Good working conditions can also increase productivity and profits

Representatives of global brands and retailers, manufacturers and international organizations meet to discuss and reaffirm their commitment to sustainable development and discuss engagement with the UN’s 2030 Agenda.

Article | 08 November 2016
The ILO’s engagement at the factory-level, through it’s Better Work programme, shows that efforts to improve working conditions as well as enhance compliance with ILO standards and national legislation is having a significant and positive impact in all countries where the programme is active.

This was the conclusion of an in-depth evaluation, entitled “The Impact of Better Work”, by an independent, interdisciplinary research team that gathered and analysed nearly 15,000 survey responses from garment workers and 2,000 responses from factory managers in Haiti, Indonesia, Jordan, Nicaragua and Vietnam.

With this backdrop, the Better Work Programme held its annual Business Forum at the UN Headquarters in New York City on 31 October 2016 with the goal of bringing together business and global policy leaders to discuss how to place sustainable development at the centre of core business models.

Better Work is a long-term collaboration between the ILO and the International Finance Corporation (IFC) to improve labour practices and competitiveness in global supply chains.

In his opening statement to the businesses and policymakers, Thomas Gass, Assistant Secretary General for Policy Coordination and Inter Agency Affairs, stated that the Sustainable Development Goals (SDGs) are “a declaration of interdependence” and urged business leaders to take greater ownership and to work hand-in-hand with governments, civil society and other stakeholders, in order to achieve the overarching objective of leaving no one behind.

He also urged business leaders to start a dialogue within their companies to develop awareness of the “social contract” established by the SDGs, and also to assess the impact of their companies against each of the goals.

Michael Green, the Executive Director of the Social Progress Imperative, cautioned that economic growth alone will not be sufficient to achieve the SDGs. He stated that “social progress is the fundamental driver of future economic growth.”

He further elaborated that GDP was not an accurate measure of development as it did not take into consideration factors such as fairness, equality or environment. The new Social Progress Index, developed by his organization, instead is a better measure moving forward as it utilizes social and environmental indicators.

The discussion panels consisted of senior representatives from large corporations including Target, GAP and PVH Corp. Ivanka Mamic, Senior Director of Responsible Sourcing at Target explained how the concept of net positive, companies instead of doing less harm wanted to do more good, was gaining ground.

The second panel of the forum informed the participants on how to bridge the public-private divide, to complement the role of government and leverage the partnership between the World Bank, IFC, and ILO.

Mary Porter Peschka, Director of the Advisory Solutions of the IFC, highlighted the importance of international organizations informing policy, as well as advising local companies and factories on what standards they can apply to create better work through the creation of better labour conditions. She reinforced her point by citing “The Impact of Better Work” report, which suggests that Better Work has an impact on productivity, investment and the overall well-being of society.

The head of Better Work, Dan Rees, emphasized that the programme deals with all conditions of decent work including international standards, compensation, contracts, occupational safety and health and working time. The efforts of Better Work have significantly improved working conditions while enhancing factory productivity and profitability. He acknowledged the ILO’s conventions and that the Better Work programme allowed for these conventions to be translated into practice in the workplace.

Mr. Rees cited Jordan as a good example of public-private partnership whereby the European Union (EU), in collaboration with local businesses in Jordan, set up satellite factories to deal with the influx of unskilled and unemployed Syrian refugees. These satellite factories have been successful in moving people, who were unwilling to leave refugee camps, closer to working zones.

The Global Operations Manager of Better Work, Tara Rangarajan, took this opportunity to announce their new service model in which the programme will work with businesses for an initial period known as the “hundred days of improvement”, followed by an assessment. This will enable Better Work to understand these businesses in a more comprehensive manner and to engage with them to make improvements in working conditions. Another aspect Ms. Rangarajan highlighted was public reporting of business compliance on the Better Work website.

She also shed light on the new system of classification for the factories which sets two bands: Band 1 will include factories that fall behind the standards set forth by Better Work, and Band 2 which will include factories that comply with most of the standards but need further work in some areas. Band 2 factories will be given the option of reporting biannually.

In closing, Dan Rees focused on the new Better Work Strategy for 2017 - 2022. He emphasized the need for scaling up existing solutions, engaging with global companies, working with national stakeholders to increase capacity, and informing policy dialogue through lessons learned.