ANALYTICAL PAPER

I.    International Political Dimension

Multinational Initiatives

Multinational initiatives on labor standards indirectly influence the activities of multinational enterprises and international public policy. The OECD Guidelines for Multinational Enterprises puts pressure on MNEs to behave ethically. The ILO conventions encourage national policymakers to pay attention to domestic labor conditions. However, no multinational framework for labor standards has legal enforcement power over either countries or companies that violate core labor standards, and gaining acceptance of an enforceable standard is unlikely in the near future.

Developing countries oppose the idea of relating labor standards to trade agreements. Developing countries do not want to see their comparative advantage in cheap labor eroded. Moreover, they are not prepared to pay increased administrative and judicial costs that would accompany the enforcement of labor standards. Even if cost were not an obstacle, most developing countries lack qualified personnel and governmental structures to effectively implement and enforce standards.

Nonetheless, developed countries’ growing concerns about worker rights means that this issue will not go away, and multilateral action will be required to address the problem. The ILO will likely become more important, but it will need some sort of enforcement mechanism if it is to have any real impact. It will need to be changed and perhaps become more like the WTO. Indeed, some suggest that the ILO could establish a labor standards review mechanism in the ILO similar to the WTO’s trade policy review mechanism (TPRM).[1]

SA 8000 as an Alternative to Multilateral Labor Agreements

SA 8000 provides a viable alternative to the painstaking and uncertain process of attempting to negotiate multilateral rules on trade and labor standards. While it will take time for SA 8000 to gain recognition among businesses, governments and consumer groups, SA 8000 leaves countries and companies free to trade openly while creating an incentive for companies to improve labor standards at their own factories, as well as to require that supplier companies establish good standards.

SA 8000 is also WTO consistent. The Agreement on Technical Barriers on Trade (TBT Agreement) defines a standard as a “document, established by consensus and approved by a recognized body, that provides, for common and repeated use, rules, guidelines or characteristics for activities or their results, aimed at the achievement of the optimum degree of order in a given context.”[2] It defines the role of a standard as “a factor for rationalization of production, a factor for clarification of transactions, a factor for innovating and developing products, a factor for transferral of new technologies, and a factor for strategic choice for companies.”[3] SA 8000 meets both of these criteria and therefore is unlikely to be challenged as a violation of WTO commitments.

SA 8000 can become internationally recognized just as ISO 9000 and 14000 already are. SA 8000 provides an incentive for companies and countries to improve labor standards without the risk of damaging the free trade environment.

Government-Business Initiatives

Governmental-business partnership programs such as the White House’s Apparel Industry Partnership (AIP) and the United Kingdom’s Ethical Trading Initiative (ETI) enable governments to review conduct practices with assistance from and in cooperation with private industry. Participation rates in both initiatives are small but larger than would be expected without government interest in and financing of the programs. Regardless of their current size, these programs have helped establish a relationship between government, the business community and civil society—a relationship that has the potential to create a flexible dialogue and a framework for improving labor conditions.

Ethical Trading Initiative (ETI)

The Ethical Trading Initiative (ETI) is a partnership between government, the private sector, unions and NGOs. The United Kingdom’s Department for International Development and the Department for Trade and Industry provided the funding for over half the anticipated costs of the initiative’s first three years. Representatives from these departments also participate in ETI board meetings.

The initiative is still in its pilot phase, but all members have already agreed on a “Base Code,” which is based on the ILO core labor standards. Members have also agreed to participate in tests of ETI’s monitoring and verification systems. While membership is “most appropriate” for U.K. food, clothing, footwear and household goods sectors, any U.K. company is eligible for membership based on its ability to support and contribute to the ETI process. [4] Member companies are also required to ensure that their suppliers meet agreed standards “within a reasonable timeframe, and that performance in this regard is measured, transparent and, ultimately, a precondition to further business.”[5]

The Base Code includes the following nine principles:

1)      Employment is freely chosen.
2)      Freedom of association and the right to collective bargaining are respected.
3)      Working conditions are safe and hygienic.
4)      Child labor shall not be used.
5)      Living wages are paid.
6)      Working hours are not excessive.
7)      No discrimination is practiced.
8)      Regular employment is provided.
9)      No harsh or inhumane treatment is allowed.

