This article on ‘Labour Rights Breaches by Multinational Corporations (MNCs): Consequences and Promising Solutions’ was written by Harshit Yadav, an intern at Legal Upanishad.
MNCs are large enterprises that operate in numerous countries and wield substantial economic and political power in the global marketplace. They are frequently active in a variety of industries, including manufacturing, services, and natural resource exploitation, and they have played an important role in driving economic growth and development in many parts of the world.
However, MNC operations have been linked to labour rights breaches such as poor working conditions, low salaries, and worker exploitation. These infractions have been documented in a variety of sectors and places, ranging from textile sweatshops to mining operations in poor countries.
MNCs have had a huge impact on the global labour market, with many of these corporations relying on cheap workers from developing nations to improve their profitability and competitiveness. As a result, MNCs have been reprimanded for contributing to the growing wealth disparity and increasing global economic inequality.
Given the growing importance of MNCs in the global economy, governments, civil society organisations, and other stakeholders must address worker rights breaches by these businesses. This article attempts to provide an overview of the topic of labour rights breaches by MNCs, assessing the consequences and potential solutions.
Overview of Labour Rights
Labour rights are a set of legal and human rights principles that protect workers’ rights at work. These rights are recognised internationally and are enshrined in a variety of legal frameworks, including ILO treaties, national legislation, and collective bargaining agreements.
The International Labour Organisation (ILO) is a United Nations specialised body dedicated to promoting social justice and good working conditions around the world. The International Labour Organisation (ILO) has produced a set of core principles and rights at work that are recognised as basic human rights. These are the principles:
- Freedom of association and the right to collective bargaining – This principle ensures that workers have the right to form or join trade unions and to engage in collective bargaining with their employees
- Elimination of forced labour – This principle prohibits all forms of forced labour, including slavery, debt bondage, and human trafficking.
- Abolition of child labour – This principle prohibits the employment of children below the age of 15 and sets standards for the protection of children’s rights in the workplace.
- Elimination of discrimination in employment and occupation – This principle prohibits discrimination in employment based on race, gender, religion, national origin, or any other grounds.
- Promotion of decent working conditions – This principle encompasses a range of issues related to working conditions, including safe and healthy working conditions, fair wages, and reasonable working hours
Case Studies of Labor Rights Breaches by Multinational Corporations
Apple’s Chinese Suppliers: A series of studies in 2011 found that workers in Apple’s Chinese supply chain were exposed to long working hours, low wages, and hazardous working conditions. Workers were also exposed to harmful chemicals in some circumstances, resulting in major health concerns. Furthermore, several vendors were discovered to be using child labour. Apple responded by evaluating its suppliers and instituting new procedures aimed at improving labour conditions.
The Rana Plaza Factory Collapse in Bangladesh occurred in 2013 when a building holding numerous garment companies fell, killing over 1,100 employees and injuring thousands more. Mango and Benetton were among the international brands whose clothing was made in the plants. The building had structural flaws and was unlawfully built, and the workers were ordered to keep working despite cracks in the walls. This incident brought to light the pervasive problem of unsafe working conditions in Bangladesh’s garment industry, as well as the need for improved regulation and enforcement.
In Excel Wear vs. Union of India (1979), The Indian Supreme Court recognised the right to strike as a basic right guaranteed by the Indian Constitution. The decision declared that workers had the legal right to protest unfair labour practices and that the government could not take punitive action against striking workers unless there was a solid basis. The judgement contributed to the strengthening of employees’ rights in India and ensured that they have legal protection when protesting against unfair labour practices.
Impacts of Labour Rights Violations
Violations of labour rights have a severe impact on employees, their families, and communities. These consequences can be both immediate and long-term, affecting different elements of their lives such as physical and mental health, social and economic position, and access to justice and remedies.
Physical damage is one of the most immediate consequences of labour rights breaches. Workers may be subjected to dangerous working conditions, such as chemical exposure or inadequate protective equipment, which can result in accidents, diseases, and even death. This can be disastrous not only for the workers but also for their families and communities.
Infringement of labour rights can have serious mental health implications. Workers who are forced into exploitative working conditions, such as excessive hours, poor pay, and no job security, may suffer from stress, anxiety, depression, and other mental health problems. This can have an impact on their ability to work as well as their overall quality of life.
Violations of labour rights can also lead to social and economic marginalisation. Workers who are underpaid, denied benefits, and subjected to discrimination may struggle to make ends meet and provide for their families. Poverty, homelessness, and food insecurity can result, affecting their physical and emotional health, as well as their children’s schooling and future chances.
