10 th Annual Community of Learning

Transcription

1 10 th Annual Community of Learning LABOR: EMERGING TRENDS AND KEY CHALLENGES BRITISH MUSEUM, LONDON, NOVEMBER 9, 2016 Larissa Luy Principal Environmental & Social Development Specialist, IFC

2 Presentation 1. Overview 2. Key challenges 3. Supply Chain Management 4. National legislation vs. PS2 5. New trends related to PS2 a) Living Wage b) Gender c) Modern Slavery 2

3 Overview Slowdown in emerging economies Brazil, Russia, China Unemployment to increase by a further 3.5 million to 200 million in 2017 Most in emerging markets 1.5 billion people in vulnerabl e jobs by % of the global workforce are in high level of precariousne ss 3 In million living in extreme poverty 967 million in moderate & near poverty despite being employed

4 Key Challenges Early identification of risks and impacts 1. RepRisk 2. Country Briefings 3. GeoDesk 4

5 How to assess compliance 1. Type of workers and contracts 2. Review and analysis of documentation (e.g. policy, manuals, procedures, etc) 3. Review and analysis of statistics (e.g. turnover, absenteeism, grievances, accidents, working hours, etc) 4. Worker interviews Key Challenges 5

6 6 Supply Chain Management

7 Supply Chain Management What should be required: 1. Company policy on CL/FL/ and serious OHS with regards to suppliers. 2. Mapping of suppliers 3. Rating system and prioritization 4. Sourcing information monitoring and analysis, focusing on traceability systems. 5. Sourcing information collection and disclosure. 6. Determine management program depending on risk/impact. 7

8 Supply Chain Management - Uzbekistan Click to watch video 8

9 9 Supply Chain Management - Uzbekistan

10 10 Supply Chain Management - Uzbekistan

11 Supply Chain Management - Uzbekistan The E&S requirements: 1. Company policy on CL/FL/ and serious OHS with regards to suppliers. 2. Mapping of suppliers 3. Monitoring of cotton sourcing areas. Ensure that all areas of sourcing are covered by WB sponsored project monitoring program. No procurement from not covered areas. 4. Sourcing information monitoring and analysis, focusing on traceability systems. 5. Sourcing information collection and disclosure to IFC. 11

12 12 Supply Chain Management Ivory Coast

13 National Legislation vs. PS2 Most of the countries we work in have good labor laws covering ILO core conventions Weak areas under national labor law are the following: FoA Contracting schemes (direct workers, contractors) and impact on ToE and type of benefits Grievance mechanisms Workers accommodation No requirements for suppliers of goods and products PS2 vs. National Legislation FoA Contracts Grievance Mechanism PS2 Countr X Suppliers Worker accomodation 13

14 Freedom of Association National Legislation vs. PS2 In many countries specific sectors, and type of workers are still denied the right to organize and bargain collectively. For example agricultural sector and temporary workers. Government interference restricting the exercise FoA, the most common legal obstacle being the full or partial exclusion of sectors or type of workers from legislation guaranteeing the right FoA. Often excessive requirements regarding a minimum numbers of members as a condition for a trade union to be recognized. Grievance mechanisms Individual or collective legal disputes are mostly covered under labor laws; however limited requirements on private sector grievance mechanisms. 14

15 National Legislation vs. PS2 Contracts In several countries contracts of employment can be made either in written or unwritten form. Limited legal responsibility on terms of employment for contractors, sub-contractors, temporary and seasonal workers. Workers Accommodation Few countries have detailed requirements regarding worker accommodation. 15

16 Emerging Trends Why a Living wage Civil Society/NGO/ Trade Union attention Key Brands have made some progress and pilot projects have been implemented The role of collective bargaining in wage setting is crucial 16

17 Emerging Trends How to include Gender in projects. 17

18 Gender Inequalities in EBRD CoOs Country Legal Regulations and Social Norms Health Services Education and training Labour Policy Labour Practices Employment and business Access to Finance Central Europe and Baltic States Croatia Small Small Medium Medium Medium Medium Small Estonia Small Small Medium Small Large Medium Medium Hungary Small Small Medium Small Medium Medium Medium Eastern Europe and Caucasus Armenia Medium Medium Small Negligible Large Medium Medium Azerbaijan Small Medium Medium Medium Large Large Large Belarus Small Small Medium Medium Large Small Medium Georgia Medium Medium Medium Small Large Medium Small Moldova Medium Medium Medium Small Large Small Small Ukraine Small Small Medium Small Large Medium Medium Russian Federation Small Small Negligible Medium Large Medium Medium Central Asia Kazakhstan Medium Medium Negligible Medium Medium Medium Medium Kyrgyz Republic Medium Medium Medium Medium Large Medium Small Mongolia Small Medium Small Medium Large Small Small Tajikistan Medium Medium Medium Small Large Large Large Turkmenistan Medium Medium Medium Large Medium Large Uzbekistan Medium Medium Medium Medium Large Large Large Southern and Eastern Mediterranean Egypt Large Medium Medium Medium Large Large Large Jordan Large Medium Medium Medium Large Large Large Morocco Medium Large Large Medium Large Large Large Tunisia Medium Small Medium Small Medium Large Large Southeastern Europe Turkey Negligible Small Medium Negligible Medium Medium Small October 2016

