Ending Sweatshops: The Role of Corporate Codes of Conduct in Fair Labor Practices
By: Nivedita Giani
Key Questions: Why haven't voluntary corporate codes of conduct ended sweatshops? Are binding international rules the answer to this problem?
After a long workday, most of us look forward to relaxing and spending time with family. But not everyone has this luxury. For sweatshop workers, who are often children, jobs often include sub-living wages, a 16-hour workday, and unsafe workplace conditions (Sheetz). Approximately 152 million child laborers and 27.6 million forced laborers face these brutal conditions (Impact International). Sweatshops, often used by transnational corporations (TNCs), are enabled by large numbers of unskilled and unorganized workers, systems that do not safeguard human safety and dignity, and a lack of regulation, government or otherwise (Sheetz). Anti-sweatshop movements and growing political outrage have led to the establishment of corporate codes of conduct (CCCs), ethical standards for corporations to follow. However, they are not legally enforced and have therefore had a limited effect on reducing sweatshop labor (Browne). This begs the question: Are binding international rules the answer to finally ending sweatshop labor?
A Brief History
Before we explore this question, here’s a brief history of sweatshops: In the 1880s, immigrants from southern and eastern Europe were a source of cheap sweatshop labor in the US and other parts of Europe. Industrialization in the 20th century led to the rise of sweatshops in parts of Latin America and Asia (Sheetz). This, combined with offshoring in the 1970s and a postwar spike in demand for consumer goods, cemented their presence in the global south, where a majority of sweatshops remain today. The anti-sweatshop movement began in the 1990s as awareness of NAFTA and other agreements brought the horrors of sweatshop labor to light (Michigan in the World). However, as debates regarding sweatshop ethics began, academic defenders and governments also put forth their own arguments. They said sweatshops were necessary for jobs, development, and foreign investment. This, of course, was incredibly controversial, considering the human rights implications and the precedent it set that TNCs were above the law (Muchlinski and Arnold). To achieve a viable solution that satisfies both sides, labor rights, development, and profit must all factor in.
Does This Solution Exist?
Yes.
However, CCCs are not the answer. To begin with, they aren’t legally enforceable, so non-compliance does not have serious consequences. TNCs are powered by supply chains that act as networks rather than hierarchies. This means that the TNCs use suppliers and subcontractors that function independently, so CCCs do not have a significant effect on these entities (Hoang and Jones). Additionally, audits to ensure CCC compliance are often announced beforehand, allowing factories to take measures to falsify compliance (Impact International). Finally, factors such as labor union management, global demand for cheap products, and the corporate tendency to treat CCCs as a PR strategy rather than as serious ethical standards render them overall ineffective.
A unidimensional approach will not end sweatshop labor. Reform is necessary on all levels. On the international stage, TNCs could enter into agreements to reduce economic pressure on suppliers, lowering the incentive to resort to extreme labor practices and deceive auditors (Hoang and Jones). Additionally, TNCs could adopt Fair Trade regulations, which, while not legally enforceable, are monitored by a third party, and non-compliance could cause reputational harm. Meanwhile, individual suppliers need to implement enforceable labor standards.
Legislation is also a possibility. A relatively new development is the movement for mandatory human rights due diligence (HRDD). This means companies would have to identify and mitigate human rights risks in their networks. Many places, including the EU, are developing legislation to make HRDD legally enforceable instead of voluntary. Another corporation-level practice is Worker-Driven Social Responsibility (WSR) programs. These would protect workers’ human rights and give them strongly protected complaint rights, which are lacking in CCCs. Unionizing and worker participation in regulation are also key (Impact International). Additionally, international organizations and political activists that track labor practices can be significant in naming and shaming violators, introducing an incentive to adhere to these initiatives.
Governments can also protect labor rights by strongly enforcing labor law and prosecuting violations (Impact International). This is somewhat difficult in our free market system, which is based on minimal government intervention, so this type of reform will undoubtedly be gradual. International law is also difficult to enforce without an international governing body, so legislation will likely be more effective at the national and local levels. But, as previously mentioned, multilateral agreements between TNCs are a viable part of the solution.
Finally, we as consumers also have a partial responsibility in ending sweatshop labor. A significant reason sweatshops still exist is global demand. That said, if consumers demand ethically made products and boycott brands that refuse to comply, we can create reputational and financial costs to corporations that continue to violate human rights. Every dollar you spend is a vote for or against the ending of practices that violate human dignity, so spend mindfully!
Conclusion
While international codes may help eradicate sweatshop labor, they are not the end-all be-all. The solution to ending sweatshop labor is multifaceted and takes efforts from a multitude of actors, from individual factors, to legislative bodies, to TNCs, and to you! The time of trusting CCCs to solve problems is long since past, and it is time to take decisive action to uphold human rights for all.
Works Cited
Adams, Roy, and Margaret Hallock. “THE ANTI-SWEATSHOP MOVEMENT and CORPORATE Codes of Conduct.” Illinois.edu, 2025,
lerawebillinois.web.illinois.edu/index.php/PFL/article/view/3032.
Browne, Jude. “Britannica Money.” Www.britannica.com,
www.britannica.com/money/corporate-code-of-conduct.
Hoang, Dong, and Bryn Jones. “Why Do Corporate Codes of Conduct Fail? Women Workers and Clothing Supply Chains in Vietnam.” Global Social Policy: An Interdisciplinary Journal of Public Policy and Social Development, vol. 12, no. 1, Apr. 2012, pp. 67–85, https://doi.org/10.1177/1468018111431757.
Impact International. “Labour Rights in 2025: Tackling Exploitation in Global Supply Chains.” ImpACT International, 2025,
impactpolicies.org/news/475/labour-rights-in-2025-tackling-exploitation-in-global-supply -chains.
Michigan in the World. “Origins of the Anti-Sweatshop Movement · Exhibit · Ending the Business of Injustice: Anti-Sweatshop Activism at the University of Michigan, 1999-2007.” Umich.edu, 2025,
michiganintheworld.history.lsa.umich.edu/antisweatshop/exhibits/show/exhibit/origins.
Muchlinski, Peter, and Denis G. Arnold. “Sweatshops and Labour Law: The Ethical and Legal Implications of Ignoring Labour Law in Developing Countries.” Business and Human Rights Journal, vol. 9, no. 2, Cambridge University Press, May 2024, pp. 1–20, https://doi.org/10.1017/bhj.2024.9.
Sheetz, Kathleen. “Sweatshop.” Encyclopædia Britannica, 9 May 2014,
www.britannica.com/topic/sweatshop.
