|This doctrine of legal standing
is a long way from being established in the courts, but these and other
suits are attempting to hold companies liable for malpractices abroad and
the deception of American consumers at home. Obviously, this is not what
American business had in mind as "tort reform." But the legal risks are
quite real for US multinationals, according to Stanford's Armin Rosencranz,
an authority on international environmental law. It also opens a promising
new field for trial lawyers, who took on big tobacco and showed that significant
reform is still possible, despite America's stalemated politics.
legislation, both at the state and national level, can advance the cause
by ratifying in law that foreign citizens have clear standing to sue US
companies in US courts, thus pre-empting the Supreme Court's business-friendly
At the same time, Congress could require the companies to
provide hard, precise data on environmental damage to those foreign communities
and citizens who are usually kept in the dark about what's being done to
their surroundings. Information is powerful. That's why companies don't
often volunteer it. Daniel Seligman, head of the Sierra Club's responsible-trade
campaign, suggests a preliminary outline: Congress could enact legal requirements
that US multinationals disclose toxic releases at overseas production facilities
that would parallel the existing laws for industry at home. When an oil
or mining company plans to open a new project in a foreign country, it would
have to prepare the equivalent of an "environmental impact" assessment and
share it with the affected community. The company would be required to engage
in open discussions on potential consequences, not just with the national
government but with the people whose health and habitat are threatened.
Furthermore, multinationals and their affiliated producers would have to
disclose an annual inventory of what exactly is being dumped in the river
or ground, what emissions are released into the air and, of course, what
toxics are inside the factory. This does not intrude on any country's pollution
standards, but it does equip citizens to act for themselves.
As US environmentalists
have learned from long experience, the process of enforcing pollution standards
can be torturously slow and incomplete if it relies solely on government
agencies. Enactment of US toxic "right to know" laws in the eighties was
a crucial turning point. The information unleashed grassroots energies and
compelled many companies to accelerate compliance. No one should imagine
that poor people in Asia, Latin America or elsewhere are indifferent to
what's happening to their local environment. The problem is that they usually
have no voice in the matter.
Thus, a new law would embody two fundamental
reforms: First, companies would be compelled to make full disclosure of
their pollution, and, second, affected foreign citizens would have the right
to sue them for damages in American courts.
"This has nothing to do with
eco-imperialism," Seligman emphasized. "It simply holds our own firms accountable
to our values. It's not dictating the levels of pollution, but it's giving
communities, not just governments, the information they need to decide their
This reform should further stimulate the development of international
civil society and the rule of law, both of which the business establishment
claims to want. Local citizens, alarmed by the despoliation, could seek
expert help from established environmental groups elsewhere in the world.
If the facts are truly alarming, they could hire a lawyer to represent them
in American courts.
Where Are the Workers of the World?
activists targeted the wages and working conditions associated with Nike
and other famous brands, Mattel decided to act on its own, before Barbie
dolls got caught in the same cross-hairs. Half of the Barbies are now made
in China, where labor conditions are notorious and Mattel uses 300 subcontractors,
according to the Asian Monitor Resource Center. Mattel developed a detailed
industrial code for its producers, prescribing standards for everything
from injury rates to the number of bathrooms per 100 workers.
Independent Monitoring Council chosen by the company to oversee compliance
includes economist Murray Weidenbaum, an antiregulation conservative and
well-known apologist for business practices. PricewaterhouseCoopers, the
global accounting firm, was hired to audit. No one should be surprised that
their first report, in November, covering three major factories in China
and some others in three other nations, gave Mattel high marks. It describes
the local managers as enthusiastic about correcting certain deficiencies.
Still, even Mattel's own handpicked inspectors were baffled by the payroll
records at two Chinese plants--the accounting system for wages, hours worked,
overtime paid. The monitoring committee admitted that it "experienced difficulty
in verifying certain elements of the pay structure.... A large majority
of workers...expressed a lack of understanding of their pay stubs."
workers, likewise, seemed unfamiliar with Mattel's "Global Manufacturing
Principles," though the new standards were supposedly explained to them.
