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Julkaistu

Brands and retailers should now disclose concrete measures for Bangladesh and Pakistan fire safety and respond positively to IndustriALL cooperation invite

Where are the real, concrete and visible commitments from brands and retailers to help deal with the factory fire safety problems in Bangladesh, Pakistan and other countries? Promises and declarations have been heard, but we are well into 2013 and now is the time for more concrete information.

A company that has shown how one can move fast also on big issues is world’s largest retailer Wal-Mart. It did not take long for them to change their own supply chain conditions, tightening up controls. Also other steps were announced, including support for factories that need to make changes in their fire safety setup. The rapid reaction raises expectations that we will soon see action on the ground.

To be fair, also some others have told the public on what they have been doing and intend to continue with. These include GAP, unfairly and incorrectly in the teeth of US activists because they have gone their own way instead of giving support to the campaigners and their project. H&M and Carrefour have already done much, training management and workers in hundreds of factories. Inditex is now joining IndustriALL in project cooperation.

Perhaps interestingly, when I was Head of UNI Commerce I did negotiate Global Framework Agreements with all three companies – H&M, Carrefour and Inditex, and have good experiences of the social dialogue and cooperation with all of them.

Of course, we need to see much more than training and awareness raising. Physical factory conditions will need to be considerably improved. There will be big implications all the way up to buying conditions and supply arrangements.

Others have been more quiet about their activities, plans and commitments, to say it mildly.

Still, there is much going on, particularly in the fields of training and awareness raising. Craig Moss of Social Fingerprint just came back from a session in Bangladesh, and we see how WRAP and others have been active as well. But where are the brands and retailers themselves, when it comes to telling about the support for the garment industry in problem countries to ensure wokplace safety?

A particular problem is Pakistan. We cannot allow that the country’s difficult security situation leads to less attention being paid to worker safety and other conditions at supplier sites. Although reliable social audits and certifications may be impossible to continue, solutions have to be found that guarantee decent conditions for working people.

Spain’s Inditex – mother company of Zara and other clothing brands – has joined the garment workers in IndustriALL Global Union in an effort to bring about positive change in Bangladesh. This is a welcome move by a responsible retailer, but we need fast follow up also from others.

When I took the initiative last autumn in both Social Accountability International SAI and the Global Social Compliance Programme GSCP to launch action in Pakistan and Bangladesh, an important objective was to build a large coalition where everyone can participate, both business and stakeholders. IndustriALL’s recent announcement shows a similar aim. This global union’s resolve to lift up also other sub-standard working conditions to levels of human decency should stop nobody from supporting and joining.

I know that many brands and retailers – and CSR schemes and initiatives – are discussing and planning concrete activities right now. It should not be difficult to combine these plans with the IndustriALL approach. Fast action is now needed.

I would like to see talks between these leading and responsible brands and retailers, and IndustriALL, to help find a common effective approach. This large global union federation reaches out in a constructive way and business must respond positively. Other conflicts of interest, which surely will continue, cannot be allowed to hinder strong common measures for the human rights of these vulnerable supply chain workers.

The public needs to know how the international business community and its stakeholders are standing up to their promises. I have worked since many years with large brands and retailers, and often been frustrated by what seems to be almost an obsession by many of them to avoid any kind of publicity.

Social media has changed the world of information and the old approach to be quiet and hope that things go away does not work anymore. If nothing else, companies should look at Wal-Mart’s fast reaction as a good example on how to make sure that information gets out and becomes part of the discussion that goes on.

If also European brands and retailers had been more active and alert, and read the situation correctly, parts of the European Parliament Resolution on Bangladesh Fire Safety could have looked different. Just to mention one example.

The brands and retailers and those who coordinate these fire safety programmes for them have to get their information activities in order. To keep the public informed is an important part of the job. Until now, they are underperforming.

The buying public has the right to know what is being done to help avoid disasters such as those that cost the lives of hundreds of Pakistani and Bangladeshi workers under appalling circumstances.

Julkaistu

New kids on the CSR block are popular and interesting – but ILO Conventions remain the core reference for supply chain social responsibility

The UN Guiding Principles for Business and Human Rights is an important and welcome addition to handling supply chain labour relations. Governments and buyers are reminded of their human rights responsibilities.

Not so good are the attempts to market it as the new main reference for supply chain social responsibility. This role will stay with the tripartite International Labour Organisation ILO and its International Labour Conventions.

Professor John Ruggie and his Harvard University based team did a big service for universal human rights when they produced a new social responsibility building block that adds to the UN Global Compact, the OECD Guidelines for Multinational Companies, the ILO Multinationals Guidelines, and other international agreements and recommendations.

