英文尽职调查手册：促进农业、服装和鞋类供应链中的体面收入和体面工资

Handbookonduediligenceforenablinglivingincomesandlivingwagesin

agriculture,garmentandfootwearsupplychains

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Acknowledgements

ThisHandbookwasdevelopedwithsubject-matterexpertisefromtwentyfiftyandtheDeutscheGesellschaftfürInternationaleZusammenarbeitGmbH(GIZ)withfinancialsupportfromtheGermanFederalMinistryforEconomicCooperationandDevelopment(BMZ).IndraftingtheHandbook,theOECDconvenedamulti-stakeholderinformalexpertgroupofrepresentativesfromcompanies,investors,civilsociety,multi-stakeholderinitiatives,tradeunions,universities,internationalorganisationsandadheringcountriestoprovidesubstantiveinputstotheHandbookandguideitsdevelopment.AtargetedpublicconsultationwasheldfromDecember2023tillJanuary2024,andtheHandbookunderwentconsiderablerevisionbasedonfeedbackaswellastointegratetheoutcomesoftheInternationalLabourOrganization(ILO)MeetingofExpertsinFebruary2024.

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Tableofcontents

Acknowledgements3

Introduction6

Livingincomeandlivingwagesinglobalsupplychains8

Understandinglivingincomeandlivingwages9

Duediligenceonlivingincomeandlivingwages14

Livingincomeandlivingwagesincontextofresponsiblebusinessconduct(RBC)15

Relevantcharacteristicsofduediligenceonlivingincomeandlivingwages19

Collaborationonduediligenceforlivingincomeandlivingwages21

Step1:Embeddinglivingincomeandlivingwagesduediligenceintopoliciesand

managementsystems23

Integratinglivingincomeandlivingwagecommitmentsandactionintocompanypolicy24

Strengtheningmanagementsystemsonlivingincomeandlivingwages25

Livingincomeandlivingwageduediligenceexpectationsinsuppliercontractsorwritten

agreements26

Step2:Identifyingandassessinglivingincomeandlivingwagegapsandimpactsin

ownoperationsandsupplychains27

Scopingrisksandmappingthesupplychain28

Assessingthelivingincomeandlivingwagegapandrelatedrisksinownoperationsand

prioritisedsuppliers31

Step3:Preventingormitigatingharmrelatedtolivingincomeandlivingwagegaps40

Developinganactionplan41

Ceasing,preventingandmitigatingharmlinkedtolivingincomeandwagegapsinown

operations42

Preventingandmitigatingharmlinkedtolivingincomeandwagegapsinthesupplychain43

Step4:Trackingimplementationandresults56

Verifying,monitoringandvalidating57

Step5:Communicatingcommitmentsandactionstakentoaddresslivingincome

andlivingwagegaps61

Informationtocommunicatepubliclyaboutduediligenceonlivingincomeandlivingwages62

Communicationwithaffectedstakeholders63

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Step6:Providingfororco-operatinginremediationwhenappropriate65

Legitimateprocesses66

Whentoprovideremedy?67

Determiningtheappropriateformofremedy68

AnnexA.Usefulresources70

References74

Notes80

FIGURES

Figure1.Simplifieddiagramsforagricultureandgarmentandfootwearsupplychains10

Figure2.ExampleofanincomeladderforruralCentralSulawesi12

Figure3.RightsrelatedtolivingwagesandhowtheylinktoSDGs15

Figure4.Visualisingthelivingincomegap38

Figure5.Strategiesforclosinglivingincomegaps43

TABLES

Table1.Keydifferencesbetweenincomeandwageconcepts11

Table2.Exampleriskfactorsforwageandincome-relatedadverseimpacts30

Table3.Examplesofin-kindbenefitsforwageearners33

Table4.Exampleindicatorstotrackprogress58

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Introduction

Millionsofworkersgloballyarepaidbelowlivingincomeandwageestimations,exposingworkerstopovertyandleadingtootherhumanrightsrisks.Whiletheminimumwagerepresentsthelowestlegalpaysetbygovernmentstoprotectworkersfromexploitation,itoftenfallsshortofcoveringallessentialexpenses.

