#18_ Policies for upholding global labour standards: A quick guide through the jungle

Despite the general framework of the ILO conventions and recommendations, global labour standards remain difficult to enforce in global production and supply chains. One reason for these difficulties is that national and local rules for labour standard enforcement diverge in quality and strength. Another reason is that the transnational arena of labour relations is highly fragmented into substantive domains and regulatory levels. Hence, the global regulation around labour standards consists of various sub-arenas, each characterized by its own set of actors, rules, instruments, and policies. For those new to the debates, the sheer number of various instruments can be overwhelming, irritating, and difficult to understand. Therefore, here, a quick guide through the jungle of policies and instruments for upholding global labour standards is given. The purposes of this quick guide are: (1) to assist in gaining a first overview that allows sorting and orientation, and (2) providing a rough contextualization of each policy instrument for further examination. The focus is on policies directly concerned with global labour standards in multinational firms and production networks, more indirect forms of influencing labour standards such as economic and social development policies, or political and cultural aspects of interpreting labour standards are neglected here (for such an overview see for example Scherrer, 2017). Also, a warning must be issued directly at the start: Expectations of a “one fix for all” problems with labour standard enforcement in global production seem to be futile. Rather, a more productive approach seems to be the close examination of the pros and cons of each policy – also in comparison to each other – and then look for the best options of how the various policy instruments can be productively combined – also in experimental ways in practice – to lever complementarities and reduce each other weaknesses (e.g., Eberlein et al. 2014, Haipeter et al., 2021).

For sorting the policy instruments, I use the framework of labour governance in global production given in Anner (2021). Building on Gereffi and Lee (2016), this framework helps in distinguishing the various instruments by introducing three broad types of governance mechanisms: (1) a public governance mechanism (e.g., labour inspection, labour law, welfare policies social governance), (2) a private governance mechanism (e.g. market driven CSR of single multinational firms, industries or clusters of firms), or (3) a social governance mechanism (e.g. multi-stakeholder, CSO or union-centred instruments). However, Anner emphasizes the instruments’ usefulness to fulfil the regulatory goals and ambitions in reflecting upon the extant political and economic imbalances in global production. This consideration brings in the extensive discussion on corporate social responsibility and the regulation of multinational firms in economics, sociology, political science, and the study of international law. If there is a joint learning from this broad discussion at all, then it seems to be that policies and instruments for upholding and disseminating global labour standards can be and are evaluated by using a variety of criteria, largely depending on the theoretical perspective or analytical focus chosen. The following criteria play a prominent role in these debates on regulations: the spatial scope, coverage and targets, substantive issue domain, legitimacy, accountability, responsiveness, transparency, representativeness as well (legal) liability, obligations, and practicality, including the fit between instruments (Vogel, 2005; Black, 2008; Ruggie, 2009; Anner et al., 2013; Niforou, 2014; Eberlein et al., 2014; Outhwaite & Martín-Ortega, 2019). Which (sets of) criteria are used to evaluate or compare policies largely depends on the precise questions asked about labour standard enforcement. Of course, this is an issue of utmost importance requiring thorough reflection and investigation as well as careful examination and scrutiny of each instrument. For the sake of giving a rough guide to the variety of instruments and policies around global labour standards, this route is not followed here. Rather, the following listing of the instruments follows by and large the chronology of the discussion in the academic literature starting with public governance, followed by private governance, and ending with the social governance instruments and mixed policies. For each instrument, reference is made to prominent examples and introductory texts – either from the #LIB or from the literature – to start an engagement with more depth than can be delivered by a quick overview.

Public governance

Public governance is every policy that is state related whereby “state” is to be understood widely, i.e., including national, intergovernmental, supranational, and trans-governmental institutions, agencies, and organizations (Eberlein et al. 2014: 3). Hence, the instruments and policies discussed below include regulations on various levels.

