Elimination of child labour and promotion of Decent Work in the Stora Enso value chain, with a focus on Pakistan

Stora Enso is a leading paper, biomaterials, wood products and packaging company with its head offices in Finland and Sweden. The Group has some 28,000 employees in more than 35 countries worldwide, and is a publicly traded company listed in Helsinki and Stockholm. Its customers include publishers, printing houses and paper merchants, as well as the packaging, joinery and construction industries. In June 2013, Stora Enso, with its Pakistani partner Packages Ltd, established a joint venture company in Pakistan called Bulleh Shah Packaging (BSP). The company mainly provides packaging products to key local and international customers in the fast-growing Pakistani market. The joint venture employs about 950 people and has an annual capacity of 335 000 tonnes of paperboard. The two parties are committed to an investment programme during 2013 and 2014 in order to develop the business further. A total of $135m (€104m) are planned to be invested, among others, in the construction of a biomass power plant and the rebuilding of current board machines. The joint venture includes the operations of the Kasur Mill, (paperboard and corrugated packaging), and the Karachi Plant (corrugated packaging). As part of its due diligence in advance of the establishment of the joint venture company BSP, Stora Enso commissioned research which confirmed that child labour, alongside other decent work deficits, was a problem in the wheat straw and waste paper supply chains in Pakistan. At Stora Enso’s request, ILO-IPEC provided technical advice on the design of this research. Of late, international and Pakistani media reports have documented violations of fundamental rights at work in the value chain of BSP, highlighting the involvement of children in child labour in wheat straw production and waste collection. These labour rights violations and the need to resolve them was further highlighted by the global union federation IndustriALL and the national trade union centres in Pakistan in communications with the management of Stora Enso. Stora Enso and BSP face significant challenges in addressing labour rights problems in wheat straw and waste paper recycling. In Punjab large landowners who engage tenant farmers in wheat production predominate, and ILO research has documented irregular tenancy arrangements in wheat farming in Pakistan as a root cause of labour rights violations. Securing access to farms and the cooperation of landowners and farmers will require dialogue and building trust with them. Furthermore, SE and BSP’s commercial leverage with farmers is limited, as straw is a by-product of wheat and represents only an estimated 3% of farmers’ income. The waste paper recycling supply chain presents other challenges, notably that recyclers are typically not organized into cooperatives or other structures that would facilitate engagement with them, and as a group are marked by low levels of education, high levels of poverty and social marginalization. Moreover, the fraught security situation could impose significant constraints on efforts to improve labour rights in both supply chains. In this context, determining what the appropriate response of SE and BSP to child labour or other labour rights violations in the supply chains will require, inter alia, a thorough mapping of the supply chains, an assessment of the relevant governmental organizations, social partner and other organizations with presence in target communities, and an analysis of the influence that SE and BSP wield and how it might be used and increased. To support Stora Enso (SE) and BSP in meeting their commitments to respect labour rights, including those related to child labour and the other fundamental principles and rights at work, a Public-Private Partnership is proposed in which ILO will provide technical support to: 1) strengthen SE’s policies and due diligence processes on child labour and the other labour rights; and 2) address decent work deficits and

Project symbol

GLO/15/53/STO

Admin unit

FPRW

Start date

22/04/2015

End date

31/12/2018

Total allocation

267820

Total expenditure

Status

Closed

112220

Development Partners

Stora Enso

Country/Countries

Global

Outcomes

Protection of workers from unacceptable forms of work