WIEGO’s Global Trade Programme tracks the impact of globalization on informal workers and focuses on promoting ethical employment arrangements and fair terms of trade for informal workers at the bottom of global value chains.
Informal Workers Contribute to Global Production
WIEGO believes globalization should benefit all workers, including the informal workers who contribute to global production. But for informal workers at the lowest levels of production chains, globalization has often brought increased risk. This is because globalization is associated with unfair terms of trade and unethical employment arrangements.
As companies seek to lower costs, workers along the supply chain tend to suffer the squeeze: through cut-backs on wages and benefits, irregular work orders and delayed payments. Those at the bottom of the supply chain, especially the industrial outworkers who work from their homes (called homeworkers) are often the hardest hit.
Trade and market reform can improve opportunities and earnings, provided steps are taken to allow the working poor to gain rather than lose from a changed environment.
The Global Trade Programme examines the positive and negative impacts of trade and investment policies on the livelihoods of the working poor in the informal economy, especially women. Through direct involvement in the Ethical Trade and Fair Trade Movements, we focus attention on ethical hiring and contracting processes for industrial outworkers and fair terms of trade for informal producers. The programme also helps organizations of informal workers, especially those with women members and leaders, negotiate improved incomes and better quality employment.
A Unique Focus
WIEGO brings an informal worker focus and the voices of informal workers in the global South to our analysis of globalization. We concentrate attention on the bottom rungs of global value chains, where workers tend to be informal and invisible. We bridge the reality of informal workers and the ethical and fair trade movements.
Global Value Chain Analyses
The Global Trade Programme seeks to build an understanding of how informal workers are inserted into global value chains. “Value chain” refers to the full range of activities that firms and workers perform to bring a product from conception to its end use. When a chain is divided among multiple firms and spread across different countries, it is called a “global value chain.”
Informal workers can be found at every tier of value chains. At the lowest levels, those who grow or make products are often invisible, not organized and maltreated. Their earnings are low but the risks they assume are high.
Value chain analyses tend to focus on chains as a whole or on specific firms within them, while WIEGO concentrates on workers. Our early research found that the industrial outworkers – especially those who work from their own homes (called homeworkers) – at the very bottom of chains were virtually invisible. Our research analyses look at issues such as average earnings and social protection coverage down the chains, and explore how employment relationships could be regularized to meet international labour standards and how terms of trade could be made more fair and equal.
Some recent publications are:
- Informal Workers in Global Horticulture and Commodities Value Chains: A Review of the Literature (Man-Kwun Chan, 2013)
- Contract Labour in Global Garment Supply Chains (Man-Kwun Chan, 2013)
- Making Agricultural Value Chain Programmes Work for Workers: A Practical Guide for Development Donors and Practitioners (Man-Kwun Chan, 2012)
Promoting Ethical and Fair Trade for Informal Workers
Ethical Trade and Fair Trade are global movements in which WIEGO, through our Global Trade Programme, has extensive connections and influence. In this area, WIEGO seeks to promote ethical employment arrangements and fair terms of trade for informal workers and producers at the bottom of global value chains. Our focus is on home-based workers, both self-employed and sub-contracted industrial outworkers, who produce goods for markets from their homes.
Ethical Trade focuses on the implementation of international labour standards in global value chains or production networks. Fair Trade focuses on improving terms of trade in global value chains or distribution networks. Implementing ethical terms of employment and fair terms of trade can improve the returns for all workers, including the most marginalized and vulnerable.
Ethical Trade and Informal Workers
In 2007 WIEGO joined the Ethical Trading Initiative, a membership organization of companies, trades unions and NGOs. The ETI promotes voluntary codes of conduct for retailers and manufacturers at the top end of the value chain: it is committed to ensuring “that retailers, brands and their suppliers take responsibility for improving the working conditions of the people who make the products they sell.” With over 70 company members, including several major global brands, ETI has an estimated 35,000 suppliers and touches the lives of over 10 million workers, many of whom are informal wage workers or industrial outworkers, including homeworkers.
WIEGO and ETI share common goals:
- to highlight the contribution of informal workers in global supply chains
- to advocate for the labour rights of informal workers
- to test approaches to improving the conditions for informal workers (see a fashion industry project WIEGO took part in under Impacts & Achievements, below)
- to ensure the voice of informal workers is heard by global retailers
WIEGO’s Work with the Fair Trade Movement
In the Fair Trade Movement, the discourse has focused on workers in general in specific sectors. More focus is needed to ensure informal workers and producer groups at the bottom of the value chain are clearly defined and understood, so interventions can be targeted. Only WIEGO looks at fair trade from the perspective of informal workers and their employment status.