19 Albania Bulgaria Cyprus FYR Macedonia Romania Serbia Croatia Estonia Hungary Latvia Lithuania Poland Slovak Republic Slovenia Armenia Azerbaijan Belarus Georgia Moldova Ukraine Kazakhstan Kyrgyz Republic Tajikistan Turkmenistan Egypt Jordan Gender Pay GaP (%) Gender Pay Gaps 60% Gender Pay Gaps in EBRD Countries of Operation 50% 40% 30% 20% 10% 0% South-eastern Europe Central Europe and Baltic States Eastern Europe and the Caucasus Central Asia SEMED Women do not receive equal pay for equal work in all EBRD CoOs. October 2016 Source: UNECE Gender Statistics,

20 Some Basic DD Questions on Gender Discrimination 1. Does the client collect gender disaggregated data? 2. What proportion of men to women is employed in defined job groups and also at defined seniority levels within the company? 3. Do women have the same opportunities as men when it comes to consultation and participation? 4. What is the client s policy with regard to leave for women who are pregnant? 5. Does the client ever require women to undergo pregnancy testing? Why? How is this information used? What happens if the employee refuses to be tested? 6. Does the client have policies or procedures in place to ensure equal pay for work of equal value? 22/12/2016

21 Case Study: Automobile industry client, Turkey Client: Industry leader automobile manufacturer with a large workforce (over 5,000 employees) Gender gap: Large gender gap in blue collar workers: out of 5,110 blue-collar workers only 19 are women (0.4%) Large gender gap in managerial positions: women comprise 12% of managerial positions TI benchmarks: Female % of blue collar employees to reach 5%; and female % of managerial positions to reach 20% by 2017 GAS TC: Technical assistance to improve HR policies and practices on EOs and support the client in achieving TI benchmarks October

22 Case Study: Maritime transport, Turkey Results - Number of women increasing both horizontally and vertically: 2% increase of women in total staff count Higher share of female interns recruited (19% vs 5%) Higher share of the females promoted (9.2% vs 4.9%) 3 out of 6 senior managers are women (vs 0% before) First woman employed as an Able Seaman More women as coordinators, managers, vessel cabin officers. October

23 Emerging Trends What is modern slavery? 23

24 3 key pieces of transparency law [USA] California Transparency in Supply Chains Act (SB 657) Enacted in 2012 in California Applies to companies with gross receipts over US$100,000,000 Companies required to disclose their efforts to eradicate slavery and human trafficking from their supply chains, including at a minimum their policies and due diligence steps Similar legislation debated at federal level. 24 UK Modern Slavery Act - MSA (2015) In force enacted in 2015 First mandatory reports from April 2016 Transparency provisions contained in section 54 of the Modern Slavery Act Businesses with a global turnover of 36 million that carry out business in the UK must produce an annual statement on their activities to address forced labour and trafficking in their own operations and supply chains. Must be signed off at board level. European Union Non-financial Reporting Directive (2014) Will enter into force in EU countries in 2017 member states expected to pass their own laws. Companies with over 500 employees on average will be required to prepare a nonfinancial statement outlining the policies and due diligence processes implemented Subject matter scope is broader than California or UK law - all social matters included, not just forced labour and trafficking

25 IFC s approach and next steps - Technical definition as per PS2 is the same covering slavery, forced labour, and trafficking. - Main gap: transparency requirements and scope of application. - Working on a guidance note covering: - Specific guidance for specialist on additional steps/aspects to be covered during due diligence - Specific guidance for companies on additional steps to take on supply chain due diligence and reporting. - Resources to help implementation 25

26 EBRD Supply Chain TC with Verité Phase I initially aimed at a field-based risk assessment of a selection of EBRD projects and their suppliers or contractors (in high risk countries and sectors) Banking too nervous (What if TC finds anything untoward?) and defensive (Could not possibly happen in our COOs/projects. Integrity check (OCCO) eliminates the risk...) Forced to settle for a desk review of current forced labour DD and monitoring practices, but this still yielded useful information. Gap analysis about current EBRD requirements and their implementation by ESD Limited recommendations about improvements to Policy framework BUT Many suggestions for improvements to implementation Development of supporting materials for clients and ESD staff Phase II: potential for developing capacity building activities for ESD, EBRD and clients 22 December,

27 Findings of Gap Analysis Strengths Labour standards well developed and integrated in EBRD mandate, ESP and Performance Requirements Comprehensive due diligence requirements and procedures in place Useful implementation tools available Room for improvement Strengthen PR1 & 2 language (tbd during ESP review) Process inconsistency: work on Assurance Framework is ongoing and will help increase consistency Weaknesses to be addressed Lack of labour experts conducting labour/supply chain DD or monitoring in high risk sectors or countries Lack of qualifications of ESDD consultants covering PR2 Insufficient guidance and emphasis on implementing formally-recognised social and labour management systems (e.g. SA8000, GSCP) Insufficient scrutiny of the existing workers grievance mechanisms and how these perform; ESAP requirements often weak and insufficient. Further strengthen PR2 guidance documents and tools (also ongoing) 22 December,

