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BP-416E
HUMAN RIGHTS, GLOBAL
MARKETS:
SOME ISSUES AND CHALLENGES FOR
CANADIAN FOREIGN POLICY
Prepared by:
Gerald J. Schmitz, Corinne McDonald
Political and Social Affairs Division
April 1996
TABLE
OF CONTENTS
BETWEEN
MINIMALIST AND MAXIMALIST APPROACHES
MEASURES
INITIATED UNILATERALLY BY THE PRIVATE
AND PUBLIC SECTORS
A.
Private Sector Responses and Codes of Conduct
B.
Public Sector Responses and Legislative Actions
1.
Government Guidelines for Corporate Codes of Conduct
2.
Unilateral Government Legislation
MULTILATERAL
INITIATIVES
A.
Arguments Against International Labour Standards
B.
Arguments For International Labour Standards
C.
Regional Organizations
D.
International Trade Organizations: A "Social Clause" in the
ILO and WTO?
E.
Enforcement Issues
OPTIONS
FOR CANADIAN POLICY
BIBLIOGRAPHY
APPENDIX
HUMAN RIGHTS, GLOBAL MARKETS:
SOME ISSUES AND CHALLENGES FOR CANADIAN FOREIGN POLICY
The
newly-appointed Minister for Foreign Affairs, Lloyd Axworthy, reiterated
in a 13 February 1996 speech that "respect for human rights
is a critical component of the Canadian identity and therefore must play
an important role in our foreign policy agenda."(1)
He also stated that "both trade and the promotion of human rights
can serve the same purpose -- namely bettering the well-being of individuals.
... The key is to find the right balance between our human rights and
commercial agendas and then build a strong consensus behind it."(2)
In
highlighting the main points brought before the Subcommittee on Human
Rights from September to December 1995, the staff summary paper distributed
to Committee members in March 1996 observed that:
...
the credibility of Canada's international human rights policies
will be tested by the degree to which they are effectively integrated
within the central objectives of foreign policy -- that means, therefore,
within the pursuit of increased trade and investment, economic development,
employment, etc. But when and how to link human rights
to international economic policies, using instruments and means
that are both appropriate and practical, remains very contested,
as is the question of the respective roles and obligations of governments,
the private sector, and other non-government actors.
The
main purpose of this paper is to deal with these important issues and
identify initiatives that could be undertaken by Canada -- unilaterally,
bilaterally, and/or multilaterally -- to make trade policies consistent
with realizing human rights objectives.
BETWEEN
MINIMALIST AND MAXIMALIST APPROACHES
The
evolving debate over linkages between trade, global markets and human
rights is characterized by concurrent areas of consensus and discord.
The briefing note prepared for a recent conference in Toronto entitled
"Globalization, Trade and Human Rights: The Canadian Business Perspective"
aptly summarized the situation as follows: "While most agree globalization
has the potential to promote democracy and human rights, there is no consensus
concerning the circumstances under which this is likely."(3)
Indeed, it is how the globalization process is "managed" that
will determine its effect on human rights; moreover, how to convert any
such positive potential into reality is a complex and controversial
dilemma.(4) Prescriptions
for how best to achieve the objective of protecting and promoting international
human rights range from minimalist approaches, whereby market activities
remain basically free from governmental attempts to apply normative standards
to behaviour within the global economy, to maximalist approaches which
seek to elaborate and enforce a rigorous, formalized set of obligations
with respect to economic interactions from the local to the global level.
