Table of Contents

DECENT WORK AND PRIVATE REGULATION ........................................................................................................ 2

CONCEPT OF DECENT WORK ................................................................................................................................................ 2
PRIVATE REGULATION ......................................................................................................................................................... 2
INDIAN CONTEXT ................................................................................................................................................................ 3
ANALYZING GARMENT INDUSTRY ...................................................................................................................... 3
RATIONALE FOR PICKING THE SEGMENT: ................................................................................................................................. 3
WORKING CONDITIONS AND CHALLENGES FACED IN INDIAN GARMENT INDUSTRY.......................................................................... 4
POLICIES FOR IMPROVING WORK ENVIRONMENT AND LABOR REGULATIONS ................................................... 4
PRESSURES FROM SUPPLY CHAIN / MARKET DRIVEN COMPLIANCE ............................................................................................. 4
COUNTRY LABOUR LAWS ..................................................................................................................................................... 5
NGO LED POLICY ADOPTION ................................................................................................................................................ 5
PRIVATE REGULATIONS / COMPANY CODES OF CONDUCT .......................................................................................................... 5
PERSONAL / CORPORATE ETHICS........................................................................................................................................... 5
CAUSES OF FAILURE OF POLICY.............................................................................................................................................. 5
CODES OF CONDUCT AND SELF-MONITORING TOOLS IMPLEMENTED BY MNCS ................................................. 6
IMPACT OF MNC’S CODE OF CONDUCT ................................................................................................................................... 7
EXTERNAL MONITORING AND CERTIFICATION .................................................................................................... 7
FAIR LABOR ASSOCIATION (FLA) .......................................................................................................................................... 7
WORLDWIDE RESPONSIBLE APPAREL PRODUCTION (WRAP) .................................................................................................... 8
IMPACT OF THESE STANDARDS .............................................................................................................................................. 8
REFERENCES ....................................................................................................................................................... 9
APPENDIX .......................................................................................................................................................... 11
APPENDIX 1: SHIFT IN PRODUCTION BASE OF GARMENT INDUSTRY............................................................................................. 11
APPENDIX 2: INTERVIEW WITH A SOCIAL AUDITOR (MR. SURENDRA PRATAP): SCREENSHOT.......................................................... 12
APPENDIX 3: INTERVIEW WITH GARMENT LABOR UNION (MRS. RUKMINI): SCREENSHOT .............................................................. 13
APPENDIX 4: REASONS FOR THINKING OF LEAVING GARMENT INDUSTRY .................................................................................... 13
APPENDIX 5: GENERAL ETHICAL CODES OF CONDUCT MANUFACTURERS ARE TO COMPLY WITH ...................................................... 14
APPENDIX 6: SA 8000 CERTIFICATION STANDARD REQUIREMENTS .......................................................................................... 15
APPENDIX 7: INSTITUTIONAL PRESSURES LED POLICY COMPLIANCE ........................................................................................... 15
APPENDIX 8: INDIAN LABOUR LAWS .................................................................................................................................... 15
APPENDIX 9: CIVIDEP INDIA’S WORKER RIGHTS’ AWARENESS PROGRAMS ................................................................................... 17
APPENDIX 10: CIVIDEP INDIA’S REPORT ON AWARENESS ABOUT TRADE UNIONS ......................................................................... 17
APPENDIX 11: COMPARISON OF DIFFERENT PRIVATE REGULATION SCHEMES USING GOVERNANCE TRIANGLE .................................... 18
APPENDIX 12: INDICATORS USED BY ANKER AND BESCOND TO DEFINE AND MEASURE DECENT WORK ............................................ 19
APPENDIX 13: EVOLUTION OF WORKPLACE REGULATION AND FACTOR (RIGHT SIDE) AFFECTING RISE OF PRIVATE REGULATIONS. ....... 19
APPENDIX 14: TYPES OF NON-GOVERNMENTAL REGULATORS................................................................................................. 20
Decent Work and Private Regulation

