Bachelor ThesisDepartment of Business Studies

Uppsala UniversitySpring 2009

CORPORATE APPROACHES TO CHILD LABOUR– a Northern European Perspective -

Author:Isabelle Fredborg

Supervisor:Peter Thilenius

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Abstract

The purpose of this thesis is to examine what approaches large food retailers have to child labour.

The study examines companies in Sweden, Norway, Denmark, Finland and Germany.

In order to analyze the findings, a framework for comparing codes of conduct and a matrix for

measuring effectiveness developed by Kolk and van Tulder (2002a) are used, as well as the model

for comparing the companies' approach to ethical issues by Leeson (2000). Empirical data are

collected through self-completion questionnaires and e-mail interviews. Additional second-hand

data comes from the corporate websites as well as from other organisations.

The main findings show that the companies repeatedly referred to Business Social Compliance

International (BSCI), International Labour Organization (ILO) and/or United Nations (UN). There

are large differences between how much information on ethical issues companies present on their

corporate websites, and how thorough the codes of conduct are. The approaches to child labour vary

between companies, not between countries as much as between differently sized companies and

companies with different price segments.

Key words: child labour, code of conduct, corporate social responsibility, food retail industry

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Table of contents

Table of contents1 Introduction.......................................................................................................................................4

1.1 The Purpose of the Thesis..........................................................................................................52 Theoretical Section............................................................................................................................6

2.1 Child Labour, a Business Matter?..............................................................................................62.2 Corporate Responsibility as a Strategy......................................................................................7

2.2.1 The ”Three-I” Model..........................................................................................................72.3 Codes of Conduct.......................................................................................................................9

2.3.1 Comparing Codes of Conduct..........................................................................................102.4 Consequences of Actions.........................................................................................................112.5 The Effectiveness of Corporate Approaches to Child Labour.................................................122.6 Developing a Model for Discussion........................................................................................132.7 Summary..................................................................................................................................13

3 Methodology....................................................................................................................................153.1 The Respondents......................................................................................................................153.2 The Gathering of Primary Data...............................................................................................17

3.2.1 Self-completion Questionnaires.......................................................................................173.2.2 Answering Open Questions..............................................................................................173.2.3 The Interview Questions..................................................................................................18

3.3 Secondary Data........................................................................................................................183.4 Operationalization....................................................................................................................193.5 The Role of Sedex....................................................................................................................193.6 Ethical Concerns......................................................................................................................20

4 Empirical Data.................................................................................................................................214.1 Minimum Ages........................................................................................................................214.2 Alternative Measures in the Code of Conduct.........................................................................224.3 Monitoring...............................................................................................................................234.4 Actions.....................................................................................................................................254.5 Preventing Child Labour..........................................................................................................274.6 Other Organisations.................................................................................................................274.7 Summary..................................................................................................................................28

5 Analysis and discussion...................................................................................................................295.1 Minimum Ages........................................................................................................................295.2 Alternative Measures in the Code of Conduct.........................................................................295.3 Monitoring...............................................................................................................................305.4 Actions.....................................................................................................................................315.5 Differences within the Sample.................................................................................................32

6 Conclusion.......................................................................................................................................346.1 Suggested Further Research.....................................................................................................35

7 References.......................................................................................................................................36

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1 Introduction

”No man is an island, entire of itself” – John Donne (1571-1631), Meditation XVII

What Donne once wrote about man is now very true even in the corporate world. The world of

today is an interconnected world. This has led to a number of changes during the last couple of

years in the relationship between buyer and supplier. In an increasingly globalized world,

production in low-wage countries has become the norm for companies wishing to compete on the

international market. New IT and technical solutions have given automated systems between buyer

and supplier, where Just-in-Time is more important than Just-in-Case. The supply chain has become

an important cogwheel in the gigantic and complex machinery that the multinational corporation is

today. These changes have affected all markets, and this thesis will concentrate on large food

retailers and how they handle ethical issues. The technical development has not only facilitated

communication between buyer and suppliers, but also substantially facilitated the spreading of

sensitive information, making ethical awareness necessary. Uncomfortable pictures can easily be

spread worldwide within a matter of minutes, and for especially big brands, this has lead to a need

of finding possible scandals before the media. For example, after declining responsibility for the

labour conditions in its Asian sweatshops, Nike was forced to take responsibility after negative

reactions and protests. This lead to a larger public awareness and media coverage as well as

extensive academic research within the field (Emmelheinz and Adams, 1999; Zadek 2004).

Apart from scandals such as the one mentioned above, communicating sustainability and corporate

responsibility will become increasingly important for other reasons. Reports such as the Climate

Change 2007: The Physical Science Basis (IPCC WGI, 2007) affects not only public opinion but

will within time make the United Nations and the European Union regulate sustainability practices

in public, private and business sectors.

Sustainability issues have in later years become more and more important when discussing supplier

relationship. Earlier studies focusing on sustainability in supply chains have often treated the

apparel industry, that also gets larger coverage in media, or industrial production (Linton, Klassen

and Jayaraman, 2007). Articles on sustainability often focus on environmental aspects (Sarkis,

2003; Preuss, 2005; Van Hoek, 1999), and lists this focus as a source of competitive advantages

(Porter and Linde, 1995).

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This paper will look into the food retail industry, where ethical concerns are several. The consumer

is on a daily basis faced with the use of pesticides, preservatives and improvers, and has to make

decisions when it comes to genetically modified products as well as labour conditions for workers.

This is mirrored in the efforts of the companies. When earlier studies have treated the food industry,

it has often been the US market (Maloni and Brown, 2006). Studies that focus on the food industry

in Europe have given a broader view of the situation on the European market, treating each

respective country briefly and with a more environmental focus (van der Grijp and den Hond,

1999). Child labour has rarely been treated in academic papers on the food retail industry, but is

interesting as it can jeopardize a company's reputation and credibility, as well as cause legal

problems for the company.

1.1 The Purpose of the ThesisThe purpose of the thesis is to examine what approaches large food retailers in five Northern

European countries use to child labour. The paper is written for the non-profit membership

organisation Sedex (Sedex, 2009)1.

To realise the study, a mix of a quantitative and a qualitative approach will be used, with

selfcompletion questionnaires and e-mail questions to the persons responsible for purchasing and

ethics within the respective companies. The respondents will consist of the largest food retailers in

each country. To carry out the study, theories on codes of conduct and corporate behaviour in ethical

issues will be used.

Hopefully this paper will give Sedex a better understanding of today's situation in the food retail

industry in the countries studied, as well as give Sedex' members, of which many are in this

particular industry, an overview. Apart from that and the aspiration to make a contribution to

knowledge, this paper intends to facilitate future collaboration between companies as well as

improvements of sustainability practices by recognizing the existing practices. No, or very few,

studies have so far been made on how food retailers in Northern Europe handle child labour.

