Study of a Proposal (and its Alternatives) to Amend the Textile Labelling and Advertising Regulations: Applying the Conference Board's Optimal Policy Mix Framework

2. Stakeholder Discussion to Discover the Ultimate Objective of the Policy

This section offers the Conference Board?s interpretation of the feedback of stakeholders on the policy objectives behind the issue of ethical labelling, with special emphasis on labour standards, as described by ETAG supporters. The ETAG proposal focuses entirely on the need for disclosure of manufacturing location. However, the stated purpose of the disclosure is to allow consumers access to better information about the labour standards used in the manufacture of apparel destined for the Canadian market. As a result, this is the topic that has become the main issue of the report: disclosure of manufacturing locations is a means to an end, and not, in and of itself, the policy objective.

As described above, the Conference Board suggested using the OPM framework to organize stakeholder discussions around the ETAG proposal and the issue of fair labour standards in the apparel industry. The OPM process places a significant amount of emphasis on the definition of the policy objective prior to policy choice. As a result, the policy objective became a significant point of discussion by stakeholders.

The OPM is based on a fairly rigorous framework, according to which one needs to clearly define the end result of a policy (the objective) before evaluating, deciding, or designing the means (the policy instruments) of achieving the end.⁴ The objective-setting process is iterative. Practitioners return to it throughout the OPM process. This is because design issues or even analysis of what is possible in a given context often cause policy makers to reconsider the scopes of their objectives. This is exactly what happened in this case, and the objective was changed substantially three times. Box 1 describes how the Conference Board interpreted the objective statements at various stages of the process, based on stakeholder feedback.

2.1 Defining the Policy Objective

The objective setting exercise proved to be particularly challenging because of the broad range of views around this issue, the diversity of stakeholders, and their fidelity to their various positions. In the process of talking about the ultimate and immediate objectives, The Conference Board also heard about numerous alternative objectives that stakeholders wanted to pursue but which we interpreted as somewhat tangential to the ultimate objective. For example, one stakeholder believed that promoting human rights should be the ultimate objective of the proposal. Although related, this idea was viewed by many stakeholders to involve much more than the issue of ethical labelling in the apparel industry. In the end, then, the report does not attempt to capture all divergent perspectives, avoiding those without a direct impact on the issue of labour standards in the apparel industry.

Put another way, this report is about finding means to achieve the ultimate objective of the policy initiative, as clarified through the OPM process, as follows:

The ultimate objective is to find a means of addressing a serious issue of concern for many Canadians: the use and promotion of fair labour standards in respect of apparel sold in Canada.

Because it was initiated as a result of the ETAG proposal, this report also assesses the proposal?s immediate objective. This objective, which turned out to be broader than was originally described by ETAG in the documentation that was reviewed by the Conference Board, emerged from discussions with stakeholders. The initial objective was limited to disclosure of manufacturing location, whereas stakeholders confirmed that the disclosure proposal was meant to reveal information about labour practices. In the end, the report?s statement of the immediate objective contains both elements, as follows:

The immediate objective being pursued by the ETAG proposal is to provide Canadian consumers with accurate information about the location and labour practices of suppliers of apparel to the Canadian market so as to support purchase decisions based on more complete information .

Both objectives that emerged from the consultations reflect a desire for consumer information that is much broader than manufacturing location alone?the main requirement addressed by the current ETAG proposal. In particular, stakeholders support providing consumers with information that characterizes the labour standards used in the manufacture of apparel sold in Canada.

This report and the objectives that form its basis assume that consumers want and would use such information when making purchases. Some stakeholders confirm they are convinced that consumers want this type of information. Others stakeholders report that only a subset of consumers want and would use this type of information. The reality is unclear, and the Conference Board was not able to find, in its literature review, conclusive evidence that consumers want and need information about all of the aspects of labour standards that were mentioned by stakeholders. In fact, the research that is extensively quoted by ETAG in support of the proposal focuses on a much narrower issue, namely the issue of forced and/or child labour.

