USAS’ response to the FLA’s Questions

On November 9, the FLA distributed the following questions to “assist” university administrators as they meet with students to evaluate USAS’ Designated Suppliers Program. USAS welcomes dialogue about our proposed policy. At the same time, we have serious doubts about the motives of the FLA in putting out a list that includes a number of leading questions and many questions that have already been answered in detail in our FAQ of October 12 (available at www.studentsagainstsweatshops.org/docs/Sweat-Free_Campus_Campaign_FAQ.doc). It appears to us that these questions were presented not in the spirit of dialogue but mainly to serve as ammunition (however ineffective) to undermine the growing support for our Program in the university community. It is not surprising that the major apparel corporations that fund and control the FLA would be opposed to the Designated Suppliers Program, which will require them to make the fundamental changes in their sourcing practices that are necessary if worker rights are to be respected in factories producing collegiate apparel. These brands have not been willing to make these changes up to now and most of them will resist doing so, which is exactly why a mandate from universities is necessary. Nonetheless, whatever the motives behind the FLA's questions, we'll answer them in the spirit of open debate. Below are some responses that we hope will help frame the ongoing campus debates over the policy.

Considerations to Help Frame Campus Dialogue Regarding Compliance Programs

General Questions

• Should your school’s approach to its participation in influencing working standards in factories be broadly or narrowly focused?

Of course we all agree that universities’ impact on working conditions should be as broad and effective as possible. The real question is how this goal is best achieved.

This question seems to suggest that, by consolidating university production in a smaller set of factories, our proposal would have a more “narrow” (read “less effective”) impact on conditions. We strongly disagree. As we have explained at length in our FAQ, we believe the Designated Supplier approach strengthens universities’ positive impact on the industry at large by significantly raising standards in factories than can then become the baseline for the broader industry. Universities must take the lead in demonstrating that it is possible to manufacture clothing under sweat-free conditions. Rest assured, once the standard is created, USAS and the rest of the anti-sweatshop movement will press non-collegiate brands to meet it as well.

One thing is certain: despite the best efforts of USAS, the WRC, universities, and workers, the current approach is not yielding the broad, positive impact we desire because our licensees’ sourcing practices ensure maintenance of the sweatshop status quo. While the production of collegiate apparel is now spread across many thousands of factories, most of these factories routinely abuse worker rights. This is because there are too many factories to monitor, our licensees represent too small a portion of the each factory’s production to compel real improvements, there is no reward for factories that do better, and the price pressure under which these factories operate makes long-term sustainable change impossible.

• How can schools most successfully be involved in improving working conditions and affecting workers’ lives for the better, through compliance programs and through other measures, including educational initiatives?

We believe the best way to positively affect workers’ lives is to ensure that the jobs they have making university apparel are jobs that allow them to meet basic needs and make decisions about how to improve their own lives, free from the constraints of grinding poverty. Currently, the jobs of most collegiate apparel workers are sweatshop jobs – jobs that provide wages so low that workers and their families are stuck in deep poverty, so low that parents are often unable to pay for secondary school for their children, and so low that workers are forced to work such excessive overtime that many rarely spend time with their families. Educational initiatives, designed in collaboration with factory workers and advocates, may indeed be a way that universities contribute to the wellbeing of garment workers. But what is most urgently needed from universities is not educational opportunities to help workers find greener pastures, but simply the creation of apparel jobs that allow workers to rise out of poverty. We do not accept the premise that apparel jobs are inherently poverty jobs which at best provide a stepping stone to something better. As discussed in our FAQ, because labor accounts for typically between 1-3% of retail prices, apparel jobs could provide substantially higher wages without large retail price increases – if brands were willing to pay reasonable prices to their suppliers. Universities have the power to make this happen.

• How does the USAS Designated Supplier Program define ‘sweat free” and how does that definition match your campus’ definition?

We believe that for a factory to be considered “sweat-free”, workers’ rights must be fully and demonstrably respected. This means a) demonstrable respect for all rights embodied in university code of conduct; b) demonstrable respect for rights of association, as evidenced by the presence of a representative employee body; c) the payment of a living wage.

We ask that you take a look at our FAQ for in-depth explanations of what these standards mean and why they are critical, but the following are some brief comments. On the issue of representative worker bodies, five years of code enforcement has shown us that relying exclusively on sporadic visits (e.g. once per year or less) by outside monitors like the FLA and on the goodwill of managers, themselves under tremendous pressures to cut costs, is not a viable strategy. Workers are the best monitors of their working conditions.

In most of the factories where real change has been achieved, through WRC and university action, the presence of a union or union organizing drive has played a central role in achieving this change and in the effort to protect the progress over time. These cases have been too few and too fragile, due to licensee sourcing practices, but they do show very clearly that deep and sustainable improvements in respect for workers rights are far more likely to occur where a legitimate, independent union is present.

