Positive class compromise in globalized production? The Freedom of Association Protocol in the Indonesian sportswear industry

• Author: Peter KNORRINGA,Karin Astrid SIEGMANN,Jeroen MERK
• Date: 01 December 2017
• Published date: 01 December 2017
• DOI: http://doi.org/10.1111/ilr.12036

International Labour Review, Vol. 156 (2017), No. 3–4

Copyright © The authors 2017

Journal compilation © International Labour Organization 2017

* International Institute of Social Studies (ISS), Erasmus University, Rotterdam, emails:

siegmann@iss.nl; j.j.s.merk@uva.nl; and knorringa@iss.nl. The authors gratefully acknowledge

helpful comments by an anonymous reviewer.

Responsibility for opinions expressed in signed articles rests solely with their authors, and

publication does not constitute an endorsement by the ILO.

Positive class compromise

in globalized production?

The Freedom of Association Protocol

in the Indonesian sportswear industry

Karin Astrid SIEGMANN,* Jeroen MERK*

and Peter KNORRINGA*

Abstract. This article investigates the role of voluntary initiatives (VIs) as non-

governmental systems of labour regulation in global value chains (GVCs). To iden-

tify the conditions conducive to a more active role for labour in VIs, the authors

apply Wright’s (2000) theory of the factors enabling positive class compromise to

a VI implemented in the Indonesian sportswear industry and extend it to the more

complex realities of GVCs. They conclude that if VIs are to create conditions under

which decent work can be strengthened, the involvement of strong local labour or-

ganizations is required while producers’ and/or buyers’ dependence on workers’

cooperation acts as a catalyst.

The past two decades have seen exponential growth in the volumes of

world merchandise exports and international foreign investment ows

(WTO, 2012, p. 19; UNCTAD, 2012, p. 24). This increase in the quantity of

international trade and investment volumes has been the consequence of a

qualitative shift in the global economy, namely, the increased fragmentation

of production and its relocation across international borders. This shift has

been underpinned by market-driven politics, from the economic liberalization

of formerly socialist countries of Eastern Europe and Asia, via the establish-

ment of the World Trade Organization to the nancialization of multinational

enterprises.

The governance of this process has been conceptualized in the scholarly

literature on global value chains (GVCs) and related concepts (for a critical

International Labour Review346

overview, see Newman, 2012).1 Yet, while the globalization of production in

GVCs has been accompanied by a rise of informal and insecure work across

different regions of the world, the role of labour – even in formal establish-

ments (ILO, 2016, pp. 7–8; ILO, 2002, pp. 35 –37) – has received scant atten-

tion in the GVC literature.

Early exceptions cautiously conclude that the process of upgrading

among supplier rms in developing countries, which is central to many GVC

studies, is not necessarily paralleled by improvements in labour conditions

(Knorringa and Pegler, 2006, p. 475). More recently, scholars have addressed

the “labour blindness” of the concept of upgrading by distinguishing between

rms’ economic upgrading and their social upgrading – i.e. improvements in

workers’ labour conditions – and by investigating the relationship between the

two (e.g. Barrientos, Geref and Rossi, 2011; Milberg and Winkler, 2011). Going

beyond the upgrading hypothesis and informed by a labour process perspec-

tive, Pegler, Siegmann and Vellema (2011, p. 116) argue that “the marginalized

position of the rural workforce [in agricultural value chains] and the resulting

low labour costs have been instrumental in securing companies’ and macro-

economic competitiveness”. Taking a Marxian view, Selwyn (2013, pp. 87–88)

therefore pleads for a shift in attention towards engagement with labour move-

ments to identify what he terms “labour-led” social upgrading.

This turn in the academic debate has followed the refocusing of labour

activists’ demands. Trade unions, NGOs and other labour rights advocates have

long criticized poor and insecure labour conditions in GVCs as a result of the

“race to the bottom” in globalized competition since the 1990s. Lead rms in

such value chains, in particular, have responded to this critique by developing

and implementing different types of private-sector voluntary initiatives (VIs)

for corporate social responsibility, which have gradually involved a wider range

of stakeholders (Newitt, 2012). The widespread failure of these initiatives to

effectively improve labour conditions in GVCs has led activists and scholars

to call for reconceptualizing corporate social accountability as a more hybrid

combination of demands for “hard” and “soft” law targeting corporations, in-

volving a more representative cross-section of civil society actors and coali-

tions, especially workers’ voices (Utting, 2008, pp. 968 –972).

The operational shortcomings of VIs, aptly summarized in Utting (ibid.,

pp. 963–966) and Brown (2013), are caused by the common dominance of a

commercial logic in their design (ibid., p. 4). Taylor points out that:

the implementation of labour codes appears to clash with one of the fundamental

driving forces of the internationalisation of production: namely, the relocation of

capital to access labour forces that are both shorn of basic rights and that can be

subjected to intense work routines in poor labouring conditions over an extended

working week for low wages (2011, p. 449).

1 For the purpose of this article, we use the term GVCs – rather than related concepts, such

as global commodity chains, global production networks or global supply chains – in keeping with

the prominence that this term has gained since the late 1990s in policy and academic circles (New-

man, 2012, p. 155).