Over the years, European haulage has been blighted by regular accusations of labour exploitation, while a number of household-name retailers are also continuing to benefit from lower operating costs by having goods manufactured in developing countries where staff often have to cope with abject working conditions for extremely low pay.
In some instances, despite these practices being widely reported in mainstream media, consumer behaviour has largely remained unchanged – something that may have emboldened the companies who profit from the exploitation of low-cost labour.
Why is this the case though? To find out, we spoke to Professor Gary Mortimer of the University of Queensland, who has conducted research in the areas of food retailing, retail marketing and consumer behaviour.
Gary’s insights into consumer behaviour and fast fashion have proved particularly popular on the open-platform website The Conversation, where his articles have attracted millions of reads.
Read on to find out:
- The social and psychological reasons why consumers often do not pay extra for ethically sourced products
- Why outsourcing, together with the complex nature of supply chains and logistics, makes it genuinely tough for companies to completely avoid businesses who have unscrupulous labour practices
- How blockchain technology may be harnessed to track supply chains and avoid sourcing from companies engaging in modern slavery
- How independent standards and labelling can help to raise awareness and foster ethical consumer choices
Thanks for talking to us Gary. In some cases, even when major household-name companies have been linked to labour exploitation scandals, there often has been little impact on consumer behaviour as a whole. Why is this the case?
Ultimately, in a perfect world, if we’d be able to convince all consumers to only purchase products that were genuinely sourced ethically, thereby avoiding modern slavery and sweatshop labour practices, it would be great.
That’s not the case though, as people are economically bound and constrained. So a $4 t-shirt in a discount department store will have to suffice. There’s not a great deal of consideration on where that product was produced, or where it’s come from.
When we talk to consumers about their concerns, all reasonable consumers would say we want people to be paid properly. We want people to live in safe environments and have homes and houses and rooms over their heads and access to food and water and medical supplies.
If you ask those questions about being prepared to pay more, everyone will generally say yes, because their intentions are to pay more. There’s always that gap though between ethical intentions and ethical behaviour.
One of the reasons for this is motivated reasoning. We tend to be conditioned to almost create excuses to justify the purchase we’re about to make. And we often fall down to that voice. Someone might think to themselves that any job is better than no job, and that 50 cents a piece is better than nothing. They might think that the living costs are much lower where the factory is and justify it in that way.
The other reason is the psychological distance that exists between the factories and the clean environment of a supermarket where a pile of new clothes have just come in. When inside a lovely, air conditioned and brightly lit store, psychologically we just don’t understand how those products are made, or where they’ve come from. They’re completely disconnected. Imagery, of course, tends to help – but only to a point I guess.
How can imagery help?
Well, myself, and Mike, one of my PhD students, and another colleague, have a paper under review at the moment, which actually tests the idea of using a label or a swing tag that uses both imagery and moral messaging to draw consumers’ attention to the potential plight of workers, particularly sweatshop labour workers.
It hasn’t been accepted yet, so I can’t disclose the precise results, though we did test a number of images, and also words, to see what resonates the most. In practice, we don’t see a great deal of influence.
When you walk into popular retailers, you generally don’t see a lot of tags or imagery around ethical sourcing. I recall that H&M did have H&M Conscious for a while, which was a range of ethically sourced products.
Our view is that anything that draws attention to potential modern slavery or sweatshop labour practices has the ability to potentially shift purchase and consumption behaviour. But unfortunately, as I mentioned earlier, I think it’s only a very small proportion of consumers that can afford to make that choice.
To what extent do you believe that modern technology can be utilised to track where items and raw materials have been sourced and who from, thereby potentially allowing companies to better avoid unethical suppliers?
I was working on some stuff with blockchain. The product arrives with a QR code or a lava code on it, you’re then able to scan that and see where it’s come from, and track it all the way through.
One of the challenges that we’re facing here in Australia is the counterfeiting of indigenous art. For example, you could walk into a tourist store in Cairns or in Sydney, and there’s a store full of boomerangs that are all $29, and all claiming to be genuine, indigenous art.
So we worked on a project using blockchain technology to legitimise where products were coming from. All the way through that process, you could stop and get an overview of the artist, the country, and a video clip of the product being made.
That same type of technology can probably be used for transport too. If I think about my Uber driver, at the end of my trip I get a little icon that says the rate, the name of the driver and their rating, and you got an image of him and his star rating. Comments can be left in the app too.
Personalising here in some ways might actually be legitimate, and might be a means of better connecting consumers to that part of the supply chain.
The idea of “out of sight, out of mind” can apply to lorry and delivery drivers too – when I get items delivered to my house, I don’t know the truck driver or the delivery driver, but I do tend to know my Uber drivers because their names come up. So again, the idea of personalisation can play a role here.
