Elsevier

World Development

Volume 37, Issue 2, February 2009, Pages 326-340
World Development

Global Value Chains, Labor Organization and Private Social Standards: Lessons from East African Cut Flower Industries

https://doi.org/10.1016/j.worlddev.2008.03.003Get rights and content

Summary

This article examines the opportunities and challenges that private social standards pose for labor organizations. It explores different labor responses to private social standards in East African cut flower industries. The analysis incorporates the concept of labor agency in global value chain analysis and reveals how retailer-driven chains offer more room for labor organizations to exercise their agency than the traditional cut flower value chains. Labor organizations have been able to influence social standard setting and implementation, and to use standards to further labor representation at production sites. However, labor organizations’ ability to seriously challenge the prevailing governance structure of the cut flower value chain appears extremely limited.

Introduction

New patterns of consumption, media pressure, and NGO campaigns have generated consumer interest in the conditions under which goods are produced in the developing countries. This has led to a growth of interest in minimum social and environmental standards, particularly among global brand name companies and retailers. Many of these have developed their own standards and monitoring procedures where compliance from suppliers is a pre-condition for market entry (Blowfield, 1999, Dolan and Humphrey, 2000, Hale and Opondo, 2005). Private social standards1 covering employment conditions of Southern producers exporting to European markets increased rapidly throughout the 1990s. Multinational enterprises (MNEs) and large buyers increasingly adopt standards that operate along their value chains, covering labor standards such as the right to form trade unions, discrimination, and child and forced labor. This has occurred not just in relation to employment within MNEs themselves, but particularly among their global networks of suppliers in developing countries.

When exploring the social consequences for labor of global production systems and when investigating the potential of private social standards, labor as an actor would seem an unavoidable ingredient in the analysis. The role of labor would seem relevant in the form of individual workers, but also as represented through labor organizations such as works councils2 or trade unions. However, existing literature surprisingly shows a very limited interest in the role of labor organizations. The global value chain (GVC) approach developed by Gereffi and Korzeniewicz (1994) while offering an analytical framework to examine interrelations between actors in value chains has traditionally downplayed the role of labor as other than a productive asset.3 Likewise, existing literature on private social standards shows a very limited interest in the potential active role of labor. Rather, labor is seen as a passive object that needs to be taken into consideration, managed and at best consulted. When looking at the significance for labor of private social standards, analysis has been of impact on workers on the ground and has not included the aspect of labor organization.

In this article, I seek to fill a gap in the literature on global value chains and on private social standards by viewing labor (in the form of labor organizations)4 as an input with agency.5 By labor organizations I refer to organizations involved in representing and/or advocating for workers thus including both trade unions and labor NGOs. The purpose of this article is more specifically to broaden the understanding of the opportunities and challenges that private social standards pose for labor organizations, especially trade unions. This is achieved by exploring different labor responses to the proliferation of private social standards in East African cut flower industries. In the specific context of Tanzanian and Kenyan export of fresh cut flowers to Europe, I seek to understand: (1) if private social standards open opportunities for labor organizations to pursue their own objectives and (2) how labor organizations use or do not use these standards to their own advantage. I collected the empirical data for this article in 2006 in the cut flower industries of Tanzania and Kenya.6

In Section 2, I start with a short discussion of trade unions and private social standards followed, in Section 3, by a review and discussion of labor within GVC analysis leading to the specific approach adopted in this article. In order to asses opportunities opened by private social standards, in Section 4, I analyze the changing environment of cut flower exports and in Section 5, the incorporation of private social standards in the value chain. In Section 6, I analyze the labor-content of private social standards employed in cut flowers from the perspective of labor organizations, arguing that significant variation exist between different types of value chains, different types of private social standards and different practical interpretations of standard implementation. As a final point, in Section 7, I analyze different labor responses to private social standards in Tanzania and Kenya. This analysis shows how labor organizations can either choose to “ride” the standards, exploiting them to gain influence and advance their own projects; or choose to position themselves against the social standards. Finally in Section 8, I conclude that some private social standard initiatives do open opportunities for labor organizations. However, their ability to seriously challenge the prevailing governance structure of the flower value chains seems extremely limited.

Section snippets

Trade unions and private social standards

The production strategies of MNEs have changed substantially during the 1970s–90s. They are now often characterized less by direct foreign investment and more by indirect sourcing through GVCs linking them to networks of suppliers in developing countries. From a trade union perspective, these developments pose serious challenges. The increased mobility of goods and capital, with labor remaining relatively confined within national borders, has made it more difficult for labor to advance its

Labor and GVCs

The GVC approach developed by Gereffi and Korzeniewicz (1994) offers an analytical framework to examine the cross-national activities of firms exploring how linkages between production, distribution and consumption of products are globally interconnected along value chains that embody a network of activities and actors. Gereffi identifies four key dimensions of commodity chains.

Cut flowers

The world market for cut flowers has grown consistently since the early 1980s but over the past 5–10 years the market has experienced slowing growth in demand, especially in the European Union. At the same time, increases in production (especially in developing countries) have led to a downward movement in market prices. Consumers in EU markets are demanding greater variety and are increasingly interested in the environmental and social dimensions of production. This is leading to a

Private social standards

The nature of cut flowers and the character of the flower trade has set the frame for some highly criticized working conditions in the industry. The Kenyan flower industry in particular has been one of the favorite targets for campaigns both locally and in Europe demanding better environmental and social conditions. The seasonal nature of the cut flower trade, with demand peaking at European festivals such as Valentines, Mothers day and Easter and lowest demand during the European summer, makes

Opportunities for labor organizations

All social standard initiatives include some element related to labor-issues. Some do so marginally, others more explicitly. Figure 1 gives an overview of the degree to which the different standards incorporate provisions that can potentially create opportunities for local labor organization.

Labor strategies toward private social standards

Although the trade union movement in Kenya and Tanzania have much in common historically, and still can be said to some degree to portray similar traits, the history of trade unionism in the floricultural sector, and specifically the way of approaching social standard initiatives, have differed remarkably.

Conclusion

The implementation of social standards in cut flower value chains can potentially help to mediate the power relations between “labor” and “capital.” “Labor” may use (at least some of the more rigorous) standards to (1) enhance union organization and obtain collective bargaining agreements; (2) obtain better insight into the operations of cut flower markets; (3) get seat at the table when social issues are discussed among business; and (4) exert a watchdog function threatening non-compliant

Acknowledgments

I would like to thank the various workers, trade unions, farm managers, business associations, NGOs, and standard initiatives for their openness and collaboration during fieldwork in Kenya and Tanzania. Valuable feedback on earlier versions of this paper was received foremost from Stefano Ponte, but also from Alex Hughes, Stine Haakonsson, Peter Gibbon, Henrik Søborg, Mette Kjær Larsen, Jesper Zeuthen, Fiona Wilson, Christian Lund as well as three anonymous reviewers.

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