Jump to main content
IndustriALL logotype

Multinationals are responsible for their supply chains

25 May, 2016Multinational corporations (MNCs) dominate IndustriALL Global Union’s industrial, energy and mining sectors. But they employ only 6 per cent of the workers who make their products. We hold MNCs accountable for union rights and living wages throughout their supply chains.

In January, the ITUC published its Scandal report, exposing that 50 leading multinational corporations employ only 6 per cent of the workers who manufacture their products directly. Suppliers and subcontractors employ the remaining 94 per cent, or 116 million-strong hidden workforce.

As a rule, wages and conditions of these workers are worse, and most union rights violations happen in the supply chain. But as the UN guiding principles on business and human rights confirm, an MNC has a due diligence responsibility over its supply chain.

This is what IndustriALL is trying to cement with its global framework agreements (GFA), which cover already over ten million workers in 47 corporations and their suppliers. This is what the Accord on Fire and Building Safety in Bangladesh is about, working on safer factories for more than two million garment workers.

Supply chain responsibility is the basis for our cooperation with the ACT garment brands, to guarantee freedom of association and living wages through building industry level collective bargaining structures. Setting higher wages across the entire industry prevents individual factories and brands from negotiating lower prices based on lower wages.

Another sector where brands do not manufacture their products themselves, is the electronics industry.  Brand image is vulnerable just like the garment industry. That is why IndustriALL targeted Apple in its successful campaign against union busting by NXP Semiconductors in the Philippines – and Apple reacted.

Our GFA with Swedish retail giant H&M proved instrumental in solving conflicts in Myanmar and Pakistan. Thanks to active intervention by IndustriALL and H&M, a Chinese supplier finally recognized our affiliated union in Myanmar, while 88 dismissed workers were reinstated at Pakistan.

Exploitation and violations of workers’ rights by suppliers and their subcontractors are a hot topic. “Decent work in the global supply chains” will therefore be the main discussion at ILO’s International Labour Conference in June.

IndustriALL and other global unions want to have a Convention on Global Supply Chains to clarify the roles and responsibilities of governments in home and host countries, and the buyers and suppliers. It should establish legal accountability and provide guidance for developing policy and legislation to ensure respect for workers’ rights in supply chains.

Governments do not need to wait for a Convention. The French parliament is debating a law on due diligence obligations for companies. Other countries give buyers responsibilities, for instance, in the case of non-payment of wages or social security contributions.

Corporate structures have changed. Laws and bargaining structures have to follow to ensure union rights and living wages throughout global supply chains.

Jyrki Raina
General Secretary