The Global Compact, Corporate Social Responsibility and Textile and Garment Companies in the Philippines

Diploma Thesis, 2004

111 Pages, Grade: 1,3



(i) Executive summary

(ii) List of abbreviations


Section One
1 The analytical framework
1.1 The issue area: labour standards in the textile and garment industry
1.2 New modes of global governance
1.2.1 Private-public modes of governance
1.2.2 Private modes of governance
1.3 Norms and norm compliance
1.4 Research design
1.4.1 Determinants of outputs
1.4.2 Determinants of outcomes

Section Two
2 The Global Compact
2.1 Origins
2.2 Structure
2.2.1 Rules
2.2.2 Actors
2.2.3 Mechanisms of engagement
2.2.4 Governance
2.3 Progress and Development
2.4 Analysis I: outputs
2.5 Analysis II: outcomes
3 Corporate Social Responsibility
3.1 Overview
3.2 Norm entrepreneurs
3.2.1 The Clean Clothes Campaign
3.2.2 The Worker Rights Consortium
3.3 Norm following I: industry self-regulation
3.3.1 Corporate codes of conduct
3.3.2 Worldwide Responsible Apparel Production
3.4 Norm-following II: co-regulation
3.4.1 The Fair Labor Association
3.4.2 The Ethical Trading Initiative
3.4.3 Social Accountability 8000
3.5 Conclusion

Section Three
4 The Philippine Background
4.1 Political system and political culture
4.2 Socio-economic background
4.3 Economic structure
4.3.1 Structure of the textile and garments industry
4.4 Labour issues
4.4.1 Labour law
4.4.2 Working conditions
4.4.3 Industrial relations
4.5 National CSR initiatives
5 The Global Compact in the Philippines
5.1 Origins
5.2 Structure
5.2.1 Actors
5.2.2 Mechanisms of engagement
5.2.3 Governance
5.3 Progress and development
5.4 Output analysis
5.5 Conclusion
6 Case studies
6.1 CS Garment
6.1.1 Commitment to CSR
6.1.2 Outcomes of the Global Compact
6.2 Indo Phil Group of Companies
6.2.1 Commitment to CSR
6.2.2 Outcomes of the Global Compact
6.3 Yarn Ventures Resources
6.3.1 Commitment to CSR
6.3.2 Outcomes of the Global Compact
6.4 YKK Philippines
6.4.1 Commitment to CSR
6.4.2 Outcomes of the Global Compact
6.5 Conclusion
7 Outcomes
7.1 Outcomes of the Global Compact
7.2 Outcomes of other CSR initiatives
7.3 Conclusion

8 Conclusion


A. List of interviews
B. Survey among Philippine Garments and Textile Producers
1. Questionnaire
2. Table: Responses from 21 companies
C. Research notes: Global Compact Workshop, Cotabato City, March 17, 2004

Executive Summary

Over the first four years of its existence, the Global Compact has made significant progress in terms of outputs, but is threatened by its participants’ poor performance in rule-compliance. It has managed to secure small but reasonable funding, and improved in the fields of guidance to participants, inclusiveness, and transparency. It has proved to be adaptable to challenges, as the introduction of the integrity measures and the addition of a tenth principle (on anti-corruption) indicate. However, the lack of any enforcement of its rules that persisted until June 2004 appears to have been a model deficiency. Up until the introduction of the integrity measures in that month, the voluntary nature of Kofi Annan’s initiative seems to have been over-stretched, as poor outcomes suggest. While it has gained hundreds of new participants and now consists of nearly 1,700, most of these participants failed to fulfil their obligations of (1) integrating the prin- ciples into business operations, (2) publicly advocating the Compact, and (3) annually reporting on progress. At least 1015 participants did not submit the required “communication on progress” (COP). Although this paper recognises the achievements of some participants as well as indirect outcomes amongst participants (such as strengthening champions of reform within companies), these successes do not make up for the huge reporting gap. Conceivably, all participants that did not submit COPs might have acted upon the principles nonetheless; but even were this so in all cases, the reporting gap posed at the very least a threat to the initiative’s transparency and integ- rity. However, it is more likely that the reporting gap represents an actual implementation gap - a gap that poses a much greater danger to the Global Compact’s credibility and long-term viability.

The Philippine Global Compact network was established in September 2001; its 137 members make it the third-largest of the 44 networks (after France and Spain). Its dynamics re- veal some of the root causes behind the participants’ poor performance in reporting. The net- work’s inception was spearheaded by the Employers’ Confederation of the Philippines (ECOP) and the International Labour Organisation (ILO); the initiative soon gained the support of the Philippine Chamber of Commerce and Industry (PCCI), Philippine Business for Social Progress (PBSP) and the United Nations Development Programme (UNDP). At the launch, a Steering Committee was formed that consulted companies and business associations, and prepared a ma- jor conference in May 2002, in the course of which all of the current Philippine participants signed up to the Compact. To maintain momentum, ECOP and the ILO held a series of semi- nars on the integration of the labour principles into companies’ business operations. However, this seminar series reached only a small fraction of Philippine Global Compact participants, and by 2004, the momentum had diminished. Even basic communication between the network man- agement and many participants had broken down, and ECOP struggled to maintain contact with the network members. While the network management, an informal working group of members from ECOP, PCCI, PBSP, ILO and UNDP, has held workshops in areas outside the capital Ma- nila to spread the word of the Compact, the original participants now form no more than a latent network of signatories. Only two of the 137 Philippine participants ever submitted COPs.

This reluctance in reporting comes as surprising in the face of the strong role that corporate social responsibility (CSR) plays in Philippine business culture. CSR has a long tradition in the Philippines, and all four companies studied in this paper engage in CSR - ranging from upholding their workers’ rights to limiting their environmental footprints, to community projects. However, the drivers behind these CSR policies lie in some mixture of personal convictions of their managers to ‘do good while doing well’, pressure from buyers, and recognition that social engagement represents a comparative advantage in the market. The Global Compact is merely seen as providing some additional ‘moral support’ for CSR policies.

For these reasons, it is other instruments of CSR that play a greater role in the Philippine textile and garment industry. The broadest but arguably least far-reaching outcomes have been generated by private regulation: corporate codes of conduct, the American Apparel and Footwear Association’s ‘Worldwide Responsible Apparel Production’ (WRAP) standard, and a local derivative thereof. Relatively few companies have thus far become engaged with co-regulative and further reaching instruments such as the SA 8000, the Fair Labor Association’s (FLA) ‘Workplace Code of Conduct’, or the Ethical Trading Initiative’s (ETI) ‘Base Code’.

