A Battle for the Soul of Social Responsibility…

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Wendy’s new code of conduct is a prime example of the discredited standards-without-enforcement model of corporate social responsibility;

Workers’ Voice Tour to contrast Wendy’s code with the proven success of the Fair Food Program and the Worker-driven Social Responsibility model…

What would you do if you could cheat on your taxes and know that you would get away with it? Not just think you might get away with it if you’re lucky, but really know that no one is watching and there would be no consequences.  Would you do it?

The answer is pretty obvious.  Nobody likes paying taxes.  And even many of those who think taxes are a necessary part of living in a modern, organized society would jump at the chance to pay less than they owe, or nothing at all, if there were no monitoring or enforcement of the country’s tax laws.  We could all certainly find other ways to use the money.

Tyour-tax-dollars-at-work-1024x576_Fotorhat’s why, when it comes to taxes, we don’t rely on voluntary compliance.  Things like roads and schools, libraries and agricultural extension offices, scientific research and space discovery, and social, economic, and national security don’t pay for themselves, so we have a well-funded and powerful monitoring body, the Internal Revenue Service.  The IRS’s job is simple: to ensure that if we do decide to cheat on our taxes, it is far more likely than not that there will be consequences.

The result?  Most of us pay our taxes, most of those who don’t get caught, and, in the main, compliance is achieved.  As we have said before on this site, enforcement is everything.

When it comes to human rights, however, it seems voluntary compliance is just fine with Wendy’s…

Just as our country has a tax code, Wendy’s has a code of conduct for its suppliers that establishes the rules — on everything from food safety to human rights and labor practices — with which it says its suppliers must comply in order to be “approved to provide goods, products, equipment, or services” to the hamburger giant.  

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The cover page to Wendy’s new code of conduct.

Yet a deeper review of the code, which went into effect as of the first of this month, reveals that there is little or no reason to hope that Wendy’s suppliers will actually comply with those rules, or at least with those that are in any way inconvenient for them.  

Wishful thinking, it seems, is Wendy’s principal, perhaps sole, strategy for compliance. 

Time after time, the code uses the words “Wendy’s expects” or “suppliers are expected” where you would think the words “require” or “are required” would be used.  Here are just a few examples:

  • “Wendy’s expects Suppliers to use best practices in all aspects of their operations…” (pg. 2)
  • “All Suppliers, and their suppliers and contractors, are expected to comply with applicable local, state, and federal laws…” (pg. 3)
  • “Suppliers are expected to affirm they have received and understand the specific outlined expectations of the Code…” (pg. 3) 
  • “Our Suppliers are expected to uphold the highest business ethics and demonstrate their business integrity at all times…” (pg. 14)
  • “As a condition of doing business with the System, each of our Suppliers is expected to comply with the provisions outlined in the Code and to reaffirm annually to Wendy’s Quality Assurance their receipt and understanding of the Code.” (pg. 16, emphasis in the original)

And if the message weren’t clear enough already, on its last page Wendy’s closes its new code with this clarion call for justice — in red lettering, all caps, no less (pg. 20):

ABOVE ALL, WENDY’S EXPECTS ITS SUPPLIERS TO CONSIDER AT ALL TIMES WHAT IS RIGHT AND RESPONSIBLE.

In all, the word “expect,” or its variations, is used well over two dozen times in the new code. Wendy’s certainly got it right when, on page 5 , it characterizes its code as one that “promotes… aspirational thinking.”

Side-by-side: How does the new Wendy’s code stack up against the principles of Worker-driven Social Responsibility?  You be the judge…

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Protesters gather outside the Manhattan offices of Trian Partners, the investment firm headed by Mr. Nelson Peltz. Peltz is also the chairman of the Wendy’s board of directors and his firm Trian is the fast-food giant’s largest shareholder.

The CIW’s Fair Food Program — the program that Wendy’s continues to shun even when all of its key competitors in the fast-food industry joined years ago — is the leading example of the Worker-driven Social Responsibility (WSR) model.  WSR has many essential elements, but perhaps chief among them are:

  1. Worker participation in the drafting of the code, the design of the program, and the monitoring of their own human rights;
  2. A focus on enforcement, with multiple, redundant mechanisms designed to ensure wall-to-wall monitoring of compliance;
  3. Market consequences for human rights violations established in binding legal agreements between the worker organization and the brands.

How does the new Wendy’s code of conduct stack up against those three key principles?

Worker participation:  Let’s start from the top.  Who, exactly, participated in the drafting of the Wendy’s code?  Fortunately, we don’t have to guess.  From the code itself:

The code was developed by Wendy’s and was created with the valued input of our Supplier community. (pg. 4)

In other words, according to Wendy’s itself, there were no workers involved in drafting the new code.  Wendy’s developed the code, with input only from its suppliers, the very companies whose behavior the code, in theory, is designed to govern and improve.   

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A worker speaks with a monitor from the Fair Food Standards Council in the fields last season.

A focus on enforcement, with multiple, redundant mechanisms:  Ok, then, who participates in the monitoring of the new code, and what sort of monitoring mechanisms are established to ensure enforcement?  Again, from the code, under the heading “Accountability and Verification”:

Each Supplier should conduct audits and inspections to ensure their compliance with the Code and applicable legal and contractual standards, and Suppliers are expected to document the results of those audits.

