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.
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."