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Julkaistu

Berlin Conference: G7 German Presidency drives stronger human rights and labour protection in global supply chains – world brands and retailers should step up their participation

OECD Secretary-General Angel Gurria and ILO Director General Guy Ryder at the podium of the German G7 Presidency Conference on sustainable supply chains in Berlin on 10-11 March 2015.

OECD Secretary-General Angel Gurria and ILO Director General Guy Ryder at the preparatory G7 Conference in Berlin in March this year.

A new approach to labour conditions in global supply chains is fast emerging. Human rights and labour standards will be applied in global supply chains more effectively than today. This came clearly out from the recent (10.-11.3.) G7 Conference on sustainable supply chains, arranged in Berlin by the German Presidency.

The Rana Plaza disaster in Bangladesh opened our eyes to the inhuman working conditions in major supplier countries. Those that may have thought that this will be fast forgotten have been proven wrong.

If the German government gets its way, the changes could be closer than we may think. The G7 Presidency is a solid platform for launching the initiative. Having participated in the Berlin Conference, I have no doubts: The political leadership of Europe’s and the European Union’s leading economy is clearly committed to change.

The intention today is to keep the approach voluntary. If the business sector lives up to its obligations, it could remain so. If real change does not happen, we may well see more legislation, sanctions and other binding measures. This would surely be the case also when countries apply the UN Guiding Principles on Business and Human Rights.

During two days, stakeholders from leading schemes and initiatives joined NGOs, business associations, governments and others, altogether 300 participants, in discussing the best ways to approach challenges. Germany’s labour and development ministers Andrea Nahles and Gerd Müller, as well as many of their minister colleagues from other countries, participated personally much of the time, joined by top government officials.

Major developments are on their way.

In Berlin, the top leaders of the ILO, OECD and the World Bank sat in the same panel, for the first time ever.  They committed their organisations to major roles in bringing about a social dimension to global supply chains.

Chancellor Angela Merkel took a personal interest and issued an important statement on the world economy and its social dimension, together with ILO Director General Guy Ryder, OECD Secretary-General Angel Gurria and World Bank President Jim Yong Kim.

Surprisingly few large brands and retailers were present. Those who were there included Carrefour, H&M and Ikea – not surprising perhaps, when one knows how seriously they approach their supply chain responsibilities.  Otherwise the business community – unless I have missed someone – was represented only through organisations, and by a number of German small and medium enterprises who are really focused on sustainability.

To stay away from the meeting was not a good choice.

Most large German brands and retailers question the government’s plans to introduce a sustainability label for consumers. Until now they have tended to distance themselves from the national tripartite textile alliance, the “Textilbündnis”.

The Berlin conference may well change this reserved approach, and hopefully it will. It does not have to mean that the companies give up their substance reservations, and if they really want to promote them they would need to be present.

Brands and retailers also tend to think that they are unable to take responsibility for anything below their first level suppliers. They point at the complicated structures of supply chains and say they are impossible to monitor effectively.

Not only brands and retailers are to be blamed for a lack of concerted action.

Social campaigners and many trade union organisations like to say that buyer companies just want to shy away from their responsibilities, focusing on generating as much profits as they can from their supply chains.

This may be true at times, and surely is, but far from always. There is a clear commitment to decent supply chain standards also in the business community and if the right approaches are found, real improvements will come about.

Taking formal responsibility for a long and complicated supply chain is definitely a serious decision that cannot be made lightly. The same is true about consumer labels. If even advanced monitoring schemes such as the Fair Wear Foundation does not believe even in certifying factories, and SA8000 has decided not to use consumer labeling, then one can ask whether it is really possible to apply this on a general level.

Back to Berlin, business should have participated more actively in the conference. Also for those who have strongly divergent views it would have been better to have them around the table.

Business should indeed be careful and alert. There is a post Rana Plaza world which will not continue to tolerate an economy that allows and even relies on poor and dangerous working conditions and extremely low wages. If a consensus between governments and all stakeholders is not found, we will see political solutions and legislation.

Social campaigners and trade unions should reflect whether it is really smart to dismiss the relevance of multi-stakeholder and business driven CSR initiatives – or social auditing for that. Without the engagement and active participation of buying brands and retailers it will be very difficult to apply any standards. The Global Social Compliance Programme GSCP can be very effective and useful here, and I will surely take some initiatives at our forthcoming board and member company meetings in Los Angeles.

So, what will then happen now?