Wendy’s may monitor a Supplier’s compliance with the Code, and has the right to conduct, or have its designee conduct, unannounced inspections of a Supplier’s facilities and records. (pg. 17)

So… first and foremost, according to this description, workers have no role in monitoring their own human rights in Wendy’s supply chain.  But perhaps more importantly, Wendy’s suppliers are expected to “conduct audits and inspections” of their own operations, and Wendy’s “may” monitor a Supplier’s compliance, but is under no obligation, legally binding or otherwise, to do so.  

No matter how Wendy’s might try to spin it, that’s a far, far cry from the worker-driven, multi-layered mechanisms — including worker-to-worker education, a 24-hour complaint investigation and resolution process, and mandatory audits by a dedicated third party monitor — of the Fair Food Program.

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Workers participate in a worker-to-worker education session on an Immokalee-area farm.

Market consequences:  Finally, what does Wendy’s new code contemplate in the way of consequences for suppliers who fail to comply?  Let’s go once more to the code:

Non-compliance by a supplier or contractor of a Supplier may have direct consequences to the Supplier’s relationship with Wendy’s. (pg. 16)

OK, sounds somewhat promising, though there’s that word “may” again…  Let’s read on.  This is a longer excerpt, under the heading “Non-Compliance”:

In addition to any contractual rights of Wendy’s or QSCC, should a Supplier be found to be in non-compliance with the Code, Wendy’s expectations for response and successful resolution may include any of the following:

  • Immediate implementation of corrective measures by the Supplier under a plan approved by Wendy’s;

  • Initiation of a probationary period before a return to in-compliance status;

  • Development of a continuous improvement program; or

  • Performance of and completion of a satisfactory re-audit.

On occasion when unintended violations do occur, despite Suppliers’ demonstrated good-faith attempts to adhere to the Code, Wendy’s will work collaboratively with Suppliers to correct issues of non-compliance.

Actions and/or issues of repeat non-compliance are inconsistent with our way of doing business and may be cause for immediate termination.

If successful resolution of non-compliance cannot be achieved to the satisfaction of Wendy’s, or if it is determined that the Supplier is no longer in a position to uphold the core values and ethical principles of Wendy’s, then termination of the relationship with Wendy’s will likely proceed. (pg. 19)

It almost sounds like Wendy’s is describing the kind of market consequences that serve as the teeth for the Fair Food Program’s uniquely successful approach to enforcement, the approach lauded so widely at last December’s annual United Nations Business and Human Rights Forum in Geneva. 

Almost… except that, a) the word “may” and the words “will likely” are used throughout to undercut any real consequence proposed to address findings of non-compliance, and b) the section is not part of a legally binding agreement but rather of an unenforceable, unilateral declaration by Wendy’s about its company’s principles regarding social accountability.  When you consider those significant caveats, you see that Wendy’s “maybe if we feel like it” consequences for non-compliance are, in fact, nothing at all like the Fair Food Program’s mandatory market consequences for human rights violations.  

Here’s a concrete example from the all-too-recent history of Florida agriculture to illustrate the problem of such unilateral, unenforceable codes.  In the years before the Fair Food Program, during the 1990s and early 2000s, seven successful slavery prosecutions earned Florida the moniker “ground zero for modern-day slavery.”  Yet during those years, there is no record of any buyer, Wendy’s included, cutting off purchases from the growers on whose farms the slavery operations were discovered.  That’s what happens when the decision is left to the discretion of the buyer and the buyer alone, and the message to growers is clear: there will be no market consequences for human rights violations, even slavery.

Since the Fair Food Program has been in existence, on the other hand, several growers have been suspended for refusing to correct violations brought to their attention by the Fair Food Standards Council, and in each case, the participating buyers who purchased from those growers cut off their purchases for the duration of the suspension, just as their legally binding agreements with the CIW require them to do.  Consequences in the Fair Food Program are real, predictable, and the message to the growers is equally clear: the market truly cares about human rights conditions on the farm, and therefore so must you.

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Some of the numbers from the first four seasons of operation of the Fair Food Program.

The battle begins…  

And so we return to the top of the post, and to the notion of voluntary compliance, but now taken out of the context of taxes and put into that of social responsibility:  

If you were a Wendy’s supplier, would you cheat on Wendy’s rules for human rights if you knew that there was no one watching and that there would be no consequences?

Sadly, the history of corporate social responsibility provides us with an answer to that question, and it is not a good one.  From the factories of Bangladesh to the fields of Mexico — and, most recently, the seas of Thailand — suppliers have left little room for doubt that, absent strong, worker-driven, enforcement-focused programs to monitor compliance, they will repeatedly, and sometimes savagely, violate their workers’ human rights. 

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And that is why we called this post “The Battle for the Soul of Social Responsibility.”  Between all of its “expects” and “mays” and “likelies,” and its total lack of worker participation on any level, Wendy’s new code of conduct is a classic example of corporate-driven social responsibility.  That model is a proven failure, and when it fails, it not only steals workers’ dignity, it can take their freedom or their very lives. 

Meanwhile, the Fair Food Program is blazing a new path toward enforceable human rights in corporate supply chains that is winning new converts daily here in the US and around the world, but still facing icy rejection from Wendy’s.  The WSR model not only gives workers a meaningful voice in the decisions that shape their lives, but it changes their lives in real and sustainable ways.

Something has to give.  This March, we will be taking the battle to Wendy’s and to its billionaire decision-makers.  Will you join us?  Workers’ lives depend on it.

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