1More information on this, for example the selection of countries, can be found in the methodology

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2 Theoretical SectionThe theory section will start by pointing out the connection between child labour and business, and

how corporate responsibility can be used as a strategy. Apart from the provided literature review,

the used theories are a framework for comparing codes of conduct and a matrix for measuring

effectiveness developed by Kolk and van Tulder (2002a). The model for comparing companies'

approach to ethical issues by Leeson (2000) was also used. The theories are based on existing

literature and theories, as well as large empirical testing. In the case of Kolk and van Tulder (1999),

a thorough analysis of 132 corporate codes of conduct was done, followed up by application on

other companies (2002a; 2002b). Kolk and van Tulder's framework for analysing corporate codes of

conduct was also used when developing the research questions, and for coding and categorizing the

findings. The consequences of companies' actions and the development of a model for discussion

finish the theory section.

2.1 Child Labour, a Business Matter?A company can no longer afford to neglect issues such as child labour, wages, safety and

environmental impact, as they affect the company's reputation and therefore its sales. The

connection between stakeholder theory and corporate responsibility has become increasingly

important (Clarksson, 1995; Harrisson and Freeman, 1999; Ruf, Muralidhar, Brown, Janney and

Paul, 2001). Corporate responsibility contributes to stakeholder value, as the company has

commitments to not only investors but to customers, employees, societies and the environment as

well (Mathur and Kenyon, 1997).

Even if investments in corporate social responsibility are expensive and not always give a clear

effect, several benefits can be seen. Social responsibility creates goodwill that results in new

opportunities (CSR, from risk to value, 2008, p. 20). From a stakeholder and shareholder

perspective, responsibility issues are increasingly important. Investors have incentive to invest in a

company that works with responsibility, as it decreases the risk for large scandals that easily can

become very costly (Sheth, Range & Anand, 2009). While employees might be seen as committed,

indifferent or dissenting (Rodrigo & Arena, 2008), large studies show that the interest among

employees for ethical issues has increased (Ethical Corporation, 12 September 2003; Brammer,

2006; MacDonald, 2008). Today, companies' commitments might be crucial for succeeding in

recruiting top talents (CSR, from risk to value, 2008, p. 20).

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2.2 Corporate Responsibility as a Strategy”Corporate responsibility is not just about meeting obligations, but even more importantly aboutlifting strategic objectives” (Ericsson Corporate Responsibility Report, 2006, p. 2).

Should companies be content with following a minimum of rules, or work actively with these

issues? The approach to child labour becomes a strategic one. By doing more than the average

company when it comes to social responsibility and more than just reaching the legislated minimum

level when it comes to such issues as working hours, minimum ages and environmental concerns, a

company can gain a competitive advantage (CSR, from risk to value, 2008, p 20). Even if the work

on responsibility should be seen as corporate philantrophy, this can become a competitive advantage

that enhances the firm's long-term profitability (Porter & Kramer, 2002). It has been discussed that

corporate responsibility might lead to better financial performance (Orlitzky, Schmidt & Rynes,

2003). Though it is difficult to prove a financially measureable benefit (Margolis & Walsh, 2003;

Ougaard & Nielsen, 2002), it can create a valuable asset for the future (Carroll, 1999).

Companies should choose to focus their commitment to societal issues close to their interests, ”a

meaningful benefit for society that is also valuable to the business” (Porter & Kramer, 2006). By

making decisions on the approach to corporate responsibilty, the company can choose to take a

more active role. A more active role can be used not only for enhancing the company's reputation,

but also to attract customers and facilitate new business.

2.2.1 The ”Three-I” ModelA model on the corporate approaches to human rights have been developed by Leeson (2000). The

”Three-I” model, based on 26 interviews with

21 companies, explains the corporate

approaches to human rights (Model 1).

Starting with ignorance, companies do not

know that their policies and actions may get

consequences for human rights further down

the supply chain. After companies becomes

aware, they either act with indifference or

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involvement. Indifference is when the company realises the impact its actions have on supply chain,

but chooses not to act or acts only because of regulations (Leeson, 2000).

The other option, involvement, is when companies shows concern for the situation and is aware of

their impact on human right issues. They might act for example by using monitoring or auditing,

cooperate with non-governmental organisations or take part in discussions in trade associations.

These companies might work not only with their perceived responsibilities, but also go beyond that

and take a larger societal perspective. By taking a leading position, the companies can use the

involvement strategy as a part of creating the competitive advantage in sustainability suggested by

Porter and Linde (1995). When showing concern and choosing to act with involvement, there are

two further strategies that divide the actions of the companies: disengagement and engagement

(Leeson, 2000; Winstanley, Clark & Leeson, 2002).

The disengagers take responsibility for human rights issues such as child labour, but with a more

strict approach. Codes of conducts and international regulations on abolishing child labour might

make a company choose new suppliers if improvements are not made fast with the old ones. Much

time and money are spent on guaranteeing that factories are free from child labour (Leeson, 2000).

Breaking of the contract with a supplier in order to immediately save the company's reputation is a

short-sighted solution, as it does not help the company, the supplier or the employees (Neef, 2004,

p. 214-215).

The engagers, on the other hand, look at human rights issues in a larger context. The important

thing is not that the factory is ”clean” from problematic issues, but that a more pragmatic approach

is used. Instead of avoiding troubled factories or areas of the world were child labour might occur,

the company recognizes that child labour ultimately is a question of poverty. By having very strict

codes of conduct, other problems such as gender inequalities can also become an issue. As women

because of cultural issues might be prohibited from working in the same room as men, alternative

methods such as registered working groups can be used, in order not to increase gender inequalities

by letting the women go. This makes it difficult to guarantee that child labour is not used, but

provides a better societal solution than other alternatives (Winstanley, Clark & Leeson, 2002;

Leeson, 2000).

The engagement approach has received more criticism than the disengagement approach, but is seen

as a way of long term improvement, as the poverty issue that is the origin of child labour is treated

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(Leeson, 2000; Winstanley, Clark & Leeson, 2002; Neef, 2004, p. 215). As said by John Brookes,

CEO of Manaxis, ”it is socially responsible to have kids at work in some of these communities...

because if they are not in the workplace, they are on the streets... ” (Neef, 2004, p. 213).

By engaging in the supplier and working with a long-term relationship, a company avoids or lower

the costs that is concerned with changing suppliers and establishing new business relationships, as

well as the time needed to create trust and knowledge (Neef, 2004, p. 214-5).

The difference between the approaches could, somewhat simplistic, be seen as responding to the

community needs (engagers) opposed to responding to peer group and consumer pressure

(disengagers) (Winstanley, Clark & Leeson, 2002).

2.3 Codes of ConductIn later years, the use of codes of conduct has become more and more widespread. The use varies

with industry, size of company and in strictness and thoroughness. The codes are often adopted to or

based on international standards such as UN (Mamic, 2004, p. 37-45). Stronger international

standards have in the last two decades become less politically accepted, giving a smaller impact on

the companies' actions (Pearson & Seyfang, 2001). This has led to the use of voluntary codes of

conduct. The code of conduct is ”a voluntary measure taken by a private sector firm to impact upon

some aspect of their labour conditions and workforce” (Pearson & Seyfang, 2001, p. 52). When

WTO and governments fail to act, organizations such as Social Accountability International, with its

Social Accountability 8000 (SA8000) become increasingly important. Third-party verifiers are used

in order to eliminate child labour as well as improving wages and working hours (Hirschland, 2006,

p.115).

