Promoting Workplace Compliance and Cooperation through Social Dialogue including in Global Supply Chains: The role of Economic and Social Councils and similar Social Dialogue Institutions

Background report

International Conference, The Hague, 29-30 October 2015

Table of contents

Key abbreviations..................................................................................................................... 2

Executive Summary..................................................................................................................3

1 Introduction....................................................................................................................... 5

2. Workplace compliance......................................................................................................72.1 Workplace compliance defined..............................................................................................72.2 Challenges..............................................................................................................................8

3. Workplace compliance and social dialogue.....................................................................123.1. Importance of national tripartite social dialogue for workplace compliance.........................123.2. Involvement of ESC-SIs in workplace compliance..............................................................133.3 Policy areas on which ESC-SIs are consulted.......................................................................143.4 Activities and contributions to workplace compliance.........................................................153.5. Strengthening social dialogue in the area of workplace compliance..........................................22

4. Role of ILO and ILO standards and guidance..................................................................234.1 Role of the ILO.....................................................................................................................234.2 ILO guidance on workplace compliance..............................................................................244.3 Support by the ILO...............................................................................................................26

5. Workplace compliance in global supply chains...............................................................285.1 Duty to protect by the State and responsibility to respect by enterprises..............................285.2 Private compliance initiatives (PCI).....................................................................................295.3 Role of different actors.........................................................................................................315.4 The role of national ESCs in global supply chains...............................................................335.5. Public and private workplace compliance collaboration.......................................................37

6. Conclusions and recommendations..............................................................................39

Some recommendations for effective engagement of ESC-SIs...............................................40

Key questions for the conference............................................................................................42

Annexes.................................................................................................................................. 43

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Key abbreviations

ACI Areas of critical importanceAICESIS International Association of Economic and Social Councils and Similar InstitutionsBSCI Business Social Compliance InitiativeCSR Corporate Social ResponsibilityDWCP Decent Work Country ProgrammesEC European CommissionEICC Electronics Industry Citizenship CoalitionEITI Extractives Industry Transparency InitiativeEPZ Export Processing ZoneESC-SI Economic and Social Councils and other Similar InstitutionsETI Ethical Trading InitiativeFTZ Free Trade ZoneICSR International corporate social responsibilityMNE Multinational enterprisesMOU Memorandum of UnderstandingOECD Organisation for Economic Cooperation and DevelopmentOEL Occupational Exposure LimitsOSH Occupational safety and healthPCI Private Compliance InitiativesSEDEX Supplier Ethical Data ExchangeSEZ Special Economic ZoneSME Small and Medium EnterprisesUNGP UN Guiding Principles on Business and Human Rights

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Executive Summary

This report services as background information for the International Conference on the 29 th and 30th of October, in the Netherlands that has been jointly organized by the International Labour Organization (ILO), the International Association of Economic and Social Councils and Similar Institutions (AICESIS) and the Social and Economic Council of the Netherlands (SER). Thirty Economic and Social Councils and other Similar Institutions (ESC-SIs) responded to the questionnaire which served as input for this report.

Compliance with national law and respect for internationally agreed international Fundamental Principles and Rights at Work, principles of international labour standards and applicable collective agreements at the workplace is a key condition for decent work. Workplace compliance is achieved when employers follow these regulations and standards. Although governments have an important role to play in protecting rights of workers and ensuring compliance, many other actors are needed as well, preferably in cooperation with each other. Tripartite collaboration at the national level, in the form of ESC-SIs bringing employers’ organizations, workers’ organizations and governments together, is crucial for achieving workplace compliance.

This report shows that: For 90 per cent of the ESCs-SIs (30 respondents) workplace compliance forms part of their

policy agenda and therefore part of national tripartite dialogue. This does not mean that all topics of workplace compliance are addressed by each ESC-SI. Wages and OSH are the most recurring topics.

The main challenges to achieving workplace compliance are lack of resources (67 per cent) for effective labour inspection and a substantial informal economy (56 per cent). To overcome these challenges, collaboration between all the actors who can contribute to effective workplace compliance is necessary. This includes workers’ and employers organisation and also multinational enterprises.

ESC-SIs use a wide variety of activities, including formulating opinions to influence the national debate, securing national tripartite consensus for reforms to secure a safe workplace, sectoral engagements of social partners and providing advice. Next to formulating opinions and recommendations, events are organized and knowledge shared. 43 per cent mention special initiatives concerning gender and provide examples of good practice.

The main role for the ESC-SI is an advisory one, more specifically in drafting legislation or developing policies. However the facilitation of dialogue and raising awareness with social partners and the government is also taken up by many ESC-SIs

Despite these initiatives, many ESC-SIs think they can be more effective if obstacles, such as lack of funding, lack of expertise and lack of a clear mandate can be overcome.

As part of their responsibility to respect human rights, including labour rights, companies have increasingly accepted responsibility for compliance, including in their supply chain. This has led to private monitoring initiatives in order to ensure that their global business partners are in compliance with their commitments. Private compliance initiatives are particularly used in countries with weak workplace compliance and labour intensive production. The effectiveness of these initiatives is questioned, particularly for the fundamental labour rights, which may also be the case for public enforcement. Social dialogue hardly plays a role in these private compliance initiatives. ESCs-SIs have an important role to play in bringing together relevant social

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actors in order to reach consensus and cooperate in dealing with the challenges of workplaces that are part of global supply chains. This report shows that:

ESC-SIs involvement in workplace compliance in relation to global supply chains and multinational enterprises (MNEs) is still limited. Only one third of the participating ESCs-SIs currently have a tripartite dialogue about global supply chains and the role of MNEs. However, another third thought it should become part of their mandate in the future.

Apparently MNEs are not always affiliated to the national employers’ organisation (only in 67 per cent of the countries), which means the dialogue with MNEs cannot take place via their representative organisations in those cases and individual relationships might be needed to establish such dialogue.

ESC-SIs are exploring their role with regard to Corporate Social Responsibility (CSR) and global supply chains. In some home countries of MNEs, ESCs take a pro-active role in reaching consensus on the role of the government and MNEs. In other countries, it is not an area of discussion at all. A wide range of activities and roles are provided as examples by the ESC-SIs, from a very active role promoting due diligence and developing instruments for companies to analysing reports, opinions and sharing good practices, also with other countries.

In general MNEs are not seen as a partner for collaboration on workplace compliance and few ESC-SIs have developed relationships with MNEs. Half of the ESC-SIs consider establishing relationships with MNEs not as their role, but as the role of the government.

Collaboration between public and private initiatives is an emerging issue, but ESC-SIs seem to be unclear about the role they can play. The ESC-SIs could ensure the ownership and internalisation of such partnership promoted by international technical cooperation.

Promoting workplace compliance presents enormous challenges for public agencies as well as private initiatives. When addressing these challenges, collaboration between all stakeholders, whether public or private is important at all levels. Social dialogue should play a key role in these processes, at the national level as well as at workplace level. ESC-SIs are well placed to promote this.

The ILO and AICESIS can build the capacity of ESC-SIs in compliance related issues, enhance the role of social dialogue in public and private workplace compliance initiatives, encourage the complementary role of the latter and the collaboration between both, as is currently done in the Better Work programme.

About 57 per cent of ESC-SIs indicated that the ILO currently plays a role to facilitate and support the consultation process in general and there is a high level of awareness of ILO instruments on inspection and safety and health, also where they are not yet ratified.

More support by the ILO and AICESIS is welcomed, especially in the form of capacity building, training from the ILO and the exchange of best practices by AICESIS

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1 Introduction

The new global agenda for Sustainable Development (Transforming our World: the 2030 Agenda for Sustainable Development), with its newly adopted seventeen Sustainable Development Goals (SDGs) by the UN, recognises that decent work for all is at the centre of inclusive growth and sustainable development (SDG 8). The 2030 agenda also reaffirms the need to respect, protect and promote fundamental freedoms for all.

Compliance with national law and respect for internationally agreed international Fundamental Principles and Rights at Work, principles of international labour standards and applicable collective agreements at the workplace is a key condition for decent work. It is these regulations and standards in diverse areas such as occupational safety and health (OSH), wages, working time (including overtime), discrimination and harassment, maternity protection, employment contracts and paid leave, that jointly determine what decent work consists of.

Workplace compliance is achieved when employers follow these agreed regulations and standards. The role of national governments is to protect the rights of its citizens, including workers, by, among other things, adopting laws and policies in line with international standards and ensuring they are complied with. However, ensuring compliance at the workplace does not equate to “law enforcement”: it is a much broader concept. Law enforcement is only one mechanism of compliance; creating a corporate culture of respect for the rule of law and international standards are equally important in preventing labour law violations through various mechanisms, including campaigns and the promotion of CSR.

Workplace compliance is the concrete result that workers, employers and governments seek to achieve together through a set of strategies, actions and policies to improve working conditions, productivity and competitiveness, and social development. It is a cross-cutting issue at the heart of workplace practices. Therefore (tripartite) Social and Economic Councils and similar Social Dialogue Institutions have an important role to play, in bringing key actors together in policy areas relevant for workplace compliance. Multinational enterprises also play a

role in workplace compliance. They have supply chains that stretch to all corners of the world and increasingly require their own entities and business partners to comply both with national law and international labour standards. Often these commitments and requirements are laid down in corporate codes of conduct or sometimes in suppliers’ terms of conditions as part of their responsible business commitments along the supply chain. Some of these private compliance initiatives use auditors to

Social and Economic councils are institutions for democratic involvement of social partners and sometimes of other civil society groups in the governance of public affairs. These or other institutions for national tripartite social dialogue have been set up and function in some 80 per cent of ILO member States, though to varying degrees. Where they function well, the institutions enable tripartite partners to tackle economic and social problems at central level, thus ensuring a certain degree of coordination and solidarity that cannot be easily achieved at lower levels of decision-making

Source: ILO: National Tripartite Social Dialogue: An ILO Guide for Improved Governance, Social Dialogue and Tripartism Unit, Governance and Tripartism Department (Geneva, 2013).

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monitor the compliance with their codes. Others do not limit themselves to auditing but engage in dialogue with their suppliers to remediate non-compliance through awareness-raising and even capacity-building programmes on e.g. occupational safety and health, and other labour issues. Further, within international sector and multi-stakeholder initiatives participants share audits, share best practices, make a joint effort to engage local suppliers and jointly develop standards that suppliers have to comply with. For example Global Union Federations (GUF) conclude International Framework Agreements (IFA) with multinational enterprises as a result, which act as a tool for social dialogue, paving the way to potential compliance. This collaboration brings compliance at local level through their networks with local unions.

There are numerous challenges to workplace compliance, especially in those enterprises that do not see how compliance can benefit their business. Moreover, in some sectors competition is so high that a race to the bottom is decreasing the incentive or the capacity to comply with the law and uphold international standards on working conditions and wages. Although the ILO and other organizations have been promoting sustainable enterprises, and identifying links between enhanced workplace compliance and cooperation to increased productivity and competitiveness, while numerous studies have shown the business case is there; there is still a long way to go. Policies and regulations cover millions of workers, and have to be implemented in hundreds of thousands of disparate workplaces in differing geographic settings. Conditions within those workplaces vary enormously—even within a single industry—and employers often face incentives to make those conditions in-transparent to law enforcers. As confirmed by the survey with ESCs, national labour inspection agencies have limited budgets and stretched staffing levels1.

The Director-General of the ILO has designated “strengthening workplace compliance through labour inspection” as one of eight areas of critical importance (ACI) in the ILO’s Programme and Budget for 2014-15. The subject is one of the 10 policy outcomes in the Programme and Budget for 2016-17. Workplace compliance is also closely related to the theme of the 2016 International Labour Conference on Decent work in global supply chains.

This report looks into the actual and potential role that Economic and Social Councils and Similar Institutions (further: ESCs and SIs) can play to promote workplace compliance at the national level and how to leverage the role of multinational enterprises in home and host countries as important actors in ensuring workplace compliance and decent work for all in their global supply chains.

85 ESCs-SIs were asked to respond to a questionnaire in order to provide grounds for the present background paper, and to serve as a basis for discussion in the international conference. Thirty countries submitted a response and filled in the questionnaire. Not all responses were tripartite2. Two countries (Brazil and Lebanon) indicated that they were not able to work on this topic due to the current situation in their country. Belgium and Luxembourg have indicated they could not fill out the questionnaire as they were not working on the topic. This might have been the case for more countries.

1 D. Weil: Improving workplace conditions through strategic enforcement, Boston University, May 2010.2 Colombia could not agree to a tripartite consensus and sent different versions of the questionnaire. The government response has been taken as the official response for this report. Mongolia sent in a questionnaire filled in by the employers’ organisation.

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Table 1: Geographical response

Geographical area respondents total respondents % of total receivedAmericas 4 13%Europe and Central Asia 11 37%Africa 9 30%Arab States 1 3%Asia and Pacific 5 17%total 30 100%

This background report will start with an analysis of the concept of workplace compliance, namely a definition, what the responsibilities of different actors are and what ESCs-SIs see as challenges that prevent effective workplace compliance (section 2). Then in section 3, the role of national social dialogue in workplace compliance is discussed, especially in relation to the role of ESCs and SIs, the policy areas they discuss, which activities contribute to workplace compliance, examples of initiatives taken and what they do and should do to strengthen the role of social dialogue, in order to achieve workplace compliance. Section 4 looks at the role of the ILO and its international standards; as well as ways for the ILO and AICEISS to provide greater assistance to ESCs. Finally, section 5 discusses the role of States versus the role of MNEs in achieving workplace compliance in global supply chains, including the role of private compliance initiatives. This section explores the role of different actors, in particular the role of ESCs and SIs and provides several examples. It also touches upon the potential of collaboration between public labour inspection and private compliance initiatives. Section 6 ends with conclusions and some key questions.

2. Workplace compliance 2.1 Workplace compliance defined

Compliance raises a few questions:

- Compliance with what, which regulations?- Who is responsible for workplace compliance?

2.1.1 Compliance with which regulations?

Depending on where the workplace is situated, compliance usually means following a vast legal framework comprising of regulation, legislation, collective bargaining agreements, standards and codes of conduct, covering areas much broader than labour alone. In this report we are describing workplace compliance in the area of labour only. Workplace compliance however is not only governed by national regulations; international labour standards also play a role when they are part of national legislation or part of a code of conduct/business principles of the MNEs or their business partner.The range of topics covered by these national and international standards may vary, but generally cover: wages and working conditions, occupational safety and health (OSH), employment contracts, the Fundamental Principles and Rights at Work (Freedom of association, Child Labour, Forced Labour and Non-discrimination and Equal treatment), social security entitlements, as well as public employment agencies (regulations on contracted workers).

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2.1.2 Who is responsible for compliance at the workplace?

Public authorities are the actor with primary responsibility in assuring compliance with workplace standards. Often, the labour inspectorate is entitled to secure enforcement of a country’s labour laws as well as to promote compliance and raise awareness.

Employers, whether an SME or an MNE, have the responsibility to ensure they behave in compliance with the national laws and regulations of the countries where activities are taking place, including labour laws. They sometimes also have to respect obligations they contractually entered into with business partners, possibly acting in compliance with the latters’ code of conduct.

