Should the US government track the working conditions at its apparel suppliers ?

An article in the New York Times titled “Buying Overseas Clothing, US Flouts its own advice” (December 22, 2013) describes the $1.5 billion in clothing purchased by the US government and working conditions at its suppliers. Contracts for clothing for the Marines was being made at a Bangladeshi plan that used child labor. Defense officials blocked plans to require their suppliers to follow recommendations by the labor department regarding factory conditions, claiming that costs would go up by over $500K. Should the US government be required to adhere to supplier audits that guarantee ethical sourcing ? Should the higher cost of such ethical sourcing be accepted as a necessary condition for sourcing ? Should manufacturing locations for all US government purchases be required to be made transparent ?

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21 Responses to Should the US government track the working conditions at its apparel suppliers ?

  1. Christine Rasquinha says:

    Although, the US government should adhere to the standards of ethical sourcing, the supply chain that the US currently works with will not make it easy to identify the path at which goods are coming from. Based on the New York Times article, the US is usually purchasing from contractors. These contractors are working with other individuals to procure the garments. Additionally, the supply chain could be much deeper in terms of who and how the materials are supplied to the garment developers. In looking at the chain, the US would have to oversee multiple pieces of the chain because their contractor may be focused solely on their bottom line. Even if the US says they are willing to pay for the ethical sourcing, it doesn’t mean that their contractor will pass these savings on through the entire supply chain. By forcing each part of the chain to become transparent, it may increase the pressure for each aspect of the supply chain to improve conditions in order to save face toward the public which is an important cultural element for some of these countries.

  2. Sarinah says:

    The challenge would always be in implementing laws and audits because of the many intermediate layers in the supply chain. Although getting the “best price” is an agenda, an online article from the Human Rights Watch stated that there is a growing trend for “supply chain transparency” which the workers, unions, and nongovernmental organizations themselves can address to the apparel companies as part of their “corporate accountability” to build credibility. But a challenge still remains since not all countries share the same rules and regulations outside the U.S.

  3. Eric Zheng says:

    The US government, among all of those defined as “business customers”, should bear the responsibility of making sure that their supplies are not coming from sweatshops, especially those use child labor. Due to the government nature, procurement personnel from the United States government possess high negotiation power to squeeze the profit margins of their suppliers, which may push the vendors to compensate elsewhere, maybe by using the cheapest labor possible, regardless of ethical concerns. In the meantime, this government nature gives the purchasing people necessary resources to dig into the seemingly low prices on the table and require the opposite side to provide a clear cost composition to justify such low figures. As far as I’m concerned, the US government has to take the lead in ethical purchasing in order to even be able to regulate huge players in other markets that are known for using sweatshops extensively.

  4. Xin Wen says:

    Even the costs would increase by over $500K, the US government should do the ethical sourcing. It is not only about the costs, but also about the child labor which has zero tolerance. The US government has a chance to find a standard manufacturer with low cost, because the quantity is large and the government and the manufacturer could be a long-term relationship. Of course, these kinds of purchases by the US government should be transparent. However, to achieve the ethical sourcing still has a long way to go. Maybe the government should make some regulations and form a department to deal with this issue.

  5. Adam Davis says:

    The U.S. government should adhere to such supplier audits and accept higher costs of ethical sourcing for two reasons: it ought to, and it can. The first point is that because the U.S. has been a world leader on human rights conventions to stamp out child labor and the deplorable conditions in factories associated with it, it would be hypocritical for the government to turn a blind eye to the abuses that occur in the countries that it procures from. Furthermore, the government does not face the same pressure to cut costs as private industry does. It is well known that the U.S. Department of Defense in particular already has a bloated budget in terms of weapons systems, and it’s difficult to see how some of this money could not be put to better use in ethical sourcing.

