“International Framework Agreements are more effective at engaging with trade unions than Corporate Social Responsibility (CSR) Codes of Practice.” Critically evaluate and discuss this statement.
Introduction
Two essential strategies that multinational corporations (MNCs) can employ to control the social and environmental repercussions of their activities are corporate social responsibility (CSR) and international framework agreements (IFAs). CSR codes of practice are voluntary programmes that motivate MNCs to accept accountability for their effects on the environment and society. IFAs, on the other hand, are contracts between MNCs and labour organisations that outline the fundamentals and requirements for human rights, social and environmental standards, and labour rights (Li et al., 2019).
I have examined the usefulness of corporate social responsibility (CSR) codes of practice and international framework agreements (IFAs) in this essay’s discussion of how to interact with labour unions. IFAs are more effective than CSR Rules of Practice in engaging with labour unions, according to my main claim based on the research study (Gold et al., 2020).
IFAs give MNCs and trade unions a platform for social dialogue, allowing the parties to bargain and reach social policies and labour standards. IFAs also offer a platform for monitoring and enforcing labour laws because they have systems for reporting, keeping track of, and resolving disputes. Research has demonstrated that IFAs can be a valuable tool for enhancing working conditions, fostering social interaction, and boosting union membership.
Yet, CSR Codes of Practice are frequently accused of needing more enforcement and accountability procedures and instead rely on voluntary activities. Despite the fact that MNCs’ adherence to CSR Codes of Practice might be seen as an indication of their dedication to ethical business practises, these guidelines might not be enough to encourage MNCs to follow labour laws or cooperate with unions. The institutional context in which CSR Codes of Practice are applied determines their effectiveness as well, and countries with robust legal systems and high levels of enforcement may find that their use is less effective.
In light of the fact that IFAs offer a more robust framework for social dialogue, monitoring, and the enforcement of labour norms, they are more effective in interacting with trade unions than CSR Codes of Practice.
Effectiveness of IFAs in Engaging with Trade Unions
International Framework Agreements (IFAs) are agreements between multinational corporations (MNCs) and trade unions that specify the fundamentals and requirements for human rights, labour rights, and social and environmental standards. IFAs’ primary goals are to enhance working conditions and advance social dialogue between MNCs and unions. The success of IFAs in interacting with trade unions is influenced by a number of variables, such as the willingness of MNCs to interact with trade unions, the legal system in the nation where the IFA is implemented, and the participation of local trade unions in the negotiation and implementation of the IFA.
The usefulness of IFAs in interacting with unions has been investigated in a number of researches. According to a study, IFAs can be a valuable method for interacting with trade unions, especially in nations where labour laws are lax or ineffectively implemented. The study discovered that IFAs could support social dialogue between MNCs and trade unions and aid in improving working conditions. The study also discovered that the IFA’s success depends on the local trade unions’ participation in its negotiation and implementation.
Similarly, a study examined the effectiveness of IFAs in improving working conditions in the Indian garment industry. The study found that IFAs can be an effective mechanism for improving working conditions, particularly in sectors where labour standards are weak or poorly enforced. The study also found that the involvement of local trade unions in negotiating and implementing the IFA is critical for its success. However, the study also identified several challenges, including the reluctance of some MNCs to engage with trade unions and the weak legal framework in India for enforcing labour standards.
Under the prism of institutional theory, the efficiency of IFAs in interacting with unions can also be examined. According to an institutional theory, organizations are shaped by the norms, values, and rules of their institutional environment. The standards and norms of the global society, which place a high emphasis on labour rights and social and environmental standards, have an impact on MNCs in the context of IFAs. MNCs can strengthen their credibility and reputation by announcing their adherence to these standards and principles by signing IFAs.
IFAs’ ability to interact with unions, meanwhile, also depends on the institutional setting in which they are used. Institutions can either be heterodox or isomorphic. Organizations are supposed to adhere to a set of norms and procedures uniform in isomorphic institutions, which are characterised by a high level of homogeneity. While organisations have more liberty to adopt various norms and procedures in heterodox institutions, they are distinguished by a high level of diversity.