The UN Guidelines both support and encourage the business driven and multistakeholder voluntary schemes and initiatives which work for social responsibility in the global supply chains. They call on buyer brands and retailers to take responsibility also for their suppliers’ human rights related action. This can add to the coverage, relevance and credibility of the voluntary initiatives.

The guidelines should encourage also those businesses who are still passive to join one of the many schemes or to launch their own initiatives.

The UN principles have been picked up by the OECD in a recent revision of their guidelines, and will surely find their way also to the ISO 26000 Standard once it will be reviewed.

On the business driven or multi-stakeholder CSR arena at least the Global Social Compliance Programme ( GSCP ) Reference Code and the Social Accountability International ( SAI ) SA8000 Social Standard will soon be up for scheduled updating, and can be expected to pick up some principles and approaches from the UN Guidelines.

These Guidelines that have been endorsed by the UN Human Rights Council in 2011 do not cover all the issues that are important for supply chain workers. The protect, respect, remedy approach focuses on human rights while many essential labour conditions fall outside.

The document recognises freedom of association and the right to collective bargaining, and the other Core Labour Conventions, but does not really address worker empowerment and involvement. Here, the core ILO Conventions and Recommendations give more concrete guidance – and rules.

In no way does this lower the value of the UN Guidelines. They are an important tool for promoting human rights, both at work and in other areas where businesses have an impact on peoples’ lives. Demanding due diligence from brands and  retailers in their global supply chains brings a new dimension to what has been driven by activist pressure and consumer opinion.

Also the ISO 26000 Standard can contribute to corporate social responsibility, as a useful tool particularly for larger companies. It could bring CSR values higher up on corporate agendas and encourage to the due diligence expected by the UN Guidelines.

The Standard is pretty complicated and not available for free. This is a treshold for many and create a lack of transparency, and thus credibility. It is somewhat hard to see how useful the ISO 26000 can really be when dealing with global supply chains.

Let us also remember that this standard does not set working life norms, this was agreed at an early stage between ISO and ILO. A company cannot be certified for compliance with the Standard. This has been made clear by the ISO itself and any certification approaches are business activities of commercial auditors and consultants.

Politicians have been fast to respond to all these CSR developments, which of course is good. Regrettably, the recent European Parliament resolution bore the fingerprint of activists who wanted to promote their own project work. This was not the right context for that, whatever one thinks about the suggested project itself. We will surely see some changes in it when it moves further through the EU machinery.

Also in the United States, the government is on the move. Bangladesh has been warned that unless they get their house in order when it comes to work safety in the garment factories, they may lose their trade privileges.

Still, something has not changed and should not change. That is the agreed and established principle that international labour norms are set by the International Labour Organisation ILO, and by ILO only.

The ILO is the only United Nations organisation where employers and trade unions work alongside governments, for the common aim to ensure decent working conditions around the globe. International Labour Conventions remain the global constitution for working life. This is correctly acknowledged in all the other guidelines as well as by the voluntary CSR schemes and initiatives.

Only ILO Conventions are enforceable in the way that governments have a formal responsibility to see that they are implemented in full in their countries. The core conventions that address human rights issues do not even have to be ratified, they bind all member countries. Governments that do not take their responsibility for this can be sanctioned, although that would be extremely rare.

Even more important is that the mainstream labour relations system builds on social dialogue and collective agreements between workers and their trade unions, and the employers. Already the ILO process itself reflects this principle which should be carefully defended.

The new kids on the block can bring much added value, but their work can also be used to support paternalist approaches, which should not be supported.

Julkaistu

IndustriALL General Secretary Jyrki Raina makes important opening for broad concrete fire safety cooperation in Bangladesh – brands and retailers should accept his invitation without delay

IndustriALL and its General Secretary Jyrki Raina are right when they are calling for broad cooperation to deal with the appalling fire risks in the Bangladesh garment industry.

On the IndustriALL Global Union Federation’s website, Jyrki Raina calls for “urgent and serious action to prevent further tragedies”.

“We invite all major international brands, national employers and the government of Bangladesh to start an urgent discussion with us on a concrete plan of action”, he says.

The brands and retailers who are sourcing and buying garments in global supply chains should welcome and accept IndustriALL’s invitation.

Recently, world’s largest retailer Wal-Mart published its new requirements for suppliers, which when applied should have an important and positive impact on factory fire safety. Also other leading brands and retailers are working on similar issues. They should already be prepared to move to concrete activities reasonably fast.

