- International Labour Standards and Corporate Social Responsibility
Why we need international labour standards in a global economy
Globalisation and labour in the international shipping industry
TNCs and global business strategies
The ILO and international labour standards
Corporate social responsibility and codes of conduct
- Why we need International Labour Standards in the 21st Century
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- The Global Market and Labour
“The spread of markets outpaces the ability of societies and their political systems to adjust to them, let alone to guide the course they take. History teaches us that such an imbalance between the economic, social and political realms can never be sustained for very long.”
Kofi Annan, Secretary General of the United Nations, address to the World Economic Forum in Davos, 1999
- According to Fortune magazine’s 1998 and 1999 business polls …
“GE is the most admired company in the world.”
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- How GE would like to do Business in the Global Economy
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“Ideally, You’d have every plant you own on a barge.”
Jack Welch
- GE Global: How Workers Live
A house owned by an employee of GE Lighting in Ciudad Acuna, Mexico
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- The House that ‘Jack’ Built
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- An Unequal Global Economy
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- Who Benefits from Globalisation?
Incomes of the world’s top 1.75% (1%) of earners exceed those of the bottom 77% (57%). The richest 85 people in the world are worth more than the poorest 3.5 billion.
The three richest people in the world have assets that exceed the combined GDP of the 48 least developed countries.
It would take 0.2% of world GDP to end global poverty of $1.25 per day and 1% to end global poverty of $2 per day (the global ‘absolute poor’).
- Globalisation and Labour in the International Shipping Industry
Global trade and business strategies
“Flags of convenience” (FoC) and “crews of convenience” (CoCs)
International collective bargaining
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- How is the international shipping industry organised?
A Greek owned vessel, built in Korea using financing from a consortium of three international banks through their branches in Tokyo, New York and Frankfurt, registered in Panama, chartered to a Danish operator that operates through an offshore company in Singapore, who employs seafarers from the Ukraine and the Philippines via a Cypriot crewing agent, insured in the UK, transports German made cargo in the name of a Swiss freight forwarder from a Dutch port to Argentina, through terminals that are concessioned from Hong Kong and Dubai respectively.
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- What is a Flag of Convenience?
“Where the beneficial ownership and control of a vessel is found to lie elsewhere than the country of the flag the vessel is flying, the vessel is considered as sailing under a flag of convenience (FoC)”
Source: ITF
- Manning and Labour Supply of the World’s Fleet
Major Supply Countries % of total
Philippines 28.5
Russia 7.3
Ukraine 6.2
Poland 5.9
China 5.4
India 5.0
Nationalities
One 33
Two 29
Three 17
Four 10
Five or more 11
Source: SIRC, Cardiff University
- The Cost Advantages of CoCs
Selective Comparative Costs (1999)
Able Seamen Chief Officers
India = 100 India = 100
USA = 286 Norway = 249
Philippines = 110 Germany = 185
Russia = 105 Poland = 115
Bulgaria = 75 Romania = 97
Bangladesh = 44 Philippines = 64
- International Collective Bargaining
ITF seafaring affiliates – east European vs. Asian labour
ITF-IMEC Agreement (FoC shipping)
Wages, hours (inc. overtime), holidays, rest periods, leave, sick pay, medical attention, termination of employment, repatriation, manning, subsistence allowances, maternity, disability, loss of life/death in service, misconduct …
- International Trade Unionism
International Trade Union Confederation (ITUC)
Global Union Federations (GUFs):
Building and Woodworkers International (BWI)
Education International (EI)
International Federation of Journalists (IFJ)
International Transport Workers’ Federation (ITF)
IndustriALL
International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Associations (IUF)
International Arts and Entertainment Alliance (IAEA)
Public Service International (PSI)
Union Network International (UNI)
- Pre-Conditions for Effective International Trade Unionism
Organisational comprehensiveness
Inclusiveness
Internal authority
External recognition
Sufficient resources
Source: Harvey Ramsay (1997)
- TNCs and Global Business Strategies
Capital and labour mobility
TNCs and the global economy
Supply/value chains and global production networks
- Capital and Labour Mobility
