Conférence «Accords transnationaux d entreprise» «Transnational Company Agreements» Conference

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1 Conférence «Accords transnationaux d entreprise» «Transnational Company Agreements» Conference novembre th -14th Novembre 2008 Centre des Congrès, Lyon

2 TURKEY AS A NEW ACTOR ENTERING THE TRANSNATIONAL COLLECTIVE BARGAINING AREA Prof. Dr. A. Nurhan Süral Middle East Technical University Ankara, Turkey

3 FAR-REACHING IMPACTS OF GLOBALISATION Whole world as a potential area for development for an MNC Global unions, EWCs and local unions as parties to transnational company agreements (TCAs) European / Global / Mixed Agreements affecting 7.5 m. employees across the world; 150 recorded texts including 60 IFAs, 80 European Agreements, and 10 mixed agreements concluded in 90 companies EWCs as a party to TCAs: MNCs with headquarters inside or outside the perimeter of the EU; Directive not limited to MNCs operating only from and into the EU

4 MNCs TCAs The scope of the TCAs are significantly wider than the reach of the EWC directive. TCAs apply in every country that a given MNC operates within. TCAs apply to many workers who are not working in MNCs. TCAs containing some language on contractors, sub-contractors, principle suppliers, licencees (franchiseholders)

5 MNCs WITH HEADQUARTERS/ SUBSIDIARIES/ JOINT VENTURES/ SUPPLIERS IN TURKEY (1) Annual GDP growth averaged 7.2% over the period , and the economy created more than new jobs outside agriculture, representing employment growth of 3.9% per year Foreign-controlled firms were very few in Turkey until 2001, but have increased in number. Initially confined to specific sectors such as oil exploration and distribution, the bulk of FDI was realised through joint ventures with local partners. Fully foreigncontrolled firms expanded in the 2000s after privatisations and large-scale mergers. FDI firms are concentrated in domestic market-oriented activities such as banking, telecommunications and retail trade. Their role in export-oriented manufacturing is minor, except in the car industry.

6 MNCs WITH HEADQUARTERS/ SUBSIDIARIES/ JOINT VENTURES/ SUPPLIERS IN TURKEY (2) Capital inflows: Net capital inflows soared especially after 2004 and reached 10% of GDP in the first half of 2007 before setting at 8% at the end of the year. FDI reached USD 20 billion in 2007, up from USD 9 billion for the whole year of Outward FDI: USD 2.3 billion in Turkish firms invest mostly in Balkan countries, former Soviet Union, and India. Through these investments they aim at overcoming Turkey s weakening competitiveness in low-skilled activities and to gain access to new regional markets. Gaining access to the US market via free-trade agreements that neighbouring countries such as Egypt and Jordan have established with the United States is also a motivation.

7 MNCs WITH HEADQUARTERS/ SUBSIDIARIES/ JOINT VENTURES/ SUPPLIERS IN TURKEY (3) MNCs with headquarters in Turkey are not present in this emerging process of transnational agreements except for management driven CSR practices MNCs not headquartered in Turkey may voluntarily agree to include representatives of companies in Turkey in their EWCs MNC may require its contractors, sub-contractors, principle suppliers, licencees (franchise-holders) to provide the TCA conditions and observe the TCA standards

8 TCAs INCREASING THE EFFECTIVENESS OF CORE LABOUR STANDARDS (IFAs) Increased outsourcing: Greater attention is given to the problem of suppliers compliance with international labor standards. The provisions on suppliers and sub-contractors compliance included in the majority of IFAs. Presence of a local union for effective implementation

9 THE INDITEX CASE INDITEX (Industria De Diseño Textil, S.A.) ITGLWF (International Textile, Garment and Leather Workers Federation) Agreement: The first of its kind to cover a retail supply chain and because it provides workers with the mechanisms to monitor and enforce their rights at work. INDITEX headquartered in Spain has outsourced major clusters in Turkey, Morocco, Portugal, Bangladesh, Combodia, and China.

