ISEAL Alliance

ISEAL member SAI (Social Accountability International) advances the human rights of workers by promoting ethical working conditions, labour rights and corporate social responsibility through voluntary standards. SAI established one of the world's preeminent social standards - SA8000 – which is a tool for implementing international labour standards and has improved the lives of over a million workers in 63 countries. India has been their focus since their foundation in 1997. Here SAI’s founder Alice Tepper Marlin discusses their longstanding relationship with India.  

When and why did you get involved in India? 
India is one of the BRIC countries so clearly it makes sense. Also, we focus in the area with the greatest pickup of SA8000 certification, and where the supply chains of our Corporate Program members are concentrated India was one of the countries where producers attained certification in noticeable numbers very early and it is still in the top four. We also look for countries where there is domestic as well as export demand for the implementation of SA8000.

Italy has far more certified facilities, but India is number one in the number of workers, reflecting a much larger average size of facility. There are some interesting heavy industry certifications to SA8000 in India: from metal, cement, building supply, steel and automobile companies. India has a lot of apparel and textile certifications too, but the numbers of workers covered is so high because they have several of the largest SA8000 facilities in the world, facilities that employ over 20,000 people.

CSR in general and labour standards have been seen primarily in the export centre, in response to demand from US and European companies. It’s a classic supply chain issue. But India is quite different in that there are strong internal drivers, including a company that is a CSR leader domestically, an institution that is an early adaptor, and an early adaptor that had a strong influence on others, either through the supply chain or through example.  

And which company worked for you in that way? 
In India that company for us was the Tata Group. Tata is interesting, it’s been a CSR leader for 100 years, it’s widely recognised as that and there are a group of 98 companies. The head of Tata Steel, Dr J.J. Irani just came across SA 8000 very soon after it was released and tried it out on a very large steel facility, over 20,000 employees, and was very pleased with the results. And then Tata internally has a process to share best practices in community kinds of issues among the 98 companies. So Tata Steel introduced SA8000 to the others and currently 16 have committed to roll out SA8000 in their own systems, and those facilities that have been certified are in the process of bringing their supply chain along. Tata is now serving on our Advisory Board.

What were the motivations for Tata doing SA8000 because classically CSR was very much philanthropy in India from my understanding? 
Tata Group originally thought of CSR in general as a philanthropy issue but they have always been a leader in how they treat their workers. And a really sophisticated understanding of how you treat your workers moves it either beyond philanthropy to a modern concept of CSR, a basic strategy of the firm and a good business practice that’s believed to have benefits as you invest in people. That approach to CSR looks at investments in people the way you invest in capital equipment, and realises that if you treat your people well you will have a variety of benefits - better retention, higher productivity, better quality, more innovation, lower insurance rates and lower absenteeism.   Tata was such a leader in providing decent labour conditions that when India first developed its labour laws right after independence in 1947, it modelled them in large part on Tata’s own internal programmes. Tata already had a 40 hour week and pension plan, a whole range of the kinds of programmes you might have expected to find in Europe, but not necessarily in the emerging countries. They just thought it was the right thing to do and they thought it was good business practice, and over the long term it has proved a critical measure of their success.

So why bother with SA8000? 
SA8000 systematised their human resource but didn’t require them to change much for their regular employees, as they already had excellent human resources policies. There was, however, one serious omission. The omission was the rapid increase in contracting out left many workers on Tata sites in a very different position. Tata Steel realised when they went through the SA8000 process -- which requires that these rights be applied for all workers on your site -- that there was a huge number - it might have been as high as 16,000 working on their site who were not their own employees and not treated in the same responsible manner. 

There were contractors who had come to build, to clean, to do all kinds of processes, but their workers weren’t Tata Steel employees. As a result of the SA8000 management system, Tata Steel now requires that their contractors treat their employees as Tata’s own employees are treated. This ranged from aspects like hours and wages to health care and occupational safety training. 

It required a big investment in human resources, it required a whole new way of thinking about things but the team at Tata Steel liked the results. So that’s one of the cases where there was a big impact on people’s lives that happened very suddenly to a very large number of people, through what was a fairly simple oversight. So some companies of course go to outsourcing, to contractors on site, just in order to cut labour costs, to avoid treating these workers like their own employees; others more fairly because it’s simply a different line of business and they want to concentrate on their core business. So there was huge, huge improvement in the lives of the workers for the contractors on site. 

