Coming together and building trust: ACT country consultations

The Action, Collaboration, Transformation (ACT) initiative brings together global brands, retailers and trade unions to achieve better wages and working conditions through collective bargaining at industry level, linked to the purchasing practices of brands.

Key to success is that actors at the country level are in the driving seat, and collaboration between all relevant actors in the global supply chain is indispensable for sustainable progress. Employers and unions in a country should agree on wages and working conditions between themselves.

It is also essential that brands’ purchasing practices contribute to the necessary economic space to enable employers and unions to achieve a sustainable industry based on continuous wage growth through negotiations.
Suppliers of ACT member brands will be requested to participate in collective bargaining at industry level. ACT member brands will then source from suppliers who comply with the standards of the collective agreement. Furthermore, wage growth will be incorporated in the brands’ purchasing practices and countries with national collective bargaining will become preferred countries for sourcing.

Countries pioneering this approach can count on a sourcing commitment from ACT member brands. The brand commitments depend in return on full respect of freedom of association and on a collective bargaining agreement at industry level providing for substantial wage growth.

“We are working together towards a collective bargaining agreement at industry level supported by the purchasing practices of ACT member brands. This has the potential to establish a new way of trade unions, employers and buyers working together.”

Ken Loo, Secretary-General, Garment Manufacturers Association of Cambodia

During recent months, ACT has been meeting with national actors in Cambodia, Myanmar, Turkey and Vietnam. Suppliers, employers’ organisations, trade unions and ministries started to discuss together the country specific dimension of the ACT approach.

In Cambodia, ACT is engaged in regular consultations with employers and trade unions to discuss these commitments and expectations in more detail. The Memorandum of Understanding which has been signed by all ACT member brands with IndustriALL, the global trade union federation of garment workers, has been crucial for building the trust and confidence of trade unions, employers and governments at the country level. Further encouraged by the brand commitments a joint bargaining group of nine trade unions has started talks with GMAC.

Commitments of ACT member brands:

• Brands will make countries with a collective bargaining agreement at industry level a preferred destination for sourcing and investment for a defined period of time.
• Brands will ask their suppliers to actively support the collective bargaining process. Compliance with the standards of the collective bargaining agreement at industry level will be requested from suppliers.
• Brands will undertake a self-assessment and share these findings with suppliers to identify and change purchasing practices that are an obstacle for suppliers to move towards a living wage.
• Brands and suppliers ensure that their purchasing practices support long term partnerships with manufacturers which enable and reward their progress to paying a living wage.
• Brands agree to incorporate the higher wages as a cost item in their purchasing price calculations.
• ACT members (brands and trade unions) will work with governments to promote the idea that the full respect for freedom of association and the implementation of a living wage is supported through different government policies.

For September 2018, ACT is preparing a meeting with the Cambodian partners to discuss a labour costing model, transparent ways of monitoring ACT member brand commitments and a joint conflict resolution approach.

Jenny Holdcroft, Assistant General Secretary of IndustriALL Global Union states: “There are still many issues to be negotiated, but there is a common will to make this work which is really important. With ACT, we have a process to ensure the sustainability of the garment industry in Cambodia”.