labour laws for multinationals

7/28/2019 labour laws for multinationals

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International

Labour Organization

Bureau for

Workers' Activities

Codes of Conduct for Multinationals

Concept Development of codes

o Regulating competitiono Anti-apartheid

Great Britain European Community United States Ireland

o Elimination of unethical business behaviouro New social responsibilities for liberalized global businesso Consumer awareness

United States Europe International

Summary of ILO Tripartite Declaration of Principles Concerning MultinationalEnterprises

o Scope Addressed by Addressed to Definition of multinationals

o Content Freedom of association Collective bargaining and agreement Disclosure of information Settlement of disputes Terms and conditions of work

o Implementation Acceptance Reporting and monitoring Conflict settlement

Summary of OECD Guidelines for Multinational Enterpriseso Scope

Addressed by Addressed to
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Definition of multinationalso The labour relations content of the code

Freedom of association Collective bargaining and agreement Disclosure of information

Terms and conditions of worko Implementation

Acceptance Reporting and monitoring Conflict settlement

Summary of Sweatshop (USA) and Clean Clothes (Europe) codeso Scope of the codes

Addressed by Addressed to Definition of apparel industry

o The labour relations content of the codes

Freedom of association and collective bargaining Forced labour and child labour Equal treatment Safety and health Wages and benefits Hours of work

o Implementation of the codes Acceptance Reporting and monitoring

Summary of football codes (FIFA code and Sialkot code)o Scope of the codes

Addressed by Addressed to Addressed child labour

o Content of the codeso Implementation of the codes

Acceptance Reporting and monitoring

Concept

Codes of conduct or guidelines for multinational corporations do not have any fixed definition.

However, it is important to make a distinction between corporate codes of conductand codes ofconduct for multinational corporations. Corporate codes of conduct are individual company

policy statementsthat define a company's own ethical standards, while codes of conduct for

multinationals are externally generated and to some degree imposed on multinationals. Thesecodes are not of the companies' own making, nor are they agreements between companies and

the entities which create the codes. In some cases, however, multinationals are involved in the

drafting process. The fact that these codes are externally established standards while other
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corporate codes of conduct are of a voluntary and internal nature has important implications

when considering their implementation in corporate practice.

Codes of conduct for multinational corporations must also be distinguished from framework

agreements, which are concluded between trade union organizations and individual companies

regarding the companies' international activities. There are two types of framework agreements.First, there are written understandings between multinational corporations and international trade

union organizations (such as an ITS), which may cover any subject. Examples of such

framework agreements include those establishing information and consultation arrangements, asmandated by the European Works Council Directive. Second, there are framework agreements

between trade unions and companies concerning the labour practices of the company, or of its

suppliers and subcontractors in other countries. Such provisions may also be included in

collective agreements that are recognized under national law. (For further reading on frameworkagreements, seeInternational Confederation of Free Trade Unions (ICFTU), Labour and

Business in the Global Market)

In relation to multinationals, codes of conduct for multinationals are recommendations. Even ifthe codes have been agreed by a number of sovereign states, or such other entities as have been

granted international personality by sovereign states, they do not have a status ofinternationallaw, which would set a binding effect on multinationals operating in those states which have

adopted or joined the code. Hence, codes of conduct for multinationals impose no legal, but only

moral, obligations on companies, and they are not capable of enforcement by the application of

external sanctions. For multinationals, the commitment to the codes is voluntary. But someorganizations have placed the acceptance of the their code as a condition to their membership or

licensing agreements.

Anyone may introduce codes of conduct for multinational corporations. Besides governments

and intergovernmental organizations, codes have been introduced by trade union organizations;employers' organizations; various environmental, consumer, investor, religious, ethical and otherorganizations; and by various groups protesting certain international phenomena. Some of the

codes have been adopted multilaterally, some unilaterally.

Codes of conduct for multinationals may address any issue relevant to their activities. Codes

have in fact addressed a wide variety of issues, including: relations between multinationals in

world markets (e.g. with regard to advertizing, marketing, sponsorship, and competition ingeneral); labour matters (e.g. terms and conditions of work and equality); environmental

standards (e.g. emissions, waste or safety in production and transportation); and health and safety

issues related to individual products (e.g. toys, baby milk substitutes, and other products).

Codes of conduct for multinationals can take various forms. Their credibility depends on three

main factors - the governments that have adopted them or companies that have subscribed to

them (e.g. in number, size or internationality); the nature of the substantive provisions of thecode; and any related monitoring mechanisms (such as investigation methods, reporting of

investigation results, and dissemination of reports).

Development of codes
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Regulating competition

The first international code of conduct for multinationals was created by the International

Chamber of Commerce (ICC)Code of Standards of Advertising Practicein 1937. Since then, theCode has been revised a number of times, and a number of new marketing-related codes have

been introduced by the ICC. These include the International Code of Sales Promotion,International Code of Practice on Direct Marketing, Code on Environmental Advertising, ICCCode on Sponsorship, and the International Code of Marketing and Social Research Practice.

