LAW/INTAFF/POL-TED Talks-Auret van Heerden: Making global labor fair

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Transcript:

This cell phonestarted its trajectoryin an artisanal minein the Eastern Congo.It's mined by armed gangsusing slaves, child slaves,what the U.N. Security Councilcalls "blood minerals,"then traveled into some componentsand ended up in a factoryin Shinjin in China.That factory -- over a dozen people have committed suicidealready this year.One man died after working a 36-hour shift.We all love chocolate.We buy it for our kids.Eighty percent of the cocoa comes from Cote d'Ivoire and Ghanaand it's harvested by children.Cote d'Ivoire, we have a huge problem of child slaves.Children have been trafficked from other conflict zonesto come and work on the coffee plantations.Heparin -- a blood thinner,a pharmaceutical product --starts out in artisanal workshopslike this in China,because the active ingredientcomes from pigs' intestines.Your diamond -- you've all heard, probably seen the movie "Blood Diamond."This is a mine in Zimbabweright now.Cotton: Uzbekistan is the second biggestexporter of cotton on Earth.Every year when it comes to the cotton harvest,the government shuts down the schools,puts the kids in buses, buses them to the cotton fieldsto spend three weeks harvesting the cotton.It's forced child laboron an institutional scale.And all of those products probably end their livesin a dump like this one in Manila.

These places, these origins,represent governance gaps.That's the politest descriptionI have for them.These are the dark poolswhere global supply chains begin --the global supply chains,which bring us our favorite brand name products.Some of these governance gapsare run by rogue states.Some of them are not states anymore at all.They're failed states.Some of themare just countries who believe that deregulation or no regulationis the best way to attract investment,promote trade.Either way, they present uswith a huge moral and ethical dilemma.I know that none of us want to be accessoriesafter the factof a human rights abusein a global supply chain.But right now,most of the companies involved in these supply chainsdon't have any wayof assuring usthat nobody had to mortgage their future,nobody had to sacrifice their rightsto bring us our favoritebrand name product.

Now, I didn't come here to depress youabout the state of the global supply chain.We need a reality check.We need to recognize just how seriousa deficit of rights we have.This is an independent republic,probably a failed state.It's definitely not a democratic state.And right now,that independent republic of the supply chainis not being governedin a way that would satisfy us,that we can engage in ethical trade or ethical consumption.Now, that's not a new story.You've seen the documentariesof sweatshops making garmentsall over the world, even in developed countries.You want to see the classic sweatshop,meet me at Madison Square Garden,I'll take you down the street, and I'll show you a Chinese sweatshop.

But take the example of heparin.It's a pharmaceutical product.You expect that the supply chain that gets it to the hospital,probably squeaky clean.The problem is that the active ingredient in there --as I mentioned earlier --comes from pigs.The main American manufacturerof that active ingredientdecided a few years ago to relocate to Chinabecause it's the world's biggest supplier of pigs.And their factory in China --which probably is pretty clean --is getting all of the ingredientsfrom backyard abattoirs,where families slaughter pigsand extract the ingredient.So a couple of years ago, we had a scandalwhich killed about 80 people around the world,because of contaminantsthat crept into the heparin supply chain.Worse, some of the suppliersrealized that they could substitute a productwhich mimicked heparin in tests.This substitute cost nine dollars a pound,whereas real heparin, the real ingredient,cost 900 dollars a pound.A no-brainer.The problem was that it killed more people.

And so you're asking yourself,"How come the U.S. Food and Drug Administrationallowed this to happen?How did the Chinese State Agency for Food and Drugsallow this to happen?"And the answer is quite simple:the Chinese define these facilitiesas chemical facilities, not pharmaceutical facilities,so they don't audit them.And the USFDAhas a jurisdictional problem.This is offshore.They actually do conduct a few investigations overseas --about a dozen a year -- maybe 20 in a good year.There are 500of these facilitiesproducing active ingredients in China alone.In fact, about 80 percentof the active ingredients in medicines nowcome from offshore,particularly China and India,and we don't have a governance system.We don't have a regulatory systemable to ensurethat that production is safe.We don't have a system to ensurethat human rights, basic dignity,are ensured.

So at a national level --and we work in about 60 different countries --at a national levelwe've got a serious breakdown in the ability of governmentsto regulate productionon their own soil.And the real problem with the global supply chainis that it's supranational.So governments who are failing,who are dropping the ballat a national level,have even less ability to get their arms around the problemat an international level.And you can just look at the headlines.Take Copenhagen last year --complete failure of governmentsto do the right thingin the face of an international challenge.Take the G20 meeting a couple of weeks ago --stepped back from its commitments of just a few months ago.You can take any oneof the major global challenges we've discussed this weekand ask yourself, where is the leadership from governmentsto step up and come up with solutions,responses,to those international problems?And the simple answer is they can't. They're national.Their voters are local.They have parochial interests.They can't subordinate those intereststo the greater global public good.

So, if we're going to ensure the deliveryof the key public goodsat an international level --in this case, in the global supply chain --we have to come up with a different mechanism.We need a different machine.Fortunately, we have some examples.In the 1990s,there were a whole series of scandalsconcerning the production of brand name goods in the U.S. --child labor, forced labor,serious health and safety abuses.And eventually President Clinton, in 1996,convened a meeting at the White House,invited industry, human rights NGOs,trade unions, the Department of Labor,got them all in a roomand said, "Look,I don't want globalization to be a race to the bottom.I don't know how to prevent that,but I'm at least going to use my good officesto get you folks togetherto come up with a response."So they formed a White House task force,and they spent about three years arguingabout who takes how much responsibilityin the global supply chain.Companies didn't feel it was their responsibility.They don't own those facilities.They don't employ those workers.They're not legally liable.Everybody else at the tablesaid, "Folks, that doesn't cut it.You have a custodial duty, a duty of care,to make sure that that productgets from wherever to the storein a way that allows us to consume it,without fear of our safety,or without having to sacrifice our conscienceto consume that product."So they agreed, "Okay, what we'll dois we agree on a common set of standards,code of conduct.We'll apply that throughoutour global supply chainregardless of ownership or control.We'll make it part of the contract."And that was a stroke of absolute genius,because what they didwas they harnessed the power of the contract,private power,to deliver public goods.