The positive aspect of having a more formal type of ethical statement, such as a code of conduct, is

not only that it sets the standard for the company and its employees, but also shows customers,

suppliers and investors what kind of behaviour that is accepted. This awareness will also assist the

company employees in taking ethics into account in their decision making (Neef, 2004, p. 111). A

reason for avoiding a clearly stated code of conduct can be to avoid media attention on sensitive

aspects (Kolk & van Tulder, 2002, JoBE).

There are serveral challenges in creating a code of conduct. To what extent should the companies

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apply it? Large multinational companies often use subcontractors where the monitoring of their

suppliers can be difficult. Also, how the code is formulated becomes important in order to establish

whether it is followed or not. Even when the ILO standard or similar is used as a base of reference,

the wording is often vague and with few precise statements that can be controlled or measured. This

also makes it difficult to compare the codes (Pearson and Sayfang, 2001).

Another large challenge is how to define what a child is and what child labour is. According to the

UN, a child is defined as a person below 18 years of age (UN Convention on the Rights of the Child

article (i)). However, the standards are not set in stone; for example, the Indian Penal Court (IPC)

defines a child as being 12 years of age or less, while International Labour Organization (ILO) have

different minimum ages depending on the nature of the work, with lower minimum ages for

developing countries (ILO, 2009). To choose the minimum age becomes complicated, as the

company can choose to follow standards by UN, ILO or some other international organization, the

host-country standards or home-country standards.

When defining child labour, there is a scale with two extremities. In one end, we find child work

that does not hinder the child from attending school, is not dangerous or too physically demanding,

such as delivering newspapers or selling strawberries. In the other end of the scale there is

hazardous work, were children work in mines or other dangerous work, often with long working

hours, low wages and without sufficient safety arrangements (Kolk & van Tulder, 2002b).

UNICEF's definition of child labour is ”work that exceeds a minimum number of hours, depending

on the age of a child and on the type of work” (UNICEF, 2009). In order to facilitate the process,

many companies choose to regard anything done by a person under a certain minimum age as child

labour (Kolk and van Tulder, 1999).

2.3.1 Comparing Codes of ConductA framework for comparing codes of conduct has been developed by Kolk and van Tulder (2002a;

2002b). Two measurements, specificity and compliance, divide child labour into several parameters

making codes of conduct comparable (table 1).

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2.4 Consequences of ActionsOnly 5% of the number of child workers are in the export sector. The other 95% are in the informal

sector, e.g. agriculture, domestic labour and selling on the streets (UNICEF, 1997, p.58). Thus, the

companies cannot change the entire societal economic situation by their actions.

The impact of the actions of companies and organisations can be far more extensive than first

expected. Firing the children does not eliminate the problem as the economic conditions have not

changed. Instead, the children are forced to find other work, often in the informal sector were there

is less control (Kolk & van Tulder, 2002a). It has been estimated that because of a total ban of child

labour in the carpet industry in Nepal, 5-7000 children got into prostitution (Basu, 1999). Even

when consideration is taken to change the situation for child workers, the implementation can be

difficult. For example, when child workers are found in factories and given education instead, some

companies choose to locate the education in the factories. But separating the children from the rest

of the workers and treating them differently might alienate them from the group. Also, the children

are rarely aware of the direct causes of why they were included in the educational program

(Winstanley, Clark & Leeson, 2002).

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2.5 The Effectiveness of Corporate Approaches to Child LabourKolk and van Tulder (2002a) presents a

matrix for the different standpoints a

company can take and the effectiveness that

comes from it (model 2). The matrix shows

four different positions that companies

choose in the debate on child labour. The

companies assumes one of four positions,

depending on their efficiency and if they

have a code of conduct or not.

The first position is when the company supports the corporate codes of conduct's positive impact.

However, too strict sanctions can shift the company to the second position. In this case, the

company has a code of conduct but the negative, unintended consequences spoil the effectiveness.

These unintended consequences can for example be that if compensatory work not is done, the

children find more dangerous work in the informal sector, as strict sanctions force them to leave

their old employment. Too strict sanctions can force suppliers to extend the supply chain further,

which might push child labour and other human rights issues from the formal to the informal sector,

making it more difficult to monitor (Kolk and van Tulder, 2002a).

The third position is when the company effectively deals with child labour by use of other means

than codes of conducts. A reason for not having a code of conduct might be that the company does

not want to get much public attention, as a published code of conduct can be followed up or

questioned. Instead they might prefer to work with human right issues in a more informal way. The

work might be discussions and cooperation with non-governmental organisations (NGOs), UNICEF

or engagement in community programs (Kolk and van Tulder, 2002a).

Companies in the fourth position view child labour as responsibility of the public and society, and

not the company itself. To these companies, following legislation is sufficient.

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2.6 Developing a Model for Discussion

The theoretical background now presented will serve as a basis for the discussion and analysis of

the findings. Table 1, together with the article by Kolk and van Tulder (2002a) was used in order to

establish the actual definitions of the different positions of the matrix measuring the effectiveness of

the company's behaviour (Kolk and van Tulder, 2002a). This was combined with model 1 (Leeson,

2000) in order to develop a model for discussion (Model 3). For further information on how Model

3 was developed, see 3.4. However, it is especially interesting to note the fact that Leeson's

disengagers can hardly be placed in just one of the positions, but in both position 1 and position 2,

depending on how strict the code is. The engagers use a ”softer” approach with a long-term

perspective, and they have been classified as position 1 also because of their consideration to

societal aspects.

2.7 SummaryThe theory section of this paper has treated the companies' approaches to ethical issues. As shown

by Leeson (2000) and Kolk and van Tulder (2002a; 2002b) there are several ways for a company to

handle child labour. If the company choses a involvement strategy, they can use either an

engagement approach, that is seen as more difficult but with large potential societal gains, or a

disengagement approach, that mainly focuses on clearing factories from child workers (Leeson,

2000; Winstanley, Clark & Leeson, 2002). How effective the codes of conduct are depends on

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factors such as how strict the code is, if alternative measures are included and how the monitoring is

performed (Kolk and van Tulder, 2002a; 2002b). Codes of conducts have become more and more

common, either own corporate codes or the use of a standardised code such as BSCI (Neef, 2004;

Pearson & Seyfang, 2001).

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3 MethodologyThis thesis treats how large food retailers handle ethical data on child labour and the effects of

monitoring. Food retailers in five countries (Denmark, Finland, Germany, Norway and Sweden)

have been used for the gathering of empirical data.

