ILO/97/10

GENEVA (ILO News) - In a new attempt to reconcile the issues of international trade and adherence to labour rights, the Director-General of the International Labour Organization, has urged the Organization's 174 member States to examine sweeping new measures designed to ensure that "social progress" and "humane conditions" proceed apace with trade liberalization in the globalizing world economy.

Citing social progress as "indispensable to the consolidation of the multilateral system," ILO Director-General Michel Hansenne said that while the globalization of the world economy can be "an unequalled factor of progress and peace, it cannot be left to its own devices."

The liberalization of trade, he warned in a major policy statement addressed to the International Labour Conference, "must go hand-in-hand with social progress" and "there must be evidence that its promises are not vain or illusory."

Designed to examine and confront fears of the potentially negative social consequences resulting from "the infatuation with globalization, the obsession with competitiveness and the casting aside of values" the ILO Director-General's report ( Endnote1 ) sets out his vision of a revitalized system of international labour standards which encompasses:

• Universal respect for fundamental human rights in the workplace as defined in the seven core Conventions of the ILO: Freedom of association and collective bargaining (No. 87 and No. 98); Forced labour (No. 29 and No. 105); Non-discrimination (No. 100 and No. 111); Minimum age (No. 138);

A solemn "Declaration", to be adopted in 1998, complementing the ILO Constitution, by providing for strengthened supervisory mechanisms to promote these principles and monitor universal compliance.

Among other measures, the Director-General's report also calls for the regular publication of progress reports by the ILO on the efforts made in each country to translate the economic development resulting from the liberalization of trade into genuine social progress and the introduction of a voluntary, global system of "social labelling" to guarantee that internationally traded goods are produced under humane conditions.

In a second, more technical, section, the report outlines proposals aimed at strengthening the relevance and efficiency of future ILO standards through a more judicious choice of subjects for international legislation, the introduction of an overall evaluation procedure, and a more systematic use of the whole range of tools available under the ILO Constitution.

Establishing universal ground rules

Early attempts to forge a direct link between international trade and fundamental labour rights through a system of sanctions - the so-called "social clause" - led to reciprocal accusations of social dumping and disguised protectionism. Though at times appearing hopelessly deadlocked, discussions conducted in various international fora - notably the ILO - have nonetheless seen a consensus emerge on two interrelated considerations:

• The comparative advantages that developing countries derive from their lower wages and levels of social protection are legitimate as long as they serve to encourage development and are not maintained artificially as a commercial strategy;

If globalization is to fulfil its promise, it needs an agreed social dimension for workers in countries at all stages of development; in the absence of a sense of multilateral fair-play, unilateral actions (trade disputes, consumer boycotts and various sorts of trial by accusation) will multiply, generating uncertainty and weakening political support for liberalization - leading to new protectionism.

The bottom line is that this process of freer trade and improved living and working conditions can only hope to develop if there is universal respect for fundamental human rights in the workplace.

A global campaign encouraging States which had not already done so to ratify the ILO's seven core Conventions has secured 29 new ratifications since March 1995. This brings the total number of ratifications among the ILO's 174 members States to 815 out of a possible 1,218.

The next step, says Mr. Hansenne, would be to consider respect for these principles to be implicit in membership in the Organization and to issue a solemn "Declaration" to that effect, which would be binding on all member States, whether or not they have ratified the relevant Conventions.

This is already the case where the Freedom of Association Conventions and principles are concerned. The Governing Body of the ILO will be called upon in November this year to decide whether and to what extent this might serve as a reference or to devise alternative supervisory mechanisms.

Monitoring social progress

Each country, emphasized Mr. Hansenne, should furthermore act in accordance with the principle that "all workers in a country, and not only those working for the world market, should be able to have a fair share of the fruits of globalization". He said this was neither unrealistic nor impossible to achieve, indeed "such policies should logically take shape during discussions between the social partners on the use of the benefits reaped from globalization and the distribution of its cost."

These trends, suggested Mr. Hansenne, could be effectively monitored through regular reports by the ILO on social progress - or the lack thereof - in member States, followed by tripartite debates allowing the public everywhere to evaluate the efforts made in each country to translate the economic development resulting from the liberalization of trade into genuine social progress.

