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Labour and Society Programme
DP/99/1999
ISBN 92-9014-607-9
First published 1999
Trade Unions and Transnational Industrial Relations
By
Robert Taylor
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| Trade Unions and Transnational Industrial Relations |
 Introduction
I. Towards a common global trade union strategy
II. Challenging the global corporations
III. Trade unions and the Europeanization of industrial relations:
A regional example
IV. Transnational union strategies against the global corporations
V. What is the future for transnational industrial relations?
Bibliography
Trade unions and transnational industrial relations
Robert Taylor
Introduction
The history of international labour has so far proved to be more a triumph of rhetoric over
substance. For the most part, cross-border cooperation between trade unions has proved to be
difficult and usually fragile. Too often workers have remained divided among themselves by
economic self-interest, language, national culture and tradition. It has proved hard for them to
reach any common accord on specific strategies, let alone establish an understanding beyond vague
commitments to generalized objectives. The search for transnational worker solidarity has so often
had to compete with participation in what to many workers has looked like nothing more than a
zero-sum game where companies can play off one group of employees in one country against
others elsewhere over wages and conditions. As a result, the tendency to embrace protectionist
attitudes towards international trade has been an understandable strategy inside the ranks of
organized labour in many industrializing countries. As the ILO's World Labour Report 1997-98
explained:
The structures and very concept of trade unionism vary from one country to another. Workers'
economic interests also differ; opposition to lay-offs in an industrialized country can obstruct the
transfer of activities to and the resulting job creation in a developing country; pressure for substantial
improvements in worker protection in the latter can be interpreted there as an indirect means of
avoiding competition from a cheaper workforce. Generally speaking it appears to be part of human
nature to put one's own concerns before those of the workers of other countries.(Endnote 1)
But the self-evident obstacles that stand in the way of the development of a credible and
continuous transnational industrial relations system need to be set against past and current efforts
by international and sector-based trade union federations to hammer out agreed strategies that
respond to and often confront the innumerable challenges from increasing globalization. The crisis
of global capitalism which has gathered pace over the past fifteen months has heightened many
familiar traditional difficulties facing international labour as it seeks to develop common policies.
The purpose of this short paper is to examine and highlight some of the current trends in the
contemporary international labour movement in the formulation of industrial relations strategies
that seek to transcend the still formidable barriers imposed by different legal frameworks, national
governments and employers. While most states say publicly they want to encourage the
development of open trade and the free movement of capital, goods and services, many continue
to restrict and even prevent the development of autonomous trade unions and the practice of
collective bargaining, regarding such developments as threats to political order, social stability and
not least to business competitiveness.
There is certainly a vigorous and inconclusive debate about the limits of what constitutes
globalization. But in their reactions to current trends international labour organizations tend to
regard globalization as more of a threat than a challenge. As Bill Jordan, General Secretary of the
Brussels-based International Confederation of Free Trade Unions, told the 50th anniversary
conference of the OECD's Trade Union Advisory Committee on 20 November 1998 in Paris:
We still have a lot of work to do to get across the idea that rather than destroy the institutions of
the labour market, including trade unions, because their alleged rigidity is a barrier to adaptation to
the global market, the priority must be to build up the confidence of working people that their unions
have a voice in managing change for the better. Collective bargaining and tripartism provide a
process for dealing with the problems of change and spreading the benefits of increased trade and
investment.(Endnote 2)
Jordan and others on that commemorative occasion in Paris recalled the era of the creation of
the Marshall Plan for Europe in the late 1940s and the way in which free trade unions saw its aim
as providing the means for developing practical action to solve real and pressing problems.
Without a social dimension built into the architecture of the international system, globalization
will fail, declared Jordan. His approach reflects an increasing cautious optimism inside the
international trade union federations that they can develop a sensible and practical agenda that will
make an important difference in at least humanizing the forces of globalization through applying
organized lobbying pressure on a range of institutions, most notably the World Bank and the
International Monetary Fund, as well as the G7 industrialized nations, to address the concerns of
organized labour. As Jordan explained in an article in the November 1998 issue of Trade Union
World: "Stopping globalization is both unrealistic and undesirable. The real question is can we
create the international policies and institutions to manage the process of globalization in the
service of the needs and aspirations of people?"(Endnote 3) Implicitly this more robust attitude undermines
the familiarly fatalistic determinism of those who seem to believe globalization is a remorseless
juggernaut destroying everything in its path which cannot be controlled. In fact, increasingly trade
unions do not take such a pessimistic view as they seek to accommodate themselves to the new
realities - as best they can - through public policy and industrial relations initiatives. In the words
of Mia de Vits, General Secretary of FGTB, the Belgian trade union federation: "Globalization is
a reality that can be controlled and not a catastrophe to curse."(Endnote 4) In a statement to the 1997 Denver
economic summit of the world's leading industrial nations, the Trade Union Advisory Committee
of the OECD argued that the word - globalization - was being used by many transnational
companies and national governments in order to foster a climate of fear among workers and a
"policy paralysis". But it went on to point out:
The global economy can only function with domestic support; that support along with support for
multinational institutions will erode unless policy makers at all levels address the concerns of working
people and demonstrate that the multilateral system can deliver economic and social process.(Endnote 5)
Before any examination of how trade unions are responding across national frontiers to the
impact of globalization, it is necessary to examine briefly the strategic importance of the
multinational corporations in shaping the contours of new industrial relations. There is an obvious
tendency to exaggerate the role of those enterprises, not only in the reach of their business
operations in determining attitudes to worker representation but also in their ability to establish
a degree of cohesion between themselves to deal with any trade union challenge to their power.
