Local to global comments in three languages. Much also from Pitäjänmäki Sockenbacka in Helsinki Helsingfors Finland, as well as from the organisations I participate in. The older content is from my previous blog page which I have now closed. Most of the contents on the earlier pages deals with sustainability, human rights and social responsibility in the global supply chains.
Will this year be a game changer when it comes to protecting and promoting human rights, labour conditions and environmental sustainability in global supply chains? Much is now happening on different arenas and if things work out as they should, we may see major positive changes.
There is important government activity in main consumer regions of the world. Many countries are transposing the UN Guiding Principles for Business and Human Rights into national legislation. Germany is committed to drive these issues within the G7 agenda during its Presidency this year. ILO, OECD and the World Bank are all stepping up their supply chain cooperation and activities.
Also the business community is on the move. Many of the world’s largest brands and retailers send signals about a more active grip and closer cooperation on their supply chain sustainability issues. A key player is the Global Social Compliance Programme GSCP which already has a widely accepted Reference Code in place, complemented by a well furbished toolbox for its implementation.
Public-private cooperation is the proper and most effective way for consumer countries to positively influence social and environmental conditions in the global supply chains.
To ensure maximum efficiency and results, brands and retailers on one side and unions and advocacy organisations on the other side need to develop a constructive and pragmatic cooperation and overcome their adversarial relations in supply chain work. Conflicts in other issues should not be allowed to undermine the work for human rights and better conditions for the often very disadvantaged supply chain workers and their families. This is an area where all efforts are needed and different approaches should be accepted and supported.
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.
The GSCP Members meeting in Los Angeles was held at Universal Studios, hosted by NBCUniversal.
Global brands and retailers created the Global Social Compliance Programme GSCP to define what good looks like in global supply chains. Their intention was to drive upward convergence of corporate social standards, thus enabling mutual audit recognition and better cooperation. Multiple and often repetitious audits would be avoided and resources directed to improving conditions.
The approach of this business driven initiative was serious and ambitious. The Reference Code that was to be the backbone of GSCP would be designed to fill the most stringent requirements of existing policies and social standards. This would be done together with trade unions and civil society representatives.
For many of the stakeholders that finally signed up, supporting the new initiative was far from self-evident. My organisation at the time, UNI Commerce Global Union, set its own requirements and conditions, and so did others. After a solid internal consultation process among member trade unions, UNI Commerce decided to join.
The years that we spent creating the GSCP Reference code and the toolbox to help apply it at supplier workplaces showed us that our decision had been correct.
It was a complicated exercise to reconcile the views of huge global retailers such as Wal-Mart, Carrefour and Tesco with those of UNI Commerce, the International Federation for Human Rights FIDH, and others. Still it worked, and the Executive and Advisory Boards always found common ground and agreed on solutions.
Today, GSCP is in place. An actively used environmental module complements the social responsibility instruments. Membership is up and global brands and industries have joined forces with traders. Many programmes and projects are using GSCP tools for capacity building and remediation. Cooperation with UN agencies and others is steadily increasing. Buyers, auditors and CSR schemes use the GSCP equivalence process to enable mutual recognition and joint action.
This is happening in an environment where many union organisations, social campaigners and politicians are suspicious and even hostile towards voluntary approaches by business. The intention of some seems to be to duplicate the Bangladesh Accord on Building and Fire Safety when addressing also other countries, regions and issues.
I doubt that this would work. The Bangladesh Accord responded to an unusually grave situation in the midst of high publicity, and addressed a specific although important part of labour conditions.The way that it finally came about was also exceptional and related to a public opinion that demanded fast action by global buyers.
To bring about something similar in a less upset situation would surely require a mutually respectful relationship where serious intentions of others are recognised and accepted rather than looked at with suspicion and often immediately discarded. In today’s strained economic and labour relations climate, this would call for much re-thinking on all sides.
It is much more realistic to accept and develop multiple approaches to improve the social situation in global supply chains. Governments need to secure the basic respect for human rights as well as decent conditions for workers and their families. Trade unions must have the right and the capacity to give workers a voice in an environment where social dialogue and collective agreements become mainstream tools for regulating wages and employment conditions. Social advocacy associations and other non-governmental organisations need to be positively engaged.
Business driven but with a solid civil society participation, GSCP comes together for its Members Conference and a joint Executive and Advisory Board Meeting this Thursday, in Los Angeles. Priorities will be defined and concrete tasks set.