On
the side of minimal or no intervention in the globalization process, a
recent World Bank report rejected any linkage between international trade
and compliance with labour rights, working conditions or other human rights
criteria. It "call[ed] on governments to pursue market-driven
policies" even going so far as to suggest "curtailing trade
union rights and privileges."(5)
As well, some supporters of unrestricted trade liberalization claim that
positive results from the process will tend to far outweigh any negative
effects. In this worldview, economic liberalization provides the path
to political liberalization by producing increased capital and technology
for the development of democratic institutions and infrastructure.(6)
One
element of the private sector in particular, led principally by large
transnational corporations (TNCs), maintains that globalization positively
impacts on human rights. For example, Thomas dAquino, President
and Chief Executive, Business Council on National Issues, argues that
trade reinforces good governance and democratic ideals by promoting openness,
transparency and accountability through liberal economic policies and
by encouraging economic growth which raises standards of living.(7)
While he does not claim that globalized free trade is a panacea for the
world's human rights problems, dAquino emphasizes that "benefits
are flowing overall from the greatly expanded reach of trade, investment,
capital and technology -- benefits that have led to an important enhancement
on a global basis of social progress, democratic development and human
rights."(8) Furthermore,
trade relationships with other countries bring opportunities to comment
on political issues through what has been referred to as "constructive
engagement." Even when recognizing the potential negative effects
of economic liberalization ("unemployment, social dislocation, income
disparities..."), dAquino stresses that attempts to "roll
back or constrain the forces of trade, investment capital or technology"
are not the way to address the problem effectively.(9)
However, dAquino concedes that individual governments and multilateral
organizations, including the World Trade Organization, will be integral
to finding a solution to the trade-versus-human-rights dilemma, stressing
all the while that "business has a very important role to play"
in developing consensus on all levels.(10)
At
the other end of the spectrum, the most ardent advocates of a maximalist
approach propose the adoption of detailed and enforceable measures in
order to regulate, formally and to the widest extent possible, international
trade and labour standards. According to Christine Elwell, there must
be a global effort to establish "cross-institutional initiatives"
which would incorporate human rights criteria and labour standards into
all international trade agreements, thereby creating a complex system
to regulate the global market.(11)
The argument against unrestricted trade liberalization highlights that
"inadequate attention is being paid to the needs of working people
in th[e] process" of a "race to the bottom" where "labour
standards are lowered in order to attract investment."(12)
In
his speech to the aforementioned 1996 conference, human rights activist
Han Dongfang described the reality of globalization as it affects human
rights in China. According to Dongfang, while
some
foreign-owned enterprises have introduced advanced management techniques
and fully respect their workers' rights by observing the labour
code and establishing good working relationships with them [creating]
harmonious labour-management relations [which] enhanced productivity
... the majority of foreign investors do not respect the rights
of ... workers.(13)
Despite
the positive pressures that the introduction of market economies might
exert, one can conclude that openness to global markets is not a sufficient
condition for, nor does it necessarily favour, the protection and promotion
of basic human rights. Trade policy expert Ann Weston of the North-South
Institute observes that "it is wrong to assume that trade will necessarily
work to improve labour standards, either in the South or the North."(14)
For that reason, some argue, such issues can only be dealt with through
institutionalized responses.
The
realities of the current global marketplace and the impact of international
competitive pressures on the policies of nation-states are troubling to
many human rights advocates. For example, Ed Broadbent, President of the
International Centre for Human Rights and Democratic Development (ICHRDD),
has spoken of a growing perception that "democratic governments [including
the Government of Canada] have become more preoccupied with conquering
new markets than they have with defending human rights."(15)
At the same time, if lower profile, there has been considerable positive
government and NGO attention to supporting human rights through institution-building,
and technical and financial assistance. Recently, the debate has also
been over whether trade sanctions or restrictions are the best way of
improving labour standards.(16)
These issues, as well as the quest to balance policy consistency with
the need for flexible strategies appropriate to address each specific
circumstance, are likely to continue to dominate the discussion of human
rights and trade policy linkages.