The ICC codes set rules for member companies, and intend to restrict inter-company competitionto certain acceptable forms, in order to help prevent competition from damaging the environment

or society in locations where the companies operate. In the introductory section of the revised

Advertising Practice Code, the ICC gives the following rationale for its standards: "The

globalization of the world's economies, and the intense competition which ensues therefrom,require the international business community to adopt standard rules. The adoption of these self-

disciplinary rules is the best way that business leaders have of demonstrating that they are

motivated by a sense of social responsibility, particularly in light of the increased liberalizationof markets."

In recent years, employers' organizations in various industries have adopted codes of conductdealing with operational and management practices. For example, the Chemical Manufacturers'

Association has adopted six codes of management practice under the Responsible Care initiative,

launched in 1988. These include codes onCommunity Awareness and Emergency Response,Pollution Prevention, Process Safety, Distribution, Employee Health and Safety and Product

Stewardship.

Anti-apartheid

The first governmental and inter-governmental guidelines for multinationals were created for

foreign companies engaged in business in or with South Africa. South Africa first came intoconflict with the ILO in 1949, when it refused to endorse Convention No. 87 on the Freedom of

Association. In 1961, the ILO passed a resolution specifically criticizing the country's racial

policies in the general field of employment, and advising South Africa to withdraw until suchtime as apartheid was abandoned. In 1963, Government, Employer and Worker delegates

representing thirty-two member States announced, after the opening of the International Labour

Conference, their decision not to participate in the deliberations of the Conference in protest

against South Africa's continued membership. In 1964, the ILO adopted the DeclarationConcerning the Policy of Apartheid.

Great Britain

In 1973, a delegation from the TUC General Council visited South Africa and published a report

recommending as follows: "Opposition to British investments in South Africa should becontinued unless British firms operating in South Africa show in a practical way that they are

encouraging and recognising genuinely independent trade unions for black workers." The House

of Commons established a select committee to investigate the wages and conditions of African
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workers employed by British firms. Its main finding was accepted by the British Labour

government. The government issued amplified guidelines in the form of a Code of Practice forBritish Firms with operating subsidiaries in South Africa, inviting these companies to fileregular reports on progress made in raising African wages and in employment practices. This

1974 White Paper then became the first issue-based code specifically focusing on South Africa.

Most British companies cooperated, but only 43 of the 189 companies that cooperated providedall the information requested in the White Paper. (A summary of the company reports is found inthe International Encyclopaedia for Labour Law and Industrial Relations, underGuidelines:

Background to the Codes.)The European Community

The Code of Practice for British Firms was assessed only once, because it was superseded by the

code of the European Community in 1977. The formal initiative to draw up a European Code of

Conduct, more broadly based than the British Code, came from the British Foreign Secretary,

Dr David Owen, at a meeting of European Community Foreign Ministers on 12 July 1977. At

that time, the European Community's collective share of foreign investment in South Africa was64%, with Britain alone accounting for 54%.

The European Code was formally adopted in September 1977 by the foreign ministers of the

nine Community governments. It emerged in a framework of political cooperation and had the

status of a foreign policy instrument. It stressed the need for an internationally acceptable systemof industrial relations based on collective bargaining and the recognition by employers of

independent trade unions.

The usual processes of consultation between member governments and their respective employer

and trade union interest groups did not take place until after the Code was adopted. The absence

of consultations led to some criticism, particularly from employers' groups. Generally, the Codewas not accepted among employers or their organizations, although the Bundesverband derDeutschen Industrie accepted the political objectives on which the Code was based.

The unions were generally more welcoming of the Code than employers, but scarcely

enthusiastic. The ICFTU especially regretted the lack of a mechanism for verifying company

reports and the absence of sanctions in the case of non-compliance.

United States

In March 1977, fully four months before the meeting of Foreign Ministers initiated the European

Code, theSullivan Principles

(See the six fundamental principles in,Jill Murray, Corporate

Codes of Conduct and Labour Standards) From the start, the principles were actively supported

by the Carter Administration and members of Congress, who were able to pressure othercompanies to subscribe. Within a year of the introduction of the Principles, the number of

subscribing United States companies rose to 103; by 1984, the number had reached 150.

However, this was only about 60% of all US companies known to have a stake in South Africa.Later on, in 1986, theComprehensive Anti-Apartheid Actwas passed by Congress, requiring all

US companies employing more than 25 people in South Africa as well as the US government
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(with respect to its own employees) to adhere to a code of conduct based on the Sullivan

Principles.

