Towards 2017 Better Work Phase III Strategy

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1 Towards 2017 Better Work Phase III Strategy Towards 2017 Better Work Phase III Strategy Promoting Good Working Conditions Across the International Garment Industry

2 Problem Analysis Sixty million workers across the developing world rely on the garment industry for their livelihoods. Of these, eighty percent are female, many of whom have migrated from rural areas and are entering the formal workforce for the first time. While factories are a valuable source of jobs and can help improve livelihoods of workers and their families, poor working conditions remain a pressing issue across the global garment industry. While there have been many advances over the past 25 years, many problems remain and momentous industry progress remains elusive for a variety of reasons including the following: Garment industries tend to represent the first step on the formal employment ladder in developing countries. As such, workers often do not have a good understanding of their rights under the law nor the skills to effectively communicate or negotiate with their employers. At the same time, employers themselves often have limited training or experience in effective industrial relations. While labour laws in many garment producing countries can be quite strong, the instruments of law enforcement are often inadequate. These industries typically lack mature systems of industrial relations and the bargaining power of workers is often weak. International buyers have to set up parallel monitoring systems to fill these gaps, resulting in a failure to focus on building the long-term capacity of government, employers, or trade unions and also leading to fragmentation and duplication of efforts. Auditing for factory compliance alone has been widely acknowledged to be limited in rectifying many issues. Factories who wish to cheat the auditing system are managing to do so without focusing on the long-term business benefits of improving their working conditions. Garment supply chains are complex and varied, often with many intermediaries between the factory and final retailer. This leads to a lack of accountability and ownership for improving compliance and weakens direct oversight and traceability of products. There is a huge development and business opportunity to grasp by investing in good jobs and by providing workers, especially women, with the support they need to realize their rights and their full potential in the workplace. Ultimately, factory work cannot lead to sustainable change unless the disadvantages workers often face are tackled head on. Paid work can and should create opportunities for workers to realize their rights, express their voice and develop their skills.

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4 The Better Work Vision Our vision is that by 2017, Better Work will have improved the lives of at least three million workers and millions more of their family members. We will achieve this by driving sector-wide sustainable improvement in adherence to national labour law and core labour standards and strengthening business competitiveness in major garment producing countries. Better Work also aims to influence the policies and practices of international buyers, governments and other institutions by sharing the unique knowledge and findings arising from its core programme. We will be the partnership of choice for our constituents, international buyers and institutional partners. Through this wider alliance, Better Work will leverage opportunities to improve industrial relations and labour law governance as well as create a level playing field for good employment practices. A partnership between the International Labour Organization (ILO) and the International Finance Corporation (IFC), Better Work is a global programme which brings expertise in labour together with expertise in business investment to provide long-term answers to the gaps and limitations in the international garment industry s labour standards. Better Work currently operates in Cambodia, Indonesia, Vietnam, Lesotho, Nicaragua, Jordan, and Haiti and Bangladesh.

5 Towards 2017 Better Work Phase III Strategy More than 900 factories across four continents employing close to 1000,000 workers are involved in Better Work Some Achievements at a Glance improvement in occupational safety and health in Haiti, Jordan and Vietnam Forced labour issues in Jordan improved by compliance in paying correct minimum wages, paid leave, and social security benefits in Jordan among factories participating for more than 2 years of factories now have workers contracts in line with the law in Haiti Elimination of formalized HIV/AIDS discrimination in factories in Lesotho of Better Work Vietnam factories have seen a rise in total sales, 62% have increased production capacity, and 60% have expanded employment. In Haiti, improvements in working conditions facilitated by Better Work have coincided with an increase of over in the value of apparel exports to the US. Better Work has helped to make labour law compliance a reality for more than one million workers Abuse of fundamental rights has been stopped. For example, in Jordan concerns about workers rights to freely leave their place of work have improved. The vast majority of workers ( ) now retain their own travel documents In an industry where employment is often precarious, of factories now have workers contracts in line with the law (benchmark). In Vietnam there has been a increase in workers issued with formal contracts. We know that these improvements in compliance to laws bring tangible benefits to workers. For example, we know that in Vietnam a improvement in compliance to labour laws translates into a improvement in incomes for workers.

