APEC’S ROLE IN ACHIEVING GLOBAL RECOVERY FROM THE ASIAN FINANCIAL AND ECONOMIC CRISIS

Trade Union Statement to the 1998 APEC Leaders' Meeting

(adopted by the fourth Conference of the

International Confederation of Free Trade Unions (ICFTU)

Asia Pacific Labour Network,

held in Kuala Lumpur, 28-30 September 1998)

The Asian financial and economic crisis: a warning signal to APEC

The Asian financial and economic crisis has brought increased poverty to hundreds of millions of Asian working women, men and their families and is seriously undermining the progress achieved during several decades of economic development, despite the warnings of trade unions for many years concerning the excesses of free capital markets, speculative transactions and short-term profit-taking. The global economy is inter-linked and falling trade and dangerously volatile stock markets threaten to trigger a truly global recession with a devastating impact on employment world-wide unless urgent corrective measures are taken. The self-congratulatory approach of much of the Vancouver APEC Leaders’ Declaration in 1997 now looks extremely complacent in the light of these subsequent events, which have demonstrated the very real down-side of the trade, investment and capital liberalisation processes in the APEC region.

Achieving

recovery from economic

crisis

These goals will be better achieved by a process which directly involves representatives of all the major institutions making up civil society. To achieve community support, representatives of both trade unions and employers must have an input into the national and APEC forums which develop the policy recommendations to overcome the economic crisis.

Trade unions provide key to successful

economic

recovery

3. The Kuala Lumpur APEC Leaders’ Meeting (17-18 November 1998) must take decisive steps to reorient the APEC work programme to address the social devastation caused by the economic crisis and the ensuing structural adjustment programmes; to support the economies most affected by the Asian crisis in order to achieve sustainable economic recovery in the whole APEC region; and to broaden popular participation in the APEC process through formal involvement of trade unions through an APEC Labour Forum.

Asian crisis demonstrates

need for

democracy

4. The APEC agenda has hitherto neglected the issue of human rights. Yet one clear lesson of the Asian financial and economic crisis is that sustained growth is not possible without both social and political democracy. Ignoring them has led to the exploitation of women, ethnic and racial minorities and children. The Kuala Lumpur APEC Leaders’ Meeting should therefore emphasise the importance of respect for human and democratic rights on the basis of the right to freedom of association, democracy and universal suffrage.

Vital force of

civil society

in APEC

5. There is growing political consensus that civil society is a vital force in APEC communities. Good governance requires the effective, transparent and accountable use of national resources in a socially-just and inclusive way to achieve sustainable development and poverty reduction. Governments should promote a vibrant civil society where trade unions and other representatives of civil society are unfettered and where full and responsive dialogue can take place. At the same time, the unique functions and representational responsibilities of trade unions make them different from non-governmental organisations and requiring of a different level of involvement.

The weakness

of the

deregulatory

agenda

6. The concentration of APEC’s agenda on the promotion of free-market policies now stands to be derailed by the Asian crisis, which has demonstrated the intellectual weakness of the arguments for unrestrained deregulation as well as the shallow underpinnings of economic growth unaccompanied by deep-seated social and infrastructural development. APEC leaders must engage in discussion and reach agreement at the Kuala Lumpur Leaders’ Meeting on strong social and environmental programmes, including policies to stimulate economic growth, wealth redistribution, training and retraining, in both APEC’s trade and investment liberalisation and facilitation (TILF) and economic and technical cooperation (ECOTECH) agendas.

7. Employment creation is the greatest policy problem confronting the APEC forum and the one which is placing the greatest pressures on the social fabric. An APEC Social Action Plan is needed, entailing the creation of national tripartite councils to reach agreement and develop strong public social and job creation programmes to prevent millions of laid off workers from falling into long term unemployment and poverty as many previously successful companies close or undergo large scale restructuring. The adoption of the ILO Declaration on Fundamental Principles and Rights at Work and its follow-up mechanism at the 1998 International Labour Conference indicates an important international consensus on the need to guarantee a harmonious balance between economic and social progress in the global economy. Accordingly, the Kuala Lumpur Leaders’ Meeting should set up a new APEC Working Group dedicated to the "Social and Employment Dimension of APEC", with the full participation of trade unions and other social partners. The Working Group would examine income and employment generation programmes, retraining and other social protection measures and identify those suitable for rapid implementation.