ThisHandbookdemonstrateshowresponsiblebusinessconductandtheduediligenceframeworkcanbeappliedtoaddresslivingincomeandlivingwagegapsbycontextualisingexistingrecommendations.TheHandbookcoversbothlivingincomeandlivingwagesastheseconceptsareintertwined.TheHandbookcansupportcompaniesinunderstandingwhethertheyareassociatedwithsignificantrisksandimpactsrelatedtolivingincomeandlivingwagesandwhereso,inrespondingtothoseimpacts,regardlessoftheirsize,geographiclocation,andpositioninthesupplychain.Incomeandwagerisksandimpactsareprevalentinthefocussectors.

TheInternationalLabourOrganization(ILO)estimatesthatoneintwoworkersworldwidedoesnotearnaformalwagebecausetheyworkassmallholdersorhomeworkers.TheFoodandAgricultureOrganization(FAO)highlightshowlowwagesinagriculturalsupplychains,compoundedbyfactorssuchasseasonallabourandlackofprotections,contributestoprecariousworkingconditions.Inthegarmentsector,wagesareoftenbelowthepovertylineduetoanumberoffactorsincludinghighcompetitionandpoorpurchasingpractices,whichincreasethelikelihoodofexcessiveovertimeandinsecurecontracts.Workersareparticularlyatriskincountrieswithinadequatepublicservices,andwherecompliancesystems,suchasthelabourinspectorate,areweak,andfreedomofassociationandcollectivebargainingnotprotected.Women,predominantinbothsectors,faceadditionalgenderpaygapsanddiscrimination.Despiteinitiativestotrytoaddresstheseissues,livingincomesandwagesremainoutofreachformanyworkers.

UndertheOECDGuidelinesforMultinationalEnterprisesonResponsibleBusinessConduct(MNEGuidelines),companiesareexpectedtoconductduediligenceonadversehumanrights,labourandenvironmentalimpactswithintheiroperationsandsupplychains1.Thisincludes,asemployers,providingthebestpossiblewages,benefitsandconditionsofwork,withintheframeworkofgovernmentpoliciesandapplicableinternationalstandards;theseshouldbeatleastadequatetosatisfythebasicneedsofworkersandtheirfamilies(MNEGuidelines,ChapterV,Paragraph4b).Actionstowardsachievinglivingincomeandlivingwagesshouldbeproportionatetothecompany'scontextandcontribution.

ThisHandbookreferencesinternationalgovernment-backedstandardsonresponsiblebusinessconduct(RBC)andcorporateduediligenceincluding:theOECDGuidelinesforMultinationalEnterprisesonResponsibleBusinessConduct(OECD,2023[1]),theOECDDueDiligenceGuidanceforResponsibleBusinessConduct(OECD,2018[2]),theOECDDueDiligenceGuidanceforResponsibleSupplyChainsintheGarmentandFootwearSector(OECD,2018[3])theOECD-FAOGuidanceforResponsibleAgriculturalSupplyChains(OECD/FAO,2016[4])andtheG20/OECDPrinciplesofCorporateGovernance2023(G20/OECD,2023[5])andalsotheUNGuidingPrinciplesforBusinessandHumanRights(UNGPs),theILOConventionsonwages,andtheconclusionsoftheILOMeetingofExpertsonwagepolicies,includinglivingwages(ILO,2024[6]).TheHandbookalsomakesreferencetotheactivitiesofvoluntarylivingincomeandlivingwageinitiatives,multinationalenterprisesandstakeholders,whererelevanttoprovideexamples.

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Followingintroductorychapterstolivingincomes,wagesandduediligence,theHandbookleadsreadersthroughthesix-steprisk-basedduediligenceframework,answeringspecificquestionsonhowbusinesscanaddresslivingincomeandlivingwagegapsundereachofthesteps.Additionalresourcesandtoolsarelistedin

AnnexA.

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Livingincomeandlivingwagesinglobalsupplychains

ThischapterintroducesimportantconceptsaddressedinthisHandbook,includingincome,wages,livingincomeandlivingwagesandtheirgaps.

