Secret Factories for 2010

Posted by admin on Jun 30th, 2008

Tom Sandborn, 30 June 2008,

Organizers of the 2010 Olympics refuse to tell the public where gear for the games and Olympics-branded products are made, though critics say such secrecy makes it far harder to expose sweatshops in the Olympic supply chain. The reason is that businesses fear competitors might lure away factories that produce on an ethical basis, or gain proprietary information, said Ann Duffy, who looks after sustainability issues for the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games. Secrecy is guaranteed in agreements already entered into with some suppliers and sponsors, Duffy said at a June 12 public event focusing on ethical purchasing for the Olympics.

When The Tyee tried to follow up on Duffy’s remarks, VANOC claimed guarantees of such secrecy were standard procedure in every contract it signs with suppliers and sponsors.

However, at the same June 12 event, a representative of shoe and apparel giant Nike said her company now publicly discloses the names and locations of its subcontractors around the world, with none of the difficulties cited by VANOC.

Nike: ‘Everyone disclose’

At the June 12 gathering titled “Igniting the Flame for a Sweat-Free Olympics,” Nike’s director of integration and collaboration, Caitlin Morris, insisted that “Nike has had nothing but positive results from disclosure,” she said. “We encourage everyone to disclose.”

Morris pointed to firms much smaller than Nike selling sports apparel into the U.S. university market, where many schools now belong to the Workers Rights Consortium and require factory disclosure. In that situation, she said, she was unaware of any companies that suffered significant losses because of disclosing their factory and sub-contractor locations.

Bob Jeffcott, who speaks for the Maquila Solidarity Network, one of the anti-sweatshop groups that organized Igniting the Flame, echoed the comments from Nike’s Morris.

“We haven’t heard a single report of negative consequences from factory disclosure for companies of any size,” Jeffcott said.

VANOC relies on audits by a for-profit firm to be sure its suppliers and sponsors are not using sweatshop labour.

Jeffcott said his group is “skeptical” that private auditors can adequately watchdog sweatshops, because they tend to rely too much on reports generated by factory management and on-site interviews with workers “open to management intimidation.”

Jeffcott urged VANOC to not only make factory sources transparent, but also create “a credible complaints process that allows workers and NGOs to blow the whistle on labour abuses, coupled with effective and publicly disclosed corrective action when abuses are revealed.”

VANOC’s ‘Buy Smart’

Duffy’s presentation to Igniting the Flame on behalf of VANOC focused on her organization’s Buy Smart ethical licensing and purchasing program, the first of its kind, she said, in Olympic history. The BuySmart program includes a code of conduct for labour rights, and tries to identify and reward leadership in Aboriginal employment, environmental performance and social benefits to the local community.

However, Duffy insisted that full public disclosure of supplier factory locations was not possible within the current program time-frame.

She said VANOC can’t do so because of prior secrecy commitments made in early agreements with suppliers and sponsors. She said some companies had expressed fears that disclosing factory names and locations would lead to loss of proprietary information or to poaching of identified good factories by competitors.

Duffy said that six off-shore factories had lost their contracts with VANOC because of labour abuses. She repeatedly refused to identify these factories in response to media questions at the panel. A recent Vancouver Sun story, however, reports that two of the six factories that were terminated as VANOC suppliers were subcontractors for Burnaby-based RC Products, which produces ski and snowboard accessories, pet products and promotional items such as luggage tags and lanyards.

‘Competitive interests of our licensees’

In an e-mail exchange with the Tyee on June 24, Duffy reiterated her position that VANOC would not be disclosing factory locations. She wrote:

“We are committed to ensuring that suppliers of licensed merchandise meet credible standards for ethical, social and environmental compliance. VANOC did meet with MSN [Maquila Solidarity Network] following the conference to explore common ground around further enhancements to VANOC’s ethical sourcing program as an initial model for the Olympic movement.

“The discussion was preliminary and as we do with all of our policies and procedures, we will review on an ongoing basis. However, our decision not to disclose factory locations for the competitive interests of our licensees has not changed.”

Confusing statements on secrecy requirments

The Tyee asked Duffy to confirm that VANOC had signed agreements with some sponsors and suppliers requiring secrecy regarding factory locations and names. Among the questions the Tyee asked: were such promises of secrecy made to the Hudson’s Bay Company, the official clothing and luggage supplier to the Canadian Olympic teams for the 2008, 2010 and 2012? What are the names of VANOC officials who signed agreements guaranteeing factory secrecy, and could The Tyee interview them about those contracts?

On June 26, a VANOC media specialist who asked not to be named insisted that no “secrecy clauses” existed between VANOC and its suppliers. However, she did say that “standard confidentiality clauses” did appear in agreements with licensees and suppliers, and that these agreements precluded factory disclosure.

She did not reply to repeated requests to know who within the VANOC organization made these agreements, or to our request to interview the decision makers. She told The Tyee that ethical purchasing was a very important value for VANOC, but the information about supplier factory locations would not be released.

Igniting the Flame was sponsored by the B.C. Federation of Labour, the Canadian Labour Congress, the Ethical Trading Group (ETAG), local labour councils and Simon Fraser University’s continuing education department.

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