Workers-Driven Social Responsibility, Compliance and Implementation of Living Wages in Ethiopia and Indonesia’s Garment Sector (OECD Side Session) - February 15, 2023

This event was a side session that took take place during the 2023 OECD Forum on Due Diligence in the Garment and Footwear Sector, on Wednesday 15, 2023.

This session explored compliance, wages and working conditions in Indonesia’s and Ethiopia’s garment sector. The session is based on projects implemented by WageIndicator where we work with trade unions and employers’ organisations to gauge working conditions, workers’ wages and labour law compliance in Indonesian and Ethiopian garment factories.

To implement these projects, databases of Minimum Wages and collective agreements were coded and improved, and coded information for 50 topics in national Labour Laws were created. The DecentWorkCheck tool, which surveys awareness of and compliance with relevant labour laws, and special surveys to gauge working conditions during the COVID-19 pandemic were used in factories across both countries to collect data on labour law and (minimum) wages. The results are made publicly available through dedicated websites in local languages. The results are also used to facilitate evidence-based social dialogues between workers’ and employers’ groups. In both projects and countries, labour law compliance, (minimum) wages, and working conditions improved tangibly.

These projects are scheduled to grow in scale and scope. We will start with a Worker Priority Poll tool which will assess the needs of workers, especially from marginalised groups, beyond the scope of labour laws. Moreover, in line with the EU Directive on corporate sustainability due diligence, WageIndicator increasingly supports brands and multinational companies to implement living wages in their company and throughout their supply chain, based on its growing living wage database.

Based on the success and the plans for the future, the session will showcase means to improve compliance, wages and working conditions in the garment sector. It will highlight the role that data and its use play in creating workspaces that are not only compliant with labour law, but also accommodating of all workers’ needs. Next to discussing the tools and methods, we analyse data from Ethiopia and Indonesia with a focus on earned wages and the wage ladders for minimum wage, living wage and average wages by skill level, and we discuss how implementation of living wage in companies and the supply chain can improve conditions not only for workers but employers and brands as well.