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Issue No. 144 12 July 2002  

The Lotto Economy
The failure of George W Bush's much-hyped pitch for corporate responsibility underlines the current crisis facing unregulated global capitalism: the system is corrupting all before it.


Interview: Capital in Crisis
ACTU president Sharan Burrow outlines the global union response to the corporate carnage gripping an increasingly shaky system.

Industrial: No Sweat
Neale Towart surveys the international debate around sweatshops and what can be done to regulate them

Bad Boss: Super Spam
Several late scratchings have seen Workplace Relations Department secretary Peter Boxall win this week�s heat of the Workers� Online Bad Boss handicap.

History: Living Treasures
Labour History is 40 this year. Greg Patmore looks back at what it took to get a regular journal of the labour movement in Australia up and away.

International: Axis of Evil
George W Bush�s scarecrow trio of Iran, Iraq and North Korea is not an original invention, argues Stephen Holt

Solidarity: Pride of Place
NSW Labor Council and CFMEU flags sit alongside the mounted jersey of former Kiwi Rugby League hooker Syd Eru in a modest home at Manurewa, south Auckland.

Technology: The Art of Cyber-Unionism
More Unionism? Transformed Unionism? Peter Waterman looks at a new handbook for unions and the internet

Poetry: The Masochism Tango
Tony Abbott's comment we should accept a bad boss like a bad husband or bad father has made us all realise that instead of fighting bad bosses, we should love them. Anyone for a tango?

Satire: Foxtel-Optus Merger 'Anti-Repetitive'
The ACCC has ruled today that the proposed content sharing arrangement between Foxtel and Optus Vision would constitute anti-repetitive conduct

Review: Bob Carr's Thoughtlines
Stephen Holt reviews one man's journey from collectivism to the centre


 Sweat Shops � Coming To A Street Near You

 Glassworkers Walk for the Umpire

 Family Friendly For A Buck

 Abbott in Slow GEER

 Royal Commission Bugs Workers

 Drivers Frozen Out by Corporate Spin

 Coca-Cola Brews Storm In A Tea Cup

 Bush Prepares for War on the Wharves

 Safety Summit A Hit With Unions

 Beattie Faces Bargaining Face-Off

 Casual Work Exploits � Catholic Church Agency

 More Effort Required On Disabled Workers

 Protecting Security Officers From Disease

 Activists Notebook


The Soapbox
Why Modernisation Matters
Labor frontbencher Mark Latham argues that the ALP's reform agenda must go way beyond the 60-40 debate.

The Locker Room
Playing To The Whistle
Phil Doyle takes a look at the man in the middle, and he doesn�t like what he sees.

Inquiry Into Executive Pay
The ACTU Executive this week called for a public debate on spiralling executive pay packets, seeking feedback from workers, community representatives and unions.

Up In Smoke
Wobbly Radio's Nick Luccinelli reports from England where drug law reform is on the political agenda.

Week in Review
Bulldust and Boofheads
Jim Marr casts his eye over a week in which bullshit and bad bosses fought for headlines�

 On Aspiration
 GST Agenda
 Amanda's Mediocrity
 Capital Ideas
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No Sweat

Neale Towart surveys the international debate around sweatshops and what can be done to regulate them


Outwork and the textile, clothing and footwear industries seem inextricably intertwined. Consumer and NGO pressure do make some impact, as the concessions of Nike to the NikeWatch campaigns show (although they do their best to claim good practice whilst blaming their contractors for poor conditions for workers). Naomi Klein has shown brilliantly in No Logo how these companies work and now the new internationalist movement is starting to find ways of combating them.

That the problems remain is shown in a recent article from Morocco where the working conditions of workers in the TCF industry are deteriorating. The general secretary of the Morocco Labour Union (UMT), Khadija Rhamiri says that most female workers earn less than the minimum wage and are not registered with the national social security fund. Many work more than 48 hours per week and do unpaid overtime on top. Sanitary and safety conditions are appalling. Over 80% of workers in the TCF industry are women and many work for family-run businesses where there is no attempt to abide by labour codes. If workers do form a union, the bosses immediately declare ar and fire all union members. They also close factories illegally and set up another one down the road. Many female workers, particularly in the carpet industry are under 12 years of age and are not allowed to pursue apprenticeships. Rhamiri says that some employers bring in armed mercenaries to deal with unions. In China manufacturers often pay about 13 cents per hour to a seemingly unlimited flow of workers moving into manufacturing zones from the country, considerably less than the legal minimum of 33 cents per hour.

In Australia we don't reach that level but sweatshops are all too common. An estimated 300,000 workers are employed as fashion outworkers, many working long hours at very low rates in poor conditions. This is despite many attempts by unions and government to regulate the industry. The NSW government has release a report, Behind the Label, in the latest attempt to deal with the problem. The aim is to pressure retailers to deal only with ethical subcontractors. There is a new code of conduct and a plan to name and shame those who do not abide.

An Ethical Clothing Council with representatives from unions and the government has been established and the code of conduct is a step up from the previous code, developed in 1996. The previous code did little for outworkers, despite the best intentions of its originators. Alistair Greig has been closely involved in the development of the new code, and points to the problems of the industry and how to tackle them in the latest Journal of Australian Political Economy.

