Globalization and Paradoxes of Ethical Transnational Production : Code of Conduct in a Chinese Workplace

Neo-liberal economic globalization and acceleration in information and communication technologies have strengthened the competitiveness of transnational corporations by making it easier for them to stretch their global commodity chains to developing countries. Such control from a distance threatens national states' capacity to regulate TNCs and their impact upon environment, labour and human rights in developing countries. This has prompted anti-TNC sentiments and campaigns that challenge brand-named TNCs on labour exploitation in the south. These changes have triggered discussions on setting labour standards in the international arena. With the WTO distancing itself from the ‘social clause’, this has prompted the TNCs, NGOs and other stakeholders to self-regulate by introducing codes of conduct. Concentrating on the clothing industry, this paper examines the emergence of company and multi-stakeholder codes of conduct that require the involvement of subcontractors and NGOs in developing countries. The moving of ethical codes to developing countries condenses and reproduces, under the twin pressures of competitiveness and social auditing, the paradoxes of ethical transnational production in the internal organizations of local firms. These paradoxes are demonstrated from a case study of a workplace in China. The paper ends by outlining three paradoxes and commenting on the development of a managerialist ‘audit culture’ in workplace practices as commodification of ethical code.