The institutional backdrop in the context of IFAs can influence how well the agreements work to engage with unions. IFAs may need to be more successful in enhancing working conditions in nations with isomorphic institutional settings where labour laws are strictly upheld and implemented. This is because MNCs are already required to adhere to labour laws in these nations. IFAs may be more successful in enhancing working conditions in nations with heterodox institutional environments where labour rules are lax or ineffectively implemented since they give trade unions a forum to interact with MNCs about workers’ rights and working conditions.
In numerous nations, IFAs have successfully improved working conditions. For instance, the International Framework Agreement (IFA) between the International Transport Workers’ Federation (ITF) and the French oil company Total was signed in 2014. It resulted in the implementation of a number of measures to enhance working conditions and safety standards for personnel on the company’s offshore platforms (ITF, 2014). Similar to this, the International Framework Agreement (IFA) that H&M and IndustriALL Global Union signed in 2014 resulted in the creation of a worldwide framework agreement covering topics including freedom of association, collective bargaining, and health and safety (IndustriALL, 2014).
Therefore, the success of IFAs in interacting with unions depends on a number of variables, including the willingness of MNCs to interact with unions, the legal environment in the nation where the IFA is implemented, and the participation of local trade unions in the IFA’s drafting and implementation. Especially in nations where labour laws are lax or poorly implemented, studies have shown that IFAs can be a valuable tool for enhancing working conditions and encouraging social interaction between MNCs and trade unions (Hennebert et al., 2023).
Factors affecting the effectiveness of International Framework Agreements (IFAs) in engaging with Trade Unions
International Framework Agreements (IFAs) are voluntarily signed agreements between multinational companies (MNCs) and global union federations (GUFs) with the objective of enhancing labour standards and working conditions throughout the MNC’s worldwide supply chain. The efficiency of IFAs in interacting with unions depends on a number of variables, such as the degree of commitment from both parties, the nature and details of the agreement, and any outside forces that might affect how the agreement is carried out.
- Commitment from both parties
The level of dedication from both MNCs and GUFs is a significant factor in whether IFAs are successful in working with labour unions. The agreement is not likely effective if one or both parties do not genuinely want to raise labour standards and working conditions. As a result, it’s critical that both parties agree on the goals of the contract and the significance of working together to attain those goals.
- Scope and content of the agreement
The efficiency of IFAs depends heavily on the scope and content of the agreement. A wide range of topics, including fundamental labour rights, health and safety, pay and benefits, and social discussion, should be covered under the agreement. The greater the agreement’s scope, the more probable it is to improve working conditions and worker rights. The agreement should also include quantifiable goals and deadlines for tracking and evaluating progress (Marassi, S, 2020).
- Implementation and monitoring mechanisms
The agreement’s implementation and oversight procedures are significant determinants of how effective the agreement will be. IFAs should have well-defined processes for notifying authorities about labour law infractions and dealing with them, as well as impartial and effective grievance procedures. In order to make sure the agreement is carried out successfully and to highlight areas for improvement, regular monitoring and assessment should also be done (Zimmer, R, 2020).
- External factors
Local rules and regulations, political stability, and economic conditions are just a few examples of outside variables that have an impact on how well IFAs interact with labour unions. For instance, the agreement’s implementation might be more difficult in nations with lax labour regulations. In a similar vein, the implementation of the agreement may need to be improved or improved in nations with fragile political or economic climates. As a result, it’s critical to consider these outside variables and collaborate with local players, such as governments and civil society organisations, to handle any issues that might occur.
- Capacity of trade unions
(Cotton, E, 2019) Another critical element is the ability of trade unions to interact with IFAs. The tools and knowledge trade unions need to negotiate and implement the agreement successfully should be available to them. To make sure that the agreement is carried out and enforced at the local level, they need also to have a significant presence and influence in the nations where the MNC conducts business.