Greig looks at the key participants in the clothing commodity chain and goes on to argue the need for manufacturers and large retailers to take on greater responsibility. He also strongly argues the case for government to take greater responsibility for regulating wages and conditions.

A legislative approach has been tried over recent years whereby outworkers have been deemed employees. However subcontractors have been able to continue to mask the real relationship with their employees so that they appear for legal purposes to be self-employed. Some outworkers do feel that they make more money this way too.

The post-Fordist views of the late 1980s and early 1990s also tended to inform those involved in plans for the textile industry at the time. The TCF Plan was seen as a way to "shake out" the industry. Lower tariffs were supposed to drive out low quality, low unit cost manufacturing and replace it with a leaner meaner high quality approach. The union endorsed tis approach too, showing a sadly touching faith in market rationality. Capital and knowledge intensive work was the way of the future.

Subsequent reports from the Evatt Foundation, NSW DIR and the Victorian government have confirmed that outwork remains a big structural component of the textile industry.

The growth of outwork has been a viable response to the free trade, deregulation agenda, according to Greig. Factors that ensure this is so include:

� The assembly stage of the commodity chain requires a sowing machine that individual workers hire or purchase. Clothing components are very transportable and seasonal fluctuations in demand all go making small scale production an attractive option

� Outworkers and child care go together for employers (they don't have to worry) and employees (who can't afford child carer places)

� Outwork has always relied on a pool of new migrant labour who are faced with various problems in the standard labour market - ie language barriers, lack of knowledge, discrimination and recently changes to social security which makes it harder to access welfare

Asian Women at Work quite rightly claim that these factors make it necessary to treat outwork as a social problem, not just an industrial one.

Stuart Rosewarne in the late 1980s wrote in the Journal of Political economy of the way large retailers dominated suppliers in the clothing industry. This remains the case with the clothing industry classified as buyer-driven. Coles-Myer and Woolies dominate. The SMH this week have been highlighting the same companies dominance of food markets, a more recent development. They have also become clothing label owners in their own right, importing directly.

The TCF Plan had assumed manufacturers would exit the low cost areas. Hey did in a sense. As Naomi Klein outlined in No Logo, they stopped being manufacturers themselves and got others to bear that cost and risk. Thus they have been evading responsibility for the way in which goods are made. They say they are not in a position to verify whether their subcontractors are employing outworkers. Greig says that there is no reason to doubt that the retailers can possess the knowledge of their production and distribution networks necessary to ensure the products are produced in fair circumstances.

Katie Franklin has recently run a good series on the problem (see on the ABC website. She also highlights the success of the Melbourne retailer and Manufacturer Hunter gatherer who do produce clothing and accessories ethically, to the horror of rivals.

Compliance with the fairwear approach has been a big issues since the TCF unions and allies launched it some years ago. The is one reason why the NSW government has been active on this issue and the reason for the launch of the newer No Sweatshop label

The proposals point out that the free market approach has been a failure. Focusing on transparency they can expose the bad faith of retailers and others in the clothing commodity chain. Manufacturers and retailer highlight this point by the old threat of "capital flight". This emphasises the need for a co-ordinated approach at least across Australia to address outworkers exploitation.

Governments and commissions have commended a national code around the No Sweatshop label. However it remains voluntary. Unions and supporters see it as a necessary but insufficient mechanism to improve conditions. It's only effective if it has universal support. The Australian Retailers Association has already withdrawn. Only 4 of the original 140 firms who had signed on to the original code of practice has signed on for accreditation by March 2001, with 5 more beginning the process.

The NSW legislative approach included:

� An ethical clothing council that has a broad function to make recommendations and makes quarterly reports

� Has a responsibility to report on the efficacy of industry compliance with voluntary mechanisms

� Provision for enforcement of obligations imposed by the code

� Amends the IR Act to allow recovery of unpaid remuneration by "self-employer" outworkers

Voluntarism remains an issue but it has acted to heighten awareness by government and consumers.

Consumer action via Fairwear has been a significant factor for some years, and some successes by public protest and lobbying have been chalked up. International consumer lobbying is also a part of this, and international labour codes have had some impact on clothing manufacturers worldwide. NGOs and campaigns such as NikeWatch and other US based anti sweatshop moves (from some US universities especially) have been important factors in keeping the issues to the fore.

The major changes still have to come at the point of production, a lesson for all social movements who tend to discount the role of real people at the "coalface" as it were. Manufacturers and retailers have been reforming the commodity chain by Quick Response and Supply Chain Management and have made big steps in quality assurance and accountability. The have been far less willing to act on the situation of workers who d the actual manufacturing and assembly.

Each part of the campaign for outwork reform is necessary but is in itself insufficient to ensure wage justice and better conditions for workers. Union and consumer action, codes of practice and the actions of some manufacturers and retailers are great beginnings but national and international co-ordination remain the keys.


Greig, Alistair (2002). The Struggle for Outwork reform in the Australian Clothing Industry. in; Journal of Australian Political Economy no. 49, June.

Lamont, C�celia (2002) Morocco: the textile industry goes underground. in; Trade Union World, no. 6, June.

Klein, Naomi (2001). No Logo (Flamingo)

Rosewarne, Stuart. Retailing in the 80s (two articles); in; Journal of Australian Political Economy a few years ago now.


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