The number of large food retailers in the five countries is quite limited as the market in each

country is dominated by a handful players, and the number of suitable respondents on each

company is limited as well. This has made it more difficult to have a quantitative study, as a

quantitative study needs a certain size of the sample in order to be statistically significant. As the

number of suitable respondents was less than the number needed to be statistically significant, a

mere quantitative approach was not used. The empirical data has been collected by choosing

suitable companies in each country (see 3.1). These companies were contacted, and then received e-

mails addressed to the person responsible for ethics, and the person responsible for purchasing. The

respondents received an e-mail with a self-completion questionnaire, that guaranteed a higher grade

of anonymity, and it also facilitated the handling of information. The e-mail also contained some

open questions that were answered directly by e-mail. As different kinds of questions were needed

in order to classify the companies into Model 3, this approach was seen as the most suitable. A

partly qualitative approach was thus needed in order to gain a deeper understanding and be able to

fulfil the purpose of the thesis. Hopefully, this approach will not confuse the reader, but ensure that

the overall quality of the collected empirics is higher.

As the persons receiving the open questions that were the basis for the qualitive data collection were

the same persons that answered the self-completion questionnaire, no analysis of the response rate

will be made. All in all, 15 companies completed the self-completion questionnaires and the

answering of open questions, with a total of 27 respondents.

A deductive method has been used, with the use of already existing theoretical studies as an

instrument for studying and analyzing reality (Bryman & Bell, 2007, p.11-14).

3.1 The RespondentsThe five countries were chosen after discussion with Sedex, based on their expanding membership

base and their area of interest. The five countries are also chosen as they are closely interconnected

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by trade. A list of the largest retailers of each country was obtained by looking at reports regarding

the food retail industry (USDA Foreign Agricultural Service 2003; 2006; 2007a; 2007b; 2007c,

Datamonitor 2008a; 2008b; 2008c; 2008d). For a list of the companies, see Appendix 1. The food

retail markets in all five countries are dominated by a handful of large players. As these companies

are the largest players, they will also make the largest purchases, have more power to negotiate and

have greater effect on the suppliers than smaller food retailers. In each country, the food retailers

receiving the questions had a collective market share of at least 75%. In order to establish

characteristics for each country, it was necessary to interview several companies in each country as

findings otherwise could have been attributed to corporate differences.

In order to obtain the right information, it is important to choose interviewees that have good

knowledge of the subject (Holme & Solvang, 1997, p.104). The persons chosen for interviews were

responsible for ethics and responsible for purchases. The respondents where considered the most

suitable respondents as they were the persons most likely to handle ethical issues. The reason for

choosing two persons from each company was that even if the two roles are closely connected, they

often have different functions. Following the ethics debate in recent years, many ethics managers

also have a role in creating the image of the company. In order to avoid an unjustly positive image

of the company and at the same time gain a closer point of view on the supply chain, a purchaser

was interviewed as well. This also allowed an adapted set of questions for each role. However,

company structures tend to vary, and the purchaser and the ethics managers were occasionally one

person, depending on the company structure and size of administration. Access to the interviewees

was gained through direct contacts with the companies.

Considering the nature of the subject, there are difficulties with relying too heavily on their

information. Even if suppliers and factories are monitored, they cannot be monitored all the time,

and perhaps only a sample of the factories is monitored. It is thus difficult for the companies to have

full knowledge of the actual situation. Therefore information such as numbers concerning age and

number of working children can only be seen as estimations unless the company has good reasons

to claim something else. There is also a risk that the respondents will try to make the company look

good by giving answers that are not completely true. By using self-completion questionnaires that

ensure anonymity, the risk for this is considered lower.

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3.2 The Gathering of Primary DataThe method used in order to collect empirical data from the respondents was a combination of

selfcompletion

questionnaires and interviews. After contact with the company, an e-mail with the link

to a self-completion questionnaire was sent out to the respondent. To guarantee anonymity,

www.surveymonkey.com was used to create the questionnaire. The questionnaire contained closed

questions. The e-mail also contained open questions, that opened up for a dialogue with the

respondent. Two respondents chose to complete the open questions in a phone interview instead.

The quantitative data will be presented mainly in percentages, in order to create an image of the

responses. The qualitative data will further develop how the individual companies handle child

labour.

3.2.1 Self-completion Questionnaires

Low cost, easy administration and convenience for the respondents are some of the benefits of self

completion questionnaires (Bryman & Bell, 2007, p.241-242). Because of the sensitive nature of the

subject, a self-completion questionnaire was chosen, as it might improve the quality of the response.

The respondent can choose to spend extra time on difficult questions and can control the

information before answering. Some of the disadvantages of the self-completion questionnaires,

such as the risk of missing data and the difficulties explaining questions (ibid, p. 242-243), are

hopefully weighted out by the e-mail interview.

3.2.2 Answering Open QuestionsThe e-mails that contained the link to the self-completion questionnaire also contained a few open

questions. The respondents were able to answer the questions directly by e-mail, which gave the

possibility to pose follow-up questions in order to clarify the answers. The e-mailed questions gave

the respondents unlimited time to consider their answer and did not force them to share more

information than they were willing to. In two cases, a phone interview was used instead of an e-mail

interview with open questions. Phone interviews were done in order to support the self-completion

questionnaires. A semi-structured interview form was used, and the respondents received the

questions before the interview so that they could prepare themselves. The reason for having phone

interviews waw mainly the respondents' wish to have a dialogue as the subject was sensitive. Phone

interviews give the possibility to be brief and keep costs down (ibid p.214-215). Because of the

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limited time and resources, it would have been difficult to interview everyone face-to-face.

3.2.3 The Interview QuestionsIn order to improve the design of the questions and get a high response rate, guidelines set by

Bryman & Bell (2007, p.266-217) were used when questions were formulated. An adaption of a

framework by Kolk and van Tulder (2002b), together with the self assessment questionnaire

provided by Sedex, was used for developing questions for the interviews.

A mix of open and closed questions was used. Closed questions are easy for the respondent to

complete and easy to process (Bryman & Bell, 2007, p.261-262). However only using closed

questions would have limited the responses. Open questions allow the respondent to answer more

freely, while at the same time demanding a greater effort from the respondents (ibid, p.259). The

risk that the response rate would be affected by too many open questions was considered. Some

open questions were necessary, and were posed mostly in the phone interviews. The questions were

tested on three persons before being sent out.

3.3 Secondary DataThe interviews where completed with secondary data in order to strengthen the reliability of the

thesis, lessen the impact of subjective information and increase objectivity. Secondary data

consisted mainly of Codes of Conduct2 from the interviewed companies and information from

corporate websites. This information cannot be seen as completely objective as it is presented by the

companies themselves. However, as this information is presented to the public it probably has

higher objectivity, as the companies face the possibility of having to defend unjustified claims.

The secondary data was also used in order to simplify the gathering of information. Reports from

various organisations, such as International Labour Organization and USDA, were used, as well as

articles from major newspapers. One of the problems with using secondary data acknowledged by

Bryman and Bell (2007, p.335-336) is that the control over data quality is limited. Therefore this

information has been gathered from credible sources such as the UN, which hightens the objectivity.