According to the ILO, social dialogue can mean negotiation, consultation or simply an exchange of information and views between representatives of employers, workers and government3. Well-developed dialogue at the workplace, as well as an effective system of industrial relations at the national and sectoral level will contribute to workplace compliance, because it requires employers and workers’ organisations to listen and take into account each other’s views. Laws and regulations agreed with national tripartite consensus are more likely to be followed at the workplace level.

The multinational enterprise is considered to be responsible “to avoid causing or contributing to negative impact through their own activities and preventing and mitigating negative impact to which it may be directly linked to its operations, products or services by its business relationships” 4. To fulfill this responsibility they may be involved in so-called private compliance initiatives (PCIs).

For the ILO, these PCIs are defined by their status as private, voluntary mechanisms for monitoring compliance with established public (laws or regulations) or private (codes of conduct, etc.) standards. They exist in a variety of types, including self-assessment (management systems), auditing (internal and external), certification and labelling, and public reporting5. These will be further discussed in section 5.

2.2 Challenges

The main goal of workplace compliance is to ensure that all workplaces are safe and healthy, and hence productive, and that all workers irrespective of their status are treated with dignity and respect. As we see in the world today, countries that have made the greatest investments in quality jobs from the early 2000s have witnessed an improvement in living standards (as measured by the growth in average annual per capita income)6. The reduction in the incidence of working poverty in many countries of the developing world has been impressive. Still, 839 million workers in developing countries are unable to earn enough to lift themselves and their families above the US$2-a-day poverty threshold.

3 ILO: National Tripartite Social Dialogue: An ILO Guide for Improved Governance, Social Dialogue and Tripartism Unit, Governance and Tripartism Department (Geneva, 2013). 4 UN Guiding Principles on Business and Human Rights, Principle 135 ILO: Labour inspection and private compliance initiatives: trends and issues, Background paper for the Meeting of Experts on Labour Inspection and the Role of Private Compliance Initiatives, Geneva, 10–12 December 2013.6 ILO: World of Work report: Developing with jobs, Research Department (Geneva, 2014).

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The private organisation Verisk Maplecroft7 supports organisations, including multinational enterprises, in assessing risks of non-compliance with labour rights. They base their assessments among others on ILO data. Their services include world maps to provide overviews on countries where non-compliance is at extreme risk, high risk, medium risk or low risk, which show that a large part of the world still is at extreme to high risk for non-compliance.

ESCs and SIs indicated that they foresee many challenges in achieving workplace compliance in their country. The size of the informal economy and the lack of human and financial resources of the labour inspectorate in the country were considered as the most prominent challenges (Figure 1).

Figure 1: Challenges to achieve workplace compliance

Lack of resources

Contraction of public expenditures

Economic downturns

Fragmentation of, and lack of, institutional coordination

Lack of collaboration

Inadequate or outdated legislation

The urgent need to assess osh risks

Lack of political will

Size of informal economy

Pressures to attract investment

Lack of labour management cooperation

Other

0 5 10 15 20 25

AmericasEurope & Central AsiaAfricaArab StatesAsia

2.2.1 Lack of political will to develop a national preventive safety and health cultureAwareness of health and safety risks is an important condition to prevent work accidents and occupational diseases. Governments can help raise awareness and develop a national safety and health culture with all workers. Although most countries did not see this as a challenge (only three did), the Korean Economic Social Development Committee (ESDC) explained that their occupational fatality rate is four or five times higher than Japan or Germany, thus they see the need to increase awareness about occupational safety and health. Consequently, they would like to expand the OSH administration system as well as the number of labour inspectors.

7 www.maplecroft.com

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2.2.2 Pressures to attract investment and the belief that promoting workplace compliance deters investmentThe beneficial effects of labour standards do not go unnoticed by foreign investors. Studies have shown that in their criteria for choosing countries in which to invest, foreign investors rank workforce quality and political and social stability above low labour costs. At the same time, there is little evidence to suggest that countries which do not respect labour standards are more competitive in the global economy8. A point, which is also recognized in the ILO MNE Declaration. The World Bank in its publication “Doing Business” repeatedly recognized that labour regulations are not necessarily considered as obstacles to business9. Still, many countries fear investment might be deterred if they are too strict with compliance.

Six countries indicated that they recognized this as a challenge for workplace compliance. (Albania, Romania, Russia, Serbia, Tanzania and Vietnam)

2.2.3 Contraction of public expenditures and economic downturnsDeteriorating economic conditions caused by the crisis led many countries to adopt rescue measures. This increased the role and profile of labour administrations as key crisis response institutions, especially in dealing with lay-offs, unemployment benefits and job creation programmes. However, the activities of labour administration and inspection systems have not been immune from the current trend towards fiscal consolidation and the adoption of austerity measures10.

As a result, labour ministries, including public employment services and labour inspectorates, have been increasingly subjected to spending cuts, creating an additional challenge for already burdened labour administration systems.

Ten of the 30 respondents saw a contraction in public expenditure and eight mentioned economic downturns as a challenge to workplace compliance. There was no particular difference per region and the number of respondents was too small to draw any conclusions as to regional differences.

2.2.4 Significant size of informal economy/informal employmentThe informal economy comprises a half to three quarters of all non-agricultural employment in developing countries. Some of the characteristic features of informal employment are lack of protection in the event of non-payment of wages, compulsory overtime or extra shifts, lay-offs without notice or compensation, unsafe working conditions, and the absence of social benefits such as pensions, sick pay and health insurance. Women, migrants and other vulnerable groups of workers who are excluded from other opportunities have little choice but to take informal low-quality jobs 11. Their workplaces are out of reach for labour inspection, unions and private sector compliance initiatives. Moreover the lack of recognition of trade union rights in the informal economy makes social dialogue difficult.

56 per cent of the ESCs did see this as a major obstacle in establishing effective workplace compliance, especially in African countries. 8 The benefits of International Labour Standards, Introduction to International Labour Standards, ILO, http://www.ilo.org/global/standards/introduction-to-international-labour-standards/the-benefits-of-international-labour-standards/lang--en/index.htm9 The International Bank for Reconstruction and Development / The World Bank: Doing Business 2008, (Washington, 2007).10 Labour administration and labour inspection key to global governance, ILO Newsroom, 31 May 2011, http://www.ilo.org/global/about-the-ilo/newsroom/features/WCMS_156165/lang--en/index.htm11Informal Economy, Employment Promotion, ILO, http://www.ilo.org/global/topics/employment-promotion/informal-economy/lang--en/index.htm

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2.2.5 Lack of labour management cooperation at the workplaceWorkplace cooperation is a process whereby employees or their representatives participate with management, through consultation and discussion, in resolving issues of common concern. Effective labour management cooperation increases workplace compliance.

Eight countries see this as a major challenge for workplace compliance. The Economic and Social Council (CES) of Spain mentions in their annual report that improving coordination between administrations would increase the effectiveness of spending and furthermore, that the role of the social partners needs to be supported in order to stimulate and develop policies for prevention.12 An example of good practice comes from the Netherlands where the Working Conditions Act (2007) was based on an advisory report of the SER. This includes a system where employers and employees agree on ways of working to achieve targets set in the public domain on Occupational Exposure limits. At company level, employers and employees may agree on ways of working, using the plan of approach that accompanies the obligatory working conditions of risk inventory and evaluation.

2.2.6 Inadequate or outdated legislationIn some cases, national legislation may not deal with labour issues, or may not be that specific in its requirements, in other cases it may be out of line with international labour standards. In the survey, nine respondents confirmed this prevents effective workplace compliance and among them Korea gives an example: “The obligations and responsibilities under the occupational safety and health legislation are ambiguous, and the legislative system fails to take into consideration the on-going changes in the industrial structure, the diversification of employment types and the vulnerable groups in terms of occupational safety and health protections, such as the aged and women”.

2.2.7 The urgent need to identify hazards and assess occupational risks When it is not clear what the hazards and risks are in an industry and type of workplace, it is more difficult to develop preventive measures and also to ensure compliance with those measures.

Fortunately, most countries (26 out of 30) did not see this as a challenge and we can hopefully assume they have already identified occupational risks.

2.2.8 Lack of resources of labour inspectoratesProper implementation and enforcement of labour legislation depends on an effective labour inspectorate, as well as on the level of protection ensured by the national legal framework. However challenges remain in countries where labour inspection systems are underfunded and understaffed, and consequently unable to do their job. Some estimates indicate that in some developing countries less than 1 per cent of the national budget is allocated to labour administration, of which labour inspection systems receive only a small fraction13.

Twenty out of thirty (67 per cent) respondents of the survey indicated that the lack of resources dedicated to inspections, presents a challenge to preventing effective workplace compliance in their country. Eight of those were from the African region. Guinea mentions that the number of labour inspectors has been reduced and the little that exists suffers from a lack of funding.

12 Annual Report CES 2014, Page 412, citation 17613 International labour standards on labour inspection, ILO, http://www.ilo.org/global/standards/subjects-covered-by-international-labour-standards/labour-inspection/lang--en/index.htm

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2.2.9. Fragmentation of, and lack of institutional coordination between inspection services and other enforcement agencies

33 per cent of the ESCs answering the questionnaire, again dispersed over the different regions, recognised this as a challenge for effective implementation.

To improve the effectiveness of labour inspection, it is important to coordinate with other enforcement institutions. It should be clear which agency deals with which type of risk and with reducing duplications and overhead. It is also necessary to clarify the respective roles and responsibilities of national and local structures.

2.2.10 Lack of collaboration between officials of the labour inspectorate and employers and workers organisations

The labour inspection services naturally maintain close and regular relations with employers, workers and their organisations. Conventions No. 81 (Labour Inspection Convention, 1947) and No. 129 (Labour Inspection (Agriculture) Convention, 1969), moreover, calls on the appropriate authorities to make arrangements to promote this collaboration. Inspectors have contact in the first instance with employers and workers in the enterprise, during visits, at the planning stage or sometimes at meetings of bodies such as safety and health committees or works councils, or possibly during conciliation meetings to prevent or attempt to settle disputes. Inspectors also have frequent contact with workers and employers outside the enterprise. Very often, they provide advice and information in their offices. Sometimes they preside over joint committees, for example to negotiate collective agreements or to settle disputes, although the latter is not a function of labour inspection according to ILO Convention No. 81. They can also give courses on labour topics for trade unionists or heads of enterprises14.

This is seen as a challenge by seven respondents from different regions (St Martin, Romania, Mauritius, Namibia, Jordan, Mongolia and Vietnam).

3. Workplace compliance and social dialogue

3.1. Importance of national tripartite social dialogue for workplace complianceSocial dialogue is defined by the ILO to include all types of negotiation, consultation or simply exchange of information between, or among, representatives of governments, employers and workers, on issues of common interest relating to economic and social policy15. Social dialogue can be an effective instrument to promote better working conditions in the workplace and can take place at the enterprise level, the sectoral level, the national level or even the international level. Dialogue in ESCs-SIs is a form of nationwide social dialogue.As of 2012, 139 ILO member States had established an ESC-SI with more than 95 per cent of these having ratified ILO - Tripartite Consultation (International Labour Standards) Convention, 1976 (No. 144)16. Since then additional countries undertook to create a framework for national tripartite social dialogue to enhance participatory governance of the labour market.

14 ILO: Encyclopedia of Occupational Health and Safety, Chapter 23 15 ILO: Social Dialogue Finding a common voice, Social Dialogue Sector, http://www.ilo.org/public/english/dialogue/download/brochure.pdf 16 ILO: Social dialogue: Recurrent discussion under the ILO Declaration on Social Justice for a Fair Globalization, Report VI, International Labour Conference, 102nd Session, Geneva, 2013.

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National tripartite social dialogue brings together government, workers and employers to discuss public policies, laws and other decision-making that affect the social partners. Tripartite consultations can ensure greater cooperation among the tripartite partners and build consensus on relevant national policies. It is not an outcome in itself, but a key instrument and process in promoting and achieving decent work, inclusive development and social cohesion, and it encourages good governance17. It can be applied to different aspects and issues, for workplace compliance as well as during the law-making process of labour standards.

Social dialogue has been successful in influencing working conditions positively when18:

Rights to freedom of association and collective bargaining are guaranteed in law and in practice; Structures are in place to enable social dialogue at national, sectoral and company level; Mutual trust and respect exists among those involved in the dialogue, which is necessary for

resolving different points of view and expectations; The parties are committed to resolving issues together; The necessary follow ups to agreements are put in place; The parties involved have clear aims of what they want to achieve.

3.2. Involvement of ESC-SIs in workplace compliance

Most ESCs-SI (90 per cent) respondents stated that promoting workplace compliance is part of their policy agenda and therefore part of their mandate. Three countries that were not involved in promoting workplace compliance indicated that their role was only to provide advice on legislation when requested to do so (Israel, Romania and Mauritius). In this role however, it was possible to formulate opinions on different aspects of conditions of work and protection of workers. Therefore the distinction between an advisory role on legislation and promoting workplace compliance was not always clear. Even when not explicitly stated in the policy agenda of the ESC-SI, it may form part of their discussions and consultations in practice.

The response rate to this year’s survey was 30 per cent. The topic of workplace compliance, especially in combination with global supply chains may have been outside the usual policy and consultation area of most ESCs-SIs, which may explain the lower response level compared to previous years. This year’s ILO-AICESIS conference is therefore committed to exploring the link between national tripartite social dialogue and workplace compliance, in addition to building the capacity of ESCs-SIs to take up this policy area in their consultation agendas.

The roles of the responding ESCs-SIs and the extent to which they are involved in workplace compliance varies greatly from country to country. Closest to their core mandate seems to be an advisory role in drafting legislation, developing policies and also monitoring performance of policies and programmes (Figure 2).

17 ILO: National Tripartite Social Dialogue: An ILO Guide for Improved Governance, Social Dialogue and Tripartism Unit, Governance and Tripartism Department (Geneva, 2013). 18 Eurofound: Working conditions and social dialogue, (Dublin, 2007).

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Figure 2: Extent of consultation

Advisory role in drafting legislation and developing policies or schemes

Monitoring performance of policies and programs

Providing overall guidance on the organization and functioning of labour inspectorates and other enforcement agencies

Promotion of voluntary workplace compliance

Sharing of good practices

Other

0 5 10 15 20 25 30

24

16

10

7

14

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Extent of consultations on workplace compliance

Other roles mentioned are:

Table 2: Other roles of ESCs Mediation Senegal Providing quality information in the field of health in the workplace Spain Review of actions required by ILO Convention No. 81 on Labour Inspection

or other ILO reporting requirementsColombia

Technical support to preparation of the ILO Decent Work Country Programmes

Guinea

Involvement of the labour inspection in the review of the implementation of the labour law

Algeria

Discuss and develop recommendations for solutions where needed in subcommittees

Korea

3.3 Policy areas on which ESC-SIs are consulted

Wages and pay are topics of consultation for most of the ESCs and SIs (Figure 3) under analysis. The National Commission on Wage and Labour in Colombia and the Social Council in Montenegro, for example, debate and define the annual increase in the minimum wage. In Mongolia, the National Federation for Employers indicated its interest in discussing equal wages for equal work and the wage gap between local employees and foreign employees. Occupational Safety and Health is another important policy area that ESCs are consulted on. Korea established several expert groups within the Economic and Social Development Commission. One example is the Committee on Occupational Safety Reforms, which is discussing how to improve the occupational safety system and establish an occupational safety culture. In Spain the CES analyses and publishes progress on occupational risk prevention each year in its report on the socio-economic and professional status of Spain19.