The council noted that when some workers responded to questions, "it appeared
that these were memorized answers." Nor were workers able to say much about
free expression or complaints to managers. "Most of them were either not
conscious or were reluctant to talk about the freedom of association or
unionization issues," the report noted.
A less charitable explanation of
the wage-and-hour confusion was provided by the Asian Monitor Resource Center
in a March 1999 report on what its citizen investigators found at twelve
Chinese toy factories, including several where Mattel is active. "During
the peak season, not a single worker can leave the workplace after eight
hours' work," the center reported. "Most workers in these toy factories
work ten to sixteen hours a day, six or seven days a week.... Since most
toy workers are paid by piece rate, they never receive overtime pay."
codes of conduct have led to some improvements, the center noted, including
on fire safety. "However," the report added, "we still found numerous blatant
violations of workers' basic labor and human rights--including flagrant
violations of China's own Labor Law, even though many of the factories we
investigated are subcontractors for [multinationals] having codes of conduct
The Asian center, for instance, found that the Tri-S factory
in Dongguan, which it identified as a Mattel and Tyco supplier, was still
operating a "three in one" factory that is ostensibly illegal. Three hundred
workers slept on the third floor; the second floor was full of raw materials.
The issue is not Mattel's sincerity. The question is whether Americans will
allow enforcement of labor rights to be "privatized"--left to the moral
judgments of individual companies-- or whether these complex matters must
be codified in law as clearly stated benchmarks, so that corporate claims
can be tested by independent verification and, if necessary, challenged
in courts of law. Even if one accepted any individual company's good intentions,
that still leaves millions of peasant workers subject to low-road practices
by thousands of other companies and their contractors, responding to fierce
market pressures that cut costs at human expense.
The first weapon is disclosure.
One can collect countless horror stories on several continents, but the
lack of reliable, comprehensive information remains a central problem. The
codes of conduct, of course, further confuse the picture, since brand-name
firms develop PR campaigns around them, while still refusing access to independent
In fact, until quite recently, companies would typically
not even reveal where their goods were made--much less how their workers
were treated. Under pressure from student activists and universities, Nike
folded last October. It disclosed the locations of forty-two of its 365
Once again, national legislation should start with simple stuff--requiring
firms to disclose information that enables citizens here and abroad to check
out corporate behavior, and giving private citizens and organizations the
legal standing to sue for damages if companies falsify their reports to
the US government. Given the overbearing political influence of the multinationals,
legal standing for private lawsuits is crucial.
This much we do know: The
US government cannot be trusted to enforce labor standards, since it has
repeatedly failed to do so under already existing laws. One especially sickening
example occurred in 1994 when Suharto still ruled Indonesia. The Clinton
Administration certified the regime's improving labor policies--thus keeping
Indonesia eligible for trade preferences--at the very moment Suharto was
smashing a promising new labor federation, imprisoning scores of its brave
leaders and charging them with subversion.
An initial labor code should,
obviously, require all US multinationals to identify the names and addresses
of offshore factories and their subcontractor plants, the owners and principal
investors. Next, the corporations would answer some fairly simple questions
about each factory: the number of workers and what they make, the base pay
for production workers, the factory's labor costs as a percentage of its
Finally, for every production site, the company would
be required to certify the existence of well-accepted labor standards or
to explain why its factory ought to be granted an exemption. Does the workplace
comply with the host country's own labor laws? Does it comply with the International
Labor Organization's "core labor standards," guaranteeing the right to organize,
forbidding child labor and forced labor? If not, why not?
A more controversial
suggestion would require each company to attest that its industrial workers
do at least receive a "living wage," that is, income sufficient to provide
for basic subsistence in terms of their own country and culture--food, housing,
clothing, health and education. If not, these powerful companies would have
to explain why such a minimal benchmark for modern industrial life is too
expensive for them.
