International Labour Office Multinational Enterprises Programme TRIPARTITE DECLARATION OF PRINCIPLES CONCERNING MULTINATIONAL ENTERPRISES AND SOCIAL POLICY

International Labour Office Multinational Enterprises Programme MNE Declaration Added Value  Universal reference point for social responsibility agreed by governments, business and labour  balances roles and responsibilities of governments, business and labour  applies equally across countries of operation

International Labour Office Multinational Enterprises Programme MNE Declaration Offers  Business – Multinational and local:  ongoing and productive partnerships in global markets  risk management  Unions:  fundamental rights at work  skills training for employability  good working conditions / health & safety  sound industrial relations  Governments:  investment flows  partnerships to build decent work and reduce poverty

International Labour Office Multinational Enterprises Programme MNE Declaration Issues  Background and aim  General policies  Employment  promotion, equality, security  Training  Conditions of work and life  wages and benefits, child labour, safety and health  Industrial relations  freedom of association and right to collective bargaining

International Labour Office Multinational Enterprises Programme MNE Declaration Background and aim  Two interdependent aims  encourage MNEs’ positive contributions to economic and social progress  minimize and resolve difficulties arising from MNE operations

International Labour Office Multinational Enterprises Programme MNE Declaration General policies Government, business and labour, through consultations and good practice:  obey national laws  respect international standards  United Nations human rights instruments  fundamental principles and rights at work  support development priorities

International Labour Office Multinational Enterprises Programme MNE Declaration Employment  promote full and productive employment in MNEs, directly and through linkages  pursue equality of opportunity and treatment  enhance employment security in set-up and changes of MNE operations

International Labour Office Multinational Enterprises Programme MNE Declaration Skills training  develop national policies for vocational training and guidance  ensure training meets needs of MNEs and host country labour market  encourage skills development for employability

International Labour Office Multinational Enterprises Programme MNE Declaration Conditions of work & life  wages, benefits and conditions of work in MNEs as favourable as those of comparable employers  if no comparable employers, best possible conditions in MNEs  basic amenities of a good standard for workers  help abolish child labour  ensure highest standards of safety and health at work

International Labour Office Multinational Enterprises Programme MNE Declaration Industrial relations  standards of industrial relations in MNEs as favourable as those of comparable employers  respect freedom of association and the right to organize  recognize and facilitate collective bargaining  systems for consultations - not a substitute for collective bargaining  processes to examine individual and joint grievances and voluntary conciliation machinery to prevent and settle disputes

International Labour Office Multinational Enterprises Programme MNE Declaration National, regional and sectoral initiatives  building tripartite partnerships  stimulating consultations and coordinated action among government, business and labour  influencing government action: FDI and employment policies  helping collective bargaining agreements  providing input at regional levels

International Labour Office Multinational Enterprises Programme MNE Declaration Principles in practice Building partnerships: Brazil National Accord for Accountability: Benzene Accord  preventing occupational exposure to benzene  shared responsibilities by MNEs, chemical industry trade unions and government  at plant level: workers monitor and enforce the agreement  at national level, a tripartite commission:  oversees developments, monitors compliance and promotes studies  supplements laws and regulations  provides for alternative control measures  issues certificates for the controlled use of benzene

International Labour Office Multinational Enterprises Programme MNE Declaration Principles in practice Building partnerships : closure of KEM gold mine in Indonesia  poor remote rural area with food insecurity: miners wages help support 28,000 villagers  before closing operations, MNE consulted miners: 25% wished to become farmers  MNE’s goal: to work with local community to offer sustainable economic occupation after closure  agriculture retraining programme as part of Government regional development plan run in cooperation with MNE

International Labour Office Multinational Enterprises Programme MNE Declaration Principles in practice Stimulating social consultations: Philippines Memorandum of Social Understanding & Plan of Action  adopted by Governments, business and workers  framework of objectives guided by the MNE Declaration  key roles of each partner in coordinated action to promote employment, security, training, working conditions and sound industrial relations

International Labour Office Multinational Enterprises Programme MNE Declaration National, regional and sectoral initiatives Influencing government action MNE Declaration guides and informs government strategy concerning labour and employment in :  foreign direct investment (FDI) activities  reducing the gap between local enterprises and MNEs concerning labour standards  mergers and acquisitions (M&As), privatization, and other major enterprise restructuring  export processing zones and other investment incentives

International Labour Office Multinational Enterprises Programme MNE Declaration Principles in practice Influencing government action : Ireland  Government strategy to attract foreign- owned MNEs, including favourable tax treatment  Tripartite “Partnership 2000 for inclusion, employment and competitiveness”:  take advantage of the potential offered by MNEs  build and strengthen local industry  improve linkages between multinational and national enterprises  Results:  increased employment opportunities  improved living standards of workers  Improved MNE resources for national social services

