Hughes

Journal of Economic Geography 7 (2007) pp. 491–513 Advance Access Published on 4 May 2007

doi:10.1093/jeg/lbm011

Organisational geographies of corporate responsibility: a UK–US comparison of retailers’ ethical trading initiatives Alex Hughes
,y, Martin Buttle
and Neil Wrigley



Abstract Ethical trade, involving corporate codes of conduct for sites of production, has become a key means through which labour in retailers’ global supply chains is regulated. Yet, there is evidence to suggest that retail corporations vary markedly in their approaches to ethical trade and that such variation is shaped, in part, by the nationalinstitutional contexts in which retailers are based. This article explores this insight by evaluating the distinct roles played by multi-stakeholder initiatives for ethical trade in the UK and USA. While the UK’s core multi-stakeholder initiative, the Ethical Trading Initiative (ETI), encompasses retailers from a variety of sectors and takes a developmental and continuous learning approach to ethical trade, the US multistakeholder initiatives are focussed more on corporate accountability based on compliance monitoring exclusively in the clothing sector. Given recent organisational attempts to foster transnational dialogue between multi-stakeholder initiatives, though, we argue that the precise ways in which national-institutional contexts shape retailers’ ethical trading approaches are fluid and mutable. We contribute to the literature on the governance of global supply chains, retailer power and corporate responsibility by emphasising the political significance of national-institutional environments. However, in line with notions of relational economic geography, we understand these nationalinstitutional environments as active and dynamic contexts, and accentuate the coalitional ways in which nationally based organisations evolve in their home countries and go on to shape broader transnational agendas for ethical trade. Keywords: ethical trade, retailers, corporate responsibility, multi-stakeholder organisations JEL classifications: F10, F23, J80, L30, L81 Date submitted: 4 December 2006 Date accepted: 16 February 2007

1. Introduction Ethical trade, involving corporate codes of conduct for sites of production, has become a key means of regulating labour in retailers’ global supply chains since the mid-1990s (Blowfield, 1999; Barrientos, 2000; Jenkins, 2002).1 Yet, there is evidence to suggest that

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Corresponding author. Alex Hughes, School of Geography, Politics and Sociology, Newcastle University, Newcastle upon Tyne, NE1 7RU, UK. email [email protected]
School of Geography, Politics and Sociology, Newcastle University, Newcastle upon Tyne, NE1 7RU, UK.

School of Geography, University of Southampton, UK. 1 Ethical trade, involving codes of conduct for minimum labour standards in supply chains, contrasts markedly with the much more radical and developmental project of fair trade, which has the goals of producer empowerment and equitable trading terms at its heart. However, there can be a blurring of the boundaries of the two movements in some cases (Smith and Barrientos, 2005).

ß The Author (2007). Published by Oxford University Press. All rights reserved. For Permissions, please email: [email protected]

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retail corporations vary markedly in their approaches to ethical trade (Hughes, 2005) and that such variation is shaped, in part, by the national-institutional contexts in which the retailers are based (Christopherson and Lillie, 2005). This article develops this insight both empirically and theoretically by presenting a comparative analysis of UK and US multi-stakeholder initiatives (MSIs) for ethical trade, which comprise different combinations of corporations, non-governmental organisations (NGOs), trade unions, national government representatives and consumer groups. Such organisations have played a pivotal role over the past decade in shaping retailers’ strategic approaches to responsible sourcing in their global supply chains. We show that there is a marked contrast between the UK and USA in terms of the genesis, structure and strategies of these influential MSIs; a contrast shaped in part by the embeddedness of the MSIs in distinct consumer campaigning environments. So while Christopherson and Lillie (2005) highlight the significance of national-level industrial relations systems and company practices in shaping retailers’ global labour standards strategies, this article emphasises the additional influence of consumer-driven campaigns and national-level ethical trading organisations in the home economies of retailers. Conceptually, we aim to contribute to the growing literature on the governance of global supply chains, retailer power and geographies of corporate responsibility by emphasising the political significance of the national-institutional environments in which retailers and brands are based. However, in line with relational/network-based conceptualisations of globalisation and its regulation (Dicken et al., 2001; Amin, 2002, 2004; Bathelt and Gluckler, 2003), we understand these national-institutional environments as active and dynamic contexts and accentuate the coalitional ways in which nationally based MSIs both evolve in their home countries and go on to shape broader transnational agendas for ethical trade. In terms of the origins of the ethical trading movement, commentators have documented the rise of corporate codes of conduct as private forms of supply chain regulation in the context of globalisation and neoliberalism (Blowfield, 1999; McClintock, 1999; Jenkins et al., 2002; Esbenshade, 2004; Merk, 2005). Drivers of voluntary ethical trading initiatives are suggested to be: (i) the growth of global supply chains which extend beyond the reach of national governments; (ii) the rise in the power of corporate brands and reputation, which make large companies vulnerable to negative publicity; (iii) an increase in public awareness of overseas production conditions via improvements in global communications; (iv) the growing importance to the investment community of ethical performance on the part of public companies (Blowfield, 1999; Barrientos, 2000; Adams, 2002; Jenkins et al., 2002). As a response to campaigning and the threat of critical media attention, retailers and brand manufacturers since the 1990s have initiated ethical trading strategies that tend most commonly to centre on a code of conduct for labour practice derived from core International Labour Organisation (ILO) conventions (Murray, 2002).2 Practices of auditing are then typically used to monitor the degree to which the codes are enforced by their suppliers in practice (Hughes, 2001b; Barrientos, 2002; O’Rourke, 2002). While much of the growing literature on ethical trade has rightly evaluated its impacts on development and working conditions at sites of production (Barrientos, 2000; Mather, 2004; Hale and Opondo, 2005), the key focus of 2

Blowfield (1999) has pointed out that while some ethical codes of conduct also incorporate environmental clauses, the majority centre on labour standards.