LABOUR
F
I
R
M
S
Source: adapted from Margaret Levi and John Ahlquist (2003)
| Localised | Mobile | |
| Localised | Site-specific services: government private sector | Transport and distribution (land-based) |
| Mobile | Non-site specific services: manufacturing literate services | “Knowledge industries”, transport (sea and air) |
- TNCs and the Global Economy
Global supply chains accounted for 80 per cent of global trade in 2012-13 (UNCTAD, 2013)
In 2009, world exports of intermediate goods exceeded exports of finished and capital goods (WTO & IDE-JETRO, 2011)
2009 survey of 300 global companies with sales >US$1bn found that: 51% component manufacture, 47% final assembly, 46% warehousing, 43% customer service, and 39% product development took place outside the home country (MIT, 2009)
- Extracting Value in the Global Economy
Of the total value of an average developing country’s exports …
Foreign value added, in the form of imported inputs, captures 25%
Domestic firms capture 40-50% directly
Affiliates of foreign firms capture 25-35%, of which: the local economy retains 15-20%(wages and other expenditures) and earnings of 10-15% are shared between domestic and foreign shareholders
Source: UNCTAD (2013) World Investment Report Report 2013
- Understanding Global Production Networks
Value – how and where value is created and captured in the network
Power – how power is used in capturing this value
Embeddedness – the degree to which the network is territorially and consequently socially and institutionally embedded
- Governance Structures of GPNs
Source: Gereffi et al (2005) Review of International Political Economy
- Mode of Governance/Choice of Value Chain Configuration
Complexity of task requirements
Codifiability of task requirements
Capabilities of actual and potential suppliers in relation to requirements
- Employment Relations and HRM in GPNs
Source: Lakhani et al (2013: 449) BJIR
| Value chain configuration | Nature of task requirements | Employment System Criteria | |||
| Lead firm influence on supplier employment relations | Skill and knowledge of employees in the supplier firm | Stability of employment in the supplier firm | National institutional influences on supplier employment relations | ||
| Market | Low task complexity High task codifiability High supplier capability | Low | Low | Low | Local |
| Modular | High task complexity High task codifiability High supplier capability | Low | Moderate | Moderate | Local |
| Relational | High task complexity Low task codifiability High supplier capability | Moderate | High | High | Local and lead |
| Captive | High task complexity High task codifiability Low supplier capability | High | Low | Low | Local and lead |
| Hierarchy | High task complexity Low task codifiability Low supplier capability | High | High | High | Lead |
- The ILO and International Labour Standards
An autonomous body of the League of Nations, founded in 1919
Only UN agency with a tripartite structure
187 member states, 189 Conventions
ILO Conference, Governing Body, International Labour Office
- The ILO and International Labour Standards
A Brief (musical) History of the ILO…
https://www.youtube.com/watch?v=UnN1eejMtVk
A world of growing inequality:
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- The Social Interdependency of Nation States
“the failure of any nation to adopt humane conditions of labour is an obstacle in the way of other nations which desire to improve the conditions in their own countries”
Source: Preamble to the Constitution of the ILO (1919)
- The Great Transformation
According to Karl Polanyi, the International Labour Organization (ILO) was established:
“to equalize conditions of competition among the nations so that trade might be liberated without danger to standards of living”
Polanyi, K. 1944/1957 The Great Transformation: The Political and Economic Origins of Our Time, Boston, MA: Beacon Press, pp.27-8.
In other words, nation states were able to maintain their own preferred (Keynesian) “social model”.
But what happens when: “The spread of markets outpaces the ability of societies and their political systems to adjust to them, let alone to guide the course they take. History teaches us that such an imbalance between the economic, social and political realms can never be sustained for very long.”
Kofi Annan, Secretary General of the United Nations, address to the World Economic Forum in Davos, 1999
- The Global Transformation
According to Guy Standing, the ILO is now an agency for globalisation:
“The [ILO] is a testament to the past century of labourism trying to protect employees in the standard employment relationship. Like it or not, in the early twenty-first century, labour is a commodity. And the ILO cannot do much about it”
Standing, G. 2008 ‘The ILO: An Agency for Globalization?’ Development and Change 39(3): 355-84.