Immediately after the devastating Ali Enterprises fire in Pakistan in September I took the initiative for the Global Social Compliance Programme GSCP to make its convening power available so that major buyers can get together around joint project activities. This was indeed picked up rapidly by these multinational corporations and a coalition is now actively working on these issues, focusing on Bangladesh but also opening up possibilities to act in Pakistan.

Also from this point of view, the IndustriALL initiative is timely. If real change is to be achieved, as it must, a broad cooperation that includes all stakeholders is needed. Also corporate social responsibility schemes and initiatives such as Social Acccountability International SAI should make their experiences and know-how available, but above all listen carefully to any views on needs for changes.

It would be important that urgent discussions be held between the large buyer brands and retailers and IndustriALL Global Union which represents the Bangladesh garment workers, about how they will work together on the concrete challenges.

IndustriALL and its General Secretary Jyrki Raina have done an important service to all, and particularly to the workers in this Asian region, by reminding that the attention must now be focused on achieving real, significant and fast change.

Julkaistu

Supplier and auditor subcontracting should be more effectively controlled to ensure reliability of CSR

Corporate social responsibility initiatives should look closely at Wal-Mart’s new supplier policies, announced earlier this week. To get subcontracting under control is essential if they are to retain their credibility. Otherwise one can ask with much justification whether social audits, certifications or other reports are always really reliable.

When a supplier that has been audited and approved by a brand or retailer moves production to another site without even notifying the buyer, we are dealing with deception which also pulls the rug from under any social audits or certifications. This happened in Bangladesh when orders were moved without authorisation by a supplier to the Tazreen garment factory. A devastating fire at this workplace took over 110 lives last November.

Wal-Mart’s new instructions to suppliers should put an end to this kind of wild subcontracting. If a supplier gets caught, the game is over and the business relationship ends.

Problems will of course remain even if subcontracting comes under control. Supply chains can be long, from commodities to product components, before work reaches audited plants and factories. Tracing is difficult, but new RFID technologies should make it easier. Swiss specialist retailer Switcher, a leader in corporate responsibility, already enables consumers to trace the history of the garment which they buy by entering its label number on the company’s website.

Wal-Mart’s new rules are a major step in the right direction.

In Pakistan, where fire devastated the Ali Enterprises plant in September, leaving well over 200 garment workers dead, a private auditing firm had granted the factory an SA8000 Certification only weeks earlier. Neither SAI nor the controlling agency SAAS knew this. Also here, subcontracting was involved. The large Italian company had outsourced the social audit to a local contractor.

In both cases the system did not function and control was lost. Wal-Mart has acted swiftly, will the CSR schemes and initiatives and the social auditing community follow suit?

Auditing companies subcontracting out their social audits is reportedly common in the industry. In most cases this would probably not cause problems, and the audits be professional and correct. Still, there is the question of lacking controls, oversight and responsibility. The tragic catastrophes in Pakistan and Bangladesh should be reason enough for even radical action.

Schemes and initiatives should consider whether not also subcontractors would have to be authorised by the control structures that have been set in place. This also means that auditor training and competence would be better secured. There may also be countries where conditions are such that reliable auditing and this also certification is impossible.

Through my engagement in SAI, I have suggested  that the importance and status of theSA8000 certificates should be raised. The certificates should be securely printed and individually numbered, and the numbers should be registered centrally first when an empty certificate is given to a certification agnecy and then again when it issues the certificate to a supplier workplace.  This would tighten controls, define where responsibilities for certifications are,  and protect the system agains fraud and abuse.

I have also suggested that social auditing systems should consider learning from financial auditing, where auditors are both qualified and prepared to follow a company even between the audits. This would also mean that management would have a discussion partner when taking corrective action and launching other remediation activities.

Yes there could be conflict of interest issues at times, but it would still be better than letting situations deteriorate between the snapshots that are taken during the days of audit. It would of course add to costs, but in many cases this investment would be necessary. On the other hand it will be supported by the ongoing work within GSCP to drive convergence of these schemes and initiatives and cut the number of audits through a built-in mutual recognition of reports and certificates.

All this does not mean that brands and retailers would be able to give up a direct involvement and monitoring of conditions. Already the UN Guiding Principles expect them to apply due diligence in their supply chains which not even the most reliable audit schemes can compensate.

The most important thing would still be to involve workers themselves and empower them to participate in making sure that conditions are correct. How this is done when there is no trade union in place requires careful consideration, to ensure that it does not become an alternative to workers’ right to regular social dialogue and collective bargaining.

