BWI Tool Box on Multinational Corporations (MNC)

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1 BWI Tool Box on Multinational Corporations (MNC) Discussion paper - A co-ordinated approach to International Framework Agreements, Company Codes of Conduct, Regional and Global Networks, European Works Councils and International instruments and guidelines and Corporate Campaigns Background The BWI world congress in Lille, 9-10 December 2009 asked especially to Extend negotiation of International Framework Agreements with key multinational companies. Provide for guarantees in the Agreements that the companies will offer Decent Work and social protection also to informal workers. Strengthen implementation and monitoring of IFAs and initiate new agreements. - to that end, there should be greater monitoring involvement of Trade Unions in the home country - in the case of difficulties, the BWI will mobilise the Trade Union network and intervene via the national Trade Unions in the home country. If needed, visits should be organised to the countries where problems of non-compliance arise. Continue development of networks and structures to share strategies for organising, recruitment and retention of members. Creation of Trade Union networks for subsectors and MNCs. BWI is planning a series of meetings and activities in 2011 for the implementation of the congress decisions. A Global staff meeting in March in Berlin for the preparation Regional seminars in Europe, Latin America, Asia Pacific and Africa will discuss their regional approaches on organising and trade union building in Multinational Companies and Public Infrastructure Projects Global Conference on Multinational Companies and Public Infrastructure Projects in Madrid October 2011 and will bring together trade union representatives to discuss the practical implementation in this area. Programme elements will be o International Framework Agreements o Trade union networks o Campaigning on Multinational Companies o Public Infrastructure Projects The meeting will take place just before the BWI European Committee meeting which will take place on 21 October Finally the World Council in November 2011 should discuss and approve BWI s strategies on MNCs.

2 BWI`s policy towards MNCs Today in a globalized economy, Multinational Companies (MNCs) in the Building and Wood Industries play an increasingly important role politically, economically, and socially. These companies have no national boundaries as they move freely from one country to another. They are rich and powerful. They are able to influence industry standards and governments to the point, where some national governments no longer have independence in developing their economic and even foreign policies as much of this is linked to the activities of these corporations. As global players they shape working conditions in our sectors, down the sub contracting chain and up the production chain. Some MNCs have developed a global industrial relationship with BWI by signing International Framework Agreements. These MNCs commit themselves to apply internationally recognised labour standards worldwide in their businesses. Other MNCs in our sectors pretend to do good business practices. But many cases show that they are just looking for exploiting workers and their families. Against a background of capitalist globalisation, the building and strengthening of crossborder trade union networks is becoming a pillar of trade union power. Building and Wood Workers International developed tools on how to approach Multinational Corporations. We target Multinational Corporations through Social dialogue, International Framework Agreement, existing Code of Conducts, ILO standards, OECD guidelines, Global Reporting Initiative, Global Compact, Procurement standards of development banks, Global and regional networks including European Works Councils, Workers Capital, Corporate Campaigns, Wood Certification logos such as FSC or PEFC. All these initiatives should assist BWI affiliates to make trade unions stronger including organizing of new members to negotiate collective bargaining agreements to improve living and working conditions of our members 1. Framework Agreements between BWI and MNCs The BWI has already concluded International Framework Agreements with Multinational Companies in the construction, building materials, and wood and forestry sectors 1. The enterprise concerned work together with BWI to ensure the full recognition of trade union rights and effective implementation of all core Conventions of the ILO. 1 IKEA (furniture, Sweden), Faber-Castell (pencils, Germany), Hochtief (construction, Germany), Skanska (construction, Sweden), Ballast Nedam (construction, Netherlands), Stabilo (instruments for writing and cosmetics, Germany), Impregilo (construction, Italy), Veidekke (construction, Norway), Lafarge (building materials, France), Royal BAM Groep (construction, Netherlands), Staedtler (writing, Germany), VolkerWessels (construction, Netherlands), Italcementi (building materials, Italy), Wilkhahn (office furniture, Germany), Pleiderer (wood processing, Germany), GDF Suez (energy, construction, France) BWI Strategy on Multinational Corporations (MNC) 2

