As Finance ministers and Central Bank governors meet with the IMF and the World Bank for this year’s Annual Meetings, globalization, its ravaging effects on emerging markets in Asia and elsewhere, and measures to deal with the crisis are central to the deliberations in the Interim Committee, the Development Committee and the plenary sessions. At the level of the international trade union movement, the ICFTU and associated ITS have argued that the promotion of core labour standards should also be an integral part of the current debate taking place within the IMF and the World Bank, on a new architecture for effective governance of the global economy. Well before the current crisis, we were raising concerns about the down-side of globalization, despite its much-touted benefits for the so-called miracle economies of Asia. We were concerned about the lack of a social dimension in the multilateral system of rules being devised, rules which seemed geared to facilitate markets at the expense of working people. We were concerned about the increasing erosion of workers’ rights in many parts of the world including Asia. We were drawing attention to the increasing inequalities in Latin America despite valiant country efforts to follow World Bank-prescribed structural adjustment, and the increasing marginalization of African economies. And we wondered how long it would take before working men and women could begin to have a fair share of the benefits of increased trade and investment.

Our calls were for a systematic social dimension in the process of globalization and structural adjustment. Key components of this approach included the observance of core labour standards, and the involvement of the social partners including unions in the formulation of social policies that would ensure that working men and women benefitted from the wealth generated by free trade. Our calls are even stronger today in light of the disturbing economic crisis, which has demonstrated that the search for solutions and the introduction of reform measures cannot be carried out successfully in the absence of a consensual framework, including workers’ representatives through their unions.

Within the ICFTU(International Confederation of Free Trade Unions)and its regional organizations APRO, AFRO and ORIT, we have been engaging the international community and our national governments over the past three years, on the question of the importance of observing core labour standards as defined by the 7 basic ILO Conventions:

-Conventions 29 and 105 on the abolition of forced labour,

-Conventions 87 and 98 on the rights to freedom of association and to bargain collectively,

-Conventions 111 and 100 on the prevention of discrimination in employment and equal pay for work of equal value; and

-Convention 138 on the minimum agefor employment(prohibition of child labour).

In large part because of our efforts, this debate is now firmly part of the agenda on globalization and sustainable development, and rightly so. At the UN’s Social Development Summit in Copenhagen in March 1995, more than one hundred heads of state and governments signed on to a comprehensive social plan of action including the promotion of core labour standards. The UN’s Beijing’s Women’s Conference in September 1995 reaffirmed the principles adopted in Copenhagen, and marked a major step forward in establishing a platform for action on non-discrimination in employment and equality. At the ILO, governments will be looking to adopt new instruments next year, complementing and strengthening Convention No. 138 on the elimination of child labour. The Declaration of the WTO Ministerial Summit held in Singapore in December 1996 renewed the commitment of member states to the observance of internationally recognised core labour standards, recognised the International Labour Organization as the competent body to set and deal with these standards, and affirmed support for its work in promoting them. And finally, the ILO has been given a stronger mandate for the promotion of core labour standards through the adoption at this year’s International Labour Conference of the ILO Declaration on Fundamental Principles and Rights at Work, committing the ILO’s 174 member states to respect the principles inherent in the seven core labour standards, and to promote their universal application. The Declaration underlines that all member countries have an obligation to respect the fundamental principles involved, whether or not they have ratified the relevant Conventions.

Recent G7 Summits have urged the Bank and the Fund to promote internationally recognised labour standards in their work, and the IMF/World Bank Development Committee Communiqué of the Spring meetings this year, in the section on the Asian crisis, included a reference to labour standards:"Members welcome the efforts of the World Bank and the IMF to help governments address the social consequences of crises, including shielding targeted public expenditures, improving labor standards, and strengthening social safety nets for the most vulnerable."