Concept of Decent Work

The concept of Decent Work was presented by Director-General Juan Somavia of ILO (International Labour
Organization) during June 1999 conference. The concept was introduced by ILO to pursue ‘fairer globalization
and formalization of the informal labour. The definition of Decent work and list of its indicators varies across
the literature and context of the application as well. In a broader consensus manner, any work is termed as
decent when the work and workplace or work environment are healthy and promoting the quality of life for
workers while providing equal opportunities for all for productive work. Other Parameters like equity, freedom,
dignity, security, and so forth are also considered as essential elements of Decent work. Anker et al. (2002) have
used 11 indicators of decent work to define it (Appendix 12), while Bescond et al. (2003, 180) have used 7
indicators to measure the decent work (Appendix 12). The ILO uses following aspects to define the concept of
Decent Work, “Opportunities for work that is productive and delivers a fair income; Security in the workplace
and social protection for families; Better prospects for personal development and social integration; Freedom
for people to express their concerns; Organize and participate in the decisions that affect their lives; Equality of
opportunity and treatment for all women and men”. (ILO 2017.)

Private Regulation
Workplace regulation has evolved with time (Appendix 13). The industrial revolution brought up state
intervention in term of regulations and labour laws. Laws and code of conduct were used as an instrument for
labour regulations which are implemented and monitored by an administrative body of the state or central. The
policy-making and monitoring of in-placed practices was a central element of regulation.
The rise of liberal economy promoted the globalization of global value chains across many informal and formal
sector of an economy. Such emerging trends of production and consumerism developed new operational
practices in MNC’s and local firms which lead to failure of governmental regulations. The economic conditions
of consumers in developed nation and exposure of workplace condition in developing labour market by media
firms and NGO evolved new forms of regulations at the workplace.
All the non-governmental regulations could be divided into three types (Appendix 14). These three categories
viz. are Institution-based regulation, Market-driven regulation and public disclosure are collectively known as
private regulations. The organizations like WTO, ILO etc. drives the institution-based regulations through
policy and guidelines for the workplace environment. In Market-driven regulations, consumer or investors act
as acting hand to force the organizations for incorporating better work-practices. The standard practices of
boycott, the decline in the purchase of goods, extracting investments from the firm are part of Market-driven
regulations. Information transparency and market forces also drive the rise of talk about good governance.
Public disclosure is used by organizations to validate their workplace practices through the social compass. Use
of NGO certifications, third party regulatory checks, labelling are few examples of public disclosure practices.
Food and garment industry has seen a rise of disclosure and certification/ labelling based labour
practices.

Indian Context
India has the largest youth population in the world and one of the fastest-growing economy facing the
challenge of creating 500 million skilled workers by 2022. According to UNDP, 2014 report, over 20 per cent of
youth between 15-24 years of age, i.e. 47 million workforces is still jobless. Being a developing country, India
has a large over 90 per cent informal economy along-with the industrialization. Issues like low-paid jobs,
hazardous work condition, gender equality at workplaces are still present in Indian workplaces. Especially in the
Indian context, increasing informalisation and rise of new forms or types of employment in the workplace has
led to divergence from decent work and exploitation of labour. The Indian garment industry is prominent
examples of increased informalization; on the other hand, Indian IT firms are using new forms of employment
to exploit labour in India and European workplace. The monotonous and mechanized work in an IT firm is also
used as a tool of exploitation.
ILO’s Decent Work Country Programme (DWCP) for 2018-2022 for India outlines a strategy for current and
future issues of the workplace. ILO considers Tripartism and Social dialogue as a central element of the
planning and implementation of an integrated programme for DWCP. In the Indian context, ILO has a primary
concern of low participation of woman in the labour force. The participation has declined from 26.2 per cent in
2010 to 23.4 per cent in 2012, leading to gender equality as an essential element of ILO’s policy and work for
India. The ILO DWCP programme for India will be focused on gender equality and non-discrimination,
tripartism and social dialogue, environmental sustainability, and promoting international labour standards. The
DWCP 2018-2022 has the objective of “creating a more decent future of work through better quality of jobs,
transition to formal employment and environment sustainability”.

