What are Binding Agreements?

Binding agreements are formal commitments between global trade unions or worker representatives and groups of multinational companies to address specific labour rights issues, often within a particular sector, region, or jurisdiction. The binding agreement model is not new—certain binding agreements date back many years—and has proven more effective in securing meaningful outcomes for workers compared to other models, such as voluntary corporate social audits.

 

Read our Publication Investor Guidance and Expectations

Key Differences Between Social Audits and Binding Agreements

Characteristic Social Audits Binding Agreements
Legal accountability No legal consequences for auditing failures Legally binding on all parties (often binding arbitration)
Market consequences No clear market consequences for auditing failures Explicit market consequences for non-compliance
Governance and independence Commercial relationship between auditee and auditor Workers participate in governance
Grievance and remedy Generally absent or ineffective Remedy is built in
Monitoring, reporting and transparency Generally one-off auditing; results typically opaque Continuous monitoring, more transparent reporting

Note: There are variations between different social audit schemes and types of binding agreements. The table represents a summary of general characteristics.
Source: Investor Guidance and Expectations: Supply Chain Due Diligence and Binding Agreements

Mitigating Risks and Securing Meaningful Outcomes

This portal showcases examples of binding agreements from around the world across various industry sectors. It is designed as a practical tool to support investors in engaging companies on supply chain due diligence and advancing respect for fundamental labour rights.

For more information on how binding agreements can help mitigate risks for companies and their investors while strengthening human rights due diligence (HRDD), see our publication: Investor Guidance and Expectations: Supply Chain Due Diligence and Binding Agreements

Table of Contents

The International Accord for Health and Safety in the Textile and Garment Industry

Sector: Garment and Textiles

The International Accord promotes worker health and safety in the textile and garment industry through independent factory inspections, remediation, safety training programs and complaint mechanisms, with corporate accountability underpinned by binding arbitration. It evolved from the Accord on Fire and Building Safety in Bangladesh, signed in 2013 after the Rana Plaza collapse. In December 2022, the Accord expanded its program to Pakistan.

  • Year: 2013 (renewed in 2018 and 2023)
  • Jurisdiction: Bangladesh and Pakistan
  • Signatories:  Over 250 global brands and two global union federations (IndustriALL Global Union and UNI Global Union)
  • Governance/oversight: The International Accord is governed by a 15-member Steering Committee, including brand and trade union representatives. Witness signatories participate as observers, and the ILO as an independent Chair

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More about the Accord

The International Bargaining Forum (IBF)

Sector: Marine transportation

The IBF is a forum for collective bargaining that brings together international maritime employers, represented by the Joint Negotiating Group (JNG), and seafarers’ unions, represented by the International Transport Workers’ Federation (ITF). Every four years, the IBF convene to negotiate the IBF framework agreement. It addresses working conditions, quality of life, and wages. This framework serves as an instrument for ITF-affiliated unions to negotiate local agreements with companies in their countries.

  • Year: 2003
  • Jurisdiction: International
  • Signatories: The JNG (the International Maritime Employers’ Council – IMEC, the International Mariners Management Association of Japan – IMMAJ, the Korean Shipowners’ Association – KSA, and a Taiwanese shipping company), and the ITF

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Action, Collaboration, Transformation on Living Wages (ACT)

Sector: Garment and textile

The ACT initiative is an agreement between IndustriALL Global Union and multinational brands and retailers in the garment and footwear industry, designed to support a pathway to living wages through collective bargaining in production countries. In 2024, ACT facilitated the establishment of individual binding agreements between IndustriALL and brands to support collectively bargained wages in the Cambodian garment sector.

Resource: A New Model for Supply Chain Industrial Relations in Cambodia, by The Global Deal.

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Dindigul Agreement

Sector: Garment and textile

The Dindigul Agreement aims to end gender and caste-based violence and harassment (GBVH) at Eastman Exports factories in Dindigul, Tamil Nadu, India. It creates a framework that empowers workers to exercise their collective power to identify, report, remediate, and prevent GBVH in the workplace.

