Beyond Trafficking and Slavery

Supply chains roundtable: Judy Gearhart

Judy Gearhart
26 June 2016
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Question 1 – do we need a binding convention on corporate accountability for labour standards in supply chains?

Our hope for the International Labour Conference conversation about global supply chains was always that it would lead to an agreement on preparations for drafting a convention on decent work in global supply chains. We believe that this convention should include an obligation for member states to pass laws and regulations which regulate the conduct of their multinational enterprises overseas and which require businesses to perform mandatory due diligence to identify labour rights risks in supply chains.

PULLRIGHT: The very existence of the multi-million dollar supply chain monitoring industry shows that global buyers know that their contractual agreements with their producers are not set up to guarantee labour rights compliance.

The convention should also create a permanent dispute settlement facility, housed at the International Labour Organisation, where multinational corporations can be held accountable for breaches in existing standards, including those set by the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises.

In the global export industries that we study – palm oil, cocoa, seafood, cotton, tobacco, and apparel – the international buyers and exporters have disproportionate influence on the price of goods and there are no legal obligations upon them to conduct their business in a socially or environmentally sustainable way. We need legal mechanisms that turn international agreements into enforceable policy changes on the ground, which in turn foster compliance.

Ironically, it is precisely this lack of a legal mechanism that has led many international brands to take voluntary measures to ensure the monitoring of labour rights in their supply chains. But these are dangerously lacking in effectiveness. Often, they mean that a worker’s only access to remedy lies with the local employer or the local courts, which are under pressure to retain the buyers’ interest from year to year. The Accord for Fire and Building Safety in Bangladesh is one notable exception of a legally binding monitoring agreement. However, more are needed.

Incidentally, the very existence of the multi-million dollar supply chain monitoring industry shows that global buyers know that their contractual agreements with their producers are not set up to guarantee labour rights compliance. In fact, the vast majority of those agreements ensure only price, quantity, quality, and timeliness of the product being supplied. This is not about labour standards.
Question 2 – what should global supply chain governance look like?

Supply chain governance needs to be established in a way that reinforces national labour law enforcement and fosters an effective system of industrial relations. This means that independent, freely-elected trade union representatives need to have access to compliance information and a role in the governance of labour law enforcement. All of this requires effective protections for workers’ rights to organise and bargain collectively, and for elected trade union leaders to have adequate protections to fulfil their duties, including their ability to fulfil their representative function and protection from reprisals. 

Question 3 – in the absence of extra-territorial legislation to ensure and enforce business accountability, how can workers best be protected in international supply chains?

With greater transparency. The lack of transparency in most modern supply chains creates significant risks not only for workers, but also for regulators, businesses, and consumers.

Under the UN Guiding Principles on Business and Human Rights, multinationals are expected to perform active due diligence in their supply chains to ensure that their business model is not perpetuating any human rights abuses. As part of this due diligence process, global buyers should be required to publish and regularly update their supplier lists. Making this disclosure mandatory would incentivise global buyers to trace their supply chains well beyond the largest, directly-contracted ‘tier one’ suppliers where many labour abuses take place.

Compliance data on workers’ rights in production should also be made publicly available both by the government and private sector monitoring initiatives.

Finally, independent, freely-elected trade unions should be fully engaged at all levels of compliance discussions and whistle blower protections must be fully enforced.

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