April 2000,

Dear people, find below the first chapter of the discussion paper written by Bob Jeffcott and Lynda Yanz, Maquila Solidarity Network. This is the first in a series of discussion papers on the debates and issues surrounding voluntary codes of conduct. The paper can be found on the webpage: http://www.maquilasolidarity.org/

February 2000.

Codes of Conduct: The Debates

Over the past ten years, there has been a dramatic increase of interest in and debate about voluntary codes of conduct. Interest in voluntary codes has grown as labour standards and working conditions in consumer products industries have deteriorated, in the wake of trade liberalization and globalization and restructuring of production and distribution networks.

The seeming inability of national governments or international institutions to regulate global production practices has awakened a renewed interest in voluntary codes of conduct as a tool to help establish minimum labour standards across national boundaries.

For many companies, a voluntary code of conduct is seen as preferable to increased government regulation. However, there are also risks involved in adopting a code of conduct. It can draw attention to the company's labour practices and raise expectations of improvements in those practices.

Companies are also becoming increasingly concerned about whether, and to what degree, voluntary codes of conduct increase their legal liability for their own and their suppliers' practices.2

For many in government, voluntary codes are seen as the non-governmental regulatory tools for the 1990s. Voluntary codes seem to be compatible with the neo-liberal model of trade liberalization, privatization, deregulation, cost-cutting, labour flexibility, and global competitiveness. Voluntary codes have the advantage, given the restrictions imposed on governments by regional and international trade agreements, of extending the application of labour standards across national boundaries and governmental jurisdictions.

According to Bryne Purchase, Professor at the School of Policy Studies, Queen's University, governments are attracted to voluntary codes because: "The traditional command and control model of government regulation is increasingly costly to enforce, difficult to apply across national boundaries, inflexible and inefficient. In certain circumstances, the voluntary code may offer some opportunity to reduce these costs."3

For these reasons, many trade unionists and social movement activists have been skeptical of voluntary codes of conduct. Many see codes of conduct as nothing more than a public relations tool used to manipulate consumers into thinking that they need not worry about conditions under which products are made or the impact they have on the environment or the community. They worry that consumer campaigns demanding corporate adherence to codes of conduct reinforce our identity as consumers and undermine our identity as citizens. Even when codes of conduct include provisions for transparency and independent monitoring, many critics see the current emphasis on voluntary codes as at best diversionary and at worst a threat to the regulatory role of the state.4

While we would agree that there are good reasons to be skeptical about the usefulness of voluntary codes of conduct, particularly if there are no provisions for independent verification and worker and third party complaints, or transparency in the monitoring, verification and remediation processes, we believe that voluntary codes need not be a privatized alternative to state regulation, but can actually complement and reinforce the regulatory role of the state.

This paper examines both the advantages and limitations of voluntary codes of conduct, and how they might interact with government regulation and worker organizing.

Contents

• Codes of Conduct: The Debates
• Limitations vs. Advantages
• Demands for "Independent Monitoring"
• Southern Responses to Northern Codes
• Multi-Company and Industry-Wide Codes
• Southern Code Initiatives
• Debates on Multi-Stakeholder Codes
• Codes and Legislation
• Voluntary Codes and Government Policy
• Conclusions - We Can't Afford to be Outside the Debates
• Endnotes