SUMMER 2019 TODAY’S GENER AL COUNSEL
Labor & Employment
International Labor Standards in the Global Economy By Els de Wind
14
C
orporate social responsibility has moved up companies’ agendas, particularly those of multinationals. Companies in their business agreements and policies — international framework agreements (IFAs), corporate codes of conduct, human rights policies, and supply chain or corporate social responsibility (CSR) policies — refer to international labor standards such as those found in the 1998 International Labor Organization (ILO) Declaration on Fundamental Principles and Rights at Work. Multinational institutions have incorporated references to the ILO Fundamental Principles into instruments — the United Nations Global Compact and the United Nations’ Guiding Principles on Business and Human Rights (UNGPs), the Organization for Eco-
nomic Co-operation and Development Guidelines (OECD) and the ISO 26000 Standard — that apply to companies. Over the years, trade unions have been exercising pressure on multinationals to sign IFAs, which are negotiated between a global union’s federation and the corporation to apply to the company’s global operations, often including their supply chain. For trade unions, IFAs are a way of promoting recognition of their organization and worker rights at a global level. Through IFAs, the unions gain new opportunities to organize and exert influence at the company level. For companies, IFAs can mean a way to improve dialogue with local trade unions, particularly in countries where such dialogue does not exist through
worker representation bodies. IFAs can help to strengthen their competitiveness in global markets with regard to ethical standards, and signal their commitment to corporate social responsibility. Codes of conduct are usually set up by companies or groups of companies to set rules embedding their environmental and social principles and values within the company. Very often, references made in IFAs or corporate instruments are not clear; and there is not a full comprehension of their legal consequences. Most “rights” are described in a very general way. Words such as “respect” and “acknowledge” are used rather than contractual language such as “bound by” or “comply.” Can these references create direct obligations for companies even if the