Transnational corporations, corporate behaviour and corporate social responsibility and their roles in determining labour conditions in developing countries : a case study of the labour conditions experienced by Nike contract workers in Viet Nam : a dissertation presented in partial fulfilment of te requirements for the degree of Master of Philosophy in Development Studies at Massey University, Turitea Campus, Palmerston North, New Zealand
The role and responsibility of Transnational Corporations (TNCs) in determining labour conditions for developing country workers has been the topic of much debate, usually between corporations and social justice activists.
The low cost/sweatshop labour debate is complex as a range of TNCs and labour conditions exist, offering an array of positive and negative contributions to labour conditions and development in developing countries. Developmental TNCs offer good work options to developing country workers, while also positively contributing to the development of its host country economies. TNCs can also act as positive role models for other industries and enterprises by offering superior labour conditions to domestic enterprises. Additionally, TNCs may offer education or developmental experiences to workers and utilise fair or ethical trading practices.
In contrast, TNCs may also act in non-development ways. For example, many TNC sub-contracted factories are sweatshops, offering deplorable wages and working conditions, exploitation and human rights abuses. Moreover, some TNC factories do not offer positive spillovers to developing countries and furthermore, there are often detrimental impacts when developing nations are forcibly integrated into the global economy.
It is important to make the distinction between core labour standards (international human rights and labour law) and corporate social responsibility (CSR) (moral and ethical judgements on how corporations should behave). CSR requirements are difficult to define and are not based in law. Nonetheless, increasing public expectations and the success of non-government organisation campaigns, have meant that CSR requirements are what the public expects of TNCs.
Nike contributes to Vietnamese labour conditions and development through the creation of thousands of factory jobs and through FDI and its spillover effects. The
Ministry of Labour comments that foreign TNCs and Nike frequently offer superior labour conditions to those of domestic enterprises. Yet, there are still many concerns with health and safety, wages and hours of work and human rights abuses in Nike contract factories.
Nike argues that there are many external factors, which determine global labour conditions (for example, globalisation, free trade and neo-liberalism). Yet, TNCs have a great deal of influence on the global environment and overall, it is TNCs that determine the labour standards of developing country contract workers. Furthermore, there is significant potential for TNCs to meet core labour standards and CSR requirements.