Opinion of the Economic and Social Committee on "Human Rights in the Workplace"
Date: 2001-07-11
Institutions: European Economic and Social Committee
Subjects: globalisation, human rights, labour law

17.9.2001

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Opinion of the Economic and Social Committee on ‘Human Rights in the Workplace’

(2001/C 260/14)

At its plenary session on 30 November 2000, the Economic and Social Committee decided, under
Rule 23(3) of its Rules of Procedure, to draw up an opinion on the above-mentioned proposal.

In accordance with Rules 11(4) and 19(1) of its Rules of Procedure the Committee set up a subcommittee
to prepare its work on this subject.

The subcommittee adopted its draft opinion on 11 June 2001. The rapporteur was Mr Putzhammer and
the co-rapporteur was Mr Gafo Ferna´ndez.

At its 383rd plenary session on 11 and 12 July 2001 (meeting of 11 July 2001), the Economic and Social
Committee adopted the following opinion by 120 votes in favour to 10 votes against, with 23 abstentions.

1. General comments

balisation on the world of work has intensified the debate on
the basic rights of workers.

1.1.
On 18 October 2000, Commissioner Lamy asked the
European ESC to draw up an exploratory opinion on the
subject of ‘Human rights in the workplace’.

2. Purpose of the opinion

2.1.
The main purpose of the opinion is to define the
Committee’s position on the issue of trade and social develop-
ment after consultation with civil society, and to bring this
position to bear on the negotiating stance of the European
Union. The ESC has already addressed this issue in various
opinions.

3.1.1.
After the Second World War the link between
trade and social development was an important aspect of
international relations, and was enshrined as a basic principle
in the Havana Charter of the International Trade Organisation.
However, the 1948 General Agreement on Tariffs and Trade
(GATT) then focused mainly on trade liberalisation as an
instrument for promoting growth and employment.

This could be the basis for discussing a general strategy,
2.2.
in particular through an analysis of the complex links between
trade and social development and the relationship between
trade and combating poverty, thus to clarify that the core
labour standards are not and must not be seen by developing
countries as a hidden protectionist policy on the part of the
industrialised countries.

The ESC stresses the importance of free trade for
3.1.2.
global economic growth. Economic growth is the fundamental
contributor to prosperity in wealth, in employment creation
and to the decrease of poverty. But it is necessary to provide a
framework for growth that will lead to these objectives. In this
context the ESC states the importance of a sustainable and
socially-responsible growth.

It could also be useful to examine the connections
2.3.
between social standards and trade flows, and the interaction
between economic growth and improvement of working
conditions.

3. Main themes addressed in the opinion

3.1. The state of play

International trade requires international rules, including basic
workers’ rights. In addition, the far-reaching impact of glo-

3.1.3. WTO data show that developing countries (excluding
countries at war and the former Communist states) which
were part of the global free trade system, enjoyed average
annual export growth of 4,3 % in the 1980s and 6,4 % in
the 1990s. Although overall the proportion of developing
countries’ GDP accounted for by exports has been rising, this
has been concentrated in only 13 countries (three in Latin
America and 10 in east and south-east Asia). In their economic
strength and level of development the latter have drawn
closer to the developed industrialised countries. In the other
developing countries exports consist primarily of raw materials
and not industrial goods. One of the reasons is that the

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developed countries have barely opened their markets to
agricultural products from the developing countries whilst
manufactures encounter technological difficulties and techni-
cal barriers in becoming competitive on those markets.

3.2. The importance of implementing core labour standards as
guiding principles of economic and social organisation

3.1.4.
The 1997 UNCTAD Report on Trade and Develop-
ment points out that market access and trade liberalisation do
not automatically lead to increased economic growth in
developing countries. The reasons are a fall in raw materials
prices, low economic growth in the developed countries in the
nineties, and rigid fiscal and price stabilisation programmes in
the developed countries, which dampened domestic demand.