19 Annual Report 2014, Page. 407-423, available on the website www.ces.es

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Many ESCs have also declared that the Committee acts as a forum for dialogue, as well as mechanisms for prevention and resolution of disputes in these policy areas. In Senegal for example, the EESC mediates on its own initiative, conflicts between employees and employers, and develops its conciliation strategy. In Algeria, the ESC established a committee for labour relations which, among other things, examines the questions related to industrial relations and promotes social dialogue in the world of work.

Figure 3: Policy areas of consultations

No reply

Occupational safety and health (OSH)

Wages and pay

Working time (including overtime)

Employment contracts

Workplace discrimination

Harassment (including sexual harassment)

Maternity protection

Paid leave

Dialogue, prevention and resolution of disputes

Other

0 5 10 15 20 25 30

2

21

24

16

16

13

10

12

9

19

4

Policy areas of consultations

Other topics that are discussed within ESCs and SIs include:

Table 3: Other policy areasSocial security JordanCompliance with ratified international conventions ColombiaLabour productivity Colombia, SerbiaDevelopment and improvement of collective bargaining SerbiaChildcare services KoreaAge discrimination Korea

15

3.4 Activities and contributions to workplace compliance

3.4.1 Special committees on workplace compliance or related topicsESCs indicate that often subcommittees or working groups are formed within the Council to debate or monitor certain topics/policy areas. 43 per cent of the respondents have set up an expert group or special committee on workplace compliance or committees dealing with related topics, such as occupational safety and health. In all cases, the committees were tripartite, including employers’ and workers’ organisations and government-appointed members, occasionally including specific experts.

3.4.2 Activities to implement workplace compliance policies

Securing national tripartite consensus, engaging at the sectoral level, providing advice, and formulating opinions were all seen as activities that ESCs work on, which contribute to workplace compliance (Figure 4).

Figure 4: Activities

None

Securing national tripartite consensus for reforms or policy adjustments with regard to a safe workplace

Engaging with Social Partners at sectoral level

Capacity Building

Planning of programs, projects and activities to encourage political deliberations on workplace compliance

Securing national tripartite agreement on financing of policies and programs on safety at the workplace

Supplying technical information and advice to employers’ and workers’ organizations that are members of the AICEISIS in developing expertize on workplace compliance

Formulating opinions on different aspects of conditions of work and protection of workers

Providing advice on policy coherence across multiple areas relating to conditions of work and protection of workers

Organizing hearings with enforcement agencies (labour inspectorates, others)

Other

0 2 4 6 8 10 12 14 16 18 20

Korea: The Committee has several consultative bodies consisting of tripartite - plus members to discuss how to improve labour standards for vulnerable groups, including non-regular workers, in-house subcontractors’ employees, harbour workers and atypical workers.

16

Securing national tripartite consensus for reforms or agreement on financing of safety Reaching consensus on reforms that contribute to a safe workplace is an important activity in which many ESCs are engaged. Few indicated that they had reached tripartite agreement on financing programmes. They explain how reaching consensus is important in general:

Nicaragua: “Through the tripartite committee, we have achieved training for the inspectorate through donations, and for workers in various sectors and relevant themes to the workplace such as evacuation, HIV - AIDS, fires relating to health and safety. The Better Work programme also contributed to training and opportunities to strengthen compliance with the legislation.”

Macao: “Regarding labour policy issues, the CPCS is an important tripartite communication and consultation platform for the government, employers and employees, and contributes to achieving balance and consensus through communication, understanding and consultation with each other, so as to assist the SAR government in formulating policies in line with the interests of both employers and employees.”

Korea: “In the ‘Committee on the Advancement of Occupational Accident Prevention System’ (March 2012 ~ March 2013), the representatives from the government, workers and employers and relevant experts got together to discuss how to address the people outside OSH protections and build a four-way (government, workers, employers and civic groups) governance.”

Portugal: tripartite agreements are made concerning matters related to the workplace; the latest agreement dates from 2014 (National Minimum Wage and Employment Promotion)

Engaging with social partners at the sectoral levelMany ESC-SIs also engage with social partners at the sectoral level. Most probably, as the SER in the Netherlands explains, social partners at the sectoral level are involved because of the participation of representatives of employers’ and workers organisations in the committees (for instance the Committee for Working Conditions) or national SER subcommittees (such as the Subcommittee on Limit Values in the Workplace, which prepare advisory reports).

Capacity buildingA few ESC-SIs indicate that they contribute to capacity building of their members. However, capacity can also be built by organisational learning through information and knowledge sharing, such as in Serbia:

“Tripartite debates within institutions provide the opportunity for social partners to participate in the consultation process and in building their capacities and expertise.”

Formulating opinionsThis is a core activity of many ESCs. By formulating opinions ESCs can reach tripartite consensus on certain topics, which can later feed into a law making process or influence the political agenda.In Morocco, the EESC provides, for example, opinions on the resolution of disputes on the regime of civil pensions, on compensation for accidents at work, and on the working conditions and employment of domestic workers. The ESDC in Korea formulates opinions on ‘different aspects of conditions of work and protection of workers’ and ‘provides advice on policy coherence across multiple areas relating to these issues.

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Organising hearings with enforcement agencies:For the ESC-SI to be able to formulate its opinions and advice, it is crucial that all actors have the right information and understanding of the issues under discussion. By organizing regular hearings with enforcement agencies, they can receive important information about the realities of workplace compliance.Morocco and Korea have indicated the setting up of hearings with the Ministry of Labour and the labour inspectorate in order to discuss reports or express opinions (Morocco). In Korea, these parties are often invited as panellists to public forums.

Other:

- In Spain, the ESC analyses progress on social economic developments each year and publishes a report on the different topics it is involved in.

- In Senegal, the CESE organises field visits to better assess difficulties on the ground on some technically specific areas (see Box below).

3.4.3 Important initiatives taken to promote workplace compliance

61 per cent of the ESCs have recently taken important initiatives to promote effective workplace compliance, usually in the form of submitting opinions or recommendations. However, the organisation of events or production of reports on certain topics for knowledge-sharing is also frequently undertaken (Figure 5).

Figure 5: Initiatives

NonePreparing Reports

Opinions/ RecommendationsCapacity Building

Organising conferences, eventsOther

0 2 4 6 8 10 12 14 16 18

11

9

16

4

9

3

ESC-SI initiatives on promoting effective workplace compliance

Field visits in Senegal: The technical commission in charge of studying the issue of gender mainstreaming in legislation, interviewed the Social Security Fund and the Provident Institution Retreat Senegal. The interviews focused specifically on aspects related to the social security scheme, family benefits and occupational hazards; a visit was also made to the SOCAS (Society of the Canned Food Senegal) to inquire about women's working conditions.

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Table 4: Examples of important initiativesReports on “Reality of Practicing Agricultural Professions”, “ Collective work agreements and Labour Protests”, Recommendations on Labour Law, and “The consequences of Syrian Refugees Influx on the Labour Market”.

Jordan

An opinion on psychosocial risks which demanded that the risk factors are identified as part of the overall risk assessment of the workplace. This initiative has given rise to very extensive consultations on preventive means for these risks.

France

The Tripartite Committee for the Zona Franca organises opinion surveys on labour relations and working conditions in the sector. It also provides reviews and recommendations on productivity, absenteeism, health, wage settlements, and labour management relations.

Nicaragua

Creation of a national safety and health observatory; restructuring of the workers' health office; the growth and development of human resources for the improvement of occupational safety and health.

Burkina Faso

Consultation in the area of health and safety and promotion of collective bargaining at the sectoral level.

Serbia

Several opinions and recommendations, including the Non-citizens Employment Act, labour law amendments with the focus on labour standards, HIV/AIDS codes of good practices.

Tanzania

The report and the EESC opinion on the resolution of labour disputes and a series of seminars on social and civil dialogue.

Morocco

Variety of reports on OSH, e.g. on the Advancement of Occupational Accident Prevention System (2013), on labour standards, e.g. on the possible protections for atypical workers (2013), maternity protection: on Work Family Reconciliation and Women’s Employment Promotion (2009).

Recommendations, e.g. Agreement on the advancement of the occupational accident prevention system’ (Feb. 2013), on guidelines on in-house subcontracting and on the improvement of exceptional working time provisions (2012) and reduction of actual hours of work (2013).

Public forums which brought together social partners and relevant experts on, e.g. “possible solutions to the problem of indirect employment towards a fair labour market.”

An international conference jointly organised with AICESIS and ILO, on the theme of social protection, including workplace compliance (Nov. 20~21, 2014).

ESDC checks on a quarterly basis to see if the tripartite agreements on OSH, maternity protection and labour standards have been fully implemented.

In July 2009, the public interest members of ESDC concluded an agreement to rationalize the bargaining system for multiple unions and the full-time unionist system, which helped both domestic companies and MNEs in Korea initiate collective bargaining under multiple unions.

Korea

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3.4.4 Attention to gender43 per cent of the countries reported giving specific attention to the special position of women in the workplace.

Figure 6: Attention to gender

No reply7%

Yes43%

No50%

Examples of activities were:

Table 5: Gender-specific activities are undertaken through the following initiatives:Demanding specific attention for vulnerability factors in professions most performed by women.

France

Through promotion of the establishment of nurseries in the workplace in the labour law.

Jordan

Through a study about the female labour force participation and rights. JordanThrough maternity leave and preserving the job vacancy when she returns. ChinaPublic forums on “Working Parents’ Difficulty”: policy options for employment-friendly childcare service (Dec 2014) and how to increase social funding of the costs of maternity leave and childcare leave benefits.

Korea

Through operationalization of non-discrimination policies and laws at all levels. TanzaniaThrough the Gender Commission of corporate Dome Superior Council of Private Enterprise (COSEP).

Nicaragua

By promoting equal opportunities, fighting discrimination and harassment, in the legislative acts on which the ESC was asked to issue opinions.

Romania

Attention to gender equality within the promotion of working conditions. Vietnam

3.4.5 Policies and guidelines discussedMost countries have discussed policy and guidelines regarding safety at the workplace through the participatory mechanisms of the ESC-SIs. This seems to be the area where tripartite consultations are most developed. To a lesser extent, policies and guidelines in the area of labour inspection or management cooperation at the workplace were part of the discussion.

20

Figure 7: Policies and guidelines discussed

Laws and regulations regarding safety at the workplace (hygiene standards, professional illnesses, reparation of workplace mishaps etc.)

Laws and regulations in the field of labour inspection (mandate; resources; organization etc.)

Measures (legal, institutional and labour practices) to enhance management cooperation to promote workplace compliance as well as competitiveness and productivity

Other

0 5 10 15 20 25 30

Policies/guidelines discussed on workplace compliance by ESC-SI

Examples

Table 6 examples of policies and guidelines discussed

The NetherlandsThe new Working Conditions Act (2007), which included a system for Occupational Exposure Limits (OEL) was based on advisory reports from the SER. One major recommendation for the new system was to expand opportunities for employers and employees to take responsibility for their own working conditions policy, thereby considerably reducing the number of regulations and simplifying legislation. At the heart of the new system is a clearer separation of the public and private domains. In the private domain, employers and employees agree on ways of working that allow for prescribed targets to be achieved. At sector or central level, this may take place on the basis of an agreement between the social partners.

In the Netherlands, ways of working thus established may be recorded in a Working Conditions Catalogue, which contains descriptions of methods recognised by employers and employees, and from which a choice can be made to meet the prescribed targets. At company level, employers and employees may agree on ways of working using the plan of approach that accompanies the obligatory working conditions risk inventory and evaluation. The public domain contains specific and unambiguous prescribed targets, based on clear and scientifically supported health and safety standards.KoreaThe Committee on OSH Reforms has focused its discussions on how to reform the legislative structure of OSH in order to realise the goals of improving the safety management mechanism at individual workplaces, promoting workers’ health and increasing their safety awareness.

Nicaragua

Discussions for adaptation and implementation of the White Paper to strengthen the enforcement of labour standards, the MECOMAC Project "Improving compliance in the maquila sector", Protocols of labour inspectors application of administrative procedure settlement provisions of Law 815 "Labour Procedure Law and Social Security"

Tanzania

The ESC was involved in discussions on an amendment of Tanzania labour laws by providing additional functions to Labour Officers: To establishing and supervising workers councils at all premises, restructuring of

21

the Department of Labour, and establishment of a new social security department.

Macao

A consensus between government, employers and employees was achieved first through the CPCS before the legislative process of Law no. 3/2014 “Construction Safety Card Regulation” (2014). The law requires that construction workers enrol on a construction safety course or attend a test on the basic knowledge of safety construction work in order to obtain a construction safety card, so as to ensure that the workers have the basic knowledge and skills of work safety in construction.

Montenegro

The Committee was consulted on the Law on Peaceful Settlement of Labour Dispute, Law on Prohibition of Harassment at Work; the Proposal of Law on Health and Safety at Work has been prepared, tripartite consultations on a new labour law have started, etc.

Serbia

Labour inspection was recently discussed in light of protecting migrated workers in other countries, which resulted in tripartite consultations on drafting the law which will regulate this topic.

3.5. Strengthening social dialogue in the area of workplace compliance

Engaging in effective social dialogue also presents some challenges, as outlined below by a number of the ESC-SIs:

Figure 8: Obstacles

No reply

Lack of expertise/knowledge

Lack of political will or interest on the part of the actors

0 2 4 6 8 10 12

Obstacles to engage in social dialogue on workplace compliance

When asked what ESCs-SIs or governments are doing to strengthen the role of social dialogue to achieve workplace compliance, a variety of steps were highlighted:

Elevating tripartite social dialogue to constitutional status (Nicaragua) or legal status (Korea).

Establishing tripartite permanent working bodies within the ESC on topics such as safety and health at work or Fighting Against Undeclared work (Republic of Srpska-Bosna Herzegovina).

Russia suggests a six-step approach: 1. establish the legal framework; 2. identify the social partners and participants; 3. identify the social dialogue event and the initial issues to be discussed; 4. identify skilled facilitators; 5. promote a common understanding of social dialogue; 6. set the agenda.

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Russia also suggests three main forms of national support for social dialogue: the institutional and legal frameworks, public encouragement and political will.

Making sure that tripartite consultations are held regularly, on time and with beneficial outcomes. (Serbia).

The involvement of the government in the tripartite meetings of the ESC. (Algeria). Capacity building and training of social partners on social dialogue (Guinea, Mauritius,

Namibia, Tanzania). To ensure that the ILO Decent Work Country Programme has tripartite support and includes a

training programme for all partners on safety issues (Mauritius). China organises Roundtable meetings with social partners, after which opinions are submitted

to central government. By ensuring policies meet the needs of many stakeholders through consultation and collecting

opinions from employers, employees, relevant associations, industries, wider society (Macao). Joint interest because of increasing work place accidents and risks in the construction sector

(Mongolia). Widening the scope of participants, including vulnerable workers in the labour market and

field experts (Korea). Facilitating tripartite discussions by ensuring everybody is well informed in advance (Korea).

