Avainsana: Trade unions

Julkaistu

Health sector problems in Japan and Finland are quite similar, seen from a union viewpoint

”Masanobu Furukawa from UA Zensen told delegates ( to the 2nd UNICARE World Conference in Rome in February 2019 ) that with the exploding elderly population in Japan, the need for collective bargaining agreements in the health sector is dire. Overcrowded care homes, burnout, stress and dangerous conditions are rife and unions are looking for solutions. The relationships built up through collective bargaining are a way to make sure that workers lives are improved.”


There is a serious situation in many private profit-based retirement homes and other social services in Finland as well. Here, under-staffing creates the kind of problems that also the Japanese health care professionals recognise. Strict minimum conditions through legislation combined with legally binding collective agreements is a solution.


In countries with well developed public social and health services such as Finland it makes no sense to outsource them to private profit-hungry multinationals like is being done here. In addition, the tax payers carry the costs and these huge companies themselves avoid taxes through internal expensive loan arrangements and ’tax planning’ that usually involves tax paradises.

Julkaistu

The Consumer Goods Forum took over GSCP – focus on combating forced labour

The Consumer Goods Forum moved in a timely way when integrating the Global Social Compliance Programme into its structures and work. The GSCP sustainability toolbox had been completed and the convergence-driving equivalence process was well established. Emphasis needed to be shifted to new things.

Taking up the challenge of forced labour in global supply chains was both bold and ambitious and sends a signal about how serious the approach is. When the joint CGF effort takes off it can again prove that voluntary private sector initiatives can effectively defend and support human rights and promote decent work in the globalised economy. As a member of the Advisory Board, I am pleased that GSCP was given the task of initiating and helping to launch this work. It does show the success of our common initiative.

When I was invited to bring the trade unions into this newly formed sustainability platform my first reaction was rather reserved. There was this group of leading multinational retailers and they had already developed a code and set a work programme. Would we really be able to influence, or be there just to give credibility to big business?

My discussions with the founding companies, particularly Carrefour at that time, convinced me that changes and adjustments would be made so that we could come on board. 

This was not a self-evident decision for UNI Commerce. Some of the GSCP companies were engaged in serious labour conflicts with our affiliates – how could we work side by side with them without weakening the union positions? What about the right to form trade unions and conclude collective agreements?

My view was – and still is – that industrial country employers and trade unions cannot act out on their disagreements or labour conflicts at the expense of workers and their families in supplier regions. This would be both immoral and unethical. We have a shared responsibility for supporting human rights and decent working conditions in countries that cannot or will not do it on their own.

Maybe my own Nordic background where seeking social dialogue and partnership plays a central role for my conviction that we should join. Thus I was pleased and even impressed that the UNI Commerce unions agreed and decided to set out on the joint voyage.

Our work on the Reference Code as well as the other parts of the unique GSCP sustainability toolbox was always marked by a genuine will from all participants to find the best and most effective approaches to defining what good looks like and how it can best be promoted in the global supply chains.

Today’s labour relations climate is harder than when we built up GSCP together. Instead of sharing the results of growth employers and unions deal with paying the costs of shrinking economies. This has also affected sustainability work.

Global unions have downgraded or even ended their participation in many schemes and initiatives. They are openly questioning social audits and voluntary programmes, calling for more legislation instead. For this, they have formed new alliances with militant social advocacy organisations. We have indeed witnessed something of a collapse of broad multi-stakeholder cooperation on social sustainability in global supply chains.

At the ILO International Labour Conference in June this year we could see the divides. Unions and their NGO allies were pushing for a new binding Labour Convention while employers denied that there were governance problems or any need for new regulations. The end result was largely non-committal as could be expected and discussions about a possible new Convention continue. 

Many unions and advocacy organisations hope that the UN Guiding Principles for Business and Human Rights would be applied through binding legislation in the home countries of buyer companies. I have seen this clearly also through my participation in Germany’s Textile Alliance.