ILO framework. In the area of global labour standards, the ILO framework with its 190 Conventions and recommendations is the most important framework of rules. Because of its tripartite structure, in which representatives of the member states as well as the representatives from employer organizations and trade unions of the respective country are represented, the ILO assemblies bring together a core set of actors for reflecting national experiences in defining a universal set of rules and standards with a global scope, in principle. At the same time, the ILO standards also provide a framework for how these rules could be put the regulatory practice within single policy domains within the states which also includes the definition of joint terminologies, definitions, and measurement standards. However, the ILO functions without an executive dimension. Apart from single initiatives and programs, such as the better work program, which are supportive of capacity building and knowledge dissemination, the ILO cannot enforce its rules on the ground. Therefore, nation states play a crucial rule in adapting their policies and instruments in substantive domains accordingly which leads to great variety in the shape, weighting, and composition of policies and instruments in each country’s labour regulation. In other words, rather than a uniform or harmonized labour regulation, each country continues to have a distinctive set of institutions and labour law regulations of varying strength and enforcement.

Labour inspection. One very direct instrument is labour inspection to control and enforce labour standards within workplaces. Across states and sectors the precise organization and strategies of labour inspection differs in the details, but, in principle, labour inspectorates as part of state administrative bodies could “police” the basic obligations from the labour law. This holds for health and safety regulations, but also other state-set rules like minimum wages, social security payment, and rules in other areas. As for labour standards enforcement in a transnational context, this also includes initiatives for local capacity building, but also the formation of new supranational national agencies such as the European Labour Agency (ELA).

Trade agreements. Another area in which global labour standards are tried to be implemented through public governance mechanisms is the international trade policy. Countries define the ground rules for the exchange of goods and services in various treaties. In this policy area, various supranational agencies play a role, above all, the multilateral World Trade Organization (WTO). In contrast to the ILO, the WTO has mechanisms for dealing with trade disputes between countries if there are accusations of rule violations such as unjustified tariffs or price dumping. Hence, there have been recurrent demands to implement the ILO standards into the WTO treaties for the purpose of applying the WTO sanctioning mechanisms also in cases of labour standard violations (Scherrer, 2017). These initiatives have been frustrated so far, largely because of fears that an inclusion of labour standards into the terms of global trade could be a form of protectionism hampering the exports of low and medium-income countries, and thereby, excluding them from participation in global supply chains (for a recent discussion of this issue see Carrère et al. 2022). However, the last decades saw more and more attempts to bring labour standards into bilateral trade agreements, i.e., those between single states, and multilateral agreements, i.e., those between a grouping of states such as the European Union or NAFTA and single countries (Zimmer, 2018). Examples for bilateral Free Trade Agreements (FTAs) are those between the United States and various countries (one exemplary discussion for the U.S. and Bangladesh agreement by Brown, 2015); for multilateral agreements, those between the European Union and other countries are an example (Myant, 2022). Case studies on the effects of trade agreements reveal, among other things, that it is also relevant for the effectiveness of social clauses in trade agreements in what form labour standards are brought into the model agreements’ texts (Marx et al., 2017). As a special variety, bilateral agreements on persons’ movements across borders can also be listed, however these agreements’ impact on upholding labour standards in more fluid supply chains has not been examined explicitly so far (e.g., Chilton & Woda, 2022).

Guidelines for multinational corporations. Already pointing towards the private regulatory mechanisms, another instrument has been the issuing of principles and guidelines by international bodies such as the UN Global compact in combination with the Sustainable Development Goals (SDG), the ILO Tripartite Declaration of Principles or the OECD Guidelines for Multinational Enterprises (for the OECD see the assessment by Ford & Gillan, 2021). These principles – or varieties thereof – are also used as frames of reference in the trade agreements mentioned before.

Public procurement. Somewhat more recently, there have been demands to make compliance with labour standards along the supply chain also a criterion in public buying, i.e., when the state itself acts as a buyer („state as client“). States and public administration as well as public organizations and state-run enterprises are customer and clients to a host of businesses in their regular operations as well as in their policy programs and larger infrastructure or construction projects (Martin-Ortega et al., 2015; Amann et al. 2014). If the accompanying public orders of goods and services would be made through tender processes and order fulfilment in which labour standards are obligatory, then, the dissemination of labour standards also may spill-over into other business areas (Sack & Sarter, 2022). Similarly, where the state acts as a provider of certain services itself (“state as provider, owner, and employer”), state-run enterprises and public organizations could be made directly responsible for upholding labour standards in their own operations.

