Tan Ern-Ser, Singapore, 18/09/00 - Policy-making and labour standards

I believe Mr Juan Somavia and Mr Bill Jordan's keynote speeches have captured the main, crucial issues confronting organized labour in the 21^st century: workers' rights, employment creation, social protection, labour standards, and the need to develop an effective global-level labour strategy.

Personally, my struggle is "how do we develop a policy that can uplift the lots of workers, and fulfill some minimum labour standards, without allowing such a policy to become a disguise for trade protectionism?"

It is possible that one country's comparative/competitive advantage can be viewed, perhaps without basis, by another country as unfair labour and trade practices. I know this question is not entirely new, but to my mind, it has never been adequately resolved. I am all for protecting labour standards, but I am, like most of us, against protectionism in any form.

Gilbert Renard, ILO, Switzerland, 20/09/00 - Partnerships between Trade Unions and Cooperatives

I was interested and pleased to note that the keynote speech by Mr. Juan Somavia encourages firmly the trade unions to explore actively, promising future approaches for them in civil society including: cooperatives and cooperative-type women groups, and that Mr. Bill Jordan, Secretary General of the ICFTU supported that idea in his response.

In that perspective, I would like to submit briefly hereafter to all of you for your reactions, indications on suggested/possible partnerships and strategic alliances between trade unions and cooperatives all over the world with the hope to engage a debate on that issue - inter alia at this on-line conference - for helping in highlighting and materializing the potentials for joined actions in that field.

Why promote partnerships between trade unions and cooperatives? Workers' organizations and mutual forms of cooperatives have traditionally shared common goals and objectives (promotion of democracy, struggle against poverty, protection of workers, job creation and preservation, etc.) and in some countries a common history and even related organizational structures. Moreover, both workers' organizations and cooperatives are based on similar universal values and principles (self-help, democratic organization, responsible management and control, mutual aid and solidarity). They aim to solve their members' problems through group action. However the strategies utilized by workers' organizations and cooperatives are different. In general, at the beginning, workers' organizations try to improve their members' standard of living and quality of life through negotiations, collective bargaining and grievance handling, while cooperatives establish joint business enterprises to provide common economic and social services such as the supply of consumer goods, savings and credit, marketing channels, etc., which tend to improve the income and the living conditions of their members and often provide with concrete mechanisms and opportunities for monitoring and supporting economic and social development and ensuring that the protection of the most vulnerable groups of the society are taken into account. The joint efforts of the cooperative members are finally developed to ensure the economic and financial viability of their enterprise for the well-being of their members and their local community.

However, in the present socio-political and economic context, probably more than ever, trade unions are more and more involved in the economic and financial aspects of the enterprises and in employment issues as the cooperative enterprises are well engaged in social and educational activities in addition to their economic and financial ones. That situation seems to fully justify joint trade union-cooperative cooperation.

In which fields of activities and how can trade unions and cooperatives cooperate?

Trade unions and cooperatives can develop their cooperation in complementarity with the traditional bargaining activities of the trade unions in their common interest. Such a cooperation may cover a wide range of services provided for union members to promote equality, stimulate employment and improve the quality of life. In many countries these services are provided in close collaboration with member-based, democratic cooperatives and supported/stimulated by trade unions.

Cooperatives assist union members and their families to improve their living standards through mobilizing savings and obtaining credits, building low-cost houses, purchasing food and other consumer goods at reasonable prices, providing child care and other social welfare services. For example, consumer cooperatives that promote the sale of good quality products at reasonable prices benefit lower-income families. Likewise, housing cooperatives can assist in the provision of good quality low-cost accommodation. Savings and credit cooperatives enable workers to save regularly and obtain loans at reasonable interest rates. Insurance, health and social welfare cooperatives all benefit workers and their families.

A significant example of trade union-cooperative action is to be found in Singapore, where the National Trade Union Congress (SNTUC) has initiated a significant network of cooperatives, including the NTUC Fair Price consumers' cooperative, the NTUC Income insurance cooperative, the NTUC Health care cooperative and the NTUC Child care cooperative. In Kenya, most national trade unions support savings and credit cooperatives and have contributed to the establishment of the National Cooperative Housing Union (NACHU). Cooperatives also support trade union members and their families by providing employment, particularly self-employment in the rural and urban informal sectors, through workers' cooperatives which create jobs for unemployed or retrenched workers, youth, women and other disadvantaged groups. This role is of particular current relevance in view of the impact of adjustment policies, liberalization and privatization. A challenging aspect of cooperative action by workers' organizations is in the area of workers' buy-outs of failing state or private enterprises. In the United Kingdom, for instance, the Wales Cooperative Center was established by the Wales Trade Union Congress in 1983 to assist workers form new enterprises in the face of redundancy and privatization. In the Philippines, the KASUCO Workers' Agricultural Cooperative Inc. was organized in 1991 by the beneficiaries of an agrarian reform programme and represents a buy-out by sugar company workers, facilitated by the National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP). The South African National Union Mineworkers (NUM) has promoted some 30 cooperatives for retrenched and retired miners. They are active in agriculture, horticulture, brick making, poultry raising and so on. The NUM considers cooperatives as a more advanced element within its overall employment promotion strategy. Workers' organizations may participate financially in the establishment of cooperative enterprises. In Singapore, trade unions are the main share holders in SNTUC cooperatives. The Ghana Trade Union Congress (GTUC) has established a fund through collecting members' contributions for the establishment of cooperative and other types of enterprises by trade union members. The Danish labour movement's Workers' Cooperative Financing Fund is another case in point, as is the joint venture bank (Unity Trust Bank) between the UK Cooperative Bank and British trade unions.

Furthermore, through participatory methods and approaches, cooperatives increase the bargaining power of workers' organizations, develop their self-reliance and empower their members. Cooperatives provide useful tools for trade unions concerned for enhancing the status of women members, through the provision of special services addressing their specific needs.

Workers' organizations may also provide information, assistance, education and training to members wishing to establish cooperatives. They may also assist workers in the informal sector to establish and develop their own cooperatives as a means of improving their working conditions and increasing their income.

Of special interest would be for the cooperative movements and trade union organizations to jointly develop strategies for raising the income and securing job and social protection of informal sector workers. This could include cooperative organization for home workers, street vendors and casual labourers. At the organizational level cooperatives and trade unions could undertake joint training of each elected officials, develop joint training programmes for members, develop joint financial services for their members such as savings, loans, insurance and pensions.

Policy documents offering guidance to trade union and cooperative organizations should be produced jointly. Jointly organized symposia and working groups should also be organized to promote best practice models of trade union-cooperative training activities, manuals and other training materials. Such joint trade union-cooperative Action Programmes should be initiated and developed with external technical and financial supports - for instance from the ICFTU and from the ILO - if needed and requested by the democratically organized trade unions and cooperatives concerned having previously decided to cooperate. Those action programmes may utilize as operating approach, the strategy of networking of trade unions and cooperatives. Thanks in advance for your comments and suggestions.

Arun Kumar, HMS, India, 21/09/00 - International Economic Policy, Employment Relations and Workers' Funds

Both the ILO's Director-General and the ICFTU's Secretary General have made excellent and thought provoking presentations, raising a lot of issues for discussion. There are some major challenges/tasks before us in the union movement in times ahead and most of these have been well listed by both the keynote speakers. Our complements to both. Indeed the trade unions' "tank" of woes is full (calling it a "cup" would be understating the problems).

However, the presentations do not emphasize adequately the need for changing global economic and trading rules. This raises a crucial issue from the point of view of developing countries and their trade unions. We shall try and be brief while outlining this:

Both DG -ILO and GS-ICFTU seem to put forward the thesis that human face to the global economy can be put mainly by the use of social policies, without necessarily effecting any major changes in the economic policies (as has been agreed under GATT, taken further under WTO rounds of trade liberalisation, and signified by the attempt made earlier under MAI by the OECD countries). The crux of their prescription for solving the problems of the workers globally lies in universal respect for core labour standards by all countries. Important as this is, what we do not understand is how this can solve employment and other development problems of developing countries in a globalized world, where unequally placed countries are all being forced to follow the same policies of economic liberalisation. Under new rules of international trade and investment, putting performance requirements on Capital (especially foreign capital) are being considered as trade distortion and an interference in the operation of free markets. In the absence of such powers of host countries to regulate foreign capital in view of its domestic development needs, we are afraid, even core labour standards are not going to help very much in preventing social and economic distress.

For instance even if the countries of South-East Asia had respected all the labour standards of ILO in letter and spirit, it is doubtful if the S.E. Asian economic crisis could have been avoided or its consequences would have been any less devastating. The lessons of the S.E. Asian crisis go beyond the respect for labour standards. Social policies need the backing of economic policies, rather than seeing their role as that of firefighting or ameliorating the effects of economic policies. What is needed is 'economic' regulation of Capital (an unfashionable prescription in today's world, but a necessary one). But this is not allowed under the present international trade and investment rules. Neither keynote presentations has stressed on these and neither questioned the legitimacy of the world trading system (except on grounds of violation of labour standards).

And it is this that is creating dangers for democracy in countries like India. Earlier, when people were disenchanted with a government's policies, they could teach a lesson to that political party by voting it out of power in the next elections. Now what happens is that governments change, but some economic policies remain in force. The link, in the words of ICFTU Secretary General, is broken between the act of voting and peoples/workers well being. What this implies for the survival of democracy is - more sovereignity over economic policies (and not just social policies, which remain empty promises in the absence of necessary economic policies to back them).