Julkaistu

Wal-Mart’s harder line on supplier subcontractors could help open way for concrete improvements in Bangladesh factory fire safety

Wal-Mart’s harder line on suppliers that use subcontractors without the retailer’s approval is an important step in the right direction.

“Our message of zero tolerance is meant to get people’s attention,” Wal-Mart’s Vice President for Ethical Sourcing Rajan Kamalanathan says in today’s Wall Street Journal.

Of course, especially suppliers are supposed to listen carefully. Without informing the US retail multinational, one of them had placed part of an order at the now infamous Tazreen garment factory in Bangladesh, where over 110 workers perished in a devastating fire late last year.

Subcontracting arrangements are indeed one of the biggest problems for corporate social responsibility schemes and social auditing. A supplier factory may be in proper shape, but the conditions at subcontractors could then be completely different. Getting subcontracting under control is an important task.

The factories which produce for Wal-Mart will have to undergo obligatory fire safety control and comply with certain requirements before they are allowed to supply the US-based retailer. They will also be required to have secondary exits from all floors, and their electrical systems have to be safe. There will also be regular follow up checks, and closer monitoring.

The observations made by Turkish fire safety expert Dundar Sahin when he visited a range of Pakistani garment factories last autumn on behalf of Social Accountability International SAI ( SA8000 ) confirmed that there is indeed much to do to ensure worker safety in these plants.

To just dismiss the measures by the world’s largest retailer like some campaigners have done in their first comments is not constructive. Cartainly, both Wal-Mart and other buyers from the Bangladeshi garment industry will have to be prepared to carry part of the costs for making workplaces safer. The Wall Street Journal that the retailer is looking at creating a fund or a revolving line of credit to support these necessary investments. This should act as an example also for other large buyers to follow

The basic reasons for poor conditions for garment workers in countries like Bangladesh and Pakistan are bedded into the global supply chain system itself. Low prices in consumer countries are too often based on poor working conditions in the producing regions. This will not change overnight, but the reactions to the recent fire catastrophes in Pakistan and Bangladesh can perhaps launch a general development in a positive direction.

Also, we should not forget that these industries are essentially important for the producing regions and countries to develop their own economies and  offer livelihoods for their people. This cannot be done at the cost of safe workplaces, decent working conditions and human dignity. It is clear that whatever differences there may be, this is now generally accepted by both the global business community and other stakeholders. Now is the time to work effectively to promote these principles without compromising the task by letting other considerations override it. This concerns equally the business sector as it does trade unions, campaigners and others.

Finally, once again some campaigners are calling for making social audit reports public. This would effectively destroy all workplace auditing. Confidentiality of all audits and reports is a condition for workers and others to be able to speak out about workplace problems, and a necessity to protect those that do it. Campaigner mistrust against business should not lead to destroying what may often be the only existing instrument to monitor the reality in these vulnerable supply chains, and thus create a basis for a concrete improvement of working conditions.

It will be both interesting and important to follow how the Wal-Mart initiative will transform into a broad action and to a changing reality on the ground in countries like Bangladesh.

Julkaistu

Trade unions should step up their engagement with social responsibility initiatives, influence from the inside to improve supply chain workers’ conditions

Are some trade unions turning against corporate social responsibility and voluntary schemes? Recent statements and action has surely given this impression, but is it really so? Is the union-campaigner alliance around garment industry fire safety a single issue phenomenon or does it signify a deeper change?

Somehow it is easy to see why social campaigners seek confrontation with buyers and retailers and their CSR schemes and initiatives rather than cooperation, even when cooperation would be the best way to bring real improvements to the supply chain workers.

Many of these organisations deserve credit for having brought appalling supply chain conditions into the public eye in countries where the products are sold and consumed. They have been largely successful, which we can see today when no renowned brands or retailers can ignore their responsibilities. Some of the worst abuses have also been if not totally eliminated, at least considerably cut down.

There is quite obviously an impatience among campaigners that companies do not go as fast or as far as they should, and that for them this is more about damage control than a serious work to improve labour conditions. Surely, this can be so in some cases. Campaigner reaction should be to focus on changing this, not abandoning the whole CSR  instrument.

Some campaigner organisations themselves may feel that there is a risk to be marginalised and lose influence as business driven operations are spreading and becoming more visible and active.

I would not question the idealistic motives behind this kind of campaigner approach, and it is not common for all campaigners. Instead I wonder if it makes sense and is effective. One should also be realistic, political and other interests can play in, either within such organisations or among those who back them up.

