Ambreen Waheed Business Ethics University of Cambridge

UNIVERSITY OF CAMBRIDGE

THE JUDGE INSTITUTE OF MANAGEMENT STUDIES

BRAND IMAGE AND BUSINESS REALITY:

ETHICAL PRACTICE STANDARDS ALONG SUPPLY CHAINS

IN THE ATHLETIC BALL INDUSTRY

MANAGEMENT STUDIESMPhil Dissertation

SUBMITTED BY AMBREEN WAHEED, MSC

SUPERVISED BY DR. JANE COLLIER

SEPTEMBER 1998

Ambreen Waheed, Cambridge 1998

Table of Contents

I. ACKNOWLEDGEMENTS 3II. LIST OF TABLES 4III. LIST OF FIGURES 4IV. ABSTRACT 5V. WORKING DEFINITIONS 6………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

1.0 INTRODUCTION 1.1 Rationale 71.2 The Context 81.3 The Case of the Athletic Ball Industry 81.4 Sialkot, Hand-stitched Balls, and Social Audits 10………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

2.0 THEORETIC PERSPECTIVE2.1 Ethics in Society 112.2 Ethics in Business 122.3 What is an Ethical Business Organisation? 152.4 Measuring Business Ethics and Social Responsibility 172.5 Social Auditing and Brand Image 19………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

3.0 RESEARCH METHODOLOGY3.1 Research Questions 213.2 Approach 213.3 The Investigative Process 233.4 Data Collection and Tabulation 243.5 Outline of Research 26………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

4.0 DATA PRESENTATION4.1 Social Accountability Standards 274.2 Codes of Conduct & Organisational Policies 274.3 Advertising and Claims 284.4 Interviews 284.5 Questionnaires & Telephone Discussions 294.6 Field Observations & Physical Verification 30………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

5.0 DATA ANALYSIS 5.1 The Supply Chain 325.2 The Stakeholders 335.3 Representation & Discussion of Findings 345.4 Where the Brands Stand on Social Responsibility 51………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

6.0 CONCLUSION6.1 Summary of Findings 536.2 The Last Word 55………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

VI. ENDNOTES 57VII. REFERENCES R1VIII. APPENDIX A3

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I. ACKNOWLEDGEMENTS

Work on this dissertation has brought me in touch with many people who have earned

my gratitude. From the staff at the British Council and Lucy Cavendish College to new-

found friends and the best neighbours one can have, encouragement of each one of these

wonderful individuals enabled me to spend a most fulfilling year at Cambridge.

I am indebted to my supervisor, my tutors, all members of the faculty I had the benefit of

learning from, and my colleagues at the Judge Institute for enriching my educational

experience and, indeed, my life.

More specifically, I would like to record my sincere appreciation for the Sialkot

Chamber of Commerce and Industry for facilitating my fieldwork in Sialkot-Pakistan

and its surrounding villages. Representatives from Adidas, AliTrading, Capital, Fair-

trade, ILO, Leatherware, Mitre, Moltex, Nike, Puma, Reebok, Save the Children, Saga,

Sublime, Talon, UNICEF – speaking for the Sialkot Partnership and their own

organisations – offered unfailingly co-operation, and were helpful without exception. I

was impressed with their concern for the artisans of Sialkot and their future.

It is inconceivable for me to have gone through the past year without my parents'

prayers. But having Feroze, my seven-year-old and my husband always by my side

remained my biggest source of strength and motivation. This effort is dedicated to them.

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II. LIST OF TABLES

Table 3 – a Outline of Research Information Requirements page 26

Table 5 – a Social Auditing Variables & Brand Codes of Conduct page 36

Table 5 – b Comparative Rating of Performance Variables page 37

Table 5 – c Aggregate Ratings of Performance Variables page 38

Table 5 – d Social Performance Through the supply chain page 52

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

III. LIST OF FIGURES

Fig.2 – a Concentric Circles of Corporate Responsibility page 14

Fig.2 – b Why Businesses Choose Social Auditing page 20

Fig.5 – a The Athletic Ball Supply Chain page 32

Fig.5 – b Stakeholder Dynamics in the Ball Industry page 33

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IV. ABSTRACT

Responding to widespread consumer concern about exploitative working conditions

along supply chains of some of the most recognised sports brands, the international

sporting goods industry adopted a Code of Conduct designed to ensure socially

responsive sourcing. Meanwhile, in Sialkot, Pakistan – source of 70% of the world’s

hand-stitched athletic balls – individual brands introduced ethical practice guidelines for

their respective sub-contractors. Brand marketing messages claim success of the Sialkot

Partnership. Consumers are assured that sub-contractors must prove compliance of these

policy guidelines, but there is insufficient direct evidence to inform public opinion.

This research applied established social responsibility performance criteria to key points

in the supply chain of five global brands and one fair-trade organisation who source in

Sialkot. It found that each brand possesses well-articulated policies on corporate

responsibility and labour practice for manufacturers. These policies are conveyed to the

consumer as part of the brand’s image. However, a look at the manufacturing end of the

supply chain reveals that the essence of these Codes of Conduct are not well understood

at the level where artisans hand-stitch the balls. The brands need to work harder with

their manufacturers to encourage the attitude of corporate citizenship necessary for

implementing socially responsive policy.

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V. WORKING DEFINITIONS

- Athletic balls: Term applied to all inflatable balls used for competitive sports.

- Beneficiaries: Local people standing to gain from development interventions.

- Brand: Owners of brand names, who sub-contract manufacturing.

- Business Ethics: Body of knowledge devoted to moral aspect of transactions.

- Code of Conduct: Policy guidelines outlining best practices based on vision.

- Community: In this case, a socio-culturally-homogenous group living in a place.

- Corporate Citizenship: The extent of fulfilment of a company’s social contract.

- “Maker”: The middleman responsible for dealing with home-based labour.

- Manufacturer: Sub-contractor often producing for many brands at once.

- Social Auditing: Evolving set of methods used to assess business responsibility.

- Social Responsibility: The social contract between business and society.

- Stakeholders: Anyone standing to gain or lose from a company’s performance.

- “Stitcher”: Artisan who hand-stitches an athletic ball, often in a family setting.

- Supply Chain: From raw material to the retail shelf – the journey of a product.

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1.0 Introduction

1.1 RATIONALE

Walk into a sports store in Britain. The soccer ball on the shelf, with the Brazilian team

logo will most likely be made of Korean artificial leather laminated with Japanese textile

and Malaysian rubber latex; stitched by a Pakistani artisan around an Indian bladder with

a German design printed in American ink.

Few sporting and leisure articles originate from a single source of materials or

manufacture. They are usually commissioned from sub-contractors by marketing

companies who own brand names familiar to the consumer. Brand company

merchandisers must identify the most profitable sourcing arrangement for a particular

article. Thus, an overwhelming proportion of athletic balls destined for retail in Europe

or North America is assembled in South Asia with raw materials from the Pacific Rim.

Tracking supply chains of leisure products has the potential to be studied at considerable

depth, but can be an ambitious undertaking. Within the limitations of this research,

therefore, it was necessary focus on a product that could serve an illustrative purpose

without the need to unravel a complicated supply chain.

The athletic ball was chosen, firstly, because no independent study of corporate

responsibility in the athletic ball industry is available. Secondly, because the product

received a lot of media attention especially in the months preceding the World Cup last

summer. Thirdly, it is 18 months since major athletic ball brands joined their local sub-

contractors to introduce ethical sourcing practices to the hand-stitched ball industry.

Fourthly, in Sialkot, east central Pakistan lives the world’s largest cluster of ball stitching

artisans, making fieldwork relatively convenient. Fifthly, being home to the Sialkot

Partnership, which accounts for 70% of the international soccer-ball business i a

representative sample is available. And finally, because the well-defined supply chain,

between the buyer at a retail outlet in the West and the artisan commissioned by a local

manufacturer in a developing country, allows a thorough study.

I VI. ENDNOTES

? Formed in February 1997, the Sialkot Partnership® claims to be committed to social responsibility and good labour practice. 55 major international brands have pledged o source only from 34 of key manufacturers who are monitored by the ILO, accounting for 70% of Pakistan’s export production..

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This study coincides with the entry of Social Auditing technique into a mature phase

represented by the introduction of “standardised” assessment toolsii. The cross-

applicability of some newly developed tools is still under debate. Criticised for

representing “Western values”, and being culturally unsuited to communities where they

will most likely be employed, a field test in Pakistan provides an opportunity to further

the dialogue on their value.

1.2 THE CONTEXT

The social responsibility debate arrived in the soccer arena in 1994 when human rights

groups and the media accused major sporting goods brands of exploitative labour

practices in poor countries. One media expose after another criticised some of the most

recognised sports brands for creating enormous profit margins out of the misery of

poverty-stricken Asians and Latin Americansiii.

The soccer-ball industry came in for some of the strongest criticismiv. The “Foul Ball”

Campaign called on “soccer moms” to boycott balls made by children in unacceptable

labour conditions. When the brands said they had limited control over sub-contracting

manufacturers in China, India, Pakistanv or Vietnam, they incriminated themselves even

more. Parliamentary debates in the United Statesvi and in the European Parliament took

notice and contemplated import embargoesvii on sporting goods produced by exploited

labour. The picture was clouded by the reported denials of Pakistani officialsviii and a

visible defensiveness within its industryix.

The media attention spurredx the World Federation of the Sporting Goods Industry

(WFSGI) into adopting an Ethical Business Code of Conduct in July 1997 for its

membersxi. Most WFSGI-member soccer brands source their hand-stitched athletic balls

from Sialkot, Pakistanxii. As a result, brands and their manufacturing partners in Sialkot

launched the Sialkot Partnership in February 1997, which aims to shift all athletic ball

production by March 1999, to manufacturing units monitored by the International

Labour Organisation (ILO). The Sialkot manufacturers are jointly funding for the ILO

monitoring programme.

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1.2 THE CASE OF THE ATHLETIC BALL INDUSTRY

Brands and manufacturers invariably refer to their role in the Sialkot Partnershipxiii, while

some proclaim their success louder than others doxiv. Its supporters claim the project is a

revolution in socially responsible sourcing, bringing together diverse agencies from the

UN system, government and the NGO sector in an intervention that leads to focused

local development. Recognised by the Council on Economic Prioritiesxv, and Business

for Social Responsibilityxvi in 1997, it could be a test case for similar interventions in

other developing countries, and may become a precursor for an industry-wide social

responsibility trendxvii. If we can confirm that the Sialkot project has appreciably

improved the labour practice situation in the ball industry, prices of soccer balls have not

increasedxviii, yet the local manufacturers still manage to remain profitable despite the

added costs, there are lessons here for Social Audit practitioners. In the time it took to

negotiate the Sialkot Partnership, the brands implemented their own sourcing guidelines

for their manufacturers. Anticipating consumer concern, especially in a World Cup year

they publicised their new sourcing policiesxix and the business standards and working

conditions they guaranteedxx in Sialkot.

It is easy to appreciate the pressure this entire situation put on the Sialkot manufacturers

to adoptxxi brand guidelines and the WFSGI code unquestioningly. Membership of the

Partnership expanded rapidly to almost 60% of the business community within the first

three months. Ironically it is the rapid move away from the traditional ways of business

that has kept the philosophy of corporate citizenship from permeating deeply. Only a

handful of local manufacturers have demonstrated a verifiable commitment to ensure

“clean” production processes and supplier arrangements. The rest do not appear

completely convinced that “good practice is good business” over the long term.

Amongst the 34 companies who have signed up for the Partnership, only one has

established a separate corporate responsibility department, while fewer than 10 have

designated social responsibility staff. Fortunately, because the few champions of the

idea represent over half the exports from Sialkot, the idea has gained impressive

momentumxxii, compared to other labour-intensive industries found all over Asia and

South America.

The ILO’s intervention as the third party monitor has generally legitimised the industry’s

efforts and their claims now have greater credibility. Other high profile UN agencies,

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international human rights organisations and national social development NGOs are

setting up in Sialkotxxiii. With the number of ILO-registered centres multiplying on target

and the future of business with American and European clients tied firmly to the

Partnership, it seems social responsibility has come to stay in Sialkot’s athletic ball

industry. Even if they cannot be credited with anything more than a timely response to a

business threatxxiv, Sialkot’s business leaders are quickly realising how difficult it will be

for them to back away from the standards they have set for themselves.

1.3 SIALKOT, HAND-STITCHED BALLS AND SOCIAL AUDITS

Whether this awareness has led to any meaningful attitude change among local

businessmen is yet to be determined. Despite the apparent level of interest, they lack

conceptual clarity about what social responsibility means for business. The capacity

within the industry to promote such understanding is limited because the very

manufacturers capable of disseminating social responsibility values learnt doing business

in highly conscious consumer societies like Scandinavia and the USA are unwilling to

share them with competitors. An accurate assessment of the attitudes and practices of

local business leaders toward social responsibility can lead to a workable approach for

building their awareness and understanding. A recognised yardstick is required.

Consumer groups, trades unions, human rights advocates, development workers and

stakeholders themselves, are all following developments in Sialkot for their own reasons.

