Labour

General

The international standard setting body for labour issues is the International Labour Organization (ILO), the tripartite UN agency which brings together governments, employers and workers. By the end of 2006, the ILO had adopted 187 Conventions and 198 Recommendations covering a broad range of labour subjects. With the adoption of the ILO Declaration on Fundamental Principles and Rights at Work (FPRW) in 1998, the ILO identified eight of its conventions as "fundamental". These eight conventions address four subjects:

• freedom of association and the effective recognition of the right to collective bargaining;
• the elimination of all forms of forced or compulsory labour; 
• the effective abolition of child labour; 
• the elimination of (ethnic, gender or social) discrimination in respect of employment and occupation.
  

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Another crucial ILO document is the Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy, which was originally adopted by the ILO in 1977. In March 2006 the fourth, updated edition was published. The Tripartite Declaration addresses the responsibilities of corporations and their treatment of labour issues more specifically. In addition to re-affirming workers' rights to freedom of association and collective bargaining, and a ban on discrimination and forced labour, the agreement calls on corporations to:

• increase employment opportunities and standards, and give priority to the employment and advancement of nationals of the host country and to the use of local materials, manufacturing and processing;
• promote equal opportunity and treatment by making qualifications, skill and experience the basis for the recruitment, placement, training and advancement of staff at all levels and avoid any type of (ethnic, gender or social) discrimination of workers;
• promote employment security and avoid arbitrary dismissals. If an employment change is necessary, to provide reasonable notice of such changes to the appropriate government authorities and worker representatives;
• ensure that relevant training is provided for all levels of their employees and management;
• provide the best possible wages, benefits and conditions for employees, which should not be less favourable than those offered by comparable local employers. These should be related to the economic position of the company and meet the basic needs of the workers and their families;
• maintain the highest standards of safety and health, and make available information on hazards to government authorities and workers' and employers' organisations;
• establish a process for regular consultation between workers and employer;
• establish a process to address grievances.

The following declarations and principles endorse the four ILO fundamental principles and rights at work and the Tripartite Declaration:

• the UN Global Compact has included the four ILO fundamental principles and rights at work among its ten principles;
• the Draft United Nations Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights endorses the four ILO fundamental principles and rights at work as well as the Tripartite Declaration;
• the OECD Guidelines for Multinational Enterprises endorses the four ILO fundamental principles and rights at work as well as the Tripartite Declaration;
• the IFC Performance Standards endorse the four ILO fundamental principles and rights at work.

Women

Both the FPRW and the Tripartite Declaration call for protection against gender discrimination in the workplace:

• Promote equal opportunity and treatment by making qualifications, skill and experience the basis for the recruitment, placement, training and advancement of staff at all levels and avoid any type of (ethnic, gender or social) discrimination of workers.
• The elimination of (ethnic, gender or social) discrimination in respect of employment and occupation.

The UN Convention on the Elimination of All Forms of Discrimination Against Women affirm women's rights to non-discrimination in education, employment and economic and social activities.

Children

Child labour refers to the employment of children at regular and sustained labour. States ratifying the Minimum Age Convention adopted by the ILO in 1973, have adopted minimum ages varying from 14 to 16. The UN Convention on the Rights of the Child supports the call for an abolition of child labour.

Health and safety

The employers' responsibility for health and safety of its workers is laid down in various international standards:

• The Occupational Safety and Health Convention was adopted as the international standard of health and safety at work by the ILO in June 1981. This convention was completed with several ILO conventions relating to specific hazards, such as the Asbestos Convention and the Chemicals Convention, and to specific sectors, such as the Safety and Health in Agriculture Convention, the Safety and Health in Mines Convention and the Safety and Health in Construction Convention. Moreover, the ILO published so-called Codes of Practice for 35 different sectors and themes, with concrete measures to ensure the safety and health of workers. 
• The maintenance of minimum standards of health and safety does not appear sufficient. According to the ILO continuous and systematic efforts to improve the health and safety of workers is necessary. Therefore the Promotional Framework for Occupational Safety and Health Convention was adopted in 2006. Countries and companies are encouraged to systematically improve the health and safety of workers and develop a preventive culture in this field. 

Supply chain issues

Companies should have clear procedures for monitoring and supervision of the treatment of workers by their suppliers, and should specify its required labour standards in its contracts with suppliers. Supply chain standards have been developed in the FTSE4Good Supply Chain Labour Standards Criteria, SA8000 Standard, Fair Wear Code of Conduct, and the Fair Labour Association Code of Conduct.

Like all companies, banks are expected to respect local, national and international law and to adhere to the international labour standards in all their spheres of influence. For banks, three spheres of influence are important, which need to be addressed separately in their policies on labour issues:

• it's role as an employer;
• the companies a bank invests in; and
• the supply chain of the companies a bank invests in.

This report does not consider internal labor practices, as it focuses on the policies related to lending and investment banking services and to investments by its asset management division.

The following elements should be incorporated in a bank's policy:

The bank will only invest in companies that:

•  Respect freedom of association and recognize the right to collective bargaining (one of the fundamental principles from the ILO Declaration on Fundamental Principles and Rights at Work);
•  Uphold the elimination of all forms of forced or compulsory labour (idem);
•  Uphold the effective abolition of child labour (idem);
•  Uphold the elimination of (ethnic, gender or social) discrimination in respect of employment and occupation (idem).
•  Respect internationally recognized workers’ rights within the Tripartite Declaration;
•  Pay explicit attention to women’s rights, within relevant issues and sectors;
•  Demand adherence to labour rights from their supply chain.

The bank will:

• Only invest in companies that respect all internationally recognized labour rights, and consider additional standards depending on the situation;
• Encourage companies to systematically improve the health and safety of workers and develop a preventive culture in this field;
• Ensure that companies have taken all necessary steps to adhere to laws and regulations, ILO Principles and the Tripartite Declaration, including processes for learning about employee grievances, clear steps for remediation and a mechanism for seeking resolution of violations or disputes; and
• Use an independent verifying organisation or work together with Multi-Stakeholder-Initiatives (MSI) in sectors where such initiatives exist (e.g. textile sector).