Geneva, March 1997
|Subcommittee on Multinational Enterprises||MNE|
FIRST ITEM ON THE AGENDA
Follow-up on and promotion of the Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy
b) Report of the Working Group entrusted with analysing
the reports submitted by governments and by
employers' and workers' organizations
Background, aim and general policies
Paragraphs 13-20: Employment promotion
Paragraphs 21-23: Equality of opportunity and treatment
Paragraphs 24-28: Security of employment
Paragraphs 29-32: Training
Paragraphs 33-35: Wages, benefits and conditions of work
Paragraphs 36-39: Safety and health
Paragraphs 41-47: Freedom of association and the right to organize
Paragraphs 48-55: Collective bargaining
Paragraph 56: Consultation
Paragraph 57: Examination of grievances
Paragraph 58: Settlement of industrial disputes
International labour Conventions and Recommendations referred to in the Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy
Part IV: The Tripartite Declaration and various economic and industrial sectors
1. At its 229th Session (Geneva, February-March 1985), the Governing Body, on the basis of a proposal made by the Committee on Multinational Enterprises,(1) set up a Working Group comprising the Officers of that Committee. The group was entrusted with the responsibility of analysing the reports submitted by governments and by employers' and workers' organizations, for the periodic surveys on the effect given to the Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, prior to their examination by the Committee (now Subcommittee) itself.(2)
2. Since its establishment, the Working Group has met in November 1986, November 1989 and October 1992 to analyse the respective reports for the third survey which covered the years 1983, 1984 and 1985, the fourth which focused on developments in 1986, 1987 and 1988, and the fifth for the years 1989, 1990 and 1991. On each occasion the reports of the Working Group(3) were submitted to the Committee on Multinational Enterprises, which in turn reported thereon to the Governing Body.
3. At its 248th (November 1990) Session, the Governing Body decided that the questionnaire for the fifth survey should be sent not only to governments, but also to the most representative employers' and workers' organizations.(4) This was done to underline the importance of the role of employers' and workers' organizations in the survey, to help advance the preparatory work they would need to undertake in the event of a joint government-employer-worker reply, or to enable them, should they wish, to send their reports direct to the ILO. A decision to follow the same procedure for the sixth survey was taken by the Governing Body at its 258th (November 1993) Session.(5) The periodicity of the survey was also changed from three to four years,(6) and the sixth survey therefore focuses on the years 1992, 1993, 1994 and 1995.
4. The Working Group, comprising the Chairperson of the Subcommittee, Ms. L. Guertin (Government, Canada), the Employer Vice-Chairman, Mr. B. Noakes (Employer, Australia) and the Worker Vice-Chairman, Mr. A. Baldassini (Worker, Argentina), met in Geneva on 13, 14 and 15 January 1997, to analyse the reports submitted for the sixth survey.
5. The Working Group had before it a document summarizing all the replies received up to 30 September 1996.(7) In addition, all the original reports, as well as accompanying documentation and communications used in the preparation of the summaries, were at its disposal.
6. The Working Group considered that it would be useful to provide the Subcommittee with information on the origin of the replies, and the means by which they were sent to the Office. It also agreed to follow precedent and make suggestions with regard to the next survey or other types of activities that may be undertaken by member States, employers (including multinational enterprises), workers' organizations, and the Office, with a view to enhancing the usefulness of the Declaration.
7. The replies provide extensive information and insights which should prove useful to the work of the Office in a number of major technical areas. In addition, the wealth of information thus made available will bring about transparency that would enable those interested and concerned to work together in addressing the problems identified. Replying to such a survey has meant considerable work for respondents. The Working Group would like to express its sincere appreciation to all governments and employers' and workers' organizations for their contributions to the survey.
8. Replies from 74 countries arrived in time for consideration by the Subcommittee as compared to 52 for the first survey (1980), 62 for the second survey (1983), 68 for the third (1986), 70 for the fourth (1989) and 73 for the fifth (1992). The deadline for submitting replies for the sixth survey was 29 February 1996. However, the Office has included in the summary, all replies received up to 30 September 1996. Table 1 shows the origins of the replies by region, country and respondent. It must be noted that the contribution of the social partners is understated when one considers that a number of governments consulted employers' and workers' organizations, and that their views were very likely taken into account for the preparation of the governments' reports. These organizations may not always have been named in the replies, nor did they all send copies of their contributions to the Office. For details on the organizations that were consulted by governments and those which were clearly identified as having contributed to governments' replies, see Part II of the Summary of reports (GB.268/MNE/1/1).
9. Table 2 contains the names of the employers' and workers' organizations which replied to all or part of the questionnaire for the sixth survey and the means by which they transmitted their replies to the Office. There were only five countries from which only employers' and/or workers' organizations submitted reports.(8) In accordance with the decision taken by the Governing Body at its 248th (November 1990) Session, copies of replies from employers' and workers' organizations which were sent direct to the Office, were forwarded to governments for their information and comments. For communications received from the Governments of Japan and Malaysia, see Annex 2 to GB.268/MNE/1/1.
Table 1. Replies to the sixth survey by region, country and respondent 1
|Chad (G)||Antigua & Barbuda (G,E)||Australia (G)||Austria (G)|
|Egypt (G, E)||Argentina (G)||Bangladesh (G, E)||Belgium (G, E, W)|
|Ethiopia (G)||Bahamas (G)||Cambodia (G)||Czech Republic (G, E, W)|
|Gabon (G, W)||Barbados (G, E, W)||China (G)||Estonia (G, E, W)|
|Mauritania (E, W)||Brazil (G, W)||India (G)||Finland (G, E, W)|
|Mauritius (G)||Canada (G)||Indonesia (G)||France (E)|
|Namibia (G)||Chile (G)||Japan (G, E, W)||Germany (G, E)|
|Nigeria (G, E, W)||Colombia (G, E, W)||Jordan (G, E)||Greece (G)|
|Swaziland (G)||Costa Rica (G)||Korea, Rep. of (G, E)||Hungary (G, W)|
|Tunisia (G, E)||Dominica (E)||Kuwait (G)||Ireland (G)|
|Zambia (G)||Ecuador (G)||Malaysia (G, W)||Italy (G, E)|
|Zimbabwe (G, E)||Grenada (G)||Myanmar (G)||Luxembourg (E, W)2|
|(12 countries)||Mexico (G, E, W)||New Zealand (G, E)||Netherlands (G, E)|
|Nicaragua (G)||Pakistan (G, E)||Norway (G, E)|
|St. Vincent & the Grenadines (E)||Philippines (G)||Poland (G, W)|
|Trinidad & Tobago (G, E)||Singapore (G, E, W)||Portugal (G, W)|
|United States (G, W)||Sri Lanka (G, E, W)||Romania (G)|
|Uruguay (G)||Syrian Arab Rep. (G, E)||Slovakia (G)|
|Venezuela (G, E)||Thailand (G)||Slovenia (G)|
|(19 countries)||(19 countries)||Spain (G, W)|
|Sweden (G, E, W)|
|Switzerland (G, E, W)|
|Turkey (G, E, W)|
|United Kingdom (G, E)|
Key: G = government; E = employers; W = workers.
Replies: 69 governments, employers' organizations from 36 countries and workers' organizations from 25 countries. In many cases more than one employers' or workers' organizations from a given country replied. In addition, a number of governments stated that they consulted the social partners for the preparation of their reports.
1 These refer to replies to all or part of the questionnaire submitted to the Office by governments, and employers' and workers' organizations. For details on the means by which the employers' or workers' replies were sent to the Office, see table 2. Those organizations which governments identified as having been consulted, and those which made observations that were incorporated in the government's reply, are specified in table 2.
Table 2. Details of the participation of employers' and workers' organizations in the sixth survey
Employers' organizations which governments identified as having contributed
to their replies 1
Bangladesh Employers' Association
National Labour Council (Belgium -- an organization comprising representative employers' and
Confederation of Industry and Transport (Czech Republic)
Estonian Confederation of Industry and Employers
Estonian Association of Small Business
£Japan Federation of Employers' Associations (NIKKEIREN)
Singapore National Employers' Federation
Employers' Federation of Ceylon (Sri Lanka)
Swedish Employers' Confederation (SAF); and Federation of Swedish Industries 2
Chamber of Industry (Syrian Arab Republic)
Employers' replies transmitted through governments
Egyptian Federation of Industries
Confederation of German Employers' Associations (BDA)
Amman Chamber of Industry (Jordan)
Federation of Luxembourg Manufacturers (FEDIL)
New Zealand Employers' Federation Inc.
Central Union of Swiss Employers' Associations (UCAPS)
Employers' Consultative Association of Trinidad & Tobago (ECA)
Turkish Confederation of Employer Associations (TISK)
Confederation of British Industry
Venezuelan Federation of Chambers of Commerce and Manufacturers' Associations (FEDECAMARAS)
Employers' replies sent direct to ILO Geneva or through ILO's field offices
(a) Copy sent to government
Bangladesh Employers' Association
National Association of Manufacturers (ANDI), Colombia
Confederation of Finnish Industry and Employers; and the Employers' Confederation of Service
Industries (Finland). Original joint reply (in Finnish) was sent to the Government and a translation in English sent to the ILO
Japan Federation of Employers' Associations (NIKKEIREN)
Korea Employers' Federation
(b) No copy sent to government
Barbados Employers' Federation
Dominica Employers' Federation
Employers' Federation of Pakistan
Employers' Confederation of Zimbabwe
(c) No indication as to whether or not copy sent to government
Antigua Employers' Federation
General Confederation of Employers of Mauritania (CGEM)
Nigeria Employers' Consultative Association (NECA)
St. Vincent Employers' Federation
Tunisian Confederation of Industry, Trade and Handicrafts (UTICA)
Employers' replies sent through international employers' organizations
The National Council of French Employers (CNPF) sent its report through the IOE. There was no indication of whether a copy was sent to the Government.
The General Confederation of Industry (CONFINDUSTRIA), Italy, sent its report through the IOE, with a copy to the Government.
The Mexican Confederation of Chambers of Industry (CONCAMIN) sent its reply through the IOE.
There was no indication of whether a copy was sent to the Government.
The following employers' organizations informed the Office that they agreed with the statements made by their governments: the Federation of Netherlands Industry and Employers (VNO-NCW); and the Confederation of Norwegian Business and Industry (NHO).
The following employers' organizations informed the Office, either directly, through their governments or the IOE, that they were unable to prepare reports for a number of reasons -- e.g., lack of time and resources, lack of information and the absence or paucity of MNEs in their respective countries: Canadian Employers' Council; Federation of Jordanian Chambers of Commerce; Latvian Employers' Confederation; Lithuanian Entrepreneur Association; Malaysian Employers' Federation; Oman Chamber of Commerce and Industry; Industrialists' and Entrepreneurs' Union of Russia; and Business South Africa.
The US Council for International Business sent a communication through the IOE stating that it did not send a separate reply because it had consulted with the Government of the United States for the preparation of the Government's report.
Workers' organizations which governments identified as having contributed
to their replies 1
National Labour Council (Belgium -- an organization comprising representative workers' and employers' organizations)
Union of Trade Unions of Chad (UST)
Estonian Association of Trade Unions
National Confederation of Hungarian Trade Unions (MSzOSz)
National Federation of Workers' Councils (Hungary)
National Federation of Autonomous Trade Unions (Hungary)
General Union of Workers (UGT) (Portugal)
National Trades Union Congress (Singapore)
Ceylon Workers' Congress (Sri Lanka)
The Lanka Jathika Estate Workers' Union (Sri Lanka)
Swedish Trade Union Confederation (LO) 3
Swedish Confederation of Professional Employees (TCO)
Swedish Transport Workers' Union
Commercial Employees' Union (Sweden)
Workers' replies transmitted through governments
Single Central Organization of Workers (CUT), Brazil
Czech and Moravian Chamber of Trade Unions (MK OS)
Central Organization of Finnish Trade Unions (SAK)
Finnish Confederation of Salaried Employees (STTK)
Confederation of Unions for Academic Professionals in Finland (AKAVA)
Confederation of Independent Trade Unions (OGB.L), Luxembourg
Federation of Swiss Salaried Employees' Associations (VSA)
Federation of Commerce, Transport and Food Industries' Workers' Unions (FCTA), Switzerland
Confederation of Turkish Trade Unions (TÜRK-I)
Workers' replies sent direct to ILO Geneva or through ILO's field offices
(a) Copy sent to government
Barbados Workers' Union
General Confederation of Democratic Workers (CGTD), Colombia
General Union of Workers (UGT), Portugal
General Union of Workers (UGT), Spain
(b) No copy sent to government
Nigeria Labour Congress
(c) No indication as to whether or not copy sent to government
Gabonese Confederation of Free Trade Unions (CGSL)
Japanese Trade Union Confederation (JTUC-RENGO)
Malaysian Trades Union Congress
Free Confederation of Workers of Mauritania (CLTM)
American Federation of Labour and Congress of Industrial Organizations (AFL-CIO)
The Confederation of Mexican Workers informed the Office that it agreed with the Government's statements.
The following workers' organizations informed the Office, either directly or through their governments, that they were unable to prepare reports for a number of reasons -- e.g., lack of time and resources, lack of information and the absence or paucity of MNEs in their respective countries: the General Federation of Jordanian Trade Unions; and the Latvian Free Trade Unions Association.
The Confederation of Trade Unions of Rwanda (CESTRAR) sent a letter stating its inability to reply because of the political situation in the country.
The Assembly of Free Trade Unions (Convention des Syndicats Libres) (Zaïre), sent to the ILO, a copy of its letter to the Government, urging it to submit a reply to the survey.
Replies from international trade secretariats
The International Federation of Commercial, Clerical, Professional and Technical Employees (FIET)
Certain governments indicated the names of all employers' and workers' organizations from which they requested information and/or which they consulted for the preparation of reports. Only the names of those organizations which were clearly identified as having provided information that is in any way reflected in the governments' replies, appear in the lists. The names of all organizations mentioned in the governments' replies as having been contacted can be found in Part II of the Summary of reports (GB.268/MNE/1/1). The names of all those to which governments sent copies of their replies are also in this section.
There were governments which stated that their reports were prepared after consultation with workers' and employers' organizations, but did not name them.
In keeping with past practice, copies of replies from employers' and workers' organizations which were sent direct to the Office, were forwarded to governments for their information and comments. Communications from the Governments of Japan and Malaysia can be found in Annex 2 to GB.268/MNE/1/1.
1 Contributions may have been fully incorporated in government replies, and in some cases copies of written contributions submitted to governments were also either annexed to the governments' replies or sent direct to the ILO by the employers' and workers' organizations concerned. 2 Both state that they have nothing new to report for inclusion in the Government's reply. 3 Written comments from the Swedish Transport Workers' Union and the Commercial Employees' Union were highlighted in the LO's contribution.
10. The 74 countries from which the Office received replies for the sixth survey constitute a good sample, as far as the origin and destination of global foreign direct investment (FDI) stocks and flows are concerned. The major countries from which multinational enterprises (MNEs) originate, and the countries in which they have their most significant levels of activity, are well represented.
11. Among the sample are 22 of the 24 States which belonged to the Organisation for Economic Co-operation and Development (OECD) prior to 1992,(9) as well as the two most recent members -- the Czech Republic and Mexico.(10) The industrialized countries account for the bulk of the world's FDI inflows and outflows. In 1992, they received 68 per cent of world FDI inflows, which totalled US$168.1 billion; and generated 89 per cent of total outflows which amounted to US$203.1 billion. In 1995, the last year covered by the sixth survey, 65 per cent of world FDI inflows which totalled approximately US$315 billion, went to the industrialized countries. Of the estimated US$318 billion world FDI outflows, 85 per cent originated from these countries. FDI stocks are concentrated in OECD member States, which are also the home countries of the world's largest 100 MNEs.(11)
12. As a group, developing countries received FDI flows amounting to US$99.7 billion in 1995. The lion's share -- US$65 billion -- went to developing countries in Asia. China alone absorbed 58 per cent of the total and six other countries (Indonesia, Republic of Korea, Malaysia, Philippines, Singapore and Thailand) accounted for 32 per cent.(12) All of the latter are in the sample, and they include four of the six "dynamic Asian economies" with which the OECD initiated informal talks in 1989, with a view to strengthening dialogue and cooperation between the two groups in certain "core areas" of economic relations.(13)
13. The sample includes four countries in Latin America which together accounted for 70 per cent of the US$27 billion inward FDI in Latin America and the Caribbean in 1995; these are Argentina, Brazil, Chile and Mexico.(14) These countries, by virtue of a combination of factors, including the size of their markets, ongoing initiatives for bringing about macroeconomic stabilization and liberalizing trade and investment, are considered to have increasingly better prospects for pulling in more private capital flows. Referred to as "dynamic non-member economies", they were included in the group of developing countries with which the OECD pursued its informal discussions during the period covered by the sixth survey.(15)
14. Also represented in the 45 developing countries in the sample are three major recipients of FDI in Africa (e.g. Egypt, Nigeria and Tunisia),(16) developing countries in which the impact of FDI is highly visible, either because of the relatively small size of their domestic economies (e.g. Mauritius and Swaziland) or the predominance of foreign capital in one or two industries, and certain economies that have great potential for attracting MNEs because of their industrial base and the market-oriented reforms under way (e.g. Zimbabwe).(17) There are countries that either have drawn, or are poised to draw, increased FDI as a result of privatization programmes (e.g. India, Venezuela); developing countries that are outward investors (e.g., Brazil, Republic of Korea, Malaysia); and six of the world's 48 "least developed countries" which are, to varying degrees, implementing policies to encourage foreign investment in export-oriented and labour-intensive industries.(18) One of these LDCs is Bangladesh -- a significant exporter of clothing, with earnings from these exports growing from US$600 million in 1990 to approximately US$2 billion in 1995. The special bonded warehouse scheme and investment in export processing zones have played a key role in the rise of this country as a major clothing exporter.(19)
15. The sample encompasses seven economies in transition. Central and Eastern Europe is a region in which inward FDI more than tripled over the period covered by the sixth survey -- from US$3.8 billion in 1992 to US$12.08 billion in 1995.(20) Respondents from this region include the Czech Republic, Hungary and Poland, which accounted for the lion's share of these capital inflows, and Estonia, Romania, Slovakia and Slovenia, which, over the period covered by the survey, gained increasing importance as recipients of FDI.(21)
16. Unlike in the past, the Office did not prepare tables comparing the responses received for previous surveys with those submitted for the present one. This is because a number of ILO member States have only joined the Organization since the last survey.(22) Consequently, they would not have been in a position to reply to previous surveys. Moreover, for the earlier surveys, countries were counted as having replied if the reports originated from governments. In addition, because of the Governing Body's decision to send the questionnaire direct to the social partners for the fifth and sixth surveys, replies may have been submitted only by employers' and/or workers' organizations in the case of certain countries. This therefore distorts the basis for making any meaningful comparison of replies to the surveys over the years.
17. The Working Group notes with appreciation that of the 36 countries from which no reports for any of the past five surveys were received (see table 3), seven submitted reports for the sixth survey.(23) It is worth mentioning that 18 of the countries which have never replied are among the world's 48 LDCs.(24) As a group the LDCs' share of total FDI into developing countries was 1.1 per cent between 1992-94, and they are hosts to very few, if any, MNEs.(25) This would no doubt largely explain their relatively low participation in the surveys.
Table 3. Countries from which the Office received no replies from governments,
employers' or workers' organizations for any of the six surveys
|Africa: Angola, Burkina Faso, Equatorial Guinea, Guinea, Libyan Arab Jamahiriya, Mali, Morocco, Niger, Sao Tome and Principe, Senegal, Sierra Leone, Somalia, Sudan, Togo, Zaire (total: 15)
Americas: Honduras, Paraguay, St. Lucia (total: 3)
Asia: Afghanistan, Islamic Republic of Iran, Lao People's Democratic Republic, Mongolia, Nepal, Saudi Arabia, Solomon Islands, United Arab Emirates, Yemen (total: 9)
Europe: 1 Bulgaria, Yugoslavia (total: 2)
1 Account not taken of the situation following the dissolution of the USSR.
18. The Working Group notes with regret that there were countries from which governments and/or employers' or workers' organizations replied to the fifth survey, but not to the sixth (see table 4). In addition, certain significant recipients of FDI (e.g. China) were unable, for various reasons, to reply to more than one set of questions. Others (e.g. South Africa) which have tremendous potential for attracting increasing numbers of MNEs and are already emerging as key outward investors in a given subregion, were unable to reply.(26) There are other developing countries and economies in transition from which respondents were not in a position to submit reports for the sixth survey because activities by MNEs in these countries are either negligible or non-existent (for details see: GB.268/MNE/1/1, Annex 3).
Table 4. Countries from which governments, or employers' and workers'
organizations replied to the fifth survey but not the sixth
|Africa: Benin, Botswana, Burundi, Central African Republic, Mozambique, United Republic of Tanzania, Uganda
Americas: Bolivia, El Salvador, Jamaica, Panama, Peru, Suriname*
Asia: Bahrain, Fiji,* Papua New Guinea*
Europe: Cyprus, Denmark, Malta*
* Only employers' and/or workers' organizations sent reports for the fifth survey (Fiji Trades Union Congress; General Workers' Union (Malta); Employers' Federation of Papua New Guinea; and Suriname Trade and Industry Association).
19. For the most part, the level of detail and relevance of the information provided were satisfactory. However, because of the heterogeneity of the respondents, there were inevitably differences in the quality of the reports. The degree of specificity and the comprehensiveness of the information varied, as did assessments of the impact and implications of developments during the period under review. There were differences in the emphasis given to certain questions as opposed to others, and some respondents chose to reply to only selected questions rather than to the entire questionnaire. Further comments on the scope and content of the reports are provided in the analyses of replies to specific sections.
20. Certain governments and employers' and workers' organizations were of the view that the questionnaire was too lengthy, complex and detailed, and that it was not possible to devote the time and personnel required to prepare a meaningful report.(27)
21. To the fullest extent possible, all relevant information in reports and accompanying official documents is reflected in the summaries. Other sources of information were also used in the preparation of the report of the Working Group. In the interest of conveying accurately the emphasis that some respondents placed on certain issues, excerpts of their original comments are quoted. Where tables were provided, certain data were extracted and calculations based on those data are included in the summaries, as required. Where respondents said that they shared the governments' views, this is indicated. If this was not stated, but the information provided was similar to that in the governments' reports, the Office may have repeated some of the observations made.
22. Some respondents stated that reference should be made to a country's reports to the ILO's Committee of Experts on the Application of Conventions and Recommendations, to their responses to complaints submitted to the Committee on Freedom of Association or to previous surveys. In such cases, these sources were consulted for the preparation of the report. The Working Group wishes to note that in the case of a number of replies in which it was indicated that information provided for past surveys was still applicable, this referred to observations dating back to the fourth survey which covered 1986, 1987 and 1988. Certain respondents mentioned laws that were passed, as well as policies and programmes initiated in 1996. Where this was the case, the summary of the reports states that during the period covered by the survey, work on these laws, policies and programmes was undertaken. In this way, they were not disregarded, but neither were they highlighted in a survey to which they are not relevant. A number of responses to questions pertaining to paragraphs 1-7 and 8-12, contain information which has a bearing on subjects discussed in other sections of the report. Consequently information was often drawn from these responses when preparing the analysis for other sections. In other cases of similar overlapping this procedure was also used.