Fundamental workers’ rights are

part and parcel

of the recovery process

8. The importance of respect for fundamental workers’ rights as an integral element to achieving recovery from the Asian economic and financial crisis has been recognised by successive meetings of the G-8 countries, including the G-8 Finance Ministers’ meeting in London in February 1998 and the G-8 Summit in Birmingham in May 1998 itself. The 1996 OECD study on the link between trade and labour standards found evidence of a clear positive relationship between trade and labour standards. The IMF and World Bank must themselves promote fundamental workers’ rights in their own structural adjustment programmes and ensure that their policy advice does not result in deunionisation or other abuses of workers’ rights. The Kuala Lumpur Leaders’ Meeting should take the decision to include on the APEC future work programme the question of respect for fundamental ILO standards in the APEC region, both in law and in practice, in accordance with the ILO Declaration and its follow-up mechanism. This question could best be addressed through the APEC HRD Working Group.

Expanding the

HRD agenda to achieve economic recovery

9. Improved human resource development (HRD) has always been recognised by APEC Leaders to be a vital component for the success of APEC economies. APEC’s HRD agenda needs to be expanded in the light of the needs for economic recovery, through enhanced work in the new direction given to the APEC HRD Working Group since 1997 in the areas of "Improving Skills Development through Co-operation and Participation" and "Enhancing Labour and Management Participation in Human Resources Development" and the new APEC HRD project with union involvement on HRD issues. The HRD Working Group should focus on stimulating successful economic adjustment and job creation in general and improving social safety nets and social security systems in APEC members, particularly education, health and medical benefits, pension schemes and unemployment benefit schemes; skills training and retraining; improved job placement services; and upgrading occupational health and safety. The HRD Working Group must focus its agenda on these issues over the coming year and should convene tripartite meetings in all the sectors identified to prepare strategies for discussion and implementation, consistent with the recommendation that the HRD Working Group should develop stronger links with key private sector stakeholders, including business and labour, adopted at the Taipei HRD Working Group (16-19 June 1998).

Social safety nets in the recovery process

10. Relevant international agencies including the International Labour Organisation (ILO), the Asian Development Bank (ADB) and the Inter-American Development Bank (IDB) should be fully involved in such social and employment-oriented policy development work and possible projects. Increased official development assistance and low-interest World Bank, ADB and IDB loans should be provided to establish social safety nets. The recommendations of the ILO’s High-Level Tripartite Meeting on Social Responses to the Financial Crisis in East and South-East Asian Countries (Bangkok, 22-24 April 1998), the Statement on the Financial and Economic Crisis by Women and Young Workers of South-East and East Asia (Bangkok, 22-26 July 1998) and of the Regional Workshop on Social Safety Nets conducted by the ICFTU Asian and Pacific Regional Organisation (ICFTU/APRO), together with the ILO and the Japan Institute of Labour (JIL) (Manila, 28 July – 1 August 1998) should be taken fully into account, including mandatory employers’ contributions in the event of redundancies, allocation of corporate tax revenues to social safety nets, implementation of public works projects and measures to eliminate bribery, corruption and other anti-social practices(1).

APEC needs

positive action to eliminate discrimination against women

11. Successive APEC Leaders’ Declarations have spoken of the importance of actions to help women, yet have confined their actions to meetings of women entrepreneurs. But women workers are particularly vulnerable to the adverse effects of market-driven policies that ignore prevailing social inequalities and have been especially hard-hit by the current economic and financial crisis. To give effect to the words of the Leaders’ Declarations, the Kuala Lumpur Leaders’ Meeting should agree to adopt measures and monitoring mechanisms to overcome discrimination in the economies of the region against women and against other vulnerable groups including indigenous people, and provide recommendations for further action on that basis, which should include guidelines for enhancing maternity protection in the APEC region.

