ILC 105 - EU Statement - Committee on Promoting Decent Work in Global Supply Chains - Q1

Madam Chair,

I speak on behalf of the EU and its Member States.

We recall that one of our objectives is to ensure that inclusive growth and development go hand in hand with social justice, human rights, including the core labour standards, and sustainable environmental practices. In this regard issues relating adequate working conditions concerning occupational safety and health, working time and fair wages are of specific importance.

Involvement in a Global Supply Chain gives opportunities for investment,  transfers of knowledge and development and promotion of better working conditions.

Often, participation in Global Supply Chains is associated with an increase in economic growth and employment. This is in particular the case in developing and emerging economies, and for women in these countries. And also in the EU, one third of our jobs are associated with Global Supply Chains. The ILO report also points out that Supply Chains are associated with higher productivity.

Even if comprehensive data is lacking on the quality of employment in both formal and informal sectors, there are examples where participation in Global Supply Chains has a negative impact on working conditions, wages and job security. For instance, the report shows that excessively long working hours can be an issue in Supply Chains. For example because the wages are often so low that excessive overtime is the only way to enable a livelihood. We have examples of severe labour abuses in certain Supply Chains, like forced labour in the fishing sector and child labour in agricultural supply chains, manufacturing and retail.

What we should discuss in this Committee is how we can prevent value chains which function at the expense of Decent Working conditions. One main aspect is to clarify the expectations, roles and responsibilities each stakeholders and the ILO on the whole have to take on. It is also important that the ILO has a clear understanding of how to position in the discussion on global supply chains within the concert of other International Organisations within the UN or outside like the OECD. We could also formulate this in a positive way: the existence of Global Supply Chains should give a positive impulse and create leverage to promote more and better jobs worldwide; it should be an opportunity. Let’s use this opportunity.

Governments have a responsibility in addressing these challenges and a number of EU internal and external policy tools have been deployed to this end. For instance, we believe that Decent Work aspects including the ILO core labour standards should be part of trade and investment agreements. All recently concluded EU trade and investment agreements include provisions on Trade and Sustainable Development as a basic part of the foundation of EU trade relations with partner countries. They contain inter alia commitments by the Parties to the respect of core labour standards and all ratified ILO Conventions and provide channels for an active dialogue on decent work aspects with our trading partners. Governments also have a special responsibility for the promotion, respect and effective implementation when they own or deal with business enterprises, for example when it comes to public procurement. Therefore, recently adopted EU law facilitates the use of social criteria to ensure the compliance with ILO fundamental conventions within the supply chain. In meeting their duty, states should consider a smart mix of measures – nationally and internationally, voluntary and where necessary mandatory – to foster business respect for Decent Work in all their operations. For instance, governments should encourage and – where appropriate – require businesses to report how they address their impact on social and labour rights.

Governments should, in their duty to protect, make sure there is a national legal framework that promotes Decent Work, and that all Decent Work aspects are enforced correctly, for example by labour inspections and effective complaint mechanisms. And governments should also make sure that attracting investors in export processing zones is not made at the expense of Decent Work. 

Whilst acknowledging the duty of governments, we also expect that businesses themselves need to act responsibly and in accordance with existing international frameworks and mechanisms, for example the UN Guiding Principles, wherever they operate and  irrespective of whether states fulfil their obligations. A negative impact on the quality of jobs may result from volatility of sourcing contracts, lack of transparency, potential downward pressure on prices and higher demand on the timelines to produce. This means that there is definitely a role for and responsibility of businesses to respect labour and social rights within their supply chains.

We are happy to note that many businesses, both within the EU but also in many other regions, are willing to take steps to improve Decent Work in their supply chain. They see this as part of their Corporate Social Responsibility or Responsible Business Conduct. In order to fully meet their corporate social responsibility, enterprises should put in place processes to integrate social, environmental, ethical, human rights, anti-corruption and consumer concerns into their business operations and core strategy in close collaboration with  the relevant stakeholders and social partners as well. Experience has shown that businesses do this in a much more effective way if they do not act unilaterally, but with the participation of social partners like in international framework agreements. They have also proven to be more effective if they foresee remedy and appeals procedures for workers in cases of violation of standards. Furthermore, the ILO should carry out an assessment to prove whether existing ILO instruments and standards are sufficient in order to support and give orientation to companies.

Beyond the tripartite constituents, the ILO’s work on Global Supply Chains offer chances to extend its influence by further cooperating internationally for example with the OECD, G7 and G20. To improve the lives of workers and sustainability of businesses, outreach and cooperation with other actors is necessary. All parties involved in the supply chain should be participating in discussions about promoting decent work.

The ILO-IFC Better Work programme, the Bangladesh Accord and the Sustainability Compact are good examples of broad involvement of stakeholders, including international buyers, that focuses on a sector and aims at improving working conditions in Global Supply Chains whilst enhancing competitiveness at the same time. Sectoral or multi-stakeholder approaches and collective bargaining can exploit the leverage of participants  to bring positive changes to Decent Work and SMEs can be involved in such an approach.

To conclude this part, we would like to underscore the shared responsibilities of all stakeholders to realize Decent Work, inclusive growth and create a level playing field. We believe Global Supply Chains issues require global solutions and working in cooperation with a wide range of actors, including at sectoral level, in order to effectively address the issues.

Thank you, chair.