Especially so, when the brands claim elaborate controls on their product manufacturing

arrangements, and guarantee the highest standards of ethical business. Thus, the athletic

ball finds itself under scrutiny again: Are “foul-balls” still emerging from the depths of a

brand’s supply chain? How true are claims of sourcing guidelines, codes of conduct and

“clean” product? Again, an acceptable measuring tool is needed.

In pace with the demand for socially acceptable products, recent strides in Social

Auditing offer tools for assessing business leaders’ attitudes and practices regarding their

social responsibility as well as sourcing for specific products. The Institute of Social and

Ethical AccountAbility has created standard tools to help companies quantify their social

performancexxv. The Council on Economic Priorities’ SA8000 standard is for companies

who want third party social auditsxxvi. Business for Social Responsibility distributes a

“Social Responsibility Starter Kit” for companies looking to set up an in-house audit

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capacity. The Ecumenical Council on Corporate Responsibility and its affiliatesxxvii have

their own benchmarks for business performance.

This research seizes the opportunity to field-test a “standard” audit tool in Sialkot’s ball

industry. It may help bring the corporate responsibility debate to Pakistan.

2.0 Theoretic Perspective

2.1 ETHICS IN SOCIETY

Ethics is the standard of what society considers right and wrong in terms of acceptable

behaviour (Serwinek, 1996). While ethics is more easily defined as a term, its

interpretation continues to be debated. The yardsticks that determine the values for a

code of ethics – for a society, for a culture, for a business – all remain fairly general and

may vary from one society to another. There is no dispute, however, that Ethics lies at

the very centre of social equilibrium. The Encyclopaedic Dictionary of Business Ethics

(Werhane and Freeman, eds. 1997) defines it as a planned attempt to follow society’s

norms, standards and expectations. Morality is the term that covers practices that may be

considered “right” or “wrong”, the rules that govern those activities and the values that

are followed in practice.

Moral codes create a balance of power between segments of society, those that are

influential and those comparatively vulnerable. By imposing restraint on one they

empower the other. A society with no moral structure may seem attractive from the

point of view of the individual. But without morality driving a legal system, and with the

individual charged with adjudicating conflict, only the interest of the strongest would

prevail. This environment of unrestrained self-interest with everyone pursuing their own

interests would be no more than a state of war. Hobbes has called it the "state of nature"

in which human nature tends to continuously test ethical limits. A society’s moral values

encourage individuals to put off their natural tendencies (Christensen, 1997), and help to

adjust for this human failing. It is, perhaps for this reason that religions exhort their

followers to rise beyond “temptation” in the pursuit of “higher” inclinations. On the

other hand, there are those who have much greater faith in the inherent goodness of the

human character and feel that, barring a few exceptions, every one would prefer to

operate in an ethical environment (Daigneault, 1997).

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Business is simply the extension of society (Evans, 1991), with the financial motive

emphasised. Hence, the values of a society permeate the conduct of business within it.

Societies are governed by a “give-and-take” ethic. The concepts of rights, privileges and

duties construct the parameters of exchange, and the rules require that members of a

society stay within them for it to retain a state of equilibrium. The “currency” of this

social exchange is a system of rewards and punishments that accrue in response to how

successful or unsuccessful a member is in meeting the demands of the required social

“trade-offs”. For every member, however, “right”, “privilege” or “duty” constitute value

measurements that can be “graded” to assess conformity with the societal ethos. With

“right” being the counterweight or equaliser, a higher “score” entitles a member to “more

privilege”, but may also demand “greater duty”. On the other hand when a member

threatens the equilibrium by scoring low, “privilege” is withdrawn to the point where it

can turn into sanctions or exclusion. Therefore, a definition of business ethics cannot be

far removed from a society’s articulation of its own values and principles.

There is a strong tradition of business ethics throughout history (Werhane & Freeman,

eds. 1998), though it has become a subject for academic debate only since the last quarter

of a century. Plato’s famous saying about virtue being more profitable in the longer term

shows how business ethics was a live issue at the time. Aristotle’s ‘ethics of virtue’ is a

charter for fairness, calling for moderation, eschewing either excess or deficiency in

conduct. Artha – or the pursuit of wealth – in Hinduism has its own rules (Sethi &

Steidlmeier, 1997). The ancient Japanese concept of kyosei collectivises social goals and

aspirations (Di Norcia, 1998). Islam echoes the value of balancing the positive and

negative qualities of human character for the overall benefit of society or Masalahah

(Sachedina, 1997). Common to the Judeo-Christian tradition are justice, morality and

higher motives as the foundations for the “greater good” that extends to business to form

the basis of fair trade and profitability (Tamari, 1997). Even staying independent of

purely religious or philosophical perspectives, there are arguments for ethical business

behaviour (Daigneault, 1997)xxviii.

Business activity, therefore, solidly fits into a society’s moral fabric. In spite of the

amount of discourse on the “amorality of business”, even the staunchest supporters of the

point of view qualify their arguments with some moral justification. Adam Smith, oft

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quoted for his free-market thesis, nonetheless argued for balancing the free market with

social institutions and personal relationships.

2.2 ETHICS IN BUSINESS

The evolution of business ethics over the past centuries tends to coincide with the natural

history of individual rights and empowerment, and more notably, the rise of

environmental activism (Cannon, 1994). Leading from a stage in the last century, where

the only requirement of business transactions was to stay clear of legal statute (Friedman,

1963), the field has grown now to require that a "fair deal" be achieved for everyone on

both sides of the bargain. The present debate is characterised by two principal positions,

with a number of “middle-ground” points of view (Gray, Owen and Maunders, 1997.

According to the “pristine capitalists” (Gray, Owens and Adams, 1996) such as

Friedman and Hetherington business is amoral and seeks only to achieve the highest

possible economic benefits in a market unhindered by excessive government regulation.

However, even staunch proponents of this utilitarian approach concede that in a human

society, every action must have ethical undertones and be judged by moral yardsticks.

On the other side of the divide are those who point out flaws in the amoral business

argument. They point out that ends cannot be justified by the means. Every business

decision is a moral decision since the motive and the way one goes about making a profit

is essential to the legitimacy of that profit. Other points of view that challenge the

pristine capitalist stance represent political ideologies that are opposed to business as the

repository of enormous power. This includes proponents of socialism, human rights,

radical feminism, and social ecology, who all believe for various reasons that the

ideology of amoral capitalism is fundamentally flawed.

In the “middle ground” of this debate are to be found those who feel that by accepting a

minimal level of social responsibility businesses can get on with making their profits

with less interference. This “expedient” view, when taken up with greater conviction

may transform into the “social contract” point of view, which considers the existence of

business a favour from the society, and hence must “pay back” by sharing profits for

wider social benefit (Samuelson, 1986; Beauchamp & Bowie, 1988; Gray, Owen &

Adams, 1997).

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For two decades now, French has argued that corporations have the capacity to take

moral responsibility for their actions much like adult human beings. Kerlin (1997), calls

this “legal fiction”, pointing out that moral blame and punishment must ultimately go to

the people who have influence on how members of a group behave. He asks if it is

possible to “shame” an organisation? In short, while businesses may be amoral in the

legal sense, they cannot remain untouched by society’s moral expectations. Hence,

although business cannot be termed as a “moral persona”, it is clearly a moral agent.

Werhane (1984) differentiates the moral agency into primary and secondary categories.

The individual retains the primary moral responsibility for decisions that affect those

around, but when organisational decisions lead to policies or actions that have a wider

impact, the individuals behind them tend to become indistinguishable from the corporate

façade. Corporations are secondary moral agents unable to operate in a “moral vacuum”

(Arkin, 1996). The collective responsibility of individual decision-makers cannot be

confused with the organisation’s “persona”. Over the years businesses have increasingly

begun to view ethical transactions as beneficial to the bottom-line (Matthews, 1988;

IBM, 1992; Bolier, 1996; Logsdon and Burke, 1996; Hunter, 1996; Solomon, 1997;

Pennington, 1997). It is easy to see how this is true in the information age, since a

positive image for a business ensures customer loyalty it is a sure recipe for profitability.

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Education, Health

Environment Protection

Local Development

Safe Working Conditions

Quality, Product ProfitsJobs, Services


Whether consumer-driven (Kaler & Chryssides, 1996) or led by an intrinsic need for

moral behaviour (Post, 1996; Daigneault, 1997), today’s business world is learning that

individual values are less carefully separated from monetary gain. As a result there is an

increasing tendency to apply morality to the conduct of business. Pope John Paul’s

Centisimus Annus (Green, 1997; Sethi, 1997) significantly indicates how the Catholic

Church superimposes business and its moral values, justifying the pursuit of “fair”

profits balanced by equitable distribution of the wealth created as a result. This changed

attitude is perhaps a principal reason for the acceptance of corporate responsibility

among modern business. Figure 2-a, from the Council on Economic Development

illustrates how a business is placed in its social role.

The phenomenal growth of multinationals, in size and influence, and their accumulation

of vast resources (Gray, Owen & Adams, 1996) fuels arguments for greater

accountability, and hence, social responsibility, to an increasingly aware consumer.

Together with a heightened sensitivity about human rights and the environment, and

issues of trade globalisation such as dumping and preferential tariffs, business finds itself

in a position where it must please a more diverse audience than ever before. The

decreasing capacity of businesses to control outsiders’ access to its information

complicates the situation further. Much like an evolving organism reacting to external

stimuli (Goodpaster in Werhane, 1997/85), the flow of information is compelling

business to change forever (Kerlin, 1997). A time has come when business must rely

more on the image it creates in the consumer’s mind (Baird, 1997) and be prepared to

change company behaviour as a result (Carmichael et al, 1995). No longer can

corporations be let off he hook simply by labelling them amoral. This means that

society’s expectations of a wider sharing of profits mount, and the vaguely articulated

“social contract” between business and society gets more and more public attention

(Samuelson, 1986). And, indeed, activists now have powerful arguments to oppose not

individuals who run the businesses, but the organisations as a wholexxix. The consumer

argues that if business has privileges then it must have obligations to match.

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2.3 WHAT IS AN ETHICAL BUSINESS ORGANISATION?

In broad terms, an ethical business can be defined as one which inspires trust because it

is responsible, law-abiding, fair-trading, socially responsive, charitable, and puts values

before profits (Appendix-I). Trust, in turn, depends on credibility, character, competence

and service (Pennington, 1997) communicated clearly and effectively to the consumer

(Elkington, 1997). Being “human” characteristics (Zadek, 1997), these values help the

consumer link them to their mental image of a socially responsible business. People

want to deal with a “human” organisation that treats its own well, is fair to deal with, and

leaves a beneficial impact on its natural, social and commercial surroundingsxxx (Nolan,

1996; Elkington 1997).

Fairness is the value that cuts across the conduct of business as a whole (Solomon,

1993). It applies to investors, owners, worker, suppliers, retailers, community,

stakeholdersxxxi, and all participants in the market system. Often businesses try to sell

themselves as fair businesses, and are prepared to bear the costs that help present them as

such (Augustine, 1997). No doubt that customers are more likely to buy from companies

that act ethically and rise above pure economic interest, but there are many who have

traditionally doubted the motives of such organisations. It is not unusual for a business

to use ethics merely for making their business activity credible, and therefore, more

profitable (Solomon, 1993; Kaler & Chryssides, 1996).

Being fair means being ethical, sensitive and responsible. Hence, businesses that

recognise their role as citizens and assume a responsibility to fulfil it can be termed

'ethical' or ‘socially responsible’ organisationsxxxii (Werhane & Freeman, eds. 1997). A

socially responsible business is more direct and proactive in anticipating its own role in

its community, being alert to social change, and responding to society's new demands

and concerns without deviating from its defined goal. Many successful models are now

documented, where businesses have proven their social commitment to their stakeholders

by allocating resources to charitable causes or initiating issue-specific programmes

(Carmichael & Drummond, 1989; Makower 1994; Scott & Rothman 1994; Reder 1995;

Korten, 1996; Bolier 1996; Daigneault, 1997; Wernhane & Freeman, eds. 1997; Zadek,

Pruzan & Evans 1997).

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From the many available definitions and literature describing its desired qualities, the

attributes of a good corporate citizen (Mahoney, 1996; Warner, 1996; Werhane &

Freeman, 1997; Daigneault, 1997) can be narrowed down to:

1. Disclosure;

2. Respect for people;

3. Human Rights and Labour Rights;

4. Employee Rights;

5. Fair business practices;

6. Environment;

7. Community involvement;

8. Political involvement.

These characteristics appear in a large number of company codes of conduct, social audit

tools and reports, and appraisal formats for various assessment programmes now in

voguexxxiii. They are important indicators for assessing an organisation’s understanding of

its own role and how it strives to deliver tangible programmes.

2.4 MEASURING ETHICS IN BUSINESS AND SOCIAL RESPONSIBILITY

Employing indicators to assess an organisation’s commitment to its social duties is

moving towards becoming a more exact science, following the demand (Zadek, 1997)

for assessing the phenomenon in more quantifiable terms. The most commonly used

term for it is “Social Auditing” (Blake, Fredrick & Myers, 1976). Theodore Kreps first

used the term in 1940, who referred to it in terms of an accountability tool for businesses.

Subsequently, in the early 1950’s Howard Bowen used the same term implying it as a

management tool.

