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Making the Global Labour Governance Constellation Work

30 April 2007, by Michèle Rioux

Recognizing that:

- globalization, growth and productivity gains must translate into higher employment levels, better wages and working conditions thereby enabling development in all parts of the world;

- there is a link, not always positive, between trade and employment;

- the avoidance of unemployment and the respect of high labour standards are conditions necessary for harmonious trading relations and the good functioning of the global economic system;

- there is a growing governance gap between mechanisms that favour the globalization of production and markets and those aiming to protect and improve workers’ rights and living conditions;

- it is necessary to increase assessment and monitoring instruments that can measure the social impacts of globalization and trade liberalization as well as the effectiveness of measures developed to ensure the effective application and effectiveness of labour standards;

- institutions do matter and that there is necessity to improve institutional frameworks in order to build a strong, coherent and effective global labour governance system that can ensure that the emergence of diverse and innovative measures play an effective and complementary role;

- the ILO’s international labour standards and decent work agenda play an important role in the development of a global labour governance system and the ILO should update its actions and its interactions with actors and institutions in order to adapt to the new realities of globalization.

We recommend that States develop a decent work agenda, build a national consensus around a decent work strategy and work towards its application in all relevant parts of national social and economic policy. In this respect, States should:

- Adopt, apply and enforce national labour laws in compliance with international labour standards (ILS).

- Commit to high standards in education for sustainable development.

- Develop methods and tools to assess the social impacts of trade liberalization and of the globalization of production as well as to monitor the application of international labour standards and their impacts on productivity.

- Set up assistance and training programs for workers suffering from the effects of trade and technology.

- Ensure policy coherence at the national level in order to achieve systemic coherence between trade, investment, industrial, and social policies that are conducive to employment, wages, and labour standards that reflect productivity levels. States, in this regard, should avoid restrictive and deregulatory policies.

- Elaborate and adopt a national CSR policy framework, such as the one proposed in the Advisory Group of the National Roundtables on Corporate Social Responsibility set up by the Government of Canada , and cooperate with other countries and international organizations involved in finding ways for improving the effectiveness of corporate responsibility initiatives worldwide.

At the international level, States should increase cooperation to improve the adoption, application and effectiveness of ILS through a multi-faceted strategy that puts to work, in a complementary manner, the ILO and other international organizations, trade agreements and initiatives from civil society and the private sector. In this respect, States should:

- Cooperate with developing countries, bilaterally and through the work of international organizations, to build institutional capacity in developing countries to elaborate and apply employment policies and labour laws that ensure continuous improvement of both productivity and working conditions for workers.

- Commit to respect the objectives and to ensure the effective implementation of the United Nations Decade of Education for Sustainable Development.

- Share all information on national measures and policy orientations affecting labour governance in order to develop best practices.

- Set up a learning network on labour governance Best Practices.

- Build a consensus around a process that would lead to a multilateral trade agreement that would incorporate a “social clause” enabling countries to take appropriate measures (sanctions or negative incentives), that do not serve protectionist interests, against trading partners that do not show progress in adopting and applying labour laws that incorporate ILS, while providing positive incentives to help and encourage countries adopting and applying labour laws that incorporate core ILS.

  • Formal collaboration and cooperation between the WTO and the ILO should be central to this initiative.
  • One first step should be the establishment of a WTO Committee on Trade and Employment that would examine the impacts of trade on employment and workers’ rights.
  • Before a multilateral consensus can be reached, states should cooperate in order to converge and adopt the same approach with regards to regional and bilateral trade agreements. These trade agreements should, therefore, include commitments by states to adopt and enforce, in non-discriminatory way, labour laws that include core ILS.
  • Special attention should be made to the role of asymmetries in trade relations and their impacts on the kind of obligations that should be imposed on less developed countries concerning international labour norms.
  • Prior to negotiation and following entry into force of trade agreements, a social impact assessment should be realized in order to measure the potential impacts (positive and negative) of the trade agreement, including effects of the dispositions relating to workers’ rights. This information should be reflected in the terms of the agreements and available for further research of the interactions between trade, employment and labour norms.
  • Whenever trade liberalisation has negative impacts on employment and working conditions in some sectors, a “trade related-social fund” (multilateral or through the permission given to countries to impose a fee on imports for the financing of these programs) should be created to allow the development of adjustment programs in developing countries to assist affected workers. International organizations—such as the ILO, the World Bank and regional development banks, UNCTAD, …— should provide information, technical assistance and perhaps funds for these programs.

- Make efforts to ensure that global macro-economic and financial systems facilitate employment creation and improvements in the effective application of ILS.

  • Regional monetary and financial institutions should play a greater role in the global monetary systems.
  • The IMF and World Bank should participate constructively to build greater policy coherence in addressing employment creation and social problems faced in the global economy, including:
  • The World Bank should not promote labour market deregulation without consideration for and measures to ameliorate the impact on workers
  • The World Bank should apply a consistent policy of ensuring that all its operations abide by ILS. Stronger requirements should be adopted and increased cooperation with the ILO should be favored.
  • The IMF, World Bank and IFC should ensure that policy recommendations concerning labour laws and practices do not violate ILS. (Ex : Doing Business)

- Develop a sound international institutional framework to ensure that CSR (corporate social responsibility) initiatives are effective as well as reinforcing and complementary to other regulatory components of the global labour governance. States and international organizations, as well as other actors, should:

  • ensure that CRS and other private and civil society initiatives create meaningful commitments and obligations for firms regarding labour standards though pro-active national and international strategies.
  • actively participate and support the work of the Special Representative of the Secretary-General (SRSG) to identify “areas of fluidity in the business and human rights constellation”, to map and analyze the variety of emerging standards and practices, and to define policy orientation to make them coherent with the building of a socially friendly globalization process.
  • develop guidelines and methods to measure and compare CSR practices and institutional frameworks as well as their impacts on working conditions and productivity.
  • favor social consensus and international convergence in the meaning and approaches towards CRS. (perhaps through ISO 26000)
  • develop reporting, accountability and performance indicators of CSR initiatives and participating firms’ compliance with commitments (perhaps building on the Global Reporting Initiative, the UN Global Compact, and other such initiatives).
  • evaluate the possibility and feasibility of introducing such CRS commitments in trade agreements (trade agreements should perhaps bind states to ensure mechanisms leading towards high commitments and accountability of firms in relation to labour standards, and/or, these agreements should allow for direct obligations of firms to respect norms, principles and guidelines in relation to labour standards)..
  • reinforce the OCDE Guidelines for Multinational and the ILO Tripartite Declaration of principles Concerning Multinational Enterprises and Social Policy – attempting, eventually and in due course, to transform them into hard law instruments.

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