CAFOD and CEREAL Feedback on the draft Guidance for the ICT industry on implementing the Guiding Principles on Business and Human Rights

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1 CAFOD and CEREAL Feedback on the draft Guidance for the ICT industry on implementing the Guiding Principles on Business and Human Rights CEREAL and CAFOD have been working together for many years on issues of business and human rights within the electronics industry supply chain and welcome this opportunity to comment on the draft guidance. Centro de Reflexión y Acción Laboral (CEREAL) CEREAL is a project of Fomento Cultural y Educativo A.C. (Cultural and Educational Promotion A.C.), part of the apostolic works of the Mexican Province of the Company of Jesus, which for the last 37 years has been devoted to educating and organising Mexican popular sectors. CEREAL provides legal assistance, labour rights training and organisational support for workers groups; it also carries out research on working conditions in different productive sectors in the country including the electronics industry and promotes public awareness campaigns with regard to workers situation. CAFOD CAFOD is the official Catholic aid agency for England and Wales. We work with over 500 partners in more than 40 countries across the world to end injustice and bring hope, compassion and solidarity to poor communities. We work with people of all faiths and none to reduce poverty and bring about a safer, more sustainable and more peaceful world. CAFOD was a founder NGO member of the Ethical Trading Initiative and one of the lead CIDSE Catholic development agencies following the mandate of the Special Representative on Business and Human Rights from 2005 to Key points for consideration: The aim of ensuring that all businesses in the ICT sector respect human rights is timely. In order to support this goal, the guidance must go beyond reflecting the existing status quo. 1

2 It is important to balance more recent debates about privacy with workers rights and environmental issues in manufacturing supply chains and differentiate between the different levels of awareness and response. Guidance alone will not be sufficient to ensure that companies respect human rights in their operations, to be effective it must be complemented by states actions to ensure that businesses meet their responsibility to respect human rights. We see this as part of states fulfilling their own duty to protect. It is essential that rights-holders themselves citizens, workers, consumers - play an active part in shaping and monitoring the implementation of the Guiding Principles and the evaluation of how this has changed corporate practices, and that rights-holders have access to the relevant information that they need to do this effectively. General comments on the guidance: the current draft is helpful but we believe that it needs further work this is reflected in our specific comments below. In particular, it would be good to make the guidance shorter, reduce the use of jargon and include more concrete examples. This would make it more accessible to a broader range of readers and potential users and is especially important in relation to reaching those who are not already business and human rights insiders. Specific comments on the draft: At the moment the guidance seems more to reflect the existing status quo, rather than driving an improvement in performance on human rights by companies within the sector. For example, the guidance frequently references the EICC and its industry code regarding labour rights, environmental impacts and ethics (p.12) but that code does not meet core ILO labour standards, especially on freedom of association and right to collective bargaining. These deficiencies should clearly be stated, otherwise businesses could take away the impression that by referencing or implementing the industry code they will meet the requirements of the Guiding Principles. From our engagement and discussions we know that some companies are unwilling to go beyond meeting the requirements of national laws, even when these are weak. We think that it is worth explicitly mentioning that the 2

3 corporate responsibility exists over and above compliance with national laws (Principle 11) and including Guiding Principle 12 to provide a clear reference point: The responsibility of business enterprises to respect human rights refers to internationally recognised human rights understood, at a minimum, as those expressed in the International Bill of Rights and the principles concerning fundamental rights set out in the International Labour Organisation s Declaration on Fundamental Principles and Rights at Work. Greater differentiation is needed because while some human rights impacts may be relatively new, others especially in the global supply chain - are already well-documented. 1 The guidance should recognise that in fact many companies are not starting from scratch but already have been aware of some identified human rights impacts and existing risks for several years (p.5 it may take time for companies to know and show.) Building the capacity to identify and address human rights abuses is at least as important as technical capacity building. The guidance should highlight the importance of capacity building in relation to a company s own internal systems as well as supporting the capacity of suppliers. Here the brands attention and effort should be as strict as it is in the case of technical quality. Therefore human rights due diligence should be as strongly enforced and demanded as technical quality requirements e.g. built into training across the business and the appraisals and financial incentives for senior management. The whole issue of public policy influence by multinational companies is missing from the current document. The draft highlights aspects of the state duty to protect which have implications for ICT companies efforts to meet their responsibility to respect human rights see for example the section inadequate or poorly enforced labour law which also mentions Export Processing Zones on page 8. Yet this ignores that some of the biggest impacts that companies can have are in fact by lobbying governments to lower the legal requirements and protections of workers. Businesses can and do use their influence to shape political decisions with significant environmental and social consequences such as labour law reforms, the development of technology parks, and other impacts down the 1 See for example, CAFOD (2004) Clean up your computer; CEREAL (2007) Electronics multinationals and labour rights in Mexico. 3

