Sweatshops and Labour Law: The Ethical and Legal Implications of Ignoring Labour Law in Developing Countries

Academic defenders of sweatshops argue that disregarding labour rights will result in increased welfare in the developing nations where transnational corporations (TNCs) operate. They argue that TNCs should ignore local labour laws in the best interests of the poor. In this article we criticise this ‘ignore the law’ position regarding sweatshops on three separate grounds. First, it fails to acknowledge the demands for businesses to respect the rule of law as part of the development process. Second, it utilises an inadequate account of voluntary contractual bargaining which overlooks how employment practises operate in sectors prone to utilising sweatshop labour, leading to coercive employment conditions incompatible with human dignity and free choice. Third, it fails to adequately account for labour law and international labour standards, which embody a strong moral conception of dignity at work and observance of fundamental human rights in protecting workers against abuse through the resulting legal duties placed on states and corporate actors. We conclude that poverty reduction requires the support of both private and public actors. Advocating the side-stepping of labour laws distracts from the important work of institution building necessary to protect workers and facilitate economic growth consistent with decent work, sustainable development, fairness and human dignity as embodied in international labour standards.