CSR and Labour Standards Lund 2014
Basic notions • CSR is a notion developed to overcome gaps in regulationat national and international levels • Many of those gaps are related to capacity – but somealso to anti-regulationadvocacy • Attention to multinationals – but remember national firmsalsoconcerned
Key elements of CSR • Voluntary nature: going beyond compliance with the law • It is an integral part of company management • CSR actions are systematic not occasional • Link with the concept of sustainable development
Company motivations • Raising the capacity to attract and maintain a qualified and motivated workforce • Improving relations with staff • Increasing productivity and quality in the long run • Improving risk management • Facilitating access to credits, taking into account the current trend of financial institutions to include environmental and social criteria in their assessments • Increasing customer loyalty • Strengthening company and brand image and reputation as essential factors for competitiveness
Law and multinationals • Legalproblem: international humanrightslawdoes notapply to privateactors • Will look atRuggie exceptions below • National lawoftenis not appliedto multinationals • Because the country cannot • Because the country does not want to • EPZs and stimulatinginvestment • « Food Lion » case in ILO, where no complaint couldbebroughtagainst a Belgianfirm for actions in US on trade union rights
The MNE Declaration, the Global Compact and the OECD Guidelines Common features: • Three main international points of reference on CSR – voluntary nature • Include the fundamental principles and rights at work • Variouskinds of follow-up • Encourage business to contribute to sustainable development and a fair globalization • Encourage dialogue and partnerships
3 main instruments now supplemented by • Ruggie Principles (2011) • ISO 26000 (2011) • All together, comprehensive coverage and agreement on what should be done … agreement it is voluntary (in absence of binding law), and various follow up measures promotional and informational in nature.
International instruments compared • ILO MNE Declaration • Most detailed & comprehensive coverage of labour & employment topics • Tripartite follow-up • UN Global Compact • Involves membership for companies • Public communications on progress • OECD Guidelines • Binding for adhering governments which undertake commitment to promote • Follow-up by governments
The ILO definition of CSR "…a way in which enterprises give consideration to the impact of their operations on society and affirm their principles and values both in their own internal methods and processes and in their interaction with other actors. CSR is a voluntary, enterprise-driven initiative and refers to activities that are considered to exceed compliance with the law"
ILS and enterprises Ratified Conventions Binding International Labour Standards Government National legislation Binding Principles Non-binding Enterprise
ILO & CSR • MNE Declaration • Declaration on Fundamental Principles & Rights at Work • Declaration on Social Justice 2008 • Business Help Desk
MNE Declaration • Key instrument on labour aspects of CSR • Adopted by the Governing Body of the ILO (tripartite partners) • Adopted in 1977 & updated in 2000 and 2006 • Non-binding character • Recommendations to enterprises, governments, employers and workers • Applies to multinational and domestic companies
Labour and Employment Standards in the MNE Declaration • Freedom of association and collective bargaining • Child and forced labour • Equality of opportunity and treatment • Employment promotion and security • Skills training • Conditions of work • Wages • Health and safety
Responsibilities of tripartite partners • 27 Paragraphs addressed to multinationals • 15 Paragraphs addressed to Governments • Includes specific roles for Employers’ and Workers’ Organizations
MNE on responsibilities • Under each of these categories of rights, responsibilities of Govts and of employers, e.g.: • 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. • 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.
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.
