Academic journal article International Journal of Labour Research

Labour Organizing and Private Compliance Initiatives: Lessons from the International Finance Corporation's "Performance Standards" System

Academic journal article International Journal of Labour Research

Labour Organizing and Private Compliance Initiatives: Lessons from the International Finance Corporation's "Performance Standards" System

Article excerpt

In recent years it has been argued that working conditions in developing economies can be improved by making supply or investment contracts conditional on compliance with certified labour standards, or by offering the less concrete market incentive of improved "corporate reputation" through product labels that certify the successful completion of some kind of social auditing process. The overwhelming majority of these private compliance initiatives - also known as (transnational) private regulation - cite the International Labour Organization as a source of normative authority and make explicit reference to the two fundamental Conventions on freedom of association and collective bargaining.1 In this article we assess the potential for workers and trade unions to use private regulation as a tool for organizing and seeking recognition from employers.

There is by now a fairly extensive research literature on private regulation. The emerging consensus is that while market incentives to improve wages and conditions of work have had a modest positive effect on certain measurable welfare outcomes such as hours of work and health and safety standards, there has been little discernible impact on the capacity of workers to pursue such improvements for themselves via collective action (AFL-CIO, 2013; Barrientos and Smith, 2007; Egels-Zandén and Merk, 2014; LundThomsen and Lindgreen, 2014).

It is tempting to conclude on this basis that transnational private regulation has been captured by employers. With so little evidence of any change in power relations, it looks as though improvements in pay and working conditions will always be limited by the financial interests of businesses. Nevertheless, this may be too pessimistic a view. Existing research arguably pays insufficient attention to the capacity of workers and unions to use private regulation proactively rather than waiting for some independent monitoring and enforcement process to take its course.

In this article we report on some new survey and case study research that shows what can be achieved when workers' organizations have the capacity to take advantage of the opportunities offered by private regulation, but that also illustrates the limits of private regulation in the absence of organized labour. We conclude by drawing some policy lessons for national and international trade unions.

Public and private labour standards regulation

Up until relatively recently, the transnational regulation of labour and employment was exclusively a public affair. Since 1919 the International Labour Organization (ILO) has been engaged in the process of constructing an international framework of labour and social security law intended to define globally accepted conditions of work and thereby to prevent the adoption of economic policies and business strategies that rely on low labour costs.

However, the peculiarity of the ILO as an international organization is that it includes institutionalized representation from bodies other than States: workers' and employers' organizations together account for half of the voting rights at the International Labour Conference, the other half belonging to member States. This and other institutionalized participation rights make it almost impossible for the ILO to adopt policies that do not have at least tacit support from both trade unions and employers' associations, the corollary being that blocking particular policies is relatively easy for either group. The combined opposition of employers and neoliberally oriented governments, then, may well explain why the strong emphasis on freedom of association, collective bargaining and tripartism that characterized ILO policy in the 30 years after the Second World War seems to have lifted at the beginning of the 1980s (Hepple, 2005). Although collective industrial relations are often encouraged "on the ground", particularly via Decent Work Country Programmes, no ILO Conventions specifically promoting collective bargaining have been adopted since 1981. …

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