3 In order to pursue this policy and to promote understanding of the concept, the BWI has developed a model framework agreement and guidance note which has been adopted by the World Council 2. The aim of such agreements is to establish a continual working relationship and dialogue between BWI and the company concerned, in order to resolve any issues related to non compliance with the terms of the agreement and to achieve socially responsible business practices at international level. In addition, they assist affiliates to get recognised as unions, to get access to worksites and to start a social dialogue on the company and national level with their subsidiaries, suppliers and subcontractors of BWI partner companies. The successful implementation of any IFA will depend on the strength of the unions at the national level and full implementation of the IFA is only possible when workers are organised in free trade unions and are able to bargain collectively at the national and enterprise level. It is clear that this strategy places considerable reliance on the goodwill and political commitment of the MNC. In the longer term it is hoped that affiliates develop negotiating power to press MNCs for negotiations on global level and to implement successfully framework agreements. In the meantime they have to be seen as good practices of industrial relations on global level. It must be emphasised that framework agreements are not intended to substitute for national law or collective bargaining; they are intended to create a framework within which all workers are guaranteed international minimum standards for work. Within these minimum standards are the right to organise and bargain collectively; workers can always use these rights to improve upon international minimum standards or the basic provisions of national law and practice. Initiating and negotiating IFAs When BWI or its affiliates initiate discussion on IFA with a company both will inform each another immediately, BWI in close cooperation with the national affiliate(s) in the home country of the company shall coordinate the approach to the company. BWI will inform affiliates of the fact that IFA negotiations are taking place. Consideration should be given to involving other Global Union Federations in the negotiations when required. When applicable European Works Councils in the company should be informed and consulted on the ongoing negotiations. The content of IFAs Every effort should be made to include the content of the BWI Model Framework Agreement. 2 Approved by BWI World Council on 16 November 2007 BWI Strategy on Multinational Corporations (MNC) 3

4 A representative of the BWI and the affiliate(s) in the home country of the company shall sign the agreement and the agreement shall be endorsed by the BWI World Board. Implementation of IFAs The overall co-ordination of implementing IFAs is the role of the BWI, but it is the responsibility of all affiliates. As part of the IFA a reference group is set up, composed of representatives of the company, and of the BWI affiliated unions in the home country of the company and a BWI coordinator. It is up to the discretion of the unions in the home country of the company to appoint their representatives which could also be trade union representatives from the company. The BWI coordinator can be BWI staff member or a representative of an affiliate in the home country of the company. Consideration should be given to involving representatives of other Global Union Federations in the reference group when required. The reference group should meet at least once a year, or when necessary, to evaluate reports on compliance and to review the implementation of the agreement or to visit and inspect selected worksites. Worksite visits will contribute to a better understanding of working situations in different countries and will facilitate the implementation of the IFA. Affiliates in these countries shall also attend the visit of the reference group. The company shall make the necessary resources available for the implementation of the agreement for example for translation of the agreement text, training of managers and union representatives, travel of reference group members. BWI Regional Offices should play an important role in assisting affiliates with training on the use of IFAs and with their implementation. Affiliates should develop plans to organise worksites including suppliers and subcontractors of the IFA Company where there is currently no union. BWI and affiliates will establish union networks along IFA companies for improving information exchange and transparency of company activities. Affiliates should report on progress with IFA implementation to the BWI and regular progress reports on IFA implementation should be made to the BWI World Board. Enforcement of IFAs Affiliates should notify the BWI of abuses of IFAs and should provide clear information and evidence of violations. BWI and affiliates will expose IFA partner companies publicly where breaches continue and withdrawal from the IFA should be a final resort 2. Corporate Codes of Conduct The BWI has noted with concern that a growing number of big Multinational Companies (MNCs) have entered into a Corporate Social Responsibility (CSR) process based on a sustainable development approach including the three pillars of social responsibility, environmental protection and economic viability and are unilaterally adopting codes of conduct, which purport to deal with labour practices. BWI Strategy on Multinational Corporations (MNC) 4