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this article is on the development of ethical trading agendas in the home countries of the retailers, and how these agendas are informed in different ways by national-level MSIs. The article proceeds, first, with the positioning of our UK–US case study of ethical trade MSIs in the context of broader literatures on retailer-driven global supply chains, geographies of corporate responsibility and the governance of labour standards, advancing a relational understanding of national-institutional contexts in these debates. Second, we move on to present our comparative analysis of the strategic significance of national-level ethical trading MSIs, attending to the following three themes for the UK and USA in turn: (i) the emergence of MSIs in particular national contexts for campaigning; (ii) their structure and governance; and (iii) the strategic approaches to ethical trade they advocate. Following this comparison, attention turns to a recent transnational initiative in which both UK and US MSIs are collaborating to develop a common approach to ethical trade. Throughout the discussion, it is suggested that national-institutional contexts play a powerful role in shaping particular philosophies and practices of ethical trade, which in turn are purported to influence retailers’ strategies for responsible global sourcing. However, our comparative analysis shows that these national-level institutions and influences are themselves far from rigid and immutable. Rather, they are fluid and dynamic as they continually evolve through multi-stakeholder networks at different spatial scales. The empirical material reported in the article derives from a research project sponsored by the Economic and Social Research Council in the UK, which aims to evaluate UK and US differences in retailers’ approaches to ethical trade in the food and clothing sectors. The extensive fieldwork for this research involves 96 in-depth interviews with UK and US ethical trade practitioners working for leading corporate food and clothing retailers and those involved in campaigning for, and developing, ethical trade on behalf of multi-stakeholder organisations, NGOs and trade unions. This particular article draws on 44 in-depth interviews conducted in 2005 and 2006 with key informants central to the development of the ethical trading agenda and campaigning in the UK and USA. These include representatives from prominent MSIs,3 NGOs, international trade unions, college-based campaigning organisations and journalists. Representatives of organisations quoted in the paper are not always named, in order to respect the wishes of those interviewed.

2. Retailer-driven global supply chains, geographies of corporate responsibility and the governance of global labour standards 2.1. Retailer-driven global supply chains The power wielded by retailers in supply chains has been the subject of research over the past 20 years or so in a range of disciplines, including development studies, economic sociology, agricultural economics, management and economic geography. From the late 1980s and through the 1990s, commentators noted a shift in the balance of power from manufacturing suppliers to retailers amidst the more broad-reaching economic growth of service sector industries in advanced capitalist economies. Some of this research noted the 3

The Ethical Trading Initiative (ETI) in the UK, and the Fair Labor Association (FLA), Worker Rights Consortium (WRC), Social Accountability International (SAI) and the Worldwide Responsible Apparel Production (WRAP) in the USA, as well as the transnational Joint Initiative on Corporate Accountability and Workers Rights (JO-IN) project.

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increasingly creative and manipulative ways in which powerful food and clothing retailers, in particular, were crafting relationships with their own-brand suppliersdictating pricing and payment terms and making strict demands on producers in terms of product specifications and delivery times (Grant, 1987; Crewe and Davenport, 1992; Bowlby and Foord, 1995; Doel, 1996). From the mid-1990s onwards, academics also documented the increasing globalisation of retailers’ supply chains within a broader political-economic context of neoliberalism, retail FDI liberalisation and rapidly expanding transnational retail activity (Wrigley, 2000; Reardon et al., 2003; Coe, 2004; Coe and Hess, 2005; Wrigley et al., 2005), observing the application of aggressive models of retailer-led supply chain management to transnational trading links (Hale, 2000; Hughes, 2001a; Barrett et al., 2004; Crewe, 2004; Dolan and Humphrey, 2004; Kritzinger et al., 2004). Studies on retailer buying power in global supply chains have drawn, in particular, on the notion of global commodity chains (Gereffi and Korzeniewicz, 1994) and, more recently, the global value chain approach (Gereffi et al., 2005), in order to understand the buyer-driven forms of coordination and organisation used by retailers in their global sourcing strategies (Dolan and Humphrey, 2004; Kritzinger et al., 2004; Gibbon and Ponte, 2005). It is against this backdrop of retailer power in the supply chain that ethical trading programmes have been called for and developed. 2.2. Geographies of corporate responsibility and the governance of labour standards There is a largely parallel, though similarly burgeoning, literature in the social sciences on the widespread development of corporate responsibility, or corporate citizenship, as a movement permeating the workings of capitalism including global supply chains (McIntosh et al., 1998; Hemphill, 2004; Sadler, 2004; Valor, 2005). While this movement has a long history, in a globalising era dominated by discourses of neoliberalism and privatisation it has signalled the displacement of various social, political and regulatory functions from traditional governmental institutions such as the nation-state to the corporate realm (Marsden and Wrigley, 1995; Matten et al., 2003; Grit, 2004). In the specific case of ethical trade, this shift of responsibility from the public to the private sphere means that it is now corporations (including retailers) who take prime responsibility for labour standards at sites of production (Esbenshade, 2004; Christopherson and Lillie, 2005). This is particularly the case where retailers’ supply chains cross national borders and extend beyond the regulatory reach of individual national governments (Blowfield, 1999; Jenkins et al., 2002). Moreover, a range of different groups with a stake in specific aspects of corporate responsibility programmes, including NGOs and trade unions, have become enrolled in organisational networks that shape corporate agendas for social (and environmental) responsibility (Oliverio and Simmons, 2002; Doh and Guay, 2006). The field of ethical trade is no exception (Braun and Gearhart, 2004; Lipschutz, 2004) and the formation of MSIs represents a clear example of such collaborative and coalitional organisational networks. In terms of the tools and techniques used to make the movement of corporate responsibility practicable, one of the key observations to make is the rise of various codes, standards and certification systems that have emerged increasingly to govern and re-regulate the global economy (Clark and Tickell, 2005; Mutersbaugh et al., 2005). Different kinds of codes and certification systems have been applied to the sphere of transnational trade, including standards for quality and safety (Le Heron, 2003;

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Barling and Lang, 2005) and certification systems for organic produce and fair trade (Raynolds, 2000; Renard, 2003, 2005). In terms of ethical trade, the absence of a WTO social clause (Haworth et al., 2005) and the lack of global enforcement of ILO conventions, along with anti-corporate campaigning, have laid the foundations for voluntary codes of conduct concerning labour standards (Pearson and Seyfang, 2001; Freidberg, 2003, 2004; Sadler, 2004; Christopherson and Lillie, 2005). These codes, developed by corporations in collaboration with other stakeholder groups, have become key tools in the re-regulation of global labour standards. Recognising the diversity of the global standards movement and its application to the governance of trade, geographers in particular have conducted research on the powerladen practices through which codes and standards are often developed in the global North and applied to sites of production in the global South (Mutersbaugh, 2002; Freidberg, 2003). With specific relevance for this article, Christopherson and Lillie (2005) complement these perspectives by evaluating the embeddedness of standards in sites of retail and cultures of capital circulation. Asserting the importance of the national contexts in which retailers are based, they analyse the contrasting cases of the Swedishbased furniture retailer, IKEA, and the US mass merchandiser, Wal-Mart. They suggest that while IKEA’s approaches to improving labour standards in its transnational supply chains link closely to the labour and union-friendly social norms in its Swedish home context, the minimalist and defensive strategies of Wal-Mart derive from the American model of economic organisation associated with the externalisation of cost and risk and more adversarial supply relationships. In our analysis, we aim to build on this insight from Christopherson and Lillie regarding the role played by the country of origin of retailers in shaping their approaches to improving global labour standards, highlighting the role of national-level, consumer-driven ethical trading intitiatives. 2.3 Understanding the significance of national-institutional contexts: beyond ‘scalar regulation’4 One of the main themes in this paper, then, is that the national-institutional contexts in which retailers and brands are based play a key role in shaping their corporate approaches to applying labour codes in their global supply chains. Following Martin (2000, 79–80), we understand institutional contexts to encompass both ‘institutional environments’ (referring to informal conventions and norms for corporate practice, consumer culture, etc.) and ‘institutional arrangements’ (referring to specific organisational forms such as the state, companies, unions, regulatory agencies etc.). In our comparative analysis of UK and US approaches to ethical trade, we focus mainly on the grounding of institutional arrangements, influenced as they are by broader institutional environments, in particular multi-stakeholder organisations for ethical trade (the MSIs). In making our argument about the importance of national institutional contexts, though, we do not want to understand their influence on global labour standards regulation in terms of hierarchical and territorial scales of governance that operate mainly through the powers of traditional governmental institutions such as the nation-state. Rather, we aim instead to advance a more fluid and dynamic conceptualisation of national-institutional contexts, recognising that they 4