(1) Have any of the activities of MNEs given rise to conflicts with national policy objectives and with the interest of the workers? If so, please explain.
(2) In an endeavour to further the aims of the Declaration, have any new laws been promulgated, policy changes made or action taken since the last survey to which you replied?
(3) Have any difficulties arisen for any of the addressees of the Tripartite Declaration in their attempts to respect its principles? If so explain.
No. of respondents: 62 governments, 37 employers' organizations and 25 workers' organizations. Total: 124.
23. Most respondents were of the view that the activities of MNEs had not conflicted with national policy objectives nor with the interests of workers. None the less, in the replies to the question concerning the application of the Declaration, some of those respondents, and others, reported cases in which the addressees of the Tripartite Declaration sometimes had difficulties in respecting the principles of this instrument, particularly with regard to workers' interests.
24. The reports generally emphasized the positive impact of MNEs on host economies and the policy reforms that were being made by different governments to give a fillip to inward FDI. There did not appear to be many major differences between the policies and practices of MNEs and national policy objectives. Governments generally perceived economic globalization as opening up possibilities for attracting MNEs, since different parts of the production process could be divided up and located in countries offering the best possibilities for cost and efficiency gains. Private foreign participation in state-owned enterprises (including utilities), and in massive infrastructural development projects, constituted another major national policy objective, for the attainment of which MNEs were expected to play a key role. Most respondents emphasized the actual and potential benefits of foreign direct investment (FDI). In particular, those from the developing regions and Central and Eastern European countries (CEECs) accorded great importance to attracting MNEs in order to diversify their economies, stimulate export-oriented industrialization and increase their share of world FDI flows. Job creation in both labour-intensive and higher value added activities, and the strengthening of technological capabilities in different fields, were other areas in which enterprises with foreign capital were expected to make a significant contribution.
25. Some respondents expressed concerns about the extent to which the activities of MNEs were consistent with national policy objectives. In one case it was reported that in the event of labour disputes, certain MNEs (i.e., those producing mainly for export) paid little heed to national policy objectives. In addition, since decisions affecting those companies were usually made overseas, it was difficult for local management to harmonize their policies with those of the host country.(28) The degree to which MNEs shared the social concerns of the host country was called into question by one respondent,(29) while another was of the view that their activities were always incompatible with national policy objectives and workers' interests.(30) In another context, the policies of MNEs with respect to the pricing of certain products sold in the host country and their persistent demands for price increases, were said to have conflicted with the government's policy on prices and controlling inflation. However, the government of the country concerned stated that MNEs' policies did not conflict with national policy objectives.(31)
26. When it came to the question of the effects of MNEs' activities on workers' interests, there were three areas in which they were said either to have caused difficulties, or to be potential sources of problems. They essentially concerned the right to organize and collective bargaining, labour-management consultations and security of employment.
27. In certain countries the incidence of labour-related problems in MNEs was found to be similar to those in comparable large companies or in locally owned enterprises.(32) However, MNEs had particular characteristics that drew more attention to the effects of their practices as opposed to those of other enterprises. One of those was the global scope of their operations which would explain the apprehensions in certain quarters about their possible relocation to countries offering better advantages in the event that conditions in the host country changed. Another feature was their decision-making structure and procedures which sometimes limited the issues on which local management could hold consultations and make decisions. The fact that host country governments and workers generally had high expectations about the positive effects of MNEs, should not be discounted since it inevitably influenced their assessment of the actions of MNEs. Many believed that MNEs should observe not only the same labour standards as comparable local enterprises, but that, ideally, they should introduce higher norms in line with those applied in the home country. As a result, it was not unusual for a respondent to point out that some MNEs applied lower standards than those in the home country with respect to wages and labour relations.(33) The fact that the standards either were or might have been in line with national requirements, seemed to be of less importance than the fact that they were not comparable to, or the same as, those applied in the country of origin. Another factor that shaped perceptions of the impact of MNEs on host countries was the commitment of most governments to increasing private foreign capital inflows. It was argued that such interest influenced their approaches to dealing with labour problems involving MNEs.(34)
28. The exercise of freedom of association and collective bargaining were said to be under threat in certain countries. There had been cases of new management boards of companies with foreign participation attempting to have the statutes and structures of trade unions changed,(35) enterprises with unionized staff being closed after their acquisition by new owners,(36) and enterprise unions being promoted, posing a challenge to traditional trade union structures.(37) One respondent reported that pressure had been exerted on the host country government for it to guarantee an "anti-union" environment. However, according to the government's report, the formation of national unions, except in the textile and electronics industries, was encouraged. There were state-based unions in the textile industry and enterprise unions in the electronics industry. These unions could affiliate to national labour centres.(38) The dismissal of unionized workers, threats to relocate if workers joined or set up unions, as well as other practices limiting the exercise of freedom of association and collective bargaining, had reportedly taken place in different countries.(39) One respondent was of the view that the social policies of MNEs were increasingly infringing on workers' rights.(40)
29. The situation with respect to collective bargaining was another cause for concern in certain countries. One complaint was that unions found themselves in a very weak bargaining position vis-à-vis foreign enterprises. Negotiations sometimes began with management proposing a complete closure of operations, or calling for a reorganization of local companies that they wished to acquire.(41) Others were unwilling to negotiate with unions.(42)
30. When it came to consultations, there were contexts in which dialogue between labour and management was uncommon and others in which they were non-existent.(43) Even where there were well-established consultation procedures, certain MNEs found it hard to adapt to the local practice,(44) and discussions were sometimes rendered difficult because local management had to report to the parent company and get approval before being able to decide on important matters raised by local employees.(45)
31. Concerns about job security had intensified during the period under review, because of the increasing privatization of local enterprises, including SOEs, the globalization of manufacturing and services, and intense competition among countries to attract MNEs. Rising labour costs and the introduction of labour-saving technologies were seen as making workers more vulnerable to possible redundancies,(46) and in certain cases, the very fact that MNEs could relocate to take advantage of differences in productivity, skills and labour costs, was enough to provoke apprehensions about relocation and a resultant loss of jobs, even before they had taken place.(47) Certain respondents reported a sharp rise in dismissals and the number of workers having to take early retirement during the period under review.(48) Atypical forms of employment in both local and foreign companies had grown to the point where 35 per cent of the working population in one country was said to have been in "precarious employment".(49) In certain cases enterprises did not act in keeping with the principles of the Tripartite Declaration. Two respondents indicated that certain enterprises had closed their operations without giving advance notice to workers and without honouring their debts to the government or workers.(50) In another case it was reported that while on the whole MNEs respected the national labour legislation, problems had arisen with regard to informing workers about economic, social and financial issues in cases of the closure or restructuring of enterprises, and certain MNEs also had difficulties in adapting to local practices as regards social dialogue and consultations. However, those problems were by no means peculiar to multinationals.(51) Moreover, as a result of subcontracting, workers in certain countries were unable to identify their employers in the event of grievances,(52) which might involve the question of responsibility for the payment of benefits in the event of termination of employment at the initiative of the employer.
32. During the period under review, a considerable number of countries adopted laws and policies dealing with investment liberalization, social policy and labour issues. However, it would be difficult to argue convincingly that they were adopted with the aim of furthering the objectives of this voluntary instrument, since decisions to pass legislation and elaborate policies in any given field are generally made in response to social, economic and political developments in both domestic and external environments. Laws and policies have also been adopted in countries where the Tripartite Declaration was said to be not well known. Laws have also been passed in response to developments within regional groupings to which countries belong (e.g., the European Union, the North American Free Trade Agreement or the Caribbean Community and Common Market). What can be said is that the laws and policies were generally of relevance to the Tripartite Declaration. Consequently, to the extent that they were respected, the changes in practices that they would have engendered, would have had the effect of furthering the aims of the Declaration.
33. There were reports which contained information that illustrated the important role of MNEs in certain countries,(53) and gave an overview of the regulatory and policy reforms that had been either initiated or strengthened, with a view to boosting FDI during the period under review. The widespread interest in creating favourable conditions for inward FDI was reflected in the passing of legislation to facilitate foreign private participation in various sectors of the economy, including those that had been traditionally reserved for the State or local private investors. The laws provided for the following: the lifting of restrictions on the repatriation of capital and on foreign exchange transactions in general; foreign ownership of assets including in the financial sector and real estate; privatization of public utilities and other industries once considered to be of great strategic importance (e.g., railways, petroleum industry, telecommunications, and air transport); the protection of intellectual property rights; and the establishment and expansion of export processing zones and similar export-oriented facilities.(54) Most countries set up institutional arrangements to ensure that investment-related administrative procedures would be streamlined to facilitate the implementation of legislative and policy reforms.
34. In the field of labour, many countries either amended existing laws, enacted new ones, or began considering draft legislation during the years covered by the survey. The introduction of flexibility was said to be the aim of these initiatives in the case of one country.(55) In others, the intention was to update and amend certain laws to make them more responsive to recent social and economic developments and to concerns expressed by the social partners. However, there was one observation that the general policy of encouraging inward FDI did not address the social dimensions of those developments.(56) During the period under review there were reports of labour codes having been amended and new codes being enacted.(57) Specific laws dealing with the following were also passed: occupational safety and health;(58) paid sick leave, pensions, and other social security benefits;(59) equality of opportunity and treatment;(60) employment, including part-time and temporary workers;(61) and different aspects of labour relations (e.g. trade union rights, collective bargaining and workers' participation).(62) It was encouraging to note that in certain countries amendments to the legislation or the passing of new laws were considered to have brought about an improvement in the different areas covered, and that policies and programmes had been instituted to strengthen labour administration procedures and supervisory mechanisms.(63) In others, plans to amend policies to provide more social protection for contract labour were being considered.(64)
35. The laws that were introduced or amended covered all areas dealt with in the Tripartite Declaration and the relevant international labour standards referred to in the annex and addenda thereto. In the case of EU countries, the passing of new laws was partly in response to the adoption of Council Directives (e.g., concerning the establishment of works councils in the social and labour fields). NAFTA countries (the United States, Canada and Mexico) undertook commitments to ameliorate working conditions and living standards, and to protect and improve workers' rights in keeping with the "Agreement on Labor Cooperation", while within the Caribbean Community and Common Market, initiatives to harmonize industrial relations standards were said to be under way.(65) On the whole, the objectives of those initiatives were consistent with the principles of the Tripartite Declaration.
36. Except for those EPZ host countries with legislation allowing export-oriented enterprises to observe different labour standards from those that applied to the rest of the country, locally owned and foreign enterprises had to respect the national labour laws in all other contexts. However, in recognition of particular characteristics that distinguished MNEs from local companies, several respondents took special initiatives to address issues that could not be dissociated from the structure and global scope of MNEs' operations. In the normative field, there were examples of governments lifting regulations that restricted workers in EPZs from forming and joining workers' organizations of their choice,(66) and issuing legal provisions dealing specifically with labour standards in foreign enterprises.(67) There was an example of changes having been made with respect to notification requirements in the event of dismissals and the payment of special severance pay to those concerned, where labour was being displaced because of the introduction of, or changes in, production technologies. While MNEs would certainly not have been singled out for the application of those new provisions, they were likely to be the most affected, since they tended to be the initiators of such changes. Moreover, the respondent did mention that rising labour costs and the use of labour-saving technologies in MNEs had led to job displacement.(68) In EU countries, laws were passed to incorporate the provisions of the Council Directive (of the EU) concerning the establishment of workers' councils and information and consultation procedures, which were of specific relevance to MNEs. Certain non-EU countries within Europe also passed legislation based on the Council Directive, with the aim of improving information and consultation practices in all enterprises, including MNEs.(69) Concerns about the protection of workers' rights in situations of changes in the ownership of enterprises due to mergers and acquisitions, led to the creation of a special committee in one OECD country, to study the labour-related issues arising from such changes, and to make recommendations in this regard.(70) Another noted that efforts had been made to improve the framework governing MNEs' activities and their effects on workers.(71)
37. The setting of standards was not the only approach taken to address labour-related issues that had either arisen or were likely to surface in foreign enterprises. The setting up and strengthening of institutional arrangements, the provision of advisory services and the dissemination of information were other approaches. In one case a special unit was set up within the Ministry of Labour to monitor labour-management relations in MNEs.(72) In another, a commission set up to monitor investors' compliance with all the applicable laws and regulations (including those pertaining to labour) was expected to enable the competent authorities to see the extent to which MNEs' activities were in keeping with the principles of the Tripartite Declaration.(73) Certain major home country governments either drew up, or amended guidelines to encourage MNEs to adopt good social policies and practices in their overseas operations.(74) Codes of conduct and guidelines for the same purpose, were issued by individual MNEs,(75) and certain employers' organizations.(76) Manuals on appropriate ways of dealing with labour matters in different host countries were distributed, and so too were the results of research on industrial relations commissioned from employers' and workers' organizations in those countries.(77) There were also examples of governments making available copies of codes of practice and concise publications highlighting national laws and practices, to all enterprises, including MNEs.(78) Access to such information would have also been facilitated through membership in local employers' organizations. All of those initiatives served to encourage enterprises to act in accordance with national labour standards which were generally in line with the principles of the Tripartite Declaration.
38. The objectives and coverage of initiatives for encouraging good social practices on the part of local and foreign enterprises demonstrated both the timelessness and universality of the principles of the Tripartite Declaration. Almost two decades after it was adopted, this instrument continues to be of relevance to the interests of home and host country governments, employers, workers and their representative organizations, and MNEs. For the most part, the areas covered by the Tripartite Declaration were reflected in codes or guidelines adopted by governments, employers' organizations or individual enterprises.(79) In certain cases, the issues of child labour and forced labour have also been addressed, in response to mounting concerns articulated in different international governmental and non-governmental fora, about the situation in some offshore export-oriented enterprises and in some local firms with which MNEs have subcontracting arrangements.(80)
39. Despite the political, technological and economic changes that have marked the world since 1977, the principles of the Tripartite Declaration and the areas to which they apply, are still regarded as being fundamental for optimizing the mutual gains that could be derived from economic globalization. On the whole, the effectiveness of this non-binding instrument was not called into question. Its voluntary nature was mentioned by only four respondents, three of which were of the view that it should remain as it was.(81) There was only one workers' organization which noted that the effectiveness of the Tripartite Declaration could be enhanced if it were made into a binding and enforceable instrument.(82) Another workers' organization called for the elaboration of what it referred to as a "new document" to improve collaboration between governments and the social partners of home countries, with the aim of stopping "flagrant violations" of laws, especially in developing regions. However, no details on the nature of the proposed document were provided.(83)
(1) Are the principles of Conventions Nos. 87, 98, 111 and 122 and Recommendations Nos. 111, 119 and 122 applied by the government?
(2) Have consultations been held between multinational enterprises and government and/or national employers' and workers' organizations concerned, in order to harmonize MNE activities with the development priorities and social aims of the host country? If not, why not?
No. of respondents: 60 governments, 29 employers' organizations and 23 workers' organizations. Total: 112.
40. The principles of Conventions Nos. 87, 98, 111 and 122 and those of their corresponding Recommendations were respected in many countries, including those which had not ratified the Conventions. Moreover, certain respondents indicated that where the instruments had not been ratified, the possibility of doing so in the future was being considered.(84) Freedom of association, the right to organize, and equality of opportunity and treatment in all aspects of life and work, were guaranteed under the national constitutions and labour codes of a number of countries.(85) In one case there was a national interprofessional agreement on trade union rights which complemented the provisions of the Labour Code. In addition, collective or enterprise agreements often contained clauses dealing with those subjects.(86) Where they did not already exist, specific laws relating to the exercise of trade union rights,(87) and protection against non-discrimination in employment, had been either enacted, amended, or were under consideration.(88) Progress with respect to the protection of workers' rights had been made in countries where the revision of the labour code had effectively removed former obstacles to the exercise of workers' rights,(89) while in others, improvements were on the horizon with the consideration of draft laws for strengthening procedures for the registration and functioning of trade unions, as well as for collective bargaining.(90) All enterprises, regardless of their origin and ownership were subject to national law and practice. While on the whole they were said to comply with the legal requirements, there were none the less concerns, particularly on the part of some workers' organizations, with respect to the non-application of standards concerning freedom of association, the right to organize, collective bargaining, and non-discrimination in employment.
41. There were examples of certain national laws being inconsistent with the principles of Conventions Nos. 87 and 98,(91) and in the case of certain EPZ host countries, legislation for promoting investment in the zones contained provisions restricting workers from forming and joining organizations of their choice for the purpose of defending their interests.(92) There were reports of anti-union discrimination and the hindering of collective bargaining,(93) sometimes in both local and foreign enterprises. The views of trade unions were said to be disregarded,(94) company unions were promoted to the exclusion of other forms of workers' organizations, and applications to form national unions or trade union federations representing workers in particular industries were reportedly rejected in certain cases.(95)
42. Even in countries where the exercise of workers' rights was guaranteed by law, undesirable practices were said to have been on the rise.(96) Weak unions, ineffective supervisory and enforcement mechanisms and the anti-union stance of certain governments, allegedly interacted to create those drawbacks which workers sometimes faced in their efforts to exercise their rights.(97) In certain cases complaints had been submitted to the ILO.(98)
43. Details of the experiences of governments and the social partners with respect to the application of Conventions Nos. 87 and 98 were given not in the replies to this section but in those concerning industrial relations (paragraphs 41-47, 48-55) and Part IV (with reference to export processing zones).
44. The principle of non-discrimination in employment, which is contained in Convention No. 111, was generally promoted in national legislation, and considerable efforts to encourage its application had been made in a number of countries during the period under review. In this section of the report (paragraphs 8-12), only one respondent mentioned that discrimination on the basis of gender persisted, and suggested that workplace inspections needed to be reinforced, and information disseminated, in order to raise awareness of the problem of gender-based discrimination.(99) With respect to Recommendation No. 119 concerning termination of employment at the initiative of the employer, several respondents indicated that its provisions were taken into account in national legislation. Only in two cases were there expressions of dissatisfaction in this regard. One workers' organization noted that the principles of this Recommendation were not applied.(100) Another mentioned discrepancies between certain provisions of the Workers' Statute and the principles of the Recommendation, in that workers who had been absent because of illness or injury and who had used up 20 per cent of the legally prescribed sick leave within two consecutive months, might be dismissed with the union having no say in the matter.(101) The replies to paragraphs 21-23 offered better insights into the degree of observance of the principle of equality of opportunity and treatment in local and foreign enterprises.
45. The principles of Convention No. 122 (employment policy) were taken into account by a number of countries. Where that instrument had been ratified, national laws and policies would have been brought into line with its principles. Certain States that had not ratified the Convention were none the less reported to be implementing policies that were consistent with its provisions. Where difficulties were mentioned, they were said to be caused by delays in implementing policies for promoting industrial development, training and labour market reforms, and by the ease with which enterprises could restructure their operations and reduce the workforce.(102) The severe incapacity of the employment office to meet the demands for employment in one country was also highlighted.(103) It was argued that a more active employment policy was required in order to curb high unemployment,(104) and that the government needed to promote such policies where they were "virtually non-existent".(105)
46. Special measures had been adopted or were being contemplated in an endeavour to respond to the challenges of rising unemployment. In certain contexts, initiatives had been taken to share available work among more people by reducing hours of work and increasing part-time and temporary employment.(106) Employment policies had been decentralized, and steps taken to promote industrialization, the creation of small and medium-sized enterprises, training, the harmonization of manpower development programmes and the expansion of state-run employment services.(107) In order to create job opportunities for disadvantaged groups, vocational training and skills development programmes had been strengthened in certain countries.(108)
47. As regards consultations involving representatives of MNEs, host country governments and national organizations representing the social partners, they are considered to be one of the ways in which efforts could be undertaken to make the activities of foreign investors consistent with the development priorities and social objectives of the countries in which they operate. Discussions of this kind, both at the initial stages of investment and after having set up operations, are expected to encourage transparency and the search for mutually acceptable ways of accommodating different interests where they exist.
48. Several respondents indicated that consultations with a view to harmonizing MNEs' activities with the development priorities and social aims of host countries had taken place. While not all of them specified at which stage the discussions were held, the reports suggested that in some cases they were held after the enterprises had gone into operation. Certain respondents did not have information as to whether or not such meetings took place.(109)
49. In certain countries there were laws and regulations providing for such dialogue,(110) or obliging foreign companies to make documents with information about the enterprises publicly available, before starting their activities.(111) In others, institutions that processed and approved applications from investors and dealt with other investment-related matters, had a mandate that included informing foreign entrepreneurs of the host country's social and economic development goals.(112)
50. Some countries had arrangements to facilitate consultations on social and economic questions at the industry, sectoral and national levels, in which MNEs, through their membership in employers' or industry-specific organizations, participated.(113)
51. Consultations usually involved government officials of different ministries and departments dealing with trade and investment matters. For example, in one country there were different tripartite committees and councils through which representatives of MNEs were able to participate in consultations on a wide range of labour-related issues.(114) In most cases meetings between MNEs, government officials and/or representatives of employers' and workers' organizations took place after enterprises had begun operating. However, the regularity with which they were held varied from one country to another. There were cases in which the parties met only in times of crisis and others where consultations were held either occasionally or fairly often.(115) Details of the experiences of respondents with respect to consultations after the establishment of companies were provided in the replies to questions concerning paragraph 56.
52. In the absence of established mechanisms for consultations either before or after the operations of MNEs came on stream, representatives of certain multinationals were reported to have taken the initiative of holding occasional discussions with local businesses. The aim was to ensure that their activities were in keeping with national labour laws and the social policies of the countries concerned.(116) Trade unions were also known to have initiated consultations with representatives of MNEs in cases where the local business partner had failed to do so. In the country in question, most MNEs were said to be willing to engage in such dialogue, even if the parent companies were known to be reluctant to deal with unions.(117) There were examples of individual senior government officials meeting with prospective investors to discuss matters which included social and labour questions.(118) While there were no formal requirements for consultations in certain countries, it was noted that nothing prevented the parties from engaging in such discussions if they considered it necessary.(119)
53. Differences in the approaches to consultations gave rise to complaints in some quarters. There were reports that consultations of the kind referred to in paragraph 10 of the Tripartite Declaration did not take place.(120) Where a respondent's statement contradicted another originating from the same country, one can surmise that not all the social partners might have participated in talks with foreign investors.