The
central question that arises is: what should be the next steps forward
in foreign policy in order to bring about a progressive realization of
both trade and human rights objectives? To help to address that question,
the following sections will:
MEASURES
INITIATED UNILATERALLY BY THE
PRIVATE AND PUBLIC SECTORS
A. Private Sector
Responses and Codes of Conduct
In
a recent speech to both business and non-governmental organizations, Ed
Broadbent outlined various strategies that companies could adopt to promote
respect for human rights. Among those he suggested were: adopting independently
monitored codes of conduct; integrating human rights into firms
business strategies through the development of issue-awareness and through
explicit linkage of corporate activities to respect for basic rights in
the countries where the company does business; contributing privately
earned moneys to the work of organizations that promote human rights;
and encouraging "better international trade agreements" through
the incorporation of human rights criteria into NAFTA, APEC and the WTO.(17)
Each of these suggestions -- most particularly the first and last -- entails
that corporations be willing to subject their activities to outside scrutiny,
something that they have usually carefully guarded against. This section
will concentrate on the first suggestion and the issue of independent
codes versus corporate self-regulation.(18)
The
first codes of conduct, which appeared in the early 1970s, were largely
a result of pre-emptive action by corporate entities "in an attempt
to head off what they saw as more dangerous and potentially compulsory
government codes."(19)
Such voluntary codes publicly outline practices that a given corporation
considers acceptable (or unacceptable) and address the consequences for
its trading partners should they fail to meet the standards established
by that code. Standards can vary depending on the needs and limitations
of the corporation and codes are typically "self-certified."(20)
Arguing
that many aspects of codes of conduct are problematic, John Cavanagh of
the Institute for Policy Studies observes that, while "many of the
principles [contained in such documents] are laudatory ... [there are
no provisions for] any enforcement mechanisms or independent audits."(21)
This leaves the impression that such actions are a public-relations ploy.(22)
Cavanagh further notes that the effectiveness of codes can be undermined
by complex chains of subcontracting which allow firms to deny responsibility
for practices beyond their control. In addition, most codes lack "uniform
language" and are "unclear" or "inadequate" in
establishing concrete guidelines for the implementation of standards.(23)
To
address these deficiencies, corporations could make provisions for greater
transparency. One such remedy would allow for public and independent
assessment of corporate practices by citizens groups such as the
Canadian Taskforce on the Churches and Corporate Responsibility (or by
government, see below).(24)
Independent monitoring, however, has been largely rejected by the
corporate community. This lack of "corporate accountability"
may change through sustained consumer pressure; citizen movements have,
in fact, been instrumental in pushing corporations to create codes and
strengthen accountability to the public. An "alternative trade movement"(25)
has also pursued consumer education through "fair trade mark"
campaigns(26) and has been
relatively successful in exerting pressure on the private sector through
boycotts; for example, the boycott of Nestlé products in reaction to the
marketing of infant formula in developing countries resulted in changes
in the companys practices.(27)
However, such tactics are no guarantee against abuses or, worse, could
even backfire.(28) For example,
UNICEF has critiqued current campaigns to eliminate child labour (such
as that begun by the remarkable Canadian teenager Craig Kielburger, or
the "rugmark campaign") on the grounds that these well-intentioned
efforts may perversely end up by impacting negatively on children and
their families through displacing those who may have no alternative source
of income and no access to education.(29)
It has been suggested that one way of compensating for the inadequacies
of voluntary or self-appointed corporate codes of conduct would be to
involve governments and legislatures directly in deliberating about the
problems.
B. Public Sector Responses
and Legislative Actions
Government
involvement in the development and regulation of codes of conduct could
serve two main purposes. First, "governments could establish official
guidelines for good corporate behaviour that would be applicable to the
international activities of their corporations."(30)
This would lend a sense of direction and consistency to the practice by
providing corporations with a set of goals that the government recommended
be adopted (but did not itself enforce). Second, to address the inadequacies
of the voluntary nature of most codes, the government could enact
legislation to make the regulation of corporate practices compulsory.(31)
By no means limited to involvement in codes of conduct, unilateral action
in the public sector could also entail initiatives to adopt legislation
formalizing the link between human rights and trade in all areas
of government policy. As with compulsory codes, such attempts at legislation
can be both controversial and problematic.