And let's face it,the contract from a major multinational brandto a supplier in India or Chinahas much more persuasive valuethan the local labor law,the local environmental regulations,the local human rights standards.Those factories will probably never see an inspector.If the inspector did come along,it would be amazing if they were ableto resist the bribe.Even if they did their jobs,and they cited those facilities for their violations,the fine would be derisory.But you lose that contractfor a major brand name,that's the differencebetween staying in business or going bankrupt.That makes a difference.So what we've been able to dois we've been able to harnessthe power and the influenceof the only truly transnational institutionin the global supply chain,that of the multinational company,and get them to do the right thing,get them to use that power for good,to deliver the key public goods.

Now of course, this doesn't come naturallyto multinational companies.They weren't set up to do this. They're set up to make money.But they are extremely efficient organizations.They have resources,and if we can add the will, the commitment,they know how to deliver that product.Now, getting there is not easy.Those supply chains I put up on the screen earlier,they're not there.You need a safe space.You need a place where people can come together,sit down without fear of judgment,without recrimination,to actually face the problem,agree on the problem and come up with solutions.We can do it. The technical solutions are there.The problem is the lack of trust, the lack of confidence,the lack of partnershipbetween NGOs, campaign groups,civil society organizationsand multinational companies.If we can put those two together in a safe space,get them to work together,we can deliver public goods right now,or in extremely short supply.

This is a radical proposition,and it's crazy to thinkthat if you're a 15-year-old Bangladeshi girlleaving your rural villageto go and work in a factory in Dhaka --22, 23, 24 dollars a month --your best chance of enjoying rights at workis if that factory is producingfor a brand name companywhich has got a code of conductand made that code of conduct part of the contract.It's crazy.Multinationals are protecting human rights.I know there's going to be disbelief.You'll say, "How can we trust them?"Well, we don't.It's the old arms control phrase:"Trust, but verify."So we audit.We take their supply chain, we take all the factory names,we do a random sample,we send inspectors on an unannounced basisto inspect those facilities,and then we publish the results.Transparency is absolutely critical to this.You can call yourself responsible,but responsibility without accountabilityoften doesn't work.So what we're doing is, we're not only enlisting the multinationals,we're giving them the tools to deliver this public good --respect for human rights --and we're checking.You don't need to believe me. You shouldn't believe me.Go to the website. Look at the audit results.Ask yourself, is this company behavingin a socially responsible way?Can I buy that productwithout compromising my ethics?That's the way the system works.

I hate the ideathat governments are not protecting human rights around the world.I hate the ideathat governments have dropped this balland I can't get used to the ideathat somehow we can't get them to do their jobs.I've been at this for 30 years,and in that time I've seenthe ability, the commitment, the will of governmentto do this decline,and I don't see them making a comeback right now.So we started out thinkingthis was a stopgap measure.We're now thinking that, in fact,this is probably the startof a new way of regulating and addressinginternational challenges.Call it network governance. Call it what you will.The private actors,companies and NGOs,are going to have to get togetherto face the major challenges we are going to face.Just look at pandemics --swine flu, bird flu, H1N1.Look at the health systems in so many countries.Do they have the resourcesto face up to a serious pandemic?No.Could the private sector and NGOsget together and marshal a response?Absolutely.What they lack is that safe spaceto come together, agreeand move to action.That's what we're trying to provide.

I know as wellthat this often seemslike an overwhelming level of responsibilityfor people to assume."You want me to deliver human rightsthroughout my global supply chain.There are thousands of suppliers in there."It seems too daunting, too dangerous,for any company to take on.But there are companies.We have 4,000 companies who are members.Some of them are very, very large companies.The sporting goods industry, in particular,stepped up to the plate and have done it.The example, the role model, is there.And whenever we discussone of these problems that we have to address --child labor in cottonseed farms in India --this year we will monitor 50,000 cottonseed farms in India.It seems overwhelming.The numbers just make you want to zone out.But we break it down to some basic realities.

And human rightscomes down to a very simple proposition:can I give this person their dignity back?Poor people,people whose human rights have been violated --the crux of thatis the loss of dignity,the lack of dignity.It starts with just giving people back their dignity.I was sitting in a slum outside Gurgaonjust next to Delhi,one of the flashiest, brightest new citiespopping up in India right now,and I was talking to workerswho worked in garment sweatshops down the road,and I asked them what message they would like me to take to the brands.They didn't say money.They said, "The people who employ ustreat us like we are less than human,like we don't exist.Please ask them to treat us like human beings."That's my simple understanding of human rights.That's my simple proposition to you,my simple plea to every decision-makerin this room, everybody out there.We can all make a decisionto come togetherand pick up the balls and run with the ballsthat governments have dropped.If we don't do it,we're abandoning hope,we're abandoning our essential humanity,and I know that's not a place we want to be,and we don't have to be there.So I appeal to you.Join us, come into that safe space,and let's start to make this happen.

Thank you very much.

(Applause)