As the ILO's World Labour Report observed it may be true that such enterprises are more willing
than in the past to transfer activities abroad and their encouragement of competition between their
plants located in different countries should not be over-estimated. But it also pointed out:
Most of the major multinationals still achieve a large share of their turnover in their country of
origin, labour costs are rarely a central concern of their policies and they do not wish to
destabilize their workforce to an excessive degree.(Endnote 6)
The nightmare picture of large firms successfully dominating the world with particularly
aggressive and exploitative policies towards workers and trade unions is more the stuff of legend
than reality. To a great extent, multinational enterprises believe in and practise the slogan - "think
globally, act locally". As a result many of them operate within legal and social constraints imposed
upon them by the countries in which they invest. Some may actually innovate in their industrial
relations practices. Indeed, some foreign-owned companies are more likely than indigenous
employers to develop more consensual strategies towards workers and trade unions. Others merely
follow, in a prudent and law-abiding manner, the common practices that are operating in local
labour markets. A multinational company can be as much a catalyst for the modernization of
employment practices as an anti-social predator seeking to enforce a downward pressure on wages
and working conditions in the search for greater profitability through the blatant exploitation of
their employees.
It is also necessary to say something about the forces that are leading to a strategic division of
international labour. Here again the trends are by no means either all malevolent or irreversible.
What is quite evident is the increasing reconfiguration of the modern company in the way it
organizes its business operations. In its home base as elsewhere there is a strong emphasis on the
flexibilization of labour, on the contracting out of work to suppliers, on the creation of intricate
networks of specialization where power and authority are diffused and delegated. The result may
not necessarily turn out to be unruly and inchoate fragmentation but it suggests a multiplicity of
activities that make it hard to generalize about the impact of multinational enterprises on the
development of industrial relations. Many trade union bodies tend, for understandable reasons, to
simplify the character of international capital by suggesting it is both cohesive and all-embracing.
In order to mobilize their members for effective social and/or industrial action, they often draw a
bleak picture of those they consider to be their enemy. The resulting adversarial process, however,
often provides only an inadequate one-dimensional insight into the behaviour of transnational
capital. A recent comparative study of the pattern of US foreign direct investment does not
suggest multinational companies prefer low cost, low skill economies in which to develop their
operations. On the contrary, the greatest flow of US foreign investment goes to countries like
Germany, France and Holland which have high skills, a high level of regulation, workers rights
and collective bargaining.(Endnote 7)
But for many trade unions in the developing economies outside the world's industrialized
heartlands, globalization is treated with open hostility or at least more scepticism. As Sam
Shilowa, General Secretary of COSATU, the South African union federation has argued: "The
process of globalization will see the North, especially the United States, benefiting the most and
the South benefiting the least."(Endnote 8) This is due in part, he believes, to the power of the transnational
corporations which account for a third of the world's trade and whose neo-liberal agenda is
designed to downsize, outsource and squeeze wages and other costs under the slogan
"concentration at the centre, competition at the periphery". But Shilowa is not pessimistic either
about what it is possible for trade unions to achieve in transnational industrial relations. "Despite
the growing power of transnational corporations, unions are not helpless", he has written. There
is space "to bargain, at least in the short to medium-term." He sees closer alliances between trade
unions in advanced countries where the companies have their headquarters and those in countries
where they operate, Shilowa also believes that while transnationals may be able to undermine
national regulations the pressure for international regulation of their activities will increase and
trade unions should attempt to influence that process. He pins his hope for advance on the
emergence of regional blocks like the North American Free Trade Area and the European Union.
"For trade unions, economic regionalism could be a stepping stone to the introduction of pro-working class interests", he believes and helping to forge inter-union alliances opposed to the neo-liberal agenda and tuned to local conditions and needs. In his view, the international trade union
organizations have a lack of capacity to engage sufficiently with international economic and trade
issues. He was struck, for example, by the fact that the non-governmental organizations were better
informed at the 1996 WTO conference than many national delegations from developing countries.
I. Towards a common global trade union strategy
The international trade union movement has established a common agenda for collective action
at international level in recent years. It is centred on the ILO Declaration on Fundamental
Principles and Rights at Work and Its Follow-Up, adopted at the International Labour Conference
in June 1998. In the words of ILO Director-General Michel Hansenne, the Declaration establishes
"a certain number of social ground rules founded on common values to enable all those involved
to claim their fair share of the wealth they have helped to generate". Its aim is to reconcile the
desire to stimulate national efforts to ensure that social progress goes hand in hand with economic
progress and the need to respect the diversity of circumstances, possibilities and preferences of
individual countries.(Endnote 9) The core values of basic worker rights were first enshrined in the 1995
Copenhagen World Summit for Social Development, organized by the United Nations. These were
itemized as "the prohibition of forced labour and child labour, freedom of association, the right
to organize and bargain collectively, equal remuneration for work of equal value and the
elimination of discrimination in employment".
