From the TUC

Time (and patience) running out for agreement on global supply chains

08 Jun 2016, by in International

As the ILO debates how to improve working conditions in Global Supply Chains, Employers are resisting responsibility for malpractice in those chains and some governments are time wasting

The efforts of the International Labour Organisation (ILO) to prepare an effective position on tackling widespread exploitation of workers producing goods for western companies are up against implacable opposition from the Employers, who clearly fear any formalisation of their role in stamping out long hours, dangerous working conditions, forced labour, low wages and many other abuses. Consensus must be found by midnight.

The ILO, the UN agency for labour standards, originally set the agenda for cross-border responsibilities of employers back in the 1970s with the snappily titled Declaration of Principles concerning Multinational Enterprises and Social Policy (also known as the MNE Declaration). Revised several times, including most recently in 2006, the MNE Declaration encouraged governments at both ends of supply chains to ensure they had ratified the fundamental ILO conventions relevant to protecting MNEs’ workers, and called on MNEs to respect not just laws, but development priorities and ‘social aims’ of their host countries.

Since then, despite those occasional upgrades, the ILO – despite it’s obvious remit – has rather been left behind on this issue. As MNEs have increasingly used supply chains, rather than direct sourcing, the MNE Declaration has been overtaken by the OECD Guidelines and the UN Guiding Principles on Business & Human Rights (UNGPs). The OECD system makes MNEs based in member countries subject to a complaints mechanism called the National Contact Point that can intervene no matter where the complaint originated. The UNGPs (also known as the ‘Ruggie Principles‘ after their author) are extremely thorough, but don’t contain anything that compels anyone concerned to follow their suggestions: either states to ‘enforce human rights’ or business to ‘respect’ them. In spite of this – or, as a cynic might say, because of it – they’ve become the darling of the Employer side and it can be hard to progress the debate on appropriate corporate behaviour beyond the UNGP text, which was surely never Ruggie’s intention.

This year, in an attempt to regain the initiative, the ILO is holding a tripartite discussion on Global Supply Chains, hoping to get agreement on what steps it should take to play its proper role in promoting ‘decent work‘ throughout the many layers and tendrils of modern business practices. More than a week into discussion, the divisions between workers, employers and certain governments are now being laid bare.

The task before us is to prepare a joint statement, agreed by all parties, that sets out a way forward for the ILO – and its constituent members – to begin the task of protecting vulnerable workers. The ILO may now be tempted to develop a cat herding policy as an easier option.

The Bangladesh government forced us to delete a reference to the Bangladesh Fire & Safety Accord as a good practice example. The Brazilian government is leading its cohort of support (otherwise known as paragon-of-workers’-rights Guatemala) into battle against labour standards in Free Trade Agreements and is engaged in a bizarre crusade about the possibility of the ILO providing mediation and dispute settlement for partners in international framework agreements which has currently wasted about half an hour. The Indian government has problems with mentions of the OECD Guidelines (and is siding with Brazil). On the other hand the European Union has been superbly progressive, as have the countries of the African group – without them we’d have got nowhere.

So far, it’s been difficult even to establish that global supply chains contain exploitation and poor conditions (even though that’s why we’re all here). The Employers’ representatives – even though they have now accepted that there are governance gaps leaving workers unprotected – are deeply concerned at the suggestion that global supply chains may not be A Good Thing, and after a deadlock the text in question has been pushed to the climactic closing of the discussion tonight. At almost every opportunity the Employers have sought to weaken language and are so far off the pace of the ethical trade debate that their chairman asked:

“If State A wants minimum labour standards in an agreement with State B, but State B’s culture and policy do not have such standards, how does State A enforce this without invading State B’s sovereignty?”

The Employer spokesperson is therefore not quite sure if expecting countries to enforce core labour standards (the thing the ILO exists to promote) is some form of imperialism. Activists from unions and NGOs committed to challenging abuse of workers around the world may be shocked at the possibility that they are vessels for the reincarnated spirit of Cecil Rhodes: they might also wonder how, in a world where trade agreements like TTIP still contain proposals for MNEs to be able to sue states with policies they think will affect their profits, it’s off limits to demand that factory or farm workers have fundamental rights.