- From the Great to the Global Transformation
ILO Geneva HQ, 1926-70
(now occupied by the WTO)
Current ILO Geneva HQ
- ILO Core Conventions
Freedom of Association and Protection of the Right to Organise (No.87, 1948)
Right to Organise and Collective Bargaining (No.98, 1949)
Forced Labour (No.29, 1930)
Abolition of Forced Labour (No.105, 1957)
Equal Remuneration (No.100, 1951)
Discrimination (Employment and Occupation) (No.111, 1958)
Minimum Age (No.138, 1973)
Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour (N0.182, 1999)
- Sector-Specific Conventions
Plantations Convention, 1958 (No.110)
Labour Inspection (Agriculture) Convention, 1969 (No.130)
Rural Workers’ Organisations Convention, 1975 (No.141)
Safety and Health in Agriculture Convention, 2001 (No.184)
Nursing Personnel Convention, 1977 (No.149)
Occupational Safety and Health (Dock Work) Convention, 1979 (No.152)
Safety and Health in Construction Convention, 1988 (No.167)
Working Conditions (Hotels and Restaurants) Convention, 1991 (No.172)
Safety and Health in Mines Convention, 1995 (No.176)
Maritime Labour Convention 2006
Work in Fishing Convention, 2007 (No.188)
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- Searching the ILO Website
ILO Conventions and Recommendations – ILOLEX
National labour law – NATLEX
Sectoral Activities Department
www.ilo.org
- The ILO in the 21st Century
“The primary goal of the ILO today is to promote opportunities for women and men to obtain decent work, in conditions of freedom, equity, security and dignity”
Source: ILO (1999) Decent Work, Geneva: International Labour Office
- Achieving Decent Work
Securing fundamental workplace rights
Creating better employment opportunities for all workers
Providing for social protection
Promoting social dialogue
Source: ILO (1999) Decent Work, Geneva: International Labour Office
- The Benefits of Standards
Improves efficiency in the world economy
Draws attention to social and environmental concerns that are otherwise hidden
A competitive advantage for firms, providing innovative routes to differentiation
Strengthens and challenges national forms of governance
Source: Nadvi (2008) J. of Economic Geography, 8(3): 323-43.
- Does what the ILO do Really Matter?
“outside of the international legal field, the world has not shown much interest in the ILO’s standards” (Baccaro and Mele, 2012: 198) – in fact, “most reasonably informed people have little idea what the letters I-L-O stand for” (Elliott and Freeman, 2003: 93).
If all 187 member States ratified all 189 Conventions, there would be 35,343 ratifications rather than just over 8,000.
The ILO is an organization “whose only tools of influence are the sunshine of public scrutiny and the shame of public censure, and whose feeble enforcement mechanisms render all but nugatory its efforts to improve global labor conditions” (Helfer, 2006: 652).
- Who Has Ratified What, and When
Freedom of Association and Protection of the Right to Organise (No.87, 1948)
Right to Organise and Collective Bargaining (No.98, 1949)
Forced Labour (No.29, 1930)
Abolition of Forced Labour (No.105, 1957)
Equal Remuneration (No.100, 1951)
Discrimination (Employment and Occupation) (No.111, 1958)
Minimum Age (No.138, 1973)
Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour (N0.182, 1999)
Note: If all 187 member States ratified all 189 Conventions, there would be 35,343 ratifications rather than just over 8,000.
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- Protection of Labour Rights
Lines track the regional average of protection against violation of labour rights in 37 different categories. Lower values indicate more categories in which labour rights violations were observed. Source: L. Mosely (2011) Labor Rights and Multinational Production, CUP.