On the issue of a living wage, we know that no job can honestly be called “sweat-free” if workers cannot afford to feed their families or take their children to the doctor when they are sick. Any definition of “sweat-free” that does not include these fundamental components is not sufficient to truly protect worker rights.

• What is your goal in holding your licensee companies accountable for working conditions in their supply chains; how important is sustainable, systemic improvement in a growing number of factories?

Our goal in holding licensees accountable is simple and, we thought, a matter of consensus in the university world: to ensure that workers’ rights are fully respected wherever collegiate goods are made and to set an example that can influence the rest of the industry. Unfortunately, most workers making collegiate apparel continue to work in sweatshops. Sustainable and systemic improvements are not currently possible because of the sourcing practices of our licensees.

The question seems to suggest that the FLA is somehow achieving “sustainable, systemic improvement in a growing number of factories.” We have seen no evidence to support this claim. The FLA and other industry directed monitoring schemes have been incredibly ineffective at helping workers achieve and sustain meaningful improvements. These failures have been worst in the most vital areas, like freedom of association, excessive overtime and wages. And the main reason these schemes are a failure is precisely because they do nothing to address the root causes of the problem: unfair pricing, unstable brand-supplier relationships, and the failure to reward good factories (There are, of course, other major weaknesses in these schemes, including ineffective monitoring in which the voice of workers is ignored).

The WRC has demonstrated that it is possible to make major improvements in the way workers are treated at individual factories, through aggressive, independent investigations and strong pressure on licensees and factory managers. But these changes have been limited and subject to reversal, because prices never reflect the cost of improved conditions and licensees have no commitment to support improved factories with orders.

Sustainable, systemic improvement in a growing number of factories is and has always been USAS’ priority. The new policy is designed to get us there. The current approach cannot.

• The USAS Designated Supplier Program applies just to apparel licensees. Does this disadvantage those companies as compared to the other collegiate licensee companies?

In drafting the Designated Supplier Program proposal, we chose apply the policy to apparel simply to make implementation as logistically feasible as possible. Our work, as well as the work of our universities’ code enforcement agents, has to date focused on factories making apparel products. We all know the most about this industry. We are less knowledgeable about non-apparel specialty products, like birdhouses and helmet-shaped chocolates. Eventually, all products will hopefully be covered, but it makes sense to start with what we know best. If, however, universities would like to have a broader scope from the start, we would be pleased to work with them on this.

• Are there enough factories that could be designated within a particular time frame and can those factories handle the demand from the university community, particularly in relation to the diversity of apparel products that are licensed and volume of product that needs to be produced for colleges and universities?

As discussed in our FAQ, given the current crisis in the global apparel industry – in which factories in many countries are truly desperate for orders – we are confident that more than enough factories will be willing to offer superior labor standards in exchange for reliable orders at prices that will allow them to meet those standards and make a profit,

There are a substantial number of apparel factories around the world that already partially fulfill these standards, through the recognition of legitimate unions. Many of these factories could be brought into compliance relatively easy, provided they receive steady orders at fair prices from university licensees. Some of these factories already produce collegiate apparel.

If licensees prefer, as we expect some will, they can work to bring factories in their existing supplier networks up to the program’s standards. Since licensees are welcome to use their existing suppliers, there is no basis for concern about inadequate capacity, in terms of volume, quality or diversity of styles. Licensees will in many cases be required to reorganize some of their production, but that is something they clearly know how to do.

Monitoring Approach Questions

• How can we best implement monitoring and other compliance efforts that do not duplicate efforts or overburden factories, companies or bodies charged with enforcement of those efforts? How can real and sustainable change be created?

The goal of establishing a unified, coherent, and rational approach to code enforcement is indeed crucial. The real problem now is that our enforcement agents (and the factories they monitor) are being asked to do the impossible: a) to monitor thousands of factories, far in excess of what is needed to produce a relatively small amount of apparel; b) to compel these factories to make changes when the licensees involved, because their production at each facility is tiny, do not have the clout at the factories needed to compel improvements even if the licensees push hard; c) to compel factories to take on extra costs of compliance with no guarantee that the prices they receive from brands will be commensurate with these costs and in fact with no guarantee that university licensees or other brands will place business in the factory at all once the changes are made – indeed, of all the burdens placed on factories, this is probably the most problematic!

The USAS proposal is designed to address each these problems. It will create a system in which the resources of university enforcement agents are not spread needlessly over thousands of factories. It will substantially lessen any confusion or burden caused by mixed messages from brands by requiring that the majority of a factory’s buyers be committed to the same standards, and it will ensure that factories have what they need from licensees – in the form of commitment of orders at reasonable prices – to meet these standards. This seems to us to be a far more coherent and less burdensome system than what is now in place.

• If production of collegiate apparel is focused on fewer factories, what impact would this have on workers at factories that are not chosen to do collegiate work? Would that be seen as ‘cutting and running’?

