Appalachian State University, NC Apparel Sourcing and Monitoring Practices

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Appalachian State University, NC, US

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Type: Resolution

Status: Introduced on 1/18/07 -- later withdrawn

Source File: Click here


SB Number: SB 040-005
Type of Legislation: Resolution of Policy
Subject: Appalachian’s Apparel Sourcing and Monitoring Practices
Purpose: To encourage ASU to join the Workers Rights Consortium and Designated Suppliers Program

Statement of the Issue:
Appalachian State University currently gets its apparel from factories which may or may not be sweatshops, and there is currently no way of knowing. ASU also uses an inadequate monitoring agency to oversee the factories which produce its apparel.


I. Though many universities have adopted anti-sweatshop policies, the reality is that university apparel is still made under sweatshop conditions in factories around the world.

As large name brands scan the globe for the cheapest products, supplier factories face tremendous pressure to keep costs to a bare minimum. Many workers making university apparel face abusive treatment, excessive working hours, dangerous conditions, and wages that are inadequate to meet basic needs; when workers organize and demand improvements, they are subject to threats, harassment, illegal firings, and the closure of their factories. In this reality, workers have little hope of winning the wages and conditions they need. This “race to the bottom” is a hallmark of modern apparel factories and university apparel. Even clothes made for ASU are not exempt from this.

Currently, ASU is unable to ensure whether any of our apparel is not made under these inhumane conditions. In order to correct this, ASU must join the Worker Rights Consortium (WRC) which monitors apparel factories and adopt their Designated Suppliers Program (DSP) which ensures that all apparel originates from factories that respect the rights of its workers.

ASU’s chapter of United Students Against Sweatshops (USAS) has been petitioning the university administration for four months to take these steps. Unfortunately the administration has yet to take a position on the issue and has stopped communication with USAS. By passing this resolution of policy, SGA will help to expedite these much needed changes in our apparel sourcing.

II. ASU is Complicit in an Inadequate Model of Apparel Sourcing and Factory Monitoring
ASU is a member of the Licensing Resource Group (LRG) which connects our university to apparel manufacturers such as Nike and Adidas. The LRG sells the right to produce apparel with our university logo, name, etc. to these manufacturers who then delegate production orders to factories which actually make the apparel. Alongside this process is the monitoring agency which ensures that the factories which make our apparel provide lawful and humane working conditions. If a factory is found in violation and continues operating below the monitoring agency's standards, orders from apparel manufacturers will be shifted to compliant factories.

ASU is currently one of 194 member schools who use the Fair Labor Association (FLA) to monitor their apparel production. The FLA was created in 1999 in response to apparel producers’ need for an organization that would certify their products “sweatshop free” in the face of growing consumer awareness about sweatshop conditions. However, the FLA provides a woefully inadequate and untrustworthy service. The WRC provides the same service at a better quality and charges the same amount for university membership. We believe that, upon close inspection of the WRC and FLA projects, you will come to the conclusion that the WRC represents an approach to factory monitoring that is fundamentally more comprehensive and effective than that practiced by the FLA.

a. Governance:
The FLA Board of Directors has six manufacturer representatives, six Non-Governmental Organization (NGO) representatives, and six university representatives. The board operates largely on super-majority votes, meaning that most changes must be approved by over half of the members from each block. For example, if every university and NGO representative votes “Yes,” but four manufacturing representatives vote “No,” the motion fails. This effectively gives the manufacturing side veto power over any significant FLA decision.

The WRC, however, does not provide for any corporate involvement in its governing structures because of conflicts of interest. The WRC has a governing board composed of 5 representatives from the United Students Against Sweatshops, 5 representatives from the WRC University Caucus (college and university administrators), and 5 representatives from the WRC Advisory Council (a collective of labor rights experts and NGOs).

b. Transparency and Reporting:
The FLA publishes a general overview of each member company’s compliance program as well as individual “tracking charts,” which show the results of external monitor visits. They do not provide the name of the factory being monitored and, in all but the rarest cases, provide no more than brief commentary on abuses and violations. Furthermore, the FLA has only produced three annual reports since its founding in 1999.

The WRC, on the other hand, makes all of its reports, as well as the locations of the inspected factories, completely public. The WRC provides extensive background information on any relevant labor rights matters, and in-depth discussion when code noncompliance surfaces, including a description of the investigative process itself. The status of remediation efforts at noncompliant factories are published, including advances that have been made and the remaining steps necessary to correct the violations. Affiliate schools also receive periodic updates on the progress of remediation. All reports are online and are searchable by factory name, location, and university.

c. Monitoring Bodies and Worker Representation:
The FLA Charter Document was not drafted in consultation with NGOs who actually represent apparel workers. The FLA does not require external monitoring to be performed by Non-Profits/NGOs. Instead, the majority (at least 15 out of 20) of the FLA’s accredited “independent external monitors” are for-profit auditing firms whose business depends on the continued patronage of companies like those that sit on the FLA board.

