What

1
Whats in it for me?Private sector compliance
with labour legislation

• Steve Gibbons
• Labour Standards in Development Finance
• Carnegie Endowment for International Peace
• April 18, 2006

2
Where does the private sector employer fit?
IFI private sector policy
Company policy
Labour inspectorate / Courts
Private sector employer complies with national
law
National law
International standards
3
What drives private sector companies to comply?

• General culture of compliance with national law
• Commercial imperative to act
• Moral imperative to act
• Response to worker / union pressure
• Response to third party pressure
• Just because...

4
Frameworks for compliance

• May depend on the labour law rule in question
• Needs responsible individuals
• Identifying risk areas
• Building expertise
• Building commitment

5
Some difficult issues

• Freedom of association
• Something more than a compliance issue
• About culture of organisation
• misunderstandings on compulsion to bargain
• Endemic issues
• Discrimination in some countries
• Some supply chain issues of child labour
• Requiring client to make changes may not be
  enough

6
Challenges for financial institutions

• Building capacity in private sector may be a
  long-term project...
• but pressure is to move quickly
• Quick fix may not be sustainable
• Sticks and carrots
• Providing or identifying support

7
Key issues

• National law
• National law enforcement
• Grievance procedures
• Clarity of expectations - action plans
• Understanding degree of leverage and limitations

8
Example from EBRD

• Client had a track record on labour issues
• State labour inspection - lots of violations
• EBRD required corrective actions of client
• Key issue - putting in place management system
• Role of EBRD pressure?
• Reinforcing the position of good guys in
  national management

9

• Just tell me what you want me to do
• When you want me to do it
• But make sure all my competitors have to do it
  too

steve.gibbons_at_ergonassociates.net
http//www.ergononline.net
10
Whats in it for me?Private sector compliance
with labour legislation

• Steve Gibbons

steve.gibbons_at_ergonassociates.net
www.ergononline.net