Calling multinationals to account for supply chain abuses

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The expansion of global supply chains has been driven by a business model expressly designed to take advantage of low wages and inadequate regulation and enforcement.

Research shows that respect for workers’ rights in supply chains is declining. In the garment industry, there was a 73 per cent drop in the workers’ rights score of the top 20 apparel exporters to the US between 1989 and 2010.
 At the same time there was a 42 per cent reduction in the price paid for the clothes they produced.

Workers at all stages of global supply chains justifiably ask why their pay and conditions are so poor. They are making products or contributing services for companies that rake in massive profits and could well afford to guarantee all workers in their supply chains a decent standard of living.

Voluntary corporate social responsibility initiatives have failed. They have not been able to meaningfully improve wages and shorten working hours, nor to ensure respect for workers’ right to join a union – or their right to a safe workplace.

Most notoriously, social auditing and certification bodies SAI and BSCI gave clean bills of health, respectively, to the Ali Enterprises clothing factory in Pakistan before it burnt down killing 254 workers and Rana Plaza before it collapsed, killing 1,134 workers in Bangladesh.


ILO Convention on global supply chains

IndustriALL supports the call for an ILO Convention on global supply chains. It should establish legal accountability and provide guidance for developing policy and legislation to ensure respect for workers’ rights.

In the absence of global rules for supply chains, IndustriALL has taken action to hold the multinational companies in its sectors accountable.

IndustriALL has signed 47 global framework agreements with multinational companies, covering over ten million workers. Our recently signed GFA with H&M has already proven instrumental in solving conflicts with the company’s suppliers in Myanmar and Pakistan, leading to union recognition and reinstatement of dismissed workers.

This agreement covers 1.6 million workers and our GFA with Inditex 1.4 million workers, employed by the garment brands’ suppliers and subcontractors, guaranteeing their fundamental labour rights, and providing for joint dispute resolution mechanisms at local, national and global levels.

This is global supply chain responsibility in action. But we need more enforceable accountability.

The Rana Plaza collapse in April 2013 was a defining moment for supply chain compliance. It led to a groundbreaking, legally-binding agreement between IndustriALL, UNI and more than 200 companies: the Bangladesh Accord on Fire and Building Safety.

The Accord establishes a new model of cooperation between global buyers and trade unions, helping to make a whole industry safer for millions of workers. The challenge now is to further develop this model to address other systemic supply chain rights violations.

Following the Accord experience, global garment companies and IndustriALL Global Union have joined forces to apply a similar approach to achieve living wages in the garment industry in a process known as ACT.

Our Memorandum of Understanding identifies the development of industry level bargaining in garment producing countries as essential to achieving living wages. This must be linked to reform of brand buying practices and recognition of workers’ rights to join a union.

We need to make such norms universal to prevent any companies from using exploitation to gain a competitive advantage. We need binding rules for supply chains that put a stop to the global race to the bottom on wages and working conditions.