DOJ Business Advisory Letter of April 7, 2000 concerning the Apparel Industry Partnership 00 - 6
(Text
excerpted from DOJ source)
Facts: The Apparel Industry Partnership ("AIP"), an informal association consisting of representatives from footwear and apparel companies, as well as labor, consumer, human rights and religious organizations, proposes to adopt a set of workplace standards and a means of compliance monitoring that would be used to inform and assure U.S. consumers that compliant footwear and apparel have been made under decent and humane conditions. AIP has agreed to establish a Workplace Code of Conduct ("Code") and to allow firms that choose to comply with the Code for some or all of their products to advertise the fact of their compliance. No firm would be required to comply with the Code. Companies that do choose to comply would agree that their products will not be manufactured by means of forced or child labor, that employees will not be subjected to physical or mental abuse, harassment or various types of discrimination, that the companies will maintain a safe and healthy work environment, and will recognize and respect employees rights to freedom of association and collective bargaining. Such companies will also adhere to certain minimum standards with respect to wages and working hours. AIP has also developed a set of Monitoring Principles to ensure that firms that publicly proclaim adherence to the Code are in fact complying with those standards.
Response: While compliance with minimum wage and maximum hour provisions of the Code could increase manufacturing costs, it appears that labor typically accounts for less than three percent of the U.S. retail price of clothing made in domestic sweatshops and as little as 0.5 percent for garments sewn abroad. In 1994, labor accounted for less than five percent of the U.S. retail price of domestically produced footwear and between 1.6 and 3.3 percent of footwear produced in certain countries. Thus, it is far from clear that adherence to the Code will have any adverse effect on the prices paid by U.S. consumers of apparel or footwear. To the extent that a firm's ability to advertise compliance with the Code provides useful purchasing information to a substantial number of consumers, it is possible that the Code and Monitoring Principles will have a net procompetitive effect. The Department has no present intention to challenge the proposal.
Formal DOJ Business Advisory Letter