Labour Standards, 3 - IV The Issues

IV. The Issues

The issue of workers rights being included in international trade is not new. According to the ICFTU,

"In 1948, the never to be ratified Havana Charter which laid the basis for the GATT included Clauses on workers’ rights. (‘The members recognise that unfair labour conditions particularly in production for export, create difficulties international trade and accordingly each members shall take whatever action maybe appropriate and feasible to eliminate conditions within the territory.’)

"About 20 years ago the subject was raised again by the Workers Group in the ILO with the objective of strengthening and broadening effective international action for the protection of basic human and trade union rights on the basis of selected ILO standards. The question has since become increasingly urgent due to the fact that unfair labour practices have become more and more important elements in the competition between countries for the expansion of their export markets." (Economic and Social Committee, 29.11.93, ICFTU).

It should be noted that already, the current GATT arrangements ban the use of forced or prison labour.

In 1986 the US representative at the Ministerial Meeting which launched the Uruguay round of GATT trade negotiations, proposed that workers rights be included as a subject for negotiations. The Chairman of the Ministerial Meeting indicated that the issue should be taken up at a later stage.

In 1987 and 1990 the United States of America proposed in the GATT Council, that GATT should set up a working group to consider the relationship between international trade and respect for internationally - recognised workers rights . (ICFTU 29.11.93).

For the international trade union movement the major issues which need to be stressed in an open and objective dialogue on the relationship between labour standards and trade include:

That the international labour standards suggested by the ICFTU constitute basic human rights for workers; it does not propose global minimum wages and working conditions - the proposal is to stop governments trying to gain competitive advantage through repression, discrimination and exploitation of workers;
The ICFTU proposals for a social clause are anti protectionist, aimed at opening markets and increasing growth in employment. A world wide commitment to basic workers rights would help to spread more fairly the benefits of trade within and between countries;
The key to successful linking of workers rights to trade is agreement on a step by step procedure which is open, fair, multilateral and gives time for problems to be resolved by discussion and negotiation; trade measures should be reserved for cases of prolonged non-cooperation. The WTO and the ILO should cooperate closely on the implementation of an international workers rights and trade agreement. (International Workers Rights and Trade: The Need for Dialogue, September 1994 ICFTU).

IV.a Definition of the Social Clause

There has been considerable confusion regarding terminology, ("Social Clause", "Code of Conduct", "Social Charter"). The "social clause" is not a "social charter" nor is it a "code of conduct."

The international trade union movement has proposed that the following paragraph, to be known as the "Social Clause" be included in the GATT and similar international trade agreements:

"The contracting parties agree to take steps to ensure the observance of the minimum labour standards specified by an advisory committee to be established by the WTO and ILO, and including those of freedom of association and the right to collective bargaining, the minimum age for employment, discrimination, equal remuneration and forced labour,"

IV.b Protection of People in Trade

Governments, such as India, have rejected any such clause being included in such agreements. For them, "Trade linkage to labour standards has no economic rationale. Mindless upward equalisation of labour standards would only make international trade arthritic and ultimately paralysed. Then international trade would not open up export opportunities, facilitate technology in investment flows and result in employment generation."

The Indian Government representative was strongly supported by the Government of Kenya spokesman who reiterated that his government, "was totally opposed to the whole idea of linking trade to the observance of ILO Labour standards. We firmly believe that there should be no attempt to use labour standards as a vehicle of protectionism to restrict the free flow of trade between countries. Such a move, would, at best, pressurise developing countries to adhere to rigid standards as a condition to free access of goods to industrially developed world markets. It is already evident that some developed countries and some international trade secretariats are attempting to introduce such a clause or a linkage with observance of labour standards into international labour agreements in order to restrict the market access, a move which would have adverse consequences on the employment opportunities for workers in developing countries such as Kenya." (ILO Governing Body, Record of Proceedings, November 1994 ILO).

The ICFTU on the other hand has argued in fact, that the social clause

"Is not about the protection of trade but the protection of people. It is not about establishing minimum wages across the world. It is not about transferring first world wage levels in terms of conditions to developing countries. It is simply about ensuring basic rights are respected in all countries that trade...... if any country claims that the acceptance of our social clause is so damaging to them and that it will damage their trading performance, then we, the workers, see that government operating a form of protectionism far more pernicious than anything referred to by those who fear protectionism from the developed world" (International Labour Conference, Provisional Record 1994 9/30)

IV.c Cultural Diversity

A continuing theme in the attack by employers and governments on the social clause, is that trade union and worker rights cannot and should not be applied uniformly and universally. National philosophies ("Pancasila" - Indonesia), historical tradition ( Confucian tradition - South Korea), and religious belief ( Principles of Islam - Saudi Arabia) have all been used to reject the universal legitimacy of any core of minimum labour standards. The international trade union movement sees such arguments as being closely linked to the debate on the relationship between, and relative priorities of, economic and social rights on the one hand, and political and civil rights on the other.