5 In the majority of cases these codes do not contain specific reference to international labour standards and do not provide for acceptable minimum levels of protection for workers. These codes are formulated, implemented and monitored without the involvement of trade unions: they are often used as strategies to bypass the 'need' for trade union organisation. The BWI does not promote the unilateral development and adoption of voluntary codes of conduct by multinational enterprises that relate to labour practices. It is not advisable however, to simply ignore these codes: many companies use corporate codes of conduct to gain credibility with consumers and base significant publicity campaigns around them. The BWI will seek to identify MNC in our sectors with unilaterally adopted codes of conduct and analyse the content of the code and inform affiliates accordingly. In circumstances where the content of the Corporate Code is reasonably in line with BWI policy the BWI will seek to engage the MNC in dialogue with a view to developing a framework agreement. In circumstances where the content of the Corporate Code is contrary to BWI policy the BWI will consider appropriate campaign action to denounce the code or to pressure the MNC to improve basic working conditions and workers rights. 3. Regional and Global Networks and European Works Councils BWI and affiliates established already union networks along IFA companies for improving information exchange and transparency of company activities but also to share strategies for organising, recruitment and retention of members. Starting points for already well established networks on regional level are European Works Councils (EWC). They are established under a European Council Directive 94/45/EC with the intention that employees in all participating member states are properly informed and consulted when decisions which affect them are taken in a Member State other than that in which they are employed. The Directive applies to all community-scale undertakings and community-scale groups of undertakings 3 operational within the participating states. 3 European Council Directive 94/45/EC Article 2 - Definitions BWI Strategy on Multinational Corporations (MNC) 5

6 The Directive requires participating states to ensure that all parties abide by the directive even if the central management is not located in that participating state. The Directive therefore applies to companies regardless of whether the central management is inside or outside the territory of participating states: this gives EWC a frame of reference that extends beyond the direct jurisdiction of the European Council. EWC are institutional forum for information and consultation between employers and employees and the BWI acknowledges that they have a very significant role to play in fostering sound industrial relations both within and across national borders. It should be stressed that EWC are established under an EC Directive with a particular defined purpose which does not preclude or limit any aspect of trade union organisation or bargaining. If used properly by the MNC and workers the EWC should facilitate the smooth running of the industrial relations process. The BWI further acknowledges that the appropriate trade union federation to monitor the role of and develop relations with EWC in our sectors is the European Federation of Building and Wood Workers (EBWW). The BWI established and developed a dialogue with the EFBWW to follow the work of EWC. The BWI will provide EWC with appropriate information concerning the development of any negotiation or agreements with MNC. BWI and EFBWW will identify EWCs and create trade union networks beyond the jurisdiction of the EWC. For this purpose the BWI and EFBWW will assist to create Trade Union Alliances of the key countries of the MNC. After a Start up meeting the involved unions should develop a strategy and set targets and should ensure funding of activities. The network coordinator will be appointed by the trade union alliance For the purposes of this Directive: a) "Community-scale undertaking" means any undertaking with at least 1000 employees within the Member States at least 150 employees in each of at least two Member States; b) "group of undertakings" means a controlling undertaking and its controlled undertakings; c) "Community-scale group of undertakings" means a group of undertakings with the following characteristics: - at least 1000 employees within the Member States, - at least two group undertakings in different Member States, and - at least one group undertaking with at least 150 employees in one Member State and at least one other group undertaking with at least 150 employees in another Member State; BWI Strategy on Multinational Corporations (MNC) 6

7 4. Global Company Councils The BWI notes that there is an emerging discussion on the development and the possible role of global company councils (GCC) despite the absence of any international legislative or judicial authority equivalent to the European Council in the context of the EU. There are two contexts in which a GCC might be formed: either by the company's creation of a separate global level information and consultation structure, or by the extension of a pre-existing EWC. Often, as the EWC become better established and develop operational credibility there is a tendency for the EWC to seek to extend its scope of influence to benefit workers in other operational territories of the company. Several EWCs have attempted to develop international 'codes' or 'social charters' establishing international minimum standards for work. The BWI believes that this is an area that should be approached by the international with extreme caution. The concept of GCC is not defined in any international instrument equivalent to EC Directive 94/45/EC: a GCC does not have any clear mandate either in the form of legislation or a formal undertaking between the MNC and trade union structures. The BWI is concerned that there is an increased risk that the MNC may use a GCC to try to avoid the exercise of trade union rights rather than a GCC being a compliment to them. The BWI considers that international framework agreements provide a more effective basis for the protection of workers rights because they guarantee trade union involvement and dialogue with MNC. Where GCC do exist in our sectors, the BWI is the appropriate trade union federation to monitor the role of, and develop relations with the GCC. The BWI must lobby to ensure that any GCC must be formed and operate in a manner consistent with the fundamental principles of the trade union movement; GWC must not be permitted to exclude or limit the freedom of association of workers or their access to collective bargaining. 5. International Instruments and Guidelines The protection of workers rights in the frame of international business is not a new concept. In the 1970 s concern over the growing power of multinational companies led BWI Strategy on Multinational Corporations (MNC) 7