6 And Better Work is better business too For example, in Vietnam, factories in which workers trust that they are paid correctly and report low verbal abuse are almost 8% more profitable than those factories in which workers do not report these conditions. In Cambodia, factories in compliance with fundamental rights are 56% more likely to retain their customers, and higher compliant factories are more likely to attract high-quality buyers. So, improvements in job quality need not cost business. 65% of Better Work Vietnam factories have seen a rise in total sales, 62% have increased production capacity, and 60% have expanded employment. In Haiti, improvements in working conditions facilitated by Better Work have coincided with an increase of over 40% in the value of apparel exports to the US. Since Better Work s establishment, compliance with labour laws and international standards has steadily improved across all programme countries Beyond Individual Factories Better Work s impact stretches beyond individual factories to national-level labour policy issues. The programme harnesses the ILO s unique position as the United Nations only tripartite organization that includes government, employer and trade union members. This convener role helps to put systems in place that address the concerns and interests of the various constituents. For example, Better Work Haiti helped develop a roundtable for social dialogue to ensure productive relations between employers and workers, in Vietnam, Better Work contributed to a historic revision of the labour law calling for the first time for worker/management committees in enterprises affecting 8-10 millions workers and in Jordan a workers centre has been set up to provide leisure and supports such as skills training, legal advice, and mental health counseling to workers. Better Work s far-reaching research are being used to influence decision makers. Research thus far, has shown compelling results.

7 Towards 2017 Better Work Phase III Strategy Towards 2017 Phase I ( ) Better Work was established on the global level and programmes were set up in Haiti, Jordan, and Vietnam. These built upon the pre-existing Better Factories Cambodia programme which was the original inspiration for Better Work. The first phase involved assembling teams, establishing global structures and quality assurance systems, and putting in place mechanisms and tools to capture workplace conditions in Better Work countries. Phase II ( ) Better Work scaled up engagement by opening programmes in Indonesia, Lesotho and Nicaragua while setting the stage for activities in Bangladesh. Operations in this phase reached seven countries and engaged more than 60 global garment brands and 600 workplaces employing more than 700,000 workers. Phase III (2012 to date) In order to carry the programme into its third phase, Better Work underwent an independent evaluation which made a series of key recommendations.. Important suggestions were that Better Work should advance and restructure its services and expand relations with buyers and should put in place systems for transferring Better Work s portfolio over to local organizations in its country programs where that is possible. These ideas have been incorporated into the Phase III strategy. Phase III Strategy Better Work created a multi-pronged strategy to guide activities from July 2012 to June 2015 with broader objectives to carry the program to The strategy for Phase III aims to harness the programme s experience and vast amount of data. To this end, Better Work s ultimate vision for Phase III is for the programme to reach a level of influencing, knowledge sharing and partnership that will contribute to lasting changes in the garment industry and beyond, where upholding good working conditions becomes an ethos and an ingrained practice for all stakeholders.

8 Better Work s Phase III strategy entails the following elements: Expanding Opening New Programmes: The Better Work Bangladesh project is beginning operations and the programme is exploring progression into other large industries. Scaling: In existing country programmes, primarily those with large industries, Better Work s services (assessment, training and advisory) are making adaptations to their model so that they can maximize the numbers of factories and workers they reach. Entering New Areas of Work: Expansion includes the footwear sector in all Better Work countries that have a sizable industry. Additionally, the IFC is leading investigations into whether a Better Work expansion into environmental services is feasible in countries including Indonesia.