The different backgrounds against which the European Code and the Sullivan Principles came

into being goes some way towards explaining the differing achievements ascribed to them. The

European Code was an elaborate version of the British Code, itself a direct descendant of theColonial Office approach. It placed emphasis on the role of collective bargaining and on

achieving minimum wage rate targets. On the other hand, the Sullivan Principles stemmed from

the legacy of combating deeply divisive race discrimination in the United States, the partialhealing of which relied on moral persuasion for employers to provide corrective opportunities for

the disadvantaged. The Sullivan Principles are therefore oriented towards employers' human

resource policies, and did not in their original formulation accord much of a role to trade unions

in the process of change.

Ireland

In 1984 theMacBride Principleswere created with the aim of influencing the behaviour of USfirms in Northern Ireland. The MacBride Principles are a set of nine equal-opportunity guidelines

for companies operating in Northern Ireland, modeled after the Sullivan Principles for firmsoperating in South Africa.

Elimination of unethical business behaviour

Most intergovernmental guidelines for multinational corporations emerged in the 1970s. In the

early 1970s, multinational enterprises (MNEs) were widely criticized for their behaviour indeveloping countries. Host governments and labour organizations claimed that multinational

corporations failed to operate in harmony with local economic, social and political objectives. A

number of interrelated developments - decolonialization, new movements and organizations ofdeveloping countries, etc. - provided the background for these criticisms.

The mood to define a social purpose for MNEs and control their activities was symbolized by the

1974 UN resolution advocating a New International Economic Order, and by the Report of theGroup of Eminent Persons, which was convened by the UN's Economic and Social Council to

report on the regulation of MNEs. The Eminent Persons' Report is a bold expression of faith in

meaningful international action to regulate the power of MNEs, including the "concertation" ofnational labour laws to ensure the global protection of workers. The Report gave rise to

negotiations on a UN Draft Code on MNEs.

In response to pressure from developing countries and human rights groups, several internationalorganizations developed ethics guidelines addressing the conduct of MNEs. In 1976, the OECD

(Organisation for Economic Co-operation and Development) adopted itsDeclaration on

International Investment and Multinational Enterprises. The Declaration constitutes a politicalcommitment, adopted by the governments of OECD member states, to facilitate direct

investment among OECD members. The Declaration contains theOECD Guidelines for

Multinational Enterprises (MNEs), which are divided into separate chapters covering the rangeof MNE activities. These chapters deal with general policies, information disclosure,
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competition, financing, taxation, employment and industrial relations, the environment, and

science and technology.

In 1977, theILO Tripartite Declaration of Principles Concerning Multinational Enterpriseswas

issued. The principles cover MNE activities related to labour matters, such as employment,

conditions of work and life, industrial relations, consultation, examination of grievances andsettlement of industrial disputes. The OECD and ILO codes are still the most universal and

comprehensive international codes of conduct for multinationals.

Some codes adopted by international organizations focus on certain products. For example, in

1981 the World Health Organisation (WHO) adopted theInternational Code of Marketing of

Breastmilk Substitutes, which aims to halt the commercial promotion of bottle feeding and toprotect and promote good infant nutrition.

New social responsibilities for liberalized global business

A new surge of social responsibility emerged in the late 1980s. This time questions focused notso much on disparities between developed and developing countries as on the more visible role

of market forces globally. Asderegulation and privatizationcontinues, corporations are expectedto assume responsibilities and roles which used to be the province of the public sector. As

business and its effects have greater global impact, corporations are expected to bear the

responsibility for the consequences globally.

On the national level, it has been typical of the 1990s that the codes of employers'organizations have become more broadly oriented in social terms, covering issueswhich go beyond simple business or labour matters. The number of such codes hasincreased rapidly. A good example of a country-wide employer code is the revised

version of theCharter for Good Corporate Behavior(1996), of the Japan Federation ofEconomic Organizations (1996). The Charter includes obligations for the subscribingcompanies concerning philanthropic activities; firmness against antisocial forces andorganizations that threaten the order and security of civil society; possibilities foremployees to lead relaxed and enriched lives; guaranteeing a safe and comfortablework environment; respecting employees' dignity and individuality; transparency ofcorporate activities; providing socially useful goods and services; giving fullconsideration to safety; and other matters.

Consumer awarenessA great number of industry-specific codes have emerged recently, mainly in theconsumer goods industries and in industries that are traditionally labour intensive,are concentrated in developing countries, and involve low levels of worker skill.Usually, these codes appeal to consumers, and have been initiated in developedcountries.

United States
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The Clinton Administration has been very active in preparing guidelines for multinationals. The

United States Department of Labor has sponsored sectoral codes, such as theWhite House

Textile and Apparel Partnership on Sweatshops and Child Laborinvolving companies, NGOs,and trade unions. The agreement was adopted in April 1997. ItsWorkplace Code of Conducthas

provisions on child labour (under the age of 15), worker abuse, safety and health, discrimination

and harassment, freedom of association and collective bargaining, as well as wages, benefits andhours. In addition, itsPrinciples of Monitoringhas provisions for independent monitoring. In1995, Clinton Administration created itsModel Business Principleswhich call for "fair

employment practices, including avoidance of child and forced labour and avoidance of

discrimination based on race, gender, national origin or religious beliefs; and respect for the rightof association and the right to organize and bargain effectively".

