Globalisation

Part of the debate – in the House of Lords at 7:17 pm on 19 April 2000.

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Photo of Lord Brett Lord Brett Labour 7:17, 19 April 2000

My Lords, I too thank my noble friend Lord Borrie for this timely debate, and my noble friend and the noble Lord, Lord Hooson, for a devastating critique of the downside of globalisation.

In my contribution I should like to meet the challenge of my noble friend Lord Desai and limit my speech to the impact on employment commissions of globalisation. Before doing so, I congratulate the noble Lord, Lord Birt, on an excellent maiden speech and urge support of one aspect of his remarks; namely, the strengthening of national cultures. As an extensive traveller, it is my unfortunate experience to find, not so much that BBC World dominates the world, but that CNN dominates the world. In my view, civilisation will have ended when every town and village on this globe has a McDonald's and we all speak CNN. CNN is not English and has a vocabulary of around one quarter of that of the normal English-speaking person. But that is perhaps prejudice on my part.

I turn to the vexed question of Seattle--that of core level standards--and attempt to meet the challenge of my noble friend Lord Desai. He said that we must not take away from the developing world the only advantage it has; that is, that it can compete on labour where it cannot compete on technology. I do not demonise the role of multinationals, as some trade unionists do. However, we have to think imaginatively how we can change the attitude of multinationals.

First, I turn to core labour standards. My noble friend Lord Lea of Crondall said that we are talking of only four basic rights: the right of freedom of association and collective bargaining; the right of freedom from forced labour; the right of freedom from child labour; and the right of freedom from discrimination. That is a compact which any country in the world--whether it be Tanzania or the state of Texas--should be able to sign up to, because those four rights do nothing other than enable workers to seek to enjoy the fruits of their labour.

A month ago in UNCTAD people were still saying that the core labour standards and the social clause that trade unions desire comprise an international minimum wage. That is absolute nonsense. The minimum wage will be what trade unions, employers and the governments concerned determine can be afforded. However, we have to find a format for these rights that is not threatening. I declare an interest as vice chairman of the governing body of the International Labour Organisation. We need to debate how we create a mechanism which on the one hand protects core labour standards but which cannot be misused for protectionist purposes.

We all say that we are against protectionism but those who wish not to have a social clause in the WTO are fearful that we do not mean what we say. I wish to debate how one creates a mechanism that could not and would not be used as a protectionist mechanism by a developed country. I believe that we have made progress. In 1998 all the member nations of the ILO--some 174--signed up to a declaration of fundamental rights at work whereby governments accept that their membership of the ILO gives them the responsibility to ensure that they enact in their countries policies of freedom of association and collective bargaining, freedom from forced labour, freedom from child labour and freedom from discrimination. All of the conventions on those fundamental rights have been ratified by over 100 member states. The noble Earl, Lord Sandwich, referred to Convention 182--this, uniquely, has been unanimously endorsed by the International Labour Conference----on extreme forms of child labour. That is now part of the package.

However, what does one do when a government clearly have no intention of protecting those rights? How do we square that with globalisation? Globalisation will fail unless the vast majority of people believe that they are beneficiaries of it. Twenty years of globalisation in Asia have led to high rates of growth on the part of the so-called "Asian tigers". However, those growth rates had two characteristics: first, the countries concerned had semi-authoritarian regimes which denied trade union rights; and, secondly, not one of them introduced any form of social security. When the Asian crisis arose, Korean factory workers fought in the factories to defend their jobs as they had nowhere else to go. They lost everything with the loss of their jobs. Some 14 million people in Indonesia lost their jobs.

I shall not enter the argument about multinational wages being driven down. However, Nike paid workers 7.60 dollars per hour in the United States whereas in Indonesia it pays 2.35 dollars per day. It claims that is the minimum wage but others suggest otherwise. The Barclay brand of Nike shoes which sold at 81 dollars in the US at the time of the transfer of production still sells for 81 dollars as far as I am aware. Therefore the beneficiaries of that transfer have not been American consumers. To judge from the wage rates in Indonesia, the Indonesian workers have not benefited from that either. Michael Jordan has certainly been a beneficiary, as a 19 million dollar contract to promote Nike would suggest!

How can we help those Nike workers in Indonesia? Nike could double the wage rate and add a dollar to the price of its shoes. However, I do not even suggest that. I suggest that if the workers of Indonesia have the right to form trade unions and the right to bargain with Nike there will, over time, be a sharing of the proceeds. Until the recent change of government in that country that was not possible. I say to those who say that sanctions are not appropriate that it is no coincidence that the decree which ratified all core labour conventions was signed by the previous president of Indonesia on the eve of a decision about whether his country should receive a 43 million dollar loan from the International Monetary Fund. That is not coincidence and it is not democracy because the president of an authoritarian government can sign a decree overnight to reverse a policy that has operated for 15 or 16 years.

How do we fix these principles in the minds of governments and in the minds of those multinationals of which we are critical? As has been said, those companies are not truly multinational. Boards of management tend to come from a single nation state; namely, the host nation. In their home countries they tend to behave in a civilised manner. They are not ogres; they are reasonable men and women--mostly men--with families and religious and ethical beliefs. Secretary General Kofi Annan of the UN is appealing to chief executives of multinationals to realise that they have a moral responsibility in regard to the behaviour of their subsidiaries, their managers and their suppliers. I believe that we should take that process forward, but how do we do so?

"Geneva 2000" will be held in June, in Geneva. This is the "world social summit plus five". The noble Baroness who represented the then government at the social summit five years ago is not present tonight. At that summit there emerged the first enunciation of the core labour standards in the form we now know them. The position would be enhanced if the special session of the General Assembly in Geneva in June were to endorse the case that the ILO declaration of fundamental rights should be enshrined in all UN policies. That would include the ILO, the World Bank and the IMF, but not the World Trade Organisation which is not part of the United Nations.

We need to establish a working party in the WTO, if only to determine what is possible. However, at the end of the day some measures need to be adopted that can be applied to recalcitrant rogue states. I refer to Burma in this connection. Forced labour is endemic in Burma. The International Labour Organisation held a commission of inquiry which cost half a million dollars and involved three eminent jurists. A 256-page report was produced which catalogued the horrors to which that nation state has subjected its own people. Burma has been condemned at the International Labour Conference and by the ILO's governing body. It has also been condemned by the UN at large. However, nothing has persuaded the Government of Burma to change their laws to conform with the conventions that they have entered into voluntarily. In such extreme cases an international body--the World Trade Organisation is perhaps the most appropriate in this context--should be able to signal that a change of policy is required if sanctions are not to be applied.

Ironically, in June, the ILO will consider taking action against Burma under Article 33 of the ILO constitution. That is the first time that such far-reaching measures have been considered in 80 years. If the motion is carried any member state can take any actions supported by international law that they deem appropriate to make Burma fulfil its obligations under ILO Convention 29 on forced labour. The issue of core labour standards and their application requires major debate. I fear that the North and the South are talking past each other, not to each other. I hope that such a dialogue will enable us to enjoy the full fruits of globalisation but with civilised standards which can be applied both in the North and in the South.