9 Towards 2017 Better Work Phase III Strategy Accelerating and Showcasing Impact Assuring Quality: A quality assurance system has been designed and is used to ensure Better Work services are reliable, high quality and consistent across all countries. Evaluating Impact: The inputs of workers and managers are being gathered on an ongoing basis to assess the impact of improved compliance on workers and businesses. Better Work is using these findings to drive policy change and build evidence that good working conditions are good for both workers and business. Increasing Focus on Core Labour Issues. In order to ensure the programme advances workers rights in a meaningful and targeted way, Better Work is intensifying efforts to address core labour issues, including discrimination, child and forced labor, and freedom of association and collective bargaining. For example, the programme has stepped up efforts to address industrial relations across its factories and based on worker inputs, has developed specialized materials on issues such as sexual harassment. Engineering changes in practices and policies Influencing National Policy: Better Work is finding ways to stimulate improvements in national-level policies and systems by harnessing the programme s experiences and data. Successful examples include Vietnam s new labour law which includes a new regulation that requires worker-management committees, largely modeled after the Performance Improvement Consultative Committees (PICCs) set up by Better Work. The government is also discussing introduction of a direct worker election system to these committees, again, building off the Better Work model. Additionally, in Jordan, following training by Better Work and the ILO, employers associations and the trade union signed a Collective Bargaining Agreement covering the full garment sector, affecting approximately 40,000 workers. Creating The Business Case: Better Work is gathering data and research to make a compelling business case for enterprises to invest in improving working conditions. For example, the program continues its partnership with Tufts University to collect information from thousands of workers across five Better Work countries. This information is being fused with factory compliance data to measure trends between better compliance and outcomes for business and the impact of improved compliance on workers lives within and beyond the workplace. This analysis is determining which facets of working conditions matter the most to workers everyday lives. Informing Global Policy: Better Work has identified areas of global public policy that could benefit from data and experience from the programme. The ILO, the IFC and the World Bank Group are using Better Work s findings to inform broad policy development, amplifying the profile of Better Work s findings. For example, the World Bank featured Better Work data in its 2012 World Development Report on Jobs to demonstrate that jobs with higher compliance in labour standards do more for development. Communicating Strategically: Communication plays an essential role in ensuring the success of Better Work s influencing strategy. As such, the programme is accelerating its use of media platforms to communicate findings and share key materials with specific target groups.

10 Influencing Buyers Increasing Effectiveness of Relations: Better Work currently collaborates with 60 international clothing buyers including many of the most iconic labels. The programme has set up a buyer partnership model to make relations with buyers more accountable, transparent and focused on results.. To date, a total of 23 buyers have joined as partners. The program has developed strong working relations with these buyers and offers them opportunities to provide input to the Better Work programme, as well as to interact with national stakeholders (government, employers and unions) to help ensure that progress is supported and increasingly owned at the national level. Reaching New Buyers: In addition to ongoing work to deepen the commitment of the buyers already engaged with the programme, the program is also working to reach out to more buyers and encourage them to join the programme. The more buyers that are engaged, the greater the number of factories involved, and the more workers who are impacted. Increasing the number of buyers also helps to increase alignment between them on basic expectations for working conditions, allowing Better Work to have a greater impact on the industry level in the countries where the program operates. Specifically, Better Work is trying to secure the participation of more buyers from the European and emerging consumer markets while also looking at groups of factories and vendor groups based in Asia.

11 Towards 2017 Better Work Phase III Strategy Strengthening Governance and Viability Boosting Viability. Larger country programmes are focused on strategies to recover their funding through charging fees to factories and buyers for the services. At the same time, programs are also securing donor funding where appropriate. Where feasible, sustainability will involve transferring the delivery of Better Work s core services (assessing, training and advisory) to independent, local organizations. Planning is underway so that this can be achieved while maintaining quality and consistency. Creating National Ownership: In order for the country programmes to have strong and appropriate ownership and continue to be viable, national stakeholders including government, employers and trade unions are being given an increasingly large role in the delivery, and ultimately the governance of the Better Work Programmes. This is being established through the Project Advisory Committees (PACs) which are made up of representatives from government, employers and trade unions to advise programmes as well as through active partnership with local representatives. Examples include training co-sponsored by Better Work and national employer organizations and/or trade unions and partnership with local Ministries of Labor on aspects of assessments and/or advisory services. Better Work s Phase III builds on the progress made by the program to date. The program will expand its impact at the factory floor by working in more enterprises and strengthening the quality and depth of our services. At the same time, Better Work will focus on using lessons and data from its factory work to have greater influence across the garment industry. Equipped with the strategic elements outlined above, Better Work s long-term aim is to carry working conditions into the 21st century, shedding the sweatshop image and ensuring that factories are safe, respectful and decent places to work. For more information please visit Better Work, International Labour Office, 4, route des Morillons, CH-1211 Geneva 22, Switzerland

12 4, route des Morillons, CH-1211 Geneva 22, Switzerland

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