8 to the adoption the ILO 'Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy' and the OECD 4 Guidelines for Multinational Enterprises. Trade unions were able to participate in the formulation of these documents: through the workers group of the ILO in the case of the Tripartite Declaration and through the Trade Union Advisory Council (TUAC) to the OECD. In July 2000 the United Nations launched the Global Compact to promote public accountability, transparency and disclosure of company activities. Although the ILO and OECD instruments were negotiated by governments, employers and workers, their application by companies is voluntary: they are not binding; they impose no legal obligation on companies ILO 'Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy' The better use and application of the tripartite declaration has been the subject of discussion within the ILO. In November 2000 the declaration was amended to include now specific references to the ILO Declaration on Fundamental Principles and Rights at Work which was adopted at the 1998 International Labour Conference and ILO Convention 182 on the Elimination of the Worst Forms of Child Labour, These references will strengthen the tripartite declaration as a tool for the promotion of core labour standards but will not serve to create an obligation on MNC to observe the terms of the declaration itself. Consideration must be given to the development of strategies to involve MNC in a more direct discussion of labour standards with the ILO. The current working structures and methodology employed by the ILO allows MNC to remain 'one step removed' from the discussion of core labour standards and from any meaningful implementation of the decent work paradigm OECD Guidelines for Multinational Enterprises The Organisation for Economic Co-operation and Development (OECD) is an organisation for co-operation between the industrialised countries through which governments, trade unions and business and industry work together for openness, growth and social responsibility. This is an important forum, as the major part of foreign direct investments around the world come from the countries belonging to the OECD. Governments from 42 countries updated in May 2011 in close consultations with trade union organisations and business and industrial organisations the OECD' guidelines for multinational companies. The updated Guidelines provide further guidance on the application especially on supply chains, human rights, environment and climate change The guidelines are non-binding and aim to ensure ethical behaviour in a wide range of areas such as environmental issues, corruption, child labour and human rights. However 4 Organisation for Economic Co-operation and Development BWI Strategy on Multinational Corporations (MNC) 8

9 the Guidelines do not meet the full expectations of the trade union movement as unions favour better enforcement procedures. The governments of the OECD countries have undertaken to promote the application of the guidelines by strengthening the role of national contact points (NCP). The contact point consists of representatives of government ministries and departments, and in some cases, the trade unions, business and industry Global Compact and Global Reporting Initiative Launched in July 2000, the United Nations Global Compact is a both a policy platform and a practical framework for companies that are committed to sustainability and responsible business practices. As a leadership initiative endorsed by chief executives, it seeks to align business operations and strategies everywhere with ten universally accepted principles in the areas of human rights, labour, environment and anticorruption. The UN Global Compact states that it is not a regulatory instrument, but rather a voluntary initiative that relies on public accountability, transparency and disclosure to complement regulation and to provide a space for innovation. BWI believes that the UN Global Compact can help encourage companies to commit to global industrial relations. Social dialogue and trade union recognition at the international level, including framework agreements negotiated between Global Union Federations and global enterprises, are elements of emerging global industrial relations. BWI supports the Global Reporting Initiative (GRI), an organization that is partly financed by the UN, is multipartite (trade unions, companies, NGOs and governments) and has been working since 1997 on the development of economic, social and environmental criteria for sustainability reporting comparable to those for financial reporting. Some 50 companies in the construction, building materials and wood and forestry industries are using the GRI guidelines which, however, remain voluntary. The international trade union movement must develop a strategic approach to the implementation of the ILO and OECD Guidelines. The BWI believes that the Guidelines and the Global Compact can be used to stimulate dialogue with MNC, which could in turn lead to the development of Framework Agreements. The Guidelines also provide a structure for submitting cases to National Contact Points (NCP): this should be widely publicised and support given to trade unions wishing to make complaints. Consideration must be given to involving trade unions from non-oecd countries and to possible joint campaigns with other non-labour NGOs on guidelines and Global Compact issues. BWI Strategy on Multinational Corporations (MNC) 9