But if the ILO core standards lie at the centre of the international labour agenda, there is an
increasing awareness among national union leaders that this will not be enough. They want to see
a more considered global economic strategy developed as well. As Dieter Schulte, President of the
DGB German trade union federation has argued:
The international trade union movement must stop the worldwide trend towards wage cuts and
dismantling social protection and turn this downward spiral upwards again. The free trade
union movement must develop its own concepts as to the direction which global development
processes should take and work in support of these ideas in cross-border cooperation.(Endnote 10)
John Sweeney, President of the US AFL/CIO, has adopted a similar position.
The global economy requires a new progressive internationalism, dedicated to make this
economy work for all working people. The central challenge of a new internationalism is to
create the conditions for a new virtuous circle in which higher wages translate into more sales,
new investment, job growth".(Endnote 11)
In his view the United States neo-liberal market model based on deregulation, workplace
flexibility and anti-union strategies, is being exported - courtesy in part of US-owned corporations
- with adverse results for workers elsewhere, especially in Europe and Asia. But for Sweeney and
others in Western trade union organizations, core labour standards must be linked in union
campaigns with a global economic agenda to regulate financial markets. As he has argued recently:
"Globalization will only be supported by workers if it is accompanied by the institutionalization
of enforceable core labour standards."
The AFL-CIO has created a new Solidarity Centre, aimed at encouraging broad-based
economic development through unions worldwide dependent of governments or employers. This
body is to provide technical assistance to workers in helping them to build up trade unions,
organizing in export processing zones, monitoring working conditions or even negotiating
contracts. Sweeney has also called for the need to elevate the rights of workers to the same
importance as the protection of property in trade agreements.
We need to create international rules that bring out the best in competition, not the worst.
We need to encourage long term investment, not short term speculation. We need development
initiatives such as debt relief to liberate nations from the harsh dictates of global creditors,
public aid to supplement private investment, a new conditionality that emphasizes bottom-up
rather than trickle-down development".
This year's global financial crisis in Asia has helped to crystallize a new international agenda
on financial strategies, especially between the ICFTU and TUAC which has been endorsed by
many of the international trade union secretariats. Its outlines were contained in the ICFTU's
executive response in December 1997. As it argued:
Recovery will not begin until fundamental reforms are made to ensure democratic accountability
and transparency of both the international financial system and national institutions for the regulation
of financial markets. Only then will the priorities of fighting unemployment and poverty have their
rightful place before the protection of the interests of multinational companies and the fortunes of the
narrow elite who have reaped the benefit of trade and financial liberalization.(Endnote 12)
The ICFTU agenda included what it called a new global framework to stop financial
manipulation and promote social development in the global market. This involved a commitment
to the introduction of the so-called Tobin tax on short-term capital flows and a tax on transfers to
tax havens; a much stronger international control of financial markets with agreed global standards
for the supervision of public regulatory bodies of financial markets and full disclosure of national
budgets. It also sought to link measures to boost long-term growth and prevent global deflation
with the need for good governance by nation states and companies with a respect for human rights,
reduction in poverty and increased employment. The need for an increase in social dialogues was
also emphasized, bringing trade unions, employers and non-governmental associations in civil
society together in the creation of consensus for sustainable development, targeted on job creation
and poverty elimination. "The only sure foundation for social dialogue and sound economic
policy-making is full respect for international human rights", the ICFTU declared.
The ICFTU has taken an increasing interest at international and regional level in coordinating
strategies to defend and increase trade union and worker rights. In alliance with OECD's TUAC
it played an important role in 1997 and 1998 in furthering the cause of free trade unionism in
South Korea. The two trade union bodies sent influential missions to that country to help and
encourage the local unofficial trade unions in their campaign for the repeal of restrictive labour
laws that made it difficult to organize and practise collective bargaining. The trade unions have
also had some success in opposing the multilateral agreement on investment, with their efforts to
introduce binding provisions on companies to accept human rights as well as social and
environmental responsibilities.
II. Challenging the global corporations
In the past few years trade unions have begun to mobilize in transnational campaigns of
industrial action and lobbying against some of the world's largest companies. It has been estimated
that the top 500 transnational corporations account for 80 per cent of investment and 70 per cent
of global trade. The United States labour movement has been especially effective in adopting an
often aggressive and adversarial approach, with a range of techniques that involve the mobilization
of organized workers in different countries. A number of campaigns should be noted as examples
of what can be achieved. The outcomes have by no means proved to be successful. But they do
reveal a potential for much more cross-border coordination between trade unions, particularly
when their members are employed by the same company.