With the passage of time “Social Auditing” has come to mean something that is the

barometer for assessing a business is in terms of its social responsibility. But there being

still no agreement on the meaning of the term so far (Zadek, 1998), its basic concepts

remain less tangibly articulated as opposed to the precision achieved by other

management processes in general. The maturation of the definition of Social Auditing

has also overlapped debate on which exactly the stakeholders are for a business. In the

1960’s George Goyder first added customers, suppliers and community into the general

description of the term (Zadek, Pruzan & Evans, 1997). Today the stakeholders’ concern

about corporate social responsibility is turning into a demand for monitoring companies’

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performance (Blake, Fredrick & Myers, 1976). Zadek (1997) proposes the term “Social

and Environmental Auditing Accounting and Reporting (SEAAR). He defines it as “360

degree picture of how an organisation is doing in social and ethical terms in relation to

its own aims… Just like financial auditing looks at monetary transactions and

environmental auditing looks at site-specific operations”xxxiv.

The most commonly referred to indicators for a measuring how a business fares in its

social responsibility fall broadly into those that have to do with people, and those that

have to do with the environment. Seven conventions and recommendations of the

International Labour Office (ILO) form the basis of international labour standardsxxxv.

Ratified by UN member states, these lay out guidelines for legislation and national

policy. ILO labour standards have traditionally provided labour unions, human rights

groups and NGOs with yardsticks to measure labour standards in industry. Among the

tools already developed to measure a company’s level of social responsibility, those from

the CEPxxxvi, CERES, and ECCR/ICCR/TCCR – collaborating inter-faith agencies in

Britain, the USA and Canadaxxxvii – appear to have already gained some acceptance

among business. These tools are grounded in the international human rights convention

and are frequently echoed in company codes of conduct.

The nineties were the beginning of the trend towards codification of ethical business

conductxxxviii. Meanwhile, the number of companies embracing socially responsible

visions and values continue to register appreciable growth, and there are discernible links

between their social performance, their impact on stakeholders, and their financial

performance. Makower (1994) is convinced that as the example of these companies

becomes more firmly established, the overriding question will not be whether companies

should adopt these policies and practices, but rather when, and how quickly, they should

do so. Like cost accounting, marketing research, or any other tool of modern

management, ethical investigation is also becoming increasingly useful to further the

commercial aims of business (Kaler & Chryssides, 1996). The science is relatively new

and is still developing its language and practice, but still Social Auditing is becoming a

useful tool. Proactive companies like The Body Shop or Reebok have enhanced their

image, and their business, by presenting themselves for social audits. Other companies

are all but scrambling to follow suit. A measure of this is the increasing number of

companies who have adopted codes of conduct governing labour practices and

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acceptable business standards relating to health, safety and the environment. Figures

from 1990 show 85 percent of major US firms have these codes of ethics (Berenbeim,

1987, 88, 91), followed by 51 percent companies in Germany, 41 percent in Britain, and

30 percent in France (Langlois & Schlegelmich, 1990 – in Kaufer and Robertson, 1990).

Yet, businesses attempting to implement ethical policies and then trying to measure their

impact face many challenges. More and more people agree on the terminology of social

auditing, but unsolved questions still remain. Even when quality standards are defined,

who would lay them down best? Organisations like SGS and KPMG or those like Oxfam

and Amnesty International? From where would they derive their legitimacy? Would an

accountant do a better job than a social scientist? How much would a company pay for

an acceptable social audit? And would it at all be practical for an organisation in

business terms? (Zadek, 1997). It seems these and other similar questions face anyone

contemplating a social audit. However, the case of ISO quality certification has

promising parallels as far as documentation of standards is concerned. Numerous

examples are now being shared, and can help companies decide on an appropriate social

audit process and measuring instruments that will become more accepted over time.

2.5 SOCIAL AUDITING AND BRAND IMAGE

Some internationally known businesses have invested significant time and resources into

setting up social auditing and disclosure programmes. Among the most visible are The

Body Shop, Ben & Jerry’s Homemade Inc. and Traidcraft plc. The New Economics

Foundation has begun an "Ethical Trading Initiative" with government support, which

aims to improve work conditions for employees along supply chains. Asda, British

Telecom, B&Q, Littlewoods and Sainsbury’s have joined up. In the USA, Business for

Social Responsibility and the Social Venture Network have programmes to promote

civic values among companies. The Council of Economic Priorities is promoting its

SA8000 auditing system for businesses to adopt a standardised way of implementing and

documenting ethical practices, much like the ISO certification programmes. Avon

Cosmetics, Otto-Versand and Toys’R’Us have already signed up (Supply Mgt, 1998).

Why do businesses want badges of social responsibility? The immediate reason is

because consumers are more aware, have higher expectations from business, and have

access to more information they will buy from brands with a good image. In short, it

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does their bottom-line good. Another reason is that some businesses have adopted social

responsibility as their special mark of identification and their business is tied to a “green”

or a “clean” image. A select few are businesses run by idealistic individuals who feel

running a socially responsible business is a better way of repaying society than private

philanthropy. And yet others see this as a marketing opportunity too good to miss, in

that they can identify with a current fad and benefit while it all lasts. And perhaps

finally, there are “free-rider” (Sethi, 1989) business that reap dividends others’

investment in socially responsible programmes.

Figure 2-b, below, (from Gray, Owens & Maunders, 1997) presents well the various

reasons why a business would want to present itself for a social audit.

Fig

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Enhance thecorporateimage

Dischargeofaccountability

CSR asextensionof financialreportingto investors

EnhanceCorporate Imageto Investors

Discharge ofAccountabilityto Investors


3.0 Research Methodology

3.1 RESEARCH QUESTIONS

Over 60 international brands source their hand-stitched balls in Sialkot, in addition to

numerous “non-brands” xxxix. At least thirteen of the world’s most recognised brands –

soccer, handball, rugby, volleyball and beach-volleyball – have a significant part of their

manufacturing sources in and around the city. As the project zone for the Sialkot

Partnership’s International Child Labour Project, Sialkot is developing culture of

dialogue in which the Chamber of Commerce & Industry has established a role for itself.

Soccer balls are still handcrafted by artisans – “stitchers” – in small village workshops

managed by middlemen called “makers”. Hence, Sialkot is the appropriate place for

studying the brands at the remotest point of their supply chains.

This study aims to compare the prevailing situation with brand and manufacturer claims.

Six questions need answers for further analysis:

i. Do acknowledged sporting goods brands recognise acceptable labour practice

standards and do they have clearly articulated social responsibility policies?

ii. Does these policies conform to an accepted social responsibility standard, and are

they applied in a measurable way at specific points in a brand’s supply chain?

iii. Is the application of these policies and standards relatively uniform at specific

points along the supply chain?

iv. Are these policies transmitted to the end-user as a marketing strategy?

v. Are these policies transmitted to sub-contractors at the end of the supply chain?

vi. Is there a measurable difference between a brand’s claims and reality, and does

the perception of stakeholders conform to the declared application of these

standards by the brands?

3.2 APPROACH

The approach taken here:

A cohort of comparable retail brands from WFSGI member brands subscribing to the

WFSGI Code of Conduct, sourcing a significant portion of their hand-stitched

athletic balls from Sialkot, and members of the Sialkot Partnership, based on the

xxxix Scott, M. & F.H. Shah. “Report on the Football Industry in Sialkot”, Save the Children UK. 1996. Baseline data on Sialkot’s soccer-ball industry and its socio-cultural context.

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following criteria:

i. they enjoy widespread consumer recognition among a variety of markets;

ii. they represent the diversity of the global market in their origin and reach;

iii. they are often found on retail shelves at the same outlet;

iv. they lay a claim to ethical business practices in their public statements.

Choose a product for each identified brand that is similar in terms of characteristics,

price and quality.

Develop a framework for assessing ethical business practices applicable to the same

point in each product’s respective supply chain. Points in the supply chain:

i. retail outlet in a developed country;

ii. international brand’s management office in its home country;

iii. local sub-contractor’s office in developing country;

iv. artisan’s workplace or home-based workshop.

Create an appropriate yardstick using the SA8000, including key areas of interest to

the brands and their local sub-contractors, as reflected in their own respective policy

documents.

Use this yardstick to compare each chosen brand’s actual performance at each

identified point in the supply chain, against its official claims appearing in

advertising and policy documents, and grade performance using a weighted grading

system.

Apply a yardstick gleaned from the brands’ own policy documents, but based on a

recognised social auditing standard to control for biases that could arise out of using

a standard that the brands themselves may not use themselves.

Analyse findings in the context of the Sporting Goods Industry’s Code of Conduct

and the Sialkot Partnership, and consumer comment, and develop a realistic picture

of how the brands and their local counterparts stand up to their own standards, as

well as to their consumers’ expectations.

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Finally, the research aims to quantify the difference, if any exists, between claims in the

brands’ public statements and present their score in such a way that it does not criticise,

or praise any brand or its sub-contractor. The purpose of a graded analysis is simply to

point out gaps that the brands themselves or their Sialkot counterparts may not be aware

of. This may help lay the basis for discussions along the supply chain and lead to an

improved overall performance on codes of conduct.

(Note: along the way, it was decided to include a fair-trade organisation to the cohort.

Comparing an organisation that is decidedly tilted towards “giving a good deal” to

disadvantaged producers to corporations whose declared mission is to make a profit for

their shareholders was considered a useful way to add depth to the analysis.)

3.3 THE INVESTIGATIVE PROCESS

Five internationally recognised brands who source their athletic balls in Pakistan were

selected for this study. One fair-trade organisation was added to the list to enrich the

analysis of value-driven business practice.

Next, by conducting a parallel set of interviews and questionnaires for each of the chosen

brands, six distinct portraits of social responsibility emerged from Sialkot. Since this is

where each of the chosen brands source their product, this method is useful to draw

conclusions regarding each brand’s ability to effectively transfer their respective

corporate philosophy to their local sub-contractor. Data collected from the questionnaires

and individual interviews was plotted under identified social responsibility indicators.

Although this particular study stops short of it, the six portraits of brand/sub-contractor

relationships in furthering claimed corporate responsibility ideals have the potential to be

developed into independent case studies.

Specific points along the supply chain of the chosen product – retailer, brand HQ,

manufacturer HQ, manufacturing unit, and artisan – were subjected to the measurement

tool. Supported by data from stakeholders, a graded score for each of the brands was

used to generate a “social responsibility profile” for each brand at each identified level of

its supply chain.

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Comparing each profile to the brand’s own Code of Conduct and with any claims on

record, an assessment of performance was made. A cross-comparison between brands

and among their local counterparts is not the aim of this exercise, although it is possible

at this stage. Tables and charts highlight comparative variations, within each brand,

regarding adherence to their respective policy all through the supply chain. Statistical

calculations, where used, serve to establish relationships between the various factors and

variables.

3.4 DATA COLLECTION AND TABULATION

Field methods were best suited for this investigative approach. Collecting of background

information from available archival sources would support all fieldwork. Direct

observation of the processes involved at the manufacturing end, combined with

ascertaining the presence or absence of defined policies and awareness about them

among staff were undertaken. Individual interviews with representatives of the various

stakeholders, including factory workers, community representatives, stitching sub-

contractors, plant supervisors, and head office staff of the various brands and their local

manufacturers was the principal activity during the field work in Sialkot, Pakistan.

Retailer representatives were contacted in Cambridge. In addition, questionnaires were

sent to product managers and corporate responsibility personnel at the respective brand’s

head offices, in Britain, Germany, and the USA, followed by telephone discussions.

Prior to finalising the semi-structured interview instruments, a list of issues relevant to

the industry were pre-tested at the international sports fair, ISPO 1998, in Munich.

This methodology was chosen because, it balances field methods well with archival

studyxl. Laboratory techniques and statistical manipulation seemed superfluous to the

outcome of the research. Being the first field data collected from Sialkot, it adds further

to original content among the existing data. Combined with the literature review and

reading policy documents and media materials, the remote interviews through telephone

and e-mail communication add a greater degree of control. An effort was made to bring

together the advantages of direct observation supported by secondary data so as to be

able to represent the real situation accurately.

In choosing the most appropriate data collection methodsxli, it was felt that they help the

researcher in handling complexity, and be sufficiently flexible to secure a variety of

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interpretations. For this purpose it was decided to employee a wide range of interview

tools, from structured and semi-structured to unstructured, in addition to the ongoing

content analysis. The need to standardise this set of interviews and uncontrolled

responses presented a challenge, countered to a large extent by keeping close to the

SA8000 format and frequently using it as the touchstone during the open-ended

interviews, organising interview notes and recording observations. Minimising bias

proved the most difficult area to handlexlii despite the standardisation of the questionnaire

using the SA8000. This research, therefore, tries to present observations as objectively

as possible, and defines terms with reference to the task itself. Moreover, it is impossible

to eliminate bias in a situation where highly competitive brands are identified by name.

Their respective policies and marketing communications reflect built-in biases that arise

out of rationalisation and a “writing of history”.

Issues of anonymity and coverage were not relevant since the cohort was selected on the

basis of their brand identity, and involved only six companies located in about a 35-

kilometre radius so that it was possible to schedule visits and interviews in the available

time. In addition to its appropriateness to the approach adopted for this research, this

method was also the most convenient in terms of the time and resources available.