Most of the responding ESCs stated that their primary role in the area of workplace compliance involves providing advice, particularly in relation to legislation and policies (Figure 9). Raising awareness on the significance of this subject is also seen by more than half of the ESCs, as an important part of their role. The Spanish CES, for example, issues reports upon its own initiative on workplace compliance related issues, while the Dutch SER organises workshops for stakeholders to raise awareness.

Figure 9: Roles re compliance and labour management cooperation

Advisory role in drafting legislation and developing policies

Raising awareness among employers’ and workers’ organizations through campaigns and similar initiatives

Facilitating dialogue among government, employers’ and workers’ organizations, possibly also including MNEs

Other

0 5 10 15 20 25 30

ESC-SI roles re compliance and labour management cooperation at workplace

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4. Role of ILO and ILO standards and guidance

4.1 Role of the ILO

The ILO, provides support to Governments, Employers and Workers worldwide on setting labour standards, developing policies and devising programmes.. Decent Work Country Programmes (DWCP) have been established as one of the main vehicle for delivery of ILO support at country-level. DWCPs have two main objectives. They promote decent work as a key component of national development strategies. At the same time they organise ILO knowledge, instruments, advocacy and cooperation to serve tripartite constituents in a results-based framework to advance the Decent Work Agenda. Tripartism and social dialogue are central to the planning and implementation of a coherent and integrated ILO programme of assistance to constituents in member States.

4.2 ILO guidance on workplace compliance

4.2.1 ILO Standards for Workplace ComplianceThe ILO has also developed several international labour standards regarding the promotion and organisation of workplace compliance. These include:- Labour Inspection Convention, 1947 (no 81)- Labour Inspection Recommendation, 1947 (no 81)- Labour Inspection (Agriculture) Convention, 1969 (no 129)- Labour Inspection (Agriculture) Recommendation, 1969 (no 133)

Labour inspection brings workplace practices into line with national labour legislation, labour standards, and human rights. Labour inspection secures the enforcement of legal provisions relating to conditions of work, and plays an important role in ensuring that labour law is applied equally to all employers and workers. The international community has recognised that labour inspection is one of the core functions of any system of labour administration and has always been central to the ILO’s mandate. In addition, “Promoting workplace compliance through labour inspection” is as an area of critical importance (ACI) in the ILO Programme and Budget for 2014-2015 and will be one of the ten policy outcomes in the ILO Programme and Budget 2016-2017.

Safe and healthy workplaces are a foundation of decent work but for many workers this is far from being a reality. The ILO has adopted several instruments on occupational safety and health in the workplace, including:

Promotional Framework for Occupational Safety and Health Convention, 2006 (no187) Employment Injury Benefits Convention, 1964 (no121) Occupational Safety and Health Convention, 1981 (no155)

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4.2.2 Awareness of ILO instruments

ESCs were most knowledgeable about the promotional framework for OSH, the Occupational Safety and Health Convention, 1981 (No. 155) and the Labour Inspection Convention, 1947 (No. 81).

Figure 10: Awareness of ILO instruments

Labour Inspection Conv., (No. 81)

Employment Injury Benefits Conv., (No. 121)

Labour Inspection (Agriculture) Conv., (No. 129)

Occupational Safety and Health Conv., (No. 155)

Promotional Framework for OSH Conv., (No. 187)

0 5 10 15 20 25 30 35

30

30

30

30

30

1

1

1

1

1

24

6

11

14

7

23

20

18

25

23

awareratifiedno replytotal respondents

25

4.3 Support by the ILO

Approximately 57 per cent of the responding ESCs indicated that the ILO currently plays a role infacilitating and supporting the consultation process.

Table 7: Support by the ILOThe ILO provided comments on the draft labour law St Martin

The ILO organised workshops and meetings regarding the improvement of social dialogue in the Republic of Srpska and Bosnia and Herzegovina.Through the implementation of the DWCP, the participation of workers ‘representatives and employers’ organisations in the working bodies and commissions for drafting laws and regulations, as well as participation in the management of social security funds was established

Republika Srpska -Bosnia Herzegovina

DWCP SerbiaThe tripartite social partners actively participated in the ILO’s International Labour Conference (ILC).

Algeria

DWCPs work on the implementation of the fundamental principles of work in June 2008.Paper on health coverage of officials (national provident fund of social servants and the national institute of obligatory health insurance).

Guinea

Training for labour inspectorates and arbitrators Namibia

Efficient implementation of Tripartite Consultation (International Labour Standards) Convention, 1976 (No. 144)The CPCS’s composition and functions follow the recommendations laid down in the Convention.

Macao

Effective implementation of Convention No.155 . In this regard, the ESDC of Korea has adopted through social dialogue among its tripartite members, the “agreement on the improvement of the OSH system” (2008) and the “agreement on the advancement of the occupational accident prevention system’ (2013)

Korea

Country office assisted and participated in the discussion of the Labour Law and developed recommendations for future improvement

China

ESCs have requested further support from the ILO in the form of capacity building and technical assistance (Figure 11) while they sought assistance from AICESIS in promoting the exchange of good practices on issues relating to workplace compliance (Figure 12).

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Figure 11: Expected support from ILO

capacity building / technical assistance/ provide training

provide exchange best practices and hindrances

conduct studies/research

organize roundtables/conferences

support with influencing other parties

other

0 2 4 6 8 10 12 14 16 18

Expected support from ILO

Figure 12: Expected support from AICESIS

facilitate exchange of best practices/ set up network/ twinning

financial resources

provide expertise/ capacity building

conduct studies/research

organize roundtables/conferences

other

0 2 4 6 8 10 12 14 16

Expected support from AICESIS

Suggestions for additional areas of assistance included:

encouraging bipartite dialogue (Sprska-Bosnia Herzegovina) training in the field of negotiation and advocacy (Srpska-Bosnia Herzegovina) adopting resolute measures in response to the formal notices concerning the malfunction of social

dialogue (Romania) closer relationship between ILO and ESCs (Vietnam) mailing list to share good practices (Aruba) financial support (Burkina Faso, Kenya)

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5. Workplace compliance in global supply chains5.1 Duty to protect by the State and responsibility to respect by enterprises

Traditionally public authorities have been recognised as the actor with primary responsibility in respect of activities designed to ensure compliance with workplace standards. According to international law, States have a duty to protect against human rights abuses, including labour abuses by non-State actors20.

At the same time, expectations of companies have increased in recent decades. Civil society and media are holding them accountable for infringements on human rights, including labour rights, far down their supply chains. Intergovernmental organisations have adopted instruments to guide the behaviour of companies, such as the OECD guidelines for multinational enterprises; while business organisations and individual companies are also developing guidelines and making similar commitments. In order to provide support to these processes and to encourage the positive contribution of enterprises to socio-economic development, the ILO in 1977, adopted the Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (further: the MNE Declaration). .

Companies “are expected to obey the law, even if it is not enforced, and to respect the principles of relevant international instruments where national law is absent.” Recently this was confirmed in the worldwide recognition of the UN Guiding Principles on Business and Human Rights, which states that companies have the responsibility to respect human rights, including labour rights21.

Each legally distinct corporate entity is subject to the laws of the country in which it is based and operates. Yet States, particularly some developing countries, may lack the institutional capacity to enforce national laws and regulations against transnational firms doing business in their country. Even when the will is there, they may feel constrained from doing so by having to compete internationally for investment. Home States of transnational firms may be reluctant to regulate against overseas harm by these firms because the permissible scope of national regulation with extraterritorial effect remains poorly understood, or out of concern that those firms might lose investment opportunities or relocate their headquarters. To attract investments and promote exports, governments may exempt national firms from certain legal and regulatory requirements or fail to adopt such standards in the first place 22. This has led to a governance gap in ensuring workplace compliance in global supply chains.

In addressing this governance gap, the policy framework “Protect, Respect and Remedy”, followed by operational guidance with the UN Guiding Principles on Business and Human Rights in 2011, received worldwide support when the UN Human Rights Council unanimously endorsed it. This framework consists of three pillars and can be interpreted as follows23:

20 UN: Protect, Respect and Remedy: a Framework for Business and Human Rights, Human Rights Council, 18 June 2008. 21 UNHCR: Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework , United Nations Human Rights Council,(New York and Geneva, 2011).22 UN: Protect, Respect and Remedy: a Framework for Business and Human Rights, Human Rights Council, 18 June 2008. 23 UN: Protect, Respect and Remedy: a Framework for Business and Human Rights, Human Rights Council, 18 June 2008.

IState duty to protect

IICorporate

responsibility to respect

IIIAccess to remedy

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Under the ‘State Duty to Protect,’ the Guiding Principles recommend how governments should provide greater clarity of expectations and consistency of rule for business in relation to human rights. The ‘Corporate Responsibility to Respect’ principles provide a blueprint for companies on how to know and show that they are respecting human rights. The ‘Access to Remedy’ principles focus on ensuring that where people are harmed by business activities, there is both adequate accountability and effective redress, judicial and non-judicial.24 This includes grievance and dispute settlement mechanisms.

5.2 Private compliance initiatives (PCI)

5.2.1 What is it?

As part of their responsibility to respect these initiatives, companies have increasingly accepted responsibility for compliance, including in their supply chain. Within this, they have started to undertake voluntary monitoring to ensure their commitments are complied with by the different entities of the enterprises and their business partners. These so-called Private compliance initiatives (PCIs) are active today in every region of the world and in several economic sectors. They originally appeared in sectors characterized by labour-intensive production, in countries (particularly developing countries) lacking adequate labour law compliance mechanisms to assure global reputation-sensitive brands. Over the last decade, Corporate Social Responsibility-driven PCIs have expanded their scope. Labour administrations and labour inspectorates have also strengthened their systems with a view to balancing voluntary initiatives with varying results, depending on the regions and countries involved25.

A necessary element of any PCI is the standards against which it measures enterprise performance. These standards often include the ILO’s Fundamental Principles and Rights at Work, at a minimum. Usually the standards include a commitment to comply with national law and a requirement for suppliers to do the same.

5.2.2 Types of PCIs

PCIs have a process of checking for conformity against standards and include characteristics in common with public labour inspections. Some types include26:

Self-assessment (management systems): to embed and integrate their commitments, companies set up management and control systems to ensure that the organisation can achieve its objectives, including compliance with public or private (as well as national or international) workplace norms. As a buyer, a company may require their supplier to do a self-assessment as assurance that the supplier is complying with the standards set. This can be an individual company’s effort or a consequence of a sectorial initiative of the branch to which the specific enterprise pertains. For example, the Electronics Industry Citizenship Coalition (EICC) requires self-assessments by suppliers as a first step.

24 New Guiding Principles on Business and Human Rights endorsed by the UN Human Rights Council, United Nations Human Rights, http://www.ohchr.org/en/NewsEvents/Pages/DisplayNews.aspx?NewsID=11164 25 ILO: Labour inspection and private compliance initiatives: trends and issues, Background paper for the Meeting of Experts on Labour Inspection and the Role of Private Compliance Initiatives, Geneva, 10–12 December 2013.26 ibid

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Auditing – Internal and external: This requires a process of collecting, analysing, and reporting of data on indicators of compliance with identified standards. The purpose of auditing is to reach conclusions on compliance on the basis of verifiable data. Enterprises can engage their own employees to audit themselves internally for compliance. An enterprise may also hire external collaborators or another company to conduct an external audit. Suppliers of international buyers can be asked to have themselves audited externally as a means of assurance of compliance.

Certification and labelling: Certification confirms an enterprise’s achievement of benchmark standards. Although certification can be – and often is – the result of an audit, the method used for confirming the achievement of the standard is not a defining aspect of certification 27. Well known examples are the Fair Trade certification, which includes compliance with ILO core conventions.

Other approaches: Some CSR initiatives engage other mechanisms to help assure compliance, often in combination with above mentioned ones. The Ethical Trading Initiative (ETI) and BCI, for example, prompt compliance through membership and the exchange of learning and good practices – with the threat of disciplinary action, refusal of membership in the organisation, and expulsion in the event of non-compliance28.

Due diligence and impact assessments: a rather new approach that is developing is the due diligence process, which includes human rights impact assessment; a process that is now expected by the UN Guiding Principles for business and human rights. Companies are assessing their compliance with human rights and impact on their stakeholders, including workers and their representative organizations. This should be a consultative process with all relevant stakeholders. E.g. Nestlé carried out human rights compliance assessments in several countries.29 Acting on the findings, tracking the effectiveness and communicating the results, are other steps in the due diligence process.

Reporting: Companies are taking the initiative to report on their performance as a response to external pressure. Initiatives arise where governments require reporting on non-financial disclosure by companies. In order to report, companies undertake assessments and measurement exercises.

5.2.3 Scope of PCIs

PCIs are most prevalent where there is a gap in workplace compliance, combined with the perception of reputational risk felt by the private enterprises, with labour intensity being the original mark of PCIs driven by these concerns30. Therefore, PCIs focus on compliance issues within specific companies, sectors or a given supply chain, and would not pursue compliance in the labour market more generally.

In Europe and North America, PCIs that focus on self-assessment and reporting may be more prevalent than elsewhere. Companies headquartered in these continents, and the governments of the countries concerned, have been important drivers on a global scale of CSR initiatives with their

27 ILO: Labour inspection and private compliance initiatives: trends and issues, Background paper for the Meeting of Experts on Labour Inspection and the Role of Private Compliance Initiatives, Geneva, 10–12 December 2013.28 Ethical Trading Initiative, Respect for Workers Worldwide, FAQs, http://www.ethicaltrade.org/faqs29 Nestlé, Human rights: Our commitment: Assess and address human rights impacts in our operations and supply chain, http://www.nestle.com/csv/human-rights-compliance/human-rights30 International Trade Centre (ITC): When do private standards work? Literature review series on the impacts of private standards – Part IV, (Geneva, 2012), p. 36.

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associated PCI mechanisms. The European Commission (EC), as a matter of policy, promotes CSR through its external policies31. The implementation of PCIs take place generally, in countries where European and North American companies outsource their activities to.

5.2.4 Impact of PCIs

No in-depth assessment of the impact of PCIs on working conditions has yet taken place. At the same time, there is sufficient evidence that they have some positive impacts, particularly with respect to health and safety, the reduction of unreasonable overtime and the payment of minimum wages. Impacts appear to be weaker with respect to rights-based and equity issues, such as freedom of association and gender equality. Also, workers with permanent contracts are still thought to be most likely to benefit, rather than vulnerable workers in precarious working arrangements (including temporary, seasonal and home-based workers)32.

Reasons for this limited success33:

- The power relations are not as straightforward as the private compliance model assumes (the buyer is not always in a position to force its supplier to improve);

- Root causes of the problems are not always identifiable via the audit model;- The expertise required to identify the real problems is often too costly;- Working conditions are also impacted by other factors, including late arrivals of key inputs

and materials, delayed orders from buyers – factors that are not part of the audit model;- Lack of transparency and cooperation by factory management;- Studies show that regulatory compliance by companies does not occur because they are forced

to, but because they have been assisted and educated.

These lessons learned may be equally valid for public compliance efforts.

5.3 Role of different actors

While governance gaps are often at the root of the lack of workplace compliance, effective responses must endeavour to reduce those gaps. But individual actions, whether by States or firms, may be too constrained by the dynamics as described above in 5.1. Therefore, multi-pronged and coordinated approaches are required. Incremental improvements should be found in more cooperation between the different actors. Below follows an overview of different public and private actors and the roles they take:

National governments setting national laws and regulations. National trade unions: representing the voice of workers in consultations around laws and

regulations and the promotion thereof, as well as feedback on the effective application of laws and regulations and education of workers on their rights. Also, they help their members facing non-compliance at the workplace by providing information and legal support.

