Last week the International Labour Organisation ILO showed its convening power when new challenges in the world of work call for concrete responses. Governments, employers and trade unions will now start to look at the best ways to jointly tackle human rights and labour problems in global supply chains. This was a major achievement by Director General Guy Ryder and his ILO team who have manoeuvred skilfully over the last years in an environment full of conflicts and emotions.
Taking on supply chain labour conditions is entering new ground where existing governance structures based on traditional employer-worker roles and relations are not sufficient. This can open up for a broader change as well, reflecting new forms of work organisation.
Governance gap needs to be filled by ILO
Buyer companies continue to grow their influence, both nationally and in the global economy. Whether brands and retailers outsource their own production or act in a buyer role, they do always wield much influence over suppliers’ labour conditions. With this should come sharing responsibility as well. To enable this, codes of conduct and voluntary standards are not enough on their own. There is a governance gap here which this tripartite UN organisation will now set out to fill.
The UN Guiding Principles for Business and Human Rights demands due diligence from business organisations in their supply chains. The consensus reached now at the International Labour Conference would have been impossible without this broadly accepted guidance. To translate it into concrete and applicable labour norms past the pure recommendations for voluntary action is a complicated but also necessary task for the tripartite ILO community.
Not an easy task
Among the most difficult issues is to determine the extent – if any – to which a buyer company can be made legally responsible in its home country for failing its due diligence obligation in supplier countries.
Would these companies abstain from working in countries where risks are deemed too high even if these are often particularly dependent on new business opportunities for their development? On the other hand, added buyer responsibility could add to the pressure on supplier country governments to ensure that risks are minimised through proper and enforced human rights and labour legislation.
Who will have the right to speak for workers if a supply chain case is raised against a buyer company? This is a difficult issue as well. The fear that social advocacy organisations and others could initiate class action suits was in fact the final reason given by US-based brands and retailers when they chose to create their own Alliance for Bangladesh Worker Safety instead of joining the Bangladesh Building and Fire Safety Accord where also unions play an important role.
These only two examples of the many questions that will inevitably come up in a continued process. It is important to find solutions to these to ensure results that really bring a change for the better.
How far are governments prepared to go?
Everything cannot be covered through legally binding international instruments. Most consumer country governments are very careful not to go too far on this road, aware that they may put their own businesses at a disadvantage. We have also seen that supplier countries are even more negative, at the Labour Conference this was made very clear. They do see this as a competition restraint, but also as an unwelcome involvement in their sovereignty from the outside world.
It will take much skills and diligence to work out an approach that is both effective and realistic.
Binding rules and voluntary initiatives are both needed
To demand binding rules by dismissing the many voluntary supply chain related CSR standards, schemes and initiatives is not a wise approach. Both should co-exist at least as long as supplier countries cannot provide an environment where these aims can be realised locally. It makes little sense to demand responsibility from business, then to go against those brands and retailers who really try to do something in their supply chains.
I do agree that these instruments and activities have not been able to change the system itself, in fact they are not even designed for it, and that poor and even dangerous labour conditions are still all too prevalent. In most of the important supplier countries and industries wages are still far below the levels that could enable acceptable living conditions for workers and their families. Workers are denied basic rights – including the right to organise in trade unions. A systemic change will require some kind of legislative action also on the international level, supported by industry-wide organising and collective bargaining such as promoted by the IndustriAll driven ACT programme.
Unfair and wrong to turn frustration against social auditing and voluntary initiatives
Even if there are valid reasons for union and NGO frustration, it is both wrong and unfair to dismiss the sincerity and value of the social responsibility schemes and initiatives, be they multi-stakeholder like SAI-SA8000 or ETI or business driven like BSCI. Whatever legislation and other legally binding rules can be developed, the need and room for commitment and action by business itself will remain.
Without the pioneering work of SAI founder Alice Tepper Marlin and BSCI creators Jan Eggert, Achim Lohrie, Bernardo Cruza and many others we would not today be discussing a broad public-private cooperation for social supply chain sustainability. For every business organisation that may still see supply chain responsibility as a public relations issue there are scores which have included this in their core values and concerns.
During my many years working with these issues – first through a global union federation and then increasingly through multi-stakeholder activities – I have seen very much commitment and engagement. This has come from all partner categories in this sustainability work – including social auditors, trainers, buyer representatives, trade unionists, civil society activists and increasingly also supplier workers and management. They have also achieved a lot, enabled improvements and also stopped unwanted developments and action.
A level playing field must be created
The responsible employer organisation IOE did of course not fail to see the need for continued work on global supply chains. They will be partners in the work of addressing also the systemic problems that must be acted on. We need a level playing field where every player has to respect, defend and contribute to upholding all universal human rights and the right of workers and their families to decent working and living conditions. Leading global brands and retailers who are already committed to this will have to lead the way, which I am convinced they are prepared to do.
Going forward will require concrete tripartite cooperation and a genuine will to search for solutions that bring added value without creating new problems. This requires moving back to the fundamental governance structures of the ILO where governments, employers and worker organisations – trade unions – negotiate and reach agreements. It was good to give NGOs a voice at this latest Labour Conference, but in the continued process also the trade unions need to guard their role as the only organisations that can negotiate and agree on working life governance, also when it comes to supply chains.