Based on the work of the Conference Board, it is fair to say that although the ultimate objective outlined above enjoys broad stakeholder support, the immediate objective does not. Furthermore, stakeholders strongly disagree on the means to achieve both the immediate and ultimate objectives. The Conference Board interprets this lack of agreement as partly the result of other objectives of stakeholders that may prevent them from agreeing on the best way to achieve the ultimate objective. The next section presents our interpretation of possible alternate objectives.

2.2 Other Objectives of Stakeholders

From time to time, claims and counterclaims about the fairness of labour standards used by the apparel industry in Canada emerge in the media. Consider, for example, the media coverage that attended the release of the Sweatshop Retailer of the Year Awards for 2002 by the Maquila Solidarity Network (MSN) on December 19, 2002.⁵ In its news release, MSN criticizes one large Canadian retailer for no longer sourcing apparel in the Southern African country of Lesotho. This was "the deciding factor in MSN's decision" to target the retailer for the dubious awards. In the same release, MSN criticizes another large retailer for sourcing from "over 20 factories in Lesotho alone," despite "reports of serious worker rights abuses in most of those factories." So, Canadian retailers should not source from factories in Lesotho because of unfair labour practices. Yet, the release also criticizes a retailer because it no longer uses factories that presumably used labour practices that would also be seen as unfair.

This example of an apparent contradiction in the report demonstrates the degree to which stakeholders are driven by alternate objectives when looking at the issue of fair labour standards. What do fair labour standards look like? What information do Canadian consumers require about fair labour standards? What should Canadian retailers and consumers do when informed about the presence of unfair labour standards?

Far from being straightforward, the immediate objectives of the ETAG proposal raise many questions that speak to the objectives of consumers, NGOs, and governments relative to fair labour standards. This section provides our interpretation of the ultimate, immediate, and alternate objectives that drive stakeholders around the issue of fair labour standards. The section was based on the explicit and implied objectives that emerged from the feedback received during the interviews conducted by the Conference Board, and as part of focus group sessions. These interpretations have not been vetted by stakeholders.

The Conference Board believes that disagreements of key stakeholders around objectives basically boil down to the requirement to disclose details about manufacturing locations. Indeed, disagreements exist around the amount of disclosure even within stakeholder groups.

For example, ETAG stakeholders disagree on how much disclosure is necessary. Some want the disclosure to include addresses for all production facilities involved in the basic steps of production. This would include cutting, sewing, assembly, finishing, laundering, pressing, and shipping. Others are not so concerned about each production step, but would rather disclose the address of the final assembly facility.

Similarly, most industry stakeholders don?t believe that disclosure of manufacturing addresses is necessary to improve working conditions in the industry (where it needs to be improved). They view the disclosure of location as a "fishing expedition" on the part of labour, tantamount to "expropriation of supply chain information," which they consider to be "proprietary." However, this view is not shared by all industry players. Some industry stakeholders, particularly those with limited or specialty supply chains, suggest they might be willing to disclose manufacturing locations as long as the other companies in the industry must do so.⁶ Still others, typically those who deal through agents and/or supply chain intermediaries, admit not being entirely sure of the exact location of their apparel suppliers. Indeed, supply chains in the apparel industry are so global, so fluid, and so complex that there are often no practical ways to really know, at all times, the exact supply chain paths taken by individual pieces of apparel.⁷

The upshot is that key stakeholders are unlikely to agree on a means of achieving the ultimate objective, particularly with respect to disclosure of manufacturing locations.

This is the situation despite several difficult months of genuine effort by all sides to reach a consensus around a voluntary initiative aimed at addressing the issue of labour practices of the clothing and apparel industry. In the end, this voluntary initiative?characterized as a negotiation by some?failed to result in agreement. Stakeholders from both sides blamed the failure on the demand for complete disclosure of manufacturing location and, to a lesser extent, on the demand for complete adherence to ILO standards when key apparel supplier countries, such as China, don't completely adhere to them.

The failure of this initial process served to alienate the key stakeholders from each other, with the result that some industry stakeholders are no longer willing to consider being in the same room as some ETAG supporters.

Yet the Conference Board believes stakeholders are not that far apart in terms of their willingness to work towards their ultimate objective, in part because ETAG stakeholders already support the ultimate objective and major companies in the industry report they have already been working toward it. Indeed, this is what Birnbaum says in his book.⁸ The Conference Board believes stakeholders may need to abandon some of their alternate objectives to make progress towards the ultimate objective.