Analyzing Garment Industry

Rationale for picking the segment:
Global garment industry currently is worth $1.7 trillion constituting 2% GDP. India’s garment export stands at
$40 billion with a cumulative growth rate of exports at 13%. Apart from the economic significance of this sector,
there has been a shift in the globalization of textile industry (Appendix 1) from western to eastern nations in
quest of abundant and cheap labor, natural resources and favorable economic policies aiming for development.
This complex Global Assembly line

This shift has led to exploitation of workers and lack of protection of worker rights. Instances like Rana Plaza
collapse, Tazreen Fashions factory fire in Bangladesh and Ali Enterprises fire in Pakistan which gained
worldwide attention; the issue of garment industry and its’ bleak respect for worker rights and compensations
(Prentice, 2012) even after such disasters has comes to fore. Despite the geographies, the underlying issues of
labor rights in these developing countries and India are similar.

Working conditions and challenges faced in Indian Garment Industry

The challenges faced by workers in the garment industry is at every stage from their recruitment process till the
very end of their leaving jobs / resignation phase. (Ilo.org, 2019)
Appendix 4 showcases the reasons Garment industry labourers have contemplated leaving this industry.

To highlight the issues faced at each of the stages (Some parts adopted from Ilo.org, 2019):

Recruitment Stage Employment Stage Resignation stage

Disguised employment
relationships
Delay in ESI and EPF payments
Renewal of contract to prevent
permanent employee status
Difference in wage payment on
piece rate basis
Deception in recruitment
process with unclear work
definition
Lack of clarity in written
employment contracts
Disproportionately low wages,
involuntary overtime with no
double rate payment
Job insecurity; Absence of
benefits like maternity leave,
paid sick leave, etc.
Threat to worker safety and
health
Child labor and sexual
harassment against women
Refusal of resignation during
high demand periods
Forced resignations to deny
collective worker rights and
entitlements
Working conditions sometimes
intentionally unbearable forcing
employees to leave
Wage theft (non-deposition of
ESI & EPF deductions) forcing
employees to not leave in the
hope of deposits
Instances of locking factories

Policies for improving work environment and labor

regulations
Pressures from Supply Chain / Market Driven Compliance
As the example from Tiruppur would show (Re.indiaenvironmentportal.org.in, 2019), pressures from brands in
supply-chain can also lead to adherence by the suppliers. This paper focusses on the ‘ways that standards
imposed by supply chain leads to measurable and auditable changes in the suppliers. With all suppliers willing to
produce and supply cheap output to the brands, the level of compliance of social policies is a measure of their
propensity to be adopted by the Brand.
Country Labour laws
India has two broad categories of Labour laws (Briefing and Singh, 2019):

1. Individual Labour Law: Dealing with employee’s rights at work e.g. Rights of Persons with Disabilities
Act

2. Collective labour laws: Tripartite relationships between employers, employees and trade unions.

As stated in Appendix 8, these laws are also differentiated basis enactment and enforcement by Federal and
State Governments. Adherence to these laws though ensures compliance, is sometimes disregarded in the
event of lack of proper auditing or non-awareness of the rights by workers.

NGO led Policy adoption

Media and powerful NGOs often pressurize firms to comply to labour rights. As shown in Appendix 7, Clean
Clothes Campaign NGO was successful in increasing transparency index by forcing Apparel buyers of disclosing
their supply chain. However, with the revelation of only Tier 1 suppliers the information of Tier 2, 3 and
contract suppliers in which the Issue of lack of respect of worker rights is rampant, still remains. Clean Clothes
Campaign has also set up its’ codes of conduct that apparel manufacturers including sportswear need to comply
with.

Private regulations / Company Codes of Conduct

Labour standards such as SA 8000 (Appendix 6 shows detailed requirements) are enforced Social
Accountability standards worldwide which are auditable and is developed by an advisory board of NGOs, Trade
unions, Civil Society Organizations and Companies in accordance with various industry and corporate codes.

Personal / Corporate Ethics

Some corporates also adopt ethical codes of conduct as detailed in Appendix 5. The proponent of such codes is
few or limited to first or second tiers in supply chain.

Causes of failure of policy

1. Authenticity of social auditing process in question: Garment manufacturers such as Rana Plaza,
Bangladesh having SA8000 compliance despite morbid infrastructure and working conditions of
workers brings out a lack in the legitimacy of the audit process altogether.