For the trade union movement,

"The argument that workers of different nationalities or races should be treated differently is extremely dangerous. The drive for independence in many former colonial countries was fuelled by the blatant inequalities of imperial rule. It is surely outrageous as the arguments in favour of colonialism to suggest that it is culturally justifiable to allow the exploitation of workers in the name of free trade. Just at the moment of a victory against apartheid in South Africa it is extremely worrying to hear suggestions that certain workers are inherently, culturally unequal." (ICFTU, September 1994).

At this point, it should be noted that some 90 governments have ratified, 5 or more, of what is increasingly being recognised as the core labour standards making up the social clause.

IV.d Implementation

In implementing the effectiveness of a social clause, the ICFTU has argued for procedures which recognise the ILO as the standards setting and supervisory agency, and the World Trade Organisation (WTO) as the body that ensures that failure to apply minimum labour standards does not lead to unfair competition. The process envisaged would include,

a. The setting up of a joint WTO/ILO Advisory Body to oversee the implementation of the social clause

b. The Advisory Body would review periodically or on the basis of complaints, the application of standards contained in the seven basic international workers standards in law and practice (NB this review process would require only a minor readaptation of existing procedures)

c. Should a report of a review show that changes in law and practice are required, then the Advisory Body through the ILO would recommend such changes or offer technical or other resource assistance, to assist countries to reach the minimum standards, and

d. Further report would be made of developments; if the government continued to fail to meet its commitments, the issue would be referred to the WTO Council for action.

For the ICFTU,

"Such a step by step procedure provides all the elements of clarity, predictability and objectivity that an effective multilateral system require. It builds on the established competence of an existing specialised international agency. It also provides adequate time for problems to be solved by dialogue. Furthermore it avoids the danger of heavy-weight trading powers trying to dictate terms for market access to small countries, and it is even handed. All countries would be subject to equally close scrutiny by reference to universal standards. In all cases fully transparent procedures would be used which would leave no opening for misuse for protectionist purposes." (ICFTU, September 1994).

IV.e National Action

The issue of a social clause and trade currently being debated at the regional and international level needs also to be grounded in local and national experience. In Australia, for example, the Federal Government has recently established a tripartite (government, employers and trade unions) Working Party on Labour Standards to investigate and report on the following issues concerning labour standards in the Asia Pacific region:

The commitment to labour standards (as defined by relevant provision in major UN and Human Rights Conventions, ILO Convention 87 and 98 Freedom of Association and Collective Bargaining; 111 - Equal Opportunities - Treatment of Discrimination; 29 and 105 Forced or Compulsory Labour; 138 - Child Labour; and right to work in a safe environment, and the elimination of forced prison and labour as defined in GATT), in Australia and amongst our trading partners in the Asia Pacific region.

The nature and effectiveness of current measures of the Australian Government, unions, Australian industry, and non government organisations, to assist our trading partners to meet the above labour standards. The measures to be investigated and reported upon should include:

The provision of technical and development assistance

The making of representations and other diplomatic activities associated with the pursuit of the above labour rights as human rights - including multilateral activity involving the UN s human rights fora, the ILO and other specialised agencies; and,

programs of cooperation between industry unions and non government organisations in Australia, and their counterparts in countries in the region.

The nature and effectiveness of measures which could be taken to address the above labour standards, including

measure to promote the commitment of Australian companies who operate in the Asia Pacific Region to abide by these standards, including the code of conduct for overseas operations;

further multilateral diplomacy in bilateral dialogue and cooperation;

The use of trade instruments in the context of WTO/GATT, APEC and regional trade agreements to improve these standards; and,

A greater recognition of these standards in international financial institutions such as the World Bank, the Asian Development Bank and International Monetary Fund in terms of incorporating labour issues in projects. This includes resources that Australian institutions may be able to make available as part of Australia s development assistance project.

The likely affect of extending existing measures and introducing new measures, taking into consideration;

the extent of Australia s international and other resources and the best effect to which these might be put, including the impact of implementation of such measures on the implementation of others; and,

importance of ensuring that any trade related measures taken to support labour standards should not be imposed for protection purposes, but to support an environment where the benefits of world trade are equitably available.

The development of worker institutions and modern industrial relations policies and practices in the region amongst our trading partners and their effect on the economic development of the region.

No church, no church agency, nor the National Council of Churches in Australia has made any comment on the setting up of this working party, nor have they made any inquiries as to its significance, or made any submission to the Working Party.

Matheson, page 1 - 2 - 3 - 4 - 5

	I. Philadelphia Declaration		VI. Chronology of Marginalisation
	II. Globalisation: Workers and Trade		VII. Towards an Explanation
	III. Labour Standards and the Debate		VIII. Conclusion
	IV. The Issues		IX. References
	V. Life and Work