Despite this, and despite some governments’ determination to trash their own reputations, the partners are slowly moving towards the end of the text. The Employers have been reasonable in a number of cases as they and the Workers have traded concessions in pursuit of consensus, and they are appearing more and more reasonable as certain governments start misbehaving. For all the showcase of cooperation and compromise that this provides, though, there will still be a twist in the story, one way or the other: the very end of the text contains the major fault-line between Workers and Employers, and between progressive governments and those like Brazil and India (or, at least, their representatives). It all comes down to “what happens next”.

By the witching hour we will know if the ILO’s ‘tripartite constituents’ will back a process of formal examination of governance gaps and standards that could lead to new mechanisms designed to protect workers in the supply chains or decide – the alternative – that we trudge back here in three years and do this all again. The Employers have clung to the line that the UNGPs only give them a duty to ‘respect’ human rights, and that nothing should be done to compel them to do so (they don’t need the “lash of the whip”, apparently). They are also chary of any transnational mechanisms that might allow responsibilities to follow them down the supply chain across jurisdictional boundaries – sadly exactly the sort of thing the Workers (and several governments) are looking to the ILO to provide.

It’s not only ethical consumers who would view this as a betrayal of their concerns, or just the ILO leadership that will rue a missed opportunity to make the organisation superbly relevant to the modern world of work. We’d also be astonished if British employers (many of them members of the Ethical Trading Initiative and signatories to a statement requesting regulation for compulsory reporting on due diligence in the UK’s Modern Slavery Act, and who – along with the British Retail Consortium – welcomed its inclusion) will be happy if Employer representatives here fail to move us towards an international mechanism that might protect not only workers in their supply chains, but would also defend their chances of developing ethical business models in the face of being undercut by cynical and exploitative rivals.

There’s still time for an agreement on this – but not much.


(updates in comments below)

3 Responses to Time (and patience) running out for agreement on global supply chains

  1. Stephen Russell

    Stephen Russell
    Jun 8th 2016, 9:41 pm

    The Employers have won a battle over text they viewed as overly negative. The original draft contained two paragraphs of relatively positive narrative about global supply chains, to be followed by a “however” paragraph that outlined the human cost of GSCs; now the paragraph is being hamstrung and no longer reflects the possibility that a supply chain might be designed to exploit workers, instead putting it down purely to some unfortunate mischance, or “failure”. Although the EU, US, and other governments strengthened the message slightly, the vagueness remained. Under protest, and pressure of time, the Workers had no choice but to accept it in the hope that their willingness to compromise will help them win the ultimate goal at the end of the night.

    The Employers have, in debate, expressed their goodwill and commitment to attending to these failures, and – despite their win here – for the most part their attempts to weaken the language of the agreement have failed, so perhaps this win may contribute to a more sanguine approach to the binary choice of the final paragraph.

  2. Stephen Russell

    Stephen Russell
    Jun 8th 2016, 11:12 pm

    It’s done! The Employers have conceded the point that standard setting should be accepted as at least a possible response to governance gaps – the text is full of possible policy responses to the “failures” that the Employers admit are present in global supply chains. Although the text is light – by necessity in the face of a certain recalcitrance by the Employers Group – on identification of the causes of the decent work deficits, with a certain amount of good grace it has left the Employers feeling able to back more robust action that they might if the text laid all the problems at their door.

    Paradise is postponed, however, as now responsibility passes to the ILO’s Governing Body, also tripartite, so set up a committee of experts with our agreed text as the basis for terms of reference.

    In the agreed text, the committee will:
    *Assess the failures which lead to decent work deficits in GSCs
    *Identify the salient challenges of governance to achieving decent work in GSCs
    *Consider what guidance, programmes, measures, initiatives or standards are needed to promote decent work and/or facilitate reducing decent work deficits in GSCs

    The ILO’s tripartite, consensus seeking nature makes progress slow and strong language rare. However, assuming there are no hitches at the Governing Body (presumably the one held this November), this represents a very positive outcome towards developing a global response to a global problem.

  3. Stephen Russell

    Stephen Russell
    Jun 9th 2016, 12:02 am

    Well, I said it was done: we’re back in the fight over labour clauses in Free Trade Agreements. Brazil wants a footnote on the official document to say they didn’t agree, but the Workers are pointing out that the report of the Committee will be public and there will be a possibility for Brazil to point out their displeasure to whomsoever they wish.

    After a brief consolation with the social partners and Brazil, the Chair has allowed Brazil, UAE, China and India to state their opposition but the reference to FTAs stands.

    And that’s it. We’re really done. I hope some of this made sense. The main ILC plenary will vote on the text on Friday.

    Good night! 01:03am.