Learning Objectives
• Name the core labour standards of the International Labour Organization (ILO).
• Describe cases of labour rights violations that commonly occur in global supply chains.
• Evaluate the arguments for and against sweatshop labour.
• Identify institutional responses at different levels to improve working conditions in global supply chains.
Introduction: Globalisation and Global Supply Chains
Globalisation is often defined as a process of increasing economic, social, political and cultural interconnectedness. While globalisation is certainly not a new phenomenon, as international trade has always been part of human history, the speed and scope of globalisation has increased substantially in recent years. Over the past two decades, globalisation has particularly manifested itself in the spread of global supply chains. The income generated in global supply chains has nearly doubled over the past fifteen years. Successive rounds of trade liberalisation, advances in information and communication technology (ICT) as well as the liberalisation of the global financial system and capital markets have substantially reduced trade and coordination costs and have been important drivers for the increase in global trade and the related growth of global supply chains.
Today, countries at all stages of development, ranging from low-income countries to the most advanced, are involved in global supply chains. The expansion of supply chains has also led to a growing specialisation of countries and firms in specific activities or stages in the value chain. Multinational Corporations (MNCs) increasingly outsource activities from industrialised countries to international networks of contractors in both developed and less developed countries. As a consequence, many industries today are characterised by a clear division of labour. In the footwear, garment or electronics industry, for example, MNCs mainly concentrate on value chain activities such as research and development, product design and marketing while thousands of independent contractors in developing countries and emerging economies focus on the often labour-intensive production of goods. These contractors cobble shoes, sew shirts or assemble mobile phones according to exact specifications of MNCs, and are required to deliver high-quality products often according to very tight delivery schedules.
