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Meeting of the Brand Caucus
20 January 2015
Accord on Fire and Building Safety in Bangladesh | Brand Caucus Meeting |20 January 2015 Amsterdam
Agenda
Introduction
Remediation (Mel, Jochen, Santi) Tier 3 – legal situation and options De-listed & 30 day rule Wage payments Resources Financial communication to factories S. 23 issue
OHS Committees (Phil, Mel)
Caucus Governance (Jochen)
Update on Arbitration – time permitting (Mel)
Accord-Alliance Update – time permitting (Mel, Phil, Roger)
AppendixWorker Participation
Introduction
New Steering Committee:Roger Hubert, H&MUwe Hilker, TchiboSantiago Martinez-Lage, InditexJochen Overmeyer, OttoPhil Chamberlain, C&AMelanie Steiner, PVH
Remediation – Tier 3 and Delisted Issue
Tier 3 Issue
Scope Section of Accord, s. 3:Tier 3 factories are subject only to “limited
initial inspections to identify high risks”Can represent no more than 35% of a
signatory’s productionMeant to include facilities with occasional
orders and where the buyer has limited leverage with the factory
S. 3 includes a caveat that if a facility is determined, as a result of the initial inspection, to be “high risk”, then it “shall be subject to the same treatment as if it were Tier 2.”
De-listed issue – Disclosure Protocol After the initial disclosure list is provided, it will be updated
in the following manner:
1) Any factory which meets the definition of a covered factory will be added by that company to its disclosure list within one month of the date on which the factory first meets the relevant criteria (e.g., one month after the first order is placed), with the understanding, however, that the factory becomes a covered factory as soon as it meets the definition, whether or not it has been disclosed.
2) Any factory that ceases to meet the definition of a covered factory will be removed from the list within one month of the date on which it ceases to meet the definition, with the understanding that the factory remains a covered factory until it has been properly removed from the list.
Note: 30 day rule is not in the Accord but was agreed the SC.
Currently 120 factories have been inspected with no active brands.
◦ 92 have 1 or more brands under 30 day rule
◦ 28 have no brands responsible under 30 day rule
◦ 16 were tier 1 or 2
◦ 104 have no CAP approved yet
Wage IssueDuring the first 1,103 inspections, 26
factories had ‘critical closures’ and were submitted to the Review Panel.
6 of these factories did not provide wage payments as required under s. 12 of the accord, which we are told is approx. 2.5MUSD(Section 13: Brands shall require suppliers to pay all outstanding wages if the factory closes for renovations)
We are being asked our opinion on the setting up of a Factory Fund where all Accord signatory companies would participate based on an agreed level.
A proposal is being put to the SC tomorrow.
Tier 3 Issue, cont.At least 40% of Accord factory base is
purely Tier 3 (currently 781 factories are Tier 3 only)
At our last SC meeting, we were advised that the CSI declared ALL factories under the Accord to be high risk, and therefore, all factories are subject to “the same treatment as if tier 2”
The definition of high risk has not been agreed, and there is ambiguity around what “the same treatment” means in the scope section.
Tier 3 and de-listed issue, cont.There are 2 key issues:
◦The legal interpretation of s. 3 of the Accord. Definition of high risk Tier 2 “same treatment as” Tier 3 issue, including
whether ss. 22 and 23 apply
◦The practical issue. Regardless of the legal interpretation, we are in a situation where over 700 Tier 3, plus delisted factories have no remediation support and therefore it is unlikely that the CAPs will be fulfilled. The question is: what is our response to this?
Tier 3, cont.Options:Labor proposal: that all Tier 3 are now
“converted to” Tier 2 Brand legal interpretation – that ss. 22 and
23 do not apply to Tier 3 regardless of being defined as high risk
Agree to disagree on the legal interpretation, but come up with a practical solution, e.g.:◦ International institutional funding (e.g. IFC)◦ Assist with remediation (e.g., set up lead
brands for Tier 3), but falling short of s. 22 possible payment obligations
For discussion1. Brands’ proposal on how to deal with
Tier 3 issue? (Jochen to discuss in next slides)
2. Discussion of relief fund proposal 3. Position on de-listed factories?
Remediation – Tier 3 Options
Structure GLA
Proposed Tier 3 Structure
.Escrow
Gov.Buyer/Accord
Agent Bank
IFC
Tier 3 Supplier
Guarantee
Credit IFC Account
Loan
Compliance
Info
Alternative DEG Approach
Main Requirements creditor
General feasibility
Sovereign Role as Guarantors (Escrow body)
Credit Volume
Remediation Guidance
System of operational and financial compliance
Due Diligence Criteria
Fall-Out Consequences
Main Requirements Sovereign
Involvement of Governments (3-5-1 Group)
Financial Capacity, ODA Funds
Escrow Body
Due Diligence Level
Regress procedures
WTO Competition Rules
Main Requirements Accord
Auditing
Support remediation
Compliance
Workers Education
Corruption Prevention
Main requirements Suppliers
Audit Results
CAP Remediation Plan
Providing trustable Financial data, Transparancy
Supporting Due Diligence
Comply to disbursement requirements
Provide additional individual sureties
Ensure repayment
OHS Committees
OHS CommitteesS. 17 of the Accord states that OHS committees
shall be required by signatory companies in all Bangla factories that supply them, which shall function in accordance with Bangla law.