54. One argument for not holding consultations was that all enterprises including MNEs were subject to the same national law and practice, which made special arrangements unnecessary.(121) It was further noted by certain respondents that the economic information required for making investment decisions was available to the public from government sources. Implicit in those observations, together with the statement that firms operating in a free market system responded to market forces when making investment decisions, was the idea that there was no need for consultations of the kind recommended in the Declaration.(122)
55. Another observation was that consultations, where they were held, did not necessarily involve workers' representatives,(123) and that in certain countries where workers used to participate in them, the situation had changed. For example, the workers' organization of a CEEC noted that whereas in the early phase of the country's privatization programme workers had the right to be informed about plans to sell off enterprises, there had been recent amendments to the legislation, eliminating that right.(124) During the period under review, there was a breakdown in the consensus with regard to the social reforms that should be undertaken in that country. That led to the suspension of social dialogue within the framework of the tripartite council, which in turn brought into question the government's commitment to taking part in broad social consultations.(125)
56. The focus of consultations was another area in which differences of interest had become apparent. According to one respondent there was a tendency for the consultations to focus on the interests of companies rather than on the host country's economic and social development objectives.(126) It therefore meant that the discussions did not provide an opportunity for bringing divergent interests to the fore, nor did they lay a basis for seeking appropriate ways of reconciling such divergences where they might have existed.
57. For many host countries, the consultations recommended in the Tripartite Declaration might be very useful since they could constitute an important means of obtaining information on the MNEs concerned which would help in ascertaining whether their planned activities would be compatible with the country's development priorities and social aims.
Paragraphs 13-20 (Employment promotion)
(1) Please describe action taken by MNEs to increase employment opportunities and standards and to cooperate with government and workers' organizations in combating unemployment.
(2) In order to keep their manpower plans in harmony with national social development policies, do MNEs undertake appropriate consultations before starting operations?
(3) What steps have been taken by multinational enterprises to give priority to the employment, occupational development, promotion and advancement of nationals employed by them?
(4) Have multinational enterprises contributed to the local development/use of appropriate technology and to technology capable of generating both direct and indirect employment? If so, please cite any examples.
(5) What has been the policy and practice of MNEs with regard to the use of local raw material, local manufacture of parts or local processing of raw materials?
No. of respondents: 58 governments, 27 employers' organizations and 20 workers' organizations. Total: 105.
58. Notwithstanding the current levels of unemployment in a number of countries and the concerns expressed about the need to promote policies to stimulate job creation, not many respondents provided specific information on the policies that might have been implemented to promote employment by MNEs.
59. There was widespread acknowledgement that MNEs had made a significant contribution to increasing employment opportunities and standards and promoting economic growth and development during the period under review. Direct employment was created through greenfield investment, the acquisition of state-owned enterprises (SOEs) and the expansion of activities in different industries. Indirect employment opportunities were generated through linkages with SMEs and other enterprises, subcontracting arrangements and the use of raw material, components, goods and services from local sources. MNEs also played a critical role in training, upgrading the skills of local workers, and introducing new management practices and advanced technologies -- all of which have had some impact on employment.(127)
60. Notwithstanding the positive assessment of MNEs' contribution to the host economies, it was argued by some respondents that actions taken by MNEs had resulted in widespread layoffs, which aggravated the general unemployment situation.(128) The acquisition of SOEs by foreign investors had led to job losses as a result of the restructuring of those newly privatized enterprises.(129) Layoffs also occurred as a result of mergers and acquisitions of privately owned enterprises, and the reorganization and rationalization of production and marketing arrangements in response to concerns about increasing productivity, efficiency and competitiveness. However, in the case of newly privatized companies, it may be argued that in the absence of foreign investment, some of those enterprises might have been closed, thereby aggravating the unemployment situation even further.
61. MNEs were generally subject to the same legal provisions concerning employment that applied to domestic enterprises and in a number of countries they were said to have cooperated with governments in implementing their labour market policies. Employment opportunities and standards did not seem to differ between the two groups.(130) The role of MNEs in the labour market seemed to be largely positive, but in the absence of any quantitative or qualitative information in this regard, it was difficult for certain respondents to determine precisely the employment impact of MNEs and whether or not they had taken any particular measures to increase employment opportunities and standards.(131)
62. In 1994, MNEs directly employed 73 million persons worldwide, representing about 3 per cent of the world's labour force. According to conservative estimates, MNEs accounted for 150 million direct and indirect jobs.(132) According to the information provided, MNEs took note of governments' employment policies and played an important role in creating jobs in a number of countries. The following examples are illustrative. In one case they had created, up to the last year covered by the survey, direct employment for 100,000 persons and the same number of indirect jobs.(133) In another, they employed 35.9 per cent of the workforce in 1992, and their involvement in infrastructural development projects was expected to contribute to job creation and the upgrading of skills and know-how in new fields.(134) In that same year, minority foreign-owned (less than 49 per cent) MNEs accounted for 7,926 part-time workers and 30,926 full-time workers in another country, while enterprises with 50 per cent or more foreign capital created jobs for 28,773 part-time and 132,707 full-time employees.(135) A number of respondents provided details of the size of the workforce in MNEs in both home and host countries. According to the data, those with relatively medium-sized and small operations were significant job creators.(136)
63. In several countries MNEs were said to have undertaken appropriate consultations with the competent authorities in accordance with national law and practice.(137) In some cases, even though there were no legal obligations for them to hold such consultations prior to commencing operations, many MNEs held discussions with the parties concerned to obtain information about local practices, industrial trends, the skills available and the manpower plans of the host country.(138) There were none the less certain respondents which indicated that MNEs either never, or rarely, engaged in appropriate tripartite consultations prior to setting up their operations.(139)
64. While certain host countries had specific regulations pertaining to the employment, occupational development, promotion and advancement of nationals in MNEs,(140) in others, the employment of non-nationals in all enterprises, including MNEs, was said to be guided by existing immigration laws.(141) The experiences with respect to the employment and promotion of nationals appeared to have been positive in many countries. Some MNEs provided technical, professional and, where necessary, language training for local employees, thereby preparing them to assume greater responsibilities in those enterprises.(142) However, it was argued that MNEs offered enterprise-specific training which was not always transferable to jobs elsewhere.(143) There were also instances in which they demonstrated a preference for foreign workers by stipulating requirements which could not be met by nationals.(144) Foreign citizens were said to be employed in critical positions, with the understanding that they would be gradually replaced by nationals.(145) However, one respondent indicated that when the time came to transfer the responsibilities to local employees, there was, in certain cases, a reluctance to do so. That was attributed to "mistrust" and there was the perception that regardless of the technical competence acquired by local employees, there were limits to the levels of responsibility which they would be given.(146) The comments suggested that the difficulties that had arisen, concerned primarily senior technical and managerial positions.
65. Certain reservations were expressed with respect to having policies under which priority was given to the employment and promotion of nationals of host countries. In one case it was argued that such policies and practices might be discriminatory and therefore inconsistent with the provisions of paragraph 21 of the Tripartite Declaration.(147)
66. The record as regards MNEs' contribution to the creation of backward and forward linkages varied considerably. In certain countries, MNEs subcontracted some of their activities to local enterprises, including those with small-scale operations.(148) In others, they had contributed to the development of supplier industries, by establishing arrangements with SMEs for the supply of goods and services. Moreover, certain local enterprises had developed a capacity to provide high-quality inputs required by foreign enterprises.(149) The activities of MNEs and the establishment of linkages with local SMEs were expected to contribute to indirect employment in the latter, which had a high profile in the domestic economy of certain countries -- e.g., 98 per cent of all firms in manufacturing, in one case.(150) In an endeavour to create a favourable environment for strengthening business relations between foreign and local enterprises, there were governments which introduced initiatives to encourage local sourcing.(151) Not surprisingly, MNEs in natural resource-based industries and those involved in agro-based industries (e.g. aluminium, fertilizers, steel, petroleum and food and drink) were more likely to use local raw materials than other enterprises.(152)
67. Notwithstanding the encouraging reports about linkages that had been established between foreign and local enterprises in certain countries, there were cases in which the experiences were said to be disappointing. Certain respondents reported that MNEs had no policies on, or had adopted only limited measures regarding local sourcing, the manufacture of parts and the processing of raw materials, nor did they contribute to the development and use of appropriate technology.(153) Several factors may have accounted for that: the types of activities in which the MNEs were involved; the capacity of local enterprises to fulfil demands for goods and services, taking into account considerations of quality, cost and timely delivery; and the existence and effectiveness of information channels for making known the requirements of potential buyers and that which is available from local suppliers. In the case of one EU country, it was reported that as much as 90 per cent of inputs used by MNEs might originate from enterprises within the group. However, some of them were based in the country in question.(154) Not all respondents were convinced about the appropriateness of governments taking initiatives to promote linkages between MNEs and local enterprises. One government was of the view that actions of that kind could be perceived as encouraging the imposition of local content requirements, which would be contrary to the multilateral agreement on Trade Related Investment Measures (TRIMS).(155)
Paragraphs 21-23 (Equality of opportunity and treatment)
(1) Does government policy promote equality of opportunity and treatment in employment and does the practice by multinational enterprises comply fully with the letter and spirit of such policy?
No. of respondents: 59 governments, 28 employers' organizations and 19 workers' organizations. Total: 106.
68. In general, respondents agreed that efforts were made to respect the principles of equality of opportunity and treatment in employment, and that MNEs usually applied the national standards in this regard. Many provided substantial information on national policies and programmes in this field.
69. On the whole, governments pursued policies designed to promote equality of opportunity and treatment in employment, in keeping with the principles of the Conventions and Recommendations mentioned. In some countries laws were enacted or amended during the period under review. They were designed to counter discrimination on any grounds, including on the basis of race or against minority groups and women, sexual harassment and gender-based wage disparities. Maternity-related issues and the protection of part-time workers were also covered by the legislation.(156)
70. Policies were adopted and programmes implemented, to put into effect anti-discrimination legislation and provide support to disadvantaged groups. Various incentives were offered and programmes put in place to encourage the hiring of women in professional and other positions where they were under-represented, to improve their representation in senior positions (on the basis of merit), and to enable their re-entry into the labour market after a period of prolonged absence. Some of those initiatives included the identification and removal of barriers that women faced at work and in public life, the provision of child care for children of school age, and the encouragement of flexible working arrangements. Legislation was also introduced to provide for longer maternity leave, automatic protection against maternity-related dismissal, as well as the protection of the identity of employees involved in sexual harassment cases.(157) Part-time employment was another area in which new regulations were adopted with a view to guaranteeing part-time employees the same protection as that given to full-time workers.(158)
71. Legislation to promote equality of opportunity and treatment was not always perceived to be the solution to gender inequalities. The appropriateness of such legislation was called into question by an employers' organization, which noted that while the principle of promoting women at work was respected and the responsibility of enterprises was recognized, discrimination against women had social origins that could not be dealt with by imposing legal obligations on enterprises.(159)
72. The regulatory framework generally applied to all enterprises, regardless of their origins, and there seemed to be a widespread view that the prescribed standards were respected by MNEs. Notwithstanding efforts to eliminate discriminatory practices, there were problems in certain countries,(160) and governments' efforts to stamp out discrimination were sometimes said to have been undermined by the practices of MNEs.(161) Various examples were given. In one case women doing the same work as men were said to earn about one-third less than their male counterparts, and when new technologies were introduced, low-skilled workers were dismissed, and no efforts were made to train them.(162) In another, it was reported that opportunities for women to obtain jobs which were covered by collective agreements were limited, because only 29 per cent of collective agreements in MNEs either fully or partially covered part-time workers, as opposed to 49 per cent of agreements in other enterprises, and only 1 per cent of all companies (regardless of their ownership) provided child-care services.(163) One respondent was of the view that performance appraisal systems opened up possibilities for hidden forms of discrimination against women,(164) and another stated that economic difficulties had given rise to growing wage disparities between men and women.(165) Other problems mentioned were: the preference for young and middle-aged workers as opposed to those who were older;(166) discrimination against nationals in favour of foreign staff, as evidenced by the demand for special technical skills and professional qualifications from foreign institutions; and wage differentials between nationals and expatriates.(167) The absence of information on available skills in the local labour market, and subjective factors such as a lack of confidence in the capabilities of local workers on the part of certain foreign employers might explain some of the problems reported. The lack of union representation in the enterprises concerned and the weak enforcement of relevant legislation, might also have contributed to those difficulties. The political will of a certain government to implement the relevant policies and enforce the legislation in this regard was called into question by a trade union which stated that equality of opportunity and treatment was not promoted and that the government's employment policy was characterized by "discrimination based on a system of oppression and exclusion". ILO Convention No. 111 has been ratified in the country in question.(168)
73. In conclusion, most governments seemed to be fully committed to the principle of equality of opportunity and treatment and to ensuring that all enterprises, including MNEs, fully respected it, in accordance with national law and practice.
Paragraphs 24-28 (Security of employment)
(1) What role do multinational enterprises play in promoting and providing stable and secure employment?
(2) In considering changes in operations that may have major employment effects, do multinational enterprises provide reasonable notice to: (a) those employees affected; (b) their organizations; and (c) to the appropriate organs?
(3) What has been the respective role of government, multinational enterprises and national enterprises in providing income protection for workers whose employment has been terminated?
No. of respondents: 56 governments, 28 employers' organizations and 22 workers' organizations. Total: 106.
74. The responses suggested that it was difficult to evaluate the overall contribution of MNEs in promoting and providing stable and secure employment. However, a large number of respondents believed that MNEs played a significant role in that regard.(169)
75. In the reports that provided details of the employment practices of MNEs, the following were identified as having created job security: career-long employment; comprehensive remuneration policies and employee welfare programmes; avoidance of arbitrary dismissals; permanent jobs; the provision of social security benefits; and, where possible, the provision of alternative employment for workers whose jobs had been declared redundant.(170)
76. Job security for some workers was threatened by the rationalization and restructuring of large enterprises, economic concentration at the international level, relocation, outsourcing and subcontracting. Mergers and acquisitions, privatization, technological innovation and the application of new management methods were also seen as having contributed to the displacement of jobs and the rise in precarious forms of employment. In some cases, those who lost their jobs due to the relocation of enterprises had not been able to move into new ones.(171)
77. Not all respondents agreed that MNEs played a special role in providing stable and secure employment.(172) In one case the threat of relocation was considered to be "always present" in MNEs.
78. While large MNEs (more than 500 employees) still accounted for a significant share of direct employment in many countries, their new strategies, such as outsourcing and subcontracting, had generated indirect employment in SMEs, which were perceived as the "engine of expansion".(173) Those SMEs, many of which supplied goods and producer services to MNEs, were reported to account for 70 per cent of the growth in jobs; 98 per cent of the enterprises in the manufacturing sector, and 75 per cent of the foreign-owned enterprises (1993) in certain OECD countries during the period under review.(174) It is worth noting that there were differing views on the ability of SMEs to provide the type of jobs that offered job security.
79. With a few exceptions, the replies indicated that MNEs tended to comply with the requirements in the labour regulations and collective agreements relating to advance notification in the event of dismissals. A number of countries had enacted legislation requiring all employers to provide information about proposed changes to workers and their representatives, to notify affected workers about planned changes in a timely manner, and in some cases to discuss those changes with a view to finding ways of mitigating their negative effects.(175) In certain cases, the law required that certified agreements (between the employer and the relevant unions) and enterprise flexibility agreements (between the employer and employees directly concerned) must be signed, to provide for consultations on matters relating to changes in the enterprises.(176) The issue of collective dismissals and redundancies seemed to be of enough concern to warrant the amending of industrial relations legislation in some countries in order to ensure that workers and their representatives, as well as the competent authorities, would be notified in good time.(177) The concept of "reasonable notice" was defined in some collective agreements, and MNEs in which workers were unionized were guided by the relevant provisions.(178) There were countries in which employers who had not complied with the advanced notice requirements were required to pay compensation in lieu of such notice.(179) Certain countries had provided incentives to encourage employers to comply with notification provisions. For example, under the social security insurance fund in one OECD country, employers were rewarded in the form of a rebate on their lump-sum payment to the fund, if the minimum period of dismissal notice had been duly respected.(180)
80. There were reports of MNEs failing to comply with the provisions concerning advance notice and compensation in the event of collective redundancies and dismissals. Attention was drawn to a particular problem of non-compliance by MNEs with the national law in cases of the transfer of an enterprise. The non-observance related to collective dismissals, plant closures as well as information and consultation with workers regarding employment or maintenance of rights.(181) The multinational character of the enterprise in question made it difficult to negotiate a social plan or, failing that, to impose sanctions. Certain trade unions also pointed to the practice of some MNEs not giving prior notice in cases of such dismissals and the absence of possibilities for holding discussions with a view to dissuading the enterprises from taking such action.(182) In certain circumstances workers had resorted to strike action.(183) A number of countries had enacted legislation in line with ILO Recommendation No. 119, providing for income protection for workers whose employment had been terminated, regardless of the ownership of the enterprises in which they worked. Different forms of cooperation and agreements regarding compensation procedures between MNEs and workers' representatives were reported to be in place. Termination benefits that exceeded the statutory requirements were provided by certain MNEs, which had also contributed to the retraining of workers, granted early retirement instead of laying off workers, and helped some people to start their own businesses.(184)
81. There had been tripartite efforts to protect workers affected by the large-scale layoffs caused by the privatization of SOEs. The examples of two CEECs are of interest. In the first case, legislation concerning the obligation of foreign owners upon the acquisition of SOEs had been enacted, and in the second, MNEs had concluded agreements with workers' organizations guaranteeing that existing employment levels would be maintained for between one-and-a-half and two years after a change of ownership.(185) Even in cases where there was a legal void, those workers' rights could be protected. The Court of Appeal of an OECD country held that an employer may be required to pay compensation even where there were no contractual obligations to do so. In such cases, the courts would consider factors such as reasons for the redundancy, length of service, period of notice provided and the ability of the employer to pay.(186)
82. Contributory and non-contributory social security and unemployment insurance schemes were identified as the main sources of funding for compensation packages. Certain governments had implemented special programmes to supplement those, and there were provisions for assisting those dismissed for economic, structural or technological reasons.(187) Some of those packages included vocational and preparatory training, wage subsidies for new employers hiring redundant workers, and assistance to help workers relocate to regions with better job opportunities. In one country, workers in the textile, clothing and footwear industries, passenger motor vehicles, as well as railways, were the main beneficiaries of such adjustment packages during the period under review, and another, covering workers in forestry and related industries, was launched in the last year covered by the sixth survey.(188)
83. Not in all cases did governments, MNEs or national enterprises provide income protection for workers whose employment had been terminated.(189) One respondent was of the opinion that MNEs had the same approach to dealing with workers' incomes as national enterprises -- i.e., when there were changes in operations, they tried by all means to pay the least possible, without considering the situation of those concerned.(190) In the case of one country where the minimum severance pay was 30 days' wages for each year's service, and where the system, based on seniority, provided for the payment of compensation in lieu of notice, it was argued that such requirements could have a negative effect on the overall capacity of MNEs to provide stable and secure employment.(191)
(1) Does training provided by MNEs also meet the needs of the development policies of host countries?
(2) Are there national programmes (including funds) aimed at enhancing/encouraging human resource development?
(3) If so, do national and multinational enterprises support and actively participate in such programmes? What role do they have in the process of implementation?
No. of respondents: 55 governments, 32 employers' organizations and 22 workers' organizations. Total: 109.
84. Some respondents provided information relating only to the questions, while others described in detail their overall human resources development programmes, which included vocational guidance and training, and the different means by which they were implemented. Most of the replies came from governments, which can be explained by the fact that as policy-makers, they were best placed to give an overall assessment of the degree to which MNEs' activities were in line with national development objectives and to give an overview of national training programmes. Where there were reports from employers' organizations, they usually shared the governments' views, while the observations of those workers' organizations which responded, tended to be mixed.