2.2.1 Apparent Alternate Objectives of ETAG Stakeholders

A clear benefit of the proposal for ETAG supporters is that the information made available about manufacturing locations will greatly facilitate the primary functions of their respective organizations. In the view of such stakeholders, manufacturing location information is the great facilitator, and ETAG stakeholders often came back to the issue of disclosure of location, even when proposals not based on disclosure of manufacturing locations were being discussed. This is because disclosure, in and of itself, is an important objective for ETAG stakeholders. The Conference Board offers the following interpretations of the feedback from selected ETAG stakeholders to back this up:⁹

• The labour organizations that support ETAG (i.e., the Canadian Labour Congress, UNITE, etc) need location information partly to facilitate offers of union representation to apparel workers. Stakeholders such as these seek detailed information about location (including cutting, sewing, finishing, assembly, pressing, laundering, and shipping) partly because this maximizes the number of potential locations where the union movement could become more involved. This objective is consistent with the ultimate objective in as much as the need for information is based on a belief that labour organizations are best able to protect workers rights and pressure business to improve labour conditions in the industry. Disclosure of labour practices without location detail tends to be viewed negatively by such stakeholders, even when it may also contribute to consumer information about the existence of fair labour standards in purchases of apparel?because it does not facilitate the involvement of labour organizations in the solution.
• ETAG stakeholders that represent religious groups or interest groups (such as the Maquila Solidarity Network or international aid agencies) appear to want the location information to publicize and better target their efforts. Such groups tell us their main objectives are to work with or coerce the apparel industry to make a difference in local working conditions. Location information would also be useful in providing examples of Canadian retailers and manufacturers "abandoning" suppliers instead of working with them to improve local working conditions. Representatives from such groups suggest they are flexible about the amount of location detail they require. Presumably this is because the additional detail on the location of key components of the production process (as described by labour groups) is less valuable to them. This group of stakeholders also believes that information about manufacturing locations would force apparel retailers and manufacturers to adopt longer term relationships based on Canadian labour practices within their supply chains. This, in turn, would help them alleviate poverty around the world and improve conditions in countries where apparel workers are being exploited.

These interpretations are not meant to diminish each stakeholder?s commitment to the ultimate objective. Nor are ETAG stakeholders in any way alone in pursuing alternate objectives. Rather, outlining alternate secondary benefits of disclosure helps explain why disclosure of location, per se, has become as important for a subset of stakeholders as the labour conditions at those locations.

2.2.2 Alternate Objectives of Apparel Industry Stakeholders

The apparel industry?s perspectives on disclosure and their desire to protect proprietary information similarly affect industry stakeholders? perspectives of the various proposals. A number of alternate objectives emerged from discussions with industry stakeholders.

Protection of proprietary information: A trend in retailing in the past 10 years or so has been the increasing degree to which supply chains provide competitive advantage to retailers or manufacturers. As a result, the success of industry leaders is now commonly being associated with their ability to source goods from name brand manufacturers cheaper, quicker, and more effectively than competitors. It is not that the goods are different or better?leading retailers are just better able to keep them rolling off the shelves faster with timely product replenishments, slightly better prices (i.e., $4.77 instead of $4.99), and better staff support. With knowledge about supply chains widely viewed as competitive proprietary information and with the escalating costs of setting up global supply chains, a key objective of industry stakeholders becomes keeping detailed information on supply chains out of the public domain, so that competitors, retailers, and labour unions cannot use it for competitive advantage. For example,

• Competitors could use the proprietary information to set up in the same manufacturing locations, steal designs at those manufacturing locations through industrial espionage, or poach key workers from those locations;
• Important clients could use the information to more easily direct source high volume/high margin items currently sourced through manufacturers or agents; and
• Labour unions could use the information to systematically target and attempt to organize all of the workers of a particular manufacturer or retailer at multiple locations around the world. This could disrupt product flow, making it necessary to hire additional staff (for example, to undertake simultaneous labour negotiations at several locations).

