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Bachelor ThesisDepartment of Business Studies
Uppsala UniversitySpring 2009
CORPORATE APPROACHES TO CHILD LABOUR– a Northern European Perspective -
Author:Isabelle Fredborg
Supervisor:Peter Thilenius
1
Abstract
The purpose of this thesis is to examine what approaches large food retailers have to child labour.
The study examines companies in Sweden, Norway, Denmark, Finland and Germany.
In order to analyze the findings, a framework for comparing codes of conduct and a matrix for
measuring effectiveness developed by Kolk and van Tulder (2002a) are used, as well as the model
for comparing the companies' approach to ethical issues by Leeson (2000). Empirical data are
collected through self-completion questionnaires and e-mail interviews. Additional second-hand
data comes from the corporate websites as well as from other organisations.
The main findings show that the companies repeatedly referred to Business Social Compliance
International (BSCI), International Labour Organization (ILO) and/or United Nations (UN). There
are large differences between how much information on ethical issues companies present on their
corporate websites, and how thorough the codes of conduct are. The approaches to child labour vary
between companies, not between countries as much as between differently sized companies and
companies with different price segments.
Key words: child labour, code of conduct, corporate social responsibility, food retail industry
2
Table of contents
Table of contents1 Introduction.......................................................................................................................................4
1.1 The Purpose of the Thesis..........................................................................................................52 Theoretical Section............................................................................................................................6
2.1 Child Labour, a Business Matter?..............................................................................................62.2 Corporate Responsibility as a Strategy......................................................................................7
2.2.1 The ”Three-I” Model..........................................................................................................72.3 Codes of Conduct.......................................................................................................................9
2.3.1 Comparing Codes of Conduct..........................................................................................102.4 Consequences of Actions.........................................................................................................112.5 The Effectiveness of Corporate Approaches to Child Labour.................................................122.6 Developing a Model for Discussion........................................................................................132.7 Summary..................................................................................................................................13
3 Methodology....................................................................................................................................153.1 The Respondents......................................................................................................................153.2 The Gathering of Primary Data...............................................................................................17
3.2.1 Self-completion Questionnaires.......................................................................................173.2.2 Answering Open Questions..............................................................................................173.2.3 The Interview Questions..................................................................................................18
3.3 Secondary Data........................................................................................................................183.4 Operationalization....................................................................................................................193.5 The Role of Sedex....................................................................................................................193.6 Ethical Concerns......................................................................................................................20
4 Empirical Data.................................................................................................................................214.1 Minimum Ages........................................................................................................................214.2 Alternative Measures in the Code of Conduct.........................................................................224.3 Monitoring...............................................................................................................................234.4 Actions.....................................................................................................................................254.5 Preventing Child Labour..........................................................................................................274.6 Other Organisations.................................................................................................................274.7 Summary..................................................................................................................................28
5 Analysis and discussion...................................................................................................................295.1 Minimum Ages........................................................................................................................295.2 Alternative Measures in the Code of Conduct.........................................................................295.3 Monitoring...............................................................................................................................305.4 Actions.....................................................................................................................................315.5 Differences within the Sample.................................................................................................32
6 Conclusion.......................................................................................................................................346.1 Suggested Further Research.....................................................................................................35
7 References.......................................................................................................................................36
3
1 Introduction
”No man is an island, entire of itself” – John Donne (1571-1631), Meditation XVII
What Donne once wrote about man is now very true even in the corporate world. The world of
today is an interconnected world. This has led to a number of changes during the last couple of
years in the relationship between buyer and supplier. In an increasingly globalized world,
production in low-wage countries has become the norm for companies wishing to compete on the
international market. New IT and technical solutions have given automated systems between buyer
and supplier, where Just-in-Time is more important than Just-in-Case. The supply chain has become
an important cogwheel in the gigantic and complex machinery that the multinational corporation is
today. These changes have affected all markets, and this thesis will concentrate on large food
retailers and how they handle ethical issues. The technical development has not only facilitated
communication between buyer and suppliers, but also substantially facilitated the spreading of
sensitive information, making ethical awareness necessary. Uncomfortable pictures can easily be
spread worldwide within a matter of minutes, and for especially big brands, this has lead to a need
of finding possible scandals before the media. For example, after declining responsibility for the
labour conditions in its Asian sweatshops, Nike was forced to take responsibility after negative
reactions and protests. This lead to a larger public awareness and media coverage as well as
extensive academic research within the field (Emmelheinz and Adams, 1999; Zadek 2004).
Apart from scandals such as the one mentioned above, communicating sustainability and corporate
responsibility will become increasingly important for other reasons. Reports such as the Climate
Change 2007: The Physical Science Basis (IPCC WGI, 2007) affects not only public opinion but
will within time make the United Nations and the European Union regulate sustainability practices
in public, private and business sectors.
Sustainability issues have in later years become more and more important when discussing supplier
relationship. Earlier studies focusing on sustainability in supply chains have often treated the
apparel industry, that also gets larger coverage in media, or industrial production (Linton, Klassen
and Jayaraman, 2007). Articles on sustainability often focus on environmental aspects (Sarkis,
2003; Preuss, 2005; Van Hoek, 1999), and lists this focus as a source of competitive advantages
(Porter and Linde, 1995).
4
This paper will look into the food retail industry, where ethical concerns are several. The consumer
is on a daily basis faced with the use of pesticides, preservatives and improvers, and has to make
decisions when it comes to genetically modified products as well as labour conditions for workers.
This is mirrored in the efforts of the companies. When earlier studies have treated the food industry,
it has often been the US market (Maloni and Brown, 2006). Studies that focus on the food industry
in Europe have given a broader view of the situation on the European market, treating each
respective country briefly and with a more environmental focus (van der Grijp and den Hond,
1999). Child labour has rarely been treated in academic papers on the food retail industry, but is
interesting as it can jeopardize a company's reputation and credibility, as well as cause legal
problems for the company.
1.1 The Purpose of the ThesisThe purpose of the thesis is to examine what approaches large food retailers in five Northern
European countries use to child labour. The paper is written for the non-profit membership
organisation Sedex (Sedex, 2009)1.
To realise the study, a mix of a quantitative and a qualitative approach will be used, with
selfcompletion questionnaires and e-mail questions to the persons responsible for purchasing and
ethics within the respective companies. The respondents will consist of the largest food retailers in
each country. To carry out the study, theories on codes of conduct and corporate behaviour in ethical
issues will be used.
Hopefully this paper will give Sedex a better understanding of today's situation in the food retail
industry in the countries studied, as well as give Sedex' members, of which many are in this
particular industry, an overview. Apart from that and the aspiration to make a contribution to
knowledge, this paper intends to facilitate future collaboration between companies as well as
improvements of sustainability practices by recognizing the existing practices. No, or very few,
studies have so far been made on how food retailers in Northern Europe handle child labour.
