12:49 PM Jun 10, 1997

LABOUR: EU TRIES TO HEAD OFF CONFRONTATION OVER SOCIAL LABELS

Geneva, 10 June (Chakravarthi Raghavan) -- The 85th session of the International Labour Conference, now in its second week, began a week of general debate Monday, with a major focus of the debate on the issue of labour standards, trade and the ILO Director-General, Michael Hansenne's controversial proposals for "social labelling" of exports of countries.

The Hansenne proposals, implicitly trying to link social standards to trade, and to enable rich nations, particularly through actions of labour unions and consumers, through "consumer power" and boycotts, keep out imports from low-wage countries that fail to get ILO's "social labels", has aroused much concern and anger among many developing nations, and is expected to figure at the Conference.

Several of the developing countries are joining together to present a common statement which would effectively challenge Hansenne's authority to make such a proposal, and insist on further discussions and studies of the entire range of questions by the ILO's governing body.

In an effort to head this off, the European Union's Social and Employment Ministers and the EC's Social Commissioner, sought a meeting with some of their counterparts in the Asia-Pacific region and had about two-hours of discussions - with most of the time occupied by statements of several EU ministers, two of their Asian counterparts (the Iranian Minister, who chairs the Asia-Pacific government delegations group, and the deputy labour Minister of the Philippines), and a brief period of discussions for other interventions.

According to the EU, the Ministers or Deputy Ministers of China, Iran, the Philippines, and Bangladesh were present, as also ambassador of India and diplomatic representatives from other countries.

At the end of the session, the social and employment minister of Netherlands (which is now in the EU chair), Mr. A.P.W.Melkert, described the meeting, at a press conference, as "constructive" -- which in normal diplomatic language means, frank discussions with no agreement. The two sides however agreed to carry forward the dialogue at the level of ambassadors and diplomats at Geneva.

Melkert said however that in initiating the meeting, the EU ministers knew they were starting with a predictable gap, but they wanted to start building bridges, and to take the initiative to avoid any confrontation. He however conceded that even the building blocks for building a bridge were yet to be gathered.

The Dutch Minister identified the points emerging from the discussions as:

* need to focus on ILO's standard-setting and supervisory role, without extending ILO's role beyond those of the organization; such an extension would lead to different understanding or misunderstandings of the ILO's mission.

* need to prioritise the areas and issues, and have a more gradual approach, rather than drawing up a long list of issues without any priority and thus provoking a lot of resistance.

* aim at bringing together experiences of best practices instead of merely focusing on legal instruments.

Melkert noted that some countries may not have ratified the convention on freedom of association, because of problems relating to civil servants having such a right, but that in practice may allow most of labour the right of association and collective bargaining.

* need to focus on technical assistance to developing countries to enable them to implement labour standards.

Hansenne's proposals in his report to the Conference call for an ILO imprimatur behind "core labour standards", an ILO inspection machinery to visit and inspect observance in practice of such standards by developing countries, and the issuance by ILO of a "social label" -- certifying observance by the country of the labour standards -- that could be used by countries on their export products, and that would enable consumers, presumably of the rich industrial nations to organise boycotts against products not having such a label.

This has created opposition among many countries of the South, both those where there is suppression of labour rights and those where there is not, with many of them questioning Hansenne's authority to put forward such proposals.

Several of these countries, drawn from Asia, Latin America and Africa, have been discussing among themselves and have drawn up a statement which they expect to present this week at the Conference, though the form in which they would do it is not very clear -- given the ILO's rules and procedures.

While in other international organizations, any government or governments could present a document (on an issue before a meeting) and have it circulated, the ILO's tripartite structure is such that this is not so easy or simple.

Traditionally, in the ILO, for a long time, employers, workers and governments met as groups, without any north-south or regional focus.

But gradually, in the 1960s and 1970s, as a North-South dimension shaped up in international organizations, with the group of 77 developing countries emerging to present a common, coordinated position on economic issues and the Non-Aligned Movement (NAM) on political issues, the OECD countries (and the ILO machinery) tried to discourage developing countries forming a group inside the ILO. Some of the developing nations also saw the ILO as basically as a political and labour rights body.

The developing countries began looking at ILO issues collectively through the framework of the Non-Aligned Movement, and there were also the regional groups. In Asia, particularly, this regional group (Asia-Pacific countries) had not only the developing countries of the region, but also Japan, Australia and New Zealand.