Management of Risk: Industry stakeholders are concerned about the risk of misrepresentation or claims of wrongdoing. Reputations are valuable. They take a long time to build but only a short time to destroy. Industry stakeholders have told us that having information about manufacturing location readily available to anyone also makes them vulnerable to misinformation or negative uses of that information. For example,

• Labour activists could use claims of wrongdoing at one location to target other locations and disrupt production;
• Competing unions could simultaneously target (or raid) specific or particularly desirable manufacturing locations, making claims along the way that suit their purpose;
• NGOs and local aid agencies could use single events of non-compliance with standards and misrepresent the event as company policy in the public domain; and
• Interest groups might use unacceptable situations in the distant past to claim further wrongdoing or criticize the company for moving away from an unacceptable situation.

Complexity: Some industry stakeholders have complex supply chains encompassing tens of thousands of items manufactured in hundreds of locations around the world. While they concede that firms with limited numbers of geographically concentrated facilities can claim to be in control of every aspects of production, they are wary about making similar claims of complete control over facilities around the world. Birnbaum talks about the supply chain for sweaters spanning 5 countries and 29,000 miles, a path that Birnbaum characterizes as "the normal pattern of any American sweater manufacturer."¹⁰ Yet, individual retailers report managing thousands of such supply chain patterns for tens of thousands of apparel products.¹¹ It is difficult to imagine how a head office in Canada could be fully aware of all of the labour issues that such a supply chain would create, day in and day out.

Large complex firms in the apparel industry genuinely believe?and this is supported by Birnbaum in his book?that the best policies in the world and the best enforcement money can buy cannot guarantee perfect compliance everywhere.¹² Small firms, on the other hand, generally lack the time and resources needed to verify the performance of every agent and importer they use to access suppliers. Both are extremely leery of leaving this task to outsiders who might have their own objectives during compliance audits.

From time to time, the internal verification processes of apparel industry participants uncover instances of policy non-compliance. Management?s job is to be vigilant and respond on a timely basis to emerging issues of quality, cost, and adherence to production standards. Compliance with overall production codes and local labour standards are part and parcel of the efforts of the apparel industry to control supply chains, and most firms report that they enforce codes and procedures for manufacturing facilities within their supply chains. Industry stakeholders report they conduct unannounced compliance audits wherever products are manufactured and respond to the findings of those audits all over the world. Yet, the significance of these efforts is often lost when a single event is turned into what they characterize as a "false claim" of a systemic propensity to support unacceptable behaviours in the name of profit. The objective of protecting supply chain information is partly to minimize the risk of claims, particularly since false claims can be just as damaging as real events.

This is not to suggest in any way that the industry does not value the ultimate objective or even parts of the immediate objective that relate to providing information for consumers. Indeed, industry stakeholders told us that consumers who request information about supplier selection and compliance programs are often impressed and become very supportive of those efforts. Rather, industry?s perspective is that to ask it to make manufacturing location widely available to consumers also makes the same information widely available to competitors, pressure groups, and retailers/clients. This greatly reduces the value of supply chains, a key tool of the trade. The damage this would do would be compounded if Canada was the only country in the world to remove this key competitive advantage. In effect, the supply chains of the Canadian industry could become targets for all other competitors in all other countries. This is a major reason retailers and manufacturers are extremely concerned and reluctant to participate in any process that would publicly disclose details about their systems and supply chains.

Clearly, the alternate objective of industry stakeholders is first and foremost preservation of their commercial franchises. To help preserve the commercial franchise, they do not disclose manufacturing locations. This becomes their primary objective even when they support the ultimate policy objective. Indeed, many would say millions are already being spent on ensuring compliance with employment standards.

2.2.3 Alternate Objectives of Government Stakeholders

Governments and their agencies must also balance alternate objectives with the desire to contribute to the use and promotion of fair labour standards within their mandates.

The ultimate objective speaks directly to improving labour standards. It is a global issue, requiring a global solution, as much as it is an issue that Canadians and their governments want to contribute to solving. Canadians contribute to the solution through provincial governments that implement and enforce strong labour standards in Canada. Canada contributes to the solution by ensuring labour standards agreements exist in parallel with its trade initiatives. As a relatively small country contributing to a global solution, Canada needs to align its efforts with those of other countries. If its objective is to show leadership, it needs to be seen as pushing the envelope on this particular issue. In other words, there are many objectives at play and the various government stakeholder perspectives around the use and promotion of fair labour standards reflect those objectives.

