Globalization of Economic Relations:
|
Mr. Chairman,
Distinguished delegates,
It is appropriate for a representative of the International Labour Organization to set the stage for your discussions on the implications for occupational safety and health of the globalization of the economy. The ILO is a global organization whose work is increasingly focused on developing a multilateral approach to the resolution of social problems associated with the globalization of the economy.
Now, that term has become a kind of catchphrase, often thrown about but seldom defined. While I would be the last to venture a rigorous definition, I should at least indicate for the purposes of this presentation what we mean by globalization: the increasing integration of national economies into a world market through trade, investment and other financial flows. Putting it another way, the increasingly intense and complex worldwide interchange of goods, services, finance, productivity and, I would add, working people.
The collapse of communism, and the spread of economic liberalization, has meant that a significantly increased proportion of the world is now connected to the world market. The advance of trade and financial liberalization across the world means that an increasing proportion of world production and investment is now affected by international market forces. World production is now increasingly "transnational" or "borderless" and it has been argued that the capacity of national states to control their economies is being eroded by this. The extent to which this has occurred or is occurring is still a subject of debate in the academic literature but the process itself would be hard to deny.
The volume of world trade has grown significantly faster than world output over the past decade. Between 1984 and 1989, for instance, world trade grew at a rate of 6.4 per cent per year while world output grew at 3 per cent per year. Moreover, even during the recent recession of 1991 to 1993, when world output growth slowed to 1.2 per cent, world trade continued to grow significantly faster than output at 4.6 per cent. As a result of this trend a larger share of world output is now traded internationally and many countries are now more open to international competition.
At the same time flows of foreign direct investment, especially to developing countries, have also increased sharply. From a base of 50 billion U.S. dollars in the early 1980s, the average annual flow of foreign direct investment for the world as a whole has increased more than threefold by 1994. Over the same period flows to developing countries increased fivefold and amounted to 70 billion dollars in 1994. These increasing flows of foreign direct investment have been accompanied by the growth of globally integrated production systems characterized by increasing intra-firm trade in intermediate products and new forms of outsourcing of work across national borders.
Other financial flows have also increased sharply with the globalization of financial markets. This has included massive increases in the volume of trading in foreign exchange and in new financial instruments such as derivatives. Cross-border trading in bond and equity markets has also increased rapidly and a striking new development has been the large flows of equity investment towards emerging markets.
These trends have been driven by a combination of policy and technological changes. The growth in international trade and investment flows has been driven by the worldwide shift towards more open and market-based economic policies. Trade has been liberalized, controls over capital flows have been reduced, and there has been a wave of privatization and deregulation across the world. At the same time technical change has resulted in dramatic falls in the cost of transport and communications and has provided the enabling conditions for the growth of global production systems and financial markets.
In a broader sense, the extent and pace of technological change is radically affecting every sector of the economy and every region of the world.
This dual process of globalization and technological advance promises to bring about a more efficient and productive world economy that will deliver faster growth in output and ultimately rises in living standards. But it has also given rise to serious problems and anxieties. Increased competitive pressures have impelled widespread economic restructuring that has caused increased unemployment and income inequality, at least during a transitional period. Unemployment and job insecurity have become widespread and long lasting.
The ILO estimates that the number of people unemployed or underemployed in the world today exceeds 800 million. This amounts to nearly one-third of the labour force.
While some pockets of full employment do exist in different regions, unemployment is a serious problem in every region. This is true even of the more prosperous countries where unemployment has reached and has remained at levels undreamed of a couple of decades ago. In the EU countries, overall unemployment is nearly 11 per cent. Some major countries have been more successful in reducing unemployment than others but they are experiencing no less serious problems of poverty, stagnating or declining living standards, and social exclusion.
Now, this is not a Congress about unemployment and I will not get into the rights and wrongs of that issue. But I cite the problem to illustrate the context in which social issues, including occupational safety and health, must be examined.
What kind of response is needed to minimize the potential adverse social effects of these pressures, particularly in respect of occupational safety and health?
Allow me to put forward three suggestions.
First, globalization has raised a new set of problems of cross-national scope that call for increased international concertation for their solution. This may require the development of new mechanisms or, perhaps more practically, the reinforcement and updating of existing ones. The ILO's system of international labour standards is a prime example of an existing mechanism that is capable of dealing with an important aspect of the new generation of problems arising out of globalization.
Many of you will already be familiar with ILO Conventions and Recommendations. You may also be aware that the ILO has elaborate and quite effective machinery for supervising the implementation of ratified Conventions. It must be admitted that the Conventions on safety and health have not received as many ratifications as we would like but we are hopeful that the situation will improve. In any case, the importance of these Conventions goes far beyond the legal obligations created by ratification. They form a body of internationally accepted standards and thus provide authoritative guidance to national authorities.
In the field of occupational safety and health, the basic Convention is No. 155, adopted in 1981, concerning occupational safety and health and the working environment. This requires ratifying States to formulate, implement and periodically review a coherent national policy on occupational safety and health and the working environment, in consultation with the most representative employers' and workers' organizations.
Convention No. 161, adopted in 1985, on occupational health services provides that ratifying States must institute progressively health services at work for all workers.
