Abstract
Private regulation has been one of the most vibrant fields of labor regulation in global supply chains, and accordingly, has been heavily studied. Sarosh Kuruvilla provides one of the most comprehensive interrogations yet of private regulation across multiple countries, industries, and regulatory methods in Private Regulation of Labor Standards in Global Supply Chains. Kuruvilla, Professor of Industrial and Labor Relations, Asian Studies, and Public Affairs at Cornell University, analyzes and summarizes a vast amount of quantitative and qualitative data to examine how the 20-plus years of private regulation have affected the extent of compliance and progress in its efforts to establish better labor standards in global supply chains. Building upon a robust body of research that has interrogated this very question, Kuruvilla and his collaborators use several exclusive data sets from auditing companies and clothing brands to adjudicate various findings of the literature, explained through the lens of institutional theory. Through the vocabulary of field opacity, transparency, and decoupling, the book contributes concrete case studies, empirical validation of theories, and policy recommendations for practitioners.
The book is divided into three parts, appropriately titled: Problems, Progress, and Prospects. Part 1 examines the widespread issues in compliance to private regulation, including the unreliability of audit data, data cooking, and what Kuruvilla calls practice multiplicity (p. 48) of multiple regulatory standards present in the industry. These all lead to causal complexity in which it becomes difficult for researchers and policymakers to make sense of the exact determinants of compliance. Part 2 uses data from a private auditing company (AUDCO). Kuruvilla analyzes 21,041 audits from 2011 to 2017 in 10 countries and 13 industries and demonstrates that overall, private regulation has not effectively brought dramatic progress to labor standards. An in-depth look at wages, freedom of association, and collective bargaining standards arrive at similar conclusions, confirming findings of many previous studies. This section additionally adjudicates among several multi-stakeholder efforts in the diversity of ways they have tried to measure, recommend, and impose labor standards. While the evidence concretizes findings of other scholars, the analysis provides necessary nuance through the various cross-sectional examinations of countries, industries, and issues of the field. Part 3 proposes important critiques and avenues for change through qualitative case studies of extant private regulatory efforts, including a critique of the emptiness behind the B Corps label. This section presents a detailed study of a company’s effort to tie sourcing with compliance, and reviews various strategies of effective forms of private regulation. These include a discussion of niche institutions such as the Bangladesh Accord on Building and Fire Safety and Better Work, efforts geared at increasing transparency of company supply chains, and other examples of evidence-based strategies that have proven to be effective. Taken together, the book provides an overview of not just the most prominent problems in private regulation but also crucial insights on ways that companies can engage in practices that respect international labor standards.
The book provides a compelling theoretical framework, drawing upon institutional theory to explain the ways in which field opacity contributes to decoupling policy from practice in many companies that rely on labor in global supply chains. Drawing on institutional theory’s insights on decoupling reveals the ways that, intended or not, private regulation, by the structure of its diffusion, has led to futile attempts at improving labor standards. Dynamics of isomorphism prompt firms in the field to adopt private regulation as a symbolic practice, without integrating labor regulation to its core activities, such as in their sourcing practices. This, coupled with the multiplicity of standards existing in the field, lead to field opacity. Furthermore, Kuruvilla’s discussion of the ways that field opacity leads to complex causality contributes a new vocabulary to the literature. The discussion, however, contains an assumption that identifiable causal processes uniformly operate across multiple contexts. While the analysis is mindful of contextual variation, it seems inevitable that similar processes operate differently from one another, depending on historical contingencies and the legal environment of private regulation in different countries. Future research could further deliberate on this dynamic to devise solutions for better working conditions in global supply chains.
The methodological approach that combines both quantitative analyses of audit reports and qualitative case studies is highly commendable for its breadth and appropriateness of studying an opaque field. The quantitative analyses included in the volume demonstrate important variation in country- and industry-level effects on various meters of audit reliability and audit scores and their progress across time. However, the qualitative case studies featured throughout the book are also praiseworthy for revealing previously hidden insights. In particular, the in-depth investigation of online advertisements of audit-consulting companies that help factories “cook” audit data would come as a shock to many readers. While this practice has been suspected by many, the specific ways that the audit-consulting industry works and finds customers add much-needed texture and confirmation of unreliability for scholars and practitioners who examine studies and policy reports that heavily rely on audit data. Similarly, the case study of Pangea’s 7-year process of organizational restructuring to align sourcing to compliance metrics is an important and necessary example of organizational processes that look toward best practices, which would be helpful for both practitioners and academics. Kuruvilla’s identification of the data-driven approach and the necessity of shared tools, infrastructure, and strategy are valuable for showing how companies may “recouple” policy to practice. Comparative studies of companies’ efforts to link sourcing and compliance across dissimilar contexts would add further insights on how generalizable this approach could be.
The policy recommendations based on this empirical study are particularly noteworthy for the detailed discussion of practices that companies may adopt. Echoing findings from Richard Locke and colleagues on the importance of long-term relationships on compliance to labor regulation, Kuruvilla outlines specific and adaptable tools that enable companies looking toward organizational change, such as commodity price indexing and category-based sourcing. Kuruvilla also builds on calls by many scholars to increase the transparency of supply chain practices to outline ways that evidence-based sourcing decisions could lead to better respect for labor standards and the bottom line. By coupling efficient sourcing allocations to long-term relationships, companies can practice both streamlining processes and complying to international labor standards through the establishment of long-term relationships with factories to incentivize compliance. Findings related to the ways that collective bargaining increases compliance also point to governments’ responsibility to provide legal and regulatory buttress for democracy in the workplace.
Kuruvilla does not hesitate to provide a much-needed, nail-in-the-coffin critique of the current system of private regulation through comprehensive data and review of literature. Private regulation has evolved into an industry of its own, with fewer results than expected, save for the mostly symbolic but profoundly flawed system that works mostly through undermining customer expectations. This book is excellent in that it not only provides a well-explained background of the problem of private regulation in global supply chains but also builds upon previous research to add texture to arguments made by scholars such as Mark Anner, Matthew Amengual, Jennifer Bair, Stephanie Barrientos, and Richard Locke, sorting through the complex web of incentives, decoupling, and opacity of global supply chains. Private Regulation of Labor Standards in Global Supply Chains would be helpful as a textbook for students learning about labor in the global economy, as well as for practitioners who grapple with the day-to-day problems of managing information, sourcing strategies, and compliance outcomes of supply chains around the world.