In the apparel industry, a number of codes adopted by employers' organizations and trade unionshave emerged since 1995. In June 1995, two New York locals of the International Ladies'

Garment Workers' Union (ILGWU) and three industry associations signed a three-year code of

conduct on workers' rights for employers' overseas contractors and subcontractors. The union

and industry parties agreed to a "Code of Conduct for Overseas Vendors" (see summary) thattouches upon key human rights issues covered by conventions of the ILO, including the right to

freedom of association. Two organizations that bring together the bulk of United States apparelproducers and retailers - the American Apparel Manufacturers Association (AAMA) and theNational Retail Federation (NRF) - have also developed codes of conduct. (For codes of conduct

for in the apparel industry and corporate codes of specific apparel companies, see United States

Department of Labour, The Apparel Industry and Codes of Conduct)

Europe

In Europe, the Clean Clothes Campaign, which was launched in Holland in October 1990 and

unites consumer, trade union and other organizations and research institutions, introduced twocodes in 1997. TheCode of Labour Practices for Apparel Industry Including Sportswearand theFair Trade Charter for Garmentsseek an end to the oppression, exploitation and abuse of

workers in these industries (most of whom are women) by advancing concerns of consumers

who purchase products made and sold by these industries. The codes are addressed to retailers,manufacturers, and to all companies positioned in between them. The codes are based on the

ILO's core labour standards, but they also include provisions on wages, working hours, the

employment relationship, and working conditions. The European Apparel and Textile

Organization and the European Trade Union Federation of Textiles also adopted aCharterin1997, the content of which is limited to a list of ILO core standards.

Great Britain

TheBritish Toy and Hobby Association's Code of Practice, which was adopted in1996, forbids the use offorced, indentured or underage labour in the production of toys, anddeals broadly with working and living conditions. It also includes recommendations on working

hours. A slightly amended version of this code was adopted by the International Council of Toy

Industries in May 1996. (See,Jill Murray, Corporate Codes of Conduct and Labour Standards)
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International

The ICFTU adopted a basic code of conduct for use by trade unions as a benchmark whenconsidering codes of labour practice. TheICFTU-ITS basic code, adopted in 1997, is a relatively

short list of key principles meant to correct the deficiencies in various codes of conduct. (For

further reading on trade unions and codes, seeICFTU, Labour and Business in the GlobalMarket). In September 1996 the ITGLWF, FIET and the ICFTU concluded an agreement with

FIFA on theCode of Labour Practice for Production of Goods Licensed by the Federation

Internationale de Football Association (FIFA). In February 1997, the International Labour Officeformed a partnership with the Sialkot Chamber of Commerce and Industry (SCCI) and UNICEF

with the goal of eliminating child labour in the soccer ball industry in Sialkot, Pakistan, during

the next 18 months. TheAgreementmarks the first time the organizations of multinational

corporations and their local suppliers have teamed up with international organizations toeliminate child labour from this specific industrial sector.

Summary ofILO Tripartite Declaration of Principles

Concerning Multinational Enterprises

Scope

Addressed by Governing Body of the International Labour Office

Addressed toGovernments of States Members of the ILO, the employers' and workers' organizations

concerned and the multinational enterprises operating in their territories

Definition of

multinationalsMultinational enterprises include enterprises, whether they are of public, mixed or private

ownership, which own or control production, distribution, services or other facilities outside

the country in which they are based.

Content

Freedom of

association Right to establish and join organizations of workers' own choosing without

previous authorization; Protection of organizations against any acts of interference; Support to representative employers' organizations; Application of the principles of Convention No. 87, Article 5; Right for consultation and exchange of views among workers.

Collective

bargaining and

agreement

Encouragement and promotion of the full development and utilization of machineryfor voluntary negotiation between employers or employers' organizations and

workers' organizations, with a view to the regulation of terms and conditions ofemployment by means of collective agreements;

Provision of facilities as may be necessary to assist in the development of effectivecollective agreements;

Multinationals should not threaten to utilize a capacity to transfer the whole or partof an operating unit from the country concerned in order to influence unfairly those

negotiations or to hinder the exercise of the right to organize; nor should they

transfer workers from affiliates in foreign countries with a view to undermining

bona fide negotiations with the workers' representatives or the workers' exercise of
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their right to organize; Collective agreements should include provisions for the settlement of disputes

arising over their interpretation and application and for ensuring mutually respected

rights and responsibilities; Systems devised by mutual agreement between employers and workers and their

representatives should provide, in accordance with national law and practice, for

regular consultation on matters of mutual concern. Such consultation should not bea substitute for collective bargaining.