1More information on this, for example the selection of countries, can be found in the methodology
5
2 Theoretical SectionThe theory section will start by pointing out the connection between child labour and business, and
how corporate responsibility can be used as a strategy. Apart from the provided literature review,
the used theories are a framework for comparing codes of conduct and a matrix for measuring
effectiveness developed by Kolk and van Tulder (2002a). The model for comparing companies'
approach to ethical issues by Leeson (2000) was also used. The theories are based on existing
literature and theories, as well as large empirical testing. In the case of Kolk and van Tulder (1999),
a thorough analysis of 132 corporate codes of conduct was done, followed up by application on
other companies (2002a; 2002b). Kolk and van Tulder's framework for analysing corporate codes of
conduct was also used when developing the research questions, and for coding and categorizing the
findings. The consequences of companies' actions and the development of a model for discussion
finish the theory section.
2.1 Child Labour, a Business Matter?A company can no longer afford to neglect issues such as child labour, wages, safety and
environmental impact, as they affect the company's reputation and therefore its sales. The
connection between stakeholder theory and corporate responsibility has become increasingly
important (Clarksson, 1995; Harrisson and Freeman, 1999; Ruf, Muralidhar, Brown, Janney and
Paul, 2001). Corporate responsibility contributes to stakeholder value, as the company has
commitments to not only investors but to customers, employees, societies and the environment as
well (Mathur and Kenyon, 1997).
Even if investments in corporate social responsibility are expensive and not always give a clear
effect, several benefits can be seen. Social responsibility creates goodwill that results in new
opportunities (CSR, from risk to value, 2008, p. 20). From a stakeholder and shareholder
perspective, responsibility issues are increasingly important. Investors have incentive to invest in a
company that works with responsibility, as it decreases the risk for large scandals that easily can
become very costly (Sheth, Range & Anand, 2009). While employees might be seen as committed,
indifferent or dissenting (Rodrigo & Arena, 2008), large studies show that the interest among
employees for ethical issues has increased (Ethical Corporation, 12 September 2003; Brammer,
2006; MacDonald, 2008). Today, companies' commitments might be crucial for succeeding in
recruiting top talents (CSR, from risk to value, 2008, p. 20).
6
2.2 Corporate Responsibility as a Strategy”Corporate responsibility is not just about meeting obligations, but even more importantly aboutlifting strategic objectives” (Ericsson Corporate Responsibility Report, 2006, p. 2).
Should companies be content with following a minimum of rules, or work actively with these
issues? The approach to child labour becomes a strategic one. By doing more than the average
company when it comes to social responsibility and more than just reaching the legislated minimum
level when it comes to such issues as working hours, minimum ages and environmental concerns, a
company can gain a competitive advantage (CSR, from risk to value, 2008, p 20). Even if the work
on responsibility should be seen as corporate philantrophy, this can become a competitive advantage
that enhances the firm's long-term profitability (Porter & Kramer, 2002). It has been discussed that
corporate responsibility might lead to better financial performance (Orlitzky, Schmidt & Rynes,
2003). Though it is difficult to prove a financially measureable benefit (Margolis & Walsh, 2003;
Ougaard & Nielsen, 2002), it can create a valuable asset for the future (Carroll, 1999).
Companies should choose to focus their commitment to societal issues close to their interests, ”a
meaningful benefit for society that is also valuable to the business” (Porter & Kramer, 2006). By
making decisions on the approach to corporate responsibilty, the company can choose to take a
more active role. A more active role can be used not only for enhancing the company's reputation,
but also to attract customers and facilitate new business.
2.2.1 The ”Three-I” ModelA model on the corporate approaches to human rights have been developed by Leeson (2000). The
”Three-I” model, based on 26 interviews with
21 companies, explains the corporate
approaches to human rights (Model 1).
Starting with ignorance, companies do not
know that their policies and actions may get
consequences for human rights further down
the supply chain. After companies becomes
aware, they either act with indifference or
7
involvement. Indifference is when the company realises the impact its actions have on supply chain,
but chooses not to act or acts only because of regulations (Leeson, 2000).
The other option, involvement, is when companies shows concern for the situation and is aware of
their impact on human right issues. They might act for example by using monitoring or auditing,
cooperate with non-governmental organisations or take part in discussions in trade associations.
These companies might work not only with their perceived responsibilities, but also go beyond that
and take a larger societal perspective. By taking a leading position, the companies can use the
involvement strategy as a part of creating the competitive advantage in sustainability suggested by
Porter and Linde (1995). When showing concern and choosing to act with involvement, there are
two further strategies that divide the actions of the companies: disengagement and engagement
(Leeson, 2000; Winstanley, Clark & Leeson, 2002).
The disengagers take responsibility for human rights issues such as child labour, but with a more
strict approach. Codes of conducts and international regulations on abolishing child labour might
make a company choose new suppliers if improvements are not made fast with the old ones. Much
time and money are spent on guaranteeing that factories are free from child labour (Leeson, 2000).
Breaking of the contract with a supplier in order to immediately save the company's reputation is a
short-sighted solution, as it does not help the company, the supplier or the employees (Neef, 2004,
p. 214-215).
The engagers, on the other hand, look at human rights issues in a larger context. The important
thing is not that the factory is ”clean” from problematic issues, but that a more pragmatic approach
is used. Instead of avoiding troubled factories or areas of the world were child labour might occur,
the company recognizes that child labour ultimately is a question of poverty. By having very strict
codes of conduct, other problems such as gender inequalities can also become an issue. As women
because of cultural issues might be prohibited from working in the same room as men, alternative
methods such as registered working groups can be used, in order not to increase gender inequalities
by letting the women go. This makes it difficult to guarantee that child labour is not used, but
provides a better societal solution than other alternatives (Winstanley, Clark & Leeson, 2002;
Leeson, 2000).
The engagement approach has received more criticism than the disengagement approach, but is seen
as a way of long term improvement, as the poverty issue that is the origin of child labour is treated
8
(Leeson, 2000; Winstanley, Clark & Leeson, 2002; Neef, 2004, p. 215). As said by John Brookes,
CEO of Manaxis, ”it is socially responsible to have kids at work in some of these communities...
because if they are not in the workplace, they are on the streets... ” (Neef, 2004, p. 213).
By engaging in the supplier and working with a long-term relationship, a company avoids or lower
the costs that is concerned with changing suppliers and establishing new business relationships, as
well as the time needed to create trust and knowledge (Neef, 2004, p. 214-5).
The difference between the approaches could, somewhat simplistic, be seen as responding to the
community needs (engagers) opposed to responding to peer group and consumer pressure
(disengagers) (Winstanley, Clark & Leeson, 2002).
2.3 Codes of ConductIn later years, the use of codes of conduct has become more and more widespread. The use varies
with industry, size of company and in strictness and thoroughness. The codes are often adopted to or
based on international standards such as UN (Mamic, 2004, p. 37-45). Stronger international
standards have in the last two decades become less politically accepted, giving a smaller impact on
the companies' actions (Pearson & Seyfang, 2001). This has led to the use of voluntary codes of
conduct. The code of conduct is ”a voluntary measure taken by a private sector firm to impact upon
some aspect of their labour conditions and workforce” (Pearson & Seyfang, 2001, p. 52). When
WTO and governments fail to act, organizations such as Social Accountability International, with its
Social Accountability 8000 (SA8000) become increasingly important. Third-party verifiers are used
in order to eliminate child labour as well as improving wages and working hours (Hirschland, 2006,
p.115).