Clearly, however, the federal government's objectives on this issue depend on the mandate of the department or government stakeholder contacted. For example:

• Industry Canada?s mission "is to foster a growing competitive, knowledge-based Canadian economy." Within the context of the ETAG proposal, the department is concerned about putting in any regulatory regime that will impede the development and prospects for the apparel industry or one that will be impossible or costly to enforce. It is concerned about the impact on competitiveness. The apparel industry has already had to change substantially with the elimination of trade barriers and the globalization of apparel supply chains. Industry Canada is already working to assist the apparel industry, for example by introducing its Canadian Apparel and Textile Industries Program. It is within this context that Industry Canada must balance its competitiveness, innovation, and promotion objectives?what we call alternate objectives in this section?against those that address the use and promotion of improved of working conditions, where those conditions are deemed to be unfair. Complicating this issue is the fact that labour standards are an area of provincial responsibility in Canada and of sovereign government responsibility outside of Canada;
• The Department of Foreign Affairs and International Trade (DFAIT) is primarily concerned with "developing and implementing strategies to promote the Government of Canada's agenda abroad: global peace and security, prosperity and employment for Canadians." On the trade front, it is primarily concerned about "assisting and encouraging Canadian companies to enter the export market, develop new markets, or improve existing trading relationships, creating jobs and prosperity for Canadians." DFAIT has divisions responsible for corporate responsibility, human rights, and humanitarian affairs.¹³ It has initiated the Least Developed Countries (LDCs) Market Access Initiative, an initiative to eliminate duties and quotas from 48 LDCs that includes new measures for imports of textiles and apparel products. As such, DFAIT should be a key participant in any initiative whose objective is the use and promotion of fair labour standards in the apparel industry. Yet the focus on labelling and disclosure tends to exclude DFAIT from the initiative, and this is a concern, particularly when proposed regulatory changes for apparel have implications for trade..

When discussing NAFTA, stakeholders offer conflicting legal opinions, claiming both that there is potential and no potential for a trade dispute following a requirement to disclose manufacturing location as a condition of market access in Canada. Some have found a potential trade issue relating to Section 11 under expropriation of property?in this case, supply chain information. Others claim that there is no potential trade issue related to NAFTA as long as all industry players are subject to the same treatment. In addition, some stakeholders raise a concern about protectionism, since countries may claim that special Canadian requirements for disclosure around manufacturing location and labour standards (and any associated consequence) are nothing more than policies aimed at protecting and favouring its own apparel workers (who already adhere to the standards). The concerns around this argument are particularly significant if disclosure rules to treat imports of apparel are seen to target imports from LDCs covered by the Market Access Initiative.

Obviously, Canada has a well defined strategy for trade and support of economic development with many LDCs because it believes development this is the best way to improve conditions in such countries. Improving labour standards are often discussed in parallel with the trade initiatives, a key feature of negotiations. The apparel industry features prominently within the initiative, both in terms of imports and in terms of support to the Canadian apparel industry in the form of the Canadian Apparel and Textile Industries Program, sponsored by Industry Canada. The feedback does suggest that the apparel industry figures prominently in trading patterns for LDCs. Birnbaum states in the preface to his book that "virtually every developing nation looks at garment making as the first step in building an export-based industrial economy." This, he says, means that "the number of suppliers are rising geometrically." Import quotas are also a key feature of trade in apparel, albeit a feature slated to be abolished in 2005 as part of World Trade Organization (WTO) negotiations. Apparel quotas have a significant impact on apparel trade patterns and costs.¹⁴

Finally, some comments on the Competition Bureau, which of course has its own alternate objectives. By being asked to review the ETAG proposal, it is in effect being asked to delve not only into the disclosure issue but also into the issues of labour standards, child labour, and acceptable minimum wages in developing countries, since these are the issues that the proposal for disclosure of manufacturing locations is trying to address. These are difficult issues for the Bureau in the Canadian context?indeed, the responsibility for the ultimate policy objective tends to reside with other departments such as Human Resources Development Canada (HRDC), DFAIT, with other agencies such as the Canadian International Development Agency (CIDA), or with other groups within Industry Canada.