  • The UN Guiding Principles on Business and Human Rights will be applied through national legislation in all major industrialised countries. There is no doubt about this. There will also be a legal dimension and home countries of buyer companies will require that obligations are respected.
  • The OECD Guidelines for Multinational Enterprises will be more effectively applied and national contact points will play more of a role, this was made clear by Secretary-General Angel Gurria.
  • The world Bank will substantially upgrade social conditions as part of its development projects and is adding to its dedicated staff in cooperation with ILO, as its President Kim told the Berlin meeting.
  • Next year’s International Labour Conference will focus on global supply chains as a major issue.

I am further convinced that a living wage for all workers will soon be required all through the global supply chains.

When the G7 Presidency actively, openly and forcefully promotes environmental and social conditions in global supply chains, it would be smart to listen very carefully. We may well be witnessing the beginning of a new CSR era that brings a real change to the better for the supply chain workers and their families.

Julkaistu

Genetically modified GMO crops make me uneasy – thoughts when preparing for G7 sustainability conference in Berlin

I am preparing for a G7 Conference in Berlin on sustainability and social standards in global supply chains and have spent much time on reading about both environment and labour dimensions.

Working conditions is of course a familiar subject while other sustainability issues formed a major part of my report to the German cooperation and development ministry BMZ on Fairtrade cotton. As I will be in Berlin on behalf of the Global Organic Textile Standard GOTS, both will be important to follow.

One particular subject keeps coming up, genetically modified food and other agricultural products. I have approached this with an open mind, trying to close out the more extreme GMO views, for and against.

What strikes me particularly is that so many of those who defend the agribusiness interests don’t even hide their contempt for environmentalists and other concerned people. This has surely fed my already suspicious mind – are these scientists and others afraid of getting into an intellectually honest discussion?

I am not opposed to genetic modification science as such and I accept that much good has come out of it. What makes me concerned is that so much of this research and development is purely business driven, by large multinational companies.

As I said about genetically modified Bt cotton in my Fairtrade textile report, we may see these innovations being applied already before we know what longer term effects they will have on people and environment. There seems to be a belief that when new problems arise they can be addressed by modifications to the modified seeds.

When the Bacillus Thuringiensis pesticide produced by the genetically modified Bt cotton is not strong enough to kill the bugs that have developed a resistance, pesticide use goes up again and new generation GMO seeds are developed that are more effective. I am not comfortable about this approach, and not confident that responsibility for the environment and for human health will always prevail against economic short term interests.

This is an area where mistakes cannot be made. When the card has been played it remains on the table. Just that here the stakes are much higher than in any poker game.

Why then does something like 80 per cent of world cotton come from GMO farming?

Undeniably, yields increase considerably and pesticide use goes down in the years after having moved to these cotton varieties. Any future risks seem to be far away, if the farmer even knows about them. In the poorer countries of the world, where cotton is often one of the most important crops, there are obvious reasons that short term benefits prevail. Active marketing of GMO seeds contributes to these choices, marketing where risks are surely not often mentioned.

The lack of alternative seeds is a huge problem in many parts of the world. Even if a farmer would like to stay with other cotton varieties, this is often impossible. Also a cross contamination is a real risk, especially in environments where farms are small and education levels not very high. To apply the rather demanding buffer zones in these circumstances is not really realistic.

As the GMO seeds are produced by private companies, they are also their intellectual property. The producer multinationals like Monsanto are of course actively protecting their interests and either selling the seeds for every growing season, or requiring royalties.

This would not be a real problem in the developed world where most farmers already for long have bought seeds rather than collected them when harvesting. In poorer parts of the world the situation is different. There, millions of small farmers have been pulled into a ‘modern’ monetary economy in a situation where neither financial nor social support networks often exist. We have heard of many family tragedies when a harvest season has gone badly wrong.

Maybe we will still see something similar to the pharmaceutical industry, which has had to accept that cheaper generic drugs are produced and marketed in poorer countries?

Would I eat GMO food? Yes I would, even if I avoid it whenever possible. Would I serve GMO food to my children if they were still young? No, I would not.

Julkaistu

Time for Europe to resolve the Greek debt issue


Time to resolve the Greek debt issue!

The rather disrespectful language and misguided statements that soured early stages of discussions and negotiations have of course not been helpful for building confidence. Now the tone seems to be changing and attention shift to seeking concrete solutions. This is how it should be.

We have seen that Germany’s social democrats believe that the latest proposal from Athens gives a good basis for this. They also distance themselves from the most hardline conservative opinions. Vice Chancellor and SPD President Sigmar Gabriel has said this clearly.

Europe’s other social democratic movements, including in my own country Finland, should join in working for an end to the yes-no debate, together with moderate conservatives and others. I am sure that this will happen.

It is not always easy for people in the Eurozone countries to accept added liabilities when they themselves are squeezed by recession and unemployment. In Finland, also the decline of the Russian Rouble and the mutual sanctions hit hard on economy and employment and add to the strains.

