Generally, an IFA recognises the ILO Core Labour Standards. In addition, the company should also agree to offer decent wages and working conditions as well as to provide a safe and hygienic working environment. Furthermore, there is an agreement that suppliers must be persuaded to comply and, finally, the IFA includes trade unions in the implementation.

MUTUALLY BENEFICIAL
Transnational business operations and a global economy raise issues that go beyond the reach of national legislation. Through IFAs, the ILO’s Core Labour Standards can be guaranteed in all facilities of a transnational company, which is especially helpful in transitional and developing countries, where legislation is sometimes insufficient, poorly enforced or anti-worker.

For transnationals, IFAs can secure good relations with trade unions and contribute to a positive public image. More and more companies increasingly see the need to respond to the growing ethical concerns of consumers and investors.

For trade unions, IFAs are a way to promote workers’ rights in the global arena. The arrangement guarantees influence and the possibility of a dialogue that is mutually beneficial. Unlike unilateral Codes of Conduct, IFAs emphasise implementation, which paves the way for actual improvements.

CODES OF CONDUCT VERSUS IFAs
The Global Union Federations, including the IMF, have abandoned the expression “Code of Conduct” in favour of “International Framework Agreement”. The reason is that the former expression is often used for unilateral initiatives by the management, frequently of questionable value for labour. Most of these “codes” are instruments for PR or marketing purposes.
Read more about Codes of Conduct versus IFAs.