Global Labor Strategies

Globalization, Neoliberalism, and Climate Change

As the global economy hurtles toward Great Recession II, the earth hurtles toward climate catastrophe.  Both represent the results of a neoliberal deregulation that has left humanity no means to shape our economies to serve human needs -- not even the need for economic and environmental survival.

How global movements respond to these intertwined environmental and economic crises will be key to our common survival. The politics will surely be complicated.  A case in point is an article in today's New York Times about the United Steelworkers union's WTO complaint against China for providing "illegal clean energy subsidies" to domestic solar, wind and other green industries.

To promote international dialogue on these questions, we thought it might be useful to post a recent paper, entitled "Globalization, Neoliberalism and Climate Change", which was prepared by GLS at the invitation of Professor Liu Cheng of Shanghai Normal University for an international conference this April on "Global Economic Recession vs. Deregulation" jointly organized by the Peking University Law School and the Shanghai Normal University Faculty of Law and Politics and supported by the ILO Beijing Office.  The paper stresses the interest of workers around the world in cooperating to create an alternative to neoliberalism based on making the transition to a green economy.

Globalization, Neoliberalism, and Climate Change: Toward a New Regulatory Regime

For thirty years, global and national economies have been guided by policies of neoliberal deregulation, often known as the "Washington Consensus." Neoliberalism has been disastrous for workers in most countries, pitting workers against each other in a race to the bottom and making it all but impossible to protect working class interests. There is now a growing consensus that the Washington Consensus has been a failure.

There is also a growing global recognition that we are in the midst of an unprecedented climate crisis. Ready or not, that crisis is affecting every nation, every locality, and every worker. Its effects are already serious, and unless decisive global action is taken to counter it, they will soon be catastrophic. Neoliberal deregulation, by dismantling the means for public steering of society to meet social needs, has also made it nearly impossible to correct global climate crisis.

These twin realizations, the failure of neoliberalism and the climate crisis, will define the struggle for the interests of poor and working people for the next century. At the same time, the necessity to counter climate change may provide an opportunity to address the broader problems of neoliberal deregulation.

This article argues that it is only by rolling back neoliberalism that we can protect the rights of workers globally and solve the crisis of climate change. In Part 1 we provide a short history of globalization. In Part 2 we discuss the climate crisis and its effects on workers. In Part 3 describes proposals for a "global green new deal" to create full employment through climate protection. Part 4 argues that a new global and national regulatory regime is necessary both to counter both climate change and the race to the bottom. Part 5 discussions the role of organized labor nationally and globally in bringing about such a transformation.

Global Warming and Global Labor

[This is the first in a series of posts as representatives of trade unions around the world head off to Copenhagen.  It is sross-posted with the Labor Network for Sustainability]

While world leaders play the “blame game” for their failure to negotiate a binding climate agreement in Copenhagen, trade unions from around the world, almost unnoticed, have forged their own common approach to climate protection.

Unions in different countries and industries inevitably have different interests.  But remarkably they have been able to come together as a unified force around the necessity for protecting the climate, protecting workers, and protecting the world’s poor.

As world leaders assemble in Copenhagen for the global climate conference, they will be joined by a global labor delegation of 250 trade unionists from around the world demanding a just transition to an environmentally and socially sustainable global economy.

According to Guy Ryder, General Secretary of the International Trade Union Confederation  (ITUC) which represents unions from around the world,

The science shows clearly that the longer we wait, the higher the human, environmental and economic costs will be.  We need governments to make ambitious commitments which will set in stone the core elements of a treaty that must be completed as a matter of urgency.  This means legally-binding targets on emissions and longer-term financing to assist developing countries to adapt, as well as ‘just transition’ strategies to deal with the social and employment dimensions.

Not all unions and federations agree with the ITUC position on every issue.  The Solidarity union in Poland and the AFL-CIO in the US have different positions on the issue of emission reduction targets, for example.  But they have not tried to block the ITUC’s overall approach.