  • Year: 2022
  • Jurisdiction: India
  • Signatories: Three global brands, the supplier Eastman Exports, trade unions (Tamil Nadu Textile and Common Labour Union – TTCU), and labour organizations (Asia Floor Wage Alliance – AFWA, and Global Labor Justice – GLJ)
  • Governance/oversight: The execution of the Dindigul Agreement is overseen by an Oversight Committee comprising an independent gender and labour rights expert, representatives from TTCU, AFWA, GLJ, Eastman, and up to two signatory fashion companies

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Lesotho Agreements

Sector: Garment and Texile

The Lesotho Agreements combat GBVH at five factories owned and operated by Nien Hsing Textile Co. in Lesotho. Consequently, the Anti-GBVH Program was established in 2020 to ensure a safe workplace free of GBVH at Nien Hsing factories.

  • Year: 2019
  • Jurisdiction: Lesotho
  • Signatories: Three global brands, the supplier Nien Hsing, Lesotho-based trade unions and women’s rights organizations (Federation of Women Lawyers in Lesotho, Women and Law in Southern Africa Research and Education Trust – Lesotho, the Independent Democratic Union of Lesotho, the National Clothing Textile and Allied Workers Union, and United Textile Employees), and labour organizations (Solidarity Center, Worker Rights Consortium and Workers United)
  • Governance/oversight: The Workers Rights Watch (WRW) was established in 2021 as an independent monitoring organization to oversee the implementation of the Anti-GBVH Program

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More on the Lesotho Agreements

Fair Food Program (FFP)

Sector: Agriculture

FFP brings together growers, farmworkers, and retail food companies to ensure better wages and working conditions for farmworkers. The initiative centers on a Code of Conduct applicable to participating growers, a price premium paid by purchasing companies to support wage increases, and binding agreements between brands and the Coalition of Immokalee Workers (CIW). Notably, CIW’s 2005 Fair Food Agreement with Taco Bell was the first of its kind — a legally binding agreement between a brand at the top of the food supply chain and the workers at the bottom of the supply chain. All Fair Food agreements also require brands to preferentially purchase from participating growers who are in good standing (with standing determined by the worker organization or by an auditor of the workers’ choosing) and, importantly, to suspend purchases from any growers who are suspended from the FFP for failures to comply with the Code of Conduct.

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The Central Java Agreement for Gender Justice

Sector: Garment and Textile

The Central Java Agreement is an enforceable agreement between Indonesian garment unions and fashion brands that aims to prevent and remedy gender-based violence and harassment (GBVH) in two garment factories in Central Java owned by Ontide. The Agreement draws from best practices, including the Dindigul and Lesotho Agreements, and covers all 6,250 workers at the two factories, approximately 5,600 of whom are women.
  • Year: 2024
  • Jurisdiction: Indonesia
  • Signatories: Two suppliers (PT Batang Apparel Indonesia and PT Semarang Garment Indonesia, owned by Ontide), four Indonesian unions (SPN, SPSI, and KASBI at PT Batang Apparel Indonesia, and SPSI at PT Semarang Garment Indonesia), a global supply chain buyer (Fanatics Brands), and labour organizations (Asia Floor Wage Alliance, Global Labor Justice, and Worker Rights Consortium)
  • Governance/oversight: Each factory has a GBVH Elimination Committee, equally composed of union‑appointed worker representatives (a majority of whom are women) and management. These committees oversee the implementation of the Agreement, coordinate investigations, and issue remediation recommendations.

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ASOS/ITF Human Rights Due Diligence Agreement

Sector: Transport and logistics

ASOS signed a legally binding human rights due diligence agreement with the International Transport Workers’ Federation (ITF), extending its commitments to cover transport and logistics in its global supply chain. The agreement commits ASOS and the ITF to collaborate on developing policies, identifying and mitigating risks, and determining remedies when rights are violated.

  • Year: 2025
  • Jurisdiction: International
  • Signatories: ASOS and ITF
  • Governance/oversight: ASOS and the ITF will set up a joint technical working group, meeting twice a year to work together on fulfilling the shared responsibilities and objectives of the agreement.

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More on the Due Diligence Agreement