The new Greek government’s declared commitment to respect its obligations and to build up a sound economic administration and taxation was both necessary and welcome with a view of seeking political acceptance among these voters for a final agreement.

Others must now also understand that changes are needed in Greece itself to alleviate the situation of those who are the weakest and most badly hit while supporting the growth that is necessary for the longer term building up of the economy.

The economic dimension is of course highly important for the Eurozone tax payers who are backing up the recovery programme, but let us not forget that the European Union is about much more.

Already a look at the map of Europe should convince anyone about the importance of a stable and democratic Greece in the south-east where the political and social situation is far from settled.

Together with the Nordic ties it defines also Finland’s place in the world. For many of us this was the key reason when we voted for EU membership. Today we need to strengthen the community, not weaken it.

Julkaistu

Pleased to be part of the Global Organic Textile Standard GOTS Technical Committee

I am preparing for the Global Organic Textile Standard GOTS Technical Committee next weekend in Frankfurt. There is indeed lots to read, but also lots to learn…

No, I have not gone over into agricultural science but will focus on social issues in textile production and supply chains.

The organisation describes itself briefly on its website, which also contains a very solid documentation about this initiative.

“The Global Organic Textile Standard (GOTS) was developed through collaboration by leading standard setters with the aim of defining requirements that are recognised world-wide and that ensure the organic status of textiles from harvesting of the raw materials through environmentally and socially responsible manufacturing all the way to labelling in order to provide credible assurance to the consumer.

Since its introduction in 2006 the Global Organic Textile Standard has already demonstrated its practical feasibility. Supported by the growth in consumption of organic fibres and by the remarkable demand for unified processing criteria from the industry and retail sector, it has gained universal recognition, enabling processors and manufacturers to supply their organic textiles with one certification accepted in all major markets. With the introduction of the logo and labelling system the GOTS is already visible not only on the shelves of natural textile shops but large-scale retailers and brand dealers as well. This is a milestone in consumer recognition and a strong acknowledgement of our reliable quality assurance concept.”

So why did I join this committee? An important reason is that I am impressed with the approach and work of this Standard, which is the only one of its kind and widely recognised. Working on my recent project for the German development ministry BMZ on Fairtrade textile certification GOTS did stand out as a reliable, solid and very practical approach.

There is a growing interest for organic textiles by both consumers and retailers, and it is important that also the people who are engaged in this industry can work under safe, good and dignified conditions.

I am pleased to have been invited to be part of this work and motivated to learn more.

With my experience from and board engagement in two leading corporate social responsibility organisations GSCP – Global Social Compliance Programme – and SAI – Social Accountability International SA8000 – I hope and believe that there are things I can contribute with.

Julkaistu

Amazon in Germany should negotiate with workers’ trade union and accept European labour relations culture

Amazon’s long-lasting labour conflict in Germany raises issues far beyond wages and working conditions. Amazon needs to accept to negotiate with ver.di and to respect European and German working life culture.

The American e-commerce giant refuses to negotiate a collective agreement with ver.di which is the Amazon workers’ trade union, a leading member of Germany’s powerful trade union confederation DGB. According to the union, they make extensive use of time limited employment contracts also when there is no reason for it, and when workers stay quite permanently in their positions. Many wages and other benefits remain below general collective agreement levels even if the workers’ action has already forced management to make some concessions.

Strikes are usually about much more than wages only. For workers to go on strike is a difficult decision and today’s trade unions both know and respect this. The unions know very well that a protracted conflict leads to serious income losses that require a long time to recover, however ‘good’ the result. Here, the workers and their union stand up in defence of German and European social dialogue and collective agreement cultures.

This is not the first time that a U.S. based company wants to play its own game in Europe instead of respecting the rules. Toys”R”Us tried it a few decades ago until it was driven out of Sweden. Wal-Mart got it wrong in Germany, suffered for a few years, and pulled back.

Amazon needs to accept that their German workforce is well organised.  They must be prepared to negotiate a collective agreement in good faith, fully respecting International Labour Conventions. In the longer run they will not be able to import an authoritarian human resource management in a culture and environment where social dialogue is widely supported. Many leading German politicians have joined in calling on the company to start negotiating with ver.di and putting an end to this conflict.

This is an example of a large employer forcing a labour conflict by its own behaviour. If the workers and their union would accept management’s refusal to enter into social dialogue and collective agreement negotiations the entire labour relations system could come under pressure.

Not only trade unions should be concerned. Competing employers who approach their workers and their trade unions responsibly have an equal interest to defend themselves. This is shared by society as a whole, particularly in times when social unrest and political instability are increasing also in Europe.