The positive aspect of having a more formal type of ethical statement, such as a code of conduct, is
not only that it sets the standard for the company and its employees, but also shows customers,
suppliers and investors what kind of behaviour that is accepted. This awareness will also assist the
company employees in taking ethics into account in their decision making (Neef, 2004, p. 111). A
reason for avoiding a clearly stated code of conduct can be to avoid media attention on sensitive
aspects (Kolk & van Tulder, 2002, JoBE).
There are serveral challenges in creating a code of conduct. To what extent should the companies
9
apply it? Large multinational companies often use subcontractors where the monitoring of their
suppliers can be difficult. Also, how the code is formulated becomes important in order to establish
whether it is followed or not. Even when the ILO standard or similar is used as a base of reference,
the wording is often vague and with few precise statements that can be controlled or measured. This
also makes it difficult to compare the codes (Pearson and Sayfang, 2001).
Another large challenge is how to define what a child is and what child labour is. According to the
UN, a child is defined as a person below 18 years of age (UN Convention on the Rights of the Child
article (i)). However, the standards are not set in stone; for example, the Indian Penal Court (IPC)
defines a child as being 12 years of age or less, while International Labour Organization (ILO) have
different minimum ages depending on the nature of the work, with lower minimum ages for
developing countries (ILO, 2009). To choose the minimum age becomes complicated, as the
company can choose to follow standards by UN, ILO or some other international organization, the
host-country standards or home-country standards.
When defining child labour, there is a scale with two extremities. In one end, we find child work
that does not hinder the child from attending school, is not dangerous or too physically demanding,
such as delivering newspapers or selling strawberries. In the other end of the scale there is
hazardous work, were children work in mines or other dangerous work, often with long working
hours, low wages and without sufficient safety arrangements (Kolk & van Tulder, 2002b).
UNICEF's definition of child labour is ”work that exceeds a minimum number of hours, depending
on the age of a child and on the type of work” (UNICEF, 2009). In order to facilitate the process,
many companies choose to regard anything done by a person under a certain minimum age as child
labour (Kolk and van Tulder, 1999).
2.3.1 Comparing Codes of ConductA framework for comparing codes of conduct has been developed by Kolk and van Tulder (2002a;
2002b). Two measurements, specificity and compliance, divide child labour into several parameters
making codes of conduct comparable (table 1).
10
2.4 Consequences of ActionsOnly 5% of the number of child workers are in the export sector. The other 95% are in the informal
sector, e.g. agriculture, domestic labour and selling on the streets (UNICEF, 1997, p.58). Thus, the
companies cannot change the entire societal economic situation by their actions.
The impact of the actions of companies and organisations can be far more extensive than first
expected. Firing the children does not eliminate the problem as the economic conditions have not
changed. Instead, the children are forced to find other work, often in the informal sector were there
is less control (Kolk & van Tulder, 2002a). It has been estimated that because of a total ban of child
labour in the carpet industry in Nepal, 5-7000 children got into prostitution (Basu, 1999). Even
when consideration is taken to change the situation for child workers, the implementation can be
difficult. For example, when child workers are found in factories and given education instead, some
companies choose to locate the education in the factories. But separating the children from the rest
of the workers and treating them differently might alienate them from the group. Also, the children
are rarely aware of the direct causes of why they were included in the educational program
(Winstanley, Clark & Leeson, 2002).
11
2.5 The Effectiveness of Corporate Approaches to Child LabourKolk and van Tulder (2002a) presents a
matrix for the different standpoints a
company can take and the effectiveness that
comes from it (model 2). The matrix shows
four different positions that companies
choose in the debate on child labour. The
companies assumes one of four positions,
depending on their efficiency and if they
have a code of conduct or not.
The first position is when the company supports the corporate codes of conduct's positive impact.
However, too strict sanctions can shift the company to the second position. In this case, the
company has a code of conduct but the negative, unintended consequences spoil the effectiveness.
These unintended consequences can for example be that if compensatory work not is done, the
children find more dangerous work in the informal sector, as strict sanctions force them to leave
their old employment. Too strict sanctions can force suppliers to extend the supply chain further,
which might push child labour and other human rights issues from the formal to the informal sector,
making it more difficult to monitor (Kolk and van Tulder, 2002a).
The third position is when the company effectively deals with child labour by use of other means
than codes of conducts. A reason for not having a code of conduct might be that the company does
not want to get much public attention, as a published code of conduct can be followed up or
questioned. Instead they might prefer to work with human right issues in a more informal way. The
work might be discussions and cooperation with non-governmental organisations (NGOs), UNICEF
or engagement in community programs (Kolk and van Tulder, 2002a).
Companies in the fourth position view child labour as responsibility of the public and society, and
not the company itself. To these companies, following legislation is sufficient.
12
2.6 Developing a Model for Discussion
The theoretical background now presented will serve as a basis for the discussion and analysis of
the findings. Table 1, together with the article by Kolk and van Tulder (2002a) was used in order to
establish the actual definitions of the different positions of the matrix measuring the effectiveness of
the company's behaviour (Kolk and van Tulder, 2002a). This was combined with model 1 (Leeson,
2000) in order to develop a model for discussion (Model 3). For further information on how Model
3 was developed, see 3.4. However, it is especially interesting to note the fact that Leeson's
disengagers can hardly be placed in just one of the positions, but in both position 1 and position 2,
depending on how strict the code is. The engagers use a ”softer” approach with a long-term
perspective, and they have been classified as position 1 also because of their consideration to
societal aspects.
2.7 SummaryThe theory section of this paper has treated the companies' approaches to ethical issues. As shown
by Leeson (2000) and Kolk and van Tulder (2002a; 2002b) there are several ways for a company to
handle child labour. If the company choses a involvement strategy, they can use either an
engagement approach, that is seen as more difficult but with large potential societal gains, or a
disengagement approach, that mainly focuses on clearing factories from child workers (Leeson,
2000; Winstanley, Clark & Leeson, 2002). How effective the codes of conduct are depends on
13
factors such as how strict the code is, if alternative measures are included and how the monitoring is
performed (Kolk and van Tulder, 2002a; 2002b). Codes of conducts have become more and more
common, either own corporate codes or the use of a standardised code such as BSCI (Neef, 2004;
Pearson & Seyfang, 2001).
14
3 MethodologyThis thesis treats how large food retailers handle ethical data on child labour and the effects of
monitoring. Food retailers in five countries (Denmark, Finland, Germany, Norway and Sweden)
have been used for the gathering of empirical data.