Obviously there’s some privacy issues around that. There would be drivers that don’t particularly want their name or their details shared.
On the other hand, personalisation tends to better connect consumers with workers. Then they’re not seen as just a brand or a truck.
Nowadays there is so much outsourcing that goes on down the supply chain and in the transportation process. I’ve often seen large corporations blame a 3rd party when the transportation partner it has used indirectly has been found guilty of exploiting drivers. In one case, I recall a 3PL company who had blacklisted a 3rd party for this reason, only to be found to be using them again as the company they had outsourced to had subsequently outsourced to that blacklisted company. Is outsourcing merely a convenient excuse for these companies, or should we be understanding of the complexities involved in today’s supply chain management?
Supply chains are so complex. It reminds me of work I did many years ago on cosmetics. Cosmetics brands would always claim their products are not tested on animals.
I think there was one well-known French perfume and cosmetics producer that really came out to say that. But there must have been a clause in that statement somewhere that said they may outsource to other organisations that may have engaged in that sort of behaviour. So they were aware of it.
The challenge, of course, with any business, because supply chains are so long and so complex, is that you can lose control pretty quickly of what’s happening in say Bangladesh, compared to your own stores in Australia or in the States.
I think some of Australia’s discount department stores like Kmart, Target, and Big W are increasingly removing brands and using contract manufacturers to create their own brands.
So the supply chain is becoming more vertical, and better controlled. Kmart, for example, they’ve got rid of all of their brands. They used to have Revel, Sanyo and Sony, and they’ve just created their own brand called Anko.
They now contract factories to produce the product for them. They’re aware of the transportation companies, from those factories to the ports. They’re aware of the ports and the ships that go from the ports down to Australia, and then into their own distribution centres.
So really, the whole chain is now quite vertical and controlled. When you’re dealing with the horizontal chain, which might involve raw goods and sourcing through to manufacturing through the wholesaling, through the distribution, through the retailing and all the nodes in between, it can get quite complex.
Potentially on one hand, one would say it’s convenient for them to say that’s not our bit of the chain, we can’t control it. However, I think there’s actually a legitimate argument here too. A company could have gotten so big with a chain so long that it can only physically control elements of that chain up to a point.
You’ve talked about how independently-audited standards with corresponding labelling can help to foster ethical consumer behaviour. What are the chances of major economies agreeing on this concept and engaging in dialogue to get a universal standard off the ground?
It’s complex, because if you start to deal with developing economies where a lot of this product, and potentially labour comes, whether they’re driving trucks or sewing t-shirts, it’s not just a case of who owns the factories that are allegedly trying to reduce their costs and turn a profit.
You could also argue that there might be governments that are, and I used the term loosely, allegedly corrupt. They might want those factories in their towns and cities because it’s politically good for them to say they’re creating jobs, and then turn a blind eye to anything that goes on afterwards. So there’s entire government structures and cultures that need to be changed to establish appropriate and safe work.
I was in Bali last year and spoke to a driver while we were on an awful, muddy, bumpy, dirty road before getting out at this amazing resort. I said, when we develop stuff here in Australia, the developer needs to make sure the roads and the footpaths are appropriate. And there’s a cost involved in that.
The driver responded by saying he was sure the developers had paid the government for that bit of road, but it’s just never been built because it’s not inside the resort.
I sense there will probably be a challenge around convincing governments in developing economies to not turn a blind eye to practices where they’ve sought to create manufacturing hubs, because it’s good politically and economically for them.
To what extent are companies coming together to find a common standard themselves, thereby finding a private sector solution without the need for any state or multinational intervention?
There’s some good companies that do it well, I can only think of Australian ones at the moment.
I often look at that Oxfam report that comes out every year. It’s a top 10 naughty and nice list that they do; you always want to be at the top of that nice list and avoid the naughty part of the list. The top part of that list is always the big Australian publicly-listed retailers, and they’ve got checks and balances in place.
I used to work for a couple of them and I remember we would regularly go to China to do unannounced audits of factories to make sure that things are being put in place. If you look at Kmart, in their ethical sourcing statements or strategies, they clearly say every year when they’ve cancelled contracts due to breaches they’d seen. So there are those that are really quite open about it.
Nevertheless, there is one group here in Australia that owns a number of retail brands that aren’t signatories to that agreement. They won’t release their data of where they source from and how they source.
The other agreement that stands to mind was the Rana Plaza agreement after the Rana Plaza came down. A number of brands were caught up in that including Benetton, and many big brands signed the Rana Plaza agreement. But some didn’t, and people really don’t know because it doesn’t get enough noise. So they walk into a designer store and they don’t know if they are a signatory or not.
Photo: Fair Labour Mobility / X
