Starting a Responsible Labor Initiative: Lessons From the DR-CAFTA

Authors

• BSR Staff

  

Last week—applying lessons learned from BSR’s 15 responsible labor demonstration projects in the DR-CAFTA region—we examined why such initiatives are good for business. And while the full business case for responsible labor may not be completely written, there is mounting evidence that these programs help companies increase productivity, reduce costs, enhance their reputations, open up markets, and more.

This week, we look at some of the best ways to implement responsible labor programs throughout a company’s global operations—from the corporate board room, to local producer, to the field. Based on what we have learned from our demonstration projects, the following are useful practices to build an effective program.

Embed Responsible Labor Into Company Culture

Creating a real and lasting culture of responsible labor means going beyond compliance and integrating good labor practices into the very DNA of the company. At CASSA, El Salvador’s largest sugar refinery, which employs 17,000 people at two mills and produces a third of the country’s sugar, the company had a set of core values in place for years—on paper, anyway. But when BSR surveyed workers as part of our demonstration project, many responded that these values were too general and not well-communicated. One employee told us that “the link between the company values and staff members is missing.”

To address this, BSR, together with our local partner FUNDEMAS, launched a three-part series of workshops to redefine the company’s values. Senior-level managers and mid-level staff participated in exercises to map the company’s main stakeholders and outline their expectations of the company. In response, managers and employees jointly developed company values and concrete actions to meet those expectations.

Although some workers went into the workshops assuming that, in one worker’s words, it would be “like a play with a predetermined finale,” after the workshops, participants said they felt a greater sense of belonging, communication, and trust with the company. This collaborative approach gave employees a vested interest in disseminating the company’s values and—most difficult of all—ensuring that they are practiced in day-to-day operations and decision-making.

Align Responsible Labor Practices With Business Strategy

Responsible labor initiatives are most effective when they are aligned with a company’s business goals. Programs that yield tangible benefits for both the company and its employees find greater support among senior management, guaranteeing sustained investment and long-term commitment to the program.

An example of this is BSR’s work with Nicaragua’s association of agrochemical producers and distributors, ANIFODA, to improve container-recycling practices. Throughout Nicaragua, used containers are frequently collected and resold with fake pesticides or families pick them up and use them as storage devices at home. The sale of these fake chemicals under ANIFODA-member labels has damaged the reputation of the industry.

The project aims to implement responsible labor practices at the farm level by promoting safer handling of agrochemical containers by farmers, and improving the association’s container collection system. As more used containers are collected, our work in improving the association’s recycling program directly lessens the risk that these containers end up in circulation after the company has used them. The Nicaraguan population benefits from avoided illnesses and a cleaner environment, while ANIFODA can increase sales by deterring the illegal market and safeguarding the industry’s reputation. The program is a high priority for ANIFODA and will likely be a continuous, sustained effort by the association.

Encourage Management-Worker Dialogue

Effective communication between employees and managers is invaluable in many ways, and when it comes to responsible labor programs, it is a critical part of building trust. We found that one of the best ways to encourage dialogue is to allow workers to offer concrete innovations for improving their own working conditions and productivity.

BSR and our partner FUNDAHRSE took this approach in our work with the Honduran banana industry, which has a long history of tense management-worker relations. At the banana farm Finca Tropical, we helped the company improve these relations by giving workers a key role in identifying productivity problems and solutions on the farm.

One of the project’s main steps to achieve increased worker participation was to reinvigorate the farm’s existing Fair Treatment Committee—a committee recognized by Honduras’ Ministry of Labor to represent workers’ opinions—which was previously viewed as inefficient, providing little input in the farm’s decisions. Following our project, the number of members in the committee expanded from three to 12 workers, with employees representing a broader range of the company’s operations. The committee now meets with management on a regular basis to identify opportunities to improve operational efficiency. At these same meetings, the senior management team shares production goals with supervisors and employees.

As a result of improved communication and greater worker participation, employees at Finca Tropical reported an overall positive change in their interactions with managers and increases in productivity—which led to an associated increase in their income.

Use Best Practices as a Benchmark

Companies and public agencies that are just starting responsible labor programs can look to other industry leaders—locally and globally—for inspiration. Benchmarking is commonplace among international corporations, but it can be challenging for small, local producers that lack access to information about the practices of their peers. For this group, benchmarking against multinational operations has limited value.

To address this challenge in Costa Rica’s high-tech industry, we developed a system to benchmark best labor practices among members of the Costa Rican Chamber of Information and Communications Technologies (CAMTIC), the main business association representing software-development firms in the country’s thriving high-tech industry.

First, we helped CAMTIC conduct a member survey to identify best practices—and challenge areas—in responsible labor policies and programs to retain valuable employee talent. Because we surveyed the local association, these practices were, by definition, already adapted to small firms operating in Costa Rica. The survey results were clear: Most firms provided environments that were respectful of employees, but only a few offered opportunities for professional development. The companies that provided training, software workshops, and seminar opportunities were more likely to retain employees.

Through this tailored benchmarking, participating companies became aware of the powerful, motivating effect of these policies and made appropriate changes to their own programs. Benchmarking best practices, as we did with CAMTIC, provides companies with valuable information against which they can identify gaps and adopt new practices to improve their corporate responsibility programs.

Look for Opportunities to Partner With Government

By partnering with government, companies can help create a local culture or “enabling environment” that supports positive labor practices across entire industries. Public-private partnerships can also increase impact and minimize costs in the implementation of shared responsible labor objectives.

BSR took this approach in Costa Rica, where we worked with the country’s Ministry of Labor to develop a series of recommendations on how to build “responsible labor” into public policy and regulatory frameworks. In looking for synergies between the private and public sectors, we recommended that international buyers partner with the government to share in the oversight of their suppliers’ labor standards. This engagement would help avoid duplicative efforts and increase the number of workers nationwide covered by a monitoring program, leading to a more efficient, sustainable system for ensuring responsible labor practices in Costa Rica.

Viewing governments as stakeholders and becoming familiar with their programs can lead to alliances that make the successful implementation of responsible labor practices more achievable.

The DR-CAFTA Responsible Competitiveness Project demonstrates how enduring responsible labor practices can be implemented in different industries, settings, and, at times, in remote locations. These projects provide actionable lessons for companies about their engagement with members of their global supply chains.

These demonstration projects and case studies were made possible by a grant from the U.S. Department of State to BSR for its DR-CAFTA Responsible Competitiveness Project. The project works with producers, labor, government, and international buyers to promote responsible labor practices in countries of the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA). For more information, visit www.drcafta.bsr.org.