03 WRONG PERCEPTIONS..

..about how human/work right protection should be promoted in free trade agreements and along global supply chains..

THREE WRONG PERCEPTIONS ...

…ABOUT HOW HUMAN AND WORKER RIGHTS CAN BE PROMOTED IN FREE TRADE AGREEMENTS AND ALONG GLOBAL SUPPLY CHAINS...

By Ha Dang 

Updated March 2017 

Vietnam’s entry to free trade agreements (FTAs) that strongly pledge to respect fundamental human and labor rights gives hopes for fairer playing fields in the country and within the trade pack borders. However some universal wrong perceptions about how those rights should be promoted have been hindering Vietnam’s economic growth and social development opportunities. They are as follows:

01.Human rights should not be intertwined with workers’ rights.

July 1st 2016, ILO Vietnam experts came to share their take on workers’ rights in Trans-Pacific Partnership (TPP) with Vietnam’s PPWC (People Participation Working Group) and its counterparts. In their presentation, they concluded that Vietnamese workers’ right to freedom of association (FOA) should not be covered in the drafting Bill of Association but in Labor Code or Trade Union Law instead. The reason was FOA should not be affected by the new Bill that if passed will create a lot of barriers for all Vietnamese to exercise their civil right to associate on their own choosing. PPWC therefore excluded workers from the Bill’s beneficiary groups and at the same time demanded for zero government interventions into FOA execution (i.e. citizens must be able to organise and associate without any official registration or notification to the current administration). Their proposal to pass the bill last year was turned down, resulting in FOA remaining out of reach together with the new United States administration’s decision to leave TPP.

Few months before, ILO Bangkok experts came to give advice to Vietnamese government officials and National Assembly leaders about labor standards in TPP. They analysed the case of Cambodia with "undue multiplicity of small and competing trade unions can be avoided by workers (ILO Digest)” and advised Vietnam to carefully take this into consideration in the discourse of balancing social stability and economic growth. 

 

Respect Vietnam’s position: The FOA requirements in TPP could have provided an unique leverage for Vietnamese workers and hence passed it to all Vietnamese citizens if they were included in the Bill of Association.  Given the exclusion of FOA for workers, the Bill has lost this leverage. 100% freedom of association in Vietnam is not realistic. Vietnam might only promote non-violent or peaceful collective actions, non-abusive political engagement and effective protection of jobs and incomes as part of genuine FOA and UN Covenant on Civil and Political Rights[1]. However, means and ways to comply with international labor standards are more important than the standards. FTAs that respect the standards should provide a broader sphere to create meaningful compliance measures to level the playing field. Their efficacy therefore should be based on some key binding mechanisms that create equal opportunities for workers and employers’ organizations to measure and fill their gaps in standard interpretation and compliance prior to their negotiation and protection for their recognized rights in the given sphere and at the lowest conflict cost.

 

 

Respect Vietnam’s Case Study: In December 2016, based on a two-day worker-absent audit on Occupational Safety and Health (OSH) in one of its suppliers in Central Vietnam, one of the most well-known CSR front-runners from Europe proclaimed that the supplier seriously violated the top CoC requirements including official data manipulation, severe health/safety hazards, and poor worker accident compensation. The supplier was requested to stop shipping two finished production lines to Europe. A month after, however, the supplier successfully defended and removed itself from the list of top labor requirement deviations, releasing the production and leaving hundreds of workers in the recognized high risks of unsafe conditions, permanent injuries, and continuous frauds.

Without the “devil of the details” of the internal meetings, the case might be viewed as another “slap on the wrist” or compliance bias that CSR leading brands have been making. However, the supplier’s aggressive attack against the audit quality, the auditor’s capacity and the inconsistency between the Code and the actual audit during one of the in-door meetings has shown the real challenges that CSR advocates have been facing despite how much efforts have been made. The “grey” areas in CoC languages, the auditors’ poor efficacy and most importantly the faulty auditing approach which lacks of measurable worker engagement and trackable worker-employer conflicts are the problem’s root-causes (RespectVN’s 2017 Paper on Labor Compliance Means).