With governments unwilling to put their own business sectors at disadvantage, this will not happen. Also from a development point of view increased risks for sanctions – also for unintended issues – could lead brands and retailers to leave some of the least developed countries where the need for a foreign economic involvement may be biggest. I am convinced that respecting the UN and OECD due diligence obligations will continue to rely largely on voluntary corporate responsibility schemes and initiatives.

I do understand the NGO and union frustrations over what they feel is an all too slow pace of positive changes through audit based initiatives. Still I think that much of the criticism is unfair, maybe also driven by their own organisational interests. The projects that they have developed themselves are highly supportable and can be useful as best practice examples, but too narrow both to substance and coverage to make a real difference for the total supply chain picture.

Both buyer companies and sustainability schemes have done much to support human rights and decent working conditions in global supply chains. GSCP has played a major role in moving emphasis from audit reports to improving labour conditions. Both capacity building and remediation has grown, most of it enabled by the buyer community.

Social auditing continues to be an essential part of this work. GSCP has done much to support the auditing industry in its efforts to secure audit quality and reliability and this work now continues in the new Association of Professional Social Compliance Auditors. I have joined the APSCA Stakeholder Board together with representatives of some of the CGF member companies, a further sign of these links.

Approaching the forced labour issues through joint activities does not mean that the CGF, GSCP or member companies would abandon the rest of their agenda. Driving convergence of social sustainability work at a high and demanding level remains essential if we want real and positive changes to take place in the supply chains.

Very much is already being done, but regrettably much of it outside the public eye. While brands and retailers are very skilled in marketing their products they are much less active in telling about their own sustainability work. Here, both the CGF and GSCP should pay much attention to transparency and reporting. The work to eradicate forced labour will give a good opportunity to do this and thus also draw attention to the need for broad public-private cooperation to defend human rights at work.

Julkaistu

Governments, business and stakeholders need to work together for supply chain sustainability

Supply chain social responsibility is on the move this spring. The tripartite ILO International Labour Conference will be a high point with governments, employers and trade unions debating how best to secure human rights and promote decent work. Countries around the world are following up on the UN Guiding Principles for Business and Human Rights, setting their own National Action Plans. Many sustainability schemes and initiatives are developing and stepping up their own work. The professional social auditors have established their own organisation APSCA to secure and develop audit quality.

It is important to ensure that the activities and programmes are efficient and help bring about positive change. The attention to policy and structures should not move away the focus from real and concrete efforts to improve labour conditions. Taking care of the tools and using them effectively should complement each other, not compete about our attention.

We need broad engagement for sustainable supply chains

Public-private cooperation is an important element of any effective sustainability efforts, also in consumer countries that work on their own social and environmental responsibilities in global supply chains.

Governments need to influence supplier countries to play an active role in ensuring human rights and decent working conditions. They must also set rules for buyer companies and other supply chain participants to follow. Bringing together business and stakeholders around joint objectives and tasks, such as Germany is doing in its textile alliance – – Bündnis für nachhaltige Textilien – is equally essential.

Buyer brands and retailers can and must use their commercial power and know-how to require and help their business partners to behave responsibly. Carefully designed buying practices and agreements can both encourage and enable this.

Trade unions and non-governmental organisations are important partners in this work, enabling and helping workers to participate in setting labour conditions.

GSCP has created a solid base for convergence and cooperation

The Global Social Compliance Programme GSCP has done much to help brands and retailers translate their sustainability commitments to concrete action. The GSCP Reference Code and a collection of sustainability tools now form a solid base for effective sustainability engagement. They were all created through a multi-stakeholder process and aim at securing full respect for universal human rights. Furthermore, they set minimum requirements for decent working and employment conditions, based on ILO International Labour Conventions. Key toolbox elements deal with sustainability management systems, both for suppliers and for buyer companies. Others cover all aspects of social auditing and auditor competence, setting minimum standards that should ensure reliable audits.

GSCP was created to drive an upward convergence of social responsibility codes and standards, based on the ambitious reference code and the application guidelines in the toolbox. This would enable mutual recognition of social audit results and help direct more resources to capacity building and remediation at supplier workplaces. The GSCP equivalence process was developed for the analysis and benchmarking that serves this process.

