1 fichter, helfen & sydow: ensuring core labor standards through ifas? setting standards of...

1Fichter, Helfen & Sydow: Ensuring Core Labor Standards through IFAs?

Setting Standards of Labor Practices in Global Production Networks –

Trade Union Involvement via International Framework Agreements?

Michael Fichter, Markus Helfen & Jörg Sydow

Institute of Political Science & Institute of Management,Freie Universität Berlin, Germany

GUF WorkshopFriedrich-Ebert-Foundation / Hans-Böckler-Foundation

IGM BildungsstätteMay 18, 2009

Introduction: Taking Stock of IFAs


Context: Trends in labor related standards and Initiatives

Sanctions, Obligations

EU directives

National state regulation

WTO rules

OECD Guidelines for Multinational Enterprises

ILO Tripartite Declaration of

Principles

ISO 26000

Scope

International Framework Agreements

Corporate codes of conduct

SA 8000

Global reporting initiative

(GRI)

UN Global compact

OHSAS 18001

Social investment

Stewardship and charity

ILO Conventions

ILO core labour standards

CSR Europe

Business Social

Compliance Initiative


… based on contract relationships between transnational corporations (TNCs) und global union federations (GUFs) which within a defined space

• afford a mutual recognition of both sides,

• provide for mechanisms of conflict resolution

and

• set standards regarding

• ILO core labour standards (union rights and collective bargaining, no forced or child labour, no discrimination),

• additional ILO conventions (i.e. work- ing time, pay, health & safety, repre- sentation).

As such, IFAs are an instrument of regulating international labour relations positioned between unilateral self-restrictions of TNCs and international law (ILO).

Definition: International Framework Agreements (IFAs) are…

Total number of IFAs (1994 to 2008)

But: there is only a relatively small number of IFAs (ca. 80), compared to some 65,000 TNC (UNCTAD 2006: 122)

!


• What motivates TNCs on the one hand, and trade unions or employee representatives on the other hand, to negotiate and sign IFAs?

• How are IFAs being implemented at multiple levels of the global production network? To what extent are managers, suppliers and unions informed and involved at different levels?

Research Questions


Research Design

Key Variables in Regard to Implementation (Impact and Interaction to be determined):

• The structure of the particular branch or sector

• TNC organization structures and management.

• Labor relations in the TNC and the global value network.

• The political, institutional and socio-economic environment of TNC operations (country-specific; global impact)


Research Design

• Empirical Research across the Global Value Network

• Dual Focus on Management and Trade Unions/Employee Representatives

• Embedding the Empirical Findings in Broader Social Science Discourses • Global Governance• Corporate Social Responsibility• Global Production Networks• Cross-Border Labor Relations


Context: IFAs and the regulation of labor

Management of global

production networks (GPN), including IHRM

“Global governance” and industrial relations: ILO labor standards, GUFs, NGOs, …

TNCs and corporate social responsibility

(CSR)IFAs


Research Design: Case Study Selection

HQ

Sub1-4

Sup1 Sup2

Case Selection: First Wave – 16 TNC

• Four GUFs account for 72 of 80 IFAs: BWI, ICEM, IMF, UNI

• Region of Origin (EU) + Location of Subsidiaries

Second Wave – 8 TNC

• expert interviews (1 x management, 1 x union/wc)

• identification of "good practice"


IMF: Bosch, Daimler, Leoni, BMW, GEA, VW ICEM: Rhodia, Evonik, Freudenberg BWI: Lafarge, Hochtief, Skanska UNI: ISS, Carrefour, G4S, Securitas

AllIFA cases(80 cases)

Pre-selection (16 cases)

Potential case studies (8 Fälle)

Case Studies(4 cases)

Criteria: GUFs, region of

origin, host countries

Expert interviews:Identification of „best practices“

Research design: Case selection


Region of origin

One TNC per industry/GUF

Host countries

ContinentalEurope

IMF UNI ICEM BWI

Brazil India Turkey USA

Research design: Criteria of case selection

4 Industries (four GUFs have signed the majority of IFAs). • metalworking (IMF)• services (UNI)• chemicals (ICEM)• building & construction (BWI)

4 Host countries (regional diversity, international division of labor):• Brazil• India• Turkey• USA

1 region of origin (majority of IFAs has been negotiated and concluded by TNCs from continental Europe).


Management Labor NGO No. of Interviews

Headquarters HRM GUF 1-2 4-8

Production National Trade Union(s)

Sourcing WWC/EWC/other

Subsidiary HRM National Trade Union(s) 1-2 3-8

Production employee reps.

Sourcing other TU, empl. reps.

Supplier HRM/Prod. Trade Union(s)empl. reps. 1-2 5-8

Supplier HRM/Prod. Trade Union(s)empl. reps.