12. Ordinary workers and their families, especially the elderly and children, have borne the brunt of the social and economic costs of liberalisation. The poverty induced by the Asian economic and financial crisis is increasing the number of children forced to leave school and look for work, particularly as spending on education is reduced as an immediate consequence of crisis-induced budget cuts. Comprehensive education policy that deals specifically with child labour is essential to address this matter effectively. The Kuala Lumpur Leaders’ Meeting urgently needs to adopt specific measures to tackle child labour by directing the APEC HRD Working Group to undertake examination of the situation in each APEC member and develop strategies leading to its elimination, in consultation with the ICFTU and ITSs which have experience in this area. At the same time, the HRD Working Group should develop mechanisms and proposals to monitor and improve the situation of young workers in the APEC region.

13. The tens of millions of migrant workers in the APEC region have been similarly hard-hit by the crisis. The APEC HRD Working Group needs to devise concrete proposals to respect the basic human rights of migrant workers and improve their labour market status, including mechanisms to monitor the conditions of migrant workers in the APEC region.

14. Economic recovery will require fundamental reforms in the countries concerned to ensure democratic accountability, transparency and participation. Furthermore, there is now a consensus amongst many economists that the austerity programmes initially imposed in return for IMF loans have contributed to deepening the impact of the crisis and continuing recession. They have added to the recession and contributed to unemployment through raising of interest rates, measures to deregulate labour markets, and cuts in state spending and privatisation. The APEC Leaders’ Meeting should call for structural reform of the international financial institutions to ensure economic development goes hand-in-hand with social progress. Their existing programmes should be replaced by measures to stimulate investment, job creation and training, maintain and develop education, health and social security programmes, maintain essential public services in public ownership, stabilise foreign exchange markets and assist countries to overcome the challenges posed by currency speculation. Provided such changes are agreed and fully implemented, increased resources should be provided for the IMF, the World Bank and the regional development banks.

15. A crisis is a time for decisive measures. Those APEC members not hit by the crisis must play their role in assisting the worst-affected ones to achieve recovery, in line with the recommendations of the G-7 Finance Ministers’ Meeting in London on 14 September 1998. All APEC members should co-ordinate their interventions at the IMF and World Bank to ensure that appropriate policies are implemented which promote economic growth, provide positive assistance and improve the conditions of ordinary people, to ensure that the members in need get over their economic crisis. The Kuala Lumpur Summit must be the occasion to provide assurances of financial assistance to the poorer APEC members from the better-off ones, to help meet the basic needs of their poor such as food purchases, with adequate assistance earmarked to alleviating the social costs of the crisis.

                                      Defeating protectionism

requires respect for basic workers' rights

16. The better-off APEC members should allow their markets to grow for increased goods and services exports from other APEC members. Provided that trade takes place under fair conditions, it can contribute to future increases in living standards. However, protectionist pressures will be the sure result of the wave of currency devaluations of the countries suffering from the economic and financial crisis. Such pressures will increase if the increased exports are built on the violation of basic workers’ rights. Defeating such pressures and keeping markets open will require clear evidence of respect for fundamental workers’ rights in the countries concerned. At the same time, sustainable development will require developing APEC members to build their own domestic markets by increasing their workers’ purchasing power.

APEC’s contribution

to strengthening the WTO

17. APEC has consistently stressed its support for multilateral trade and investment liberalisation through the World Trade Organisation (WTO). The biggest contribution which the Kuala Lumpur Leaders’ Meeting could make to reinforcing the long-term sustainability and strength of the WTO, at the next WTO Ministerial Conference in the United States and beyond into the 21^st century, would be to support an enhanced role of the WTO with regard to respecting fundamental workers’ rights, as highlighted at the Singapore Ministerial Meeting of the WTO in December 1996 and endorsed at the Geneva WTO Ministerial Meeting in May 1998. These internationally agreed standards, as defined by the UN World Social Summit, the UN 4^th World Women’s Conference and the ILO Declaration on Fundamental Principles and Rights at Work, are freedom of association, the right to collective bargaining, non-discrimination, prohibition of forced labour and prohibition of child labour.

18. The Kuala Lumpur Leaders’ Meeting should strengthen the APEC Non-Binding Investment Principles by including reference to the importance of respect for fundamental workers’ rights, as well as the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy. The ILO Declaration already applies to virtually all members of APEC and need only to be accompanied by a monitoring mechanism and assistance programme to make it an effective device to promote fundamental workers’ rights in the APEC region. Such respect for workers’ rights, including trade union rights, would further bring about an increase in the value of the multinational enterprises’ output remaining in the host countries.

overwhelming lack of popular confidence throughout the APEC region that higher living standards and more employment can result from the APEC process.