2 Or correspondent. Just as companies use different names for their ethical work (CSR, CR, SR, Corporate Citizenship, etc), they may have different names for reports on their responsibilities. Also, not all companies chose to have a public statement of their ethical decisions, one main reason cited as unwanted media attention (Kolk and van Tulder, 2002b)

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3.4 OperationalizationThe model for discussion (p.13) was developed by combining the effectiveness matrix with the

framework by Kolk and van Tulder (2002a; 2002b) and the model by Leeson (2000). In order to

make it possible to divide companies into the different positions, clear definitions of the positions

were needed. By using the framework (Kolk and van Tulder, 2002a; 2002b), interview questions

were established. The answers from the questions could then be categorized according to the model,

where the answer on the questions could decide the respondents place in the matrix.

The closed questions made it easy to code and categorize the responses between the positions in the

discussion model (Model 3). As the framwork by Kolk and van Tulder (2002a; 2002b) classified the

scale of the responses (for example strict or broad codes of conduct), something that made it easier

to divide the answers between the different positions. The open questions provided information that

was coded and categorized based on other information from Kolk and van Tulder (2002a; 2002b).

As open questions can give unspecific or unclear answers, follow-up questions were used when

needed. This ensured that it was possible to map the answers within the discussion model (model 3).

In order to gain a deeper understanding in the analysis, discussion and conclusions, corporate

websites were analyzed even for the non-responding companies. The analysis of the websites was

based on Kolk and van Tulder (2002a; 2002b).

The analysis was carried out by comparing the empirical data with Model 3, with the rest of the

presented theory in mind. The conclusions are drawn mainly with the analysis in mind, but also by

noticing general patterns in the collected information.

3.5 The Role of SedexIn order not to loose the academic aspects on the paper and focus to much on satisfying the receiver

of the thesis, the role of Sedex as a receiver of the thesis must be considered.

Sedex does not have, or has not expressed, any specific ideas or wishes on the findings. While

expressing interest for the result, Sedex has not said anything that could be seen as a subjective

view on suitable findings. Nor has Sedex elsewhere stated a clear opinion in this subject, for

example on Sedex' website, that might affect the work. The involvement with Sedex has consisted

mainly in Sedex acting as a discussion partner for the subject of the thesis. Sedex has also assisted

with information on social sustainability, as well as a self-assessment questionnaire normally given

19

to new members. Even if the questionnaire was used as a tool for developing interview questions,

the used model by Kolk and van Tulder (2002) was very similar in concept and based on extensive

research. Apart from that, Sedex has not been involved in the writing of the thesis. Consideration

has been taken to make sure that the thesis is written independently.

3.6 Ethical ConcernsHuman rights are a sensitive subject for many companies, as a bad public discussion can severely

harm the company. It was therefore important to state that all shared information would be strictly

confidential and not traceable to the responding company. The respondents were also notified on the

fact that their participation was voluntary and anonymous. When conducting interviews, it is

important to consider the possible impact on the respondent. In this case, it was seen as crucial to

give the respondents unlimited time when responding to the questions, as they then were free to

consider their answers for as long as they wished. This would further decrease the already small risk

of sharing something that might damage the company and cause trouble for the respondent.

20

4 Empirical DataThe empirical section will start with an overview of the food retail industry, and continue with

presenting information gathered through questions based mainly on Kolk and van Tulder (2002a;

2002b). Their approaches to minimum ages, the companies' alternative measures when child labour

is found and the monitoring are first presented. Then their actions, what they do to prevent child

labour and their use of other organisations will follow.

The food retail industry is generally dominated by a handful of large market players. In the five

countries treated in this thesis, the five largest players in each country accounted for at least 75% of

the market. The large concentration can be seen as a natural evolution, as retailers are able to get

better prices in the purchasing situation, hence being able to give the customer lower prices than

might be possible for smaller players.

In later years, two trends can be seen in all five countries. The establishing of discount stores such

as Lidl, Netto and Aldi have changed the market, and are threatening the old gigants in a market

traditionally stable and with few possibilites for growth. The second trend is that of higher customer

demand for healthier, more nutritious food (Blay-Palmer, 2008, pp. 111-113). Concerns such as

environmental impact, origin and quality of the product have changed the assortment of the stores

(USDA, 2006; 2007a; 2007b; 2007c).

4.1 Minimum Ages

In Table 2, it becomes clear that most respondents had a reference to the ILO and/or UN when

deciding their minimum age for workers. The companies either just mentioned that they followed

UN and ILO, or referred to a specific age (14-15) in accordance with UN and ILO. Only one

respondent did not have a set minimum age for the suppliers. The respondent however claimed that

this was not needed, as the company was a member of Business Social Compliance Initiative and

fully compliant with their organisation and rules. Only one responding company had country-

specific minmum ages, in accordance with ILO or the host-country laws.

21

Most firms made implicit or explicit referals to international standards. The most established

standards were those by UN and ILO, as seen in Table 3.

In order to establish the correct age of workers, birth certificates were used in most cases. This was

done when the worker was hired. Two respondents also mentioned that in addition to controlling

birth certificates, an interview was made were it was assessed if the mentioned age was credible.

4.2 Alternative Measures in the Code of ConductOne Norwiegan respondent said that what kind of alternative measures that were used depended

somewhat on the supplier, as the company itself rarely engaged in those measures. Instead, the

company had an agreement with the supplier to work out standards, something that mostly resulted

in the children being sent to school. The respondent however pointed out that since they got more

regulated auditing and monitoring, the number of employed children had decreased and they were

now rare.

Three of the companies had explicitly written in their code that new recruitment of child labour was

not tolerated. If child labour was already in place, an immediate phasing out would start. It was seen

as important to provide the children with subsistence, and education until they were no longer of

compulsory school age.

22

Three companies had no official concrete measures for what would be done if child labour was

discovered. They made reference to their Codes of Conduct, and one specified that they followed

BSCI:s recommendations. One respondent admitted that it was important to get the children out of

their supplier's production, but even if they wanted to make sure that children got education it was

difficult to guarantee that they did not find work elsewhere. To start an own educational programme

was however not on the company's agenda, as the company felt it was beyond its responsibilities.

Instead it was most important to fulfil the standards of ILO and UN.

Four companies mentioned a specific plan, in case child workers were found. Those plans included

remediation and assuring that the child could attend and remain in school. As a basis for decisions,

one company referred to ILO convention 79, 138, 142, 146 and 182.

Depending on the relationship with the supplier, a Finnish and a Danish company mentioned the

need to support the suppliers in their work for becoming approved in audits. The Finnish company

had found that their Chinese suppliers needed more support and time than first was expected. The

company saw it as necessary to assist the suppliers, if the codes would be implemented within the

company's desired time frame. In order to support the suppliers, the company started its own

monitoring activities in China. The monitoring activitites followed BSCI's standards, and the goal

was to help the supplier to pass the standards of SA80003 and BSCI. The audits showed that child

labour was one of the lesser problems, with other problems with working conditions such as

working hours.

