#6_Global Framework Agreements: Progress at snail’s pace or new boost?

With 190 conventions accompanied by recommendations and protocols, and the regular sessions of the International Labour Conference, in which representatives of states, employers and unions debate over reports the ILO’s rule system looks like an impressive framework for upholding and enforcing labour standards worldwide. Indeed, it actually is one, but still much more in terms of global rule-making rather than effective rule enforcement. In fact, the progress towards an universal coverage and compliance is at snail’s speed. Of course, ILO conventions cover a huge range of topics from health and safety issues in special industries, the governance conventions on labour inspection and tripartite dialogue within the ILO itself, various issues of working time, pay and social security as well as labour statistics’ criteria. And yes, on a global scale, within the United Nations framework of human rights, the fundamental importance of those conventions in setting an universal floor of industrial rights at work can’t be underestimated (ILO Declaration on Fundamental Principles and Rights at Work, 1998).

And yet, one is surprised to learn that globally active corporations and other business firms still are not directly covered by those standards in their dealings with employees and workers worldwide. At first sight, one would expect that elementary rules such as the prohibition of child and forced labor, equal treatment and non-discrimination, and respect for the right of employees to organize freely into unions and to bargain collectively have universal coverage. However, these standards are violated around the globe and only the most extreme violations stir up public attention. And even then, violators have a good chance to get away with it, because the ILO has no immediate option to issue and policing any sanctions. The ILO conventions are binding for states, not for private businesses or multinational corporations directly, and in many situations the local law of the land prevails regardless of whether an ILO convention is ratified and would specify otherwise. Although not all violations are related to or caused by multinational corporations (MNCs), in many cases labour standards violations take place in MNCs’ global production networks and supply chains, making them direct or indirect beneficiaries of exploitative captures, particularly from production networks’ peripheral parts, i.e. their subsidiaries’ (sub-)contractors and informal labour in the global South (IlO, 2016).

Within such a context, Global Framework Agreements (GFAs, sometimes also International Framework Agreements, IFAs), are a company-related attempt by Global Union Federations (GUF) to uphold ILO norms, for regulating global labour relations and provide a space for improving working conditions throughout the operations of a MNC’s production network (Hammer, 2005). As such, GFAs as a regulatory instrument are located between voluntary standards (e.g. Codes of Conduct) and international law (e.g. ILO conventions). In contrast to the unilateral and voluntary character of corporate social responsibility initiatives, GFAs are bilateral agreements between multinational corporations and global union federations (GUFs) with their local affiliates in many countries (Tørres & Gunnes, 2003; Egels-Zandén, 2009). And in contrast to a direct and sanction-based international legal regulation, for example legitimized through an potentially empowered ILO rule system, GFAs are a second best only, because they can stipulate their effects only indirectly through social dialogue, for example, by supporting the right to form independent unions or the right to bargain collectively where a MNC is present (Mund & Priegnitz, 2007). However, because GFA directly involve workers’ representatives they constitute a social dialogue which is more participative for and responsive to those workers directly experiencing the impact of labour standard violations, than, say, certificates negotiated with customer groups (Donaghey et al, 2014; Lévesque et al., 2018).

Overall, it is fair to say that GFAs are still an instrument used very little and spreading rather slowly (Miller, 2004). The first GFA was signed in 1994 between IUF and the French food giant Danone. Today, estimates oscillate between 110 and 130 functional GFAs, i.e. those agreements connected to an identifiable practice of implementing their rules. This means that roughly a good hundred of MNCs have signed a GFA in the last 25 years which compares to more than a 100,000 MNCs worldwide (Hadwiger, 2015; UNCTAD, 2011). Although GFAs have been signed with MNCs on nearly all continents, the majority of GFAs have been negotiated between central managements of MNCs headquartered in the European Union. And, the majority of all GFAs has been initiated by two GUFs: IndustriAll and UNI_global union, also because not all GUFs cheer for the instrument as a strategic priority (Anderson, 2015). Nevertheless, GFAs carry valuable and promising potential, at least for the millions of signatory MNCs’ direct employees and the even larger number of people employed in their wider supply chain.

Potential is good, real impact is better? So far, research findings on the GFAs implementation shows a rather critical overall picture, with a few instances of positive solutions found for single issues in a couple of cases (Papadakis, 2011). Ideally, GFAs extend to subsidiaries, alliance partners, joint ventures as well as suppliers and sub-contractors. However, in many cases this extension cannot be guaranteed by the actors involved for various reasons. For example, where a GFA is subordinated under the rubric of “Corporate Social Responsibility (CSR)” the GFA’s implementation often varies with corporate ambitions in that area. Hence, the observation that implementation of GFAs is not uniform across cases, but varies substantially from one corporation to the next and between locations and divisions of one and the same MNC. Next, there is often a large number of diverse organizations involved in varying institutional contexts. For example, signatory organizations, local union representatives and subsidiary’ managers need to translate a headquarter-level agreement into a locally understandable practice; sometimes, also local government officials and agencies are involved, too. Within economic settings which involve being attractive for foreign direct investment through low wages, local governments’ responses may not be beneficial for GFA implementation. Also, in a number of local jurisdictions collective worker rights are heavily violated. Additionally, the provisions of the agreement itself play a role. For example, whether local complaints can reach the top bottom-up reliably or whether a suitable conflict resolution mechanism has been specified in the agreement. Apart from the organizational constraints set by the scope and structure of the global production network, a major limitation is the GFA’s resources (money, staff, …) to influence local implementation and enforcement. However, if initiated in institutional environments with dedicated and active unions and collaborative managements, and where unions are connected with each other across borders, GFAs are more likely to bring about innovative solutions for single local problems of labour standard violations (Barreau et al., 2020).

As for GFAs’ future, a couple of recent developments might be positive for the GFA as a policy instrument; although a “boosting” in the true meaning of the term may be an exaggerated expectation. In some cases, additional implementation agreements for single MNCs’ host countries have been negotiated, directly involving local actors in the process of translating the GFA in local practice, not least because management values unions as additional “monitoring agents” for their local operations (Bourguignon et al., 2019). Also, the Bangladesh accord (Accord on Fire and Building Safety, 2017) – triggered by the Rana Plaza catastrophe in 2013 in Bangladesh – is a promising example for future GFAs, because it includes a local and global widening of the stakeholders involved, peculiar implementation measures (building safety, health and safety), resourcing as well as the option for legal litigation in the case of violations (Schüßler et al., 2019). Furthermore, the recent initiatives towards due diligence and supply chain transparency legislation in various countries might provide GFAs with a new role (European Commission, 2020), inasmuch as respective legislation might effectively contribute to establish “joint liability” in supply chains (Anner et al., 2013; Davidov, 2015).

References
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