ILO Online: What's a Global Agreement?
Dominique Michel: An international (or global) framework agreement (IFA) is an instrument negotiated between a multinational enterprise and a Global Union Federation (GUF) in order to establish an ongoing relationship between the parties and ensure that the company respects the same standards in all the countries where it operates. Sectoral trade unions from the home country of the multinational also participate in the negotiation of the agreement. Although framework agreements are not corporate social responsibility (CSR) initiatives, they are often referred to in the CSR debate because they are one of the ways in which companies can express their commitment towards the respect of certain principles. However, the specific aspect that distinguishes frameworks agreements from CSR initiatives is that they result from negotiation with international workers' representatives. Framework agreements are thus one of the possible developments of industrial relations in the era of globalization.
ILO Online: But what's in it?
Dominique Michel: The content of these agreements vary according to the different requirements and characteristics of the companies and trades unions involved, as well as depending on the industrial relations' traditions between the parties. They all include the four fundamental principles and rights at work and specifically reference ILO Core Conventions. The other provisions that differ from one agreement to the other refer to various issues covered by ILO standards such as the protection of workers' representatives, wages, occupational safety and health, and skills training.
ILO Online: How far do these agreements reach? Can they set wages and working conditions worldwide?
Dominique Michel: They do not substitute for direct negotiations between companies and workers at the national or workplace level, they just provide a framework for those negotiations to take place in a constructive way and with a minimum floor.
ILO Online: Do these agreements also have an impact on suppliers or associated companies?
Dominique Michel: Most framework agreements make reference to the entire supply chain, even if supplier companies are not parties to them. Companies usually commit to inform all their subsidiaries, suppliers, contractors and subcontractors about the agreement. If a subsidiary or associated enterprise is found not to be respecting the global agreement, the case can be taken up with the multinational headquarters that will look for solutions through dialogue.
ILO Online: How is the implementation of the agreement monitored?
Dominique Michel: Most framework agreements include follow-up mechanisms involving trade union participation. These mechanisms include specific actions on the part of management and workers' representatives, such as company-wide dissemination (and translation, where necessary) of the agreement or the development of joint training programs. Some agreements provide for joint missions by the relevant national trade union and global union federation in order to carry out on-site monitoring of the implementation of the agreement. Most of them also include mechanisms for the global union federation to raise a case if the company violates the terms of the agreement.
ILO Online: How many companies have signed such agreements so far?
Dominique Michel: Fifty companies operating in different industries have signed international framework agreements with five global union federations. The first one was signed by the French food multinational Danone in 1988, then the hotels' chain ACCOR signed the second in 1995. It was only in 2000 that the number of agreements signed per year accelerated to reach 50 by the end of 2006. Among them you can find the Swedish furniture company IKEA; the American banana company Chiquita; the German pencils producers Faber-Castell and Staedler; oil companies in Norway (Statoil), Italy (ENI) and Russia (Lukoil); car producers in Germany and France like Volkswagen, Daimler-Chrysler, Renault and Peugeot-Citroën; the Spanish and French electricity producers Endesa and EDF; telecom companies in Spain (Telefonica) and Greece (OTE), and retailers in France (Carrefour) and Sweden (H & M).
ILO Online: What role is the ILO playing in this field?
Dominique Michel: As a recent development in the area of industrial relations, international framework agreements represent an interesting topic for the ILO. The Director General of the ILO has witnessed the signature of some of them like Chiquita's. Several ILO departments (Social Dialogue sector, Institute for Labour Studies, Bureaus for Employers' and Workers' Activities, and the Multinational Enterprises Programme) are keeping track and analyzing these developments. The ILO's Tripartite Declaration on Multinational Enterprises and Social Policy provides a useful point of reference for companies considering the content of such agreements. This Declaration provides recommendations on what would be desirable behaviour of enterprises with regard to employment, equality of opportunity and treatment, skills training, working conditions, occupational safety and health, and industrial relations.