High unemployment and economic hardship in most consumer countries contribute as well. Brands and retailers are criticised for moving production outside the countries where they themselves are based or active. This is a valid criticism also when one accepts that industrial growth in new countries is necessary to raise their low living standards, and that a globalised economy is necessary as such for economic and social development.

This is not the place to go deeper into these issues, but they do play an important role particularly when unions decide to back up supply chain focused campaigners. The more pressure these campaigns put on large brands, industries and retailers, the better they support these traditional union objectives.

There may be also other aims for some of the union campaigners. Companies that are considered anti-union are especially targeted – to push them to accept unionisation but even more to show unionised competitors the disadvantages of not accepting trade union representation and collective agreement, and the advantages of doing it.

I will not take a stand on these issues here, that may come later. They are also not black and white, and can be looked at from many angles. My question here is only whether it is correct to allow them to influence policies and action when it should be about conditions for really disadvantaged workers in much poorer countries.

Trade unions have never found it easy to approach business driven voluntary initiatives, aiming to set working conditions without union involvement and collective agreement. From the union point of view this gives employers the right to impose wages, working hours and other other conditions while denying workers influence over their own working lives.

It was neither easy nor straightforward for the the global retail trade unions in UNI Commerce to join the advisory board of the Global Social Compliance Programme GSCP. On the board and among the GSCP membership were many retailers which were considered strongly anti-union, and with whom UNI and UNI Commerce had major ongoing conflicts. How could we then sit on the same board with them?

I was Head of UNI Commerce at that time, and already had some experience of CSR supply chain cooperation with major companies. Many years earlier I had succeeded UNI General Secretary Philip Jennings on the Advisory Board of Social Accountability Internations SAI (SA8000). I also represented UNI-Europa Commerce on the Stakeholder Board of the Business Social Compliance Initiative BSCI. Although we had wished for faster progress, we could see many positive effects from the work of these two organisations. We also saw the benefits in a union and civil society influence and participation.

After long and deep discussions among our member trade unions we decided to get onboard when the GSCP created its multi-stakeholder Advisory Board. The motives were moral and ethical rather than based on our own priorities and objectives.

We were not prepared to compromise when it came to setting our members’ working conditions through social dialogue and collective bargaining. We could see, however, that in most parts of the global supply chains this would probably not be possible for many years to come. Thus, the commitment of big buyers to require that supply chain workers are treated correctly and enjoy decent working conditions was seen as a positive and necessary.

It was encouraging to see the maturity and responsibility of the commerce trade union leaders who refused to see the supply chain workers as tools for reaching their own objectives at home. The decision was based on the finest traditions of labour solidarity.

Union involvement in CSR programmes, schemes and initiatives has been essential to keep these focused on supply chain workers’ conditions. Had unions not participated, they could have become breeding grounds for paternalist approaches and competitors with worker empowerment and collective agreements. Without unions participating, these schemes and itnitiavites would not be as clear in their respect for freedom of association as most of them are today.

Sometimes I have wondered why trade unions and their projects do not make more effective use of this by soliciting and supporting buyer support for their organising efforts.

For unions to now distance themselves from these CSR programmes would be ill advised. The economic crisis that continues to affect most consumer countries puts growing pressures on supply chain workers and their conditions. Hard price competition in retailing makes companies source for low cost suppliers, which we see clearly in a migration of many buyers from China to even cheaper countries in Asia. That major shareholders who have seen the value of their investments dwindle keep pushing operative management for ever bigger returns does not help.

It would essential that trade unions and other civil society representatives continue and even strengthen their engagement in the CSR schemes and initiatives, instead of distancing themselves. With all their shortcomings these are among the few mechanisms which exist for the outside world to practically and effectively support human rights and decent conditions in the global supply chains.

It is clear that also the CSR schemes and initiatives must develop if they are to retain their usefulness and confidence, in the eyes of brands and retailers but also trade unions and other stakeholders. The tragic fire catastrophes in Pakistan and Bangladesh exposed many shortcomings that must be addressed. Issues include social auditing and certification, which still is too unreliable and probably needs major reforms to survive. Worker empowerment and continuous involvement is an urgent issue to approach, without it one can question whether the audit ‘snapshots’ are still up to date when the auditors have left.

A key issue is the link between CSR and purchasing practices. There is much positive development here, this I have seen in my engagement with GSCP. The social responsibility professionals are doing a systematic work and my impression is that there is a growing appreciation and support for its importance by top corporate management.

These are some things that unions should be pushing for, from the inside. They are also issues that I will come back to in later comments.