Meanwhile, the Philippine Global Compact network has been successful in gaining inter- est amongst Philippine companies for other initiatives by UN agencies, and in making disparate actors co-operate. However, in order to enhance inclusiveness and to gain additional expertise, the network should seek co-operation with trade unions and civil society organisations. The net- work’s failure to generate more substantial outcomes is due on the one hand to insufficient ef- forts and resources of the network’s management, on the other to the fact that the participant structure is SME-heavy : many of the SMEs, especially those producing for the domestic market, see little value in Global Compact activities, have few resources to act upon the principles, and face fierce competition.

Based on the Philippine experience, this paper makes three recommendations to the Global Compact Office:

(1) Apply the new integrity measures thoroughly. Not only will this prevent hollow growth, but also ensure the Global Compact’s integrity, credibility and long-term viability.
(2) Enhance the support provided to SMEs. One step towards this end might be the local- isation of the integration of UNIDO down to the national networks. In the Philippines, UNIDO has its office in the very same building as UNDP, but does not yet collaborate with the existing network.
(3) Strengthen local network structures. On the side of the UN agencies involved, ensure fluid takeovers when responsible staff changes (which occurs regularly due to many short- or medium-term contracts). Improve communications between the respective UN agencies in a given country. On the side of the domestic organisations involved, allow alternative sources of funding (such as participants fees) to enhance the functioning and the sustainability of the networks.

List of abbreviations

illustration not visible in this excerpt


What has emerged in the past decade in the debate about global governance is a trend towards new modes of governance (See Risse 2004). Be they termed multi-stakeholder dialogues, cross-sector or private-public partnerships, global public policy networks or private regimes, what all those modes have in common is an integration of private actors into a realm that pre- viously had been the nearly exclusive domain of public actors. In many ways, this inclusion comes as no surprise: in the trail of globalisation, new transnational problems have emerged, and others have intensified or simply gained increased importance on the public agenda. At the same time, transnational corporations (TNCs) have shaped the course of globalisation and now hold considerable power over vast networks of suppliers and, to a lesser extent, govern- ments. Therefore, private actors are recognised as a potential part of the solution to transna- tional problems like the spread of HIV/AIDS or global warming. Among the business com- munity, a convergent movement has grown rapidly over the past decade which recognises that power breeds responsibility. Corporate social responsibility (CSR), or corporate citizenship, has become a buzzword without borders; there appear few if any of the largest TNCs left that do not acknowledge some sort of social responsibilities. While some of the so-called CSR ac- tivities might well be public relations stunts, others have represented sincere efforts - not least, through co-operation with international organisations and NGOs in one of the new modes of global governance.

The Global Compact represents such a new mode: with its inclusion of public actors (UN agencies), private corporate actors (companies and business associations) and private voluntary actors (NGOs and labour organisations) and its global reach, it can truly be called a global public policy network (GPPN). Initiated by Kofi Annan in 1999, the Compact asks companies to embrace ten principles on human rights, labour standards, environmental per- formance and corruption.1 More than 1,600 corporations have thus far responded by joining the Global Compact. However, while its growth in outreach has been tremendous, can the Global Compact be called a success? To what extent have companies learned, changed behav- iour, complied with its principles? To what extent does it make a difference?

In the past two years several attempts have been made to find answers to these ques- tions. In May 2004, the consultancy firm McKinsey published what to date has been the broadest attempt of an evaluation, being based on a survey among 370 participating companies (See McKinsey&Company 2004). The report attests to the Global Compact having indeed a positive, if incremental, outcome on member companies (See ibid:1-2).

This paper takes a deeper, yet narrower look. It focuses on one of the 44 national or regional Global Compact networks, describes its evolution and analyses it in terms of outputs and outcomes. The Philippine network was formed in September 2001, and managed quickly to reach out. With 137 participants, it represents the third-largest network in the world and the largest amongst non-OECD countries (See Global Compact 2004d). In order to get a fuller picture of the way the Global Compact operates, the analysis of a large network from a devel- oping country is sensible for a number of reasons. First, to the author’s best knowledge, no previous efforts have been made to assess these networks - they thus represent unchartered waters. Second, it is in developing countries - many of which are weak in enforcing human rights, labour standards and environmental protection - where the Global Compact can have its greatest ‘bite’ (See Sethi 2003:120). Third, it represents an opportunity to develop an under- standing of interaction between various new modes of governance like industry self-regulation and co-regulation between TNCs and NGOs.

In order to build a viable analytical framework, several steps need to be taken. First, the scope has to be defined. As its title suggests, this paper focuses on textile and garment companies from the Philippines. Furthermore, it concentrates on the labour dimension of the Global Compact; its principles 3 to 6. As many anti-sweatshop campaigns have demonstrated, the adherence to core labour standards a pressing issue in this labour-intensive industry. Sec- ond, the question as to whether the Global Compact and its Philippine network have been ‘successful’ needs to be operationalised. To do so, the paper borrows from a common concept of compliance research, according to which compliance with a given set of norms is measured in terms of outputs, outcomes and impact. As an introduction, outputs refer to legal or admin- istrative measures taken by states (in our case the Global Compact) in order to endorse com- pliance. Outcomes represent the subsequent measures by other actors (in our case companies) to comply. This concept of compliance will be developed further in the following chapter.

Bearing this concept of compliance in mind, the central question of this paper is as follows: to what extent has the Global Compact in general and the Philippine Global Compact network in particular generated outputs and outcomes leading to the adherence of fundamental principles and rights at work among Philippine garment and textile companies?

A related second task of this paper concerns the further determination of the relevance of the Global Compact in the overall process in textile and garment companies’ recognition and implementation of labour standards. It is set against examples of three other new modes of governance: private-private partnerships (between corporations and NGOs), mechanisms set up solely by NGOs, and private (corporate) self-regulation. In sum, the paper seeks to assess the relative weight the Global Compact has in promoting compliance among Philippine textile and garment companies with core labour standards.

Among the mechanisms it is set against are three private-private partnerships: Social Accountability International with its standard SA 8000, the Ethical Trading Initiative with its Base Code, and the Fair Labor Association with its “Workplace Code of Conduct”. The two Model Codes of Conduct of the Clean Clothes Campaign and the Worker Rights Consortium are both instruments created solely by NGOs. Finally, examples of industry self-regulation to be considered include the American Apparel and Footwear’s Association’s “Worldwide Re- sponsible Apparel Production” (WRAP) principles, and corporate codes of conduct.