  6. Anzi Peng says:

    Beside the profit and cost, another important indicator that US government and enterprises should seriously take into consideration is the “sustainability” of organizations. As a leading super power, US government has the responsibility to standardize the supply chain environment in order to regulate all the unethical issues such as child labor. What I’m concerned about is even the costs go up by over $500K, the scenario of child labour won’t be diminished. Those profits will be directly go to those public servants or owners of the factories. Child labours are less likely to gain any advantage from these $500K. Therefore, this is not something about the cost. Government intervention is urgently required

  7. mfoust35 says:

    The fact that the US government does not adhere to some form of supplier audits, or at least does not strictly enforce them, is abhorrent. Basically, we are allowing the US government to be above the law if they do not abide by what other companies have to do with regard to supplier auditing. The higher cost of ethical sourcing is the only way to run business. Furthermore, all manufacturing locations for all US government purchases should be required to be transparent so that the public can hold the government up to ethical standards. All of this said, even if the government were to ethically source the needed materials, there would always be new suppliers who would cover up their unethical practices and would offer a lower cost to compete with the current suppliers. In essence, the only way to avoid unethical sourcing would be to completely stop it at the base level, in the sourcing areas themselves. But this idealistic view is impossible for all practical purposes. Despite this, the US government should do their due diligence to avoid and be publicly accountable for unethical sourcing.

  8. Murilo Siqueira says:

    Basing our analysis 100% on ethical values, it is unacceptable to buy products from suppliers that use child labor. Since the US Government enforces laws to prohibit this behavior, it shouldn’t be the one to go against its own principles. Thus, audits should be part of it. Whether it is up to the Government to run the audits, or the contractor, the information should be included in the sourcing contract.
    As the Government usually represents an entire nation, they should make all transactions public, and use their power and ability to pool demand to reduce costs so that they can gather better supply offers.
    Offers including child labor shouldn’t even be considered as part of the auction, so they do not provide a realistic benchmark for prices.

  9. Man Lu says:

    Ethical purchasing is always the important point in the supply chain. I think the US government should do the ethical sourcing. Everyone involved in purchasing and supply management in an organization should be aware of the organization’s ethical policy and be actively encouraged to embrace its principles. If the government doesn’t adhere to ethical purchasing, ethical problems cannot be solved. The government, as a buyer in the supply chain, is responsible for keeping the supply chain be ethical. It can push suppliers to manufacturer ethically.

  10. Koustuv Pal says:

    On one hand the US government represents the world’s most powerful economy and by not adhering to ethical standards it will set a wrong precedent to the world at large. But again the US government is not responsible for the factory standards where the apparel is produced and in this case the responsibility lies with the Bangladeshi government to ensure that the country’s labour standards are kept high. When it comes to ethics no cost is too high however the key difference again is between owning and buying. If the US government decides to own the supply chain,which is the reasonable thing to do, it can both be ethical and set the standards for the world to follow. As suggested earlier when it comes to ethics transparency is the key. So all manufacturing locations for US government purchases should be made transparent unless there is some pressing strategic need to conceal any particular location.

  11. Amer Nasrawi says:

    Absolutely yes! Double standards and hypocrisy should not exist in any government venue. This will not only hurt the cause, but it will give a leeway to other government agencies and private sector agencies to take the same route. However, the government does not fear the threat of boycott like private sector retailers like Walmart would. Such lack of constraints is taking pressure off of the government and making such dealings seem okay.
    One way to counter this is bringing wide publicity to the issue and creating public reaction that will create alternative type of pressure on the government.

  12. Milind Patel says:

    Basically, the question is should the U.S. government’s contractors continue to acquire clothing from suppliers using child labor and poor factory conditions, or spend an additional $500K (with current spending of $1.5 billion annually)? Clearly it should be pay the extra cost of $500K because child labor in very unsafe factories in Bangladesh, and anywhere in the world, should not be supported. Supplier audits should be implemented to guarantee ethical sourcing. The article mentions trade barriers and allowing manufacturers to move from country to country looking for cheaper labor, as well as free-trade zones contributing to driving labor wages lower and lower. This could be an area where legislators can work on improving, however it is very difficult and lengthy to improve laws involving international governments. Another area where the article mentions a push being made, is requiring agencies to let the public know about their contractors and put the addresses for factories out. Along with information on all players in the supply chain, this should be a good starting point for congressman to go after to get ethical sourcing.