We hope that our views will be seen not as criticism of ICFTU or ILO but as suggestions for taking a recook at the root causes of our problems. We are not in disagreement with the key note speeches, just wish to add to the debate.

Some other thoughts on strategies for trade unions in times ahead:

1. The world of work is changing in many ways, in particular the employment relationships. It needs to be noted that while most of the labour laws are based on employer-employee relationship, the new form of employment is contractual, which is more in the nature of client-supplier relationship and employment is offered not as appointment but assignment. Under this form of employment, workers find it hard to not only establish themselves as workers under the labour law but the employer-employee relationship is also not easy to establish (at least under Indian labour laws).

The need for flexibility of production has meant greater sub-contracting of work. It is often seen that large employers sub-contract out production at ever lowering rates to the sub-contractors, which means that even if that sub-contractor wanted to respect labour standards he may not be able to. If after much struggle the workers in this sub-contractors' unit get organized, and he is expected to pay negotiated wages, this unit may not be able to bid successfully for the sub-contract from the main company who will award it to that unit which can squeeze the workers more. (Such an incident has been reported in the case of Nike's contracts in Indonesia by the unions there in the year 1997-98). Both MNCs as well as domestic companies do this. Therefore what we need on the legislative front is a Fair Contract Act- which should have a clause for fair price of labour and the right to intervene of the regular workers union on behalf of contract workers in case it is not being followed.

2. Use of workers Funds (without spending these) to organize the unorganized and ensure respect for domestic labour standards. In countries like India, workers funds (such as Provident and Pension Funds) are the single largest sources of investment funds in the economy. So far, these funds have been used mainly by the government and now the private sector too wants access to them. Although trade unions are opposing this demand of the employers, some of us feel that unions should agree to it since, in any case, they use the funds indirectly. What the unions can however do is- put a labour social clause to the use of these funds; that is- workers funds will not go to those employers who do not respect labour laws such as right to unionise, right to social security, maternity benefits, collective bargaining, etc. many employers would willingly recognise unions in their units if by doing so they could have access to these relatively cheap funds. What the labour department has not been able to ensure, the market power of workers funds can help in implementing. Such a labour clause can help in organizing the unorganized workers as also ensure respect for other trade union rights.

Apart from these, there are many unions in the country with huge fixed deposits in the banks, which lie there, accumulating year after year a 12% rate of interest. I think that central trade union organizations should help in centralising these deposits and placing them with general insurance companies, with whom they should not only seek the same rate of interest (or 1% less) but also seek other facilities for their members and unorganized workers such as cheap health care and accident/life insurance policies. Imagine the impact a union poster which declares "become the member of the union and get health care, life and accident insurance, even housing loans at cheaper than market rates" would have. It may be noted that at present the insurance companies pay their agents to get business but here they can get huge business as well as access to workers funds. (These arguments can be refined further).

Trade unions will find it hard to organize workers in the unorganized sector since they cannot possibly run after each and every employer as well as ever changing employers of the workers in this sector. However, it can be done by uniting the workers under the idea of membership-based social security. This will also increase fee paying membership and hence the capacity of the unions to effect further changes, and especially gain political influence.

3. Just a passing thought, why is it that core labour standards in the global economy do not include right to maternity benefits? Is it gender blindness? Or is it because this right will not be given by the American employers to their women workers? We feel that maternity benefits for women workers should be considered as much a core standard as any other.

Sid Shniad, Canada, 22/09/00 - Free Trade, Social Clause and Core Labour Standards

I would like to comment on the subject of free trade, social clause and core labour standards. In my view, too many unions are falling prey to what consumer advocate Ralph Nader has referred to as "defeatist realism." When it comes to labour's response to free trade - the Jewel in the Crown of the forces promoting neoliberalism - defeatist realism amounts to arguing that in the face of overwhelming adversity we must pull in our horns and settle for something achievable, like the social clause and core labour standards.

I have two objections to this position. First, if the social clause and core labour standards were to be added, they would be totally ineffectual in addressing the larger, underlying problems with free trade. It is as if labour were saying to the transnationals "Go ahead and deregulate, privatize, copyright life forms, and otherwise enhance corporate power at the expense of democratic rights, sovereignty, and life itself - as long as you add on provisions that will give some (meagre, unenforceable) protections to organized labour."

The addition of a social clause and core labour standards is simply inadequate to the task of addressing the fact that these are fundamentally, radically anti-human mechanisms. Adding the social clause to free trade agreements won't have even the slightest ameliorative effect.

Secondly, I believe that those who promote the social clause and core labour standards at this juncture are making a major strategic error. At a time when popular forces have succeeded in derailing the MAI - a huge setback for the forces of neoliberalism - and US President Clinton has found himself unable to get Fast Track authority from the U.S. Congress, we have every reason to build on that success by demanding a fundamental reorientation to the trade negotiation process.

In this context, however, when the forces of transnational capital are increasingly concerned about their continuing ability to promote neoliberal free trade, some labour organizations are putting forth the demand for social clauses and core labour standards, sending the proponents of free trade the message that popular opposition can be readily divided because organized labour can be brought on side easily and inexpensively.

As the news clippings indicate, there is huge popular opposition building to free trade. Opponents of the WTO are organizing quite a show for Seattle. Now is not the time for thinking small or being defeatist. Now is the time for moral outrage and audacity about the manner in which human beings and the planet are being treated at the hands of transnational capital.

Labour has a key role to play in this battle. I just hope that we don't settle for a mess of pottage in the form of social clause and core labour standards.

Tequila Brooks, USA, 22/09/99 - Alternatives to Globalisation and Privatisation in Developing Countries

I would like to further discuss the statement the forces of economic globalization and transnational markets are "fundamentally, radically anti-human mechanisms".

I would also like to pose two questions. First, what alternative is there to economic globalization and transnational markets for countries that wish to modernize their economies? Second, in the case of privatization of utilities (electricity), what is the alternative to privatization when modernizing a decrepit system costs billions of dollars the government may not have?

Alicia Sepulveda, Mexican Telephone Workers' Union, Mexico, 24/09/99 - Privatisation in Mexico

As a Mexican unionist who lived trough the drastic deregulation and privatization of our economy I would like to point out the outcomes. First: We were told that the Mexican Government could not afford to spend scarce resources that were needed to feed and house the poor or in developing sectors, that could be better managed by the private sector. Recently, the entire world learned that we will have to bail out the privatized banks, that it will represent 21% of our GNP, i.e. almost 900 billion dollars, and that we now have 40 million officially poor people whereas we used to have 26 million. We will also have to bail out the privatized roads and foundries, spending almost 45 billion on interest alone.

That is, we have been very successful privatizing gain and socializing loss, because these resources will come from our national budget, that is, from our taxes. Of course, there will be less resources for social spending, modernizing obsolete industries and so on and so forth. Second: Instead of creating a stronger and richer economy, of diversifying sources of income, etc., the Mexican Government is becoming more and more dependent on oil revenues, because its diversified sources of income (for example, the Mexican telephone company, TELMEX, which is one of the "motors" of our economy) are now privately owned.

When the Mexican telephone company was privatized in 1990 it was 87% self sufficient, even though the rates were quite low. They have been raised fivefold, 600 thousand users have given back their telephones because they can no longer afford them and we cannot go beyond the 10 million subscribers that we now have (telephone density, 10%).Of course, we now have good Internet access, our central offices are 98% digitalized and we can provide first rate services, for those very few that can afford them.

Regarding electricity, we have been fighting for the last seven months to stop the privatization of our electrical industry, which used to be privatized before 1960, much in the same way that they are trying to establish now, with lots of local enterprises competing amongst them. Mexico is a poor, hilly country and the results were so bad that the Government had to step in so as to provide service to rural communities and poor sectors in the cities.

We have proposed that instead of giving all our pension funds to the --very badly mismanaged-- banks they should be invested in a development fund where they earn the same that the banks are now offering and are used to modernize our industry. We have also proposed establishing the Tobin Tax and using the resources obtained to develop our industry. In 1938, when our oil was nationalized, all Mexicans helped, Women gave their jewellery, children gave their savings, because we believed in a democratic government that was working for the people and not against it. We have been now forced to give much, much more that that. We workers have lost, officially, 70% of our earning power in the last 20 years. We want to work for modern industries and provide cutting edge services, but we also want good jobs for our children, which they are not getting. We want to end poverty or, at the very least, alleviate it. And we are sure that privatizing our electrical industry will not help us to attain these goals.

Michael Herrmann, Eberhard-Karls-Universitaet Tuebingen, Germany, 24/09/99 - Social Clause and Core Labour Standards

There is little doubt that industrialization is a necessary condition for development. It can promote virtuous cycles of economic growth, and only such sustainable economic growth can effectively ensure social well-being. This is because it provides indispensable resources for the satisfaction of basic needs and wants (food, shelter, housing, security, sanitation, health, environmental preservation); and it potentially provides even sufficient resources for the assurance of all necessary "capabilities to functionings" [Sen, Nussbaum, Galtung].

The industrialized countries achieved industrialization only through inhuman working environments and exploitation. This fact should not be an excuse for developing countries today to encourage their development under similar conditions; but it should encourage proponents of industrialized countries to reflect upon their recommendations to the developing world.