Disclosure of

information Governments should supply to the representatives of workers' organizations on

request, where law and practice so permit, information on the industries in which

the enterprise operates, which would help in laying down objective criteria in the

collective bargaining process. In this context, multinational as well as national

enterprises should respond constructively to requests by governments for relevant

information on their operations;

Multinational enterprises should provide workers' representatives with informationrequired for meaningful negotiations with the entity involved and, where this

accords with local law and practices, should also provide information to enable

them to obtain a true and fair view of the performance of the entity or, where

appropriate, of the enterprise as a whole; In considering changes in operations (including those resulting from mergers, take-

overs or transfers of production) which would have major employment effects,

multinational enterprises should provide reasonable notice of such changes to the

appropriate government authorities and representatives of the workers in their

employment and their organizations so that the implications may be examined

jointly in order to mitigate adverse effects to the greatest possible extent.

Settlement of

disputesMultinational as well as national enterprises jointly with the representatives and

organizations of the workers whom they employ should seek to establish voluntary

conciliation machinery, appropriate to national conditions, which may include provisions for

voluntary arbitration, to assist in the prevention and settlement of industrial disputes

between employers and workers. The voluntary conciliation machinery should include equal

representation of employers and workers.

Terms and

conditions of

work

Promote equality of opportunity and treatment in employment, with a view toeliminating any discrimination based on race, colour, sex, religion, political

opinion, national extraction or social origin; Make qualifications, skill and experience the basis for the recruitment, placement,

training and advancement of their staff at all levels; Endeavour stable employment for their employees and should observe freely

negotiated obligations concerning employment stability and social security. In view

of the flexibility which multinational enterprises may have, they should strive to

assume a leading role in promoting security of employment, particularly in

countries where the discontinuation of operations is likely to accentuate long-term

unemployment; Avoid arbitrary dismissal procedures; Provide some form of income protection for workers whose employment has been

terminated; Develop national policies for vocational training and guidance, closely linked with

employment; Ensure that relevant training is provided for all levels of their employees in the host

country, as appropriate, to meet the needs of the enterprise as well as the

development policies of the country. Such training should, to the extent possible,

develop generally useful skills and promote career opportunities. This


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responsibility should be carried out, where appropriate, in cooperation with the

authorities of the country, employers' and workers' organizations and the competent

local, national or international institutions; Participate, along with national enterprises, in programmes, including special

funds, encouraged by host governments and supported by employers' and workers'

organizations. Wherever practicable, multinational enterprises should make the

services of skilled resource personnel available to help in training programmesorganized by governments as part of a contribution to national development;

Offer wages, benefits and conditions of work not less favourable to the workersthan those offered by comparable employers in the country concerned;

When multinational enterprises operate in developing countries, where comparableemployers may not exist, they should provide the best possible wages, benefits and

conditions of work, within the framework of government policies. These should be

related to the economic position of the enterprise, but should be at least adequate to

satisfy basic needs of the workers and their families. Where they provide workers

with basic amenities such as housing, medical care or food, these amenities should

be of a good standard; Provide adequate safety and health standards for their employees; Cooperate in the work of international organizations concerned with the preparation

and adoption of international safety and health standards; Cooperate fully with the competent safety and health authorities, the

representatives of the workers and their organizations, and established safety and

health organizations.

Implementation

ILO Declaration

Acceptance The Declaration or its Annexes do not include anything about the acceptance of theDeclaration by Member countries or enterprises.

At its Sessions, the Governing Body has called upon governments and employers' and

workers' organizations to further promote acceptance of, and adherence to, the principles of

the Declaration. One measure suggested in the 226th (May-June 1984) Session was that the

annual reports of enterprises (both domestic and multinational) should express support for, and

adherence to, the provisions of the Tripartite Declaration.

Reporting

and

monitoring

The Declaration or its Annexes do not include anything about reporting or monitoring.

At its 205th (February-March 1978) Session, the Governing Body invited governments to

report periodically on the effect given to the Declaration after full consultation with the

national employers' and workers' organizations. The action taken by the Governing Body was

confirmed and reinforced in a resolution adopted at the 65th Session of the International

Labour Conference in June 1979. The Governing Body Subcommittee on Multinational

Enterprises is called upon to examine these reports, and the Working Group, constituted by itsOfficers has been entrusted with the task of analysing them before they are submitted to the

Subcommittee.

See thesixth report.

Conflict

settlement When a request for interpretation of the Declaration is received by the International

Labour Office, the Office shall acknowledge receipt and bring it before the Officers

of the Committee on Multinational Enterprises. The Office will inform the

government and the central organizations of employers and workers concerned of any
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request for interpretation received directly The Officers of the Committee on Multinational Enterprises shall decide unanimously

after consultations in the groups whether the request is receivable under the

procedure. If they cannot reach agreement the request shall be referred to the full

Committee for decision. Requests for interpretation may be addressed to the Office as a rule by the

government of a member State acting either on its own initiative or at the request of anational organization of employers or workers; by a national organization of

employers or workers, which is representative at the national and/or sectoral level; by

an international organization of employers or workers on behalf of a representative

national affiliate.