No one can demand that American companies alter another
society's laws and customs, but once again we are separating bad guys from
innocent players. It is not always the foreign government that suppresses
labor rights but sometimes American companies who insist on it. My favorite
example is the US semiconductor industry's production platform in Malaysia--famous
names like Intel, Motorola, Texas Instruments, Hewlett-Packard. At their
insistence, the electronics sector operates union-free, though Malaysia
has vigorous, independent unions everywhere else.
A typical reaction is:
Do these foreign workers really want or need our help? Despite sometimes
harsh conditions, aren't they better off with the jobs and grateful? It
is true that many of the young people in poor countries, entering industrial
life for the first time, are quite bewildered by their new circumstances.
They have migrated from the desperate poverty of rural villages, eager for
wage incomes. Many of them do not even grasp what a union is, much less
understand the broader rights accorded to workers elsewhere in the global
What many of them do understand, however, is that they are being
exploited. They don't have to be told this by do-gooders from America. They
know it from the sordid working conditions or from meager wages and their
own disappointed hopes. That's why there are so many wildcat strikes--thousands
of spontaneous strikes that occur regularly across developing nations, not
organized by any unions but by workers themselves. Angry workers even strike
in China, despite the real risk of imprisonment.
These sporadic, local
protests are seldom mentioned in the US press, but together they constitute
an optimistic statement about our common humanity.
Freedom and Unfreedom
Nobel economist Amartya Sen begins his new book, Development as Freedom,
with a provocative comparison: "The battle against the unfreedom of bound
labor is important in many third world countries today for some of the same
reasons the American Civil War was momentous." Is it possible that Americans
are once again participating in an economic system that is half free, half
The question does not seem farfetched when one examines more closely
the predicament of the young women in many Chinese factories. Typically,
they are recruited from remote villages by a government agency that collects
a fee from them for the job. They must pay for their own travel, then place
a "deposit" with factory managers, who will withhold their wages for the
first month or two and frequently also take away the workers' official ID
cards. Hired under three-year contracts, they cannot leave or jump to better
jobs without losing their money and perhaps identity papers too. Their factory
dorms are fenced and guarded, the workers cannot come and go freely, the
stories of brutality by security guards are commonplace.
This is not slavery,
to be sure, but it does resemble a sly form of indentured servitude, imposed
on people who are powerless to resist its terms. What can be done to stop
it? For starters, a serious Congressional investigation that digs into the
ugly facts and calls corporate CEOs to explain themselves would do more
than embarrass industry. The American people, I believe, cannot bear the
guilty knowledge of how their consumer trifles are produced, any more than
they could live with knowledge of the racial caste system in America once
the civil rights movement compelled them to confront it. This new movement
has the same task of teaching and confronting.
The "enhancement of human
freedom," Sen argues, "is both the main object and the primary means of
development." Democracy and civil rights are thus central to economic progress,
but the "unfreedoms" Sen describes involve much more than legal guarantees
of free speech and religion or standards for powerful corporations. Poverty
also enslaves lives. So do the still-existing, precapitalist feudal systems
that deny individual aspirations in some countries. So do the social hierarchies
that send adolescent girls to work in the factories while the boys go to
school. These confining forces and others interact with the marketplace,
which sometimes liberates people and sometimes uses unfreedoms for its own
Human rights, in other words, pose the most profound challenge for
reform because the issues go to the core nature of every society, and legislation
alone cannot resolve them. Americans, above all, must remember to bring
humility to this struggle. The promise of life expectancy, as Sen observes,
is greater for people in some very poor nations than it is for African-American
males in the United States. Our luxurious wealth, not just our values, is
sometimes implicated in the unfreedom of others. As this new movement educates
us about global realities, we shall see ourselves more clearly.
William Greider is The Nation's national affairs correspondent.