4.3 Monitoring72% of the respondents made reference to Business Social Compliance Initiative (BSCI). BSCI, a

European organization provides a standardized Code of Conduct, which the companies agree to

follow as they sign up for membership. The suppliers should pass a neutral audit against the BSCI

Code of Conduct, and once they have passed it, the audit is recorded in BSCI's database. One

respondent saw BSCI as a possibility to lower the transaction costs between buyer and supplier, and

a way to improve the credibility of the audits.

One Swedish company had a very thorough Code of conduct which specified the monitoring

3For more information on SA8000, se 4.6

23

process. First, discussions were held with the supplier's management, after which an assessment of

the factories or production sites were done together with a review of documentation of working

hours, injuries etc. Then interviews were held with the employees, in group as well as individually.

Finally the supplier's management was informed on the findings and violations, if any. Other

companies were not as specific in the Code of Conduct, or chose not to share the information. One

respondent stated that the exact process not was performed by the company but ”according to

standards”.

Two companies, one Norweigan and one Finnish, stated that they used SA 8000-experts for

independent monitoring of the factories. Reasons for this was that they did it according to the

standard, had local knowledge and were professional.

Monitoring was often carried out with help from other players, as seen in Table 5. In four cases, the

firm itself did the monitoring of the suppliers. A respondent from one of the four mentioned that

even though the company itself carried out the monitoring, it was done with assistance from local

experts.

A Finish company used a combinition of different actors. Internal audits were made by the firm

itself, while SA 8000 auditors did external auditing. Together with the company's own

selfassessment forms and factory visits, this created the company's auditing and monitoring system.

In the long run, one company hoped that monitoring and auditing would not be necessary, as the

host-country laws would become strict enough. The company stated that as it was difficult for its

24

buyers to control all suppliers in a credible way, the solution became to ask the suppliers to request

of an external organisation to perform audits according to common standards. The audit would

provide the supplier with proof of its compliance.

Assisting the suppliers with support was seen as important by most respondents. How much support

the company offered often depended on the relationship. 54% of the respondents had listed specific

social commitments that the company had as a motiviation for the suppliers. This included

cooperation with international organisations as well as educational projects and work in developing

countries.

Something that 54% of the respondents mentioned was that they labeled certain countries in the

world – mostly China and India – as high-risk for violations of human rights. This affected how the

monitoring efforts were done. By increasing monitoring and audits in high-risk countries, it became

easier to know where extra support was needed. As one Finnish company mentioned, suppliers in

low-risk areas still had to pass the BSCI standard, but they seldomly needed support in order to

make corrections if they did not pass the auditing.

4.4 ActionsWhen child labour was found, three companies began an immediate phasing out, and the company

provided education for the children. One of the companies specified that this was at the suppliers

expense, but mostly accepted as the contract otherwise would be cancelled.

One company specifically referred to its BSCI membership, and that the company chose to follow

their recommendation in these matters but did not want to be more specific about that.

The most commonly used sanction against the supplier was cancellation of contract, as seen in table

25

4. The respondents often stated that this was seen as necessary, as suppliers often promised to

improve but never did. The most common combination was to use severance of relationship and

then cancellation of contract. Three of the respondents explained that they saw it as a gradual

process. The decision was made based on the company's code of conduct, but was also based on the

situation. The company's decision depended on the relationship with the supplier and the

seriousness of the violation.

One company specified that to stop using a supplier was seen as the last thing to do. Instead, they

demanded corrective actions and increased the monitoring of the supplier. If the supplier despite

reprimands chose to continue a behaviour that did not correspond to the company's compliance, the

contract would be cancelled. The company representantive stated that the company valued its

suppliers and thought of them as crucial to their long-term success. Long-term relationship also

increased the trust and loyality that made it more likely that the supplier would be honest about the

working conditions and follow the compliance, even if montoring and auditing still were made.

A Danish company stated that if the corrective actions had not been carried through, the contract

was cancelled after the second follow-up. This depended on how serious the violation was. If the

violation was less serious, it would be reported to one of the organisations the company had a

cooperation with. Which organisation it was depended on the host-country. The company saw this

as a good measure, as it gave the organisation the possibility to monitor the supplier more closely. It

would also work as an incentive for the supplier to improve, as it otherwise might be difficult to

obtain other customers.

A Swedish company explicitly stated in its Code of conduct the importance of having a dialogue

with the supplier's management. The company meant that it otherwise would be difficult to improve

the conditions. After the inspection, the result was shared with the management so that they together

with the company could agree on what arrangements were to be done. Giving the supplier a chance

to improve in case of violations was seen as the true way of taking responsibility. If the supplier

however would resist improvements, the contract would be cancelled. The work with compliance

was seen as complex and sometimes difficult because of differing interests. Good working

conditions and not using child labour was seen as crucial for good production. As many of the

suppliers were in developing countries, it sometimes required not only time to correct violations of

the code, but also understanding for different ethical viewpoints, culture and history.

26

None of the responding companies used fines as a way to stop child labour.

4.5 Preventing Child LabourOne responding company stated that they had had troubles with child labour mostly in China and

India, but that avoiding the countries altogether was not an option as their products were needed and

avoidance would not improve the situation of the workers either. Before a supplier is signed up for a

contract, the company makes sure that a SA 8000 revision of the supplier is performed.

One Danish and one Swedish company mentioned unplanned visits to the production sites as a way

of preventing child labour. By making visits without the supplier knowing beforehand, a more

realistic view of the conditions on the production site would be presented.

Supporting the supplier in making corrective actions, providing the supplier with training and

discussing the corporate code of conduct was seen as important by three companies. That training of

the supplier was important was totally stated by five companies, one from each country.

BSCI was mentioned by a Danish company as a way of assuring that the suppliers would follow the

code. In case they did not, and did not improve after warnings, it would be more difficult for the

supplier who would be excluded from ”vast parts of European retail”. By making the suppliers take

a BSCI assessment, a certain standard was guaranteed.

One purchaser claimed that the company not only looked at the audits that were done when

establishing a relationship with the supplier, but also if the organisations they cooperated with had

any information on previous history in human rights, environmental thinking and other

sustainability issues.

4.6 Other OrganisationsAs mentioned before, 72% of the respondents referred to BSCI in their responses. Another

organisation that frequently was mentioned was SA 8000. SA 8000 is a standard started in 1997 by

the non-profit organisation Social Accountability International. By cooperating with various

organisations, the standard has become one of the most used standards when it comes to human

rights. They provide members with management systems on factory level, support and expert

auditing (Social Accountability International, 2009).

27

A number of other organisations assisted the companies by setting guidelines, working as discussion

partners. Some of those who were mentioned were, besides BSCI, UN's initiative Global Compact,

GRI, CIES Global Social Compliance Program and OECD.