31 For example Directive 2014/95/EU on disclosure of non-financial and diversity information by certain large undertakings and groups (http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32014L0095): 32 K. Newtitt: Private sector voluntary initiatives on labour standards, Background paper for the world development report, Ergon Associates Limited, 2013.33 R. Locke: The Promise and Limits of Private Power: Promoting Labor Standards in a Global Economy, (New York, 2013).

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Workers at the workplace raising concerns and challenges at work, notifying any non-compliance to management and the labour inspectorate as appropriate.

Employers’ organisations: representing the voice of private enterprises in consultations around laws and regulations, promotion and compliance.

Employers and managers respecting legal obligations and collective agreements, codes of conduct, etc.

ESCs: bringing the first three key actors together. National labour inspection: Its main role is to convince the social partners of the need to observe

the law at the workplace and their mutual interest in this regard, through preventive, educational and, where necessary, enforcement measures34.

Private standard-setting organisations (For example, ISO and its national standards organisations, representing countries in the ISO).

Industry (single and multiple) bodies that have drawn up standards with accompanying PCIs. These bodies tend not to engage with other stakeholders in these standards-related processes, although such engagement may become more frequent (such as the ICTI, WRAP, the BRC, the Business Social Compliance Initiative (BSCI), the Supplier Ethical Data Exchange (SEDEX), etc.)35.

Auditors: are monitoring compliance with the standards set, whether as an internal staff member or an externally hired person or body.

Business partners to enterprises (e.g. buyers): passing private standards along the supply chain and insisting on compliance and compliance assurance.

Civil society: campaigning groups or consumer groups call for compliance worldwide and serve as a watchdog and motivational force.

International unions: organising awareness raising campaigns and knowledge sharing, training sessions for members and civil society, as well as a watchdog function and a partner for dialogue vis a vis multinational enterprises on global compliance. E.g. Global Unions (sectoral) negotiate international framework agreements with MNEs, often including provisions on workplace compliance including in supply chains of the MNE.

Multi-stakeholder groups both set and monitor standards and are distinguished by the fact that they involve a wide range of stakeholders in their activities, including consumer groups, workers’ organisations, trade unions, campaign groups, and others (e.g. Ethical Trading Initiative, Fair Labour Association, Fairwear foundation).

Regional groupings: harmonising or uniforming their training curricula on labour inspection, labour administration systems, as in UEMOA (West African Economic and Monetary Union).

International organisations such as the UN (e.g. UN Global Compact), the Organisation for Economic Cooperation and Development (OECD) (e.g. OECD Guidelines for MNEs and their implementation mechanism of national contact points) and international financial institutions (IFC) are also important actors, injecting standards and associated PCIs into enterprise operations.

ILO as the only public standards-setting organization on which others build, as well as providing technical support and information on achieving workplace compliance.

34ILO: Labour Inspection: What is it and What it does A Guide for Workers, LAB/ADMIN, 2010.35 ILO: Labour inspection and private compliance initiatives: trends and issues, Background paper for the Meeting of Experts on Labour Inspection and the Role of Private Compliance Initiatives, Geneva, 10–12 December 2013.

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5.4 The role of national ESCs in global supply chains

Multinational enterprises based in industrialized countries have often outsourced their production to countries with low labour costs or source raw materials globally. Traditionally, this was divided between European and Northern American countries being home countries and African, South American or Asian countries being hosts. This has been changing in recent decades, where large multinationals are now based in Latin America, Asia or other parts of the world. Thus the role of national ESCs-SIs in global supply chains may differ depending on whether the ESC-SI is based in a home country of multinationals operating with global supply chains, or in a host country where the supply chains of MNEs are operating.

Being in a position to bring important social actors together in the council to reach consensus and cooperate in dealing with the challenges of workplace compliance, ESCs-SIs could play an important role. However, only one third of the participating ESCs-SIs indicated that global supply chains and the role of MNEs is discussed, (table 8) not coming from one region particularly but divided around different parts of the world, whether home or host country. Many others see this as a government’s role. Indeed, it seems that in many countries especially –host ones- government prefers to deal with issues such as promoting foreign direct investment and the operations of MNEs outside existing channels for tripartite cooperation.

Table 8: Countries Involved in global supply chains and having relations with MNEs

Activities ESC-SIs re Global Supply Chains with MNEs

Policy entails GSC and MNEs

Relations with MNEs on social and environmental requirements

Relations with MNEs on PCI re workplace

Nicaragua y y ySt Martin y y nNetherlands y y yRussia y y ySpain y n nBurkina Faso y n nGuinea y y yKenya y y nMorocco n y nChina y y nVietnam y y y

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These ESCs-SIs whose activities include global supply chains, usually have relationships with individual MNEs as well. Only Morocco indicated having these relationships, while global supply chains and the role of MNEs is not a policy area.

International guidelines (Figure 13) directed at companies play a role in discussions within ESCs on global supply chains (Figure 13). Most often fundamental ILO Conventions played an important role in the discussion. However private ISO standards, which are looking at management systems at the workplace, act as important guidelines as well. In some countries where global supply chains are part of the policy agenda, international guidelines hardly play a role (e.g. Russia); in contrast, international guidelines in Korea and Senegal play a role, but supply chains are not included in their policy agendas.

Figure 13: International guidelines for global supply chain discussion

No reply

Fundamental ILO conventions (conventions 182, 138, 29, 100, 98, 105, 111, 87)

ILO MNE Declaration

The OECD Guidelines for multinational companies

The UN Guiding Principles on Business and Human Rights

ISO standards (such as ISO 9000, 14000, 26000 etc)

Other

0 2 4 6 8 10 12 14

5.4.1 Examples of roles ESCs-SIs

However, ten of the ESCs-SIs currently not involved in global supply chains emphasised that this and the role of MNEs should become part of their mandate in the future. The ESC from Jordan indicated that SMEs were a higher priority now, while the ESC of the Republika Srpska – Bosnia & Herzegovina explained that they have no MNEs based in their country. The ESC from Tanzania thought it should become part of the Strategic Plan under preparation as they should be able to advise the minister in this area too. Some indicated that the law would need to be changed (ESC Romania) to make this part of their mandate, or that a formal tripartite decision would be needed to put this on the agenda (ESC Korea).

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Examples of roles ESCs are taking with regard to global supply chains and MNEs:

Table 9: Examples of roles of ESC re workplace compliance in global supply chainsNicaraguaConsultation around the impact of global supply chains and the role of MNEs is mainly dealt with via the ILO Better Work Programme for the textile sector.SpainThe Economic and Social Council of Spain addressed global supply chains and global value chains in its "Report 1/2015 competitiveness of Spanish companies in the internal market: production structure, imports and economic cycle." The report analyses these chains as a differentiating feature of the world economy in recent years, in the context of the growing interdependence between countries involved therein and, in particular, integration of Spanish production in these channels without forgetting the analysis of the relationship between the content importer and supply of exports of Spanish companies involved in these chains (see pages 72 to 75 of report 1/2015)NetherlandsThe SER of the Netherlands takes an active role in promoting international corporate social responsibility (ICSR), including responsible supply chain management. In the last couple of years, it has focused on ‘due diligence’ as is now required under the updated OECD Guidelines for Multinational Enterprises and UNGP guidelines. It undertook the following activities:

- The SER’s International CSR committee has written a report on due diligence,- developed a practical module on the various steps of due diligence and- a code of practice with the Netherlands Standardization Institute (NEN) to integrate due

diligence into existing (risk) management systems,- organised a work conference on due diligence,- advised on ICSR agreements (the Dutch government would like to conclude agreements with

a number of sectors to reduce International CSR (ICSR) risks, including labour, based on Advice offered by the SER)

- and offered a workshop for companies, including SME and MNEs, on how to identify, appropriately prioritise, and start to address their most salient human rights risks, in line with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights.

The overarching theme for the period 2014-2015 is the development of a national agenda that connects risks to opportunities. In this context, attention will also be paid to the theme of 'living wage'. The SER has used, and will continue to use, the revised OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights as the framework for its ICSR activities. See https://www.ser.nl/nl/actueel/werkprogramma/imvo.aspx.Burkina Faso and ChinaHolding sessions, conferences, and roundtable meetings about the topic.

More examples were given around the role of sharing good practices on workplace compliance and social dialogue within global supply chains:

Table 10: Examples of ESCs sharing good practicesSharing good practices

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ChinaProviding advisory opinions to legislature and working closely with other social partners.KoreaSharing the reports published by international organisations (ILO, OECD, IMF, etc.), to learn from good practices on workplace compliance and social dialogue within global supply chains/global value chains.Concluding MOUs with the ESC-SIs in other countries to promote mutual cooperation and exchanges (e.g. with Russia and Brazil).Participating in and organising international conferences on social dialogue.MoroccoComparative studies of national and international best practices to add value to its recommendations.FranceOpinion on Corporate Social Responsibility supporting the dissemination of good practices.RussiaProvides insight into the potential for the market to protect and improve labour standards and working conditions in global apparel supply chains. It examines the possibilities and limitations of market approaches to securing social compliance in global manufacturing industries. It does so by tracing the historic origins of social labelling both in trade union and consumer constituencies, considering industry and consumer perspectives on the benefits and drawbacks of social labelling, comparing efforts to develop and implement labelling initiatives in various countries, and locating social labelling within contemporary debates and controversies about the implications of globalization for workers worldwide.Burkina FasoAdvisory roles, facilitating dialogue between actors and raising awareness of such actors.TanzaniaEndeavour to establish linkages and share experience with similar institutions in other countries.

Jordan

Conducting seminars and workshops, consultations with chambers in addition to planning to organise a seminar on investment.

5.4.2 Relationships between ESC-SIs with MNEs in the field of CSR

Most countries working on international supply chains build some kind of relationship with MNEs, through:

CSR forum, symposium, workshops (Nicaragua, St Martin, Netherlands, Senegal)

Expert meetings (Netherlands, St Martin) Through the employers’ organisations (Netherlands) Reaching out to local communities through the leverage of the company (Guinea) Key relationships with enterprises, including MNEs (Netherlands)

The Social and Economic Council's International Corporate Social Responsibility Committee (ICSR) of the Netherlands offered a workshop for companies, including SME and MNEs, on how to identify, appropriately prioritize and start to address their most salient human rights risks, in line with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights.

The SER of Sint Maarten’s first symposium was about Corporate Social Responsibility, with the purpose of clarifying the concept of corporate social responsibility and to define the roles and responsibilities of businesses and stakeholders. After the symposium there was an expert meeting with MNES about consciously creating long-term value in terms of Profit, People and Planet.

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Policy dialogue (Kenya) The establishment of a trade union branch in 2006 (China with Walmart) as part of the effort to

unionize foreign-financed enterprises (goal of 60 per cent by 2006 and 80 per cent or more by 200836)

One way of developing dialogue with MNEs is when they are represented in the ESC-SI by the employers’ organisation. 67 per cent responded that MNEs in their countries are affiliated to the employers’ organisation. Others indicated that MNEs did not have significant presence (Republika Srpska – Bosnia & Herzegovina) or that it is incompatible with their role (ESC Algeria). Several thought MNEs should become affiliated and the ESC-SI should reach out to them in the future (e.g. Mongolia).

5.4.3 Relationships between ESC-SIs and MNEs regarding PCIsIn five countries (Nicaragua, Netherlands, Russia, Guinea, Vietnam) relationships were built regarding PCIs, such as auditing and certification. Examples given are related to the Better Work Programme in Nicaragua or the EITI (Extractives Industry Transparency Initiative), especially in mines and agriculture (Guinea).

Most ESCs do not have these relationships and half of them do not think this is the role of an ESC, but the role of the government.

5.5. Public and private workplace compliance collaboration

In practice, public institutions (including labour inspection) tend not to be involved directly in PCI activities. Nor are private audits and reports shared with the public inspection authorities. However, it is an emerging issue and this type of collaboration is being tried out in countries around the world.

5.5.1 Some good practices around the world:

Table 11: Examples of good practices in public and private workplace complianceColombiaThrough the initiative to eliminate child labour, public-private partnerships have been established with a number of enterprises, including in the supply chains.Republika Srpska-Bosnia HerzegovinaThe law on public-private partnership has provided the legal basis for cooperation in this field and presents institutional-private communication. However, the ESC has only been involved in the enactment of law but without a significant contribution on the aforementioned field.Burkina FasoA public-private partnership law exists and codifies this kind of collaboration.36D. Lague. “Union 'breakthrough' at Wal-Mart in China – Business - International Herald Tribune”, in The New Yourk Times Online, http://www.nytimes.com/2006/10/12/business/worldbusiness/12iht-unions.3141929.html?_r=1&

In 2013-2014 the SER-commission ICSR of the Netherlands has chosen to focus and undertake activities on the theme due diligence, a central concept in the OECD and UNGP guidelines. As part of its year-long focus on the theme of due diligence, the SER’s International CSR committee has written a report on due diligence, developed a practical module on the various steps of due diligence and a code of practice with the Netherlands Standardization Institute (NEN) to integrate due diligence into existing (risk) management

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Examples found outside the scope of the survey with ESCsScandinaviaIn the Scandinavian countries, governments are routinely involved in devising and overseeing private PCIs, such as the Danish OSH certification scheme mentioned above.SingaporeIn Singapore, in an example of public authorities making PCIs operational, the Ministry of Manpower encourages companies to conduct regular inspections to uncover safety or health lapses at the workplace37.USAUnder US law, the labour inspection services have the authority to embargo goods manufactured in violation of the labour standards law. In cases where goods have been embargoed as a result of violations found through public labour inspection, the labour inspection authority enters into a direct agreement with the buyer of the apparel products in question to undertake monitoring arrangements with all the buyers’ current and future production contractors. The use of government authority to interrupt the flow of goods therefore creates incentives to induce the more extensive private policing of contractors via buyer monitoring38.VietnamIn Vietnam, a self-assessment form requires employers to reply to a questionnaire and send it to the relevant labour inspection authority. The completed report must be signed by the employer and the trade union representative (where an enterprise-level trade union has been established). Violations identified through a self-assessment and noted in the questionnaire do not necessarily result in a follow-up inspection visit or penalty. Employers who do not return self-assessment forms are included in the annual inspection plan for a follow-up visit39. A new code of conduct against sexual harassment was adopted through tripartite agreement with ILO support.ILO and public and private workplace compliance collaborationAn example of work with the private sector and labour inspection includes the past partnership with ILO and Volkswagen (VW). Within this project, a number of in-depth labour inspections of suppliers lasting one or two days took place. The approach focused on an improvement process, rather than compliance control and policing. This resulted in positive changes at the supplier level with regard to the implementation of OSH standards, as well as improved cooperation with labour inspectorates40.The Better Work Programme is a unique partnership between the International Labour Organization (ILO) and the International Finance Corporation (IFC), a member of the World Bank Group, which builds on these organizations’ respective strengths in labour standards and private- sector development. Better Work brings together governments, employers’ and workers’ organizations, and international garment retailers and brands (buyers) to improve working conditions and competitiveness in garment-sector firms. Information on working conditions provided by Better Work helps buyers, suppliers and the public understand factories’ compliance with national labour laws and core labour standards, while assisting firms in improving performance.