The decision to blend interview techniques also stemmed from the need to reflect the

situation as accurately as possible. While head office people at the brands got semi-

structured interview forms, the forms used in Sialkot with the local sub-contractors

served only to set the context of open-ended unstructured interviews that often lasted

through up to three sessions. Direct observation was made during several visits to

production facilities and village workplaces, sometimes escorted by a company

representative.

Another advantage of using the above methodology is the reliability that the chosen

standardised tool, interview methodology, and multiple levels of analysis impart to the

study. Perhaps a less tangible but strategic benefit of this study is that the use of this

methodology has helped sensitise the local industry stakeholders to future efforts of a

similar nature.

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Based on a detailed assessment conducted, the following were chosen:

1. Adidas – Germany2. Fair-Trade – Germany (NGO added for comparison)3. Mitre – Britain4. Nike – United States5. Puma – Germany6. Reebok – United States

3.5 OUTLINE OF RESEARCH

I. Representative stakeholders to be contacted: 1. Consumer2. Retailer3. Brand’s Marketing Office4. Manufacturer/Exporter5. Stitcher/artisan

II. Points of comparison at specific points of the supply chain:

Corporate policy and implementation mechanismsSpecific stakeholders (as below)Government policy and legislationCompetitors’ policy and brand imageMarket share and brand image

Table 3-a

Representative Stakeholders

Focus Information needed

CONSUMER Brand image Purchase decision

Consumer interviews

Retailers feedbackRETAILER shelf prices

advertising/ marketing

Physical verification/ price list

News paper/ media coverage examples

BRAND code of conduct employee rights integrity market ethics

code of conduct (written document)

annual reports media responses employee policy implementation

plans competitors views

Representative Focus Information needed

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StakeholdersMANUFACTURER manufacturer’s own

code of conduct availability and

inclusion of brand codes of conduct

acceptable international standards (SA8000)

SA8000-based tool Records of

implementation of code of conduct

STITCHER/ARTISAN employee policy human rights community

development initiatives

code of conduct annual reports reports of ethical

initiatives media reports/

media coverage reports or views

from ILO monitoring units, SCF, FIFA etc.

reports of education, health, or other philanthropic initiatives

reports on child labour, labour rights, health and safety

interviews with supervisors

interviews with artisans

4.0 Data Presentation

4.1 SOCIAL ACCOUNTABILITY STANDARDS

A composite variable list developed from the literature review forms the basis for the

data collection tools within the parameters of this study (Appendix-II). This list also

served as the benchmark for selecting the formal assessment tool.

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The literature reveals a number of social accountability tools that various businesses

have either developed on their own. Others have evolved through the dialogue between

academia, non-governmental agencies and business. Examples of the former include

those used by Ben and Jerry’s Homemade Inc. in the USA, The Body Shop plc. In

Britain, and Sbn Bank in Denmark. The latter category includes the SA8000, and similar

instruments created, or being developed by the ECCR/ICCR/TCCR and the Institute of

Social and Ethical AccountAbility.

Copies of the assessment tools used by The Body Shop and the Institute of Social and

Ethical AccountAbility could not be made available. The CEP’s guidelines on SA8000

were readily acquired, as was the ECCR/ICCR/TCCR tool. Examples from tools used

by a number of companies other than those mentioned above were found in “Accounting

and Accountability” by Gray, Owen and Adams (1996). Going through examples and

case studies cited by Di Norcia (1998), Bolier (1997), Solomon (1997), Zadek, Pruzan &

Evans (1997), Korten (1995), Reder (1995), Scott & Rothman (1994), and Carmichael

and Drummond (1989) helped choose the best one for this study.

The SA8000 was finally selected as the standard around which to adapt the measuring

instrument for this research. The reason for this was its relevance to the environment of

the study, its reliance on the ILO’s internationally accepted labour practice standards, its

relative comprehensiveness, and the ready availability of its detailed guidelines. Some

elements from the ECCR benchmark were incorporated in the final version, along with

relevant points from available brand Codes of Conduct (Table5-b).

4.2 CODES OF CONDUCT AND ORGANISATIONAL POLICIES

A variety of printed materials on their labour practice policies were provided by the

brands themselves or their manufacturing partners in Sialkot. This included copies of the

Code of Conduct adopted by the World Federation of the Sporting Goods Industry

(WFSGI), and its yearly and quarterly publications.

The ILO provided a summary of the international labour conventions and a listing of

ratifying countries. Organisational Codes of Conduct were acquired from Nike, Reebok,

and Puma. Fair Trade, Mitre, Nike and Puma made available policy documents

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describing their respective company labour practice standards, and their expectations

from the supply chain. There was considerable uniformity in the issues outlined in each

of the documents, and all conformed closely to the ILO standards (Table 5-a).

4.3 ADVERTISING AND CLAIMS

Each of the WFSGI publications available, contains advertisements from international

brands as well as local manufacturers. Among brand advertisements, Reebok’s is the

most specific in mentioning the company’s social responsibility activities. Adidas,

Mitre, Nike and Puma follow this marketing approach to a significantly lesser extent.

This is also borne out by Reebok’s labelling of every ball.

Copies of the December 1997 news bulletin from the U.S. Sporting Goods

Manufacturing Association (SGMA), and a flyer released on behalf of its member

brands, both declare a commitment to the efforts by the Sialkot manufacturers to work

with the ILO, UNICEF and Save the Children. Over 50 international brands have

participated in releasing this “pledge” that describes their commitment to source athletic

balls only from manufacturers participating in the Sialkot Partnership.

Advertisements by Sialkot manufacturers are loudest in their claims to eliminate child

labour. Most appear in the WFSGI’s special newsletter editions – one each in 1997 and

1998 – devoted to child labour and labour practice issues. Some placed signs outside

their stalls at the international sports exposition, ISPO, at Munich in August 1998. All

the Pakistani manufacturers included in this research advertised in WFSGI publications.

4.4 INTERVIEWS

Each of the local manufacturers in Sialkot co-operated to the fullest possible extent when

asked for interviews. Being open-ended and unstructured, the interviews demanded long

sessions. Chief Executives of every one of the seven manufacturing companies agreed to

be available. Four chief executives – from Capital, Leatherware, Moltex and Talon –

took time out for an average of two sittings each. Three being away from Sialkot

(AliTrading, Saga and Sublime) were represented by company directors. Each of these

gentlemen also instructed senior production and quality assurance staff to be available

for site visits and detailed discussions.

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Each CEO interview took at least two sessions, the longest lasting three hours. Visits of

plants and village-based workshops took as much as half a day including travel time.

During the visits, there was no discernible attempt to “manage” events, and workers were

allowed unhindered access to the researcher.

Interviews were arranged through the Sialkot Chamber of Commerce. The ILO,

UNICEF and Save the Children, were included because of their membership of the Co-

ordinating Committee of the Sialkot Partnership, and their implementation role in the

“social protection” programme of the Sialkot Child Labour Project. Their views were

used to countercheck the claims of the various brands and manufacturers and ensure a

wider perspective.

The co-operation extended during the visit reflected the pride that the local

manufacturers have about what their industry is trying to achieve on a collective level.

Appendix-III gives the list of interviewees. Questionnaires used appear in Appendix-IV.

4.5 QUESTIONNAIRES & TELEPHONE DISCUSSIONS

Being dispersed all over Europe and the USA, it was not possible to individually

interview representatives of each brand. It was disclosed that, with the exception of Nike,

all brands would be present in Munich to attend ISPO 1998. While in Sialkot, preparing

for interviews with local manufacturers, it became apparent that many of them would be

there as well. With the help of a European contact, present in Munich at the time, it was

arranged to elicit responses from Adidas, Mitre, Puma and Reebok. This approach was

not successful, partially because ISPO being a trade event few brands had the appropriate

staff available, and partially because the absence of the researcher meant queries from

respondents could not be completely answered. Except for Adidas, no brand returned a

completed questionnaire at ISPO.

However, because names and contact addresses for the appropriate brand representatives

were obtained there, ISPO proved a useful opportunity for sensitising the respondents.

The persons identified are directly responsible for corporate responsibility issues in their

ball sourcing work. As a result, they provided reliable information and candidly shared

their views during telephone discussions and on e-mail. An added advantage to this

approach turned out to be that the structured questionnaire transformed itself into a semi-

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structured interview during the telephone interviews, becoming less rigid and allowing

for a richer content.

4.6 FIELD OBSERVATION & PHYSICAL VERIFICATION

Field visits at the production end in Sialkot included factory sites and village workshops.

Pre-stitching and post-stitching phases of ball production were observed in the factories.

Here manufacturers produce the artificial leather laminate, cut it into panels, print

designs, and punch stitching holes into the panels. These panels are then delivered to

artisans who stitch the ball casings around a rubber bladder. The stitched balls are then

returned to the factory where they are checked against the brand’s quality standards,

cleaned, packaged and shipped out.

Each of these local companies participating in this research is a signatory to the Atlanta

Agreement and has opened its centres to ILO inspection. At the same time, each of the

participating brands has signed the SGMA pledge to restrict sourcing to ILO-monitored

manufacturers in Sialkot.

The village-based centres vary in their size, arrangements and management structure.

Except for Saga, which now employs artisans in fully owned and managed community-

based centres, all the others still work through the traditional sub-contracting system run

by entrepreneurial middlemen who act as negotiators and agents for groups of

independent artisans. The manufacturers arrive at an arrangement with the middlemen

(called “makers”) who guarantees a steady stream of finished products through a

network of village-based artisan “groups” in return for a negotiated piece-rate and a

variable amount of cash as working advance to the workers – called “peshgi”. With the

recent agreement with the ILO that demands the registering of verifiable workplaces for

all local manufacturers, and moving 100% production to ILO-monitored centres by

March 1999, there has been a move to formalise the manufacturer-“maker”-artisan

relationship in terms of workplace standards acceptable to the ILO. While the financial

arrangements have remained more or less intact, the manufacturers have made

arrangements with their respective “makers” aimed at fulfilling the demands of the

Atlanta Agreement.

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Another aspect of the field observation included visiting a number of retail stores that

sell soccer equipment as part of their range, and eliciting responses to a brief open-ended

questionnaire from staff as well as consumers present there (Appendix-IV/4). This

exercise was undertaken to ascertain how much the retail end of the supply chain knows

about what the brands themselves proclaim about their sourcing practices, and how much

the customer is prepared to listen when making buying decisions. A total of 8 retail

outlets were visited, four of which opted to withhold their names. Places visited included

a Debenhams department store that stocked all chosen brands except Reebok and Fair-

Trade, Sports Soccer and JJB Sports, each part of a retail chain, and JSB Sports, a

privately owned sports shop in Cambridge. Each of these stocked all the chosen brands.

None stocked the Fair Trade ball, but it was possible to have a telephone interview with

Traidcraft plc, which sells Fair-Trade balls through their catalogue. A copy of the

catalogue advertising the ball was made available.

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5.0 DATA ANALYSIS

This research treats each brand and its manufacturer as one entity because they form

different parts of the same supply chain. With the artisan at the end, they are inseparable

from the point of view of the consumer. The local industry, raw material importers and

suppliers, all identify the manufacturer with the brands it makes for.

5.1 THE SUPPLY CHAIN

Fig.5-a, below, shows the product supply chain for the athletic ball. The various

stakeholders appear in relation to each other. The consumer and the media are the

farthest removed from the artisan who actually stitches the ball, but have the greatest

impact on the brand’s business. Ambiguity or mis-perception surrounding sourcing

practices affecting the bottom line can be removed through better communication. There

is a greater possibility that the existing situation will be out of context if information

about the supply chain does not flow through its main stem. Alternate channels despite

appearing plausible may not be credible. For example, the competition may inject

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Fig.5-a

CSR Corporate Social Responsibility

SC Stitching Centres

Demand Directly

Pressurized /Influenced by


rumors, news of government awards or punitive action may bypass facts, citations for

violations noted by monitors might have been long corrected, and media snapshot stories

may ignore the big picture. A standardized Social Audit and disclosure is an appropriate

tool for making verifiable information available within its correct context, and relevant to

issues close to the various stakeholders.

5.2 THE STAKEHOLDERS

Fig.5-b, below, shows how major stakeholders influence a business in its social role.

The arrows show the direction of influence and identify the stakeholder affected directly.

The manufacturer’s position in the supply chain makes it highly vulnerable. On the one

hand is pressure to keep prices low for the brand and on the other, to maintain an

acceptable relationship with its workers and the community.

This study focuses on the manufacturers from two distinct but entwined perspectives.

One sees the manufacturer as a representative of the brand’s professed ethical practices,

and therefore an extension of the brand’s image. The other sees the manufacturer as an

independent corporate player with responsibilities to its own community, as well as

obligations as a trading partner with access to global markets.

Fig. 5-b presents how a Social Audit process and the resulting information flows can

balance pressures among the various stakeholders and create a fairer environment for

business transactions and community decisions.

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5.3 REPRESENTATION & DISCUSSION OF FINDINGS

Elements from the SA8000, the ECCR Benchmark, and brand codes of conduct yielded a

list of variables appropriate to the research (Appendix-II). These form the core of this

investigation, being used to develop questionnaires and interview outlines, organise data,

run comparisons and present findings.