Supply chain laws. Most recently, several initiatives have been taken for direct supply chain regulation on national, supranational like the European Union (European Union Directive on Corporate sustainability due diligence) and on the global level through (UN treaty on transnational corporations and human rights). While in a couple of countries these supply chain regulations have already been put into national law, in others, political discussions are just beginning. The basic idea of this sort of regulation is to install and generalize what has been called joint liability, i.e., large corporations and corporate buyers are held responsible for the labour standard violations happening in their wider supply chain (e.g., Anner et al. 2013). Much depends on the details of how such a supply chain regulation is implemented and enforced, and what it contains in substance. For example, a critical issue is whether supply chain regulation follows a rights-based approach, which also includes the definition of individual rights of victims to bring violators to court (“legal liability”) or suing them through class-actions for compensation payments, for example. Alternatively, supply chain regulation can be more of an administrative kind in which violations are persecuted through state agencies and punished accordingly. Another issue is whether these regulations contain largely auditing, transparency, and reporting duties or whether they are extended towards what has been called mandatory due diligence, i.e., rules’ scope also extends to multinationals’ responsibility and accountability for what actions they have taken in their business operations internally to end or at least reduce the risk of labour standard violations in their supply chains. Rarely discussed in this context is the question whether there should also be a limitation put on the expansion of supply networks, for example, by defining certain conditions of employment directly or prohibiting certain forms of subcontracting.

Transnational welfare policies. Even newer are suggestions to think about new transnational welfare policies which are especially dedicated to the situation of transnational supply chain exposure of local workforces. For example, buyer firms could be made subject to pay into unemployment and social security funds for local workers in the Global South who may lack social insurance in their respective countries (Kuruvilla, 2021). Similarly, supply chain regulation could make the establishment of buyer funds obligatory out of which compensation payment could be made to the victims of detected labour standard violations.

Private governance

Due to the weaknesses and complexities of public governance in cross-border settings, involving serious stumbling blocks for a straightforward enforcement because of heterogeneous national jurisdictions and traditions of labour law, the last decades have seen a voluminous public and academic discussion of the pros and cons of private governance mechanisms. According to the concept private governance mechanisms are centred around company-driven policies. Company-driven policies have been largely debated under the rubric of Corporate Social Responsibility, Social Accountability and Sustainability. These company-driven policies can be grounded in ideas that relate the upholding of labour standards to situations in which it is in the best economic interest of firms to uphold these standards (Vogel, 2005). And, indeed, for certain groups of transnational firms they exist incentives to couple the voluntary upholding of labour standards with an economic upgrading of their position in the value chain, especially if supported by the technological requirements of production as well as respective trade and industrial cluster policies of their home market governments (Gereffi & Lee, 2016). Also, large firms in a sector or market may collaborate on taking labour standards out of competition to avoid a race to the bottom in their industry, also ruining the viability of the businesses themselves (Scherrer, 2017). On these ground companies engage in various self-binding activities that may benefit the enforcement of global labour standards.

Voluntary business initiatives. The typical voluntary initiative is the signalling of adherence also to labour regulation through corporate codes of conduct and compliance management by a single firm or a grouping of firms (already Tulder & Kolk, 2001). Often, these business codes refer to the guidelines issued by international organizations (s. above). Additional instruments contain mechanism for internal whistleblowing about corporate misconduct and the setup of organizational responsibilities for compliance management.

Non-financial Auditing. Going one step beyond the voluntary self-declaration to adhere to labour standards is the membership and application of certain certification schemes in which third bodies audit whether a corporation fulfils the respective standards. There is wide variety of these standards reaching from technical process standards, non-financial reporting standards to the social auditing of local subsidiaries and supplier firms. Examples are the ISO 45001, the Global reporting initiative (GRI) or SA 8000. There are also international standards like.For example, financial institutions and institutional investors, use a variety of these standards as ESG (Environment-Social-Governance) indicators for channelling investment funds into firms that have a proven record of adhering to social standards in their business conduct.

