IFC PERFORMANCE STANDARD 2 LABOR & WORKING CONDITONS PRESENTION TO UNIONS, ISTANBUL APRIL 5, 2013

1. IFC PERFORMANCE STANDARD 2 LABOR & WORKING CONDITONS PRESENTION TO UNIONS, ISTANBUL APRIL 5, 2013

2. Performance Standards Overview PS1: Assessment and Management of E&S Risks and Impacts PS4: Community Health, Safety and Security PS2: Labor and Working Conditions PS3: Resource Efficiency and Pollution Prevention PS5: Land Acquisition and Involuntary Resettlement PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources PS8: Cultural Heritage PS7: Indigenous Peoples

3. PS2: Laborand Working Conditions

4. SCOPE ILO Conventions • Child Labour • Forced Labour • Non-Discrimination • Freedom of Association & Collective Bargaining Objectives • Fair treatment, non-discrimination, equal opportunity • Good worker – management relationship • Comply with national employment and laborlaws • Protect workers, in particular vulnerable categories • Promote safety and health • Avoid use of forced labor or child labor

5. SUMMARY OF REQUIREMENTS HumanResources Policy Document and Communicate Working Conditions and Terms of Employment Respect Collective Agreements Workers’ Right to Organize and Bargain Collectively Non-discrimination and Equal Opportunity Retrenchment Plan Grievance Mechanism No use of Child Labor No use of Forced Labor Safe and healthy work environment

6. PS2: 2012 Clarifications & Updates • Comparable conditions for migrant workers • Requirements for workers’ accommodation • Monitoring of conditions for workers younger <18 • Alternatives analysis prior to retrenchment • Third-party worker access to grievance mechanism • Safety requirements for primary supply chain • (NB many of these changes were proposed by unions during consultations and adopted, in full or in part)

7. Supply chains Aim: To protect workers, including vulnerable categories of workers such as children, migrant workers, workers engaged by third parties, and workers in the supply chain • Triggers: Where there is: • High risk of child labor and forced labor • High risk of significant safety issues (life threatening) • in the primary supply chain Requirement: Client required to introduce procedures and develop mitigation measures Implementation: Any projects with high E&S risk supply chains will be categorized ‘A’, e.g. commodity / country combinations with Biodiversity, Deforestation, Child Labor risks Examples: palm oil in Indonesia, cocoa in West Africa, cotton in Central Asia, soy/beef from Brazil (Amazon - Cerrado) Tools: GMAP, Maplecroft

8. Convergence of standards • 78 financial institutions have adopted the Equator Principles to date, incorporating application of PS 2 • EBRD’s PR 2 based on PS 2 and near identical • MIGA and IBRD adopted IFC PSs for private sector projects, ensuring World Bank Group coherence (as lobbied for by global unions) • OECD Export Credit Agencies benchmark against PS 2 • European Development Finance Institutions apply PSs when more than one EDFI is involved in a financing

9. Due diligence process

10. Implementation tools • Internal Resources • Internal resources: Labor Toolkit, PS 2 training for Specialists, Labor working group (virtual) • Templates: grievance mechanism, disciplinary practices, non-discrimination etc to assist Clients • PS 2 ‘champions’ • Various sources of PS 2 info, e.g. US Dept Labor List of Goods Produced by Child Labor or Forced Labor • External Resources – Good Practice Publications • Addressing Child Labor in the Workplace & Supply Chain (2002) • Managing Retrenchment (2005) • Non-discrimination & Equal Opportunity (2006) • Workers’ Accommodation – Processes & Standards (2009) • Measure & Improve Your Labor Standards Performance: PS 2 Handbook for Labor and Working Conditions (2010)

11. Global Ifc-union interaction • Unions substantially involved in formulation of PS 2 in 2004-6 and again in the PS 2012 update (+ ILO) • Global union review point for new E&S disclosure documents exists – union concerns over timing • Dedicated website for raising union concerns on proposed new investments: ~ 30 projects highlighted to date • Some union complaints directed via the Compliance Advisor Ombudsman (CAO) mechanism • ESG Department representative meets 2-4 times a year, as informal contact in between on PS 2 matters • Differences of opinion generally concern implementation of PS 2 requirements, not content

12. Website

13. Regional issues & challenges • 2 CAO complaints in Turkey (AssanAluminium and Standard Profil), both about Freedom of Association (not respecting workers’ rights to join and form unions) • Dealing with the aftermath of the Arab Spring (multiple and ongoing strikes, union issues) • Worker Health & Safety in many jurisdictions, e.g. in Turkey in construction • Privatizations / retrenchment (e.g. Albania, Lebanon…) • Least developed (IDA) countries: lack of Govt capacity, enforcement on labor, low incentives, union issues