Tables 5-a and 5-b present how qualitative data have been weighted and quantified.

Table 5-c presents aggregate numerical scores for the variables. The tables are followed

by a descriptive analysis of each variable. Table 5-d ranks respondents by placing

aggregate scores in value categories.

Measurement Tools and Data Interpretation

COMPARISON OF SOCIAL RESPONSIBILITY VALUES

Table 5-a compares the social responsibility values found in the two Social Audit (SA)

tools and the Social Responsibility (SR) policy documents of five athletic ball marketing

brands. SR variables are listed down the left column with the brand codes and SA tools

across the top. All variables that are mentioned in a brand policy document is marked

with a “” in the corresponding box. By revealing the range of SR activity a brand is

prepared to undertake, this shows how proactive a company is towards SR issues. This

comparison also presents the ability of a measuring tool to assess the activities of

business.

COMPARISON OF SOCIALLY RESPONSIBLE ACTION

Table 5-b weights the SR variables according to the extent they are implemented by the

brands and their manufacturing partners. The variables appear in the left column with

the businesses across the top. Each variable is weighted according to the level of its

implementation by a business. The scale measures increasing levels of practical

implementation. Categories exists for those respondents who are opposed to

implementing policy on a particular variable, those who are unaware or do not want to

implement, and where there is insufficient information to determine a score. By showing

how far ahead a company is on implementing activities on a particular variable, it is

possible to ascertain its commitment to invest in practical SR initiatives.

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SOCIAL RESPONSIBILITY SCORE CALCULATION

Table 5-c presents an aggregate score calculated from the above findings. To minimise

bias, all data have been triangulated from a variety of sources, including available

documents, stakeholder feedback and personal observation (Appendix-IV). The score

reflects a business’s proactive stance, and its level of commitment to specific SR actions.

This way it is possible to assess the breadth and depth of socially responsible behaviour

in terms of both policy and action. The aggregate score is calculated by combining the

score for each variable from all sources. The numerical values are calculated by giving

each positive finding a value of “+1”. No data is represented by a zero, and opposition to

a value is expressed as “–1”. Where there are sub-variables, their mean represents the

score for the particular variable, to the maximum value of “+3”.

SCORE INTERPRETATION AND RANKING

Table 5-d places a business in Di Norcia’s grid, according to its attained aggregate score.

A business’s score reflects its attitude and practical initiatives towards socially

responsible behaviour. This is evident from how proactive it is in choosing its sphere of

SR activity, and how far ahead it is in practically implementing actions. Two

characteristics determine where a business fits into the grid; voluntary participation and

proactive attitude. Companies who are resistant to SR ideas fall in category I.

Companies scoring higher on action fall in category II. Those with a higher score on the

proactive attitude, fall in category III. Those scoring high on both fall in category IV.

IMPORTANT NOTE:

The scores or ratings are not intended to compare the various companies or pass judgement. The scores

simply reflect a quantification of the numerous observations recorded from a wide variety of stakeholders,

and despite efforts to limit bias, cannot control for individual interpretation of open-ended questions. The

following statement is included at the request of a respondent company:

“The participating companies have trusted the researcher with information not normally available

beyond corporate boundaries. They retain their rights to their own corporate information and may

consider it a breach of confidentiality if data or ratings from this research are quoted without the

owner’s express consent.”

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Table-5-aSocial Responsibility Measurement VariablesFound in Standard Assessment tools andBrand codes of Conduct

Adi

das

ESSR

/TC

CR

Fair

Trad

e

Mitr

e

Nik

e

Pum

a

Ree

bok

SA80

00

Child laborDo not employ children Do not engage in or support child labour Redemption of child labor Promotion of child education Exposure to hazard, unsafe or unhealthy situations Forced laborPrison labor Bonded labor Human RightsDiscriminationDiscrimination against Cast, race, origin, gender, etc. Harassment and threats Employee RightsCompensationWages meet legal or industry minimum Sustainable community wages to meet basic needs

Equal pay for work of equal value

Working conditions Child care, elder care and community service

Benefits and insurance

Working hoursOvertime according to law Maximum 60 hours per weekFreedom of association Labor force representative of community where located Unions and right of collective bargaining Disciplinary practicesPhysical, sexual, psychological or verbal harassment/abuse Health and SafetySafe and healthy work environment Preventive measures First aid supplies Management systemsReview adequacy, suitability, and continuing effectiveness of company's policy

SA policy Social accountability policy documented and publicly available

Internal compliance process of training onsite inspections and audits of suppliers

Violations are effectively addressed SA preparation and conductionAccepts independent monitoring from NGOs, local communities, religious and HR, CR and labor groups.

DisclosureTransparent. Result of internal and external monitoring available to public

EcosystemCompany action do not damage global environment Physical infrastructure impact Social infrastructure impactCommunity involvementContribute to improve community conditions

Customers and consumers rightsInternational standards for products and services Products meet customer requirement Ethical Marketing practices Fair trading practices Fair advertisement and labelling.Products with clear , specific warnings

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Table 5-b

+ Aware of/ agree to Social Responsibility variable++ Planning to implement Social Responsibility variable+++ Already implemented/ actively support or participatex Unaware of or don't approve of SR variable- Initiative has a negative effect on the SR variable NI Insufficient information to judgeNA Not applicable

Scoring system adapted from the tool developed by Levi Strauss & Company (Makower,1994)

Level of Action/Practical Implementation on Selected Social Responsibility Variables

Ad

idas

Cap

ital

Su

blim

e

Fai

r T

Tal

on

Mit

re

LW

Nik

e

Sag

a

Pu

ma

Ali

trad

Ree

bo

k

Mo

ltex

Vision mission Statement + X x x + ++ x +++ ++ + ++ ++ x

Code of conduct ++ + + +++ ++ + + +++ +++ ++ ++ +++ +

Variable SA 8000

Child Labour

Involve in elimination of child labor + +++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++

Engage in or support child education + ++ +++ x ++ x + +++ ++ ++ + ++ ++

Remediation/rehabilitation of child labor x X ++ ++ x + x x ++ + x ++ xPromotion of child education x X ++ + ++ x x ++ ++ + ++ ++ +

Exposure to hazardous and unhealthy situations

+ + + ++ + + x + ++ ++ ++ ++ ++

Forced labor

Prison labor +++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++

Bonded labor +++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++

Health and Safety

Safe and healthy work environment + ++ ++ ++ ++ ++ ++ +++ +++ +++ ++ ++ ++

Health and safety manager x X x x x x x +++ x +++ x + x

Clean Air, water, ++ ++ ++ ++ + ++ ++ +++ +++ +++ ++ +++ ++

No exposure to hazardous, unsafe or unhealthy situations in or outside workplace

+++ ++ ++ ++ ++ +++ x +++ ++ +++ ++ +++ ++

Health and safety laws and systems to detect and respond to potential threats

NI X x + + ++ x +++ ++ +++ x +++ ++

Freedom of association

Labor force representative of communities in which operation is located

x + x x + ++ + ++ + + + x ++

Discrimination/ Human Rights

Discrimination against Cast, race, national origin, gender, disability, political affiliation, union membership

++ ++ ++ ++ ++ ++ ++ ++ ++ ++ ++ ++ ++

Disciplinary practices

Declared position on equal opportunity x + + + + x + +++ + ++ x ++ +

No employee subject to physical, sexual, psychological or verbal harassment or

x +++ ++ ++ ++ x ++ ++ ++ ++ x ++ ++

Working hours

Overtime according to law +++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++

Maximum 60 hours per week +++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++

CompensationWages meet legal or industry minimum +++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++

Pays sustainable community wages to meet basic needs

++ ++ ++ +++ ++ ++ ++ +++ ++ +++ ++ ++ +

Equal pay for work of equal value NI NI NI NI NI NI NI NI NI NI NI NI

Benefits and insurance + + x + ++ + + +++ +++ ++ x ++ ++

Working conditions + + ++ ++ ++ + ++ +++ +++ +++ +++ ++ ++

Child, elder care and community service + x x x + x x +++ +++ x X + x

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Table 5-b continued

Ad

idas

Cap

ital

Su

blim

e

Fai

r T

Tal

on

Mit

re

Lea

ther

war

e

Nik

e

Sag

a

Pu

ma

Ali

trad

Ree

bo

k

Mo

ltex

Management systems

Regular meetings x + + + ++ +++ + +++ ++ NI + +++ ++

Review

Sources of information feedback mechanism ++ x x ++ x ++ + ++ x NI ++ +++ x

Computerized Information system x x x x + ++ x +++ +++ x ++ +++ x

Social Auditing

Own Social Auditing policy ++ x x ++ x ++ x +++ +++ ++ x +++ x

Onsite inspections internal ++ ++ ++ + ++ x ++ +++ ++ ++ ++ ++ +++

Onsite inspections external x +++ +++ x +++ x +++ +++ +++ ++ +++ x +++

Internal compliance NI x + NA + NI + ++ + NI + ++ +

Process of training and audits of suppliers + ++ + + ++ ++ + +++ ++ x x +++ ++

Violations are effectively addressed x + NI ++ NI x NI NI NI x x ++ ++

Accepts independent monitoring from NGOs, local communities, religious and HR, CR and labor groups.

x NI NI + + x + ++ ++ ++ + x +

Accepts independent monitoring from international agencies

+ ++ ++ + ++ x ++ ++ ++ ++ ++ x ++

Familiarity with/implementation of social Auditing Standards

x x x ++ x + x ++ +++ x x +++ x

Disclosure

Transparent. Result of internal and external monitoring available to public

x x x ++ + x + ++ + + + ++ +

Independent Company SA variables

Leader ethical attitude

Action for unethical behavior x ++ + ++ x x x x NI x x -

Feel obligation for workers + + + +++ ++ x + ++ +++ + + ++ ++

Feel obligation for community x x ++ ++ ++ x x +++ ++ x + +++ x

Ecosystem

Company action do not damage global environment

++ ++ +++ ++ ++ ++ ++ ++ +++ +++ ++ +++ +++

Physical infrastructure impact x ++ ++ ++ + + + +++ +++ ++ + ++ +

Social infrastructure impact - -x -+ -++ -+ -+ --++ --++ -+ -x -+ -++ -+

Community involvement ++ x + + ++ x x + + x + ++ +

Contribute to improve community Conditions

++ X + + ++ x x + + x + ++ +

Employer/worker support programs

Free meals, child care centres, sports + x x x x x x +++ +++ x x x +

Safety procedures x x x + ++ x ++ ++ ++ x ++ ++

Credits, Insurance + + x ++ x x x ++ +++ x x + +

Education , sports, + ++ x x x x x +++ +++ + x ++ ++

Customers and consumers

International standards for products and services

+++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++ +++

Products meet customer requirement +++ +++ +++ + +++ +++ +++ +++ +++ +++ x +++ +++

Ethical Marketing practices NI ++ ++ +++ ++ + + ++ +++ ++ x ++ ++

fair trading practices NI ++ ++ +++ ++ + + ++ ++ ++ x ++ ++

Fair advertisement and labeling. NI ++ ++ +++ ++ + NI ++ ++ ++ x ++ ++Products with clear , specific warnings ++ NI NI NI NI ++ + +++ +++ +++ x ++ NI

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Table 5-cAggregate Score

on Cumulative Performance* on

SA Variables

Ad

idas

Capital

Su

blime

Fair trad

e

Talon

Mitre Lea

ther W

are

Nike

Sa

ga

Pu

ma

Ali T

rad

Reebok

Moltex

Code of conduct 2 2.0 1 1.0 1 1.0 3 3.0 2 2.0 1 1.0 1 1.0 3 3.0 3 3.0 3 3.0 2 2.0 3 3.0 1 1.0

Child Labour 3 0.6 6 1.0 11 2.2 8 1.6 8 1.6 5 1.0 5 1.0 8 1.8 11 2.2 9 1.8 8 1.6 11 2.2 8 1.6

Forced labor 6 3.0 6 3.0 6 3.0 6 3.0 6 3.0 6 3.0 6 3.0 6 3.0 6 3.0 6 3.0 6 3.0 6 3.0 6 3.0

Health and Safety 7 1.4 6 1.2 5 1.0 7 1.4 6 1.2 9 1.8 4 0.8 15 3.0 10 2.0 15 3.0 6 1.2 12 2.4 8 1.6

Freedom of association

0 0.0 1 1.0 0 0.0 0 0.0 1 1.0 2 2.0 1 1.0 2 2.0 1 1.0 1 1.0 1 1.0 0 0.0 2 2.0

Discrimination/ Human Rights

2 2.0 2 2.0 2 2.0 2 2.0 2 2.0 2 2.0 2 2.0 2 2.0 2 2.0 2 2.0 2 2.0 2 2.0 2 2.0

Disciplinary practices

0 0.0 4 2.0 3 1.5 3 1.5 3 1.5 0 0.0 3 1.5 5 2.5 3 1.5 4 2.0 0 0.0 4 2.0 3 1.5

Working hours 3 3.0 3 3.0 3 3.0 3 3.0 3 3.0 3 3.0 3 3.0 3 3.0 3 3.0 3 3.0 3 3.0 3 3.0 3 3.0

Compensation 7 1.2 7 1.2 7 1.2 10 1.7 10 1.7 7 1.3 8 1.3 15 2.5 14 2.3 11 1.8 8 1.3 10 1.7 8 1.2

Management systems

2 0.5 1 0.3 1 0.3 3 0.8 1 0.8 7 1.8 2 0.5 8 2.0 5 1.3 0 0.0 5 1.3 9 2.3 2 0.5

Social Auditing 6 0.8 10 1.3 9 1.0 11 1.3 11 1.3 5 0.6 10 1.1 20 2.5 18 2.3 10 1.3 9 1.1 15 1.9 14 1.8

Disclosure 0 0.0 0 0.0 0 0.0 2 2.0 1 1.0 0 0.0 1 1.0 2 2.0 1 1.0 1 1.0 1 1.0 2 2.0 1 1.0

Leader ethical attitude

1 0.3 3 1.0 4 1.3 7 2.3 4 1.3 0 0.0 1 0.3 5 1.7 5 1.7 1 0.3 2 0.7 5 1.7 2 0.7

Ecosystem 1 0.3 4 1.3 5 1.7 3 1.0 3 1 3 1.0 3 1.0 5 1.7 6 2.0 4 1.3 3 1.0 6 2.0 4 1.3

Community Involvement

2 2.0 0 0.0 1 1.0 1 1.0 2 2.0 0 0.0 0 0.0 1 1.0 1 1.0 0 0.0 1 1.0 2 2.0 1 1.0

Employer/Worker Support program

3 0.8 3 0.8 0 0.0 3 0.8 0 0.0 2 0.5 0 0.0 10 2.5 11 2.8 3 0.8 0 0.0 5 1.3 6 1.5

Customer and Consumer

8 1.3 12 2.0 12 2.0 15 2.5 12 2.0 11 1.8 9 1.5 15 2.5 16 2.7 15 2.5 6 1.0 14 2.3 12 2.0

NOTE: The first column under each company name represents the raw score on a particular variable. The second column gives the score which is the average of sub-variable scores.

