Enforcement Instruments for Social Human Rights along Supply Chains Labor and Globalization Volume 9 Edited by Christoph Scherrer Christoph Scherrer (Ed.) Enforcement Instruments for Social Human Rights along Supply Chains Rainer Hampp Verlag Augsburg, München 2017 Bibliographic information published by the Deutsche Nationalbibliothek Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available in the Internet at http://dnb.d-nb.de. ISBN 978-3-86618-894-5 Labor and globalization: ISSN 2196-5382 First published 2017 Cover photo: A garment worker in the Dharavi locality of Mumbai, 2016, by Christoph Scherrer. © 2017 Rainer Hampp Verlag Augsburg, München Vorderer Lech 35 86150 Augsburg, Germany www.Hampp-Verlag.de All rights reserved. No part of this publication may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publisher. In case of complaints please contact Rainer Hampp Verlag. Contents List of Figures and Tables .................................................................................... iv Acknowledgments ................................................................................................. v Notes on Contributors .......................................................................................... vi 1. Introduction ....................................................................................................... 1 Christoph Scherrer 2. Economic Arguments for International Workers’ Rights ................................. 6 Christoph Scherrer 3. Overview of Enforcement Instruments for Workers’ Rights along Supply Chains.................................................................................................. 18 Stefan Beck / Christoph Scherrer 4. Instruments of German Foreign Economic Policy for Promoting Co-Determination along Supply Chains ......................................................... 50 Alison Schultz 5. The Enforcement of Workers’ Rights through Conditional or Promotional Trade Agreements: A Comparison of US and EU Social Chapters.............. 155 Madelaine Moore 6. Corporate Due Diligence: A Contribution to the Enforcement of Human Rights? .............................................................................................. 186 Christian Scheper List of Figures and Tables Figures Figure 3.1: ILO member countries with trade agreements including labor provisions by region, 2013 ...................................................... 21 Figure 3.2: Increase in number of labor provisions in bilateral and regional trade agreements, 1990 – 2013 ................................. 22 Figure 4.1: Review Process of KfW Bank’s Export Financing ..................... 77 Figure 4.2: The different evaluation standards ............................................... 79 Figure 4.3: Due Diligence Procedure for Export Credit Guarantees, Investment Guarantees and Untied Loan Guarantees ............. 85 Tables Table 3.1: Labor Provisions in US PTAs ........................................................ 23 Table 3.2: Different types of labor provisions in EU trade agreements ......... 25 Table 3.3: Comparison of Basic Elements for a Labor Chapter ..................... 29 iv Acknowledgments This volume brings together a few very recent studies on the enforcement issue of social human rights. While each of them is offering valuable insights in its own right, together they provide a fuller picture of the current debates on the instruments necessary for improving the working conditions of workers in global supply chains. Therefore, I asked the authors of these studies whether they would be interested in contributing an updated version of their studies to a volume on enforcement instruments for social human rights along supply chains. I am pleased that the authors responded positively and also got permission from the organizations that previously published their studies as working papers. The contribution of Stefan Beck and me is taken from a longer study commissioned by ACTRAV of the International Labor Organization. It was published as a Global Labour University working paper in October 2016 (“Trade regulation and global production networks”). The contribution of Alison Schultz is a translation of a study published in German (Schultz und Scherrer, 2017: Mitbestimmung in Zulieferketten. Instrumente der deutschen Außenwirtschaftspolitik, Hans-Böckler-Stiftung, Working Paper Forschungsförderung Nr. 033) with the financial support of the Hans-Böckler- Foundation. The contribution of Madelaine Moore builds on a study commissioned by the Friedrich-Ebert-Foundation for its project on “Core Labour Standards Plus”. The chapter by Christian Scheper is a modified and updated version of Part I of the study “Corporate Obligations with Regard to Human Rights Due Diligence”, published by the Friedrich-Ebert-Foundation in 2015 (and co-authored with R. Grabosch). My own brief chapter on the economic arguments for international workers’ rights builds on a number of previous publications. I thank Kosmas Kota for translating the long study by Alison Schultz and the Hans-Böckler-Stiftung for funding the English language translation. I like to express my thanks to Nicole Magura for formatting the manuscripts. Many thanks also to Rainer Hampp at Hampp Verlag who was enthusiastic about the book project from the very beginning. Financial support was granted by the International Center for Development and Decent Work which is one of the five Centers of Excellence for Exchange and Development program managed by the German Academic Exchange Service (DAAD) using funds from the German Federal Ministry for Economic Cooperation and Development (BMZ). Christoph Scherrer Berlin, May 2017 v Notes on Contributors Stefan Beck is an adjunct lecturer at the University of Kassel, focused on political economy and comparative research on capitalism. He holds a PhD in political science from Kassel University. He published on the export surpluses of Germany (“Vom fordistischen zum kompetitiven Merkantilismus”, Metropolis) and issues of international trade in general. Madelaine Moore is an associate PhD fellow at the International Center for Development and Decent Work (ICDD) at the University of Kassel. She received her MA in Labor Policies and Globalization from the Berlin School of Economics and Law and the University of Kassel as part of the Global Labour University. The PhD thesis is about struggles over access to water from a Social Reproduction Feminist perspective. Her areas of interest include social movements, Social Reproduction Feminism, Labour Rights and Global Value Networks. Christian Scheper is a postdoctoral researcher at the Institute for Development and Peace at the University of Duisburg-Essen. His work focuses on human rights, transnational corporations and the politics of global production. He holds a PhD in political science from the University of Kassel. In his dissertation he analyzed the discourse on corporate responsibility for human rights in the context of global production networks. Christoph Scherrer is director of the International Center for Development and Decent Work at Kassel University. He works on issues of the international political economy and labor. His most recent books are: Public Banks in the Age of Financialization: A Comparative Perspective (Edward Elgar; forthcoming), Combating Inequality: The Global North and South (co-edited with A.Gallas/H. Herr/F. Hoffer, Routledge, 2015), Financial Cultures and Crisis Dynamics (co- edited with B. Jessop/B. Young, Routledge, 2014) Alison Schultz is a master student of Global Political Economy at the University of Kassel. She has published on the Latin American debt crisis (with L. Rama Iglesias “What Kind of Challenges does a Debtors’ Cartel Face? An Analysis of the Latin American Debt Crisis”, New Research in Global Political Economy 2015/2) and is currently working on fossil fuel divestment. vi 1. Introduction Christoph Scherrer Dire working conditions are prevalent in the labor-intensive segments of global value chains. Suicides, such as those that occurred at the some of the Foxconn consumer electronics assembly plants in China, and accidents such as the collapse of the Rana Plaza garment factory in Bangladesh, have made consumers more attentive to the plight of workers. For many years, trade unions and human rights nongovernmental organizations have called on corporations and governments to take responsibility for ensuring the human rights of the workers in sweatshops around the world. In response, corporations have developed internal codes of conduct and have hired corporate social responsibility staff and consultants to certify their suppliers’ labor relations. By signing on to the United Nations Covenant on Economic, Social and Cultural Rights and membership to the International Labor Organization, governments have committed themselves to respect social and human rights, encompassing freedom of association and the right to organize and bargain collectively. Economically advanced countries have also written OECD guidelines for businesses outside their home countries. And recently all member countries of the United Nations have underlined their commitments to the human rights of workers by including the goal to “Promote sustained, inclusive and sustainable