The immediate objective of the ETAG proposal, which is to provide Canadian consumers with accurate information about the location and labour practices of suppliers of apparel to the Canadian market. This is not part of the current textile mandate of the Competition Bureau. First and foremost, the Bureau is the competition watchdog of government. Its main role is to "promote and maintain fair competition." It may not even be a current consideration in the work of the Competition Bureau in Textiles except where inaccurate or misleading statements are being made in advertising (see Box 2). The Bureau is therefore concerned that the objectives of the ETAG proposal expand considerably the scope of its work, i.e., to labour practices. This concern is expressed at several levels of its textiles activities, including:

• A concern about the expansion of the scope of the TLA, which is currently described on its web site as:
  • to protect consumers against misrepresentation in the labelling and advertising of textile fibre products; and
  • to enable consumers to choose textiles on the basis of fibre content.

In its simplest implementation, the ETAG proposal is simple: to require additional information on product manufacturing location as part of the CA labelling requirements. But this information does not appear to fit into the current scope of the Act. This suggests the need to add to the scope of the Act to include wording to the effect that the Act also aims to enable consumers to choose textiles on the basis of the labour practices used in their manufacture. Adding this or similar wording would provide scope for requiring such information to be disseminated to consumers.

Concerns about the resulting expansion of its areas of focus relating to textiles. As far as we could determine, neither the issue of labour conditions under which the textiles are produced nor details about product manufacturing locations (beyond country of manufacture) are currently part of the implementation of the textile requirements managed by the Competition Bureau (see Box 2). As a result, the ETAG proposal broadens the Bureau?s mandate from consumer protection in Canada to providing consumers with information about labour conditions used by the apparel industry.

A concern about the resulting expansion of the CA Number database. This concern reflects the fact that the ETAG proposal fundamentally shifts government policy with respect to identifying a person or organization that takes legal responsibility for the goods. Currently, dealers of most consumer commodities are allowed to label the name and address of the person "by or for whom" the product was manufactured to satisfy their legal obligations. The ETAG proposal removes this option for apparel and would, in effect, require the label to state the person "by AND for whom" the product was manufactured. Currently, this level of detail is only required in exceptional circumstances, such as with certain meat products, where the nature of the product requires the actual registered establishment that manufactured the goods to be shown on the label (by means of a registered establishment number). Since there is little rationale for applying this requirement to only the apparel industry, the change may also lead to additional pressures to amend other federal legislation that address the labelling of manufactured consumer goods. Any such shift in mandate would result in considerable additional costs for maintaining the database.

A concern about the level of detail required to do a credible job for consumers. To effectively inform customers of apparel about working conditions, one needs to report not only on what the working conditions are in absolute terms but also in relative terms. Birnbaum illustrates this point in its Case Study 27 Nike: The Philip Morris of Shoes. In that case, the author talks about describing Nike operations in Vietnam and Indonesia, where wages, although poor by U.S. standards, are well above the average wages for those in Indonesia and Vietnam who sew for a living.

In its efforts to support information about labour standards, should government require reporting on wages in Vietnam and Indonesia, reported in the book to be U.S. $1.84 a day and U.S. $2.60 a day, respectively? Should the comparator be local standards in the country or North American Standards (Birnbaum reports that the wage rates, above, were 40 per cent higher than normal industry wages at the time)? Should the requirements include adherence to ILO standards or to local standards, considering that not all apparel producing countries adhere fully to ILO standards?

It is not difficult to imagine the type of information required by Canadians who genuinely want to compare the fairness of the labour standards used in Canada with those used in developing countries. But the level of detail needed is of concern for government because it would add immensely to the cost of running the database, and change the nature of the information it administers. With the additional information would come expanded responsibilities for dealers and for the government itself.

In some implementations of the ETAG proposal, the government merely presents the location information, with perhaps links to sites where consumers can find further information about the use of fair labour standards. Such implementations would simplify various aspects of the proposal and reduce the administrative impact on government. There is a concern, however, that its responsibility with respect to acting on the information provided would remain, since the Bureau would still have to respond to complaints about the information listed in the database.