Scalar regulation is a term used by Amin (2004, 224) to reflect spatial imaginaries of regulation built on territorial units and geographical hierarchies.

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are materially and discursively constructed through complex sets of interactions and practices between different organisational actors at a range of geographical levels. Against the backdrop of theories of regulation in the world economy that rest on notions of territory and hierarchy, Amin (2004) suggests instead that global economic flows and networks have encouraged new heterarchical, hybrid and decentred practices of regulation. He terms these ‘micro-worlds of regulation’, which are: . . . mappings of regulation that transect geographies of regulation based on territorial jurisdiction and scalar reach. They all point to another logic of regulation- heterarchical, topological and micro-performative- that does not correspond with meta-orders of regulation, with their emphasis on territory, state and nested hierarchy (Amin, 2004, 226).

This reconceptualisation of regulation in the global economy is helpful for our analysis of ethical trading MSIs for two reasons. First, it recognises the role played by global economic flows in creating new ‘micro-worlds of regulation’. This corresponds with the understanding that retailers’ globalising supply chains have themselves sowed the seeds for the growth of voluntary codes and MSIs. Second, while not denying the significance of national governments and global institutions like the ILO and WTO in the governance of global supply chains, the relational approach recently advocated by economic geographers5 acknowledges that the role of these states and institutions becomes decentred, as the construction and implementation of labour codes takes place through hybrid organisational networks comprising a range of actors including companies, NGOs, consumer groups and trade unions, as well as governments and global regulatory institutions. Our case study will show that influential ethical trading MSIs have been instituted initially at the national level in the UK and USA. However, thinking relationally allows us to show that the establishment of nationally based MSIs has been prompted by transnational flows of capital and has been grounded through the actions and coalitions of a variety of stakeholder groups that extend the governance of labour standards beyond the reach of traditional scalar regulation. Moreover, new political initiatives to connect these national-level MSIs through transnational forms of multi-stakeholder alliance demonstrate the ever-changing regulatory landscape of which these organisational networks form a part. National-institutional contexts are, therefore, viewed through this conceptual lens as active and dynamic contexts. This is not to deny their significance, but rather to emphasise their changing role in the particular politics of connection that constitute the ethical trading movement.

3. Ethical trade and the strategic significance of national MSIs: a UK–US comparison 3.1. The case of the UK 3.1.1. Campaigning and the emergence of the Ethical Trading Initiative From the mid-1990s onwards, ethical trading has risen in profile through both critical media attention and organisational campaigning by civil society organisations 5

‘Concerned primarily with the ways in which socio-spatial relations of actors are intertwined with broader structures and processes of economic change at various geographical scales’ (Yeung, 2005, 37).

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(Freidberg, 2004). Media reports in the late 1990s focussed on the poor working conditions of overseas labourers supplying own-brand products to the UK supermarket chains and clothing retailers in particular. Articles appeared in broadsheets, highlighting poor environmental and working conditions at sites of export production (for example, Durham, 1996; Bowcott, 1997; Abrams, 1999; Monks, 1999). Radio and television documentaries, particularly the well-known Mange Tout film, were also part of the process (Hughes, 2001a). At the same time, direct pressure was exerted on UK food and clothing retail corporations by NGO campaigns. In the mid-1990s, Christian Aid’s focus on supermarkets’ global sourcing practices (Orton and Madden, 1996) and CAFOD’s Fashion Victims campaign against the high street clothing retailers represented two key examples. The Labour Behind the Label group- a UK-based coalition of labour unions and activists united in their solidarity with garment workers in the global South and affiliated with the European-wide Clean Clothes Campaignalso focussed on exploitation in the global production of clothing with reference to UK fashion retailers and supermarkets. Supermarkets targeted in these campaigns included the leading four corporations of Tesco, Sainsbury, Safeway (since taken over by Morrisons) and Asda (since taken over by Wal-Mart). High street retailers targeted included Marks and Spencer, Next, Debenhams and the Aracadia brands of Topshop, Top Man, Dorothy Perkins, Burton, Miss Selfridge, Evans and Wallis, since acquired by Philip Green. The Ethical Trading Initiative (ETI) has its origins in this NGO campaigning in the mid-1990s, along with decisions made by many UK retailers to respond to the criticism by acting collectively and in collaboration with willing NGOs and trade unions. There was a push by NGOs and trade unions to institutionalise recommendations for socially responsible trade. As a result, the Monitoring and Verification Working Group was set up, including representatives from the Trades Union Congress (TUC), the International Textile, Garment and Leather Workers’ Federation (ITGLWF), the International Confederation of Free Trade Unions (ICFTU), Oxfam, CAFOD, Save The Children, the World Development Movement and the New Economics Foundation. Co-operation with the group’s recommendations was gained from high-profile retailers, including Sainsbury and the high street retailer, Littlewoods. The idea of establishing a more formal tripartite alliance of companies, NGOs and trade unions, in order to develop ethical trade collaboratively, was then taken to the Department for International Development (DfID) of the UK government, which endorsed the initiative, not least because it epitomised the ‘third-way’ politics associated with its then new Prime Minister Tony Blair. The ETI was formally established in 1997 and now represents one of the largest and most strategically significant civil initiatives of its kind in Europe. Its endorsement and sponsorship by the DfID and its base location in London roots the organisation in national political structures. However, its origins in the political work of various UK-based NGOs and trade unions with links to overseas civil society organisations at sites of export production also demonstrate the rooting of the ETI in transnational networks and negotiations. Since the establishment of the ETI, journalists and campaigning groups have continued their focus on retailers’ supply chains, with a developing critical spotlight on retailers’ ethical trading programmes themselves. Television documentaries have continued with, for example, BBC Panorama and Real Story programmes in 2000 and 2005 examining retailers’ labour codes in global supply chains for clothing and horticulture, respectively. Newspaper reports have also maintained their critical focus

