© 2014 KATHLEEN M. BOYLE ALL RIGHTS RESERVED ORGANIC COTTON CLOTHING: IS IT HELPING TO RAISE THE BOTTOM? A Thesis Presented to The Graduate Faculty of The University of Akron In Partial Fulfillment Of the Requirements for the Degree Master of Arts Kathleen M. Boyle August, 2014 ORGANIC COTTON CLOTHING: IS IT HELPING TO RAISE THE BOTTOM? Kathleen M. Boyle Thesis Approved: Accepted: _______________________________ ________________________________ Advisor Dean of the College Dr. Teena Jennings-Rentenaar Dr. Chand Midha ________________________________ ________________________________ Committee Member Dean of the Graduate School Dr. Virginia Gunn Dr. George R. Newkome ________________________________ ________________________________ Committee Member Date Dr. David Witt ________________________________ School Director Dr. Virginia Gunn ii ABSTRACT Evidence is pointing to the re-emergence of sweatshop and/or exploitive working conditions within the textile and apparel industries, possible today because of the concentration of players and the move to off-shore production. Today, globally, cotton is the primary fiber of choice for apparel. The globalization of the cotton industry has had detrimental effects on small-scale farmers. Environmental and social activists are documenting evidence of the disparities of cotton production due to globalization. Small-scale cotton farmers, in today’s arena, have to compete with large cotton agribusinesses that are highly subsidized. Fair trade and/or organic cotton have met standards demonstrating environmental and social responsibility. Large retail companies are now making clothing from organic cotton for the eco-conscious consumer. Does organic cotton apparel equate to better working conditions for the farmer-to-garment supply chain? One of the goals of this research paper has been to compile a literature review from disparate points of view in order to establish the relationship of organic cotton to the working conditions within the textile and apparel industry. These topics include the social history of the textile and apparel industry in the United States, the development of trade agreements, and the expansion of the textile and apparel industry globally and the various standards and organizations iii establishing criteria for cotton. In addition, through investigative studies of five retail companies known for their organic cotton apparel, this paper analyzes whether organic cotton clothing is helping to raise the bottom line in the “race to the bottom.” iv ACKNOWLEDGEMENTS I would like to thank Dr. Teena Jennings-Rentenaar who has a deep appreciation for textiles, and who first made me aware of conventional cotton’s environmental hazards. I would also like to thank Dr. Virgina Gunn, an outstanding teacher in the field of Family and Consumer Science. Her enthusiasm for knowledge and her high expectations have enlarged my heart and mind. My sincerest appreciation also goes out to my family and friends who have been patient with me in this thesis process, especially my partner, Mufit Balabanlilar, for giving me the time needed to complete this work. v TABLE OF CONTENTS Page LIST OF FIGURES……………………………………………………………………………….…………………………...x CHAPTER I. INTRODUCTION…………………………………………………………..………………………..1 II. A BRIEF HISTORY OF THE GARMENT INDUSTRY……………………………………..3 III. THE RETAIL INDUSTRY IN THE UNITED STATES………………………..……….……8 The Quick Response Program……………………………………………..……..……...…9 Private Label Clothing……………………………………………………………...……………9 Repeal of Fair Trade Laws…………………………………………………………….……..10 IV. GLOBALIZATION AND THE NEW MANUFACTURING CLIMATE……….……..12 The International Organization Addresses Human Rights……………....…..14 The Ethical Trading Initiative…………………………………….…………………...……15 The Global Compact…………………………………………………………………………….16 Is There a Market for Virtue?..................................................................17 The Decent Working and Fair Competition Act……………………………………18 The North American Free Trade Agreement……………………………....……….20 China’s Contribution to Globalization………………………………………………….22 Monitoring Factories…………………………………………………………………………..23 V. COTTON……………………………………………………………………………………….………27 The Historical Role of Cotton…………………………………………………………………27 A Look at Cotton Subsides in the Marketplace………………………………………29 The DOHA Development Round……………………………………………………….……31 vi Cotton as a Commodity Today……………………………………………………………...33 The WTO and the Need for Governance…………………………………………….….35 The Potential for Change………………………………………………………………….…..37 Genetically Modified Cotton and its Dangers………………………………..………38 Why Organic Cotton………………………………………………………………………………41 Organic Cotton as an Alternative for Small-Scale Farmers…………………….44 VI. COMPANY RESEARCH…………………………………………………………….………..