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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
2Fichter, Helfen & Sydow: Ensuring Core Labor Standards through 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
3Fichter, Helfen & Sydow: Ensuring Core Labor Standards through IFAs?
… 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)
!
4Fichter, Helfen & Sydow: Ensuring Core Labor Standards through IFAs?
• 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
5Fichter, Helfen & Sydow: Ensuring Core Labor Standards through IFAs?
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)
6Fichter, Helfen & Sydow: Ensuring Core Labor Standards through IFAs?
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
7Fichter, Helfen & Sydow: Ensuring Core Labor Standards through IFAs?
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
8Fichter, Helfen & Sydow: Ensuring Core Labor Standards through 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"
9Fichter, Helfen & Sydow: Ensuring Core Labor Standards through IFAs?
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
10Fichter, Helfen & Sydow: Ensuring Core Labor Standards through IFAs?
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).
11Fichter, Helfen & Sydow: Ensuring Core Labor Standards through IFAs?
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
12Fichter, Helfen & Sydow: Ensuring Core Labor Standards through IFAs?
• 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.)
13Fichter, Helfen & Sydow: Ensuring Core Labor Standards through IFAs?
• 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)
14Fichter, Helfen & Sydow: Ensuring Core Labor Standards through IFAs?
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?
15Fichter, Helfen & Sydow: Ensuring Core Labor Standards through IFAs?
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.
16Fichter, Helfen & Sydow: Ensuring Core Labor Standards through IFAs?
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)
17Fichter, Helfen & Sydow: Ensuring Core Labor Standards through IFAs?
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
18Fichter, Helfen & Sydow: Ensuring Core Labor Standards through IFAs?
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
19Fichter, Helfen & Sydow: Ensuring Core Labor Standards through IFAs?
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
20Fichter, Helfen & Sydow: Ensuring Core Labor Standards through IFAs?
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.
21Fichter, Helfen & Sydow: Ensuring Core Labor Standards through IFAs?
• 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