While the programme is widely known and in demand for its compliance assessments, the majority of resources are dedicated to services that help employers and workers establish systems to: achieve and maintain compliance; improve productivity and competitiveness; and establish workplace social dialogue, in many cases for the first time.

37 ILO: Labour inspection and private compliance initiatives: trends and issues, Background paper for the Meeting of Experts on Labour Inspection and the Role of Private Compliance Initiatives, Geneva, 10–12 December 2013. 38 ibid39 ILO: Labour Administration and Inspection Programme: Technical memorandum: Viet Nam labour inspection needs assessment (Geneva, 2012). 40 The ILO, the private sector, and strengthening workplace compliance through labour inspection , ILO, http://www.ilo.org/pardev/public-private-partnerships2/labour-inspection/lang--en/index.htm

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In Jordan, the collaboration between the labour inspectorate and Better Work is defined in a Memorandum of Understanding, which includes a protocol for reporting serious violations to the competent authority. Labour inspectors participate in training activities and in quarterly meetings with Better Work to share knowledge and discuss areas of mutual concern.BangladeshIn the garment sector in Bangladesh, working conditions and safety remained unsatisfactory despite many years of PCIs by garment brands. It provides a recent example, where it is clear that neither PCIs nor public workplace compliance efforts are effective when they are not combined and there is no collaboration among social actors. After the Rana Plaza disaster, efforts have increased to prevent such tragedies from happening again. Brands are involved in the Accord, a private compliance initiative, while the ILO also increased its technical assistance in labour inspection.

6. Conclusions and recommendations

Workplace compliance is a complex issue especially in today’s globalised economy. The informal economy, lack of resources of public services as well as increasing individualisation and diversification of the labour force, poses major challenges to implementing effective workplace compliance.

Promoting workplace compliance presents enormous challenges for public agencies as well as private initiatives. At the public level, the effectiveness of labour inspection is often dependent on the national legal framework. Where there is no legislation, inspectors cannot enforce. On many occasions, the law provides the conditions for operation but there are no applicable sanctions, or if in existence, may not be sufficiently dissuasive for reluctant employers. As is confirmed by the ESC-SIs the inspectorate can often be constrained by a lack of resources and capacity. Moreover, it is difficult to obtain information and gain access to unregistered workplaces– who are part of the informal economy. These informal workplaces can even be part of a global value chain – often through sub-contracting practices-, but also remain unvisited by auditors of private compliance initiatives. Private compliance initiatives often are not very effective in achieving compliance with fundamental labour rights such as non-discrimination and freedom of association. Public inspections in many countries may face these challenges too. Addressing these challenges requires collaboration and social dialogue between all stakeholders, whether public or private. ESC-SIs realise the important role of national tripartite dialogue to promote workplace compliance and most are actively involved.

The advisory role played by many ESC-SIs, on drafting/revising policies and legislations and the facilitation of dialogue are also seen as key to good compliance. Many ESC-SIs provided examples of how they influence the debate by formulating opinions and organizing events, bringing different stakeholders together to discuss topics related to workplace compliance, while reaching consensus through dialogue. As some ESCs recognise, the more participation there is in laws and policies by employers and workers organisations at the national level, the higher the chance that they will be implemented at the workplace level.

Social dialogue is strengthened when it is well institutionalised, either through a law or by tripartite agreement between the parties.

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Social dialogue on workplace compliance within ESC-SI is often formally arranged by law, as are special committees. When it is not formally established, some ESCs do take it up in practice. Regardless of the form or status of the council, the key for success seems to be the effective institutionalisation of social dialogue, with capable and committed actors, regular meetings, common objectives and concrete results.

Several ESC-SIs mention a formalized approach to ensure its effectiveness. However, this also means that when it is not formalized, ESCs have little room to take up a new topic and assume a role. Apparently, discussions sometimes arise regarding whether the promotion of effective workplace compliance should be part of the social dialogue within the ESC.

ESC-SI Involvement in workplace compliance in relation to global supply chains and MNEs is limited; however some are exploring avenues for increasing their involvement.

In some home countries of MNEs, ESCs take a pro-active role in reaching consensus on the role of MNEs in global supply chains. In other countries, it is not an area of discussion at all. Several ESCs take a role in sharing good practice on workplace compliance and social dialogue in global supply chains by publishing reports, or organising meetings to share these developments, which raises awareness amongst different stakeholders.

A few (five) ESC-SIs have direct relationships with MNEs via conferences, or expert meetings. Many do not consider this as part of their role. However two thirds have indirect relationships with MNEs via the employers’ representatives in the ESC-SI. In general MNEs are not seen as a partner for collaboration on workplace compliance. In some countries, ESCs are aware of international (private compliance) initiatives (some with ILO, others started by MNEs) to improve the situation of employees or for the elimination of child labour. However, evidence would suggest that ESCs require further guidance on their role in these initiatives, which can be provided by the ILO due to its expertise on tripartism and social dialogue.

Public and private workplace collaboration on compliance is only somewhat developed, although evidence suggests that some ESC-SIs are beginning to gain more exposure in this field.

Some countries (Colombia, Netherlands, Srpska-Bosnia Herzegovina, Burkina Faso) mentioned collaboration on public private partnerships that are sometimes established by law. Although these partnerships could enhance the effectiveness of workplace compliance, very few examples are known (except for ILO/IFC Better Work Programmes). The role of social dialogue in the existing initiatives is limited. ESCs could help promote such partnership and collaboration.The ESC-SIs should also ensure the ownership and internalisation of such partnership promoted by international technical cooperation.

Some recommendations for effective engagement of ESC-SIs

Several factors may push ESCs-SIs to engage further in the promotion of workplace compliance. Work place compliance is more than just the mere enforcement of legislation; it is about ensuring

respect of fundamental principles and rights at work, the creation of safe workplaces that foster productivity and competitiveness; it is about strengthening industrial relations and labour management cooperation at the work place; as such as it is a development issue;

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A more effective engagement of ESCs-SIs in the national debate about promoting workplace compliance including within global supply chains will enhance their profile and authority as forums for policy concertation and deliberation on fundamental principles and rights at work;

ESCs-SIs would need to: commit internal resources to addressing the issue of workplace compliance including by

creating specialised committees or working groups devoted to it; build the capacity of their members especially the social partners on labour related issues

such as fundamental principles and rights at work and social dialogue; take a more proactive role in bringing up the issue of workplace compliance including within

global supply chains on the consultation agenda; this encompasses review of the legal framework, law enforcement, dispute resolution mechanisms and workplace cooperation;

Enhance the role and weight of the social partners in the work of ESCs and similar social dialogue institutions.

ESCs-SIs could reach out to: enforcement agencies especially labour inspectorates and other relevant institutions in order to

strengthen their capacities as well as working relations with them; MNEs through their member employers’ organisations to contribute to the debate on

MNEs/FDIs and promoting compliance within global supply chains.

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Key questions for the conference

1. How can ESCs-SIs contribute to the promotion of compliance at the work place including in global supply chains in an effective way? What can they learn from each other?

2. What can ESC-SIs do to promote social dialogue at workplace level to enhance the effectiveness of the labour inspectorate as well as private compliance initiatives?

3. What are the advantages and disadvantages of having a direct relationship with MNEs in home and host countries?

4. Can ESC-SIs play a role to promote collaboration among public and private compliance initiatives in achieving workplace compliance? Under which conditions can ESCs-SIs achieve such a goal? And how can the cooperation between ESCs-SIs and enforcement institutions be strengthened?

5. What are the specific roles for AICESIS and ILO in these questions? What capacity is needed exactly?

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Annexes

Annex 1: QuestionnaireQuestionnaire

“Promoting Workplace Compliance including in Global Supply Chains: The role of Economic and Social Councils and similar social dialogue institutions”

DEADLINE : 15 July 2015

Information concerning the ESC-SICountry:Name of the institution:Website:President:

Information concerning the focal point in the institutionName:Department and function:Address:E-mail:Phone / Fax number

Background

Workplace compliance refers to compliance in workplaces with national labour laws and regulation, Fundamental Principles and Rights at Work, ratified international labour standards and applicable collective agreements. This includes regulation and standards in diverse areas such as occupational safety and health (OSH), wages, working time (including overtime), discrimination and harassment, maternity protection, employment contracts and paid leave.

Its main goal is to ensure that all workplaces are safe and healthy hence productive and that all workers irrespective of their status are treated with dignity and respect.

Globalization today means that industrial supply chains are stretching to all corners of the world. In developing and emerging economies, global supply chains offer unprecedented opportunities for enterprises to grow and create jobs. However, they also present tough challenges in enforcing social standards. Many multinational companies also insist that suppliers comply with codes of conduct to safeguard international labour and environmental standards. Increasingly, there is a business case for improving working conditions. ILO research shows growing evidence on the association between good workplaces practices and various types of positive enterprise-level outcomes, including reduced employee turnover and improved profitability.

The impact data of the ILO Better Work program illustrate some of these benefits. Factories that become compliant commonly achieve increased business benefits as well as improving job quality for workers. Some examples from the Better Work impact data bank: A 5% increase in compliance leads to a 10% increase in employee incomes, a 9% increase in remittances from workers to their families, and a 3% improvement in worker health; 62% of Better Work Viet Nam factories have increased production capacity and 60% have increased job opportunities;

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In Lesotho, Better Work has helped to ensure 100% of factories have eliminated HIV/AIDS discrimination in the workplace; In Haiti, a 50% improvement in occupational safety has been achieved.

Source: ILO (2014), Sustainable Enterprise Programme factsheet, November 2014.

The Director-General of the ILO has also designated “strengthening workplace compliance through labour inspection” as one of nine areas of critical importance (ACI) in the ILO’s Programme and Budget for 2014-15. The subject is also one of the 10 outcomes in the Programme and Budget Proposals for 2016-17. Workplace compliance is also closely related to the theme of the 2016 International Labour Conference on international supply chains.

Workplace compliance is the concrete result that all the workers, employers and governments seek to achieve together through a set of strategies, actions and policies to improve working conditions, productivity and competitiveness and social development. It is a crosscutting issue at the heart of workplace practices.

Occupational Safety and Health requires a culture of prevention; effective implementation of labour-related regulation requires a culture of dialogue; and productivity improvement requires a culture of cooperation. It is therefore clear that Workplace Compliance is intrinsically linked to Social Dialogue and positive relations among its actors.

Workplace Compliance does not equate to “enforcement”: it is a much broader concept. Enforcement is only one mechanism of compliance. The preventive and promotional approaches to Workplace Compliance are equally important preventing labour law violations through various mechanisms, including campaigns and Corporate Social Responsibility (CSR).

Multinational enterprises and large domestic enterprises can play a particularly important role in promoting workplace compliance, as part of their responsible business practices along the supply chain.

Given the importance and timeliness of this topic the ILO, AICESIS and the Social and Economic Council of the Netherlands (SER) are jointly organising an international conference on October 29 th

and 30th in the Netherlands. This questionnaire will provide input for the conference from the different AICESIS members and non-members and we very much welcome your response.

I. The extent of Social Dialogue in the area of Workplace Compliance

1. Do the policy areas of the ESC-SI entail discussion/consultation over promoting workplace compliance?☐ Yes☐ No

If the answer is yes, please indicate the extent of consultations on this topic:

☐ Advisory role in drafting legislation and developing policies ☐ Monitoring performance of policies and programs ☐ Providing overall guidance on the organization and functioning of labour inspectorates and

other enforcement agencies☐ Promotion of voluntary workplace compliance

☐ Sharing of good practices☐ Other, please specify

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Please insert text here

If the answer is no, do you think it should be part of the ESC-SI work programme in the future? How?

Please insert text here

2. Which policy areas are the focuses of these consultations?

☐ Occupational safety and health (OSH)☐ Wages and pay ☐ Working time (including overtime) ☐ Employment contracts- ☐Workplace discrimination - ☐Harassment (including sexual harassment)- Maternity protection☐- Paid leave☐- Dialogue, prevention and resolution of disputes☐ ☐ Other, please specify

Please specify for each checked box the details on the nature of the questions discussed in the consultations

Please insert text here

3. Does the ESC-SI encompass an expert group or special committee on Workplace Compliance in one of the areas mentioned above?☐ Yes☐ No

If the answer is yes, please specify the composition of the expert group/special committee, and its mandate:

Please insert text here

4. Do the activities of the ESC-SI contribute to the development and/or implementation of workplace compliance policies? If so, how?☐ No☐ Securing national tripartite consensus for reforms or policy adjustments with regard to a

safe workplace☐ Engaging with Social Partners at sectoral level☐ Capacity Building☐ Planning of programs, projects and activities to encourage political deliberations on

workplace compliance☐ Securing national tripartite agreement on financing of policies and programs on safety at

the workplace

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☐ Supplying technical information and advice to employers’ and workers’ organizations that are members of the ESC-SI in developing expertize on workplace compliance

☐ Formulating opinions on different aspects of conditions of work and protection of workers

☐ Providing advice on policy coherence across multiple areas relating to conditions of work and protection of workers

☐ Organizing hearings with enforcement agencies (labour inspectorates, others)☐ Other, please specify

Please specify for each checked box the contributions the ESC-SI has madePlease insert text here

5. Has the ESC-SI recently taken any important initiatives in the field of promoting effective workplace compliance?

☐ Yes☐ No

If the answer is yes, in which following form(s)?☐ Preparing Reports☐ Opinions/ Recommendations☐ Capacity Building☐ Organising Conferences, events☐ Others, please specify

Please specify for each checked box, the theme of the initiative taken by the ESC-SI.Please insert text here

6. In the activities of the ESC-SI in the area of workplace compliance is there any specific attention paid to the different needs of men and women in workplace compliance (gender perspective)? ☐ yes ☐ no

If yes, how?Please insert text here

II. Workplace Compliance in the past decade

7. Have there been any policies or guidelines concerning workplace compliance discussed in any of the following issues through a participatory mechanism of the ESC-SI?☐ laws and regulations regarding safety at the workplace (hygiene standards, professional

illnesses, reparation of workplace mishaps etc.) ☐ laws and regulations in the field of labour inspection (mandate; resources; organization etc.)☐ measures (legal, institutional and labour practices) to enhance labour-management

cooperation to promote workplace compliance as well as competitiveness and productivity☐ Other, please specify

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Please insert text here

Please briefly summarize the reform for each respective subject indicated, and please list any outcomes/results.

Please insert text here

8. Has the ILO, or any other international institution, played a role to facilitate this consultation process? ☐ Yes, please specify☐ No

Please insert text here

III. The role of International Labour Standards and ILO guidance to companies

9. Is the ESC-SI aware of the following ILO standards?☐ Labour Inspection Convention, 1947 (No. 81)☐ Labour Inspection Recommendation, 1947 (No. 81)☐ Labour Inspection (Agriculture) Convention, 1969 (No. 129)☐ Labour Inspection (Agriculture) Recommendation, 1969 (No. 133)☐ Promotional Framework for Occupational Safety and Health Convention, 2006 (No. 187)☐ Employment Injury Benefits Convention, 1964 [Schedule I amended in 1980] (No. 121)☐ Occupational Safety and Health Convention, 1981 (No. 155)☐ ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social

Policy, 1977 (last updated 2006)

10. Does your country has put in place a national program on occupational safety and health in consultation with the most representative organizations of employers and workers, as provided by Art.5.1 of Promotional Framework for Occupational Safety and Health Convention, 2006 (No. 187)?