In order to answer the paper’s central questions, research was conducted following an empirical-inductive approach. This approach represents the only viable option as no theories have been developed on the operations of Global Compact networks. Research is based on four sources: the literature available on the Global Compact, GPPNs and norm compliance; online documents; interviews; and a survey. Researching online documents and literature was begun in November 2003. However, all online documents were current in June 2004, unless stated otherwise. Core research was carried out during the author’s stay in the Philippines be- tween March 2nd and April 5th, 2004. During this time, 15 interviews were conducted with rep- resentatives of all organisations involved in the Global Compact Working Group, of compa- nies, trade unions, a government agency, as well as two academics.2 Furthermore, the author was able to obtain documents and attend a Global Compact workshop in Cotabato City, Min- danao. Finally, an electronic survey among Philippine textile and garment producers was con- ducted to get a broader picture of the relevance of the Global Compact and CSR to them.

The paper is structured in three sections. Section one develops the analytical framework by taking into account relevant factors: it introduces the issue area of labour standards, the global governance debate, and tools to measure norm compliance. The scope of section two is the global level. In chapter two the Global Compact is introduced, described and analysed in terms of outputs and outcomes at the global scale. In order to understand how the Global Compact works in the Philippines, it is imperative to see how it functions globally. Similarly, chapter three describes and analyses the other instruments of CSR in their global scale. Section three turns to the Philippines. Chapter four includes brief political, social and economic profiles of the country. Chapter five describes the evolution of the Philippine Global Compact net- work and analyses it in terms of its outputs. In support, chapter six contains case studies of four Philippine textile and garment companies that illustrate the outcomes of the Global Compact and the relevance of CSR to them. Finally, chapter seven focuses on the outcomes of the Philippine Global Compact network and the influence of other international and national initiatives on Philippine textile and garment producers.

Section One

The Analytical Framework

1 The analytical framework

In essence, this paper is about norms, norm recognition and norm compliance. Before turning to the Global Compact and its role in the Philippines, and to the assessment of its perform- ance in achieving norm recognition and compliance, the analytical framework is presented in this chapter. It is developed in four steps. First, the issue area - labour standards in the textile and garment industry - is introduced (1.1). Secondly, I discuss global governance, with a focus on ‘new modes of global governance’ - new in terms of institutional set-up and modality (1.2). Third, this chapter defines norms and means of measuring norm compliance (1.3). Finally, the three aspects of issue area, global governance and norms are integrated into the development of the research design (1.4).

1.1 The issue area: labour standards in the textile and garment industry

Labour standards are defined by the International Labour Organisation (ILO) through its conventions, and are implemented and enforced by the states that ratified them. In 1998, the ILO issued the Declaration on Fundamental Principles and Rights at Work, which, based on eight conventions3, comprise the most crucial labour rules:

- “Freedom of association
- the effective recognition of the right to collective bargaining,
- the elimination of all forms of forced or compulsory labour,
- the effective abolition of child labour, and
- the elimination of discrimination in respect of employment and occupation” (ILO 2004:91).

Implementation and enforcement of these fundamental rights have often been poor, and have deteriorated as globalisation accelerated (See ibid:93). When transnational corporations (TNCs), especially those in labour-intensive sectors, began to move their production facilities to low-cost countries, they contributed significantly to the macro-economic growth of many developing, especially East Asian, countries. However, in order to attract foreign direct in- vestment (FDI), developing countries entered an “incentive competition”, offering corpora- tions income tax holidays, lowering regulations, environmental protection and labour stan- dards (See ibid: 80). A typical phenomenon of incentive competition is the sprawling of export processing zones (EPZs), in which companies produce exclusively for export, are freed from tariffs, and often face less rigorous regulation.4 A second development relevant to working conditions concerns outsourcing: most TNCs have transferred production to local suppliers5, and in the early days of international campaigns for the improvement of working conditions thus rejected responsibility for violations of labour standards by their suppliers.

The campaigns against sweatshops took root in the early 1990s and concentrated on the textile, garment and footwear industries, with Nike being the prime target (See Sethi 2003:28). Transnational activist networks like the Clean Clothes Campaign in Europe or the Maquila Solidarity Network (MSN) in North America evolved and pressured both TNCs and their suppliers to improve working conditions. Consequently, many corporations - especially those with a brand name - began to see their reputation at risk, and started developing their own codes of conduct, which they asked suppliers to adhere to. But problems persisted (and still do) as corporate codes differ significantly in their scope, precision and enforcement (See OECD 2000b).

Eventually, new initiatives evolved, linking either activists and companies, or both those groups with governments. In 1996 U.S. President Bill Clinton introduced the Apparel Industry Partnership, one such private-public partnership (which later became the Fair Labor Association). In 1998 British NGOs and corporations formed the Ethical Trading Initiative with the support of the government. Furthermore, NGOs - often in co-operation with corpo- rations - began introducing their own tools to enhance and monitor working conditions. They include the so-called Social Accountability 8000, the Clean Clothes Campaign Model Code and the Worker Rights Consortium’s Model Code of Conduct. Finally, the industry sector has commenced some degree of self-regulation through the American Apparel and Footwear As- sociation (AAFA)’s WRAP programme. TNCs thus have begun to acknowledge some re- sponsibility towards upholding labour standards, or in other words, to recognise norms. La- bour standards form an integral part of corporate social responsibility (or corporate citizen- ship), a movement among business that has grown tremendously over the past years. Not least, the Global Compact’s growth itself represents one manifestation of CSR.

After this introduction to the issue area, let us now turn to the second essential element for the development of the analytical framework: global governance.

1.2 New modes of global governance

The term ‘governance’ can be broadly defined as “any form of creating or maintaining political order and providing common goods for a given community on whatever level” (Risse 2004:289). In international relations, however, a more narrow definition has been promoted by James N. Rosenau and Ernst-Otto Czempiel: it refers to ‘governance without government’, to political arrangements that rely primarily on non-hierarchical forms of steering. (See Czempiel/Rosenau 1992:8). As Thomas Risse writes, “governance is confined to creating political order in the absence of a state with the legitimate monopoly over the use of force and the capacity to authoritatively enforce the law and other rules.” (Risse 2004:289) Since there is no world government, this definition applies perfectly to the global level.

Global governance can be conducted either by public actors, by private actors, or by some form of partnership between them. Traditionally, global governance has been pursued solely by public actors, via international organisations or international regimes.6 The ‘new modes of global governance’, however, include private actors such as corporations and NGOs (See ibid:291). What has brought about the shift to the new modes?