Trouble at Wal-Mart: The Rocky Road to Labor Reform in China

The industrial relations system in China is in play as workers, peasants, corporations, and a variety of civil society, state, and party actors vie to determine its future.  Now the collapse of the global financial system and the likelihood of a deep global recession/depression add a whole new dimension to the struggle of Chinese workers and reformers for a more equitable system. Global markets for goods made in China will shrink. Thousands of foreign companies with operations in China could be swept away or be forced to significantly downsize. Indeed, even global giants like automaker GM, one of China's biggest auto producers, are teetering on the brink of bankruptcy. China’s banking system—while somewhat isolated from global pressures—is likely to feel the effects of the financial crisis. No one knows what effect the crisis will have on the value of the vast quantities of the US dollars and debt that China currently holds.

Against this back-drop we take a look at aspects of the Chinese industrial relations system before China is sucked into the vortex of a global recession.

Trouble at Wal-Mart

It has been two years since the ferociously anti-union Wal-Mart recognized the ACFTU in its stores. The event made headlines around the world.

Under Chinese labor law if 25 workers petition for a union, a committee can be elected and the union must be recognized. Normally this is a top-down pro-forma affair in which both management and the official union play a part, but in this case, Wal-Mart’s refusal to play by the normal rules forced the ACFTU to actually recruit workers at the workplace and establish the union without management participation. Once Wal-Mart recognized the first union branch, at its Fujian store, recognition quickly followed at Wal-Mart’s other Chinese facilities. Today, the ACFTU says it represents 50,000 Chinese workers at 108 Wal-Mart locations in China. Many hoped the Wal-Mart experience would be a breakthrough in the development of the Chinese industrial relations system and in the evolution of the ACFTU. Things have not turned that way.

We have a good glimpse into the world of Wal-Mart’s workers through voices of the workers themselves as they discuss and debate--and criticize--the actions of Wal-Mart and the ACFTU in on-line blogs. Some of these discussion threads, as well as relevant articles from the Chinese press, have been translated by the excellent, and increasingly indispensible, China Labor News Translations (CLNT). Read them here.

Wal-Mart has not engaged in serious collective bargaining and the ACFTU has fallen into a typically cozy relationship with Wal-Mart’s management. After Wal-Mart and the ACFTU signed a substandard contract at a store in Liaoning province, the company presented the agreement as a template for contracts at stores throughout China and essentially refused to bargain any further. Among the contracts provisions were a pay increase that did not keep up with inflation and which will not come into effect until mid-2009.  According to CLNT report, “Many individual store unions were not even given a chance to sign the template themselves. Indeed in Shenzhen City, for example, the Buji store has signed a collective contract on behalf of fifteen other outlets in surrounding areas.”

For its part, the ACFTU defends its approach to bargaining with Wal-Mart. According to Zhang Jianguo, the ACFTU’s director of collective bargaining, the new contracts require annual negotiations, wages above the minimum wage, and contain language on working hours, vacations, and social security and training.

But workers at Wal-Mart’s Bayi store wanted to negotiate a better agreement. A grassroots leader, Gao Haitao, who has become a hero to Wal-Mart workers throughout China for his combative defense of Wal-Mart workers’ interests, organized a fight back and made new demands in negotiations with management. Instead of negotiating, “Wal-Mart simply bypassed Gao by convening the staff and workers’ congress and finding a trade union chair from another store to sign the contract in his place!”, according to CLNT.

The ACFTU—which says it supports Gao—stood by while Wal-Mart refused to bargain leading the CLNT to conclude. “….the experience of Gao Haitao and the farcical top-down collective bargaining contract negotiation procedure shows that there is no genuine collective bargaining by workers’ representatives. When a Wal-Mart union did come out to negotiate a good contract, the ACFTU did not tender its support.” As a result of Wal-Mart’s actions Gao resigned from his job in frustration in September in a move that many see as a blow to authentic union development in China.

Labor Charts a New Course on China

Trade unions and labor organizations around the world are seeking to establish a presence in China. Initially, that means beginning a dialogue with the All China Federation of Trade Unions (AFCTU)—China’s only legal union. Last year, following its split from the AFL-CIO, the US Change to Win federation, comprised of 7 US unions, broke new ground when it opened talks with the ACFTU.  And in December, the Brussels based International Trade Union Confederation (ITUC), the global union umbrella organization comprised of 309 affiliated organizations in 156 countries, voted to begin a “critical dialogue” with the ACFTU. (The AFL-CIO is the largest affiliate of the ITUC, while Change to Win  is not a member.)

