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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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5. Conclusions

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The empirical findings presented above allow interesting insights into the emer- gence and strengthening of self-regulation regimes in the global apparel indus- try. The emergence and proliferation of self-regulation regimes in the late 1990s and the following years can be convincingly explained by the two variables pub- lic pressure and the threat of governmental regulation. The first appears to be more powerful. Consumer pressure organised by NGOs has had a severe impact on the way TNCs conduct their business. They were forced to accept responsi- bility for their production chain and the way they treat workers at home and abroad. TNCs have realised that they are highly vulnerable in that field and without implementing extensive changes, they will lose social legitimacy and customers. Both with respect to timing and content of CSR mechanisms, self- regulation regimes corresponded strongly with the emergence of public pressure campaigns. The first wave of CSR emerged in the United States where the NGO movement fighting for better labour conditions in the apparel industry started. And the first companies to react were those which rely heavily on the value and reputation of their brand. It took several years for smaller or less brand- dependent companies to follow. CSR has become an essential tool in corporate risk-management. Next to in- dividual self-regulation in the form of codes of conduct, collective self- regulation regimes are seen as an important tool in minimising the risk of being targeted by NGO campaigns. Collective self-regulation regimes increase the credibility of corporate...

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