This important initiative by many of the world’s largest brands and retailers has had a much broader impact than only driving its core convergence objective. We have seen a remarkable growth of both awareness and engagement in the business community with activities levels stepped up across many industries. A good and welcome example is the commitment made by the Consumer Goods Forum CGF to play an active role in working for the UN Sustainable Development Goals SDG’s.

The first concrete joint measure by the CGF companies will be launching of an ambitious and welcome project to eliminate forced labour from their supply chains. This will also be reflected in the work of GSCP now that the Reference Code, toolbox and equivalence process are in place. This does not mean that other parts of the Code would be neglected, they will continue to be as important as ever on the agendas and programmes of the individual brands and retailers.

Sustainability schemes and initiatives update their own approaches

Buyers need to be actively engaged if we really want to secure human rights and decent working conditions in global supply chains. Corporate social responsibility CSR schemes and initiatives can contribute to the quality and efficiency of this engagement. To achieve this, both transparency and full civil society engagement are needed.

There have been big changes and efficiency boosts also on the standard and code application side. As an example, Social Accountability Accreditation Services SAAS has further increased the reliability of the already demanding SA8000 Social Standard. The sustainability auditing industry itself has established a new organisation to safeguard audit quality and reliability. The Association for Professional Social Compliance Auditors (APSCA) is an important initiative and I was happy to accept an invitation to join their Stakeholder Board.

Also other sustainability programmes such as Social Accountability International SAI and the Business Social Compliance Initiative BSCI have updated their codes or standards. They have continued to add more emphasis on remediation and capacity building and have developed new innovative approaches for this. Others, such as the Better Cotton Initiative BCI and the Global Organic Textile Standard GOTS are also working on code and standard revisions and the Fairtrade movement has just released a new textile standard.

Improvements in conditions are the test for schemes and initiatives

To improve the instruments is of course not enough. Supply chain workers are still too often working under sub-standard conditions and paid far below what is needed for a decent life. Voices that reject voluntary business initiatives and call for far reaching legislation instead will grow stronger unless concrete and significant improvements at supplier workplaces are made at a faster pace.

There is today a genuine disappointment over the slowness or lack of visible improvements in labour and social conditions in global supply chains. These sentiments go also beyond the many advocacy organisations and trade unions that are actively voicing their frustrations.

The best way for the business community to respond is to step up their contributions to bring about real improvements of human rights and labour conditions in the supply chain. The new Consumer Goods Forum CGF forced labour initiative is a good example of this and can lead to substantial positive change. This is a sign of success also for the patient work done by GSCP, to build awareness and drive convergence in the sustainability work of global buyers. The challenge is now to use the significant commercial power of these world class companies to translate this commitment into real action. GSCP will have an important role in making this possible, as will also cooperating sustainability schemes and initiatives.

Sustainability initiatives and mainstream labour relations can complement each other

The best approach to improve labour conditions includes organised social partners, effectively applied labour legislation, collective agreements and an efficient labour inspection system. As this is still a distant dream in large parts of the world also other approaches are needed. The UN Guiding Principles on Business and Human Rights is a manifestation of this.

Voluntary schemes and initiatives are there also to help buying brands and retailers respect their obligations. The UN Guiding Principles on Business and Human Rights could hardly be applied without these business-driven or multi-stakeholder programmes which build on social auditing and focus on remediation and capacity building.

We should remember that all leading schemes demand full respect for freedom of association and the right to collective bargaining. Also unions and advocacy organisations could and should use this for supporting organising efforts.

Colder labour relations climate hurts supply chain cooperation

Buying brands and retailers are targeted also without valid reasons and the CSR concept itself is put in question. Often this relates to anti-globalisation drives and is more general and political than referring to concrete supply chain issues. It does also reflect an overall polarisation of opinions and a deterioration of labour relations where social partnership gives way for the struggle over dwindling resources.