85. On the whole MNEs were said to comply with the national development policies of host countries, even though the training that they provided was primarily intended to meet their own requirements. There were examples of countries in which MNEs were said to have played a critical role in fulfilling local manpower needs, and certain respondents attributed the attainment of national economic development policies to the training initiatives of those enterprises.(192) Skill formation and development, particularly among technical, professional and supervisory personnel, and improved career prospects, were direct advantages for the individuals concerned; while enterprises derived, inter alia, higher productivity levels and better quality products and services.(193) In spite of those positive experiences, some respondents said that the training activities of MNEs were not always consistent with host countries' development needs. However, those observations were rare, and the reasons for them were not advanced.(194) It was also said by one respondent that MNEs did not offer adequate training to local workers to enable them to master the use of appropriate technology.(195)
86. Since all enterprises, regardless of their ownership or origin, operated within the same regulatory and policy frameworks governing training, it was difficult for respondents to make a meaningful comparative assessment of the role of MNEs as opposed to that of local enterprises in this field. Where comments specific to MNEs were made, they often acknowledged that the internal training programmes and facilities were of a high standard, and in certain cases they served as role models for local companies.(196) The contribution of MNEs to the development and upgrading of skills in various technical fields, to the strengthening of research and development capabilities, and the introduction of new management techniques, was recognized by a number of respondents.(197)
87. In the case of economies in transition, the role of MNEs was considered to be particularly critical to the process of modernizing manufacturing and service industries and to enhancing the capabilities of the workforce to meet the technical, linguistic and other skill requirements of foreign enterprises.(198) Foreign MNEs were known to spend considerable sums for the training of their workforce -- in one case, a multinational was reported to have devoted almost 5 per cent of its budget for personnel management on training.(199) Where training centres already existed, certain MNEs were said to have retained those facilities after acquiring the local enterprise.(200)
88. The positive contribution of MNEs to the training of workers in the host country was by no means unique to the CEECs, which have had to adapt to the requirements of the free market economy. There were OECD and developing countries which noted that the training provided by MNEs was beneficial to workers. It had positive spillover effects on the domestic economy, as some workers formerly employed by MNEs either set up their own businesses or moved to local enterprises, bringing with them their skills and know-how.(201) Certain observations are worth mentioning since they provided concrete examples of the ways in which the actions of MNEs stood out vis-à-vis those of local companies. In one OECD country, a 1992 survey found that 60 per cent of foreign enterprises, as opposed to 43 per cent of locally owned establishments, enabled staff to improve their skills. Forty-one per cent of MNEs gave leave for further training and 19 per cent financed it. The comparable figures for local firms were 32 and 17 per cent respectively.(202) The importance of training and retraining was emphasized in discussions on MNEs' manpower plans with governments.(203) There were countries in which MNEs were said to provide locals with the necessary expertise to replace expatriate staff in middle-level and senior professional positions, and to train staff to master the use of new technologies.(204) There were others in which MNEs stood out as having a greater interest than local companies, in management development and training as a whole.(205)
89. A large majority of governments had developed national human resource development (HRD) programmes. Training programmes were considered to be an essential component of policies for reducing unemployment, promoting economic development and increasing the competitiveness of enterprises.(206) Training was undertaken at all levels. In a number of countries special training and retraining programmes designed to meet the needs of specific groups had been put in place. They were targeted to the following: the long-term unemployed; workers in industries undergoing conversion; first-time jobseekers, including youths; women; and disadvantaged and vulnerable groups.(207) By virtue of the growing trend towards the privatization of state-owned enterprises, special attention was being given to the retraining of public sector workers in the enterprises concerned, in certain countries, while the need to pay attention to that question was recognized by policy-makers in another context.(208) Courses for enabling workers to master the use of new technologies had been implemented by enterprises in some countries.(209) High unemployment among youths stood out as a particular concern in many contexts, and in response, apprenticeship systems aimed at facilitating labour market entry for young jobseekers were fairly widespread. There were also examples of schemes under which formal training in institutions was alternated with on-the-job experience through internships.(210) One noteworthy example was that of a developing country in which almost 9,000 contracts for on-the-job training for young persons were concluded over the period covered by the sixth survey, and more than 9,000 youths were said to have obtained jobs in which they were able to make practical use of the training they had received.(211)
90. When it came to the funding of training programmes, there were different schemes to which governments and employers generally contributed. A number of governments had a policy of imposing on companies a levy (usually around 1 per cent of their wage bill) to help finance government-run training programmes. Others collected the equivalent of 1 per cent of the profits made by companies, and in certain cases employers and workers each contributed 0.5 per cent of the workers' insurable earnings to a government training fund.(212) However, one employers' organization considered the training levy to be burdensome.(213) A number of government funds were established to subsidize different training activities to facilitate initial employment and the return to work, or to build up a highly trained workforce in a context of economic restructuring.(214) For example, in one country, the law required all employers to channel 1 per cent of the salaries of employees earning less than S$1,000 per month to a skills development fund, which covered the training costs incurred by enterprises.(215) Financing from external bilateral and multilateral sources was also reported.(216)
91. The granting of incentives was one way in which governments sought to encourage enterprises to expand their training activities. They took the following forms: special tax rebates for enterprises that devoted a stipulated percentage of their gross expenditure to training and other activities that would facilitate the transfer of technology;(217) reductions in contributions to government funds for enterprises which offered places to apprentices or provided professional training to youth;(218) training subsidies and other cost-sharing arrangements, including for small and medium-sized enterprises.(219)
92. MNEs supported and took an active part in the development, management and implementation of training programmes in a number of countries. There was evidence of a growing trend in certain States of a shift towards giving increasing responsibility to the social partners to ensure that training kept abreast of the changing demands of the labour market.(220) In such cases, the government's role was progressively reduced to that of planning, defining and coordinating activities, with the social partners collaborating in formulating proposals on the most appropriate ways of meeting the skill requirements of the labour market. MNEs cooperated in national training programmes through their representation on tripartite training bodies and the management boards of training institutions.(221) That was said to satisfy both MNEs' requirements and contribute to the needs of others in the industry.(222) Furthermore, an equal number of private and public sector employers were represented on a training board to ensure that the government's training efforts met the needs of the market and received the support of all the actors involved.(223) MNEs participated in the setting and monitoring of training and certification standards, as well as curriculum development activities.(224) By concluding collective agreements containing provisions for the training of workers, by providing both in-house and overseas training for staff in different occupational categories, and by accepting apprentices under government training programmes, MNEs contributed to the development of human resources in a number of countries.(225) Enterprises also signed agreements with government institutions for the running of alternating training programmes.(226) MNEs shared the cost of the stipends of trainees whom they accepted, participated in national programmes by sending staff on courses, and initiated training projects in collaboration with governments.(227) MNEs benefited from training facilities through government agreements with both local and multinational enterprises, enabling them to utilize government institutions for their own training activities,(228) and they also benefited from subsidized training schemes.(229) As regards initiatives by MNEs, some had implemented basic educational and literacy programmes on a voluntary basis,(230) others had concluded collective agreements providing for training and the setting-up of a bipartite body to handle questions pertaining to the promotion of staff.(231) Guidelines issued with the aim of engendering good social practices among MNEs operating abroad, also contained provisions urging them to organize internal training activities and to take into account the needs of host countries with regard to the transfer of technology.(232)
93. While many respondents were of the opinion that MNEs played a positive role in the development and upgrading of workers' skills, there were, none the less, opposing views from certain quarters. There were countries in which MNEs were said not to have supported training initiatives.(233) Other arguments were that training was targeted mainly at highly qualified staff, and it was also implied that the benefits derived by MNEs from the financial incentives and training facilities provided by host country governments, far exceeded the contribution that they made in the field of training.(234) It was also argued that there was a "contradiction between MNEs' policies of training young persons and their employment practices as regards this group".(235)
94. From the reports, it can be concluded that in a number of countries the contribution of foreign enterprises to the development of human resources was significant. They ran training programmes, provided different forms of support for, and participated in, government training activities. However, the fact that there were unsatisfactory experiences in certain contexts suggests that policy and institutional changes may be required to improve consultations and cooperation between enterprises, host country governments and representatives of employers' and workers' organizations, in order to maximize the potential gains of enterprise-based and national training programmes.
Paragraphs 33-35 (Wages, benefits and conditions of work)
(1) Please comment on wages, benefits and conditions of work offered by multinational enterprises taking into account the recommendations in paragraphs 33-34.
(2) What (new) measures, if any, have been adopted by the government so that lower-income groups and less developed areas benefit from the activities of MNEs?
No. of respondents: 61 governments, 33 employers' organizations and 24 workers' organizations. Total: 118.
95. Only in isolated cases,(236) was there any divergence between the reports of the relatively small number of workers' organizations that responded and those of governments, which for the most part indicated that there were few, if any, problems associated with wages and benefits paid by MNEs.
96. The general perception seemed to be that during the period under review, wages, benefits and conditions of work in MNEs compared favourably with, and often exceeded those, prevailing in comparable local enterprises. While recognizing that certain MNEs provided good wages, benefits and conditions of work in host countries, reservations were nevertheless expressed by some of the respondents.(237)
97. In general, national legislation provided the guidelines that enterprises, both local and multinational, must follow with regard to their wage policies. Virtually all the respondents from countries which had a statutory minimum wage were of the view that MNEs paid higher wages. Different types of wage-fixing machinery existed. They included: minimum wages prescribed by law and industrial awards, or set by wage councils, bipartite boards and tripartite bodies.(238) However, according to one respondent, wages, benefits and conditions of employment were agreed between employers and workers or their representatives in all enterprises, and there was no government intervention as long as there were no discriminatory practices based on sex, race or trade union affiliation.(239) Another contended that since firms operated in response to market forces, it could be assumed that both local and foreign enterprises offered competitive wages and benefits in order to attract and retain their workers.(240)
98. Practices differed with regard to wage setting by MNEs. A number of respondents noted that wages higher than the legal minimum could be obtained through collective bargaining,(241) and in some instances they were reported to be better than those paid by comparable local enterprises.(242) Privatized SOEs in a certain CEEC entered into "social agreements" with workers' representatives guaranteeing that workers would be able to retain certain rights and privileges, including wage and social security entitlements for a period of time.(243) In one case MNEs were said to set on a voluntary basis, wages that were 25 to 30 per cent higher than those in comparable enterprises for jobs in the same occupational categories.(244) In another, certain MNEs were said to have refused to negotiate with unions and to have revised wages and benefits unilaterally, even though they were operating in industries covered by sectoral collective agreements.(245)
99. Wage levels in MNEs appeared to be influenced by the industry and sector in which the enterprises operated, the size of their operations and the skill levels of the workforce. Large MNEs or MNEs involved in activities requiring highly skilled labour tended to pay higher wages than comparable local enterprises.(246) Only exceptionally was it reported that wages in foreign-owned SMEs were better than those in local enterprises.(247) The growing preference of certain MNEs for giving individual contracts of employment and introducing performance-related pay schemes were said to have an impact on wages in MNEs.(248) In general, MNEs offered advantageous remuneration packages and good job opportunities for skilled technical and professional personnel.(249) In contrast, workers in low-skilled, labour-intensive activities did not enjoy similar benefits.(250) The length of time that enterprises were present in a country was also said to have an influence on wages, benefits and conditions of work. For example, in one case it was mentioned that foreign enterprises involved in public works projects of limited duration offered less favourable terms of employment and conditions of work than those MNEs which had been operating in the country for longer periods.(251)
100. MNEs did not always pay better wages than comparable local enterprises. Where there was a statutory minimum, they generally respected it, and in certain cases when the national standard was higher, it had to apply to most foreign workers employed by MNEs.(252) None the less certain workers' organizations were of the view that the wages paid by MNEs could have been better.(253) Low wages in certain multinationals were attributed in certain instances to the workforce not being organized.(254) An employers' organization noted that according to workers in the country in question, most MNEs provided "adequate" wages, benefits and conditions of work, but there were others in which they were only "marginal or near marginal".(255)
101. There were certain countries in which the labour legislation stipulated not only the minimum wage but also the minimum package of benefits to be provided by all enterprises, including MNEs.(256) MNEs often offered benefits that were said to be better than those given by comparable local enterprises. Many included accommodation, transport, medical facilities, meals, bonuses, child allowances and loans, including for housing.(257) Some extended medical facilities to the families of workers.(258) There were also profit-sharing schemes and possibilities for workers to buy shares in the companies.(259) Just as in the case of wages, the bargaining strength of organizations representing workers in MNEs seemed to have had an impact on the benefits offered. In certain MNEs where there were either enterprise agreements or collective agreements, wages and benefits were found to be more favourable than those in other comparable enterprises.(260)
102. With respect to working time, it was generally regulated by national legislation, and in the case of EU Member States the provisions of Directives in this regard had to be incorporated in national legislation.(261) On the whole working time arrangements in MNEs appeared not to pose any problems for workers. However, there were isolated reports that economic conditions and high unemployment in certain contexts had led to a shortening of working hours in MNEs, with a corresponding reduction in wages, and workers in certain enterprises with which some retailing MNEs had subcontracting arrangements, were required to work "extremely long" hours.(262) The introduction of weekend working by some MNEs was regarded as an undesirable development in certain quarters.(263)
103. MNEs base their locational decisions on many considerations, which include the availability of a skilled workforce, infrastructure, utilities, raw materials and other resources. Certain governments have attempted to influence those decisions by offering various forms of incentives. In an endeavour to encourage the industrial development of less developed areas and to create employment opportunities for lower income groups, a number of measures were taken by some governments during the period under review. They included: the passing of legislation and the launching of industrial development programmes to attract FDI to less developed areas; the granting of special incentives to attract MNEs out of overcrowded urban areas and to encourage them to locate in other parts of the country; and the establishment of export processing zones, special economic zones or industrial parks in less developed areas or regions characterized by high unemployment.(264)
104. Several respondents mentioned examples of MNEs that had developed infrastructure including schools and health care centres, that benefited the local community and stimulated the creation of local enterprises.(265)
105. The granting of special incentives to promote investment in specific parts of the country was not a practice in certain States, and many respondents adopted no special measures to influence the locational decisions of MNEs.(266) In one case it was considered "utopic" to attempt to influence such decisions,(267) and in another, such policies were considered to be of more interest to developing rather than industrialized countries.(268)
Paragraphs 36-39 (Safety and health)
(1) Are the principles embodied in Conventions Nos. 119, 115, 136, 139 and Recommendations Nos. 118, 114, 144 and 147 applied in the country, by all concerned, to the greatest extent possible?
(2) Do multinational enterprises:
(a) maintain the highest standards of safety and health in conformity with national requirements?
(b) make available to worker representatives, workers' and employers' organizations, and the competent authorities, information on relevant safety and health standards which they observe in other countries?
(c) make known to those concerned the special hazards and related protective measures associated with (their) new products/process; and if so, how?
(d) play, like comparable domestic enterprises, a leading role in examining causes of safety and health hazards and in the application of both remedial and preventive measures?
(3) Do MNEs cooperate with the competent safety and health authorities, established safety and health organizations and representatives of the workers and their organizations? Are safety and health matters incorporated in agreements signed between workers and MNEs?
(4) Please comment on the cooperation, if any, between national and multinational enterprises in the country and the competent international organizations in the preparation and adoption of international safety and health standards?
No. of respondents: 62 governments, 30 employers' organizations and 22 workers' organizations. Total: 114.
106. A significant number of respondents, in keeping with the recommendation made in paragraph 191 of the report of the Working Group for the fifth survey, supplied detailed information on legislation, codes of practice and guidelines dealing with OSH that were adopted during the period under review. Respondents also provided, in line with the recommendation in paragraph 193 of that report, information on measures that had been taken to strengthen tripartite cooperation in the field of OSH. There were fewer details on the ways in which MNEs cooperated in the work of international organizations concerned with the preparation and adoption of international safety and health standards. In many cases that information was not available. It must also be mentioned that there were relatively few workers' organizations among the respondents. This could mean that if workers experienced difficulties related to OSH in different industries or countries between 1992 and 1995, they were not all brought to light in the reports received for the survey.
107. The responsibility for establishing safety and health norms rests with governments. During the period under review, a number of governments from industrialized and developing countries had either enacted or amended legislation with a view to raising national OSH standards -- an indication of the growing awareness of the importance of ensuring a safe and healthy work environment, taking into account the economic impact of the costs of occupational injuries and deaths.(269) In one country the new legislation was particularly significant as it also applied to homeworkers, a category of workers normally not protected by any regulatory framework.(270) National OSH legislation generally incorporated the principles of either some or all of the Conventions and Recommendations mentioned and, in some cases, ILO codes of practice and other guidelines were said to have been reference points for the drawing up of national standards and practices.(271) Even where the ILO Conventions referred to had not been ratified, the evidence was that many governments took them into account for the setting of standards.(272) Only in isolated cases was it said that the principles of the Conventions mentioned were not applied in the national legislation.(273) Council Directives (of the EU) constituted another source of norms in the field of safety and health, with which EU members had to bring their national legislation into line.(274)
108. The majority of respondents were of the opinion that MNEs complied with national legislation, albeit to varying degrees. They were also said to maintain high safety norms that generally exceeded those observed by comparable national enterprises.(275) Apart from company policy, the degree of compliance appeared to be determined by a number of other factors. They included: country of origin; length of operations; types of economic activity; size of enterprise; the effectiveness of enforcement and inspection mechanisms in the host country; and the costs associated with establishing the required OSH standards.(276) Enterprises that had adopted the ISO 9000 specifications were considered by two respondents to provide higher safety standards at the workplace.(277) Disparities in the degree of observance of OSH standards were none the less said to exist between MNEs from different regions.(278) While certain MNEs applied their home country norms, which tended to be higher than those of the host country,(279) there was an exceptional case in which certain aspects of the home country's norms (e.g. the provision of natural lighting) were considered to be lower than those applied locally.(280)
109. The enforcement of OSH standards was recognized as essential for ensuring that the applicable norms were adhered to by all enterprises, including MNEs. Countries generally had supervisory and enforcement mechanisms which provided for penalties to be imposed in cases of non-compliance.(281)
110. MNEs had a mixed record when it came to furnishing information about the norms observed in other countries. There were governments and a few employers' organizations which indicated that most MNEs made available information on the relevant safety and health standards observed in other countries.(282) That practice might have been due to the interest of some MNEs in harmonizing the OSH standards observed in their global operations.(283) In some contexts that was done on a voluntary basis, since MNEs were not always obliged by law to disclose such information.(284) In the view of some MNEs, the standards observed in one location were not always adaptable to another.(285) There were a number of observations that the disclosure of such information was not widespread among MNEs,(286) and that it sometimes depended on the practices of the home country and parent company of the MNE.(287) It was not always known whether or not MNEs made available information on the norms applied.(288)
111. As regards the provision of information on special hazards and related protective measures associated with new products and processes, that seemed to be common in many countries and in keeping with national law and practice.(289) A number of countries had regulations requiring the disclosure of information on potential risks prior to the commencement of operations by MNEs. None the less, one respondent said that it was not unusual for such information to be provided only after work with potentially hazardous products had commenced,(290) and another said that false claims had been made with regard to the safety of particular processes prior to their introduction.(291)
112. Information was disseminated in the form of notices and manuals, and certain MNEs conducted awareness campaigns, provided training and protective clothing to their workers,(292) and the question of health hazards was dealt with in enterprise safety committees where they existed.(293) In certain countries, special attention was also paid to the protection of pregnant women and nursing mothers.(294) Despite the relatively good OSH records of MNEs, there were nevertheless cases in which certain enterprises reportedly did not inform workers of potential hazards.(295) Some MNEs did not play a leading role in this regard,(296) and others only provided such information occasionally.(297) One respondent mentioned the case of a certain MNE which did not accept responsibility for accidents, including fatalities, caused by hazardous working conditions.(298)
113. Reliable and adequate OSH-related information is essential for the training of workers and implementation of accident prevention measures. In this regard the involvement of all employers, including MNEs, is crucial. With only a very few exceptions it was indicated that MNEs played a significant role in examining the causes of occupational hazards and in applying both remedial and preventive measures.(299) Those with large-scale operations, and those involved in high-risk industries, tended to be more active in the examination and prevention of accidents.(300) However many of the responses were not detailed enough to enable an assessment of the degree of their involvement. In many countries appropriate legislation, enterprise-level safety committees and the appointment of in-house safety experts facilitated MNEs' involvement in accident prevention activities.(301) There were also examples of cooperation between enterprises in the same economic sector.(302) National and industry-level programmes had been successful in raising awareness, creating safe workplaces and contributing to a reduction in industrial accidents in certain countries.(303) Accident-prevention measures taken by MNEs were said to include the setting of regulations governing the design of workplaces and the carrying out of periodic medical examinations of workers who might have been exposed to potentially harmful substances.(304)
114. On the whole, consultation and cooperation between MNEs and, some or all of, the social actors with regard to OSH issues, appeared to be good. In some countries, the legislation stipulated the areas in which cooperation was required and the modalities for carrying out such cooperation.(305) In addition, many countries had institutional arrangements at the national and enterprise levels, which facilitated cooperation between MNEs and the competent authorities, workers' organizations and established safety and health organizations. Those arrangements included national bipartite and tripartite councils, safety committees and other bodies, and works councils.(306) In some cases, MNEs participated in national consultations for the setting of OSH standards,(307) while in others, they cooperated closely with governments, provided information on the economic aspects of implementing OSH norms and contributed to the financing of national OSH programmes.(308) However, some respondents from developing countries were of the view that MNEs either did not cooperate at all in the field of OSH,(309) or that they cooperated with the government but not always with workers or their representatives.(310) The presence and strength of unions appeared to be critical for both the degree of cooperation with workers and their representatives, and the importance accorded to OSH matters.(311) For example, in one country the lack of involvement by workers in OSH matters was attributed partly to the limitations on freedom of association in certain MNEs.(312) In another, union members were said to cooperate with MNEs in a training exercise on the safe use of chemicals.(313)
115. While employers were often obliged to inform workers and their organizations of potential risks, they did not always have to provide them with special protective measures. In this regard, many respondents noted that collective agreements concluded between workers' organizations and MNEs contained some general provisions relating to safety and health matters. Only in exceptional cases, were specific issues such as the supplying of protective gear, night work, or the relocation of injured workers included in these agreements.(314) MNEs operating in certain high-risk industries were more likely than others to conclude collective agreements that included OSH provisions, e.g. electricity and high-tech; chemical and metal; automobile and petrochemicals.(315)
116. When it came to the participation of national and multinational enterprises in the work of international organizations concerned with the setting of international safety and health standards, not much information was provided on the methods of cooperation and the fora in which it took place. Some respondents indicated that such cooperation either did not exist or that they had no relevant information on the subject.(316)
117. Through their membership in national employers' organizations or other national bodies, MNEs were able to participate in multilateral fora where safety and health standards were dealt with -- e.g. International Labour Conference, European Union, the World Health Organization and the Organisation for Economic Co-operation and Development.(317) MNEs also participated in international standard setting through the activities of their parent companies.(318) In an effort to benefit from the pooling of experiences, enterprises in the chemical industry in particular, were said to be at the forefront of initiatives for cooperation at the international level. In one country, an industry-wide programme, "Responsible business in chemistry", was launched, and in another, chemical safety management was the subject of an International Forum on Chemical Safety.(319) On the whole, the contribution of MNEs in international standard-setting activities was considered to be of value, and certain respondents noted the need for there to be such cooperation where it did not already exist.(320)
Paragraphs 40-47 (Freedom of association and the right to organize)
(1) Are there limitations on the ability of workers in MNEs to exercise fully the right to freedom of association or have there been cases in which MNEs have not observed, or have been alleged not to have observed, the principles of freedom of association? What remedial procedures are available to those concerned?
(2) Have there been any new initiatives to attract foreign direct investment (FDI) and if so, does the provision thereof -- in particular the incentives offered -- limit in any way freedom of association and the right to organize and bargain collectively?
(3) What efforts have been made by the government and national and multinational enterprises as well as workers' organizations to develop and improve industrial relations policies and practices and to bring them into conformity with the principles of the Declaration?
No. of respondents: 62 governments, 30 employers' organizations and 23 workers' organizations. Total: 115.
118. Freedom of association and the right to organize are enshrined in the national constitutions of many countries and generally guaranteed by the labour laws of all those from which replies were received. There are however exceptions with certain countries which either have, or are in the process of setting up, export processing zones (EPZs) restricting the exercise of these rights in enterprises governed by the EPZ regime. In all other cases, the national standards apply to enterprises regardless of their ownership, and there are legal mechanisms for ensuring that they are respected.
119. On the whole, the practices of MNEs were not reported to be less favourable than those of other enterprises. However, certain common problems were found to have arisen in MNEs regardless of the political, social and economic contexts in which they were located. Reports of incidents and/or allegations of anti-union discrimination originated from a number of governments, workers' organizations, and three employers' organizations from industrialized, newly industrializing, developing, transitional and least developed countries.(321)
120. In some countries subtle means were reportedly used to discourage the emergence of unions or to weaken those that already existed.(322) They included the payment of relatively high wages which had the effect of diminishing workers' interest in either forming or joining unions, and the encouragement of company unions and other in-house bodies as alternatives to membership of, or affiliation with, independent external organizations representing workers at the industry, sectoral or national levels. Interference in the choice of shop stewards (sometimes with the complicity of the government), was also reported.
121. Overt anti-union practices did occur in certain contexts. Where they did, they took various forms: the intimidation and dismissal of union officials; failure to follow the relevant dismissal procedures in cases where the termination of employment may have been justified; the replacement of dismissed workers with non-unionized permanent staff; the offering of individual labour contracts as opposed to negotiating collective agreements; and discrimination against unionized workers as regards their wages and conditions of employment. These problems have occurred in countries of different levels of economic development and in different parts of the world. However, with only two exceptions where the respondents indicated that there were frequent incidents of anti-union practices,(323) the reports suggest that the number of enterprises involved was, in most cases, limited. What is worth noting is that, where there are only a few MNEs in a given country, or where their profile is quite high by virtue of the size of the economy or the importance of the industry or sector in which they operate, for the domestic economy the labour practices of these enterprises and the impact of their actions would inevitably assume considerable significance.
122. A number of key factors seemed to have some bearing on the conduct of MNEs: the size of their operations; type of industry; the strength of existing trade unions and labour practices in the host country; the origin of the enterprises and the industrial relations practices of the parent company; and the efficacy of the host country's supervisory and enforcement mechanisms.
