To Members of the Merchandise, Licensing and Marketing Policy Committee
I am writing in response to the Committee's recommendation following its meeting of November 15, 2006. The minutes of that meeting were transmitted to me on November 27, along with a minority report from two of the members, and background information on the Worker Rights Consortium's Designated Supplier Program. I have thoroughly reviewed all these materials. On December 6, I met with four representatives of the Purdue Organization for Labor Equality, which has advocated adoption of the DSP and has organized a hunger strike in support of that view. In addition, I have discussed the DSP proposal with my senior staff and with executives of peer universities, including some that have made the decision to adopt the DSP.
After consideration of all these inputs, I have decided on behalf of the University to accept the Committee's recommendation that Purdue not adopt the Designated Supplier Program at this time. I agree with the Committee majority's conclusion that the DSP in its present form would require Purdue to adopt practices in one sector of business — the granting of licenses for manufacture of logo-bearing apparel — that it does not use in any other sector. I also agree with the Committee's view that it is not certain that the DSP would achieve its objective of better ensuring that Purdue-licensed apparel was manufactured in compliance with our code of conduct. The consequences of adopting the DSP are not understood at this point, and I cannot commit the University to the program when so much doubt exists.
The specific aspects of the DSP that cause me concern are:
• The requirement that suppliers be neutral about union organization: This is a requirement that does not exist in federal or Indiana law, and it certainly is not something Purdue would stipulate in a contract in any other area of business.
• The living wage provision of the DSP: A living wage is not defined in law, and efforts to develop such a definition have been unsuccessful. I am not persuaded that the WRC can or should determine what constitutes a living wage in the numerous markets and nations where apparel is manufactured.
• Price controls: Under the DSP, the WRC would require that licensees set prices at certain levels in order to assure that living wages could be paid by manufacturers. Price fixing is illegal in most cases, and it is at odds with Purdue's policy of accepting the best, lowest bid in contracting.
While there remains evidence of abuse and exploitation in the global apparel industry, I am not persuaded by the argument that the DSP should be adopted because the current system is not working. First, while the DSP is an alternative to an imperfect system, there is not convincing evidence that it is an effective alternative. Second, while enforcement of university codes of conduct — including Purdue's — for the manufacture of licensed materials has not eliminated labor abuses in the global apparel industry, there is evidence of progress.
Through its membership in the WRC and the Fair Labor Association, Purdue and other universities receive reports alleging violations of codes of conduct. Purdue's Contracting Group works with the two organizations, other universities and the licensing companies to address these issues, mitigate any abuses and bring about resolutions. While it is true that problems persist, it is apparent that these are attributable primarily to global labor conditions and the legal and cultural realities in the more than 75 countries where most apparel is manufactured. It is not apparent that our efforts to enforce the code of conduct are counterproductive or ineffective.
However, I believe we should continue to seek better solutions to this problem. Therefore, I have decided to pursue two courses of action:
1. I would like the Merchandise, Licensing and Marketing Policy Committee to continue to meet regularly and keep me apprised of progress on enforcement of the code of conduct.
2. We have received an invitation to send a Purdue representative as an observer to future meetings of the Designated Supplier Program working group, which is studying implementation of the DSP by the universities that have decided to adopt the program. I have decided to accept that invitation and to ask Doug Sabel, director of the University Contracting Group to represent Purdue at future meetings. He will report back to the Committee. I believe this step will allow us to become better informed about the DSP and to evaluate any modifications to the program.
While I do not believe the DSP is a viable choice for Purdue at this time, I am prepared to reconsider this decision if changes to the program address my concerns. I also am hopeful that other ideas will come forward as we continue to study this issue.
Purdue is determined to enforce the code of conduct that governs its licensing program. Everyone with whom I have discussed this matter has a sincere interest in protecting the dignity and rights of the people who manufacture the products that bear Purdue's name. Because of the complexity of the issue and the deep feelings involved, it has not been possible to achieve unanimity on the best means of assuring compliance with our code of conduct. However, these differences should not keep us from working cooperatively. The students who have continued a hunger strike for more than three weeks have made a bold statement of their commitment to a solution. Their passion for a better world will be needed as we move forward, and I hope they will discontinue this tactic in favor of a cooperative effort.
Finally, I am deeply grateful to Chairman Dworkin and the entire Committee for their hard work on this complex issue. I look forward to working with you as we continue to pursue compliance with our code of conduct.
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