Major organizations involved in ETI are as follows:[6]

·        Companies

J Sainsbury
Levi Strauss & Co
The Body Shop

·        Non-governmental Organizations

Action Aid
Council on Economic Priorities
New Economics Foundation
Oxfam UK/I
Save the Children Fund

·        Trade Unions

The International Confederation of Free Trades Unions (ICFTU)

·        U.K. Government

Department for International Development
Department for Trade and Industry

Developing Countries’ Enforcement Frameworks

One of the major difficulties in protecting labor standards in developing countries is the difficulty of establishing effective legal enforcement schemes in each country. Even if a country has strict labor laws for protecting worker rights, improvements in working conditions usually do not materialize without regular inspections, effective administration of legal procedures, and adequate human resources to conduct inspections. Some researchers note that when labor inspection agencies lack sufficient verification staff, local governments are likely to overlook bad shop-floor practices.[7]

International cooperation will be needed to provide resources and technical assistance to help developing countries establish legal enforcement mechanisms and educate inspectors. However the SA 8000 system circumvents the issues by gaining companies’ verifiable commitments to meet basic labor standards.



Status of SA 8000 under the International Accreditation Forum (IAF)

To be successful on the worldwide level, SA 8000 will need to gain the same status that ISO 9000 and 14000 already enjoy. Toward this end, CEPAA is seeking membership in the International Accreditation Forum (IAF), an international organization that works to encourage the development of a single worldwide system of mutually recognized conformity assessment certificates. [8]

IAF recognition will generally strengthen SA 8000’s credibility and reputation with the business community, governments and civil society worldwide. Moreover, IAF recognition will be important in convincing the Japanese Accreditation Board (JAB) to promote the certificate when CEPAA introduces it in Japan.

Private Initiatives

In response to the public’s growing concern about labor standards, private companies have initiated their own social auditing programs and codes of conduct. Nike and The Body Shop are examples. Both companies have developed their own codes of conduct and use third-party monitoring to ensure that their codes are met.

However, individual programs have several problems. First, they often lack transparency and credibility. Indeed, just having a code of conduct does not gain the public’s trust because companies’ internal reviews of labor practices are usually not disclosed in public. Second, individual auditing programs often cost too much for small and medium sized businesses to afford, partly because verification of labor standards in a company’s overseas factories or in its supplier factories can be extremely costly. It is not clear that individual companies’ own codes of conduct and social auditing programs are transparent enough to be credible and therefore justify their high cost.

Investor responsibility schemes have similar problems because the effectiveness of screening processes that determine whether or not companies take social responsibility is questionable. Nevertheless, socially responsible investing encourages corporate management boards to respect codes of conduct in order to gain shareholder confidence, and in the United States, the social investment programs are blossoming. In 1998, assets in socially and environmentally responsible portfolios in the United States exceeded $ 1 trillion.[9]

II.   Domestic Political Dimension

Japanese Trade Policy and Labor Standards

The GOJ opposes combining labor standards with trade negotiations. Nevertheless, as the Japanese Central Labor Union (often called “Rengo”) has become more concerned about the treatment of workers in developing countries, so too has the GOJ.

Three factors make it all the more important that the GOJ address labor issues: 1) Japanese imports are increasing, making overseas labor issues more relevant within Japan; 2) American and European concerns about labor standards are growing, which could lead to costly company boycotts; and 3) there is an increasing danger that labor issues could become barriers to trade with developing countries—which would both stunt third world development and make it more difficult for Japanese companies to maintain and build new relationships with developing country suppliers.


The Japanese ODA Policy and Labor Standards

ODA’s current five-year plan (1999-2003) stresses social development programs such as human resource development, health, and legal reinforcement programs. Accordingly, Japanese ODA can contribute significantly to international efforts toward building individual countries’ labor standards enforcement mechanisms.

SA 8000 fits well with ODA’s objectives. CEPAA should approach ODA officials about introducing SA 8000 in developing country factories and businesses as a part of ODA’s programs.

III.   Commercial Analysis: Labor Standards and SA 8000

Benefits of SA 8000 for Japanese Corporations and Consumers

Consumer demand for goods produced under socially responsible business conditions is pushing businesses around the world to verify their good corporate conduct. Japanese corporations have come under particularly intense scrutiny with the recent discovery of a number of business scandals that involved bribery, sexual harassment, and discrimination, among other things. Japanese corporations, however, lack necessary expertise in the fields of public relations and social auditing. Gaining an objective SA 8000 certification will provide these companies with a ready made public relations tool for advertising their good corporate governance both domestically and overseas.

