Letters: Sweatshop scandals

Sir: The problem of sweatshop labour points up the fallacy of global free markets bringing benefit to poorer countries.

By their ability (or mere threat) to move production to lower cost countries, transnational corporations, including many in the fashion industry, can either force "flexible" working conditions on labour in northern countries or sweatshop conditions on those in the south.

With fund managers and corporate raiders standing by to rubbish any "under- performing" company, the pressure on corporations to seek out the lowest possible manufacturing costs is likely to make the effectiveness even of independently monitored codes of conduct patchy at best.

Instead (or additionally), governments around the world should consider abolishing corporation tax and replace it by taking an equivalent shareholding in all major corporations.

Tax revenue would thus be exchanged for dividends. Governments would be entitled to appoint special directors, empowered through an internationally agreed code of conduct to block any board decision that might contravene it. That code would define appropriate social and environmental standards worldwide.

In a competitive world where the corporation credo is "if we don't do it, our competitors will", curbing globally mobile corporations solely through regulation imposed "from the outside" is unlikely ever to suffice.

JOHN BUNZL

London SE3