 

The solution package to this challenge, in this case, should include the protected (workers)’s measurable feedbacks towards how many accidents actually result in their permanent injuries, how many are not their own faults which decide how much they should be compensated, and an effective measure where grievance makers can be free from retaliation or threats to their job and income security. As expectations vary from worker to worker, from workplace to workplace, from time to time, particularly in “grey” areas in both CoCs and national labor laws, only real conflicts emerge from both workers and managers would be able to measure the health of the workplace relationship as well as the degree of social compliance the supplier actually makes.

02.Worker rights’ protectors are CSR promoters

 

A number of MNCs have invested in Corporate Social Responsibility (CSR) programs to promote workers’ rights along their supply chains. However most of CSR best practices have been solely developed upon the perspectives of the “so-called” protectors, namely employers, suppliers, vendors, buyers, etc., instead of those from the protected or their genuine representatives in any form. In Vietnam, CSR has been known for philanthropy and due diligence where the former is viewed as short-run or pop-up activities and the latter only provides quick-fix or window-dressing efforts. In the particular social compliance programs that are considered effective, the “slap on the wrist” reputation still remains due to the controversial conflict between social goals versus economic growth visions. The strictest Code of Conducts have been poorly improving working conditions as violations to their requirements have been hardly tracked, traced and therefore fixed on only tip of the iceberg. They repeated or even expanded before and after any social audits.

 

Respect Vietnam’s position: Worker right protectors should not be employers or their clients but workers’ genuine representatives. In the absence of FOA in Vietnam, CSR advocates and actors should promote concrete binding mechanism that enable the level playing field for workers and employers, with their representation in whatsoever form. They should include enforceable acts of Information Disclosure, Worker Engagement, Conflict Management and Whistle-blowing.

 

Recently several MNCs have shifted their auditing practices into coaching ones, ranging from the launch of LEAN manufacturing methodologies to the execution of Living Wage strategies. However, none of them has actually promoted genuine Worker Engagement or Conflict Management to track, measure and execute unfair labor practices, resulting in the unmeasurable or low impacts on poor working conditions and arbitrary corporate governance. An increasing number of suppliers have realized that the more they invest in social compliance programs, the less competitive they are in terms of pricing, workplace stability and sustainable development[2].

 

03. Protection of human and worker fundamental rights comes at some cost of productive efficiency[3]

 

Violations of human (worker) rights invite social (industrial) unrests, costly conflicts, high turnovers and low efficiency in which significant cost occur. It is unlikely that this kind of cost has been calculated as the cost of violating human (worker) rights or the cost of promoting faulty compliance or due diligence approaches. An international labor and employment law conference led by American Bar Association (Hong Kong, May 2016) revealed that USD 87 billions have been spent on CSR in vain annually. In many other forums, although CSR on ESG (environment, social and governance) is appreciated as one of emerging corporate governance trends, their impacts have been considered insignificant in improving working conditions and sustainable development over the globe.

Respect Vietnam’s position: High costs for violating human (worker) rights come from low-performing or arbitrary corporate governance where poor investment in operating systems that are comparable to the performance of teams or workforces. RespectVN’s study on wildcat-strike rootcauses from 2013 to 2015 shows that industrial disputes mostly occurred due to pro-longed and unsolved right-based conflicts of individual labor contracts, collective bargaining agreements and especially workplace regulations that were solely developed by management with discretion. The majority of the right-based conflicts were based on misinterpretation and miscommunications of these documents, whereas the violations of worker rights were driven by poor national labor law enforcement (i.e. government labor inspections mostly involve employers’ self-assessment with low worker denunciation)[4]. Effective Conflict Management, Worker Engagement, Whistle-blowing and Information Disclosure as additional benchmarks for social compliance and CSR efforts along global supply chains and within trade packs that Vietnam is entering will reduce the cost and create the meaningful linkage between human (worker) right protection and sustainable development.

 

[1] RespectVN’s standpoints on Vietnam’s labor obligations in TPP - http://www.respectvn.com/?lightbox=dataItem-ivd9qba3

[2] A statement made by supplier reps during the TPP labor obligations workshop jointly organized by RespectVN and VCCI on Feb 2016

[3] https://www.brookings.edu/articles/workers-rights-labor-standards-and-global-trade/

[4] RespectVN’s Conflict Management views on air - http://vietnamnews.vn/society/350096/vn-urged-to-adopt-conflict-management-tools-to-stop-disputes.html#HBiBc65puOfc1ZW2.97

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