As all the responding companies were in food retail, Fairtrade Labeling Organisation International

was mentioned by serveral companies as a quality mark and a guarantee that certain conditions

were being met. Fairtrade was seen as the only social label that was recognized internationally, and

is a label guaranteeing the customer that the product has been produced in a socially responsible

way.

4.7 SummaryTo summarize the empirical findings, we can see that even though the countries differ in size and

growth potential, the basic conditions are the same with few, strong market players, a growing

market for discounters and increasing ethical interest from the customers (USDA, 2003; 2006;

2007a; 2007b; 2007c).

When deciding on what ages were appropriate as minimum age for the workers, most companies

supported their decision in the standards set by UN and ILO. As they monitored that the minimum

age was met, many of them had concrete plans of action, which often involved providing the

children with education. 72% made reference to BSCI for establishing standards for the code of

conduct and taking care of the auditing of the suppliers. The two most used approaches to

monitoring was for the firms to do it themselves or to hire external professionals. Either way, they

often worked with the standards of BSCI or SA8000.

In order to solve the problem with child labour, many companies used a gradual process, that would

lead to cancellation of the contract if the supplier was unwilling to make corrective changes. The

primary preventive measure was to establish a good relationship with the supplier.

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5 Analysis and discussionThis section will discuss and compare the empirical findings with the theoretical data.

5.1 Minimum AgesThe minimum ages were set in accordance with UN and ILO standard by 63,6% of the respondents.

Only three companies had chosen to set a completely separate minimum age (two cases of

minimum age 18 years) or, in one case, did not have a set minimum age. The fact that so many

companies chose to refer to standards by well-known international organisations is in accordance

with Kolk and van Tulder (2002a; 2002b), as they gain credibility by referring to them, as well as

motivate their decision. As ILO's minimum ages depends on the country, with 15 as a general

minimum age and 14 as minimum age in developing countries, this can be seen as a way to try to

enforce that at least the lower minimum age is followed. To have higher standards also in

developing countries increases the risk that the supplier will not be able to follow the code, putting

the company in Position 2 (Model 3). To have 18 as the minimum age can thus be seen as

unnecessarily strict, especially for suppliers in developing countries. The risk of having too high

standards is that the suppliers are forced to further extend the supply chain, which only transfers

child labour. Then the children that are too young to work are transferred from the formal to the

informal sector, where there is less control. Instead of having a minimum age as high as 18, the

companies could focus their efforts on other aspects, such as working hours or wages, while still

mainting a minimum age in accordance with UN, ILO and legislation in home- and host-country.

5.2 Alternative Measures in the Code of ConductFew companies had clear plans for the children once child labour was discovered. Several of the

companies had expressed very strict views on child labour in their Codes of Conduct, stating that no

child labour whatsoever was tolerated. If it was found out that it existed in their supplier's factories,

an immediate phasing out would start. According to the theories presented by Leeson (2000), this

would be seen as a clear disengagement approach. While the companies stated that the children

would be taken care of, the most important part was still to get the children out of the factories.

Thus, the strictness of the code would also place this in Position 2 in Model 3. In case child labour

was found at their suppliers, four companies mentioned a concrete plan. The plans included

assuring that the child could attend and remain in school. However, as another respondent

remarked, it was difficult to guarantee that the children stayed in the educational programmes and

did not find work elsewhere.

29

As mentioned by Leeson (2000), the engagement approach has received much more criticism. It is

therefore understandable that the companies choose to be strict with child workers and rather put

their resources on the auditing and on community programs, instead of working out long-term

solutions that might temporarily include child workers. Choosing alternative ways of handling child

workers would not only be a possible source of criticism, but also result in higher costs.

5.3 MonitoringIt was suggested by Kolk and van Tulder (2002a) that companies would wish to use an independent

actor for monitoring. By hiring external professionals, the company would ensure that the results

from audits and monitoring were credible. If the independent monitoring is taken care of by an

acknowledged organisation such as SA8000, the monitoring process could be seen as clear as they

follow the internationally used standards. This, and the independent status of the monitoring actor,

hightens the credibility and makes it possible for the company to assume Position 1 in the

discussion model (Model 3), meaning that the company has a code of conduct and is effective in its

work against child labour.

In this case, the empirical findings showed that many of the retailers chose to take care of the

monitoring themselves, with self-monitoring as the second largest after hiring professionals. A

positive aspect of establishing own monitoring is that it can give the company a certain degree of

control. However, the less positive aspects are several. Mainly, self-montoring affects the

credibility, even if the company chooses to present publicly how the monitoring is done and the

results. If compared to the discussion model (Model 3), it is clear that using first-party monitoring

increases the risk for ineffectiveness, even though the Code of Conduct otherwise is correct. The

company or its personnel could for reasons of cost, reputation or comfort, choose to warn the

supplier of factory visits before-hand in an inappropriate way, choose not to notice violations of the

codes or alter the monitoring results. Also, establishing good monitoring and auditing arrangements

in countries were the political, cultural and societal climate can be very different from the retailer's

home-country demands great resources. Considering this, it is surprising that so many companies

chose to use self-monitoring. One of the companies suggested that own monitor could work as an

addition or as a preparation for the auditing of professionals, experts crediting according to SA8000

or BSCI. In that way, the company's self-monitoring became a support for the supplier, and cannot

be seen as compromising the credibility of the company's monitoring efforts.

30

Even though 54% of the respondents mentioned developing countries as entailing a high risk for

human rights violations, the areas were too important to avoid. In contrast, we can see the

beforementioned strictness of the codes, were violations are followed by sanctions. In some cases,

the contract was cancelled if violations had not been corrected at the following-up, while others had

more patience. With very strict codes, ultimately leading to the termination of the business

relationship if the code not is followed, and work in high-risk countries, there is a possibility that

the companies simply change suppliers until they follow the code. This puts the company in

Position 2 (Model 3), where the company has a code but the work on child labour issues not is

effective. The other option would be to work with the suppliers until they are able to follow the

code and support their progress, something that a Swedish and a Finnish company clearly expressed

that they did, instead placing the company in Position 1 (Model 3) where the work is more

effective.

Codes should not become substitutes for government regulations (Leeson, 2000), something that

was supported by a company that hoped in the long run not having to monitor and audit the

suppliers as the legislation would become stricter. As several of the companies found that they had

to set the standards for their acting, this makes the work against child labour less effective (Kolk

and van Tulder, 2002a).

5.4 Actions

The most commonly used sanction was to cancel the contract with the supplier. This has been

classified by Kolk and van Tulder (2002a; 2002b) as very strict, putting the company in Position 2.

While how child labour was did not differ substantially between countries, a strict approach can be

seen as giving larger unintended consequences. In this case, by cancelling the contract the situation

at the supplier does not change. One company specifically mentioned the importance of having

good, long-term relationships with their suppliers as goal. The relationships with the suppliers and

the suppliers' development were seen as something positive, and the company wrote explicitly

about this in the information on their corporate website. This would follow the engagement

approach, and put the company in Position 1 (Model 3). It could also be seen as an example of

building a competitive advantage in sustainability, as the company proudly displays their long-term

work with and assistance of their suppliers.