The draft reply to a receivable request shall be considered and approved by theCommittee on Multinational Enterprises prior to submission to the Governing Body

for approval.

The reply when approved by the Governing Body shall be forwarded to the partiesconcerned and published in the Official Bulletin of the International Labour Office.

Summary ofOECD Guidelines for MultinationalEnterprises

Scope

Addressed by Governments of OECD Member countries

Addressed toEntities of multinationals which operate in OECD Member countries and domestic

enterprises of OECD countries.

Definition of

multinationalsMultinational enterprises usually comprise companies or other entities whose ownership is

private, state or mixed, established in different countries and so linked that one or more of

them may be able to exercise a significant influence over the activities of others and, in

particular, to share knowledge and resources with the others. The degrees of autonomy of

each entity in relation to the others varies widely from one multinational enterprise to

another, depending on the nature of the links between such entities and the fields of activity

concerned. For these reasons, the Guidelines are addressed to the various entities within the

multinational enterprise (parent companies and/or local entities) according to the actual

distribution of responsibilities among them on the understanding that they will co-operate

and provide assistance to one another as necessary to facilitate observance of the

Guidelines. The word "enterprise" as used in these Guidelines refers to these various

entities in accordance with their responsibilities.

The labour relations content of the code

Freedom of

association Right of the employees to be represented by trade unions and other bona fide

organizations of employees; Observation of industrial relations not less favourable than those observed by

comparable employers in the host country.

Collective

bargaining and

agreement

Enable authorised representatives of their employees to conduct negotiations oncollective bargaining or labour management relations issues with representatives of

management who are authorised to take decisions on the matters under negotiation;
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Engage in constructive negotiations, either individually or through employers'associations, with such employee organizations with a view to reaching agreements

on employment conditions, which should include provisions for dealing with

disputes arising over the interpretation of such agreements, and for ensuring

mutually respected rights and responsibilities;

Provide such facilities to representatives of the employees as may be necessary toassist in the development of effective collective agreements;

In the context of bona fide negotiations with representatives of employees onconditions of employment, or while employees are exercising a right to organize,

not threaten to utilise a capacity to transfer the whole or part of an operating unit

from the country concerned nor transfer employees from the enterprises'

component entities in other countries in order to influence unfairly those

negotiations or to hinder the exercise of a right to organize.

Disclosure of

information Provide to representatives of employees information which is needed for

meaningful negotiations on conditions of employment; Provide information which enables them to obtain a true and fair view of the

performance of the entity or, where appropriate, the enterprise as a whole; In considering changes in their operations which would have major effects upon

the livelihood of their employees, in particular in the case of the closure of an entity

involving collective lay-offs or dismissals, provide reasonable notice of such

changes to representatives of their employees, and where appropriate to the

relevant governmental authorities and co-operate with the employee representatives

and appropriate governmental authorities so as to mitigate to the maximum extent

practicable adverse effects.

Terms and

conditions of

work

Observe standards of employment not less favourable than those observed bycomparable employers in the host country;

In their operations, to the greatest extent practicable, utilise, train and prepare forupgrading members of the local labour force in co-operation with representatives of

their employees and, where appropriate, the relevant governmental authorities;

Implement their employment policies including hiring, discharge, pay, promotionand training without discrimination unless selectivity in respect of employeecharacteristics is in furtherance of established governmental policies which

specifically promote greater equality of employment opportunity.

Implementation

Acceptance OECD Member countries adopted the code. All enterprises concerned are recommended to indicate publicly their acceptance of

the Guidelines, preferably in their annual reports.

Reporting

and

monitoring

Member Governments shall set up National Contact Points for undertakingpromotional activities, handling inquires and for discussions with the parties

concerned on all matters related to the Guidelines so that they can contribute to the

solution of problems which may arise in this connection. The business community,

employee organizations and other interested parties shall be informed of the

availability of such facilities.

National Contact Points in different countries shall co-operate if such need arises, onany matter related to the Guidelines relevant to their activities. As a general


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procedure, discussions at the national level should be initiated before contacts with

other National Contact Points are undertaken.

The Committee on International Investment and Multinational Enterprises(hereinafter called "the Committee") shall periodically or at the request of a Member

country hold an exchange of views on matters related to the Guidelines and the

experience gained in their application. The Committee shall be responsible for

clarification of the Guidelines. Clarification will be provided as required. TheCommittee shall periodically report to the Council on these matters.

The Committee shall periodically invite the Business and Industry AdvisoryCommittee to OECD (BIAC) and the Trade Union Advisory Committee to OECD

(TUAC) to express their views on matters related to the Guidelines. In addition,

exchanges of views with the advisory bodies on these matters may be held upon

request by the latter. The Committee shall take account of such views in its reports to

the Council.

If it so wishes, an individual enterprise will be given the opportunity to express itsviews either orally or in writing on issues concerning the Guidelines involving its

interests.

