Labor Standards: Improving Working Conditions

In 2009 IFC and the International Labor Organization (ILO) formed the Better Work program, a strategic partnership to improve labor standards compliance.

Focusing initially on one of the developing world’s key employers of women, the garment sector, the program supports local factories selling to leading global brands with high standards of social responsibility in their global supply chains. Bringing together local enterprises, foreign buyers, governments, and workers’ and employers’ organizations, it works to improve labor standards and thereby promote competitiveness.

Two years ago Better Work began operating in Vietnam, where 85 percent of garment sector workers are female. At the time, factory managers were either unsure of the value of their worker committees or saw them as ineffective. But by promoting elected worker representatives and facilitating local problem-solving, the program has prompted more effective factory-level decisions. This in turn has made the factories more competitive. 

A recent independent evaluation found that participating factories in Vietnam have now increased their:

  • Number of employees by 547, of which 438 were women
  • Average order size for their main customer from 2.5 million to 6 million pieces
  • Innovation in production systems, managers’ supervisory skills, and workers’ pay packages and grievance procedures

Based on a model that helped Cambodia create 165,000 jobs and increase the value of its exports to the U.S. by 151 percent between 2001 and 2008, Better Work now supports the garment sector of nine countries and is exploring expansion into other sectors such as electronics, agribusiness, and tourism. It is committed to providing practical solutions that build the capacity of government, employers, and workers, while increasing dialogue among stakeholders to ensure long-term, sustainable compliance with labor standards. 

Nguyen Van Tien of Vietnam’s Ministry of Labor, Invalids, and Social Affairs chairs the local advisory committee. Why is he involved? “To make it successful in achieving the objectives: better labor compliance, better working conditions, more jobs for laborers, and increased productivity,” Vietnam’s chief inspector says.