The WRC Founding Document was drafted in consultation with workers and worker-allied NGOs. As explained in the WRC Investigative Protocols, one of the members of any WRC investigative team is required to be representative of local workers who know the local conditions.

d. Monitoring Protocols:
FLA companies are required to hire external monitors to evaluate 5% of their supplier factories annually after their initial certification. This means that, even if factories are monitored on a rotational basis, it is possible that a factory can go un-inspected for 19 years. Furthermore, companies have significant influence in the FLA’s decisions on which factories will be monitored. High-risk suppliers can be shielded from monitoring by not making the list of factories to be monitored defined by previous citations for violations.

The WRC believes that only independent, external monitoring can expose and solve labor rights abuses. The WRC stresses third party, unannounced monitoring visits so that factory managers cannot prepare the workers for inspection. The WRC’s monitors are composed of experts and individuals with local knowledge and contacts in the community. Their investigations may be triggered by workers, third parties, or one of the many proactive spot or systemic investigations.

e. Certification of Companies:
The FLA allows participating companies to advertise publicly that its products are manufactured in compliance with Fair Labor Association standards. This statement can be included on garment labels, in advertising, and in communication with shareholders after the FLA’s two-year initial implementation phase. However, companies do not actually have to implement the standards, but only agree to them, to be able to use the FLA label.

Instead of certifying companies, the WRC is transparent with its information, allowing universities and consumers to make informed decisions about which garments were made under fair conditions. This encourages all companies to make the necessary improvements, outlined in WRC reports, to bring their factories into compliance with the code.

f. Case Study:
Though there are many examples of the FLA’s inability to make tough decisions and its compromised impartiality (available upon request). The following is a representative example of how the WRC’s protocols have been successful when the FLA failed:

The Kukdong factory (now called Mexmode) in southern Mexico, which produces Nike sweatshirts for many U.S. colleges, was the first maquiladora in the country to recognize an independent, worker-led union and negotiate a collective bargaining agreement. When 500 workers staged a strike in January 2001 to protest conditions in the factory and demand an independent, representative union, the WRC’s factory investigation capacity was put to the test for the first time, and it passed with flying colors. When peacefully striking workers were brutalized by riot police and later prevented from returning to work because of their participation in the protest, the WRC was able to bring together an investigative team and begin interviewing the locked-out workers within a week. While the WRC was documenting the abuses and providing guidelines for universities and brands to address the ongoing harm being done to workers, Nike (while sitting on the FLA board) expended most of its energy on press releases denying the seriousness of the abuses. Nike initially cited an audit report produced several months earlier by one of their corporate monitors, Pricewaterhouse Coopers, which indicated that Kukdong was a model factory. In reality, there were long-standing violations of minimum wage laws, among other problems at Kukdong, but Nike’s monitor failed to identify this.

Due to student and university pressure, it became clear to Nike and the FLA that this labor dispute was too important to ignore. Nike sent down another monitor and its own compliance team, and slowly began to work with the WRC and others to push the factory to reinstate the workers, cease harassment and intimidation of employees associated with the independent union drive, and allow a free and fair union election. The results represented a historic breakthrough, and while Nike proudly touts its cooperation with the remediation process, it is clear that it would not have happened without schools’ commitment to the WRC and independent monitoring

III. What the DSP Solution is:
While a switch of monitoring agencies is a necessary step in exposing abuses and working to solve them in a just and sustainable way, any changes will likely be fleeting and unstable as factories can be shut down, fire all the workers, and move to a place where there are less provisions for worker rights and access for factory inspections. This is why, in consultation with membership universities and labor rights experts, the WRC drafted the Designated Suppliers Program (DSP). While the WRC is the most adequate monitoring organization available to us, the DSP puts their values into action. The DSP is a comprehensive program which consolidates universities’ demand for apparel and concentrates it over just a few factories in order to guarantee non-sweatshop factories a market. Hence, it becomes worthwhile economically for other factory owners to change their standards to meet the consolidated demand.

The DSP has been endorsed by a significant and growing number of universities, and is under active consideration by many others. Under the Designated Suppliers Program, university licensees are required to source most university logo apparel from supplier factories that have been determined to be in compliance with their obligation to respect the rights of their employees" including the right to organize and bargain collectively and the right to be paid a living wage. In order to make it possible for factories to achieve and maintain compliance, licensees are required to meet several obligations to their suppliers. Licensees are required to pay a price to suppliers commensurate with the actual cost of producing under applicable labor standards, including payment of a living wage; they are required to maintain long-term relationships with suppliers; and they are required to ensure that each supplier factory participating in the program receives sufficient orders so that the majority of the factory’s production is for the collegiate market. Licensees may bring any factory they choose into the program, provided the factory can demonstrate compliance with the program’s labor standards. The DSP works with the University to phase in sourcing from designated suppliers over a period of three years. It also serves to continuously monitor the licensees. Universities as well as representatives from USAS and the WRC revised the DSP proposal in September 2006.

a. Unique Benefits for ASU
ASU is gaining a reputation for its commitment to sustainability, and sits poised to excel in the teaching and application of the Environmental Science, Sustainable Development and Social Justice fields. With the University continually moving in this direction and with the possibility that our University will become a leader in this type of research and pedagogy, it is in our interest to become an exemplary institution in the enforcement of labor standards worldwide. By adopting the DSP proposal, ASU will become the first school in the UNC system and the first public university in the southeastern United States. Currently, UNC-Chapel Hill is already a WRC member and is seriously considering adopting the DSP. ASU would also become the first of its peer institutions to adopt the DSP and sixth to join the WRC. Some other peer institutions who are members of the WRC include James Madison and Bowling Green.