☐ Yes (please specify)☐ No, please specify why not

If yes, was the ESC-SI involved in the formulation, implementation and monitoring of this national program?

Please insert text here

IV. Global Supply Chains/ Global value chains

11. Do the policy areas of the ESC-SI entail discussion/consultation on the way to maximize the positive development impacts of global supply chains/ global value chains and the role of MNES (multinational enterprises) in your country in general?

☐ yes

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☐ no

If yes, how?Please insert text here

If no, do you think they should be included in the scope of ESC-SI?

12. Has the ESC-SI built any relationship with key MNES established in the country in the field of Corporate Social Responsibility (CSR), including respecting national laws and safeguarding international labour and environmental standards?

☐ yes ☐ no

If yes, how?Please insert text here

If no, do you think they should be included in the scope of ESC-SI?Please insert text here

13. Has the ESC-SI built any relationship with key MNES established in the country regarding private workplace compliance initiatives such, auditing and certification?

☐yes ☐ no

If yes, how?Please insert text here

If no, do you think they should be included in the scope of ESC-SI?Please insert text here

14. Are you aware of any collaboration between private (business-driven voluntary) compliance initiatives of MNEs and the labour inspectorates and other enforcement agencies in your country, such as public-private partnership?

☐ yes ☐ no

If yes, how? Please insert text here

If no, do you think they should be included in the scope of ESC-SI?Please insert text here

15. Do the following international guidelines play a role in the discussions at the ESC-SI on global supply chains?☐ Fundamental ILO conventions (conventions 182, 138, 29, 100, 98, 105, 111, 87)

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☐ ILO MNE Declaration ☐ The OECD Guidelines for multinational companies

The UN Guiding Principles on Business and Human Rights☐☐ ISO standards (such as ISO 9000, 14000, 26000 etc) ☐ Other, please specify

Please specify for each checked box the details on the nature of role played by the guidelinesPlease insert text here

16. Are MNES established in the country affiliated to employers’ organizations members of the ESC-SI? ☐ yes ☐ no

If yes, how?Please insert text here

If no, do you think the ESC-SI should try to raise awareness in respect of the involvement of MNES in National Social Dialogue?

Please insert text here

17. Has the ESC-SI built any expertise on Workplace Compliance in EPZ (export processing zone), special economic zones or free trade zones and operate monitoring activities on the aforementioned zones in the country?☐ yes☐ no

If yes, how?Please insert text here

If no, do you think that such issue should be covered by the activities of the ESC-SI?Please insert text here

V. The Social Dialogue in the area of Workplace Compliance: challenges and perspectives

18. Which of the following factors, if any, have hindered the ESC-SI, to engage in social dialogue in the area of workplace compliance?☐ Not part of the mandate/competences of the ESC-SI☐ Lack of expertise/knowledge☐ Lack of funding☐ Lack of political will or interest on the part of the members☐ Other, please specify

Please insert text here

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19. What, if any, are the current challenges that prevent effective workplace compliance in your country? Please elaborate in the box. Any documents, reports or opinions on this subject are very welcome.☐ Lack of resources of the labour inspectorates (human and financial)☐ Contraction of public expenditures (austerity measures and other)☐ Economic downturns ☐ Fragmentation of, and lack of, institutional coordination between inspection services and other

enforcement agencies☐ Lack of collaboration between officials of the labour inspectorate and employers and workers or their organizations☐ Inadequate or outdated legislation ☐ The urgent need to assess occupational risks or hazards☐ Lack of political will to develop a national preventive safety and health culture☐ Significant size of informal economy / informal employment ☐ Pressures to attract investment and the belief that promoting workplace compliance deters

investment ☐ Lack of labour management cooperation at the workplace

☐ Other, please specify

Please insert text here

20. Which steps have the ESC-SI or the government been taking to strengthen the role of social dialogue in the area of ensuring workplace compliance? Please do not hesitate to attach any relevant documents.Please insert text here

21. What roles should the ESC-SI play in the area of promoting compliance and labour management cooperation at the workplace? ☐ Advisory role in drafting legislation and developing policies☐ Raising awareness among employers’ and workers’ organizations through campaigns and

similar initiatives☐ Facilitating dialogue among government, employers’ and workers’ organizations, possibly

also including MNEs☐ Other, please specify

Please insert text here

22. What role does the ESC-SI play or should play in sharing good practices on workplace compliance and Social Dialogue within global supply chains/ global value chains?

Please insert text here

23. What kind of input or support would the ESC-SI expect from the ILO to strengthen the role of ESC-SIs, and social dialogue in general, in the area of workplace compliance?

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Please insert text here

24. What kind of input or support would the ESC-SI expect from the AICESIS in the area?

Please insert text here

25. Please fill in below any additional comments that might be of use for drafting the background report for the conference, as well as other issues that the ESC-SI feels should be addressed during the conference.

Please insert text here

______________

Thank you for your cooperationPlease do not hesitate to include any documents, reports, or opinions produced by your ESC-SI on any of these topics and to contact us at the aforementioned addresses if anything is unclear.

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Annex 2: Tripartite declaration of principles concerning multinational enterprises and social policy (MNE Declaration)

International Labour OrganizationTRIPARTITE DECLARATION OF PRINCIPLES CONCERNING MULTINATIONAL

ENTERPRISES AND SOCIAL POLICY(adopted by the Governing Body of the International Labour Office at its 204th Session (Geneva,

November 1977) as amended at its 279th (November 2000) and 295th Session (March 2006)

The Governing Body of the International Labour Office;Recalling that the International Labour Organization for many years has been involved with

certain social issues related to the activities of multinational enterprises; Noting in particular that various Industrial Committees, Regional Conferences, and the

International Labour Conference since the mid-1960s have requested appropriate action by the Governing Body in the field of multinational enterprises and social policy;

Having been informed of the activities of other international bodies, in particular the UN Commission on Transnational Corporations and the Organization for Economic Cooperation and Development (OECD);

Considering that the ILO, with its unique tripartite structure, its competence, and its longstanding experience in the social field, has an essential role to play in evolving principles for the guidance of governments, workers' and employers' organizations, and multinational enterprises themselves;

Recalling that it convened a Tripartite Meeting of Experts on the Relationship between Multinational Enterprises and Social Policy in 1972, which recommended an ILO programme of research and study, and a Tripartite Advisory Meeting on the Relationship of Multinational Enterprises and Social Policy in 1976 for the purpose of reviewing the ILO programme of research and suggesting appropriate ILO action in the social and labour field;

Bearing in mind the deliberations of the World Employment Conference; Having thereafter decided to establish a tripartite group to prepare a Draft Tripartite

Declaration of Principles covering all of the areas of ILO concern which relate to the social aspects of the activities of multinational enterprises, including employment creation in the developing countries, all the while bearing in mind the recommendations made by the Tripartite Advisory Meeting held in 1976;

Having also decided to reconvene the Tripartite Advisory Meeting to consider the Draft Declaration of Principles as prepared by the tripartite group;

Having considered the Report and the Draft Declaration of Principles submitted to it by the reconvened Tripartite Advisory Meeting;

Hereby approves the following Declaration which may be cited as the Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, adopted by the Governing Body of the International Labour Office, and invites governments of States Members of the ILO, the employers' and workers' organizations concerned and the multinational enterprises operating in their territories to observe the principles embodied therein.

1. Multinational enterprises play an important part in the economies of most countries and in international economic relations. This is of increasing interest to governments as well as to employers and workers and their respective organizations. Through international direct investment and other means such enterprises can bring substantial benefits to home and host countries by contributing to the more efficient utilization of capital, technology and labour. Within the framework of development policies established by governments, they can also make an important contribution to the promotion of economic and social welfare; to the improvement of living standards and the satisfaction of basic needs; to the creation of employment opportunities, both directly and indirectly; and to the enjoyment of basic human rights, including freedom of association, throughout the world. On the other hand, the advances made by multinational enterprises in organizing their operations beyond the national framework may lead to abuse of concentrations of economic power and to conflicts with national policy objectives and with the interest of the workers. In addition, the

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complexity of multinational enterprises and the difficulty of clearly perceiving their diverse structures, operations and policies sometimes give rise to concern either in the home or in the host countries, or in both.

2. The aim of this Tripartite Declaration of Principles is to encourage the positive contribution which multinational enterprises can make to economic and social progress and to minimize and resolve the difficulties to which their various operations may give rise, taking into account the United Nations resolutions advocating the establishment of a New International Economic Order, as well as subsequent developments within the United Nations, for example, the Global Compact and the Millennium Development Goals.

3. This aim will be furthered by appropriate laws and policies, measures and actions adopted by the governments and by cooperation among the governments and the employers' and workers' organizations of all countries.

4. The principles set out in this Declaration are commended to the governments, the employers' and workers' organizations of home and host countries and to the multinational enterprises themselves.

5. These principles are intended to guide the governments, the employers' and workers' organizations and the multinational enterprises in taking such measures and actions and adopting such social policies, including those based on the principles laid down in the Constitution and the relevant Conventions and Recommendations of the ILO, as would further social progress.

6. To serve its purpose this Declaration does not require a precise legal definition of multinational enterprises; this paragraph is designed to facilitate the understanding of the Declaration and not to provide such a definition. Multinational enterprises include enterprises, whether they are of public, mixed or private ownership, which own or control production, distribution, services or other facilities outside the country in which they are based. The degree of autonomy of entities within multinational enterprises in relation to each other varies widely from one such enterprise to another, depending on the nature of the links between such entities and their fields of activity and having regard to the great diversity in the form of ownership, in the size, in the nature and location of the operations of the enterprises concerned. Unless otherwise specified, the term “multinational enterprise” is used in this Declaration to designate the various entities (parent companies or local entities or both or the organization as a whole) according to the distribution of responsibilities among them, in the expectation that they will cooperate and provide assistance to one another as necessary to facilitate observance of the principles laid down in the Declaration.

7. This Declaration sets out principles in the fields of employment, training, conditions of work and life and industrial relations which governments, employers' and workers' organizations and multinational enterprises are recommended to observe on a voluntary basis; its provisions shall not limit or otherwise affect obligations arising out of ratification of any ILO Convention.

GENERAL POLICIES

8. All the parties concerned by this Declaration should respect the sovereign rights of States, obey the national laws and regulations, give due consideration to local practices and respect relevant international standards. They should respect the Universal Declaration of Human Rights and the corresponding International Covenants adopted by the General Assembly of the United Nations as well as the Constitution of the International Labour Organization and its principles according to which freedom of expression and association are essential to sustained progress. They should contribute to the realization of the ILO Declaration on Fundamental Principles and Rights and Work and its Follow-up, adopted in 1998. They should also honour commitments which they have freely entered into, in conformity with the national law and accepted international obligations.

9. Governments of States which have not yet ratified Conventions Nos. 29, 87, 98, 100, 105, 111, 122, 138 and 182 are urged to do so and in any event to apply, to the greatest extent possible, through their national policies, the principles embodied therein and in Recommendations Nos. 35, 90, 111, 119, 122, 146, 169, 189 and 190.41 Without prejudice to the obligation of governments to ensure 41 Convention (No. 29) concerning Forced or Compulsory Labour; Convention (No. 87) concerning Freedom of Association and Protection of the Right to Organise; Convention (No. 98) concerning the Application of the Principles of the Right to Organise and to Bargain Collectively; Convention (No. 100) concerning Equal Remuneration for Men and Women Workers

53

compliance with Conventions they have ratified, in countries in which the Conventions and Recommendations cited in this paragraph are not complied with, all parties should refer to them for guidance in their social policy.

10. Multinational enterprises should take fully into account established general policy objectives of the countries in which they operate. Their activities should be in harmony with the development priorities and social aims and structure of the country in which they operate. To this effect, consultations should be held between multinational enterprises, the government and, wherever appropriate, the national employers' and workers' organizations concerned.

11. The principles laid down in this Declaration do not aim at introducing or maintaining inequalities of treatment between multinational and national enterprises. They reflect good practice for all. Multinational and national enterprises, wherever the principles of this Declaration are relevant to both, should be subject to the same expectations in respect of their conduct in general and their social practices in particular.

12. Governments of home countries should promote good social practice in accordance with this Declaration of Principles, having regard to the social and labour law, regulations and practices in host countries as well as to relevant international standards. Both host and home country governments should be prepared to have consultations with each other, whenever the need arises, on the initiative of either.

EMPLOYMENTEmployment promotion

13. With a view to stimulating economic growth and development, raising living standards, meeting manpower requirements and overcoming unemployment and underemployment, governments should declare and pursue, as a major goal, an active policy designed to promote full, productive and freely chosen employment.42

14. This is particularly important in the case of host country governments in developing areas of the world where the problems of unemployment and underemployment are at their most serious. In this connection, the general conclusions adopted by the Tripartite World Conference on Employment, Income Distribution and Social Progress and the International Division of Labour (Geneva, June 1976),43 and the Global Employment Agenda (Geneva, March 2003)44 should be kept in mind.

15. Paragraphs 13 and 14 above establish the framework within which due attention should be paid, in both home and host countries, to the employment impact of multinational enterprises.

16. Multinational enterprises, particularly when operating in developing countries, should endeavour to increase employment opportunities and standards, taking into account the employment policies and objectives of the governments, as well as security of employment and the long-term development of the enterprise.

17. Before starting operations, multinational enterprises should, wherever appropriate, consult the competent authorities and the national employers' and workers' organizations in order to keep their manpower plans, as far as practicable, in harmony with national social development policies. Such

for Work of Equal Value; Convention (No. 105) concerning the Abolition of Forced Labour; Convention (No. 111) concerning Discrimination in Respect of Employment and Occupation; Convention (No. 122) concerning Employment Policy; Convention (No. 138) concerning Minimum Age for Admission to Employment; Convention (No. 182) concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour; Recommendation (No. 35) concerning Indirect Compulsion to Labour; Recommendation (No. 90) concerning Equal Remuneration for Men and Women Workers for Work of Equal Value; Recommendation (No. 111) concerning Discrimination in Respect of Employment and Occupation; Recommendation (No. 119) concerning Termination of Employment at the Initiative of the Employer; Recommendation (No. 122) concerning Employment Policy; Recommendation (No. 146) concerning Minimum Age for Admission to Employment; Recommendation (No. 169) concerning Employment Policy; Recommendation (No. 189) concerning General Conditions to stimulate Job Creation in Small and Medium-Sized Enterprises; Recommendation (No. 190) concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour.42 Convention (No. 122) and Recommendation (No. 122) concerning Employment Policy; Recommendation (No. 169) concerning Employment Policy; and Recommendation (No. 189) concerning General Conditions to stimulate Job Creation in Small and Medium-Sized Enterprises.43 ILO, World Employment Conference, Geneva, 4-17 June 1976.44 ILO Global Employment Agenda, 2003, ILO, Geneva.

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consultation, as in the case of national enterprises, should continue between the multinational enterprises and all parties concerned, including the workers' organizations.

18. Multinational enterprises should give priority to the employment, occupational development, promotion and advancement of nationals of the host country at all levels in cooperation, as appropriate, with representatives of the workers employed by them or of the organizations of these workers and governmental authorities.

