 |
INTRODUCTION TO THE SOCIAL CLAUSE
(extract from "South/North Conference: new alliances for dignity in Labour"
background material, october 1995)
The social clause in the European GSP
Since 1971, the European Community has conceded preferential tariffs-on the basis of a plan which is renewed every five years for finished and semi-finished industrial products coming out of developing countries. The latest GSP, which regards the period 1995-98, provides for, in its article 7, a special program of incentives in the area of social issues (there's another which deals with ecological issues), which will come into effect at the beginning of 1998: "Effective as of January 1,1998, a special regime under the form of additional preferences can be placed at the disposition of those countries permitted to enjoy preferential duties which make a written request in which they demonstrate that they have adopted and are applying the norms of the conventions Nos. 87 and 98 of the International Labour Organization as regards the application of the principles of the right to organize unions and of collective bargaining, and of convention n. 138 of the ILO concerning the minimum age for admission to work."
Social clause in the U.S. GSP
The United States has two commercial programs which give trading partners a system of concessions in the tariffs they pay. They are the Generalized System of Preferences (GSP) and the Caribbean Basin Economic recovery Act, commonly known as the Caribbean Basin Initiative (CBI). GSP allows certain quantities of specific goods from developing countries to enter the U.S. duty-free. GSP was passed into law in 1976 on the (debatable) premise that making it easier for Third World countries to export to the U.S. would promote economic development. CBI was proposed by President Reagan as part of an economic program to win the Cold War in the Central America and Caribbean region. CBI also provides duty-free treatment on certain goods.
Both programs, which provide substantial trade benefits to Central American countries, are supposed to be conditioned on the exporting country "taking steps to afford internationally recognized worker rights to (its) workers...". Internationally recognized worker-rights are defined as freedom of association, the right to organize, the right to collective bargaining, prohibitions on forced labor and child labor, and acceptable conditions with respect to minimum wage, hours, health and safety.
The GSP program provides for an annual proceess under which any group (U.S. or otherwise) can file a petition with the U.S. Government requesting that the worker rights situation of a particular country be investigated to determine whether or not GSP benefits should be terminated. If the petition is accepted for review, hearings are normally held with a decision to be made by the following April 1, whether to suspend benefits, extend the review/investigation (a form of probation), or remove the country from the review process.
The social clause in the WTO: a knotty proposal
At the beginning of 1994 some Western nations proposed the insertion of the social clause in the multilateral accord of the WTO (World Trade Organization). Discussion is still ongoing. The Southern states of the world have a generally unfavorable opinion of the social clause, which they see as an attempt for protectionism by the Northern nations. Entrepreneurs from the South have an equally unfavorable view, while those of the North are divided in opinion; those who continue production in their own country are favorable, while those who have transferred their production activities to another country hold an unfavorable view.
Even the social players are divided. Notable among those favorable is the international union ICFTU, which has stated "One cannot expect that increased trade will deliver promised better working and living conditions in the absence of workers' rights. These can be achieved only by trade unions through collective bargaining and by govemments through adequately enforced labor laws. [...] The social clause does not mean the imposition of a world minimum for "labor standards", wages, or other benefits as some opponents claim. But it would mean meaningful collective bargaining, more equitable distribution the benefits of trade, and effective demand will be improved through increased real wages, leading to more effective growth in world trade".
The position of the ICFTU is not shared by the confederation of Indian unions INTUC and CITU. In the opinion of some union leaders, workers' conditions are the concern of national governments and trade unions, not that of the WTO. They say it would be impossible to use a social clause to the advantage of trade unions even if it were brought within the WTO.
The WTO should be made a part of the UN system before it is given the authority to implement ILO standards.
Even some non-government organizations of both North and South take a critical view; while at the same time acknowledging the necessity of having mechanisms which would guarantee the rights of workers internationally, they would prefer that the social clauses be applied to the multinationals, creating a sort of compulsory code of conduct.
In effect, the proposal to apply a social clause to States still contains quite a number of knots to be worked out. For just this reason, it continues to stir up discussions and create formations of partners who are very different in nature and purpose.
1st knot: which standard should be included?
Most proposal for a social clause make reference to, or are based on, a selection of international conventions adopted in the International Labour Organization (ILO). The ILO is an international, tripartite organization in which governments, employers' and workers' representatives participate on an equal basis (see ILO description at the end of this document for more information)
The ILO has adopted a series of conventions which set international labour standards. Once ratified, these conventions create binding - but not coercive obligations for member states, and they must be introduced into national issues.
Usually, most or all of the following conventions are suggested for inclusion in a social clause:
1- freedom of association (Convention 87)
2- the right to organize and bargain collectively (Convention 98)
3- minimum age for the employment of children (Convention138)
4- freedom from discrimination in employment and occupation on the grounds of race, sex, religion, political opinion etc. (Convention 111)
5- freedom from forced labour (Conventions 29 and 105)
A number of organizations also ask for the inclusion of various other conventions regarding occupational safety and health.