The debate about global governance has focussed strongly on the question of whether the new modes improve the effectiveness and the accountability of institutionalised co- operation (See Held/Koenig-Archibugi 2004: 126)7. Indeed, the mere idea that they can, ap- pears to be one of the primary reasons for the shift. In their report “Critical Choices” Wolf- gang Reinicke and Francis Deng identify two core challenges (See Reinicke/Deng 2000: 2f) to conventional co-operation. The operational gap refers to the simple lack of information, knowl- edge or tools that public-policymakers and institutions need in order to respond effectively to many dauntingly complex public-policy issues. The participatory gap then refers to the lack of accountability, transparency and democratic deficit of governance beyond the nation-state. Optimists argue that “pooling public and private resources in synergetic relationships could improve the overall problem solving capacity and at the same time increase societal participa- tion and control”.8 By contrast, critics raise doubts whether co-operation between “essentially unrepresentative organizations - international organizations, unaccountable NGOs and transnational corporations” can promote effective and accountable governance (Ottaway 2001:245). I will return to the question of effectiveness and accountability in the further development of the analytical framework.

Before turning to private-public and private modes of governance in greater detail, the usage of the term sector should be clarified: in this paper it refers to the institutional rather than the socio-economic or industry dimension: broadly, there is a public (governments and international organisations) and a private sector. The private sector is further differentiated into a for-profit and a voluntary sector - the former including corporations and business associations9, the latter including non-governmental, civil society organisations.

1.2.1 Private-public modes of governance

While private-public partnerships (PPP) have long been practiced on the national level, in international relations PPPs have experienced an upsurge only over the past decade - both in programmes (e.g. Global Reporting Initiative, World Commission on Dams) and in projects (the set-up of a PPP office by the German development agency GTZ is just one indication of this trend). Four arguments in favour of PPPs are presented here, the first three concerning the operational, the last one the participatory gap. First, private actors are said to increase the knowledge base of public actors (See Börzel/Risse 2002b:8). In the field of labour standards, for example, organisations like the Clean Clothes Campaign enhance the knowledge base of the ILO. In the fight against corruption, Transparency International has become an authorita- tive source informing governments and international organisations.10 The second point regards compliance: the greater the degree to which private actors are included in the process of rule- making, it is said, and the more rule targets are still open to discussion, the more compliance with those rules will be achieved (See Chayes/ Chayes/ Mitchell 1998). The third argument favouring PPPs is that they might lead to better governance through a learning process: rather than just reaching a compromise through bargaining, in a dialogue that involves most or all stakeholders a consensus could be found through arguing (See Risse 2004). The Global Com- pact is based on this notion - that companies, NGOs and governments learn from each other and reach a common understanding. Finally, it has been proposed that PPPs might contribute to filling the participatory gap by improving the correspondence between the ‘rulers’ and the ‘ruled’ (Reinicke/Deng 2000:23)

Global public policy networks (GPPN) are a subset of PPPs. They include all PPPs that involve at least three actors and that are located on a programme level, and thus not limited to the mere implementation single projects. The emergence of 50 to 60 GPPNs during the 1990s has led Wolfgang Reinicke and Francis Deng to speak of a “quiet revolution in global governance” (Reinicke/Deng 2000:4). GPPNs facilitate the negotiation towards setting global standards and regulations (e.g. the World Commission on Dams (WCD)), coordination to bring scarce resources to their most effective use (e.g. the Global Alliance for Vaccines and Immunization), or help implement existing international treaties (e.g. the Global Environmental Facility) (See Benner/Reinicke/Witte 2004:197).

Regarding the management of GPPNs, Reinicke and Deng have proposed a list of six crucial functions:

(1) “Getting the network off the ground through leadership and a common vision;
(2) Balancing adequate consultation and goal delivery;
(3) Securing sustainable funding (because money talks);
(4) Maintaining the ‘structure’ in structured informality;
(5) Finding allies outside one’s sector; and
(6) Tackling the dual challenge of inclusion (North-South/local-global).” (Reinicke/Deng 2000:65).

Based on experience drawn from the WCD or the Multilateral Agreement on Investment (MAI), they furthermore stress that “the legitimacy and effectiveness depends on the participation of all stakeholders” (Ibid). They envisage the UN as the central manager of GPP networks, but claim that at the time of writing in 2000 the organisation’s involvement had been “piecemeal if not accidental” (Ibid:93). In their view, the Global Compact thus represents a more systemic approach to filling this void.

1.2.2 Private modes of governance

Entirely private modes of global governance have received far less attention in international relations literature (See Cutler/Haufler/Porter 1999: 6). They include corporate self- regulation, various forms of co-operation among for-profit actors, and partnerships or net- works between actors of the for-profit and the voluntary sectors. Company self-regulation usually comes in the form of corporate codes of conduct.11 Most TNCs and many smaller corpora- tions have introduced codes of conduct over the past decade (See Haufler 2001:1). These codes vary substantially in their scope, quality, and monitoring mechanisms (See OECD 2000b). While some critics dismiss the codes as “a public relations ploy designed to ward off government regulation and make the companies look good to consumers”, proponents argue that they have “a significant positive influence on the behavior of companies and are more flexible and easier to implement than traditional industry regulation”(Haufler 2001:1; see also Sethi 2003: 287). Co-operation among for-profit actors comes in various shapes. Coordination ser- vices firms, such as rating agencies, stock exchanges and financial clearinghouses hold enor- mous private authority, and “may set the standards of behaviour for other firms, enforcing a certain code of conduct” (Cutler/Haufler/Porter 1999:10). Cases in point are the Dow Jones Sustainability World Index or the FTSE 4Good Index Series.12 Business associations are mostly representative organisations, but often include self-regulatory mechanisms. They de- velop and enforce binding obligations on their members and often on the industry as a whole (See ibid). For instance, the American Apparel and Footwear Association encourages compli- ance to its WRAP principles among its members and their subcontractors (See chapter 3). Finally, private regimes are “integrated complexes of formal and informal institutions that are sources of governance for an economic issue area as a whole [my italics, P.B.]” (Cut- ler/Haufler/Porter 1999:13). An example is the Internet Corporation for Assigned Names and Numbers (ICANN) - a private organisation regulating the internet.

What has spurred industry self-regulation, or, in Dana O’Rourke’s words, the “out- sourcing of regulation” (O’Rourke 2003)? On the one hand, corporate actors have filled fields that governments or international organisations had not yet covered, as the ICANN case shows. On the other, Virginia Haufler has identified three factors that make corporate actors pursue self-regulation: risk, reputation and learning (See Haufler 2001:20). Risk includes a po- litical (potential government regulation, transnational activist pressure, socially responsible investment), and an economic dimension (competitiveness, asset specificity13 ). Reputation is an asset especially important for TNCs. The larger the share of the brand name of the overall value of a corporation, the more likely that corporation is to make an effort to protect and enhance its reputation. Large apparel and sportswear corporations, whose share of intangible assets is attributed to be at fifty or more percent of the overall value, provide a good illustra- tion, as we shall see later. Reputation management can be a double-edged sword: a company that claims to follow certain social standards or norms might not, or not only, enhance its reputation in the public, but also becomes more vulnerable to activist campaigns, and can eventually not afford to publicly recognise norms without indeed complying to them (See ibid:27). Learning processes constitute another factor driving industry self-regulation, and stems from an exchange of experience and ideas not only among for-profit actors, but also with actors from the public and the voluntary sector.