1. Government
Guidelines for Corporate Codes of Conduct
In
late 1994, the Clinton Administration in the United States adopted a document
outlining "Model Business Practices."(32)
It provides U.S. companies with a point of reference "in framing
their own [completely voluntary] codes of conduct" and is "not
intended for legislation."(33)
The five principles contained in the document were developed through extensive
consultations between the government, business and labour leaders, and
non-governmental organizations. They include:
(1)
safety and health guidelines for the workplace;
(2)
fair employment practices (no discrimination, no forced or child labour,
respect for freedom of association and collective bargaining);
(3)
"responsible environmental protection and environmental practices";
(4)
"compliance with U.S. and local laws promoting good business
practices"; and
(5)
"maintenance of a corporate culture that [inter alia]
respects free expression, ... does not condone political coercion,
... and makes a positive contribution to the communities in which
the company operates...."(34)
The
United States government has also committed itself to the development
of a "library" of codes of conduct for consultation by interested
parties, including corporations seeking guidance on developing their own
code. The administration is seeking international support for the initiative
and has encouraged other governments to adopt similar guidelines which,
through recognition of leadership, would provide incentives to corporations
to comply with minimum standards.(35)
If
the Canadian government chose such an approach, it would, like the American
administration, face significant hurdles. First, principles would have
to be stated clearly and precisely so as to reduce the ability of corporations
to interpret standards with excessive latitude. Second, and more importantly,
the mere existence of guidelines and voluntary codes would in no
way ensure effective compliance. Corporations would remain free to ignore
government exhortations. That said, it is important not to dismiss too
quickly the potential benefits of government guidelines. Combined with
consumer pressure on corporations to comply, guidelines might very well
provide an essential foundation for linking human rights and labour standards
with trade in global markets. However, some additional legislation would
still likely be required to bring all aspects of Canadian policy
in line with the objective of preserving and promoting international human
rights.
2. Unilateral
Government Legislation
Compared
to the United States, Canada lacks legislated policies in a number of
areas considered crucial to the promotion of international labour rights,
including bilateral aid, multilateral aid, export credit and insurance,
and preferential tariffs.(36)
There is no specific legislated framework for bilateral aid. With regard
to multilateral aid, Canada does not include human rights in its legislation
on international financial institutions, nor, therefore, does it require
mandatory reports to Parliament on any measures of compliance with Canadian
values. Canada's Export Development Corporation (EDC) is not required
to apply human rights criteria when evaluating applications for export
credits and insurance. Furthermore, there is "no public access to
information about specific projects" undertaken by the EDC.(37)
This undermines the transparency of the process. Lastly, the Canadian
"General Preferential Tariff" (GPT) program does not require
the application of human rights criteria to determine a countrys
eligibility for preferential treatment.(38)
In
contrast, the United States government uses a number of "legislatively-mandated
measures designed to protect the labour rights of workers in foreign countries"
including incorporating workers rights criteria into:
(1)
the Generalized System of Preferences (GSP), a system of preferential
trade access arrangements;
(2)
the Caribbean Basin Initiative which allows duty-free entry for
specified products from a number of countries eligible for beneficiary
status;
(3)
the Overseas Private Investment Corporation (OPIC) to protect American
investments in foreign countries against loss caused by political
instability; and
(4)
the Omnibus Trade and Competitiveness Act of 1988 which establishes
that "the systematic denial of internationally recognized worker
rights constitutes an unreasonable trade practice, and a country
engaging in such practices may be subjected to a wide variety of
sanctions."(39)
Philip
Alston, however, suggests that these unilateral U.S. actions are founded
primarily on rhetoric rather than "the substance of international
standards" as outlined in instruments which the US itself has
failed to ratify. (Indeed, one area where Canada has surpassed the United
States is in ratification of the International Labour Organizations
(ILO) conventions on basic labour rights and of the United Nations
International Covenant on Economic, Social and Cultural Rights.(40)
Alston further questions how the United States, which has refused continuously
"to submit itself to multilateral accountability," can apply
to other states standards which it has not formally accepted.(41)
Such an approach ignores existing international mechanisms and even undermines
international standards by contradicting them.