The Committee shall not reach conclusions on the conduct of individual enterprises. This Decision shall be reviewed at the latest in six years. The Committee shall make

proposals for this purpose as appropriate.

Conflict

settlement Member countries may request that consultations be held in the Committee on any

problem arising from the fact that multinational enterprises are made subject to

conflicting requirements. The Member countries concerned shall give prompt and

sympathetic consideration to requests by Member countries for consultations in the

Committee or through other mutually acceptable arrangements, it being understood

that such consultations would be facilitated by notification at the earliest stage

practicable. Member countries concerned will co-operate in good faith with a view to

resolving such problems, either within the Committee or through other mutually

acceptable arrangements.

The Committee will continue to serve as a forum for consideration of the question ofconflicting requirements, including, as appropriate, the national and international

legal principles involved.

Summary of Sweatshop and Clean Clothes Codes

Scope of the codes

Sweatshop Code Clean Clothes Code

Addressed by Business for Social Responsibility, InterfaithCenter on Corporate Responsibility,

International Labor Rights Fund, LawyersCommittee for Human Rights, National

Consumers League, Union of Needletrades,

Industrial and Textile Employees, Robert F.

Kennedy Memorial Center for Human

Rights, Retail Wholesale Department Store

Union, AFL-CIO and some individual

companies (seemembers of the partnership)

Alternative Consumer Union, Phillipine

Group Netherlands, Bangladesh People

Solidarity Center, The Center for Researchon Multinational Corporations (SOMO),

India Working Group of the Netherlands and

the Federation of Worldshops in the

Netherlands

Addressed to Individual apparel companies Retailers as well as manufacturers and all
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companies positioned in between those in the

apparel and sportswear including sports

shoes supply chain, industry associations and

employer organizations

Definition of

apparel industryNo definition Apparel and sportswear products (including

sportshoes). The code specifically applies to

the following general industrial classificationof economic activities within the European

Community (NACE) classification codes:

436 knitting industry 451 manufacture of mass-produced

footwear

452 production of hand-madefootwear

453 manufacture of ready-madeclothing and accessories

454 bespoke tailoring, dressmakingand hatmaking

456 manufacture of furs and of furgoods

The labour relations content of the codes

Sweatshop Code Clean Clothes Code

Freedom of

Association and

Collective

Bargaining

Employers shall recognize and respect the

right of employees to freedom of association

and collective bargaining.

The right of all workers to form and join

trade unions and to bargain collectively shall

be recognized (ILO Conventions 87 and 98).

Workers' representatives shall not be the

subject of discrimination and shall haveaccess to all workplaces necessary to enable

them to carry out their representation

functions (ILO Convention 135 and

Recommendation 143). Employers shall

adopt a positive approach towards the

activities of trade unions and an open attitude

towards their organizational activities.

Forced labor

and child laborThere shall not be any use of forced labor,

whether in the form of prison labor,

indentured labor, bonded labor or otherwise.

No person shall be employed at an age

younger than 15 (or 14 where the law of the

country of manufactureallows) or younger

than the age for completing compulsory

education in the country of manufacture

where such age is higher than 15.

There shall be no use of forced, including

bonded or prison, labour (ILO Conventions

29 and 105). Nor shall workers be required to

lodge "deposits" or their identity papers with

their employer.

There shall be no use of child labour. Only

workers above the age of 15 years or above

the compulsory school-leaving age shall be

engaged (ILO Convention 138). Adequate

transitional economic assistance and

appropriate educational opportunities shall be

provided to any replaced child workers.


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Employment

relationshipObligations to employees under labour or

social security laws and regulations arising

from the regular employment relationship

shall not be avoided through the use of

labour-only contracting arrangements, or

through apprenticeship schemes where there

is no real intent to impart skills or provideregular employment. Younger workers shall

be given the opportunity to participate in

education and training programmes.

Equal treatment Every employee shall be treated with respectand dignity. No employee shall be subject to

any physical, sexual, psychological or verbal

harassment or abuse.

No person shall be subject to any

discrimination in employment, including

hiring, salary, benefits, advancement,

discipline, termination or retirement, on the

basis of gender, race, religion, age, disability,sexual orientation, nationality, political

opinion, or social or ethnic origin.

Equality of opportunity and treatment

regardless of race, colour, sex, religion,

political opinion, nationality, social origin or

other distinguishing characteristic shall be

provided (ILO conventions 100 and 111).

Health and

safety

Employers shall provide a safe and healthy

working environment to prevent accidents

and injury to health arising out of, linked

with, or occurring in the course of work or as

a result of the operation of employer

facilities.

A safe and hygienic working environment

shall be provided, and best occupational

health and safety practice shall be promoted,

bearing in mind the prevailing knowledge of

the industry and of any specific hazards.

Physical abuse, threats of physical abuse,

unusual punishments or discipline, sexual

and other harassment, and intimidation by the

employer is strictly prohibited.