International Labour Office Multinational Enterprises Programme MNE Declaration Principles in practice Helping collective bargaining: Argentina & Brazil Common approach among Volkswagen affiliates and trade unions in Argentina and Brazil:  exchange information  strengthen productivity  resolve disputes (individual & collective)  respect workers’ right to be represented and to organize  include trade unions in planning skills development  continually improve the contract through social dialogue in MERCOSUR

International Labour Office Multinational Enterprises Programme MNE Declaration Principles in practice Providing input at regional levels: a Southern African experience The “Maputo Declaration” :  adopted 1999 by worker representatives in the textile, clothing, leather and footwear industry from nine SADC member countries  calls for:  respect and promotion of core labour standards  endorsement and implementation of the MNE Declaration and the 1998 ILO Declaration on Fundamental Principles and Rights at Work  encourages regional collective bargaining agreements

International Labour Office Multinational Enterprises Programme MNE Declaration Corporate Social Responsibility  inspiring company policies and programmes on a day-to-day basis  offering benchmarks for corporate performance  providing baselines for framework agreements

MNE Declaration Corporate Social Responsibility Inspiring company policies 1998 ILO Study Codes of conduct Issues selected  Health and safety 75%  Employment discrimination 66%  Child labour 50%  Wage levels 40%  Forced labour 25%  Freedom of association 15% Sources of reference  Self-definition 55%  National law 45%  International labour standards 33% Conclusion: unpredictable correlation with MNE Declaration benchmarks

MNE Declaration Corporate Social Responsibility Offering benchmarks for corporate performance Elements for putting principles into practice: Equality of employment opportunity Quantitative workforce ratios by gender, ethnicity, religion, in percentage of population ratios Qualitative penalties for violation of discrimination/equality laws and regulations recruitment based on skills Systems equal opportunity policy training systems on non-discrimination grievance procedure to address discrimination/harassment

International Labour Office Multinational Enterprises Programme MNE Declaration Corporate Social Responsibility Providing baselines for framework agreements 16 agreements between MNEs and Global Union Federations for worldwide operations:  Building and wood working: IKEA, Skanska, Hochtief, Faber Castel, Ballast Nedam  Food, agriculture, hotel: Danone, ACCOR, Chiquita, Fonterra  Chemistry, energy and mining: Statoil, Endesa, Freudenberg  Metallurgy: Merloni elettrodomestici, VolksWagen  Telecommunications: Telefónica  Retail: Carrefour

MNE Declaration Corporate Social Responsibility Providing baselines for framework agreements Percentage of 16 Framework agreements including references to international labour standards: 1.Freedom of association and collective bargaining 100% 2.Employment discrimination 88% 3.Child labour 81% 4.Forced labour 81% 5.Safety & health 50% 6.Minimum wages 44% Conclusion: higher correlation with MNE Declaration benchmarks

MNE Declaration Other international initiatives The OECD Guidelines on Multinational Enterprises OECD Guidelines  Countries of operation of OECD companies  OECD governments’ supervision  Service by National Contact Points with or without business and labour inputs MNE Declaration  All ILO member states  Tripartite oversight  Assistance by ILO offices on a tripartite basis

MNE Declaration Other international initiatives UN Global Compact UN Global Compact  Labour principles  freedom of association and collective bargaining  elimination of forced labour  effective abolition of child labour  elimination of employment discrimination  built-in dialogue and partnerships  UN agencies, business, labour and NGOs oversight MNE Declaration  Added guidance on ways to implement labour principles by the four parties  built-in dialogue and partnerships, includes reporting and dispute solution systems  Tripartite oversight

International Labour Office Multinational Enterprises Programme MNE Declaration ILO products and services Follow-up  Tripartite surveys to assess progress  Interpretation procedure to address conflicts  Thematic, sectoral, country or regional studies  Dialogue and advisory activities at national and regional level

MNE Declaration ILO products and services Assessing progress: follow-up surveys  Successes and challenges in realizing MNE Declaration goals  Joint or separate views of home and host country governments and of workers’ and employers’ organizations across ILO membership  Conclusions and recommendations decided by global representatives of government, labour and business  Results:  examples of good practice  insights into new trends  practical experiences

MNE Declaration ILO products and services Assessing progress: survey Experiences of governments, business and labour in 100 countries:  positive and adverse effects of the use of technology by MNEs and of their linkages with local enterprises  MNE contributions to social and business partnerships that develop skills to sustain employment in changing markets  regional ripple effects of good MNE practices in health and safety  benefits and difficulties of promoting security of employment in the context of flexibility, restructuring and out-sourcing  MNE and government policy and practices in export processing zones and other investment incentives  employment effects of privatization and mergers and acquisitions.

International Labour Office Multinational Enterprises Programme MNE Declaration ILO products and services Addressing conflicts: interpretation procedure  Requests for interpretation of the MNE Declaration:  in specific cases of actual dispute over the meaning of the principles  examined and answered by the ILO Governing Body  to date, interpretations have been given in four cases covering:  Notice before change of operations  Consultations on decisions with major employment effects  Authority of management representatives to take decisions during negotiations

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