Contracting with multinational corporations to monitor labor conditions in their supplier factories

The Commission for the Verification of Corporate Codes of Conduct (Coverco) conducts long-term, intensive, independent monitoring of labor conditions in Guatemalan apparel factories and agricultural export industries, verifying compliance with internationally accepted labor standards. Based in Guatemala City, Coverco is an inde­pendent monitoring organization formed in 1997 by members of civil society groups; it does not work as a consul­tant to management nor as a worker advocate. The organization first establishes a relationship with a corporation (for example, Liz Claiborne Inc.) then negotiates an agreement permitting full, unannounced access to the pro­duction facility where the corporation commits to pay service fees. The organization independently publishes its findings on its website.

Rather than conducting short-term visits and filing one-time reports, Coverco maintains a steady presence in the factories it monitors over a period of at least six months. It tries to “make movies” of the labor relationships in a production facility, instead of taking a snapshot. Trained monitors visit factories several times a month, un­announced. Monitors review factory records, have management explain official policy on issues as they arise, conduct “sensory inspections” of production facilities, meet with workers during and outside of normal business hours and maintain a telephone hotline to ensure that employees have full access to them. Interviews are con­ducted in Spanish and kept in strict confidence. Full access to the production facility, personnel files, manage­ment and workers is guaranteed by the multinational corporation.

Monitoring begins with a “social audit” whereby monitors characterize labor relations at the production facility — for example, checking whether there is a grievance procedure and whether or not it works. Working conditions are thoroughly documented, including the presence and handling of industrial chemicals, the maintenance of and access to bathrooms, on-site health care and compliance with other health and safety criteria.

Monitors then undertake a thorough review of payroll records, payment of employee benefits, production bo­nuses, and compliance with overtime regulations. They carefully investigate worker complaints and make certain to include management comments in all reports, noting situations where claims cannot be verified.

Coverco’s monitoring and verification activities have led corporations to require suppliers to demonstrate sys­temic compliance with labor rights. For example, one minor working at a supplier to Liz Claiborne complained that her manager refused to allow her to leave work early to attend classes as required by both local law and the LCI Code of Conduct. When Coverco documented this violation, LCI intervened with local management to ensure that managers complied with this law. This led Coverco to review the files of all minors working at the factory. The supplier then acted to ensure that they had the required parental permission for all working minors and to comply with local law requiring that minors work no more than 35 hours per week.

Coverco has reported some problems with gaining access to supplier factories and reluctance by some suppliers to implement the remediation programs they have negotiated with the multinational corporations. Managers at one Gap supplier factory, for instance, refused for a time to let Coverco monitors walk unescorted through the pro­duction facility or speak unobserved with workers.

Although the record is hardly perfect, failure to implement remediation programs has led some supplier facto­ries to reprimand or dismiss managers. Illegally dismissed workers have been reinstated, excessive overtime has been reduced and cases of incorrect benefit payments have been remedied.


New Tactics in Human Rights does not advocate for or endorse specific tactics, policies or issues.

What we can learn from this tactic: 

Coverco invites multinational corporations to improve human rights by comparing their corporate codes of conduct with on-the-ground reality in the overseas factories supplying their goods. Coverco gathers, examines and independently publishes information to remove any excuses the business may have for failing to respect human rights.

Different types of monitoring are being undertaken around the world, including confrontational approaches and those, like Coverco’s, which involve working in cooperation with companies. Coverco uses a collaborative relationship with international businesses rather than an adversarial one. It negotiates with them to fund this external, independent monitoring program and then, in interesting ways, takes monitoring a step further than usual. It provides a safe venue where workers can complain without fear of reprisals, thereby encouraging them to take a hand in improving their own working conditions. It also employs local monitors who are more likely than foreigners to understand local conditions and make connections with workers. To make this tactic work, it is crucial to have the support of both workers and management. When it is successful, all stakeholders contribute to the creation of a culture of compliance.