TNC Motives for Signing International Framework Agreements: A Continuous Bargaining Model of Stakeholder Pressure

Abstract

Over the past decade, discussion has flourished among practitioners and academics regarding workers' rights in developing countries. The lack of enforcement of national labour laws and the limited protection of workers' rights in developing countries have led workers' rights representatives to attempt to establish transnational industrial relations systems to complement existing national systems. In practice, these attempts have mainly been operationalised in unilateral codes of conduct; recently, however, negotiated international framework agreements (IFAs) have been proposed as an alternative. Despite their growing importance, few studies have empirically studied IFAs. This paper starts to fill this gap by studying why corporations adopt IFAs, based on a qualitative study of the process leading to the signing of a recent IFA. The study's findings complement existing research into why corporations adopt IFAs, codes of conduct, and CSR policies by demonstrating that corporate motives can be linked to a desire to retain a trusting relationship with the labour union movement. In addition, the findings indicate that the discrete campaign model of stakeholder pressure dominant in previous research should be complemented by a continuous bargaining model of stakeholder pressure. The paper concludes by discussing differences between these conceptual models of stakeholder pressure and avenues for future research.

Negotiating as Institutional Work: The Case of Labour Standards and International Framework Agreements

“…However, institutional thickness is a double-edged sword in a cross-border setting like the IFA negotiations we examine. On the one hand, the rather thick regulatory environment of European labour relations provides for access to the bargaining table (Egels-Zandén, 2009). On the other hand, these regulations may restrict the range of solutions negotiators can think of, leading to negotiation outcomes that are difficult to translate and enact for local actors constrained by different institutions.…”

Transnational Governance of Workers’ Rights: Outlining a Research Agenda

“…Regarding the first of these three research areas, there is ample research into why firms adopt codes of conduct (e.g., Weaver, 1993;Esbenshade, 2001;van Tulder and Kolk, 2001;Bondy et al, 2004;Graafland, 2004), and some emerging research into why firms adopt IFAs (Miller, 2004;Riisgaard, 2005;Egels-Zandén, 2008a). There is also some research into why labour unions prefer IFAs (Justice, 2003;Frundt, 2004;Miller, 2004;Lipschutz, 2004;Roman, 2004;Riisgaard, 2005); existing research, however, provides few answers as to why NGOs promote codes rather than IFAs.…”

“…For example, it is reasonable to expect that IFAs might be more effective than codes of conduct in promoting union rights, given the influential role of unions in negotiating and implementing IFAs (cf. Wills, 2002;Riisgaard, 2005;Egels-Zandén, 2008a). Union rights is also an area in which codes of conduct have had limited success (Barrientos and Smith, 2007;EgelsZandén and Hyllman, 2007).…”

“…Similarly, greater union involvement could be expected in the auditing of IFAs than of codes of conduct (cf. Riisgaard, 2005;Egels-Zandén, 2008a). Central questions then become: i) is greater union involvement linked to greater corporate involvement (higher union commitment leading to higher corporate commitment) or lower corporate involvement (higher union commitment leading to lower corporate commitment), and ii) how is greater union involvement linked to implementation effectiveness?…”

Do Voluntary Labour Initiatives Make a Difference for the Conditions of Workers in Global Supply Chains?

“…IFAs and codes of conduct may serve a similar purpose, namely, to improve and protect workers' rights, but the governance system of IFAs is different and does not simply lay in the hands or control of the business enterprise. The system of governance attached to IFAs recognizes and implants the role of trade unions in representing and promoting workers' rights (Egels-Zandén, 2008). There is just one IFA in the banana sector, which was signed in 2001 by Chiquita Brands International, the IUF and the Central American trade union Coordinadora Latinoamericana de Sindicatos Bananeros (COLSIBA) (IUF, 2001).…”