Serious about supply chain sustainability? Business, unions and advocacy organisations must work together

Berlin Conference on National Action Plan on Business and Human Rights sGermany would be a good role model for supply chain cooperation between business and unions. Of course there are major disagreements but this does not stop the social partners from taking joint responsibilities for human rights at work in producer countries. This picture is from the last of three multi-stakeholder Conferences arranged in 2015 by Development Ministry BMZ, to prepare the German National Action Plan for implementing the UN Guiding Principles on Business and Human Rights.

To promote better labour conditions in global supply chains we need effective and sincere public-private cooperation in consumer countries. We need socially responsible buyer companies willing to invest in supply chain conditions. We need trade unions and civil society organisations that have set their priorities right and put supply chain workers’ interests first.

Why do we have so much suspicion and conflict between those who should be driving positive supply chain change together, as main private sector partners?

Relations have deteriorated

Global supply chain relations have indeed deteriorated during a number of years. Where joint sustainability approaches used to play the major tole we now see new alliances between global unions and labour advocacy organisations. Businesses tend to go more on their own than before, and there is a much weaker trade union participation in voluntary schemes and initiatives.

Labour relations are more adversarial and the political climate much harder than before the economic crisis hit. Instead of sharing the added value created by growth, labour partners fight over who will pay the costs of shrinking economies. Workers carry an unreasonably heavy burden through unemployment and dwindling standards. Income differences are bigger than ever, and political polarization continues to generate conflicts and instability.

This year’s International Labour Conference in June sent conflicting signals on supply chains. Employer organisations lead by the International Organisation of Employers IOE started by flatly denying that there would be governance issues that need to be tackled. Global trade unions and their non-governmental organisation (NGO) allies saw nothing good in voluntary initiatives, questioned the sincerity of buyers, and did not hide their preference for legislation that would impose rules and sanctions on them. Much of this was normal ILO tactics, for sure, but there is also a troubling reality behind.

The adversarial start was finally turned into an agreement to continue discussions, with much of the credit for saving the dialogue going to the International Labour Office and ILO Director-General Guy Ryder.

Why are unions and campaigners against voluntary initiatives?

I can well see many reasons why global unions question voluntary multi-stakeholder and business driven social sustainability initiatives. Some criticism is fair enough, other reflections are linked more to trade union needs and ambitions. It is good to remember that corporate social responsibility (CSR) itself something suspicious in broad union circles. Business is not at all too innocent in this respect, having too often used CSR as a vehicle to avoid trade union recognition and collective agreements.

Many of these unions and advocacy organisations are unhappy with what they see as a slow pace or even absence of improvements in supply chain labour conditions. They genuinely believe that voluntary initiatives have failed to change overall supply chain realities.  This is why they call for more legal regulations and accountability.

These views should be taken seriously.

Brands and retailers have surely often dragged their feet and failed to act on poor working conditions in supply chains. They have thus ignored their due diligence obligations, which of course were there far before the UN Guiding Principles for Business and Human Rights made them formal. For sure there were many brands and retailers, both large ans small, who understood this and really tried to drive positive change, but there were also numerous businesses who did not.

Unfair to accuse initiatives for poor supply chain labour conditions

I share much of this union and civil society disappointment over an all too slow slow pace of change. The enormity of the task is a contributing factor, but also a bad excuse for not investing more resources and effort. Still, full credit should be given to the many brands and retailers who have been and are very actively working on these challenges.

It is both unfair and non-professional to criticize the sustainability schemes and initiatives or social compliance auditors for this. Here we often find the actors who have the strongest and most concrete commitment to decent conditions in supplier industries and who are trying to do something concrete to improve them.

To support organising and collective bargaining in producer countries is a legitimate activity for any trade union. Our aim must be that working conditions and labour relations are managed locally, respecting universal global norms. This requires a social dialogue between mutually respectful partners – trade unions and employers – who negotiate collective agreements. They should preferably be concluded on an industry level and applied and enforced with effective government support. The IndustriAll-driven ACT project on living wages which includes a number of buying brands present in Cambodia is an interesting and supportable pilot for such approaches.

Many unions and advocacy organisations make a mistake when they try to exclude voluntary multi-stakeholder or business driven schemes and initiatives.  Unions and social advocacy organisations could never fill the gap if brands and retailers were to abandon their programmes and activities.