123. Unionization rates were higher and management was more disposed to dealing with unions in medium-sized and large enterprises as opposed to smaller establishments, and those in certain industries where the workforce tended to have certain common characteristics -- i.e., a relatively large number of temporary and part-time staff, young workers and women.(324)
124. Where traditionally there had been a strong trade union presence in the enterprises concerned or in the country as a whole, and where the principle of freedom of association was respected, they seemed to facilitate efforts to have new investors accept the presence of unions in certain contexts. The government of a CEEC attributed foreign investors' acceptance of unions in a privatized state-owned enterprise (SOE), to the application of the labour code and the practice of investors and unions signing "social agreements" guaranteeing the protection of workers' rights in the establishments concerned.(325) It would seem reasonable to argue that the conclusion of such agreements would not have been possible in the absence of relatively strong unions and where the climate of labour relations was not favourable to such dialogue and negotiations. The degree of interest on the part of the enterprise in having a presence in the particular country was another factor that cannot be underestimated, since the case of a prospective investor abandoning its investment plans upon learning that there was a strong trade union presence at an enterprise in which it was interested, was reported by the government of another CEEC.(326)
125. The origin of enterprises, labour relations practices in the home country, and company policies, seemed to have considerable influence on attitudes towards unions. Certain MNEs from countries where trade union rights were generally respected and enforced, and where the parent company had a policy of dealing with workers' organizations, were said to have carried those practices to foreign countries. The government of a developing country in Asia noted that enterprises from OECD countries tended to be "more concerned about freedom of association and collective bargaining, partly because they follow policies laid down by the parent company".(327) However, it must be borne in mind that among industrialized countries there are differences. If enterprises are not accustomed to interacting with trade unions at home, and company policy does not promote this, they are unlikely to change their practices in other contexts, unless conditions in the host country require them to modify their conduct. For instance, one trade union from a CEEC found that whereas enterprises from Western Europe generally recognized unions, those from certain non-European OECD countries were not inclined to do so. In another industrialized country in Asia, the Government pointed out that certain MNEs attempted to marginalize unions and obstruct collective bargaining, while a trade union from an EU Member State mentioned that some multinationals from certain OECD countries tried to prevent the formation of unions, and others promoted company unions.(328)
126. From the foregoing it is clear that the host country's national law and practice, and the quality of its supervisory and enforcement mechanisms, play a key role in shaping the conduct of MNEs when it comes to the observance of national labour standards, including those that pertain to freedom of association and the right to organize. In those cases where violations of these principles by certain MNEs have persisted, this has been attributed to the anti-union attitudes of host country governments, some of which consider this adoption of such a stance as being essential for creating an "investor-friendly" environment.(329) In fact, there is evidence that certain governments and investors believe that with economic liberalization, trade union representation and collective bargaining are no longer necessary. This perception to a large extent explains the reluctance of the competent authorities to sanction violations of trade union rights and the opposition to unions by some new enterprises (greenfield investment).(330) The importance of having well-functioning labour inspection and enforcement institutions to promote respect for the workers' right to organize, was confirmed by reports of two enterprises which were made to bring their practices into line with the host country's legal requirements. A tribunal in one industrialized country in Asia issued, in one case, an interim award prescribing pay rates, thereby overriding the provisions of individual labour contracts that workers were being constrained to accept. In the other case, an interim order was issued, obliging the enterprise to extend the same terms and conditions of employment to all workers covered by industrial awards, provided that either individually or through the union they agreed to work in accordance with staff contracts.(331)
127. As regards initiatives for attracting inward FDI, most respondents gave no details of the measures adopted, but they did note that they had no bearing on workers' rights. Where incentives were described, it was evident that they were generally of an economic nature -- e.g., diverse fiscal advantages, the lifting of restrictions on foreign equity in different industries and on the repatriation of profits, the removal of foreign exchange controls, and the provision of physical infrastructure. However, even where there were no official policies or laws limiting the exercise of freedom of association and the right to organize and bargain collectively as a means of attracting inward FDI, there were none the less incidents of anti-union practices. Sometimes both national and multinational enterprises were involved.(332) There were no reports of such incentives being given, or official policies or laws likely to produce the same effect in economies in transition.
128. In the case of industrialized countries, there was only one case in which legislation (right to work laws) applicable in some states within the country, were contested by unions as being discriminatory, because wages and labour standards tended to be lower in the states concerned. However, those laws in principle did not prohibit the exercise of freedom of association and the right to organize. Another industrialized country noted that it had introduced reforms to make the industrial relations system flexible and promote enterprise-level collective bargaining, while still guaranteeing minimum entitlements for all workers. In addition, the reforms were not aimed exclusively at foreign investors.
129. It was among EPZ host countries that the tendency to offer incentives limiting the exercise of trade union rights, was most noticeable. Certain respondents from countries known to grant such incentives, did not acknowledge that they existed, but in one case, the reply of an employers' organization contradicted the government's statement, by reporting that the application of "some" provisions of the national labour laws was waived in the case of "certain" enterprises in the zones.(333) Respondents from other countries indicated that incentives for attracting investors to the zones had the effect of restricting workers' rights,(334) with one workers' organization reasoning that the incentives being offered would "certainly" limit workers' rights, but that in its view that was "usual with EPZs".(335) The focus of the incentives suggests that the intention is to create a union-free environment by restricting the right to organize and collective bargaining, and banning all forms of industrial action in the event of labour disputes -- in short, piecemeal efforts to introduce flexibility in the setting of wages and the determining of conditions of employment in a specific segment of the domestic economy.
130. It may of course be argued that the conclusions might have been different had more workers' organizations made known their experiences. From the information received, it would appear that except for the EPZ-related laws of certain countries, official policies and incentive packages for boosting inward investment generally did not contain elements that impinged on the exercise of trade union rights. Where problems in exercising those rights have emerged, their causes may be traced to the convictions and practices of certain competent authorities and certain enterprises.
131. As regards efforts for improving industrial relations policies and practices, the reports indicated that during the period under review governments and the social partners in many countries either initiated or intensified activities that had a bearing on labour relations. Of the 115 respondents only four explicitly said that no particular action had been taken in this regard, while one workers' organization from an EU country pointed out that the social partners had not been consulted by government with respect to FDI-related matters and the content of agreements governing the establishment of MNEs.(336) One argument was that since the Tripartite Declaration was not well known, it was not referred to in company codes which were intended to improve the social and labour practices of enterprises.(337)
132. Where measures had been taken, they were in the normative, institution-building, consultative and informational fields, and at both the national and regional levels. Legislation had either been enacted, amended or was in the process of being elaborated in several countries, including one CEEC and an OECD member State. Commissions to look into the question of introducing reforms in the industrial relations field had also been set up.(338) Discussions on the reform of industrial relations systems generally took place in tripartite bodies at the national level. In one case they were said to have been "highly contentious",(339) which was to be expected since, in the present climate, marked by the search for labour market flexibility, it was not unlikely that the proposed reforms would spark controversy. According to the information provided, the aims of some of those initiatives were the following: to modernize the industrial systems; enhance protection for members of trade unions; to make the recognition of unions mandatory; to define clearly the rights and obligations of unions and their members as well as those of employers; and to improve the functioning of tripartite consultative bodies and the collective bargaining process.(340) Certain respondents mentioned the technical and advisory services provided by the ILO for the drafting of their legislation and the organization of meetings.(341) It was encouraging to note that a workers' organization from a country in Africa was able to report that with the passing of the new Labour Code, former restrictions on the exercise of trade union rights had been abolished, and that the government of an EPZ host country expressed its intention to pass legislation that would make the recognition of unions obligatory, including in EPZs.(342)
133. Within the European Union, there was no doubt that Council Directive 94/45/EC of 22 September 1994 on the Establishment of European Works Councils, played a pivotal role in laying a normative basis for institutionalizing information and consultation procedures in MNEs operating within the EU. In other subregions, attempts to harmonize industrial relations policies and practices were reported,(343) and so too was the intention of the government of an OECD State to use its position on the Advisory Group of a regional development initiative,(344) to increase awareness of the principles of the Tripartite Declaration.
134. The passing and amendment of labour laws were not the only means by which governments sought to foster sound labour relations practices. In certain cases, codes of practice were drawn up in consultation with employers' and workers' organizations and efforts made to promote their observance and have their provisions incorporated in collective agreements. In others, the competent authorities collaborated with enterprises for the drawing up of internal regulations governing employment and labour relations.(345)
135. Efforts to strengthen employers' and workers' organizations have come from governments and both sides of industry. There were examples of governments and employers' and workers' organizations signing agreements for the organization of training programmes for union leaders and employers' representatives;(346) employers' organizations promoting modern tenets of business management, which included the principle of "social partnership";(347) and trade unions setting up institutions to encourage the observance of workers' rights as an integral part of respect for human rights.(348) Within the framework of arrangements such as the North American Free Trade Agreement (NAFTA), trade unions in the signatory States reinforced their cross-border cooperation and supported each other in efforts to have cases of violations of workers' rights brought before the relevant legal authorities.(349)
136. The holding of regular bipartite and tripartite consultations at the enterprise, industry, sectoral and regional levels, was the practice in a number of countries, and provisions for labour-management consultations were included in some collective agreements.(350) In certain contexts, labour-related matters were addressed even before enterprises began to operate in the country, since they were included in the agenda for discussions between investors and the relevant government authorities.(351) Within Europe, including in non-EU countries, there were employers which took the initiative of encouraging the establishment of works councils, even before there was a legal obligation for them to do so. Membership in employers' organizations facilitated consultations with governments and workers' organizations, and in one CEEC, the government and an association founded by, and representing MNEs only, engaged in regular discussions even in the absence of formal arrangements for the holding of such meetings.(352)
137. One medium through which improvements in labour relations policies and practices can be brought about is the dissemination of information, which can be reinforced by periodic consultations. During the years covered by the survey, there were examples of major home country governments of MNEs issuing guidelines urging these enterprises to respect the national laws of host countries and to adopt good social practices; and there were employers' organizations which produced and disseminated booklets outlining the rights and obligations of employers and workers.(353)
138. The impact of initiatives to ameliorate industrial relations policies and practices in different countries would depend on the commitment of governments and the social partners and their ability to accommodate their interests in pursuing economic growth and development with the principles of the Tripartite Declaration.
Paragraphs 48-55 (Collective bargaining)
(1) Do representative organizations of workers in MNEs face legal or practical problems in being recognized for the purposes of collective bargaining, or in carrying out such bargaining? If so, please explain?
(2) Do representative organizations of workers encounter problems in negotiations because MNE representatives have to refer matters to headquarters prior to agreement and implementation?
(3) Do multinational enterprises provide their workers' representatives with the necessary facilities, as well as appropriate/adequate information required for meaningful negotiation including a true and fair view of the performance of the entity or of the enterprise as a whole?
No. of respondents: 59 governments, 26 employers' organizations and 30 workers' organizations. Total: 115.
139. The possibility of workers' organizations or duly elected workers' representatives bargaining freely with employers or their representative organizations in order to regulate the terms and conditions of employment, constitutes an important facet of the exercise of workers' rights.
140. A very large number of respondents indicated that there were laws setting out the requirements for trade union recognition for the purpose of collective bargaining and procedures for the bargaining process itself. In addition certain countries had either amended legislation with a view to making improvements in this regard, or enacted new labour codes that removed former obstacles to the exercise of trade union rights.(354) Institutional arrangements for promoting collective bargaining,(355) and planned legislative reforms to facilitate union recognition and bargaining were also described.(356) The practice of leaving it up to employers and workers to agree on the modalities for recognition and bargaining seemed fairly common,(357) and certain countries had no legal provisions requiring the registration or authorization of bargaining agents.(358) In certain cases there had been court rulings permitting industrial action, including strikes, in the event of disputes over union recognition,(359) while in others, the law stipulated the procedures to be followed when workers exercised their right to strike for better pay and working conditions.(360) All indications were that the laws, where they existed, focused on procedural aspects of collective bargaining and not on the scope and content of negotiations. These were left up to the parties concerned to decide.
141. A substantial number of respondents indicated that bargaining agents had no problems in being recognized for the purpose of collective bargaining, faced no obstacles during negotiations, and obtained with relative ease the necessary facilities and information for carrying out their activities. In certain countries the law prohibited employers from acts of interference designed to influence collective bargaining, and from refusing to negotiate without just cause.(361) Nevertheless, certain difficulties were reported.
142. Problems in being recognized as a bargaining agent and/or in carrying out the actual negotiations were experienced, with varying frequency, in OECD and developing countries, and the CEECs. The reports suggest that where they occurred, it was due to undesirable attitudes and practices on the part of certain governments, local enterprises and MNEs. Only in isolated instances did legal and institutional factors contribute significantly to those difficulties. There were two situations in which even though there were no legal obstacles to getting recognition for the purpose of collective bargaining, getting in contact with, and representing workers, including in local enterprises, proved difficult if not impossible where company premises were inaccessible and where there was shift work.(362)
143. The bargaining process generally proceeded with no major problems in those enterprises where there had been no protracted disputes over representational rights, where collective bargaining was accepted as a legitimate procedure for determining wages and working conditions, and where the relevant rules or national practice concerning collective bargaining were respected. Where problems did occur they tended to take the following forms: frequent deadlocks, threats to relocate, and the intimidation, lock out or dismissal of workers or union officials.
144. When it came to practical problems, various methods were reportedly used to delay and if possible circumvent the recognition of unions and hinder negotiations. There were examples of enterprises refusing to recognize unions, changing the name of an enterprise, intimidating workers, and dismissing or locking out workers and union leaders.(363) There was an example of 4,200 workers who were reportedly replaced when they went on strike to protest against management's refusal to negotiate the proposed introduction of 12-hour shifts, a reduction of health care protection and accident benefits and the payment of lower wages for new staff. Another enterprise locked out 762 workers for 30 months during a dispute arising over violations of OSH standards which resulted in the death of a worker, the firing of union activists and demands that workers accept individual labour contracts. Only 349 were reinstated after accepting to return to work on the company's terms.(364) Threats to relocate (even if never carried out),(365) were a tactic used to influence negotiations. So too was the practice of offering or giving pay rises to dissuade workers from opting for collective bargaining or going on strike, offering individual labour contracts, and interviewing workers individually to inquire about their future career aspirations with the enterprise in question.(366) Where other acts of interference to obstruct the progress and conclusion of negotiations were said to have taken place, they were not specified.(367)
145. Several explanatory factors for the occurrence of recognition disputes and thorny negotiations could be identified. One of those was the lengthy and cumbersome legal and administrative procedures in certain countries, which delayed the settlement of disputes over the right of trade unions to represent workers in a given enterprise. In such situations it was not unusual for organizations seeking recognition in both local and foreign enterprises to be affected, since they were all subject to the same procedure.(368) In some cases, union officers either had been long dismissed and the union disbanded by the time the question of recognition was resolved, or they had been dismissed without the enterprise or government authorities ever having taken all the necessary steps for a decision to be made.(369) An anti-union stance on the part of government officials at different levels on the part of some investors and, in certain cases, allegedly even the media, were considered to be partly responsible for the difficulties experienced.(370) It may be argued that such attitudes would have helped to create a favourable environment in which enterprises which were not disposed to dealing with unions, could feel free to engage in acts of interference in union activities.
146. The policies and practices of individual companies were other critical factors that explained differences in behaviour. There was an example of local management taking the decision to downgrade the terms of employment set by the parent company.(371) In one context, the management of new MNEs (originating from greenfield investment) were found to be less willing to recognize unions and deal with an organized workforce than management in privatized state-owned enterprises where the presence of unions would have been well established.(372) Nevertheless, there was a tendency towards recruiting staff on the basis of individual contracts of employment, introducing individualized pay systems and showing a preference for dealing with company unions as opposed to those representing workers at the industry, sectoral or national levels.(373) The shift by many companies to enterprise-level bargaining may be seen as representing an attempt to give negotiators more scope over determining wages in order to accommodate the introduction of new working time arrangements and practices, and to have more autonomy over pay rates based on workers' skills and performance. Where companies did not have a history of negotiating collective agreements, they were more likely to resist workers' attempts in this regard. One example worth mentioning was that of the local management of a foreign MNE refusing to resume negotiations after a temporary impasse, insisting that collective agreements be written in a language other than the official language of the host country, and showing a general unwillingness to sign the agreement, notwithstanding prolonged strikes affecting its operations in the given country.(374) In fact, when an agreement was finally reached, it was said to have been the first of its kind concluded by the enterprise. The labour relations practices of the home country and parent company have been said to influence the approaches of affiliates to collective bargaining. As a result, there may be a preference for submitting to tribunals disputes arising during bargaining, as opposed to having recourse to voluntary conciliation or attempting to find a negotiated settlement. The choice of taking matters to tribunals has been known to result in the prolongation of disputes and the slowing down of the negotiation process, because of deadlocks.(375)
147. The field of activity and characteristics of the workforce also seemed to have a bearing on the behaviour of enterprises vis-à-vis unions and collective bargaining. Those which tend to have relatively large percentages of temporary and part-time labour were said to be less inclined to deal with unions than others in which such staff were less in number.(376)
148. The relatively limited information provided showed that experiences varied when it came to the effects of local management having to refer matters to the parent company. Very few respondents gave any indication of the frequency with which local managers sought the approval of central management before making decisions. Of those which reported on this, it was evident that in some cases such consultations were carried out only occasionally,(377) if at all, while in others they were said to be frequent or always necessary during negotiations.(378) The referral of matters to headquarters did not necessarily have serious adverse effects in all situations.(379) Certain respondents were unaware of whether or not there had been problems as a result of local management having to refer matters to the parent company,(380) and where there were difficulties their frequency, nature and effects were not always described.(381) In certain countries local management was generally authorized to conclude agreements and required to hold "genuine consultations".(382) In others, even though there were no specific legal provisions relating to the decision-making authority of negotiators, there was the requirement that management should engage in "meaningful negotiations" which implied that they should have the capacity to conclude agreements.(383)
149. In the opinion of some respondents one major problem was the delay in negotiations as a result of local management of certain MNEs having to refer matters to, and await the decisions of, central management. This was said to cause long delays in concluding negotiations, to provoke strikes and other serious problems (unspecified).(384)
150. Claims by local management that decisions on labour-related matters were made at headquarters, while central management stated that consultations on such questions with their subsidiaries were not necessary, posed a problem in one country.(385) Similar experiences were reported with reference to information and consultation procedures and collective bargaining in another country.(386) These situations may be attributed to the organizational and decision-making structures and processes in MNEs. They also reflected the difficulty in identifying the issues that were subject to centralized decision-making, as opposed to those with which enterprises within the group could deal autonomously. The reports suggest that the referral of matters to headquarters varied from company to company, and generally depended on the subject under discussion. Questions concerning remuneration and the plans and viability of the enterprise were in some cases referred to headquarters.(387) One respondent indicated that "important issues" were subject to approval by headquarters, but did not specify what they were,(388) while it would appear that the range of issues subject to centralized decision-making was much broader in certain countries where the referral of matters under negotiation was necessary either "always" or "in most cases".(389)
151. With respect to differences arising over the implementation of collective agreements, in certain countries the legislation required that procedures for settling such disputes be stipulated in collective agreements.(390) Sometimes that was the practice even in the absence of such legal requirements.(391)
152. Facilities and information for the purpose of collective bargaining were provided either in keeping with the national legislation in force,(392) collective agreements,(393) or arrangements agreed by the parties concerned on a voluntary basis.(394) In one case, there was a code of practice on this subject, which, although not legally binding, could be taken into account in legal proceedings.(395) In the case of EU countries where laws incorporating the provisions of the Council Directive on the Establishment of European Works Councils had been passed, or where voluntary information and consultation agreements had been concluded by MNEs, information that could be used for collective bargaining would have been made available under the established information and consultation procedures. Compliance with the relevant laws and clauses of collective agreements appeared not to pose serious problems in many contexts.
153. The replies suggested that the provision of information and facilities to workers' organizations for the purpose of collective bargaining was covered in the relevant legislation of many countries. In one case the laws required that information necessary for bargaining must be supplied, but the question of the provision of facilities was left up to the parties to decide through collective bargaining.(396) A number of reports discussed employers' obligations to furnish information required for the development of effective collective agreements and the experiences in this respect. The government of one developing country where by law information about the economic situation must be supplied, indicated that a Bill to improve the disclosure of such information as well as that pertaining to labour costs was under consideration.(397)
154. Of those respondents which commented on the conduct of enterprises with respect to the granting of facilities and information, several stated that national law and practice were respected by most enterprises. However, practices varied and it was sometimes difficult to know with certainty whether the information given to workers was adequate and appropriate.(398) Facilities and information were provided in a number of countries,(399) with employers sometimes covering the travel expenses of workers involved in negotiations,(400) and the costs of offices used by unions for collective bargaining, where company facilities were not provided.(401) None the less, there were a number of cases in which neither facilities nor information was made available.(402) In isolated cases workers reportedly did not ask for either, or where they did, management often did not fulfil their requests.(403) There was one observation that certain foreign as well as local enterprises in a particular country failed to provide information even though it was required by law.(404)
155. Several comments, particularly about the qualitative aspects of the facilities and information furnished by employers, were made. The reports showed that factors such as the quality of labour-management relations, the management style of local managers, the industrial relations practices of the group to which the enterprises belonged, and the size of their operations, all had a bearing on the frequency of disclosure, the content of information, and the adequacy of facilities.
156. Certain respondents pointed out that by law, all registered companies had to give the competent authorities economic and financial information, and that it was available to the public.(405) Implicit in those observations was that unions could obtain the data they needed from those sources. Labour-management consultations, where they took place, provided fora for employers to report on the performance and financial situation of enterprises. In addition, information of that kind was known to be disclosed during negotiations.(406)
157. Where problems were reported to have arisen, they stemmed from the following: reluctance of managers to provide any or all of the information required, often because of concerns about confidentiality;(407) management practices marked by a lack of transparency;(408) non-compliance with national law and practice and the relevant international labour standards;(409) and the provision of information considered to be inappropriate, inadequate or unreliable.(410)
158. Those difficulties occurred with varying frequency and with a few exceptions, the practices did not appear to be widespread. However, the fact is that there were reports that neither facilities nor information were provided, and that in certain other contexts where they were, the quality was such that they were considered unsatisfactory. Those observations would seem to provide compelling arguments for governments and the social partners in the countries concerned, to address those issues, in the interest of fostering a sound industrial relations climate marked by transparency and mutual confidence.
Paragraph 56 (Consultation)
(1) Please explain the policy and practices of multinational enterprises concerning information and regular consultation on matters of mutual concern.
No. of respondents: 53 governments, 22 employers' organizations and 18 workers' organizations. Total: 93.
159. It is clear from the responses that labour-management consultations outside the framework of collective bargaining are widely recognized as being important for fostering a good industrial relations climate within enterprises. They can help to build mutual trust, contribute to transparency by facilitating an exchange of views, and provide a channel for addressing questions that might otherwise become sources of tensions and even provoke disputes. Consultations may be held at the plant or factory, the enterprise or at the level of the group of enterprises (either at the national level or a group of establishments operating in different national contexts).
