Within the construction industry and in particular on large or complex projects, responsibility for and performance of the work generally cascades down the supply chain. The first and second tier of the supply chain may be held accountable by strict contractual requirements, but further down the sub-contracting chain the contractual liabilities decrease until suppliers at the end of the chain are often unbound by any requirements to uphold
labour standards and working conditions.
As buildings are becoming more complex, they require additional design features and the services of specialised suppliers. At the same time, there is increasing fragmentation of the industry as is evident from the growing number of specialized suppliers/contractors, the proliferation of diversified products and the fragmentation of design and supervisory activities.
The supply chain is often not transparent, which is increased by the project-based nature of the industry with defined start and end points, and a traditional separation between design phase and construction phase. Demand is created through a series of competitiveltendered prototypes set up by temporary coalitions of contractors. This all has an impact on organisational relationships. Within the European construction industry there is a growing trend to use third country companies in the supply chain for activities performed in the EU.
As such, the transnational supply chain of the European construction industry is gradually transforming into a global supply chain. Elements of the supply chain include the flow of resources to satisfy the demand for materials, labour, information, skills, and so on. It can also refer to competences and
bundling of resources. It is well known that tendering within the supply chain is primarily driven by cost factors in order to cope with the extreme price pressures that the construction sector faces. Within a structured organisational setting ‘the central management’ of the main contractor is formally the responsible authority, which directs the rules, aims, objectives and practices through its “management” using supply chain systems and procedures. The monitoring of supply chain management and practices requires a holistic perspective and a technical view of organisations as parts of interconnected processes. It requires the ability to look beyond organisational boundaries and to recognise the interdependence of organisations.
During the 2016 International Labour Conference the subject of “Decent work in global supply chains” was discussed extensively, which resulted in the adoption of a report. In its conclusion the report states that “the expansion of global supply chains can also be associated with significant governance gaps, and global competitive processes that have sometimes placed downward pressures on working conditions and respect for rights at work, including freedom of association and collective bargaining and other fundamental rights”.
The report provides eleven valuable and innovative recommendations, which should be implemented to ensure that social and labour standards can be ensured within the supply chain.
At EU level the social and labour dimension within supply chains was discussed within the framework of public procurement. A notable EU tool is the guide “Buying social”. This guide takes social considerations in public procurement into account. The new guide is also a very concrete tool to address social inclusion in supply chains. After the implementation of the EU Directives on public procurement (2014/24/EU; 2014/25/EU; 2014/23/EU), the EFBWW (with the financial support of the European Union) conducted a project aimed to strengthen the application of social considerations in practice. Supply chains can play a crucial role in this context, and the second part of the final report contains an overview of various best practices, which could be applied to improve the situation at national level.
Via the system of “Information and consultation” embedded in the EU Directives 2002/14/EC and 2009/38/EC, workers’ representatives in EWCs can play an active role in ensuring that social and labour standards are ensured within supply chains. The ability to access information and to share this information across national boundaries presents an excellent opportunity for workers’ representatives to influence how multinational companies organise their supply chain policies and practices.
The overall objective of this project application is to strengthen the capacity of workers’ representatives in European Works Council to ensure that inclusion of social considerations in complex supply chains is properly implemented and applied in line with ILO and EU standards. Among other things, it will result in a practical toolkit for EWCs to strengthen their capacity to use their right to information and consultation.
To achieve tangible and concrete results, the project will include three case studies in three companies in the construction and building materials sectors: Royal BAM, Vinci and LafargeHolcim. The choice of companies in the project is meant to ensure a broad geographical distribution, to cover different sectors and EWCs with various levels of experience.
Operating on five continents with 700 companies, Vinci is an ideal choice to identify the supply-chain practices of European companies with sub-contractors from third countries. This also offers the opportunity to involve workers’ representatives from candidate countries in activities that can have a real added value in improving working conditions and respect for European and International labour standards in their countries.
The company has a new EWC. Targeting the company in this project will enable the members of the EWC to gain practical experience that can help build a foundation for a high level of information and consultation in this company. By using this leading player as an example, we can experiment with a strategy of an international trade union network at group level in the construction sector.
In a previous project, the EFBWW followed the merger between Lafarge and Holcim cement groups, together with other accompanying measures by EFBWW EWC coordinators. The result of this support was an optimal cooperation between the two EWCs during the merger. LafargeHolcim was therefore identified as a target for the current project to build on the previous foundations and involve the newly composed EWC in practical
activities that are relevant to the workers’ representatives of a global player in the cement industry.
Goals of the project
The main target group of the project will consist of active EWC workers’ representatives. The project has the following objectives:
- Strengthening the technical capacity of members of the EWCs to obtain and assess data related to supply chain practices of the company/management as part of their right to information and consultation (closing the knowledge gap);
- Promoting international and European social and labour standards in the whole supply chain;
- Developing a practical EWC workers’ toolbox on monitoring supply chains;
- Strengthening transnational workers’ coordination and monitoring networks on supply chains;
- Promoting and enhancing an inclusive culture of transnational social dialogue as part of the existing EWC structures;
- Strengthening monitoring and enforcement tools and transnational cooperationincluding partnerships with European and national administration systems
(procurement, company registration, VAT, …)