To ask developing countries to respect high labour standards and/ or preclude low wage rates - both are associated with increased local production costs that can potentially reduce local investments and competitiveness - means to ask developing countries to voluntarily eliminate what often is their only comparative advantage vis-a-vis the rest of the world and, subsequently, is the only tool for the promotion of industrialization at home.

Labour representatives that are interested not merely in the well-being of their country-men, but of all humans alike (regardless of citizenship and other attributes) should depart from political demands that benefit only selected nations and should instead search for political actions that are favourable to all countries. Such policies must preclude social-dumping and they should even further social standards. However, these policies must also always be compatible with the economic development of the developing countries. An all-encompassing, radical rejection of free trade policies does not correspond with this criterion.

Many proponents of industrialized countries suggest that the developing world engages in social dumping and that the industrialized world needs to be protected from such policies. This is because they could kick-off a downward spiral characterized by a competitive down-grading of social standards. It is not that easy, however. Protectionism is unlikely to benefit the industrial countries, and it very likely harms the developing world. In the industrial nations it leads to an artificial preservation of old, outdated, uncompetitive industries, rather than the promotion of new, innovative, enterprises (which promise more sustainable solution to underemployment problems and income inequalities). Furthermore, protectionism of the North means that the developing countries have even more difficulties to export their products and gain necessary foreign exchange. In order to compensate for higher import tariffs of industrialized countries, developing countries are inclined to further decrease the prices of their exports (e.g., by further decreasing wage rates). Alternatively, they are inclined to attract foreign exchange (which is indispensable for the development of industries) through capital market liberalizations. The risks of such liberalizations, however, were well documented by the recent financial crises in Asia, Russia, and Brazil [UNCTAD Trade and Development Report 1999].

In short, import tariffs (and other import restrictions) which decrease the market access to industrialized countries can at best promote unsustainable short-term solutions to the problem of unemployment and inequalities within the industrialized countries. Furthermore, such protectionism can actually cause adverse effects (potential decreases of wages and labour standards) in the developing world.

The point is not that managed trade is necessarily bad, and that unmanaged free trade is optimal. Rather, the point is that the issue of international trade and labour standards is very complex and cannot easily be answered. Both, a radical rejection and an unreflected endorsement of free trade policies are unjustifiable. If the labour movement supports such simplistic approaches it will damage its reputation and loose its credibility. This is because it will present itself as a rather nationalistic institution which is primarily concerned with the satisfaction of the short-term interest of workers in industrialized countries. This stands in sharp opposition to the true spirit of labour which is international and as such concerned with the preservation and advancement of social justice across countries as well as the elimination of extreme inequalities between them.

True to this spirit, the proponents of labour should be outspoken critiques of all social, cultural, and economic policies which increase inequalities.

This, however, demands more than radical platitudes. It demands a sophisticated and differentiated discussion of trade policies which addresses structural impediments such as externalities, scale economies, and increasing returns that can lead to a virtuous cycle of development in industrialized countries, while provoking an absolute competitive disadvantage (i.e., non-competitive trade) of developing countries. It is vitally important that structural impediments which preclude the advancement of developing countries are resolved. Otherwise the competitive advantage of industrialized countries is too overpowering, and the policy-options of developing countries are too limited. Under such conditions, the developing countries can only hope to compete in the global market if they persistently ensure low levels of wages and labour standards (and/ or low levels of corporate taxes and environmental standards).

Too often can one find that "where you sit determines what you see". If you look from the North down South, you see developing countries having low wages and labour standards, and you think that these are the evils that encourage a global down-grading of labour standards. However, looking from the South up North, you will see industrialized countries that partially benefit from a self-exacerbating competitive advantage which translates into self-exacerbating capital accumulation. The self-reinforcing mechanisms makes the catching-up of the South very difficult, if not impossible. Hence, economic growth - which is a precondition for an improving social well-being (even though it does not necessarily induce an automatic improvement of social welfare) - is impeded.

In my view the central challenge of labour for the 21st century is the development of truly international strategies for poverty alleviation. Such strategies consider both the perspective of the industrialized countries and the perspective of the developing countries in order to develop solutions that benefit all workers in all nations. Accordingly, the strategy must promote the economic development of the developing world, while precluding social-dumping in the industrialized world. The inclusion of labour standards in WTO regulation may be an integral part of such solutions [De Martino et al.] However, it must be considered that the developing countries are not able to introduce the relativity high labour standards of the North and, hence, it must be ensured that the developing countries have some more flexibility regrading such standards.

Sid Shniad, Canada, 24/09/00 - Alternatives to Corporate-driven Globalization and Privatization

Free trade agreements are fundamentally, radically anti-human mechanisms; hence adding social and labour clauses are inadequate to addressing the fundamental problems that such agreements embody.

Concerning alternatives to corporate-driven globalization and privatization, I would propose to countries seeking to modernize their economies that they reject the concept of modernization outright, if the term is used to mean what it has meant for so many societies around the world: increased inequality, destruction of social safety nets, reduced life expectancy, increased despoliation of the environment, attacks on democratic control, subversion of national sovereignty, increasingly precarious livelihoods for those who do have jobs, destruction of community, etc.

I do not subscribe to the view that privatization has been driven by society's need to modernize decrepit infrastructure. From my experience with developments in telecommunications, and from everything that I have read on the subject in other sectors, the push for privatization has everything to do with curtailing the role of governments in addressing the needs of their citizens; creating openings for capital to purchase publically-owned assets at bargain- basement prices; and to ensure that the notions of quality, affordability and ubiquity, which were at the heart of publically- provided services, are replaced by narrowly-construed bottom-line priorities based on cost reduction, corporate downsizing, service degradation, etc.

When the privatization process has been completed, corporate owners of privatized companies segment their markets and focus on meeting the needs of high revenue customers, while they ignore the needs of masses of ordinary customers. As a consequence, as we move into the Information Age, privatized phone companies are creating a situation in which the well-to-do are receiving platinum- plated service. Meanwhile, many in the ranks of the poor are finding that they cannot afford phone service, while users who are somewhat better off are paying ever-increasing amounts for service which is no longer subject to regulation and social control.

Hank Frundt, United States, 25/09/00 - Social Clause, Core Labour Standards and Corporate behaviour

I must strongly disagree with the point raised that the advocacy of core labour standards and social clause represents a conservative pull-back position in the face of corporate globalization and free trade. In fact, until recently the ILO itself has been very reluctant to discuss any sanctions or rules that might affect corporate trade - precisely what both clauses and standards would do and have done.

While we need more empirical verification, we do know that nations that have incorporated core labour standards into trade legislation have achieved important changes in corporate behaviour beneficial for workers. Greater verification and enforcement procedures for standards and clauses, would provide a greater payoff. It hardly represents a compromise with industry or a conservative direction, however.

Tan-Ern Ser, Singapore, 02/10/99 - Trade Union Empowerment, Social Clause and Minimum Standards

I agree with the principle underlying the social clause and minimum standards. The problem lies with implementations and enforcement in a rather unequal world dominated by powerful countries and corporations.

A conclusion we can draw here, and which, I believe, resonates with the keynote speeches of Mr. Somavía and Mr. Jordan is that the bottom-line is to address the reality of power and power inequality.

The challenge for organized labour in the 21st century is therefore to seek empowerment and to empower itself against powerful governments and corporations. This entails mobilization and solidarity at the different levels: local, national, global. It involves a multi-pronged approach, ranging from "shaming the powerful who violate social clauses and minimum standards", active participation in international forums, mutual aids among labour organizations, building up a "popular collective" and "people-power" (cf. Richard Hyman), to worker ownership (cf. Hoyt Wheeler: "You can't defeat them, join them).

Kuriakose Mamkootan, India, 02/10/99 - Revitalisation of Unions and Globalisation

To my mind, globalization is an irreversible process which has been accelerated/facilitated by technological advancement. Information technology, in particular, is playing a vital role in the ongoing process of globalization and competitiveness, benefits of which have gone not just to the MNC's, but the consumers as well.

While not undermining the role played by trade unions during the past few decades, it should also be recognised that the new generation of workers are less attracted by the traditional agenda of unions, which lay undue emphasis on protectionism. The need, perhaps, is to develop ideas to re-vitalise unions rather than oppose/ reject modernity and globalization.

Ron Dickson, Canada, 03/10/00 - Unions as Counterbalance to the Harmful Effects of Globalisation

I agree somewhat with the idea that corrective clauses in international trade agreements are at best an inadequate solution to the harmful effects of a continued globalization of trade and investment. In my case, that does not mean that it would not be useful to lobby and work for at least some socially moderating measures.

I think the whole discussion evades a central problem.

We have seen the proposed MAI strategy fall to a hail of protest in Western countries. Yet, does anyone doubt that the World Bank and other international bodies which are dominated by the economic and political power bases of the leading industrial countries will not rapidly find other ways to package and implement every MAI measure? I put this forward as an example to show that perhaps the fundamental issue is one of greatly unbalanced political and economic power at the global level. If I am right in this, any modest attempts to moderate the effects of globalization will do no more than wring minor and temporary concessions from those very powerful forces which favour and promote the present course towards a global economy. Given the current weak state of unions and others who have some ability to press for reform, that is perhaps the most we can hope for in the immediate future. If we do win such clauses, how will they be enforced? In Canada, it is difficult to force provincial and national government agencies to enforce existing laws.

The real challenge, in my view, is to create a powerful economic, political and media counterbalance on a global scale.

When labour unions were first formed in Europe and North America they were local bodies of working people coming together to address local problems. When they began to experience resistance from alliances of employers and their government and media allies they began to come together to form regional and national bodies in the hope of re-balancing power and finding new winning strategies.