10 CROSS-BORDER SOLIDARITY (1) DITAS CASE Automotive parts producer DITAS, a Turkish supplier to DaimlerChrysler: the refusal of the employer to respect union rights at the workplace (2002) Case resolved under the DaimlerChrysler IFA Cross-border union solidarity - IMF (International Metalworkers Federation)

11 CROSS-BORDER SOLIDARITY (2) TESCO CASE The leading British retail multinational Tesco embarked on a union-busting spree in Turkey (2004). UNI Commerce affiliatetez-koop-is sought for cross-border solidarity. UNI Commerce approached Tesco's management in the United Kingdom, reminding them of the company's responsibility to respect fundamental ILO Conventions and the OECD guidelines on multinationals, as well as the European social dialogue agreements on fundamental workers' rights and corporate social responsibility.

12 CROSS-BORDER SOLIDARITY(3) NOVAMED STRIKE(2007) The ICEM (International Chemical Energy and Miners Union) (ICEM general secretary Manfred Warda and the German IGBCE s (Chemical, Mining and Energy Union) international representative Michael Wolters making solidarity visit), the American Steel Workers Union, (collecting hundreds of signatures), the head of the Women s section of Verdi (solidarity message through the German Immigrant Women s Association), IGMetall Union s Women s section (solidarity message) among many more.

13 CROSS-BORDER SOLIDARITY(4) CLEAN CLOTHES CAMPAIGN Rights of Turkish garment workers violated by transnational Paxar, a US based company (2006) Clients of the Turkish factory include Marks and Spencer, Next, Adidas, Wal-Mart, Levi Strauss and Co., Puma, Disney, Gap, C&A, OTTO, Esprit, Nike, S.Oliver and Tommy Hilfiger. Intensified action from the ITGLWF A first meeting was held in the UK with Paxar and the Ethical Trading Initiative and its members, Marks and Spencer, Levi Strauss and Co, Next, Gap and ITGLWF. Paxar agreed to begin negotiations in good faith with TEKSIF, facilitated by ITGLWF and observed by Next

14 CSR (1) Turkey has signed OECD Guidelines for MNCs, the ILO Declaration on the Fundamental Principles and Rights at Work. Global Compact was launched in Turkey in No specific law on CSR in Turkey. CSR related tax incentives (Art. 89, Income Tax Law No. 193). Companies benefit from tax incentives for their charitable contributions and donations on the field of education which in fact triggered the support of corporations to the special campaigns such as 100% Support to Education and Girl s Let s go to School which are organized by Ministry of Education and UNICEF.

15 CSR (2) Leading document: Corporate Governance Principles announced on July 4, 2003, following the preliminary works conducted based on the OECD Corporate Management Principles, which were announced in Key CSR activities of MNCs in Turkey: Children s education and health, volunteerism, sponsoring NGO activities and partnerships with governmental agencies. These activities aim at supporting the brand name and reputation of the MNC, while facilitating and contributing to the development of society. CSR Related Awards Research indications: Society expects that companies focus/support to education, followed by health, environment and act of violence in family. Education is also the first expectation of the corporate agenda followed by the issues of unemployment, ethical behaviour, social security and health.

16 CSR PROJECTS (1) Establishing a Global Compact Network in Turkey (Name of project: Seed Funding, February 2006 January 2007 Aim: To facilitate an active network of Global Compact companies in Turkey through which to exchange innovative strategies to implement the Global Compact's Ten Principles on Human Rights, Anti-Corruption, Labour and Environmental Standards. The network was to build a platform upon which Turkish companies would advocate for socially responsible business practices both at the national and global levels.

17 CSR PROJECTS (2) Regional CSR project Accelerating CSR practices in the new EU member states and candidate countries as a vehicle for harmonization, competitiveness, and social cohesion in the EU funded by the European Commission and the United Nations Development Programme (2007-8) Turkey Corporate Social Responsibility Baseline Report

18 TOUGHER ISSUES Manpower adjustments through corporate restructuring and subconracting Staff reductions in a business unit or subsidiary Greater need for transnational negotiation

19 GLOBAL LEVEL DECISIONS, LOCAL IMPACTS (1) TCAs have local impacts. Impact on social dialogue. Effects on future capacity of social actors: Social actors need to develop strategies to deal with transnational nature of company organisation.

20 GLOBAL LEVEL DECISIONS, LOCAL IMPACTS (2) Future direction of TCAs, Comparative perspectives, Challenges stemming from heterogeneity of national industrial relations systems, Socialisation processes, Cross-border solidarity networks, are issues of importance for the new actors.

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