Wages and

benefitsEmployers recognize that wages are essential

to meeting employees' basic needs.

Employers shall pay employees, as a floor, at

least the minimum wage required by local

law or the prevailing industry wage,

whichever is higher, and shall provide legally

mandated benefits.

In addition to their compensation for regular

hours of work, employees shall be

compensated for overtime hours at such

premium rate as is legally required in the

country of manufacture or, in those countries

where such laws do not exist, at a rate at least

equal to their regular hourly compensation

rate.

Wages and benefits paid for a standard

working week shall meet at least legal or

industry minimum standards and always be

sufficient to meet basic needs of workers and

their families and to provide some

discretionary income. Deductions from

wages for disciplinary measures shall not be

permitted nor shall any deductions from

wages not provided for by national law be

permitted without the expressed permission

of the worker concerned. All workers shall

be provided with written and understandable

information about the conditions in respect of

wages before they enter employment and of

the particulars of their wages for the payperiod concerned each time that they are

paid.

Hours of work Except in extraordinary businesscircumstances, employees shall (i) not be

required to work more than the lesser of (a)

48 hours per week and 12 hours overtime or

(b) the limits on regular and overtime hours

Hours of work shall comply with applicable

laws and industry standards. In any event,

workers shall not on a regular basis be

required to work in excess of 48 hours per

week and shall be provided with at least one


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allowed by the law of the country of

manufacture or, where the laws of such

country do not limit the hours of work, the

regular work week in such country plus 12

hours overtime and (ii) be entitled to at least

one day off in every seven day period.

day off for every 7 day period. Overtime

shall be voluntary, shall not exceed 12 hours

per week, shall not be demanded on a regular

basis and shall always be compensated at a

premium rate.

Implementation of the codes

Sweatshop code Clean clothes code

AcceptanceCalls individual companies to voluntarily adopt

the code and require their contractors to adopt

the code

Calls companies, industry associations or

employers' organizations to adopt the code and

require their contractors to adopt the code

Reporting

and

monitoring

Those companies which adopt the code shall

establish an Internal Monitoring System that

outlines the obligations each company will

undertake to ensure that the Code of Conduct is

enforced in its facilities and its contractorsfacilities both domestically and internationally.

Those companies which adopt the code make a

commitment to form an Association over the

next six months that will:

Recruit new member companies whichalso will abide by the Code and

implement independent monitoring; Develop a reliable, independent means

to provide for public confidence that

the above obligations are being met;

and Develop a mechanism or seal of

approval informing consumers about

which companies abide by the Code

and monitoring.

Independent External Monitors will conduct

independent reviews of participating company

policies and practices; provide company

employees and contractors employees with

secure communication channels to report

concerns of noncompliance; audit production

records and practices to ensure compliance;

conduct employee interviews and site visits; andverify that the company is in compliance with its

obligations and commitments under the Code of

Conduct.

When adopting the code, the company agrees

to take positive actions to implement the code,

to incorporate the code into all of its

operations and to make the code an integral

part of its overall philosophy and generalpolicy. The company will assign responsibility

for all matters pertaining to the code within its

organization and inform the independent

institution and other relevant bodies where this

responsibility is assigned. The Board of

Directors (or other governing body) of the

company shall periodically review the

operation of the code, including the reports of

internal and external monitoring. The company

accepts responsibility for observing the code

with respect to all employees and workers that

it supervises and agrees to:

1. assign responsibility forimplementing this code at each place

that it owns or controls;

2. ensure that all workers are aware ofthe contents of the code by clearly

displaying an authorised text of the

code at all workplaces and by orally

informing these employees in a

language understood by them of the

provisions of the code;

3. refrain from disciplining, dismissingor otherwise discriminating against

any employee for providinginformation concerning observance of

this code.

The company will make observance of the

code a condition of all agreements that it

enters into with contractors, suppliers and

licensees.


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When a sufficient number of companies,

industry associations or employers'

organizations have adopted the code of labour

practice for the apparel and sportswear

industry, then they, in conjunction with

appropriate trade union organizations and

NGOs, shall establish jointly an independentinstitution, referred to in this document as "the

Foundation", which conduct, directly or

indirectly, through other organizations, the

independent monitoring of compliance with

the code; assist companies in implementing the

code; and provide a means to inform

consumers about observance of the code and

more generally about labour conditions in the

industry.

Companies adopting the code of labour

practice for the apparel and sportswear

industry shall enter into an agreement with theFoundation. This agreement shall provide for

the following:

the time-frame in which theproduction in the different facilities

should comply with all the standards

in the code;

the information the company has togive to the Monitoring Foundation;

the payments the company shouldmake to the Monitoring Foundation;

the procedures for the actualmonitoring and the obligations of thedifferent parties; and

the use of the Foundation contract bythe company in its public relations.

Summary of football c

labour laws for multinationals

Documents