Surely, we must recognize that we are facing a similar situation, only on a grander scale, where the employers are consolidated on a global level and are overwhelming us economically, politically and in the media which they strongly control. Meanwhile we continue to fight economic battles against single firms or single divisions of multi-nationals on a local by local basis. Is this parochial approach not a recipe for slow death of the labour movement?

This conference is one of the reasons we can find some hope for turning the situation around. Another positive sign is the attempt by unions in the steel industry to create international bargaining alliances. Yet another positive sign is the increased effort by labour to use new media to draw us together. The single best effort is the labourstart website "labourstart.zzn.com". The AFL/CIO in the U.S. and some of its larger union affiliates are also making great progress as are the central labour bodies and some individual unions in Canada, Britain and Australia. I am sure there are other good catch up efforts in other countries as well.

Despite these positive early steps, we are still way behind the international employer community. In this context, it would be foolish to hope for dramatic gains through lobbying for social clauses in international trade agreements. We do not presently have the economic or political clout to obtain major concessions. The multi-national corporations and their allies in the national governments of the economically favoured nations are not stumbling blindly toward globalization. They have clearly established goals which they are aggressively pursuing. In our current state of organization we are no match for them.

This does not mean we should not pursue social clauses in trade agreements. We should, however, recognize that they are mere stopgap measures. If we mount international campaigns around such clauses, the most important long term benefit will be the gains we make in the labour movement in learning how to develop closer global ties and move toward effective global unions.

One of the frustrations is that we already have incredible resources at hand if we have the organization and the will to use them. Union controlled pension funds are the biggest pool of investment funds in the world. If we applied our resources to the problem of corporate dominated media, for example, we could build a new media system that would make CNN and the media conglomerates look like minor players.

Incredibly, as we continue to lose ground all over the world, unions at least in North America, continue to waste energy on jurisdictional disputes, raiding and competitive approaches to organizing. Nor should we reject the idea of global unions because of fears that such enormous organizations would be bureaucratised or undemocratic. Continuing to be inadequate to the tasks before us is no alternative. "There must be an alternative."

In my view we must develop global unions. Access to new media could assist not just in organizational tasks but also in keeping members informed. New media could even play a role in democratic decision-making. Since Global Unions could only be built through voluntary mergers, there is no reason to suggest that guarantees of democracy and respect for workers from disadvantaged countries could not be negotiated.

With capital investment flowing freely around the world, workers in the privileged countries need the support of workers in the disadvantaged countries as much or more than workers in disadvantaged countries need them. At least in theory, there is a basis for respectful, democratic and equal relations.

Sid Shniad, Telecommunications Workers' Union, Canada, 07/10/00 - Civil Society's Position on Trade Agreements

The following is a message containing my views on NAFTA, distributed widely via email in the summer of 1993, when the debate about NAFTA was raging in North America. While the specifics of NAFTA and the WTO are different, I think that the underlying argument remains as valid today as it was then:

My name is Sid Shniad. I am the research director for the Telecommunications Workers' Union in Vancouver, British Columbia. I was involved in the struggle against the U.S.-Canada Free Trade Agreement in 1988 and am now involved in the struggle against the North American Free Trade Agreement (NAFTA) as the co-chair of the Action Canada Network in Vancouver.

I had a lengthy discussion with Salvador Peniche here in Vancouver in July. Salvador is a professor of economics at UNAM and is active in RMALC. He has participated in the face to face negotiations with Herminio Blanco, et al., along with Jorge Calderon and other representatives of groups active in the fight against free trade in Mexico.

The occasion of our social meeting gave me the opportunity to ask Salvador about something that I find incomprehensible in the Mexican opposition's stance vis-a-vis NAFTA. (The American opponents of NAFTA take a similar position.) What follows is based on that discussion. It is the position of the Action Canada Network that the Canada-U.S. Free Trade Agreement should be abrogated and that we should say "No" to NAFTA.

As I understand it, the position of the Red Mexicana Contra El Tratado de Libre Commercio (RMALC) is that Mexico cannot simply say "No" to NAFTA. The explanation, if I have it right, is that to take a position opposing increased trade and investment at a time when Mexico desperately needs both would undermine the RMALC's credibility and destroy its access to both the negotiating table and the national press.

As an alternative, therefore, RMALC seems to be trying to put forth a position that can be seen as a more reasonable and constructive, showing how NAFTA should be changed to address the concerns of unionists and environmentalists. From my personal point of view, this position is fundamentally flawed, from both an analytical and a tactical point of view.

ANALYSIS

First the analytical questions. The people who are working to defeat NAFTA in Canada are not opposed to increased investment and trade. In fact, it is generally agreed that the Canadian economy -- which is experiencing the worst depression since the 1930s -- is in desperate need of both. But NAFTA is not really about removing barriers to trade and investment. NAFTA, along with the U.S.-Canada Free Trade Agreement, GATT and a number of other, similar international "trade" arrangements, is designed to institutionalize a neo-liberal political and economic agenda.

In Canada, the Conservative national government, under Prime Minister Brian Mulroney, has spent the last ten years putting in place a comprehensive plan consisting of airline, trucking, financial and telecommunications deregulation; cutbacks in public sector employment; * drastic reductions in spending for social programmes; * off-loading of the federal responsibility for shared social programmes, including health care and post secondary education onto provincial governments which do not have the ability to fund them; * undermining the protections provided by the country's Unemployment Insurance system; * undermining the long-term viability of Old Age Pensions and child benefit programmes by providing them with only partial protection against the impact of inflation; * reducing the federal minimum wage, etc.

As I see it, free trade agreements must be evaluated in the context of the overall policy environment in which they are being promoted, not according to a technical reading of their texts. The Action Canada Network believes that the Canada-U.S. Free Trade Agreement and NAFTA should be seen as an integral part of our government's neo-liberal agenda, as outlined above.

Although the F.T.A. and NAFTA are touted as "trade" agreements, they include provisions relating to subjects which are not usually included under the heading of "trade".

- The section of NAFTA that deals with intellectual property rights actually restricts trade for the benefit of huge transnational drug and computer software companies by extending patent coverage to a range of goods and services.

- NAFTA requires that such matters as public education and health care be made accessible to commercial penetration, opening these sectors -- which are currently run by governments which are answerable to their electorates -- to bids by private companies.

- NAFTA covers an enormous range of subjects. It includes provisions affecting the operation of the public sector, including terms and conditions related to law enforcement, correctional services, income security or insurance, social security or insurance, social welfare, public education, public training and health and child care.

- NAFTA provisions affecting the private sector include a range of restrictions on governments' ability to regulate corporate behaviour.

In short, NAFTA constrains governments' ability to meet the needs of their citizens. From the point of view of the Action Canada Network, this is what NAFTA is really about. It is a continuation of the pursuit of the Conservative government's neo-liberal agenda at the level of an international trade agreement.

The focus on "trade" has tended to frame the terms of the discussion. But the rhetoric of "freedom" and "trade" masks the real agenda: - de-regulating international commerce and enshrining corporate principles in international trade agreements; - preventing governments from taking an active role in pursuit of social goals; - subjecting governments that don't go along with the corporate-driven programme to trade sanctions.

After more than a decade of government of, by and for the corporations, people in Canada have seen the results. They are angry. They want to see a change of direction, with government playing a more active role to meet human needs.

But the corporate interests driving the FTA and NAFTA have done their homework. The purpose of the Canada-U.S. FTA, NAFTA, GATT and other, similar arrangements, is to ensure that, regardless of WHAT the people want, governments will not be able to give it to them.

NAFTA is designed to lock the corporate agenda into an international trade agreement so that governments which try to satisfy popular demands will feel the full weight of international trade sanctions. Michael Walker, who is the Chief Economist at the corporate-sponsored Fraser Institute in Vancouver, put the matter succinctly. Walker explains that "A trade deal simply limits the extent to which the US or other signatory government may respond to pressure from their citizens."

Mexico has experienced its own, particularly harsh variant of neo-liberal "adjustments" over the past ten years. If we accept the above analysis of what the Canada-U.S. Free Trade Agreement, NAFTA, GATT and other, similar, corporate- driven trade arrangements are all about, it is difficult to understand why RMALC and other Mexican opponents of neo-liberalism should not simply say "No" to NAFTA from an analytical perspective. The "compromise" position they have adopted seems to accept the view that the regressive changes that are being brought about by transnational capital are inevitable and that, under the current circumstances, we can only hope to temper their effects by making marginal changes.

TACTICS

RMALC and other organizations opposed to NAFTA are saying that given Mexico's enormous economic problems and the crying need for investment and jobs, it is neither practicable nor desirable to say "No" to NAFTA. Implied in this position is the view expressed by the PRI and President Salinas, that the defeat of NAFTA would be a disaster which would hurt Mexico by limiting the amount of foreign -- especially American -- investment coming into the country.

It is my view that in the foreseeable future, Mexico will experience enormous economic problems -- with or without the passage of NAFTA. But it is also my view that the passage of NAFTA can only make things worse by enshrining neoliberal guidelines in international trade agreement, making it even more difficult for future Mexican governments to carry out progressive change.

In short, the precondition for the deepening of democracy and making real social choices possible requires the freeing of nation states from constraints in the form of free trade agreements, constraints which are used as the basis for imposing neo-liberal programmes.