Opposing interests and differing perceptions cannot
3.1.5.
call into question the fact that globalisation should lead to a
generalised improvement in quality of life. However, there is
evidence that economic growth does not always improve
development indicators (i.e. poverty, educational level, infant-
mortality rate, general access to health care). Stronger growth
continues to be the main contributor to an improvement in
the employment situation. But growth does not automatically
mean more jobs and less poverty. There are different sorts of
growth. If growth leads — as in Brazil, Colombia, Kenya and
South Africa — to major social inequalities in wages and
income, poverty increases and then barriers to growth arise (1).

3.1.6.
In many parts of the world it has not been possible
to make any real impression on poverty or the development
and prosperity gap between poor and rich countries. In 1960,
per capita GDP in the world’s 20 richest countries was 18 times
that of the world’s 20 poorest. By 1995, this had increased to
37 times. Over 80 countries now have lower real per capita
incomes than 10 years ago (1).

According

3.1.7.
to the 2000 World Employment
Report (2), one third of people in the world who want to work
are unemployed or under-employed. Over 3 billion people
(about half of the world’s population) currently live on less
than 2 US dollars a day.

3.2.1.
There are many factors which can lead to an
improvement in the economic and social situation as described
in the previous chapter. For instance, the ILO core labour
standards as defined internationally in 1998 are an important
instrument as they:

— promote the development of a social market economy,

its legal foundations and institutions;

— strengthen the recognition of employers’ associations and
trade unions and hence help to consolidate a civil society;

— improve the general position of marginalised groups and
their social and economic situation (workers without
contracts, children, women, forced labour);

— have a positive redistribution effect for working women

(in the formal sector).

3.2.2. World trade must bring benefits for all. Every effort
must be made to avoid fierce competition between developing
countries using comparative advantages solely based on low
wages and exploitation. In many cases, they cannot compete
with the production quality of the industrialised countries. In
order for the poorest countries to escape from this trap, the
foundations must be laid for higher productivity and innova-
tive capacity — and this begins with people in the workplace.
Infringements of association and collective bargaining rights,
along with child labour and forced labour, are not really
comparative advantages for the developing countries.

Thus, foreign direct investment favours dynamic markets with
a stable environment. According to the OECD, in 1998 55 %
of FDI (3) in the developing world (excluding countries such as
China and Indonesia) went to countries with an improving
political and social environment, e.g. Brazil, Mexico and
Singapore, while the 48 poorest developing countries account-
ed for only 1 % between them.

(1) ‘Global trends in work, employment and income — challenges
ILO, Geneva,

for social development’, Werner Sengenberger,
2001.

(2) ILO ‘World Employment Report: Life At Work in the Information

Economy’, Geneva, 2001.

(3) FDI = Foreign Direct Investment.

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3.2.3.
Exploitative forms of child labour and forced labour
hamper sustainable economic development as they result
in an underskilled population. The focus is solely on the
comparative advantage of low/zero wages with no attempt
to raise productivity. The liberalisation of trade and new
technologies have, however, reduced the need for low-skilled
workers on the labour market. The pace of economic activity
and technological change calls for innovation and knowledge
— i.e. human capital is becoming increasingly important. The
International Programme on the Elimination of Child Labour
(IPEC), which was set up in 1991, provides an example of how
respect for the ban on child labour can be promoted. The
international community sees participation in the IPEC as a
sign that the countries involved are committed to abolishing
child labour. This has become the ILO’s biggest technical
cooperation programme, and demonstrates that
the core
labour standards can be implemented transparently on a
cooperative basis if the political will is there (1).

3.2.4.
The Declaration on Fundamental Principles and
Rights at Work explicitly mentions migrant workers who are
employed legally in the host country. Many of these workers
are employed in countries or economic sectors where foreig-
ners are specifically banned from forming trade unions or
in Kuwait), are clearly not
joining such organisations (e.g.
covered by labour legislation (e.g.
in Kirghizstan) or are
subject to excessive restrictions on the role they can play
in professional organisations (e.g. in Mauritania, Nicaragua,
Rwanda and Venezuela).
In this context the core labour
standards can provide a worldwide minimum level of protec-
tion for migrant workers (2).