In 1996 the Postal, Telegraph and Telephone International spearheaded an offensive against
Sprint, the United States company, after it dismissed Hispanic workers trying to organize a union
at its La Conexion Familiar subsidiary in San Francisco. As a result Deutsche Postgewerkschaft,
the German telecommunications union, demanded Deutsche Telekom should introduce a code of
labour standards as part of its deal to launch a $2.7bn joint venture with Sprint. French
telecommunication workers also managed to hold up a similar agreement between Sprint and
France Telecom while STRM, the Mexican telecom company, drew up charges against Sprint for
alleged breaches of the labour side-clauses in the North Atlantic Free Trade Agreement.(Endnote 13)
In 1997-1998 dockers in the United States, especially on the west coast, and in Australia, Spain
and Israel took sporadic solidarity action in support of the dismissed dockers in Liverpool. The
leaders of the unofficial dispute were able to travel across the world to mobilize support for their
struggle. Although the conflict was a good deal more complicated than it might have looked from
California or Sydney, the international solidarity was an impressive indication of what could be
achieved across national frontiers. So was the practical support for the British Airways cabin crew
in the summer of 1997 in their dispute over changes in their work organization. Again, the
outcome was more messy than it seemed at the time but undoubtedly the activities of the
International Transport Workers Federation was an enormous help in putting pressure on the
customer-sensitive company to reach a settlement.
The classic example of the international campaign against the anti-union behaviour of
Bridgestone, the Japanese tyre manufacturer, at its US subsidiary of Firestone, where strikers were
replaced by a substitute workforce, is documented in the ILO's World Labour Report 1997-98.
A bitter and marathon dispute took place in the early 1990s at A E Staley, a corn-processing
plant in Decatur, Illinois, which was acquired by the United Kingdom sugar conglomerate Tate
and Lyle in 1988. New working methods were introduced by the company in the form of a 10 or
12 hour four day week in the name of flexibility. The workforce sought to resist the new system.
In dispute they sought to mobilize wide community support as well as a consumer boycott of
pressure on Miller and Pepsi, both companies being customers of Staley. They even sent
delegations to London in 1995 and 1996 to address Tate and Lyle annual shareholders meetings.
Although this gave a high profile to their campaign, it did not lead to their victory. Trade unions
have also been relatively effective in working with other organizations such as Greenpeace and
Amnesty International in corporate campaigns against specific transnationals.
III. Trade unions and the Europeanization of industrial relations: A regional example
The arrival of the Euro and European economic and monetary union is stimulating a renewed
interest in trans-border industrial relations among trade unions. At European Union level this can
be seen in the evolution of a common strategy by the European Trade Union Confederation which
will be presented to its next conference in Helsinki next June. What the ETUC leadership wants
to do is establish a minimum framework agreement that will provide a kind of benchmark for its
affiliate unions and sector-based European federations on collective bargaining. But central to this
objective is a need to revitalize and strengthen social dialogue with European employer bodies and
the European Commission. A draft copy of the ETUC position provides an indication of its future
strategy. As it explains:
The paramount goal of a coordinated collective bargaining policy is to counter the danger of wage
dumping within the European Monetary Union. At the same time a coordinated collective bargaining
policy must be designed to support national concerns to improve purchasing power. In addition,
further discussion is required to devise a European solidaristic pay policy intended to counter growing
income inequality, thereby contributing to a reduction in disparities in living conditions and to
effective implementation of the principle of equal treatment.(Endnote 14)
The ETUC calls for an urgent effort to draw union representatives from different European
Union countries into the work of company and sector-based collective bargaining bodies and it
believes the European industry federations should take the lead role in such a development. This
view is underlined, for example, by the preparatory work which has been carried out in recent
months by the European Engineering Workers Federation. In a resolution to be presented next
week to a collective bargaining conference in Frankfurt, the EMF argues that the metalworker
unions across the EU must coordinate their industrial relations strategies around what it calls an
"active wage and distribution policy" to ensure the pay of workers keeps pace with the rise in
living costs with an additional increase for productivity gains. While affiliate unions will continue
to have national autonomy, they need to coordinate their collective bargaining efforts at European
level. This would not simply be concerned with a core demand on pay and conditions but also
cover a wide agenda including investment, training, employment creation, employability policies,
lifelong learning and health and safety measures. The aim is to create a minimum set of labour
standards applicable across the bargaining units of the EU. "Binding minimum standards for
Europe are a key factor for establishing European-wide agreements", says the EMF.(Endnote 15)
But like many of the other sector federations, the EMF is also keen to ensure this coordination
is not purely a top-down exercise but develops a dynamic through the emerging structures of
industrial relations at company and plant level. It believes the newly formed consultative
European Works Councils will provide a necessary mechanism for the establishment of a trans-national approach rooted in workplace realities. Since the adoption of the European Union
directive on 22 September 1994, a growing number of the larger community-scale undertakings
have been negotiating information and consultation committees for their employees. By September
1996 an estimated 400 voluntary agreements had been signed. By the end of the century about
1,300 enterprises will have such workplace bodies. A recent study carried out by the European
Foundation for the Improvement of Living and Working Conditions and the European Commission
highlighted the importance of international trade union organizations in the negotiations for the
creation of the works councils. Just under a third of the agreements were signed by such bodies
compared with 18 per cent by national trade unions in one country alone and 14 per cent by
national trade unions in two more countries. The presence of international unions was most
apparent in those agreements signed with companies in food and drink, textiles and clothing,
construction and banking and finance.(Endnote 16)
The study goes on to conclude that there are a number of works council agreements which have
been negotiated that provide for a proactive role for the trade unions at European level. As it
explains: "A process of innovative institution building at European level has already commenced.
