LABOUR STANDARDS & REGULATION

FOR DEVELOPMENT

ANIL VERMA
ROTMAN SCHOOL OF MANAGEMENT
CENTRE FOR INDUSTRIAL RELATIONS & HUMAN RESOURCES

UNIVERSITY OF TORONTO
Vicious

Virtuous
“HIGH ROAD” – “LOW ROAD”

•Costco vs. Walmart

•Wages: $24/hr vs. Legal Minimum
•Benefits: full-time employees, health insurance,
retirement plans, career advancement. Vs. None
• Unionization: Engagement vs. “scorched earth”
58,000 Chart Title

56,000 Average Annual Wages: 2000-2021

54,000
in constant USD 2021 PPPs

52,000 Germany
50,000

48,000

46,000

44,000 UK
42,000

40,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Germany U.K.
 RESPONDING TO GLOBALIZATION AT
THE FIRM-LEVEL: MOBILIZING TALENT

Skills
•Efficiency
•Innovation
Interesting •Creativity
Create a Work
Vision
Incentives
Hire the best
(domestic Autonomy Competitive
initially, but
Advantage
later more Respect for
globally) Diversity
Work-family
Balance
PROBLEM FOR GLOBALIZATION WITHOUT
STANDARDS OR REGULATION

• Race-to-the-bottom
• Inefficient allocation of human resources
• Not aligned with the goal of development: paths to
prosperity
• Unsustainble globalization
• Morally wrong
POLICY RESPONSES:
• Illegitimate:
• Apathy
• Lip service
• Smoke screen
• Whitewashing/Greenwashing
• Legitimate: Regulatory mechanisms to ensure fair &
“decent” standards
• Government-led; industry/firm led; labour-led; joint bi-partite, tri-partite
and multi-partite
• International vs. national
 Labour Regulation
in the Context of
Globalization

Laws & International

Regulations Private Initiatives
(Hard Law) (Soft Law) (Soft Law)

CSR-
General Labour
Labour & Litigation for Industry Internatio
damages Firm Level level nal CB
Social
Clauses in under
Trade & existing
laws -UN Global ILO-Tripartite
Investment Codes of Compact
Agreements -Clean Body:
Conduct: - UN Guidelines - Core LS
-Bilateral - Clothes
-Nike for Trans-
Multilateral -Wal-Mart -Ethical - Supervisory - IFAs
Trading national Role
-Ford Corporations - B’desh
-Apple Initiative Demonstration
-SA8000 -ISO 26000 Accord
-Etc. Projects
- Bangladesh - Better Work
Alliance -Equator
Principles - IPEC
-Global
Reporting
Initiative (GRI)
-Voluntary
Principles
- OECD
Guidelines for
MNCs
- World Bank
Contract
Compliance
rules
 THREE STEPS IN
LABOUR STANDARDS REGULATION
THROUGH INDUSTRY SELF-REGULATION

• Develop standards
• Relatively easy
• ILO Core LS
• Corporate Codes

• Monitor and report

• Relatively harder

• Remedies and sanctions

• Most difficult part
 THE EVOLUTION OF FTAS: CANADIAN EXPERIENCE

• NAFTA 1994-2020 : no social clause but a ”side” agreement

• North American Agreement on Labour Co-operation (NAALC)
o No international standards but agreement to enforce one’s
own labour laws (standards)
o No enforcement provisions
o Only: investigate, educate and publicize
o “toothless”?
13
B. CUSMA 2021: AN IMPROVEMENT “NAFTA 2.0”

Ø Labour Standards (Ch. 23), Dispute Settlement (Ch. 31) +

Annexes 23 and 31.
Ø Enforcement Mechanism: “Rapid Response Labour Mechanism”
• Complaint against a specific location
• Panel formed for investigation
• On-site Verification
• Conviction or penalties for non-compliance
14
 POINTS TO NOTE:
2. International Standards (Ch. 23)
• Fundamental Declaration
• ILO Conventions
3. Dispute Resolution Systemic Level:
• “Neutral” Role
Ø Conciliation / mediation
Ø Panel of experts
…. “… with expertise and experience in labour law or practice …”

• Final Report .. binding determinations, recommendations along with reasons

• Suspension of benefits (Article 31.19) 15
C. COMPREHENSIVE AND ECONOMIC TRADE AGREEMENT (CETA)

v CETA is a multilateral trade agreement between relatively

comparable jurisdictions (Canada and the 27 member countries in the
EU). It is a provisional trade deal awaiting ratification by every EU
member country. We will focus on the following chapters only:
Ø Ch. 22 - Trade and Sustainable Development
Ø Ch. 23 - Trade and Labour
Ø Ch. 26 - CETA Joint Committee
Ø Ch. 29 - Dispute Settlement
16
D. COMPREHENSIVE AND PROGRESSIVE TRANS-PACIFIC
PARTNERSHIP (CPTPP)

v The CPTPP is the “brainchild” of the United States with a geopolitical

motivation. With the election of President Trump in 2016, the group of 12
countries became 11 with the departure of the United States from the
equation … for now. The CPTPP came into force December 30, 2018.

