Corporate Social Responsability (Employees Financial Participation )

Brussels, 09-10 June 2004

- 1 - The journey begun by the European Commission back in July 2001 with the Green Paper on Corporate Social Responsibility (CSR) which was intended to launch a debate on "how to build a partnership for the development of a new framework for the promotion of corporate social responsibility, taking account of the interests of both business and the various stakeholders", will reach an important milestone on 29 June when the Multi-Stakeholder Forum comes to an end and the key elements of its final report are presented.

- 2 - Our priorities need, of course, to be set afresh as a result of this busy agenda.

- 3 - In the current context of globalisation, the Executive Committee reaffirms its call for European businesses to behave with growing responsibility, in a manner that is firstly consistent with the content of the Lisbon strategy (particularly the development of the quality of work and employment, sustainable development and the European social model across the world) and secondly consistent with the Commission Communication from July 2001 on promoting core labour standards.

- 4 - The Executive Committee confirms that CSR should complement, but in no way replace, legislation on social and environmental rights or standards set by collective bargaining. Thus, no company failing to comply with agreements, legislation o the social dialogue can be defined as socially responsible. Moreover, ETUC is demanding that social dimension be taken into account in world trade.

- 5 - In public at every opportunity and also in the forum, ETUC has sought to clear up uncertainties or confusion surrounding the nature of CSR and actions taken by companies in that connection. Some progress has been made on worker participation and respect for legislation and bargaining. However, the following key misconceptions need to be rectified:

1. the illusion that CSR would sweep away the balance of power, as the employer's responsibilities are diluted;
2. the illusion that all stakeholders are on an equal footing in this policy;
3. the illusion that the 'voluntary' method or other 'best practices' would be enough to assert CSR.

- 6 - The Executive Committee stresses that, rather than being regarded as an added extra, CSR must permeate the very being of the company and its governance, colouring its ongoing production and taking on board social and environmental issues in its day-to-day management.

- 7 - As such, ETUC rejects a philanthropic or 'public relations' approach to CSR. It believes that CSR must constitute a challenge not just globally and for developing countries, but also for an enlarged and integrated European Union of 25 Member States.

- 8 - In this case, the prerequisite for CSR is respect for collective bargaining and laws, which means companies must act to:
• promote collective bargaining where there it is insufficient or even nonexistent;
• enhance the involvement of trade unions, workers and their representatives as well as the respect for and defence of their rights.

- 9 - ETUC therefore affirms that one of the key components of CSR is the quality of industrial relations within a company.
In fact, it would be a contradiction in terms if a company failing to apply a collective agreement or respect an employment contract was deemed 'socially responsible'.
In other words, a company can only be responsible vis-à-vis the outside world

The ETUC Executive Committee sees this responsibility as meaning:
• showing respect for industrial relations;
• promoting solid participation structures using ongoing consultation and information processes, particularly within European Works Councils;
• developing vocational skills and lifelong training for workers;
• respecting health and safety standards and adopting preventive policies;
• promoting gender equality;
• finding a way for the social partners to work together, enabling them to anticipate change and manage restructuring;
• promoting the social and fundamental rights of workers;
• enhancing the quality of work;
• defending and integrating the most vulnerable groups, such as youngsters, disabled people or immigrants.

- 10 - The Executive Committee acknowledges that CSR needs to be the result of a voluntary process, and reaffirms that this voluntary commitment needs to be shaped by guidelines set at European level. Without a framework, the voluntary approach is unacceptable. When a company opts to be socially responsible, it must do so within precisely defined guidelines and with the involvement and input of the trade unions.

- 11 - Admittedly, international reference standards already exist, being set, amongst other things, by ILO fundamental conventions, OECD guidelines and the United Nations. However, the EU's CSR model also needs to be based on European values that are consistent with the Lisbon Strategy, the European social model and the Charter of fundamental rights. Consequently, we are calling on the European Commission to set behavioural standards so that a single framework can be created that contains the criteria with which companies must comply if they choose to be socially responsible. This will prevent these companies from unilaterally setting their own criteria. The requirement that CSR go beyond the law and existing rules does not mean that companies can adopt an 'à la carte' approach to CSR focusing on certain social and environmental factors, while ignoring others.

- 12 - Given the context of globalisation, particularly post-Cancun, an extra effort is required to impose rules of responsibility so that rights can be extended throughout the world with a view to combating 'bad practices' or social dumping and getting to grips with companies which exploit poorly or completely unprotected regions.

- 13 - ETUC is calling on the European Commission:

1. to set standards and precise criteria and, in particular, to insist that large companies produce an annual report on the action they have taken in terms of social and environmental impact which must be submitted to the relevant European Works Council;
2. to promote standards covering all corporate governance, not just the certification of end products, but also transparency and quality throughout the chain of production, including the traceability of products, subcontracting, supply and relocation;
3. to adopt a consistent policy for promoting CSR, setting access criteria for the use of Community funds and thereby encouraging positive selection. ETUC is calling for these criteria to specifically cover structural funds, export credits and public procurement contracts.
4. to promote a resource centre with real and active participation by the social partners and other stakeholders so as to support policies on information, training and exchanges of know-how and positive practices.
5. to have codes of conduct and/or labels or similar certificates developed by using clearly drawn up procedures and checks managed by the Commission and in conjunction with certification agencies and/or instruments, and based on contributions and input from the trade unions and NGOs. These must meet verified criteria so that their representativeness and legitimacy can be ascertained.
6. Lastly, ETUC is calling on the European Commission to set up a permanent monitoring body to verify compliance with European standards. ETUC also wants the Commission to publish an annual report measuring the progress made on CSR and submit these reports to the social partners in the forum.

- 14 - ETUC reiterates that it is in favour of entering into a partnership with representative, legitimate and independent NGOs and stakeholders outside the company which share our values and which can play an essential complementary role in linking up internal and external corporate social responsibility in areas that are of concern to them.

- 15 - The priorities and points stressed in this resolution not only represent our position, which will be presented at the aforementioned concluding conference, but also propose content to be included in the forum report and be taken into account in the European Commission's future activities and initiatives.