……47 Hennes and Mauritz (H & M)………………………………………………………..……….48 Location of Manufacturing for Organic Cotton Apparel……………..49 Factory Monitoring for Corporate Social Responsibility……….…….50 Transparency………….…………………………………………………………………53 Trade Affiliations……………………………………………………………………….53 Freedom of Association………………………………………………….………….53 Organic Cotton Initiatives……………………………………………..…………..54 Nike, Inc………………………………………………………………………………………………..56 Location of Manufacturing for Organic Cotton Apparel………..……57 Factory Monitoring for Corporate Social Responsibility………..……59 Transparency……………………………………………………………………….……60 Trade Affiliations……………………………………………………………………….62 Freedom of Association…………………………………………………………….62 Organic Cotton Initiatives………………………………………………………....63 Patagonia……….……………………..……………………………………………………………..66 Location of Manufacturing for Organic Cotton Apparel…………….66 Factory Monitoring for Corporate Social Responsibility…………….67 Transparency…………………………………………………………………………….67 vii Trade Affiliations……………………………………………………………………….69 Freedom of Association……………………………………………………………..69 Organic Cotton Initiatives…………………………………………………..……..70 Maggie’s Organics………………………….………………………………………….………….70 Location of Manufacturing for Organic Cotton Apparel…………….71 Factory Monitoring for Corporate Social Responsibility…………….73 Transparency…………………………………………………………………………….73 Trade Affiliations……………………………………………………………………….74 Freedom of Association……………………………………………………………..75 Organic Cotton Initiatives……………………………………………………..…..75 Earth Creations…….…………………………………………………………….…………………76 Location of Manufacturing for Organic Cotton Apparel……………..77 Factory Monitoring for Corporate Social Responsibility……………..78 Transparency…………………………………………………………………………….78 Trade Affiliations……………………………………………………………………….78 Freedom of Association……………………………………………………………..79 Organic Cotton Initiatives………………………………………………………….79 VII. SUMMARY……………………………………..………………………………………………….….81 Location of Manufacturing for Organic Cotton Apparel……………….…….….83 Factory Monitoring for Corporate Social Responsibility…………………………85 Trade Affiliations………………………………………………………………………………..…88 Freedom of Association………………………………………………………………………..89 Organic Cotton Initiatives……………………………………………………………………..90 Conclusion…………………………………………………………………………………………....92 NOTES………………………………………………………………………………………………..…………….………….97 viii BIBLIOGRAPHY……………………………………………………………………………………………………………111 ix LISTS OF FIGURES Figure Page 2.1. Consumer Protection Label, Manufactured by Fair Labor Standards……………..……….7 6.1. Factory auditing includes annual assessment, compliance visits, ERA, ESH Audit, Licensee M Audit, MAV, NSAP and Third-Party Audit…………………..…………………..….59 6.2. OE 100 and OE Blended and GOTS Standards: A Quick Reference Guide……..……..65 7.1 A Summary of the Five Companies’ Performance in CRS for Organic Apparel….…...82 x CHAPTER I INTRODUCTION With fingers weary and worn, With eyelids heavy and red A woman sat in unwomanly rags, Plying her needles and thread - Stitch! Stitch! Stitch! In poverty, hunger, and dirt, And still with a voice of dolorous pitch She sang the “Song of the Shirt.” Thomas Hood, 1799-18451 Evidence of human rights violations in the garment industry has concerned citizens throughout the world. Free trade laws, unfair labor laws, and corporate greed have hurt millions of small cotton-producing farmers and apparel workers. Some people are attempting to right these wrongs. One of the goals of this research paper has been to compile a literature review from disparate points of view in order to establish the relationship of organic cotton to the working conditions within the textile and apparel industry. This research study has three main objectives. The first is to examine the literature dealing with the development of sweatshops at the turn of the twentieth century in the United States, their demise, and why they reappeared in the latter part of the twentieth century. The second is to look at the role that cotton has 1 played in the textile and apparel industry by looking at the literature to provide a brief overview of cotton’s notorious past, and to study its role in today’s clothing market. The third is to look more closely at organic cotton clothing production in relation to sustainable and socially responsible apparel manufacturing. This thesis examines global issues in cotton production and evaluates whether organic cotton apparel results in a higher living wage for the farmer-to-garment supply chain. This research focused on five retail companies chosen to represent the full spectrum; two of the largest companies using organic cotton in manufacturing clothing, one mid-sized company, and two smaller companies known for their organic cotton apparel. This research reveals the degree to which ethical labor standards for the farmer-to-garment