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Case Study: CalPERS & China ... CalPERS and China. In 2000, CalPERS contracted with US-based Verit 'to provide a quantitative ... – PowerPoint PPT presentation

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Title: ILO

ILO Corporate Social Responsibility Efforts in
the Past, Present and Future
  • Tim De Meyer,
  • Specialist on International Labour Standards and
    Labour Law
  • ILO Sub-Regional Office for East Asia, Bangkok

The Origins of Corporate Social Responsibility
How the ILO operates
  • The ILO promotes social justice by operating
    international law
  • G, E and W set international labour standards
  • States ratify these standards, bring law and
    practice in conformity after tripartite
    consultation (transposition)
  • technical assistance if and where necessary
  • ILO runs a supervisory system to monitor this
  • natural emphasis on fundamental Conventions
    because so widely ratified (in Asia Pacific)
  • States fulfill or fail their obligations under
    international law
  • sanctions are infrequent, but not inconceivable

As of 15 November 2005 - ILO 178 Member States
Adopted No. Title
Ratifications 1930 29 Forced
labour (167) 1948 87 Freedom of
Association and Protection of the Right to
Organise (144) 1949 98 Right to Organise
and Collective Bargaining (154) 1951 100 Equal
Remuneration (162) 1957 105 Abolition of
Forced Labour (164) 1958 111 Discrimination
(Employment Occupation) (162) 1973
138 Minimum Age (142) 1999 182 Worst Forms
of Child Labour (157)
What is CSR ?
  • Corporate Social Responsibility (CSR) encompasses
    a wide variety of initiatives by private actors
    that go beyond legal requirements, and are mostly
    voluntary in nature
  • Private actors often means a variety of
  • ILO social partners (E W)
  • consumer groups
  • NGOs
  • Rests on a variety of philosophical underpinnings
    (ethical, economic, sociological, )

What is CSR
  • Deals with a variety of issues
  • labour and employment
  • bribery and corruption
  • human rights impacts
  • community involvement
  • environmental practices

What is CSR
  • Takes a variety of forms
  • Workplace initiatives (corporate codes of
  • Kenyan Flower Council incorporating provisions of
    buyer codes
  • Ethical Trading Initiative (sharing experiences)
  • Accreditation and certification schemes,
    monitoring and inspection initiatives (e.g. Fair
    Labor Association)
  • Framework agreements (e.g. IKEA / IFBWW)
  • Reporting initiatives (e.g. Global Reporting
  • Management frameworks (e.g. SA8000)
  • Intergovernmental Belgium passed a law
    introducing a product label that would certify
    compliance with core labour standards

How CSR operates
  • Standards are not set, but private stakeholders
    with market leverage (consumers, buyers,
    unions...) borrow them mostly from
    international law
  • Little or no consensus-building towards the
    standards to be applied
  • Compliance is voluntary only in the sense that
    legal sanctions are absent
  • commercial loss of business, funds or reputation

What are MARLS ?
  •  Market Access Requirements related to Labour
    Standards (MARLS)  are positive or negative
    measures, originating with Governments as well as
    market forces ( private initiatives ) that
    target a certain degree of respect for labour
    standards by a producer (or service provider) as
    a condition for the producer/provider to sell
    goods or services, particularly on foreign
  • conditionality can extend to the ability of the
    producer to raise capital (e.g. CalPERS) or
    sustain intangible assets (e.g. reputation)

Typology of MARLS
  • Multilateral
  • GATT Art. XX (e) (prison labour)
  • Bilateral
  • Free Trade Agreements (FTAs) incorporating
    labour provisions mandated by the US Omnibus
    Trade and Competitiveness Act 1988
  • Unilateral
  • EU Generalized System of Preferences (GSP)
  • Private - Corporate Social Responsibility
  • SA8000

Case Study CalPERS China
  • The California Public Employees Retirement System
    (CalPERS) is among the largest investment funds
    in the world, with a portfolio (Aug 04) of USD
    165.3 billion
  • Investment policy is to manage risk by choosing
    international equity markets in function of
  • financial criteria (market factors)
  • market liquidity and volatility
  • market regulation and investor protections
  • capital market openness
  • settlement proficiency
  • transaction costs, as well as
  • but also stability criteria (country
  • political stability
  • financial transparency
  • labor standards
  • Wilshire (a US-based pension consultant) puts
    together an Overall Scoring Framework of
    permissible equity markets

CalPERS and China
  • In 2000, CalPERS contracted with US-based Verité
    to provide a quantitative ranking of 27
    countries based on labour conditions, adherence
    to United Nations standards and governmental
    efforts to address problems in the following five
  • Freedom of Association and Collective Bargaining
  • Forced Labour
  • Child Labor
  • Equality/Discrimination
  • Conditions of Work
  • Verité is an independent, non-profit social
    auditing and research organization established in
    1995. Our mission is to ensure that people
    worldwide work under safe, fair and legal working
    conditions. Where Verité auditors identify
    exploitation of workers or health and safety
    violations in the workplace, we develop concrete
    steps to correct them through a combination of
    trainings for management and workers, education
    programs and remediation programs.

(No Transcript)
Verite 03 Overall Rank
Verite 03 - Category Scores
WB Key Challenges to CSR
  • Key Challenge 1 The Plethora of Individual Buyer
    Codes Is Now Generating Inefficiencies and
  • Key Challenge 2 An Increasing Number of Buyers
    Are Recognizing That Traditional Top-Down CSR
    Strategies Are Not Achieving Improved CSR
  • Key Challenge 3 Insufficient Understanding of
    the Business Case

The Business Case
  • Developing new products and markets
  • launch of a new product or service
  • improvement of an existing product or service
  • creation of a new market for goods or services
  • learning laboratory for innovation
  • e.g. partnership between computer companies and
    public authorities for the development and
    testing of new services.
  • Enhancing the image of the company (pro-active)
    or preventing it from deterioration (reactive)
  • Appearing as an attractive workplace
  • attract and/or retain a workforce
  • strengthen the company culture and the skills of
    the employees
  • Smooth running of the company

  • Corporate citizenship is part of the Employment
    pillar of ILOs Decent Work set-up
  • CSR is part of the the supportive systems and
    the managerial competencies that enable
    enterprises to be productive, competitive and
    viable and at the same time meet the increasing
    social expectations on business
  • CSR does not alter the division of rights, roles
    and responsibilities established by the ILS
  • Bureau for Employers Activities actively
    endorses Global Compact
  • ILO Budget 2006 2007 InFocus Initiative on CSR
  • 2007 International Forum on Corporate Social
    Responsibility and the World of Work