The Role of Corporate Social Responsibility on the Global Supply Chain in the Achievement of Workplace Compliance

Abstract

Multinational Enterprises (MNEs) are economically stronger than some developing countries and their capacity to impose their influence in order to keep high their competitiveness at expenses of workers rights is well known. An efficient regulatory body capable of holding all MNEs accountable for harmful behaviour does not exist so far, since many initiatives have been weak both at national and international level, even if intergovernmental organizations have tried to create a global reference framework for responsible behaviour. For all these reasons the issue of Corporate Social Responsibility (CSR) has arised as a pressure from the society and companies’ clients who have become sensitive to workers’ rights violation and threats to the environment. This study examines the structure of the term “Corporate Social Responsibility” and the role of codes of conduct, by focusing on how they are diffused by international organization and voluntary adopted by enterprises. In spite of its non-legally binding nature, CSR is now one of the most debated regulatory instruments, so as to become a milestone of the management system and a way to promote the company’s ethic image. The first part is meant to analyse CSR initiatives carried out at global level by the major intergovernmental organizations: International Labour Organization (IL0), Organization for Economic Cooperation and Development (OECD), United Nations (UN) and European Union (EU). The first chapter has the aim of providing an overview of what is the nature of CSR and what is the power of its instruments in regulating companies’ activities: the codes of conduct. All the theory get a match in the second part of the thesis, where responsible management will be applied to the supply chain of a multinational company, and how the latter may have positive effects in improving workers’ conditions. The second chapter highlights the great problem of regulations from the company to its entire supply chain, focusing on documents drafted by ILO, OECD and UN on how to incorporate sustainability into companies’ network practices. Three actors are in charge of taking initiatives in order to drive the change: they are the three governance types able to promote decent working conditions in line with national and international labour requirements: public, private and social governance. Governments, MNEs and social partners, like trade unions and employers’ organizations, have all the ability to enforce labour norms; in this second chapter there have been analysed pros and cons of initiatives performed by the three actors, particularly by international companies. Despite the non-legally binding nature of codes of conduct and multi-stakeholder initiatives, actions voluntary performed by companies gained certain authority in regulating workers’ condition along the supply chain, and more important, they have the potential to influence other sectors’ initiatives. Finally, a case study will be analysed which cover all the relevant activities undertaken by a multinational company in order to engage in responsible conduct; the focus is on a Finnish multinational company: Kemira Oy. The case study is meant to examine the company’s structure by focusing on responsible practices performed with respect to their employees and the supply chain. The company publishes two kind of codes of conduct: one for suppliers and distributors, one for employees; the purpose is to highlights good practices performed by a real enterprise in order to put into practice all the theory analyses as far as here; I mean to introduce Kemira as a good example of responsible conduct which developed its own due diligence approach in line with international standards.