Recession pitches business and unions against each other. Having negotiated how the fruits of growth are shared, capital and labour are now engaged in a combat over who shoulders losses. High unemployment and deteriorating social services add to conflicts. Unions are pushed into defence by business circles and their political supporters who want to get rid of collective agreements and legal regulations that are seen as restrictive.

Supply chain sustainability cooperation is clearly affected by this lack of confidence.

Conflicts at home is not an excuse to forget joint obligations

The commercial workers’ trade unions engaged themselves for improving supply chain conditions during the time that I was in charge of UNI Commerce Global Union. We joined the advisory and stakeholder boards of initiatives such as Social Accountability International SAI, the Business Social Compliance Initiative BSCI and the Global Social Compliance Programme GSCP.

These decisions were not made without thorough considerations. Many of the large retailers that we came to work with were formidable opponents in their own employer roles. What made us sign up to these initiatives was the conviction that our own conflicts should not be played out at the expense of the already hard pressed and badly treated supply chain workers and their families.

This was a very mature and responsible stance by the large commerce trade unions around the world that were our members. Something of the same spirit would be needed also today. This would require also many buyer brands and retailers to take a more positive stance to involving workers and their unions in supply chain sustainability work.

Julkaistu

Law or Codes – Germany Works on Business and Human Rights Plan


Germany would be a good role model for supply chain cooperation between business and unions. Of course there are major disagreements but this does not stop the social partners from taking joint responsibilities for human rights at work in producer countries. This picture is from the last of three multi-stakeholder Conferences arranged in 2015 by Development Ministry BMZ, to prepare the German National Action Plan for implementing the UN Guiding Principles on Business and Human Rights.

Will brands, retailers and other buying companies voluntarily respect human rights in their global supply chains? Are voluntary commitments reliable, or do we need legislation? Can consumer country laws help improve working life in producer regions?

These questions were very much present when German businesses and stakeholders met recently for a third and final conference in the run-up to a National Action Plan for implementing the UN Guiding Principles on Business and Human Rights.  Next step will be drafting a proposal to be discussed with all stakeholders, beginning early next year.

How will Germany build a balance between civil society expectations and business preparedness? All of us who are engaged in promoting supply chain responsibility are surely waiting to see how the country will apply the business part of the UN Guiding Principles – “Protect, Respect and Remedy”.

Germany’s National Action Plan will influence also other countries. Europe’s biggest economy is actively promoting sustainability in global supply chains. We have seen this clearly during its 2015 G7 Presidency when the country has put business and human rights on the leading industrialised countries’ common agenda.

Business concerned over unwanted negative effects

In Berlin, business representatives and social advocacy organisations were far from each other when speaking about voluntary initiatives and binding legislation.

Most business representatives preferred voluntary action as the best way to apply the due diligence required by the UN Guiding Principles. They were concerned that legislation and possible sanctions could lead many buyers to leave sensitive supplier countries and regions when they should stay and help improve conditions. If Germany would introduce more obligations for buyer companies than those of competing countries it would put the country’s business sector at a clear disadvantage, it was said.

Corporate speakers questioned whether small and medium enterprises really have the knowledge and capacity to deal with new regulations.

Business is not a uniform group but consists of companies on very different levels when it comes to sustainability issues. For ‘the best in class’, even a demanding National Action Plan would bring little change as their voluntary approaches already go much further.

This has been all too slow. Fully understanding that changes take time there should already be major improvements in the big picture.

Sub-standard wages and uncontrolled excessive working hours remain the reality in many parts of the supply chains. There is less child labour, but still too much. Forced labour continues to be a problem in some industries and regions, and freedom of association is frequently ignored. Farming is a weak area for many schemes and initiatives.

If buying companies and other businesses want to be credible when pushing for voluntary due diligence approaches they need to show more concrete results, on all fundamental human and workers’ rights issues.

Unions question CSR effectiveness 

Global unions have a more negative attitude towards voluntary corporate social responsibility initiatives than before. They say that there have been little if any results from corporate social responsibility programmes. This has driven them to close alliances with social advocacy organisations.