This is not simply a story of bureaucratic relationships. Trade unions are an especially important non-governmental interlocutor on labor and worker rights issues in China—a country with few civil society organizations but a significant formal trade union sector. The lack of civil society organizations means that rights oriented NGO’s have many fewer dialog partners in China than do trade unions. 

Today, one in four workers in the global economy is Chinese. Many are employed by the same global corporations or their contractors that employ union members in other countries. This employment relationship potentially gives foreign unions more standing to advocate for the labor rights for co-workers employed in China by those companies and for Chinese workers generally.   

We’ve written extensively about why the new engagement is a good thing and suggested topics for discussion. Labor’s opening to China represents a significant move away from its Cold War era shunning doctrine, long considered outmoded by many labor activists. Under that doctrine, most trade unions have had little contact with the ACFTU because they do not consider it a legitimate trade union but an arm of the Party/State apparatus. Chinese law does not recognize crucial international labor rights such as the right of workers to establish independent unions, to bargain collectively, to strike, or to elect union officials of their own choosing. 

There have been some previous attempts to create a dialogue with the ACFTU, particularly in the 1980s when China adopted a market economy and opened up to foreign investment. While some individual unions and Global Labor Federations have maintained contact over the years through various joint projects, most unions severed formal relations following the suppression of the pro-democracy movement in 1989.

Meanwhile global corporations and investors flocked to China to take advantage of China’s low wage labor force and business friendly environment.  The consequences of labor’s absence from China were graphically illustrated last year during the debate over the Labor Contract Law which extended new rights to workers. Foreign corporations and their business associations in China actively lobbied the Chinese government to weaken some of the law’s key provisions. But global labor—with no organization or influence on the ground in China—could only comment from afar. Many realized that this asymmetry needed to be addressed.

Labor’s Opening to China

The announcement in December by the International Trade Union Confederation (ITUC) that it would begin a “dialog” with the All China Federation of Trade Unions (ACFTU) marks a sea change in global labor’s approach to China.  Equally significant is the endorsement of the talks by the AFL-CIO.  Until now, the ITUC, the AFL-CIO, and most national labor federations shunned official contacts with the ACFTU—China’s sole legal union—because they did not consider the party-state controlled organization a legitimate representative of China’s workers. 

But, according to Guy Ryder, the ITUC’s General Secretary,

“By starting a dialogue with the Chinese trade union, ITUC wants to have more influence on the ground in China….It should enable us also to discuss the role of China in the world.”

The action actually caps a gradual shift toward engagement with China by unions from around the world. Some European unions affiliated with the ITUC have been active in China for over a decade. The Change to Win federation in the US began talks with the ACFTU last year. Officials have exchanged visits and plans are underway to expand contacts in the coming months.

The policy shift by the ITUC, the AFL-CIO, and other global unions is long overdue. Three decades of rapid economic growth have transformed China from an economic backwater into the world’s workshop.  Workers, trade unions, communities, and countries throughout the world are confronting the challenges posed by China’s growing role in the world. Today, about 25% of all the workers employed in the global economy are Chinese.  The “China price” sets the global norm for wages and working standards up and down the value chain, from inexpensive garments to sophisticated electronics.  As a result the hard-won gains of workers in the global North are being rapidly undermined, while the aspirations of workers in the developing world are being dashed, as China becomes the wage setting country in industry after industry.

