With the European economy faltering and public trust in business declining, the EU Commission’s new CSR strategy embodies a noticeably more hands-on approach than its last CSR communication issued in 2006. Institutional backing within the Commission appears stronger with three Commissioners standing behind it. Further, it represents a step-up in terms of language and commitment. The Commission’s proposed new definition of CSR – ‘the responsibility of enterprises for their impacts on society’ – places a tougher and clearer emphasis on business responsibility compared to the previous process-driven definition of ‘a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis’. Continue reading
Posted in CSR, EU, Human Rights, Public procurement
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Stuart Bell and I recently travelled to China to talk to different stakeholders about the employment impacts of the global financial crisis and future policy approaches with respect to decent work. Not surprisingly, the situation of China’s rural migrant workers was central to all of our discussions.
The rise in the number of migrant workers over the past three decades has been one of the most dramatic – and unique – shifts in the Chinese labour market. It is estimated that there are now around 150 million migrant workers in China’s cities, many of whom work in low-skilled jobs in labour-intensive, export-oriented sectors in the coastal manufacturing hubs.
These workers are defined by the hukou household registration system, which places controls on internal migration by assigning rural and urban residence permits and restricting rural residents’ rights in urban areas. Nevertheless, the incentives for rural residents to migrate are considerable: geographic income inequality means that most workers moving from rural to urban areas still see a three-fold increase in their average income, although this ratio is declining over time. Continue reading
Posted in China, Decent work, Migration
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It’s 30 years since Brazilian economist Edmar Bacha characterised Brazil as ‘Belindia’ – an unfortunate imaginary conjunction of a small wealthy industrialised populace (Belgium) with a much larger and poorer nation (India). Much has changed, not least the metaphorical reference points of his coinage (Belgium is barely still a country, India has transformed). But what of Brazil?
Any recent visitor to Brazil will confirm: it’s busy. It’s busy because the past decade has seen a massive change in patterns of consumption. The Lula government often liked to claim that it had overseen the advent of a ‘new middle class’, the so-called Class C – people who can now afford discretional spending beyond basic needs. Of course the airports are heaving, the roads creaking: they simply weren’t designed for this many people. Continue reading
Posted in Brazil, Decent work
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I must hold up my hand, I am a bit of a geek when it comes to International Finance Corporation Performance Standards, particularly PS2. Therefore I make no excuse for blogging on my holiday on the day – after 18 months of consultation – when the revised performance standards are released. For readers less versed in this field, the IFC Performance Standards are aimed directly at improving the broad sustainability performance of companies that are clients of the IFC – the private sector arm of the World Bank Group. However, the Performance Standards’ influence goes much wider, directly affecting the operations of other national and international development finance institutions and also, through the Equator Principles, private sector banks. Further, a number of major private sector mining, oil and gas and infrastructure projects use the Performance Standards as appropriate benchmarks, even without any external financier. Continue reading
Posted in Human Rights, IFC Performance Standards, PS2
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Code-bound organisations and multi-stakeholder initiatives (MSIs) are increasingly emphasising activities that encourage payment of higher wages above and beyond legal minimum wages. The immediate impetus in many instances has been recognition that the dramatic recent increases in basic living costs have outpaced minimum wage levels, while price pressures faced by retailers and suppliers threaten to squeeze labour costs further.
New developments
Among MSIs, the new 2011 Fair Labor Association (FLA) Code, has moved on from a minimum wage standard and now requires employers, ‘to take appropriate actions that seek to progressively realize a level of compensation that meets basic needs and provides some discretionary income’ while Social Accountability International (SAI) has developed further guidance on its basic needs wage approach. The Ethical Trading Initiative (ETI) too recently held a well-attended roundtable seminar to explore new wage initiatives. Continue reading
The new version of the OECD’s Guidelines for Multinational Enterprises, agreed at the end of May, contains some important new clauses and represents a closer alignment with other international instruments on CSR.
Whilst voluntary, the Guidelines are the most important international mechanism seeking to set standards of behaviour for international corporations. Unlike ILO Conventions, they are directed specifically at corporations rather than governments, and they are more wide-ranging than either the UN Global Compact or the ILO’s Tripartite Declaration on Multinational Enterprises.
The most obvious new inclusion – absent from the previous 2000 iteration – is a specific section on human rights, itself a testament to the intervening acceptance and recognition of business’ human rights impacts. The section closely follows the UN Framework for Business and Human Rights (the ‘Ruggie Principles’), also launched this month, in requiring businesses
- to respect human rights,
- to mitigate adverse impacts associated with their operations,
- to carry out human rights due diligence assessments and
- to contribute to remediation of adverse impacts. Continue reading
Many of you may be familiar with TED and the excellent talks that you can find there. Here is one we want to share, the insightful Auret Van Heerden from the Fair Labor Association.
www.ted.com
Following a long, and at times difficult, period of consultation and development, the United Nations Secretary General’s Special Representative on the issue of human rights and transnational corporations and other business enterprises, Professor John Ruggie, has produced his final report on Guiding Principles for Business and Human Rights. This is a significant landmark and should cause all businesses whose activities have a real or potential impact on human rights to sit up and take notice.
Professor Ruggie started his work in 2005 and put forward his draft “Protect, Respect and Remedy” framework in 2008; which was unanimously accepted by the UN Human Rights Council and has been adopted by a range of public and private actors since. Three main principles:
* Protect – the State duty to protect against human rights abuses by third parties, including business, through appropriate policies, regulation, and adjudication
* Respect – the corporate responsibility to respect human rights, which means to act with due diligence to avoid infringing the rights of others and to address adverse impacts that occur; and
* Remedy – both State and business responsibility to provide greater access by victims to effective remedy, both judicial and non-judicial.
As ETI’s corporate members prepare to submit their annual reports, it’s worth reflecting on what they tell us about the state of ethical auditing, and to consider other ways of pursuing ethical trade. Our analysis of ETI members’ audit findingsprovides ample evidence of the limitations of relying solely on audits as a means of identifying and rectifying labour abuses. They reveal a predominance of health and safety issues, followed by breaches on wages and working hours, but freedom of association and discrimination violations lag far behind. Relying on audits alone would suggest that these two issues are not problematic for workers. This is clearly nonsense. While audits are useful for spotting ‘material’ infractions, other issues, often reliant on capturing worker perspectives, slip under the audit radar.
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