160. Only a few respondents from developing countries and those in transition reported that consultations were held either rarely or not at all.(411) Others had no information on the policies of enterprises and could therefore not state with certainty whether consultations did take place, even if nothing prevented them from being held or if they were required by law.(412)
161. For the most part consultations in both national and multinational enterprises were possible in keeping with national law and practice. In some contexts, the Labour Code provided for social dialogue at the enterprise level and in one CEEC management had a legal obligation to inform organizations representing their workers of important developments, including the financial results achieved and forecasts of the enterprise's performance.(413) In other countries, there was specific legislation dealing with labour-management consultation and cooperation,(414) including through workers' participation in decision-making. The requirements could be very stringent. For example, in one OECD country in Asia consultations must be held in any enterprise wishing to register an enterprise agreement, and a declaration attesting that the necessary consultations took place must be furnished; while in another non-EU country in Europe, employers must justify decisions taken without prior consultations with labour.(415) With or without an official policy or legal requirements, enterprises in several countries had informal consultative arrangements, and the inclusion of consultation-related provisions in collective agreements seemed fairly widespread.(416) There were two cases of respondents indicating that labour-management consultations were facilitated through tripartite discussions, at which MNEs and other enterprises were represented through employers' organizations -- which did not really fall within the scope of the consultations referred to in the footnote to paragraph 56 -- i.e., consultations at the level of the undertaking.(417)
162. For EU Member States the adoption of the 1994 Council Directive on the Establishment of European Works Councils marked a watershed in labour relations practices, notwithstanding the fact that even earlier, informal and institutionalized information and consultation procedures were in widespread use. Respondents from the EU inevitably made reference to the Directive, noting the legal obligation to incorporate its provisions in the national legislation by 22 September 1996, in cases where that had not already been done. A noteworthy trend that had developed since the adoption of the Directive was that a growing number of MNEs -- the enterprises to which the Directive essentially applies -- were voluntarily concluding agreements for the setting up of works councils even before it became mandatory in the countries in which they were located.(418) A 1994 study enumerated at least 35 voluntary agreements and the list was by no means exhaustive.(419) The Council Directive was perceived to have greatly enhanced possibilities for workers to have their concerns addressed in an adequate manner. In the opinion of certain respondents, that would not have been the case in the absence of the Directive.(420) A non-EU country in Europe had passed legislation on workers' participation, which had been inspired largely by the Council Directive.(421)
163. Institutionalized mechanisms for engaging in consultations existed at the levels of the plant or factory, the enterprise and/or the group. Consultations took place through diverse arrangements -- e.g. staff representatives, union representatives, safety and health committees, participation committees, works councils, works committees, work excellence committees and labour-management councils. These entities may comprise workers' representatives only, or representatives from both sides of industry. Works councils -- i.e. entities representing all staff members regardless of whether or not they are unionized and engaging in group-wide consultations -- were a particular characteristic of consultative bodies within the EU. Neither industrialized, transitional nor developing countries provided details of MNEs' policies with respect to workers' participation in management boards, where such participation existed.
164. Consultations at the level of the group of enterprises operating either at the national level only, or in more than one country, were facilitated through group committees or works councils. In one EU country which had passed, since the 1980s, legislation providing for the setting up of "group committees" to represent workers in groups of enterprises at the national level, it was argued that the definition of works council in legislation incorporating the provisions of the Council Directive, should stick closely to that of "group committees".(422)
165. Not many respondents provided details of the questions addressed by consultative bodies. However, the available information showed that on the whole, discussions tended to focus on the following: OSH, training, workers' welfare which generally covered the provision of certain amenities including recreational facilities, and the sharing of facilities (unspecified). Ways of increasing productivity and efficiency, production plans, changes in technology, employment (including conditions of employment), and labour relations, were also dealt with in some countries.(423) There was little evidence of consultations focusing on subjects such as the financial situation of enterprises, relocation plans and collective dismissals (only four respondents touched on these issues),(424) but given the lack of detail in a number of replies, no solid conclusions about the content of consultations could be drawn from this. In addition it must be borne in mind that under the Council Directive on the Establishment of European Works Councils or an information and consultation procedure, councils shall have the right to meet with central management on an annual basis to be informed of, and consulted on, developments concerning the enterprise or group of enterprises as regards a wide range of financial, organizational planning and employment-related matters.(425) Research has shown that where European-level works councils already existed, the group-wide or transnational issues dealt with spanned these subjects in most cases. A 1995 survey of 48 agreements showed that 43 of them provided for information and consultation on economic and financial questions, 41 for employment and social policy issues, and 19 included new technology and working methods on their agendas.(426)
166. Most respondents to the survey reported that plant-level or enterprise-level meetings were held on a "regular basis". Where the periodicity was specified, respondents stated that there were monthly meetings, while in other cases meetings were held "as often as necessary". In the case of European works councils, most agreements provided for annual meetings, but other arrangements were also catered for.(427) On the whole, company policy and practices, legal requirements of host countries and the provisions of collective agreements, undoubtedly shaped practices in different contexts.
167. Given the diversity of the countries from which replies were received, it was not surprising that experiences with respect to MNEs' policies and practices varied. Nevertheless, there were a few cases in which MNEs were said to have no consultation policy and no interest in engaging in dialogue with labour.(428) As regards the content of discussions, there were reports that deliberations with MNEs were either limited in scope or that the discussions were superficial and did not adequately address workers' concerns.(429) Examples of management-making unilateral decisions, consulting with workers only in situations of crisis when they needed their support to justify the company's actions before the government authorities, and ignoring possibilities for meeting with workers, originated from five non-OECD countries.(430)
168. Notwithstanding the existence of formalized information and consultation procedures in keeping with the aforementioned Council Directive, there was one situation in which the practical application of the requirements concerning information disclosure reportedly posed problems by virtue of the organizational and management structure of MNEs. In one EU country a workers' organization reported that there were cases of MNEs claiming that they could act autonomously when dealing with labour matters, but not when it came to financial and fiscal questions because of the structure of the group of enterprises to which they belonged and their position in the group.(431) This undoubtedly had implications for the provision of information on the economic and financial situation of subsidiaries, which is likely to be of relevance for discussing, and taking decisions on, employment-related matters. The respondent contended that the MNEs' stance made it difficult to implement effectively the laws concerning information, consultation and codetermination, and that the relevant legislation should be amended to prevent this problem.
169. Several reasons may be advanced for the differences in host countries' experiences with the policies and conduct of MNEs as regards information and consultation. One of these is the recent presence and/or the relatively small number of MNEs in certain countries which are in the process of opening up their economies after years of having had little or no dealings with foreign investors.(432) Another is either the lack of regulations or collective agreements providing for consultations and the weak enforcement of relevant legislation where it exists. The strength of the tradition of social dialogue may be another contributing factor. It would explain the non-existence or inadequacy of consultations in foreign as well as local firms in certain countries,(433) as opposed to comments by other respondents to the effect that there was a tradition of labour-management consultations, that the conduct of MNEs was in line with the best local practices, and that both MNEs and local firms had a good record in this regard.(434) The fact that in certain countries MNEs acted no differently from local companies, attested to the importance of contextual factors in the host country in influencing consultation practices. In short, where national law or practice encouraged and facilitated social dialogue at the plant, enterprise or group levels, the conduct of MNEs in this domain appeared to be less problematic. Conversely, where there were no laws or tradition in this respect or where the legal requirements were neither respected nor effectively enforced, consultations were either weak or non-existent. The frequency and scope of social dialogue may also be inadequate where organizations representing private sector workers are either absent or have a low profile. In contrast, there were examples of respondents from industrialized, developing and transitional countries attributing the holding of regular and meaningful consultations in enterprises to the presence of organizations that could articulate workers' interests, and to the existence of agreements providing for such consultations.(435)
170. Firm-specific attributes such as size, personnel management policies and the industrial relations systems of the parent company, also seemed to have a significant bearing on consultation practices. There were respondents which noted that large enterprises usually had well developed consultation procedures,(436) while observations that policies and practices in this field varied from one company to another, attested to the role of a company's or group of companies' personnel management and industrial relations policies in influencing the behaviour of firms.(437) In the absence of a set policy or statutory requirements, certain enterprises neither provided information nor demonstrated a willingness to consult with officials or bodies representing their workers, whereas others operating under similar conditions, at least produced information brochures on issues of interest to workers.(438) The willingness of enterprises to engage in social dialogue was also found to differ depending on their country of origin. The setting up and functioning of joint consultation mechanisms were said to be more likely in MNEs in which labour-management consultations were a regular feature of industrial relations practices in the parent company.(439) In such cases companies seemed more disposed to respect legal requirements, to conform to local practices and, in certain cases, to introduce or improve consultation procedures in their overseas operations.
171. In conclusion, regardless of whether there were mandatory requirements relating to labour-management consultations or systems based on pure voluntarism, there was evidence that a combination of firm-specific factors interacted with conditions in the external environment in which MNEs operated to shape their consultation policies and practices. One noteworthy initiative designed to promote workers' participation deserves to be mentioned. The government and employers' organization in an OECD country which favours voluntarism, have launched a number of promotional activities to increase awareness of the positive contribution of workers' participation in enterprises and to encourage both sides of industry to adopt and strengthen such practices. Guidelines for management have been elaborated; booklets on the subject have been published for public distribution; publications featuring cases of "best practice" in this field have been produced; and research on the development of workers' involvement in enterprises (both local and multinational) has been commissioned.(440)
Paragraph 57 (Examination of grievances)
(1) Have any problems occurred in connection with the examination of employers' grievances in accordance with the principles set out in this paragraph? If so, please explain.
No. of respondents: 48 governments (of which 44 said that there had been no problems), 24 employers' organizations (of which 22 said that there had been no problems) and 11 workers' organizations (of which eight reported that there had been no problems). Total: 83.
172. The examination of grievances submitted by workers, either on an individual or collective basis, did not give rise to problems according to the vast majority of respondents. Most of them described at length the laws and procedures that applied and the protection guaranteed to the workers concerned, without indicating whether or not there had been difficulties, while others explicitly stated that there had been none. Four respondents noted that there had been in certain cases difficulties with respect to the examination of grievances.(441) However, their causes and nature were not always specified.
173. Only two of the 11 workers' organizations which made known their views offered some explanation for the difficulties which workers experienced in submitting complaints and having them dealt with, without adverse consequences. The lack of appropriate regulations and a specific entity for addressing these issues was considered to be one reason.(442) It seems that the absence of a "specific entity" meant that there were no well-defined procedures and set arrangements for the joint examination of complaints by workers' and employers' representatives within the enterprise, and that procedures external to the enterprise were considered to be inadequate. The other factor to which problems were attributed was the "stage of the employer-employee relationship". This suggests that a system of labour-management consultation, cooperation and effective arrangements for settling labour disputes had not yet been consolidated in certain enterprises in the economy in transition from which this comment originated.(443) Procedures for the examination of workers' grievances may be stipulated in laws, regulations, work rules, arbitration awards and collective agreements. In one country where a Bill on the Right to Complaint was under discussion, employers' and workers' organizations had been involved in the drafting of recommendations calling for the inclusion of procedures for the examination of grievances in collective agreements.(444)
174. As regards the difficulties experienced with respect to the submission and examination of grievances, one respondent reported that workers might be denied certain privileges to which they were entitled (e.g. company car and additional allowances), they might be discredited, or run the risk of being dismissed even if their complaints were justified.(445) The fear of dismissal was also cited by another respondent.(446)
Paragraph 58 (Settlement of industrial disputes)
(1) Are there any particular problems in the setting up/functioning of voluntary conciliation machinery as presented above? If so, please explain.
No. of respondents: 55 governments (44 of which identified no particular problems), 25 employers' organizations (of which 24 identified no particular problems) and 12 workers' organizations (of which five identified no particular problems). Total: 92.
175. Where there were initiatives for setting up voluntary conciliation machinery, or where such machinery functioned, there appeared to be no particular problems, according to a very large number of respondents. Governments and workers' organizations of different countries pointed out that voluntary conciliation and arbitration mechanisms did not exist,(447) even in one case where the law provided for their establishment.(448) Alternative arrangements were at the disposal of the social partners and this was not seen as being to the disadvantage of many of the parties. However, in one country the involvement of the judicial authorities was perceived to be to the disadvantage of workers, who faced threats of imprisonment and were constrained to end any strike action associated with the unresolved labour dispute.(449)
176. Access to and the use of voluntary conciliation and arbitration arrangements were affected by a few factors, which were none the less significant. One of these was the cost -- which was said to be prohibitive in one country.(450) Another was company policy and practices which in some cases militated against the election of workers' representatives, the presence of unions, labour-management negotiations, as well as access to relevant information and the workforce in certain firms.(451) The size of the enterprise was cited as important in only one country, with problems in the setting up and functioning of voluntary conciliation procedures more likely to occur in relatively small-scale plants. Staff shortages in government ministries which provided voluntary conciliation services tended to cause delays in the organizing of meetings, and this inevitably hindered the efficacy of these services.
177. Initiatives to introduce dispute settlement arrangements of the kind referred to in this paragraph, were either under consideration or being taken in certain countries,(452) and reforms to encourage the social partners to make use of them were being proposed in others.(453) The absence or inadequate use of voluntary conciliation and arbitration for resolving labour disputes was not peculiar to any particular group of countries.
(1) If this is a joint report, please indicate the names of the employers' and workers' organizations that participated in preparing this reply.
(2) In the event that this is not a joint report, please identify the employers' and workers' organizations to which copies of your report were sent.
Employers and workers
(3) In the event that employers' or workers' replies are being sent directly to the Office, have copies thereof been sent to the relevant government authorities and to the most representative employers' or workers' organization? If so, please identify them.
No. of respondents: 48 governments, 16 employers' organizations and 11 workers' organizations. Total: 75.
178. A large number of governments stated that they had invited the representative employers' and workers' organizations to contribute to their reports, and there were several cases in which the social partners responded positively to those requests. Others forwarded to the ILO, copies of the written contributions that had been given to governments, and others submitted statements indicating that they shared the governments' views. The organizations which were consulted and the views of which had been incorporated into the governments' reports, were generally named. However there were cases in which it was simply indicated that the opinions of the social partners had been taken into account. Those organizations that had been invited to make known their views but which did not do so, were usually identified. On the whole, governments sent copies of their replies to the representative employers' and workers' organizations, and a large number of employers' and workers' organizations copied their reports to the governments. That would have afforded all the parties concerned the opportunity to comment on each others' reports, if they wished to do so. Details of the employers' and workers' organizations which contributed in any way to the reports of their respective governments, as well as those which submitted reports to the ILO, can be found in table 2 of the report of the Working Group. The channels through which the reports came to the Office are also specified in that table.
(1) What kind of promotional activities, if any, have been undertaken by government, the employers and workers -- alone or jointly -- during the last four years, with the aim of increasing awareness of the aims and principles of the Tripartite Declaration?
No. of respondents: 34 governments (of which nine said that there had been no promotional activities), 17 employers' organizations (of which six said that there had been no promotional activities) and 15 workers' organizations (of which six said that there had been no promotional activities). Total: 66.
179. Activities for increasing awareness of the principles of the Tripartite Declaration and encouraging their observance had been undertaken in 24 countries during the period under review. One means by which governments have attempted to make this instrument widely known was by distributing copies to employers' and workers' organizations, government offices dealing with labour-related matters and certain libraries.(454) In one exceptional case, the government of an EU country supplied the copies of the Declaration to the government of a CEEC.(455) Certain employers' organizations provided copies to their members, which included MNEs.(456) In certain cases, governments assumed responsibility for having the second edition of the Declaration translated into the official language of their respective countries.(457) Others distributed the foreign language versions of the second edition of the Declaration that had been made available by the ILO.(458)
180. Seminars organized by governments and/or the social partners, and sometimes with the collaboration of the ILO, provided fora for discussing the aims and principles of the Declaration. The text of the instrument would have also been distributed to the participants.(459) The holding of seminars, the compilation of information kits featuring the Tripartite Declaration, OECD Guidelines and other legal instruments relating to labour-management relations in MNEs, and the highlighting of the Declaration in training programmes for union officials, were identified as promotional means that merited consideration.(460) During the period under review, an OECD country adopted a code aimed at encouraging its foreign-based MNEs to adopt good social practices. The principles of that code were said to be complementary to those of the Tripartite Declaration and the OECD Guidelines.(461) Other voluntary codes with the same aims were either adopted or amended by the government and employers' organization of another OECD country.(462)
181. Tripartite discussions at the national level, were identified as useful channels for promoting the Declaration. In certain contexts such discussions had taken place during the period covered by the survey,(463) while in others, it was foreseen that the subject would be covered either on a regular or ad hoc basis.(464)
182. Certain respondents were of the view that the passing of laws dealing with issues covered by the Declaration, constituted an indirect means of promoting this instrument, and particularly its observance.(465) Others thought that since the national labour legislation in force encompassed subjects in the Declaration, and they applied to both local and foreign enterprises which were expected to apply them, special activities to promote observance of the Declaration were not necessary.(466)
(1) In the event that there are export processing or special economic zones in operation, do the labour laws applicable in such areas differ in any way from those applied elsewhere in the country? If so, please explain.
(2) Have workers in export processing and special economic zones the right to form associations of their own choosing and bargain collectively on the terms and conditions of employment which would apply to them?
(3) Do special incentives that may be offered to investors in such special areas limit in any way, directly or indirectly, fundamental human rights or basic trade union rights, employment security, equality of treatment, safety and health standards and other rights of workers?
(4) Is there any particular experience with regard to the application of the Tripartite Declaration in the various economic/industrial sectors on which you would wish to provide information?
(5) Can you provide any information specific to export processing/special economic zones or offshore production installations with regard to paragraphs 17, 20, 25, 26, 30, 34, 37, 40, 41, 45, 52, 54, 56 and 58 of the Declaration?
No. of respondents: 43 governments (of which ten said that there were no EPZs or SEZs in their countries), 19 employers' organizations (of which four said that there were neither EPZs nor SEZs in their countries) and 15 workers' organizations (of which three said that there were no EPZs and SEZs in their countries). Total: 77.
183. All the questions focused on export processing zones and special economic zones.(467) Since these are to be found mainly in developing countries, most of the reports originated from within this group. Of the six OECD countries from which there were replies, two had no such arrangements. However the respondents wished to make the general observation that the national labour standards applied to all enterprises regardless of their ownership, location or sector of activity.(468)
184. Insights into the degree of observance of national labour standards in EPZs were somewhat limited. Three reasons can be identified for this. First, certain major EPZ host countries from which replies were forthcoming for the fifth survey either did not submit any for the sixth, or did not answer this part of the questionnaire. Secondly, there was a relatively low response rate from national workers' organizations, which meant that it was unclear whether or not they shared the views of other respondents from their respective countries. In addition, there was the absence of reports from those international trade secretariats which have been playing a key role in monitoring developments in EPZs worldwide over the years and drawing the attention of the international community to the social and labour impact of EPZs in different national contexts. Thirdly, only exceptionally did respondents go beyond giving a description of the legal and institutional frameworks governing the establishment and operation of EPZs, to comment on alleged or proven cases of violations of national labour standards in their respective countries, and to give some indication of the responses of government and the social partners to those situations.
185. The reports showed that EPZ host countries in which the national labour laws did not apply either in part or in full to the zones were the exception rather than the rule. In the majority of countries there was, in principle, no distinction between the labour laws and regulations that applied in enclaves designated as EPZs or SEZs, or in enterprises operating under the same or similar regimes, and those governing activities in the rest of the country. Those CEECs which either had plans to offer EPZ-type concessions to encourage inward FDI in export-oriented industrial complexes, or in which there were already a few enterprises operating under such arrangements, had not waived the application of national labour standards as a means of attracting investors.(469)
186. Respondents from only six countries indicated that there were official policies or laws allowing EPZ enterprises to observe different labour standards, from those which applied elsewhere.(470) Perhaps the most controversial of the exemptions were those pertaining to the exercise of trade union rights. There were countries which totally prohibited workers in the zones from organizing. A reply from one of the two most cited cases of countries granting such exemptions in Asia,(471) stated that there were "special incentives in the form of exemptions from certain provisions of the Labour Code". However, these were not specified.(472) Prohibition of the right to organize in selected industries (e.g. electronics) considered to be of importance for a country's economic development, was also reported by another respondent.(473) Elsewhere, workers were in principle able to form or join organizations of their choice, but the governments, in a bid to create a climate of "industrial peace", banned the right to strike either for set periods or indefinitely.(474) In this regard it is worthwhile to draw attention to the opinion of the ILO's Committee on Freedom of Association on this question.(475) The idea that some degree of restriction on the exercise of workers' rights was indispensable for the establishment and successful operation of EPZs seemed to have taken root in certain quarters. As a result, one country in Africa which passed EPZ-specific legislation during the period under review, excluded EPZ enterprises from applying the Labour Relations Act in its entirety. Up to the time of submitting its report, there was an ongoing debate about whether or not that provision should be maintained.(476)
187. The other official exemptions seemed designed primarily to bring about a degree of flexibility in the labour field in EPZs. There were examples of legislation enabling employers to give workers in the zones fixed-term contracts,(477) to set working time arrangements in ways that enabled management to compute overtime on a weekly as opposed to a daily basis as was the case in the rest of the economy,(478) and to organize shift work and overtime to suit fluctuations in demand and workloads. In some cases measures were taken to reduce social costs by making the criteria for workers' eligibility for social security benefits upon retirement for medical reasons, or in the event of justified dismissal, different from those that normally applied.(479) For example, the EPZ Remuneration Orders in one country do not, unlike most other Orders, provide for compensation depending on length of service in the event of retirement at or before 60 years of age, for medical reasons. In addition, while in cases of justified dismissal private sector workers are generally entitled to one-quarter of a month's wage for each 12-month period of service, this does not apply to EPZ workers.(480) In sum, where compromises had been made, they tended to have a bearing on certain aspects of the exercise of trade union rights, social security benefits, overtime pay, security of employment and working time. Barring the few cases in which zones were excluded from all or most labour laws, deregulation was usually on a selective basis, in that governments did not necessarily make concessions in all the aforementioned fields. For example, a country may make exceptions to the application of social security legislation or legal provisions pertaining to hours of work without restricting, in any way, the right to organize and bargain collectively.(481) As regards working time, and particularly overtime, there were usually legally prescribed limits, guidelines set by EPZ authorities or minima agreed between employers' and workers' organizations representing EPZ workers where they existed. There was no evidence of governments having made concessions that had implications for OSH standards. However, equality of opportunity and treatment might have been compromised in situations where the EPZs were exempted from the scope of the Labour Code, including whatever provisions it contained with respect to the application of this principle.