Clearly there is a crying need for increased employment in Mexico. But is it reasonable to expect increased foreign investment -- with or without NAFTA -- to generate the necessary jobs? Foreign investment in Mexico has increased tremendously over the past ten years. But this generated only a fraction of the number of jobs needed to employ the tens of thousands of Mexicans who are fleeing the countryside in search of work in the cities.

There is no prospect that this new investment will make a dent on the country's unemployment crisis. What is required is an activist, interventionist economic approach -- precisely what NAFTA is designed to block.

Even if foreign investment was capable of generating the necessary level of employment, it is critically important to ask what price Mexico is willing to pay to lure foreign investment to get the resulting jobs. Should rules and regulations be liberalized to make Mexico a more attractive place for international capital to invest if this means duplicating the working and environmental conditions that exist in the maquiladoras along the U.S.-Mexico border? As I see it, this is precisely the model of economic development that will be encouraged by the passage of NAFTA.

Finally, there is the issue of credibility. On several occasions, I have heard members of RMALC and other opponents of NAFTA say that if they came out opposing NAFTA, the PRI government would exclude them from official briefing sessions and the national press would ignore them. I may not be fully understanding this position. But it sounds like these people are saying that they must refrain from putting forth a position of straightforward opposition to NAFTA -- a position that they might otherwise sympathize with -- because they will lose their legitimacy in the eyes of the government if they go too far in their criticism. If this is an accurate portrayal of their position, it amounts to an admission that these organizations are tailoring their positions in order not to alienate the government.

Clearly the government will not encourage organizations like RMALC or give them legitimacy if it feels their actions threaten its pro-NAFTA position. It appears, then, that President Salinas has found an effective way to keep his critics under control and to ensure that their criticisms remain within limits acceptable to him and his government.

As long as there is not a sufficiently strong base in popular sector organizations to enable RMALC and other critics to adopt positions independently of the government -- positions that can be backed up through popular action against the government's programme -- it is not at all clear how taking a "reasonable" (i.e. acceptable) position that does not call for the outright rejection of NAFTA gives the movement any real power in this situation.

CONCLUSION

From the perspective of an ally and sympathizer living in Canada, the RMALC and other Mexican popular sector organizations' equivocal opposition NAFTA is difficult to understand. Although this position is explained in the language of political pragmatism and is ostensibly crafted to reflect Mexican realities, it seems to me to be neither pragmatic nor to address Mexico's pressing problems.

As someone who is interested in and sympathetic toward the plight of the Mexican people, I have written this message in hopes of generating dialogue with activists on this all-important topic.

Ebrahim Patel, South Africa, and Bob Kyloh, ILO, Switzerland, 08/10/00 - Trade, Economic Development and Core Labour Standards

We would like to respond to points raised in a number of contributions since the conference commenced on trade, economic development and labour standards.

In the early part of the debate on this broad topic Herrmann suggests that "where you sit determines what you see" and that perspectives on the trade and labour standards debate will differ substantially depending on whether you are looking from a southern developing county angle or from a northern industrialised country optic. We therefore thought it might be appropriate to try looking from both sides simultaneously. Consequently this joint response comes from South Africa and Switzerland.

Herrmann made several important points with which we would fully agree. For example, he argued that proponents of labour should be outspoken critiques of all social, cultural and economic policies which increase inequalities. Also he argued that trade unions need to develop a comprehensive and sophisticated position on trade and development issues. In particular he drew attention to the structural impediments which preclude the advancement of developing countries in world trade. There would appear to be broad consensus around these points.

In other contributions and subsequent debate both Sid Shniad and Arun Kumar argued very strongly that links between trade and labour standards will not be adequate to overcome the social inequalities generated by globalization, trade liberalisation and the economic power of multinationals. They both make the case for a more aggressive attack by the labour movement on these developments. Subsequently Brooks, Dickson and others have qualified and/or expanded on these arguments.

We welcome all these comments and firmly believe that the broad thrust of these views is fully consistent with policies being implemented by trade unions at the international and national level. As far as we are aware no one in the trade union movement has ever suggested that the full implementation of core labour standards, or a link between trade and labour standards, will be a panacea for all social and economic inequalities engendered by the forces of globalization. Rather, it is our understanding that the proponents of a linkage between trade and labour standards see this as a necessary, but certainly not a sufficient condition, to improve the governance of globalization and the generation of a more equitable global economy.

Moreover the proponents of a trade-labour standards linkage see this as just one component in a long term and sustained attack on what Dickson as accurately described as "the increasing power of capital on the world scene." Consequently we would take issue with those who might characterise the campaign for a linkage between trade and labour standards as some "short term" objective and not an effective long run solution.

It should be emphasised in this discussion that the trade union movement does have a very comprehensive policy on trade and economic development that goes well beyond the labour standards issue. For example:- trade unions in the north and the south have jointly supported policies that would help expand developing country markets and employment opportunities through faster domestic growth and more equitable income distribution;- unions throughout the world have consistently argued for significant increases in official international development assistance for developing countries and rapid widespread international debt relief for the least developed countries;-unions in the north and south have been unified for almost two decades in criticising the structural adjustment policies of the Bretton Woods institutions and supporting increased public investment in the physical and social infrastructure that is necessary for faster economic and trade growth in developing countries; -many unions in the north support removing barriers in industrialised countries to imports from developing countries; -unions throughout the world have joined together to attack the liberalisation of financial markets that contributed to the Asian crises and the contagion effects that followed, they have supported far reaching reforms to financial markets including policies like the Tobin tax to help curtail pure speculative capital movements;- through the international trade union movement considerable effort has gone into developing and implementing codes of conduct and framework agreements in an effort to improve the social responsibility of multinational companies.

The trade union perspective on trade and economic development is therefore more comprehensive and a little more sophisticated than is sometimes portrayed. Perhaps more can be done to publicise the above mentioned policies and win wider public support for these objectives. However it is patently wrong to characterise the international trade union movement as a one issue movement.

We now wish to go back to some of the other comments made by Herrmann in the early part of the debate on a possible linkage between trade and labour standards. He seemed to assert that trade unions in the north are asking developing countries to respect the "high labour standards" that apply in the north and which would "preclude low wage rates - both are associated with increased local production costs..."

The first point to note is that many trade unions in the south, including unions throughout Asia, Africa and Latin America, have been at the forefront of developing and articulating international trade union policy on this issue. They have done so because it is their members that are usually the first and foremost to be affected by the impact of unfair global competition. When labour is exploited in one developing country, in order to lower labour costs and gain a trade advantage, this inevitably generates pressure for lower labour standards within the same industries in other developing countries. The textile industry is a very good example of where employers have often manipulated and threatened workers in one developing country that their factories and jobs will be transferred to another developing country unless labour costs are reduced. In Asia these trends are well established with many textile producers relocating from developing countries with relatively low labour costs to China in pursuit of "bargain basement" labour costs. More recently in South Africa major textile factories in Cape Town have relocated to Malawi where they can hire labour for 5 US dollars a week.

Trade unions in developing countries that face these sort of actions, and threats of further relocations, are under extreme pressure to accept increased poverty for their members in order to prevent capital flight. These threats and actions are the fuel that propel the race to the bottom with labour standards. It is precisely in order to help place a brake on this downward momentum, and prevent employers and governments pitting the workers in one developing country against workers in another developing country, that trade unions in the south have supported a trade-labour standards linkage.

Trade unions in developing countries also believe that a linkage between trade and labour standards can help promote constructive competition between companies and countries, which will lead to faster growth and better working conditions. The full implementation of the core Labour Conventions will certainly not curtail competition but rather help channel the nature of competition away from a narrow concentration on lower labour costs and towards the utilisation of better technology, more efficient production processes and improved marketing strategies. In the textile factories mentioned above this would mean a change in management mind set from relocation to revitalising existing production facilities, upgrading the quality of products and searching for new markets.

Unfortunately some of the contributions to this debate have demonstrated that some people are still confused about the details of any linkage between trade and labour standards. All trade union arguments concerning a possible linkage between trade and labour standards, focus on what are commonly referred to as the core ILO Conventions which cover the most basic rights (child labour, bonded labour, discrimination and freedom of association). Most participants in this discussion are probably well aware of these labour standards and the fact that the trade union movement has for several years been very clear in limiting its demands about a linkage with trade measures to these basic standards.

However, as the contribution from Herrmann makes clear, we can not assume that this message has been heard and understood in all quarters. It therefore must be repeated regularly in order to ensure the debate about trade and labour standards is based on fact rather than fiction. It is also important to regularly remind people that the core labour standards, referred to above, have been endorsed as universally applicable by the widest possible range of governments in a wide range of forums- including the UN Social Summit, the recently adopted ILO Declaration on Fundamental Principles and Rights, by the IMF and World Bank, and even by Trade Ministers at the WTO Ministerial in Singapore.

It is difficult to understand how anyone could describe the core labour standards as "high labour standards" as Hermann has suggested. Consequently to equate a possible linkage between trade and labour standards with high unit labour costs and a barrier to local investment, as Hermann has also asserted, is completely inaccurate.