Follow up Mechanisms • GB Subcommittee & Multinational enterprises team • Survey Process • Promotional activities, research, technical cooperation
… the current work undertaken by the Office on the MNE Declaration …: (a) ensuring policy coherence at the international level as related to intergovernmental initiatives providing guidance to business, especially the UN Global Compact, OECD Guidelines for Multinational Enterprises and UN Business and Human Rights Framework and Guiding Principles; (b) providing assistance to company managers and workers who want to align their policies and practices with the principles of the MNE Declaration through the ILO Helpdesk for Business on International Labour Standards (assistance service and website); and (c) undertaking country-level activities on the MNE Declaration … (Governing Body paper March 2013)
Survey Process • Purpose of the surveys is to monitor the effect given to the MNE Declaration by multinationals, governments, and employers’ and workers’ organizations • Eight surveys on the effect given to the Tripartite Declaration have been completed • Most recent published in 2006, covers the period 2000-2003 • Now modifying survey mechanism, noting that little info on MNE activities exist in most countries
Interpretation procedure Adopted by the GB to resolve a disagreement on the meaning of the provisions of the MNE Declaration, arising from an actual situation between parties to whom the Declaration is commended - Considered impractical, has now been dropped
Promotion and Research • Global, regional, country, sectoral and thematic studies on labour and employment effects of multinationals and FDI • Tripartite meetings at national, regional and international level • Promotion of the Declaration to governments, workers’ and employers’ organizations • Corporate Social Responsibility • ILO Help Desk • Stepping up training for constitutents
UN Global Compact • UN Brochure: Launched in July 2000, the UN Global Compact is a leadership platform for the development, implementation and disclosure of responsible and sustainable corporate policies and practices. … With more than 8,500 signatories in over 135 countries, the UN Global Compact is the world’s largest voluntary corporate sustainability initiative. • The UN Global Compact is not a regulatory instrument, but rather a voluntary initiative that relies on public accountability, transparency and disclosure to complement regulation and to provide a space for innovation and collective action.
Principles of the Global Compact (extract) Human rights • Businesses should support and respect the protection of internationally proclaimed human rights; and • make sure that they are not complicit in human rights abuses. Labour • Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; • the elimination of all forms of forced and compulsory labour; • the effective abolition of child labour; and • the elimination of discrimination in respect of employment and occupation.
Global Compact follow up • Companies should: • make the UN Global Compact and its principles an integral part of business strategy, day-to-day operations, and organizational culture; • incorporate the UN Global Compact and its principles in the decision-making processes of the highest-level governance body; • engage in partnerships to advance broader development objectives (such as the MDGs); • integrate in its annual report (or in a similar public document, such as a sustainability report) a description of the ways in which it implements the principles and supports broader development objectives (also known as the Communication on Progress).
OECD Guidelines revised 2011 • First adopted 1976, revised latest 2011 • States join Guidelines • Assume responsibility for promoting the Guidelines with companies in those States: • ‘The OECD Guidelines for Multinational Enterprises are recommendations addressed by governments to multinational enterprises operating in or from adhering countries.’
New (2011) Chapter on Human Rights (following Ruggie) • States have the duty to protect human rights. Enterprises should, within the framework of internationally recognised human rights, the international human rights obligations of the countries in which they operate as well as relevant domestic laws and regulations: • 1. Respect human rights, which means they should avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved. • 2. Within the context of their own activities, avoid causing or contributing to adverse human rights impacts and address such impacts when they occur.
3. Seek ways to prevent or mitigate adverse human rights impacts that are directly linked to their business operations, products or services by a business relationship, even if they do not contribute to those impacts. • 4. Have a policy commitment to respect human rights. • 5. Carry out human rights due diligence as appropriate to their size, the nature and context of operations and the severity of the risks of adverse human rights impacts. • 6. Provide for or co-operate through legitimate processes in the remediation of adverse human rights impacts where they identify that they have caused or contributed to these impacts.
OECD and ILO • From OECD Guidelines: • 20. The International Labour Organisation (ILO) is the competent body to set and deal with international labour standards, and to promote fundamental rights at work as recognised in its 1998 Declaration on Fundamental Principles and Rights at Work. The Guidelines, as a non-binding instrument, have a role to play in promoting observance of these standards and principles among multinational enterprises. The provisions of the Guidelines chapter echo relevant provisions of the 1998 Declaration, as well as the ILO’s 1977 Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy. The Tripartite Declaration sets out principles in the fields of employment, training, working conditions, and industrial relations, while the OECD Guidelines cover all major aspects of corporate behaviour. The OECD Guidelines and the ILO Tripartite Declaration refer to the behaviour expected from enterprises and are intended to parallel and not conflict with each other.