This covers the right to take up substantive company issues between the statutory annual meetings
of the works council, an involvement in agenda setting, the right to convene emergency meetings,
the right of trade union officials to take part in discussing a wide range of questions." "These
active European works councils are likely to have strong links with structures of employee
representation at national and local levels within the multinational company and at sector level
beyond the multinational group", the study concludes. "Such EWCs have the potential to develop
new forms of employee interest representation at transnational level, including the conclusion of
joint opinions or framework agreements over aspects of employment and social policy and thereby
to be effective in exercising employee influence over management decisions in multinational
corporations".
The study's conclusion is strengthened by the clear determination of the European-wide trade
union organizations to utilize the works councils and turn them into proactive bodies committed
to a common European agenda of industrial relations. The EMF says in its resolution that the
works councils should assume "the role of pace-setters for social unification in Europe through
active participation in regional and national collective bargaining policy". "Only in a developed
European industrial relations with a strong European trade union movement, a coordinated
European collective bargaining policy and a European corporate and works constitution can the
interests of workers be effectively represented", says the EMF. For its part, the ETUC also
emphasizes the crucial, strategic importance of the works councils in the Europeanization of
industrial relations. As it argues in its draft statement for Helsinki:
The works councils will in future be able to make an important contribution to furthering the sectoral
social dialogue. In particular in areas of qualitative significance, such as occupational health and safety, equal
treatment and increased opportunities for women, training and further training or environmental protection
in the workplace, it is quite feasible to imagine innovative company-level agreements which could provide
examples for the sectoral and inter-sectoral dialogue. Any trends towards the creation of company unions can
be effectively countered only by proactive support of trade unions at national and European level and by the
creation of sectoral bargaining structures.(Endnote 17)
IV. Transnational union strategies against the global corporations
The 20 million strong International Federation of Chemical, Energy, Mine and General
Workers Union was formed in January 1996 as a result of the merger of existing trade union
organizations in the mining, chemical and energy sectors. Its founding declaration provided a
stirring indication of a more invigorated approach at global level to the challenges facing the
industries where its members work. As it argued:
The grip of transnational corporate power on the world economy is a phenomenon which did not
exist when the original federations were created. Under the new and powerful influence of the
transnational corporations, governments have often become mere agencies to facilitate the free flow
of capital, technology, information and products. The real needs and wants of working men and
women are ignored in the balance sheets of corporate giants.(Endnote 18)
ICEM also set out its aim of encouraging the nationally based sector union federations to
become more actively involved in industrial struggles by ensuring the international bodies were
no longer seen as firefighters, a last resort when local action failed, but closely linked from the
start with each other. This meant a diffusion of power through a series of networks, particularly
with plant-level union activism, which would ensure ICEM had a permanent communications
system between its headquarters and company-based bargainers. As ICEM explained:
The longer-term trade union aim of the international's multinational company networks should be
entirely independent of any regional, national or other institutional agenda. Simply out, the aim should
be to engage the multinationals in negotiated exchanges with trade unions at the global level.
But ICEM has made it clear that it does not envisage such networks developing international
collective bargaining functions over wages. However, it believes it would provide a way of
enforcing minimum codes of behaviour and agreed international standards at the company level
worldwide in areas like health and safety and the environment.
A good example of what ICEM has in mind was the 1994 agreement reached between the food,
agriculture and allied workers international IUF and Danone, the French-based food conglomerate.
This commits both parties to monitor observance of trade union rights in the company, negotiate
and publicize collective bargaining agreements and ensure union representatives have equal access
to skill training and opportunities for promotion.
ICEM envisaged a greater regionalization in the structure of the new body. It believed there
must be a flexible, interdependent response based on mutual respect between trade union
movements everywhere. "Never again should we witness a world labour monolith striving to
concentrate all power within its own crumbling centre", declared ICEM. But it also emphasized
that the challenge of regionalization for transnational labour was to "decentralize some activity
while maintaining worldwide cohesion and identity". In its view ICEM would have to become an
enabling mechanism, a forum for the exchange of views, a collecting point for information, a pool
of practical assistance, a link between provision of information and action.