The number of large food retailers in the five countries is quite limited as the market in each
country is dominated by a handful players, and the number of suitable respondents on each
company is limited as well. This has made it more difficult to have a quantitative study, as a
quantitative study needs a certain size of the sample in order to be statistically significant. As the
number of suitable respondents was less than the number needed to be statistically significant, a
mere quantitative approach was not used. The empirical data has been collected by choosing
suitable companies in each country (see 3.1). These companies were contacted, and then received e-
mails addressed to the person responsible for ethics, and the person responsible for purchasing. The
respondents received an e-mail with a self-completion questionnaire, that guaranteed a higher grade
of anonymity, and it also facilitated the handling of information. The e-mail also contained some
open questions that were answered directly by e-mail. As different kinds of questions were needed
in order to classify the companies into Model 3, this approach was seen as the most suitable. A
partly qualitative approach was thus needed in order to gain a deeper understanding and be able to
fulfil the purpose of the thesis. Hopefully, this approach will not confuse the reader, but ensure that
the overall quality of the collected empirics is higher.
As the persons receiving the open questions that were the basis for the qualitive data collection were
the same persons that answered the self-completion questionnaire, no analysis of the response rate
will be made. All in all, 15 companies completed the self-completion questionnaires and the
answering of open questions, with a total of 27 respondents.
A deductive method has been used, with the use of already existing theoretical studies as an
instrument for studying and analyzing reality (Bryman & Bell, 2007, p.11-14).
3.1 The RespondentsThe five countries were chosen after discussion with Sedex, based on their expanding membership
base and their area of interest. The five countries are also chosen as they are closely interconnected
15
by trade. A list of the largest retailers of each country was obtained by looking at reports regarding
the food retail industry (USDA Foreign Agricultural Service 2003; 2006; 2007a; 2007b; 2007c,
Datamonitor 2008a; 2008b; 2008c; 2008d). For a list of the companies, see Appendix 1. The food
retail markets in all five countries are dominated by a handful of large players. As these companies
are the largest players, they will also make the largest purchases, have more power to negotiate and
have greater effect on the suppliers than smaller food retailers. In each country, the food retailers
receiving the questions had a collective market share of at least 75%. In order to establish
characteristics for each country, it was necessary to interview several companies in each country as
findings otherwise could have been attributed to corporate differences.
In order to obtain the right information, it is important to choose interviewees that have good
knowledge of the subject (Holme & Solvang, 1997, p.104). The persons chosen for interviews were
responsible for ethics and responsible for purchases. The respondents where considered the most
suitable respondents as they were the persons most likely to handle ethical issues. The reason for
choosing two persons from each company was that even if the two roles are closely connected, they
often have different functions. Following the ethics debate in recent years, many ethics managers
also have a role in creating the image of the company. In order to avoid an unjustly positive image
of the company and at the same time gain a closer point of view on the supply chain, a purchaser
was interviewed as well. This also allowed an adapted set of questions for each role. However,
company structures tend to vary, and the purchaser and the ethics managers were occasionally one
person, depending on the company structure and size of administration. Access to the interviewees
was gained through direct contacts with the companies.
Considering the nature of the subject, there are difficulties with relying too heavily on their
information. Even if suppliers and factories are monitored, they cannot be monitored all the time,
and perhaps only a sample of the factories is monitored. It is thus difficult for the companies to have
full knowledge of the actual situation. Therefore information such as numbers concerning age and
number of working children can only be seen as estimations unless the company has good reasons
to claim something else. There is also a risk that the respondents will try to make the company look
good by giving answers that are not completely true. By using self-completion questionnaires that
ensure anonymity, the risk for this is considered lower.
16
3.2 The Gathering of Primary DataThe method used in order to collect empirical data from the respondents was a combination of
selfcompletion
questionnaires and interviews. After contact with the company, an e-mail with the link
to a self-completion questionnaire was sent out to the respondent. To guarantee anonymity,
www.surveymonkey.com was used to create the questionnaire. The questionnaire contained closed
questions. The e-mail also contained open questions, that opened up for a dialogue with the
respondent. Two respondents chose to complete the open questions in a phone interview instead.
The quantitative data will be presented mainly in percentages, in order to create an image of the
responses. The qualitative data will further develop how the individual companies handle child
labour.
3.2.1 Self-completion Questionnaires
Low cost, easy administration and convenience for the respondents are some of the benefits of self
completion questionnaires (Bryman & Bell, 2007, p.241-242). Because of the sensitive nature of the
subject, a self-completion questionnaire was chosen, as it might improve the quality of the response.
The respondent can choose to spend extra time on difficult questions and can control the
information before answering. Some of the disadvantages of the self-completion questionnaires,
such as the risk of missing data and the difficulties explaining questions (ibid, p. 242-243), are
hopefully weighted out by the e-mail interview.
3.2.2 Answering Open QuestionsThe e-mails that contained the link to the self-completion questionnaire also contained a few open
questions. The respondents were able to answer the questions directly by e-mail, which gave the
possibility to pose follow-up questions in order to clarify the answers. The e-mailed questions gave
the respondents unlimited time to consider their answer and did not force them to share more
information than they were willing to. In two cases, a phone interview was used instead of an e-mail
interview with open questions. Phone interviews were done in order to support the self-completion
questionnaires. A semi-structured interview form was used, and the respondents received the
questions before the interview so that they could prepare themselves. The reason for having phone
interviews waw mainly the respondents' wish to have a dialogue as the subject was sensitive. Phone
interviews give the possibility to be brief and keep costs down (ibid p.214-215). Because of the
17
limited time and resources, it would have been difficult to interview everyone face-to-face.
3.2.3 The Interview QuestionsIn order to improve the design of the questions and get a high response rate, guidelines set by
Bryman & Bell (2007, p.266-217) were used when questions were formulated. An adaption of a
framework by Kolk and van Tulder (2002b), together with the self assessment questionnaire
provided by Sedex, was used for developing questions for the interviews.
A mix of open and closed questions was used. Closed questions are easy for the respondent to
complete and easy to process (Bryman & Bell, 2007, p.261-262). However only using closed
questions would have limited the responses. Open questions allow the respondent to answer more
freely, while at the same time demanding a greater effort from the respondents (ibid, p.259). The
risk that the response rate would be affected by too many open questions was considered. Some
open questions were necessary, and were posed mostly in the phone interviews. The questions were
tested on three persons before being sent out.
3.3 Secondary DataThe interviews where completed with secondary data in order to strengthen the reliability of the
thesis, lessen the impact of subjective information and increase objectivity. Secondary data
consisted mainly of Codes of Conduct2 from the interviewed companies and information from
corporate websites. This information cannot be seen as completely objective as it is presented by the
companies themselves. However, as this information is presented to the public it probably has
higher objectivity, as the companies face the possibility of having to defend unjustified claims.
The secondary data was also used in order to simplify the gathering of information. Reports from
various organisations, such as International Labour Organization and USDA, were used, as well as
articles from major newspapers. One of the problems with using secondary data acknowledged by
Bryman and Bell (2007, p.335-336) is that the control over data quality is limited. Therefore this
information has been gathered from credible sources such as the UN, which hightens the objectivity.