19. Multinational enterprises, when investing in developing countries, should have regard to the importance of using technologies which generate employment, both directly and indirectly. To the extent permitted by the nature of the process and the conditions prevailing in the economic sector concerned, they should adapt technologies to the needs and characteristics of the host countries. They should also, where possible, take part in the development of appropriate technology in host countries.

20. To promote employment in developing countries, in the context of an expanding world economy, multinational enterprises, wherever practicable, should give consideration to the conclusion of contracts with national enterprises for the manufacture of parts and equipment, to the use of local raw materials and to the progressive promotion of the local processing of raw materials. Such arrangements should not be used by multinational enterprises to avoid the responsibilities embodied in the principles of this Declaration.

Equality of opportunity and treatment

21. All governments should pursue policies designed to promote equality of opportunity and treatment in employment, with a view to eliminating any discrimination based on race, colour, sex, religion, political opinion, national extraction or social origin.45

22. Multinational enterprises should be guided by this general principle throughout their operations without prejudice to the measures envisaged in paragraph 18 or to government policies designed to correct historical patterns of discrimination and thereby to extend equality of opportunity and treatment in employment.46 Multinational enterprises should accordingly make qualifications, skill and experience the basis for the recruitment, placement, training and advancement of their staff at all levels.

23. Governments should never require or encourage multinational enterprises to discriminate on any of the grounds mentioned in paragraph 21, and continuing guidance from governments, where appropriate, on the avoidance of such discrimination in employment is encouraged.

Security of employment

24. Governments should carefully study the impact of multinational enterprises on employment in different industrial sectors. Governments, as well as multinational enterprises themselves, in all countries should take suitable measures to deal with the employment and labour market impacts of the operations of multinational enterprises.

25. Multinational enterprises equally with national enterprises, through active manpower planning, should endeavour to provide stable employment for their employees and should observe freely negotiated obligations concerning employment stability and social security. In view of the flexibility which multinational enterprises may have, they should strive to assume a leading role in promoting security of employment, particularly in countries where the discontinuation of operations is likely to accentuate long-term unemployment.

26. In considering changes in operations (including those resulting from mergers, takeovers or transfers of production) which would have major employment effects, multinational enterprises should provide reasonable notice of such changes to the appropriate government authorities and representatives of the workers in their employment and their organizations so that the implications may be examined jointly in order to mitigate adverse effects to the greatest possible extent. This is 45 Convention (No. 111) and Recommendation (No. 111) concerning Discrimination in Respect of Employment and Occupation; Convention (No. 100) and Recommendation (No. 90) concerning Equal Remuneration for Men and Women Workers for Work of Equal Value.46 See the two following ILO codes of practice: HIV/AIDS and the world of work, ILO code of practice, 2001, ILO, Geneva; Managing disability in the workplace, ILO code of practice, 2002, ILO, Geneva.

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particularly important in the case of the closure of an entity involving collective lay-offs or dismissals. 27. Arbitrary dismissal procedures should be avoided.47

28. Governments, in cooperation with multinational as well as national enterprises, should provide some form of income protection for workers whose employment has been terminated.48

TRAINING

29. Governments, in cooperation with all the parties concerned, should develop national policies for vocational training and guidance, closely linked with employment.49 This is the framework within which multinational enterprises should pursue their training policies.

30. In their operations, multinational enterprises should ensure that relevant training is provided for all levels of their employees in the host country, as appropriate, to meet the needs of the enterprise as well as the development policies of the country. Such training should, to the extent possible, develop generally useful skills and promote career opportunities. This responsibility should be carried out, where appropriate, in cooperation with the authorities of the country, employers' and workers' organizations and the competent local, national or international institutions.

31. Multinational enterprises operating in developing countries should participate, along with national enterprises, in programmes, including special funds, encouraged by host governments and supported by employers' and workers' organizations. These programmes should have the aim of encouraging skill formation and development as well as providing vocational guidance, and should be jointly administered by the parties which support them. Wherever practicable, multinational enterprises should make the services of skilled resource personnel available to help in training programmes organized by governments as part of a contribution to national development.

32. Multinational enterprises, with the cooperation of governments and to the extent consistent with the efficient operation of the enterprise, should afford opportunities within the enterprise as a whole to broaden the experience of local management in suitable fields such as industrial relations.

CONDITIONS OF WORK AND LIFE

Wages, benefits and conditions of work

33. Wages, benefits and conditions of work offered by multinational enterprises should be not less favourable to the workers than those offered by comparable employers in the country concerned.

34. When multinational enterprises operate in developing countries, where comparable employers may not exist, they should provide the best possible wages, benefits and conditions of work, within the framework of government policies.50 These should be related to the economic position of the enterprise, but should be at least adequate to satisfy basic needs of the workers and their families. Where they provide workers with basic amenities such as housing, medical care or food, these amenities should be of a good standard.51

35. Governments, especially in developing countries, should endeavour to adopt suitable measures to ensure that lower income groups and less developed areas benefit as much as possible from the activities of multinational enterprises.

Minimum age

47 Recommendation (No. 119) concerning Termination of Employment at the Initiative of the Employer.48 ibid.49 Convention (No. 142) concerning Human Resources Development and Recommendation (No. 195) concerning Human Resources Development: Education, Training and Lifelong Learning, recalling the voluntary nature of the substance and levels of collective bargaining.50 Recommendation (No. 116) concerning Reduction of Hours of Work.51 Convention (No. 110) and Recommendation (No. 110) concerning Conditions of Employment of Plantation Workers; Recommendation (No. 115) concerning Workers’ Housing; Recommendation (No. 69) concerning Medical Care; Convention (No. 130) and Recommendation (No. 134) concerning Medical Care and Sickness Benefits.

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36. Multinational enterprises, as well as national enterprises, should respect the minimum age for admission to employment or work in order to secure the effective abolition of child labour and should take immediate and effective measures within their own competence to secure the prohibition and elimination of the worst forms of child labour as a matter of urgency.52

Safety and health

37. Governments should ensure that both multinational and national enterprises provide adequate safety and health standards for their employees. Those governments which have not yet ratified the ILO Conventions on Guarding of Machinery (No. 119), Ionising Radiation (No. 115), Benzene (No. 136) and Occupational Cancer (No. 139) are urged nevertheless to apply to the greatest extent possible the principles embodied in these Conventions and in their related Recommendations (Nos. 118, 114, 144 and 147). The list of occupational diseases and the codes of practice and guides in the current list of ILO publications on occupational safety and health should also be taken into account.53

38. Multinational enterprises should maintain the highest standards of safety and health, in conformity with national requirements, bearing in mind their relevant experience within the enterprise as a whole, including any knowledge of special hazards. They should also make available to the representatives of the workers in the enterprise, and upon request, to the competent authorities and the workers' and employers' organizations in all countries in which they operate, information on the safety and health standards relevant to their local operations, which they observe in other countries. In particular, they should make known to those concerned any special hazards and related protective measures associated with new products and processes. They, like comparable domestic enterprises, should be expected to play a leading role in the examination of causes of industrial safety and health hazards and in the application of resulting improvements within the enterprise as a whole.

39. Multinational enterprises should cooperate in the work of international organizations concerned with the preparation and adoption of international safety and health standards.

40. In accordance with national practice, multinational enterprises should cooperate fully with the competent safety and health authorities, the representatives of the workers and their organizations, and established safety and health organizations. Where appropriate, matters relating to safety and health should be incorporated in agreements with the representatives of the workers and their organizations.

INDUSTRIAL RELATIONS

41. Multinational enterprises should observe standards of industrial relations not lessfavourable than those observed by comparable employers in the country concerned.

Freedom of association and the right to organize

42. Workers employed by multinational enterprises as well as those employed by national enterprises should, without distinction whatsoever, have the right to establish and, subject only to the rules of the organization concerned, to join organizations of their own choosing without previous authorisation.54 They should also enjoy adequate protection against acts of antiunion discrimination in respect of their employment.55

52 Convention No. 138, Article 1; Convention No. 182, Article 1.53 Recommendation (No. 194) concerning the List of Occupational Diseases and the Recording and Notification of Occupational Accidents and Diseases. The ILO Conventions and Recommendations referred to are listed in the Catalogue of ILO Publications on Occupational Safety and Health, ed. 2000, ILO, Geneva. See also <http://www.ilo.org/public/english/protection/safework/publicat/index.htm.54 Convention No. 87, Article 2.55 Convention No. 98, Article 1(1).

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43. Organizations representing multinational enterprises or the workers in their employment should enjoy adequate protection against any acts of interference by each other or each other's agents or members in their establishment, functioning or administration.56

44. Where appropriate, in the local circumstances, multinational enterprises should support representative employers' organizations.

45. Governments, where they do not already do so, are urged to apply the principles of Convention No. 87, Article 5, in view of the importance, in relation to multinational enterprises, of permitting organizations representing such enterprises or the workers in their employment to affiliate with international organizations of employers and workers of their own choosing.

46. Where governments of host countries offer special incentives to attract foreign investment, these incentives should not include any limitation of the workers' freedom of association or the right to organize and bargain collectively.

47. Representatives of the workers in multinational enterprises should not be hindered from meeting for consultation and exchange of views among themselves, provided that the functioning of the operations of the enterprise and the normal procedures which govern relationships with representatives of the workers and their organizations are not thereby prejudiced.

48. Governments should not restrict the entry of representatives of employers' and workers' organizations who come from other countries at the invitation of the local or national organizations concerned for the purpose of consultation on matters of mutual concern, solely on the grounds that they seek entry in that capacity.

Collective bargaining

49. Workers employed by multinational enterprises should have the right, in accordance with national law and practice, to have representative organizations of their own choosing recognized for the purpose of collective bargaining.

50. Measures appropriate to national conditions should be taken, where necessary, to encourage and promote the full development and utilization of machinery for voluntary negotiation between employers or employers' organizations and workers' organizations, with a view to the regulation of terms and conditions of employment by means of collective agreements.57

51. Multinational enterprises, as well as national enterprises, should provide workers' representatives with such facilities as may be necessary to assist in the development of effective collective agreements.58

52. Multinational enterprises should enable duly authorized representatives of the workers in their employment in each of the countries in which they operate to conduct negotiations with representatives of management who are authorized to take decisions on the matters under negotiation.

53. Multinational enterprises, in the context of bona fide negotiations with the workers' representatives on conditions of employment, or while workers are exercising the right to organize, should not threaten to utilize a capacity to transfer the whole or part of an operating unit from the country concerned in order to influence unfairly those negotiations or to hinder the exercise of the right to organize; nor should they transfer workers from affiliates in foreign countries with a view to undermining bona fide negotiations with the workers' representatives or the workers' exercise of their right to organize.

54. Collective agreements should include provisions for the settlement of disputes arising over their interpretation and application and for ensuring mutually respected rights and responsibilities.

55. Multinational enterprises should provide workers' representatives with information required for meaningful negotiations with the entity involved and, where this accords with local law and practices, should also provide information to enable them to obtain a true and fair view of the performance of the entity or, where appropriate, of the enterprise as a whole.59

56 Convention No. 98, Article 2(1).57 Convention No. 98, Article 4.58 Convention (No. 135) concerning Protection and Facilities to be Afforded to Workers' Representatives in the Undertaking.59 Recommendation (No. 129) concerning Communications between Management and Workers within the Undertaking.

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56. Governments should supply to the representatives of workers' organizations on request, where law and practice so permit, information on the industries in which the enterprise operates, which would help in laying down objective criteria in the collective bargaining process. In this context, multinational as well as national enterprises should respond constructively to requests by governments for relevant information on their operations.

Consultation

57. In multinational as well as in national enterprises, systems devised by mutual agreement between employers and workers and their representatives should provide, in accordance with national law and practice, for regular consultation on matters of mutual concern. Such consultation should not be a substitute for collective bargaining.60

Examination of grievances

58. Multinational as well as national enterprises should respect the right of the workers whom they employ to have all their grievances processed in a manner consistent with the following provision: any worker who, acting individually or jointly with other workers, considers that he has grounds for a grievance should have the right to submit such grievance without suffering any prejudice whatsoever as a result, and to have such grievance examined pursuant to an appropriate procedure. 61 This is particularly important whenever the multinational enterprises operate in countries which do not abide by the principles of ILO Conventions pertaining to freedom of association, to the right to organize and bargain collectively, to discrimination, to child labour and to forced labour.62

Settlement of industrial disputes

59. Multinational as well as national enterprises jointly with the representatives and organizations of the workers whom they employ should seek to establish voluntary conciliation machinery, appropriate to national conditions, which may include provisions for voluntary arbitration, to assist in the prevention and settlement of industrial disputes between employers and workers. The voluntary conciliation machinery should include equal representation of employers and workers.63

Geneva, 28 March 2006

60 Recommendation (No. 94) concerning Consultation and Co-operation between Employers and Workers at the Level of Undertaking; Recommendation (No. 129) concerning Communications within the Undertaking61 Recommendation (No. 130) concerning the Examination of Grievances within the Undertaking with a View to Their Settlement.62 Convention (No. 29) concerning Forced or Compulsory Labour; Convention (No. 87) concerning Freedom of Association and Protection of the Right to Organise; Convention (No. 98) concerning the Application of the Principles of the Right to Organise and to Bargain Collectively; Convention (No. 100) concerning Equal Remuneration for Men and Women Workers for Work of Equal Value; Convention (No. 105) concerning the Abolition of Forced Labour; Convention (No. 111) concerning Discrimination in Respect of Employment and Occupation; Convention (No. 138) concerning Minimum Age for Admission to Employment; Convention (No. 182) concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour; Recommendation (No. 35) concerning Indirect Compulsion to Labour; Recommendation (No. 90) concerning Equal Remuneration for Men and Women Workers for Work of Equal Value; Recommendation (No. 111) concerning Discrimination in Respect of Employment and Occupation; Recommendation (No. 146) concerning Minimum Age for Admission to Employment, and Recommendation (No. 190) concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour.63 Recommendation (No. 92) concerning Voluntary Conciliation and Arbitration.

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Annex 3: Overview of Country Responses to the Survey

Question 1 3 5 6 8 10 11 12 13 14 16

policy areas entail WPC

special committee on WPC

promotion of WPC

attention to gender needs

in WPC

ILO role in consultation

process

national programme

on OSH

policy entails global supplys

chains and MNEs

relationship with MNEs

on CSR

relationship with MNEs on PCI re WPC

collaboration between PCIs and

public enforcement

agencies

MNES affiliated to employers

organizations member of

ESC-SI

Aruba x x x xColombia x x x xNicaragua x x x x x x x x xSt Martin x x x xAlbania x x x x x xFrance x x x x xIsrael xMontenegro x x x xNetherlands x x x x x x x x x xPortugal x xRep. Srpska x x x xRomania x x xRussia x x x x x x x xSerbia x x x x x xSpain x x x x xAlgeria x x x xBurkina Faso x x x x x x xGuinea x x x x x x x x x xKenya x x x x x x x xMarocco x x x x x x xMauritius x x xNamibia x x x x xSenegal x x xTanzania x x x x x x

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Jordan x x x x xChina x x x x x xMacao x xMongolia x x x x xSouth Korea x x x x x x x xVietnam x x x x x x x x x x x

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