Since its formation ICEM has displayed a professionalism in its pro-active strategy. For
example, it signed an agreement in October 1998 with the World Chlorine Council in Montreal
bringing together a wide range of companies with unions from different countries including the
United States, Germany, Sweden and Japan. The agreed accord says the parties will "recognize
the role and legitimacy of trade unions in the workplace" and they are pledged to "act in good faith
to create a positive and enduring labour-management relationship which recognizes and respects
the rights of employees to organize and bargain collectively".(Endnote 19) The signatory companies have
agreed that they will not urge employees to oppose unionization in their operations worldwide. A
clause in the agreement says that employers and consultants will "not engage in derisive anti-union
actions including, but not limited to, the use of unfair or illegal tactics during organizing
campaigns; attacks on the honesty and integrity of union members, supporters or staff; attacks on
the economic effectiveness of unions, spreading false information, firing or taking other reprisals
against workers because they support unions". The agreement also says labour and management
will "not engage in derisive attacks on each other" and organizing campaigns will be conducted
with "fairness and integrity, consistent with employees' right to choose a representative for
collective bargaining". There is also a relatively strong commitment to environmentally sustainable
production. "This agreement calls a truce to anti-labour activity in a substantial segment of the
global chlorine industry", said Vic Thorpe, General Secretary of ICEM. "This is a joint
commitment to the chemical industry's responsible care programme from the shopfloor to the
global level".
In July 1998 ICEM signed the first ever industrial relations global agreement in the oil sector
with Statoil, the Norwegian state oil company. This covered recognition of basic union rights,
health, safety and the environment, information and training. It applies to all Statoil operations
over which the company has a direct control. The agreement spells out explicitly its commitment
to the ILO core labour standards. But in September Statoil found itself the focus of trade union
attack for its links with the US anti-union company Crown Central Petroleum which refines its
North Sea crude oil for the American market.
In February 1998 ICEM brought unions from 10 countries together to launch a global strategy
against the activities of Rio Tinto, the world's largest mining company. Particular attention was
focused on the alleged anti-union policies of the firm, especially in its business operations in
Australia, Portugal and Zimbabwe. The conference established a network of trade unions with
membership in Rio Tinto for the exchange of information and the creation of a data base. It was
also agreed that a broad-based campaign against the company should be launched through alliances
with community groups, environmentalists, churches and other organizations. "One essential part
of the action programme is that union action at local level will be backed by the entire network
globally", declared ICEM. Vic Thorpe said that ICEM would set aside resources where necessary
to challenge the legality of perceived breaches of worker rights as well as health and
environmental damage allegedly caused by the company through non-observance of mining laws
and regulations.(Endnote 20) The trade unions involved organized a demonstration of protest against the
company at its annual shareholders meeting in May 1998 when Rio Tinto denied the charges laid
against them.
The International Transport Workers Federation also provides a good example of an
international trade secretariat that is developing a forward-looking strategy for transnational
industrial relations. At its 1996 centennial congress delegates endorsed its new programme. This
emphasized the potentiality of the strategic power of transport workers in the globalizing economy.
"As company structures develop to answer the requirements of advanced logistics and just-in-time
production, transport workers are becoming the strongest organic link between different parts of
ever more disparate enterprises", it explained. "Just as transport workers keep the whole
production chain moving, organized transport workers have the potential to stop it".(Endnote 21) Like ICEM,
the ITF sees regional economic integration as the greatest challenge to organized labour, although
aware of the dangers of regional nationalism. In July this year the ITF held a meeting of affiliate
unions in Miami covering the Americas where it was agreed tentatively to develop closer
cooperation, particularly within the emerging network of sub-regional free trade groupings led by
NAFTA and MERCOSUR. In September it was agreed that a new body should be formed which
was Europe-wide, and designed to unite ITF affiliates as a transport federation within the ETUC.
The ITF has begun to develop a higher profile in mobilizing transnational protests. Its main
activities have centred on its world-wide campaign against the use of flags of convenience. But
increasingly the ITF has also become involved in global struggles in civil aviation, as well as road
and rail transport. The ITF organized a day of protest on 8 September 1998 by thousands of bus
and truck drivers against excessive working hours. This led to industrial action, including road
blockades in Austria, France and Germany.
The ITF has also been spearheading the development of closer relations between affiliates in
civil aviation. In July 1998 unions representing workers employed by British Airways, American
Airlines, Canadian Airlines, Qantas, Iberia and Aerolineas Argentinas met in Miami to develop
a coordinated union strategy in response to the growing business alliances between carriers. An
Internet information site is to be developed and during 1999 moves are promised to organize close
ties.
Trade unions have sought to form alliances with human rights groups to pressurize
transnational companies to adopt codes of conduct for their foreign subsidiaries or suppliers. The
ICFTU has developed a campaign for corporate codes of conduct on international labour rights.
A good example of success has been the 1997 apparel industry partnership formed between unions,
human rights bodies and companies like Levi and Reebok to agree on a code prohibiting the use
of forced or child labour and uphold the right to organize and health and safety laws. This
agreement is, however, only a start. It has proved difficult in practice to establish effective
monitoring and enforcement procedures. Companies, sensitive to consumer markets, are vulnerable
to such campaigning, particularly in western societies. Often the media has been mobilized as well
to expose labour right violations, especially in the garment sector, where companies supply US
brand name products or promote labelling measures aimed at consumers who want assurance that
products are made in decent working conditions. Action against companies trading and investing
with repressive regimes such as Burma has had some success.