China’s export oriented development model has had a particular impact on trade unions everywhere. Multinational corporations—the very firms that employ millions of union members around the world—have flocked to China seeking to take advantage of its low wage workers and business friendly policies, reducing labor’s bargaining leverage and the number of union jobs. These firms have been central to China’s development. Roughly 66% of the increase in Chinese exports in the past 12 years can be attributed to foreign owned global companies and their joint ventures. (Stephen Roach, Business Times, Singapore, 8/8/06) These companies account for 60% of Chinese exports to the US. Despite all of the talk in the current presidential campaign, the “Chinese threat” is less about trade with China than it is about “trade” with US based companies like Wal-Mart, GE, or any of the other of the hundreds of Fortune 500 companies that have set up shop in China to cuts labor costs and avoid environmental regulations. Ways, however imperfect, must be found to reach out to Chinese workers to find mutually acceptable ways to halt a global race to the bottom, which in end, hurts all workers.

Labor after Bali

(first in a series)

Like an oil tanker hurtling toward a shoal, the world, the U.S., and the labor movement are being forced to make a radical change of course by the emerging threat of global warming.  The recent UN conference on climate change, held in Bali last December, showed representatives of the whole world grappling with how to limit the man-made greenhouse gasses that are threatening our biosphere.  The conference ended with the U.S. government, under enormous worldwide pressure, reversing its threat to turn its back on the UN process.  And it revealed what may become a sea change in the attitude of U.S. labor.

Ninety union delegates, more than 20 from North America, participated in the Bali conference.  Blogging from Bali, Abraham Breehey of the International Brotherhood of Boilermakers caught the epochal character of the climate change challenge and the centrality of workers to it.

For the past century, our craft has been involved in constructing infrastructure we now know has contributed substantially to the greenhouse gas emissions that are causing climate change.  For the next century, our craft will be essential to deploying the new technology now available to reduce the carbon emissions associated with energy generation and industrial processes.

New Approaches to Promoting Labor Rights in China

 

A 10-day trip in May by a high profile delegation from Change to Win (CtW), and a recent letter on China’s proposed draft labor law from the General Secretary of the International Trade Union Confederation (ITUC) to China’s President spotlight new approaches by the world’s trade unions as they grapple with how to deal with China’s emergence as a global economic powerhouse—and how to promote labor rights for Chinese workers.

The Change to Win delegation which included Teamster President James Hoffa, SEIU President Andy Stern, United FarmWorkers President Aruto Rodriguez, CtW Chair Anna Burger, and CtW Executive Director Greg Tarpinian  met with Chinese government officials, executives from US based companies doing business in China, and significantly, with officials from the All China Federation of Trade Unions (ACFTU), the government controlled union federation to which all Chinese unions must belong.

 

Sao Paulo Declaration

Protecting the environment is a fundamental need of working people; after all, workers must breathe the air, drink the water, depend on energy and other resources, and face the hurricanes, floods, and ecological destruction that result from global warming.  But the specific policy objectives of labor movements struggling for jobs and organizational position have often come into conflict with environmental movements an policies.  Now the changing political, economic, and social situation in Latin America and the Caribbean is creating an opening for a new synthesis of labor and environmental concerns.

This April, 60 unionists from 13 countries met in Sao Paulo for the first Union Conference on Labor and Environment in Latin America and the Caribbean.  Brought together by the new International Labour Foundation for Sustainable Development (Sustainlabour) and ICFTU’s Regional Inter-American Organization of Workers (CIOSL-ORIT), they drew up the “Sao Paulo Declaration” designed to express the labor movement’s concern for environmental issues.  As the Declaration states: 

“Decent work is essential for people to enjoy a sustainable livelihood.  However, it is only possible to create decent and secure jobs if environmental sustainability is attained.”

The Conference represents the intersection of two conflicting forces.  On the one hand, since the 1980s and 1990s, “the region has been a privileged testing ground for neoliberal policies that promoted privatization and denationalization of companies, neoliberal restructuring of production, mass unemployment and precarious work situations.”  These policies have followed the “paradigm of structural adjustment favored” by “large transnational corporations.”  Current trade negotiations will have “direct consequences for water, public services, education, health, communications and other sectors.”

But in spite of this, “in recent years, large-scale struggles and social movements have been able to challenge neoliberal policies, transforming Latin America and the Caribbean into a point of reference for resistance to neoliberalism with the participation of unions, the peasand and indigenous movements.” 

The declaration ties these movements directly to environmental issues.  “Not by chance, some of these large struggles have developed around protecting natural resources, against water privatization, and protecting natural gas and other public goods in different countries in the region.” 