2. Pressures from supply chain: Pressures for cheaper production with small turnaround times in turn
puts pressure on manufacturers to deploy contract laborers who work for long hours, often in
dilapidated conditions

3. Lack of workers’ awareness of their rights: Lack of awareness of workers is directly related to their
propensity to demand. This has led to NGOs like Cividep India educating workers of their rights
ensuring decent work for all. The same is stated in Appendix 9. Also, as the report by Cividep shows,
 4. Desperation for work leading to compromise on rights: Lack of alternate job availability often forces
workers to accept jobs debarring them of their rights and being extremely demanding for the basic
needs’ fulfilment.

5. Weak Trade unions: As illustrated in Appendix 10, Cividep’s report on Garment Sector and Unionisation
in India – Some Critical Issues (Mani, 2019) states there is a 25-50% lack of awareness about unions
amongst laborers. Also, failure of manufacturers’ representatives to attend tripartite committees
between manufactures, workers and trade-unions leads to further weakening of the efficacy and
authority of trade unions.

Hence, the garment industry has critical issues despite pressures from various arenas for compliance to labor
laws. With this backdrop, we see, if private regulations are able to cater to workers’ rights.

Codes of Conduct and Self-Monitoring Tools implemented

by MNCs
Many brands have incorporated codes of conduct for their companies and to ensure the compliance of suppliers with
these codes they have developed sophisticated procedures for monitoring them. For instance, Gap, has installed a
separate department with over 100 employees to make sure that the company’s code of conduct is followed throughout
its global value chain. Similar programs have been launched by other big companies, like Levi’s, Adidas, Reebok,
H&M and Disney, as well.

Nike was one of the first companies, in the apparel and footwear industry, to set up a compliance department in the
company in 1992. They created a code of conduct for labor and environmental practices for their global supply chain.
The compliance of the suppliers with the code of conduct was first monitored through internal evaluation by the
Nike’s own staff. This was later reviewed by external consulting firms in the domain of health and safety, auditing
and environment. They have tried to integrate the evaluation of environment and labor issues with broader
management issues by developing internal monitoring tools such as SHAPE (Safety, Health, Attitude of Management,
People Investment, and Environment) audit and MESH (Management, Environment, Safety, and Health) program
(Nike, 2002).

Similar initiatives have been taken by other companies as well in the apparel and footwear industry. For instance,
Reebok established the worldwide system “Human Rights Production Standards Factory Performance Assessment”,
and Adidas launched the initiative “Standards of Engagement” for labor, health and safety and environment issues
for their subcontractors (O'Rourke, 2003).

These auditing tools are used by Nike, Adidas and Reebok to evaluate their environment and labor performance. Nike
uses a grading mechanism where subcontractors are rated over wide categories and in that double weight is given to
labor and environmental performance. The subcontractors which perform better than other subcontractors in the same
country often get more lucrative deals and offers while low scorers might end up losing their contracts.

Impact of MNC’s code of conduct

It is hard to quantify the extent of improvement achieved through the implementation of firm led code of conduct.
There is little empirical data to reach a conclusion regarding the impact of codes on the actual working condition of
employees. As expected, companies believe that these monitoring tools and auditing programs are quite effective and
sufficient in themselves. However, going by the press reports, neither the general public nor the activists adhere much
credibility to these initiatives of self-monitoring (Connor, 2001a). There have also been cases where self-monitoring
tools and codes are used primarily for public relations rather than labor and environmental issues, leading criticism
from several stakeholders (O’Rourke, 2002).

External Monitoring and Certification

There has been a lot of public scrutiny and pressure from activists and this has led to an increase in the programs
designed by third party auditors to establish codes of conduct. This phenomenon has specially been noticed in the
United States and Europe, where we have seen the emergence of initiatives like Fair Labor Association (FLA), Social
Accountability International (SAI), and the Worldwide Responsible Apparel Production (WRAP) certification
program. These programs have been inspired by the ILO core standards to a large extent. The role of third-party
auditors is played by the professional service firms, accounting firms and consulting bodies (Bartley, 2001).