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on supermarkets and high street clothing retailers with respect to their supply chain management (Pratley and Finch, 2005; Mathieson, 2006; Mathieson and Aglionby, 2006a, 2006b).6 And, despite the establishment of the ETI, campaigns aimed at retailers have continued, exemplified by Action Aid’s Rotten Fruit report (Wijeratna, 2005) illustrating how workers on South African fruit farms supplying Tesco are being exploited despite the retailer’s claims to be trading responsibly, and Oxfam’s Trading Away Our Rights (Raworth, 2004), which focuses the debate on the power and purchasing practices of retailers. 3.1.2. The structure and governance of the ETI The ETI, as the only significant MSI based in the UK, is at the time of writing made up of 37 corporate members, 15 NGOs and representatives from four international trade unions.7 It has a permanent secretariat based in London and has selected representatives from the UK government’s Department for International Development, trade unions, NGOs and corporations sitting on its Board. The remainder of its ordinary members constitute four different caucuses: general merchandising, food, NGOs and trade unions. The majority of the corporate members are retailers, though some are manufacturers of large brands, and most of these companies operate in the food and clothing sectors, reflecting the focus of the campaigns and media attention. Significantly, the top three supermarket chains— Tesco, Sainsbury and Asda/Wal-Mart—which together account for over 50% of all grocery sales in the UK (Mintel, 2005)—are ETI members. And, four of the leading five UK clothing retailers in terms of market share—Marks and Spencer, Next, Debenhams and Asda/Wal-Mart (Verdict, 2006)—are members of the organisation. While there are several large UK food and clothing retailers not signed up as members, the list above nonetheless shows how influential the ETI is in terms of its membership. Another key point to draw out is the central participation of trade unions, which reflects the acknowledged position of unions in UK (and more broadly, European) modes of industrial organisation. As we will show in the case of the USA subsequently, the place of trade unions is by no means guaranteed in MSIs for ethical trade. This key difference concerning the contrasting composition of MSIs in the UK and USA supports Christopherson and Lillie’s (2005) point about the significance of national industrial relations systems in retailers’ home countries to the strategies they adopt in their approaches to ethical trade. Lying at the heart of the ETI is the base code of conduct, which the organisation encourages all corporate members to use in the implementation of responsible business standards in the context of their (mainly) own-brand supply chains. This base code consists of nine provisions that build directly on core ILO Conventions. These provisions, exclusively concerning labour standards, are as follows: (i) employment is freely chosen; (ii) freedom of association and the right to collective bargaining are respected; (iii) working conditions are safe and hygienic; (iv) child labour should not be used; (v) living wages are paid; (vi) working hours are not excessive; 6 7

Media expose´s and campaigns recently have focussed on UK-based as well as overseas food suppliers to supermarket chains, attending to the issues of migrant workers and gangmasters (see, for example, Vidal, 2006). http://www.ethicaltrade.org/Z/abteti/who/memb/list.shtml#tu [Accessed 2 August 2006].

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(vii) no discrimination is practised; (viii) regular employment is provided; (ix) no harsh or inhumane treatment is allowed (ETI, 2000). This code illustrates the continuing involvement of the ILO in working towards the regulation of global labour standards (Murray, 2002), but lends support to Amin’s (2004) thesis on the decentring of the regulatory process, as the core conventions become implemented through transnational trading networks and initiatives like the ETI.

3.1.3. ETI approaches to ethical trade: research, learning and collaborative development In setting up our comparison of UK and US MSIs, there are two fundamental aspects of the ETI’s approach to draw out. The first concerns its emphasis on collaborative learning and the development of ‘best practice’, and the second concerns the lack of any strict demands for transparency and enforcement of the code on the part of its retail members. Dealing with the issue of learning first, much of the ETI’s initial work following the finalisation of its base code was on the development of methodologies for its implementation. This mainly centred on developing strategies and methods for the social and ethical auditing of retailers’ supply chains, and involved debate about the organisations best positioned to conduct these audits (retailers, private companies, NGOs or trade unions). However, as scepticism has mounted on the value of auditing in bringing about improved labour standards (O’Rourke, 2002), ETI members have focussed increasingly on developing best practice in ethical trading beyond the monitoring process, incorporating remediation work with suppliers and giving workers a stronger voice in the process of code implementation (personal interviews). Indeed, the core activities of the ETI all pivot around a broad suite of learning and knowledgebased activities, including conferences, seminars, roundtable discussions, experimental projects and training courses. Moreover, as part of its research-based activities, the effectiveness of the ETI’s base code in improving labour conditions has been independently evaluated through an impact assessment conducted by the UK’s Institute of Development Studies (Barrientos and Smith, 2006). The report from this assessment shows that while working conditions have improved in the areas of health and safety as a result of code implementation, there is still significant progress to be made on issues such as freedom of association and discrimination. Overall, the ETI concentrates on experimental learning projects and the pursuit of best practice ethical trade through research rather than the accreditation of a standard or the policing of supply relationships. As the Director of the ETI acknowledges: This is not an exact science. Membership is not a badge. It doesn’t mean that these companies are all great. Actually what it probably means is some of them are doing good and bad things all the time, and we try and identify the good and talk about the good. Interview, 12 September 2005

One of the main advantages of this developmental approach to ethical trade, acknowledged by trade union and NGO representatives in the ETI, is that companies are comfortable about being involved in an organisation that effectively creates a ‘safe space’ for learning. However, weaknesses of the approach are identified by interviewees as relating to the lack of strict demands made on its members by the ETI in terms of code compliance and enforcement. One trade union representative of the ETI suggested

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that its focus on learning represents organisational strength and weakness simultaneously, with a risk that the institution simply becomes a ‘talk shop’ (interview, 14 November 2005). The following view from an NGO representative in the ETI expresses similar concerns: Although the idea of learning organisations is a helpful one and I think it has created an atmosphere of trust within ETI, at the same time sometimes it’s possible for companies to just say, ‘Well, we are participating’. And you do have to keep thinking, well what are the outcomes? What has changed as a result? And there is quite a difference in terms of the corporate members, the extent to which they are investing in changing practices. Interview, 05 October 2005