Discussion of Performance Variables

CODE OF CONDUCT

Nike and Puma were the brands whose local counterparts were aware of their vision of

trust and quality respectively. Among local manufacturers Saga promoted its vision of

"share, care, dare", and Talon and Ali Trading emphasised their unwritten vision of

quality.

None of the manufacturers has its own code of conduct, except Saga that claims to be

working on one through an ongoing participatory process. Each manufacturer, however,

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is required to follow a code of conduct handed down by their contracting brand. This

varies from bullet point, one-page versions as in the case of Nike and Puma, to more

detailed policy statements for Adidas, Mitre, and Reebok. Fair-Trade have a detailed set

of operational criteria that, according to them, form the code of conduct.

Each of the codes of conduct, and the Fair-Trade criteria, emphasises nearly the same set

of labour practice principles as found under the various ILO conventions. These areas

include elimination of child- or forced labour, labour and employee rights, and

responsibilities to the environment and the community. All brands have communicated

their formal codes of conduct to their manufacturer in writing. Leatherware disclosed

that although Mitre has not provided any written code of conduct, it has been conveyed

verbally and through various business documents. In the case of Nike and Reebok, the

codes are translated into Urdu and are accessible to literate workers. (Table 5-b)

Regarding the implementation of the codes of conduct in a way that is visible, the results

are highly variable. Saga/Nike appear farther ahead in establishing demonstrable

systems that show that the code of conduct is being implemented. This may be so

because they are relatively more willing to open up their modern plant and monitoring

programme to outside scrutiny. There is a separate department to run a programme

called SHAPExliii that is open to third party monitoring by a chartered accounting firm in

addition to the ILO. This programme is implemented through groups of elected

employees who document the quality of benefits and ensure a working environment

standards. The two companies have health and education community projects with equal

resource contributions. There is evidence of physical infrastructure and a management

information system being created to match a set of written objectives. The Saga/Nike

relationship may be taken as an example of how two companies of disparate size and

focus can come together because of a shared view of business practice. Saga applies

uniform standards to all client brands.

Reebok has created significant physical infrastructure, backed by independent

monitoring mechanisms to ensure that its code of conduct is followed to a verifiable

level. As Moltex manufactures for a number of brands, its sets of arrangements for

Reebok are different for those that it has for other brands and make a useful comparison.

xliii Safety, Health, Attitude, People, Environment; adapted from a Nike factory inspection tool.

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Reebok balls are produced in an exclusive plant adjacent to the main factory that

employs superior labour standards. Monitors hired by Reebok operate independently of

Moltex management and ensure that the required standards are maintained. For the other

brands Moltex relies on the traditional "maker" network and sources from village

workshops registered with the ILO. While both arrangements are "clean" according to

the evidence available, the difference may be illustrative of how a manufacturer will

change its practices for a client brand keen to invest in promoting its labour practice

standard, but retain existing practices where there is no pressure to change them.

Of the contractors for Adidas, Mitre and Puma, none has advanced to the level of the two

mentioned above. Each plan to gradually build up systems and invest in infrastructure

better capable of fulfilling the claims made by their respective brand, but seem content

with being members of the Sialkot Partnership. Adidas and Puma both have locally

based quality inspectors, who are required to monitor labour practices by their respective

sub-contractors also. Adidas is also establishing a permanent office in Sialkot. Sublime

plans to construct purpose-built centres for ball production, offering better employee

benefits. Others are opting for less expensive infrastructure. Capital provides resources

to sub-contractors for upgrading existing production facilities. Leatherware has a phased

programme under Mitre's ongoing supervision to bring production in line with

guidelines. Ali Trading shows interest but cited resource constraints for not moving as

rapidly as the other manufactures who have a larger turnover. Talon is working with

Fair-Trade to standardise its labour practice mechanisms to the minimal requirements.

This is perhaps the only case in Sialkot where the client pays a direct financial subsidy to

the manufacturer over in addition to prevailing market prices. Fair-Trade has contracted

a local NGO to support community credit and education initiatives, with the Pakistan

office of Rugmark providing technical guidance.

All local manufacturers are overwhelmingly preoccupied with child labour, as opposed

to broader labour practice and ethical business standards. Apparently because of the

controversy stirred by the "Foul Ball Campaign" in the USA and television coverage

portraying the Pakistani industry as the villain. Manufacturers’ responses to questions

about labour standards and business ethics show that these concepts are equated with

child labour. The codes of conduct, on the other hand, focus on general principles that

included child labour as one among them. Moreover, except for Mitre who were accused

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of exploiting child workers in India, the others brands have faced criticism on labour

issues others than child labour. Adidas is in litigation for exploiting prison labour in

China, while Nike has faced strong criticism for poor labour conditions in it's Vietnam

manufacturing arrangements. Except for Nike and Reebok, no brand has made any

direct or indirect investments into mechanisms or infrastructure for “cleaner” sourcing.

None of the brands or Fair-Trade have communicated their respective codes of conduct

to the retailers asked. Store managers interviewed said they knew of the media's

criticism of the brands' sourcing. However, the brands themselves had made no effort to

reach the retailers or provide any information to help them with customer queries. The

only exception was Nike who provided written materials on the company's labour

practices in developing countries, possibly in anticipation of consumer concern.

The consumers interviewed were also unaware of any labour practice or ethical business

document made public by the brands. None had heard of any of the Pakistani

manufacturers – or Sialkot. Only one was aware of Pakistan as a source of balls,

recalling a BBC television story around the World Cup.

CHILD LABOUR

All brands and their contracting manufacturers claim not to employ or engage child

labour in their manufacturing units. The Sialkot Partnership is presented as evidence of

this commitment. Puma and Reebok claim special care and assistance to children. None

of the codes of conduct specifically focus on the rehabilitation of child workers who face

loss of livelihoods as a consequence of the Sialkot project. Mitre claims credit for

providing the impetus for work leading to the Atlanta Agreement, but is of the view that

the rehabilitation and social aspects of child labour elimination should be dealt by

welfare agencies. Reebok claims giving importance to children's education and

rehabilitation, presenting its NGO-run school as proof. Local opinion leaders dispute

this claim, saying the one school that does exist is far away from areas where children

are likely to be exploited. It has no specific activity that can plausibly serve a

rehabilitative function.

Capital and Sublime both claim that although there is no pressure from Adidas regarding

education or any community focused programme, they are engaged in supporting basic

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education on their own because they feel it is their civic duty. Their education work does

not target working children specifically. Sublime is directly involved in managing 21

primary schools and one girls’ high school under a family trust. Each of the local

manufacturers claims to promote education by funding deserving students for college

and university. Capital, Saga and Sublime have joined a number of other businesses in

resourcing Sialkot's first "public school". Except for Nike and Reebok, no brand has

expressed interest in local education projects. Saga and Nike claim to be finalising a

community services programme to be run by an NGO. At present, however, this is

limited to weekly mobile health clinics for women and children. Child care centres in

each of the Saga facilities provide pre-school care and basic literacy to children of

workers making Puma and Nike balls. Puma and Leatherware are interested to help local

schools in future in a "fitting way".

On the whole, the brands and their local partners appear serious about removing child

labour from their production processes. The manufacturers have pooled about

US$300,000 to pay ILO for managing an independent monitoring programme.

FORCED LABOUR

The available evidence excludes forced labour from Sialkot's ball industry. This may be

why Adidas is said to be relocating significant business from China after facing criticism

for using prison labour. Except for Mitre, the other brands source only in Pakistan.

Field research over the past two years by Save the Children, ILO, the Human Rights

Commission of Pakistan, and others has not substantiated use of working advances to

force artisans to work for manufacturers. A 1997 Save the Children report suggests that

the working advance, "peshgi", serves to strengthen the local cash economy, providing

poor people who cannot put up collateral, access to capital. Regulated and made

equitable this system could contribute to a sustainable local economic solution.

HEALTH AND SAFETY

Adidas, Fair-Trade, Nike, Mitre, Puma and Reebok each has written policies on health

and safety in the work environment that complement Pakistan’s workplace laws, except

legal employment age. Despite the law allowing employment to 14 year-olds, the brands

have set their own limit at 16 years. The most visible health and safety issues are:

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1. Fire protection. All factory sites visited have fire extinguishers as required by

law, but there is a marked variation in the level of awareness and preparedness

for an emergency. Only the new purpose-built plants have adequate fire exits.

Among the stitching centres, only Saga and Moltex have fire equipment. All the

others have neither equipment nor an adequate number of labelled exit routes.

Saga has an in-house fire-fighting unit with a fire-truck and trained crew, who are

said to conduct periodic fire drills under their SHAPE programme. No one else

has designated fire wardens or awareness programmes or drills.

2. Exposure to fumes and toxic chemicals. Of the processes involved, only two

bring workers in contact with potentially hazardous chemicals or fumes. One is

during lamination where artificial leather is bonded with fabric using natural

latex. The high ammonia content of the solvent exposes workers to fumes over

the entire shift. The other is during printing where ball panels are individually

hand-screened, exposing the skin to carcinogenic dyes and inks, especially when

being mixed without protective equipment. None of the factories visited has

verifiable checks on safe handling of toxic chemicals. Safety instructions are

limited to sporadic labelling, often in English, which is unintelligible to the

workers. Mitre claims it has begun a phased process of upgrading health and

safety conditions of it manufacturing partners. The manual on chemical handling

it has provided to Leatherware and Saga, in addition to other workplace

guidelines, has remained with managers so far. Saga displayed an Urdu

translation that it plans to distribute among workers and supervisors. Though

every manufacturer expressed frustration with efforts to motivate workers to use

masks and gloves, supposedly due the hot climate, there is no evidence of

effective awareness building among the manufacturers. The brand guidelines are

either non-specific or not followed up consistently.

3. Ergonomics and Posture during work: Each of the factories visited has

workstations at waist height. Routine work neither involves lifting heavy weights

nor prolonged exposure to noise, particles or glare. In the stitching centres,

however, artisans still sit on the floor or low stools, holding ball panels in

wooden vices held between their knees. Complaints of back pain and strain on

neck muscles are common due to the crouched position artisans retain for up to

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an hour at a time. Managers claim that the artisans are resistant to changing the

workstation design, and did not accept benches in exchange for floor mats. This

is understandable considering the "floor" culture of rural Pakistan. The

ventilation and lighting is adequate, possibly because the centres shown were the

best the manufacturers have. Again, there are stark differences among the

conditions present in the various centres. Saga’s nine purpose-built “community

centres” and Sublime’s “soccer village” facility are expansive in scale and their

design has taken in account the requirements of the work. Reebok's monitors

have had Moltex carry out structural changes to its new facility in response to

workers complaints about inadequate light and ventilation. The other village-

based centres are either existing buildings or built in the local scale and tradition,

although they do aim to fulfil the ILO's requirements and the brands'

expectations.

4. Use of safety equipment: in addition to handling chemicals and working with

ammonia fumes, workers in the factories face another hazard that requires

preventive measures. Ball panels are cut using hand-operated cutting presses

without adequate safety features. Workers have been known to lose fingers while

operating these presses, although it was not possible to meet anyone who had

suffered as a result of working on these machines. Management representatives

agreed that the threat is real, and there is an industry-wide move towards

automated cutting presses that have safety features build in. Saga claims to have

phased out all except a few of its hand-operated cutting presses. Even apart from

the cutting presses, attention to safety equipment is not clearly visible.

