Auret van Heerden has done a lot of labor organizing in his day, getting his start 30 years ago fighting for workers' rights as a student in apartheid South Africa. The apartheid government didn't welcome the fact that he served two terms as president of the National Union of South African Students and co-authored a book on trade union rights.
For his efforts, he suffered both solitary confinement and torture, before being forced into exile in 1987. From Geneva, van Heerden worked for the International Labor Organization, as well as serving as labor attaché to the South African mission to the United Nations, following the formation of a democratic, post-apartheid South Africa.
The 51-year-old van Heerden began working on labor issues in China a decade ago. That's when his role at the ILO, setting up a special action program to improve social and labor conditions in export processing zones, first brought him to mainland manufacturing cities like Southern China's Shenzhen.
Today, in his role as CEO of the Fair Labor Association, a coalition of 20 brand-name companies, as well as universities and non-government organizations that seek improvements in global labor practices, van Heerden splits his time between organizing worker committees and running training programs on worker issues in China, Thailand, and Honduras.
With his long mane of curly gray-blond hair, van Heerden, who survives on a bottomless cup of coffee, also is a recognized figure at anti-sweatshop conferences on U.S. college campuses where he represents FLA members such as Eddie Bauer, Adidas, Nike, Nordstrom (JWN ), and Liz Claiborne (LIZ ).
Beijing bureau chief Dexter Roberts met with van Heerden earlier this year in Kunshan, Zhejiang, where the FLA was doing a training program for soccer equipment suppliers, to talk about the challenges in treating workers right in China. Edited excerpts of their conversation follow:
In China, the biggest issue facing the FLA is systemic underpayment of wages and excessive overtime in supplier factories. Why are these problems so prevalent?
One is that the brands book and confirm orders really late. And they often change their orders after booking. The brands want to order later and they don't want to hold product. Then you add price pressures into that and it is really tough for the supplier [to not overwork its workers].
But the factory often doesn't order the materials until too late and they are often delivered late [to the factory], too. The factory production layout is often a mess, so the supplier gets behind schedule and over budget even before they know it. Then they have to catch up. And to save money, they extend hours, but don't pay overtime premiums. And the suppliers also lack proper training. The styles [of clothing and footwear] are becoming more complicated and are changing more frequently.
What does this mean financially for the suppliers?
Well, this means there are lots of reworks and quality problems and then there are lots of charge-backs [fees charged by the labels to the suppliers]. There are charge-backs for all kinds of things: If they are late with the product delivery, there is a charge-back. And if there are defects, there is one, too. And these guys [the suppliers] will do anything to avoid air freighting [which is much more expensive]. And these are not companies that can call up SAP and say we need the software to manage my production.
Is there a solution that allows the supplier to get the job done without having to make its workers put in overtime?
Well, they can add a second or third shift to avoid having to pay overtime. But that assumes the factory has accommodation for more workers and assumes there is transportation for them to get to the factory if they don't live there.
And then there are the worker themselves, who often want to make as much money as possible even it if means working overtime. A lot of activists will say just pay the workers a living wage [so they don't have to do overtime]. But if you raise many of these Chinese workers' wages 100%, they will still want to work on Sundays.
So how well are the corporate codes of conduct working to date?
Multiple codes are a big problem. The classic example is the height that a fire extinguisher should be kept off the ground—how high varies according to different codes. Companies like McDonalds (MCD ), Disney (DIS ), and Wal-Mart (WMT ) are doing thousands of audits a year that are not harmonized. That's where audit fatigue comes in. For many retailers, audits are a way of covering themselves. The general counsel says we need a piece of paper—it's a liability issue. An awful lot of that kind of auditing is taking place.
What is a better kind of auditing?
There is lots of talk of harmonizing common standards for company codes of conduct. Often suppliers are having an audit a week or more. And auditing in itself tells you a little about the problem, but not enough, and not why there is a problem. So you have an overtime problem, but you don't know why. Is it because of electricity shortages, labor shortages, or a shorter order turnaround time? You don't know.
What is the argument made by anti-sweat shop activists who say that simplifying enforcement codes of conduct can never work?
They argue that brands will cut and run if suppliers become compliant or if they set up a union in their factories. So there is zero reward for compliance and workers are not paid a living wage. The NGOs say they want a situation where companies allow unions, pay a living wage, and where the buyer pays a fair cost, which takes into consideration compliance costs, too. Yes, the cutting-and-running phenomenon exists. The lack of rewards for compliance is a real problem.
But how can the suppliers ever meet labor codes of conduct when they are under constant pricing pressure from the labels and retailers?
Productivity improvements in the factory are very important. I started working on labor rights and got into areas like productivity and supply chain management. I never thought I would deal with these kinds of issues. But until they get resolved, China will continue to have overtime problems.
We started [our training] with grievance procedures in the factory as the most basic issue. If you want greater compliance, you have to get more efficient factories. It seems odd for us to be teaching career development. But improved HR (human resources) means greater productivity, which all improves the chances for labor compliance. And if you want to eliminate discriminatory practices, you need to train HR people how to hire and fire workers properly.
How do you explain your progression from working in an international organization like the ILO to today representing companies as head of the FLA?
The focus of the ILO is on labor, management and government—it's a tripartite relationship. But then we realized that often nothing was getting done. Governments are not able to legislate labor markets because globalization is outstripping the power of governments.
When I was visiting the special economic zones, none of the suppliers would listen to us. I saw that happening and started asking why Nike has more authority than the ILO and governments. It's because private actors are assuming state functions. And why are they moving this way? It's because the consumer is pushing them. The most powerful force is when consumers demand social responsibilities from labels.