188. Except for a relatively small number of countries that granted official exemptions designed to enhance their attractiveness to investors, the general observation was that the same labour standards applied to all enterprises in most host countries and that enterprises were obliged to respect them. Consultations between potential investors and government (through EPZ authorities), respect for minimum wage requirements and the provision of stable jobs and pay comparable to those in non-EPZ firms, were reported by one country in Asia which furnished a detailed reply.(482) National OSH norms were said to be respected and enforced by the competent authority and medical services were provided by employers. Freedom of association and collective bargaining were said to be "encouraged" and periodic consultations convened to discuss employment-related questions with the aim of increasing workers' productivity and settle potentially contentious matters. Industrial relations offices, under the direct supervision of industrial zone managers, had been set up in different EPZs to monitor labour relations and play a role in the settlement of disputes.(483)
189. Responding to observations made by a workers' organization, another government emphasized that MNEs had stood out as having the highest OSH standards, as evidenced by their receipt of a national award in this field, ever since it was instituted. It added that anti-union practices did not go unsanctioned. In the case of an enterprise which attempted to evade recognizing a company union by changing its name, the competent authorities also allowed the union to change its name and the company was ordered to recognize the organization in question.(484)
190. Implicit in the other reports, was that the development and expansion of EPZs were not incompatible with the observance of national and international labour standards. None the less, over the years, noticeable gaps between the reality and that which was supposed to exist in principle, have become evident. They were, to a limited extent, highlighted in certain reports, which came mainly -- but not only -- from workers' organizations.(485) In addition, the reports of the ILO's Committee on Freedom of Association and the Committee of Experts on the Application of Conventions and Recommendations between 1992 and 1995 provided further evidence of practical obstacles to the observance of workers' rights in certain EPZs in different regions.
191. Anti-union practices and tense labour relations existed in certain EPZs, even though freedom of association and the right to organize were guaranteed by law. In one case a company changed its name in order to avoid recognizing a union.(486) In another, access to zones and enterprises for the purpose of organizing workers was said to be difficult.(487) One respondent reported that workers in certain enterprises were denied the right to organize and engage in collective bargaining.(488) Difficulties in exercising trade union rights in certain cases were not unique to enterprises with foreign participation.(489) This would seem to suggest that the problem may be due to the attitudes and practices of government authorities at different levels, and ineffective supervisory and enforcement mechanisms. That made it possible for certain enterprises, regardless of their ownership or location, to violate the applicable norms. In some cases, governments were alleged to have turned a blind eye to incidents of non-observance of labour standards, or to adopt practices that had the effect of hindering the exercise of freedom of association and collective bargaining. Amidst growing allegations of anti-union action, a government reported that it had made declarations to the national and international press, in the presence of representatives of employers' and workers' organizations and other groups, to give the assurance that there was no official opposition to the registration of trade unions and collective agreements in EPZs.(490)
192. Occupational safety and health was another area in which the observance of national regulations was reported to be unsatisfactory, particularly in those enterprises where workers were not organized.(491) Institutional deficiencies, including the shortage of labour inspectors, were identified as being partly responsible for that situation in one country.
193. The lack of job security in certain zones was another source of concern. In one case the workforce, in what was essentially an EPZ involved in import-substitution as opposed to export-oriented production, was reduced by more than 60 per cent during the period under review. In others, workers were reportedly dismissed at short notice or with no advance notice at all.(492) The facility with which the employment relationship could be terminated in those cases, may be explained by the absence of provisions in this regard in individual labour contracts, the non-observance of those clauses where they existed or the failure of the competent authorities to ensure that the laws governing the termination of employment at the employer's initiative were respected.
194. Low wages were another major problem, with as many as 90 per cent of EPZ workers in one country reportedly earning no more than the minimum wage.(493) One argument was that certain employers paid no more than the statutory minimum wages or those recommended, e.g. in guidelines issued by EPZ authorities, because they took their cue from the government's policy of keeping wages low in the zones.(494) The policy of maintaining low wages in EPZs as opposed to those in other comparable enterprises, has been imputed to certain governments. Another complaint was that the practice of informing investors of the legal minimum wage had the effect of making it "extremely difficult" for unions to negotiate higher pay. While within the framework of collective bargaining wage negotiations generally built on legally prescribed minima or wage guidelines, it would appear from the comments of one respondent that enterprises in the country in question were not willing to negotiate wages exceeding those minima.(495) It therefore meant that a government practice that might have been intended to prevent enterprises from paying less than the statutory minimum wage had the unintended consequences mentioned by the workers. Relatively weak bargaining strength on the part of the workers' organizations concerned and other factors such as high unemployment and proximity to other countries to which enterprises could threaten to relocate if they found the wage demands unacceptable, may help to explain the stance of certain enterprises.
195. Certain EPZ host countries have taken legislative and institutional initiatives aimed at improving labour relations in EPZs, which are worth mentioning. The government of an EPZ host country in Asia is attempting to pass legislation for promoting a National Workers' Charter under which trade union recognition will be mandatory, the principle of freedom of association will be reinforced and limits will be placed on the recruitment of casual and temporary labour in favour of more stable jobs.(496) In another Asian EPZ host country there are industrial relations offices in EPZs, to monitor labour relations and recommend appropriate solutions to problems that may arise.(497)
196. During the period covered by the survey there were other measures taken by EPZ host country governments to improve the labour relations climate in the zones, which were not reported by respondents but seem to merit some mention.(498) In its 1994 report to the ILO's Committee of Experts, the government of a developing country in Asia indicated that a tripartite Task Force on Labour had recommended that the national labour laws apply throughout the country, including in EPZs. The July 1994 report of that Task Force was subsequently submitted to the Cabinet Committee for consideration. Up to 1995 (last year covered by the sixth survey) those deliberations had not led to a conclusive outcome. Similarly, the government of another Asian country had also reported in 1994 that it was reviewing the provisions of EPZ legislation and that amendments extending the application of the labour laws in force in the zones had been proposed to the competent authority. The government of a country in Africa in 1995, amended the EPZ Act to make the Labour Act applicable in the zones. However, strikes and lockouts remain banned for a specific period. In 1993, a developing country in the Americas passed legislation prohibiting solidarist associations from "engaging in activities that have the effect of hindering the formation and functioning of trade unions and cooperative organizations". The outcome of these initiatives will depend on whether or not the stated intentions to amend the laws are actually carried out. Where they have been amended, the desired changes will only come about and endure if there is a commitment on the part of employers and workers to respect the new legal provisions, and an interest and capacity on the part of governments to enforce them.
(1) Have any disputes arisen in your country as a result of different interpretations being given by parties concerned to any paragraph(s) of the Tripartite Declaration? If so, please provide details on the issues and the ways in which these were resolved.
(2) Does the procedure, as outlined, raise difficulties? If so, please explain and also suggest improvements you consider feasible.
No. of respondents: 38 governments (of which 37 reported that no disputes had arisen and that the procedure caused no difficulties), 15 employers' organizations (all of which reported that no disputes had arisen and that the procedure caused no difficulties), and eight workers' organizations (of which six reported that no disputes had arisen and that the procedure caused no difficulties). Total: 61.
197. The one government which made a specific comment was of the view that problems had not arisen because no concrete measures had been taken so far to apply the principles of the Tripartite Declaration.(499) Of the two workers' organizations that made statements, one attributed the relatively little use that had been made of the interpretation procedure to a lack of political will and awareness on the part of both the government and social partners.(500) The other noted that the non-application of this instrument was widespread, and that it would require "general political and economic measures to change that situation". It attributed the non-observance of the Tripartite Declaration to economic globalization, internal economic problems, and the failure to take into account social policy concerns. It none the less pointed out that the fundamental rights of workers were not undermined by the presence of MNEs.(501)
198. Having studied the reports submitted by governments and by employers' and workers' organizations, and on the basis of the analysis it carried out, the Working Group has agreed on the following conclusions, and has formulated a number of recommendations concerning action to be taken at the national or international levels. The Working Group submits these to the Subcommittee for endorsement. The Subcommittee may also wish to formulate additional conclusions and recommendations which it may consider necessary.
199. The information provided by governments and employers' and workers' organizations which responded to the survey is significant. Since it covers core areas of the ILO's activities, the Working Group recommends the Governing Body to call on the Director-General to ensure that the technical departments at headquarters and the multidisciplinary teams in the field make use of this information and take into account the issues raised when designing programmes to assist governments and employers' and workers' organizations in ILO member States.
200. Foreign direct investment (FDI), driven primarily by the globalization strategies of MNEs, has been growing rapidly in recent years. The globalization of production is reshaping the global economy, resulting in increased world trade and capital flows. MNEs accounted for 150 million direct and indirect jobs worldwide in 1994.
201. MNEs invest in all sectors -- agriculture, mining, manufacturing and services. Moreover, because of the global reach their intra-corporate trade now accounts for the bulk of world trade flows. The privatization programmes that are under way in different parts of the world have opened up opportunities for greater participation by MNEs in the economies of many countries. New or revised investment codes for stimulating inward FDI are being issued, while interregional and subregional agreements for promoting investment have either been concluded or are under consideration.
202. The Working Group notes that while a number of international instruments relating to FDI have either been adopted or are in preparation, none of them touch on the labour and social aspects of foreign investment. It has been acknowledged that only "The ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy provides a widely accepted set of standards covering most key labour issues ... developed with the direct involvement of labour and business representatives, [it] provide[s] a key reference standard for international investment accords that seek to address the relationship between FDI and labour issues".(502)
203. Private capital flows and the activities of MNEs will continue to play an important role in the global economy in the years to come, and the labour-related aspects of these developments will have to be addressed. The ILO's Tripartite Declaration sets out guidelines concerning the roles and responsibilities of governments, the social partners and MNEs in dealing with the key labour issues. Consequently, the Working Group recommends that a seventh full-scale survey covering the years 1996, 1997, 1998 and 1999 be carried out.
204. The Working Group notes that because of the extensive nature of the questionnaire, a number of respondents had difficulties in responding to the sixth survey. Therefore the questionnaire to be sent out in connection with the seventh survey should be shorter, yet cover the main issues dealt with in the Declaration. The draft text of the questionnaire should be examined by the Subcommittee in November 1998 and dispatched early in 1999, and the replies thereto should be examined by the Subcommittee and the Governing Body in November 2000.
205. The general perception was that MNEs had a positive impact on the economies of host countries. Although no major divergences between national policies and the practices of MNEs were reported, there were instances in which the activities of multinationals had caused difficulties, particularly as regards job security, the right to organize, collective bargaining and labour-management consultations.
206. The principles of Conventions Nos. 87, 98, 111 and 122 and their corresponding Recommendations were generally reflected in the national constitutions and labour legislation of many countries. Where that was not the case, legislation was either in preparation or on the verge of being passed. Even though some progress with respect to the exercise and protection of workers' rights was noted, there had none the less been some degree of interference in the setting up and functioning of workers' organizations in a number of countries. Labour-management consultations had taken place in several countries either in keeping with national law and practice, or at the initiative of the MNEs or unions. Many host countries stressed the importance of such consultations.
207. The Working Group reiterates that the issue of economic and social development is a shared responsibility in which governments set national priorities and enterprises, in both the public and private sectors, as well as labour, have important roles to play. The passing of national laws and regulations remains the responsibility of governments, and the laws and regulations must be fully respected. Good social practice, based on full respect for international labour standards, in particular Conventions Nos. 29, 87, 98, 100, 105, 111, 122 and 138 and their accompanying Recommendations, is particularly desirable and highly recommended.
208. The Working Group recalls that many positive steps have been taken in setting policies that take into account the respective concerns of the tripartite partners on economic and social issues. The principles of the Declaration are valid for both foreign and local enterprises. While there are specific provisions addressed to governments, employers (including MNEs) and workers, it is essential that the addressees work both separately and collectively to give full meaning to the objectives of this instrument.
209. It appears from the reports that MNEs in several countries have undertaken appropriate consultations in order to harmonize their manpower plans with national development policies. In addition to their important contributions to employment, MNEs play critical roles in training, the introduction and use of advanced technologies and modern management practices. However, certain actions by MNEs have resulted in layoffs and aggravated unemployment.
210. The employment of nationals was in many instances regulated by law, and the experiences in this regard were said to be positive. However, one respondent considered paragraph 18 of the Declaration, concerning the priority to be given to the employment of nationals of host countries, to be discriminatory and inconsistent with the provisions of paragraph 21. While it was found that MNEs generally provided job-specific training, there were some which offered training in a broad range of fields which enabled nationals to assume positions with higher responsibilities.
211. The experiences as regards linkages between MNEs and enterprises in host countries were varied. There were no indications as to the direct role of MNEs in promoting the use of local raw material, the local manufacture of parts and the local processing of raw materials. None the less, there were countries in which subcontracting arrangements with local enterprises for the supply of goods and producer services were said to have led to the development of a capacity to provide high quality products and services. In sum, the record of MNEs with respect to the development of backward and forward linkages with host economies remains varied.
212. The Working Group is aware that cost and quality considerations might be among the main reasons for which local sourcing and local processing continue to be relatively limited in many contexts. It recognizes that more needs to be done to improve the capabilities of local enterprises so that they would be able to meet the demands of MNEs. Governments, in consultation and cooperation with MNEs and potential local suppliers, need to explore what can be done and to develop strategies in this regard. Given the potential of linkages for generating employment and contributing to the development of less developed areas, the Working Group urges MNEs as well as national enterprises, to collaborate with governments in promoting the use of local raw material and other intermediate inputs for the manufacture of parts and equipment.
213. MNEs play a significant role in the introduction of modern technologies and this has implications for employment. Given that job creation is of fundamental importance, the Working Group urges MNEs and governments, when discussing investment arrangements, to balance the need for advanced technology with the urgent imperative of creating jobs. Paragraph 19 of the Declaration is particularly relevant in this regard.
214. During the period under review efforts were made to promote equality of opportunity and treatment. The action taken included the enactment of new or amended legislation designed to counter all forms of discrimination, the granting of incentives to hire more women in professional and senior positions, and programmes for promoting equality for different groups, including youths. However, it was argued that the passing of legislation alone, did not suffice for dealing with what were termed the "social origins of discrimination", and that other solutions should be sought.
215. The Working Group considers that governments have the responsibility of instituting a process of education as regards equality. It recommends the Governing Body to urge governments not only to make policy pronouncements and issue legislation on equality of opportunity and treatment, but also to put in place effective enforcement measures and education programmes, in consultation with the social partners. Recognizing that this problem is not particular to MNEs, it is essential that national enterprises get involved in whatever initiatives may be taken to eliminate discriminatory practices.
216. Respondents found it difficult to evaluate the contribution of MNEs to promoting and providing stable and secure employment. None the less, many affirmed that MNEs played a significant role in employment creation. Job security in both multinational and national enterprises was under threat because of privatization, restructuring and relocation of enterprises, subcontracting and technical innovation. While it was acknowledged that subcontracting arrangements created employment, concerns were expressed about the nature of some of those jobs. MNEs generally complied with the legal requirements governing advance notice in cases of redundancy and the payment of dismissal compensation. In the absence of laws in this regard, some provided, on a voluntary basis, benefits of a similar nature. Most countries reported having contributory and non-contributory social security and unemployment insurance schemes. In some contexts, there were special programmes to assist those who had been made redundant to relocate and retrain, and to provide subsidies to enterprises which hired such jobseekers.
217. The Working Group shares the concerns expressed about the negative consequences which arise from the lack of secure and stable employment. The creation of an environment in which opportunities for freely chosen, productive and full employment are maximized is one of the principal goals of any government. The Declaration urges MNEs to play a positive role in this sphere. In order for them to do so, there need to be arrangements whereby foreign and local enterprises can take part in consultations with the relevant government entities responsible for investment and related matters. The Working Group calls on the Governing Body to urge governments and, through them, employers' and workers' organizations, to cooperate in promoting secure and stable employment and in devising better income protection for workers whose employment may cease for various reasons. Given that unemployment can lead to serious social unrest, the need for tripartite cooperation in avoiding or minimizing dismissals and layoffs, and in putting in place institutional and other mechanisms to deal with the effects of such decisions, cannot be overemphasized.
218. While the training provided by MNEs was geared primarily to meeting their own requirements, MNEs were credited with playing critical roles in meeting local manpower needs in some countries. Their initiatives in the field of training had contributed to the attainment of national economic policy objectives. While it was difficult to evaluate the contribution of MNEs as opposed to that of local enterprises, the high standard of training by MNEs was considered to have had positive spillover effects. Governments and MNEs underlined the importance of training and retraining, and they both contributed to financial arrangements for meeting training costs. There were signs of an emerging trend among certain governments to give increasing responsibility to the social partners in the field of training in order to enhance the country's responsiveness to training needs.
219. The Working Group reconfirms the important role of training in promoting sustainable development. Improvements in productivity, in the quality of goods and services, and in the capacity of locals to assume technical and managerial positions in both national enterprises and MNEs, depend to a great extent on training. The quality of the workforce is critical to the development of a country's technological capabilities and its competitiveness in world markets. Training should be responsive to the demands of the labour market and, in this regard, the business community is perhaps best placed to advise decision-makers on skill requirements and the appropriate training for enhancing employability. The Working Group recommends that the Governing Body urge governments and the social partners to work closely at all levels in elaborating training policies, setting goals and implementing programmes, and to give equal consideration to the question of training in rural areas and the informal sector.
220. In general, national legislation provided guidelines regarding wages. Pay, benefits and conditions of work in MNEs compared favourably with, and often excelled, those provided by comparable local enterprises. Governments were also reported to have tried to encourage MNEs to locate in less developed areas. Special measures, including the granting of fiscal and other incentives, were adopted with a view to creating job opportunities for lower income groups. Industrial development programmes were launched, and EPZs, SEZs and industrial parks were established in a number of countries.
221. Higher wages and better living standards are the results of economic growth and development. The Working Group recommends that the Governing Body: call on governments and, through them, employers' (including MNEs) and workers' organizations, to work jointly in setting wage policies, and in the drawing up of relevant legislation thereon, to ensure respect for the principle of equal pay for work of equal value and to have recourse to collective bargaining for determining wages and working conditions; urge governments to take measures that will encourage investment in less developed areas.
222. The efforts that have been made to raise national OSH standards attest to a growing recognition of the importance of having a safe and healthy work environment. ILO Conventions, Recommendations, and codes of practice and guides, were referred to as guidelines for the drafting of OSH laws and regulations. MNEs generally complied with national legislation and maintained safety standards that sometimes exceeded those observed by comparable national enterprises. The provision of information on special hazards and related protective measures seemed fairly widespread. However, there were reports of MNEs not informing workers of potential hazards. Information was disclosed either as required by law, or sometimes on a voluntary basis. The practice of providing information on the OSH standards which they observed in other countries did not appear to be widespread among MNEs. One argument was that standards were not adaptable to other places. With few exceptions, MNEs played a significant role in examining the causes of hazards and taking corrective measures.
223. Programmes at the industry and national levels had been successful in raising awareness about the importance of OSH. They had contributed to the improvement of safety standards at workplaces and the reduction of industrial accidents. Institutional arrangements facilitated consultation and cooperation between MNEs and the social partners through national bipartite and tripartite councils as well as in-house safety committees. There was not much information on cooperation between MNEs and institutions dealing with OSH standards. However, it was quite likely that such cooperation took place through the national employers' organizations to which the parent companies or their affiliates belonged. MNEs did participate in multilateral fora where safety and health matters were discussed. They took part in national consultations for the setting of OSH standards and cooperated closely with governments, including for the financing of OSH programmes. The presence and strength of trade unions appeared to be an important factor in influencing the OSH policies of multinationals and the degree to which they cooperated with governments and the social partners in that field.
224. The Working Group reiterates the importance of a safe and healthy work environment. The economic impact of occupational injuries, diseases and fatal accidents is significant and the human cost extremely high. Attempts need to be made at every level by all concerned to bring about radical improvements in this respect. The Governing Body may wish to request governments and, through them, employers' (including MNEs) and workers' organizations, to work closely in bringing about improvements in the application and enforcement of OSH norms and in raising awareness about safety issues. The provision of safety instructions in languages that are easily understood by the workforce and the establishment of enterprise safety committees and national councils, should be encouraged. In view of their experience and capabilities, MNEs should be urged to cooperate with governments and the social partners, as well as local institutions that may be set up to deal with safety and health matters.
225. The record of MNEs as regards trade union rights was not reported to be less favourable than that of other enterprises. Freedom of association and the right to organize were enshrined in many national constitutions and guaranteed by the labour laws in force. None the less, certain EPZ host countries restricted the exercise of those rights as a means of attracting inward FDI. Anti-union attitudes and the lax enforcement of laws were also reported to have emerged in some contexts and they were attributed to the increasing efforts of some governments to create an "investor-friendly" environment. On the whole, however, initiatives for increasing inward investment had no bearing on the exercise of workers' rights, except in certain EPZs. During the period under review, a number of countries took steps to improve industrial relations policies and practices. They included the amendment of legislation, adoption of codes of practice in the field of industrial relations and the organization of training programmes for representatives of employers' and workers' organizations. Where there were violations of workers' rights, it was possible to have recourse to established legal procedures for resolving those problems.
226. The Working Group is of the view that a peaceful industrial relations climate is a sine qua non for investment, growth and social stability. Free, responsible, independent and strong employers' and workers' organizations are essential for the proper functioning of tripartism in any country. The Working Group considers that national law and practice, the quality of supervisory and enforcement mechanisms, and tripartite cooperation, are critical determinants of the industrial relations climate that reigns in any country. It recommends that the Governing Body draw the attention of governments to the importance of respecting freedom of association which, according to the Declaration of Philadelphia, is one of the fundamental principles of the ILO and essential to sustained progress. Governments, as well as employers' and workers' organizations, should be urged to pay special attention to the social and labour effects of economic globalization, to respond in appropriate ways to the concerns of the different parties, and to promote a climate of industrial peace based on the principle of freedom of association and the right to collective bargaining. The Working Group recommends that the Governing Body call on governments that have not yet done so, to ratify and fully implement Conventions Nos. 87 and 98 in accordance with the Tripartite Declaration.
227. The procedures for trade union recognition were generally prescribed by law. There were relatively few recognition problems or obstacles to negotiation. The necessary facilities and information were generally made available. That depended on the quality of labour-management relations, local management practices, and the industrial relations policies of the group of enterprises. None the less, there were cases in which neither information nor facilities were provided. Confidentiality was sometimes given as the reasons for non-disclosure. In other cases the relevant laws were simply not being respected. Recognition problems existed in a few countries, due in part to undesirable attitudes and practices of some governments, local enterprises and MNEs. The collective bargaining process was at times hampered by, inter alia, threats to relocate, intimidation, the lockout or dismissal of workers, particularly union officials, as well as acts of interference to obstruct progress in negotiations. The inaccessibility of company premises and changes in the registration of companies were other factors that hindered the bargaining process. Lengthy legal and administrative procedures in certain countries delayed the settlement of disputes over trade union recognition. There was no extensive information on problems caused by the need for local management to refer matters under negotiation to the parent company before being able to take decisions or implement agreements. Where such referral was required, and it caused delays in negotiations, that sometimes led to industrial action.
228. The Working Group considers collective bargaining to be important for shaping labour-management relations. Collective bargaining should be a natural, and perhaps the preferred, method for labour and management to deal with matters relating to the terms and conditions of employment. Interference in the bargaining process should be avoided since outcomes attained under such circumstances are unlikely to have widespread support. The Working Group therefore recommends that the Governing Body call on governments, employers' and workers' organizations to promote collective bargaining as a key element in industrial relations. Governments and the social partners should develop specific programmes to make their members and the public aware of the importance of collective bargaining for fostering peaceful industrial relations. Information and facilities for the negotiation and conclusion of collective agreements should be made available and those involved should be given the authority to make final decisions on the matters under discussion.
