1. Promoting Labour Standards in MNEs: Voluntary v/s Negotiated Initiatives Issues for discussion

2. What are the key voluntary standards? Inter-governmental  ILO MNE Declaration  OECD Guidelines  UN Global Compact  UN Framework for Business and Human Rights

3. Types of “voluntary standards” Private  Company codes, e.g., NIKE, Walmart  Industry initiatives, e.g., BSCI (Business Social Compliance Initiative), EICC (Electronic Industry Citizenship Coalition)  Multi-stakeholder initiatives, e.g., ETI, Workers’ Rights Consortium, Clean Clothes Campaign, ISO 26000, IFC Performance Standards on Social & Environmental Sustainability

4. Role of Public regulation v/s Private voluntary initiatives?

5. ILO MNE Declaration (adopted in 1977 and amended in 2000) Objective: « to encourage the positive contribution of MNEs & FDI and to minimize difficulties caused by their operations »  Tripartite & the only global instrument agreed to by G, E & W, provides for  Principles that MNEs should respect in host countries, especially in labour and social matters  Seeks to promote synergies between public & private policies

6. MNE Declaration offers Framework for:  Decent Employment with rights @ work  Skills training for employability  Good working conditions  Sound industrial relations

7. MNE Declaration Provisions Concerning promotion of good industrial relations (IR), Governments should: Apply the principles of Freedom of Association Not include in their incentives to attract foreign investment any limitation of the workers' freedom of association or the right to organize and bargain collectively. Speaking mainly to « host » governments where companies are operating

8. MNE Declaration Provisions Concerning promotion of good industrial relations (IR), MNEs should: Observe IRs no less favourable than those observed by comparable employers Respect FoA & the right to collective bargaining, provide the facilities & information required for meaningful negotiations Support representative employers’ organizations. Provide for regular consultation on matters of mutual concern. Examine the grievances of worker(s), pursuant to an appropriate procedure.

9. MNE Declaration « Interpretation » Procedure For disputes over the meaning & application of the provisions of MNE Declaration Voluntary process which is promotional in nature Limitations—requests go to tripartite committee on receivability, which must UNAMIOUSLY conclude that the request is receivable Complaints are outside the scope, but can be referred to other parts of the ILO for action.  New « dialogue facilitation » procedure

10. ILO Helpdesk for Business Service launched in March 2009 To assist company managers and workers’ organizations to align private standards with ILS Programme comprised of two services:  Individual requests from managers or workers’ representatives  assistance@ilo.org  Access to the wide range of expertise and resources across the Office  www.ilo.org/business

11. MNE Declaration Advantages and disadvantages Most comprehensive concerning labour rights Addresses both business and government Global instrument & tripartitely agreed But Not widely known,: but new EC CSR strategy will require EC to invite all EU MNEs to adhere to the principles No remedy for violation of rights

12. OECD Guidelines for MNEs First adopted 1976; last revised May 2011 Aligned with the UN Guiding Principles on Business and Human Rights of the ‘Protect Respect and Remedy” Framework Signed by governments (45, including 11 non OECD countries) – not by MNEs Provide (non-binding)recommendations to MNEs Apply to MNEs with headquarters in countries that have signed the Guidelines, wherever those MNEs operate Cover subsidiaries as well as suppliers, investors and other business partners of these MNEs (new concept – “adverse impacts”)

13. Chapters of the OECD Guidelines I. Concept and Principles II.General Policies III.Disclosure of Information IV. Human Rights V.Employment and Industrial Relations VI.Environment VII. Combating Bribery, Bribe Solicitation and Extortion VIII. Consumer Interests IX. Science and Technology X.Competition XI.Taxation

14. National Contact Points Governments that sign the Guidelines are required to establish National Contact Points (NCPs) to resolve issues arising under the Guidelines including handling cases/complaints of breaches of the Guidelines: Complaints mechanism: 1. Conciliation/Mediation (problem-solving) 2. Recommendations on future implementation of the GL 3. Examination to determine a breach of the Guidelines Complaints mechanism is a unique characteristic of the Guidelines

15. Filing Cases/Complaints No complaints mechanism at the OECD Complaints filed with the National Contact Points  If the violation takes place in a country that has signed the Guidelines – then the case should be filed with the host country NCP  If the violation takes place in a country that has not signed the Guidelines then the case should be filed with the home country NCP

16. Landmark successes : IUF and Unilever Unilever (food): Brooke Bond & Lipton’s tea factory NCP: UK - Factory in Pakistan (Khanewal) Issue: precarious work/abusive use of temporary contracts/ agency work (22 v 723): Provisions of the Guidelines: right to organise (V. 1a)  NCP Role: Provided external mediation - led to an agreement between IUF and Unilever – providing for 200 permanent positions at Khanewal, in addition to the existing 22 positions at this facility AND use of contract agency workers (labour engaged through third party service providers) only in case of ancillary, non-manufacturing and seasonal positions http://www.bis.gov.uk/files/file49308.doc

