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Self-Regulation and Labour Standards

An Exemplary Study Investigating the Emergence and Strengthening of Self-Regulation Regimes in the Apparel Industry

Carolin Zeller

The question of how to deal with powerful transnational corporations has entered the national and international political agenda. The last years have seen a strong academic interest in business ethics and corporate social responsibility (CSR). This study offers some insights into the question under which circumstances collective global self-regulation regimes emerge and gain strength. It investigates the rationales and incentives driving corporate decision-making resulting in collective self-regulation regimes in the apparel industry. The work is based on a theoretical discussion of rational choice approaches and expert interviews. The research suggests that public pressure can convincingly explain the emergence of CSR policies in general and self-regulation regimes in particular. Moreover, the emergence and proliferation of collective self-regulation regimes has been influenced by the role of governmental regulation in the early 1990s and has been stagnating in the last years. This development can be convincingly explained by the changed dynamic of public pressure and by the lower perceived threat of governmental regulation.

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1. Introduction

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Since the 1990s, NGO publicised severe allegations against transnational corpo- rations (TNCs). The apparel industry and its labour practices have been especial- ly under the spotlight: Fourteen year old children working fourteen hours a day, young women working for less than twenty US cents an hour, workers losing their jobs after establishing a union, unpaid overtime and factories resembling prisons – the news on scandalous labour practices in apparel factories are travelling the globe.1 In an era of cheap and easy communication which allows news to spread quickly, allegations of abusive labour standards threaten TNCs. The public out- cry against these practices is remarkable and the call for states to restrain corpo- rate power is getting louder. In recent years, business regulation has been a con- troversial issue within societies and in relations between states. The process which is often referred to as ‘globalisation’2, a term that de- scribes the increasing economic, political, and cultural interdependence, has cre- ated various new possibilities for states, corporations and individuals. Moreover political and cultural exchanges offer individuals and other actor groups new opportunities. But globalisation has also caused serious problems for the regula- tion of business. Firms can evade national regulation by relocating their business activities and the fear of losing valuable investment and affecting the national economy in a negative way has made governments very careful about further regulating their businesses. International institutions, for example the UN, the ILO or the OECD, try to address the problem, but in most cases either lack...

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