This is where the third private mode of global governance comes in. Partnerships between for-profit and voluntary sector actors have to some extent changed the relation between transnational activism and corporations. Traditionally having tended to be antagonists, some NGOs and TNCs now work together in order to enhance problem-solving capacity. Examples include the Ethical Trading Initiative, the Fair Labor Association and Social Accountability, all to be discussed more thoroughly in chapter three.

Where does this leave us with the question of effectiveness and accountability? In a similar fashion to the arguments favouring PPPs, it has been contended that they can improve effectiveness due to a higher likelihood of compliance (See Sethi 2003:11). However, this point is highly contentious - I will return to the issue in due course. As far as accountability is concerned, it has been stated that “private authority is unaccountable and perhaps uncontrol- lable without concerted international cooperation among states” (Cutler/Haufler/Porter 1999: ix). On the other hand, Thorsten Benner, Wolfgang Reinicke and Jan Martin Witte show a range of existing accountability mechanisms like market accountability, public reputational and peer accountability.14 The creation of instruments like AccountAbility 1000 and the Global Reporting Initiative, which both define guidelines for corporate reporting, are just two mani- festations of a wider movement of so-called ‘corporate social accountability’.15

In sum, many question marks remain on the issues of effectiveness and accountability of the new modes of global governance. This notwithstanding, the issues will nonetheless be relevant in the framework development. Before we turn to that stage, however, one more ingredient requires consideration: norms.

1.3 Norms and norm compliance

A widely accepted definition of a norm states that it is “a standard of appropriate behaviour for actors with a given identity.” (Finnemore/Sikkink 1998: 891) Norms can be either regula- tive, thus ordering or constraining behaviour, or constitutive, thus creating new actors, inter- ests, or categories of action (See ibid). While the literature on the role of norms in interna- tional politics has become abundant in International Relations (IR) theory, the impact of norms on business conduct has received no similar attention (See Cutler/Haufler/Porter 1999:4). Nevertheless, existing IR literature can be appropriately applied to the study of the role of norms on business.

I will touch upon two elements that are fundamental to the latter part of this paper: the evolution of norms, and the measurement of norm compliance. Martha Finnemore and Kathryn Sikkink describe the evolution of norms as a life cycle of norm emergence, norm cascades and internalisation (See Finnemore/Sikkink 1998: 895-905). At the first stage, norm entrepreneurs attempt to convince a critical mass of actors (norm leaders) to embrace new norms. While Finnemore and Sikkink write about states, I will apply this mechanism to this paper’s issue: the ‘new’ norms are the fundamental principles and rights at work - which are of course not new at all, but address states that are meant to implement and enforce them. The new element is the fact that they address corporations directly. The norm entrepreneurs in our case are the transnational activists that try to persuade a critical mass of textile and garment companies to embrace the ‘new’ norms. Once a critical mass is reached (the ‘tipping point’), the second stage begins, which is characterised by a dynamic of imitation as the norm leaders attempt to socialise other actors (companies) to become norm followers. The motivation be- hind the second stage, where the norm “cascades” through the rest of the population (the business community, in our case), may vary. Finnemore and Sikkink, writing about states, ar- gue that “a combination of pressure for conformity, desire to enhance international legitima- tion, and the desire of state leaders to enhance their self-esteem facilitate norm cascades” (Ibid:895). Adapted to the case of companies, the motivation could be described as a combi- nation of pressure for conformity (competition), a desire to enhance the brand reputation, and a desire by CEOs and managers to enhance their self-esteem. In the course of the norm cas- cade, norms may eventually become a prevailing standard of appropriateness. In the final stage, at the end of the cascade, norms are internalised - “norms acquire a taken-for-granted quality and are no longer a matter of broad public debate” (Ibid). However, not all emergent norms reach this stage, as many fail to ever reach the ‘tipping point’.

Looking at the process that occurs within each norm leader, and especially within each norm follower (during the norm cascade), one has to distinguish between norm recognition and norm compliance. The former contains statements through which an actor declares the acceptance and recognition of a given new norm (See Raustalia/Slaughter 2002:538). The latter is the actual “state of conformity or identity between an actor’s behaviour and a specified rule” (Ibid:539). Between recognition and compliance is the implementation of the norm. Based on the system-theoretical approach of David Easton many studies of this implementation process distinguish between three phases:

(1.) the output: legal and administrative measures taken by rule addressees (states) that enable the implementation of a norm
(2.) the outcome: the effect of the legal and administrative measures on the target group;
(3.) the impact: the effect of the norm on its socio-economic environment (effectiveness) (See Börzel/Risse2002a:144)

Applying this approach to the paper’s topic, the output in the implementation process of the norms of fundamental principles and rights at work towards the target group (companies) are the administrative measures taken by the rule addressees, the Global Compact and the other initiatives discussed in the paper, that enable the implementation of the norm. The outcome then refers to the reactions of the companies to the administrative measures.

illustration not visible in this excerpt

Figure 1: Norms and stages of their implementation

Finally, the impact is the effect of the working rights on the actual working conditions. The last dimension is set aside here, for the practical reason that it is extremely difficult to determine the causal relationship in the absence of ceteris paribus conditions. The focus of the analysis of this paper is therefore on outputs and outcomes. How to determine them will be the subject of the remaining part of this chapter.

1.4 Research design

To the best of my knowledge, no comprehensive set of variables exists that would be able to determine the output and outcome of initiatives like the Global Compact, the Ethical Trading Initiative or the Fair Labor Association. As a consequence, I will now develop a set of variables based on the existing literature, in particular drawing from Reinicke/Deng 2000, Börzel/Risse 2002a and Kell/Levin 2002. Reinicke and Deng, it should be reiterated, focus on the management functions of GPPNs (see 1.2.1). Börzel and Risse roughly outline key components of outputs and outcomes, while Georg Kell and David Levin propose “determinants of effectiveness” of the Global Compact - translated into the language used here, however, they represent determinants of outputs and outcomes.