The Benefits of SA 8000 for Contracting Suppliers in the Developing Countries

Developing countries’ lack of know-how and weak legal enforcement systems make the task of instituting and enforcing labor standards a difficult and slow process. Requests from Japanese corporations that their suppliers become SA 8000 certified will have a large impact on labor management practices in developing countries by encouraging these countries to do their best to speed the development of internationally acceptable labor standards. Having SA 8000 certification will become a marketing tool for supplier companies in Asia.


Cost of Labor Standards

The cost of implementing responsible labor standards varies according to each company’s circumstances. On the one hand, improving labor standards can increase wages for workers and the overall management costs of an organization. On the other hand, sound labor standards can enhance productivity by enticing workers to stay in their jobs longer.[10]

The cost of SA 8000 depends on the size and condition of the applicant company or factory. [11]

Initially, companies or factories interested in certification attend a four-day, $1,600 course to learn about the certification system. Subsequently, the applicant works with a third-party auditor to complete a comprehensive review of the applicant’s internal labor practices and management system. Of the total cost of obtaining SA 8000 certification, only 15 percent goes to human resources costs; 85 percent goes into correcting labor conditions and establishing appropriate management practices.[12]

Despite the fact that SA 8000 certification can be used as a marketing tool, some companies and factories simply cannot afford the costs associated with certification and SA 8000’s ongoing audits. In such cases, financial assistance from Japanese corporations could make a large contribution toward improving developing country labor standards.

To date, no empirical studies have investigated how SA 8000 contributes to or damages the corporate bottom line. However the threat of boycotts will make SA 8000 attractive to companies even without evidence that improved management systems will increase profits. The cost of negative publicity due to poor management practices is almost certainly far larger than the cost of obtaining SA 8000 certification.

Due to the economic recession, cost reduction and efficient management are in the forefront of every Japanese manager’s mind. While obtaining SA 8000 certification presents an additional cost, these costs should be weighed against productivity gains that can be expected after implementing SA 8000 consistent labor and management practices.

Labor Standards and Human Resource Development (HRD)

A better work environment is said to contribute to higher productivity and development. That is, building better working conditions and allowing employees more control over their work tends to increase productivity. At present, many developing countries do not achieve these correlations. “While many developing countries possess numerous laws meant to regulate workplace conditions, these laws are often enforced in a hit and miss fashion, and usually apply only to foreign and large domestic firms.”[13]

SA 8000 has the potential to improve working conditions in a way that makes employees take more responsibility for their work product and thereby increases productivity. For developing countries, this could prove significant. In fact, NGOs conducting development assistance programs have expressed their interest in SA 8000 as a means of advancing local economies, as well as improving living standards.[14] Indeed, as one set of authors noted, “HRD policy can be used to formalize the informal sector, protect women, children and other vulnerable workers, and address unfair or exploitative working conditions in EPZs [Export Processing Zones].”[15]

IV.   Analysis of Stakeholders

A number of organizations, as well as businesses, have a stake in the debate over labor standards and will be interested in any effort to implement SA 8000 more broadly. These stakeholders’ interests are briefly described below. Further details are included in Exhibit 11.

International Stakeholders

·        International Labor Organization (ILO)

The ILO is eager to see every country ratify the ILO conventions. However, if a country lacks the capacity to enforce the conventions, worker and human rights are unlikely to improve. To address this problem, the ILO is studying effective enforcement mechanisms. It is especially interested in exploring private initiatives such as SA 8000 and other voluntary codes of conduct and labeling schemes. 

Because the ILO’s Asia-Pacific representative is Japanese, she should be approached as part of CEPAA’s comprehensive strategy for introducing SA 8000 in the region. CEPAA should propose the possibility of promoting SA 8000 through ILO events and activities in the region.

·        Organization for Economic Cooperation and Development (OECD)

Currently, the OECD’s Guidelines for MNEs is a voluntary code that member countries are supposed to instruct their MNEs to observe. However there is no mechanism for enforcing the Guidelines, and they do not contain clauses concerning the abolition of child labor and forced labor or other core labor standards, such as discrimination, compensation, and freedom of association.[16]

The OECD’s Development Assistance Committee (DAC) has expressed great interest in SA 8000; the DAC’s 1999 report recognized SA 8000’s potential for improving working conditions around the world.

·        World Trade Organization (WTO)

At the Singapore ministerial meeting in 1996, WTO member countries acknowledged the relationship between labor standards and trade. The ministerial declaration stated that the WTO does not support the use of labor standards as protectionist measures and also noted the importance of preserving developing countries’ comparative advantages so that they can fully participate in global trade.

The WTO maintains that the ILO, not the WTO, should handle labor standards because it is the ILO that has competence on this issue. Nevertheless, at the Seattle Ministerial meeting in November 1999, countries such as the United States, Sweden and Germany pushed for consideration of how labor standards should be addressed within the system of international trade rules, and the United States is pushing for the establishment of a WTO working group on trade and labor standards.

SA 8000 could provide a solution on the conflict between labor and trade issues. However care will need to be taken to ensure that the standard is not used as a protectionist measure.

·        United Nations Development Programme (UNDP)

The UNDP is concerned with social inequality worldwide. In its 1999 Human Development Report, it focused on the widening gap between developed and developing countries and discussed the impacts of globalization. Since globalization gives corporations more power, the UNDP stresses the importance of strengthening corporate governance to handle social policy.[17]

The report also discussed social auditing programs and noted that SA 8000 is currently being implemented worldwide. The UNDP is interested in SA 8000 as a measure for supporting social policy as developing countries become more integrated into the world trade system. Combining the SA 8000 certification program with UNDP programs in Asia will advance the legitimacy of the new certification.

·        Multilateral Financial Institutions (MFIs)

Multilateral Financial Institutions (MFIs), such as the World Bank (WB) and the Asian Development Bank (ABD), are interested in assisting in the development of legal institutions in developing and emerging markets—particularly because the Asian financial crisis was largely caused by a lack of government regulatory control over financial activities.

MFI financial assistance also should be utilized to establish legal enforcement mechanisms for labor standards in developing countries. One of the major obstacles to improving labor standards in developing countries is their lack of personnel qualified to audit companies and enforce labor laws.

Given that MFIs are willing to cooperate with private sector companies to achieve their objectives, they are likely to be interested in promoting SA 8000 as a complement to public sector reforms in developing and emerging market countries. In Asia, the ADB will have a large influence over programs designed to improve labor standards. The current president of the ADB is a Japanese officer who has connections with Japan’s Ministry of Finance (MOF).

·        Multinational Enterprises (MNEs)

Business can no longer ignore consumers’ and stockholders’ growing concerns about labor practices. Large enterprises can create their own disciplinary codes of conduct and these codes can help reduce a company’s risk of image-damaging boycotts. However, the public does not necessarily trust self-auditing programs, and the existence of numerous codes of conduct or social labeling programs dilutes the effectiveness and credibility of any one code. Moreover, it can be quite expensive for a company to use its own code of conduct as a marketing tool. Because the code is unique, it requires extra branding effort. Consumers will not immediately recognize it as they would a global label such as SA 8000.

·        International Accreditation Forum (IAF)

CEPAA is in the midst of applying for membership in the IAF. Gaining IAF membership will give SA 8000 credibility in the eyes of the business community. By becoming an IAF member, CEPAA would also gain greater access to other IAF member organizations that could help in marketing SA 8000 around the world. In Japan, for example, the Japan Accreditation Body (JAB) is an IAF member.

·        Contracting Suppliers in Asia

Supplier companies in Asian developing countries might not by themselves decide to improve working conditions in their factories. However, more and more companies are likely to begin demanding some sort of verification of labor practices from their suppliers because labor issues have become a risk management issue.

·        Labor Unions in Asia

I ntroducing SA 8000 in Asia will assist union organizing efforts because the standard calls for freedom of association. Introducing SA 8000 in Japan might not directly support freedom of association. However, if Japan’s MNEs adopt SA 8000, they might start demanding that their Asian suppliers ensure freedom of association rights.

Domestic Stakeholders

·        The Ministry of Foreign Affairs (MOFA)

MOFA has not explicitly indicated concerns about labor standards to its Asian counterparts. Nonetheless, it should be encouraged to promote SA 8000 in Asia. Because MOFA is responsible for developing Japan’s foreign policies, it has a great deal of influence over other countries in the region.

·        The Ministry of International Trade and Industry (MITI)

MITI is responsible for domestic economic policy and trade policy, and it cooperates with JAB concerning standardization issues in Japan. MITI’s support of SA 8000 will be of great assistance in marketing the certificate program to the Japanese business community.

·        The Ministry of Labor (MOL)

The MOL often cooperates with the ILO in implementing labor policies worldwide. In 1999, the MOL, along with the ADB, WB and ILO, held a meeting in Tokyo on labor policies for Asian governments. Within Japan, the Ministry’s role has expanded since Japan’s plunge into economic depression.

·        The Japan International Cooperation Agency (JICA)

JICA implements Japanese development assistance programs. It also cooperates with the UNDP to implement development programs. Currently, JICA is focused on social development and legal institutions building programs for developing countries. Because JICA recently began using NGOs in implementing its programs, CEPAA should explore the possibility of including SA 8000 training in JICA’s social development program.

·        The Japan Bank for International Cooperation (JBIC)

JBIC is a government organization that supplies loans for export and import financing, as well as development assistance loans. In determining whether to grant development assistance loans, JBIC currently does not consider human rights or labor standards issues. However such consideration could be incorporated into JBIC’s loan criteria. Increased information about the beneficial relationship between labor standards and development would provide a strong argument for doing so.

·        The Diet (Parliament)

  Mr. Naoto Kan, a Diet member, former leader of the Democratic Party of Japan, and formal civil rights movement leader, is particularly influential on labor standards issues. Although he was not re-elected as the DPJ leader in 1999, he remains popular. CEPAA should work towards gaining his support, as well as support from the DPJ, the LDP, and the Social Democratic Party.

·        The DPJ, an opposition party, is sensitive to labor issues because it is backed by  
      “Rengo,” Japan’s National Labor Union. The DPJ’s major constituencies are the 
       populations of Japan’s large cities and workers’ union. The DPJ is the largest 
       opposition party in the Diet.

·        The Liberal Democratic Party (LDP), the majority party, traditionally assists the 
      industrial and agricultural sectors.  Its relationship with the Keidanren is strong.

·        The Social Democratic Party led by Ms. Takako Doi is a left-of-center political 
       group. It was the primary political organization for labor union members until the DPJ 
       was formed.

·        Keidanren (The Japanese Federation of Economic Organizations)

Keizai Dantai Rengo Kai (often called “Keidanren”) is a federation of large Japanese corporations, which has a great deal of influence over Japanese economic policy decisions. The current president of the organization is Mr. Tadashi Imai, chairperson of the Nippon Steel Corporation, the second largest steel company in the world. The Keidanren’s board is made up of executives of major Japanese corporations such as Sony, Toshiba, Ajinomoto, Toyota, and Tokyo Electric Power Corporation (TEPCO).

The Keidanren has put forth principles on corporate governance. Although the principles are not legally enforceable, they demonstrate the organization’s concern with corporate activities in Japan and overseas. The Keidanren has acknowledged the growing international concern over labor standards, and it has featured SA 8000 in its newsletter.

·        The Japan Trade Union Confederation (JTUC, “Rengo”)

With 78 affiliates and 8 million members,[18] the JTUC is the most influential labor union in Japan. The organization has a close relationship with the ILO and the International Confederation of Free Trade Unions (ICFTU). The JTUC has tried to protect worker’s rights during Japan’s economic recession. It has also made efforts to promote the interests of workers throughout Asia, sometimes even lobbying for workers rights in the United Nations, ILO, OECD, WTO and other international institutions.[19]

In “Actively promoting International Joint Activities for Peace, Human Rights and Fairness” (one of its so-called “action policies”), the JTUC described its efforts to promote respect for human rights, union rights, and democracy. “RENGO will strengthen in Asia its endeavor to consolidate these rights.”[20]

·        Japan Accreditation Board (JAB)

JAB accredits and registers industrial standards systems in Japan, including inspection companies. It also represents Japan in foreign bilateral and multilateral negotiations concerning mutual recognition of accreditation systems. JAB is a member of the IAF. SGS-ICS, Inc. of Japan is a CEPAA authorized auditor and is also registered by JAB. JAB will not promote SA 8000 without MITI’s support.

·        Japanese Corporations

Japanese corporations are generally not familiar with labor standards issues. However, the boards of directors of Japanese companies historically have cooperated with labor unions to facilitate corporate management. Accordingly, labor unions may be able to help push business toward acceptance of labor standards, particularly if such standards are portrayed as part of a sound risk management strategy. Indeed, due to the economic recession as well as recent business scandals, consumers are more conscious of corporate governance issues than ever before.

The government’s new deregulation policies (which have pushed corporations to disclose their activities) and growing competition with foreign rivals in domestic markets may also push companies toward more concern over labor issues. Both of these factors have caused companies to accelerate their efforts to restructure their procurement systems. Japanese companies’ traditional "Keiretsu" (intra-group transaction) system of doing business is beginning to breakdown as companies look to outside, often overseas, suppliers for cheap input sources.

Japanese corporations are not likely to be immediately enthusiastic about implementing SA 8000, particularly given the difficulties they face due to the economic recession. However as their foreign rivals begin adopting such labor standards in response to consumer demand, it will become increasingly important that Japanese corporations follow suit. SA 8000 provides a valuable risk management tool.