Bangladesh passed a new labor law which requires an OHS committee at every workplace with more than 50 employees:◦ 90(A) Formation of the Safety Committee: “Where In a
factory, 50 or more workers are employed, there shall be a Safety Committee formed and functioned in the manner as prescribed by the Rule”
Problem is that the GoB has not issued the implementation rules which detail how this will happen e.g., how to elect/form the committee.
OHS Committees, cont.SC has put forward a proposal for discussion as
follows:◦ Intensify efforts with GoB-MoLE including a letter from
Accord SC.◦ Involve Ambassadors, High Commissioners and ILO◦ Start with the 45 factories that have a registered union◦ Continue with the nomination of ‘high performing’ factories◦ Brands to support outreach and prep work
Points for consideration:◦ Are we ok to proceed before the Bangla implementation
laws are passed?◦ Likely to be claims that we are violating the sovereignty of
Bangla and imposing rules ahead of the law◦ Possible stand-alone position as the Alliance has indicated
they may wait for the implementation rules to be passed
Caucus Governance
Roles and Responsibilities in information and decison- making process between Signatories and Company SC Representatives
Situation today 196 company signatories to the Accord in
more than 20 countries in Europe, North America, Asia and Australia
3+3 brand representatives in the Steering Committee
Only 4 caucus meetings p.a. 5 regional brand meetings only with
management One joint email-address to directly address
SC Comp. Members No structures for “brand only” information
sharing, discussion and decision building process
Objective Clear, and structured process and platform for
information and decison building process between brands and brands and SC representatives.
Pragmatic structure and short reaction times
Easy to access intermediate level for exchange of information, questions and feed back between brands prior to involving SC Reps.
Structuring and Summarizing of opinion forming process
Structure Clustering of Signatories in area
groups Appointment of liason colleagues Communications matrix for opinion
forming process
Possible Cluster Criteria: - countries ? - size and type of signatory ? - common language ?
Structure proposal countries
Cluster 1 Austria, Germany 31Cluster 2 Austria Germany 31Cluster 3 UK, USA, Canada, 21Cluster 4 UK, USA, Canada 22Cluster 5 Belgium, Netherlands 30Cluster 6 France, Switzerland 10Cluster 7 Spain, Italy 10
Cluster 8
Australia, Sri Lanka, Hong Kong, Japan,
Turkey 16
Cluster 9
Poland, Norway, Sweden, Finland,
Denmark, 25
CoordinationEach area group with an own cluster liason
colleagueVice-versa communication Information and requests from companies
via liason colleaque to SC Corp. Reps (Caucus Coordinator) and reverse
Opinion finding, discussions and information sharing among area group,
Aggregated transfer by liason colleaque to
Comp.Reps.
Further ideas?
APPENDIX
Results of the Working Group on Worker Participation
(published February 21st, 2014)
4 main topics:
• The right to refuse unsafe work• Joint Occupational Health & Safety Committees• A complaint mechanism• Training programmes
The Right to Refuse unsafe work
• Builds on the Accord commitment to ensure that workers have the right to refuse unsafe work by providing a clear definition of the term "unsafe work", together with a detailed process for both factory management and workers to follow
• Allows for both individual and collective refusals
• Makes a link to the complaint mechanism in cases where reprisals are alleged to have been taken against workers for using this right
Joint Occupational Health & Safety Committees + Complaint Mechanism
• Outlines the composition of the committees including the election of worker members, the selection of management members, recognising the need for a gender component
• Establishes the mandate of the committees
• Sets rules for the effective functioning of the committees
• Establishes clear links between these committees, the training programme and the inspectorate
• The complaint mechanism establishes a process for filing, evaluating, investigating and resolving complaints by workers which conforms to the Ruggie Principle for grievance handling
Next Steps
The introduction of the Complaints Mechanism and
the Right to Refuse
Dangerous Work are
being put into operation
A pocket guide for workers on
the same 2 elements is
being prepared
A complaints form has been developed and
shared with the IBC RMG federations
Rob Wayss will provide a more comprehensive
update this afternoon
• The goal of the training programme is to empower factory managers and workers to take ownership over the implementation of key Accord provisions, including remediation of inspection findings, running H&S Committees, making use of the complaint mechanism, and exercising the right to refuse unsafe work, where necessary
• The training programme applies a dialogue and empowerment orientated methodology, which is derived from classic change management approaches
• The core principles of the training programme include action learning, change orientation, integration and peer learning, dialogue and trust building, participation in decision-making, trade union involvement, transparency and quality
• The main target groups are factory managers and workers, with an emphasis on H&S committee members who will receive training on rights and responsibilities, the election of worker representatives, the right to refuse unsafe work, the complaint mechanism and issues linked to discrimination ( including social, gender, cultural) plus Freedom of Association
• Trainers to be selected according to quality standards and to be evaluated through a practical assessment
A Comprehensive Training Programme