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May 30, 2002
Labor Law Database Eases Companies' Compliance Efforts
    by William Baue

A new database service aids corporate compliance teams in gathering information on national and local labor laws.


Corporate compliance teams expend considerable effort and money identifying national and local labor laws in foreign countries where they do business, especially these companies seek to ensure compliance throughout the supply chain. Failure to comply with labor laws, even if it is due to inadequate knowledge of laws rather than from ill intent, can also cost companies dearly. Not only do companies risk fines and expensive lawsuits, but they also risk harming their reputation, all of which can erode shareowner value.

Last week, San Francisco-based Business for Social Responsibility (BSR), a global nonprofit that promotes corporate social responsibility (CSR), launched its Labor Law database to facilitate companies' compliance efforts, which protect companies from labor law disputes that threaten their value.

"Companies are committing greater energy to ensuring fair labor practices in their supply chains. Until now, gathering verified labor law information from multiple countries has been an expensive endeavor with uncertain results," said Aron Cramer, BSR vice president of business and human rights. "Labor Law gives companies a dynamic resource that will make compliance efforts considerably stronger--at a cost far below what a single company would have to commit to make comparable progress."

The Labor Law web-based database contains reports based on primary sources pertaining to national and local laws in 60 countries. Regional labor lawyers affiliated with the global law firm Baker & McKenzie review these reports for independent verification. The database contains some static content, such as country overviews, but it also offers dynamic interactive capabilities, allowing users to generate customized reports specific to the countries where they operate and the issues they face.

The issues covered by Labor Law span a wide spectrum, from child labor, disciplinary practices, and discrimination to forced labor, working hours, and wages and benefits. BSR staff ensure the information is kept current by contributing briefs on emerging issues. A discussion board provides a forum for users to learn from one another while offering the option of confidentiality for addressing sensitive issues.

BSR highlights how the information supplied by Labor Law supports labor and human rights, although companies could use the same information to identify countries and locales with the most lax labor laws, which could undercut labor and human rights.

"That's certainly not what the product is designed for," said BSR Senior Manager David Eichberg. "The companies we've seen interest from, many of whom are BSR members, desire to match effective and efficient commercial operations with a greater commitment to human and labor rights. Our pool is growing, but it will remain intimate enough that we're hopeful that we'll see those companies using the service toward positive ends."

BSR has licensed Labor Law to about 20 U.S. and European brand manufacturers, particularly those with international sourcing operations. Mr. Eichberg attributes the attractiveness of this product to its comprehensive benefits.

"It's really about risk management," he said. "Once companies have this information about country labor requirements, then they can better understand and mitigate supply chain issues. And supply chain practices are getting tied into their overall business operations, brand perception, customer loyalty, employee morale, and the achievement of sustainable business. That's where we see this service ultimately fueling shareowner value."

 

 
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