Therefore, it is crucial to make sure that these variables are thoroughly reviewed and handled during the negotiation and implementation of IFAs in order to enhance their efficacy.
Effectiveness of CSR Codes of Practice in Engaging with Trade Unions
Corporate Social Responsibility (CSR) Codes of Practice are voluntary programmes to promote ethical business conduct, including respect for human rights, social and environmental norms, and labour laws. CSR Codes of Practice, which define the standards and principles for ethical corporate behaviour, are often created by MNCs (Bourguignon et al., 2020). The success of CSR Codes of Practice in interacting with unions depends on a number of variables, such as the extent to which the Codes are enforced, the degree of interaction between MNCs and unions, and the accountability mechanisms in place to check compliance with the Codes.
Several studies have looked at the efficiency of CSR Codes of Practice in interacting with labour unions. CSR Codes of Practice can be a helpful tool for interacting with labour unions, according to a study by Utting and Marques (2010), especially if coupled with strong accountability measures. The study concluded that CSR Codes of Practice could support social dialogue between MNCs and trade unions, improve working conditions, and enhance corporate social responsibility. The study also discovered that the success of CSR Codes of Practice depends heavily on the level of involvement between MNCs and trade unions.
Similarly, Taylor and Napier’s study from 2005 looked at the efficiency of CSR Codes of Practice in interacting with trade unions in the South African mining industry. The study discovered that CSR Codes of Practice could be a powerful tool for enhancing working conditions, especially when they are created through a process of social dialogue between MNCs and trade unions. The study also discovered that the willingness of MNCs to cooperate with unions and the degree of trust between the parties is necessary for CSR Codes of Practice to be effective.
Using the prism of institutional theory, it is possible to examine how well CSR Codes of Practice interact with trade unions. The institutional theory asserts that an organization’s culture is moulded by the standards, beliefs, and laws of its institutional setting (Scott, 2008). MNCs are impacted by the standards and ideals of the global community, which place high importance on ethical business practices in the context of CSR Codes of Practice. MNCs can increase their legitimacy and reputation by adopting CSR Codes of Practice, which demonstrate their commitment to these standards and values (Aggarwal et al., 2019).
The institutional setting in which CSR Codes of Practice are implemented, meanwhile, also influences how well they work in interacting with unions. Due to the fact that CSR Codes of Practice offer a forum for communication between MNCs and trade unions, they may be more effective in interacting with unions in nations with lax legal systems and low levels of enforcement. CSR Codes of Practice, however, may be less effective in interacting with unions in nations with robust legal systems and high levels of enforcement because MNCs are already required to adhere to labour laws in these nations.
Factors affecting the effectiveness of CSR Codes of Practice in engaging with Trade Unions
Corporate Social Responsibility (CSR) Codes of Practice are voluntary guidelines developed by companies to promote responsible business practices and improve their social and environmental impact. These codes can also play a role in engaging with trade unions, particularly in the context of supply chains. The effectiveness of CSR codes of practice in engaging with trade unions depends on several other factors, including:
- Clarity and specificity of the code
For the CSR code to be effective in interacting with unions, it must be clear and precise. The expectations and requirements that businesses must meet in relation to labour rights, working conditions, and other social and environmental issues should be clearly stated in the code. The code should also outline the steps that businesses must take to ensure compliance and lay out precise instructions for filing complaints or reporting infractions. The code should be written in a simple manner that both workers and labour unions can understand, and it should also be translated into the languages of the nations where the corporation conducts business (Muchlinski, P, 2021).
- Credibility and legitimacy of the code
In order to interact with unions, it’s crucial to consider the CSR code’s legitimacy and reliability. Trade unions, as well as other interested parties, should be included in the development of the code, which should be based on internationally accepted norms and standards such the conventions of the International Labor Organization (ILO). To ensure that the business is adhering to the code’s principles, the code should also be approved by impartial third parties, such as civil society organisations or certification agencies. To guarantee that the code is current and useful, it should be examined and updated on a regular basis (Kassem, et al., 2023).