Contrarily, very few organizations ask for the insertion of convention 117, which lays out the conditions for the guarantee of a minimum wage. In the opinion of most, this convention shouldn't be inserted because wages are the result of many economic and technologic elements, and, as such, can't be imposed by an international organization. Furthermore, they argue, wages are a central aspect of a commercial advantage held by the countries of the South, and any clause in this direction could be used for protectionist purposes. It is for this reason that those voicing this opinion consider it to be sufficient to limit the social clause to the defense of the norms which allow workers to organize, leaving to them the job of fixing salaries on the basis of their evaluations and their contractual strength. Nevertheless, it can't be ignored that when an actual minimum wage, perhaps fixed by law, is below the poverty line, fundamental human rights are encroached on, like the right to food and shelter, and must be upheld.
FIAN goes even further and states that "workers' rights constitue only a part of the social and economic rights". As an example, they cite the case of peasants and indigenous communities that are robbed of their land and are thus driven away. "A social clause that is limited to the workers' rights could only prove a potential incentive for TNCs to continue with this kind of practices".
And what is to be said about the millions of tenant families in the export crop plantations that live well below the poverty line? "Their fundamental human right to food is permanently violated. In spite of this, this human right is not covered by the ILO Conventions, reference should be made to the International Covenant on Social, Economic and Cultural Human Rights" (Art. 1l,2) of the United Nations.
The 2nd knot: how to evaluate transgressions?
The first aspect to be resolved concerning this point is whether we should take as our point of reference the actual situation or the legal picture, or perhaps if an evaluation taking both into account both shouldn't be made. Let's look at Italy, for example. Legally the employment of minors in the workplace is prohibited; but in fact, tens of thousands of children under the are of 14 are working.
The second aspect in need of resolution concerns those sectors to be taken into consideration: only those for exportation or also those which produce for the internal market? The businesses of the North, interested only in defending themselves from the competition from the South, lean towards the first hypothesis, while social forces and unions are obviously in favour of the second position. It also has to be decided if the evaluation should also regard the informal sector which is often outside union and govemment control.
The 3rd knot: to whom should be entrusted the management?
One of the reasons which push some social forces and unions to oppose the social clauses is the fear that such clause can be transformed into instruments of power to be wielded by the governments of the North, who could utilize the violations of workers' rights as a pretext to actuate commercial retaliations against countries which are unwelcome for political reasons. In other words, they fear that social clauses can be transformed into instruments of neocolonialism. This is why it is so important to define who should manage the mechanism.
The most detailed proposal concerning this point was made by the ICFTU, which proposed a mechanism founded on the WTO Council and on a Joint Advisory Body. The first would have decisional functions, while the second would be for control, assistance, and proposals.
The Joint Advisory Body would consist of delegates nominated by the ILO and the WTO. In this way, it would contain the representation of governments, unions, and businessmen. Its duties would be the following:
1 specify a list of minimum standards and oversee implementation of the clause;
2 recommend measures to be undertaken by the govemments found to be falling short of their obligations;
3 present reports to the Council of the WTO on the effects gained through the measures taken.
The Council of the WTO would be made up of representatives of all member governments and would decide which sanctions to adopt against countries which, notwithstanding the warnings of the Joint Advisory Body, persist in their violations of the social clauses.
The 4th knot: how should it function?
Because one of the principles of the WTO is the application to all states of the same tariff accorded to the most favoured nation, a social clause inserted into a multilateral agreement can only be of a negative character. In any case, the proposal of the ICFTU suggests a marked gradualism and an approach which leads to negotiations.
When a country is found to be falling short of its obligations, the Joint Advisory Body should recommend measures to be undertaken by the government within a specified period of time to improve the situation. One element of this effort would probably be better enforcement of laws and regulations through a strengthened labour inspectorate. The ILO would also offer technical assistance, perhaps funded by a new international social fund, to help countries in the process of raising standards. At the end of the period, say two years, a further report would be prepared on the effect gained by the earlier recommendations. This second report would state one of the following: that the country in question was not fulfilling its obligations; or that progress was being made and further time was needed to deal with the problem; or that the government had failed to make adequate efforts to implement tho WTO/ILO recommendations; and that increased tariffs should be levied by all WTO members on the offending country's exports, for example. Only where a country consistently failed to improve its performance would any sanction be imposed. Initially such sanctions could be the suspension of some of the non tariff benefits given to countries by multilateral trade agreements. Continued violation of fundamental human rights could mean the imposition of increased tariffs.
The 5th knot: which products should be targeted?
Common opinion holds that tariff sanctions should be applied to all products coming from states against which punitive provisions have been decided. But in so doing, positive initiatives would also be penalized, such as fair trade organized expressly to guarantee producers' and workers' fair and dignified conditions.
The alternative hypothesis is that of applying the sanction only against the businesses and the sectors in which violations of the social clause have been ascertained. But in this case it might happen that states organize themselves to guarantee the rights of only those sectors involved in exportation, without concerning themselves with the sectors involved in production for the internal market.
The 6th knot: what use to make from additional customs tariffs?
Both the NGOs and the Trade Unions are of the opinion that profits coming from increased customs tariffs should go into a special fund which would enable the ILO to provide increased technical assistance to a developing country where the Joint Advisory Board found that it was not keeping up to its obligations.
|