Corporate Codes of Conduct as a Local Union Strategy: The case of Indonesia

Abstract

Today the role of companies as societal actors is subject to a vivid debate due to the ecological degradation and unethical working practices that has resulted from an increased outsourcing of production to developing countries. A commonly used method to increase the sustainability of production is by adopting codes of conduct but implementing these sustainability policies is a complex issue in developing countries partly due to the top-down design of the codes. However, recent research indicates that the implementation of corporate codes of conduct can benefit from the involvement by local actors. Simultaneously, this increased focus on firm-society relationships has created new avenues for labour unions to use these codes in pressuring the suppliers to improve the situation for the workers. This is opening up a new research field in which we have studied how unions can use these codes of conduct as a strategy to improve workers’ conditions. Thus, this study aims to contribute to the understanding of how codes of conduct can be used in a bottom-up approach by local actors. Therefore, we have carried out an empirical study of how Indonesian labour unions use codes of conduct to leverage their demands in the textile-and garment industry. Our empirical findings show that unions use codes of conduct on a regular basis. Moreover, our results indicate that the use of codes of conduct constitute three main strategies where the codes are used in relation to the supplier, the international buyer or through an international network. To conclude, the choice of codes of conduct-strategy is influenced by internal elements such as the codes of conduct-education, the union’s access to international networks as well as the characteristics of issue.