Michael Posner on the Global State of Workers’ Rights

Michael H. Posner is a Professor of Business and Society at NYU’s Stern School of Business. He is currently working to launch a center on business and human rights at NYU Stern, the first of its kind at a business school. From 2009 to 2013, Posner served as Assistant Secretary of State for the Bureau of Democracy, Human Rights and Labor. Previously, he led Human Rights First, a New York-based human rights advocacy organization, for more than three decades. On August 14, 2015, we discussed the rights of workers around the world, the collapse of a Rana Plaza garment factory in Bangladesh that killed 1129 workers in 2013 and its global implications, the Trans-Pacific Partnership (a proposed trade agreement among several Pacific Rim countries, including the United States), internet privacy and security, and divestment. Below is a transcript of our conversation.

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Jonathan Faust: What, if anything, has changed in terms of the conditions of Bangladeshi workers since the Rana Plaza Collapse in 2013?

Michael Posner: I’d say two things have changed. One is that there’s a greater public appreciation of the precarious nature of the garment factories themselves, threats to safety, and the broader issues of how workers are treated, compensated, etc. That has led to a greater willingness on the part of the brands and retailers to think collectively about the steps they need to take. They formed two associations: one mostly European and one American called the Accord and the Alliance, which together have monitored about 1800 garment factories and found a whole bunch of problems. A greater public recognition and greater brand risk to reputation have led the brands and retailers to say, ‘we have to get our arms around what’s going on and try to minimize our risk.’

The second thing that has changed is that there’s also a more open debate about the real scope of the problem. There aren’t just these 1800 factories: there is a whole network of subcontracting factories that numbers at around an estimated 7000. So brands have a direct relationship with 1800 factories, and these factories subcontract out to roughly 5000 more.

There’s also now a more honest debate about what do you do about the whole universe of garment factories that are producing for export. We [at the Center on Business and Human Rights at NYU Stern]are about to produce a map in the middle of September that will document just how extensive the network of factories is in Bangladesh, where they are, how it works, etc. We’re talking about a universe of between 4 and 4.5 million factory workers. It’s the second biggest garment-manufacturing country in the world after China, and it’s eighty percent of the export income for Bangladesh. This is a hugely important industry for them.

JF: Is it mostly just awareness, or have there actually been tangible changes in terms of the workers’ conditions?

MP: I think there’s been a lot more on the first than on the second. There’s a much greater sense of how precarious these conditions are, and many of these 1800 factories that have been inspected are failing. Literally, these structures are not stable. A number of factories have been closed, but the real cost of fixing the overall problem is great; we haven’t had the necessary commitment from either the global brands and retailers (and there’s 200 of them,) or local manufacturers, or anybody else to invest in the major need for closing factories and relocating them, fixing others, and dealing with a broken electric grid in Bangladesh. So there’s a big set of things that need to be done, not to make it perfect but to even make it acceptable, and nobody’s really committed to doing that, either at a local level or at a global level.

JF: How about workers in the rest of the world? Did the collapse spark a global movement to improve worker conditions?

MP: I would say that quite cautiously. I would say there is an evolving conversation where, not just garment manufacturers, but people outsourcing the manufacture of anything are recognizing that it’s not enough to say, ‘the local government ought to take care of it. It’s not our business. We don’t own the factory.’ They’re now recognizing that we live in an increasingly transparent world where media, internet, and social media make these things much more visible and where consumers and even investors are paying more attention. Consequently, the companies that are the beneficiaries of this global supply chain need to be paying more attention to these issues. It’s a gradual evolution, and I would say Rana Plaza was one touchpoint along a broader road. We’re still pretty far from companies accepting responsibility or even their share of responsibility.

JF: Which countries, aside from Bangladesh, present the biggest challenges to workers’ rights?

MP: It’s a pretty long list, actually, for different reasons: China, Vietnam, Myanmar, etc. Conditions are somewhat better in the Caribbean and Central America, but there are a bunch of challenges there, as well. There are the beginnings of progress in manufacturing in Africa, but huge challenges still exist there. There are challenges in Turkey, there are challenges everywhere, but I would say in the less developed countries where wages are low and regulations are more lax, the problems are the greatest.

JF: What do you believe is the most effective way of improving the rights of the workers in these countries? Through government regulation? Through a company’s own sense of corporate responsibility and desire to project an image of a company that cares? Or by convincing consumers not to buy products from companies that violate workers rights?

MP: Let me take that in a couple of stages. I think that, at the end of the day, what will make the most difference is strengthening of governance by national governments. I want to live in a world where there are 193 governments that protect their own people. That’s the long term goal. We don’t happen to live in that world right now.

So then the question is, what’s the way to get big global companies to interact with weaker or disinterested governments? Governments have the primary responsibility. A lot of them are failing. You have a governance gap, and the question is what is the right balance between what local governments, private industry, western governments, the U.N., World Bank, etc.? We have to push governments to behave better and to protect their people. On a parallel track, companies need to move away from a policing model where they conduct random spot-check audits of some of their factories.They do this as a kind of risk mitigation and sometimes as a public relations gesture to say ‘we’re doing something,’ and move to a more holistic look at how do we actually get at the problem.