  13. Huaijing Lin says:

    WTO regulates legal trading requirements regarding government procurement procedure across national borders. As one of founders of WTO, US Government has pledged to comply fair trading regulations of WTO, which against child labor, unfair salary, hazardous working environment etc. Besides, US domestic law also specifies working conditions and laboring as parts of trading agreement, in which enforcement agencies are also involved.

    Just as cost and specifications, ethical sourcing should be a part of contractual obligation. Any intent or unintentional breach of ethical terms shall lead to termination of contract regardless of cost. As a buyer in transactions, US Government is entitled ultimate discretion to make the call. Additional contractual endorsements might be underwritten when US Government is trading with parties located in non-WTO countries or at where government intervention is widely absent.

    Transparency could be problematic if several international trading intermediaries are in the loop. Establishing an effective tracking system in-house could be costly and time consuming for government. One possible easy solution is to procure from intermediate merchants or dealers which have proven ethical records, and therefore can delegate responsibility of due diligence to their hands.

  14. Kyle Fithian says:

    The US government should be required to adhere to supplier audits that guarantee ethical sourcing. They should follow the same recommendations laid out by the labor department. There is no reason the government should be exempt from these ethical standards.The higher cost is something that will be a byproduct of increased sourcing scrutiny. However, the benefits are that the government will have greater concern for their supply chain. This can lead to increased efficiencies and better quality. I do not believe all manufacturing locations for government purchases should be made transparent. Although the government should be transparent in its business, there can be national security risks related to disclosing manufacturing contracts. It may be the case that certain types of contracts, or non-defense related contracts can be made more transparent.

  15. Jutong Cui says:

    In any country, employing child labor is prohibited. Although the target of sourcing is to generate cost-savings, the restricted zones, such as ethnic issues can’t be violated. Regulations on rigid supplier audit and ethnic sourcing need to be carried out by the government.
    Sourcing is not only about cost reduction, it also has to be responsible for the product quality and brand reputation. Having suppliers using illegal child labor may be broadcasted by media and leave a bad impression on the customers. Hence, higher cost of supplier audit and information transparent is worthwhile preventing such bad news from happening.

  16. Xiaodan Liu says:

    No matter which country that US government are sourcing from, they should all adhere to supplier audits that guarantee ethical sourcing, especially the use of child labor should be prevented at any region. However, the sourcing process is normally out of US government’s control, the local supplier will try to lower their cost but still can generate the highest profit, by doing so, they will use child labor or violate ethnic rules. US government should take the responsibility to guarantee ethical sourcing, along with it the cost will be high and there will be more people involve for just monitoring the sourcing process. But it is hard that manufacturing locations for all US government purchases be required to be made transparent, there will always be something out of control, and some sourcing country will not allow US government to monitoring their working process. The best way to do is when picking the supplier, pick from those with good reputation or has past ethical records. It will rise the cost, but still will be a better option for US engorgement, which can make sure they follow the ethical rule without violation.

  17. Saravana says:

    Ethical sourcing is certainly essential to keep up the image of such big organizations as US military, marines etc. Implementation of end to end transparent system, audits and assistance at tiers 3, 4 suppliers would require huge funds. This fact should not be used to justify child labor at suppliers’ end.
    One such example of ethical sourcing is the conflict diamonds from Kimberley diamond mines at South Africa. Diamond mining in African countries such as Congo, Sierra Leone etc. employed slave labor who were exploited severely. Several nations such as Australia, China, India, USA came together and adhered to Kimberley certification process with a goal of eliminating trade of conflict diamonds in the world. Kimberley process kick started when people (customers) didn’t want to purchase a diamond that was produced as a result of slave labor. Hence, diamonds are required to be certified to ensure that they are ethically sourced. Several companies adopted block chain technology that provides information to customers about end to end sourcing details of the diamond they wish to buy.
    Similarly, US government should convene meetings with supplier countries and implement ethical sourcing in a much larger scale. US government can partnership with countries that have similar ambitions and thus can sustain its goodwill.

