Ergon Update August 2011
New IFC Performance Standards
The IFC (the private sector arm of the World Bank) has published updated Performance Standards, which set the sustainability framework for its transactions with clients. As Steve Gibbons explains in a new blog, the Standards not only apply to the IFC's operations, but have a wide influence through other development finance institutions and through private sector banks, via their incorporation within the Equator Principles (see below). The new Performance Standards are the result of extensive consultation, and will become effective from 1 January 2012. On labour issues (in PS2), the main changes are around:
• Requirements on migrant labour
• Provision of accommodation
• Retrenchment provisions
• Third party contractor rules including access to a grievance mechanisms
• Clarifications on trafficked workers
• Amendments to supply chain provisions.
Steve's blog summarises these changes, as well as highlighting the more substantive new clauses that extend the human rights requirements within the Standards.
Equator Principles review
The Equator Principles Association has announced a process to develop a new iteration of the Principles, with the aim of publication in March 2012. The review will take account of the revised IFC Performance Standards, but will range far wider taking into account the results of a strategic review conducted earlier this year. Subjects up for discussion include: the scope of the Principles, reporting and transparency, governance issues including membership criteria, and stakeholder engagement during the update process. Internal work on thematic areas will be followed by stakeholder consultation during September-November with a formal consultation period likely in early 2012.
Freedom of association and development
As flagged in our last Update, Ergon has authored a study for the ILO on the ways in which freedom of association fosters and supports economic and social development. The report is now available and identifies the ways in which strong independent worker and employer organisations contribute to the conditions that underpin economic progress. The key identified channels of influence are:
• contributing to national policy dialogue to promote a fairer distribution of wealth and addressing social disadvantage;
• promoting a positive environment for business through economic competitiveness and dispute resolution, skills development and change management;
• promoting co-operation in times of crisis and assisting in responsible restructuring;
• and strengthening democracy and good governance at national level.
The report includes a variety of case studies and also identifies the internal and external challenges for governments, worker and employer organisations in promoting freedom of association.