The ETI is regarded by many practitioners as a successful civil initiative for ethical trade, with a focus on developmental approaches supported by both the UK government’s Department for International Development and proactive NGO members. However, while corporate members are required to produce annual reports to the ETI on the progress they have made with code implementation in their supply chains, there are no requirements for the public disclosure of inspection results. This arguably stems from the fact that campaigning in the UK has mainly been conducted by NGO and trade union activists rather than ordinary consumers themselves, in contrast to the USA where campus-based consumers have been involved in direct protests, discussed subsequently. In the UK, calls for public disclosure of social auditing results are notable for their absence, and this has engendered more of a culture of learning than one of rigid compliance in the ETI. 3.2. The case of the USA 3.2.1. Campaigning and the emergence of US MSIs The story of the anti-sweatshop movement in the USA and the way it became so symbolic of resistance to neoliberalism is well documented. As in the UK, there was an explosion in the US media of expose´s on labour conditions in global supply chains during the mid to late 1990s, with Klein (2000, 327) noting that between 1995 and 1996, ‘North Americans couldn’t turn on their televisions without hearing shameful stories about the exploitative labor practices behind the most popular, mass-marketed labels . . .’. Articles on the subject appeared frequently in newspapers such as the New York Times and the Wall Street Journal, as well as popular magazines. Retailers and brand manufacturers operating in the apparel and toy sectors were the main targets of criticism, including Gap Inc., Nike, Wal-Mart, Target, Sears and Nordstrom (Klein, 2000). Most famously, in May 1996 Charles Kernaghan of the National Labor Committee (NLC) made talk show host, Kathie Lee Gifford, cry on US primetime television when he revealed that child labourers in Honduras and sweatshop workers in New York were involved in the production of her sportswear range sold in Wal-Mart stores (Adams, 2002; Featherstone and USAS, 2002; Jenkins, 2002). At the same time, direct protests and campaigns against clothing brands and retailers were being launched by NGOs, unions, consumer organisations and student groups. While these began in the early 1990s with the anti-sweatshop work of organisations like the NLC and had their roots in earlier collective organisation of garment industry workers in the global South (Featherstone and USAS, 2002), the mid-1990s represented

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a pivotal point in the development of a significant US-based anti-sweatshop movement. During this time, Sweatshop Watch formed in California, many Student Labor Action Coalitions formed at universities across the USA, and the Union of Needletrades, Industrial and Textile Employees (UNITE) founded the Stop Sweatshops Campaign with the National Consumers League (NCL) (Hartwick, 2000; Johns and Vural, 2000; Featherstone and USAS, 2002). The engines of this political activism were located at sites of retail and consumption in the USA rather than at sites of production, which Johns and Vural (2000) argue is a corollary of the overarching ‘consumerist turn’ in the global economy beginning in the late twentieth century. However, emphasising the point that this consumer-based activism was fuelled by political connections made with workers in the global South, Cravey (2004, 207) talks about ‘an increasingly complex geography of activist connections’ and Silvey (2004) refers to the ‘transnational alliances’ (191) and ‘translocal political agendas’ (193) that have characterised the US anti-sweatshop movement. These observations support the view that the US anti-sweatshop movement was produced through networked relations between individuals and groups which cross-cut spatial scales. Nonetheless, Russell (2004) highlights the US base of the antisweatshop movement and emphasises the way in which it has been so powerfully motivated by notions of consumer sovereignty. The embeddedness of the anti-sweatshop movement in national political, as well as cultural, processes is illustrated by the establishment of US MSIs in the mid-1990s. In 1996, concerned that the campaigns and publicity on sweatshops would threaten its continued drive for free trade, the Clinton Administration initiated the Apparel Industry Partnership (AIP)—a multi-stakeholder group of companies, unions, human rights organisations and consumer groups—to reach consensus on the monitoring of labour conditions in global supply chains (Adams, 2002; Featherstone and USAS, 2002; Jenkins, 2002). In 1998, the Fair Labor Association (FLA) was formed from the AIP, and arguably remains the most strategically significant MSI for ethical trade in the USA. However, several groups left the organisation due to fundamental disagreement over issues of a ‘living wage’ clause in the code of conduct and methods used to conduct independent monitoring of supply chains. Most significantly, it was trade union representatives from UNITE, along with the Interfaith Centre for Corporate Responsibility, who led the walkout from the FLA. At the same time, campus-based protests against sweatshops, particularly those targeting college sportswear brands including Nike, were gathering momentum. In 1998, with the support of UNITE, United Students Against Sweatshops (USAS) was established (Featherstone, 2004), which became increasingly opposed to the FLA and its apparent domination by corporate members such as Liz Claiborne, Nike and Reebok. In due course this opposition led to the formation of the Worker Rights Consortium (WRC), a MSI focussed on the supply chains for college clothing brands. The WRC continues to represent an arguably more radical alternative to the FLA in the USA, illustrating a more fractured landscape of ethical trading MSIs in the USA than the UK. As in the UK, the subject of sweatshops in connection with retailers’ supply chains continues to feature in the US media (for example, Goodman and Pan, 2004; Liedtke, 2004; Nocera, 2005; Greenhouse and Barbaro, 2006). The US retailers targeted in these reports include Wal-Mart, JC Penney, Sears, Target and Gap Inc. Documentaries also have been released by independent media organisations in the USA, exemplified by

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Stolen Childhoods (Morris, 2005) and Wal-Mart: The High Cost of Low Price. While student activism on the theme of sweatshops continues through USAS, it is now mainly channelled into the ongoing programmes of the WRC such as recent sweat-free campus campaigns. Focus on the retail sector has developed, though, through the emergence in 2005 of two groups targeting Wal-Mart—Wake-up Wal-Mart and Wal-Mart Watch—though these organisations address a broader range of issues relating to Wal-Mart’s domination of the US market, rather than purely supply chain exploitation. In contrast to the UK, US-based campaigning has a significant legal dimension, with groups like Human Rights First and the International Labor Rights Fund both being run by lawyers and experimenting with legal frameworks, such as the Alien Tort Claims Act, which hold corporations accountable for actions affecting foreign workers. Another significant UK–US contrast concerns the lack of attention paid by the US media and campaigning groups to the global supply chains of supermarkets (with the exception of the mass-merchandiser, Wal-Mart). It has been suggested by several interviewees that this stems from the absence of prominent national supermarket chains/brands in the USA and the weak position (compared to the UK) of US supermarket own-brand products (Hughes, 1996; M. Sinclair, personal communication), though this situation is changing with the increasing concentration of capital in US food retailing (Wrigley, 2002). While there have been campaigns focussed on labour rights within the US agricultural industry, including the work of Oxfam America (Mesbah, 2004) and the Coalition of Immokalee Workers (Imig, 2005), these movements have tended to concentrate on agricultural supplies to fast food chains. Campaigns and media reports concerned with issues of labour standards in the global supply chains of US supermarket chains are notable for their absence, and this stands in marked contrast to the situation in the UK with implications for the structure and scope of US MSIs. 3.2.2. The structure and governance of US MSIs The FLA is arguably the most strategically significant MSI for ethical trade in the USA on account of its more broad-reaching corporate membership and the expansive range of global supply chains it therefore covers. However, it differs from the UK’s ETI in terms of structure and membership. There has been a notable absence of trade union representatives since UNITE left the organisation in the late 1990s, reflecting the far weaker position of unions in the USA. In addition, and unlike the ETI with its significant supermarket membership, the sectors covered are limited to the apparel industry. Like the ETI, though, the FLA has a permanent secretariat based mainly in Washington DC and a Board of Directors consisting of six corporate members, six NGOs and three university representatives. At the time of writing in 2006, it has twenty corporate members between them sourcing from over 3500 factories in 76 different countries and with sales of $30 billion.8 Amongst these are retailers such as Nordstrom and retailer/multi-brand companies such as Liz Claiborne. However, the vast majority are clothing and sportswear brands like Adidas and Nike that have a less significant presence in retailing. Many US clothing retailers targeted by campaigning and media 8

http://www.fairlabor.org/all/companies/index.html [Accessed 9 August 2006].

