Strengthening capacity of Thailand's automotive sector would help build resilience: ILO report

Thailand's automotive industry is the backbone of the country's economy, accounting for 10 per cent of GDP and employing over half a million workers in manufacturing processes alone.

Strengthening the capacity of Thailand's automotive manufacturing sector to adopt responsible business practices would help build resilience and sustainability amid a rapidly changing supply chain landscape, according to a new report launched by the International Labour Organization (ILO). 

The report entitled “Decent work and responsible business practices in Thailand’s automotive manufacturing sector” was produced by the ILO’s Resilient, Inclusive and Sustainable Supply Chains (RISSC) project in Thailand, which is supported by the Government of Japan. 

Thailand's automotive industry is the backbone of the country's economy, accounting for 10 per cent of GDP and employing over half a million workers in manufacturing processes alone.  However, despite its high-tech, high-wage status, it faces challenges in ensuring decent work and responsible business practices up and down the supply chain, as well as meeting emerging global requirements.

Findings reveal that although the sector is strong in key areas like wages and social protection coverage, there is room for improvement in others, including social dialogue, training and equal opportunity. Similarly, while supply chains globally are being reshaped by new requirements for ‘human rights due diligence’, there remain gaps in its understanding and application in the Thai automotive sector.

The report also highlights disparities in the workforce, with migrant workers and agency-hired workers facing weaker conditions of work and lower wages, on average, than Thai workers and regular employees. 

Over half of the workers in the sector received some form of formal work-related training, predominantly employer-sponsored vocational courses. However, gaps in access to certified training courses were observed, emphasizing the importance of skills development in career advancement.

The report praises the high enrolment in social security schemes but notes a need for improved awareness of compensation programs like the Workmen's Compensation Fund. It also identifies disparities in maternity benefits provision and awareness.

Approximately one-third of workers were found to have access to a trade union at their workplace, while a majority of workers would like to join one if available. Unionized workplaces exhibited better social dialogue and negotiation channels between workers and management, underscoring the importance of worker representation in securing safe and productive work environments.

The report concludes with stakeholder focused recommendations to strengthen the sector’s commitment to decent work and responsible business. These include ratifying key ILO Conventions, improving social dialogue, expanding quality employment opportunities, tackling discrimination, and raising awareness and application of responsible business requirements.

"We believe this study serves as a vital resource for industry planning in the Thai automotive sector," said David Williams, manager of the ILO RISSC programme. "By working together to implement the recommended changes, stakeholders can build a more resilient supply chain that not only guarantees worker rights and productive enterprises, but also unlocks opportunities for industry growth in an ever-more competitive and socially conscious global marketplace.