Evaluating Strategies for Negotiating Workers’ Rights in Transnational Corporations: The Effects of Codes of Conduct and Global Agreements on Workplace Democracy

Journal of Business Ethics · 2007 · Volume 76 · Issue 2

Abstract

Following the offshoring of production to developing countries by transnational corporations (TNCs), unions and non-governmental organisations (NGOs) have criticised working conditions at TNCs’ offshore factories. This has led to the emergence of two different approaches to operationalising TNC responsibilities for workers’ rights in developing countries: codes of conduct and global agreements. Despite the importance of this development, few studies have systematically compared the effects of these two different ways of dealing with workers’ rights. This article addresses this gap by analysing how codes of conduct and global agreements bothindependentlyandinteractivelyaffect workers’ rights. We do this based on a qualitative study of the Sri Lankan operations of a Swedish TNC in Sri␣Lanka, and on interviews with union and NGO representatives actively involved in codes of conduct and global agreements. Our results indicate that global agreementsindependentlyaddress all the aspects included in codes of conduct, while also addressing additional, more process-oriented aspects of workers’ rights. Hence, on their own, global agreements seem to comprise the superior approach to promoting workers’ rights. Furthermore, our results indicate that promoting codes of conduct has negativeinteractiveeffects on global agreements. Based on these results, we argue that the current focus on codes of conduct is counterproductive for the promotion of workers’ rights.

Keywords

code of conduct, corporate responsibility, global agreement, international framework agreement, labour practice, non-governmental organisation, transnational corporation, union, workplace democracy

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