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The Power(lessness) of Industry Self-regulation to Promote Responsible Labor Standards: Insights from the Chinese Toy Industry

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Abstract

The provision of responsible labor standards along the entire value chain poses considerable challenges for corporations. In particular, management shortcomings and institutional deficits—which are partly related to cultural issues—frequently impede the realization of responsible business practices in emerging and developing countries. It is widely established in theory that industry self-regulation constitutes a particularly promising approach for overcoming these challenges. Nonetheless, it is still an open question as to whether industry initiatives effectively promote responsible standards in practice. This contribution aims to enrich the current discussion about the power of industry self-regulation to ensure responsible labor standards in factories in emerging and developing countries. For this purpose, we analyze the ICTI CARE Process (ICP), the self-regulation initiative of the international toy industry, that aims to promote responsible business practices in Chinese toy factories. The assessment of the ICP shows that corporations’ buying behavior is decisive in order for industry self-regulation to become an appropriate means of improving labor standards. Based on the insights from the study and from theoretical reasoning, we develop a framework for effective industry self-regulation that integrates the perspective of factories.

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Notes

  1. It should be noted that the term “deficits” does take into account that some rules and regulations might be absent due to a deliberate (and culturally influenced) decision of the local government.

  2. The current composition of the governance board can be accessed online at: http://www.icti-care.org/e/content/cat_page.asp?cat_id=183 (retrieved March 29, 2015).

  3. The ICTI Code of Business Practices can be accessed online at: http://www.icti-care.org/e/content/cat_page.asp?cat_id=193 (retrieved March 29, 2015).

  4. The detailed ICP regulations on working hours can be accessed online at: http://www.icti-care.org/uploadfileMgnt/0_2013912174232.pdf (retrieved March 29, 2015).

  5. The “CARE” Card can be accessed online at: http://www.icti-care.org/uploadfileMgnt/04_20131231143842.pdf (retrieved March 27, 2015).

Abbreviations

BSCI:

Business and Social Compliance Initiative

CSR:

Corporate Social Responsibility

EICC:

Electronic Industry Citizenship Coalition

ICP:

ICTI CARE Process

ICTI:

International Council of Toy Industries

ILO:

International Labour Organization

NGO:

Non-governmental organization

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Acknowledgments

This publication is inspired by an impact study of the ICTI CARE Process that was commissioned by Misereor and conducted by the first author in 2011/2012. The authors wish to thank Misereor and the ICTI Care Foundation for their support in the evaluation of the ICTI Care Process.

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  1. University of Vechta, Driverstrasse 22, 49377, Vechta, Germany

    Nick Lin-Hi & Igor Blumberg

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  1. Nick Lin-Hi
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  2. Igor Blumberg
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Correspondence to Nick Lin-Hi.

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Lin-Hi, N., Blumberg, I. The Power(lessness) of Industry Self-regulation to Promote Responsible Labor Standards: Insights from the Chinese Toy Industry. J Bus Ethics 143, 789–805 (2017). https://doi.org/10.1007/s10551-016-3075-0

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