In
Canada, as in the United States, resistance to unilateral legislation
restricting trade on the basis of labour standards and human rights performance
is concerned primarily with the fact that these actions --
would
violate existing multilateral trading rules... put at risk [Canada's]
key objectives of improving international compliance and strengthening
the rules-based multilateral system... [and] open Canada to the
unilateral actions of others, thereby jeopardizing our prosperity
and our ability to sustain standards appropriate to Canadian circumstances."(42)
Combined
with the fact that these measures often have little impact, it seems that
they may end up being "more symbolic than anything else."(43)
However,
if unilateral legislation becomes an option, the Canadian government could
learn from the flawed American experience. For example, a revised GPT
program would have to address dilemmas over which standards to use, what
the process should be for judging whether they are being respected, and
how to determine the effect (if any) this will have on targeted countries.
Some of the reforms suggested by Alston for the United States would be
applicable to Canada in such a scenario. He sees "normative consistency"
and the establishment of "reasonably clear criteria" in developing
mechanisms which "follow fair and consistent procedures, and [aim
to avoid] double standards as far as possible" as crucial to developing
an effective link between international human rights standards and trade
practices.(44) Governments
that would judge others should first themselves ratify the relevant international
agreements on basic human rights, including ILO conventions. That in turn
would improve the ability of states to ensure a more overall consistent
use of ILO-generated information according to reasonably objective standards.
Combined with additional steps, such as the inclusion of human rights
experts in government departments responsible for developing legislation,
and the implementation of "procedural safeguards" to promote
"fairness, impartiality, objectivity, and transparency in the process
of assessing a governments compliance with accepted standards,"
such actions would help to counter accusations that, by introducing unilateral
legislation, governments, mostly from the rich North, are really just
indulging in disguised forms of protectionism.(45)
In other words, unilateral measures can be reformed and made more acceptable
by being aligned with multilateral standards and actions, the object of
both being to improve the effectiveness and legitimacy of policies linking
human rights to trade and investment under conditions of open global markets.
MULTILATERAL
INITIATIVES
Advocates
of a maximalist approach have called for governments to implement binding
codes, not only at the national level but also at the international level.
For example, Elwell argues that: "A code of conduct for multinational
enterprises integrated in a multilateral agreement would formally oblige
all member states to require that multinationals respect the established
principles of the host country."(46)
While documents such as the 1977 ILO "Tripartite Declaration of Principles
concerning Multinational Enterprises and Social Policy" offer "guidelines
to governments, firms, and workers in the areas of industrial relations,
employment, training, and working conditions,"(47)
as yet no international organization has developed enforcement mechanisms,
a subject which remains highly controversial. Several past attempts in
this direction -- e.g., the 1975 United Nations Commission on Transnational
Corporations -- have failed in part due to pressures from individual state
governments.(48)
A. Arguments
Against International Labour Standards
Those
who oppose formal international standards -- primarily multinational companies
and investors -- argue that market mechanisms are the most effective way
to regulate international trade. Any attempt to develop multilateral agreements
on labour standards would be incompatible with a free global market, as
it would "fix" standards between countries, resulting in a form
of "cost equalization."(49)
These reservations about international standards are not limited to the
private sector.
Certain
industrialized countries fear that "the costs of pressing for new
links between trade and basic human rights outweigh the likely benefits."(50)
As for developing countries, some fear "competition and loss of capital,"
inability to comply with or implement standards, loss of "comparative
advantage"(51) and
"protectionism by the north to prevent the development of the south."(52)
Of these, the principal concern is protectionism -- the use of tariffs
and non-tariff barriers, such as linkage to minimum standards, to insulate
a home market that might otherwise be vulnerable to imports. If international
standards were formalized, regulated and enforced, certain countries could
use them for protectionist ends, depriving less-developed countries of
the benefits of their comparative advantage -- namely, low wage costs.
As expressed by Erika de Wet, the concern is that the "social
clause [would] force developing countries to raise their labour costs
artificially,"(53)
negatively affecting their growth prospects and the world economy overall.
