Is Unilever setting an example for others to follow?

Food & livelihoods, Governance, Private sector, Rights

Oxfam’s recent report on labour rights in Unilever’s supply chain in Viet Nam revealed a gap between policy and implementation, but the company’s commitment to transparency sets an example to others. 

Few will be surprised by the headline ‘Multinational’s labour practices found wanting by NGO‘ . What is refreshing is that it results from research conducted by Oxfam, but facilitated by Unilever. Such openness by major global corporations is still all too rare in the reputation-driven world of corporate
responsibility. Equally innovative is the approach taken by Oxfam in using the UN Global Principles on Business and Human Rights (UNGPs) as the benchmark for assessing Unilever’s activities. While the UNGPs have rapidly become a central talking point on the conference circuit, examples of implementation
either in practice as a research tool are still thin on the ground.

It is often easier to hide behind high-minded global policies and solutions, without letting the messy truth of country-level application of policies come to light.

Oxfam’s report is ambitious, using an approach that seeks to compare Unilever’s global commitments with implementation in the national context – taking Vietnam as a case study – and also going beyond Unilever’s direct Vietnamese operations to look at impact on suppliers and outsourced labour. Again, this is a relatively novel exercise but definitely worthwhile for identifying localised impacts. 

However, drawing global conclusions may be problematic. For example, the living wage calculations (which Ergon devised and then worked on with Oxfam and Unilever to feed into this report) are specific to Vietnam. 

For instance, a different, markedly lower, minimum wage applies to employees of state-owned enterprises, including the principal provider of outsourced staff to Unilever Vietnam operations. While it is certainly the case that workers in many emerging economies will not be receiving a living wage even if they are being paid the national minimum wage, the levels of disparity will vary by country.

Our methodology in devising a specific wage ladder can broadly be applied across countries, but a different ladder needs to be calculated and constructed for each country or region, and it needs to be updated regularly. Equally, national situations with regard to important issues such as freedom of association and use of outsourced workers dramatically vary and need to be understood, analysed and placed in context.

However, the importance of the local context only serves to underline the report’s key finding of a disjuncture between global policies and national/local implementation. Ensuring that sound, centrally-directed policies are operationalised effectively within national contexts is a huge challenge for global companies. It requires a range of implementation strategies which gives rise to the risk of uneven and erratic application.  Such inconsistency in the is unlikely to be excused by stakeholders that are looking to corporations to implement their sustainability commitments on
a global scale with the same vigour that they apply quality or financial standards.

Faced with this challenge, Unilever’s open door to Oxfam should be applauded. It is often easier to hide behind high-minded global policies and solutions, without letting the messy truth of country-level application of policies come to light. This kind of collaborative transparency and an understanding of the complexity on local delivery – and the need for resource and commitment – is certainly an important example for others to consider and follow.

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Author: Stuart Bell
Archive blog. Originally posted on Oxfam Policy & Practice.