2 Or correspondent. Just as companies use different names for their ethical work (CSR, CR, SR, Corporate Citizenship, etc), they may have different names for reports on their responsibilities. Also, not all companies chose to have a public statement of their ethical decisions, one main reason cited as unwanted media attention (Kolk and van Tulder, 2002b)
18
3.4 OperationalizationThe model for discussion (p.13) was developed by combining the effectiveness matrix with the
framework by Kolk and van Tulder (2002a; 2002b) and the model by Leeson (2000). In order to
make it possible to divide companies into the different positions, clear definitions of the positions
were needed. By using the framework (Kolk and van Tulder, 2002a; 2002b), interview questions
were established. The answers from the questions could then be categorized according to the model,
where the answer on the questions could decide the respondents place in the matrix.
The closed questions made it easy to code and categorize the responses between the positions in the
discussion model (Model 3). As the framwork by Kolk and van Tulder (2002a; 2002b) classified the
scale of the responses (for example strict or broad codes of conduct), something that made it easier
to divide the answers between the different positions. The open questions provided information that
was coded and categorized based on other information from Kolk and van Tulder (2002a; 2002b).
As open questions can give unspecific or unclear answers, follow-up questions were used when
needed. This ensured that it was possible to map the answers within the discussion model (model 3).
In order to gain a deeper understanding in the analysis, discussion and conclusions, corporate
websites were analyzed even for the non-responding companies. The analysis of the websites was
based on Kolk and van Tulder (2002a; 2002b).
The analysis was carried out by comparing the empirical data with Model 3, with the rest of the
presented theory in mind. The conclusions are drawn mainly with the analysis in mind, but also by
noticing general patterns in the collected information.
3.5 The Role of SedexIn order not to loose the academic aspects on the paper and focus to much on satisfying the receiver
of the thesis, the role of Sedex as a receiver of the thesis must be considered.
Sedex does not have, or has not expressed, any specific ideas or wishes on the findings. While
expressing interest for the result, Sedex has not said anything that could be seen as a subjective
view on suitable findings. Nor has Sedex elsewhere stated a clear opinion in this subject, for
example on Sedex' website, that might affect the work. The involvement with Sedex has consisted
mainly in Sedex acting as a discussion partner for the subject of the thesis. Sedex has also assisted
with information on social sustainability, as well as a self-assessment questionnaire normally given
19
to new members. Even if the questionnaire was used as a tool for developing interview questions,
the used model by Kolk and van Tulder (2002) was very similar in concept and based on extensive
research. Apart from that, Sedex has not been involved in the writing of the thesis. Consideration
has been taken to make sure that the thesis is written independently.
3.6 Ethical ConcernsHuman rights are a sensitive subject for many companies, as a bad public discussion can severely
harm the company. It was therefore important to state that all shared information would be strictly
confidential and not traceable to the responding company. The respondents were also notified on the
fact that their participation was voluntary and anonymous. When conducting interviews, it is
important to consider the possible impact on the respondent. In this case, it was seen as crucial to
give the respondents unlimited time when responding to the questions, as they then were free to
consider their answers for as long as they wished. This would further decrease the already small risk
of sharing something that might damage the company and cause trouble for the respondent.
20
4 Empirical DataThe empirical section will start with an overview of the food retail industry, and continue with
presenting information gathered through questions based mainly on Kolk and van Tulder (2002a;
2002b). Their approaches to minimum ages, the companies' alternative measures when child labour
is found and the monitoring are first presented. Then their actions, what they do to prevent child
labour and their use of other organisations will follow.
The food retail industry is generally dominated by a handful of large market players. In the five
countries treated in this thesis, the five largest players in each country accounted for at least 75% of
the market. The large concentration can be seen as a natural evolution, as retailers are able to get
better prices in the purchasing situation, hence being able to give the customer lower prices than
might be possible for smaller players.
In later years, two trends can be seen in all five countries. The establishing of discount stores such
as Lidl, Netto and Aldi have changed the market, and are threatening the old gigants in a market
traditionally stable and with few possibilites for growth. The second trend is that of higher customer
demand for healthier, more nutritious food (Blay-Palmer, 2008, pp. 111-113). Concerns such as
environmental impact, origin and quality of the product have changed the assortment of the stores
(USDA, 2006; 2007a; 2007b; 2007c).
4.1 Minimum Ages
In Table 2, it becomes clear that most respondents had a reference to the ILO and/or UN when
deciding their minimum age for workers. The companies either just mentioned that they followed
UN and ILO, or referred to a specific age (14-15) in accordance with UN and ILO. Only one
respondent did not have a set minimum age for the suppliers. The respondent however claimed that
this was not needed, as the company was a member of Business Social Compliance Initiative and
fully compliant with their organisation and rules. Only one responding company had country-
specific minmum ages, in accordance with ILO or the host-country laws.
21
Most firms made implicit or explicit referals to international standards. The most established
standards were those by UN and ILO, as seen in Table 3.
In order to establish the correct age of workers, birth certificates were used in most cases. This was
done when the worker was hired. Two respondents also mentioned that in addition to controlling
birth certificates, an interview was made were it was assessed if the mentioned age was credible.
4.2 Alternative Measures in the Code of ConductOne Norwiegan respondent said that what kind of alternative measures that were used depended
somewhat on the supplier, as the company itself rarely engaged in those measures. Instead, the
company had an agreement with the supplier to work out standards, something that mostly resulted
in the children being sent to school. The respondent however pointed out that since they got more
regulated auditing and monitoring, the number of employed children had decreased and they were
now rare.
Three of the companies had explicitly written in their code that new recruitment of child labour was
not tolerated. If child labour was already in place, an immediate phasing out would start. It was seen
as important to provide the children with subsistence, and education until they were no longer of
compulsory school age.
22
Three companies had no official concrete measures for what would be done if child labour was
discovered. They made reference to their Codes of Conduct, and one specified that they followed
BSCI:s recommendations. One respondent admitted that it was important to get the children out of
their supplier's production, but even if they wanted to make sure that children got education it was
difficult to guarantee that they did not find work elsewhere. To start an own educational programme
was however not on the company's agenda, as the company felt it was beyond its responsibilities.
Instead it was most important to fulfil the standards of ILO and UN.
Four companies mentioned a specific plan, in case child workers were found. Those plans included
remediation and assuring that the child could attend and remain in school. As a basis for decisions,
one company referred to ILO convention 79, 138, 142, 146 and 182.
Depending on the relationship with the supplier, a Finnish and a Danish company mentioned the
need to support the suppliers in their work for becoming approved in audits. The Finnish company
had found that their Chinese suppliers needed more support and time than first was expected. The
company saw it as necessary to assist the suppliers, if the codes would be implemented within the
company's desired time frame. In order to support the suppliers, the company started its own
monitoring activities in China. The monitoring activitites followed BSCI's standards, and the goal
was to help the supplier to pass the standards of SA80003 and BSCI. The audits showed that child
labour was one of the lesser problems, with other problems with working conditions such as
working hours.