Association and collective bargaining rights enable
3.2.5.
workers to secure wage levels commensurate with the pro-
ductivity of their labour. They do not eliminate worldwide
differences in workers’ incomes, but the gap may gradually be
closed. To this extent a comparative advantage remains.
Association and collective bargaining rights could increase the
capacity for innovation and employability of workers and also
their long-term attachment to the same company.

3.2.6.
Respect for ILO core labour standards is further
bolstered by new awareness on the part of consumers who are
opting increasingly for fair trade products.

3.2.7.
International labour standards are also figuring more
often on the agenda of multilateral and bilateral negotiations:

— At the 1995 World Summit for Social Development in
Copenhagen, the Heads of State or Government under-
took to respect the following basic workers’ rights:

— freedom of association and right to organise;

— the prohibition of forced labour;

— the prohibition of child labour;

— equal rights at the workplace.

— At the 1996 ministerial conference in Singapore the
WTO and ILO secretariats decided to cooperate on
the social dimension of world trade, but real formal
cooperation has not taken place.

— With the 1998 ILO Declaration on Fundamental Prin-
ciples and Rights at Work, a global consensus was
reached on the need for a generally accepted minimum
standard to prevent global competition from impairing
working and living conditions. This minimum standard
was universally defined, and what follows concerns this
standard alone. The International Labour Organisation
(ILO) was mandated to provide technical assistance,
financial aid programmes and monitoring of the ratified
ILO conventions in order to foster the implementation of
the core labour standards. The ILO can also investigate
the situation with respect
to core labour standards
in countries that have not ratified the conventions.
Ratification of the ILO conventions makes them consti-
tutionally binding, and of 184 members, some 150 coun-
tries have now adopted the eight core conventions within
the above four groups of labour standards.

— Both the preamble and Article 50 of the new Cotonou
Agreement of 23 June 2000 refer to the relationship
between trade and core labour standards. The main
objectives of the Agreement are poverty eradication,
sustainable development and the gradual integration of
the ACP countries into the world economy; for their part,
the ACP countries have undertaken to implement a
development strategy.

(1) Banning child labour means defining certain types of exploitative
work, including for instance the trade in child slaves in some
African countries.

(2) Global report within the follow-up to the ILO Declaration,

Geneva, 2000.

— The EU’s free trade agreement with South Africa and its
negotiating brief for a free trade agreement with Mercosur
incorporated for the first time basic labour standards and
the monitoring of these in relation to free trade.

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— The Generalised System of Preferences (GSP) of the EU
and the USA offer additional incentives for developing
countries if they abide by the core labour standards.

— The demonstrations that have taken place since the third
WTO conference in Seattle show that basic human and
workers’ rights are a key issue in the public debate and
will therefore not disappear from the political agenda.

The implementation of core labour standards and
3.2.8.
other social
improvements in developing countries require
money and time, not to mention a political commitment on
the part of governments in developing countries and world-
wide civil society support for this process. The ESC is therefore
of the view that it is necessary to accompany this process
step by step with support measures by the EU and other
international bodies.

3.3. Work on a ‘Social Agenda’ for the New Round

3.3.1.
The industrialised countries are endeavouring to
push ahead with the liberalisation of world trade in the
WTO and are therefore committed to getting the developing
countries on board for a new round of negotiations in Qatar
in November. The intention is to set up a ‘development
round’ aimed at giving developing countries special market
concessions and supporting the integration of developing
countries in the world economy by addressing the develop-
ment dimension of trade. The ESC promotes the idea of an
international and inter-institutional ‘social agenda’ in parallel
with the WTO agenda. The following measures should figure
substantially in the negotiation package:

3.3.1.1.
Support for the initiative by Kofi Annan — ‘The
Global Compact: A Challenge to Business’. Together with a
majority of its member countries and their economic partners,
the ILO is attempting to persuade businesses to abide by the
internationally recognised minimum labour and environmen-
tal standards. However, the Global Compact is not intended to
be a code of conduct and therefore does not include a
procedure for monitoring compliance with the obligations
companies impose on themselves. Nevertheless,
is an
important instrument in terms of public relations.

it

3.3.1.3.
Support measures, such as international recog-
nition awards or preferential access to international public
lending institutions, for multinational companies who commit
to international labour standards in accordance with the ILO’s
Tripartite Declaration by means of a self-imposed code of
conduct or fair trade marking.

international

As a matter of principle, respect for and monitoring
3.3.1.4.
of
labour standards should be progressively
included in the EU’s bilateral free trade agreements. The current
EU Generalised System of Preferences grants preferential
rights, subject to respect of ILO conventions on freedom of
association and the right to organise, and the minimum age
for admission to employment (ILO Conventions Nos. 87, 98
and 138). In the case of Burma, the European Union withdrew
additional preferential rights after an observation period of
10 years because of serious human rights violations in the
form of forced labour and child labour. However, the economic
leverage that can be achieved through incentives has to be
reinforced. This GSP of the European Union, which provides
additional tariff concessions when international labour stan-
dards are respected, must be enhanced and broadened through
additional
feasibility studies should be
carried out to this end.

incentives. Urgent

The ESC welcomes the ‘Everything but Arms’
3.3.1.5.
initiative adopted by the EU Council of Ministers, which
provides for immediate lifting of EU duties and quotas for the
49 least developed countries, as an important concession for
developing countries. These concessions should be further
expanded in future, linked to respect for ILO core conventions.

3.3.1.6.
In the next WTO Round, other matters should be
included in the agenda for negotiation with the developing
countries to help improve their economic situation, including:

— renegotiation of the agreement on trade-related aspects

of intellectual property rights (TRIPS);

— improved market access for exports from developing

countries;

Guaranteeing compliance with e.g.

3.3.1.2.
international
labour and environmental standards, or others. It is intended
that a monitoring mechanism involving the national contact
points supports the enforcement of those guidelines. Voluntary
codes of conduct can also be a good and alternative way to
ensure this effective implementation at a company level.

— block exemptions, pending certain objective and account-
able requirements, of developing countries from certain
obligations to liberalise under WTO rules so as to take
due account of the development gap;

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— assistance for developing countries in the use of the trade

dispute settlement mechanism.

The ESC will expand on these recommendations in an opinion
it is preparing on ‘The Preparation of the 4th WTO Ministerial
Conference in Qatar — ESC position’.

3.3.2.
In the overall context of such a negotiating package
it is clear that the core labour standards are not and must not
be seen by developing countries as a protectionist policy on
the part of the industrialised countries. If the European Union
is making respect of the core labour standards a key part of its
political agenda, then it must obviously pursue a policy based
on these principles and implement them itself and in its
external relations.

3.3.3.
All international organisations such as the ILO, the
World Bank, the IMF, the WTO, the UNCTAD and others,
which have an influence on policy in developing countries,
should bear this social responsibility. Over the past thirty years
the International Monetary Fund and the World Bank have
taken primarily a supply-oriented approach in the developing
countries, with loans, support for direct investment and debt
remission for poor countries in which reform is needed,
subject to concomitant restrictive monetary, fiscal and wage
policies that were designed to reduce inflation and current
account deficits. Structural adjustment programmes, i.e. privat-
isation of the public sector and deregulation of goods and
factor markets, were designed to boost free trade and market
efficiency. The result was limited, with at best a slight increase,
and in some cases even a fall,
in economic growth and
employment, an increase in developing countries’ indebtedness
and a widening of the income gap and consequent increase in
poverty. This was due also to limited support to accompany
those measures with the improvement
in the governing
capacity of these countries. To achieve sustainable economic
development in developing countries, it will be necessary, in
the light of this experience, to add a social dimension to the
structural adjustment programmes imposed by the inter-
national financial institutions before account can be taken of
the social situation in such countries, and also to insist on
good governance in the countries concerned. This includes
supportive measures by industrialised countries for debt
reduction programs.

