Forging a partnership for sustainable and responsible business practices in the Sialkot sporting goods industry: a winning strategy

Sialkot, Pakistan is known around the world for the quality of the sports goods it produces and exports. The city is dotted with thousands of small- and medium-sized enterprises engaging tens of thousands of workers. These enterprises produce a wide range of sporting goods for global brands that support major sporting events such as the Olympics and the football World Cup. Building on a legacy of social progress achieved through ILO supported efforts to eliminate child labour from the soccer ball industry in Sialkot, the government, and employers’ and workers’ organizations have forged a new partnership for establishing sustainable, socially responsible business practices, good industrial relations and working conditions, improved occupational safety and health practices and skills development.

The ILO “More and Better Jobs through Socially Responsible Labour Practices in Asia (Pakistan)” project, funded by the Government of Japan was launched with strong support of the Employers’ Federation of Pakistan (EFP) in August 2015. Otherwise known as the “MNED Project”, its objective is to strengthen socially responsible labour practices among multi-national enterprises (MNEs) and their direct suppliers operating in the Sialkot sports goods manufacturing sector and promote decent work by engaging with MNEs operating in Sialkot.

Following the first phase of the project, during which a study to assess the decent work opportunities and challenges was conducted, a workshop was organized in Sialkot in August 2016 to discuss the project’s progress, activities, priorities and the way forward. Sixty participants representing the MNE brands/buyers sourcing from Sialkot, the Punjab Government, employers ‘and workers’ organizations, the media and civil society joined the workshop. It concluded by agreeing to establish a Task Force to boost the industry’s competitiveness through more and better jobs, resulting in the adoption of a Plan of Action. 

With the technical support of ILO, the EFP organized a second “tripartite-plus" dialogue in Sialkot in December 2016 that launched the “Task Force on Promoting Sustainable and Responsible Business in the Sialkot Sports Goods Manufacturing Sector”. The main aim of the Task Force was to spearhead the promotion of sustainable and responsible business practices in the sector through the establishment of a platform for dialogue for the buyers, brands and suppliers and by introducing new initiatives to improve productivity and competitiveness in the sector. Currently, the Task Force consists of the Labour and Human Resources Department, the Government of the Punjab, Trade Development Authority of Pakistan (TDAP), the EFP, the Pakistan Sports Goods Manufacturers and Exporters Association (PSGMEA), the Pakistan Workers Federation (PWF), and several prominent sports goods manufacturers in Sialkot. The ILO provides technical assistance to the Task Force in an advisory capacity.    

Subsequently, a three-day workshop on Multinational Enterprises, Social Policies and Fundamental Principles & Rights at Work (FPRW) was held from 14-16 March 2017 in Lahore. Over 50 participants including CEOs, directors and other representatives from the export-oriented sports goods manufacturers in Sialkot, representatives from the brands, trade bodies, business associations and the ILO constituents (government, employers’ and workers’ organizations) enhanced  their understanding of the key elements of the MNE Declaration, with a particular focus on the Fundamental Principles and Rights at Work (FPRW). The workshop concluded with a panel discussion on challenges and solutions to apply the FPRW principles and the development of individual (company) and collective action plans defining the way forward. 

Promoting OSH standards at the enterprise level: a top priority 

Occupational safety and health (OSH) is a critically important are for improvement for the enterprises in the region. The ILO therefore provided support to the EFP and the PSGMEA in organising a series of six Factory-Based Workshops in November 2017 to enhance understanding and practical skills on OSH management systems. The 187 participants included 22 women from 41 sports goods producing factories in Sialkot. The hands-on workshops were facilitated by an ILO OSH specialist and resulted in lively interactions among the participants, involving management, supervisors and workers.

These workshops - unique to the sports goods industry in Sialkot - were highly appreciated by the stakeholders, prompting a bilateral commitment by the management and the workers to uphold and improve OSH standards in their respective companies and organizations through action plans. The PSGMEA, EFP and sports goods industries requested the ILO and other relevant stakeholders to further strengthen the application of international standards in the industry and as such enhance its competitiveness in international markets. Building on the sharing of good practices, the ILO continues to support the industry’s commitment to promoting improvement of OSH standards and management systems.