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reports, such as Wal-Mart, JC Penney, Sears and Target, appear to be pursuing global labour standards strategies outside MSI structures in the USA, which represents another important contrast with the UK context. Gap Inc., through its involvement in Social Accountability International (SAI) and the UK’s ETI, is one of the few US retailers engaging with MSIs. The formal multi-stakeholder approach to ethical trade therefore appears to be more directly influential with retailers in the UK than it is in the USA. The FLA code of conduct is very similar to that of the ETI, including clauses relating to: forced labour, child labour, harassment of workers, non-discrimination, health and safety, freedom of association and collective bargaining, wages and benefits, hours of work and overtime compensation.9 There is not space to detail the precise clauses of the FLA code here. For a comprehensive comparison of different MSI codes of labour conduct, see SGS (2005). However, a key point to make is that the FLA code does not refer to a ‘living wage’ in the same way as other MSIs, which relates to the absence of unions on its Board. Rather, it states that employers should pay as a minimum the legal or prevailing industry wage required by local law in the country in which the supplier is based. This absence of a living wage in the FLA code remains a target of criticism by NGOs, unions and other MSIs in the USA (personal interviews). The FLA is also less specific than the WRC in terms of its standards concerning overtime work (Jenkins, 2002). The WRC differs from the FLA, and also the UK’s ETI, predominantly because it is limited to supply chains for clothing bearing college and university names. It does not include mainstream retail members. By 2006, there were 157 colleges and universities affiliated to the WRC, and the focus on college apparel is a direct result of the strength of the campus-based anti-sweatshop movement in the USA. The organisation has permanent staff based in Washington DC and a Governing Board comprising five representatives of its university caucus, five from USAS (who continue to be supported by UNITE-HERE) and five members of its Advisory Council made up of independent labour rights experts.10 Its model code of conduct is very similar to the codes used by the ETI and FLA, though it specifies and defines a ‘living wage’11 and has an additional section devoted to women’s labour rights (Jenkins, 2002). The Worldwide Responsible Apparel Production (WRAP) and Social Accountability International (SAI) are other US ethical trading organisations worthy of mention. WRAP is essentially a business association code rather than a MSI (Jenkins, 2002; O’Rourke, 2002) and therefore receives less attention here. Its code of conduct reflects its dominant private sector membership, omitting a detailed clause on a living wage for example. By contrast, SAI represents a much stronger MSI with a history of close relations with the ETI, FLA and WRC. As well as its involvement in accrediting and training social auditors, it promotes a strict workplace standard in the form of its SA 9 10 11

http://www.fairlabor.org/code/index.html [Accessed 9 August 2006]. http://www.workersrights.org/govern.asp [Accessed 9 August 2006]. The WRC defines a ‘living wage’ as ‘a ‘‘take home’’ or ‘‘net’’ wage, earned during a country’s legal maximum work week, but not more than 48 hours. A living wage provides for the basic needs (housing, energy, nutrition, clothing, health care, education, potable water, childcare, transportation and savings) of an average family unit of employees in the garment manufacturing employment sector of the country divided by the average number of adult wage earners in the family unit of employees in the garment manufacturing employment sector of the country’ (http://www.workersrights.org/coc.asp) [Accessed 9 August 2006].

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8000 code which is arguably more detailed than that of any other MSI and which works progressively with a ‘basic needs’ wage.12 The organisation was set up in 1997 and has a Board including two NGO representatives, one lawyer and three companies. It also has a trade union presence, though significantly these are European-based unions. Although based in the USA, SAI does not quite fit with the model of a nationallevel MSI as it has always had European as well as US companies as signed-up members. It also differs from other US MSIs in terms of its sectoral scope, incorporating European food in addition to clothing companies. However, its influence on US retailers and brands is limited. Of the leading food and clothing retailers in the USA, only Gap Inc. is involved in the organisation and working with SA8000. 3.2.3. US approaches to ethical trade through MSIs: transparency, disclosure and certification While there are clear similarities between UK and US MSIs in terms of their codes, with the exception of the living wage clause, there are more notable contrasts with respect to implementation strategies and the philosophies that underpin them. The FLA is significantly more directive than the ETI in terms of laying down guidelines with respect to code implementation for its corporate members. It requires that companies establish internal systems for monitoring their suppliers against the FLA code, but it also operates independent external monitoring through FLA-accredited private auditors. All corporate members of the FLA have to allow these external monitors to audit their suppliers through unannounced visits and a clear philosophy of transparency is advanced through FLA programmes. As the Executive Director of the FLA explained, ‘The concept of transparency is at the very heart of what we do’ (Interview, 08 March 2006). Transparency is achieved through the independent monitoring system itself and the publication of monitoring outcomes on the FLA website. The President and CEO of the FLA justified this approach as follows: The ultimate test, if you like, for a company walking the walk is the fact that they don’t know when we are going to arrive and they know that whatever we find is going to be public. Interview with the President and CEO of the FLA, 02 December 2005

This fundamental contrast with the ETI’s approach hinges on firmer strategic connections being made between the FLA, its members’ supply chains and the US consumers of apparel. As the organisation asserts on its website, ‘The FLA serves as a source of information to consumers and promotes public awareness about labour conditions around the world through candid and transparent reporting.’13 This reflects, in part, the notion of consumer sovereignty lying at the heart of the US anti-sweatshop movement, and in effect enrols consumers into the auditing process as a critical audience in a way that is absent from organised ethical trading programmes in the UK. The ways in which auditing can be as much about ‘being seen to be audited’ as it is about the audit outcome itself (Miller, 1998, 202) are, therefore, more apparent in US organisational approaches than they are in the UK. However, it must be noted that the FLA also engages in additional activities that move the organisation beyond the 12 13

SA8000 is essentially a certification standard focussed on factories rather than brands and retailers. http://fairlabor.org/all/transparency/reports.html [Accessed 16 August 2006].

