Problems in global manufacturing businesses abound. The majority of workers in Chinese factories that supply various global brands work over the legal limit of 60 hours. Various internal audits in the electronics industry find problems of inadequate safety precautions, instances of child labor, low wages, and involuntary work. The International Labor Organization (ILO) today reports that there are around 168 million child laborers worldwide, and more than half of them undertake hazardous work. Every 15 seconds a worker dies from a work-related accident or disease (ILO, 2015).The list goes on and it is clear that long term solutions to improve labor standards in global supply chains are desperately needed. A first step seems to be publicizing these widespread violations of minimum standards of working conditions in firms of the global supply chains, which has increased since the 1990s. In response, transnational corporations have scrambled to protect their reputation and to address these violations in a series of changes to their codes of conduct and the development of a series of monitory systems. The most common private initiatives have been internal audits by the corporations themselves, or third party audits, usually undertaken by non-governmental organisations. Many TNCs have come up with their own “codes of conduct,” in which they develop their social and environmental standards of the production process, and request the extension of such codes to their suppliers and sub-contractors.

In The Promise and Limits of Private Power, Richard Locke asks whether and how these private initiatives have been able to address the dreadful conditions in global supply chains. The book assembles an impressive wealth of data and information featuring over a decade of research by Locke and his graduate students. The research includes thousands of factory audit reports by several major brands such as Nike and HP, and more than 700 interviews with company managers and factory directors, inspectors, and representatives from non-governmental organization (NGO) in 120 factories and in 14 different countries.

Testing the ability of corporations to address the problems in their supply chains is a fundamental question. The positions on this issue are fairly divisive. For some, corporations are seen as welcome actors in an era when national governments do not seem to have the power, mandate, or willingness to tackle these global labor issues. Corporations might be able to fill the regulatory gap or responsibility vacuum; and their ideas of the “triple-bottom-line” in their philosophy are welcomed. Thus there is much hope expressed in the power of transnational corporations and their commitment to social corporate responsibility and self-governance. For others, there is much doubt that corporations can police themselves, because any such initiative stands potentially in contrast to the profit-making goals of corporations. Indeed, many critics have warned that corporations are ever more powerful but also less accountable and less regulated.

Locke’s analysis thus arrives at an important moment. But his message is not really encouraging. He finds that while Nike invested heavily in new codes of conduct, auditing schemes, and new staff that was trained to oversee the compliance of its suppliers, these changes did not live up to expectations. When Locke examines compliance rating scores that all Nike suppliers were assigned over time, he determined that in the early 2000’s over 80% of their suppliers’ workplace conditions remained the same or worsened over time (pp. 65ff). The problem is that even though suppliers can be committed to compliance, they do not necessarily stick to it. Moreover, while some factories that have been more compliant saw some rise in health and safety standards, others have experienced persistent problems of excessive working hours and low wages. Moreover, Locke argues that the basic assumptions of the traditional compliance model are flawed, e.g. upgrading codes of conducts and the number and quality of audits does not lead automatically to an enhanced situation of workers, especially not to more freedoms of association.

While many private conventional compliance initiatives fail to change the fundamental problems, Locke finds that some programs, such as the capability approach, have had some impact. In this approach the function of auditors is not to discover workplace problems and punish suppliers with bad grades, but to engage in coaching and mentoring to share low-cost solutions and best-practices for health and safety issues (pp. 92ff). Locke arrives at this conclusion by relying on very creative ideas for his research design and innovative methods to tackle these questions. His approaches and methods, including quasi-experimental designs, pre- and post-test designs, and matched paired comparisons are rarely used in this area of research. In addition, he utilizes best-practice vignettes, interviews, and document research in thousands of internal audit reports to carefully take apart which approach works and which does not. Based on his research, there is some hope that the capability-building approach performs better than the traditional compliance model, but Locke’s research also shows its limits. For example, in order to understand the effect of capability building programs he studies HP audits before and after the implementation of an important program, and adds a control group. Based on this smart pre- and post-test design he shows that the program improved health and labor standards of workers, but also indicated small declines in environmental achievements. Yet since he also discovered that the control group, which did not implement the program, improved in the same timeframe on health and labor standards, he concludes that the small successes cannot be clearly attributed to the capability program (p. 100).

In another comparison Locke matches two Mexican Nike suppliers of T-shirts. In one case, capability building was implemented with a new approach that involved workers on the ground, as they were highly trained and were asked to work in teams, to rotate across several machines, and to consult with supervisors to set production targets. In another comparable plant, managers were focused on lowering the labor costs, and workers were not encouraged to get really involved in enhancing the factory’s operation. The first plant reached better results, as their wages and productivity levels were higher, and it could also better respond to new challenges that arose when external market pressures increased. Locke concludes that the manager’s choices are essential for the successful implementation of the capability approach.

While these capability programs seem to help address some grievances on the ground, especially with the right managerial styles, they still cannot tackle the major issue of why so many violations occur in the first place. According to Locke, the violations of working conditions have to do with business upstream demands on the industry that include last-minute changes in colors or product design, and involve problems in market forecasting and misjudgements of the productive capacity of suppliers. So, which solution can address these demands and at the same time guarantee better and more stable working conditions? Locke proposes to blend private and public regulation and recommends that they be practiced in tandem. To him, there is no way around stricter state enforcement of national labor laws; greater collaboration with government actors, whereby longer and better buyer-supplier relations, and developing trust will also help to improve standards. So, government needs to be brought back into these private initiatives to help regulate and strengthen them. Private corporate initiatives work best in countries with strong political institutions and rule of law.

What Locke does not discuss is how the consumers in Western countries can influence not only whether the issue of sweatshops and child labor are brought into the public agenda, but also how consumers can put targeted pressure on companies at the right moment and with the right emphasis. There are two ways of consumer influence that matter here. First, consumer strategies of using biting culture jams, threats of boycotts, and pressure on companies to support third-party certified labeling schemes could be an important way to link such consumer pressure to the success of companies to overcome the abusive labor conditions. How do consumer movement campaigns help keep the pressure on corporations, and how does the fear of dissemination of information on labor conditions of suppliers help brands to find the best possible solutions that ensure better auditing grades? Could the absence of continued consumer pressure explain some of the ups and downs in suppliers’ performance? Second, consumers are key for attacking the very reasons why suppliers spiral into abusive working conditions in the first place. Extremely high consumer demand and related short-term changes in manufacturing practices can be tamed when consumers realize the consequences of their actions. Consumers are able to recognize that they have a responsibility for the demands they put on a highly outsourced and unregulated production process and its potential impact on workers and the environment. Thus while we certainly need governments to pay more attention to labor issues internationally, as Locke concludes, the model does not work, if consumers do not care.

Overall, Locke’s book is an insightful and methodologically rich journey into how corporations have attempted to address the miserable working conditions in the global supply chain. The book carefully tests the success of various kinds of these initiatives in enhancing labor conditions. It is a must-read for anyone who is interested in global labor issues, worker’s rights, international political economy, corporate social responsibility, and program evaluation.