In the absence of transparency and dialogue, globalization is likely to be seen more as a threat than as a promise. And under such circumstances it would prove "highly likely that public opinion will continue to believe widely that globalization inevitably implies a downward levelling of pay for jobs of equal skills in a market in which goods and capital can freely circulate."

A global social label

In his report, Mr. Hansenne points out that "social progress is no longer only a matter for States; it is increasingly becoming a matter for other actors, in particular manufacturing enterprises, wholesalers and retailers, and consumers." He cited in particular a growing awareness among multinational enterprises of the social and environmental repercussions of their activities - not to speak of their image - and among consumers in developed countries of the consequences of their purchasing decisions.

The convergence of these concerns is leading to a proliferation of voluntary charters, codes of practice, and labels of different sorts purporting to guarantee the manufacturer's or distributor's respect for a given set of criteria. These have, in some instances, proven to be useful in the promotion of desirable social ends.

However, Mr. Hansenne also warned that labelling may, "depending on its origin or the methods used, risk being arbitrary, singling out a particular right or product or being put to improper use." It may, for example, be directed only to export sectors, thus abandoning workers in domestically traded sectors. Improper or selective uses could prompt boycotts, leading to job losses rather than production improvements in targeted industries.

A better alternative, says Mr. Hansenne, would be a "global social label" awarded to countries which show comprehensive respect for fundamental labour rights and principles and which agree to submit to reliable and legally autonomous international inspections. "It would be perfectly feasible to provide for such a system of inspection under an international labour Convention which, because of its voluntary nature, would allow each State to decide freely whether to give an overall social label to all goods produced on its territory - provided that it accepts the obligations inherent in the Convention and agrees to have monitoring on the spot." Ratifying such a Convention would be attractive not only on moral grounds but for sound business reasons as well.

Driving forces for change

In his report, Mr. Hansenne refers to the many political and institutional forces driving calls for improved social performance in the increasingly interdependent world economy. He cites the similarity of social and industrial unrest that took place in France and more recently in the Republic of Korea as evidence that the difficulties posed by globalization were not confined to any single region of the world.

Nearly one billion persons around the world, approximately 30 per cent of the global work force, are currently unemployed or under-employed, the ILO reported in November 1996 ( Endnote2 ), pointing also to growing numbers of "working poor" - workers earning very low wages. The ILO believes that nothing short of a renewed international commitment to full employment is required to reverse these trends.

The pervasiveness of the challenge underscores "how important it is, in the context of trade liberalization, to guarantee fundamental rights which should allow the social partners to claim freely their fair share of the economic progress generated by the liberalization of trade" and that observance of core ILO labour standards is the best way to ensure respect for those rights.

Institutional support for the approach is building well beyond the ILO. The UN's World Summit for Social Development (in Copenhagen, 1995) agreed on the need to actively promote respect for ILO Conventions on the prohibition of forced and child labour, freedom of association, the right to organize and bargain collectively and the principle of non-discrimination.

The most recent and perhaps most significant show of support for fundamental rights in the context of trade liberalization came at the Ministerial Conference of the WTO Singapore where the ministers, while agreeing that the comparative advantage of countries, particularly low-wage developing countries should not be called into question, renewed their "commitment to the observance of internationally recognized core labour standards (and) recognized that the ILO was the competent body to set and deal with these standards".

The ILO, standard setting and globalization - Report of the Director-General, International Labour Conference, 85 ^th Session, 1997. International Labour Office, Geneva, ISBN 92-2-109882-6, Swiss francs 15-. The report can be obtained directly from ILO Publications, ILO, CH-1211 Geneva 22, Switzerland (tel: +4122/799-7301; fax: +4122/799-8578), and ILO offices around the world.

The Report, an Executive Summary and this press release are available on Internet.

Endnote1:

The ILO, standard setting and globalization - Report of the Director-General, International Labour Conference, 85 ^th Session, 1997. International Labour Office, Geneva. ISBN 92-2-109882-6.

Endnote2:

World Employment 1996/97 - National policies in a global context. International Labour Office, Geneva. ISBN 92-2-110326-9.