It is no wonder that behaviour like this easily drives polarisation and aggressiveness instead of promoting social dialogue and even cooperation. This will not help Europe to get out of the crisis.

Julkaistu

Shop opening hours affect workers and societies – should not be left to market forces to decide

Hypermarket at night in Seoul South Korea

Trading hours don’t affect only shop workers but also society at large. Excessive shop opening hours will force many others to work on Sundays and holidays or late at night. And do we really want all days to be the same, from Monday to Sunday, 365 days a year? More complex than we sometimes reflect on, opening hours cannot be left to market forces alone.

Once again, many shop workers worked on New Year’s Day. Of course, they were not the only ones. There were many others who spent the first day of 2015 at work instead of being with family and friends.

Societies have to function also on important holidays, and many services are needed. Some are clearly essential, others can be discussed. Retail shops provide important services for sure, but is it necessary that they do this 365 days a year, 7 days a week and 24 hours a day?

Trading hours is one of the issues that both business and trade unions, and society at large, need to look carefully at. Accepting that there are different values, traditions, cultures and also interests, we should do this with an open mind.

Retailing is an industry where substantial changes can happen fast. Today, much is about e-commerce. Web-sales continue to gain ground while jobs are lost in traditional commerce.

From the start, e-commerce has been used as an argument for trading hours liberalisation. High street shops and supermarkets cannot compete if they must follow shop opening rules. Trading hours restrictions have outlived themselves. The market and finally the consumers will decide. Limited hours drive customers from shops to the web, the proponents for removing shop opening rules say.

If stores really would be closed when consumers have time to shop this argumentation could make some sense. Many decades ago we could saw them close at 17 or so from Monday to Friday and 14 or 15 or even noon-time on Saturdays. There were serious calls by some unions for closing completely on Saturdays as well, to allow for a five day working week with the weekend free.

Even in the most regulated of environments today’s opening hours give plenty of time for shopping even for those with long working hours.

I cannot see that a regulated shop opening would be the major issue that drives consumers from high streets and supermarkets to the web. Other factors will surely be more important, such as price and assortment.

Some goods and services are just easier to select on the web than in a store. Bookstores and computer shops, home electronics outlets and traditional department stores face serious problems. Supermarket retailing on the internet continues to grow. Music and movies have already moved to electronic sites.

This will go on and traditional retailers will change, or suffer until it may be too late.

Over the years we got used to seeing commerce as a growth sector. It was a major entry road to employment and gave opportunities also for those whose formal education was not all that strong. Today we see shops being closed and staff being cut even where we did not think it would ever happen.

This can not be stopped or slowed down by letting market forces steer shop opening in an unregulated environment. Instead, we could see new problems emerge, for many, and for all of us.

Regulating trading hours is genuinely important for shop workers and others whose jobs are affected. Retailing is a low-wage industry where women form the big majority of the workforce. The negative social effects of excessive opening hours should not be ignored.

Eating from the fridge easily takes over from the Sunday dinner table. Doing and experiencing things as a family is more difficult and the role of parents and homes is undermined whilst everyone agrees that it should be strengthened. Day care centers are closed when they would be needed. To get home from work is difficult if public transport has ended for the day. Late night security risks abound.

The list could be much longer.

Inequalities have reached a level where even the World Economic Forum sees it as the biggest threat to our societies. The divide between those who have and those who don’t is deep and growing. Mass migration creates a third class in many societies. Unemployment is high and soaring.

Xenophobia and racism are on the rise. Young people who have lost hope revolt, and worse.

As this happens, business is taking the place of voters as the source of power. And, what does this have to do with shop opening hours?

The question is whose interests and which values drive the development of societies? Can economic interests be reconciled even better with cultural and social values?

Do we really want to give up our rhythm of life, for a new reality where everything is up and running 365 days a year and 7 days a week, possibly also 24 hours a day? From Monday to Sunday all days would be the same. If retailing goes this way, lots of other functions will have to follow a d extend their operating times. This would affect both the private and the public sectors – and workers.

What about employment then?

It is hard to see how this would promote job creation as retailing depends on the purchasing power of consumers and extending trading hours would hardly bring much added value. What may happen is that small shops, which in many countries already benefit from opening hours exceptions, would be pushed out even faster by larger operators.

There are seldom simple solutions to complex problems. Here we are dealing with a very complicated issue. Removing all regulations could have more negative consequences than positive effects. Changes and adjustments should of course be made when useful and necessary. The tricky thing is then to adapt to realities without losing human and cultural values.

Maybe the European social partners for commerce – UNI-Europa Commerce and EuroCommerce – should do a study on trading hours, accepting that they would be likely to draw conflicting conclusions from the material. At least the issues would be jointly defined, the first step to enable a dialogue.