Beyond Decoupling: Unions and the Leveraging of Corporate Social Responsibility in Indonesia

Key Insights for Managers

Do unions in apparel, textile, and footwear factories have more power or respect when their factories are governed by codes of conduct?

Studying unionized factories in Indonesia, authors Tim Bartley and Niklas Egels‐Zandén found that factories serving multinational companies with supplier codes of conduct tended to have higher-quality collective bargaining agreements, as rated by union representatives. Managers of such factories also tended to be more likely to make good faith efforts to respond to union grievances.

The paper describes four ways that workers can leverage their brand’s codes of conduct and monitoring regime to promote better working conditions in supplier factories: engage in whistleblowing to the buyer’s compliance auditors, warn managers of involving brands if necessary, reach out to foreign bodies to shame brands, improve organizational structure based on brand’s image. Involving foreign bodies can lead to modest gains such as the payment of social security, severance pay, the re-hiring of fired workers and compensation for unpaid overtime.

The analysis was based on data from 135 interviews of representatives of unions, NGOs and brands conducted between 2008 and 2011, and a 2009 survey of unionized factories in Indonesia in the apparel, textile, and footwear sectors.  Qualitative and quantitative analyses were conducted.