Using the MNE Declaration as a reference framework

Apart from the core work in Sialkot, the MNE Declaration principles have served as a reference for complementary activities among businesses, including in Pakistan’s leading commercial city, Karachi. Thus in August 2016, some 130 business representatives, including more than 100 CEOs and their suppliers met in Karachi to discuss the opportunities and challenges stemming from the Declaration’s principles. Participating multi-national enterprises presented their CSR projects and shared good practices.

In December 2016, a stakeholders’ consultation meeting “Challenges and Opportunities Promoting Decent Work: Promotion and Application of the Principals of MNE Declaration - Maximizing the Contribution of Business to Inclusive Growth and Sustainable Development in Pakistan” brought together more than 60 participants from the private sector in Karachi as well as representatives of Government, workers and civil society. 

Working closely with the Employers Federation, the project successfully mobilized a wide range of stakeholders from the business community including multinational enterprises, the sports goods industry, the Japan-Pakistan Business Forum, Overseas Investors Chamber of Commerce and Industry (OICC), Swiss Pak Business Council and the Pak German Business Forum. To date, the most important outcome of the project has been to forge an alliance of stakeholders in building a strong business case for socially responsible labour practices and decent work to enhance market access for enterprises in Pakistan.  The Project is currently supporting the collection of good labour and CSR practices in the Sialkot sporting goods industry that are replicable and scalable and thus can serve as inspiration for other companies. 

In Pakistan and beyond

With the technical assistance of the ILO, the EFP organized another stakeholder dialogue on its National Business Agenda and the MNE Declaration in October 2017. The dialogue brought together more than 200 participants from the public and the private sectors to share the experience from Sialkot. Officials included the Minister for Labour, Information and Transport of the Government of Sindh, the President of the EFP, the Deputy Major of Karachi and the Consul General of Japan in Karachi.

The Minister expressed appreciation for the EFP’s positive efforts to bring the business community together on issues of labour and social compliance and its projects, and announced support for a Sindhi translation of the ILO’s OSH training materials. The EFP President highlighted the direct link between the National Business Agenda and Pakistan’s third Decent Work Country Programme and the Agenda 2030 Sustainable Development Goals. The Consul General of Japan in Karachi was confident that the lessons learned from the Project would lead to more intensive efforts to help sustainable industry growth in Sialkot and beyond.

While promoting training programmes in the area of OSH and women in employment at the enterprise level will continue to be important for Sialkot, the EFP also suggests sharing the experience in the sports goods manufacturing industry with other industries in the country. 

Efforts in Sialkot will be enhanced in the context of a unique partnership agreement between the 2020 Tokyo Organising Committee of the Olympic and Paralympic Games, and the ILO. The partnership seeks to advance decent work by promoting socially responsible labour practices among the Games’ delivery partners based on the guidance provided by the ILO’s MNE Declaration. The partnership will encourage enterprises to play a positive role in promoting decent work to achieve sustainable development leading up to 2020.  It is the ILO’s first official partnership with an Olympic and Paralympic Organizing Committee and Tokyo 2020’s first partnership with a UN organization.

In December 2020, Pakistan has designated the Employers Federation of Pakistan as its national focal point on the promotion of the ILO MNE Declaration. This appointment comes with the strong commitment of the Pakistani tripartite constituents in further promoting the ILO MNE Declaration in the country, building on the efforts made to date in the sports-goods manufacturing industry. The focal point function will rotate amongst the employers, workers and government every 3 years. The terms of reference for the national focal point on the promotion of ILO MNE Declaration in Pakistan include awareness raising, capacity-building, development of on-line information and dialogue platforms, and the promotion of the ILO Helpdesk for Business. The focal point will organise tripartite-plus dialogues involving sectoral associations, business associations, ILO tripartite constituents and MNEs to discuss opportunities and challenges for advancing decent work. Dialogues between home and host countries are envisaged, as outlined in paragraph 12 of the MNE Declaration.

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