Alternative business models. More recently, debates have been started about alternative ways of doing business either by rearranging the governance structures of firms themselves or by. Such alternative models are B Corporations or cooperatives that already include the adherence to social standards in their business statutes as goals on par with business criteria (e.g., Hiller & Shackelford, 2018; Ridley-Duff & Bull, 2021). Also, more traditional organizations can experiment with different ways of doing business in engaging in a re-organization of work processes along the supply chain by job design or using IT-Tools such RFID, machine learning, or blockchain to root out preventively high-risk processes in their supply chain.

Social governance

Given certain pitfalls and deficiencies of private governance mechanisms, a variety of social governance mechanisms have been proposed and enacted almost simultaneously, these are largely driven by civil society organizations and non-governmental organizations of various sorts. These initiatives are also “private” as far as they are “non-state-driven”, but they emanate from society rather than the rule of the private market. According to the concept, social governance also includes union initiatives that directly involve workers in the definition and monitoring of policies, thereby fulfilling the representativeness criterion (e.g., Outhwaite & Martín-Ortega, 2019).

Civil society advocacy. Many initiatives coming from civil society organization center around campaigns that raise awareness for labour standard violations or propagate certain initiatives like the campaigns for living wages (for an exemplary grouping see European Coalition for Corporate Justice). Some civil society initiatives also collaborate with private firms in that they issue certifications and social auditing.

Consumer-driven initiatives. In the realm of social governance, there is also a myriad of various consumer-driven initiatives that might be grouped under the rubric of ethical buying. Here, there is a clear overlap with social governance mechanisms as often civil society organizations form certain “labels” to indicate whether products come from firms that uphold labour standards or other criteria (Baumann-Pauly et al., 2017).

Global union agreements. Global union federations have issued a couple of initiatives that resemble NGO campaigns, but also have attempted to reach direct agreements with multinational firms in which the latter oblige to uphold labour standards in their global operations. Occasionally, these agreements extend into negotiations beyond single firms (e.g., ACT), but rarely achieve the status of what might be regarded as a genuine transnational collective agreement for a multitude of firms (the one exception are the ITF seafarers’ agreements). Recently, however, a small number of global framework agreements have been developed further into systems of agreements that cover a wider array of issues such as supply chains and implementation in various countries. Also, in the academic literature some signs have been identified of how collective bargaining could be extended towards (global) production networks and supply chains (Anner et al. 2021).

Multi-agent-initiatives. The latter builds also on experiences with mixed forms of social regulation that aim for combining various governance mechanisms (private-social-public) for lifting the effectiveness of regulations. Examples of this sort of multi-agent regulations are multi-stakeholder dialogues such as the one practices around the Bangladesh accord (e.g., Ashwin, Oka, Schuessler, Alexander & Lohmeyer, 2020), the Indonesia collective bargaining protocol (e.g., Zimmer, 2020) or the Better Cotton initiative (e.g., Riisgaard et al., 2021). The multi-agent or mixed form is also observed in certain program such as the “Better Work”-program which is a combined effort of the ILO and the International Finance Corporation that aims for bringing together firms, employers, workers, and their unions as well as local authorities to build capacities for upholding labour standards on the ground (for one assessment see Pike, 2020).

Already this brief and rough overview shows that there is vast array of various policies and instruments intended to uphold global labour standards, and very likely others could be added. Of course, much is to be done in comparatively evaluating these policies and instruments in terms of the different criteria outlined above. To name but a few questions: Who is represented in defining the policies and why? Who is reached by a certain policy? What working conditions are improved on the ground and how? Does the instrument target the cause of labour standard violations or does it cure a symptom? How effective are certain implementation processes? As outlined elsewhere the most urgent issue around these various instruments and policies is how these can be combined in order to end the ongoing violation of labour standards (Eberlein et al., 2014). In studying the relations and connections between different policies and instruments, different actor constellations are to be examined and how they may or may not connect to other policy fields and domains. This underlines the need for multi-disciplinary research activities that engage with the complementarities as well as the substitutive pressures between single initiatives. Of course, this a formidable research question about the complementarity and fit of various regulatory approaches faced with the complexities of global production networks, supply chain regulation, and international politics. Beyond that, of course, finding solutions to this challenge also is a practical question for those engaged in the various sub arenas of global labour politics: How to trigger a productive dialogue and combine forces to lift the conditions of workers around the globe?


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