229. Labour-management consultations reportedly took place at the plant, enterprise and group levels. There were a few reports that consultations were held either rarely or not at all. While consultations generally took place in keeping with national law and practice, they were also said to have occurred in contexts where there were no legal requirements or official policy in this respect. The 1994 Council Directive (of the EU) on the Establishment of European Works Councils, which contains provisions that expand on those of paragraph 56 of the Declaration, has brought about important changes in consultation policies and practices in EU Member States.
230. Labour-management consultations are essential for developing a meaningful and mutually beneficial partnership between employers and the workforce. These contribute to minimizing uncertainty, building trust, reducing tension, and to the prevention of disruptive action or disputes. The adoption of ILO Recommendation No. 94 concerning consultation and cooperation between employers and workers at the level of the undertaking, and Recommendation No. 129 concerning communication within the undertaking, attests to the importance of consultations. The Working Group requests the Governing Body to call upon governments and, through them, employers' and workers' organizations in ILO member States, to give effect to the aforementioned Recommendations and to adhere as closely as possible to the provisions of the Tripartite Declaration on this subject.
231. While the vast majority of respondents indicated that the settlement of individual and collective grievances posed no problems, difficulties were nevertheless reported in some contexts. These appear to have been caused by the absence of well-defined in-house procedures for the examination of grievances. There were isolated cases of workers having faced reprisals for having submitted complaints, and the fear of reprisal was said to be responsible for workers' reticence to make known their grievances. Several reports suggested that provisions relating to the handling of grievances either would be or should be included in collective agreements in order to minimize problems in this respect.
232. The examination and settlement of grievances should be a routine matter. Grievances should be handled expeditiously and the procedures for doing so should be clearly specified and made known to workers and their representatives. The Working Group wishes to recall that the provisions of Recommendation No. 130 provide adequate guidelines in this respect. The Governing Body may wish to draw to the attention of governments and, through them, to employers' and workers' organizations and MNEs, the need to bear in mind the provisions of Recommendation No. 130 concerning the examination of grievances within the undertaking, with a view to their settlement.
233. Where conciliation machinery existed and functioned, no particular problems were noted. However, some countries reported that such machinery did not exist. The shortage of staff in the relevant government institutions, the size of enterprises and the costs of conciliation services were identified as the main obstacles to the use of conciliation mechanisms.
234. Procedures for the settlement of industrial disputes should normally be provided for in collective agreements, but where the parties thereto may be unable to resolve their differences through direct discussions, facilities for voluntary conciliation machinery should be available. The Working Group recommends that the Governing Body urge governments and, through them, employers' and workers' organizations and MNEs, to use the provisions of Recommendation No. 92 concerning voluntary conciliation and arbitration, as guidelines for the settlement of disputes.
235. The surge in FDI flows in recent years has been fuelled by the globalization of corporate production, technological innovation and policy changes favouring competition and a greater role for private enterprises in developing, transitional and industrialized countries. Globalization not only has significant economic effects, but also far-reaching social and labour consequences. The Tripartite Declaration is widely recognized as the only instrument concluded within the framework of the United Nations, which addresses all aspects of the labour concerns to which the increased activities of MNEs may give rise. It is seen as providing "a key reference standard for international investment accords that seek to address the relationship between FDI and labour issues".(503) One of the few issues on which there was unanimity during the negotiations on the draft UN Code of Conduct on Transnational Corporations was that the principles of the Tripartite Declaration should comprise the chapter dealing with Employment conditions and industrial relations.(504) The OECD has stated that "wherever the ILO Tripartite Declaration refers to the behaviour expected from enterprises, they parallel the OECD Guidelines and they do not conflict with them."(505) The universal applicability of the Tripartite Declaration is widely acknowledged.
236. The Working Group recommends that the Governing Body: request the Director-General to intensify, including through closer cooperation with governmental and non-governmental organizations involved in activities relating to FDI, economic development, human rights, and particularly workers' rights, ILO activities to promote the Declaration by giving greater publicity to this instrument and to the fact that its principles need to be respected; urge governments and employers' and workers' organizations to cooperate more actively with the Office, as well as through independent activities of their own in publicizing and promoting the Tripartite Declaration in their respective countries; call on governments and employers' and workers' organizations to incorporate in their training programmes, meetings, etc., a discussion of the Tripartite Declaration and the social aspects of FDI and MNE operations. In carrying out such activities, they are encouraged to call on the ILO (MDTs, ILO area offices and the relevant services at headquarters) for assistance.
237. Listed in the Annex and Addenda to the Tripartite Declaration are the international labour Conventions and Recommendations that the Governing Body considers to be of direct relevance to this instrument. The Working Group wishes to reiterate that the instruments in question provide useful guidelines for addressing social and labour problems to which the activities of MNEs may give rise. It therefore recommends that the Governing Body call on governments and, through them, on employers' and workers' organizations, to apply to the fullest extent possible the principles of the Conventions and Recommendations in the Annex and Addenda.
238. Deregulation has opened up avenues for MNEs to acquire assets in public utilities and industries in which the involvement of foreign private capital was either prohibited or restricted. The survey revealed that those changes have had a major impact on employment, wages, working conditions, training and industrial relations in many of the enterprises concerned. In view of the mixed experiences in this regard, the Working Group suggests that questions designed to gain further insight into the labour effects of the participation of MNEs in different deregulated industries and sectors be included in the questionnaire for the seventh survey.
239. Interest in setting up EPZs, SEZs and similar arrangements for promoting export-oriented industries continues to gather momentum in different regions. According to the replies to the sixth survey, EPZs are widely regarded as an important means for job creation. However, certain common labour problems persist in a number of zones and individual enterprises operating under EPZ-type regimes, as a result of which the choice of EPZs as a strategy for industrial development and employment continues to be called into question in some quarters. The Working Group therefore suggests that questions pertaining to employment and workers' rights, as well as the degree of observance of the Tripartite Declaration in EPZs and SEZs, be included in the seventh survey.
Geneva, 31 January 1997. (Signed) Louise Guertin,
Points for decision:
1. The Committee on Multinational Enterprises has become the Subcommittee on Multinational Enterprises, as a result of the restructuring of the Governing Body committees, when it was decided to establish the Subcommittee on Multinational Enterprises within the framework of the Committee on Legal Issues and International Labour Standards (GB.256/13/24, para. 6(b)(i)), May 1993.
10. Mexico and the Czech Republic became members of the OECD on 18 May 1994 and 21 December 1995, respectively. Unless otherwise indicated, the Czech Republic and Mexico may also be counted among the countries of Central and Eastern Europe, and the newly industrializing countries of Latin America, respectively.
11. In 1995, 70 per cent of the world's inward FDI stock was in industrialized countries, and they also accounted for 92 per cent of total outward stock. Source: UN: World Investment Report 1996 (New York and Geneva, 1996), pp. xiv, xvi, 239-245 (shares of FDI flows calculated from data in Annex, tables 1 and 2, pp. 227 and 233).
13. The four DAEs are the Republic of Korea, Malaysia, Singapore and Thailand. The core areas include macroeconomic policy, investment, trade, finance and taxation. In March 1992, the subject of FDI and relations between the OECD and DAEs was addressed at a workshop in Bangkok.
15. Jean-Luc Le Bideau: "La libéralisation des législations et des politiques à l'égard de l'IDI [investissement direct international] dans les économies dynamiques non membres", 2ème Réunion du Group de Travail sur l'investissement et les flux financiers, Genève, 28 juin-1er juillet, Conférence des Nations Unies sur le commerce et le développement, TD/B/WG.1/Misc.2/Add.5, 8 juillet 1993, 11 pages. Mexico became a member of the OECD in 1994.
21. FDI stock in Estonia rose from US$58.6 million in January 1993 to some US$523.7 million in July 1995. In the case of Romania, FDI stock in January 1992 was valued at US$225.8 million. By July 1995, they had reached an estimated US$1,380.2 million. The figures for Slovakia were US$231.2 million in January 1993 and about US$585.1 million in 1995. As for Slovenia, FDI stock increased from US$851 million in January 1994 to approximately US$1,346.6 million in 1995. United Nations Economic Commission for Europe: East-West Investment News, No. 4, Winter 1995, table 1, p. 17.
22. The following countries joined the ILO during the period covered by the sixth survey: Armenia (1992), Azerbaijan (1992), Bosnia and Herzegovina (1993), Croatia (1992), Eritrea (1993), Gambia (1995), Georgia (1993), Kazakstan (1993), Kyrgyzstan (1992), Republic of Moldova (1992), Oman (1994), St. Vincent and the Grenadines (1995), Slovenia (1992), Tajikistan (1993), the former Yugoslav Republic of Macedonia (1993), Turkmenistan (1993) and Uzbekistan (1992). The former Czechoslovakia was a member of the ILO from 1919 to 1993. With the division of the country into two States, the Czech Republic and Slovakia became members in 1993.
23. For the names of the other 29 countries see table 3. The seven from which there were replies to the sixth survey are: Antigua and Barbuda, Bahamas, Cambodia, Gabon, Grenada, Mauritania, Trinidad and Tobago.
24. The 18 countries are: Afghanistan, Angola, Burkina Faso, Equatorial Guinea, Guinea, Lao People's Democratic Republic, Mali, Nepal, Niger, Sao Tome and Principe, Senegal, Sierra Leone, Solomon Islands, Somalia, Sudan, Togo, Yemen, Zaire.
26. Since 1992, China has been the largest recipient of FDI to developing countries. As regards South Africa, companies from this country invested US$300 million in hotels and tourism and in mining in Africa during the 1994-95 fiscal year. See: C. Lowe Morna: "South African companies look to the continent to expand their horizons", in Development Business, Vol. 18, No. 428, 16 Dec. 1995, pp. 1 and 2.
53. For example, at the end of 1993 there were 2,816 MNEs with a combined workforce of 212,000 in Austria and 850 Austrian MNEs abroad which employed 89,900. Foreign-owned enterprises in Canada accounted for 21 per cent of the country's total assets and employed 36 per cent of the workforce in 1992. The number of enterprises with foreign capital in China exceeded 100,000 at the end of 1994 and they had a total workforce of 140 million. FDI inflows into Finland rose from US$406 million in 1992 to US$1,467 million in 1994, and the workforce in Finnish MNEs abroad increased from 133,330 to 138,300 over the same period. Up to 1995 there were 100,000 workers in MNEs in Ireland and the same number of indirect jobs was said to have been created. In 1992, 3,441 enterprises with some degree of foreign ownership was operating in New Zealand with a workforce of 199,987 (comprising full-time and part-time staff). In 1994, there were 7,950 enterprises with foreign capital employing 1,414,484 persons in Mexico. In the United States, in 1993, 4.7 million persons worked in 12,703 subsidiaries of foreign MNEs. (Source: respondents.)
67. China (G). "Provisions on labour administration of enterprises with foreign investment" were drawn up by the Ministry of Labour and the Ministry of Foreign Trade and Economic Cooperation and promulgated on 11 August 1994.
74. United States (G), "Model business practices" adopted in 1995. Japan (G), "Actions (ten items) expected of enterprises in development of their business activities overseas" issued in 1989 and revised in 1992 to include provisions on safety and health at the workplace.
84. For example, Estonia (G) (Conventions Nos. 111, 122), Ireland (G) (No. 111), Mauritius (G) (No. 87), Switzerland (G) (No. 98), United States (G) (Nos. 87, 111, 122), Zimbabwe (G) (Nos. 87, 98, 111, 122).
127. Australia (G), Bahamas (G), Bangladesh (G), Barbados (G), Brazil (G), Cambodia (G), Canada (G), Chile (G), Colombia (W), Costa Rica (G), Czech Republic (W), Egypt (E), Ireland (G), Jordan (G), Luxembourg (E), Malaysia (W), Mauritius (G), Mexico (E), Namibia (G), Nicaragua (G), Pakistan (E), Portugal (G), Slovakia (G), Slovenia (G), Sri Lanka (G), Swaziland (G), Sweden (G), Switzerland (E), Trinidad and Tobago (G), Tunisia (G), United Kingdom (E), United States (G), Zimbabwe (E).
145. "MNEs rely, to some extent, on expatriates especially from their home countries, for staffing their foreign affiliate operations. In aggregate terms the number and proportion of expatriates working in foreign affiliates are not large." UN: World Investment Report 1994, p. 238.
156. Australia (G) (New South Wales and Queensland) (paras. 1-7), Austria (G), Belgium (E, W,) Finland (G), Ireland (G), Republic of Korea (G), Norway (G), Spain (G), Switzerland (E), Tunisia (G), United Kingdom (G), United States (G).
169. For example, Cambodia (G), Colombia (G), Costa Rica (G), Czech Republic (G), Finland (W), Ireland (G), Grenada (G), Hungary (G), Jordan (E), Republic of Korea (E), Luxembourg (E), Nigeria (G), Singapore (E), Spain (W), Swaziland (G), Tunisia (E), Turkey (E), Zimbabwe (E).
173. For example, Canada (G), Sweden (G). For further details see also the OECD job study: Evidence and explanations, Part I: Labour market trends and underlying forces of change (Paris, OECD, 1994), p. 1.
193. For example, Costa Rica (G) (paras. 13-20), Ecuador (G), Namibia (G) (paras. 13-20), Nigeria (G) (paras. 13-20), Singapore (E), Slovakia (G) (paras. 13-20), Thailand (G) (paras. 13-20), Venezuela (E) (paras. 13-20).
264. For example, Australia (G), Austria (G), Bangladesh (G, E), Hungary (G), Gabon (G), Ireland (G), Jordan (G), Mexico (G), Pakistan (E), Saint Vincent and the Grenadines (E), Slovenia (G), Sri Lanka (G), Switzerland (E), United Kingdom (G).
266. Barbados (E, W), Brazil (G), Czech Republic (G), Estonia (W), Ethiopia (G), India (G), Republic of Korea (G, E), New Zealand (G), Poland (W), Romania (G), Slovenia (G), Thailand (G), Uruguay (G), Zambia (G), Turkey (G, W).
269. "Around 8,000 workers die each year in the EU alone as a result of occupational accidents. Out of some 120 million workers, almost 10 million are victims of work accidents or occupational diseases ... the proportion of occupational fatalities and diseases is much higher in countries outside the EU -- some 210,000 workers die each year and another 115 million are injured or suffer from work-related diseases, mostly in the industrially developing world." Dr. Chandra Pinnagoda: "Introductory report of the ILO", Proceedings of the XIVth World Congress on Occupational Safety and Health, Madrid, Spain, 22-26 April 1996 (forthcoming).
281. For example, Austria (G), Barbados (G, E), Belgium (G), Brazil (G), Cambodia (G), Canada (G), Chad (G), Colombia (G), Czech Republic (G), Ecuador (G), Greece (G), Republic of Korea (G), Kuwait (G), New Zealand (G), Poland (G), Slovakia (G), Spain (G, W), Trinidad and Tobago (G), United States (G).
286. For example, Antigua and Barbuda (G), Barbados (W), Cambodia (G), Chile (G), Kuwait (G), Malaysia (W), Mauritania (E, W), Mexico (G), Myanmar (G, W), Nigeria (W), Portugal (W), Romania (G), Saint Vincent and the Grenadines (E), Syrian Arab Republic (G), Turkey (W).
292. Austria (G), Bahamas (G), Barbados (G), Belgium (G), Egypt (G), Ethiopia (G), Finland (G), Grenada (G), New Zealand (G), Pakistan (E), Singapore (G), Switzerland (G), Syrian Arab Republic (G), United Kingdom (G), Zimbabwe (E).
299. Brazil (W), Chad (G), Barbados (G), Grenada (G), Myanmar (G), Norway (G), Nigeria (G), Kuwait (G), Mauritania (E, W), Slovenia (G), Sri Lanka (G), Thailand (G), all noted that either no work was done in this regard or they did not have any relevant information to give.
301. Australia (G), Bangladesh (E), Barbados (G), Chile (G), Czech Republic (G), Dominica (E), France (E), Germany (G), India (G), Mexico (G), Netherlands (G), New Zealand (G), Singapore (G), Spain (G), Switzerland (G), Tunisia (G), United States (G).
302. Belgium (G) (occupational medicine issues are discussed at industry level), Egypt (E) (pharmaceutical and metal industries), Finland (W) (chemical industry), Malaysia (G) (electronics, oil and gas industries), Tunisia (G) (petroleum industry).
306. Argentina (G), Bangladesh (G), Barbados (G), Belgium (G, E, W), Canada (G), Chile (G), Costa Rica (G), Ecuador (G), Finland (G), France (E), Greece (G), India (G), Ireland (G), Republic of Korea (G, E), Malaysia (G), Mauritania (E), Mexico (G), Namibia (G), Netherlands (G), Norway (G), Portugal (G), Romania (G), Singapore (G), Spain (G, W), Switzerland (G), Tunisia (G), United Kingdom (G), Venezuela (G), Zimbabwe (G).
316. Australia (G), Cambodia (G), Ethiopia (G), Republic of Korea (G), Mauritania (E), Mauritius (G), New Zealand (G), Pakistan (E), Romania (G), Spain (W), Sri Lanka (G), Syrian Arab Republic (G), Turkey (G).
321. Australia (G), Brazil (W), Colombia (W), Costa Rica (G), Czech Republic (W), Dominica (E), Finland (W), Greece (G), Hungary (G), Japan (W), Malaysia (W), Mauritania (W), Poland (W), Portugal (W), Saint Vincent and the Grenadines (E), Spain (W), Sri Lanka (G, W), Switzerland (W), Thailand (G), United States (W), Zambia (G), Zimbabwe (E).
324. For commentary on differences according to size of establishment see replies of Australia (G) and Finland (G). The two industries cited as examples are information technology firms, Finland (W); and retailing, Switzerland (W).
332. Brazil (W), Colombia (W), Japan (W) (referring to the situation in certain host countries to Japanese MNEs), Malaysia (W), Mauritania (W), Spain (W), Sri Lanka (W), Switzerland (W), Turkey (W), United States (W), Zimbabwe (E).
370. Colombia (W), Czech Republic (W), Dominica (E) (referring to problems reported by workers), Hungary (W), Japan (W) (referring to the situation in certain host countries to Japanese MNEs), Turkey (W), United States (W).
400. Colombia (E). In the case of European works councils the Directive provides for "... the accommodation and travelling expenses of members of the European Works Council and its select committee shall be met by the central management unless otherwise agreed". Council Directive 94/45/EC of 22 September 1994, Official Journal of the European Communities No. L 254/64, Annex, Subsidiary Requirements referred to in Article 7 of the Directive, para. 7.
407. Barbados (G), Nigeria (G), Saint Vincent and the Grenadines (E), Zambia (G). Under the Council Directive on European Works Councils "... members of special negotiating bodies or of European Works Councils and any experts who assist them are not authorized to reveal any information which has expressly been provided to them in confidence. The same shall apply to employees' representatives in the framework of an information and consultation procedure". Council Directive 94/45/EC, Article 8(1).
419. European Foundation for the Improvement of Living and Working Conditions: Voluntary agreements on information and consultation in European multinationals (collected and edited by Pascale Bonneton), Working Paper No. WP/94/50/EN, 228 pp.
425. For example, "... the structure, economic and financial situation, the probable development of the business and of production and sales, the situation and probable trend of employment, investments, and substantial changes concerning organization, introduction of new working methods or production processes, transfers of production, mergers, cut-backs or closures of undertakings, establishments or important parts thereof, and collective redundancies". Council Directive 94/45/EC of 22 September 1994, Annex "Subsidiary Requirements referred to in Article 7 of the Directive".
426. European Commission: Directorate-General for Employment, Industrial Relations and Social Affairs: Social Europe: Agreements on information and consultation in European multinationals, Supplement 5/95 (Luxembourg, Office for Official Publications of the European Communities, 1996), table 11, p. 32.
458. Jordan (G). (The second edition of the Tripartite Declaration is available in the following languages: Amharic, Arabic, Bahasa, Bulgarian, Chinese, Czech, Dutch, English, Farsi, Finnish, French, German, Greek, Italian, Japanese, Korean, Norwegian, Polish, Portuguese, Romanian, Russian, Spanish, and Turkish (Mongolian and Vietnamese versions in preparation). The first edition (revision in progress) is available in Danish, Hungarian, Portuguese (Brazilian), Swedish and Thai.)
467. An EPZ has been defined as "... a clearly delineated industrial estate which constitutes a free trade enclave in the customs and trade regime of a country, and where foreign manufacturing firms producing mainly for export benefit from a certain number of fiscal and financial incentives". International Labour Organization and United Nations Centre on Transnational Corporations: Economic and social effects of multinational enterprises in export processing zones (Geneva, ILO, 1988), p. 4. In many countries, enterprises located in any part of the national territory can be granted EPZ-type incentives provided that most or all of their output is for export. Consequently, delimited areas as well as individual companies can have the status of, and be referred to, as an "EPZ".
471. The reference is to Bangladesh and Pakistan. ILO: Freedom of association and collective bargaining, p. 29 (footnote 29). See also reports of the ILO's Committee of Experts on the Application of Conventions and Recommendations (for 1992, 1993, 1994 and 1995), pp. 227, 277-278 (1992); 217-218 (1993); 199, 219, 251, 280-281 (1994); and 153, 184 (1995).
475. Digest of decisions and principles of the Freedom of Association Committee. The ILO's Committee on Freedom of Association noted in a 1994 report that although "... the right to strike is not explicitly stated in the ILO Constitution or in the Declaration of Philadelphia, nor specifically recognized in Conventions Nos. 87 and 98, it seemed to have been taken for granted in the report prepared for the first discussion of Convention No. 87 ... several resolutions of the International Labour Conference, regional conferences and industrial committees refer to strike or to measures to guarantee its exercise". The right to strike is also recognized in article 8(1)(d) of the International Covenant on Economic, Social and Cultural Rights, article 6(4) of the European Social Charter of 1961, article 27 of the Inter-American Charter of Social Guarantees of 1948 and article 8(1)(b) of the Additional Protocol to the American Convention on Human Rights in the Area of Economic, Social and Cultural Rights (1988). ILO: Freedom of association and collective bargaining (Geneva, ILO, 1994), pp. 62-64.
498. ILO: Reports of the Committee of Experts, 1994 and 1995, pp. 199 and 202 (for 1994) and pp. 153, 185 and 280 (for 1995); ILO Southern Africa Multidisciplinary Advisory Team: Labour standards in export processing zones: A southern African perspective (Working Paper submitted to the African Regional Workshop on the Protection of Workers' Rights and Working Conditions in Export Processing Zones, Johannesburg, 15-18 July 1996), p. 18.
504. See text of the draft UN Code of Conduct; and Joint Statement of the International Chamber of Commerce and the International Organization of Employers on the draft Code, doc. No. 191/290, 3 Oct. 1990, para. 25.