One of the things we’re trying to push is a notion we’re calling shared responsibility. That is, where you figure out what’s the right delineation of responsibility and cost between global companies, local business partners, the manufacturers themselves, local governments, the governments of the countries that are the beneficiaries (the U.S., Western Europe, Japan), and then the big development agencies, like the World Bank and the IMF. That’s part of where I think the discussion needs to go. How do you move from risk mitigation to problem-solving and taking on a country-by-country, industry-by-industry basis, a broader look at what’s the real nature and scope of the problem, and then how do you divide up the responsibility so that it’s not too onerous on any one group. However big Walmart is, you can’t expect them to rebuild the electric grid in Dhaka in Bangladesh, but they ought to be paying more than they are into a system where they’re the greatest beneficiaries of very cheap labor and quick production of goods. Somewhere between where they are and being totally responsible is where they and the other global brands ought to be.

JF: Which companies take the rights of their workers seriously and actively try to give their workers greater protection?

MP: If you go to fairlabor.org, you will see a number of companies that have signed up for probably the most rigorous system of both evaluation and commitment to worker protection, both broad labor rights and worker safety. Included in that list are companies like Nike, Adidas, ASICS, New Balance, a lot of the athletic shoe companies, and Phillips-Van Heusen, which owns Calvin Klein, Hilfiger, and others. H&M, the big fast-fashion discount retailers from Sweden, Uniqlo, the Japanese fast-fashion company, Russel, again, Apple, Nestle in the agriculture sphere as well as Syngenta Seed, are all part of it as well now. So those are companies that are really trying to take these issues seriously.

JF: What about human rights abuses in the United States, e.g. in the fast food industry or among migrant workers? How do these abuses compare to those in other countries?

MP: To be sure, we have a whole range of labor challenges today, including efforts to undermine union representation and factory safety issues (we have OSHA that deals with that on a daily basis), but we do have a system that provides safeguards or remedies that don’t exist in places like Bangladesh. We have a court system that works; we have the federal and state and local regulatory agencies; we have a free press; we have unions that function freely; NGO’s that are writing reports. So I don’t think there’s any country that is immune from these kinds of challenges. We have huge problems on our southern border with exploitation of migrant workers. All of those things are real, but the differentiator to me is whether or not there are corrective measures or remedies or institutions that are legitimate and are legitimately trying to address these problems when they arise or to prevent them from happening, and on that scorecard we do reasonably well. There are some countries that probably do better, but we are certainly among the most advanced in terms of legal and social systems that address these issues in a serious way.

JF: What about child labor laws? How much of a problem is this in countries like Bangladesh?

MP: There was a big push fifteen to twenty years ago to eradicate child labor in Bangladesh, and a lot of people there will say they’ve done that. They’ve certainly reduced it, but I’ve just been in a couple of factories. There is no question that there is still pretty broad child labor in many of those factories, especially these second-tier, subcontracting factories employing kids twelve, thirteen years old, even younger. Again, because it’s such a weak government, technically child labor is prohibited, the law is clear, but they have very weak regulatory capacity, so those practices continue.

If you look at the International Labor Organization or others that track this, I think you would find that there’s a huge population of kids working in factories and facilities throughout South Asia. For example, in the rock industry in India or Pakistan, it’s a huge, pervasive problem. You also have a lot of child labor in agriculture almost everywhere with family farms. They need labor, and they turn to their kids. That’s a big problem in Africa, but really throughout the world.

JF: Should companies take sides in perceived human rights issues (by use of boycotts/divestment)? If so, what parameters should we use? How should they determine legitimate targets for divestment? For example, what is your opinion of companies that decide not to divest from dictatorships, but instead choose to divest from a country like Israel (as the French company Orange did)?

MP: I’m not a big fan of divestment in general. There are governmental restrictions on trade for a range of reasons. I think in general the thing that companies can and should be doing is making sure that their own house is in order. By that I mean that they ought to be looking at where they are making their central profits. What’s their profit-making activity, what are the human rights challenges that they face in relation to their business practices, their business model, and what should they be doing individually and collectively with their industry competitors to develop standards and metrics that will alleviate or reduce the incidence of human rights violations or challenges? That is, to me, central to what companies ought to be doing, and to get involved in broader subjects, I think, runs far afield.

Now, there are circumstances somewhere in the middle, like the South African Apartheid, where a number of American and European companies joined something called the Sullivan Principles, which didn’t require them to divest or to stop doing business, but it said, in a place where racial discrimination was \the law, that they would, in their own practices, make sure that there wasn’t that kind of discrimination, and dozens, maybe a hundred companies joined that. That struck me as a reasonable middle ground, but in general, I think companies ought to be much more focused on their own business model and try to address human rights that way.

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Jonathan Faust, a sophomore studying international relations, is a staff interviewer at Stanford Political Journal.