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monitoring process alone, with programmes of learning on sustainability and remediation. The WRC, with its sole focus on factories producing apparel bearing college and university names, has been primarily concerned with investigating worker complaints and conducting investigations in response to these complaints. As such, this MSI has been likened by one trade union representative to a ‘flying squad’ (personal interview). Another key difference is that, instead of conducting monitoring through private corporate auditors, the WRC operates its monitoring by working closely with worker organisations and labour rights specialists at sites of production. However, like the FLA, it advocates an approach resting on transparency, including the disclosure of factory names, locations and monitoring results. Most recently, and connected to the sweat-free campus campaign, the WRC have been involved in the innovative Designated Supplier Program. The strategy for this programme is that university logo apparel should be sourced only from factories that have been determined to have ‘affirmatively demonstrated full and consistent respect for the rights of their employees’ (USAS, 2005, 5) by adhering fully to the WRC code. The programme also suggests that, ‘University licensees pay these factories prices for their products sufficient to achieve these standards . . . and will be expected to maintain the kind of long-term relationship with these factories necessary to allow for a reasonable degree of financial stability and job security’ (USAS, 2005, 5). This takes the WRC in the direction of a certification model, with one implication emerging that it might create an enclave of best practice within the apparel industry. Promoting one of the strongest and most detailed workplace codes for global labour through its SA 8000 workplace standard, SAI’s whole approach rests on strict labour standards, the measurability of those standards and detailed systems of certification used to monitor them. SAI’s comprehensive programmes for the training and accreditation of auditors also reflect this compliance-monitoring approach. WRAP, as a business association rather than a MSI, is most influential with manufacturers’ associations (Merk, 2005) and operates a code and implementation strategy that is weaker than those used by other US MSIs (Jenkins, 2002). It proposes an approach combining factory self-assessment and independent monitoring by accredited private auditing companies in order to certify a supplier, but does not disclose factory names, locations or monitoring outcomes. This differs dramatically from the prevailing philosophies of transparency and disclosure that so powerfully shape the approaches to monitoring advanced by the other leading US initiatives and which contrast so markedly with approaches advocated in the UK.

4. Transnational experimentations in ethical trading approaches: towards UK–US institutional convergence? While ethical trading MSIs on both sides of the Atlantic have been shown to be deeply embedded in national contexts of campaigning and politics at sites of retail and consumption, their focus on global sourcing and the influence of overseas organisations at sites of production implies that they are all far from hermetically sealed organisations confined to the national scale. In fact, their programmes of code development and their approaches to code implementation are shot through with the kinds of ‘trans-territorial presences’ that Amin (2004, 224) suggests are characteristic of new, networked forms of regulation in the global economy. There are many examples of the ways in which

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‘trans-territorial presences’ shape, and are themselves shaped by, national-institutional contexts. The in-house corporate strategies for ethical trade developed by retail TNCs like Wal-Mart, Gap Inc. and Tesco, for example, represent cross-border channels of learning that are influenced by many different ethical trading agendas including those of national MSIs in the different countries in which they operate. In the case of campaigning, most NGOs who are MSI members also operate through broad-reaching, transnational civil society networks that shape the agendas they bring to MSI negotiating tables. These examples, amongst others, do not deny the importance of nationally based MSIs. Rather, they are illustrative of the trans-scalar production of MSIs and national-institutional contexts that are fluid and mutable. The case we use to discuss this geographical dynamism further concerns a recent transnational project of experimental learning involving UK and US MSIs. The Joint Initiative on Corporate Accountability and Workers Rights, known as JO-IN, began in 2003 as a transnational initiative to combat the proliferation of labour codes in the global economy and to reduce the duplication of organisational efforts on ethical trade. Its strategy is firmly based on the use of the multi-stakeholder approach to ethical trade, and its membership is made up of six MSIs- the ETI, FLA, WRC and SAI, as well as the Dutch-based Fair Wear Foundation (FWF) and the Clean Clothes Campaign (CCC). WRAP is not involved in the initiative, given its distance from a genuine multi-stakeholder approach. JO-IN has been funded by the European Commission and the US State Department, as well as by private members of participating organisations. Its direction has benefited from an independent Chair and its committee, consisting of representatives of the six member MSIs, meets up to three times a year. The organisation quotes its central objectives as being: ‘(i) to maximise the effectiveness and impact of multi-stakeholder approaches to the implementation and enforcement of codes of conduct by ensuring that resources are directed as efficiently as possible to improving the lives of workers and their families; (ii) to explore possibilities for closer co-operation between the organisations; and (iii) to share learning on the manner in which voluntary codes of labour practice contribute to better workplace conditions in global supply chains’.14 Rather than being representative of complete institutional convergence and the unproblematic pursuit of one common code of conduct for global labour standards, the activities of the Joint Initiative illustrate how such transnational learning networks are shaped by, and subsequently influence, the philosophies and approaches of its constituent, nationally based member organisations. The most obvious example of this is the influence of the ETI’s philosophy of inter-organisational learning in the development of good practice, articulated within JO-IN’s third objective listed earlier and applied through its collaborative pilot project with Turkish garment suppliers. What this illustrates is the dominant role played by the ETI in shaping the JO-IN agenda. At the time of writing, eight brands and retailers who are members of different participating MSIs are involved in the Turkish pilot project, including Gap Inc., Adidas, Puma, Marks and Spencer and Nike. The aim is for the MSIs to agree a common code between them and then to work towards agreeing best practice for implementing that code by pooling the different experiences and viewpoints of the MSIs involved. The priority of the project is to focus on elements of the code that are 14

http://www.jo-in.org/about.html [Accessed 21 August 2006].

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particularly pertinent to garment suppliers and on which various MSIs have traditionally disagreed. These elements centre on freedom of association and the right to collective bargaining, wages and overtime hours. Both the JO-IN Chair and the Director of ETI emphasise that the subsequent development of a common methodology for code implementation is not simply about comparing existing MSI approaches, but about agreeing common guidelines for implementation and trialling those guidelines. Highlighting the centrality of collective learning to this process, the President of SAI explained that, ‘We’re agreeing joint guidance and the guidance is really benefiting from best practice of all of us’ (interview, 24 February 2006). Unsurprisingly, there have been challenges associated with the Turkish pilot project stemming from the different philosophies and approaches underpinning the MSI members. First, with respect to the establishment of a common JO-IN labour code, the President of SAI recounted how the initiative went through eighteen drafts before a final version was agreed, with the clause on wages representing a particular point of contention. This was despite the similarity between ETI, SAI, FWF and CCC codes resulting from previous inter-organisational dialogue. As she explained, ‘The FLA does not have a living wage in their code. We [JO-IN] have a common code now, which has a living wage in it’ (interview, 24 February 2006). As other JO-IN members revealed, the solution to this particular problem in practice was to construct a ‘wages ladder’ in the JO-IN code, which incorporates a range of levels of wages standards, from the FLA’s use of the in-country minimum wage to the more ambitious standards for living wages and basic needs wages espoused by other MSIs. While this wages ladder appears to represent an answer to the problem, it does not transcend individual MSI standards. Moreover, some JO-IN members are pessimistic about the possibility of consensus emerging from the implementation of the ladder concept in Turkey. Another significant area of debate to emerge from the pilot project concerns the issue of disclosure and transparency. As discussed earlier, this is a philosophy lying at the heart of US MSIs and is, arguably, fuelled by the consumer sovereignty powering the US anti-sweatshop movement. While the WRC calls for transparency in the JO-IN project, incorporating the disclosure of Turkish factory names and locations and the results of factory inspections, the brands and retailers themselves and other MSIs, including the ETI, have reservations about this approach. This has created tensions between the MSIs, as one anonymous commentator suggested: The WRC can’t compromise. They can’t come down from where they are at, and these other organisations at this point, given who their Boards are, can’t get to that transparency level.

