Avainsana: GSCP

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

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

European Parliament members call for more brand and retailer responsibility – but new labelling standard for global supply chains may be unrealistic

Today’s European Parliament discussion about factory fire safety in Bangladesh and other supplier countries is significant for the whole concept of corporate social responsibility. For the first time there is a serious attempt at this level to force multinational brands and retailers to require their suppliers to respect ILO Labour Conventions. The resolution has been put forward by a broad coalition of political groups which should mean that it becomes the opinion of the Parliament.

Even if the way to European legislation will still be long, this is an important initiative. It should lead to an active and constructive exchange about the best ways of ensuring the human rights and proper working conditions for supply chain workers.

The EU parliamentarians propose a new labeling standard to ensure that the labeled product has been produced in accordance with the core ILO labour standards. Whether this is useful can be discussed. Those of us who have worked actively with these issues know how difficult it is to develop a reliable social labeling system, if not outright impossible. Who would interpret whether conditions have been right. What about countries where freedom of association is not fully respected? How would the controls be built up? Would labels be required for all products and all producing countries, including the EU Member States, Switzerland, Norway, United States, Australia – just to mention a few.

I also doubt whether still another social standard would make sense. The problem today is rather that there are too many of them. This is a main reason for the Global Social Compliance Initiative GSCP driving an upward convergence and mutual recognition. If the EU starts to work for still another code, and establishes a labeling system, it will once again move resources away from improving workers’ conditions, to multiple auditing and added bureaucracy.

Still, the initiative itself is good and commendable. Also when it comes to fire safety, this should contribute to real improvements of today’s situation in many countries, particularly in Asia. The European countries need to make it clear to governments in some of the supplier countries that they have to improve their act considerably if they want their industries to enjoy a continued access to the EU markets.

Also private initiatives are continuing and evolving, initiated both by the corporate world itself or launched by civil society organisations. All those who are involved have to show the maturity and responsibility to cooperate rather than engage in attacking and questioning the seriousness or justification of what others are trying to do.

If something good is to come from the recent tragedies, it could perhaps be a more general acceptance that human rights are universal, that they have to be actively supported also in global supply chains, and that decent working conditions cannot be denied whatever competitive interests companies believe that they have.

Julkaistu

Bangladesh and Pakistan factory fire safety must be supported by broad coalition that lays aside other conflicts

Companies, unions and campaigners must set aside their differences and work together on supply chain fire safety.

If we really want to help improve factory fire safety in Bangladesh and Pakistan we need to move from talking to doing. There is one effective working week left for the global economy and supply chains in 2012. This is not much, but should be enough for concrete commitments to be made and plans of action agreed. This allows for the all-important work on the ground to begin early next year.

Already before the tragic factory fire in Bangladesh, I took the initiative to raise fire safety issues urgently also within the Global Social Compliance Programme GSCP. This was a reaction to the disastrous fire that struck the Ali Enterprises garment factory in Karachi in Pakistan in early September, and was readily agreed to by both the executive and advisory boards.

Nobody would of course have wanted to see that when the boards met for a joint meeting in Switzerland at the end of November, there was a second disaster to prove that urgent action is needed to protect the safety of workers in these as well as many other countries, where the present situation is bad beyond belief.

When I asked GSCP to take this up as an urgent issue on the joint agenda of the executive and advisory boards it was because of the unique convening power that this programme has among buyer brands and retailers.

GSCP itself is not really adapted to deal itself with the immediate needs for correcting the safety situation on the ground. It is more of a platform for encouraging and advising buyers and retailers on integrating high social and environmental standards into their supply chain behaviour. Driving upward convergence of individual codes, standards and other tools to achieve this, GSCP can help to move resources from social and environmental auditing to the all-important capacity building and remediation at supplier workplaces.

Leading global brands and retailers are already working together within GSCP on many aspects of supply chain responsibility, both on central levels and in regions where their buyers are active. When it comes to social and environmental conditions, the approach is non-competitive. I am convinced that we will very soon see this culture of working together forming a realistic and solid basis for their concrete and substantial contributions to making supplier factories safer for the workers.

This will further underline the important role that GSCP plays, but also that of individual corporate responsibility schemes and initiatives. They are not there as a substitute for obligatory rules or collective bargaining between employers and trade unions, but a tool to promote the same aims in circumstances where this would often not be possible without them.