The US unions also claim to have played a key role in the defeat in the American Congress in
1997 of President Clinton's attempt to secure negotiating authority through a "fast track" trade bill,
enabling him to extend free trade arrangements to Latin American countries. The opposition of
organized labour followed the defeat of the trade unions in Congress over NAFTA. Pressure did
ensure the commitment in that agreement to 11 labour principles, which although lacking any
effective enforcement mechanism did enable unions to seek through cross-border initiatives the
filing of suits in the United States, Canadian and Mexican courts over alleged abuses of labour
rights. Some action has also occurred in Latin America with a trade union summit in Santiago,
Chile in April 1998. This decided to press for the inclusion of core labour standards in any free
trade agreement for the Americas. Trade unions are working through ORIT, the regional trade
union affiliate of the ICFTU to achieve that objective. Heads of the governments of the Americas
agreed at the same time to press for a social action plan to promote ILO core standards, reduce
poverty and inequality, and guarantee human rights. This is the first occasion that a formal trade
negotiating process has found a role for civil society groups including trade unions alongside business.
The threat of litigation by trade unions against transnational companies for alleged abuse of
workers' rights can prove to be a risky strategy, being slow, cumbersome and potentially
expensive. Cases such as that at MacDonalds, however, can produce adverse publicity against an
employer. US unions have set the trend in using shareholder power to try and confront or at least
embarrass companies over their employment practices. The use of worker pension funds to
mobilize pressure against a company may turn out eventually to be an effective weapon for the
unions to use in campaigning but again this has not yet been systematically used by international
labour with much success.
What is the future for transnational industrial relations?
Hard questions need to be raised and answered over the range of strategies described in this
paper as trade unions attempt to develop transnational strategies as a response to the varied
consequences of globalization or regionalization. In no area is the rhetoric so much out of line with
the realities. First of all, we need to stress the massive obstacles that still stand in the way of
progress over closer coordination. The current crisis of global capitalism is having a devastating
effect on the living standards of workers and their families across much of the world. It may
therefore not be a propitious moment for the launch of aggressive transnational strategies. At every
level, organized labour is being forced back on the defensive, particularly outside the industrialized
economies of western Europe. The threats of social dumping, of the transfer of production
facilities from one low-cost country to an even lower-cost country are often exaggerated. But the
pressure on wages and welfare benefits is remorseless in today's competitive world. The calls for
protectionism, in some cases disguised by the demand for social clauses in trade agreements, are
real and understandable enough even if they are based on a false appreciation of the globalizing
economy. A return to the beggar-thy-neighbour policies of the inter-war years would not help the
trade unions and would help to impoverish many of their members. A commitment to open markets
and transparency in global trade and finance needs to go hand in hand with transnational union
strategies to defend and ensure the enforcement of core labour rights. Most unions at every level
tend to stress this approach as necessary to extend democratic values in newly emerging open
market economies. But it is evident trade unions also need to demonstrate that their approach is
not incompatible with the creation of successful market economies. Trade union rights are good
for workers but they are also good for business. The most affluent countries in the world are the
ones which not only have trade unions but also integrate them successfully into their societies
through forms of corporate governance and in alliance with non-governmental associations.
Few trade unions have managed so far to come to terms with the new world of increasing
globalization but if they hope to survive and grow again they will have to make radical
accommodations. But this should not mean that the trade unions have to abandon their core values
that seek to protect and improve employees' interests. On the contrary, the need for more
transnational industrial relations requires the trade unions to reassert their primary objectives in
a modern language that resonates in the flexible labour markets and workplaces. But in order to
ensure the success of freedom of association and the right to collective bargaining, trade unions
need to remain defiantly independent from the control of the state and employers. But the attitude
of governments cannot remain passive and disinterested. A sympathetic public policy approach
is required if trade unions are to develop, providing legal frameworks that do not prevent the
development of transnational industrial relations. The creation of bodies like consultative works
councils, human development enterprises, stake holding companies, employee cooperatives and
public-private partnerships need to be encouraged. So does the institutional approach based on
social pacts and mutual gains agreements where trade unions, employers and the state find
negotiated settlements of key workplace issues and establish a common view on macroeconomic
agendas for jobs and growth.
Nation states and international bodies such as the WTO, the IMF and the World Bank must
assist trade unions with the provision of legal rights and protections to ensure they can perform
their various roles as bargainers, skill trainers, service bodies, social movements. At the level of
the multinational company the trade unions at international sector level need to press for world-wide works councils, agreed and legitimate voluntary institutions that provide a strategic approach
to corporate bargaining. To do this, however, trade unions at international sector level will have
to broker alliances across national frontiers that recognize the different economic and social
interests that exist between workers employed by the same company. This means the development
of trade unions at company and sector level as mediatory bodies, which can seek to try and avoid
any zero sum game but accept the need to reconcile as far as it is possible economic efficiency
with social equity through the development of mutual gains bargaining. Such institutional
development will not be a soft option for trade unions. It means a hard-headed pragmatic response
to globalization, technological change and mass unemployment. It requires an effort at
international, national, sector and company level to reconcile the diverse business objectives of
the company in developing competitive goods and services with employee demands for greater
security and protection of their human rights in the workplace. Trade unions across the western
industrialized world are currently trying to find ways of achieving such partnership agreement.
