ILO Deputy Director-General: "Corporate Social Responsibility is complementary and not a substitute to international labour standards"

Workers rights in third countries

European Parliament Subcommittee on Human Rights - Hearing on business and respect for the human rights of workers (outside the EU), 24 September 2014

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Madam Chair,
Distinguished Members of the European Parliament,

I would like to thank you for inviting the ILO to this important hearing on corporate social responsibility and workers’ rights – a very important topic indeed.

At the very outset, let me take this opportunity to congratulate the Members of Parliament on their recent election (or re-election) to this important assembly.

In my intervention, I will first outline some of the key challenges for workers’ rights in a globalized economy and then mention the tools and instruments adopted by the ILO to deal with them. I will conclude by making some suggestions on how Members of Parliament could support the respect for workers’ rights in developing countries.

Today, there is growing awareness of the need for a fair globalization.

The World Commission on the Social Dimension of Globalization, established by the ILO in 2003, highlighted ,in its report, that Multinational enterprises are important agents of change in the process of globalization. They can stimulate economic growth in host countries and play a key role in cross-border transfers of capital, skills, know-how, resources and technology. In this context, ensuring respect for fundamental principles and rights at work results in undeniable benefits to the development of human potential and economic growth in general and therefore contributes to global economic recovery, social justice and sustainable peace.

The ILO Declaration on Fundamental Principles and rights at Work of 1998 and the ILO Declaration on Social Justice for a Fair Globalization of 2008 are mutually supportive and aim at giving a social dimension to globalisation and promoting respect for workers’ rights.

Unfortunately, attacks on human and trade union rights are on the rise as demonstrated by the increase in the number of cases examined by the Committee on Freedom of Association every year. Last year the Committee examined 100 cases. There are 168 million children still working in the world and 21 million victims of forced labour. Migrant workers’ rights are not respected and gender-equality is not yet fully realised.

Last year the collapse of the Rana Plaza factory claimed the lives of more than 1,100 people – mostly women - This tragedy drew much public attention far beyond the borders of Bangladesh and the European Parliament itself adopted several resolutions related to it.

Today, our economy is characterised by global competition and the rapid growth of extensive global supply chains.

As you all know, many of the products and goods we consume today are often produced and manufactured in different parts of the world and let me emphasize that global supply chains, operating across borders, have undoubtedly created much-needed jobs especially in least developed economies.

But at the same time, global supply chains raise important question marks about the quality of the jobs created and respect for workers’ fundamental rights. Very often, several work-related tragedies witnessed in recent past would have prevented if national and international standards had been applied. But the reality of supply chains is very complex.

Naturally, working conditions and labour relations are regulated by national laws. Unfortunately in many low income countries (or middle income countries with weak institutional capacities) enforcement of national laws could be a serious challenges. An added complication is that, some supply chains, notably the ready-made garments, are becoming extremely long with “sub” and “sub sub” contractors reaching down to very small enterprises.

But international retailers cannot ignore the working conditions being offered by their suppliers, at least by their main suppliers, as they usually tightly control the quality of the production, especially when it is sold under their brand.

The ILO’s response is to engage in innovative partnerships with the workers, employers and government of both the supplying and consuming countries.

Building on this, the ILO together with the World Bank’s International Finance Corporation has a joint programme called -- Better Work. It aims to improve both compliance with labour standards and competitiveness in global supply chains through country-based programmes in the garment sector.

I believe these sorts of creative partnerships do hold hope for working women and men in great need of improved labour protection.

37 years ago, the ILO tripartite constituents adopted the Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy and is today more relevant than ever. As an ILO instrument, the Declaration revolves around industrial relations, freedom of association and collective bargaining, dialogue and consultations as the key mechanism to achieve positive outcomes. Making full use of the MNE Declaration is an excellent opportunity to promote workers’ rights in the global chains.

Ultimately while solidarity, corporate social responsibility and technical assistance are important, true sustainable progress requires a clear and equitable regulatory environment, strong law enforcement and national institutions to enable social partners to do their part of the job

Allow me to conclude with some suggestions for you, Members of the European Parliament, in your future work in this area:

• Firstly, I think it is essential to continue raising awareness on this issue both within the EU and in its external relations. I am sure several of you are already deeply involved in this and your efforts should be pursued.
• Secondly, in your relations with other countries, or when involved in your human rights dialogues, you might feel the need to emphasize the importance of putting national legislation in conformity with international labour standards - particularly freedom of association and the right to collective bargaining which are essential for workers to be able to negotiate better working conditions both at the plant and national levels.
• Thirdly, in many developing countries, law enforcement is weak. Development cooperation should give higher visibility and priority to this problem. International support can play a significant role to help strengthen the capacity of national authorities to better implement laws and regulations.
• Fourthly you might wish to raise the issue of financial and technical assistance for the effective implementation of the international standards set forth in the sustainability chapters of the free trade agreement that the EU signs with third countries.
• Lastly call on companies to adhere to internationally agreed standards such as the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (ILO MNE Declaration), the UN Global Compact or the OECD guidelines and encourage companies to use the free ILO helpdesk for business if they need advice on respecting international labour standards.

It has been widely recognised that in a global market economy, there ought to be rules that embrace everyone and a mechanism for dialogue, common solutions and follow up.

After all, being “socially responsible” should not become a distraction from the real issue—obeying and enforcing the law and respecting principles. Corporate Social Responsibility is complementary and not a substitute to international labour standards.

I wish you a lot of success in your new legislature and thank you very much for your attention.