Additionally, our licensing company is already familiar with the WRC and DSP protocols due to the fact that they have phased them in with other schools. In fact, the LRG currently works with the WRC for three of our peer institutions: University of Wisconsin" La Crosse, Bowling Green, and Miami University (Ohio).

b. Costs Associated with the DSP
The cost of implementing DSP standards for ASU would be next to nothing. The university would have to do little in the way of finances - the consumer would absorb all of the workers’ wage increases. In countries where prevailing wages can be around $0.17/hr, a substantial increase is often unnoticeable in retail prices. The increase in labor costs would likely result in an expected $.20 -$1.00 increase in the price of a $20.00 shirt. And that estimate is based on the doubling of the workers’ wages. In addition, the DSP would only affect the top licensees such as Champion, Gear For Sports, and the NCAA. Therefore, any sort of small retailer such as Mast General Store would not be affected.

c. Response to FLA Criticisms of the DSP
The FLA claims that there will be job loss for workers as brand names move their production to designated suppliers. However, the DSP is designed specifically to address the rapid factory relocations and closings associated with the unstable apparel job market. With the phase "out of the Multi-Fiber Arrangement in 2000, over 250,000 jobs have been lost in Mexico alone. The DSP essentially provides the protections of the MFA and more, but on a smaller scale. It is worth mentioning that, additionally, the DSP will eliminate the even greater worker risks such as physical and verbal abuse, blacklisting, and unhealthy work conditions.

Research has shown that since university orders generally account for only a small percentage of each factory’s orders, DSP shifts will not be dissimilar from month to month fluctuations that a factory may experience anyway. There may be some shifting involved, but no net loss. And in the long term, the DSP will create more stability by consolidating production in good factories and using new production to bring poor factories up to their standards. With DSP provisions of meaningful representation, production order stability, and higher wages; workers will be far less subject to the whims of the market and the brands’ sourcing practices.

IV. United Students Against Sweatshops at ASU

a. United Students Against Sweatshops was founded as a national organization in 1998 and now has affiliates on over 400 campuses. The ASU chapter of USAS was founded in the summer of 2006 by a concerned group of students and alumni. USAS started organizing by communicating with the University Bookstore for information. Students and student groups were also approached informally to gauge their opinion. USAS eventually decided that there was enough support to bring their requests to join the WRC and adopt the DSP directly to the chancellor. USAS met once with Chancellor Peacock in October of 2006. Informational materials on the proposal had been forwarded to his office at his request so that our meeting could be spent discussing the issue. However, Chancellor Peacock did not read the material, and the meeting became a presentation of the information. After repeated requests for another meeting, students were eventually referred to the chancellor’s chief of staff, Dr. Baumhover. Dr. Baumhover requested an academic, data-driven report on why these measures were necessary. That report and supporting documentation was provided to his office in early December. Despite multiple requests for a follow-up, USAS has not yet been given any word on the report or future meetings as of January 18th, 2007.

In the meantime, outreach to faculty, lower-level administration, student organizations, and individuals was done and the response has been overwhelmingly in favor of the proposed measures. As a small piece of data supporting this fact, USAS has an ASU-only “Facebook” group with over 700 members as well as over 500 individual and 25 club signatures petitioning the administration to adopt the measures.

b. USAS is currently continuing its outreach and educational campaigns, fundraising, and legislation through prescribed conduits.

c. This resolution will act as a strong precursor to future legislation in both Faculty Senate and Staff Council. The sponsor for the Faculty Senate, Colin Ramsey, is waiting for the SGA resolution to get moving before bringing legislation before his senate. In addition, a resolution of policy would be a powerful statement that would corroborate the existing student support and get the attention of the administration in ways that USAS has been unable to as of yet.

V. Conclusion
In conclusion, the benefits of joining the WRC and adopting the DSP far overwhelm any potential negatives. The system benefits, or is indifferent to, every party involved, including: consumers, retailers, licensees, the Licensing Resource Group, Appalachian State University, SGA, and most importantly, the workers who sew ASU garments for a living.

Desired Outcome:
If passed and acted upon by the administration, this resolution will result in the university joining the WRC and adopting the DSP. First, the administration will contact WRC Executive Director Scott Nova. Mr. Nova will personally visit ASU and our licensing company to work out the details of joining the WRC and phasing in the DSP, with a strong commitment to transparency in the process. This bill makes no statement regarding ASU’s membership in the FLA. For the time being, it is viewed as a neutral body as WRC member schools have chosen either to stay with the FLA or be members of both monitoring groups simultaneously.

Exact Wording:
Therefore, let it be resolved that the Appalachian State University Student Government Association, on behalf of the student body and general electorate, do advocate the policy of joining the Workers Rights Consortium and adopting the Designated Suppliers Program.

Date of Execution: