SOSC 3042 Study Guide - Final Guide: International Labour Organization, Clothing Industry, Global Governance

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23 Jul 2016
Labour Globalization Exam review:
1. What is a global value chain?
a. Describe at least three of the different links in the chain of a global value
chain, focusing on a particular industry (e.g. global value chain for
apparel, global value chain for coffee, etc.)
b. What are some key challenges to protecting the rights of workers at the
bottom end of the global value chain?
-Different pieces of the process bring a product from a start to finish. Value is
added; something new is added, better in shape than before. Other word is global
supply chain. It could be poorly or well integrated. Example: Phones,, plastic
metal turns into processors, programmer in China or India then sell it to Apple.
Even car, parts are assembled in Ont, but parts come from different countries.
Even teas, grown from the ground, mass produced from somewhere else (India,
North Turkey, Sri Lanka), and sending them off somewhere and being processed
into teabags. Teabags are made from somewhere, then setting it off somewhere.
Even the boxes, labels and what not. Even chocolate. Even Alcohol.
-Global value chains which comprises “the full range of activities that are required
to bring a product from its conception, through its design, its sourced raw
materials and intermediate inputs, its marketing, its distribution and its support to
the final consumer”. Specifically, when activities must be coordinated across
geographies, the term global value chain (GVC) is used in the development
literature. Simply put, the global value chain includes all of the people involved in
the production of a good or service.
Part A:
-The apparel value chain is organized around five main segments: (1) raw material
supply, including: natural and synthetic fibers; (2) provision of components, such
as the yarns and fabrics manufactured by textile companies; (3) production
networks made up of garment factories, including their domestic and overseas
subcontractors; (4) export channels established by trade intermediaries; and (5)
marketing networks at the retail level. Over time, there have been continual shifts
in the location of both the most significant apparel exporting countries and
regions, as well as their main end markets. Apparel has been the classic “buyer-
driven” global value chain. Unlike producer-driven chains, where profits come
from scale, volume and technological advances, in the buyer-driven global
apparel value chain, profits come from combinations of high-value research,
design, sales, marketing, and financial services that allow the retailers, designers
and marketers to act as strategic brokers in linking overseas factories and traders
with product niches in their main consumer markets. The companies that develop
and sell brand-name products have considerable control over how, when, and
where manufacturing will take place, and how much profit accrues at each stage,
essentially controlling how basic value-adding activities are distributed along the
value chain. To understand how this division of work occurs and how initiatives
to develop the workforce may affect the role developing countries play in the
global value chain, six distinct value-adding activities can be identified: (1)
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research and new product development (R&D), (2) design, (3) production, (4)
logistics (purchasing and distribution), (5) marketing and branding, and (6)
services What is striking about this schema is that the most important value-
adding stages are intangible services that occur before and after the apparel
production process, which requires us to expand considerably our ideas about
where the greatest gains from workforce development are likely to occur.
-Coffee is a truly global commodity and a major foreign exchange earner in many
developing countries. In global value chain (GVC) analysis,2 the international
structure of production, trade, and consumption of commodities is disaggregated
into stages that are embedded in a network of activities controlled by firms. In its
original formulation, one of the founders of this approach identified three key
dimensions of commodity chains: (1) their input-output structure and
geographical coverage; (2) their form of governance; and (3) their institutional
framework. The GVC approach emphasizes the power of different constellations
of “lead firms” and how interactions between these firms determine some of the
specific organizational features of trade. The analysis of the coffee marketing
chain is particularly important in understanding the political economy of
development for a variety of reasons. First, over 90 per cent of coffee production
takes place in developing countries, while consumption happens mainly in
industrialized economies.4 This production- consumption pattern provides
insights on North-South relations. Second, for most of the post-World. War II
period coffee has been the second most valuable traded commodity after oil.5
Third, attempts to control the international coffee trade have been taking place
since the beginning of the 20th century, making coffee one of the first “regulated”
commodities. Fourth, a number of developing countries, even those with a low
share of the global export market, rely on coffee for a high proportion of their
export earnings. Coffee is a source of livelihoods for millions of smallholders and
farm workers worldwide.6 Fifth, producing country governments have historically
treated coffee as a “strategic” commodity; they have either directly controlled
domestic marketing and quality control operations or have strictly regulated them
—at least until market liberalization took place in the 1980s and 1990s.
-Apple products look at definition first point.
Part B:
2. What is the ‘global governance deficit’?
a. In class we discussed four layers of protection for workers in global value
chains. What are these four layers?
b. Describe the benefits (intended or real) of each of these layers of
c. Describe the ways in which each of these layers of protection falls short of
protecting workers.
-Contemporary economic globalization has outstripped the capacity of national-
level governmental and societal institutions to regulate markets and to compensate
for their impacts, resulting in a global governance deficit. ‘Governance’ refers to
those institutions that constrain or enable market actor behavior both in the
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public sphere, in the form of governmental policies, rules and regulations, and in
the private sphere, in the form of social norms, codes of conduct adopted by
businesses, consumer demand for social responsibility or non-governmental
institutions and social movements. ‘Governance deficit’, to which states and
societies responded by seeking to fill in the gap with new governance capacities.
Also it is characterized by limited capacities in the merging economies, weak
international institutions, increasingly challenged institutions in advanced
industrial countries, and everywhere greater emphasis of facilitation than on
regulation or redistribution. This deficit can be understood as a relative dis-
embedding of the market from institutions of governance and enhanced
opportunities for predatory behavior.
Part A B and C:
- National Law (hard law):
Establishment of Labour Codes
Minimum wages, hours of work, other basic conditions of employment
Arbitration Councils for workers to file grievances and exercise voice
Why not stay in US, because no better labour laws, cheaper to do it in another
country, by making their workers work in bad conditions. Easy to get away with
low wages, and health and safety. No one was really watching. These companies
wants to make millions for Nike shoes and what not. Workers don’t have their
rights protected.
Problems: Infrequent and inadequate inspections, Backlogs in labour courts,
Access to arbitration procedures, Corruption in monitoring and enforcement
practices, Union fragmentation, Other issues related to capacities, infrastructure,
What is the minimum standard? Monitoring down increasingly complex supply
- International Labour standards:
Universal minimum standard of working conditions
Core Labour Standards:
1. Abolition of child labour
2. Elimination of all forms of forced labour
3. Elimination of discrimination in the workplace
4. Freedom of Association and Collectively Bargain
No child labour, no discrimination, freedom association and the right to
collectively bargain. No forced labour
Problem: Application in different global contexts, Appropriate methods of
implementation, What constitutes compliance in different countries, Reliance
on formal organizations in informal labour economies, Regulation for,
Continuous Improvement in the Global Workplace, Lack of ‘teeth’
- Buyer Codes of Conduct:
Consumer pressure spurs Nike into action
Wave of code adoption and implementation
Factories must adhere to codes as condition of business with global buyers
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