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December 10, 2008
US-based Verite Helps Build Coalitions to Improve Working Conditions in China
    by Robert Kropp

The organization's report details relationships with academics and civil society organizations to ensure fair labor practices in centers of manufacturing for export.

Holiday shopping in much of the West consists in part of many purchases of products manufactured in China.Yet too little consideration is given by many to the conditions facing workers in factories in China that manufacture for export.

Corporate supply chains in China and elsewhere have gained a fair amount of attention from the socially responsible investment community, as the tenets of Corporate Social Responsibility (CSR) call on corporations to manage the social and environmental issues of their suppliers more effectively. Verite, a US-based non-governmental organization (NGO), conducts workplace audits to ensure that people worldwide work under safe, fair and legal working conditions.

But Verite does more than identify through its audits the exploitation of workers, or health and safety violations in the workplace. According to Dan Viederman, Executive Director of Verite, "Our goal is to build capacity among civil society organizations (CSOs) to empower workers," by enhanced understanding of labor standards and corporate social responsibility.

In order to bring word of its efforts to a wider readership, Verite recently inaugurated a series of publications that provides information about ethical sourcing of corporate supply chains. The first report in the series, entitled Strengt hening Institutions for Worker Empowerment: Capacity Building among Civil Society Organizations in China, focuses on Verite's work with NGOs and academic institutions in China.

The report finds that based on over 1,000 social audits, "significant workplace violations remain resistant to improvement, despite the accordance of Chinese labor law with international standards." Among the problems cited by Verite are obstacles to the empowerment of workers, widespread violations of working hour standards and laws, and non-payment of benefits.

The presence in China of many supply-chain manufacturers for major corporations provides leverage for Verite to conduct its audits and begin to implement strategies for correcting the problems its audits uncover. Such leverage is crucial in China, where audits have uncovered the considerable problems outlined above.

Earlier reports published by Verite indicate both the scope of the problems encountered in China, as well as potential solutions to aspects of those problems. Rapidly expanding Chinese factories that failed audits due to a number of social compliance issues experienced a significant reduction in production orders and reduced business from corporate customers increasingly concerned with the effects of damaged reputations in the marketplace. Factory managers realized that in order to achieve ongoing business success and a productive workforce, they had to integrate social compliance into the factory’s management systems and make social compliance an integral component of factory operations.

In its most recent report, Verite outlined a more ambitious grassroots program for ensuring social compliance by encouraging the formation of civil society organizations to advocate for workers' rights and the assurance of fair labor standards.

In many countries, non-governmental organizations exist to provide the kind of advocacy and action Verite describes as essential for the assurance of workers' rights in China. Defined by the United Nations as "not-for-profit, voluntary citizens’ groups, organized on local, national or international levels to address issues in support of the public good," NGOs are "an essential force for holding government accountable in most nations," according to the Verite report.

However, in China, "NGOs are growing in number but are underrepresented," the report found. Furthermore, "NGOs, in particular, have difficulty finding long-terms sources of support, and are subject to pressure from government agencies and businesses."

Yet, said Viederman, "We had to make sure that the responsibility for empowering workers was not left up to just the private sector."

As a result, Verite sought to cast a wider net in developing civil society organizations in China. By acting on a broader definition of civil society organizations than is articulated in western societies, Verite could focus on the important role played by academic institutions in Chinese society. Academic institutions, Verite found, enjoy greater flexibility in engaging on social issues than do others. Verite also found the leadership and faculty willing to take proactive roles in improving working conditions.

Because academics are more likely to study and report on Chinese labor policy, Verite also found academic institutions to be an effective location for the discussion of issues of policy. As Viederman pointed out, "These academic institutions are engaged in the training of future officials in the Chinese government."

For almost ten years, Verite has conducted audits and built relationships with CSOs in the province of Guangdong, China's center for manufacturing for export. Not surprisingly, therefore, the prevalence of CSOs in Guangdong is greater than in other provinces. Furthermore, because of Guangdong's proximity to Hong Kong, a number of Hong Kong-based CSOs work on labor conditions there.

As a result of manufacturing for export expanding into coastal regions north of Guangdong, as well as into some inner provinces, according to the report, "approximately 40% of Verite's factory audits now take place outside of Guangdong." However, the development of CSOs to meet the greater demand for their services has not kept up.

The report focuses on the expansion of Verite's efforts into the provinces of Anhui and Jiangsu, where it formed partnerships with provincial universities to train workshop participants in the principles of social auditing and the training of smaller CSOs and workers. The agenda of the workshop was "to provide a platform from which each CSO could identify and explore topic areas for engagement on labor issues," the report said.

According to Viederman, since the Verite report went to press it has expanded its efforts yet further, into the Hunan province in the Chinese interior. "In Hunan, we have engaged with academic institutions, with which we are facilitating a new CSR curriculum focus," he said.

Of the project described in the report, Viederman said, "It is a project we're proud of. This engagement with civil society in China to induce companies to face challenges in their supply chains represents a not insignificant cultural change."


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