However, social partnerships in transnational enterprises will not be enough to ensure
widespread trade union revival across the world. The difficulties of enforcing labour codes of good
behaviour in the contracting plants in China, for example, who are manufacturing toys for the large
companies like Mattel and Hasbro, are real enough. The International Council of Toy Industries
agreed in 1997 to adhere to a code of practice on working conditions for workers in the sector.
Mattel, the world's largest toy manufacturer, even agreed in November 1997 to introduce its own
code governing workers' rights and health and safety issues at subcontracted factories but this does
not appear to have made much difference so far to the position of workers in the Chinese toy
plants.
For success, more trade unions at international level will need to forge links with non-governmental organizations. In its 1997 report on the state in a changing world, the World Bank
called for a public strategy that required trade unions to establish networks that embrace the wider
civil society beyond any specific workplace or industry with environmental, community and
women's groups. In this way, it is argued, they can reach common cause, integrating producer with
consumer interests and helping to revive a more active and ethically responsible social citizenship.
This will be helped by the changing role of the state from being less the direct provider of rights
and services to being the enabler of diverse and pluralistic activities in a society which encourages
and promotes secondary and autonomous civil associations. It means also trade unions will have
to make a strategic break with their more traditional workplace-centred culture and embrace more
decentralized and flexible structures that appeal more to individual employees both as workers and
consumers.
Globalization and/or regionalization provide trade unions across national frontiers with an
opportunity to help in the management of change by ensuring their international agenda of core
standards of worker rights is not lost among the other pressures. The annual report on violations
of trade union rights published by the ICFTU provides depressing evidence of the extent of the
troubles facing organized labour. Last year in countries as diverse as Colombia, Indonesia, Burma,
Algeria, Nigeria and China, workers have been persecuted and in some cases murdered for their
efforts to organize themselves in unions. Nearly 300 trade unionists were killed standing up for
their rights, a further 1,681 were tortured or ill-treated, and 2,329 detained without trial.
Intimidation occurred in 33,369 specific cases. The repression occurred across 79 countries.
As Bill Jordan, the ICFTU General Secretary declared: "The trend around the world is one of
increasing repression of trade unions". He argues that the spread of export processing zones and
the social impact of structural adjustment programmes have increased discontent and in turn led
to state repression. In his words:
As national boundaries become blurred, rules established at national level, often after years
of social struggle, are becoming as irrelevant as they are ineffective. In this context, freedom
of association, established by the ILO as a universal right has never been so crucial to working
people. As is the need to include social clauses in international trade agreements in order to
ensure globalization furthers the cause of social justice and benefits those who create the
wealth.(Endnote 22)
This is why the development of transnational industrial relations is so important if organized
labour is to have any hope of mobilizing any effective check on the power of global capital through
international agreements.
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Endnote 1:
ILO. 1998. World Labour Report 1997-98: Industrial relations, democracy and social stability. Geneva,
ILO, pp. 38-39.
Endnote 2:
Speech to the TUAC 50th Anniversary Conference, Paris, 20 November 1998.
Endnote 3:
ICFTU. 1998. Trade Union World. ICFTU, Brussels, Nov., p. 6.
Endnote 4:
Swedish LO. 1998. World Wide Workers. p. 32.
Endnote 5:
OECD. 1997. TUAC Statement to the G7 Denver Conference.
Endnote 6:
ILO. 1998. World Labour Report 1997-98: Industrial relations, democracy and social stability. Geneva,
ILO.
Endnote 7:
Cooke, W.N.; Noble, D.S. 1998. "Industrial relations systems and US foreign direct investment abroad",
in British Journal of Industrial Relations, Vol. 36, No. 4, Dec.
Endnote 8:
Swedish LO. 1998. World Wide Workers. p. 142.
Endnote 9:
ILO. 1998. Declaration on Fundamental Principles and Rights at Work and Its Follow-Up. Geneva, ILO,
June, p. 1.
Endnote 10:
Swedish LO. 1998. World Wide Workers. pp. 164-165.
Endnote 11:
Ibid, p. 169.
Endnote 12:
ICFTU Executive Statement, December 1997.
Endnote 13:
Taylor, R. 1996. Trade union strategies in the global economy. Geneva, ILO.
Endnote 14:
ETUC. 1998. The Europeanisation of industrial relations, draft document, Oct.
Endnote 15:
Draft document from European Metalworkers Federation for Frankfurt Conference, 8-9 December 1998.
Endnote 16:
European Foundation for the Improvement of Living and Working Conditions; European Commission. 1998.
Negotiating European works councils: An analysis of agreements under Article 13. Dublin, Nov.
Endnote 17:
EMF draft document for Frankfurt meeting.
Endnote 18:
ICEM. 1996. Power and counterpower, The union response to global capital. London, Pluto Press, p. 68.
Endnote 19:
World Chlorine Agreement, ICEM Statement, 20 October 1998.
Endnote 20:
ICEM. 1998. Global No. 2. p. 4.
Endnote 21:
International Transport Workers Federation. 1996. Transport workers: Beyond 2000, Progress Report.
London, ITF, pp. 7-8.
Endnote 22:
ICFTU. 1998. Annual survey of violations of trade union rights. Brussels, ICFTU, pp. 5-6.
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