Model DSP Code of Conduct Language

To:WRC Affiliate Universities and Colleges
From:Scott Nova
Date:May 18, 2012
Re:Model DSP Code of Conduct Language  

As we reported to those of you who were able to attend this year’s WRC University Caucus meeting, we continue to believe that the Designated Suppliers Program (DSP) is the only program that has been proposed that would enable universities to succeed in their long-standing goal of protecting the rights and welfare of the workers who make collegiate goods. The supply chain reforms – fair prices, long-term commitments to responsible suppliers – that are the foundation of the DSP are essential. Without these reforms, and other provisions of the DSP, we do not believe it is practically feasible for universities to achieve broad and sustainable compliance with their codes.

For this reason, it is our guidance to affiliate universities that the adoption and implementation of the DSP is the best way forward. Having received confirmation from the U.S. Department of Justice that the program complies with federal antitrust laws, it is now feasible and, in our view, desirable for universities to proceed to adopt the program.

This is a recommendation to affiliates. It is not a requirement of affiliation. We will continue to do our best to serve all affiliate schools, whether or not they adopt the DSP. It is nonetheless our guidance that adoption is the best path forward.

The WRC cannot advise universities as to when they should adopt the program, nor to which specific licensees it should be applied. We can, however, provide some general guidance on two related issues:

  1. Because, consistent with guidance from the U.S. Department of Justice, universities should not coordinate with each other in their engagement with their licensees around DSP implementation, licensees may need more time than originally anticipated to prepare for implementation. For this reason, we recommend a longer grace period between when a university adopts the program and when licensees are obligated to meet the new requirements. The original proposal included a grace period of six months. We believe a grace period of twelve months from the date of adoption is now preferable.
  2. One of the only real challenges to effective implementation of the DSP, which we continue to believe is a feasible program from all practical standpoints, is the need to ensure sufficient production volume in a given product category in order to sustain an appreciable number of DSP-compliant factories. For this reason, we believe it may make sense for a university to exempt from the requirements of the program, at least temporarily, those apparel products that are generally sold in only modest quantities and that cannot be produced in the factories that make the primary categories of collegiate apparel. Possible examples could be neckties and leather goods.

At this link you will find model language for incorporating the DSP into an existing university code of conduct. This language encompasses all of the standards, requirements and enforcement procedures of the program. To adopt the DSP, a university would simply append this language to its existing code and, ultimately, include it in the licensing agreements to which it applies (with such modifications to the language as any individual school might or might not choose to make). Beyond this, the responsibility for implementing these new standards and making them a reality in the collegiate supply chain lies with the licensees, who should properly be in charge of managing their own supply chains, including any changes to those supply chains necessary to conform to university standards. The WRC will be ready and able to work with licensees and potential DSP factories on any and all technical aspects of implementation. I want to stress that it is the responsibility of the licensees, not the universities, to coordinate the transition within their supply chains necessary to be in compliance with the DSP requirements. When we speak of DSP adoption, from a university standpoint, it is important to bear in mind that the act of adoption consists of an institution modifying its existing code to encompass the DSP standards and, at the appropriate time, modifying licensing agreements accordingly. The language we have provided is a model for how to do this.

Please note that the model language has been prepared by the WRC as an additional “rider” to the standard Collegiate Licensing Company (CLC) code, as this is the language that is most commonly used by universities. At this link, you will find a copy of the CLC’s Special Agreement regarding Labor Codes of Conduct and Labor Code Standards – Schedule 1, to which universities that use this code and choose to adopt the DSP would append the DSP rider. Customizing this language for a code that departs from the CLC standard code would be a straightforward procedure.

The model language leaves two items unspecified, as these should in all cases be a product of individual university decisions: 1) which categories of apparel items are covered by the DSP requirements, and 2) the percentage of the covered apparel items that licensees will have to produce at DSP factories after the full phase-in of the program. Universities must also decide, individually, whether to adopt the program, when to do so, and to which individual licensees the program should apply.  

We hope you find this model language useful. Please contact me with any thoughts or questions. We stand ready to assist any university that wishes to adopt the program.

Scott Nova 
Worker Rights Consortium 
5 Thomas Circle NW 
Washington DC 20005 
ph 202 387 4884 
fax 202 387 3292 
[email protected]