAI’s as they were the people on the ground.

However it really doesn’t rescue SAI. To blame it on RINA is to use the precise defense that suppliers try to use but know they can’t get away with. Imagine if Mattel said that in 2007 when it had the toxic paint problem: “Well, hey, it’s not our supplier, it’s our supplier’s supplier doing the wrong thing, so how are we to know?” If SAI, the supposed leader, can’t monitor their own contractors, how are companies supposed to?

This tragic episode underscores the shortcomings of SA8000. You can’t manage workers’ rights in the same way that you might manage food additive levels or child restraint shock resistance, as something that can be measured and implemented but always imparted. All companies need to do is stand back and listen to what people want (like … ventilation and fire exits, let’s say). It’s not really that difficult.

Asia Monitor Resource Centre recently published a book about this very issue, titled The Reality of Corporate Social Responsibility: Case Studies on the Impact of CSR on Workers in China, South Korea, India and Indonesia. You can download the PDF on their site here: It is well worth checking out.

This book is written by people at the front line thoughout developing Asia and documents how Corporate Social Responsibility (CSR) that reflects the corporate agenda is not only unhelpful to workers in the developing world but is frequently used as a strategy to prevent workers and other community groups from having their place at the table.

In the Asian context, CSR mostly involves activities like adopting villages for what they call a ‘holistic development’, in which they provide medical and sanitation facilities, build school and houses, and helping villagers become self-reliant by teaching them vocational and business skills. Such corporate strategies have been effectively hegemonic, providing a strong legitimacy and license for corporations to sustain the exploitation of human and natural resources. More importantly, it leads people to wrongly assume that the business houses, and not the states, are responsible for citizens’ basic rights to better education, clean water, healthcare, etc. It disciplines the un-informed poor motivating them to behave in ways that make state regulation obsolete, while leaving them at the mercy of market forces. (pp. 2-3)

Rights aren’t something that you can “give” or impart, they are something that you acknowledge. That’s the problem with CSR: it is by definition an after-thought that merely papers over an existing way of doing things without seriously challenging them.


SAI’s mistake was not promoting SA8000, it was disowning this catastrophic system failure. They haven’t made a peep of a suggestion that they need to re-examine their way of doing things.

SAI is funded by the companies that obtain its certification (rather like FairTrade), which leads me to think it will soldier on through the crisis, notwithstanding the harm that’s been done to its reputation.

There is more than one group operating in this space and it’s really important that they aren’t all tarred with the same brush. All up, six groups belong to the Joint Initiative on Corporate Accountability and Workers Rights.

SAI is one. Another, the Fair Labor Association (FLA), was set up during the Clinton administration. It has also been criticised for being too soft on business (they are the company auditing Foxconn).

Of the others, Fair Wear Foundation, Clean Clothes Campaign and the Workers Rights Consortium all put the promotion of union membership and worker consultation and participation front and centre and really need to be lauded for the great work they do in partnership with developing-world worker organisations.

The last, the UK-based Ethical Trading Initiative, seems to adopt a tripartite ILO-type approach which presumes unions’ involvement without pushing it too hard.

The best thing that could come out of this disaster is that FWF, CCC and WRC start getting some phone calls from companies whose motivation isn’t white-washing but who want to know that their suppliers are decent places to work in reality.

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English: Generic brand cola can from Jewel Com...

English: Generic brand cola can from Jewel Companies (US, 12 oz., 355 ml) (Photo credit: Wikipedia)

A lot of time is spent pressuring brands over their supply chains (though not nearly enough).

People ought to challenge themselves about this: are you just picking on the brands that you see most often: the Apples, the Gaps and the Nikes of the world? What about, in the mundane world of groceries, the supermarkets’ store labels, such as Costco’s Kirkland or Wal-Mart’s Great Value? Ever wonder what conditions those goods are made under?

Perhaps now is a good time to start thinking about this, because store brands are on the march.

In Australia, the two largest retail conglomerates make no secret of their strategy of progressively expanding their store labels at the expense of intermediate producers. Controversially this has included an offer of $1 milk at Coles and $10 jeans at its stablemate Kmart, sourced directly from China.

This could mean greater transparency about producers’ working conditions, since the retailers are themselves responsible for the contract of supply, yet the issue is barely on the radar. When it comes to overseas-made store brand products I rarely if ever hear people voice concern for the people making the goods; the discourse is all about ‘buying local’.

Right now Australia’s Parliament is debating a Bill that would compel companies to reveal whether goods “Made in Australia” are merely canned or batched here or if they are truly made from 100% Australian produce. However the motivation behind the Competition and Consumer Amendment (Australian Food Labelling) Bill 2012 is not to encourage transparency, it’s to encourage local farmer’s markets by “shaming” companies that import food. The Bill’s drafters would prefer that food not be imported at all. Consequently, it contains no provisions for monitoring or reporting (and these people call themselves progressive!)

Store label goods are not intended to draw attention to themselves, and they normally do a good job of it. A rare exception was an IGLHR report published in March which detailed abuses at a Chinese-owned factory in Bangladesh. The researchers somehow uncovered that the factory’s sweaters were being procured by Australia’s Wesfarmers group (owner of Coles Supermarkets and Kmart Australia). It didn’t even break into the mainstream news.