3.3.4.
As far as civil society is concerned, the EU’s commit-
ment to a Social Agenda must be the starting point for core
labour standards to be incorporated into negotiations for a
renewed international trading system. Developing countries
should be given technical and financial assistance as well as
reasonable transition periods to put these minimum standards
in place.
Joint consultative committees for EU free trade
agreements or other fora could provide important technical

support here. There are already a number of such international
committees, e.g. the meetings of the EU-ACP economic and
interest groups, the Euro-Mediterranean summit of
social
economic and social councils and similar institutions, regular
meetings of the MERCOSUR economic and social forum and
the economic and social council for social dialogue in Chile.
The same applies to relations with India and some of the
applicant countries.

3.4.
How can the international system best promote the
universal application of core labour standards, including the
positive interface with trade and investment liberalisation?

3.4.1.
Core labour standards could be enshrined as a
precautionary principle in a joint declaration by as many ILO-
WTO members as possible.

To this end there is an urgent need to conduct an
3.4.2.
examination of the relationship between trade measures, trade
liberalisation and core labour standards in a Permanent Forum
of the ILO and the WTO, as proposed in the conclusions of
the European Council of October 1999. According to the ESC,
it needs to be
to make this Forum really representative,
enlarged to incorporate international development and/or
financial
institutions such as UNCTAD, UNDP, the World
Bank ... Also the international social partners and other parts
of civil society should be involved in the work of the Permanent
Forum.

3.4.3.
This Permanent Forum should be empowered to
analyse the interface between trade liberalisation and social
development to identify best practices and agree on means
to promote a trading system that is supportive of social
development.

4. Organisation of the subcommittee’s work and follow-

up

4.1.
Given the international dimension of the issue and the
need to start a dialogue with the representatives of third
countries, work has been done in liaison with the various
groups in the Committee that maintain formal relations with
the countries in question:

4.1.1.
Euromed Partnership: An ESC Information Report is
being drawn up on ‘International trade and social development’
and a hearing of Egyptian organised civil society was organised
in Alexandria on 5 May 2001;

4.1.2.
EU-ACP relations: the ESC, as well as the ACP side,
are preparing a thematic contribution on ‘Balanced trade
relations and economic and social development’. A hearing of
economic and social interest groups of 15 Caribbean countries
was organised in Santo Domingo on 22 and 23 May 2001.

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4.1.3.
The International Association of Economic and
Social Councils and similar institutions composed of nearly
40 organisations from various parts of the world: the question
addressed this year is ‘Coping with globalisation — the only
option for the most vulnerable’ on which the ESC recently
adopted an Information Report (CES 326/2001 fin rev.).

trade unions and employers’ representatives from Africa, Asia
and Latin America.

It is proposed to present the opinion ‘Human rights in
4.2.
the workplace’ in various fora related to the implementation
of the strategy and to continue the dialogue engaged with
representatives of third countries on this issue.

4.1.4.
A number of hearings have been organised in
conjunction with this opinion, most notably the one organised
in Geneva at the ILO Headquarters, with the attendance of

4.3.
The ESC Bureau has proposed organising a final
conference in Brussels to publicise the Committee’s work in
this sphere.

Brussels, 11 July 2001.

The President

of the Economic and Social Committee

Göke FRERICHS

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APPENDIX

to the opinion of the Economic and Social Committee

Defeated amendment

During the debate, the following amendment, which received more than 25 % of the votes cast, was defeated.

Point 3.3.4

Replace the second part of the 1st sentence by:

‘... starting point for promoting internationally the universal application of core labour standards. Developing
countries ...’

Reason

Self-explanatory.

Result of the vote

For: 47, against: 85, abstentions: 4.