- Number of Conventions adopted and number of ratification (average over 5 year intervals), 1950-2014
Chart1
| 74.2 | 4 |
| 91.2 | 11 |
| 197.6 | 8 |
| 116.6 | 8 |
| 93.8 | 10 |
| 136.6 | 13 |
| 82.6 | 6 |
| 57.6 | 10 |
| 173.2 | 6 |
| 86.6 | 7 |
| 132.6 | 3 |
| 83.6 | 3 |
| 60.6 | 1 |
Sheet1
| 1950- | 1955- | 1960- | 1965- | 1970- | 1975- | 1980- | 1985- | 1990- | 1995- | 2000- | 2005- | 2010- | |
| Conventions adopted (left-hand axis) | 4 | 11 | 8 | 8 | 10 | 13 | 6 | 10 | 6 | 7 | 3 | 3 | 1 |
| Ratifications (right-hand axis) | 74.2 | 91.2 | 197.6 | 116.6 | 93.8 | 136.6 | 82.6 | 57.6 | 173.2 | 86.6 | 132.6 | 83.6 | 60.6 |
- Accounting for Low Ratification and Application
Out-dated Conventions and the “new world of work”
Adoption (the “parliament of labour” vs. the national parliaments) and incentives (e.g. “false positives”)
Enforcement (e.g. labour inspectors per worker ILO benchmark = 1/15,000 cf. Asia-Pacific = 1/85,000)
Employer opposition
- “Four Pillars” of International Maritime Regulation
Safety of Life at Sea (SOLAS) 1974
Standards of Training, Certification and Watchkeeping for Seafarers (STCW), 1978
International Convention for the Prevention of Pollution from Ships (MARPOL) 1973
Maritime Labour Convention 2006
- Can Governments Enforce Labour Standards?
Unilateral (e.g. enforcement of national employment laws)
Bilateral (e.g. USA-Cambodia Trade Agreement on Textiles and Apparel)
Multi-lateral (e.g. EU social agenda)
- Can TNCs Enforce Labour Standards?
Ethical standards for company conduct (corporate social responsibility) are typically embodied in Corporate Codes of Conduct …
management philosophy
corporate credos
compliance code
“We’ve known about labor abuses in some factories for four years, and they’re still going on [. . .] Why?
Because the system works for us.
Suppliers would change everything
tomorrow if Apple told them they
didn’t have another choice [. . .] If
half of iPhones were malfunctioning,
do you think Apple would let it go
on for four years?”
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- How much do banana workers make?
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- Cup of tea?
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- Can anyone can tell me what these symbols mean?
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- Credibility of (voluntary) Corporate Codes of Conduct
transparency
monitoring
enforcement
redress
- Corporate Codes of Conduct
Ineffective social dialogue
No benchmarks/conflicting standards
Northern agenda imposed on Southern producers to appease consumers
Complexity of networks (sub-sub-contracting) and use of supplier coordinator firms (e.g. Li & Fung)
Ineffective private sector monitoring
‘What does it mean when The Carlsberg Group states that it “shall respect employees’ rights to form, join or not join a labour union or other organisation of their choice, and to bargain collectively in support of their mutual interests […]” without a reference to the ILO? To what extent is this different from SABMiller, which states that the company “is committed to conducting its business with due observation of the principles of […] the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, and ILO Core Conventions on Labour Standards.” Should labour rights activists (who are of course not influenced by taste, price, marketing or other superficial concerns) order a Carlsberg or a Peroni Nastro Azzurro?’
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- Socially Irresponsible Corporations
“Race-to-the-bottom” on terms and conditions of employment – “boosterism” in the North, direct and indirect exploitation in the South
The “bullwhip” effect
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- Global Governance Deficit
ILO standard setting – Conventions and Recommendations ratified (but often not enforced) by the nation state
TNCs coordinate activities across countries, exploit “spaces of exception” (e.g. EPZs), “regulatory enclaves” and weak national laws/enforcement
CSR and corporate codes of conduct rarely refer to ILO Conventions (especially C.87 and C.98)
- Quiz
- Reading
- Hassel, A. (2008) ‘The evolution of a global labor governance regime’, Governance: An International Journal of Policy, Administration, and Institutions, 21(2): 231-51; and
- Haworth, N. and Hughes, S. (2012) ‘The International Labour Organization’, in G. Wood and M. Demirbag (eds.) Handbook of Institutional Approaches to International Business, Edward Elgar, pp.204-18 (available on Blackboard).
Additional reading:
- Thomas, H and Turnbull, P (2017) ‘From horizontal to vertical labour governance: The International Labour Organization (ILO) and decent work in global supply chains’ Human Relations. Forthcoming: http://journals.sagepub.com/doi/full/10.1177/0018726717719994