This interpretation of the objectives of government is not meant in any way to diminish the real support of government for the ultimate objective, which goes to the heart of many Canadian government initiatives. Rather, it suggests that Canada acts in a global context, in which prudent and effective government intervention must reflect a careful assessment of the risks of doing nothing against those of doing the wrong thing or of doing things wrong.

In general, government stakeholders report being extremely concerned and reluctant to participate in a process that would unknowingly:

• Expand roles and responsibilities to areas outside of their jurisdiction;
• Generate efforts without results;
• Create potential trade issues;
• Lead to retaliation by the United States; or
• Somehow hurt the workers they are trying to help with any new policy on working conditions in the apparel industry.

Some stakeholders tell the Conference Board that the ETAG proposal, in its current form, has the potential to do all of these things.

2.2.4 Conclusions on Objectives, Secondary Objectives, and Ultimate Objectives

By asking the Industry Minister to review a specific proposal designed to show Canada?s leadership in the area of labour standards for apparel, ETAG is in effect forcing a comprehensive review of a serious issue and of the ways with which to address it in Canada and around the world. It would have been easier if Canada was following the lead of other countries, since we could learn from them and point to their successes when setting up Canadian policy. However, as will be apparent in the next section, others have not followed the proposed disclosure approach outside their domestic markets, and no single approach is being used consistently to address the issue of fair labour standards in the apparel industry.

The number of conflicting and supporting objectives of stakeholders that emerged during the interviews and focus group discussions not only underlines the importance of getting the policy objective right but also significantly broadens the scope of the policy decision. We know from the OPM work that too broad an objective can cause policy failure. Broad objectives are rarely good at addressing secondary objectives, either. Too narrow an objective is equally ineffective because it focuses efforts on subcomponents that don?t contribute much to the ultimate policy objective. Getting the objective right is important, and the government needs, a priori, to spend sufficient time reflecting on the material in this section, consulting with the minister on objectives, and coming up with a clear statement of the objective it wants to pursue and therefore entertain comment on.

This objective need not simply be the immediate objective of the ETAG proposal, as this one may be too narrow. On the other hand, it may not be the ultimate objective either, since this objective may be too broad. In the concluding sections, the Conference Board suggests three potential objectives relating to information, verification of information, and consequence that might combine in an effective policy mix.

In general, the Conference Board has found that the seemingly simple change of requiring disclosure of manufacturing locations in the name of promoting the use of fair labour standards has significant implications for ETAG supporters and for consumers, government, domestic industry, international trade, and trade initiatives. In deciding whether or not to accept the ETAG proposal or any of its alternatives, a number of issues and risks needs to be carefully weighed using criteria that can be discussed with stakeholders before a decision is made. Indeed, this is the OPM process that was suggested as a framework for the report. The experience of other countries can also provide some policy direction?should Canada want to take a leading role in using and promoting fair labour standards in the apparel industry around the world. Appendix A provides a listing of resources and organizations that are currently working to address the issue of concern in Canada and around the world.

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⁴ For more information about the Optimal Policy Mix process, please see Chapter 6.

⁵ See the Maquila Solidarity Network (MSN) website, at: http://www.maquilasolidarity.org/awards.htm.

⁶ See the news release at the following address: http://www.maquilasolidarity.org/campaigns/nosweat/disclosure/retailers.htm.

⁷ For a description of the current state of the global apparel industry, read the book by Birnbaum.

⁸ Birnbaum, page 152.

⁹ These observations are based on Conference Board impressions and analyses of issues raised by stakeholders. These views have not been vetted with stakeholders and as such may not be supported by stakeholders.

¹⁰ Birnbaum, page 13.

¹¹ For example, The Hudson's Bay Company reports that it sources products from approximately 1,000 vendors representing 3,000 to 5,000 factories in 16 countries. The relevant web page is available at: http://www.hbc.co m/hbc/socialresponsibility/ethical.asp.

¹² Birnbaum, page 158.

¹³ For example, see Trade, Employment and Labour Standards, Discussion Paper, February 2001, available at www.dfait-maeci.gc.ca/ tna-nac/social-en.asp

¹⁴ Birnbaum, pages 33-36.