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ILO Chief Warns of Globalization "Backlash": Calls for ILO, Private Sector Cooperation


Press release | 08 November 1996


GENEVA (ILO News) - Warning of a possible "backlash" to globalization, the Director-General of the International Labour Office (ILO), Michel Hansenne, today urged government, labour and business leaders at the first "ILO Enterprise Forum" to link economic progress to creating jobs and reducing poverty in order to avoid jeopardizing worldwide economic growth.

Speaking to some 600 participants in the two-day "ILO Enterprise Forum '96", Mr. Hansenne noted that despite rapid advances fostered by the globalization of the world economy, the advent of unprecedented unemployment, and the "alarming growth of poverty, in equality and exclusion" threatened to spark tensions that could "strain or tear the social fabric" in both developed and developing countries.

"How can we make sure that progress in enterprises is translated into progress in employment on a sufficient scale and in a sufficiently well-balanced manner to ensure that the resulting social tensions do not strain or tear the social fabric?", Mr. Hansenne said. "If economic progress is not translated into an equal amount of social progress, especially in terms of jobs, there is a real risk that a backlash could result which would seriously jeopardize the very opportunities for growth afforded by the opening up of the market in the last few years."

The "ILO Enterprise Forum '96", organized with the theme of "Promoting social progress and enterprise competitiveness in a global economy", takes place on 8-9 November at the ILO's Geneva headquarters. The Forum marks the first time the ILO's traditional "social partners" - government, and representatives of employers' and workers' organizations - have met formally with representatives of the private sector, entrepreneurs and enterprise executives to discuss such issues as globalization, rising unemployment, growing poverty and expanding inequality.

Noting that "one of the characteristic features of globalization of the economy is incontestably the major role of the enterprise", Mr. Hansenne added that enterprises, entrepreneurs and multi-nationals would play an increasingly important role in creating jobs.

"By trying to achieve a better understanding of how the development of the global market will affect the future of enterprises and the future of work, the shape of labour relations and employment in the world", Mr. Hansenne said, "we also want to make sure that economic development is not jeopardized by excessive social imbalances and that it meets the goals of progress and justice that are at the heart of our Organization."

Mr. Hansenne acknowledged that, it had often seemed that the ILO "either does too much or does not do enough" regarding enterprises and entrepreneurs. While enterprises were struggling with the new challenges of the global economy, the ILO's international standards were "often perceived as outdated or inappropriate".

Nevertheless, this approach was now changing, and the ILO would be asking what role it, as a tripartite body, could play in the emergence of new "rules of the game" regarding the private sector, Mr. Hansenne said.

"One of the ILO's permanent concerns has been to ensure that the observance of the values it stands for is not at the expense of those practising them", Mr. Hansenne said, referring to the Preamble of the ILO Constitution which says failure of any nation to adopt humane conditions of labour is an obstacle to other nations which desire to improve the conditions in their own countries. "Is it now high time to reinterpret it for the benefit of enterprises that do not confine themselves to complying with national legislation but undertake to observe, wherever they may operate, essential humane conditions of labour ?"

Forum organizers said the two days of talks would seek new ways of creating jobs, developing human resources and improving working conditions and labour-management relations. Mr. Hansenne heads a list of speakers that includes over 50 officials (ministers, entrepreneurs and enterprise leaders, CEOs, leaders of workers' and employers' organizations, and representatives of the United Nations, World Bank, IMF and WTO). Other keynote speakers include Mr. Jean-Philippe Maitre, Councillor of State responsible for Geneva's economic affairs and Mr. Claude Smadja, Managing Director, World Economic Forum.

Following the opening plenary Friday, panel discussions will be held on implications for enterprises and the ILO of a changing world economy; enterprises and jobs; social initiatives by enterprises; and, the future of the social partners at the enterprise level. In sessions on Saturday, participants will discuss entrepreneurship and job creation for women; new business paradigms; and, small enterprise development for the creation of productive jobs.

The individual panels are expected to focus on the following issues:

  • Implications for Enterprises of a Changing World Economy : While the world today is much richer than ever, disparities are increasing: 75 percent of the world's population enjoys only 16 percent of its income, while the richest 20 percent of the world's population have access to 85 percent of global income. How can business help to promote world integration or globalization of the economy, while at the same time helping to reduce fragmentation brought on by unemployment and inequity? Should, or can, the world economy be controlled and monitored, and if so, by whom? How will the world economy in general and business in particular face the challenges of labour, human resources, development, improvement of working conditions and labour-management relations ?
  • Enterprises and Jobs : Globalization and rapid changes in technology, communications and investment flows are changing the competitive environment for enterprises and forcing profound changes in all aspects of business strategy and operations. The emergence of the "network enterprise" and new global production networks and alliances have profound implications for labour relations and human resource management practices. Participants will explore the impact of ever increasing pressures for higher productivity and competitiveness on overall employment levels and job quality, implications for human resource development strategies at national and enterprise levels, means of increasing the "employability" of employees, and ways that micro-, small- and medium-sized enterprises can generate jobs in this new economic climate.
  • Social Initiatives by Enterprises : At a time when the enterprise is universally accepted as the engine of growth and development, many are embarking on initiatives to address social challenges whether in terms of improving conditions for their own employees through innovative personnel policies and initiatives, or contributing to the wider community through, for example, programmes to counter social exclusion and generally demonstrate "corporate citizenship". The session will review a number of such initiatives and explore how effective they appear to be, why and how they have been implemented, as well as the roles of trade unions and employers' organizations.
  • The Future Role of the Social Partners at the Enterprise Level : As globalization and other economic factors change the nature of enterprises and the private sector, the traditional forms of employment relationships which focused mainly on collective bargaining are undergoing profound changes. Participants will discuss how extensive these changes have become, whether these changes are confined to industrialized market economies and other issues involving questions of employment security.