Another challenge has been the difficulty of getting Turkish suppliers to sign up to the project. Indeed, increased labour costs and the possible exposure of the factories of suppliers to public scrutiny are particular concerns that must be addressed by JO-IN in its ongoing work (interview with the Chief Executive of the WRC, 07 March 2006). However, despite these challenges, JO-IN is continuing as a transnational experimental project on ethical trade. As the Executive Director of the FLA noted: I think the more interesting story is the fact that these six organisations, as different as they are, the fact that they’re still talking to each other is really the amazing aspect of what’s happened so far. Interview, 08 March 2006

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In the case of JO-IN, the pursuit of a common standard for, and common approach to, improving global labour standards through transnational organisational networks is progressing through continual negotiation between nationally based MSIs with contrasting philosophies and approaches. As a result, it is these nationally embedded philosophies and organisational approaches that are shaping specific pathways of transnational code development, as well as themselves being challenged and re-shaped by such cross-border dialogue. The JO-IN project, therefore, exemplifies the discursive construction of both national MSIs for ethical trade and the so-called construction of a common approach to global labour standards.

5. Conclusion: global labour standards, national-institutional contexts and the unsettled geographies of corporate responsibility In this article, we have compared UK and US MSIs in order to assert the significance of national-institutional contexts in framing corporate (including retailer) approaches to ethical trade and global labour standards. While campaigning for responsible trading and the development of MSIs are evident in both countries, the comparative analysis highlights significant points of contrast between UK and US national-institutional contexts for ethical trade. To summarise, first, there is a striking UK–US difference in terms of the sectors targeted by the media and campaigning organisations since the 1990s. In the UK, both the clothing and food retailers have received criticism for their global supply chain practices. In contrast, the USA has seen the vast majority of attention directed at the clothing retailers and leading brand names in sportswear and college apparel through the anti-sweatshop movement. Second, and related to this, there is a clear contrast in the development of multi-stakeholder organisations between the two countries. One dominant organisation, the Ethical Trading Initiative (the ETI), has emerged in the UK to co-ordinate ethical trading developments on the part of leading retailers and brand manufacturers in a variety of sectors including the food and garment retail industries. In the USA, the establishment of multi-stakeholder organisations has been much more fragmented and focuses exclusively on the clothing sector as a result of the original focus of media and campaigning attention. Reflecting the UK–US differences in institutional environments/arrangements, including national industrial relations systems, trade unions appear to play a more central role in the UK ethical trading movement than they do in the USA, while legal organisations are more influential in US anti-corporate campaigning. What we have also emphasised in our comparison is that not only have the MSIs evolved in the context of quite distinct national campaigning and political contexts, but also they embody contrasting strategies for, and approaches to, the implementation of ethical codes of conduct. While the ETI advocates an approach focussed on continuous learning and the pursuit of best practice for ethical trade based on collaborative research, US MSIs exert far greater control over the code implementation process and place emphasis on transparency, including the public disclosure of auditing results. This strategy of disclosure in the USA is argued to stem from the embeddedness of US MSIs in a national anti-sweatshop movement energised by a discourse of consumer sovereignty. However, the strict demands regarding transparency represent one

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reason why many US retailers avoid engagement with MSIs, in contrast to the UK where the ETI provides a ‘safe space’ for many companies to learn about evolving ethical trading approaches. With broader significance for understanding the global economy and its governance, this contrast between the UK’s learning approach and the US model of rigid compliance monitoring for ethical trade is mirrored in regulatory practices for accounting standards. It has been shown, for example, that the management of accounting standards in the UK is associated with a ‘principlesbased’ approach, while in the US a more ‘rules-based’ system has been dominant (Schipper, 2003; Nobes, 2005). In terms of the strengths and weaknesses of each MSI’s approach, the key asset of the ETI’s learning-based strategy centres on the production of a safe space for corporations to develop leading edge approaches to the implementation of ethical trading principles in collaboration with various stakeholders. However, in the absence of rules for strict enforcement, the wider impacts of these positive developments run the risk of being limited. In contrast, the key strength of the US MSIs’ methodology based more on compliance monitoring and transparency is the potentially broader extent to which labour standards are implemented and guaranteed. The most advanced MSI in terms of working with a comprehensive and progressive code, collaborating with stakeholders and developing transparent monitoring programmes appears to be the Worker Rights Consortium. In the context of the JO-IN project, the standards embodied in the WRC’s approach present a challenge to other MSIs. The resulting tensions between MSIs as this transnational experiment unfolds illustrate both the political significance and the fluidity of national-level contexts and institutions in the developing ethical trading agenda. Ethical trade remains a central subject of inquiry for social scientists interested in understanding the broader architectures of global supply chain governance and transnational retail activity. As retailers are becoming increasingly responsible for labour standards in global supply chains, understanding the strategies they use to manage these standards is an important academic and political objective. The rising market power of transnational retailers (Wrigley et al., 2005) implies that power and authority in the governance of global supply chains is falling increasingly into the hands of an elite group of globalising retailers. What is clear from this comparative analysis, though, is that the national-institutional contexts in which these (and other national) retailers are based continue to play a significant part in moulding their strategies for the management of ethical trade. However, recognising the dynamism of national institutions and organisations—the ways in which they are always shaped through practices and interactions at a variety of spatial scales—is crucial to grasping their significance. Taking a relational approach to understanding UK–US differences in corporate ethical trading approaches therefore highlights the remarkably unsettled geographies of corporate responsibility that are currently shaping the global economy.

Acknowledgements We would like to thank two anonymous referees for their very helpful comments on an earlier draft of this article. The research was carried out as part of an ESRC research grant (award number RES-000-23-0830), for which we are very grateful. And finally, we thank our interviewees for their valuable participation in the study.

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