More importantly, when one understands the very basic nature of the rights protected through the core ILO Conventions it is difficult for us to understand the logic of arguments that suggest a link between trade and labour standards will undermine the comparative trade advantage of developing countries. Any comparative trade advantage achieved through slavery, child labour, discrimination and the prohibition of trade unions will definitely prove ephemeral. There are much more efficient, equitable and sustainable ways to achieve lower unit labour costs and a comparative advantage over competitors. The fact is that the trade union movement, in both the north and the south, wish to preserve and expand the comparative advantage of developing countries and thereby generate more and better jobs for workers in these regions. History has demonstrated that one of the best strategies to achieve sustainable improvements in comparative advantage is through human capital development. This will not happen when: children are in sweatshops rather than schools; workers are owned by their employer and have no incentive to improve their productivity; access to jobs and conditions of work are determined by colour, race and gender; and, workers are denied a voice and the opportunity for collective action.

In conclusion we would fully endorse the view expressed by Herrmann and others that the central challenge for the 21st century is the development of international strategies for poverty alleviation and that this must include promoting economic development in the south. The implementation of core labour standards can make a substantial contribution to this objective but this must be complemented by policy changes in a wide range of other areas.

John Gravesgaard, Denmark, 09/10/00 - Labour Inspection and Labour Standards

Effective labour inspection is of fundamental importance for workers at the factory floor. Strong and committed unions and workers parties fighting for the interests of the workers is primary...but the health and safety of millions of workers is not defended only by political programmes and solemn declarations at international conferences....they want change in their daily working life, safeguarding them against chemicals, asbestos, dust, noise, stress and accidents etc. not to mention the degrading conditions of millions of children working in factories without labour inspection (or only inspected by corrupt inspectors).

Even though one could show some respect for the role of labour inspection by referring to the ILO Conventions 81, 82, 85 and 129. Repression of unions and trade union rights means social dumping and transfer of risks to other countries, where multinational companies can profit cynically. But this social dumping is done not only in relation to repression of unions, but also in lowering safety and health standards. And here the role of inspection is fundamental, be it state or union inspectors! The key words are: Good health and safety laws, access to the companies and a competent labour inspection. Enforcement at the company level is what workers are looking for. And here I want to focus on the inspectors trying to fulfill "the splendid task of workers protection". Just to mention one task: Inspection in the non-unionized companies, where unions have no or limited access.

It must be of central importance for our discussion to be interested in their work, their resources and supporting the building of competent labour inspection authorities in all countries. And to start analyze the political and economical barriers, that hinders the work of "an institution responsible for ensuring respect for the protection of workers and promoting legislation adapted to the changing need of the world of work"(ILO Convention no. 81 from 1947).

One good question could be: What does the structural adjustment schemes in the Third World mean to the state budgets financing labour inspection? To raise these questions and bring them into the forums of international labour, we must start to build networks between labour inspectors on a global scale.

Michael Herrmann, Eberhard-Karls-Universitaet Tuebingen, Germany, 11/10/99 - Competitive Advantages and Human/Labour Rights

I do not object to the inclusion of core labour standards into an international regulatory framework and, hence, as an implicit defence of human rights violations.

International competition cannot be based on certain fundamental human rights. Thus, advocates of human rights (including labour unions) must preclude an inclusion of fundamental human rights in the competitiveness formula. They must ensure that employment of child labour and bonded labour as well as restrictions on the freedom of association and any form of discrimination are "taken out" of the competition.

To defend the inclusion of human rights violations as a mean of increasing competitiveness would be no less absurd than trying to - for example - defend and legitimize the killings of competitors as a mean of increasing the own competitiveness. The fact that fundamental human rights of workers are still widely violated, but that the killings of competitors - to continue with this example - are naturally excluded from the competition, expresses a very arbitrary application of moral principles, and explicates the very depressing state of the economic discourse today.

Economic theory and policy - whether economists like to agree or not - is not derived from an empty space, but based on normative principles, some of which maybe intrinsic to the human nature, and others may result from cultural/ political/ economic/ etc. socialisation. However, the moral content of economics is for instance explicated by the very "natural" exclusion of killings of competitors from the means to increase competitiveness. But there are further examples of the normative choices made by economists. The most important criterion of the predominant neoclassical paradigm is the criterion of efficiency. Most economist automatically accept this criterion without questioning it. This is because it simply seems natural, but it is not. The criterion of efficiency too is based on an implicit normative choice. This is because economist could have instead decided for the criterion of equality as the most important criterion of them all.

The point is: Economics is not the value free science it likes to be. Economics is based on normative choices, some of which are accepted without questioning even though they should be questioned (e.g., the emphasis on efficiency rather than equality), while others need to be repeatedly asserted even though they should stand beyond any discussion. The violation of fundamental human rights (core labour standards) sadly belongs to the list of the latter. However, their inclusion in international regulatory framework is out of question, and any objection to their inclusion is unjustifiable and arbitrary. Just like environmental issues which are (regrettably only selectively) included in this regulatory framework, also core labour standards must be part of an enforceable international legal system. An argument against it can hardly remain reasonably coherent. This is because it would need to explicate that the environment is worth protecting, but fundamental human rights are not. This endeavour is impossible.

I believe there is no participant in this conference that would question the inclusion of core labour standards into the international legal system and implicitly defend the violation of fundamental human rights in order to promote an increased competitiveness. If economics creates inhuman living conditions, it fails to fulfill its sole purpose which is the creation of sufficient wealth so that individuals can live up to their potentials (i.e., utilize their capabilities to functionings). However, these matters seem fairly obvious. Subsequently, I believe that the next great challenge is the identification and development of the mechanism that most appropriately ensures the spread and enforcement of core labour standards throughout the world. A central question in this context is whether it is possible to include additional/ higher labour standards into this regulatory framework in a flexible manner in order to preclude them from having constraining effects for LDC's.

Tan-Ern Ser, Singapore, 11/10/99 - Government's Accountability for Workers' Welfare

It is quite clear by now that nobody is suggesting that we should forget about social clauses and minimum labour standards. It is also clear that organized labour needs to mobilize and harness sufficient power and resources to ensure that workers welfare (e.g., wages, health, safety) are not compromised or sacrificed on the altar of the market economy.

Given that corporations can transcend boundaries in the increasingly borderless world, there is no question that organized labour must do likewise, to be effective in helping to enhance workers welfare.

However, let me add that even in this increasingly borderless world, where transnational corporations may often be more powerful than national governments, it will be extremely crucial for workers (and other citizens) to put in office a non-corrupt, accountable government which (1) has the welfare of workers at heart; (2) implements development policies that benefit workers; and (3) evaluates foreign investment on the basis of what the latter can do for workers.

Paradoxically, in the early phases of industrialization, a "worker-friendly" government may find it necessary to pursue a "low wage" strategy, especially if workers are lowly skilled. Obviously, the low wages need to be supplemented by other welfare measures that will help to keep costs of living low, such as through the provision of decent public housing, education, and healthcare. This will make it possible to pursue a low-wage policy without sacrificing workers welfare.

However, from the perspective of competitors, the above policy may be viewed as a form of protectionism, and therefore unacceptable. I do not hold this view.

Nevertheless, a "low wage" approach cannot be a long-term strategy if the government is genuinely concerned about raising living standards. It must enhance the long-term employability of workers through investment in human capital--training, retraining, and skills upgrading. Moreover, pursuing a policy that subsidizes housing, education, and healthcare not backed up by healthy national income figures will be suicidal. In other words, a "low wage" foreign investment will be judged favourably only if it helps to strengthen the country's (not corrupt government's) coffers, and help to finance welfare policies.

To summarise: A "low wage" policy does not necessarily mean low level of welfare, insofar as the latter is financed by a healthy national surplus brought about by a vibrant economy. Perhaps, a forgotten dimension in this debate is that organized labour needs to put in office a good government, and to help the latter stay accountable.

David Owen, United States, 18/10/99 - International Financial Institutions

I would be very interested to get some ideas and insights from participants to this conference on what sort of role the international financial institutions (IFIs), particularly the World Bank (and its private sector arm, the International Finance Corporation) might play in promoting better labour practice.

By "better labour practice", broadly interpreted as potential for IFI's to contribute to improving conditions at work. This might comprise actively promoting or encouraging adherence to core labour standards, or more direct initiatives oriented towards enterprises or industries with which IFI's are engaged (with loans, equity investment or business advisory services, etc..).

John Gravesgaard, Denmark, 19/10/99 - International Financial Institutions and Labour Standards

Regarding IFIs, I will suggest that:

1) Support to a state or a company must be connected to control and enforcement of labour standards, here also health and safety laws. Rights to organize in unions in one side of the coin, the other side is the workers right to health and safety, where all states have health and safety laws. But often weak enforcement agencies.

2) A precondition must therefore be public access to companies and institutions to ensure that these standards are fulfilled.

3) This public access is normally done by state labour inspectors according to the ILO Conventions about labour inspection.

4) That means financial support to a state or companies must be followed by conditions on the number and frequency of labour inspections of these. And on the qualifications of these inspectors and on their duty of reporting the findings and enforcements. Reports shall be public.

5) That means any structural adjustment policy that reduces the state budget, especially the labour ministry budget financing labour inspection, is contradictory to this. Allocation of sufficient funds for labour inspection should therefore be a precondition for investment in a country/region.

6) Companies can make risk-assessments on health and safety themselves, not waiting the labour inspectorate to do it!

7) Would it be too much to get guarantees on this? Or are neo-liberalistic ideology making people blind to the real conditions in the working places? And blind to the side-effect of the downsizing of all public activity, here also labour inspection?

Naoko Otobe, SEAPAT, Japan, 20/10/99 - International Financial Institutions and Labour Standards

I fully support the view that the IFIs have responsibilities in contributing to shaping an economic environment where people could work with human dignity and in a healthy working environment, in addition to safeguarding the natural environment in general. This goes along with the principles of promoting both sustainable development and fundamental human rights to achieve justice and peace in the world.

