Trade Unions as Guardians of Labor Rights in Global Value Chains

The article explores the findings of a recent ILO report on the evolving role of trade unions in global value chains, particularly in the context of emerging human rights due diligence frameworks. It discusses how unions can leverage economic and social upgradation pathways to influence labor governance and ensure that decent work goals are integrated into global supply chain management.

Trade unions have long been seen as the frontline defenders of workers' rights. But as global value chains (GVCs) become more complex and fragmented, their role is facing new challenges and evolving opportunities. A recent report titled “Trade Unions, Labour Governance, and Economic Upgradation in Value Chains”, published by the International Labour Organization (ILO), delves into the dynamics of trade unions in GVCs, especially as new human rights due diligence frameworks emerge. This report by Rohan Dominic Mathews highlights how trade unions can influence labor governance amidst the changing landscape of global production networks.

Human Rights Due Diligence: A New Frontier for Trade Unions

The expansion of global value chains has brought both opportunities and complications for labor governance. The report explores how recent developments, such as the Corporate Sustainability Due Diligence Directive (CSDDD) approved by the European Parliament, are reshaping the landscape. This new directive mandates firms operating in the European Union to prevent, mitigate, or address their adverse impacts on human rights, extending the accountability net across their supply chains worldwide.

While regulations like the CSDDD are steps forward, they pose a daunting question: who will ensure compliance? The report argues that trade unions, with their historical expertise in safeguarding labor rights, are ideally positioned to step in as compliance monitors and knowledge generators. By actively engaging in this emerging due diligence ecosystem, trade unions can ensure that labor standards are not just token additions to corporate policies but integral components of business strategies.

Economic and Social Upgradation: The Missing Link?

A key highlight of the report is the need for integrating economic upgradation with social upgradation. Traditionally, discussions around GVCs have centered on economic upgradation, which refers to firms improving their position in the value chain by adopting new technologies, improving productivity, or moving to higher value-added functions. However, the ILO report emphasizes that economic gains must go hand in hand with social upgradation — better wages, improved working conditions, and job security for workers.

The challenge is that many countries, especially in the Global South, struggle to balance these two goals. Economic upgradation often happens at the expense of workers' rights, as firms prioritize cost-cutting to remain competitive in global markets. For instance, in the garment sector, while process and product upgradation have led to increased output and quality, these advancements have not necessarily translated into better wages or working conditions for the workers on the shop floor.

The report suggests that trade unions can address this imbalance by using their knowledge to map economic and social upgradation pathways. This approach involves understanding how value is created and distributed along the value chain and using this data to advocate for a fairer distribution of gains.

Global Framework Agreements and Private Governance: The Role of Trade Unions

In the complex web of GVCs, traditional mechanisms like national labor laws often fall short. This is where private governance mechanisms, such as Global Framework Agreements (GFAs) and Corporate Social Responsibility (CSR) initiatives, come into play. GFAs are agreements between global union federations and multinational enterprises to uphold labor standards not just in the home country but across all operations, including their global suppliers.

The report underscores the potential of GFAs to act as tools for advancing labor rights in GVCs. However, it also notes that trade unions in developing countries often lack the resources or organizational power to fully implement these agreements. The solution? Stronger transnational collaboration between trade unions in the Global North and South. By building alliances across borders, trade unions can ensure that GFAs are not just words on paper but real drivers of change on the ground.

Additionally, the rise of private governance through CSR and supplier codes of conduct presents both opportunities and pitfalls. While these initiatives have improved factory conditions in some sectors, they are often voluntary and lack binding enforcement. Trade unions can play a pivotal role here by acting as watchdogs, ensuring that companies adhere to their commitments and do not use CSR as a façade for business-as-usual practices.

Charting the Future: A Call for Evidence-Based Interventions

Ultimately, the report calls for trade unions to adopt a more proactive and evidence-based approach. By leveraging tools like value-chain analysis, unions can identify key points of intervention, assess decent work deficits, and build strategic plans to engage with firms and governments. This evidence-based approach will not only strengthen their bargaining power but also position them as credible partners in the emerging human rights due diligence landscape.

The ILO report concludes by reiterating that trade unions have a unique opportunity to redefine their role in GVCs. They can move beyond reactive interventions to become proactive agents of change, ensuring that economic upgradation does not come at the cost of social justice.