Germany has placed supply chain sustainability high on the agenda of the G7 Group of leading advanced economies. At a stakeholder conference in March in Berlin, the German Presidency announced its intentions to work for a common approach social and environmental standards. Some leading brands and retailers who form a critical mass of global buyers have sent signals that they are prepared to play an active role. This could well be through GSCP, which can make its Reference Code and other tools available.
Seeing a clear engagement of global brands and retailers to improve supply chain conditions makes me optimistic. Last week’s members meeting of the Global Social Compliance Programme GSCP in Los Angeles confirmed this commitment. And no, it is not really a result of anyone ‘putting pressure on’ or ‘forcing’ them, or any other adverse campaigning and publicity.
The UN Principles for Business and Human Rights – the Ruggie principles – and their follow up both by the public and private sector are of course important. International buyers understand the need for due diligence when managing supply chains, be it about their own work or that of their suppliers and contractors. Universal human rights conventions and international labour norms create a solid basis for this.
This task is not new for most large brands and retailers. They have their own sustainability personnel and are active on the ground, working with their supplier factories and farms. Smaller companies go even further than most, like Swiss apparel retailer Switcher and German Hess Textiles. Both have a hands on approach to ensure social and environmental compliance in the supply chains.
Corporate social responsibility initiatives such as Social Accountability International (SA8000), the Business Social Compliance Initiative BSCI, the Ethical Trading Initiative ETI and the Fair Labor Association FLA have been working for decades to support and promote human rights and decent working conditions in global supply chains. The Fairtrade movement has long traditions as well, as does the Fair Wear Foundation FWF, to mention two others.
These are just some of the many initiatives that contribute to better supply chain conditions, some on a multi-stakeholder basis and some business driven with a civil society contribution. More important than their structures are the code framework withing which they operate, and their concrete support for remediation and capacity building. Of course there are problems, even failures at times, and these schemes cannot cover all needs.
On the environmental side we have a similar situation with dedicated initiatives like the Global Organic Textile Standard GOTS and the Rainforest Alliance – and many others – certifying compliance, informing consumers and supporting companies and supply chain workers.
Better and mutually recognised social auditing
liberates resources for training and remediation
Much is now happening on the social responsibility agenda. The factory catastrophes in Asia exposed limitations and also shortcomings, and led to tighter auditing rules and other improvements. Capacity building and remediation at workplaces is being stepped up. Harmonisation and convergence of codes and standards through GSCP and its Equivalence Process enable mutual recognition of audit results and liberate resources for real positive change.
The social auditing industry itself has been an active partner in these developments. Two years ago at a GSCP conference in San Francisco, I stressed the need for these companies to get organised and establish their own ethical guidelines. This is now happening and the social auditing industry has created its own association.
There has also been much done by specialised organisations such as the Social Accountability Accreditation Services SAAS. SAI has linked SA8000 certification and social auditing to supplier self assessment and remediation, through its innovative Social Fingerprint approach. BSCI – which has the by far largest membership of all schemes – has also tightened up and clarified its auditing rules.
The first years of GSCP were spent on building up a toolkit for applying the principles of the Reference Code. Meetings with buyers and suppliers were an important part of this work. The final tools were then dealt with and agreed by the Executive and the Advisory Board. All tools are freely available. Here, buyers from leading global brands and retailers meet with representatives of both boards in Shenzhen in China in April 2014. This meeting was hosted by Wal-Mart, world’s largest retailer.
The social audit companies themselves work closely with GSCP on minimum auditing standards which create a common base for helping achieve proper conditions, which satisfy the needs of buyer companies, are accepted by civil society, and are supported by the concerned public authorities. A dedicated, efficient and competent social auditing industry needs to play an important and active role in developing the best ways to protect human rights and improve working conditions.
GSCP Reference Code and other Tools
are good basis for G7 supply chain work
All this is now related to important government activity in the consumer regions. The UN Guiding Principles are transposed in national legislation of many countries. Germany, which has this year’s Presidency of the G7 group of major advanced economies, has committed to drive these issues within the common agenda.
At a recent G7 meeting in Berlin, where I had the opportunity to be present as a representative of GOTS, the top directors of OECD, ILO and the World Bank committed their support and pledged cooperative action of their own to help achieve the goals.
GSCP has an important role in channeling a concrete business contribution to the public-private partnership that will be needed to bring about real change and improvements. An initiative of the Consumer Goods Forum CGF, GSCP groups together a critical mass of global buying companies both within and outside this consumer goods industry itself. Its Reference Code as well as the extensive and publicly available toolbox can form both a demanding and realistic base for any standard-setting and implementation.
There are clear signals coming from the Consumer Goods Forum and its member companies that there will be an important upgrading of social and environmental supply chain issues on their agenda. At the same time, there is a solid understanding of the necessity to ensure the acceptance and credibility of this work with civil society.
This underlines the importance of GSCP which is based on always seeking consensus between the business driven Executive Board and the Advisory Board that represents civil society. As an Advisory Board member coming from a trade union background I can vouch for the serious and respectful approach to these principles. Indeed, the boards have never had to vote.
Time to move away from adversarial relations
that make supply chain workers pay for other conflicts
We may see major commitments made and steps taken already this year to tighten up the defence of human rights, improve labour conditions and support environmental sustainability in global supply chains. To ensure that this process will be effective we should move forward from the all too common adversarial attitudes that we have seen when dealing with global supply chains after the fire and building catastrophes of the last years.
The present labour relations climate is of course not particularly favourable for seeking compromises and consensus. Still, it should not be allowed to hinder a constructive cooperation in global supply chain matters.
The GSCP Reference Code as well as leading standards such as the SA8000 provide, when seriously applied, a solid base for a joint approach. They are clear also on common issues of contention between employers and unions in many of the consumer countries. If we are serious about respecting the rights of supply chain workers and improving their social conditions, we should not let these differences reflect on the supply chain cooperation.
Real differences should be approached
through honest and respectful dialogue
There will remain important issues to solve also if we can ensure a positive supply chain cooperation between business, trade unions and engaged non-governmental organisations. We can see this in the living wage discussions, in how to apply freedom of association and the effective right to collective bargaining, in applying working hour rules, and in many other areas. This is normal and acceptable, and the answers should be found through common deliberations, resulting in a clear message from the international community to governments and employers in supplier countries on how worker’s rights and needs have to be protected and promoted as a condition for participating in the global economy.
The common aim must be a situation where employers sit down with workers and their trade unions to freely and respectfully negotiate employment and working conditions, enabled and supported by governments through solid legislation and guarantees for an effective application of what has been agreed. We know that it will take a long time for this to become a reality and that an active involvement of consumer countries – governments, businesses, trade unions and other civil society representatives – will continue to play an important role.