The ILO Asian Development Bank and will be undertaking a pilot project to integrate some labour standards (in the areas of occupational health and safety, elimination of child labour, and promoting gender equality in the world of work) into various developmental activities that ADB funds here in Asia.

Globalization and economic liberalization have been the buzz words and philosophy promulgated by IFIs lead by neoclassical economists who have believed that perfect competition in "flexible markets" will allow fast economic growth and that eventually the gained economic wealth will trickle down to the poor. What seems to be happening in the world is that this process has polarized the direction of economic wealth distribution, whereby the rich have become richer and the poor, the poorer.

Then we would need to re-think about globalization and development for "whom"? So perhaps it may be about the time to re-think about the basic paradigm of "development" and guiding principles for it. In my view, it would have to be "for the people (workers), by the people, and of the people." In this context, mechanisms to enhance the civil society's participation in making decisions for their own development would have be facilitated.

IFIs would then also need to provide right signals to governments towards this goal through suggesting macro-economic and social policies which will fall in line with the above objectives. While it may be time-consuming, it would also be very useful to have wide-based civile society consultation at the national level to come up with a consensus on the economic packages that the IFIs may consider funding. (In some of the African countries this has already been done, for example).

Daniel Owens, United States, 20/10/99 - How do we achieve minimum standards internationally?

The basic premise is that multilateral institutions such as the World Bank clearly have a wide range of opportunities for leverage and influence of "clients" that derive directly from the terms and conditionalities imposed on investments. For IDA/IBRD, this leverage is generally one of policy influence on governments. For the IFC and other similar international financial organizations, the influence relates uniquely to the private sector. There are various ways and means this influence can be extended. The most obvious is through operational policy/guidelines on due diligence and safeguards. Compliance with formal guidelines - be they financial, environmental, social - by private sector clients are a prerequisite for IFC engagement.

By "core labour standards", I am referring to the ILO core. By "direct initiatives" I am suggesting other approaches beyond seeking overall compliance with either ILO standards or existing national legislation. In the context of a private sector loan to a medium-sized enterprise, this might entail setting out explicit minimum acceptable standards and seeking guarantees on how performance against these standards will be monitored, especially in areas where labour inspection capacity is weak.

Tan-Ern Ser, Singapore, 20/10/99 - Minimum Standards and International Competition

I believe most of us support the use of minimum standards (including decent wages/standard of living). Unfortunately, it is possible that one country may accuse its competitors of human rights violations in order to protect its own uncompetitive domestic industries. By the same token, one country may use a "miserably low wage" approach to attract foreign investment, and in the process of which contribute towards promoting a "race to the bottom."

Precisely for the above reasons, we need to establish and enforce some minimum standard. Above this standard, competition is acceptable and should in fact be encouraged. Below this standard, competition is absurd and likely to be dehumanising.

Bo Jonsson, 21/10/99 - IFIs and ICFTU statement

In mid September 1999, ICFTU made the following statement:

INTERNATIONAL CONFEDERATION OF FREE TRADE UNIONS (ICFTU)

World union body accuses international institutions of delaying adoption of labour law in Bosnia.

Brussels, September 17 1999 (ICFTU OnLine): Undue interference by representatives of the World Bank, the IMF and the Office of the High Representative in Bosnia-Herzegovina has led the Bosnia-Herzegovina parliament to delay the adoption of badly-needed labour law in the war-torn country, the International Confederation of Free Trade Unions (ICFTU) says in a letter addressed today to Edhem Bicakcic, Prime Minister of the Federation of Bosnia-Herzegovina. The Brussels-based group, which is the world's largest trade union body, has also sent strong protests to the leaders of the financial institutions in Washington as well as to the Office of the High Representative in Sarajevo.

According to the ICFTU a draft law which had been under discussion for more than two years was to have been adopted by Bosnia's House of Representatives at its session on September 14. Yet, despite agreement on most of the draft text, deputies were asked not to adopt the new provisions by representatives of the international community on the ground that it would not "create an adequate framework for creating a business environment that would attract private investment''.

The ICFTU has criticised both the High Representative in Bosnia-Herzegovina a, Mr Wolfgang Petritsch, and the local representative of the World Bank, Rory O'Sullivan, for their role in achieving the withdrawal of the legislation by Bosnia's parliament. The Confederation is particularly concerned at reports of statements by the World Bank representative to the effect that the adoption of the new legislation would have led to delay in budgetary support.

The failure of the Bosnian parliament to adopt labour legislation means, according to the ICFTU, that "there continues to be no law regulating collective bargaining nor legal provisions for the democratic rights of workers to elect their representatives at the enterprise level". The ICFTU acknowledges that some of the provisions contained in the draft legislation could be controversial. It, however, rejects suggestions by the OHR and the World Bank, that a new working group, excluding social partners, should be set up to revise the entire text. The ICFTU considers that the overwhelming majority of the draft text should, as planned, be adopted in normal parliamentary procedures. Individual controversial provisions, such as article 143 dealing with severance pay for workers who have lost their jobs as a result of the war, could then be debated in a working group, provided it included the social partners.

The absence of labour law means that Bosnian trade unions are operating without any legal backing. Neither collective agreements nor negotiations between social partners can take place in a binding legal framework. Private sector employers are taking advantage of this to impose their own laws, says the ICFTU. "Criticising the management or simply insisting on your rights is still risky for workers and their families", the global labour body stresses.

In a letter addressed to the High Representative, ICFTU General Secretary Bill Jordan stresses that "respect for rights and decent and proper labour relations are crucial elements of the creation of a stable and just society".

The ICFTU proposals for sound industrial relations were discussed earlier this year in Sarajevo where the ICFTU, in conjunction with the UN's International Labour Organization and local trade unions, held a conference on the "Social Dimension of the Reconstruction and Transition Process". One of the conclusions of that conference, which was attended by senior government officials and representatives of financial institutions, was precisely to call for the rapid adoption of a comprehensive labour law prior to the process of privatisation.

Tan-Ern Ser, Singapore, 21/10/99 - Minimum Standards and International Competition

I acknowledge that there are contradictions and dilemmas whichever position we take. Hence, the need to look for an optimum solution, rather than a maximizing solution, in our less than perfect world.

My stand is that below certain minimum standard, (1) workers will be living under dehumanised conditions, and (2) the market economy will be "rewarding" violations of workers'/ human rights.

Above that minimum standard, we should allow the market economy to reward quality and productivity or, in short, comparative/ competitive advantage. Corporations will recognize that going for "low wage, alienated" workers does NOT necessarily make the best business sense.

As for whether enforcing a minimum standard will undo 75 years of social contract in the developed countries, my argument is that the best thing that the state and labour can do to uphold the social contract is to promote a vibrant economy that can (1) do far better than stay at minimum standard; 2) help finance the social contract and social policies; and (3) create jobs.

I don't think any of us is under any illusion that finding an optimum solution is an easy task. The point is not to lose sight of our main objective, which is to promote workers welfare. The point about having a minimum standard is not to level everybody down, but to get everyone to level up.

L.V. Subramanian, India, 27/10/99 - Living Standards and Purchase Power Parity

I do not know whether the yardsticks employed for arriving at purchasing power parities(PPP) can lead to erroneous impressions about standards of living. I think it would be more appropriate to take personal incomes of working people of different sectors of the economy and co-relate them to actual prices items (of their daily needs) of personal consumption to arrive at standard of life. In India the minimum wage (this differs from state to state, skill to skill) of workers in the capital of the country Delhi is about Rs1500/- or Rs1600/- It is not linked to cost of living index. It is periodically reviewed by the government and arbitrarily a certain minimum is fixed. In India trade unions have not taken up the question of deciding per hour wage for workers like you have in the USA where it is about US$ 5.75 per hour or so. If this per hour wage corelated to purchasing power of working time some startling revelations can come. I am presently working on purchasing power of working time of different sectors and corelate it to daily needs.

The minimum wage worker with family of three or four cannot afford more than half litre of milk in day as milk prices for a litre in metros major towns and cities ranges between Rs 11 to 16 per litre.(US$ 25 cents.) A workers getting one dollar a day has to spent over a dollar day. If we take other items of needs of daily nutrition to keep the family health in reasonable health the minimum is a starvation wage.

The goods and services produced by the worker are sold at a cheap price at the international market place because of unfair and unrealistic exchange rate mechanism. The dearness allowance system is applicable to only organized sector white collar blue collar in industries, services and governmental sector. After having worked in the trade union movement for well over three decades and still trying to working for the movement through media I feel that time has come for Indian trade unions to do some rethinking on the disparities they themselves are creating within the movement, neglecting a massive force of workers who are virtually cast to the wolves. I would like to have the comments of brother Bo Jonsson whose name rings a bell in the mind. I have associated him with IMF of Aerospace workers. Am I correct? In India we have heard this name for many years.

I am very keen that those who are participating in the discussions to work on this purchasing power of working time which is an idea of IMF worth pursuing particularly in the increasing globalization. Because of wide wage and salary disparities even fairly well paid sectors in India many skilled personnel feel that if they work in Middle East, East Asia for that matter in any other country other than India they would have to work only for five years to earn what they would not be able to earn even within 30/40 years. These questions will soon stare at the union movement in the coming years. I am more concerned with the plight of unorganized sector where there is urgent need to protect their real wages and give them a sense of security, for them and their families from being pushed into starvation wages and their standards plummeting all the time. I would be happy to have comments from those who are well informed about these matters.