We will focus on the provisions of the CPTPP found in:

Ø Ch. 19 - Labour
Ø Ch. 28 - Dispute Settlement
17
 CASE STUDIES:
SOME DIFFERENT STRATEGIES WITHIN TRADE DEALS

1. Canada: Labour Co-operation Agreements

• Bilateral trade deals (i.e. Peru, Columbia, Jordan, Panama)

• System of fines (up to $15M) for non-compliance

• Novel “wrinkle”: $ poured into improving the labour standards in

the delinquent jurisdiction

18
 WHAT IS NEXT FOR CANADA?

1. The need to “diversity” our list of trading partners

2. On-going Active negotiations
• Indonesia
• India
• U.K.
• Other (i.e. Mercosur and Pacific Alliance (Mexico, Chile,
Columbia, Peru)

• Why not China? 19

THE FAIR LABOR ASSOCIATION
• US-based initiative
• Large apparel firms
• NGOs and US universities
• Developed a Code
• Developing monitoring and reporting
procedures
• Plans to publish audit results
• Issue sweat-free labels
• Remedies & sanctions not clear
 COUNCIL ON ECONOMIC PRIORITIES
US-BASED NGO

• SA8000 = ILO Core LS+

• Created the CEP
Accreditation Agency
• Audit and certification
• Similar to ISO 9000 for
quality
• Audit results to be published
THE CLEAN CLOTHES CAMPAIGN

• Europe-based
• Code based on ILO Core LS+
• “Clean” Label
• Signed up many large firms
• Foundation to audit and monitor
 THE ETHICAL TRADING INITIATIVE

• Sponsored by the UK government

• Code developed
• Pilot studies to find best means to
monitor, report and remedy
• Includes NGOs, unions and firms
 CORPORATE CODES: DO THEY WORK?
• Can be effective in some sectors;
• International linked production chains
• Consumer industries
• Adequate community-level capacity – NGOs
• Union presence
• Less effective where,
• No community pressure, no govt pressure
• No unions
• No consumer pressure
 Bet terWork
An ILO-IFC Program to Improve
Labour Standards in the
Global Garment Industry

Anil Verma, University of Toronto

Based on materials provided by BW Staff, ILO

LABOUR RELATIONS IN THE GLOBAL
ECONOMY
Garment Factories

International Buyers

26
LABOUR RELATIONS IN THE GLOBAL
ECONOMY
Garment Factories

International Buyers

27
BANGLADESH “ACCORD”
Garment Factories

Bangladesh
Accord on Fire
& Building
Safety
2 Global
Union
Federations

8 Domestic
unions

4 NGOs 28
International Buyers
PROGRAMME STAKEHOLDERS

Government
(PAC)

International
Better Work Buyers
Country
Programme

Workers/
Unions Manufacturers
(PAC)
(PAC)

PAC: Project Advisory Committee

29
The BW SERVICE MODEL
A PERFORMANCE IMPROVEMENT CONSULTATIVE
COMMITTEE (PICC)
• an enterprise level JOINT advisory committee comprised of
an equal number of management and worker
representatives
 4 STEPS IN COMPLIANCE SYSTEMS

Apply
remedies
Report
Monitor
compliance
Set
Standards
CONCLUSIONS FROM BW DATA

• Factories have generally improved compliance since

they joined BW.
• Compliance improves over time for most factories.
• Just having unions is not enough. They need to be
effective.
• Factories with evidence of unions + dialogue show
more improvements than those that have only a union.
 CRITICAL ASSESSMENT: 6 QUESTIONS