4 production chain. This section of the guidance must recognise the negative influence that businesses can have if they deliberate water down actions by the state to meet its duty to protect, and, as a consequence, the need for public affairs activities to be covered by the company s human rights due diligence processes. As the Guiding Principles explicitly state: Business enterprises should not undermine States abilities to meeting their own human rights obligations (Guiding Principle 11). There are specific cases of repression against trade unionists and electronics workers who defend their rights in a number of countries including for example, the Philippines and Malaysia. In light of this situation, we believe that it is worth highlighting the status of independent trade unionists and workers representatives status as human rights defenders, and the protections that the UN has recognized are needed for them. To make the guidance clearer, it is important to reduce the number of references to stakeholders - it would be better to talk about specific groups or actors instead. This is an area where for instance the annexes which break down the different groups company workers, supply chain workers, affected communities, consumers etc. - are much easier to follow. Here it would also be important to refer to rights-holders in the Guidance. Drawing on our experience within the electronics industry, unfortunately sometimes companies prefer to talk to NGOs such as CAFOD and CEREAL rather than engage with their own workers. Therefore to avoid this kind of situation, it would be helpful to spell out that contacting and informing NGOs, for example, is not the same as contacting and communicating to the company s workers themselves. Companies should also take this distinction into account when they evaluate and report their how effective their communication has been. It is good that the draft includes a specific text box 8 on temporary and migrant workers. Given how widespread the use of temporary contracts is within the ICT manufacturing and assembly supply chains, and the impact that this has on a wide range of rights, there would be value in expanding this box. For instance while it is definitely useful to make the point that migrant workers can be more vulnerable, it should also be absolutely clear within the guidance that temporary workers who aren t migrants also lose out when it comes to benefits and rights. In our experience, temporary workers usually cannot participate in 4

5 collective bargaining because the company doesn t recognise their own responsibility in the employment relationships with temporary workers who are usually contracted via an employment agency. Workers on repeated short-term contracts are often afraid to speak up in defence of their rights or attempt to organise because they are afraid that their contracts will not be renewed. Given the important role that they play, more mention should be made of relationships with employment agencies in the discussion of relationships with suppliers on p.31. Reporting requirements set out in the guidance are currently too weak for example to be in any way meaningful explanations must definitely be more than the usual boilerplate language of set paragraphs or statements that say nothing about the particular company and its response to human rights impacts and risks (p.40). Given that a number of EU states and the Commission are currently looking at mandatory non-financial reporting requirements, it is important to strengthen this section of the document so that it outlines genuine good practice, otherwise this aspect of the guidance could quickly become outdated. In order to be relevant, we suggest that the guidance on reporting should recommend transparency about business practices and models which have a significant impact on human rights within the ICT sector for example the presence of independent trade unions, collective contracts with inactive unions and KPIs relating to the proportion of workers on temporary contracts and/or employed via agencies. We believe that there is an urgent need to address the issue of inactive trade unions or company controlled ones, given that this is a well-documented feature of the ICT sector in some significant sourcing countries. We suggest that it might be helpful to include a text box on this issue as recognising and identifying repression and anti-union policies is an important step in changing such practices, so that companies can meet their corporate responsibility to respect. The Guiding Principles are very clear that: Operational-level grievance mechanisms can be important complements to wider stakeholder engagement and collective bargaining processes, but cannot substitute for either. They should not be used to undermine the role of legitimate trade unions in addressing labour-related disputes, nor to preclude access to judicial or other non-judicial grievance mechanisms. We suggest that this quote from the commentary on GP 29 is included in the new text box. In terms of 5

6 practical actions that companies can take now to improve their performance on these core labour rights, we suggest that the guidance refers to the IndustriALL, ITUC and Clean Clothes paper on The UN Guiding Principles on business and human rights and the human rights of workers to form or join unions and to bargain collectively and also to forthcoming guidance by the Ethical Trading Initiative. It would be good to highlight that a mature system of industrial relations represents the best way of dealing with problems early on so that they don t escalate. This is good practice. It is helpful that Global Framework Agreements are mentioned (p.38) but it would be good to expand and explain what these agreements are and give a short illustrative example. This input was prepared by Anne Lindsay (CAFOD) and Pedro Reyes (CEREAL). We would be happy to provide further examples and detail, if this would be helpful. Contact: alindsay@cafod.org.uk and parl1974@gmail.com 6