Fair Labor Association (FLA)

The Fair labor Association (FLA) is the oldest initiative, instituted by the Clinton Administration in 1996, to conduct
monitoring and verification. It was originally designed to focus on the apparel and footwear industry but not it has
expanded to other industries as well.
They developed “Workplace Code of Conduct and Principles for Monitoring,” for verifying and auditing the
companies. They had adopted the system in which companies had to first inspect half of their factories themselves in
the first year. In the next two years, companies had to go for external inspection covering 30% of their factories and
then 5% of factories annually thereafter.
The model implemented by the FLA came under scrutiny from multiple NGOs and student activist bodies for being
controlled by the industry (Benjamin, 1998). They were allegations on companies selecting their own monitors and
directly paying them, they were also able to select which factories they wanted to get audited and, in the end, they
only released the summary of their auditing results.
The continuous pressure from activists forced the FLA to mend their process. The FLA is now taking more proactive
measures in their auditing process. Currently, the monitoring is unannounced where the monitoring firm and the
factory that is to be audited is selected by the FLA staff. They receive all the auditing reports directly from the auditing
forms and then disclose the summaries of the result publicly. This is often followed by the inspection by FLA staff to
gauge the progress on the remediation process.

Worldwide Responsible Apparel Production (WRAP)

The World Responsible Apparel Production was formed in 1998 by the American Apparel Manufacturers Association
and can be seen as industry edition of external monitoring and verification. The WRAP Certification board houses
private sector individuals and they claim that most of their members are from outside the apparel industry and
therefore would be unbiased in their approach (MSN, 2001a).

WRAP has constituted their own code of conduct, like FLA, known as ‘WRAP Principles.’ It is set of twelve
principles catering to child protection and labor and environmental issues. The fact that distinguishes WRAP from
other codes is that it also entails unique requirements for drug prohibition efforts and stringent customs compliance.

WRAP certification body provides certificates to factories and not brands. There is a requirement for companies to
go for self-assessment and submit the reports for external monitoring. Facility Monitoring Reports are submitted by
external monitoring firms to WRAP Certification board, who are assigned with the task of reviewing every report and
deciding for and against the certification. This certification provided by the WRAP to the facilities is valid for one
year. This may or may not be followed by unannounced inspections by certification board (MSN, 2002).

In spite of all the effort, WRAP standards are considered to be the weakest and least transparent of the lot (MSN,
2002). It is censured by many stakeholders for its industry bias and minimal public transparency. The names and
location of the facilities certified by WRAP are not disclosed publicly. It is also lacking the participation of NGOs
(Appendix 11) and other civil society bodies which is perceived to be necessary to ensure the unbiased auditing of
factories. The audits are also preannounced and firms are able to select their monitoring firms and can pay them
directly.

Impact of these Standards

There is little data available to analyze the performance of these systems od monitoring and regulations. It is
considered to be a critical area for future research. However, there is are some reports based on the monitoring
programs in US which can help us in starting the evaluation of these non-governmental regulations.
We have seen a push among companies to opt for these monitoring programs. For instance, In US alone more than
60 companies have entered into agreements with US Department of Labor for conducting factory monitoring and
several companies are now conducting self-monitoring. According to Esbenshade (2000) private monitoring firms
have audited more than 10,000 firms in Los Angeles alone which is more than 10 times the number of auditing carried
out by state authorities.

Towards the late 1990s alone, there has been an increase of around 20% in the rate of compliance which can be
attributed to an extent to the monitoring carried out by third parties and because of these non-governmental
regulations. This proposition is supported by the fact that the rate of violation in the non-monitored facilities is twice
as high as monitored facilities. While monitoring has solved some issues, it is not the final solution. It has been
reported that fifty-six of the monitored facilities are still violating the laws.

<Subham here>

<Neha here>

<Subham again here>

References
1. Re.indiaenvironmentportal.org.in. (2019). Power, Inequality and Corporate Social Responsibility: The
Politics of Ethical Compliance in the South Indian Garment Industry. [online] Available at:
http://re.indiaenvironmentportal.org.in/files/Corporate%20Social%20Responsibility.pdf [Accessed 9 Sep.
2019].

2. Ilo.org. (2019). Insights into working conditions in India’s garment industry. [online] Available at:
https://www.ilo.org/wcmsp5/groups/public/---ed_norm/---
declaration/documents/publication/wcms_379775.pdf [Accessed 9 Sep. 2019].
3. Prentice, R. (2012). “No One Ever Showed Me Nothing”: Skill and Self-Making among Trinidadian
Garment Workers. Anthropology & Education Quarterly, 43(4), pp.400-414.

