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A CONDITIONAL "YES" ON THE ISSUE OF SOCIAL CLAUSE IN TRADE AGREEMENTS
(The national conference on the social clause - October 16-18 1996 - Manila)
We reject totally the framework of trade without social responsibility and favor the inclusion of a Social Clause or the linkage of trade and labor rights, within the WTO, provided that certain condition are met. We must emphasize that we seek to include in the social clause only the basic universally-recognized labor rights, and not labor standards.
We believe that the social clause is an additional instrument for the protection of labor rights and an aid in the organization and education of workers. However, the social clause should not be implemented solely by the WTO. The ILO, which has the expertise in monitoring labor rights, should be the body primarily responsible for the monitoring, adjudication, and enforcement of labor rights.
Labor rights should not be linked to trade alone, but also to access to finance. In extending financial assistance, the WB and the IMF should also consider compliance with labor laws. Developing countries which enforce basic labor rights should be used for establishing safety nets for workers that may be adversely affected by globalisation.
In order to prevent the use of the social clause for protectionism, it should include only the following basic labor rights:
1- Right to self-organization;
2- Right to collective bargaining and concerted action;
3- Freedom from child labor;
4- Freedom from forced or slave labor;
5- Freedom from discrimination.
The above are all universally-recognized basic human rights, and all countries, regardless of stage of development, should enforce these rights. At no point in time should labor standards - such as minimum wage, days and hours of work and overtime pay be included in the social clause.
1. The labor rights should be limited to the five (5) enumerated above. Labor standards - such as minimum wage, days and hours of work, and overtime pay - should never be included.
2. There shall thus be no sanctions imposed outright on the alleged violators, and additional trade incentives and trade preferences shall be given to developing countries which enforce the basic labor rights in the social clause.
3. The alleged offenders should be given sufficient time to comply progressively, technical assistance should be provided, and there should be periodic monitoring. Only after all of these are exhausted should trade sanctions be imposed.
5. All memeber-states should establish sufficient safety nets for workers that may be affected.
6. The WTO should change its system of representation. Since the developing countries may be affected adversely, they should be given more representation in the social clause adjudication body. Labor should also be given sufficient representation in monitoring, adjudication, and enforcement bodies.
7. Labor groups and workers themselves should be allowed to file complaints directly with the adjudicatory bodies.
8. All member-states of the WTO, or whatever trade bloc, should sign a treaty on inter-country liability of multinational companies which will allow legal actions against MNCs, wherever they are located, for violation of national labor laws committed by their branches, subsidiaries and subcontractors who manufacture their products, wherever these are located.
9. All memebers-states of the WTO should sign the core conventions of the ILO.
10. The social clause shall also be applicable to migrant workers and the informal labor sector.
It is proposed that a body called the "Joint ILO-WTO Enforcement Regime" be set up. The Enforcement Regime possesses a distinct international legal personality, though its memebers would come from those recommended by the Directors-General of the ILO and the WTO with approval of the Governing Body of the ILO and the Dispute Settlement Body of the WTO, respectively.
A complaint may instituted by either:
1. the Enforced Regime or
2. Members of the ILO and/or the WTO.
An employers' or workers' association may file a complaint, but the Enforcement Regime would have to set up a joint committee comprising three of its members (two from the ILO and one from the WTO), who would determine whether or not a complaint should be filed with a Dispute Panel to be created from a pool of labor and trade experts named by the Directors-General of the ILO and the WTO. Should the Enforcement Regime find that "prima facile" evidence of a pattern of a gross and reliability confirmed international labo rights violations have been committed, a case will be filed before the International Labour Office or the WTO Secretariat. Members of the ILO and/or WTO may file their cases directly with the International Labor Office or the WTO Secretariat.
The Dispute Panel would come from a pool of experts to be selected by the Directors-General of the ILO and the WTO. Two members of the Panel would be from the ILO and one member would come from the WTO, with the senior ILO member to act as Chair. The Dispute Panel would require the hearings, deliberations. It may undertaken on-thespot investigations.
Should the Dispute Panel find that a pattern of a gross and reliability confirmed labor rights violations were committed by the implicated state, the Dispute Panel Report would suggest a reasonable period of the time for compliance, programs to aid in compliance, and possible countermeasures. The Report would be submitted before the Enforcement Regime for adoption, applying the "autoconsensus" rule (it is assumed that the Report will be adopted, unless there is a consensus not to adopt the report) prevailing in the Dispute Settlement Body of the WTO. Should the Enforcement Regime be a party to the case (when an employers' or workers' association originates the complaint), the Dispute Settlement Body of the WTO will adopt the Report accordingly.
Three months after adoption of the Dispute Panel Report, the violating state may enter into a technical cooperation program with the ILO. Should the violating state continue to commit patterns of international labor rights violations in bad faith, or should the violating state fail to enter into a technical cooperation program within the three-month period, the Enforcement Regime shall form a Remediation Committee. The Remediation Committee shall form a remediation plan which shall take into consideration the suggetsions of the Dispute Panel with regard to reasonable period of time for compliance and possible countermeasures. The remediation plan shall be adopted be the Enforcement Regime, applying once more the "autoconsensus" rule. The plan would indicate compliance with international labor rights for a stipulated period, after which time countermeasures would be instituted. A wide variety of penalties are available, which include export bans, suspension of concessions, anti-dumping or countervailing duties, or payment of compensation. Wider trade sanctions would be instituted and would intensify over time until the violations are eradicated.
All economic sanctions would cease once the enforcement regime adopts a finding of full compliance. The remediation committee would continue to monitor the state for one additional year, and continue to submit reports to the regime every four (4) months.
Also, a developing country which enforces all of the five (5) basic labor rights may apply for additional trade concessions. The above procedures, as far as they are applicable, would also be followed; but instead of filing a compaint, a petition ro grant additional trade concessions may be filed. However, unlike the complaint for non-compliance which understandably takes more time to resolve, the petition for additional concessions should be resolved as early as possible. After the Dispute Panel finds that a developing country enforces the five basic labor rights, it shall submit the Dispute Panel Report to the WTO, which will then order all member states to grant additional trade concessions.
Participants who support this position belong to the following organizations:
1. Democratic Labor Caucus |