Moreover, labour rights violations can create barriers to access to justice and remedies. Many workers may fear retaliation or lack the resources to seek legal remedies, such as filing a complaint or taking legal action. This can further perpetuate a cycle of exploitation and abuse, as workers may be hesitant to speak out and hold their employers accountable for fear of losing their jobs or facing other negative consequences.
Legal and Policy Responses
The International Labour Organisation (ILO) establishes worldwide employment standards through treaties and guidelines that member countries are obliged to comply. The UN Guiding Principles on Business and Human Rights establish a framework for multinational corporations (MNCs) to respect human rights, particularly labour rights, and to take actions to prevent and redress negative human rights consequences.
Countries have their own labour laws and regulations that define standards for working conditions, minimum salaries, and collective bargaining at the national level. Many nations have also enacted corporate social responsibility (CSR) frameworks or guidelines to urge Multinational Corporations (MNCs) to respect human rights, particularly employment rights, in their operations and supply chains.
Despite these frameworks, obstacles and limits remain in addressing MNCs’ abuses of labour rights. One difficulty is the lack of international labour standards enforcement mechanisms, which can limit their efficacy. Furthermore, certain countries may lack effective labour laws or have poor enforcement procedures. MNCs may also refuse to comply with employment regulations or use weak enforcement procedures in some nations.
Civil society organisations and labour unions play an important role in advocacy for labour rights and monitoring adherence to work standards. They can raise awareness about violations of labour rights, campaign for legislative and legal reforms, and engage in collective bargaining to improve workers’ working circumstances.
Corporate Social Responsibility and Business Ethics
In recent years, corporate social responsibility (CSR) and business ethics have received more attention. MNCs play an important role in promoting labour rights and avoiding labour rights breaches. CSR refers to a company’s voluntary efforts to enhance its social and environmental effects. In contrast, business ethics refers to the moral principles that influence corporate decisions and activities. Both notions are intimately related to labour rights and can aid in their promotion in MNCs. MNCs, for example, can implement CSR policies that prioritise workers’ rights, such as fair wages, safe working conditions, and free association.
CSR and business ethics programmes, on the other hand, confront a number of problems and limits. One of the most significant issues is that they are entirely voluntary and non-binding. This means that multinational corporations might choose to disregard or prioritise other goals, such as profit maximisation, over social responsibility. For example, a firm may opt to outsource production to a supplier in a nation with weaker labour standards in order to save money, albeit knowing that this may result in abuses of labour rights.
Another issue is the absence of effective monitoring and enforcement procedures. MNCs may implement voluntary codes of conduct or CSR policies, but ensuring that their vendors and contractors follow these standards can be problematic. Similarly, ethical supply chain management practices such as auditing and inspecting may not always be helpful in detecting or preventing workers’ rights breaches.
Furthermore, the influence of CSR and business ethics programmes may be limited. For example, multinational corporations (MNCs) may primarily focus on improving worker conditions in their own operations rather than addressing bigger structural concerns such as poverty and inequality. Furthermore, these measures may fail to address the underlying causes of labour rights breaches, such as ineffective labour legislation and enforcement procedures.
Conclusion and Suggestions
Abuse of labour rights by multinational corporations is a prevalent and ongoing concern in many regions and businesses. These violations include child labour, forced labour, exploitation, and hazardous working conditions, all of which have serious implications for worker well-being and achieving sustainable development.
Several initiatives can be taken by policymakers, MNCs, and civil society organisations to promote labour rights and prevent breaches by MNCs. Labour regulations that are in line with international norms and protect employees’ rights can be enacted and enforced by policymakers. MNCs can adopt and put into practice ethical business practises that prioritise workers’ rights and aim to eliminate labour rights breaches in their supply chains. Civil society organisations can play an important role in monitoring and exposing violations of labour rights, as well as pushing for policies and practices that promote decent work and social justice.
Future research directions include assessing the efficacy of existing labour rights frameworks and initiatives, investigating the impact of labour rights violations on workers’ mental health and well-being, and investigating the interconnectedness of labour rights violations with other forms of discrimination such as gender and race.
Promoting and protecting labour rights is essential for advancing human dignity and well-being, and preventing labour rights violations is the responsibility of all stakeholders. By working together, we can create a world where all workers are treated with dignity and respect.
List of References:
- Prasadi Wijesinghe, “Human Rights Violations by Multinational Corporations: Nestle as the Culprit”, SSRN, 14 March 2018, available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3136321
- Laura Boudreau, “Multinational enforcement of labor law: Experimental evidence from Bangladesh’s apparel”, Princeton School of Public and International Affairs, 15 May 2020, available at: https://spia.princeton.edu/sites/default/files/2020-09/boudreau_2020_05.pdf
- “Labour Law Primer for Multinational Companies in India”, Singhania & Partners, available at: https://singhania.in/admin/blogimages/doc-3817594.pdf