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The Other Side of Sweatshops

By Sebastian Mallaby

Saturday, April 15, 2000; Page A21

Far from the storm and clang of this week's street protests in Washington, there seems to be progress--or at least the hope of progress--in managing the harsh side of globalization. A deal has been reached to restrain sweatshop abuses in Saipan, an American territory in the Western Pacific. And, as if to signal the emerging shape of global governance, the new labor rules on this remote tropical islet will be overseen by a nongovernmental organization (NGO) based in Amherst, Mass.

When Bill Clinton so much as mentioned the idea of improving global labor standards at the World Trade Organization meetings in Seattle, the recrimination instantly buried hopes of progress at the summit. But now a coalition of forces--comprising American NGOs, labor and (naturally) some pushy lawyers--seems to have done what Clinton merely talked about. By shining a light on sweatshops, they have persuaded corporations involved in Saipan--famous names such as Calvin Klein and Liz Claiborne--to do something about them.

Which raises an intriguing question: If street protests such as the ones now taking place in Washington make it impossible for right and left to discuss globalization politely, can the process instead be managed by pragmatic NGOs and CEOs?

The Saipan settlement hints that, yes, this may be possible. Provided that it gets the necessary court blessing, the deal will encode promises made by 17 U.S. retailers that the factories they buy from will treat workers decently. The factories will have to pay a fair rate for overtime work, provide safe food and water, and crack down on the practice of exploiting workers' indebtedness to suspend many of their rights. The monitors from Amherst will be empowered to compel back payment of wages and other remedies, and even to recommend that retailers cancel contracts with incorrigible sweatshops.

The Amherst group is called Verite. It is only five years old, but even before the Saipan deal it had been flourishing. Corporations, anxious to protect their images, have hired the group to find abuses among their subcontractors before others uncover them and broadcast them to consumers. In the past half decade, Verite has inspected nearly 600 factories for clients such as Adidas, Mattel and Timberland. Meanwhile, other inspection services are booming. Over the past two years, PricewaterhouseCoopers, a consulting and accounting firm, has carried out 7,500 "labor audits."

Not so long ago, the big clothing retailers declared that their subcontractors' labor policies were not their responsibility. As the Saipan deal shows, they no longer make that argument. Last year, after coming under pressure from student groups, Nike took the unprecedented step of disclosing the factories that make sportswear for colleges and then inviting the students to tour them. Even the Gap, which buys some of its merchandise from Saipan but which has refused to be part of the recent settlement, emphasizes that it has an in-house team of labor inspectors to visit its suppliers' sites.

So long as consumers in the rich world wear clothes produced by methods that those same consumers deplore, this reformist momentum will continue. But how far reform really benefits poor workers is a harder question. Remarkably, one of the first people to admit this is Heather White, Verite's founder, who acknowledges that the moral pressure on Saipan's garment industry may be driving retailers to shift production to less scrutinized places. If so, the campaign against Saipan's sweatshops may actually harm some of the island's laborers. Many of them go into debt in order to get to Saipan from their native China. If the jobs disappear, they have no way of paying off their loans.

White worked in international subcontracting for 15 years before she founded Verite; she knows she is up against an industry whose suppliers are constantly shifting between factories and even continents. She may hope that one day the whole world will be covered by Verite-type inspections, making it impossible for production to flee to abuse-condoning havens. But that prospect seems far off, and perhaps even far-fetched. After all, there are thought to be 2,000 or more illegal sweatshops in New York City.

If that gives Verite some pause, it should surely silence globalization's more intemperate critics. The Saipan story shows that even if you forswear impossibly Utopian goals such as an international minimum wage, and even if you seek only to reduce extreme sweatshop abuses, and even if you do all this in negotiation with business, you are still, despite all your good intentions, in danger of hurting some workers at the same time that you help others. If even the most careful global regulatory effort yields ambiguous results, careless denunciations of international capitalism are not going to help anyone.

© Copyright 2000 The Washington Post Company

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