B. Arguments
For International Labour Standards
While
most arguments for international labour standards are typically normative,
citing the need "to end abuse and exploitation of workers"(54)
as their driving force, there are also non-normative arguments. For example,
the development of a "social clause" in international trade
agreements could restrict "social dumping," a term referring
to
the
practice of relying upon low "social" costs (whether in
the form of low wages, poor working conditions, or neglect of basic
environmental, safety, or health standards) to produce goods that
can then be sold in another market at a price which is well below
the cost of production in that market, primarily because producers
in that market would not be permitted to tolerate such low social
standards.(55)
The
international community ought therefore to address labour rights issues
through formalized regulations since, to cite de Wet, "optimal
social protection requires political negotiation and standard-setting
and cannot be left entirely to market forces [...as market forces put]
countries under pressure to lower their labour standards, which could
lead to social dumping."(56)
Proponents
of such internationally applied labour standards dispute, furthermore,
their critics contention that a social clause is intended to achieve
"cost equalization" or "standardized costs." Claims
that a social clause would seek to eliminate the competitive labour-cost
advantages of less-developed countries are unfounded. For example, on
the issue of a minimum wage, a social clause would seek to establish a
"universal principle of a minimum wage" rather than a
"uniform minimum wage" for the entire globe.(57)
This would allow each country to establish its own legitimate levels,
based on available resources and the basic requirements of its population
for a minimum standard of living particular to that country. In
the words of Ray Marshall, "while having low wages because of underdevelopment
is legitimate, strategies to gain competitive advantage by suppressing
wages and labour standards are not."(58)
As a result, a social clause would be designed to address cases where
clearly unacceptable labour exploitation and abuses of human rights can
be established, without this compromising countries pursuit of legitimate
trade objectives. Such measures could be undertaken in a variety of forums,
including both regional and international organizations.
C. Regional Organizations
Canadas
involvement in at least two regional organizations -- namely, NAFTA and
APEC -- offers an opportunity to pursue social clauses at the regional
level as well.
There
is no formal social clause within the confines of the North American Free
Trade Agreement, despite the existence of an attached "side-agreement"
on "labour cooperation." Elwell observes that "the present
Labour Agreement does not have the machinery needed to enforce international
workers rights and standards if they have not already been implemented
into the NAFTA partner's domestic law."(59)
The Canadian government could adopt policies to reinforce and strengthen
the NAFTA labour side-agreement by insisting, for example, that "each
country [including Canada itself] respects its own labour laws and provides
for a variety of remedies in cases where these laws are violated, ranging
from consultations between countries to trade sanctions."(60)
Increased transparency in regard to implementation of the agreements
could also strengthen labour rights in North America.(61)
Canada
is also a member of APEC (Asia Pacific Economic Cooperation), which is
a much looser regional trade-oriented association than NAFTA. The Asian-Pacific
region, moreover, is the only one that "does not have its own specific
human rights instruments or a regional mechanism for the protection of
human rights."(62)
As yet, only eight of the eighteen member countries of APEC have ratified
the United Nations International Covenant on Economic, Social and
Cultural Rights (ICESCR). While Canada has long been a signatory to the
ICESCR, both China and the United States are among those that are not.
Thus, Canada stands in a position to provide encouragement and leadership
to APEC to adopt measures which would preserve and promote respect for
international human rights, including labour standards.
D. International
Trade Organizations: A "Social Clause" in the ILO and WTO?
Past
attempts to include a "social clause" -- which would define
"the violation of workers' basic rights as unfair trade practices
punishable by trade sanctions" -- in international trade organizations
have repeatedly been defeated.(63)
Principal reservations with respect to such measures include concerns
that a social clause would be abused by protectionist forces and, as discussed
earlier, would have an unfair, asymmetrical impact on less-developed countries.
Many experts have nevertheless come to recognize that international labour
standards cannot be dealt with exclusively as a human rights issue in
the abstract; they are intimately connected with the issues of production
for export and the rules under which trade is conducted across borders.
Thus, "both international bodies and specialized agencies [i.e.,
the International Labour Organization (ILO) and the General Agreement
on Tariffs and Trade (GATT), now the World Trade Organization (WTO)] have
a role to play and should cooperate in this regard."(64)
Since
1919, the "main mission" of the International Labour Organization
(ILO) -- of which Canada is a founding member -- has been to preserve,
promote and monitor international social and economic rights.(65)
As with most international organizations, the basic rights contained in
ILO conventions are binding only on states that have ratified those conventions,
with one exception: the convention on "freedom of association ...
is binding for all member states of the ILO."(66)
With no consensus on which standards should be included, there has long
been some resistance to writing a social clause into the ILO.(67)
To counter this, advocates of the clause have developed two arguments.