Industries that should be targeted are:

1)      Major Trading Corporations (MTCs);
2)      Retailers;
3)      Sports product manufacturers;
4)      Apparel manufacturers; and 
5)      Toy manufacturers.

·        Third-Party Auditing Companies

Five third-party auditors are currently authorized by CEPAA to conduct SA 8000 verifications. Of these, SGS-ICS, BVQI, and DNV have Japanese offices. Because they will benefit from broad acceptance of SA 8000 in Japan, they will be willing to support CEPAA’s marketing efforts.

·        Japanese Consumers

A Marymount University survey found that 70 percent of respondents were inclined to pay an extra one dollar for a $20 shirt—a five percent premium—if they were guaranteed that the shirt was not made in a sweatshop factory.[21] Such consumer consciousness has not taken hold in Japan. Accordingly, media campaigns to educate the public about labor standards and SA 8000 will need to be implemented before SA 8000 will be able to become a marketing tool in Japan.

·        Educational Institutions

Several Japanese universities conduct research on business ethics. Among these, Reitaku University and Sophia University are the most prominent. Reitaku has an institute for the study of business morals. Sophia is a Catholic-based institution in Tokyo. It has an institute that studies social justice issues.

CEPAA should enlist both of these universities in its efforts to promote SA 8000 in Japan. Seminars should be held for students and the public in order to increase general public awareness of labor issues.  Special seminars for the business community could also be convened.

V.    International Negotiation Challenges

The Asian Countries and Human Rights

Asian countries generally believe that labor standards are being imposed on them by Western counties. Accordingly, the GOJ will be reluctant to be seen linking trade and labor issues because doing so could damage its diplomatic relationships with developing countries in the region. Nonetheless, Japan’s support for improving labor standards around the world can help make labor standards not just a “Western” issue but a global issue. As one scholar has argued, “Japan could – if it chose – play a significant role in shaping leadership choices toward democratization and in reinforcing the trend toward democracy in Asia.”[22]

The World Trade Organization (WTO) and the Trade Agenda

The trade and labor issue is not going to go away anytime soon. The public is only growing more concerned about labor issues; the United States has officially proclaimed its strong interest in the establishment of a WTO working group on labor standards; and the International Confederation of Free Trade Unions (ICFTU), one of the world’s most powerful labor voices, argues that “the promotion of labour rights must be linked to the development of trade if basic living standards are to be raised across the developing countries.”[23]

Nevertheless, because developing countries, including Asian countries, continue to oppose any linkage between labor standards and trade rules, there is still no clear path for even beginning to examine labor issues within the WTO. If labor standards were to make it to the WTO agenda, CEPAA could use the opportunity to promote SA 8000 around the world. However, CEPAA can immediately begin promoting SA 8000 as a way to address labor issues without the need to incorporate labor standards in trade agreements. SA 8000 could be treated under the GATT/WTO in the same way that ISO/IEC standards are treated.

Public Policy vs. Private Initiative

SA 8000 provides a means of encouraging private companies to voluntarily improve labor standards in their own factories. However, that does not mean that governments do not need to use their authority to protect labor standards. Local governments’ need to develop their own labor standards, as well as their ability to enforce those standards. Indeed, as the power and influence of the private sector grows, it becomes increasingly important for government agencies to have efficient and effective means of safeguarding workers’ rights.

Governments also play an important role in increasing the public’s and the business community’s general awareness of labor issues, and they can provide incentives for corporations to adopt verifiable labor standards systems. Government activism will be important in making SA 8000 an internationally recognized standard.

Competition with Other Codes of Conduct

Corporations around the world are establishing their own codes of conduct and using these codes as a marketing tool. In order to draw the business community’s interest toward SA 8000, CEPAA will need to show businesses how they will benefit more from SA 8000 than from their own private codes. In order to get business interested in SA 8000, CEPAA will need to gain broad-based international recognition of the standard.

Relationship with International Organizations

Gaining international organizations’ recognition of SA 8000 as an international certification system like the ISO standards will help in gaining broader acceptance of the standard. International organizations that already deal with labor issues in one way or another include the ILO, the United Nations Development Programme (UNDP), the World Bank (WB), and the Asian Development Bank (ADB). The UNDP has already discussed the benefits of SA 8000 in its Human Development Report. The ILO in its internal documents has suggested that private social auditing programs can help improve labor conditions around the world and has identified SA 8000 as a promising program. 

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