Moral Responsibility for Overseas Sweatshops

Instructor: Dr. Jan Garrett

This page was originally composed in 1997. It has been slightly modified on November 9, 2001.

University-level study of business ethics, now about two decades-old as an academic discipline, covers many topics: from the ethical justification or the market, to the issues such as environmental impact, whistleblowing, international bribery, and sexual harassment.

Because of the bewildering variety involved, I have wanted to focus on some smaller set of issues that are central to business ethics, as distinct, say from medical ethics or the theories normally discussed in environmental ethics. I wanted also to find or create a theory that would meet two demands: It must be (1) specific enough to be applied with relative ease and (2) general enough to cover a range of questions. After years of trial and error, what I have partly found and partly created is a theory of ethical exchange relations which I call the theory of fair trade. It does not cover everything--it may not give us all the guidance we need in environmental ethics or sexual harassment cases--but it does a fair job in discussions of many contractual and half-contractual relations in business, such as those between partners, employer and employees, providers and suppliers, buyers and sellers.

There are two main parts of the theory and the first part is subdivided:

I. Set of duties for conditions in which the exchange partners are
(A) more or less equal in knowledge and power.

(B) significantly unequal in knowledge and power.

II. A way of assigning moral responsibility for actions to firms and individuals.

The core of this theory has been influenced by Manuel Velasquez, Business Ethics: Concepts and Cases. I A and B are inspired by his chapter on Manufacturers' and Marketers' Duties to Consumers and II by his discussion of responsibility in the introductory chapter. I A is based on what V. calls the Contract Theory, and I B on what he calls the Due Care Theory.

The Contract model requires or presupposes a rough equality between Manufacturer and Consumer, or Seller and Buyer. For it, the duties of producers and marketers are essentially four: Three of them describe conditions which must be met if a genuine contract is to be created. These are

(1) the duty to disclose (pertinent facts about the product or service being offered),

(2) the duty not to misrepresent (the product or service being marketed), and

(3) the duty not to coerce.

This list of duties is not arbitrary. They are necessary on the assumption that a genuine sales contract, like any genuine agreement, requires that both parties enter into it voluntarily. Ignorance, misinformation, or manipulation of emotions, at least of the more extreme kind, undercuts the voluntary nature of the buyer's choice.

Once a genuine contract exists, a fourth duty kicks in, the duty to comply. This duty entails that the manufacturer/seller must deliver a product/service that meets the specifications agreed upon, explicitly or implicitly, in the formation of the contract. One can be more specific about the duty to comply, although we needn't go into a lot of detail now: for example, the product must be as reliable as the buyer was led to believe, it must be reasonably risk-free to use, etc.

The second model (Due Care) is most applicable in a situation of inequality between the exchange partners. Frequently consumers are as ignorant of the product they are purchasing as most medical patients are ignorant of the science of medicine. Products get increasingly complex all the time. Consumers know less and less about their components and the interrelations between components; new materials (including chemicals and drugs) are constantly being introduced. Unless special efforts are made to gain information, we know less and less about shelf-life, nutritional value, or toxicity.

Under these circumstances, one could claim that producers have a special duty to exercise all reasonable care or concern for the interests of potential users, above all, to take special precautions that the product does not harm the user in any way. It does not matter if, in the creation of the sales agreement, the producer did not pledge to exercise due care. The theory says that, morally, she is obliged to do so. Just because the producer is in the position of greater knowledge and power, he/she has that duty.

The Due Care idea, incidentally, has historical roots in reflections, going back at least to Plato, on the relationship between professionals, such as doctors and lawyers, and their clients. The greater knowledge of the professionals enables them to do great harm if they do not exercise due care for legitimate interests of their clients, who are weaker relative to such professionals. One who fails to exercise due care when he should is guilty of negligence, if not worse. Now, both these theories, which Manuel Velasquez discusses in a chapter on producer-consumer ethics, can be extended without too much effort to cover other exchange relationships, for example, employer-employee. Here too the relationship is at least apparently contractual, so that when the contracting parties are more or less equal, a version of the contract theory might apply; when the parties are unequal in power, something like the due care theory applies.

How might this work?

First, the Contractual model. The employer's duty to disclose would include his obligation to explain the nature of the job, prospects for promotion, the risks of the job (including risks of the chemicals the prospective worker may be using, etc.). The duty not to misrepresent would prohibit the employer's making misleading claims about such matters. The duty not to coerce would require the employer not to take advantage of a particular worker's desperate need for a job to "persuade" her to accept extremely low wages or extremely dangerous tasks. The duty to comply, which kicks in once the worker is hired, would of course mean that the employer must genuinely try to keep the promises he or she originally made.

Second, the Due Care model. This model does not presuppose anything like equality between employer and employee. It does not even presuppose that the employer can give the employee enough information that the employee's decision will be as voluntary, which is to say, as informed and free, as the employer's. In this model, the employer has a duty, whether or not she agreed to it, to look out for the interests of the workers. To exercise due care towards the employee in design of the production process, in scheduling of tasks, bathroom breaks, and rest periods, in the materials used, in training the workers and researching alternate production methods so that workplace dangers can be minimized, and perhaps in providing health check-ups.