First, they maintain that efforts to develop a clause should concentrate
on those labour standards that are already widely accepted.(68)
Furthermore, according to de Wet, "it is not so much the number
of standards that are important, but the type"; thus, a social
clause would include basic rights -- freedom of association, collective
bargaining, prevention of forced labour, and prohibition of discrimination
-- as outlined by ILO conventions which have been ratified by a high percentage
of countries in proportion to the total membership.(69)
As other conventions -- on the introduction of a minimum age, provisions
for occupational safety and health, and the setting of minimum wage levels,
among others -- enjoy increased ratification, the scope of this clause
could be expanded.(70)
The
argument in support of a social clause asserts that "universality
does not always depend on this ratification of specific conventions [since]
these standards are also protected in other widely ratified international
instruments" -- most notably the International Covenant on Economic,
Social and Cultural Rights, which goes even further. Many countries have
therefore already "willingly committed themselves to protect their
workers on a much wider scale than what is actually foreseen by a possible
social clause."(71)
Yet, it must also be acknowledged, the simple inclusion of a social clause
under the ILO might well prove inadequate to respond effectively to abuses
of workers' rights. And, given that "the ILOs supervisory mechanism
is based on persuasion and voluntary compliance with freely accepted international
obligations,"(72) any
social clause would be difficult to enforce.
To
address such weaknesses, some experts have suggested that efforts in the
ILO should be coupled with revisions to the GATT/WTO. According to Elwell,
"the new World Trade Organization offers greater opportunities than
ever before to link human rights and labour standards" as it has
the authority to respond to accusations of unfair trade practices and
administer sanctions.(73)
As Cavanagh points out, it is for this reason that "trade unions
favour a mechanism whereby it is still the ILO that determines workers
rights conventions and the ILO would handle petitions on violations, yet
it would be the trade agreements that have the enforcement powers of sanctions
or fines."(74) Under
such a system, the ILO tripartite committee could review the practices
of individual governments with respect to labour rights and make recommendations
for improvements that would have to be implemented within a given time-frame.
If a "government failed to make adequate efforts ... [other] governments
could turn to the GATT/WTO to enact the second stage of the implementation
system."(75) The WTO
would then determine the appropriate response and act accordingly. To
establish such a system would require certain modifications to the GATT
-- the foundation of the WTO -- to establish links between WTO membership
and respect for the obligations created by specific ILO conventions.(76)
In
order to facilitate the above process and achieve policy coherence between
the two organizations, "the implementation of a social clause would
also imply cooperation [and coordination] between the ILO and the GATT/WTO."(77)
This would take place in two stages. First, countries would have to respect
the "internationally recognized workers' rights," which, in
accordance with ILO procedures and the standards in the social clause,
would rely principally on moral suasion.(78)
Second, failure to fulfil these obligations would prompt action by the
WTO, ranging from the denial of membership and trade sanctions to "constructive
assistance."(79)
As de Wet observes, however, if such a system is to be created, it will
require a clear understanding by all parties "of the [current and
potential] relationship between the GATT and the ILO."(80)
Furthermore, "...such a system could only function if the membership
of the GATT/WTO and the ILO continue to be almost identical, as is presently
the case."(81) These
issues would have to be considered carefully before a social clause could
be put into practice.