20. Over the years APEC has invested much effort in the development of the APEC Business Advisory Council (ABAC), yet has omitted to create a structure for relations with representatives of workers. APEC Leaders cannot expect to achieve the popular support for the APEC process they have recognised as so important, unless they bring working peoples’ representatives into that process through structures for meaningful involvement of trade unions, the representatives of over thirty million of APEC’s workers. Such involvement is needed starting at the APEC Leaders’ level, mirroring the arrangements for access by the ABAC, as well as throughout the APEC process. APEC governments need to devote the necessary resources to enable such participation to take place. The active promotion of participation will require the timely and active dissemination of information to the social partners to build involvement in a manner that can influence decision-making.

21. The APEC Human Resources Development (HRD) Working Group is now developing a project to enable representatives of labour, management, and government from member economies to exchange views on best practices on training, skills development, the use of technology, and other human resources development related issues in the workplace. Such formal recognition of the importance of involvement of trade unions stands to be crucial to the future of APEC. The Kuala Lumpur APEC Leaders’ Meeting must broaden such recognition into involvement of unions alongside employers, not only on one part of the HRD work programme, but on the whole gamut of issues covered by the APEC agenda.

22. In conclusion, the ICFTU/APLN reiterates that we believe it essential to secure a formal recognition of the trade union role in APEC in order to bring about durable economic recovery. APEC must move beyond being an institution which primarily addresses economic issues to also include matters which relate to the impact of economic changes on the labour force and society at large. The current crisis does not simply have economic effects but also has immense social ramifications. This Statement demonstrates the uniquely valuable perspective that trade unions are able to bring to the examination of policies needed to maximise the contribution that working people, and their freely-chosen trade unions, can make to growth and improved international co-operation. The 1998 Kuala Lumpur Leaders' Meeting should continue APEC’s trend of innovative ideas to address the challenges of increased international economic co-operation, by agreeing to trade unions becoming involved in relevant areas of the Asia Pacific Economic Cooperation forum.

• greater transparency and regulation of financial markets with internationally mandatory reserve-to-asset ratios, disclosure of asset holdings and a "Tobin Tax" on foreign currency transactions;

• improved procedures for the accountability of government budget-making and policy implementation;

• institutional and policy changes including stronger rules on bribery and corruption.

24. Accordingly, the ICFTU/APLN proposes:

24.1 Endorsement by the Kuala Lumpur Leaders’ Meeting of the establishment of an APEC Labour Forum and a commitment to engage in discussions, involving the ICFTU Asia Pacific Labour Network, of how to bring this about.

24.2 The establishment of regular contacts between our Labour Network and the APEC secretariat for the exchange of information so that, where appropriate, trade union comments on issues being discussed within the APEC process can be formulated and presented;

24.3 The inclusion of trade union and civil society representatives in the national consultative committees established by members and, where appropriate, in national delegations to APEC meetings;

24.4 Participation of trade union experts drawn from the ICFTU/APLN at selected APEC committees, working groups and ministerial meetings;

24.5 Expanded labour and management involvement in the APEC Human Resources Development (HRD) working group, building upon the decisions of the Taipei HRD working group held in June 1998, as well as continued implementation of the new APEC HRD project on workplace best practices, with the participation of the most representative workers’ organisations from all APEC members;

24.6 A much expanded social dimension to APEC, with consideration of the setting up of a new APEC Working Group dedicated to the "Social and Employment Dimension of APEC" with the full participation of the social partners;

24.7 Inclusion on the agenda of the APEC HRD Working Group of the question of fundamental workers’ rights in the APEC region.

25. The annual meetings of high-level ICFTU/APLN delegations with the Heads of State or Government hosting the APEC Leaders’ Meetings have provided a valuable opportunity for two-way dialogue on the issues of concern to the APEC workforce. It is vital that at future APEC Leaders’ Meetings (New Zealand, 1999; Brunei, 2000; China, 2001), the precedent which has been set of an annual meeting between the host of the Leaders' Meeting and a delegation from the ICFTU Asian Pacific Labour Network to discuss issues of mutual interest for the APEC agenda should be maintained.