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ACT Initiative

Tackling systemic worker issues through industry collective bargaining

ACT Initiative graphic

 

 

“The ACT initiative is an example of how companies have been working together with trade unions, governments, and others to address some of the most severe and systemic labor rights abuses in their supply chains. It illustrates the promise of collective action to leverage change.
Importantly, initiatives like ACT are not just about voluntary philanthropic contributions to development, but also the product of a recognized responsibility of companies to address severe human rights risks in their supply chains. In meeting this responsibility, ACT makes a critical contribution to sustainable development as well.”
Professor John Ruggie, former UN Special Representative on Business and Human Rights

 

The challenge

April 2013: The Rana Plaza factory collapse shook the world and the business community along with it. For the textile and apparel industry in particular, the deadliest garment factory accident in history – totaling 1,134 individuals killed and approximately 2,500 injured – crystallized awareness about continued failings in both government and business oversight of supply chain conditions and the potentially devastating human cost of those shortcomings. The Bangladesh Accord was thus born, creating the first legally binding agreement between global brands and trade unions to ensure safe working conditions in the Bangladeshi ready-made garment industry.

For many apparel and textile brands, engagement in the Bangladesh Accord became an important first exposure to the necessity and power of collective, industry-wide action in the face of a pervasive supply chain issue. Due in part to this experience and a drive to examine other working conditions alongside health and safety issues, several leading brands came together to face another systemic issue in their supply chains – the lack of a living wage in garment factories and the severe impacts that this has on workers, their families and their communities.

“We can’t talk about ACT without talking about the Bangladesh Accord. Many of the relationships we have with the brands now involved in ACT were forged through the Accord context.

There has to be a willingness to work together, but also to jointly commit to a common set of rules and systems that work. And, in all of my engagements on ACT, across all of the relevant actors, not one person has said, ‘That won’t work.’ This is extraordinary. And it’s because we’re providing a logical framework that will be built out in each country by the unions and employers standing together on their common interest platform and taking wages and working conditions out of industry competition. This is the only path toward systemic, sustainable change in this industry on this issue.”

Jenny Holdcroft, IndustriALL


Even before the Rana Plaza tragedy, however, various brands had built foundational relationships with trade unions through global framework agreements that are now feeding into collective, industry action in this area. These agreements, which are “negotiated at a global level between trade unions and a multinational company,” put in place standards across a company’s operations and business relationships and can be enforced regardless of whether those standards are in place and upheld in an individual country.

“An important benefit of the ACT initiative is that it is an opportunity to reinforce and build on what we are already doing around living wages within the Global Framework Agreement with IndustriALL Global Union, which Inditex signed in 2007 and which plays a priority role in our sustainability strategy. ACT is focused on building more positive relationships between brands and suppliers and between suppliers and workers through enforcement of collective bargaining in the industry. And it is increasing internal awareness within Inditex on our living wage efforts. The more brands that join this effort, the more powerful the impact will be.”
Félix Poza Peña, Inditex


The response

The ACT (Action, Collaboration, Transformation) initiative, which formally launched in 2015, is an agreement between international brands and retailers and trade unions to “transform the garment and textile industry and achieve living wages for workers through industry-wide collective bargaining linked to purchasing practices."

The initiative centers on a memorandum of understanding between the global union IndustriALL and 17 global brands and retailers (including ASOS, C&A, H&M, Inditex, Kmart, Next, Primark, Target, Tchibo, Tesco and others). It is led by a 50% union, 50% brand board and a full-time secretariat.

“There’s no playing to the galleries on this. With living wages, there’s an astounding opportunity to improve lives. But, before ACT, there was never any means of dealing with the issue in any effective way. After the Bangladesh Accord, we built on the relationships with IndustriALL and other brands that were strengthened as part of that effort to tackle living wages.

How many environments are there where you have brands, retailers, manufacturers, governments, trade unions and employer associations all at the same table? This is real innovation.”

Christopher Grayer, Next

 

Key aspects of the initiative

Putting freedom of association and collective bargaining at the center, the ACT model is comprised of three distinct but interrelated components:

  1. Industry-wide collective bargaining between employers and unions of registered and legally enforceable agreements at the national level, such that “workers in the garment and textile industry within a country can negotiate their wages under the same conditions, regardless of the factory they work in and the retailers and brands they produce for."

  2. Purchasing practices of the member brands and retailers that ensure that “payment of the negotiated wage is supported and enabled by the terms of contracts” between global buyers and their suppliers.

  3. Government engagement on national minimum wage fixing enforcement mechanisms, so that they provide “an adequately resourced regulatory, inspection, and legal system that ensures that no less than legal minimum wages are paid to workers” since “minimum wages play a vital role in underpinning living wages and must be set in accordance with this level and regularly reviewed in line with cost of living increases."

In tackling each of these components, ACT is currently supporting capacity- and relationship-building among member brands’ supplier factories, IndustriALL’s affiliated unions and governments in target countries, as well as research on how purchasing practices can best facilitate payment of a living wage.

The initiative’s current countries of focus include Bangladesh, Cambodia, Myanmar, Turkey and Vietnam. It is working to bring additional brands on board to further increase its scope and influence and avoid competitive disadvantages.

"This is a groundbreaking program. We’re organizing ourselves in a way that we never had before. Yes, this takes time, but it is the only way to tackle systemic, structural challenges.

Importantly, we’re connecting this back to our own human rights due diligence at the same time. If we want to secure our future as a business enterprise, we can’t cherry pick what we want to work on, including when it comes to the SDGs. We need to thoroughly look at both our positive and negative impacts on people and then take action, collectively and independently, from there.”

Achim Lohrie, Tchibo

 

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