A final but essential ingredient of the theory is a set of insights regarding responsibility. "Responsibility" is a word with many meanings: the meaning I have in mind is the meaning in the sentence: "Lockheed CEO Carl Kotchian was responsible for Lockheed's bribery of the Japanese Prime Minister." To be responsible in this sense means "to be praised" (if the act is good) or "to be blamed" (if the act is bad). Sometimes, when the action is bad, "responsible" has only the negative meaning "to be blamed": as in, "Who is responsible for this mess?"

Two conditions make a moral agent responsible for his or her actions. One of those conditions is knowledge (e.g., of the nature of the action, of the object acted upon, of the instruments being used, of the context, etc. Generally, the scope of an action for which one is responsible includes its consequences if the acting person foresaw or should have foreseen them.

We are responsible for acts that we could have done differently. If our acts were truly compelled, as cursing may be for a victim of Tourets syndrome, or if we are ignorant of the relevant facts (because we are too young and haven't learned or because they have been hidden from us), we may be excused from responsibility.

Some circumstances, without excusing us, may mitigate responsibility--situations of duress, for example, in which a person does something she would not have done otherwise because of a threat that she might lose her job.

The study of responsibility also addresses the important issue of individual responsibility for cooperative, corporate, or joint acts. Such acts are generated when two or more parties, individuals, corporations, or both, jointly act and create an outcome. Many case narratives discuss situations where a corporation's action is the joint action of several or even many employees of the corporation. What I aim to discuss here are cases in which two or more corporations and the individual consumer are involved.

There is now a vast amount of evidence regarding sweatshop production of shoes, clothing, toys, rugs, and meat products sold by North American or European retail outlets to North American or European consumers. Nike shoes, produced in Indonesia, in terrible sweatshop conditions, where people make $2.25/day, are then sold for over $100 in the U.S. Rugs sold in Europe and made by Pakistani children as young as 6 years old working as much as 12 hours per day, kept tied to the job (sometimes literally chained) as debt slaves. Illegal Chinese or Mexican immigrants to the U.S. illegally working for U.S. employers in New York or rural Iowa to produce clothes or process meat. The relationship of the U.S. consumer to these workers is not direct, for we do not trade with them directly but with Xmart or some other retail outlet. (The numbers given here may be somewhat dated. They were the ones available to me in 1997, when I originally drafted these remarks.)

There are often four exchanges, at least, in this chain: the consumer's exchange with Xmart, Xmart's exchange with the brand name corporation (Nike in Indonesia or Mattel in Mexico), the brand name corporation with the owner of the sweatshop (or his representative), and the sweatshop owner's exchange (if we can call it that) with his employees.

Let us suppose, for the sake of discussion, that the Contract Theory fits the first two of these exchanges and they do not violate any of its demands: The consumer knows the physically relevant features of what she is buying, she is not coerced into making the purchase; Xmart, in turn, knows the physically relevant features of what it buys from the brandname corportion and, once again, there is no coercion. But the next steps are different. The brandname corporation may seek the cheapest possible products, so long as product quality is not sacrificed. For example, tuna-canning moved from California (wages $17/hr) to Puerto Rico ($7), to American Samoa ($3.50), to Ecuador ($1), and now partly to Indonesia (a couple dollars per day) (Tom Athanasiou, Divided Planet: The Ecology of Rich and Poor, University of Georgia Press). This kind of pressure does not give much local third-world suppliers much leeway. The transaction is not an equal one at this level.

Nor, of course, is it equal at the last one. Here we are inside the sweatshop, or a Third World country whose government welcomes sweatshops producing for export to the West. Here there is nothing remotely resembling equality or a voluntary transaction between employees and employers. Workers are usually on their own and often desperate enough to accept any job at all. Unions are usually either outlawed or terrorized into ineffectiveness by gangs paid by the employers and not arrested by the government. In general, there is a cozy relationship between employers and a corrupt military and government bureaucracy. Laws may exist that prohibit various kinds of mistreatment of employees by employers but officials will look aside for a fee or out of loyalty to the "old boy" network that includes the employers in question.

The so-called exchange relation between employees and employers in these sweatshops starts out unequal and remains so. The initial inequality would call for the application of the due care theory. The employers should look to the health and long-term interests of their employees, now essentially powerless. But the long-term interest of these employees lies in their being empowered and, in many cases, it lies in their being educated. But part of being educated is learning to stand up against mistreatment, but the employers fear and oppose this.

What is the brandname firm's responsibility in this? What is our responsibility as consumers? Are we blameless if we know these things and say or do nothing about it? The theory of joint responsibility can speak to this matter. Because we are linked with Xmart as a shopper there, and less directly with the brandname firm which supplies Xmart, and even with the sweatshop owner who supplies the brandname firm, we are indirect exchange partners of workers in Asia, Africa, and Latin America. Our purchases, along with those of Xmart and the brandname firm, contribute to a single complex act affecting physically distant people. Without our collective complicity, things might be better for them. Now someone who is ignorant and has no chance to learn may be excused from responsibility, but if you suspect that you may be contributing to harm and choose to remain ignorant because you don't want to know, the excuse evaporates, the innocence evaporates.

Not all consumers are equally blameworthy, of course. Workers who are holding down two jobs just to make ends meet (one of them might be a full-time job as a homemaker) or through no fault of their own never picked up the skills to check out rumors about distant injustice are not as blameworthy as persons with research skills, internet access, and a modest amount of free time.

We have long since passed the date at which the large corporate middlemen (Nike, The Gap, etc.) can plead excusable ignorance of the conditions in factories of their suppliers.