28 New/Updated Tools (Work In Progress) Updated guidance/tools for clients and staff Forced labour/prison labour HR Policies and Employee Documentation Worker Grievance Mechanism ESDD Questionnaire New guidance/tools for clients and staff Heat Map Recruitment Fees: International & National Legal Frameworks (Ergon) Managing Construction Contracting Chains (Ergon) Forced Labour in E&S Management Systems 22 December,

29 Forced Labour Heat Map Country What does each column tell us? Trafficking in Persons (TIP) Report (US State Dept 2015) Countries are placed into tiers based on the extent of government action to combat human trafficking. Tier 3 is the highest risk ranking. Forced or Involuntary Labour Index (Maplecroft 2014) Assessment of the risk of forced labour in the target countries using both publicly available data and a proprietary algorithm. Foreign Migrants as % of Population (UN) Percentage of the total population in the country that are international migrants. Population of Concern; mid-2015 (UNHCR) Total population of refugees, people in refugee-like situations, asylum-seekers, and internally-displaced persons. Fragile States Index 2015 (Fund for Peace) The country's ranking on the Fragile States Index (measure of stability) Corruption Index (Transparency International) Score indicates the perceived level of public sector corruption on a scale of 0 (highly corrupt) to 100 (very Evidence of State Sponsored Trafficking (US State Dept) Are there reports of government officials that are complicit in activities that enable human trafficking. Albania 2 High Risk 3.1% 8, Yes Armenia 1 High Risk 10.6% 16, No Azerbaijan Belarus 3 High Risk 11.6% 7, Yes Georgia Greece 2 High Risk 3.4% 628, Risk Indicator 2 High Risk 8.9% 37, Yes Hungary 2 Medium Risk 4.7% 28, Yes Migrant Worker Source Countries (US State Dept) Migrant worker countries of origin. Risk is based on conditions in the sending countries. Albania, Ukraine, Sectors at Risk of Human Trafficking (US State Dept) The sectors of the country that are at risk for human trafficking. Global Labor Rights Index Ranking (ITUC) A score of 1 indicates that labor rights are well protected, while a score of 5 indicates poor Goods Produced with FL or CL (US Dept of Labor) Type of goods produced using forced labor (FL) or child labor (CL) Note: "not listed" does not mean absence of risk. Destination, Source or Transit Country for Human Trafficking Whether the country is a source, transit, destination country. Russia, UK, Norway not listed 2 not listed S,D China Agriculture not listed not listed S, D China, Russia, Turkey, Uzbekistan, Turkey, Philippines, Bosnia, Belarus, Serbia Russia, Agriculture Construction Services not listed Cotton (CL) S,D,T Moldova, Ukraine, Construction 5 not listed S,D,T Bosnia and Herzegovina 2 Medium Risk 0.6% 143, Yes Bosnia (domestic) not listed 2 not listed Bulgaria (Domestic), S,D,T Bulgaria 2WL High Risk 1.2% 18, Yes Romania not listed 3 not listed S,D,T Croatia 2 Medium Risk 17.6% 17, Yes Bosnia, Romania the Balkans, Eastern Agriculture 2 not listed S,D,T Cyprus Bulgaria, Moldova, 2 Low Risk 18.2% 14, Yes Dominican Republic, Agriculture not listed not listed S,D the Philippines, Construction Egypt Agriculture Cotton (CL), 2WL Extreme Risk 0.4% 256, Yes Indonesia, Sri Lanka, Asia, Estonia Africa, (domestic), Georgia Construction Services 5 Limestone (CL) S,D Estonia 2 Low Risk 16.3% 86, Yes Ukraine,Poland, Albania, Macedonia Construction 1 not listed S,D,T FYR Macedonia (domestic), Bosnia, 1 Medium Risk not listed 13, Yes Kosovo, Romania, not listed 2 not listed Serbia, Ukraine S,D,T 2 Medium Risk 4.4% 268,306 Yes Yes Georgia (domestic), Agriculture 3 not listed S,D,T Kurdistan Greece (domestic), Construction Albania, Bulgaria, Georgia, Romania, Agriculture 5 not listed Russia, Moldova, D,T Hungary (domestic), Romania, China Agriculture 2 not listed S,D,T Jordan Kazakhstan 2 2 Extreme Risk High Risk 40.2% 684, % 7, No Yes Syria, Sri Lanka, Lebanon, Indonesia, Philippines, Bangaldesh, East Kazakhstan (domestic),china, Uzbekistan, Kyrgyzstan, Mongolia Agriculture Construction Services Agriculture Construction Services 4 not listed Garments (FL) Cotton (FL,CL) S,D,T S,D 22 December,

30 THANK YOU! CoL 2016