The multi-stakeholder Bangladesh Fire and Safety Accord is often referred to as an example of projects that could come instead of the present social sustainability schemes and initiatives. It has indeed achieved many things and I do of course support it. Still, we should remember that even together with the US-based business-driven Alliance for Bangladesh Worker Safety it covers only a part of labour conditions, albeit an important one. The whole field of human rights and sustainability at work is of course very much broader. The problems encountered when trying to secure freedom of association within these projects send a message that mainstreaming their principles would be an extremely complicated and long process, if not even politically impossible.

It is more than unlikely that retailers and brands – or governments – would agree to substitute voluntary codes and standards and remediation activities with legislation and sanctions, or even legally binding programmes such as the Bangladesh Fire and Safety Accord. I do fail to see the logic in unionists and labour advocates demanding that brands and retailers to respect their due diligence obligations while at the same time doing their best to discredit their efforts.

Ending the voluntary involvement of buying companies would spell disaster for workers in many supplier industries and countries.

Both legislation and voluntary schemes are needed

We will continue to need all stakeholders on the stage, both public and private, employers and unions. Voluntary schemes and initiatives are an important tool for this. But there needs to be more legally binding norms as well. National governments and the international community need tools to set minimum acceptability standards and create a level playing field which would also protect serious enterprises against social dumping and unfair competition. How this can be done without creating disadvantages for businesses in the countries where governments take their obligations seriously, and without scaring buyers away from the least developed producer countries, remain to be seen.

As a result of awareness building, in which multi-stakeholder and business driven voluntary initiatives have played the central role, supply chain conditions is not and cannot be ignored by business anymore. They are now part of core corporate issues and concerns. Buyer-driven capacity building and remediation activities abound and suppliers have to pay more attention to their labour conditions.

This does not mean that voluntary initiatives should not improve their performance – in fact they are constantly doing this. I take an example which I know very well, Social Accountability International SAI. With their Social Fingerprint and Ten Squared programmes and an impressive work to improve SA8000 social audit reliability, the new young SAI leadership does indeed merit a very strong support from business, unions and other stakeholders. This is a good example of linking social auditing and workplace certification to capacity building and remediation.

The SA8000 Social Standard is still the strongest instrument to define and promote human rights at work and decent working conditions. In today’s social climate it would not be possible to reach a common understanding between labour partners on levels as high as those in SA8000. Being one of the authors of the standard-setting GSCP Reference Code I can also vouch for the SA8000 having been one of the main resources in that work. SAI – as well at the Social Accountability Accreditation Services SAAS – was an important source of knowledge and experience when we were working on the whole GSCP toolbox, with its guidelines and advisories for all parts of sustainability activities.

Campaigning against social auditing hurts workers and is not professional

Social audits play an important role when buying brands and retailers exercise their supply chain due diligence. Visible and commercially managed, both auditors and auditing firms have been a frequent target for campaigns and criticism. Individual cases of shortcomings and mismanagement have regularly been generalized with the objective to to question the credibility of the entire industry and its work. This is both unfair and incorrect towards the numerous serious and highly skilled enterprises and individual auditors who are producing important services for supply chain businesses and their workers. Without them, due diligence would be impossible. It is not professional to allow criticism against globalization and mistrust against large private enterprises influence the attitudes to social auditing.

Most social auditing takes place outside the public eye and there are indeed many reasons for this. Confidentiality rules are equally important to protect workers as it is for the supplier companies. Without this confidentiality it would often be impossible to get a correct picture of conditions. Demands for more transparency in  global supply chains and buyers’ supplier relations will surely bring some changes to sustainability audits. This has to be done by increasing transparency without violating the necessary areas of confidentiality. The auditing industry itself can benefit from more openness in and about global supply chains. The new Association of Professional Social Compliance Auditors APSCA, where I am now a member of the Stakeholder Board, will have to address this issue.

We need mutual respect and new cooperation to improve supply chain conditions

We need to move to more cohesion in global supply chain sustainability work and engage both public and private partners in serious and effective joint efforts. This also means accepting and supporting a broad specter of actions and initiatives. The task to defend human rights and work and ensure that there are decent conditions for all is far too big to handle otherwise. We owe to the workers and their families as well as to the businesses and entrepreneurs in producer countries to put their interests first. We cannot let relations at home in advanced consumer countries  undermine effective joint efforts. The Global Social Compliance Programme GSCP has proved that this can be done. I have similar experiences from Germany’s government-initiated Partnership for Sustainable Textiles (Textilbündnis) where I have represented GOTS – the Global Organic Textile Standard – in the expert committee that has developed its principles and programme.

Genuine engagement and responsibility, mutual respect by and for all participants, and honest intentions to build pragmatic and effective partnership are some of the elements that are now needed.



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.