So the more goods on shelves come in these nondescript black-and-white packages, the less we know about them. Unless retailers are forced to disclose the identity of their suppliers, or someone like the IGLHR goes digging for it, all that we have to go by is their CSR statements. These are generic blanket statements covering thousands, possibly tens of thousands of product lines, with no associated checking mechanism. Even with the best intentions in the world, that is a recipe for inaction.

“Trust, but verify”

Voluntary standards are not a top priority in the companies that use them, and even less so when they are invisible to the outside world. Their priority is making money. Someone else needs to check that standards are adhered to. An academic study into the banana supply chain, conducted in 2010, concluded that the competitive pressure to drive down prices is always going to take precedence. It concluded that:

The voluntary labour initiatives in the global banana industry appear to be both driven by and in the interest of business. This is particularly so when there is no mechanism for the relevant worker representatives to monitor compliance of such initiatives (Robinson, p. 562; emphasis added)

Incidentally the opposite holds true as well. In an interview with Australia’s Inside Retail the week before last, the owner of the Gideon Shoes fairtrade shoe company, Matthew Noffs, said:

We haven’t had much support from the big name chains […] I have found the whole industry largely unsupportive (p. 4)

A lot of people like the idea of how [our product] is made but are also very scared, because as soon as you understand how things are really made and if you decide to get serious about it, it changes the way you buy (p. 5)

In other words, faced with the option of stocking a product that puts its commitment to ethical labour front and centre, retailers don’t want to touch it.

What does that tell you?


See also:

  • The Battle of Tomato Identities: The Rise of Supermarket Own-Label in Harvey, Quilley & Beynon (2003) Exploring the Tomato: Transformation of Nature, Society and Economy, Edward Elgar Pub., Northhampton, Mass., pp. 174-200

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Employment Exhibition

Employment Exhibition (Photo credit: Modern_Language_Center)

The notion of modernity leading to a better life is so ingrained that it is almost mythical. However it’s not inevitable, as citizens of the United States are now learning, and as the Japanese have known for the last two decades. I argue that workers in less prosperous parts of the world face the prospect of being stuck on an even lower rung on the ladder.

The incentive of wages

However sophisticated we think we are, rewards and punishments still work. Even people who are not under economic strain will relocate to less favourable locations, lured by nothing more than a higher salary.

Wages do not even need to be increased to lift performance. Many companies have hit upon the idea of incentivising workers compete against one another for scarce rewards. Samsung, for example, has a practice of firing the worst-performing 5-7% of it’s workforce every year, keeping everyone swimming towards the top like a school of fish fleeing a predator.

Lost knowledge

Human Resources, as a discipline, twigged half a century ago to the inadequacy of behavioural psychology as a basis of motivating employees beyond a certain point and making the most of their contribution. Work (in the developed world) has increasingly been re-structured to meet people’s higher-order needs for self-fulfilment.

Capital mobility is preventing this story from being repeated for workers in developing nations and let me explain why.

Global companies are not in the game of waiting about for the workforce of a particular country to improve their education and skills and start suggesting improvements to processes that would reduce costs and raise productivity. Take the Foxconn factory in Shenzhen for example. iPhones and iPads are basically manufactured by hand because labour is so cheap – cheaper than robots. A hundred years ago manufacturers were strongly geographically situated and over time their workers’ salaries would rise and processes would be improved. Today that’s no longer how it works. As the wages of the workers of Guangdong increase, the companies sourcing their products are simply moving on to lower cost countries, or even lower cost regions still inside China: Vietnam, Cambodia, Bangladesh (no doubt Burma will join that list soon). To stay with the same example, Foxconn is moving to Brazil and Chengdu. Why wouldn’t they? They never had any deep connection with Guangdong in the first place. This is sad in its own right; if only there were more high-ground employers like Alta Gracia or Olam who pay their workers more than the market rate.

There are other hidden costs in this quick fix, as there often are. During this transfer, all of those workers’ learning is lost, and the processes transplanted to the new location are just as inefficient as the original ones. That doesn’t show up in the company’s balance sheet, however, analysts on Wall Street simply rejoice at the new cost saving.

Meanwhile the workers of Guangdong are left to find other occupations. They bring their experiences with them of course but China is not exactly famous for its innovative business culture, so I’m yet to be convinced that workers with manufacturing experience are putting their knowledge to work in more advanced manufacturing in large numbers, selling higher-value products. The Chinese Government has figured this out in the last few years and is trying to push companies in that direction but it’s an open question whether they have what it takes. The country’s slow-moving but comfortably dominant state-owned enterprises are at risk of crushing nimbler private enterprises.

Meanwhile the workers of Cambodia, Vietnam et al are bequeathed senselessly inefficient processes. It’s a lose-lose-lose proposition. The sourcing company doesn’t win either, it merely survives to fight another day. The only winners are its investors and those of its consumers who remain content with cheap or at least cheaply-made goods.

The innovative Free2Work iPhone app allows you to scan and look up data about what you are buying

What a brilliant use of technology to overcome human laziness!

The only downside is that the app focuses on high-profile brands; most of the everyday commodities in your pantry will not show a result.

Free2Work is available free in the appstore.

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