Management tend to blame workers for resisting attempts to introduce use of

safety equipment, but it appears to be a low priority for them.

5. Air-quality and ventilation: The manufacturers claim to have made considerable

improvements in the air quality of their lamination and printing areas as a result

of brand intervention. Every one of the factories visited has installed mechanical

ventilation systems. Supervisors and managers all agree on the importance of air

quality. However, none of them are familiar with any air quality standard or

possess any instruments to measure air quality in their facilities.

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6. Emergency medical care: Ball production processes can be divided into three;

panel production, stitching and finishing. Medical emergencies that can

potentially arise in the first include chemical ingestion or injurious contact with

the skin or eyes, hand injury from cutting presses, or accidents involving

electrical or moving machinery. In the second category, the most common are

needle-pricks to fingers, or rarely, to the eye. The third category may present

machine operation-related injuries while lifting or moving loads. In addition,

accidents from slippery floors, falls from stairs or trauma resulting from

transport-related injuries or fire hazards can potentially cause medical

emergencies. Reportedly, the incidence of any of these is significantly low.

However, each of the factories claim that workers have access to emergency

medical care when needed. The artisans have no such arrangements, except at

the Saga centres, which have full-time doctors and paramedics, Sublime, which

has a mobile doctor service for workers, and Reebok, which provides workers

medical cover through the government's Social Security department. Like other

areas, the health and safety measures also vary significantly. Factories are better

equipped than are village-based centres. The workplaces are generally clean but

air quality is a significant issue. To a lesser degree are natural ventilation,

sanitary toilets. None of the manufacturers has a designated health and safety

manager. There is a need to bring village stitching centres up to acceptable

standards, and the ILO’s proposal to include health, safety and working

environment conditions in their monitoring guidelines may be beneficial.

FREEDOM OF ASSOCIATION

All brands recognise the right for workers to form unions, and to collective bargaining.

They accept the idea of involving labour force representatives into decision-making.

Puma chose not to respond. There are no organised labour unions in any of the

manufacturer's factories. With regard to the stitching centres, managers claim that since

artisans are piece-rate sub-contractors they don not qualify as "employees" and hence do

not fall under the freedom of association clause in Pakistani law. Reebok believes their

group managers work as representatives, Adidas refers to the independent "maker" as a

representative of the artisans, while Nike/Saga claims that its elected SHAPE

representatives fall within the definition of labour force representatives. The Puma

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representative spends one hour every month meeting with artisans and workers to handle

complaints through an established mechanism.

Pakistani labour law empowers the artisans to organise and bargain collectively even

when they are piece-rate sub-contractors. The "makers" who negotiate piece rates based

on the seasonal market may well be playing this role. Though not a result of collective

bargaining, the "makers" have been able to exploit the heightened sensitivity of the

brands towards "clean" sourcing. The piece-rate has doubled over the past 18 months as

a direct consequence of the attention that the industry has received from outside

agencies. In addition, non-salary benefits such as free meals, transport and medical

services have also increased appreciably during this time.

DISCRIMINATION

The brands all proclaim non-discriminatory policies. Nike, Puma and Reebok have a

written stance on threats and harassment. There is no evidence of the manufacturers

disregarding this policy. However, from the data available it is impossible to either

dismiss or accept this claim.

COMPENSATION

The Pakistan government periodically fixes minimum wage levelsxliv. Every brand and

their manufacturer claim to pay accordingly, and workers agree. Fair-Trade, Nike, and

Reebok expect their contractors to pay sustainable or “living”. It is important to note

that a majority of the artisans are on contract, don’t work for a continuous period of time,

and may have other sources of income. Hence, it is not easy to determine whether wages

declared are "living" wages. Ali Trading, Capital, Leatherware, and Sublime pay a cash

piece rate to their artisans and claim that it is sufficiently high to cover costs of any

benefits. Moltex and Talon pay a cash piece-rate and add some benefits such as social

security contributions and free or subsidised meals. Saga pays a monthly salary, bonuses

and performance pay along with benefits that are the same for full-time and part-time

employees, including child-care, healthcare, leisure facilities, commodity credit and

community outreach services. Fair-Trade and Saga provide insurance and credit. Fair-

trade has established a Trust managed by Talon into which a fixed amount per ball is

deposited for community welfare. No other brand gets directly involved or expects their

source to provide benefits beyond a fair piece-rate. Every manufacturer expresses an

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obligation towards their workers, but only Talon and Saga have social benefits in

addition to salary. Moltex makes its “makers” pay the mandatory subscription to the

government pension and social security fund, otherwise paid by the manufacturers

themselves.

WORKING HOURS

In keeping with the demands of a seasonal trade populated by independent piece-rate

contractors, working hours are flexible all over the industry, except where the artisans

are employed. The factories observe a more fixed timetable, while the village stitching

centres normally open between 6 AM to 5 PM. Artisans attend according to their

convenience. Most leave on completing 3 or 4 balls, except when seasonal demand is

high. The "maker" normally manages individual workload and negotiates compensation

with the artisans. Legally mandated overtime is the norm for factory employees. There is

no overtime for piece-rate artisans, but the industry-wide rates tend to increase during

high season

MANAGEMENT SYSTEMS

While this SA8000 variable is not included in any of the brand codes of conduct, it

determines whether a brand will choose to work with a local manufacturer. Although

technically independent of them, the manufacturers accept technical or management

advice from the brands. Adidas and Puma both have technical representatives based in

Sialkot to oversee quality and social responsibility. Fair-Trade supervises Talon through

the Rugmark Foundation. Mitre and Nike send representatives every few weeks to

oversee their manufacturing. All manufacturers have computerised management

information systems, albeit at variable levels of technological sophistication. Ali

Trading, Leatherware and Sublime have acquired ISO9000 certification. Moltex and

Talon will consider it if their client demands it. Capital and Saga are content with their

existing quality control systems.

SOCIAL AUDITING

The concept is new to all manufactures except Saga, which has a separate department of

corporate responsibility. All the others think that their employees and shareholders are

the only stakeholders. All have internal monitoring teams for their own manufacturing or

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sub-contracting units. It is important to note that the primary focus of this monitoring is

to avoid children being employed. However, in some instances, with the building of new

manufacturing facilities, manufacturers are including clean and safe working

environments as a priority. Only Saga has a policy on social responsibility and the

elements of social auditing in its SHAPE programme.

Every manufacturer has contributed to bring in ILO as independent monitors and opened

its centres to their inspectors, but they concede that this is so because of the demands of

the Atlanta Agreement. So far only Saga (Grant-Thornton) and Talon (Rugmark) have

allowed in independent third party monitors in addition to the ILO. No independent

social audit has been conducted for any of the manufacturers, although Saga claims to be

on the verge of an environmental and social audit and is commissioning impact

assessment studies of its community-based programmes.

DISCLOSURE

Among the manufacturers Ali Trading, Leatherware, Moltex, Saga and Talon claim to

disclose results of management reviews to their employees. There is no evidence of such

disclosure or of the companies sharing such information with other stakeholders, the

local community or the public. A general hesitation to share company information with

outsiders is visible. One of the respondents said why he did not allow his company to

document information was that it could be used by competitors in ways harmful to his

company. The general attitude does not seem conducive to open disclosure.

COMMUNITY INVOLVEMENT

Adidas's code of conduct favours business partners who improve conditions in the

countries and communities in which they operate, but according to their subcontractors

in Sialkot they have made no direct contribution in this regard. Ali Trading, Capital,

Leatherware and Moltex are not directly involved in any community programmes but

prefer private philanthropy. Sublime's principal focus is only on education through the

21 community schools they support. Saga runs a weekly mobile clinic half-funded by

Nike, and has built roads, schoolrooms, water channels and local parks. Talon is

administering a trust fund for Fair-Trade. Nike sponsors an annual youth soccer

tournament. Reebok is supporting a school for working children through a local NGO.

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All manufactures claim to create employment and therefore directly contribute to the

cash income of local communities. This further leads to better quality of life and

improved infrastructure for local communities. However, children can no longer help

their parents, and may end up in other industries not well regulated like the ball industry.

Woman artisans who constitute a sizeable percentage of the informal workforce are also

being denied work opportunities as many cannot leave their household duties to work

full-time in ILO registered stitching centres, or may not be able to leave home due to

cultural compulsions. In response, some manufacturers have started women's-only

centres. Adidas, Leatherware and Talon have organised women artisans through their

existing "maker" networks and are providing facilities to them on the same lines as their

all-male centres. Saga has begun a pilot project employing 400 women in a large multi-

purpose centre providing education and training programmes with NGO collaboration.

Conservative members of the community feel it is encouraging women to break from

their housebound tradition. Competitors say Saga will not be able to sustain the centre

because of high overheads and low efficiencies.

ECOSYSTEM

The manufacturers claim that their products and manufacturing processes do not damage

the environment. The typical athletic ball, made of synthetic leather, fabric and natural

latex with traces of chemicals and polyester, is a non-hazardous product. Questions

about the "recycle-ability" of the product were not answered with certainty, nor could

claims about the waste material being easily incinerated be verified. The inks used for

printing cosmetic designs contain highly toxic chemicals, but the manufacturers claim

that quantity used per ball is minute and they are imported and stored in environmentally

safe containers. Nike has declared a ban on PVC in favour of “greener” materials from

August 1998. The preceding sections give examples of some direct contributions by the

manufacturers and their partner brands. The Sialkot partners also claim to have changed

the social dynamics through their efforts to remove children from the workforce. Not all

the effects have had a beneficial effect on family incomes, which will remain depressed

until the Sialkot Project's social protection programmes show impact.

CONSUMER AND CUSTOMER

The brands ensure that only quality products that conform to defined standards

prescribed by sports organisations like FIFA leave Sialkot. Since 1994, however, there

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has been an additional demand for "clean" products. The manufacturers have sought to

meet this demand through the Sialkot Partnership. Though media stories have targeted

brands first, the manufacturers have mostly faced the pressure. On the other hand

consumer interest in investigating sources with any rigour has been significantly less

than expected. The two principal determinants of buying decisions among the consumers

and retailers interviewed are product price and special advertising promotions around

sporting events.

Of a sample of 8 sports retailers interviewed, including department stores, franchised

chain stores or individually owned shops, only two reported consumer inquiries about

brand sourcing over a year. More importantly, knowledge of source did not adversely

affect the buying decision in both cases because the salespersons were able to satisfy the

customer. Only one retailer remembered receiving literature on Nike's sourcing

practices. When asked, children accompanying an adult to buy a ball confirmed they

chose a brand because their favourite team or sportsman uses it. Adults, however,

sometimes over-ruled children in favour of a substitute if the price was too high. This

inquiry is illustrative of the quantum of impact brand sourcing has had on buying

decisions for the average buyer. It can be investigated whether catalogue buyers and

subscribers to fair-traded magazines have a greater appreciation of brand sourcing.

ETHICAL MARKETING PRACTICES

Every company claims a child labour free product. It appears acceptable for their

advertising to reflect their role in implementing the Atlanta Agreement. However, in the

absence of independently verifiable social responsibility indicators, none of the brands

would be justified in claiming a comprehensive social responsible stance, apart from the

isolated examples seen above. Among the local manufacturers, Saga and Talon may be

justified in making a limited claim to socially responsible behaviour. No specific

information on fair-trading and ethical marketing for any of the manufacturers was found

except for Talon.

5.4 WHERE THEY STAND ON SOCIAL RESPONSIBILITY

Social Performance through the Supply Chain (based on Di Norcia, 1998)

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Table 5 – d

Ad

idas

Cap

ital

Su

bli

me Fai

r T

rad

e

Tal

on

Mit

re

Lea

ther

war

e Nik

e

Sag

a

Pu

ma

Ali

Tra

din

g Ree

bok

Mol

tex

I.HostileResistanceII.LegalisticCompliance

III.AccommodativeMediation

IV.Leading Edge

Table 5-d categorizes socially responsible attitudes into four levels. Two characteristics

determine where a business fits in the grid; voluntary participation and proactive attitude.

The above rating reflects how advanced a business is in both.

In addition Categories I and IV reflect a “radical” thinking, reflected by either a

resistance to the idea or great enthusiasm for it. Categories II and III reflect

“mainstream” thinking.

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6.0 Conclusion

The aim of this research has been to apply an objective yardstick to determine what

major brands “do” to promote their respective social responsibility policies, as opposed

to what they like to “say”. By examining each identified point in the supply chain, this

research has been able to assess social responsibility policy implementation in less

visible points of the supply chain as compared to the more obvious ones. It has identified

weak areas in the distant points of the supply chain, which may be hidden from the

brands due to any number of reasons. This study has been an opportunity to

independently field test the utility of a selected chosen assessment tool for a cottage-

ii SA8000, SEAAR, CERES, ECCR

iii "Human Development Report". United Nations Development Program, 1996, 1997.

iv Congressional Record, US Congress, September 1996.

v 70% of the world’s soccer balls are estimated to originate in Pakistan.

vi Report of US Congress debate on plight of 3-year bonded labourers stitching balls in Sialkot

vii The Sander’s Amendment called for banning imports from countries unable to satisfy US Customs on fair labour practices. Pakistan named target country.

viii Lasi, G.Akbar, Minister for Labour at the time, declaring that there was no child labour in Pakistan. Carried by national newspapers through 3rd week of August 1996, and subject of foreign media comment.

ix Interview with President and Executive of Sialkot Chamber of Commerce, reported by Save the Children Report, July 1996 by M. Scott and F.H. Shah.

x

? “The Way Forward”. Proceedings WFSGI Conference, Verbier, 1995. Formation of Committee on Ethics & Fair Trade (CEFT), and papers suggesting ways of “cleaner” sourcing.

xi Report in the World Federation of the Sporting Goods Industry (WFSGI) Bulletin, mid-year issue, 1997.

xii Khan, M.H, Head of Monitoring, Saga Sports, Sialkot. Interview. xiii Briggs, J.A., Jr. “The Partnership to End Child Labour in Sialkot®”, Soccerline. 24 December, 1997.