Which sectors have adopted the SA8000 in India?
Metal products is the biggest with 87,000 workers at 10 facilities, apparel has more than 56,000 /172, automotive 37,000 /4, energy around 30,000/15, textiles 42,000/ 124. 

What are the issues that you face in India?

One of the big issues in India is health and safety. That’s easy to identify and probably where we have the biggest impact, because the auditors are very good at finding it, everybody knows how to fix it and knows how to verify whether it has been fixed! An issue that is particularly challenging in India is the level of poverty. 42 per cent of the population earns less than a dollar and a quarter a day –the threshold definition of poverty. It’s no surprise then that India is one of the countries with the highest incidence of child labour. Then there’s discrimination on the basis of gender and caste– and out of all the issues I would say that’s where I have the least confidence that we could find it and address. Which means it will be a particularly strong focus in our work in the future, because it’s engrained in the culture. The auditors are local and it’s difficult for them to see that it’s difficult, even for the victims. Caste and gender are both very significant in India, and it wouldn’t necessarily be overt by caste, but it’s certainly deeply engrained and so difficult to identify.

You talked earlier about internal drivers – particularly companies like Tata – in India and how that speeds up change. Are there opportunities then for scaling up change?
Well that’s of the reason I was in India. I was in India for a meeting to develop an exciting new development partnership (PPP - public private partnership) with the Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH1, BCSI (Business Social Compliance Initiative of the Foreign Trade Association of Europe) and SAI. It will be a project focused on scaling up Indian CSR initiatives. So we are expecting a future real growth in the Indian uptake of voluntary labour standards and compliance with Indian law - but not only using SA8000.  Because one of the things that’s really shifted in the last few years is that, as our training became recognised, we are asked to do training for other codes, national codes, global codes and individual company codes. 

Our code is an international model based on the ILO Conventions, and a dozen years ago SAI was unusual in using these Conventions as our model. Since then this has become more common with the ILO Convention used as the base for many codes.  

If we’re teaching a course on occupational safety and health, or a course on freedom of association, we teach –not only how it’s being addressed in SA8000 but also put it into a context of  other major standards  and the national law in whatever country we’re working in. This PPP will have three major objectives. 1) to train on labour standards and management systems a group of at least 150 suppliers - 90 per cent in the apparel sector - who are suppliers either to BSCI retailers or SAI Corporate Program member companies; 2) to train and qualify a cadre of local trainers; and 3) to create a national CSR expertise centre, which continues providing CSR related services and supports linkages among different CSR initiatives in India.

For the trainings, we’ll develop generic courses on a modular bases that would be widely available at a reasonable cost. These will be delivered through a national expertise centre that is being developed as the second part of the project. So we will be training a group of trainers to deliver those courses, developing the curriculum for those courses and testing it in the suppliers to SAI and BSCI, and then developing and launching this national expertise centre to continue delivering these courses. We will primarily teach generic issues about good labour relations and advanced industrial relation systems that are applicable to a whole range of codes and standards, both global and national.
There are many definitions of scaling up and of course some people think that the idea would be just to bring all of these together into one glorious code.  Is that some sort of thing which is even possible?

It shouldn’t be impossible. It’s not theoretically impossible, but there have been a lot of efforts to do it, none of which have succeeded. It is not an explicit objective for the project but we do envision that the expertise centre’s generic courses will foster harmonization among code requirements and cooperation among standards setting organisations and training organisations. . 

And the future in India? At the moment you have over 300,000 workers at 458 SA8000 certified facilities in India, which I think is pretty amazing. 
Thank you but it’s still an infinitesimal portion of the number of businesses or workers in India. But I think there is an enormous potential in India. It’s one of the countries that we picked as the strategic priority for these several reasons. A lot of certification activity, particularly strongly that the demand is very mixed between global market and domestic market, because there is good public awareness and interest locally and a generally, good supportive government attitude. In fact, the Ministry of Corporate Affairs has set up an institution called the Indian Institute of Corporate Affairs, which is a think tank and a capacity building institute looking into all aspects of corporate functioning including sustainability and social responsibility issues. There may be some real potential for the government to take strong leadership in scaling up and spreading from a small number of CSR leaders into getting vast numbers of companies involved, in implementing and training. So it’s very early stages, but we’re quite excited about it. There are some very good people there. 

Somebody from Tata is on board, that’s always a good sign. So we think there's great potential. We are very excited about this public private partnership, because the national expertise centre could eventually do training for all ISEAL members, though this PPP focuses just on labour. It has really big potential to cover all CSR areas, and to be a node that all the ISEAL members can work with over time.