Labour standards
31. Chapter 2 of the Globalisation White Paper briefly
addresses the issue of labour standards. It notes that "effective
governments are needed to build the legal, institutional and regulatory
framework without which market reforms can go wrong ... effective
regulation remains essential ... to promote and protect human
rights, including core labour standards".[62]
The White Paper attracted a significant response on the issue
of labour standards. Amongst others, the Committee received memoranda
from the Commonwealth Trade Union Council (CTUC), the Trades Union
Congress and the International Confederation of Free Trade Unions
(ICFTU), and the International Centre for Trade Unions Rights
(ICTUR). Whilst welcoming some elements of the Globalisation White
Paper — including its overall objective to make globalisation
work for the poor — the overall tone of these memoranda
was critical of the White Paper's treatment of labour standards.
The CTUC stated that "unless there is much greater recognition
of the need for all governments to enforce basic labour standards
the White Paper might well be entitled 'Making the Poor Work for
Globalisation'".[63]
They continued, "Chapter 2 of the White Paper emphasises
the need for effective regulation to promote and protect human
rights, including core labour standards, and equality and empowerment
for women. The experience of trade unionists throughout the Commonwealth
is one of governments responding to globalisation by taking steps
which have entirely the opposite effect".[64]
Trade unionists were under constant pressure to accept worsening
conditions so that their employees remained competitive. A number
of case studies were provided where regulations have been relaxed
and where monitoring has been reduced which we draw to the attention
of DFID.[65]
32. There is obviously disagreement between the Secretary
of State and trade unions. ICTUR felt that "the White Paper
totally understates the role and potential of trade unionism ...
trade unions are qualitatively different to other NGOs and could
be at the centre of a development process which sought to end
mass poverty and advance democratic and human rights".[66]
Clare Short felt that "we urgently need to mature the trade
union debate on these questions in that the poorest of the world
are not in organised sectors and are not in trade unions ... unionisation
of the very poorest in the world is unlikely to be the remedy
which will improve the labour standards of the poorest".
She rejected calls for the WTO to be used to enforce labour standards,
"the logic of that is that any country which has problems
of child labour, of bonded labour and of labour which is badly
paid or badly treated, would have trade sanctions against it.
Every poor country has child labour. If you go down that road
you punish countries for being poor".[67]
However, the Government makes clear, in the Globalisation White
Paper, that it strongly supports the ILO Declaration on Fundamental
Principles and Rights at Work and that it is firmly committed
to taking action against child labour.[68]
33. We agree with the Secretary of State that the
World Trade Organisation should not be used to enforce labour
standards, as suggested by some of the memoranda received by the
Committee. To do so would simply be to punish countries for being
poor and to provide a further excuse for rich countries to erect
trade barriers. At the same time, we agree with the ICFTU which
argued that the ILO Declaration on Fundamental Principles and
Rights at Work needs an effective implementation mechanism in
the ILO.[69]
Core labour standards are, after all, defined as 'core' precisely
because they are fundamental human rights that can be respected
by any country, regardless of its level of poverty. At present,
it is often left to trade unions to monitor and implement basic
rights, a point made by the Commonwealth Trade Union Council in
their memorandum, "precious union resources are used to secure
justice when it is the responsibility of the government to enforce
the legislation".[70]
This is clearly not acceptable. We call for the Government to
set out how core labour standards can best be implemented, monitored
and enforced.
International capital flows
34. War on Want stated that "One specific aspect
of globalisation which has caused poverty is the growth and instability
of capital flows. $2 trillion is now exchanged every day on world
currency markets. As a direct result of the East Asian crisis,
the ILO has estimated that 10 million people were thrown out of
work and poverty levels rose dramatically".[71]
The Globalisation White Paper has an entire chapter dedicated
to the topic of 'harnessing private finance'. It notes that foreign
direct investment to developing countries has more than quadrupled
from US$36 billion in 1992 to US$155 billion in 1999 — three
times the level of development assistance. It states that "The
UK Government favours a more country-specific approach to capital
controls, and a gradual approach to the opening up of capital
accounts. An important part of this is to work with countries
and international institutions to design 'road maps' for the opening
up of capital accounts".[72]
35. The Globalisation White Paper's commitment that
"in countries which have weak financial sectors and are at
the earlier stages of liberalisation, there may sometimes be a
case for specific measures to help discourage excessive short-term
capital inflows" was welcomed in submissions to the inquiry.[73]
Clare Short elaborated on this in oral evidence, "famous
examples have been used, like in Chile, which required the depositing
for no interest of sums of money to try to restrict the inflow
of hot money ... it was a mechanism which was used which is reasonable
... we think it is a good idea for countries to look for taxing
mechanisms and so on to make short term flows in and out have
some taxation and cost on them so that there is a restriction
on hot money that can cause a destabilising effect".[74]
We welcome the Government's pragmatic approach to capital account
liberalisation and to attracting foreign direct investment to
developing countries. We would welcome further details on the
Globalisation White Paper's proposal for 'road maps' for the opening
up of capital accounts and on proposals to discourage excessive
short-term capital inflows.
36. A number of submissions also focussed on the
potential for a capital transactions tax (also known as 'the Tobin
tax') to impede financial speculation and provide increased tax
revenue. Clare Short, whilst attracted to the idea, was not optimistic
about it being implemented in the near future, "On the Tobin
tax, the idea that there should be a very tiny charge on hot money
moving around the world which would go into a big global development
pool is a very attractive idea. The problem is that we have to
get all countries in the world to agree for it to be able to work
... Let us look at it with interest but do not hold your breath.
It might be our grandchildren who inherit that".[75]
We look forward to receiving the note on the Government's policy
on the Tobin Tax promised by the Secretary of State in evidence.[76]
47 Evidence, p.38 Back
48
Evidence, p.83 Back
49
Globalisation White Paper, para. 32 Back
50
Ibid., para.28 Back
51
Qq. 6-7 Back
52
Evidence, p.83 Back
53
Evidence, p.70 Back
54
Evidence, p.70 Back
55
Globalisation White Paper, para.132 Back
56
Ibid., para.133 Back
57
Q.19 Back
58
Evidence, p.14 Back
59
Evidence, p.14 Back
60
HC Deb, 14 November 200, Col. 816 Back
61
'Raid' on South African Teachers, The Guardian, 16 February 2001 Back
62
Globalisation White Paper, para.56 Back
63
Evidence, p.21 Back
64
Evidence, p.21 Back
65
Evidence, p.21 Back
66
Evidence, p.88 Back
67
Q.25 Back
68
Globalisation White Paper, p.29 Back
69
Evidence, p.64 Back
70
Evidence, p.21 Back
71
Evidence, p.17 Back
72
Globalisation White Paper, para.162 Back
73
See for example, Evidence, p.17; p.65 Back
74
Q.26 Back
75
Qq. 26-30 Back
76
Q.30 Back