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Understandinglivingincomeandlivingwages

Incomeandwages

InthisHandbook,incomeandwagesrefertotheremunerationthatworkersandfarmersreceivefortheirwork(whileincomecanalsocomefromothersources)andbotharerelevantconceptsforworkersintheagriculture,garmentandfootwearsectors.

Incomeisconsideredatthehouseholdlevelandcancomefromorbeimpactedbymultiplesourcesincludingincomefromemployment,incomefromproduction(e.g.crops),produceconsumedathomeandfromtransfers,suchasbenefitsorcashstipends.Understandinghouseholdincomewillbeespeciallyrelevantforworkerswhoarepaidforthedeliveryoftheirgoodsorservices,whoareinseasonalwork,ordividetheirlabourbetweendifferenttypesofwork(whichcanincludewagedwork).Incomesthereforegoupanddownaccordingtoworkoutputandprices,aswellasdependingonwhichotherformsofincometheworkerandtheirhouseholdhasaccessto(ILO,2023[7]).Incomeisrelevantinsupplychainsincludingsmallholderfarmersproducingrawmaterialsoringredientsintheagriculturesector(ILO,2022[8])(GLWC,n.d.[9]).Itisalsorelevantforcompaniesinthegarmentandfootwearsectorsasdownstreamusersofagriculturalproducts,andalsobecauseofthepresenceofinformalwork,suchashomework,ingarmentandfootwearproduction.

Wagereferstothefixedremunerationthatworkersreceiveforworkdone,paidataregularfrequency,forexampleattheendofthemonth.Inthegarmentandfootwearsectoritisthepredominantmethodofpaymentforworkersinformalsettings,suchasinfactoriesorsmallproductionunits,aswellasinallnodesofthesupplychainthathaveemployedlaboursuchasdistribution,logistics,warehousingandretail.Itisalsoarelevantconceptintheagriculturesectorforworkersengagedonfarmsorplantations,seasonalorcontractworkers,aswellasothernodesofthesupplychainthathaveemployedlabourfromprimaryprocessing,packaging,manufacturingtodistributionandretail.Wagescanalsobevariable,suchasisthecaseforemployeeswhoarepaidpiecerates,andpaidininformalsettingstoo.See

Figure1

asanillustrationofwhereincomeandwagesaretypicallyrelevantinthesesectors.

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Figure1.Simplifieddiagramsforagricultureandgarmentandfootwearsupplychains

Note:Figure1showsprocessesandactorsinthevaluechainforwhomitmaybemorerelevanttoconsiderlivingincomeorlivingwages,butshouldbeunderstoodasanapproximationassupplychainsandemploymentmodelswilldiffer.Incomecanalsocomefromandbeimpactedbyothersourcesthanwork.

Livingwages

ThepreambleoftheILOConstitutioncallsfortheprovisionof“anadequatelivingwage”,andtheDeclarationofPhiladelphia(1944)callsontheILOtopromote“policiesinregardtowagesandearnings,hoursandotherconditionsofworkcalculatedtoensureajustshareofthefruitsofprogresstoall,andaminimumlivingwagetoallemployedandinneedofsuchprotection”.InlinewiththeseinstrumentsandconsistentwiththeUniversalDeclarationofHumanRights(UDHR),in2024theILOdenotedthattheconceptofthelivingwageis:

•thewagelevelthatisnecessarytoaffordadecentstandardoflivingforworkersandtheirfamilies,takingintoaccountthecountrycircumstancesandcalculatedfortheworkperformedduringthenormalhoursofwork

•calculatedinaccordancewiththeILO’sprinciplesofestimatingthelivingwage(see

Box3)

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•tobeachievedthroughthewage-settingprocessinlinewithILOprinciplesonwagesetting(see

Box6)

.(ILO,2024[6]).

