Level playing field through supply chain labour convention supported by voluntary schemes and initiatives

I have been following – at distance – the ongoing ILO Labour Conference #ILC2016 in Geneva. Much of the discussions center around the often unacceptably poor working conditions in global supply chains, as well as the all too common human rights violations.

The International Labour Organisation ILO brings together governments, employers and trade unions from around the world. This tripartite UN organisation develops and agrees global labour norms which are then set as a basis for national legislation and collective agreements.

Fundamental rights are regulated by core Conventions which have to be applied by all member countries whether they have ratified them or not.

The global supply chains which provide us a with a major part of what we consume have brought new dimensions to setting labour standards. Here, not only the direct employers in producing countries determine working conditions, but very much also the powerful buying brands and retailers. Their influence on supplier conditions is substantial as prices and purchasing conditions can set severe limitations on what the producer in a developing or newly industrialised country is able to offer. This does not mean that these supplier companies would be benign employers, often quite to the contrary, but it does limit the possibilities to press nationally for improvements.

Many brands and retailers have realised that they need to share in the responsibility for employment and working conditions in their supply chains. This has been accepted also by the international community, for instance in the UN Guiding Principles for Business and Human Rights and the OECD Guidelines for Multinational Companies.

The workers’ group at the Labour Conference say that they wish to see a new International Labour Convention to protect the supply chain workers who are often vulnerable and work under difficult and even unsafe conditions for wages far below what is needed for a decent life.

Not surprisingly at all, the employers’ group lead by the International Organisation of Employers IOE say no to any regulations. They insist that new rules are not needed and that dealing with problems is more of a practical task.

Often these employer politicians are slower and more reluctant to accept the need for change than real life employers and business leaders. When we look at positions taken by many top global brands and retailers we can see that they are far ahead of the Geneva outfit. Of course, the negotiating setup at the ILO plays its own role for positioning.

Like in other parts of life and society, constructive and responsible behaviour in global supply chains requires both binding legislation and conviction and voluntary action by business itself.

Some of the more advanced companies could well on their own enable decent conditions in their supply chains. Many are making sincere efforts to do this. Still, binding rules are needed to establish a level playing field that guarantees the basic worker rights at the same time as it protects brands, retailers and suppliers from unfair competition. A new convention would also make it more difficult to push less developed supplier countries to compete with each other through a downward spiral.

Of course, drafting a new supply chain convention would be a highly complicated task. Any new responsibilities will need to be analysed very carefully in order to avoid unwanted effects, including on investment decisions.

Confidence levels are also at a low between many stakeholder groups and business which complicates the situation now when advocacy organisations play a more visible role on the side of trade unions which have an established negotiating culture and direct responsibility to their constituents in companies and workplaces.

Also unions need to take a critical look at themselves, especially the global unions that have to play the role as a counterforce to the no-saying IOE employers. To combine a vocal criticism towards social responsibility schemes and initiatives with the drive for binding regulations, denying the value of these schemes and initiatives, is not the best of approaches.

There has to be room for both legislation through a new Convention and for voluntary schemes that allow going further and help applying the principles. In many countries concerned it will take a long time before local trade unions emerge and genuine tripartite labour relations can take on the responsibility.

To build up an artificial conflict between binding legislation and voluntary initiatives will only weaken the chances of arriving at an acceptable result.

About the Author

Jan Furstenborg
I started my working life as education secretary for the Finnish secondary students' association Suomen Teiniliitto in 1967. From 1969 to 1986 I was employed by the Finnish trade union movement and held many different positions in the commercial workers' union. In 1986 I started to work for FIET, one of the predecessors and founders of the present UNI Global Union. At first I worked with organisation development and education in the developing world and was actively engaged in the integration of unions in the new market economies of Central and Eastern Europe. At the end of 2009 I left my position as Head of UNI Commerce Global Union where I was responsible for the Global and European trade union work and the sector social dialogue within EU and with leading multinationals. Since then I have worked with governments, standard organisations, companies, trade unions, and others to promote social responsibility, environmental sustainability, dialogue and partnership. I have retained my longstanding membership on the Advisory Board (now through the Founders Committee) and the Board of Directors of Social Accountability International SAI, known for its SA8000 Social Standard. I am also member of the Advisory Board of the Global Social Compliance Programme GSCP where I have participated actively in the work since the initiative was launched. Early 2015 I was invited by the Global Organic Textile Standard GOTS to advise them on social and labour issues as a member of their Technical Committee. In addition, I am a member of the Stakeholder Board of the newly established Association of Professional Social Compliance Auditors APSCA. I share my time between Helsinki, Finland and Founex, Switzerland.