A platform rather than an operative CSR scheme, GSCP deals with similar issues as individual standard organisations. Still, the programme is different from the schemes and initiatives. GSCP does not conduct audits, issue certificates or engage directly in concrete capacity building and remediation at workplaces.
GSCP has a unique convening power among brands and retailers, much due to the serious commitment of its host association, the Consumer Goods Forum CGF. An important task for GSCP is indeed to mobilise responsible brands and retailers both within and outside the consumer industry for concerted action to help improve supply chain conditions.
To focus on particularly difficult or widespread supply chain problems may well be useful when real changes are sought. Successful projects on this basis can be good catalysts for further remediation of conditions. It is important to set any aims so that they build on the GSCP Reference Code principles of setting standards on the highest existing levels. To go below this could easily lead to misunderstandings or false interpretations and even harm other sustainability activities.
Even if individual issues are singled out for special attention, GSCP cannot distract itself from its core mission as a whole. The GSCP Reference Code is and must remain the backbone of all policies and programmes, to ensure cohesion, credibility, impact and respect.
The final aim of this social responsibility work is a situation where employers and workers can agree on relations and conditions through mutually respectful social dialogue and collective agreements, supported by governments. To achieve this requires that buyer companies help ensure full compliance with universal human rights standards and international labour norms, also where national legislation or policies are not on these levels.
GSCP is an exceptionally good forum to develop joint approaches which then can be implemented through multiple programmes and partner organisations. The UN Guiding Principles on Business and Human Rights is now being included in national legislation and programmes. The German Presidency of the G7 Group of leading industrialised countries has placed supply chain sustainability high on the common agenda for 2015. These are but some of the developments that directly affect GSCP and its role as a convening platform.
The corporate sector wields much power in the globalised economy. GSCP exists to help leading global brands and retailers as well as other parts of the business community to ensure that universal human rights and decent labour standards are respected and applied in global supply chains. This is – and should be – in the interest of all. Without this contribution by the business community itself, change would be both slower and less effective.
This engagement is now building up within GSCP and should be actively nurtured. The member brands and retailers should more clearly show their commitment to GSCP as their common sustainability platform. This would not weaken their ties with schemes and initiatives who have their own missions and roles. GSCP itself should have the members’ support to speak out on their behalf for these business driven activities that are firmly anchored in civil society.
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.
The influence of the Bangladesh building and fire safety Accord and Alliance on labour conditions in global supply chains should not be underestimated. Despite targeting only a small even if very important part of the supplier landscape, some of their approaches could useful and possible to apply also more broadly.
For obvious reasons, and rightly so, these activities have attracted a lot of attention and considerable resources. It is of course important that this does not happen at the expense of other urgent supply chain needs.
Factories, farms and fisheries in many regions and countries are affected by serious problems. Child labour is still a burning issue, from cotton fields to stone quarries. Trafficking and forced labour remains a huge problem, on construction sites, fishing vessels and in many other activities. Income levels remain far below the acceptable and a living wage seems very hard to reach.
What is often lacking is respect for workers as human beings. Traditional social divides and discrimination combine with profit interests to feed resistance against worker organising, social dialogue and collective agreements. Unless attitudes change and workers’ rights to collective representation get accepted there can be no sustainable improvement of labour conditions.
There are many countries where changes will not take place without clear messages from the outside world. Excluding any groups from efforts to improve the human rights and labour situation in global supply chains would be wrong. Business as well as unions and NGOs can all make important contributions and should all be encouraged to do their part.
Buying brands and retailers need to be seriously engaged, doing their part of implementing the UN Guidelines for Business and Human Rights. Voluntary initiatives and codes of conduct can be useful guidelines for driving concrete action and they should not be belittled. There is much concrete capacity building and remediation going on with supplier companies, together with dedicated CSR schemes and initiatives such as SAI, ETI, FLA, BSCI and others. A professional social auditing industry can provide valuable knowledge about local situations and needs.
As a common business owned platform with a strong stakeholder representation, GSCP works for a general recognition and application of demanding social standards with a focus on bringing about real improvements to supply chain workers.
The GSCP Reference Tool for Auditing Competence wants to make sure that auditing remains credible and serious. Setting minimum professional standards, it supports buyers and their suppliers as well as the auditing industry itself. It helps schemes and initiatives ensure that they offer services at the highest industry standards. Most of all it benefits workers, ensuring that social audits lead to remediation and respect for human dignity at workplaces.
