Decent Work in Global Supply Chains

Unit 7, Lecture 5 - From Voluntary Responsibility to Responsible Governance


Argument for main reasons for decent work deficits:
- Inefficient labor administration and inspection
- corruption
- lack of implementation of ILO standards at the national level

MNEs are not only rule takers but are also rule makers through their decisions of placing investments and orders. MNE often make weak labor laws and tax exemptions a precondition for their investment. Wage hierarchies and asymmetric power relations can contribute to undermine the political space for effective labor market institutions.

Impact Project – European research project to study the effects of CSR
“There is little empirical evidence which explains the concrete impacts of CSR activities and programmmes”.

Global buyers need to make:
  • Credible, time-bound threat of responsible disengagement if Freedom of Association is not respected
  • Commit to contribute to sustainable solutions by adjusting purchasing prices to allow for living wages

According to the Universal Declaration of Human Rights, a living wage is a human right. The OECD Guidelines are the most comprehensive standard for Responsible Business Conduct (RBC). Currently 46 countries adhere to the Guidelines. These governments made a legally binding commitment to set up National Contact Points to promote corporate responsibility and to handle complaints about corporate misconduct. 2011 revision of the Guidelines introduced new expectation of enterprises to carry out due diligence.

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