Minimum / Maximum per Case Study: 12 / 25

Research Design: Interview plan


• global union federations (5):

IMF, ICEM, BWI, UNI

• TNCs (11):

TNCs with an IFA: Evonik, Freudenberg, Rhodia,

Leoni, BMW, Daimler,

Lafarge, Hochtief,

ISS

TNCs without an IFA:

Deutsche Bank, BASF

• country experts, NGOs, Employers (8): Brazil, India, Turkey, USA, NGO, IOE

First Results: Case Studies and secondary content analysis

Secondary dataPrimary data: 24 Interviews

• Additional information for 16 TNCs which might enter the case study group and 4 GUFs

• Qualitative and quantitative content analysis of IFA texts (Atlas.ti):

• Goals and Motives: HRM, competitiveness, labour relations

• Substantial Rules: ILO core conventions and additional ILO conventions, other substantial rules, etc.

• Procedural Rules: Forms of monitoring, extension to suppliers, etc.

• data set of 72 IFA cases containing information on year of agreement, industry, ownership structure, number of employees, etc.)


• Political, institutional and socio- economic conditions at a TNCs‘ country of origin

IFA Origins: Country and Sector (GUFs)

• Activities and strategies of GUFs

IFAs by TNCs‘ country of origin (n=72)

IFAs by global union federation (GUFs) (n=72)


Initial findings:Actor constellation on employees‘ side

IFAs by actor constellation on labour‘s side (n=72)

Actor constellation on labour‘s side is marked by diversity:

a) global union federations (GUFs),

b) In around 75 percent of all cases national unions and/or employee representatives (EWC) are additionally involved.

c) Interpretation: successful cooperation or vertical and horizontal divergence of interests?


Initial findings: Monitoring of subsidiary’s compliance

IFAs by form of monitoring (n=72)

Forms of monitoring show differing degrees of institutionalization depending:

a) on the GUF involved in negotiations (*):IMF: EWC embodiment, ICEM, UNI: meetings only,BWI: special bodies.

b) on TNCs’ country of origin (*): German TNCs and Western Europe: EWC embodiment, South European TNCs: special body, Scandinavian TNCs: meetings only.


Initial findings: Formal extension to suppliers

Formal extension to suppliers by sanctioning is positively associated with:

a) form of monitoring (*): (EWC embodiment and special body go along with stronger forms of sanctioning),

b) individual complaint procedures(*):(participatory HR management style)

c) specific GUFs (*):(IMF and BWI) and

d) TNC‘s country of origin (*):(Western and Southern Europe vs. Scandinavia and other countries).

Extension of IFAs to suppliers by type of sanctions (n=72)


Initial Findings on actors‘ motivation: Goals and expectations of management

• credibility of CSR activities

• risk management and legitimation of management decisions

• management of global production networks by standardization

• Avoidance of state regulation

Transnational Corporations (TNCs) Global union federations (GUFs)

• recognition as a negotiation partner

• institutionalization of collective conflict

resolution

• minimum labour standards

• definition of an independent role for GUFs

• creation of organizing space


Initial Findings:Overall CSR typology

Fichter, Helfen & Sydow: IFAs and the Transfer of Practices in Global Production Networks

Voluntary CSR initiatives

Initial stage of CSR

• Implementation process • special monitoring procedures• Robust conflict-resolution mechanism

• reference to Corporate Governance Standards

• complaint handling by management

• „meetings“

• code of conducts• reference to global compact• standard reporting &

controlling• issue management & public

relations

• integration of sustainability dimensions

• several management functions, processes, structures and locations involved

• management incentives and empowerment

Union involvement in management practices

Holistic-integrated management approach


Initial Findings: Headquarter-Subsidiary relationships

Problems for implementation and monitoring emerge out of complicated HQ-subisdiary relationships, and complex supplier relationships in value chains:

Subsidiaries as legally independent entities, sometimes not fully owned by focal multinational

Subsidiaries as joint-ventures, partnerships

Subsidiaries as completely owned and controlled by focal multinational

Sub-contracting: first and second tier suppliers

Sub-contracting: informal economy


Initial Findings: Implementation: processes, instruments

Implementation ad hoc vs. implementation by integration in management practices

• systematic implementation: special monitoring procedures and bodies, definitions of sanctions for suppliers and union involvement

• ad-hoc approach of implementation: complaint handling by management and „meetings only“

The type of GUF involved has an impact on the potential of labour-related CSR to be effectively implemented throughout GPN.


• IFAs have a very limited impact in the global economy

• IFAs may protect workers from financialization pressures, but could become less relevant in the crisis.

• Multiple actors (signatories) on labor side could indicate still unresolved conflicts and power struggles

• Unions generally junior partner in implementing and

monitoring IFAs. Need for stronger union input.

• Management places IFAs in context of a broader CSR repertoire • Newer IFA (e.g. Rhodia, ISS) are models for using IFAs for union organizing.

Preliminary Conclusions

1 fichter, helfen & sydow: ensuring core labor standards through ifas? setting standards of...

Documents

core labor standards

helfen sydow

labor related standards

standards of labor practices

stock of ifas slide

sign ifas

total number of ifas

small number of ifas