17. BUT FAILURES TOO - High to low performing NCPs - NCPs have common rules -visible, transparent, accountable, impartial, predictable and equitable - No common performance -Challenge: Strengthen NCP Performance - Key obstacles to success - Other legal proceedings (parallel proceedings) - Timescales - Getting parties (companies) to mediation

18. Key Resources for OECD Guidelines TUAC web site on trade union cases and NCP performance: http://www.tuacoecdmneguideline s.org/home.asp OECD Watch web site on NGO cases: http://oecdwatch.org/ OECD web site: http://mneguidelines.oecd.org

19. UN Global Compact Backed by the United Nations Supported technically by other international organizations, including ILO « Labour Working Group » secretariat includes representatives of ITUC and IOE

20. Global Compact Labour Principles 1Support & respect internationally proclaimed human rights 2Ensure that their operations are not complicit in human rights abuses 3Uphold FoA & recognition of the right to collective bargaining 4Uphold elimination of forced or compulsory labour 5Uphold effective abolition of child labour 6Uphold elimination of discrimination in employment & occupation 7Support precautionary approach to environmental challenges 8Undertake initiatives to promote environmental responsibility 9Encourage the development & diffusion of environmentally friendly technologies 10Work against all forms of corruption, including extortion & bribery Business should...

21. IFC Performance Standards 1: Social & Environmental Assessment & Management System 2: Labor and Working Conditions [ apply to employees, non employee workers & also in supply chains] 3: Pollution Prevention and Abatement 4: Community Health, Safety and Security 5: Land Acquisition and Involuntary Resettlement 6: Biodiversity Conservation and Sustainable Natural Resource Management 7: Indigenous Peoples 8: Cultural Heritage

22. Areas of ILS covered in PS2 Wages and benefits Hours of work Sickness and maternity leave Annual leave Workers’ Organizations: national law or parallel means Non-Discrimination and Equal Opportunity Retrenchment Grievance Mechanism Child Labor Forced Labor OHS

23. UN "Respect, Protect and Remedy" framework « Ruggie Framework » Governments duty to PROTECT people from human rights abuses, including in connection with business activity; businesses responsibility to RESPECT; & Obligation of both government & business to provide a REMEDY for violations of rights Addresses both companies and governments MNEs responsible for supply chain operations Approach: Instead of naming & shaming, knowing & showing: due diligence requires companies to give special attention to high-risk sectors and countries Obligation to provide remedies has great potential for Trade Union action Working Group on business & human rights set up to follow up

24. UN Business and Human Rights Framework: Limitations Companies are encouraged, but not obliged, to respect human rights Guidance isn't enough – mechanisms needed to scrutinize how companies & governments apply these principles Too early to tell how the Working Group on business & human rights and annual Forum on business & human rights will operate No working group members have labour backgrounds

25. ISO 26000 Guidance on social responsiblity Voluntary international standard on CSR developed by International Organization for Standardization (ISO) Provides guidance, not for certification Covering 7 core subjects of social responsibility, including labour practices In core subject on labour practices:  1998 ILO Declaration  MNE Declaration and  other ILO Conventions

26. ISO 26000 Guidance on social responsiblity Advantages Contains some provisions which go beyond ILS Reaches companies which may not otherwise be reached, e.g., companies operating in Asia and Arab States Disadvantages Much like a management system No enforcement No remedies available

27. Codes: What happens in practice Code  monitoring  remediation  reporting Monitoring has brought about limited change  Issues of poor training, hasty assessments, lack of input from workers or worker coaching, corruption  « static » snapshot taken only periodically No sanction for non-compliance  Procurement officers typically ignore findings Remediation rarely based on IR approach

28. Limits of voluntary standards Not a rights-based approach Creates a lottery approach to respect for workers’ rights Risk that governments will off-load their responsibility to protect workers’ rights Reinforces notion that market solutions are always better than government solutions Paternalistic model doesn’t address, and often aggrevates, power imbalances

29. Negotiated Instrument: International Framework Agreements Negotiated between a GUF and an MNE, with joint oversight of implementation Formal recognition of social partnership Can apply to MNE employers, supply chain workers or both Compliments national and local agreements (baseline for collective bargaining) Current number – over 100

30. What to do?

31. “Voluntary standards” should reinforce the institutions which strengthen respect for workers’ rights Most important is good industrial relations Ratification of ILO Standards & their implementation Respect for FoA & CB