4.3 Monitoring72% of the respondents made reference to Business Social Compliance Initiative (BSCI). BSCI, a
European organization provides a standardized Code of Conduct, which the companies agree to
follow as they sign up for membership. The suppliers should pass a neutral audit against the BSCI
Code of Conduct, and once they have passed it, the audit is recorded in BSCI's database. One
respondent saw BSCI as a possibility to lower the transaction costs between buyer and supplier, and
a way to improve the credibility of the audits.
One Swedish company had a very thorough Code of conduct which specified the monitoring
3For more information on SA8000, se 4.6
23
process. First, discussions were held with the supplier's management, after which an assessment of
the factories or production sites were done together with a review of documentation of working
hours, injuries etc. Then interviews were held with the employees, in group as well as individually.
Finally the supplier's management was informed on the findings and violations, if any. Other
companies were not as specific in the Code of Conduct, or chose not to share the information. One
respondent stated that the exact process not was performed by the company but ”according to
standards”.
Two companies, one Norweigan and one Finnish, stated that they used SA 8000-experts for
independent monitoring of the factories. Reasons for this was that they did it according to the
standard, had local knowledge and were professional.
Monitoring was often carried out with help from other players, as seen in Table 5. In four cases, the
firm itself did the monitoring of the suppliers. A respondent from one of the four mentioned that
even though the company itself carried out the monitoring, it was done with assistance from local
experts.
A Finish company used a combinition of different actors. Internal audits were made by the firm
itself, while SA 8000 auditors did external auditing. Together with the company's own
selfassessment forms and factory visits, this created the company's auditing and monitoring system.
In the long run, one company hoped that monitoring and auditing would not be necessary, as the
host-country laws would become strict enough. The company stated that as it was difficult for its
24
buyers to control all suppliers in a credible way, the solution became to ask the suppliers to request
of an external organisation to perform audits according to common standards. The audit would
provide the supplier with proof of its compliance.
Assisting the suppliers with support was seen as important by most respondents. How much support
the company offered often depended on the relationship. 54% of the respondents had listed specific
social commitments that the company had as a motiviation for the suppliers. This included
cooperation with international organisations as well as educational projects and work in developing
countries.
Something that 54% of the respondents mentioned was that they labeled certain countries in the
world – mostly China and India – as high-risk for violations of human rights. This affected how the
monitoring efforts were done. By increasing monitoring and audits in high-risk countries, it became
easier to know where extra support was needed. As one Finnish company mentioned, suppliers in
low-risk areas still had to pass the BSCI standard, but they seldomly needed support in order to
make corrections if they did not pass the auditing.
4.4 ActionsWhen child labour was found, three companies began an immediate phasing out, and the company
provided education for the children. One of the companies specified that this was at the suppliers
expense, but mostly accepted as the contract otherwise would be cancelled.
One company specifically referred to its BSCI membership, and that the company chose to follow
their recommendation in these matters but did not want to be more specific about that.
The most commonly used sanction against the supplier was cancellation of contract, as seen in table
25
4. The respondents often stated that this was seen as necessary, as suppliers often promised to
improve but never did. The most common combination was to use severance of relationship and
then cancellation of contract. Three of the respondents explained that they saw it as a gradual
process. The decision was made based on the company's code of conduct, but was also based on the
situation. The company's decision depended on the relationship with the supplier and the
seriousness of the violation.
One company specified that to stop using a supplier was seen as the last thing to do. Instead, they
demanded corrective actions and increased the monitoring of the supplier. If the supplier despite
reprimands chose to continue a behaviour that did not correspond to the company's compliance, the
contract would be cancelled. The company representantive stated that the company valued its
suppliers and thought of them as crucial to their long-term success. Long-term relationship also
increased the trust and loyality that made it more likely that the supplier would be honest about the
working conditions and follow the compliance, even if montoring and auditing still were made.
A Danish company stated that if the corrective actions had not been carried through, the contract
was cancelled after the second follow-up. This depended on how serious the violation was. If the
violation was less serious, it would be reported to one of the organisations the company had a
cooperation with. Which organisation it was depended on the host-country. The company saw this
as a good measure, as it gave the organisation the possibility to monitor the supplier more closely. It
would also work as an incentive for the supplier to improve, as it otherwise might be difficult to
obtain other customers.
A Swedish company explicitly stated in its Code of conduct the importance of having a dialogue
with the supplier's management. The company meant that it otherwise would be difficult to improve
the conditions. After the inspection, the result was shared with the management so that they together
with the company could agree on what arrangements were to be done. Giving the supplier a chance
to improve in case of violations was seen as the true way of taking responsibility. If the supplier
however would resist improvements, the contract would be cancelled. The work with compliance
was seen as complex and sometimes difficult because of differing interests. Good working
conditions and not using child labour was seen as crucial for good production. As many of the
suppliers were in developing countries, it sometimes required not only time to correct violations of
the code, but also understanding for different ethical viewpoints, culture and history.
26
None of the responding companies used fines as a way to stop child labour.
4.5 Preventing Child LabourOne responding company stated that they had had troubles with child labour mostly in China and
India, but that avoiding the countries altogether was not an option as their products were needed and
avoidance would not improve the situation of the workers either. Before a supplier is signed up for a
contract, the company makes sure that a SA 8000 revision of the supplier is performed.
One Danish and one Swedish company mentioned unplanned visits to the production sites as a way
of preventing child labour. By making visits without the supplier knowing beforehand, a more
realistic view of the conditions on the production site would be presented.
Supporting the supplier in making corrective actions, providing the supplier with training and
discussing the corporate code of conduct was seen as important by three companies. That training of
the supplier was important was totally stated by five companies, one from each country.
BSCI was mentioned by a Danish company as a way of assuring that the suppliers would follow the
code. In case they did not, and did not improve after warnings, it would be more difficult for the
supplier who would be excluded from ”vast parts of European retail”. By making the suppliers take
a BSCI assessment, a certain standard was guaranteed.
One purchaser claimed that the company not only looked at the audits that were done when
establishing a relationship with the supplier, but also if the organisations they cooperated with had
any information on previous history in human rights, environmental thinking and other
sustainability issues.
4.6 Other OrganisationsAs mentioned before, 72% of the respondents referred to BSCI in their responses. Another
organisation that frequently was mentioned was SA 8000. SA 8000 is a standard started in 1997 by
the non-profit organisation Social Accountability International. By cooperating with various
organisations, the standard has become one of the most used standards when it comes to human
rights. They provide members with management systems on factory level, support and expert
auditing (Social Accountability International, 2009).
27
A number of other organisations assisted the companies by setting guidelines, working as discussion
partners. Some of those who were mentioned were, besides BSCI, UN's initiative Global Compact,
GRI, CIES Global Social Compliance Program and OECD.
As all the responding companies were in food retail, Fairtrade Labeling Organisation International
was mentioned by serveral companies as a quality mark and a guarantee that certain conditions
were being met. Fairtrade was seen as the only social label that was recognized internationally, and
is a label guaranteeing the customer that the product has been produced in a socially responsible
way.
