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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.

Julkaistu

Bangladesh fire safety: Instead of only attacking multinationals the EU Parliament should seek their engagement and support

Not well chosen words by the British Member of the European Parliament Richard Howitt when he spoke at the Plenary yesterday on fire safety in Bangladesh factories:

“So in this debate we should condemn companies, including Walmart, Gap and Sweden’s H&M, who have so far refused to sign Bangladesh’s fire and building safety agreement to upgrade factories.”

It should be remembered that this is only one of many proposed projects and that also others are in the makings.

To start by condemning huge and resourceful companies who should instead be welcomed to be part of the efforts to improve supply chain conditions is not particularly smart.We can have our own views on how they are operating, but if change is to come about they must be angaged. All three of them have committed to this, and rather than pushing them away they should of course be invited to participate.

It is also fair to acknowledge that much has already been done by these three multinational retailers to address fire safety and other issues in their supply chains. Perhaps not enough, and perhaps purchasing practices still need to be changed to bring about real advances, but this is not the way to do it. It just seems that much of the criticism stems from the campaigners who own the project which Howitt referred to.

In Bangladesh itself a tripartite cooperation has been established, supported by the ILO. Why can this not be the the EU approach as well?

That Howitt spoke as the Parliament’s rapporteur on corporate social responsibility would have made his words even more difficult to understand if the debate had really been only about fire safety and Bangladesh. Now Howitt turned his presentation into a general call for stricter regulation of brands and retailers in supply chains, through the UN Guiding Principles and the OECD Guidelines for multinationals.

I can agree with much of what he said about the need for buyer companies to get more responsible for and involved in supply chain conditions. What is sad though is that once again, already disadvantaged supply chain workers are made into instruments for promoting political objectives, however good these objectives might be.

It was also not well advised by the rapporteur to single out one of the planned factory fire safety projects for this part of Asia. The campaigner-driven project that he referred to should be supported, as of now only two companies have signed up, but there are others as well which can have a similar or perhaps even a bigger impact. It is time for coalition building, not infighting in the consumer countries.

I hope that this less fortunate presentation and formulation of the resolution will not weaken efforts to come to grips with global supply chain problems. MEP Howitt is widely appreciated for his strong support for social and economic justice, but this time things just seemed to go less well.

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Julkaistu

Tripartite cooperation in Bangladeshi textile industry to address fire safety problems

The fire safety problems in the Bangladeshi textile industry are to be addressed locally, through a tripartite cooperation. The government, the manufacturers and employers associations, and the trade unions signed a joint commitment yesterday. A National Action Plan on Fire Safety will be developed before the end of February.

This is good news for everyone, particularly for the country’s garment workers who will hopefully see a fast improvement of their conditions. A broad cooperation in the countries which consume these products becomes even more urgent now, to support the action of the local partners and to work alongside with them.

Also leading multinational brands and retailers are clearly prepared to participate in bringing real improvements about. Now is the time to transform this commitment into concrete action, in cooperation with governments, trade unions and civil society organisations. The work does not need to start from scratch, much has already been done through various projects, particularly with regard to awareness raising and training.

What is new now is the realisation that also such things as the factory premises themselves, fire safety equipment, safety inspections, firefighting capacity and other structures and procedures have to be brought up to acceptable standards. This will be expensive, and buying brands and retailers as well as the end consumers have to be prepared to participate substantially.

Let’s hope that the ILO-supported tripartite initiative in Bangladesh will lead to similar cooperation in other countries concerned, particularly Pakistan.