Social clause

SOCIAL CLAUSE AS AN IDEOLOGY
(Third World Resunrgence n. 76)

  Addressing a meeting on the Confederation of Indian Industry (CII), Renato Ruggiero, World Trade Organisation (WTO) Director General, exhorted Indian industry not to make a drama out of the so-called social clause. Earlier, he said that it was only a debate about a debate. Such a non committal attitude of the Director General of WTO raises the legitimate question of the nature of the global debate on the social clause.
  But first it is important to define the term social clause as it is being used in this article. Primarily, the social clause establishes a tie between labour standards and international trade. The tie is established by inserting a clause in the instruments of the World Trade Organisation or any other multilateral trade institution. It gives legitimacy to a country to ban import of goods produced in another country violating pre-defined international labour standards. It is the enforcement of labour standards by linking it with trade, especially, through the instrumentality of WTO or other multilateral trade institutions, that gives the social clause its specificity.
  The social clause also implies that in situations of dispute, WTO will be the arbitrator, and the respective nation states, enforcing agencies, of labour standards. Therefore the social clause cannot be equated with labour rights, their protection, or a social policy delinked from the instruments of international trade, WTO and nation states. There is a deliberate attempt to swap terminologies so that the distinction between genuine concern for labour rights and the use of labour rights as a trade barrier is blurred.
  Is the insertion of the social clause in WTO genuinely intended to monitor the rights of workers all over the world? Is it in the interest of the transnational corporations, who remain competitive on the differentiated and segmented labour markets, not to insert any clause that harm their interests? In this sense, is the debate serving an ideological function?
  Ashim Roy, an Indian Trade Union activist, argues (Labour File, November 1995, New Delhi) that the debate is indeed serving an ideological function. On a hypothetical question, the debate is intended to divide the workers, and eventually transnational corporations to maintain the advantages of segmented labour markets.
  Let us examine two unintended consequences of the social clause de bate. One, at a critical moment when global capitalism spreads its net everywhere, labour organisations stand divided along the North-South lines among Southern countries, and even within specific countries, on an instrumentality over which labour organisations do not have any control. Second, ironically, the debate has helped in creating an apparent identity in positions between labour/non governmental organisations and their respective governments. For example, the Indian labour organisations' rejection of the social clause proposal was apparently similar to that of the Indian government. Such an identity of positions could also be drawn between labour organisations/NGOs and respective governments in the Northern countries. Nevertheless articulations based on genuine concerns for the rights of labour in a highly competitive and ruthless global economy should be seen as distinct from the ideological articulations of the social clause.

Two national consultations

  A highly participatory process in India tried to address this dilemma the need for protecting the rights of labour, and its negation in the instrumentality of WTO. Two national consultations were held. Major trade union centres, organisations of workers in the unorganised/informal sectors, child labour campaign groups, environmental groups and human rights groups participated at these consultations.
  The first, held in New Delhi in March 1995, provided an open forum for all the varied participant organisations to openly argue out their perspectives. The New Delhi consultation set up three working groups - on labour standards, environmental standards and human rights. The reports offered an analysis of costs and benefits of labour standards WTO linkage, and suggested some alternatives. These reports were further scrutinised and approved in the second national consultation held in Bangalore in October 1995.
  The Bangalore Consultation came up with, among other things, three innovative proposals on the issue. They were, one, to draft a UN Labour Rights Convention, two, to campaign for an (Indian) National Labour Rights Commission and three, to work to wards a South Asian Labour Alliance.
  The resolutions were made based on three undergirding principles. First, the emphasis shifted from labour standards to labour rights. Second, there had been a shift from a total rejection to the search for an alternative mechanism to enforce labour rights at the international level. Third, the group distinguished its position vis-a-vis that of the government and suggested ways to enforce labour rights at the national level