James Howard, ICFTU, Belgium, 29/10/99 - The World Bank and the Promotion of Core Labour Standards

First and most directly, the obvious route for promoting compliance with core labour standards for the IFC, and the World Bank Group in general, is through their own tenders. The World Bank is amongst the largest employers in the construction industries. In recent fiscal years, average annual lending of US$22 billion has accounted for about 220 new projects. Each year approximately 30,000 contracts are awarded to firms by borrowers of World Bank funds (approximately 70% are for goods and equipment, 20% for civil works, and 10% for consultant services). These contracts create employment for hundreds of thousands of workers many of whom are engaged in the building, construction and wood-working industries.

The size and scope of these activities place the World Bank Group in a unique strategic position to promote and protect workers rights, particularly since the majority of World Bank funded projects are undertaken in developing countries where there is often inadequate protection of worker's rights. Yet at present, their contracts are awarded through the use of competitive bidding practices, creating a serious risk that the reduction of labour protection costs, including the non consideration of safety issues, are means by which those tendering for contracts may attempt to reduce their overall costs.

The World Bank has attempted to deal with this for its larger projects through its guidelines concerning Procurement of Works (for projects in excess of $10 million). These include mandatory provisions which state that the Contractor is responsible for adequacy, stability and safety of all site operations and methods of construction, and must conform to national law. But the fact that provisions are tied to existing laws in the borrowing country means they offer no real protection to workers in the event of poor or non existent legal provision. Neither is it clear what standards of 'adequacy' of safety are referred to.

These provisions may be supplemented by optional clauses but these depend upon the willingness of the borrower to observe sound labour practices. Therefore, one obvious step the World Bank should take is to incorporate the ILO Declaration of Fundamental Principles and Rights at Work, 1998 into its lending provisions, including the Standard Bidding Documents (SBDs) used for smaller projects and which do not include labour protection clauses. The International Federation of Building and Wood Workers (IFBWW) has sought to visit a number of construction projects funded by the World Bank but has generally been frustrated by the lack of involvement or information provided by the Bank. The IFBWW has urged the Bank to develop a more open review of conditions of work on Bank funded sites, with a view to facilitating an open and constructive review of all mandatory and optional labour clauses used in World Bank funded procurement.

In the light of the above arguments, we would propose that a thorough and systematic impact assessment of social and labour issues should be undertaken in the planning of all construction and infrastructure projects. Impact assessment and project evaluation should be undertaken with the full involvement of all social partners.

The material above is based upon some excellent research by the International Federation of Building and Wood Workers (IFBWW), and I would refer interested participants to the IFBWW for further information on this subject, at:

email: ulf@ifbww.org

web site: http://www.ifbww.org

Secondly, in addition to the above, I would refer again to Bill Jordan's opening remarks in September, proposing the need for the World Bank to deepen its work on "best practices in social policy". We in the ICFTU strongly support the case for the IMF and World Bank to incorporate the Commitments adopted at the Copenhagen Social Summit in 1995 - and which include core labour standards - into their policy and lending instruments, including their Country Assistance Strategies and Policy Framework Papers. These are issues we would hope the IFC itself is actively engaged in discussing through the IFC's Corporate Social Responsibility Discussion Forum set up earlier this year.

The question of promotion of core labour standards by the IFIs brings me back once more to the Bosnian labour legislation question which caused much discussion in this forum. I would like to clarify that the objection of the ICFTU to the role taken by the World Bank's resident representative in Bosnia was one of principle. We are not arguing that the World Bank is not entitled to advance its views on labour law in a Bank member state, any more than the Bank should not advance its views on environmental policy or any other aspect of national development. However, we believe that such interventions must be integrated into a comprehensive strategy, drawn up with the full and equal participation of the ILO (as the UN's specialised agency with responsibility in this area) and the social partners in the country concerned. The World Bank's priorities in Bosnia have not been conducive to the development of a proper framework of labour protections for the workers of that country and in consequence would leave them in a legal vacuum concerning their fundamental right to collective bargaining. Private sector employers are taking advantage of this to impose their own laws.

As we said in September, we have never argued that the legislation is perfect; certain controversial provisions, such as article 143 dealing with severance pay for workers who have lost their jobs as a result of the war, could be excluded from the draft and then debated in a working group, provided it included the social partners. But the Bank should have agreed that the overwhelming majority of the draft text should, as planned, be adopted in normal parliamentary procedures.

Incorporation of core labour standards into the Bank's lending policies would ensure that it duly prioritised the basic human rights of workers, rather than the elusive and controversial advantages of promoting "investment incentives" through a hypothetical increase in attractiveness to foreign companies derived from the absence of adequate labour protections.

K.L. Mahendra, India, 10/11/99 - IFIs and Labour Standards

In the internet debate that is being conducted by ILO, representatives of ICFTU are pressing that IMF and World Bank while sanctioning loans should make observance of social standards as a condition.

This is to remind that the ILO could not accept social labelling and suggesting by WTO because of opposition by 113 developing countries and also number of Trade Union delegates from the developing countries pointing out it was no tariff barriers for protectionism.

Now it is being propagated that the use of child labour in one country can sabotage and has sabotaged the livelihood of workers in those countries that observe the core standards.

In the last session the convention on elimination of child labour in worst forms it is agreed that apart from the national efforts there shall be international support /assistance for eradication of poverty and spread of education.

Those who are proposing punitive actions like conditions on loan should remember the constraints of resources caused by the earlier imperialist loot and at present the disadvantage due to the pricing of primary and industrial goods.

The developed countries by use of capital intensive new technology, globalization and neo-liberalism have caused unemployment and poverty in the developing countries.

The multinational corporations in their lost for profits are trying to create division between the working class of developed and developing countries.

Even though the cold war is over the USA and the European union spend huge amounts on armaments. If only there is elimination of atom bombs and disarmament enough resources will be available for employment and decent life for the workers in developed countries and also for rapid development of developing countries.

If the loan for projects are not sanctioned it will help to increase unemployment and poverty which I do not think any trade unionist should strive for the developing countries.

Michael Herrmann, Eberhard-Karls-Universitaet Tuebingen, Germany, 15/11/99 - Labour's "Bottom-Line" to Improve Workers' Lives

The only purpose of economic activities is to improve the well-being of individuals. It is the primary task of labour representatives to ensure that economic activities indeed fulfill this objective. This means that they must contribute to the well-being of individuals by improving living and working conditions, ensuring human rights and labour standards. Furthermore, they must encourage fair wages and equal opportunities. All of which are indispensable conditions that ensure human functioning and allow individuals to live-up to their potentials and pursue their destiny. That indeed is/should be the labour proponent's "bottom-line".

For this end, labour unions have multiple means. On a micro-level, they can improve their organization in order to better bargain with capitalist representatives, and to better influence government policies. On a macro-level, they can encourage policy changes in order to combat an (international) economic climate that is counter-productive to the described ends.

Consistent with these ends and means, this conference first focussed on the discussion of labour standards and now moved into a discussion of the means themselves. Central thereby should be (1) codes of conduct that are voluntarily accepted by corporations and (2) the enforcement of labour standards through labour representatives. The labour proponents evidently include labour unions, but they may also include other economic institutions, such as the socio-economic bodies of the United Nations, the World Trade Organization and the World Bank Group.

The ongoing discussion of labour standards and the possibilities of their promotion so far was enlightening and interesting. Especially valuable were the less cynical contributions that focussed on practical ways in which for instance the World Bank Group is able to ensure higher labour standards in their projects. However, all in all the discussion still largely focuses on theoretical matters rather than these practical issues. This I find regrettable especially since the conference participants largely agree on the theoretical side of things: It is important to promote higher labour standards and fair wages where they are not existing and it is equally important to preclude a down-scaling of social achievements in other regions.

After having achieved this essential theoretical consensus, it appears important to focus on practical matters: What exactly are the basic labour standards that shall be promoted? What exactly do we mean by an elimination of child labour? What do we mean by an elimination of discrimination? The elimination of child labour and the assurance of non-discrimination that seem to be absolutely basic labour standards, may turn out to be very high labour standards. In many industrialized countries under-age people need to have part-time jobs and they are even allowed to serve in armies. In most industrialized countries women receive relatively low wages compared to male co-workers. In most industrialized countries minorities are the first to lose their jobs during enterprise restructuring. Thus, despite substantial economic wealth and democratic political regimes, industrialized countries have not yet managed to preclude child labour and discrimination.

Consequently, the first necessary step seems to be a definition of the labour standards that we expect industrialized countries to fulfill, as well as those that we expect developing countries to respect. (The different countries should emphasize identical core labour standards, but they should remain flexible regarding "higher" labour standards.) An additional, indispensable step is the promotion of these standards. In this context further questions arise: Is it possible to effectively organize labour unions across national boarders? Is it possible to overcome the collective action problems described by different rational games? Is it possible to replace win-lose situations and create win-win situations? Is it desirable to promote the respect of defined labour standards through their inclusion in the international trading scheme? Should the standards be enforced by the World Trade Organization? If so, how? How can countries/companies that violate labour standards be sanctioned? Do we want to extend the application of counter-veiling duties and anti-dumping measures? What about product labelling indicating the production process of commodities?

These questions urgently require answers, but the answers - I fear - are not always straight forward. I therefore hope we can address some of these practical matters in more detail.