WIEGO is equipping women fair trade producers to improve their lives and livelihoods. Under a current project on Leadership & Business Skills for Informal Fair Trade Producers, in partnership with women’s organizations in Ghana (cocoa farmers), Kenya (handicraft producers), and Uganda (coffee farmers and handicraft producers), women are being trained and taking what they’ve learned back to women in their communities. Training modules on leadership and business skills for informal women workers are being developed and will be disseminated broadly.
This project builds on an earlier project, Women Organizing for Fair Trade, which involved women in seven countries across Africa, Asia and Latin America. It demonstrated that when women organize into collective enterprises such as cooperatives and producer associations, they can better access markets, improve their incomes and support their families. To see the project findings, read Trading Our Way Up: Women Organizing for Fair Trade.
Building Capacity to Advocate for Change
To advocate for increased wages, benefits, and protection for their members, workers’ organizations must have a better understanding of value chains.
Home-Based Worker Organizations ─ WIEGO has engaged with national and regional HomeNets, networks of organizations of home-based workers, in Asia to map the value chains in which their members are inserted. This information is important for increasing the visibility of home-based workers, particularly those who work as industrial outworkers. It is being used as background material for a Training of Trainers with organizations, to help these workers understand the value chain, their role in it, and to advocate for their rights as workers.
Drawing Attention to Informal Workers at the Bottom of Global Value Chains
In 2013, WIEGO commissioned a study called Contract Labour in Global Garment Supply Chains by Man-Kwun Chan. It examines the prevalence and drivers of contract labour use in key sourcing countries, the characteristics of labour contractors and contract workers, and the contractual relationships between them. The increased use of contract labour since the onset of the global financial crisis is discussed. The paper was presented to a corporate members’ meeting of the Ethical Trade Initiative (ETI), where attendees agreed this was a critical issue and several companies committed to addressing it. As a direct result, both company and NGO members called on the ETI Secretariat to ensure contract labour is included in ongoing strategic discussions.
Improving the Terms of Fair Trade for Informal Women Producers
WIEGO, through its Global Trade program, has been able to bring attention to women informal workers within the World Fair Trade Organization. Partners in WIEGO’s Women Organizing for Fair Trade project presented workshops and documentaries at the biennial conference of the World Fair Trade Organization (WFTO) in 2011, which led to the inclusion of a focus on women workers, especially women informal workers, on the WFTO agenda for the first time.
WIEGO was subsequently asked to develop a gender strategy for WFTO with a focus on informal workers. Elaine Jones chaired a working group with WIEGO’s partner fair trade organizations to redraft Fair Trade Principle Six: Commitment to Non Discrimination, Gender and Women's Economic Empowerment and Freedom of Association.Adopted in 2013, that principle now “ensures that women as well as men have the ability to gain access to the resources that they need to be productive and also the ability to influence the wider policy, regulatory, and institutional environment that shapes their livelihoods and lives.” It also covers the rights of all workers to join organizations such as trade unions, and to bargain collectively. This revised principle will improve the way fair trade organizations engage women workers, especially women informal workers.
The working group is now working to see the policy implemented by liaising with regional WFTO networks. Regions will report on the progress of implementation at the next biennial conference in Milan in May 2015.
Advocating More Ethical Employment Arrangements
Guidelines for Corporations that Use Homeworkers ─ As an ETI member, WIEGO was involved in developing a set of Homeworker Guidelines. The guidelines aim to ensure companies apply labour standards to homeworkers, and outlines core business practices with corporate members to look at how the ways businesses engage with suppliers affects the labour standards of workers, including informal workers. A roundtable convened in October 2008 by One World Action, the Self Employed Women’s Association (SEWA) and WIEGO provided a forum for an engaged discussion on strategies to improve policy and advocacy on homework. Read the report.
A Manual to Give Homeworkers Voice ─ Through consultation with organizations of homeworkers, and together with a labour rights consultant Celia Mather, WIEGO prepared a “popular” manual to help organizers of homeworkers understand the place they occupy in the chain and to increase their visibility. See “We Are Workers, Too!” Organizing Home-based Workers in the Global Economy.
An Ethical Standards Analysis of the Fashion Industry ─ Collaborative research undertaken by WIEGO and a High Street retailer of fast fashion looked at the impact of purchasing practices on working conditions in one factory in Turkey. The project involved an analysis along the supply chain from end to end. It found evidence that the fashion and garment industry’s way of working drives poor working conditions and an increasing informalization of labour. For more information about this project, see Analysis of Purchasing Practices in the Garment Industry.