Deteriorating labour relations has a negative influence on supply chain cooperation. Collective bargaining has turned into a defensive union struggle as new wealth to share in negotiations is not generated anymore. Social dialogue suffers and aggressive campaigning has increased.

Trade unions do have a point when they criticise brands and retailers for largely ignoring freedom of association in supply chains. Many buyers demand that suppliers comply with child labour, forced labour and anti-discrimination rules but are quick to leave trade union rights out. This can give suppliers the impression of having a free hand to resist organising efforts. Many companies are also reluctant to engage in joint projects with worker organisations, although here the distrust is often mutual.

Unions and advocacy organisations are calling for binding legislation in consumer countries, as part of the National Action Plans. This would include the right to initiate collective legal proceedings, something like the U.S. class action lawsuits. They also call for legal sanctions against companies in these countries if they ignore their due diligence obligations.

The role of social standards and codes

Social standard and codes will continue to be important tools, as will social auditing. Collective bargaining and social dialogue between employers and workers’ trade unions can often not replace these functions.  There are no structured labour relations in many countries and regions, and all governments do not effectively guarantee decent conditions. This will continue into the foreseeable future. The aim must be that labour conditions are eventually set by local partners, through mainstream tripartite procedures. Also corporate responsibility initiatives and activities must be geared in this direction.

Environmental and other initiatives pay increasing attention to human rights and labour conditions. They are responding to business demands but also protecting their own quality and reliability. The Global Organic Textile Standard GOTS where I am engaged certifies organic textiles through a highly demanding process. The same serious and demanding approach applies to human rights and labour conditions. Many others are doing the same which does not mean their standards or codes or other tools would be as detailed as those of specialised social responsibility initiatives. There is in fact already much cooperation around capacity building, training and other activities, as well as in auditor accreditation. The National Action Plans will surely intensify this cooperation.

Whether a scheme or initiative calls itself multi-stakeholder or business driven does not have to make a big difference. Important is that they are serious, demanding and committed and produce results. Social Accountability International SAI, the Ethical Trading Initiative ETI, the Business Social Compliance Initiative BSCI, the Fair Labor Association FLA and the Fair Wear Foundation FWF are examples of cross-industrial initiatives which have set their standards and ambitions high, and which are working actively with remediation programmes. The Fairtrade movement has a similar approach in its own niches of the global economy.

None of these initiatives can guarantee that every workplace audit produces absolutely reliable results, but as verifying and certifying demands and social auditors’ skills grow, also reliability increases.

More than voluntary, less than legislation?

I would expect an approach by the Berlin government that goes further than only demanding voluntary commitments by businesses to apply due diligence in global supply chains. This would not necessarily mean that sweeping legal responsibilities or tight sanctions for buying brands and retailers would be put in place.

A National Action Plan is of course exactly what it is called, an action plan, not legislation. It is more about the process towards more responsible business practices than about a set end result.

A solution is surely now sought that meets at least part of the civil society expectations while protecting and promoting German business interests. Responsible politicians and government agencies will have a difficult task as there seems to be a mutual lack of confidence especially between business organisations and social advocacy movements. When political positioning now is giving way to concrete drafting, Germany’s influential trade unions could well play a constructive role in looking for balanced and realistic compromises.

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I represented the Global Organic Textile Standard GOTS at the meeting in Berlin. Human rights and labour conditions are important concerns for this organisation which is engaged in updating its certification standard. Above all, training and capacity building ‘on the ground’ is developed and growing.

This article does not express the views of GOTS and I do not write it as a GOTS representative.  These are my personal reflections and opinions, of course influenced by my background in the global trade union movement and my very active board engagements in the Global Social Compliance Programme GSCP and Social Accountability International SAI,which owns the SA8000 Social Standard.

Julkaistu

GSCP meets in Los Angeles – Brands and retailers strengthen engagement and can better use the GSCP platform

UniversalGate
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.

Julkaistu

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

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

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

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

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

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

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

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

Major developments are on their way.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

So, what will then happen now?

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

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

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