Such movements have created the context in which “various governments, committed to popular struggles and social movements, have been elected and are now constructing a new socio-political milieu in the region.”  These include “Alternativa Bolivariana par alas Americas – ALBA (Bolivarian Alternative for Latin America and the Caribean), the Comunidad Suramericana de Naciones – CSN (South American Community of Nations), and the Tratados de Comercio con los Pueblos – TCP (Trade Agreements with the Peoples).”   

In this context, the Sao Paulo statement brings together a number of proposals to “strengthen the links between the environment, work, and poverty.”  For example:

-- “Mainstreaming and systematically addressing public policies that guarantee access to goods and services, sanitation, health, energy, housing, education, public transportation, social security as an indispensable element in overcoming poverty and protecting access to water as a human right.

-- “To protect the fundamental rights of workers and their unions, such as the right to free association and collective negotiation so that they can participate in strategies in favor of sustainable development, which is understood as development that ensures decent work with clean technology and productive processes that do not harm the environment, workers, their families or society in general.”

-- “To protect gender equity and the inclusion of women workers as a fundamental condition for advancing the realization of an environmentally and socially sustainable region.”

-- “Just transitions” toward sustainable production and consumption, with policies that ensure that “workers who are negatively affected during restructuring processes have decent work alternatives.”

“To reject ‘double standard’ policies used by some multinational companies that ‘export’ to Latin America and the Caribbean production methods that negatively impact the environment and that are not legally or socially acceptable in their countries of origin.”

The Declaration calls for a specific set of convergences and alliances.  For example, labor should “strengthen strategic relationships with other social movements and socio-environmental organizations and networks, particularly with the Alianza Social Continental” – known in the US as the Hemispheric Social Alliance (HSA) – “and its development of ‘Alternatives for the Americas,’ which includes an important section on the environment.”  It should “establish water as a key issue for union work in the region, supporting the position of ISP and other social organizations in the Joint Declarations of Social Movements and Organizations on Water at the Social Forum of the Americas (Caracas, January 2006) and during the round of meetings on cities during the IV World Forum on Water (Mexico, March 2006).”  And labor should “support actions undertaken by REL-UITA, COPROFAM and other organizations” to “combat the expansion of agrotoxins, transgenics and production models of intensive agriculture based on unsustainable production techniques.”

The Declaration also begins to sketch what labor-friendly sustainable development might entail.  It proposes, for example, to “promote an agricultural production model based on principles of agroecology and family agriculture.”  It sees this as “directly linked to the movement for agrarian reform and to demands for food security and sovereignty and justice in agriculture.”

Declarations can be nothing more than just that.  But in this case, the participants in the Sao Paulo conference will return home to a context of broad social ferment, in which the possibilities for “another world” appear as more than a distant dream.  The water, energy, and other struggles in the region have already begun to draw together environmental and social concerns.  As they experiment with new ways to integrate environmental issues with more traditional labor social, those of us in the rest of the world should be watching closely to see what we can learn. 

[Documents from the Conference are available at:  http://www.sustainlabour.org/documents.php]

y.r.

New Labor Standards Adopted by World Bank

Back in 1997, during the Asian financial crisis, one of us at GLS who was working on the staff of the House Banking Committee drafted federal legislation to force the International Monetary Fund and World Bank to make respect for the core ILO labor standards a condition of all future loans.  At the time, under intense pressure from the Clinton Administration, the AFL-CIO public policy department actually lobbied against the legislation.  Almost a decade later much has changed, with the US labor movement now in wide agreement with the rest of the working world that IMF and WB policies hurt workers and grease the wheels for the race to the bottom.

There are signs that that the global labor movement's new ability to speak with one voice on international funding and reform is having an effect. A few weeks ago, the International Confederation of Free Trade Unions (ICFTU) announced that the World Bank directors had agreed  that all private sector, International Funding Corporation (IFC), loans must pass a core labor rights screening.  After the new standard is implemented in April, all companies that borrow from the IFC will be required to abide by the core labor standards (CLS) as defined by the International Labor Organization (ILO). This commitment stands to affect a wide range of private investment in the developing world since during its 2004-2005 fiscal year the IFC initiated 236 new projects in 67 countries totaling $6.45 billion.

