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Trade unions and globalization: trends, challenges and responses

Globalization has proved a complex and multi-faceted process for workers around the world, as are the strategies they must develop to face its challenges. A new ILO book examines some of the crucial issues facing the trade union movement...

Article | 21 November 2007

Globalization has proved a complex and multi-faceted process for workers around the world, as are the strategies they must develop to face its challenges. A new ILO book (Note 1) examines some of the crucial issues facing the trade union movement and how new policies are being shaped to improve alliance-building, international collaboration and the promotion of the adoption of international labour standards during this period of face-paced change. ILO Online spoke with the editor of the book, Verena Schmidt, of the ILO’s Bureau for Workers’ Activities and coordinator of the Global Union Research Network.

ILO Online: In the book, “enlargement” of the overall trade union agenda is highlighted as one of the key responses to globalization. How have trade unions gone about this process?

Verena Schmidt: Increasingly trade unions are enlarging their agendas to include issues such as engaging with international organizations in order to influence their policies and organizing global campaigns and extending and deepening their cooperation at the transnational level.

The Global Unions, consisting of the International Trade Union Confederation (ITUC), Global Union Federations (GUF) and the Trade Union Advisory Committee to the OECD (TUAC), are engaging with large international organizations such as the International Monetary Fund, the World Bank Group, the United Nations and their programmes and funds, the World Health Organization and the World Trade Organization to promote a fair globalization.

For instance, since the late 1990s, global union leaders have lobbied for inclusion of the ILO core labour standards in World Bank lending and procurement practices. This action has paid off. In May 2006 the International Finance Corporation (IFC) started requiring that all enterprises borrowing from the IFC abide by the core labour standards. Then in December 2006 the World Bank announced that it would extend the core labour standards requirement to public works projects financed by the International Bank for Reconstruction and Development and the International Development Association. The World Bank started including the core labour standards requirement in its procurement contracts in May 2007.

ILO Online: In what ways is the trade union movement working to expand its network and alliance building?

Verena Schmidt: Building networks between trade unions along global production systems is an example of transnational cooperation. Unions have to deal with sophisticated and often anti-union human resource management strategies at a local level within global production systems and respond to difficult representational situations as a result of sourcing decisions.

However, the concept of value chains also presents some opportunities for labour. To benefit from these opportunities, unions are developing strategies with a view to organizing and bargaining collectively along the value chains. Organizing along supply chains could be a way to move beyond existing North–South cooperation arrangements.

At the same time, one potential conflict of interest exists between workers of the global North and the global South when it comes to offshoring and outsourcing. Indeed, there is a need for active labour market strategies in the global North to avoid workers in the North bearing the cost of outsourcing. It is also important to stop a race to the bottom, especially between countries of the global South. Here, the ILO has an important role to play.

ILO Online: How are trade unions addressing issues of governance and accountability as a result of globalization?

Verena Schmidt: The enhanced coordination of productive activity between countries by multinationals highlights how the strength of corporate governance has increased in recent years despite the greater dispersion of production. In contrast, the impacts on labour of these value chain strategies, combined with the reduced relevance of national labour legislation in many countries, has left gaps in labour rights. As unions are confronted with the growing influence of the private sector, many are concerned that, in some cases, voluntary corporate codes of conduct are not accompanied sufficiently strongly by measures of “accountability”.

The increasing integration of national economies in a single global market and the appearance of new world production systems are demanding stronger coordination of national and international trade union agendas. This is a big challenge for trade unions that traditionally organize within a national context.

ILO Online: Where do International Framework Agreements fit into the picture?

Verena Schmidt: International Framework Agreements are a key tool used by a number of unions to lay down the rules of conduct for transnational companies. Since they are negotiated jointly by national trade unions and GUFs and companies, they are an important instrument for dealing with some of the issues raised by globalization.

For example, this new framework of global governance enables the unions to intensify efforts to integrate sustainable development practices within their policies, both by lobbying international institutions and by building alliances with non-governmental organizations. If a MNE violates social and environmental norms, the GUFs can either react by initiating demonstrative action or they can take proactive steps by making an offer to negotiate with the corporation on relevant agreements.

ILO Online: What is the role of the ILO and international labour standards in achieving a fair globalization?

Verena Schmidt: International labour standards are an important catalyst in improving working conditions. While core labour standards must be respected in all member States of the ILO regardless of whether they have been ratified by the countries, the reality is very different. The international labour movement is mobilizing the international community to put pressure on those countries which do not respect the core Conventions to make the necessary changes.

For example, the issue of private equity and hedge funds has been addressed recently by the international trade union movement. The Global Unions are calling for governments and international organizations to ensure proper regulation, taxation and transparency concerning the activities of private equity and hedge funds.

The book showcases a number of examples of how trade unions have improved the situation of workers by enlarging the labour agenda and cooperation at international, transnational and national levels, as well as through their alliance-building with other civil society groups. The challenges of globalization can only be met if the trade union movement continues to address new issues and adapt its organizational structures accordingly.

Note 1 - To order a copy of Trade Union Responses to Globalization: A review by the Global Union Research Network, 2007, ISBN 978-92-2-119860-4, please visit: /publns.