TheILOsaysthatmethodologiestoestimatelivingwagesshouldbebasedonanidentificationandassessmentofabasketofgoods,usinglocalpricesofthecostsofatleastthefollowingcomponents:food,housing,healthandeducation,andothernecessarygoodsandservices,inaccordancewithnationalcircumstances,whichshouldprovideforadecentlivingstandardoftheworkerandhis/herfamily.TheGlobalLivingWageCoalition(GLWC),apartnershipworkingtoenablecollaborativeactiontoachieveadecentstandardoflivingforworkingpeopleandtheirfamiliesworldwide,definesthelivingwageastheremunerationreceivedforastandardworkweekbyaworkerinaparticularplacesufficienttoaffordadecentstandardoflivingfortheworkerandherorhisfamily.Itspecifiesthatelementsofadecentstandardoflivingincludefood,water,housing,education,healthcare,transportation,clothing,andotheressentialneedsincludingprovisionforunexpectedevents(GLWC,n.d.[10]).

Livingincome

ThereisnoILOdefinitionoftheconceptoflivingincome.TheLivingIncomeCommunityofPractice(LICoP),anallianceforimprovingsmallholderincomes,developedaworkingdefinitioninconsultationwithcivilsocietyorganisations(CSOs),governmentandbusinesspractitioners.TheLICoPdefinesalivingincomeasthenetannualincomerequiredforahouseholdinaparticularplacetoaffordadecentstandardoflivingforallmembersofthathousehold.TheLICoPagreesonthesameelementstodefineadecentstandardoflivingasGLWC,seeabove.

Livingincomeandlivingwageconceptscomparedwithotherincomeandwageconcepts

Povertylinesandminimumwagesareotherimportantincomeandwageconceptsthatareoftenincorrectlyusedinterchangeablywithlivingincomeandwageconcepts.Whileeachcountryorcontextisunique,therearesomekeydifferencesbetweenthesetermsandhowtheyareapplied(see

Table1)

.

Table1.Keydifferencesbetweenincomeandwageconcepts

National

Povertylines

InternationalPovertyLines

Minimumwage

Collectively

bargainedwages

Livingincomeandlivingwage

Origin

Determinedbygovernmentstomonitorpovertyandidentify

affected

population

groupson

nationallevel.

DeterminedbytheWorldBanktomonitorpovertyglobally.

Usuallydeterminedbyindividualgovernments,butsometimesbysocialpartners,ideallyinlinewiththeILOConvention131.193countries

worldwidehavealegallydeterminedminimum

wage.

Wageratesfixed

throughnegotiations

betweenoneormoreemployers(ortheir

organisations)andoneormoreworkers’

organisations(thatis,tradeunions).

Calculatedbasedonthecostofabasketof

goodsthatshould

provideforadecent

livingstandardofthe

workerandhis/her

family.Themethodologyusedshouldbeclearonthefamilysizeand

numberofwage

earners.(ILOonlivingwages).

Calculation

UsestheCost-

of-Needs

approachor

LivingStandardsMeasurement

Studyandbasedonhousehold

data

Defineslivingstandardatsubsistencelevelper

personperdayandis

calculatedinpurchasingpowerparity(PPP)to

convertdifferent

currenciesintoacommonandcomparableunit

acrosscountries.

Calculatedatanhourly,weeklyormonthlyrateforoneperson

none

Livingwageis

calculatedperpaid

employeewhereas

livingincomeappliestoindependentworkers

andiscalculatedfortheentirehousehold

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National

Povertylines

InternationalPovertyLines

Minimumwage

Collectively

bargainedwages

Livingincomeandlivingwage

Degreeofbindingnature

Povertylinesarevoluntary

referencevalues.

Povertylinesare

voluntaryreferencevalues.

Minimumwageisbindingandhastheforceoflaw.

Collectiveagreementsbindthesignatoriesandthoseonwhosebehalftheagreementis

concluded.Measures

canbetakentoextendtheapplicationof

collectiveagreementstoallemployersand

workersinparticularsectors.

Voluntaryreference

values.TheILOnoteslivingwageestimatescancontributetoandinformanevidence-basedsocialdialogueforwagesetting.

Frequencyof

adjustment

Regularityofadjustment

varies

dependingoncountry

Updatedregularly.

Regularityofadjustmentvariesdependingon

country

Variable

Regularityofadjustmentvariesaccordingtothemethodologyused.

Scope

Nationallevel,

oftensegregatedintourbanand

rural.

Globallyavailable;nationallevel.