4.7 SummaryTo summarize the empirical findings, we can see that even though the countries differ in size and
growth potential, the basic conditions are the same with few, strong market players, a growing
market for discounters and increasing ethical interest from the customers (USDA, 2003; 2006;
2007a; 2007b; 2007c).
When deciding on what ages were appropriate as minimum age for the workers, most companies
supported their decision in the standards set by UN and ILO. As they monitored that the minimum
age was met, many of them had concrete plans of action, which often involved providing the
children with education. 72% made reference to BSCI for establishing standards for the code of
conduct and taking care of the auditing of the suppliers. The two most used approaches to
monitoring was for the firms to do it themselves or to hire external professionals. Either way, they
often worked with the standards of BSCI or SA8000.
In order to solve the problem with child labour, many companies used a gradual process, that would
lead to cancellation of the contract if the supplier was unwilling to make corrective changes. The
primary preventive measure was to establish a good relationship with the supplier.
28
5 Analysis and discussionThis section will discuss and compare the empirical findings with the theoretical data.
5.1 Minimum AgesThe minimum ages were set in accordance with UN and ILO standard by 63,6% of the respondents.
Only three companies had chosen to set a completely separate minimum age (two cases of
minimum age 18 years) or, in one case, did not have a set minimum age. The fact that so many
companies chose to refer to standards by well-known international organisations is in accordance
with Kolk and van Tulder (2002a; 2002b), as they gain credibility by referring to them, as well as
motivate their decision. As ILO's minimum ages depends on the country, with 15 as a general
minimum age and 14 as minimum age in developing countries, this can be seen as a way to try to
enforce that at least the lower minimum age is followed. To have higher standards also in
developing countries increases the risk that the supplier will not be able to follow the code, putting
the company in Position 2 (Model 3). To have 18 as the minimum age can thus be seen as
unnecessarily strict, especially for suppliers in developing countries. The risk of having too high
standards is that the suppliers are forced to further extend the supply chain, which only transfers
child labour. Then the children that are too young to work are transferred from the formal to the
informal sector, where there is less control. Instead of having a minimum age as high as 18, the
companies could focus their efforts on other aspects, such as working hours or wages, while still
mainting a minimum age in accordance with UN, ILO and legislation in home- and host-country.
5.2 Alternative Measures in the Code of ConductFew companies had clear plans for the children once child labour was discovered. Several of the
companies had expressed very strict views on child labour in their Codes of Conduct, stating that no
child labour whatsoever was tolerated. If it was found out that it existed in their supplier's factories,
an immediate phasing out would start. According to the theories presented by Leeson (2000), this
would be seen as a clear disengagement approach. While the companies stated that the children
would be taken care of, the most important part was still to get the children out of the factories.
Thus, the strictness of the code would also place this in Position 2 in Model 3. In case child labour
was found at their suppliers, four companies mentioned a concrete plan. The plans included
assuring that the child could attend and remain in school. However, as another respondent
remarked, it was difficult to guarantee that the children stayed in the educational programmes and
did not find work elsewhere.
29
As mentioned by Leeson (2000), the engagement approach has received much more criticism. It is
therefore understandable that the companies choose to be strict with child workers and rather put
their resources on the auditing and on community programs, instead of working out long-term
solutions that might temporarily include child workers. Choosing alternative ways of handling child
workers would not only be a possible source of criticism, but also result in higher costs.
5.3 MonitoringIt was suggested by Kolk and van Tulder (2002a) that companies would wish to use an independent
actor for monitoring. By hiring external professionals, the company would ensure that the results
from audits and monitoring were credible. If the independent monitoring is taken care of by an
acknowledged organisation such as SA8000, the monitoring process could be seen as clear as they
follow the internationally used standards. This, and the independent status of the monitoring actor,
hightens the credibility and makes it possible for the company to assume Position 1 in the
discussion model (Model 3), meaning that the company has a code of conduct and is effective in its
work against child labour.
In this case, the empirical findings showed that many of the retailers chose to take care of the
monitoring themselves, with self-monitoring as the second largest after hiring professionals. A
positive aspect of establishing own monitoring is that it can give the company a certain degree of
control. However, the less positive aspects are several. Mainly, self-montoring affects the
credibility, even if the company chooses to present publicly how the monitoring is done and the
results. If compared to the discussion model (Model 3), it is clear that using first-party monitoring
increases the risk for ineffectiveness, even though the Code of Conduct otherwise is correct. The
company or its personnel could for reasons of cost, reputation or comfort, choose to warn the
supplier of factory visits before-hand in an inappropriate way, choose not to notice violations of the
codes or alter the monitoring results. Also, establishing good monitoring and auditing arrangements
in countries were the political, cultural and societal climate can be very different from the retailer's
home-country demands great resources. Considering this, it is surprising that so many companies
chose to use self-monitoring. One of the companies suggested that own monitor could work as an
addition or as a preparation for the auditing of professionals, experts crediting according to SA8000
or BSCI. In that way, the company's self-monitoring became a support for the supplier, and cannot
be seen as compromising the credibility of the company's monitoring efforts.
30
Even though 54% of the respondents mentioned developing countries as entailing a high risk for
human rights violations, the areas were too important to avoid. In contrast, we can see the
beforementioned strictness of the codes, were violations are followed by sanctions. In some cases,
the contract was cancelled if violations had not been corrected at the following-up, while others had
more patience. With very strict codes, ultimately leading to the termination of the business
relationship if the code not is followed, and work in high-risk countries, there is a possibility that
the companies simply change suppliers until they follow the code. This puts the company in
Position 2 (Model 3), where the company has a code but the work on child labour issues not is
effective. The other option would be to work with the suppliers until they are able to follow the
code and support their progress, something that a Swedish and a Finnish company clearly expressed
that they did, instead placing the company in Position 1 (Model 3) where the work is more
effective.
Codes should not become substitutes for government regulations (Leeson, 2000), something that
was supported by a company that hoped in the long run not having to monitor and audit the
suppliers as the legislation would become stricter. As several of the companies found that they had
to set the standards for their acting, this makes the work against child labour less effective (Kolk
and van Tulder, 2002a).
5.4 Actions
The most commonly used sanction was to cancel the contract with the supplier. This has been
classified by Kolk and van Tulder (2002a; 2002b) as very strict, putting the company in Position 2.
While how child labour was did not differ substantially between countries, a strict approach can be
seen as giving larger unintended consequences. In this case, by cancelling the contract the situation
at the supplier does not change. One company specifically mentioned the importance of having
good, long-term relationships with their suppliers as goal. The relationships with the suppliers and
the suppliers' development were seen as something positive, and the company wrote explicitly
about this in the information on their corporate website. This would follow the engagement
approach, and put the company in Position 1 (Model 3). It could also be seen as an example of
building a competitive advantage in sustainability, as the company proudly displays their long-term
work with and assistance of their suppliers.
31
Considering the fact that cancellation of the contract and finding a new supplier can be costly, it is
surprising that not more companies started by demanding corrective actions instead of having the
cancellation of the contract as their strategy.