Programme aims to place 100% ball production under ILO monitoring. Children will be removed into rehabilitation programmes run by UNICEF, Save the Children Fund, Pakistan Bait-ul-Mal (National Welfare Trust), and the Sialkot Chamber of Commerce & Industry.

xiv Mitre, Nike and Reebok were the first to implement labour practice guidelines with manufacturers in Sialkot.

xv WFSGI News Bulletin, vol:3 1997.

xvi Business for Social Responsibility Annual Convention, Los Angeles, November 1997. Representatives from the Partnership were on a panel to respond to questions on the Sialkot experience.

xvii Shah, F.H., Director, Saga Sports, Sialkot, & former chair Sialkot Partnership’s Project Implementation Team. Interview

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based production process, and record, perhaps for the first time, how stakeholders view a

particular brand and its known stance on social responsibility. The results show the

promise of further work in the future, and establish a basis for it in Sialkot-based

industries.

Apart from the customary shortage of resources, time and inconvenient interview

schedules, this study’s principal limitationxlv was the near complete lack of awareness

regarding social responsibility concepts among the stakeholders in Sialkot. The general

xviii Javed, N., Director, Sublime Sports, Sialkot. Interview: Traditional buyers of souvenir balls, like Pizza Hut or Coca Cola decided against using balls from Sialkot, causing loss of business.

xix Reebok/Moltex label every ball “guaranteed made without child labour”, by their Human Rights Program. Fair-Trade/Talon also label balls produced through their sub-contractor system.

xx Advertisements in WFSGI Handbook and Bulletins; personal interviews with Brands & Manufacturers.

xxi Hussain, S.A., CEO, Leatherware, Sialkot. Interviewxxii

?BBC/Lloyd-Roberts, S, documentary on Sialkot’s ball industry on “Newsnight”, 16 May 1998.

xxiii Until mid-July 1998, Sialkot had offered office space to ILO, UNICEF, Save the Children, Pakistan Baitul-Mal (National Welfare Trust), National Rural Support Programme, Punjab Rural Support Programme, All-Pakistan Federation of Trade Unions, Bunyad Literacy Community Council, Sudhaar, Society for the Advancement of Higher Education, apart from high profile visitors from UK’s DfID, the US Department of Labour, Foul-Ball Campaign, AFL/CIO, association of Swedish Trade Unions, ITGLWU, Mercy Corps International, Human Rights Commission of Pakistan, Pakistan Institute of Labour Research and numerous media representative xxiv

? Zakauddin, K, CEO, Capital Sports Corp., & SCCI representative on the Sialkot Partnership’s Programme Co-ordination Committee.

xxv

? Zadek, S, P.Pruzan and R. Evans, “Building Corporate Responsibility”, Earthscan, 1997.xxvi

? Matthews, V., The Financial Times, London 12, December 1997. Avon Cosmetics, Toys R Us, Otto-Versand are the first to sign on to SA8000 social audit standard.

xxvii “Principles for Global Corporate Responsibility” Ecumenical Council for Corporate Responsibility (ECCR), UK, Task Force on the Churches and Corporate Responsibility (TCCR), Canada, Inter-faith Center on Corporate Responsibility (ICCR) US, 1998. Bench Marks for Measuring Business Performance.

? “Principles for Global Corporate Responsibility” (TCCR) Canada, (ECCR) UK, Inter-faith Council on Corporate Responsibility (ICCR) US, 1998. Bench Marks for Measuring Business Performance.

xxviii

? Diagneault’s 5 imperatives for CSR: 1. Moral; everyone wants to operate in an environment of integrity2. Pragmatic; its good business3. Legal; because getting caught has a price4. Perceptual; being seen as ethical pays5. Change; where values provide a constant.xxix

? Kunz, M., Director Fair-Trade, a German NGO sourcing soccer balls from Talon, Sialkot, and respondent to the research. Interview.

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absence of earlier material made archival work a bigger challenge than expected.

Another problem was the relative newness of the Social Audit tools and difficulty in

acquiring a healthy variety from a large number of sources. The general tendency among

brand and manufacturer representatives, and even social audit practitioners to be

circumspect was an initial bottleneck, but once a certain level of confidence was

achieved, candid sharing of views became one of the most satisfying achievements of the

research. Although initially presenting itself as a limitation, being the first out in Sialkot

has had its advantages too. When they arise, future opportunities for work in Sialkot or xxx

? Includes: 1. Cultural sensitivity2. Natural resource conservation3. Waste-management4. Safeguards5. Impact on local animal and plant life

In addition, cross-cutting categories:1. Indicators for adherence to the norms of civil society2. Health and safety3. Service4. Help to the needy

xxxi Stakeholders extend beyond the corporation's shareholders, its employees or customers, to any person, community or interest group, whose quality of life is actually or potentially affected by an organisation’s actions.

xxxii

? Corporate Responsibility categories:1. Economic: selling goods and services at a fair price, making a legitimate profit according to norms of

acceptable behaviour without harm to anyone2. Legal: obeying the law and creating policies and structures to ensure the health and safety of workers

and consumers, and environmental pollution3. Ethical: fulfil expectations of society, based on the commonly understood precepts of fairness and

justice, and exhibit moral values in business dealings4. Discretionary (philanthropic): performing voluntary and non-codified actions meaningful to it,

dictated by the discretion of the organisation

Broad CSR values:xxxiiiDisclosure: whereby a corporation presents for public scrutiny not only it’s financial status but

information that reflects its commitment to improve the quality of life or its stakeholders2. Employee Rights: where access to the benefits that the corporation has the power to dispense, are within

reach of anyone regardless of gender, age, or personal persuasion3. Fair business practices: where the principle of fair-play and justice underpins all business transactions

of a corporation and a conscious effort is visible to adhere to a set of moral guidelines4. Community involvement: where a discernible level of participation is present at the level of the

community within which a business operates, in decision-making as well as accountability5. Environment: where concrete steps to safeguard, conserve and protect it match an acceptable level of

awareness about a company’s impact on its physical environment6. Human and Labour rights: where the basic human values form the basis of corporate policy and there

is evidence of adhering to laws that guarantee them7. Political involvement: where there is freedom to associate with groups espousing any moral

perspective on life and social issues, without fear of sanctions or organisational reprisals8. Respect for people: where the fundamental rights of a person dictate measures for performance and

productivity and do not extend human capacity beyond limits.

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similar places will find the researcher better equipped, and thereby ready for an

improved quality of output.

6.1 SUMMARY OF FINDINGS

The six research questions led to the following findingsxlvi:

1. Brand policies conform to acceptable standards of labour practice. Though they do

not use Social Responsibility and Accountability terminology, the policies conform

to recognised international principles. Both the brands and the manufacturers are

serious about clearing their name.

2. Successful implementation of brand codes of conduct, matched with their ready

acceptance by the manufacturers, has improved prevailing labour conditions. This

has reduced consumer and media pressure on the industry. Without the brands’

critical support during negotiations, in funding research, and with drafting the

partnership agreement document, the local manufacturers would not have been able

to cope. Despite scepticism about the motives of both parties, the Sialkot Partnership

is a timely response with potentially far-reaching effects for the ball industry;

xxxiv Zadek, S., AccountAbility Quarterly, summer 1997.

xxxv “The Fundamental Human Rights Conventions of the ILO”. Handout, ILO/SAAT. New Delhixxxvi

? CEP’s SA 8000, is a certification system with 9 areas for evaluating businesses. The accreditation process will be managed by recognised monitoring agencies, such as, Societe Generale Surveillance (SGS), while certification will be awarded by CEPAA.

xxxvii

xxxviii van Luijk, H., “Business Ethics in Europe” chapter in the Encyclopaedic Dictionary of Business Ethics, Werhane & Freeman, eds. p 75.

xl Child, J., Un-sourced class handout, 20 October, 1997. Describes in a continuum the progress of research from being “highly realistic, (but) uncontrolled” to “highly artificial, (but) controlled”.

xli Ibid. Comparative characteristics of various data collection methods.

xlii Additional information in chapter 6.0- Conclusion, page 52. Cross-reference.

xliv

? Punjab Labour Department, Minimum Wage Board, notification of July 1997: 1. unskilled Rs.1,950 /month2. semi-skilled Rs.2,025 /month3. skilled Rs.2,300 /month4. highly skilled Rs.2,520 /month

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3. Application of social responsibility policies is not uniform along the supply chain.

The gap is most significant at the two ends – the artisan and the retailer. Effective

awareness-raising to promote corporate citizenship values must be a high priority.

Because of the global spread of the supply chain, and a marked variation in laws,

enforcement mechanisms, and cultural conditions at different points of the supply

chain, building understanding is critical. Social Audits and disclosure would

strengthen information flow along the supply chain and ensure uniform application of

policies;

4. Brand labour practice reality deviates considerably from their consumer image.

Despite their efforts to work with manufacturers in improving social performance

standards, the brands’ existing knowledge about social auditing as a management

tool and how to implement it is sparse. Nevertheless, there is interest in learning

about, and utilising standard social auditing tools, even if the present focus on child

labour seems narrow. The brands were more proactive when there was a threat from

consumers and the media, but have become complacent. Their reluctance to become

involved in local social programmes and a low priority to women’s and family

livelihood issues is bound to have a slowing down effect on their manufacturers

soon.

5. Manufacturers labour practices have improved only due to brand pressure and need

to be sustained over the long term. They are still not convinced of the value-added

benefit of corporate social responsibility. The best examples of corporate citizenship

are actually driven by motivated individual manufacturers, and fuelled by their

willingness to invest in local facilities and welfare. Moreover, with a few notable

exceptions, the brands have not been able to raise their buying prices, leaving

manufacturers with a greater economic burden. Unless consumers can be convinced

that they are equal partners in the “social contract”, the sustainability of responsible

sourcing programmes may not be guaranteed.

6. Child labour is over-emphasised as compared to overall socially responsible

corporate behaviour. Even though the ILO monitoring programme has increased xlv Additional information on Limitations in chapter 3.0-Research Methodology, page 24.

xlvi Bullet Summary of issues raised be stakehlders in the appendix-VI

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awareness about positive labour practices, it is still seen as a way to get children out

of the industry and not linked to socially responsible behaviour. The ILO needs to

broaden its mandate beyond child labour to include corporate social responsibility,

and assume a leadership role in sustaining momentum among local manufacturers.

However, the monitors are themselves unaware of Social Responsibility concepts and

issues relevant to it.

6.2 THE LAST WORD

The short answer to the research question is that, yes, the social responsibility image of

the brands is at variance with their labour practice at the extreme ends of the supply

chain. Not discounting the efforts made by the Sialkot partners, there are still some gaps

in how individual brands and their manufacturers have geared up for implementing

verifiable corporate responsibility policies. The most visible cause of this is that the

seriousness and quantum of consumer mobilisation in demanding “clean” sourcing is not

effectively conveyed all the way to the ends of the athletic ball supply chain. It is also

true that such consumer demand may be more pronounced in some markets, and take a

longer time to build up in others.

It is the brand’s responsibility to ensure that its ethical values permeate all the way down

its sourcing mechanisms. At the same time, the manufacturer being an independent

corporate player cannot be excused from similar obligation to its own consumer, i.e., the

brand. In the interest of fairer business, consumer awareness can be hastened by using

the electronic media more effectively, and by conducting credible social audits followed

by disclosure and cross-level training for stakeholder groups.

This research concludes that despite the variance found between brand policy

standards and their implementation, creating an enabling environment for

corporate social responsibility in Sialkot is itself an act of responsible corporate

citizenship. The critical need now is to sustain the gains made over the past 18 months

and develop effective, viable and culturally consistent models of ethical business and

labour practice in Sialkot. The Sialkot Partnership must be strengthened to perform a

permanent leadership role in disseminating corporate citizenship values.

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It is essential, therefore, that the brands commit resources for the benefit of Sialkot’s

artisans and their communities. This they can do either by manipulating their cost/price

structures and trusting their manufacturing partners to invest the additional revenues into

civic interventions. Or they can create local trusts, letting specialised non-profit agencies

manage them within clearly defined mandates. There are many examples to learn from –

even within Sialkot. The stakes have been raised. It is again up to the brands to wield

their considerable influence on manufacturers as well as consumers to make the gains of

the Sialkot experience a lasting example of global corporate citizenship. Will they take

up the challenge?

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xlvii

xlvii

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Ambreen Waheed Business Ethics University of Cambridge

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