On Monday, the parliament will decide on a new law that describes the rights and obligations of trade unions, and related to that, employers. In the process of developing the law, the International Labour Organization (ILO), Global Union IndustriALL as well as international brands and retailers, amongst others Tchibo, urgently requested the government to ensure that international standards were met. In this regard there have been positive developments. However, there are still gaps to the ILO conventions. For more information please refer to the website of IndustriALL.

This morning, together with international brands and retailers we addressed the Prime Minister of Cambodia, to clarify the importance for investors in the country that labour laws are in line with international standards. In previous interventions, we had already communicated that the economic attractiveness of the country is linked to a positive development in this regard.

The background:

Over the past year we have regularly blogged about topics related to Freedom of Association and the Right to Collective Bargaining as well as Living Wage. For a large scale, sustainable implementation Tchibo is engaged in a global initiative – ACT on Living Wage – jointly with a group of international brands and retailers as well as the Global Union IndustriALL.

ACT aims to improve wages in the industry by establishing industry collective bargaining in key garment and textile sourcing countries, supported by world class manufacturing standards and responsible purchasing practices.

Through this, specifically through industry bargaining between employer and employee representatives, we as a company aim to support the increase of wages to a living wage level. The advantage of such a systemic approach: regardless of whether a factory produces for the export or the local market, regardless of whether a retailer is a member of ACT or not, the negotiated wages will be applicable for all.

An important step in this direction are functional unions who have the freedom to organize workers and who can engage in collective industry bargaining in a fair and equal manner with the employers. The legal premises regarding Freedom of Association, the Right to Collective Bargaining and the corresponding rights and obligations of trade unions and employers are outlined in several ILO Conventions. These Conventions are legally binding international law and applicable for all countries.

If we take a look at the realities in many sourcing countries, however, there still exists an unnecessary concern that the representation of employees, specifically through trade unions, hampers the economic development of a country. This is a complex matter, also related to social structures, but within this political economy, it is unfortunately not rare that workers who wish to organize themselves and trade union representatives face discrimination.

This is unfortunate, as we have learnt from our programs that factories with functioning representation structures, especially those including unions, are much more successful: they are more stable, have a better economic performance and worker satisfaction is much higher. In such a context, human rights are implemented more effectively and competitiveness rises.

It is clear of course, that there is a need for transformation with regard to effective Freedom of Association and the Right to Collective Bargaining not only in Cambodia, but almost in all production countries for consumer goods worldwide.

With ACT, our partners from other companies, IndustriALL as well as other initiatives we will be working towards the necessary paradigm shift.