- Access to information and transparency
Access to information and transparency are also important for the effectiveness of CSR standards of practise in working with unions. The company’s supply chain should be thoroughly described in the code, including the locations and working circumstances of its suppliers and subcontractors (Losada-Otálora et al., 2021). A company’s performance in upholding the criteria set forth in the code, including any infractions or complaints, should be disclosed in the code. Trade unions should be able to utilise this information to hold the firm responsible for its deeds and should have access to it.
- Communication and consultation
For CSR codes of practice to be effective in working with unions, there must be effective communication and engagement with the unions. To learn about the unions’ interests and concerns and to have their influence on the creation and application of the code, businesses should have regular conversations with them. To aid trade unions in comprehending and successfully implementing the code, businesses should also offer training and capacity building to them (D’Andrea et al., 2019).
- Enforcement and sanctions
The effectiveness of CSR codes of practice in engaging with trade unions also depends on the enforcement mechanisms and sanctions in place. The code should specify the consequences for non-compliance and provide for effective grievance mechanisms that allow trade unions and workers to report violations and seek redress. Sanctions should be meaningful and proportionate to the severity of the violation and should include remedies for workers who have been harmed (Kurniawan, et al., 2020).
The clarity and specificity of the code, its credibility and legitimacy, access to information and transparency, communication and consultation with trade unions, and the enforcement mechanisms and sanctions in place are just a few of the variables that influence how well CSR codes of practice engage with trade unions. Businesses are more likely to successfully interact with unions and promote ethical business practices if they give these considerations top priority when developing and putting into practice their CSR codes of practice.
Conclusion
The argument is that when it comes to interacting with trade unions, international framework agreements (IFAs) are more useful than corporate social responsibility (CSR) codes of practice. This is due to the fact that IFAs are legally binding agreements between corporations and trade unions that address a wide variety of concerns and offer enforceable methods, whereas CSR codes are voluntary guidelines that may lack specificity and enforceability. However based on different aspects including clarity, credibility, transparency, communication, and enforcement procedures, both IFAs and CSR codes can help to promote ethical company practices and interact with trade unions.
IFAs (International Framework Agreements) and Corporate Social Responsibility (CSR) Codes of Practice can both be used to engage with trade unions and promote ethical company practices, although it seems that IFAs are more successful at doing so than CSR codes (Torres et al., 2021). IFAs are legally binding contracts with enforcement processes that address a wide range of issues, whereas CSR codes are voluntarily agreed-upon standards that might not be as detailed or enforceable. IFAs and CSR codes’ efficacy, however, is dependent on a number of elements, including their clarity, veracity, transparency, communication and enforcement methods. To effectively interact with trade unions and advance ethical business practices, companies should give priority to these elements while developing and implementing their agreements or codes.
The essay contends the fact that IFAs are legally binding contracts that address a variety of concerns and offer enforceable methods makes them more useful. CSR codes, on the other hand, are voluntary standards that could be vague and difficult to enforce. IFAs and CSR codes both rely on elements like clarity, trust, transparency, communication, and enforcement procedures to be effective. For successful engagement with trade unions and promotion of ethical business practices, companies should give priority to these criteria in the creation and implementation of their agreements or codes.
References
Utting, P. and Marques, J.C., 2010. Introduction: The intellectual crisis of CSR. Corporate social responsibility and regulatory governance: Towards inclusive development?, pp.1-25
Aggarwal, V.S. and Jha, A., 2019. Pressures of CSR in India: an institutional perspective. Journal of Strategy and Management, 12(2), pp.227-242
Bourguignon, R., Garaudel, P. and Porcher, S., 2020. Global framework agreements and trade unions as monitoring agents in transnational corporations. Journal of Business Ethics, 165(3), pp.517-533
Li, C., Meyer, K. and Thein, H.H., 2019, July. Global Framework Agreements as Substantive Commitments to Employment Practices in MNEs. In Academy of Management Proceedings (Vol. 2019, No. 1, p. 17593). Briarcliff Manor, NY 10510: Academy of Management
Gold, M., Preuss, L. and Rees, C., 2020. Moving out of the comfort zone? Trade union revitalisation and corporate social responsibility. Journal of Industrial Relations, 62(1), pp.132-155
Kocher, E., 2021. Transnational Labour Law?“Corporate Social Responsibility” and the Law. Transnational Legal Activism in Global Value Chains, p.187.
