ILC 105 - EU Statement - Committee on Promoting Decent Work in Global Supply Chains - Q3

Madam Chair,

I speak on behalf of the EU and its Member States. The EFTA country Norway, member of the European Economic Area, aligns itself with this Statement.

We would like to recall the governments’ role to ratify and implement international labour standards into national law and to promote compliance and enforce national labour laws and regulations. However, in a globalizing world in which labour issues, growth and inclusive development are cross border issues, national policy measures are not sufficient anymore.

We believe that promoting Decent Work in Global Supply Chains is a shared responsibility of stakeholders. It is the merit of the UN Guiding Principles on Business and Human Rights and OECD Guidelines having clarified the different roles and responsibilities of states and business enterprises and the importance of access to remedy and the implementation of complaint mechanism. We should build on this. Such a multi-stakeholder approach also creates opportunities to organize cross border solutions and to broaden our horizons. Furthermore, complex supply chain requires smart governance approaches.

Public Governance

Starting with public governance, for us national governments have a clear duty. Significant elements of public governance in this context of Global Supply Chains relate to compliance with and enforcement of national laws and regulations, as well as international labour standards, access to appropriate and effective remedy and complaints mechanisms as well as promotion of Responsible Business Conduct.

First of all, transparency of what is done to ensure Decent Work in Supply Chains is key. Governments should stimulate and – where necessary – require reporting on due diligence. The EU has adopted legislation on disclosure on non-financial information by large undertakings and groups. This legislation provides for disclosure in management reports on several aspects as we mentioned under discussion question 2.

Secondly, when public authorities do business with companies, they should make sure that these companies respect Decent Working conditions. States should use social clauses in their public procurement to promote Decent Work in its own chain. European legislation facilitates the use of such social criteria in public procurement. States should also adopt conditions within their state owned enterprises and their export credit agencies to warrant promotion of Decent Work in the Supply Chain.

Thirdly, workplace compliance is essential as is the role of public administrations and bodies such as labour inspections in this regard. We recall the outcomes of last year’s recurrent discussion on labour protection and the November 2015 Governing Body examination of workplace compliance. We foster an approach to comprehensive compliance approaches, with an attention to sufficient resources and a coordination between different actors, including social partners.

Last but not least, governments should promote and provide an enabling environment for social dialogue.

Private governance

Then moving to private governance. The EU and its Member States believe that private initiatives have an important role to play. We stress that the involvement of social partners in particular like in International Framework Agreements or sectoral initiatives and the link with public actors, like inspectorates, is essential for private governance initiatives to produce best Decent Work outcomes.

We see practical guidance on procedural steps to implement due diligence into operational management systems as very useful. The EU and OECD are working on guidelines on due diligence. Guidance on procedural steps to implement due diligence should be complemented by guidance on work quality criteria to give enterprises orientation  especially when operating in countries where labour rights  and provisions of health and safety are not implemented and enforced. We fully support these processes and believe the ILO, other UN agencies and the OECD should strengthen their cooperation to promote Responsible Business Conduct and due diligence processes. Governments should also clearly communicate on what they expect from companies with respect to Corporate Social Responsibility and could consider further measures, including binding regulation on due diligence if these expectations are not met within a reasonable timeframe.

We also expect companies to integrate human rights and social concerns in their core business operations and strategies. Companies should know their suppliers as far as possible and should prove whether they meet demands of sustainability and respect social and labour rights in all their operations. The buyers should design their trade conditions, like prices and delivery times, with their suppliers in a responsible and sustainable manner. For instance making use of audits to gain insights in what is happening at a production site in cooperation with all relevant stakeholders, with special emphasis on workers, and by sharing the results of these audits. Capacity building for management at all levels in a company and everywhere in the Supply Chains on Decent Work aspects as well as exchanges of best practices will also be instrumental in fostering progress in this field. A special attention should be paid to SMEs which could need support in order to meet their obligations, including public procurement.

Social governance

As to social governance, we consider it is of great importance in promoting Decent Work in Global Supply Chains. Social dialogue is a crucial precondition for Decent Work. The global nature of Supply Chains begs the question how we can organize social dialogue at the international level. Engaging with trade unions and employer organisations through International Framework Agreements  covering the whole supply chain and collective bargaining will be instrumental in addressing Decent Work challenges in today’s complex Global Supply Chains. In particular through strengthened follow-up and dispute resolution mechanisms. As mentioned in the report, the ILO could support and facilitate the conclusion and design of International Framework Agreements by giving guidance on minimum requirements and play a role in the follow-up process including monitoring, mediation and dispute settlement. A further tool to strengthen social dialogue and the effective implementation of decent working conditions is the establishment of  anonymous complaints mechanisms for workers. on a company level as well as on national or international level. The 2013 ILC concluded that the ILO should convene a meeting of experts on cross border social dialogue to analyse contemporary experiences, challenges and trends as well as a role and value added of the ILO. We call upon the ILO to follow up on this.

Multilateral governance

And then last but not least, the multilateral governance. The EU supports the use of internationally recognised frameworks and principles on Responsible Business Conduct, including the UN Global Compact and UN Guiding Principles on Business and Human Rights, the OECD Guidelines for multinational enterprises and the ILO MNE Declaration. Important initiatives are also taken in the context of the G20 and the G7 to strengthen for instance complaints mechanisms, promote occupational safety and health and develop a common understanding of due diligence to create a global level playing field. It is important that what the ILO does or will do in the future, is coherent and coordinated with the other multilateral frameworks and initiatives. The MNE Declaration is an important entry point for engagement of the ILO with business and the work on Decent Work in Global Supply Chains. It will be reviewed together with its interpretation procedure in a separate process, but relevant outcomes of this ILC discussion should definitely be part of the revision. Furthermore, we need to assess whether current ILO instruments are sufficient to effectively promote Decent Work in Global Supply Chains. This could be started in a tripartite expert meeting as a follow up of this ILC discussion, which should discuss whether any new instruments are needed.

To wrap up, we want to emphasize that synergies need to be strengthened between the various governance forms to reach our overarching objective of ensuring Decent Work. It is not a question of one governance form or the other. Operating through different channels can maximize our impact as long as the objectives are the same and consistency and coordination is ensured. Public governance in Global Supply Chains and multilateral initiatives with a focus on Global Supply Chains should be supportive to private governance initiatives and vice versa. That is why discussions such as these are necessary to increase global understanding on which policies are effective.

Thank you, chair.