The new policy represents two major advances. First, it applies to private corporations—not just governments—and is thus a good precedent for creating labor rights rules that target global corporations. Second, it contradicts the general neoliberal/WTO principle that the processes and working conditions under which products are produced cannot be regarded as a factor in allowing them "free trade".  (This is an extension of the "free trade" principle that it is each individual government, not the corporation/vendor, that is responsible for setting and enforcing standards.)

But take it from few wounded warriors who have battled the international funding institutions for many years: The World Bank has a long history of talking social movements to death while in practice they continue to foster a race to the bottom. Only time will tell if the Bank has had a change of heart.  But don't hold your breath.

Below is a copy of the ICTFU press release announcing the deal. Once the new standard is implemented, ICTFU's  Washington office (Contact: Peter Bakvis, [email protected] ) will send periodic reports advising the relevant Global Union Federations and national organizations of upcoming IFC investments in their sectors or country. 

ICFTU Communiqué, 22 February 2006
Action by World Bank's IFC on Workers' Rights a Major Step Forward

The ICFTU has applauded yesterday's adoption by the International Finance Corporation (the private sector lending arm of the World Bank) of a new loan performance standard on labour rights and working conditions.  After the new standard is implemented in the coming weeks, all companies that borrow from the IFC will be required to abide by the core labour standards (CLS) as defined by the International Labour Organization (ILO).  The CLS prohibit the use of forced labour, child labour and discriminatory practices, and require recognition of freedom of association and the right to collective bargaining.  The new standard also obliges IFC clients to observe some other basic conditions, including health and safety standards, protection for contract workers, and a policy for managing reductions in employment.

'"Thousands of workers in IFC-financed projects stand to benefit from this decision, which we believe should be a precedent for international lending in both the private and public sectors", said ICFTU General Secretary Guy Ryder.  "The World Bank funds billions of dollars of development projects each year, and we will be working to ensure that this landmark decision is extended across the entire scope of its activities.  In the meantime, we have offered to work with the IFC to implement this new standard", he added.

The IFC decision demonstrates what can be achieved when the World Bank engages in serious consultation with trade unions.  "In the two years during which the standard has been developed, the IFC sought input from trade unions and the ILO as well as IFC's traditional partners, governments and business.  As a result, the IFC corrected several problems and weaknesses in earlier drafts that we helped them identify," said Ryder.

At the ICFTU's suggestion the IFC accepted two years ago, on a pilot basis, to include a CLS condition in a loan to a clothing manufacturer, Grupo M, which opened new production facilities in Haiti.  The firm initially dismissed hundreds of workers when they attempted to create a union, and it took several months of pressure by the Haitian union, along with international support from trade unions and other organizations, before the workers were rehired and the company recognized the union.  In December 2005 Grupo M and the Haitian union signed the first collective agreement aimed at improving wages and working conditions.

The Haitian example demonstrates both the challenges and opportunities created by the new IFC standard, especially the need for an effective implementation mechanism.  An effective mechanism, coupled with the CLS standard, can have a tremendous positive impact on workers' living standards and working conditions. This is particularly significant in a country such as Haiti, where workers' rights have been ignored and the poor disenfranchised for so long.

Ryder believes that the onus is now on the other branches of the World Bank, namely those that lend to the public sector, to follow the positive step taken by the IFC: "This is not a matter of asking the Bank to do the job of the ILO, governments or anyone else.  It is a matter of asking the Bank to ensure that all of the its operations abide by internationally-recognized workers' rights' standards."

In 2004, a coalition of Indonesian trade unions and researchers published a report showing that child labour, discrimination against women workers and denial of freedom of association were taking place in public infrastructure projects financed by the World Bank.  The Bank's spokesperson in Indonesia acknowledged at the time that the practices were inconsistent with Bank policy and promised corrective action.  However, except for this IFC standard, the Bank has not taken measures to ensure respect for CLS in its projects.