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The China Multi-Stakeholder Advisory Committee: A snapshot

By: Bonnic Chung
Feb 8
The China Multi-Stakeholder Advisory Committee (MAC) is a volunteer team of CSR program organizations working collaboratively to develop consensus-based strategies for improving industrial relations and labor conditions through a dialogue forum.
 
Since the first meeting took place in Jan 2012 in Beijing, WRAP has been one of the convening partners among seven members who mostly come from global CSR standard organizations.  The China MAC holds a meeting twice a year aiming to achieve objectives to:
 
I.    Harmonize implementation gaps when various supply chain partners – especially the factories implementing different social standards;
 
II.    Better define the role of brands in supporting standards implementation;
 
III.    Develop innovative projects targeting Chinese manufacturers;
 
IV.    Provide recommendable best practices to buyers and manufacturers, including how to collaborate in international markets. 
 
Each meeting invites representatives from workers, trade unions, employers, business associations, governments, brand companies, standards organizations, social auditors and NGO to share best practices and group discussions to come up with suggestions to address a subjected topic.  Over the past six years, eight meetings were being held to discuss various issues relating to social insurance, environmental, health & safety, auditing quality...etc.  Among those, WRAP has been the host for two of the meetings about enhancing social auditor competence and creating an environment of transparency.  Below is a quick snapshot of the background and inputs of these meetings:
 
1st meeting “Understanding Chinese Social Insurance” on Feb 20, 2012 
The Social Security Insurance (SSI) program of China is designed to guarantee citizens’ rights to participate and benefit from five types of insurance: occupational accident, pension, maternity and child care, medical and unemployment. Employers are solely responsible for contributions to industrial accident and maternity/childcare insurances. The employer and employee co-pay into the pension, medical and unemployment insurances. Local SSI Bureaus set the percentages of employer and employee contributions.  In 2011, revised SSI regulations established by law the ability of all citizens to access their SSI accounts anywhere in the country, regardless of household registration and location of work. 
 
MAC participants recommended that workers should be informed of their rights and responsibilities and how to participate in SSI through awareness training; manufacturing companies can establish 100% SSI coverage for all personnel as a performance goal and the buying companies can align purchasing practices to support their suppliers’ full compliance with SSI. 
 
2nd meeting “Build a Decent Workplace" – Enhance Professional Health & Safety Administration” on Jan 23, 2013
Workers are the most important asset to any manufacturing settings, and their Occupational Health and Safety should come as the top priority. Participants suggested that establishing an effective incentive mechanism to engage employees fully is essential to ensure OHS. Communications and building a relationship to mutual respect between management and their workers are critical success factor to implement OHS effectively. 
 
3rd meeting “Cleaner and Sustainable Production – Instruments for Change” on July 31, 2013
 
The government promotes cleaner production by enforcing different environmental-related laws and regulations but focus mostly on high-energy-consumption and heavy polluting enterprises.  Medium and small size facilities in the dyeing industry face substantial challenges to pursue clean production to meet their buyer’s requirement of environmental protection.  Participants recommended that increase awareness from senior management and employees are necessary.  Building their technical knowledge and enhancing capacities through the supports from standing expert team from the local government would be helpful.  The buyers can also facilitate sustainable development through partnership with their supplier factories. 
 
4th meeting “Constructive Labor Relations for Better Business Performance” on Jun 13, 2014
 
In recent years, China labor market experience shortage of workers and it also seen the significant change in workers’ awareness and behaviors resulting from increasing young workers joining the workforce. It is believed that apart from creating an excellent corporate culture which is essential, a grievance mechanism, concerning the national law, at the factory level benefited the building of the functional relationship between employers and employees. International brands can also include in their procurement policies and hear workers’ voice to help to create a favorable environment for improving labor rights and interests. 
 
5th meeting “ Enhancing Social Auditor Competence” on Dec 5, 2014
Although we can’t expect a factory to be audited into compliance simply, it serves as a useful tool to evaluate the level of a factory to social compliance.  Therefore, the auditors’ quality, capability, and integrity are critical factors to foster a healthy measurement environment to the industry. According to participants’ discussion, sound academic background with an actual code of ethics is the essential qualities of auditors.  It is also recommended that advance communication with the factory on integrity policy from certification programs, 3rd parties, and brands & retailers is a good practice.
 
WRAP has actively participated in subsequent follow-ups and discussions with third parties organization after the MAC meeting.  In 2018, the Association of Professional Social Compliance Auditors was officially formed to enhance the professionalism, consistency, and credibility of industrial auditors and organizations performing independent social compliance audits. 
 
6th meeting “Rising Wage in China – Opportunities and Challenges” on Aug 31, 2015
 
Over the past few years, the annual wage was increased in the manufacturing sectors by more than 10% along with short labor supply in China.  Enterprises who provide competitive wages in the labor market are likely to retain talented employees, but it also urges the operation cost.    Some may move to low-cost countries while some may go for automation to improve production efficiency.  Participants commented on the impact of the wage collective consultation mechanism to deal with wage issues should not be underestimated.  Hence, participants proposed to strengthen the mutual understanding between the companies and their employees through support from the trade union and working committee is a way to minimize worker disputes on wages in the coming years. 
 
7th Meeting “Harmonious Labor Relations through Social Dialogue” on Dec 16, 2015
 
Workers of nowadays are more aware of their labor rights and are more willing to express their discontents.  Hence, an excellent compliant mechanism helps to eliminate the escalation of potential conflicts which resulting from lower staff turnover rate and improve production efficiency.   To make compliance mechanisms more effective, the participants suggested that management’s positive acknowledgment of its importance is crucial; the competency to handle worker’s complaint by the Human Resource together with regular feedback and handling process are vital elements to promote a harmonize labor relations. 
 
8th Meeting "Creating an Environment of Transparency" on July 1, 2016
In today's supply chain management systems, transparency for the business is critical to ensuring compliance.  However, making it transparent is no comfortable task stakeholders’ interest might be short term, the information might be misused or inaccurate and lack of mutual trust.  The participants believed that a reasonable and practical standard among brands’ and standards’ requirement that aligns with industry practice helps to institutionalize transparency.  However, most of the participants believed that it might take a long time to reach this ultimate goal.  However, as a short-term solution, participants proposed that a common platform to share partially open information and incentivize some good transparent practices with the supply chain would be a good start. 
 
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