We have also addressed this question in some depth in our FAQ. It is important to understand that the apparel industry is now characterized by extreme volatility, with brands’ orders constantly being shifted from one factory to another to another – and university licensees are no exception. Our current arrangement could fairly be described as a constant state of “cutting and running.” It is this state of chaos that our proposal seeks to replace, with a structured, rational system that offers real job security for workers.

Won’t consolidating production in the designated factories cause more cutting and running? The reality is that, since collegiate apparel usually comprises a small portion of each factory’s production (often under 5% annually), the one-time redistribution of orders needed to create the program will be experienced by factories as a relatively minor loss of business, the kind they deal with every season, and will not have a dramatic impact on workforce levels. Any problems workers do experience would be in no way worse than what they face under the current system. The difference is that this shift would result in vastly improved conditions and job security for workers making collegiate apparel, instead of merely perpetuating the race from factory to factory in search of ever lower prices.

USAS has consulted with worker organizations around the world and these organizations have expressed support for the proposal, because they know from experience that workers have no job security with current industry practices.

Those who oppose the USAS proposal should be asked to explain what their plan is to stop the cutting and running by university licensees that now takes place.

• How can a factory ensure that it has enough work year round to sustain its workforce if it is only producing for schools?

Factories do not sustain their workforce year round in the apparel industry. This problem already exists. Employment levels fluctuate constantly and often drastically, season by season, year by year. Factories are more and more hiring contract labor, so they can more easily dump workers during low periods. The constant layoffs are one of the main problems workers face. The Designated Suppliers Program would bring qualified factories far more stability in terms of orders than they now enjoy. This will probably not totally eliminate seasonal changes in the level of production, but it will reduce them. And, by reducing the brutal price pressure that licensees and other brands now place on factories, the program will give factories less incentive to lay off workers during brief periods of reduced production. The proposal will also limit the use of contract labor.

Again, those who oppose the USAS program should explain what they would do to address the job insecurity that we now see throughout the industry.

Legal & Financial Questions

• What legal considerations does a school need to take into account when it engages in a compliance program, particularly with respect to anti-trust and restraint of trade type issues? Have legal opinions been sought?

Please see our FAQ for a detailed discussion of legal issues related to the new policy. Based on informal legal consultation to date, USAS is confident that when universities decide to adopt a policy along the lines of what we have proposed, an implementation approach can be readily worked out that does not violate applicable laws. USAS looks forward to seeking legal opinions on the question of how such a policy can be implemented that allows factories producing university goods to receive the necessary prices and order stability required to meet the wage and freedom of association standards outlined in the Designated Suppliers Program. The WRC University Caucus Governing Board representatives have asked the WRC staff to seek out such legal opinion, and this process is underway. The legal consultation is a matter of ensuring effective implementation and should not hinder discussion or the ability of universities to reach agreement on the basic principles of the policy.

• What are the contractual obligations and responsibilities that a school has with its licensee companies and what impact would different approaches to compliance have on those contractual relationships?

USAS is not asking universities to disregard existing contractual relationships with licensees. As with past changes to university policy (codes of conduct, factory disclosure) the Designated Suppliers Program will be integrated into applicable contracts when these contracts are up for renewal.

• Are there potential conflicts with those that select the factories and then perform the follow up monitoring to insure compliance with the determined standards?

Under the proposed policy, the Worker Rights Consortium (WRC) will not “select” the factories. The WRC will, as a service to licensees, provide a list of factories that have the potential to become Designated Suppliers, and licensees will then be able to choose these or other factories from their existing supply chains. The WRC will then assess candidate factories to determine if they meet the standards of the program. Those that do will be deemed Designated Suppliers once licensees begin placing orders there in accordance with the new policy. The WRC will then verify compliance on an ongoing basis at these factories.

Universities already set standards and charge various organizations with determining which factories are meeting these standards. Asking the WRC to assist universities by identifying factories that comply with new standards, and then to monitor these factories for ongoing compliance, is not a departure from past practices.

• What effect might different approaches to compliance have on a university’s licensing revenue streams? How would a reduced revenue stream affect other programs on campuses that are dependent on such revenues?

If universities have some reason to believe there will be a decrease in licensing revenue as a result of implementing the new policy, they should explain to us exactly what they think will happen. Like claims about unspecified antitrust violations, this excuse has been thrown at students every time a new university anti-sweatshop policy has been proposed, from the adoption of the original codes of conduct, to factory location disclosure, to affiliation with the WRC. Yet universities ultimately adopted all of these proposals, and licensing revenues and corresponding royalties have grown, not declined, since the policies were implemented.

Furthermore, the implication that the only way to sufficiently fund campus programs is to sell our logos to companies that refuse to curb their exploitative labor practices is a disturbing position for these not-for-profit institutions of higher learning to take.