Supply Chain Due Diligence in Ethiopia - The Role and Opinion of Trade Unions

On 5 September 2024, FES Ethiopia in partnership with the Confederation of Ethiopian Trade Unions (CETU) Mekelle Branch held a workshop focused on the importance of Supply Chain Due Diligence and its role in advancing Business and Human Rights (BHR) in Ethiopia. The session provided a platform for participants to explore how Ethiopia’s labor rights can be safeguarded within global supply chains and how the country can align with international standards in business practices.

As businesses integrate into global markets, supply chains increasingly extend across borders, affecting millions of workers. Supply chain due diligence refers to the responsibility of companies to ensure that human rights are respected throughout every stage of production. When businesses fail to account for human rights, it opens the door to violations such as child labor, exploitative working conditions with inadequate pay and working hours or lack of protective material, and environmental harm. The goal of this workshop was to highlight the importance of due diligence in addressing these challenges and fostering an ethical business environment in Ethiopia.

Participants discussed how supply chain due diligence directly affects labor markets in Ethiopia, particularly as the country works to position itself as a major player in industries like agriculture, textiles, and manufacturing. When human rights are embedded into supply chain policies, businesses not only comply with international standards but also enhance their sustainability and reputation.

The workshop also highlighted key international frameworks for due diligence, including the OECD Guidelines, the ILO Tripartite Declaration of Principles, and the UN Guiding Principles on Business and Human Rights. While all of these frameworks are relevant, the UN Guiding Principles stand out for their comprehensive approach, as they cover all sectors and UN member states that signed them. These international guidelines also provide a clear path for Ethiopia to follow as it advances its efforts toward aligning with global standards.

The German Supply Chain Due Diligence Act, was explored as an example of how rigorous due diligence can be enforced. While Ethiopia may not be directly bound by these international laws, their impact on global markets—particularly for trade unions and industries—was emphasized. If supply chain due diligence standards are not met, companies risk losing market access or facing reputational damage, which can have serious consequences for workers and economies reliant on global trade.

Since Ethiopia continues to develop its National Action Plan (NAP) on Business and Human Rights, the workshop provided a timely opportunity to reflect on how the plan can better incorporate the needs of workers. The NAP, which is being overseen by a 30-member steering committee, aims to establish a framework for ensuring that human rights are respected across all sectors. However, it was noted that workers' rights have not been emphasized enough in the ongoing discussions.

This gap presents a critical opportunity for trade unions and civil society to play a proactive role in the NAP consultation process. By contributing their voices and expertise, trade unions can ensure that the final plan reflects the realities on the ground, especially in sectors where workers are most vulnerable to exploitation.

Throughout the discussions, participants identified several key challenges to effective supply chain due diligence in Ethiopia. The "implementation gap" was a recurring theme, with many laws and policies being ratified but rarely enforced. This disconnect between policy and practice has created a situation where workers remain vulnerable, despite the presence of legal protections. Economic conditions and varying levels of knowledge about due diligence further complicate the issue, making it harder for businesses and workers to fully grasp their responsibilities and rights.

Additionally, participants raised concerns about Ethiopia’s economic strategy, particularly its focus on attracting foreign investors by marketing the country as a source of “cheap labor.” While this approach has drawn investment, it has also made workers more susceptible to exploitation. The workshop stressed the need for Ethiopia to shift its focus toward creating a fair labor market, where rights are upheld and workers are treated with dignity.

Trade unions were recognized as essential in holding businesses and governments accountable for implementing supply chain due diligence. Unions play a crucial role in advocating for fair working conditions, raising awareness about the importance of labor rights, and ensuring that policies are effectively enforced. Strengthening union membership and fostering greater collaboration between unions, workers, and businesses were identified as key strategies for ensuring that human rights are respected across supply chains.

The discussions also highlighted the importance of creating a productive work environment where labor rights are respected, ensuring that workers can contribute to Ethiopia’s economic development without fear of exploitation. Trade unions were encouraged to actively engage in stakeholder dialogues, both at the national and regional levels, to ensure that their concerns are reflected in policy decisions.

As Ethiopia continues to navigate its path toward becoming a key player in global supply chains, the workshop emphasized the importance of embedding human rights into business practices. By aligning with international standards and strengthening domestic frameworks like the NAP, Ethiopia can create an environment where workers’ rights are not just protected but prioritized.