New Conversations Project: Towards Sustainable Labor Practices in Global Supply Chains

Mission Statement

The purpose of Cornell University’s New Conversations Project is to develop actionable strategies for improving the work-lives of workers in global supply chains, with a particular focus on the apparel industry.  Our project is based on the premise that existing private sector approaches, developed over the last 25 years, have not led to transformational improvements in wages and labor standards globally.  For this reason, we believe a “new conversation” is past due.

Our objective is to take stock of what we know about the limitations of existing approaches, to consider how these problems can be remedied, and to highlight new avenues and practices that hold greater promise for meaningful improvement. Working in collaboration with a multi-stakeholder board of advisors, we will undertake new research, sponsor a series of experiments to evaluate promising approaches, and engage in continuous dialogue with stakeholders.

In our view, the goal of cultivating sustainable supply chains demands engaging with the variety of public and private institutions and practices that make up the regulatory and normative eco-system. Accordingly, our Project is committed to examining both public regulation and private governance as two critical, and ideally complementary, ingredients supporting the search for improved wages and working conditions in global supply chains. Public regulation includes the role of national labor law, state labor inspectorates and ministries, international institutions such as the International Labor Organization, and international and bilateral trade regimes. Private governance includes the role of global brands and industry associations in both exporting and importing countries, as well as trade unions and other organizations representing workers and consumers.

While our Project will engage both the public and private dimensions of the supply chain eco-system, in this inaugural statement of the New Conversations Project we begin with a discussion of our current thinking about the contributions and shortcomings of private governance specifically. Given the participation of retailers, manufacturers, and labor representatives on the project’s advisory board, this is a topic that we are particularly well-suited to address.

Our review of the evidence thus far suggests that the “code-of conduct-monitoring- compliance” approach (the centerpiece of current private governance efforts), as currently practiced, is in need of reinvention.  Audits are characterized more by a verification focus than an improvement focus, and compliance has peaked in many factories. Further, audits are increasingly a routine, commodified and relatively inexpensive exercise, which are outsourced to third parties, and occur over too short a time frame to uncover many problems or analyze the root causes of compliance issues. Moreover, there are a variety of negative incentives that affect auditor behavior and limit audit effectiveness.  Finally, we see little to no evidence of a relationship between audit scores and real conditions in the factory, nor do we see evidence to suggest that the process of compliance auditing is integrated into the business strategies of brands and retailers in a way that adequately incentivizes and rewards compliant factories.

We believe that what is required is an integrated approach resting on three pillars: stable buyer-supplier relationships, responsible sourcing practices of buyers and sellers, and meaningful auditing that goes beyond ensuring basic compliances, all based on the overarching principles of transparency and collaboration. Research indicates that when brand-supplier relationships are more trusting, when there is information sharing, when brands use auditors who function as coaches and not just verifiers, and when suppliers feel that compliance is valued by brands and integrated into sourcing practices, there are clear and sustainable improvements in compliance.

Yet, these good practices have not diffused widely, and one of the objectives of our Project is to understand why this is the case.

We further believe that transparency and collaboration are important ingredients of an integrated approach. Research suggests that greater transparency among supply chain stakeholders can encourage sustainable improvement in factory compliance.  In addition, there have been long-standing calls for greater collaboration among buyers (especially in multi-brand factories) in order to realize sustainable improvements in the working lives of factory workers. Our Project seeks to identify how the overarching principles of transparency and collaboration can meaningfully inform the search for more sustainable supply chains. While current efforts to develop common auditing tools and common auditing standards are a step in the right direction of greater transparency and collaboration, our view is that auditing is only one component of the integrated approach needed to effect meaningful change.

In developing an integrated approach to sustainable supply chains, the New Conversation project will draw on rigorous academic research, conducted by an interdisciplinary team of researchers drawn from leading universities in the USA (e.g. Cornell, MIT, Virginia).  We will also draw on a series of “experiments” designed and developed by our multi-stakeholder advisory board, on different aspects of the entire public and private governance eco-systems. With foundation funding, we begin our research into different elements of the regulation eco-system, partnering with brands, multi-stakeholder organizations, and other organizations in the governance eco-systems. Our initial research will be focused on developing and evaluating an integrated approach to private governance based on stable buyer-supplier relationships, responsible sourcing practices, and meaningful auditing. This research will involve brands who have indicated willingness to participate and will share a variety of data to help us evaluate existing as well as new more integrated approaches.

Over the lifespan of the New Conversations Project we will expand our efforts to address the role of public regulation in the supply chain eco-system. As disseminating the results of our experiments is an important aim of the new Conversations Project, our research findings will be made publicly available on our website, and through a series of public conferences on cutting edge topics and research findings.   A complete listing of the current research questions our project will examine is listed on our web page.