  18. Shashank Chinnolla says:

    Ethical practices in business or any procurement activity is kind of an unsaid guideline to be followed by any organization. If it were the US government then this should be upheld to the highest standards. The government is a body which is looked up to by all forms or individuals and organizations. If it does not follow these guideline then another Rana Plaza Collapse (http://www.stern.nyu.edu/sites/default/files/assets/documents/con_047408.pdf) would be in the pipeline. Though such incidents do not effect the bottom line of the books, the example that such incidents set forward including the bad publicity would have unforeseen situations arise. At such point in time other profit organizations would follow the same route and probably lead to similar situation. Even though the manufacturing locations of the US government might not be possible to be made transparent the activities should be audited by an independent third party for unethical practices and it should be held accountable for its actions.The higher costs leading to the ethical practices can always be nullified by improving the overall efficiency of the supply chain by better manufacturing practices, optimization of logistics and building competition among the suppliers.

  19. Vinay Gundam says:

    The USA as a world leader and torch bearer of labor and human right issues has a responsibility to set a standard in addressing these ethical issues. If government agencies also operate like corporations then there is no value in championing the rights and values of employees in other countries. Increasing supply chain transparency will definitely increase costs as inspection is required at multiple levels. Instead of absconding responsibility of ethical sourcing in the name of budget, government agencies can put an more effort in and reducing costs by optimizing the supply chain with few middle men and more certified suppliers. Doubling the less than a dollar wage per hour for labor in the supplier country will have a significant impact on their lives than a dollar increase in the price of the clothing in US. I think the budget for government agencies should be decided not on the current cost trend but on how much it would cost to manufacture the same clothing in US to do justice to the moral stand it portrays.

  20. Senthil says:

    The manufacturer should have control over the entire supply chain and held responsible for any unethical activities practiced by suppliers. So, US Governments has to implement rules for auditing suppliers to ensure that they are not violating any labor conditions. Supplier’s method of manufacturing and their business practice should be transparent to prevent malpractices. If a supplier is caught for any unethical practices, it will directly affect the brand of the owner (manufacturer) of supply chain. In this case, suppliers manufacturing Marine clothes should be audited in regular periods to ensure that they are sticking with labor laws.
    The cost associated with adhering to the ethical sourcing has to be accepted as default supply chain cost. Company’s brand name is defined by how they are approaching the situation and doing the right thing. So, cost associated with ethical sourcing has to be accepted as part of operational cost. The efficiency of supply chain is determined by how transparent the information flow is between the entities in supply chain. Information about manufacturing locations for all US government purchases is not required to be transparent. However, suppliers of US government should be audited by US government to ensure that ethical sourcing is practiced by all the players in the supply chain.

  21. Manita Dagar says:

    When it comes to matters of basic human rights, there should no other option but to stand by these rights. Any nation, any company is not above it. So,US Government should adhere to supplier audits that guarantee ethical sourcing.
    Now a days, there is more awareness about the ethical sourcing of products and end customers want to know where the products originate from, even for products such as coffee, diamonds, food etc. Making manufacturing locations for US government purchases transparent might have its own organizational constraints, but it will add value to the brand name of the organization.
    So, an organization which is solely discounting the humanitarian value of ethical sourcing by reduction in costs, is not looking at the bigger picture. It should not even be a question. They can look for other avenues, from where they can still achieve the reduction in costs but source their products ethically. Neglecting and ignoring any practices which are carried by their suppliers and which violates any basic human rights is equal to participating in such practices. It also have an impending effect of other companies following the suite without facing consequences.

    So, when setting an example, why not set a good one!

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