Core Labour Standards and Trade Agreements

So clearly much progress has been made in maintaining core labour standards as part of the debate on globalization, trade liberalization and structural adjustment, although many within the international community, including within the IFIs(International Financial Institutions) remain reticent about its usefulness within a multilateral framework of rules for trade and investment. In a recent article in the IMF/World Bank Quarterly publication Finance and Development, (December 1997) Stephen Golub contends that "detailed labor standards may do more harm than good," in that they may result in loss of access to markets in the developed world, for developing country goods, thereby hampering the growth prospects of developing countries. He views the call for labor standards "in the South" as emanating from protectionist pressures "from the North", and cautions the South to resist these pressures, and consider carefully the trade off between keeping markets open, and enforcing labour standards which may negatively affect market access.

Within the international trade union movement, we maintain that core labour standards should not include a universally mandated minimum wage as implied by Golub’s article, and should not affect a country’s competitive advantage. They include a set of basic rights which should be universally applied, regardless of a country’s level of development. They provide a floor on basic worker protections, below which companies should not be allowed to go in search of competitive advantage. The universal application of these standards within a transparent multilateral framework will ensure that countries are not penalised for upholding them through failed market access. Inclusion of core labour standards in the multilateral framework of rules governing trade and investment is the best way of ensuring that protectionist pressures are removed, and that workers reap a fair share of the benefits of trade liberalization.

Our trade union experience is full of examples of the negative social costs of trade liberalization borne by workers and their families, including exploitative conditions in Export processing zones, repression for engaging in trade union activities, forced labour, exploitative forms of child labour, and discriminatory prctices against women. Countries which violate basic workers’ rights are calling into question the legitimacy of the trading system which was meant to operate according to the principle of fairness to all involved actors, including workers. Governments should not allow unscrupulous companies to gain short-term competitive advantage by abusing fundamental workers’ freedoms. The countries most at risk from the suppression of workers’ rights by such "free riders", on the world trading system are trading partners with similar levels of labour productivity, which are consequently under pressure to weaken established workers’ rights. This is why concerted international action is needed to promote adherence to basic standards and prevent destructive competition, which is damaging both for the country and the workers concerned, as well as the international system.

Promotion of the principles of freedom of association and collective bargaining provides a basic framework for stable industrial relations and social peace, which can only be achieved through involvement of the social partners at all levels, in the process of economic reforms, industrial restructuring or enterprise-level bargaining. When social tensions develop owing to the painful costs of economic down-turns, as we are seeing now in Asia and other emerging market countries, dialogue between governments and workers, through their strong, representative, free trade unions, provides a way of building consensus on social and economic policies needed to deal with the crisis and build recovery. The absence of dialogue with the social partners can only serve to exacerbate connflict and compromise prospects for recovery. It is therefore vital that responses to the current economic crisis take these principles into consideration, and that a consensual framework be established for difficult reforms. Such an approach requires, in the first instance that core labour standards be recognised and actively promoted, including freedom of association.

We fully support the work of the IFIs in developing codes of good practice for fiscal policy, for transparency in monetary and financial policy, as well as proposals put forward for a code of practice on corporate governance. These are essential building blocks for the new architecture. However, it is equally important that the IFIs adopt a code of practice on social policy, as called for by Gordon Brown (the UK Chancellor of the Exchequer) at the recently convened Commonwealth Finance ministers’ meeting in Ottawa. This should support and strengthen the social infrastructure underpinning recovery efforts, in line with the conclusions of the High-level ILO Tripartite Meeting held in Bangkok in April 1998, with the aim of ensuring that growth takes place with equity, and promotes the observance of core labour standards. Along with the other codes, the code of practice on social policy should inform the policy and lending instruments of the Fund and the Bank, including the Article IV consultations, the Policy framework Papers, and the Country Assistancs Strategies. The World Bank and the IMF should further seek to increase their cooperation with the ILO and the WTO, in order to support the ILO’s enhanced mandate in monitoring observance of core labour standards within the world trading system.