Hennebert, M.A., Roberge‐Maltais, I. and Coiquaud, U., 2023. The effectiveness of international framework agreements as a tool for the protection of workers’ rights: A metasynthesis. Industrial Relations Journal
Barreau, J., Havard, C. and Bah, A.N., 2020. Global union federations and international framework agreements: Knowledge exchange and creation. European Journal of Industrial Relations, 26(1), pp.41-57
Marassi, S., 2020. International framework agreements and management of global supply chain: extra-judicial mechanisms to enforce international labour standards. Questions of international law: Zoom out, 73, pp.51-69.
Sobczak, A., Relations industrielles Industrial Relations
Zimmer, R., 2020. International Framework Agreements: new developments through better implementation on the basis of an analysis of the Bangladesh Accord and the Indonesian Freedom of Association Protocol. International Organizations Law Review, 17(1), pp.178-205
Cotton, E., 2019. AND GLOBAL UNIONS. Critical Issues in Human Resource Management: Contemporary Perspectives, p.137
Sukdeo, V.H., 2019. Corporate Law, Codes of Conduct and Workers’ Rights. Routledge
Séhier, C., 2020. Corporate social responsibility against workers? How codes of conduct have failed to improve working conditions in the Chinese industry. Society and Business Review, 15(2), pp.55-76
Rioux, M. and Vaillancourt, C., 2020. Regulating Corporate Social Responsibility (CSR) for economic and social development through trade rules. Journal of Developing Societies, 36(3), pp.335-352
Tanimoto, K., 2019. Do multi-stakeholder initiatives make for better CSR?. Corporate Governance: The International Journal of Business in Society, 19(4), pp.704-716.
Piccolo, K., 2021. Business, Law, and Codes of Ethics. Encyclopedia of Business and Professional Ethics, pp.1-6
Muchlinski, P., 2021. The impact of the UN Guiding Principles on business attitudes to observing human rights. Business and Human Rights Journal, 6(2), pp.212-226
Kassem, R., Salama, A. and Ganepola, C.N., 2023. CSR, credibility, employees’ rights and legitimacy during a crisis: a critical analysis of British Airways, WizAir and EasyJet cases. Employee Relations: The International Journal, 45(1), pp.1-20
Losada-Otálora, M. and Alkire, L., 2021. A transformative approach to corporate social responsibility: an antidote to corporate hypocrisy. The Service Industries Journal, 41(3-4), pp.200-222
D’Andrea, A., Pizzichini, L., Marasca, S. and Gregori, G.L., 2019. CSR Communication: The Use of Internet-Based Tools. Symphonya. Emerging Issues in Management, (2), pp.38-59
Kurniawan, S. and Disemadi, H.S., 2020. Corporation’s Criminal Liability in Indonesia: A Response to the Weak Enforcement of Corporate Social Responsibility. Lentera Hukum, 7, p.209
Hadi, N., Naim, A.H., Karim, A. and Obozna, A., 2021. LAW ENFORCEMENT OF CORPORATE SOCIAL RESPONSIBILITY (CSR) IN INDONESIA. Journal of Legal, Ethical and Regulatory Issues, 24, pp.1-11
Torres, L.D., Jain, A. and Leka, S., 2021. Addressing gender inequality through corporate social responsibility: A review of public governance in Latin America. Aligning Perspectives in Gender Mainstreaming: Gender, Health, Safety, and Wellbeing, pp.133-150
write