The
Director General of the International Labor Organization,
Juan Somavia, is one of the few leaders of international
institutions to have attended both this week's
World Social Forum in Porto Alegre and the World
Economic Forum in New York. In this interview with
The Earth Times, Somavia speaks on where the world
stands in efforts to move the global social and
economic agenda forward.
Q:
What were you impressions of the meeting in Porto Alegre?
A: I was struck by the tremendous energy of
those attending- particularly among the young--who
believe that there is a peaceful way forward
to a better world. Porto Alegre showed the
importance of all people having a voice, being
able to express themselves in everything from
protests to proposals. Equally important, I
found a growing acceptance of consensus around
values. Consensus doesn't mean trading off
your values. It means building alliances, a
common sense of purpose among people who can
overcomes their differences to achieve a common
goal.
Q: How do you view the way forward for combining
labor interests with those of business in this
era of globalization?
A: There is
a wide variety of trends in the different
regions and countries of world but
to pick out some important developments: There
has been a decline in union density in the
global workforce because of the shift from
large numbers of workers on huge manufacturing
sites to smaller units and also the increase
of the number of jobs in the service sector.
Union numbers have now more or less stabilized--in
the United States it is about 13 percent and
in most of Europe the average is about 30 percent,
except for countries like Belgium and the Nordic
countries where it ranges from 60-90 percent.
Union density in the workplaces of developing
countries varies according to the denominator
chosen. Because of the high number of workers
in the informal sector, the figure can be below
10 percent; but it will be as high as in some
European countries if you take only "employees."
The main cause of falling union rolls is structural
change in employment, although employer hostility
and, in some cases, weak labor laws make it
hard to organize new workforces. While there
has been a steady increase in ratifications
of ILO conventions on freedom of association--Indonesia,
Korea, South Africa and Chile being good examples--we
still have a problem with violations of union
rights, notably in Colombia.
Social pacts between governments, unions and
employers are important for achieving growth,
low inflation and reduced unemployment. Look
at Ireland's success which is largely founded
on tripartite deals going back more than 10
years. Other success stories are the Netherlands,
Finland, Portugal, Barbados and Singapore.
Developments on the business side have shown
an increased attention to corporate citizenship.
About half of the Fortune-500 largest companies
in the world have adopted some form of code
of conduct or statement on their goals with
regard to social, labor and environmental concerns.
There is still a way to go, but companies are
increasing their reporting on social and environmental
issues. On the question of verification of
performance, the ILO is working with groups
like the Global Reporting Initiative on criteria
for company performance on labor standards
and is discussing good practice on independent
verification.
Business benefits from a sound industrial
relations framework giving the social stability
needed for profitable investment. The need
to balance security and flexibility in labor
markets exposed to intensified competition
as a result of economic integration, is best
achieved where unions and employers are free
to organize themselves and participate in rule-making
by collective agreement or through laws and
regulations. The Enron bankruptcy has spotlighted
the need to protect employees in cases of insolvency
in the areas of due wages and benefits. The
ILO offers advice on management of company
pension funds and stresses the need for a strict
separation of pension funds from the companies'
own accounts.
Q: How do you propose to integrate international
standards such as the UN Global Compact, ILO
Conventions and OECD Guidelines in corporate
strategy:
A: The ILO is approaching this question on
two fronts. We aim to work with all our members
to improve labor laws and regulations so that
they incorporate ILO standards into national
law and practice. The ILO has built up, through
rigorous research and discussion, a comprehensive
body of good practices; these are set out in
the Conventions and Recommendations that make
up international labor code.
Second, international businesses are able
to lead by example in setting patterns for
the treatment of their employees and those
of the sub-contractors. This is why the ILO
is actively supporting the UN Global Compact
and the OECD Guidelines on Multinational Enterprises
as well as our own Declaration of Principles
on Multinational Enterprises and Social Policy.
The main challenge to those companies adopting
good labor practices is to show that their
codes are not just window-dressing for consumers
but are carried through in practice. This is
particularly important in those industries
that have developed global sub-contracting
chains with large numbers of smaller enterprises--such
as the garment and sporting goods industries.
Research has proved that countries with a
poor record on core labor standards do not
gain any comparative advantage in trade and
that those with a better record generally are
well integrated into the global economy.
Q: To finish on some immediate concerns about
the economy: Because of the recession, global
growth has slowed and millions of jobs have
been lost worldwide. Do you see any chance
of any immediate improvement?
A: There is talk of a recovery in 2002 but,
from an employment perspective, we nearly always
find that, after a downswing, a significant
number of people have become trapped for one
reason or another in long-term unemployment.
We also find that the numbers of jobless keep
going up for several months after the leading
economic indicators start to improve. For example,
employment in South East Asia has still to
recover from the 1998 crisis, and the job shortages
in Latin America are largely the fallout of
slow growth in the 1990's. Now some four million
more jobless are expected in the region after
the 2001 slowdown. In the world's weaker economies
these sort of setbacks can take years to overcome--as
evidenced by the massive growth of the informal
economies of these countries where the bulk
of the 500 million poor earning less than one
dollar a day can be found.
At the ILO's Global Employment Forum last
November employers, union leaders, government
ministers and officials concluded the economic
slowdown across the world required a coordinated
stimulus package targeted at keeping up employment
growth rates in the developing world. The world's
biggest economies should take the lead in structuring
a package which would include more aid and
trade and less debt; action to produce our
way out of crisis; measures to support worker
and investor confidence; and focused programs
for those facing the most difficult transitions
in employment--school leavers, early retirees,
the technologically redundant and the structurally
unemployed.
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