But the developed countries nevertheless meet among themselves in the "Industrialized Market-Economy Country (IMEC)" group where they discuss and evolve common positions. The ILO's daily agenda lists the IMEC group as meeting every morning for an hour, apart from such meetings in the context of particular issues.

In the controversies arising over the Hansenne proposals, several of the Asian countries, in consultations with some of the Latin American and African countries, have begun drafting a common position paper/response. But in discussions within the Asia-Pacific regional grouping over the last week or so, the three industrialized nations (Japan, Australia and New Zealand) have tried to water down the views of others, in what was described as an attempt to avoid "confrontations". Some in the developing world, particularly countries with a putative candidates to succeed Hansenne, have also been trying to water down the collective response.

Nevertheless a number of key developing countries decided to draft a common statement, and get signatures of others, to present it to the Conference.

ILO sources said there was no procedure for such a statement to be automatically made into an official conference document, but that it was up to the President and bureau (two vice-presidents representing the employers and workers) to decide, but that most likely a statement on behalf of several countries was bound to be issued in some official way.

In their statement, which is being finalised, the signatory developing country governments are expected to express their concern over the ILO Director-General's Report, the "inherently flawed" approach and argument therein to introduce "an untenable link between labour standards and trade" which the signatories make clear they do not accept.

The proposal for an ILO report on social progress flows from flawed premises and linkages, with the implication that ILO would determine what is the "acceptable" level of comparative advantage and which countries are converting trade liberalisation into social progress.

The "social labelling" idea has been raised from the perspective of consumers in developed countries and such labelling would legitimise the use of labour standards for protectionism and by implication endorse the social clause idea with the ILO acting as a monitoring body, the developing countries are to say.

While supporting and encouraging ILO activities to promote labour standards, in effect they challenge the ILO head's interpretation, and the route proposed by him in his report to the conference.

The developing country statement is expected to say that while the WTO's Singapore Ministerial Conference (SMC) reiterated the ILO as the competent body to set and deal with labour standards, the SMC rejected "use of labour standards for protectionist purposes" and stipulated that the "comparative advantage of countries, particularly low-wage developing countries, must in no way be put into question."

Contrary to this (view of the SMC), the (Hansenne) Report appears to embrace the protectionist approaches linking trade with labour standards.

The SMC, they say, gave no new mandate to the ILO to take a further initiative on trade and labour standards, nor did the SMC have any authority to do this, the developing country government statement is expected to say.

There is no empirical evidence of a link between trade liberalisation and labour standards, and the thesis about low wages of developing countries as responsible for loss of jobs and lower wages in the industrialized world has been refuted by many authoritative analysis, including the ILO's own.

The diversity in implementation of labour standards across countries reflects the differences in levels of economic development and there is no evidence that lower levels of social protection affect trade patterns.

ILO instruments have been voluntarily ratified by States and any proposals for an ILO Declaration on core labour standards should not be legally binding. The most effective way to move forward to ensure respect for labour standards is universal ratification of core labour Conventions and the ILO must pursue labour standards in their own right as an integral part of social progress.

Asked at his press conference, whether the EU believed that as a result of their meeting, they had made any converts among the developing countries and whether they expected the developing countries not to proceed with the statement they were drawing up, Dutch Minister Melkert said that in seeking a meeting the EU knew they were starting with a situation of unbridged gap. But it was essential to start bridging the gap and the EU hence took the initiative so that they could have a dialogue. At their meeting, taking into account the report of the Director-General, they brought into play other elements so as to construct a bridge from both sides until the two ends could meet.

The Director-General had put forward some ideas. But at their meeting a number of alternative approaches were made and there was some agreement that it would not be very effect to push for instruments as the focus of the discussions, but instead adopt an approach based on what has been agreed upon at the ILO.

"So, at our meeting, we did not focus on instruments of social lebelling or other instruments, but tried to build a gradual approach for observance of agreements reached within the ILO.

"The 'social label' introduces a very 'valuable' element into the discussion, but it should be the outcome of the discussions on standards, and not the beginning."

Asked whether the very concept of putting a "social label" on products entering international trade did not amount to forging a 'trade-social standards link', and what was the EU position, Melkert seemed that the EU had no common position. While the EC represented the EU on trade matters, the social issues were left to individual member-states.