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ACT brand commitments: what do they mean in practice?


ACT brand commitments: what do they mean in practice?

The ACT Memorandum of Understanding between each member brand and IndustriALL Global Union commits corporate signatories to ensure that their respective purchasing practices support long-term partnerships with manufacturers and facilitate the payment of a living wage. In practice this means – among other aspects – that ACT member brands will incorporate higher wages into the purchasing prices they pay to suppliers, in order to enable them to negotiate improved wages and working conditions. This support by ACT member brands is operationalised in two sets of commitments: the ACT country support commitments and the ACT Global Purchasing practices commitments.

The ACT Country Support Commitments provide specific support for countries that are the first to sign a collective bargaining agreement at industry level. Countries can benefit from these support commitments if they have a collective agreement at industry level in place that ensures wage growth exceeding inflation and productivity growth, full respect of freedom of association and a monitoring mechanism.

The commitments are specified for each country in consultation with employers’ representatives and trade unions at country level. For Cambodia for example, ACT brands have committed themselves to maintain or increase their sourcing from the country until the end of 2022 if a collective agreement is signed. At the same time, ACT member brands have also committed themselves to working globally – across all sourcing countries – towards changing purchasing practices that are impediments to progress towards living wages and good working conditions.

Through the global purchasing practices commitments, ACT member brands commit to include wages as itemised costs in purchasing prices, to respect fair terms of payments, to undertake better planning and forecasting as well as training on responsible sourcing and buying and to practice responsible exit strategies. These global commitments are the result of the Purchasing Practices Self-Assessment (PPSA) by ACT brands and discussions with suppliers and trade unions, where 5 key areas with the biggest impact on wages and working conditions were identified.