OECD on Workers rights – Ch V • Enterprises should, within the framework of applicable law, regulations and prevailing labour relations and employment practices and applicable international labour standards: • 1. a) Respect the right of workers employed by the multinational enterprise to establish or join trade unions and representative organisations of their own choosing. • b) Respect the right of workers employed by the multinational enterprise to have trade unions and representative organisations of their own choosing recognised for the purpose of collective bargaining, and engage in constructive negotiations, either individually or through employers' associations, with such representatives with a view to reaching agreements on terms and conditions of employment. • c) Contribute to the effective abolition of child labour, and take immediate and effective measures to secure the prohibition and elimination of the worst forms of child labour as a matter of urgency.
d) Contribute to the elimination of all forms of forced or compulsory labour and take adequate steps to ensure that forced or compulsory labour does not exist in their operations. • e) Be guided throughout their operations by the principle of equality of opportunity and treatment in employment and not discriminate against their workers with respect to employment or occupation on such grounds as race, colour, sex, religion, political opinion, national extraction or social origin, or other status, unless selectivity concerning worker characteristics furthers established governmental policies which specifically promote greater equality of employment opportunity or relates to the inherent requirements of a job.
2. a) Provide such facilities to workers’ representatives as may be necessary to assist in the development of effective collective agreements. • b) Provide information to workers’ representatives which is needed for meaningful negotiations on conditions of employment. • c) Provide information to workers and their representatives which enables them to obtain a true and fair view of the performance of the entity or, where appropriate, the enterprise as a whole. • 3. Promote consultation and co-operation between employers and workers and their representatives on matters of mutual concern. • 4. a) Observe standards of employment and industrial relations not less favourable than those observed by comparable employers in the host country. • b) When multinational enterprises operate in developing countries, where comparable employers may not exist, provide the best possible wages, benefits and conditions of work, within the framework of government policies. These should be related to the economic position of the enterprise, but should be at least adequate to satisfy the basic needs of the workers and their families. • c) Take adequate steps to ensure occupational health and safety in their operations. • (Plus termination, transfer of operations, etc.)
Implementation of OECD Guidelines • National Contact Points set up in adhering countries … ‘to further the effectiveness of the Guidelines by undertaking promotional activities, handling enquiries and contributing to the resolution of issues that arise relating to the implementation of the Guidelines in specific instances’. • Amounts to a voluntary complaints procedure. • Recall that there is no requirement to make a determination about violations of the Guidelines, and lack of consequences attached to breaches of the Guidelines. • In practice very inconsistent, but have handled some cases leading to improvements.
See e.g., summary of cases noted in OECD Watch Quarterly Case Update November 2012: • The highlights of this Quarterly Case Update include 11 new OECD Guidelines complaints filed against among others Panasonic, Statkraft, ASR, POSCO, Shell, Michelin, Pöyry, Excellon Resources, BHP Billiton and AES Sonel. Mediation is ongoing in cases involving George Forrest International, Barrick Gold Papua New Guinea and ArcelorMittal. Moreover, the UK NCP issues final statement after successful mediation process between the LEAD Group and Xstrata. Cases against UCM and J-Power in US coal mining case have been rejected by the US and Japanese NCP and the UK NCP concludes BHP Billiton Mozal smelter case, determining that the company did not violate the Guidelines. • Note procedure is slow – by April 2014 the last case resolved was in October 2012.
ISO 26000 (2011): Social Responsibility • ISO: International Standards Organization • ‘This International Standard was developed using a multi-stakeholder approach involving experts from more than 90 countries and 40 international or broadly-based regional organizations involved in different aspects of social responsibility. These experts represented six different stakeholder groups: consumers; government; industry; labour; non-governmental organizations (NGOs); and service, support, research and others.’
‘This International Standard is not a management system standard. It is not intended or appropriate for certification purposes or regulatory or contractual use. Any offer to certify, or claims to be certified, to ISO 26000 would be a misrepresentation of the intent and purpose of the International Standard.’ • ‘This International Standard is intended to provide organizations with guidance concerning social responsibility and can be used as part of public policy activities.’
Workers rights in ISO 26000 • 6.3.10 Human rights issue 8: Fundamental principles and rights at work • 220.127.116.11 Description of the issue • The International Labour Organization (ILO) has identified fundamental rights at work. These include: • ⎯ freedom of association and effective recognition of the right to collective bargaining; • ⎯ the elimination of all forms of forced or compulsory labour; • ⎯ the effective abolition of child labour; and • ⎯ the elimination of discrimination in respect of employment and occupation.
The primary responsibility for ensuring fair and equitable treatment for workers lies with governments. This is achieved through adopting legislation consistent with the Universal Declaration of Human Rights and relevant ILO labour standards, enforcing those laws, and ensuring that workers and organizations have the necessary access to justice.