During the last weeks we have seen an intensive discussion activity about the social dimensions of these global supply chains. Once again, we have been reminded of the bad and dangerous conditions of many workers who produce apparel and other goods for the world markets and consumers.  This public discussion with all its excesses has been useful and important for raising awareness among both those directly concerned and the general public.

And yes, there have also been excesses and ill-advised attacks, which have not necessarily contributed to build confidence for joint work to support concrete changes and improvements. We should still understand the frustration that drives also those who rightly feel that many safety risks should have been addressed much earlier. Clearly, there is scepticism also about the real preparedness of large buyers to participate, and to accept that their purchasing prices may be affected.

Now is the time to move on from this discussion. Positions have been established and opinions registered. Unless all focus on concrete action now, the supply chain workers and their families will not see improvements in their conditions. All who want to engage themselves in real ways  must now talk and work together, however differently they see the larger picture.

Brands and retailers, corporate social responsibility schemes or initiatives, global or national trade unions, non-governmental organisations, public sector authorities and institutions, suppliers and traders – they and others must now come together. Concrete projects and other action is needed.  Only a broad and powerful coalition can make a real difference for the workers who are concerned.

There are already things that have been done, which are useful when developing a comprehensive programme. Buyer companies have developed awareness raising and training materials, and already engaged in important capacity building efforts, such as French multinational Carrefour and Swedish apparel giant H&M. Others have developed their own projects and budgeted important funds for them, one of the public examples being the US based garment company GAP. All these companies have longstanding commitments to social supply chain responsibility and much experience of dealing with these issues.

An important part should also be that of the initiative which campaigner and advocacy organisations –  the Clean Clothes Campaign, the International Labor Rights Forum ILRF, the Workers Rights Consortium WRC and the Maquila Solidarity Network –  have launched last year in Bangladesh. With union and NGO support and commitment to participate by two large companies that also have solid social responsibility track records – US-based PVH and German Tchibo – they have developed a concept that is really worth a close look when developing any approaches also on a broader basis.

If a broader coalition can come together very soon – as I think it will – care should be taken that it can provide also a platform for a multitude of individual projects which are well aligned with all other activities. This civil society driven project should be one of these, and it should be in common interest to ensure that it then gets the necessary backing to be launched. The owners of this project should also see the benefit in this and be prepared to work as a part of a larger effort to ensure real and significant results.

Some key considerations when building a broad and common approach should be :

  1. Governments in the countries concerned must act to secure and effectively enforce safety regulations in all workplaces, not only those that work for the export sector.  There is also much work needed to combat corruption, which has a big negative influence both on fire safety conditions and on dealing with catastrophes when they happen.
  2. Individual suppliers and their industry federations must understand that demands on securing worker safety are serious and have to be acted on if they want to continue their business relations and role in global supply chains. They cannot only hide behind allegations that pressure on prices and supply conditions by international buyers push them to ignore safety considerations when building and operating factories. Even if this indeed is an important factor, it is far from the only reason for unacceptable conditions.
  3. Brands and retailers, traders and others who are engaged in global supply chains and who benefit from the work done in these factories and other workplaces have to carry their part of the responsibility, also when it comes to economic issues. Prices and other supply conditions must be on a level that allows for safe working conditions to be established and upheld, and respects the human right of supply chain workers and their families to live their lives in dignity. Here, buyers cannot hide behind anti-trust regulations and the authorities in the developed world have to accept that a level playing field may be one of the necessary conditions for dealing with this issue. This time, the economic dimension will be important, the fire safety situation will require also many structural and construction changes that will cost a lot of money. Part of this has to be carried by international buyers and the end consumers in the developed world.
  4. Campaigners and trade unions must take care that they do not use these issues as a vehicle for promoting other aims and objectives, however urgent they may be seen. They have to be prepared and able to work side by side also with companies whom they may have fundamental differences with when it comes to other parts of labour relations or their conceived social and environmental behaviour.  There is a job to be done here, and if the business sector is now prepared to act strongly and concretely, campaigners and unions should support rather than question it, and accept that everyone will have to make compromises along the road to secure that the main aim is achieved.

At the end of the day, successes and failures will be measured on how effectively changes are put in place locally. This means that relations between employers and workers have to be developed as well. Without a worker empowerment which normally takes place through trade union organising and social dialogue, credible workplace action and controls can become impossible. In addition to employers and unions themselves, the corporate social responsibility schemes and initiatives must consider taking a step further from a passive recognition of freedom of association and the right to collective bargaining and work for active worker empowerment to be included as part of their codes and standards, in addition to being raised in capacity building and remediation.