10 BWI will encourage companies especially with framework agreements to use the GRI reporting guidelines in order to create better transparency of company activities. 6. Dialogue with Employer's Organisations The BWI recognises the significant influence of employers in shaping labour policy and practices and the consequent importance of engaging with them in as many forums as possible. Framework agreements, European Works Councils, Global Company Councils and Corporate campaigns are all strategies under which the BWI seeks to engage with or address one MNC at a time. These strategies should be complimented by a broader initiative to discuss with MNC collectively through their international federation. Dialogue between workers and employers at the international industrial level must seek to establish a more constructive general environment for the promotion of socially responsible business and the implementation of core labour standards. The BWI will seek to develop a dialogue with the Confederation of International Contractors Associations (CICA) which is the employer's counterpart to the BWI. This should include tripartite discussion of procurement issues with the World Bank and other development banks, BWI and CICA. 7. Industrial relations and workers capital The BWI notes that huge sums of workers money around the world are invested in pension schemes and real funds. Workers money is often being invested in enterprises providing low labour standards. Trade unions have some influence in certain funds and should use that in order to improve working conditions and industrial relations in MNCs. In addition trade unions should establish communications with Committees responsible for union pension investments to press for ethical lending policies and socially responsible practices There is a need for international co-operation over specific issues involving workers capital including broad areas such as social security and retirement provision as well as on the effects on working people of global financial markets. The BWI in co-operation with the ITUC-GUF-TUAC Committee for International Cooperation on Workers Capital will seek BWI Strategy on Multinational Corporations (MNC) 10

11 to develop and put in place effective means to ensure the continued gathering and exchange of information related to funds, including governance structures, investment policies, fund managers and other useful information; To further work on the development of principles, guidelines or recommendations concerning the investment of workers' capital; To develop an international network of trade unionists actively engaged in the area of pensions and investments in order to facilitate international trade union co-operation. 8. Corporate Campaigns Regrettably, not all MNC operating in BWI sectors respect basic workers rights and nor are they open to the possible negotiation and successful implementation of a framework agreement with the BWI. Nor do all companies that have a good industrial relations policy in their home country maintain the same high standards when operating in developing countries. Similarly companies may implement good practices within the head-company but have subsidiaries, suppliers or sub contractors that do not observe minimum labour standards. The extent to which trade union rights are denied in the building, construction, wood, forestry and allied trades in reflected in BWI solidarity work: the majority of solidarity requests are received from affiliates fighting to achieve basic trade union recognition. In many cases the BWI is able to intervene to support the union to gain recognition and to help resolve industrial disputes. In other cases however it is becoming increasingly difficult for trade unions to fight the anti union policies of MNC. The BWI has noted with concern that several companies, which have previously respected union rights and entered into collective agreements, have now refused to renew such agreements and seek to promote the use of individual contracts. The BWI and its affiliates cannot tolerate this pattern of behaviour and the BWI will adopt a proactive policy to identify and campaign against companies implementing such 'anti worker' policies and practices. The BWI will identify MNC operating in BWI sectors using poor labour practices and study their structures and geographic coverage and the nature and range of their operations. Using this information the BWI will develop clear strategies to approach individual MNC and engage in a discussion of labour standards and work practices. Strategies BWI Strategy on Multinational Corporations (MNC) 11

12 should be developed by BWI together with affiliates from the home and host countries of the relevant MNC. Where necessary, precisely targeted campaigns will be launched to bring public awareness to the plight of workers affected and to pressure the company to adopt improved practices and to observe basic core labour standards of the ILO. The BWI will also support affiliates in specific industrial disputes providing political and practical support. BWI will assist affiliates in making complaints to the ILO whenever appropriate. The BWI will seek to identify and develop networks of legal practitioners willing to offer support to trade unions. The terms and procedures for their support should be agreed on and conveyed to BWI affiliates. Marion Hellmann /6 October 2011 BWI Strategy on Multinational Corporations (MNC) 12

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