10.8 Differences in law and confusing soft law labour standards

Those persons who played a role in this dispute came from countries with distinct legal systems and cultures. Moreover, they worked in dissimilar sectors of society. Business people, NGOs, unions and campaigning organisations aim for divergent goals in life and usually their thought processes are not aligned. Diverse backgrounds imply different practices and traditions. In order to gain a better understanding of the conflict, the complaints filed and the individual party s expectations, it is useful to briefly outline the various perspectives from Indian and Dutch law, as well as those of the ILO standards and the OECD MNE Guidelines. In Annex 10.1, in fine, these standards are presented, all centred around the allegations against FFI/JKPL as mentioned in the draft Fact-finding Report. In this section the most disputed standards will be highlighted and contrasted with each other.

The main issues in this case study concern (i) the right to collective bargaining, which FFI/JKPL denied to GATWU and (ii) the freedom of association of FFI/JKPL workers. Regarding the first issue, on the basis of the facts of this case and applicable law, it seems difficult to argue that the FFI/ JKPL employees were denied their right to collective bargaining as FFI/JKPL complied with the Indian law. Contrary to the detailed set of rules contained in the Trade Unions Act concerning the establishment of unions and the right to collective bargaining, international law and CSR instruments only give general directions. The ILO core principles1 of freedom of association and collective bargaining apply to India (not directly to companies), but their generality does not add to pertinent Indian law. As India has not ratified other ILO conventions covering this subject, the provisions thereof do not apply to India.2 The ILO Tripartite Declaration of Principles concerning Multinational Enterprises and

Social Policy (ILO MNE Declaration)3 and the OECD MNE Guidelines call

upon enterprises to 'respect the right of their employees to be represented by trade unions and other bona fide representatives of employees, and engage in constructive negotiations (...)', but they do not impose specific conditions.

Consequently, Indian law plays the most dominant role in the determination of what the duties and responsibilities of an Indian employer are regarding collective bargaining. Since this case study occurred in India, a democracy that applies the rule of law, these types of questions shall not be answered differently when viewed from the perspective of CSR.

With regard to the second issue, the freedom of association, the question is of a very factual nature: were the FFI/JKPL employees free to organise or to join a union, or did they fear dismissal when doing so? It seems reasonable to consider the outcome of the various SGS/ASK audits and the Labour Department inspection (Table 10.1). The employees interviewed (a 10% sample of the workforce) acknowledged their awareness of their rights and other benefits. They indicated that they were not particularly interested in joining a union as FFI/JKPL was already paying above-average wages and other benefits. In general, though, freedom of association is certainly an issue that should be monitored carefully at textile suppliers based in developing countries (vide section 10.10 for other case studies). However, in the case at hand, the situation was different. The question could even be posed whether FFI/JKPL would have violated its employees rights to associate with a union of their choice, if the company had accepted GATWU's demand to represent FFI/JKPL's employees and had entered into collective bargaining with GATWU, since GATWU had no FFI/JKPL members.

Looking from a Dutch perspective at the labour conditions and workers relations at FFI/JKPL, or any other company with a comparable workforce, one would expect that a works council, union or any other employee representative body exists to balance management s power and to take care of the employees rights and interests. At FFI/JKPL there are indeed four grievance committees, consisting of elected workers. Yet, their duties are slightly different from works councils and unions rights and duties. However - not only by Indian labour law standards - this committee system is quite advanced. SA 8000 also recommend establishing these types of committees.4 The Lubbers Mediation agreement provided for an intermediary step with the appointment of an ombudsman with the mandate to resolve any labour complaints. So far, the COM has been perfectly capable of ' keeping the peace . Perhaps, as a more general comment, the presence of an ombudsman could develop into a more permanent communication body for companies management and employees.

Concluding, as Indian law is well developed, including labour law standards and collective bargaining mechanisms, Western customers who want to purchase 'socially responsible produced' textiles from Indian producers, should - as a first step - convince these producers to comply with domestic laws, if necessary. If the customers want to go beyond local standards, they can require their suppliers to follow social compliance certification standards, such as SA 8000, FLA, FWF, BSCI, and submit them to regular audits carried out by independent agencies. A next step on the CSR ladder would be to impose certain conditions on the local suppliers by means of contractual clauses, e.g. by including covenants or representations and warranties in purchase contracts that require the factories to provide additional medical care and educational services for workers or their families. The Indian producer thereby commits itself to follow these higher labour standards and has to provide his employees with the additional benefits which he has agreed upon with his customer. Obviously, he will also have to charge a higher price for his products to such a customer. It would be useful for apparel brands to jointly come to such additional requirements in order to keep them realistic for manufacturers.