The role of these services is notably to identify and assess risks of health hazards at the work place by surveillance of the working environment and working practices. They should also give advice on the planning and organization of work, including the conception of the work place, and the choice and maintenance of machines and equipment as well as substances used at work.
A wide range of specific occupational risks are covered in various ILO Conventions, the latest of which deal with the safe use of chemicals at work (Convention No. 170 of 1990) and major industrial accidents (Convention No. 174 of 1993). Major industrial disasters such as Bhopal and Chernobyl, of which the tenth anniversary will be commemorated this coming Friday, have demonstrated that there is a close relationship between major hazards at the work place, our communities and the environment. If we want to ensure that our future efforts lead to the development of efficient and integrated strategies for the control and prevention of occupational hazards, then full national and international cooperation is vital.
These last two Conventions are particularly relevant to issues connected with globalization since both address the responsibilities of exporting States.
In addition to these formal standards, the ILO has adopted other texts which provide guidance. One is the Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, according to which a national or multinational enterprise with more than one establishment should provide safety measures without discrimination to the workers in all its establishments, regardless of the place or country in which they are situated. Of particular importance is also the ILO Code of Practice on "Safety, health and working conditions in the transfer of technology to developing countries" which was published in 1988. In these instruments there is a clear delineation of the responsibility of each technology exporting state to inform importing states of the type of the hazardous chemicals processes or technologies being transferred with the overall aim of alerting receiving countries concerning measures which are necessary to safeguard the health of the workers and the environment. This promotes the universality and harmonization of standards which becomes a prerequisite within the framework of globalization that results in a de facto shift of decision-making in occupational safety and health matters from the recipient to the technology exporting country.
This brings me to the second suggestion I would like to put forward today.
The protection of occupational safety and health in an increasingly international economy enhances the need for developing, updating and especially harmonizing standards.
It is not my purpose here to enter into a debate on regulation, deregulation or self-regulation.
Certainly, the advantages of self-regulation in safety and health by enterprises are strongly advocated in a number of industrialized countries. The trend is likely to spill over into many other countries concerned with globalization. At the same time, consumer awareness is becoming stronger. This is resulting in more pressure on enterprises to abide by codes of conduct which aim at protecting the workers, the community and the environment.
In a globalized economy, the harmonization of standards is not in opposition to self-regulation but a powerful aid to that process.
Harmonized standards will facilitate the adaptation of the original technology to the different conditions which prevail in the country receiving the technology. Decisions concerning the design of installations, use of personal protective equipment and the effect of climate on the integrity of the industrial processes which are often made by management at the country of origin should take into account base-line data of the end-user. They should also include the incorporation of ergonomic and anthropometric considerations which are appropriate to the technology-receiving country. This will cut down the direct cost of poor safety and health practices, as well as their indirect costs, and thus render the industry more competitive.
In meeting the challenge of the harmonization of occupational safety and health standards, compatibility between such standards must be ensured in order to avoid overlap and contradiction. Of particular relevance in this connection is the ongoing effort by the International Standard Organization (ISO) to set new standards concerning quality management and environmental management, including occupational safety and health management.
The ILO and the International Occupational Safety and Health Information Centre (CIS) have an especially important role to play in defining the information needed by the users of the technology in the receiving country and serving as a clearing house for information. This should be coupled with efforts aimed at identifying institutions which are capable of assisting developing countries in strengthening their capacities in making appropriate decisions prior to the impact of the technology.
This leads to my third and final suggestion. Globalization, and particularly the rapid emergence of internationally integrated production systems together with the ever freer movement of goods, make it essential to intensify international cooperation in building up national safety and health capability. The ILO has a long and I think fruitful record of technical cooperation with developing countries in occupational safety and health. This ILO effort has been made possible by the financial support of the United Nations Development Programme and of many individual countries, notably our host country, Spain. Combined with the commitment and efforts of developing countries themselves, it has resulted in the creation of solid technical capacity in many countries.
Now, we must build upon that in two ways. First, as problems get more complex and new problems constantly arise, there is a pressing need for promoting the exchange of highly-specialized knowledge and concrete experience between industrialized and developing countries and particularly among developing countries. This includes the appropriate use of foreign expertise often at short notice, and the organization of exchange programmes aimed at bridging gaps in technical know-how at the national level.
A distinctive characteristic of ILO programmes is their emphasis on bringing together employers' and workers' representatives from different parts of the world to conduct a dialogue and foster cooperation to define and achieve safety and health goals.
Second, it is necessary but not sufficient to enhance specific technical expertise at or connected to the work place. The complexity and sometimes the magnitude of potential risks make it essential to build up a more integrated capacity in the society as a whole. Many countries have impressive technical capability but without the depth and the infrastructure that are needed to cope with the most serious problems. This is a clear lesson to be learnt from the most dramatic industrial disasters. Without strong back-up capacity neither prevention nor damage limitation and rescue can be effective.
These are some of the directions in which the international community can work in order to make sure that the potential benefits of globalization are not tarnished by accidents and diseases which could be prevented and which do untold damage to workers and communities.
Your countries, your organizations and you as individuals can do much to spread the message and to provide resources and know-how. You can count on the ILO for its support and we count on you.
| [ List of papers ] |