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Leonhard Plank, Vienna University of Technology Arianna Rossi, ILO/IFC Better Work Programme Cornelia Staritz, Austrian Research Foundation for International.

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Presentation on theme: "Leonhard Plank, Vienna University of Technology Arianna Rossi, ILO/IFC Better Work Programme Cornelia Staritz, Austrian Research Foundation for International."— Presentation transcript:

1 Leonhard Plank, Vienna University of Technology Arianna Rossi, ILO/IFC Better Work Programme Cornelia Staritz, Austrian Research Foundation for International Development Better Work Conference Workers, Businesses and Government: Understanding Labour Compliance in Global Supply Chains 26–28 October 2011

2 How does integration into fast fashion apparel GPNs impact on workers and social upgrading? Focus on Greater Europe: Morocco and Romania Methodology: primary and secondary data Overview: Social upgrading in GPNs Apparel industry in Greater Europe, Morocco and Romania Social upgrading in Morocco and Romania Conclusions and recommendations

3 Social upgrading Measurable standards Enabling rights Mixed evidence on social dimensions of global production on developing country firms and workers New employment opportunities Low road comparative advantage Commercial pressures on costs, lead times, flexibility, responsiveness and high quality may hinder social upgrading Potentially contradictory pressures are pronounced in fast fashion segment in apparel industry

4 – Macro-regional integration: Outward Processing Trade (OPT), EU accession, Euro-Mediterranean Partnership – Increasing importance of time factors and emergence of fast fashion dynamics – EU buyers involvement based on geographical location, cultural affinity, historical factors, national industry pressures, existing structures and business contacts – MFA phase out and global economic crisis – Importance of labour compliance in response to civil society pressures

5 Apparel exporters to EU-15 (market share, %) World50,37778,11785,39390,366103, EU China Turkey Bangladesh India Morocco Romania Greater Europe MENA CEE Turkey

6 Important role in economy and employment generation Importance of EU-15 market and fast fashion Role of OPT and specific division of labour (apparel/textiles) Largely locally owned SMEs Mostly CMT production Functional (finishing), product and process upgrading Differences: legacy of state socialism, recent development (6% versus -6% post-MFA), unit values, importance of fast fashion buyers, end markets

7 Similarities: Co-existence of different types of workers: Regular/Core firm workers maintain skills and workforce stability and secure quality, consistence and reliability Irregular/Subcontracting firm workers cope with cost and flexibility pressures Different social upgrading outcomes with regard to type of workers and the dimensions of social upgrading related to prevailing business dynamics Differences: local institutional structures and regulatory contexts Morocco: labour code, limited unionization, industry-wide code of conduct (Fibre Citoyenne) Romania: socialist legacy, national labour codes and inspections, trade unions, EU accession

8 Social upgrading/downgrading dimensions Measurable standardsEnabling rights accessiblecontestedaccessiblecontested Type of worker Regular/core firm workers OHS standards, employment contracts, social security, training wages, overtime, work intensity union representation in former state- owned firms in Romania union representation in Morocco and in newly found firms in Romania Irregular/ subcontracting firm workers employment contracts, wages, overtime, work intensity discrimination, voice, union representation

9 Fast fashion buyers purchasing practices have a clear impact on social upgrading trajectories Social upgrading has been selective with regard to both the dimension of social upgrading and the type of worker Buyers CSR demands exacerbate the existence of a parallel workforce if they are not aligned with purchasing practices Local institutional structures and regulatory contexts may mitigate fast fashion pressures on regular and core firm workers, but struggle to reach irregular/subcontracted workers

10 Buyers: Align CSR with core business and sourcing practices Broaden CSR scope to workers as social actors with enabling rights Engage with local stakeholders Suppliers: Reduce dependencies and diversify buyers and markets Role of industry associations and industry-wide initiatives Governments: Focus on systemic competitiveness and combine skill development, economic and social upgrading Trade unions: Develop mechanisms to reach out to regular/core and irregular/subcontracted workers

11 Many thanks! Arianna Rossi: Leonhard Plank: Cornelia Staritz:


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