Although we should not in any way underrate the work for better supply chain conditions, we have to keep in mind the huge domestic labour markets where conditions are mostly much worse and less visible. Better labour conditions in export sectors can improve overall standards if there is a political determination.
Helping to make Bangladesh garment factories safer is important. Both programmes – Accord and Alliance – are concrete and already report on results. Initial factory audits have been completed and attention is on real improvements of safety conditions.
These projects work with a tight time schedule and we should soon start to see their real performance. Much will depend on how financing is arranged for the often necessary but also costly changes. Will the financial support commitments by brands and retailers be enough and what are the supplier companies themselves prepared to invest?
The Accord gives much influence and visibility to global trade unions and social campaigners whereas the Alliance is clearly business driven even if there is a civil society participation as well. The Accord reflects the European labour relations culture which is more social dialogue oriented, while the Alliance one is surely affected by the much more problematic US situation. Both are supported by the International Labour Organisation ILO and many consumer country governments.
One joint initiative would of course have been the most effective alternative. This was in fact the intention of the GSCP Executive and Advisory Boards when we took the first initiative and asked the German development agency GIZ to start preparing a fire safety project for Bangladesh and Pakistan. When I suggested to both boards that we should take concrete action I insisted that also IndustriALL Global Union be included.
There was also another building and fire safety initiative on the table, already for a few years. This was developed by American and European labour advocacy NGOs but had failed to attract sufficient support and participation from buyer brands and retailers. These organisations also became part of the GSCP-initiated GIZ process.
At the beginning, the common aim was a joint project. Soon events took another direction when differences emerged about whether the complaints procedure should be based on court proceedings or mediation and arbitration.
Particularly US companies were concerned that they could be challenged in court by hostile campaigners on various grounds, and did not accept this. Some labour unions and NGOs on their side did not trust that a mediation or arbitration procedure would be strong enough to ensure that buyers keep to their commitments. This was clearly affected also by the strained and often hostile labour relations climate in the United States.
At the final stages of project preparations, global union federations and advocacy NGOs took over the initiative from the less well coordinated buyer brands and retailers and began actively and publicly to assemble what is now the Accord. This lead most North American based brands and retailers to detach themselves from the process and develop and launch their own Alliance.
After this complicated process it is good that both projects seem to work reasonably well, side by side. Both are clearly there to bring about real changes in garment industry conditions. Hopefully the Bangladesh government and particularly the employers’ federation will do their part of the job to ensure safe conditions in the country’s garment industry.
Income inequality tops the ten biggest challenges that we face. This is not a statement by trade unions or labour advocacy organisations, but tops the major trends for 2015 identified in a fresh World Economic Forum Report.
It is a sobering experience to look at the report’s graphics on how much the share of the national incomes of the richest 1 % really has grown during the last 20 or so years.
Hardly surprising, the United States is a particularly extreme case of this inequality, but also Australia and Sweden – and some others – show results that they can hardly be proud of. It would be interesting to measure how much of this has been due to political changes in countries that have traditionally been considered as rather egalitarian welfare states.
Lack of awareness can not be the reason for failing to act on this:
“According to the 2014 Pew Global Attitudes Survey, in the seven Sub-Saharan African nations polled over 90% of respondents regard the gap between rich and poor as a big problem; in the United States, almost 80% do.”
Looking forward, the report cautions that particularly Asia and the Pacific may face a high risk of rising inequality, although this will be true also in the other parts of the world.
With its enormous convening power and influence WEF is surely making an impact by highlighting these problems. The host of the annual Davos Summit meetings points at where solutions can be found:
“We know what we need: inclusive economies in which men and women have access to decent employment, legal identification, financial services, infrastructure and social protection, as well as societies where all people can contribute and participate in global, national and local governance. It is now time for action, in order to leave no one behind and bring everyone forward with a life of dignity.”
The step to decisive action is still a long and difficult one.
Four policy areas stand out when the experts’ opinions are summarized: Redistribution, taxation, education and jobs creation.
This new reporting on income inequalities is definitely something to read and to contemplate on, as are the nine other trends that WEF lists for the next year.
The Global Social Responsibility Programme GSCP meeting at UN Headquarters in New York was a timely and concrete opportunity for business and stakeholders to discuss and plan their own contributions to dealing with this huge problem. The next months will see more concrete action being launched, hopfeully with a big relevance for many of those who are really low down on the world’s income ladders.