ISO Additional detailed guidance: • Employment and employment relationships • Conditions of work and social protection • Social dialogue • Health and safety at work • Human development and training in the workplace
“PROTECT, RESPECT AND REMEDY” • Principles enunciated by Prof. John Ruggie, UN Special Representative on Business and Human Rights • UN has worked on the issue for many years, from emergence of MNEs. • In 1990s Sub-Commission on human rights report on Norms for Transnational Corporations • Disastrous attempt to apply international law directly to multinationals • Debate resulted in Ruggie appointment.
June 2011 Human Rights Council adopted Ruggie proposals presented in 2008 – now considered the ‘gold standard’ for corporate conduct. • Three principles in framework: • The State duty to protect human rights • The corporate responsibility to respect human rights • The need for greater access to remedy for victims of business-related abuse.
Nothing really new except the process – and endorsement by the Human Rights Council • In direct reaction to Sub-Commission draft Norms, Ruggie states up front that international human rights law does not apply to business, responsibility lies with States • Except gross human rights abuses committed by MNEs that may constitute crimes against humanity • But there is beginning to be a reaction against this position
‘Foundational principles’ on HR • GUIDING PRINCIPLE 11 • Business enterprises should respect human rights. This means that they should avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved. • GUIDING PRINCIPLE 12 • The responsibility of business enterprises to respect human rights refers to internationally recognized human rights—understood, at a minimum, as those expressed in the International Bill of Human Rights and the principles concerning fundamental rights set out in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work.
GUIDING PRINCIPLE 13 • The responsibility to respect human rights requires that business enterprises: • (a) Avoid causing or contributing to adverse human rights impacts through their own activities, and address such impacts when they occur; • (b) Seek to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts. • GUIDING PRINCIPLE 14 • The responsibility of business enterprises to respect human rights applies to all enterprises regardless of their size, sector, operational context, ownership and structure. Nevertheless, the scale and complexity of the means through which enterprises meet that responsibility may vary according to these factors and with the severity of the enterprise’s adverse human rights impacts.
GUIDING PRINCIPLE 15 • In order to meet their responsibility to respect human rights, business enterprises should have in place policies and processes appropriate to their size and circumstances, including: • (a) A policy commitment to meet their responsibility to respect human rights; • (b) A human rights due diligence process to identify, prevent, mitigate and account for how they address their impacts on human rights; • (c) Processes to enable the remediation of any adverse human rights impacts they cause or to which they contribute. • Plus Policy Commitment, Due Diligence and Remediation
Workers’ Rights • Those contained in International Bill of Human Rights (especially ICESCR) and • ILO Declaration of Fundamental Principles and Rights at Work
UN Working Group • Human rights Council established the Working Group on the issue of human rights and transnational corporations and other business enterprises, following Ruggie report • Annual Meetings – reports on UN web site.
Time for standards? • Everyone frustrated by lack of obligatory framework • An important ‘accountability deficit’ in the area of business’ human rights • Human Rights Council has requested the Working Group “to explore options and make recommendations ….for enhancing access to effective remedies” • Few instances of civil action - in most cases in a few number of North American and European countries, with additional difficulties for the plaintiffs in terms of distance, transport, and knowledge of the forum.
The international legal regimes in this field have limited • geographical scope and are not widely ratified. • The Hague Conference on Private International Law’s Convention of 25 October 1980 on International Access to Justice has been ratified only by 26 of the 87 States members. • The regime created by the European Union Brussels Regulation on jurisdiction and the enforcement of judgments in civil and commercial matters (Regulation 44/2001/EC)37 operates only within the European Union.
There is currently no international legal regime on corporate liability for human rights abuses, apart from the Optional Protocol to the Convention on the Rights of the Child on the Sale of Children and Child Pornography,39 which provides in Article 3.4 for corporate legal liability, and the Council of Europe Convention on the Protection of the Environment through Criminal Law, adopted in November 1998, but is not yet in force
Only a few States hold corporations responsible for violations of human rights (e.g., Australia, Canada, Netherlands), but inconsistent and not very widely used. • Designation of crimes – e.g., gross human rights abuses – not clear and not consistent. • US Alien Tort Claims Act mostly unsuccessful.