1. What share of the target workforce does the initiative reach?

2. Are data on reach and efficacy disclosed publicly?
3. Is there an independent assessment of its efficacy?
4. Are there disincentives in the system for non-compliance?
5. What remedies are available under the regime?
6. Is there any evidence of spillover effects?
 TRANSNATIONAL LABOUR RIGHTS LITIGATION
CLAIMS BASED ON EXISTING TORTS
• Claims based on negligence, battery, false imprisonment,
etc.
• Many examples in UK and EU member state courts,
including Vedanta (UKSC)
• Canadian examples
• Das v. George Weston Limited, 2018 ONCA 1053 (CanLII)
[Lawsuit against Loblaws for Rana Plaza]
• Garcia v. Tahoe Resources Inc., 2017 BCCA 39 (CanLII)
• Advantages: uses established law
• Disadvantages: applicable law will usually be law of
where the place occurred, possibly fails to recognize full
wrongness of certain actions
CLAIMS BASED ON INTERNATIONAL LAW
• Claims based on violations of customary international
law/fundamental human rights
• Slavery, forced labour, torture, “cruel, inhumane and
degrading treatment”
• Cases in United States and Canada, notably Nevsun in
Canada
• Advantages: applicable law is the same everywhere,
recognizes unique nature of harms
36
• Disadvantages: law still in development, possible implications
for international/foreign relations
INTERNATIONAL COLLECTIVE BARGAINING:
”GLOBAL” UNIONS NEGOTIATING WITH MNCS

qSome success in the form of IFAs

qAlso, national bargaining with companies through
international labour action – limited success
INTERNATIONAL LABOUR UNIONS
ØITUC (formerly ICFTU)
ØGlobal Union Federations (GUFs - formerly ITSs) - 10 in all
BWI (building & wood), EI (education), IFJ (journalists),
IndustriALL (formerly, IMF, ICEM) ITGLWF (textile &
Garments)), ITF (transport),, IUF (food & agriculture, hotel &
restaurant), PSI (public service), UNI (business services &
telecom), IAEA (arts & entertainment)
ØETUC – European Trade Union Confederation
ØTUAC – Trade Union Action Committee – consultant to the
OECD
Danone 100,000 France Food Processing IUF 1988
IFAS: 1988-2001
Accor 147,000 France Hotels IUF 1995
IKEA** 84,000 Sweden Furniture IFBWW 1998
Statoil 16,000 Norway Oil Industry ICEM 1998

Faber-Castell 6,000 Germany Office Material IFBWW 1999

Chemical
Freudenberg 27,500 Germany ICEM 2000
Industry
Hochtief 37,000 Germany Construction IFBWW 2000
Carrefour 383,000 France Retail Industry UNI 2001
Chiquita 26,000 USA Agriculture IUF 2001

OTE Telecom 18,500

Source: www.global-unions.org
Greece Telecom UNI 2001
 IFAS: 2001- 2002
Skanska 79,000 Sweden Construction IFBWW 2001
Telefonica 161,500 Spain Telecommunicati UNI 2001
on
Indesit (Merloni) 20,000 Italy Metal Industry IMF 2002
Endesa 13,600 Spain Power Industry ICEM 2002
Ballast Nedam 7,800 Netherlands Construction IFBWW 2002

Fonterra 20,000 New Zealand Dairy Industry IUF 2002

Volkswagen 325,000 Germany Auto Industry IMF 2002
Norske Skog 11,000 Norway Paper ICEM 2002
AngloGold 64,900 South Africa Mining ICEM 2002
DaimlerChrysler 372,500 Germany Auto Industry IMF 2002
Eni 70,000 Italy Energy ICEM 2002
Source: www.global-unions.org
 IFAS: 2007-2008
Volker
17,000 Netherlands Construction BWI 2007
Wessels
Engineering /
Brunel 5,300 Netherlands IMF 2007
ICT
Umicore 14,000 Belgium Metal Industry IMF/ICEM 2007

Inditex*** 79,517 Spain Wholesaler ITGLWF 2007

Vallourec 18,000 France Metal Industry IMF 2008

Source: www.global-unions.org
 WAY FORWARD: DUE DILIGENCE

• UN Guiding Principles on Business & Human Rights 2011

• Proposed EU Directive on Business Due Diligence 2022
• Germany: Law on Supply Chain Due Diligence 2021
• France: Loi de Vigilance
• Holland: Child Labour Due Diligence Law
• Norway: Transparency Act requiring human rights and decent work due
diligence 2021
CANADA: BILL S-211
THE FIGHTING AGAINST FORCED LABOUR AND
CHILD LABOUR IN SUPPLY CHAINS ACT
• May 3, 2023, Bill S-211 passed Third Reading in the House of
Commons.
• Likely, will come into force on January 1, 2024.
• Customs Tariff1(“Bill S-211”) will be amended to give Canada
Customs the power to seize goods deemed to be produced by forced
labour or child labour.
• Canada’s first statute aimed at preventing and reducing the risk of
forced and child labour in supply chains.
 International Domestic
From Soft to Hard Law

Voluntary Mandatory
 International Domestic
Evolution of Domestic Labour Regulation

Voluntary Mandatory
 International Domestic
ILO’s Approach to Labour Regulation

Voluntary Mandatory
Evolution of Public-Private Labour Regulation

Voluntary
International
Domestic

Mandatory