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RESEARCH PRODUCT

Corporate Social Responsibility in the Garment Industry : A Cross-case analysis of three Norwegian organizations’ approach to central challenges in improving working conditions for factory workers in developing countries

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Master's thesis Development management UT503 - University of Agder 2017 Working conditions for factory workers in the garment sector are often appalling, with extensive use of overtime, unsafe working environments, low presence of unions, union-hostility, weak (or no) contracts, and wages being held back, to name a few challenges. The idea and practice of Corporate Social Responsibility (CSR) has received increased attention, as an approach to mitigating some of these challenges. With CSR, it is proposed that businesses ought to take on voluntary social and/or environmental responsibility because it is morally right. Some suggest that part of this responsibility should include ensuring decent working conditions for workers throughout global supply chains. Critics argue that this responsibility rests with local governments, law-makers and unions, and not with corporations in the Global North. The purpose of this study is to explore how three Norwegian organizations perceive and approach some of the central challenges in improving working conditions for factory workers in the garment sector in the Global South. A case study design is applied, and information is retrieved both through document-analysis and through qualitative interviews to triangulate data, resulting in a cross-case analysis. Framtiden i våre hender monitors and puts pressure on retailers to act responsibly. Initiativ for Etisk Handel works with corporations to assist them in implementing responsible polices and practices. Stormberg is a clothing company balancing between profits and social responsibility. It is found that the regime of social auditing for compliance with ethical standards is ineffective (and even counter-productive), and that it is mainly being used by retailers for branding, legitimacy, and reputation management. It is further found that retailers’ procurement strategies can have significant impacts on suppliers, and some measures to mitigate negative impacts are identified. Responsible procurement can include long lead times, stability in industrial relations and contracts, and avoidance of last minute cancellations in orders. Furthermore, wages are depressingly low for factory workers in the garment sector. Weak contracts and workers not being properly remunerated often lead to excessive use of overtime. So-called living wage, covering basic needs for the worker and the workers family, has proven challenging to implement top-down. It is argued that wages must be lifted through transnational and sector-wide institutionalization of so-called “wage floors” – established levels which wages are not allowed to drop below. There is also an emerging consensus that unions or similar mechanisms will have to play an instrumental role in improving working conditions and increasing wages for factory workers, and that the process ought to be “owned” by the workers (bottom-up). Lastly, it is found that the voluntariness of CSR is understood to be a major barrier for further improvement, and it is called for stricter legal codification of CSR – bringing it out of the voluntary dimension in which it originated, and into hard law.