4. Briefing, I. and Singh, R. (2019). Labor Laws in India – A Guide to Federal, State, and Industry Specific
Regulations - India Briefing News. [online] India Briefing News. Available at: https://www.india-
briefing.com/news/labor-laws-india-guide-federal-state-industry-specific-regulations-18133.html/
[Accessed 9 Sep. 2019].

5. Mani, M. (2019). Garments Sector and Unionisation in India – Some Critical Issues. [online] Cividep.org.
Available at: http://cividep.org/wp-content/uploads/2017/04/garment-sector-and-unionisation-in-india-
report34.pdf [Accessed 9 Sep. 2019].

6. O'Rourke, D. (2003). Outsourcing Regulation: Analyzing Nongovernmental Systems of Labor Standards

and Monitoring. Policy Studies Journal, 31(1), 1-29. doi: 10.1111/1541-0072.00001

7. Bartley, T. (2001, August). The professionalization of scrutiny: The rise of labor-standards monitoring
organizations. Paper presented at conference of the American Sociological Association. Anaheim, CA.

8. Benjamin, M. (1998). What’s fair about the Fair Labor Association (FLA)? Sweatshop Watch Retrieved
from http://www.sweatshopwatch.org/swatch/headlines/1998/gex_fla.html
9. Maquila Solidarity Network (MSN). (2001a, September). The changing terrain in the codes of conduct
debate. Retrieved from http://www.maquilasolidarity.org/

10. Maquila Solidarity Network (MSN). (2002). Codes update (Issue no. 12)., Retrieved from
http://www.maquilasolidarity.org/resources/codes/memo12.htm

11. ILO. (2018). India: Decent Work Country Programme (DWCP) for 2018-2022 [Press release]. Retrieved
September 10, 2019, from https://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/---sro-
new_delhi/documents/publication/wcms_650121.pdf
12. Shah, T. (2017). The Skills Milieu of India: Pathway to Social Inclusion and Decent Work. Retrieved
September 10, 2019, from
https://pdfs.semanticscholar.org/a082/143d11fd0d060851356c91af355101a4bc2a.pdf

13. Lammi, S. (2018, May). Social Protection and Decent Work for Pro-Poor Growth. Retrieved September
10, 2019, from https://pdfs.semanticscholar.org/8f00/e0c6efc34bebad46b31c5f26ae095e2c8d3a.pdf

14. Jadoc, J. (2013). The Impact of Trade Liberalisation on Decent Work: The Case of the Philippine Sugar
Mill Workers. Retrieved September 10, 2019, from
https://pdfs.semanticscholar.org/fb5d/f124cf51400d2a5a26a21c763d5d2ab05fe5.pdf

15. Pereira, Susana , Santos, N., & Pais, Leonor. (2019, June 14). Scandinavian Journal of Work and
Organizational Psychology. Retrieved September 10, 2019, from
https://www.sjwop.com/articles/10.16993/sjwop.53/

16.
Appendix
Appendix 1: Shift in production base of garment industry
Appendix 2: Interview with a social auditor (Mr. Surendra Pratap):
Screenshot
Appendix 3: Interview with Garment Labor Union (Mrs. Rukmini):
Screenshot

Appendix 4: Reasons for thinking of leaving Garment Industry (Image

source (Ilo.org, 2019))
Appendix 5: General ethical codes of conduct manufacturers are to comply
with
Appendix 6: SA 8000 Certification Standard Requirements

Appendix 7: Institutional Pressures led policy compliance

Appendix 8: Indian Labour Laws (Image source: (Briefing and Singh, 2019))
Appendix 9: Cividep India’s Worker rights’ awareness programs

Appendix 10: Cividep India’s report on awareness about Trade

Unions (Image source; (Mani, 2019))
Appendix 11: Comparison of different private regulation schemes
using governance triangle

Source: Abbott, K.W. & Snidal, D. Strengthening International Regulation Through ‘Transnational New
Governance’
Appendix 12: Indicators used by Anker and Bescond to define and
measure Decent Work

Hourly Pay

Old age
Unemployement
pendsion

Male-Femal gap in
labor force
participation

Youth Share of
Hours of Work
Unemployement

School
enrolment

Appendix 13: Evolution of Workplace Regulation and Factor (Right side)

affecting rise of private regulations.
Appendix 14: Types of Non-Governmental Regulators.