1.4.1 Determinants of outputs

The first determinants of outputs are the resources the Global Compact and other initiatives have to their avail - the most basic requirement to get a network started (See Börzel/Risse 2002a:144, Reinicke/Deng 2000:65). This determinant includes human as well as financial resources. The second variable regards the level of guidance provided by the networks to partici- pating companies. According to Reinicke and Deng, “developing and sharing knowledge are key to all networks” (Ibid:47). This determinant looks at whether and how experience and knowledge is shared in order to assist companies in implementing the norms. Third, I will turn to inclusiveness as defined by Kell and Levin: inclusiveness is the “degree to which rules of par- ticipation offer all stakeholders open and equitable avenues of engagement” (Kell/Levin 2002:22). This determinant is related to but slightly altered from what Reinicke and Deng sug- gest: inclusion of participants from North and South, of global players and local actors, plus of actors from the for-profit and the voluntary sectors (See Reinicke/Deng 2000:65). The degree to which participation is open to all stakeholders is much harder to determine (that is, inclu- siveness) than the actual inclusion. However, I will analyse the three ratios of North/South participants (OECD/non-OECD world), the voluntary/for-profit participants, and the global/local participants.16 If obvious asymmetries are evident, it has to be asked what the reasons are and whether a nominally equitable access could represent a de facto inequity.

The fourth determinant is transparency, which is crucial to the success of networks and related to integrity and accountability (See Kell/Levin 2000:22). Two questions arise in regard to transparency: to what extent is the respective network transparent; and to what extent does it require participants to be transparent? Both elements are to be taken into account in the assessment.

The fifth determinant is what I call adaptability. It draws on both Kell and Levin’s point of the “ability to further goals while maintaining ethical integrity” (See ibid:25), and the idea that the networks discussed in this paper are all in an infant stage, and to some degree experimental. Accordingly, they need to be able to adapt to arising challenges in order to reach “the right institutional set-up” (Reinicke and Deng 2000:74).

A final determinant is the strength of enforcement mechanisms. These mechanisms are com- parable to the legal measures states can take against non-compliant actors (e.g. sanctions). The inclusion of this determinant might be seen as a bias against the Global Compact, which - this much can be said already - is weak in enforcement, and rather stresses its voluntary nature. Nonetheless, the inclusion of this determinant into the analytical framework appears impor- tant as a means of comparison with other initiatives, and to illustrate one of the Global Com- pact’s problems.

1.4.2 Determinants of outcomes

Outcomes, the effect of the measures taken by the Global Compact and other initiatives on companies, will be measured according to a set of four determinants. The first determinant is the outreach of an initiative - this criterion is most plausible, since the larger the outreach of an initiative is, the greater is its potential to induce change of corporate behaviour. While this factor looks at the breadth of an initiative, the three other factors focus on its depth. Here, a first determinant is the compliance with the initiative ’ s rules, e.g. the requirement of the Global Compact to annually report ‘progress’. This factor does not necessarily reflect compliance with the underlying norm, but certainly can be attributed the status of a favourable factor. After all, a company that reports on progress merely as a means of public relations, without changing its behaviour, will at the very least face the threat of public shaming. In the case of the two last determinants, one must separate between the overall outcome in terms of compa- nies’ recognition of and compliance with a given set of norms (norm-induced) - in our case fundamental principles and rights at work - and the recognition of and compliance with those norms due to the companies ’ participation in the Global Compact and other initiatives (initiative- induced). In order to assess the performance of the Global Compact and its Philippine net- work, this distinction is essential.

The third determinant is the allocation of a company’s resources to a) the overall implementation of the norm and b) the involvement in the Global Compact and other initiatives. Finally, I focus on actual policy changes. These can include newly set-up codes of conduct, labour management councils, or concrete efforts, i.e. to abolish the use of child labour. Again, it has to be separated between general and initiative-induced policy changes.

illustration not visible in this excerpt

Figure 2: Determinants of outputs and outcomes

After having outlined the analytical framework in this chapter, in the remaining part of this paper it will be applied to the global level (section two) and the Philippine level (section three) in order to measure outputs and outcomes of the Global Compact and other initiatives.

Section Two

The Global Compact and CSR at the Global Level

2 The Global Compact

Five years after Kofi Annan first proposed a “Global Compact” at the World Economic Fo- rum in Davos (Annan 1999), his initiative has evolved into a global public policy network of unprecedented dimensions. Although its idea is simple and at its core “nothing more than a moral compass” (Kell 2003:47), its network has become increasingly large and complex. This chapter serves to provide an overview of the Compact’s origins and objectives (2.1), structure (2.2), progress and development (2.3), and finally analyses the Compact’s outputs (2.4) and outcomes (2.5) on the global level.

2.1 Origins and objectives

Mindful of the global rise of concerns about negative social and environmental effects of globalisation, in his 1999 speech Annan told business leaders:

“You do not need to wait for governments to pass laws. You can and should act now, in your own selfinterest. The sustainability of globalisation is at stake.” (Annan 1999)

Stating that the fragility of globalisation had been underestimated, he drew attention to the existing “imbalance between the economic, social and political worlds”, and said that history had taught that those imbalances could “never be sustained for very long” (Ibid). Thus, busi- nesses should work in a spirit of enlightened self-interest to make globalisation more inclusive and consequently less fragile. Therefore, Annan suggested businesses should embrace nine principles in the areas of human rights, labour practices and environmental preservation (and, since June 2004, anti-corruption). None of these principles were anything new - they were derived from three universal and fundamental intergovernmental agreements: the Universal Declaration of Human Rights (Principles 1 and 2), the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work (3-6), and the Rio Declaration on Environment and Development (7-9). It was only in June 2004 that a new principle on cor- ruption was added, based on the UN Convention Against Corruption.17 The ten principles are:

Human Rights

- Principle 1: Businesses are asked to support and respect the protection of international human rights within their sphere of influence; and
- Principle 2: make sure their own corporations are not complicit in human rights abuses


- Principle 3: Businesses are asked to uphold the freedom of association and the effective recognition of the right to collective bargaining;
- Principle 4: the elimination of all forms of forced and compulsory labour;
- Principle 5: the effective abolition of child labour;
- Principle 6: the elimination of discrimination in respect of employment and occupation.


- Principle 7: Businesses are asked to support a precautionary approach to environmental challenges;
- Principle 8: undertake initiatives to promote greater environmental responsibility; and
- Principle 9: encourage the development and diffusion of environmentally friendly technologies.


- Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery. (Global Compact Office 2004g)

Although the initial responses to Annan’s speech were enthusiastic, one and a half years passed before the Global Compact was formally launched on July 26th, 2000. In between were months of consultation and “shuttle-diplomacy” to recruit participants from all social groups and to develop the network’s structure (Kell/Levin 2002:9). While some of the relevant actors had been hesitant, the protests at the WTO conference in Seattle in December 1999 appear to have finally served as a catalyst to co-operation (See Kell 2003:36).

Defining itself as a “voluntary corporate citizenship initiative”, the Global Compact seeks to provide a “contextual framework to encourage innovation, creative solutions and good practices” among its participants (Global Compact 2002). In regard to labour, the Global Compact’s principles are the common denominator with the other initiatives discussed in this paper - however, it operates in a distinctively different way. The Compact’s principal architect John Ruggie has conceptualised it as a learning network (See Ruggie 2002). Its first objective is to facilitate the exchange of ideas and best practices, through which it is to pro- mote the integration of the principles into the participants’ core business activities (See ibid). The second objective then is to enhance collective problem-solving between different stake- holders - a key to solving transnational problems (Global Compact Performance Framework, Global Compact 2003a: 58).

2.2 Structure

With the vast growth in size, the Compact’s structure has become more multifaceted. In this part of the chapter the structure will be introduced in terms of rules, actors, mechanisms of engagement and governance.

2.2.1 Rules

Participation in the initiative is principally open to all companies.18 To join, a company has to send a letter of commitment from the CEO (which is endorsed by the board) to Kofi Annan expressing support for the Global Compact and its principles. Furthermore, companies need to

- set in motion “changes to business operations so that the Global Compact and its principles become part of strategy, culture and day-to-day operations”,
- “publicly advocate the Global Compact and its principles via communication vehicles such as press re-
leases, speeches, etc.”, and
- “publish in its annual report or similar corporate report (e.g. sustainability report) a description of the ways in which it is supporting the Global Compact and its ten principles” (Global Compact 2004h).

However, how to proceed if companies do not live up to these three basic requirements has long been in the open for discussion. It was only in June 2004 that the Compact introduced “Integrity Measures”, responding to criticism raised prominently by the heads of four partici- pating NGOs, among many others. Oxfam, Amnesty International, Human Rights Watch and the Lawyers Committee for Human Rights demanded that the Compact should monitor whether companies are in fact reporting on the Compact-related progress, and that clearly defined measures are adopted for cases where companies are alleged to be in breach of the principles (See Amnesty International 2003). The Integrity Measures address both concerns; most significantly, they include strong means against non-reporting companies:

Should a participant not submit a link to/description of its communication on progress to the Global Compact website by 30 June 2005, or within two years of joining the Global Compact (whichever is the later), that participant will be removed from the list of participants until such a submission is made. Moreover, the participant will not be permitted to participate in Global Compact events, including in local network activities. The Global Compact Office reserves the right to publish names of participants removed from the list. The intention is that the same procedure will apply to any participant that has previously communicated their progress but then allows two or more years to elapse without communicating their progress.” (Global Compact 2004h)

Already, the introduction of the Integrity Measures represents the second rule change due to the unwillingness of many companies to report. In January 2003, the Compact’s Advisory Council had decided to change its former policy (of asking companies to submit one example per year to present progress made) to a requirement that companies would have to include descriptions of their Global Compact-related progress in their annual reports as described above.19

2.2.2 Actors

At the core of the Global Compact network are the Global Compact Office and five UN agencies, the Office of the High Commissioner for Human Rights (OHCHR), the Interna- tional Labour Organisation (ILO), the United Nations Environmental Programme (UNEP), the United Nations Development Programme (UNDP) and the United Nations Industrial Development Organisation (UNIDO).20 While the Global Compact Office serves as the net- work’s central administration, its resources are rather limited with 13 staff and a budget of US$ 1.5 million (See Global Compact 2003a:5). The UN agencies assume the role of an “au- thoritative convenor and facilitator” (Global Compact 2004), and due to their expertise and practical global reach, they are occasionally referred to as the “guardians of the principles” (Global Compact 2003b: 6).

The focus of the Compact is on companies, whose actions it seeks to influence. Start- ing with less than fifty signatories, to this date (as of June 30th, 2004) 1622 companies (out of 1698 participants overall) have signed up.21 Furthermore, the network includes 27 national civil society organisations, five trade unions, 41 business associations, 19 foundations and four cities.

On the global level, the International Chamber of Commerce (ICC), the International Organisation of Employers (IOE) and 15 other business associations support the initiative. With their “thought-leadership and private-sector expertise on critical issues related to sustain- able development and corporate citizenship” (Global Compact 2004i) they are regarded as playing an important role in the network. Civil society is represented by 24 NGOs, among them Amnesty International, Human Rights Watch, the Worldwide Fund for Nature (WWF), Oxfam and Transparency International. The NGOs are seen as having a crucial role in the evolution and impact of the Global Compact, as they offer “not just their competencies and substantive knowledge but their problem-solving capacity and practical reach” (Ibid). Labour, “as it is part of both industry and civil society” (Ibid) is recognised as a separate social group. It is represented by five trade unions, among them the International Federation of Free Trade Unions (ICFTU), Union Network International (UNI) and the Trade Union Advisory Com- mittee (TUAC). Finally, the governments of UN member states are essential to the function- ing of the Global Compact as they provide legitimacy and universality to the principles of the network (See Kell 2003:37). In passing resolution 56/76, they authorised the continued en- gagement of the UN with the private sector. Furthermore, they co-fund the Global Compact Office through a trust fund.22 On the national level, many governments support Compact events and the formation of Global Compact networks.

2.2.3 Mechanisms of engagement

The Global Compact features five practical mechanisms of engagement: Leadership, Learning Forums, Policy Dialogues, Local Networks, and Partnerships. Leadership translates into the Compact’s focus on CEOs: not only are CEOs the ones who have to commit through the initial letter, they are also asked to publicly advocate the Global Compact, and ensure that the principles are integrated into the day-to-day operations. Since the Global Compact is “built on the premise that a critical mass of business leaders needs to be motivated in order to establish a universally recognised framework and sustained movement” (Global Compact 2003a:23), leadership can be seen as the most pivotal mechanism of engagement.

The Learning Forum, held annually, has three specific goals: first, it offers a platform for multiple stakeholders, including academics, to identify knowledge gaps and disseminate infor- mation. Second, it “attempts to manage its network intelligently to both source and communi- cate good practices and cutting-edge knowledge to participants” (Kell 2003: 40). Third, it aims to foster accountability and transparency through its web portal in a way that both facilitates dialogue and enables web links to relevant public documents. Participants can share experi- ences in the form of presentations, examples and case studies both at the meetings and on the online Forum.23

While the Learning Forum is broad in the coverage of various topics, each Policy Dia- logue focuses on one issue. The instrument’s objective is to facilitate mutual understanding and joint efforts among business, labour and civil society organisations in “solving key challenges of globalisation, working with government and UN agencies” (Ibid: 39). The desired out- comes are threefold: incentive structures, regulatory mechanisms, and collective action.