31

Considering the fact that cancellation of the contract and finding a new supplier can be costly, it is

surprising that not more companies started by demanding corrective actions instead of having the

cancellation of the contract as their strategy.

Considering the company's responsibilty to its shareholders, the interests of investors and other

shareholders are often more important than the stakeholders, once a necessary level of responsibility

is taken (Sheth, Range & Anand, 2009). One of the reasons for why so many companies used very

strict sanctions might be the possible costs of scandals and unwanted media attention. When the

company fulfils the minimum demands by clearing the supplier from child labour, the most crucial

part for the company is over. As the companies find themselves on thin ice because of actions they

traditionally might see as ”none of their business”, they can become more reluctant to taking further

risks by adopting a more long-term perspective.

5.5 Differences within the SampleHow the companies presented themselves differed very much from company to company. Some

companies were very thorough with information, providing all kinds of information on ethical

issues that concerned them, from codes of conduct and action plans to visions and results of

auditings. Other companies did not address ethical issues at all on their corporate websites. Among

the respondents in the sample, two trends could be seen. Those of the companies that provided

thorough and clear information in the interviews and on their website were often the larger ones.

They were also rarely from the obvious discount sector. The reasons for this can be several. Even

though all the food retailers in the sample could be seen as players of importance on their respective

market, the larger player could easily be of the size 300% of the smaller. Media attention is easily

drawn to the gigants of the industry, forcing the largest players to watch their operations more

carefully. Serveral of the food retailers in the sample have not only one brand of supermarkets but

several. However, those who focused most attention to these issues were not only the larger players

but also those who did not especially target the discount segment. Those mainly focused on the

discount market were those who mentioned ethical standards the least. The reason for this might be

that their customers, in order to get a price as low as possible, might be willing to neglect ethical

issues. Ecological or fairtrade food is traditionally perceived as more expensive, but even standard

products have a background were ethical concerns should be looked into. The absence of

information to customers could signalize that the company does not think that its customers care

about these matters.

32

The differences found are most easily attributed to different strategies. Some companies chose to

get involved more in the process, by working with their suppliers until they could reach the

standards and finding alternative ways to handle child labour. They took the engagement approach

(Leeson 2000), and by working long-term they have greater chance to come into Position 1 (Model

3). Other companies made necessary arrangements, but were mainly concerned with clearing the

supplier's factories from child labour, which would be more of a disengagement approach.

To summarize the analysis and discussion, a collective model where the companies have been

sorted according to Model 3 is presented (Model 4). It would be too much to point out companies

that have chosen not to participate, however the company's wish not to participate and the fact that

no information on ethical issues and concerns can be found on their website suggests that they

might treat these issues as in Position 4 by Kolk and van Tulder (2002) or the ignorance approach

by Leeson (2000). Also, no company has been placed in Position 3, as all the responding companies

had a code of conduct or similar. They have been sorted in Position 1 or 2, depending on the

effectiveness based on Model 3. The darker grey shows the dominant side of the company's efforts.

As all the companies had both factors that can be connected to Position 1 and Position 2 (nobody's

perfect!), this was the easiest way to show each company's overall position.

33

6 ConclusionWith regard to the theoretical part of the thesis, we can see that child labour and the connected

problems reminds of the Hydra, the Greek monster that Hercules slaughtered. When one head was

cut off, two new heads immediately shot up in its place. In order to kill it, Hercules had to cut off a

head and the burn the headless tendons of the neck (Tufts University, 2009). In a societal

perspective, this is how child labour easily transforms from one form of problem to another. The

companies can choose to get rid of child labour from the factories, but if no consideration is given

to the underlying poverty issues, the children will simply move to more dangerous and less

controlled work, such as prostitution or mining (Basu, 1999).

In the same way, we have the corporate Hydra. Dealing with child labour does not end the

company's problems and challenges, as it is increasingly monitored and faced with higher demands

on ethics. Instead, the companies can choose the proactive approach and make human rights and

other corporate responsibility issues a part of their strategy and competitive advantage. In order to

stop child labour, a ”softer” approach, such as the one presented by Leeson (2000) as engagement,

is one alternative.

It is difficult for a company to say that they do not care about ethical issues without gathering

massive criticism. Instead, they have to present themselves as caring. It would be too go to far to

say that some of the companies in the sample did not care about ethical issues; however, it was clear

that some of the responding companies showed greater concern for ethical issues. This was

mirrored in the way they treated this issues on their website, as well as in the interviews. How the

company presents itself on its corporate website affects how customers looking for more

information perceive the company. A company with a thorough discussion on ethical issues on their

website will thus be perceived as having more commitment than a company only referring briefly to

the following standards. Considering Model 4, the summary of the analysis and discussion, we can

see that most companies are ”on both sides” - they are being effective in some aspects but not in

others. The companies being mostly in Postion 1 were to a large extent the companies that were

most through in their Code of Conduct and with the information presented on the corporate website.

The conclusion is that these companies are most probable to have a competitive advantage from

their sustainability work.

Some of the companies had gone to great lenghts to thoroughly explain the processes, how ethical

34

issues were treated and their plans of actions as well as visions. They managed to see themselves as

a part of a larger context, in which the ethical issues became a part to connect with the surroundings

and get a competitive advantage. Other companies only share very brief information, that often was

direct quotes from the standards of UN, ILO and/or BSCI.

How companies choose to treat human rights issues is not only a matter of caring, but of strategy.

Among the interviewed companies in the sample, the shown awareness of their impact varied a lot.

Some companies chose to treat all possible aspects of their impact, and sharing this information

with customers and other stakeholders on their website. To acknowledge the problem by showing

awareness and sharing information could be seen as a first step to a more holistic view on the

company, where the surroundings change from merely being context to something more.

While child labour wasn't very differently treated between the countries, a pattern could be seen

where larger, more important market players generally gave more attention to ethical issues. Among

the firms, those who gave the least attention to ethical issues were those with a clear discounter

profile. The conclusions that can be drawn from this is that larger players receive more media

attention, and that price sensitive customers might overlook ethical issues.

6.1 Suggested Further ResearchFurther research could choose to go more in depth and use a larger set of qualitative and

quantitative empirics in order to gain deeper understanding of the situation. With larger empirical

studies, it would also be easier to classify the companies more correctly as disengagers or engagers.

Coming studies could also focus on the supplier's point of view, and further explore the buyer's

power over the supplier.

Companies working as engagers have received strong criticism for not being able to guarantee that

their products have not been made by children, while claiming to work with a greater interest and

with consideration to society. Disengagers on the other hand have had this guarantee as the main

concern, with the importance being to be completely free of child labour, at any cost. The difference

between the two approaches is considerable, and further research could investigate how this

difference affects the children and society in general.

35

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