Universal Labour Rights

  A negation of WTO-linked labour standards should not be construed as a negation of the principle of Universal Labour Rights. The distinction made between labour standards and labour rights should be seen in this context. Labour standards implies externally determined yardsticks that others have to follow. The emphasis is more on the onus of the employers and the states to follow certain prescriptions of standards. In contrast, the concept of labour rights emphasises the worker, the specificity of the nation and the responsibility of the employers and the state to respect these rights.
  Increasing integration of national economies into a global system, liberalisation of global trade by institutional arrangements to remove trade barriers, and the drastic changes occurring in the international industrial system leading to the emergence of a division of labour quite different from what existed earlier, remind us of the need for protecting labour rights. None of these changes automatically ensure a better living and working conditions for millions of workers all over the world. On the contrary, violations of the rights of labour are increasing in all spheres. Liberalisation has accentuated competition and the urge for making profit.
  Emp]oyers, nation states, global corporations and international, financial and trade institutions are all parties to the systematic violation of human rights of working populations. The tragedy of the social clause debate, initiated at the WTO level, is that these mutiplicities of actors and locales of labour rights violations have been camouflaged. On the other hand, the issue has been narrowed down to violations of rights at plant level, mainly in the developing countries. Articulation of the issue as ""protection of jobs in the North", and "comparative advantage developing countries have due to low labour standards" have further vitiated the atmosphere. It has also aggravated the division among workers in the North and the South.
  There was no dispute in accepting certain set of rights as universally accruing to workers in all countries, irrespective of the stages of their development. It was also accepted that elaboration of such rights could be found in the UN Declaration of Human Rights, International Covenant on Economic, Social and Cultural Rights, and especially, in ILO conventions that deal with freedom of association (Convention 87), the right to collective bargaining (Convention 98), equal pay for equal work for men and women (Convention 100) and ban on child labour or that define minimum age of education into employment (Convention 138) and conventions concerning forced and compulsory labour (Convention 29 & 105) Alternative to Social Clause in WTO.
  The rejection of WTO-linked monitoring of labour rights has been unambiguous. Such an overwhelming rejection of a Social Clause in WTO, as the method to enforce labour rights, is prompted mainly by the following reasons.
A. The global economy is highly iniquitous. About 80% of world GNP is concentrated in the industrialised countries. The poorest 20% of the world population has only a share of 1.4% of world's GNP. Structural Adjustment Programmes promoted by World Bank and IMF have resulted not only in the impoverisation of masses of people, but also in the aggravation of debt crisis and resultant net transfer of resources from the developing to the developed countries.
  Of equal importance is the phenomenal growth of giant global corporations and the absolute control they wield over the global trade. The 15 largest corporations have gross in come greater than the Gross Domestic Products of over 120 countries. The 500 largest corporations control 70% of world trade. One fifth of the world' s population lives in abject poverty and about 800 million are unemployed.
  GATT negotiations and the formation of the World Trade Organisation were not intended to change this unequal structure of global economy. On the contrary they have strengthened the grip of TNCs and governments of the industrialised countries, over the millions of poor in the world. WTO has assured freer trade, but is the same institution that engenders systematic rights violations. It is a pity that trade unions and humanitarian groups in the North, who advocate WTO-labour standard linkage, have overlooked these fundamental contradictions.
B. A distinction should also be drawn between the interests of the state, which a government may espouse, and the interest of the exploited millions. WTO may reach a dispute settlement, in the interest of a nation and not in the interest of the workers. It is probable that workers' rights may further be violated in the process. The argument is not that trade-linked monitoring is impossible or that dispute settlement cannot take place. The argument is that such settlement may not be in the interests of workers, particularly of those in the poor countries, given the unequal structure of international trade.
  Nonetheless, it is important to emphasise that the rejection is not based on a "nationalistic fervour" that turns a blind eye on global economic structure and division of labour. It is not based on the theory of "comparative advantage accruing from cheap labour".
  A mere rejection will not take us anywhere. An alternative should evolve, that
1. considers the need for universal monitoring of labour rights in an unequal and unjust global economic stlucture,
2. emphasises the accountability of transnational corporations and the troika of the World Bank, IMF and WTO, and,
3. ensures the enforcement of labour rights which is more political, participatory and democratic than the economically deterministic WTO-la bour standard linkage.
  In spite of the ILO's more than 75 years of history in articulating labour rights, the ILO was not viewed as the most effective body to monitor labour rights in the liberalised trade regime under WTO. The structure of ILO does not permit effective enforceability.
  Thus the proposal for the adoption of a UN Labour Rights Convention (UNLRC). Though the details of the UNLRC have to be worked out through a process of consultations at national and international levels, the basic features of the initial proposal are as follows:
a) The Labour Rights Convention should be adopted by the UN General Assembly.
b) Transnational corporations should be brought within the ambit of the convention.
C. As with UN Child Rights Convention, there should be a very effective reporting mechanism on the progress each country is making in protecting labour rights.
  One significant advantage of the UNLRC is that it operates on the principles of moral and political pressure. To that extent trade sanctions, which may have unintended negative consequences like a spurt in unemployment and poverty, can be avoided. Another advantage is that the ILO, being a UN body, can be effectively roped in to strengthen the monitoring system.
  The proposal should also be seen in the light of the deliberate attempts being made to prop up the World Bank, IMF and WTO as alternative bodies to the United Nations. According to the UN Charter, the IMF and World Bank are nominally among the Specialised Agencies, which work with United Nations (Article 57), through the coordinating machinery of the Economical and Social Council (Article 63). But these mandates are being abandoned. These institutions have assumed virtual autonomy. It is vitally important to strengthen the UN machinery as a countercheck to the unaccountable Bretton Wood institutions.

National Labour Rights Commission

  The group acknowledged the urgency in evolving effective arrangements within the country, to safeguard labour rights, despite the fact that India does not have a dearth of labour legislations. The Enactment of the Factories Act in 1881, primarily dealt with the problem of child labour, fixing the minimum age of employment of children at seven years etc.
  The Factories Act has been amended many times to make it comprehensive; a plethora of legislations followed, enacted by central government and by different provinces and states. Despite voluminous legislation on paper, labour rights are consistently violated in all sectors.
  Employers deny with impunity the right to association and collective bargaining. Minimum wage laws are violated and child labour employed in large number in the production of export-oriented goods and in agrarian sectors.
  Violations of the rights of workers have been further aggravated by governments carrying out Structural Adjustment Programmes and policies aimed at integrating the Indian economy into the global market. The government is deliberately creating conditions for export-driven production, at the expense of the rights of workers. Consequently, the profile of workers is undergoing fundamental changes. The number of contract, home-based and unorganised workers is increasing at all levels of production processes. Consequently, it is easy to violate labour laws or to make the laws ineffective.
  It has also to be kept in mind that international labour standards (rights) do not cover 92% of the workforce in India, who are in the unorganised and informal sectors. Moreover, only a very small percentage of the workforce is engaged in trade-linked production in export-oriented sectors.
  The proposal to form a Nationa] Labour Rights Commission (NLRC) has to be seen in this context.
  The Indian proposal has four major components. First, it rejects labour rights-WTO linkage. Second, it upholds the principles of universal labour rights and the need for evolving structures to monitor the enforcement of labour rights. Third, it proposes UN Labour Rights Commission as an alternative. Fourth, at the national level it suggests the creation of a powerful National Labour Rights Commission to monitor and enforce labour rights.
  Such an approach can ward off the debilitating and divisive tendencies inherent in the ideological function of the social clause debate. Moreover, it will strengthen solidarity among workers' organisations globally, at a time when it shows signs of rupture due to internal and external factors.

(by J John, director of the Centre for Education and Communication in New Delhi, India)

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