Considering the company's responsibilty to its shareholders, the interests of investors and other
shareholders are often more important than the stakeholders, once a necessary level of responsibility
is taken (Sheth, Range & Anand, 2009). One of the reasons for why so many companies used very
strict sanctions might be the possible costs of scandals and unwanted media attention. When the
company fulfils the minimum demands by clearing the supplier from child labour, the most crucial
part for the company is over. As the companies find themselves on thin ice because of actions they
traditionally might see as ”none of their business”, they can become more reluctant to taking further
risks by adopting a more long-term perspective.
5.5 Differences within the SampleHow the companies presented themselves differed very much from company to company. Some
companies were very thorough with information, providing all kinds of information on ethical
issues that concerned them, from codes of conduct and action plans to visions and results of
auditings. Other companies did not address ethical issues at all on their corporate websites. Among
the respondents in the sample, two trends could be seen. Those of the companies that provided
thorough and clear information in the interviews and on their website were often the larger ones.
They were also rarely from the obvious discount sector. The reasons for this can be several. Even
though all the food retailers in the sample could be seen as players of importance on their respective
market, the larger player could easily be of the size 300% of the smaller. Media attention is easily
drawn to the gigants of the industry, forcing the largest players to watch their operations more
carefully. Serveral of the food retailers in the sample have not only one brand of supermarkets but
several. However, those who focused most attention to these issues were not only the larger players
but also those who did not especially target the discount segment. Those mainly focused on the
discount market were those who mentioned ethical standards the least. The reason for this might be
that their customers, in order to get a price as low as possible, might be willing to neglect ethical
issues. Ecological or fairtrade food is traditionally perceived as more expensive, but even standard
products have a background were ethical concerns should be looked into. The absence of
information to customers could signalize that the company does not think that its customers care
about these matters.
32
The differences found are most easily attributed to different strategies. Some companies chose to
get involved more in the process, by working with their suppliers until they could reach the
standards and finding alternative ways to handle child labour. They took the engagement approach
(Leeson 2000), and by working long-term they have greater chance to come into Position 1 (Model
3). Other companies made necessary arrangements, but were mainly concerned with clearing the
supplier's factories from child labour, which would be more of a disengagement approach.
To summarize the analysis and discussion, a collective model where the companies have been
sorted according to Model 3 is presented (Model 4). It would be too much to point out companies
that have chosen not to participate, however the company's wish not to participate and the fact that
no information on ethical issues and concerns can be found on their website suggests that they
might treat these issues as in Position 4 by Kolk and van Tulder (2002) or the ignorance approach
by Leeson (2000). Also, no company has been placed in Position 3, as all the responding companies
had a code of conduct or similar. They have been sorted in Position 1 or 2, depending on the
effectiveness based on Model 3. The darker grey shows the dominant side of the company's efforts.
As all the companies had both factors that can be connected to Position 1 and Position 2 (nobody's
perfect!), this was the easiest way to show each company's overall position.
33
6 ConclusionWith regard to the theoretical part of the thesis, we can see that child labour and the connected
problems reminds of the Hydra, the Greek monster that Hercules slaughtered. When one head was
cut off, two new heads immediately shot up in its place. In order to kill it, Hercules had to cut off a
head and the burn the headless tendons of the neck (Tufts University, 2009). In a societal
perspective, this is how child labour easily transforms from one form of problem to another. The
companies can choose to get rid of child labour from the factories, but if no consideration is given
to the underlying poverty issues, the children will simply move to more dangerous and less
controlled work, such as prostitution or mining (Basu, 1999).
In the same way, we have the corporate Hydra. Dealing with child labour does not end the
company's problems and challenges, as it is increasingly monitored and faced with higher demands
on ethics. Instead, the companies can choose the proactive approach and make human rights and
other corporate responsibility issues a part of their strategy and competitive advantage. In order to
stop child labour, a ”softer” approach, such as the one presented by Leeson (2000) as engagement,
is one alternative.
It is difficult for a company to say that they do not care about ethical issues without gathering
massive criticism. Instead, they have to present themselves as caring. It would be too go to far to
say that some of the companies in the sample did not care about ethical issues; however, it was clear
that some of the responding companies showed greater concern for ethical issues. This was
mirrored in the way they treated this issues on their website, as well as in the interviews. How the
company presents itself on its corporate website affects how customers looking for more
information perceive the company. A company with a thorough discussion on ethical issues on their
website will thus be perceived as having more commitment than a company only referring briefly to
the following standards. Considering Model 4, the summary of the analysis and discussion, we can
see that most companies are ”on both sides” - they are being effective in some aspects but not in
others. The companies being mostly in Postion 1 were to a large extent the companies that were
most through in their Code of Conduct and with the information presented on the corporate website.
The conclusion is that these companies are most probable to have a competitive advantage from
their sustainability work.
Some of the companies had gone to great lenghts to thoroughly explain the processes, how ethical
34
issues were treated and their plans of actions as well as visions. They managed to see themselves as
a part of a larger context, in which the ethical issues became a part to connect with the surroundings
and get a competitive advantage. Other companies only share very brief information, that often was
direct quotes from the standards of UN, ILO and/or BSCI.
How companies choose to treat human rights issues is not only a matter of caring, but of strategy.
Among the interviewed companies in the sample, the shown awareness of their impact varied a lot.
Some companies chose to treat all possible aspects of their impact, and sharing this information
with customers and other stakeholders on their website. To acknowledge the problem by showing
awareness and sharing information could be seen as a first step to a more holistic view on the
company, where the surroundings change from merely being context to something more.
While child labour wasn't very differently treated between the countries, a pattern could be seen
where larger, more important market players generally gave more attention to ethical issues. Among
the firms, those who gave the least attention to ethical issues were those with a clear discounter
profile. The conclusions that can be drawn from this is that larger players receive more media
attention, and that price sensitive customers might overlook ethical issues.
6.1 Suggested Further ResearchFurther research could choose to go more in depth and use a larger set of qualitative and
quantitative empirics in order to gain deeper understanding of the situation. With larger empirical
studies, it would also be easier to classify the companies more correctly as disengagers or engagers.
Coming studies could also focus on the supplier's point of view, and further explore the buyer's
power over the supplier.
Companies working as engagers have received strong criticism for not being able to guarantee that
their products have not been made by children, while claiming to work with a greater interest and
with consideration to society. Disengagers on the other hand have had this guarantee as the main
concern, with the importance being to be completely free of child labour, at any cost. The difference
between the two approaches is considerable, and further research could investigate how this
difference affects the children and society in general.
35
7 ReferencesBasu, K. 1999. International labor standards and child labor. Challenge, Vol 42, No 5, pp. 80–93.Blay-Palmer, A. 2008. Food Fears. From Industrial to Sustainable Food Systems. Aldershot:
Ashgate Publishing Limited.Brammer, Steve. 2006. ”Feel-Good Factories”, The Guardian, 21 September. Retrieved May 24,
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