Both the Learning Forum and the Policy Dialogue are expected to spawn local, regional or global partnership projects among Global Compact participants. These partnerships are to support the ten principles as well as broader UN goals, such as the Millenium Development Goals.24 Partnership projects are supposed to generate the most concrete results; however, Georg Kell, head of the Global Compact Office, underlines that “the Global Compact will not be directly involved in operational aspects” (Kell 2002:22).

Local networks are formed on a national, regional or sectoral basis. They replicate some or all of the global activities of dialogue, learning and projects, and offer an increasing number of companies “engagement access” (Kell 2003: 40). They can be used for Compact-related learning in a specific local or sectoral context, for promoting and displaying partnership projects, and for the recruitment of additional participants. Networks are intended to deepen participation and to “speed up change” (Ibid).

2.2.4 Governance

The organising principle of the Global Compact is horizontal rather than vertical, and rela- tionships are “non-directive” (Global Compact 2003a:13). Thus, the Global Compact Office is described as a “prime mover” or “driving hub” rather than the head of the network. In Janu- ary 2002, an Advisory Council was established to maintain and safeguard the integrity of the network (See ibid: 14). Its 21 members include 12 eminent representatives from business, two from labour organisations (representing ICFTU and ICEM), five from civil society organisa- tions (representing Amnesty International, Oxfam, Transparency International, The World Conservation Union, and Ethos Institute) and two academics (one of them being the Com- pact’s architect John Ruggie). Members are invited by the Global Compact Office and serve on a rotating basis. The Advisory Council meets twice a year and, as the initiative’s ‘legisla- ture’, decides on rule changes. Furthermore, the Global Compact envisages the creation of decentralised hubs in the national or regional networks (See ibid:13).


1 The tenth principle was added in June 2004 at the Global Compact Leaders’ Summit; see chapter 2 for details.

2 See Appendix A for the list of interviews.

3 The eight ILO conventions are numbers 29, 87, 98, 100, 105, 111, 138 and 182.

4 The ILO estimates that 50 million workers were employed in EPZs in 2002. See ILO 2004: 80.

5 Supply chains to TNCs are of enormous complexity (See Fichter/Sydow 2002): The Gap, Inc., for example, relies on no less than 3,000 suppliers globally. See Gitsham 2004.

6 International organisations are inter-state institutions “with a street address” (Risse 2004: 290), international regimes are institutions that consist of “principles, norms, rules and decision making procedures around which actor expectations converge in a given issue area” (Krasner 1982:2).

7 Effectiveness and accountability roughly correspond to what Fritz Scharpf has termed output-oriented and input-oriented legitimisation. (See Scharpf 1999).

8 Klaus Dieter Wolf, as quoted in Benner/Reinicke/Witte 2004:192.

9 Although the objective of business associations often does not include making a profit, they represent for-profit organisations and are therefore included in this sector.

10 For information on Transparency International, see (

11 In the context of this paper, corporate codes of conduct refer to social and environmental conduct; they exclude codes of corporate governance, following the use by the OECD. See OECD 2000b.

12 Both indexes rate the economic, social, and environmental performance of the companies listed in their re- spective funds. For the DJSI, see Wirsching 2004 and (, for the FTSE 4Good, (

13 Asset specificity is the degree to which the business of a company is tied to a specific locale, people, or produc- tion process (See Haufler 2001:25). For instance, the extractive industry has to make very large and long-term investments in order to operate; this high asset specificity forces it to manage political risk in a certain country. A company from an industry with a lower asset specificity, such as the garment industry, can move on should po- litical risks increase.

14 Although it should be acknowledged that Benner et al. write about accountability mechanisms in networks, they also apply in for-profit/voluntary partnerships, and to some extent in forms of corporate self-regulation. See Benner/Reinicke/Witte 2004:199.

15 For more information on Accountability 1000, see (; on the Global Reporting Ini- tiative, (

16 The first ratio of course does not apply to the analysis of the Philippine Global Compact network.

17 For details on the addition of the tenth principle see part 2.3 on progress and development.

18 In theory, corporations that contravene the UN’s mission are excluded from participation: as the UN “Guidelines on Cooperation between the UN and the Business Community” state, “business entities that are complicit in human rights abuses, tolerate forced or compulsory labour or the use of child labour, are involved in the sale or manufacture of anti-personnel mines or their components, or that otherwise do not meet relevant obligations or responsibilities by the United Nations, are not eligible for partnership” (United Nations 2000). However, companies are not checked on these criteria upon admission.

19 The numbers illustrate companies’ reporting reluctance: by March 17th, 2003, there were 696 participants, while only 106 examples had been submitted. (See Bolte/Wirsching 2003:50).

20 UNIDO joined in May 2003 to facilitate the integration of small or medium enterprises (SMEs).

21 All data in this section are drawn from the Global Compact’s Participant List retrievable on (

22 Between 2002 and 2003 principal contributors were Denmark, France, Germany, Italy, Norway, Sweden, Switzerland and the U.K. See Global Compact 2003a:5.

23 Examples are brief summary report written by the companies in which they show how they advanced the integration of the principles into their activities. Until January 2003, companies were obliged to send in annual examples. Henceforth the examples have been replaced by ‘communication on progress’ (see part 2.2.1). Case studies are more in-depth reports usually authored by independent institutions.

24 The Millenium Development Goals consist of concrete targets to be achieved by 2015; for details see (

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The Global Compact, Corporate Social Responsibility and Textile and Garment Companies in the Philippines
Free University of Berlin  (Otto-Suhr-Institut für Politikwissenschaft)
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This paper analyses the Global Compact and its Philippine network according to its outputs as well as the outcomes it has generated amongst Philippine textile and garment producers. To further assess its outcomes, the Compact is juxtaposed with other international and Philippine CSR initiatives. Based on empirical research in the Philippines, the paper finds that the Compact has had only marginal effects - and that this is the case despite the strong role CSR plays in Philippine business culture. !! Please note that appendix D is not included in this version of the study. !!
Global, Compact, Corporate, Social, Responsibility, Textile, Garment, Companies, Philippines
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Patrick Bolte (Author), 2004, The Global Compact, Corporate Social Responsibility and Textile and Garment Companies in the Philippines, Munich, GRIN Verlag,


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