Nationallevelandmore

localisedlevels,

includingsomesector

specificminimumwages

Theenterprise,theindustry,the

occupational,orthenationallevel

Focusondeveloping

andtransitioncountries;Regionalspecificlevel;sometimessegregatedinnational,urbanandrural.

Note:Furtherresourcesondifferentwageconceptsrefertopp.41in(Balestra,HirschandVaughan-Whitehead,2023[11]).

Someorganisationshaveusedincomeorwageladderdiagramstodemonstratedifferentreferencevaluesforeachconceptandtheextenttowhichorganisationsmeeteachconcept.

Figure2

illustratestheexampleofanincomeladdercomparinglivingincomeandpovertylinevaluestoactualincomesinruralCentralSulawesi,Indonesia(focusingoncocoaproducingareas).

Figure2.ExampleofanincomeladderforruralCentralSulawesi

Source:BasedonGlobalLivingWageCoalition(2022[12]),LivingIncomeReport,RuralCentralSulawesi,Indonesia,

/wp-content/uploads/2024/02/LI-Central-Sulawesi-final-report-Feb.14.2023.pdf

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Livingincomeandlivingwagegaps

Alivingincomeorlivingwagegapisthedifferencebetweenaworkerorfarmerhousehold’sactualincomeorwageandthelivingincomeorlivingwagerate.Forcalculatinglivingincomeorlivingwagegaps,actualincomesandwagesaswellasanappropriatelivingincomeorlivingwagebenchmarkareneeded.Livingincomeandlivingwagegapsareusedwidelyasanindicatoroftheextentoftheriskforworkersthattheirremunerationfallsbelowtheamountthatisneededbythemandtheirfamiliesforadecentstandardofliving,pertheILOlivingwageconcept.TheconceptisusedthroughoutthisHandbooktodenotethelevelofriskforworkers-theexistenceofagapindicatesahigherriskforwageandincome-relatedharms,povertyanddeprivingworkersoftheireconomicandsocialrights,aswellasotherinterlinkedrisks.Italsopresentsforcompaniesacrucialmetrictomeasureandmonitorprogressaspartoftheirlivingincomeandlivingwagestrategies.SeeStep2forfurtherinformationonmeasuringlivingincomeandlivingwagegaps.

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Duediligenceonlivingincomeandlivingwages

Thischaptersituatesexpectationsoncompanyduediligencetoenablelivingincomeandlivingwageswithinabroadercontextofgrowing

governmentpolicy,collaborativeinitiativesandinvestorandconsumer

interests.Itintroducesduediligenceandservesasanintroductiontothestep-by-stepsectionswhichfollow.

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Livingincomeandlivingwagesincontextofresponsiblebusinessconduct(RBC)

TheMNEGuidelineslayouttheexpectationthatcompaniesshouldconductduediligenceonactualandpotentialadverseimpactsintheirownoperations,theirsupplychainandotherbusinessrelationships.Thismeanscompaniesshouldtakeactiontoidentify,prevent,mitigateandaccountforhowtheyaddressthoseimpactswhichconcernlabour,humanrights,environmentalandintegrityandothermatterscoveredbytheMNEGuidelines.OECDrecommendationsonduediligencearealignedwithexpectationsonresponsiblebusinessconductfromtheUnitedNationsanditsagenciessuchastheILOandFAO.

Livingincomeandlivingwagesarerelatedtokeyfoundationalprinciplesofhumanrightsaslaidoutininternationalhumanrightsinstruments2.AddressinglivingincomeandlivingwagegapsisanimportantwaythatcompaniescancontributetotheSustainableDevelopmentGoals(SDGs),see

Figure3.

PovertyandwagesarehighlightedasprevalentrisksfortheagriculturesectorintheOECD-FAOGuidanceforResponsibleAgriculturalSupplyChains(theAgricultureGuidance)(OECD/FAO,2016[4]).TheOECDDueDiligenceGuidanceforResponsibleSupplyChainsintheGarmentandFootwearSector(theGarmentGuidance)(OECD,2018[3])includesamoduleonwageswhichisrecognisedasaprevalentriskforthesecto