E. Enforcement
Issues
To
consider implementation of a social clause in international trade organizations
raises issues regarding enforcement procedures, since, without enforcement,
a social clause would be nothing more than symbolic words without any
impact on the real lives of workers around the globe. According to Elwell,
this would first and foremost require that "the enforcement of minimum
international labour standards ... be based on reciprocity."(82)
All countries, regardless of their economic situation or power, would
be subject to the same standards, and would therefore have to ensure that
they complied "in both domestic and foreign operations."(83)
This would ensure greater legitimacy for moral suasion -- "the first
step in the enforcement process"(84)
-- and avoid protectionist practices and other abuses that might
arise. Furthermore, as de Wet observes, "the more effective moral
suasion is, the less need there is for sanctions and the negative consequences
that result from them."(85)
The
use of sanctions is a controversial subject and there is consensus that
they should preferably be multilaterally applied as a last resort.(86)
Due caution is advised since sanctions are a coercive tool whose effects
are often negative for both those targeted by them and those applying
them. Furthermore, "there is no guarantee that they will succeed."(87)
The effectiveness of trade sanctions, embargoes and boycotts is often
difficult to ascertain. Elwell points out that they typically do not address
"the root of the problem."(88)
Others have observed that sanctions "reduce the opportunity for dialogue"
by removing or suppressing means for "political leverage" and
"constructive engagement" with those abusing rights, and for
developing mutual understanding.(89)
Nonetheless, sanctions are a way to "demonstrate the international
community's disapproval" and may indeed have some influence over
time.(90) Cavanagh has made
a novel suggestion that could alleviate a number of the negative effects
of sanctions. He proposes that "the sanction for violation ... be
centered on the violator," e.g., through fines on corporations violating
labour rights.(91) By targeting
sanctions in this way, the international community and individual countries
could avoid unnecessarily harming the innocent people that sanctions are
intended to help.
OPTIONS
FOR CANADIAN POLICY
Any
national government faces pressures from the sometimes conflicting or
competing interests of its constituents.(92)
When deciding what policies to adopt in order to protect and promote human
rights in the fields of labour and trade, the Canadian government must
also bear in mind that there are many external as well as domestic actors
involved: other governments and parliaments, multinational corporations,
industry associations, trade unions, international institutions (ILO,
GATT/WTO, the United Nations), numerous NGOs, and groups of consumers
and concerned citizens. The government must be attentive to all of these
sources of influence as it tries to determine what is in the Canadian
public interest.
As
to whether it is "possible for Canada to pursue its economic interests
without compromising its common humanity by overlooking its fundamental
values," Professor Errol Mendes suggests a conditional response in
the affirmative.(93) According
to Mendes, the "trickle down" theory, which purports that the
benefits of macro-level economic liberalization will filter down to the
general population, is inadequate.(94)
Diana Bronson and Stéphanie Rousseau echo this sentiment, stressing that:
"growth, in itself, is in no way a guarantee of a greater commitment
to fundamental human rights and freedoms. Nor does liberalized trade and
investment promise sustainable democratic development at the national,
regional or global levels."(95)
As for the "trickle up" approach, whereby grassroots organizations
and micro-level democracy are encouraged, Mendes argues that this is not
enough to secure a government's commitment to preserve and promote international
human rights. He observes that: "Civil societies are not created
overnight and when they do emerge, they can be quickly suppressed by force...."(96)
Therefore, the government would be best advised to pursue a "trickle
sideways" approach "which attempts to integrate both governmental
and civil society components into a human rights strategy that aims at
building and supporting institutional capacity to promote respect for
the Rule of Law, good governance and universal human rights."(97)
Such an approach promises to be the most sustainable overall.
Accordingly,
Canadas human rights strategy internationally could give consideration
to the following elements: promoting adherence to the "rule of law"
in the context of negotiating international trade rules; supporting effective
functioning of organizations such as the WTO, the ILO, and other international
and regional trade institutions that would include moving towards multilaterally
agreed and enforceable labour rights standards (although resisted by many
Asian countries, similar fundamental norms have in fact been accepted
in previous UN treaties, e.g., the ICESCR); targeting of bilateral and
multilateral aid to support the development of policies, institutions
and infrastructures that promote respect for human rights; and in extreme
instances, where positive measures are no longer possible, working with
others to see that "bilateral and multilateral trade and aid sanctions
are ... imposed."(98)
Indeed, "a comprehensive approach to promoting human rights internationally
cannot be confined solely to any one proposal and will likely incorporate
aspects" of the above suggestions(99)
as well as establishing means of assessing the impact of these policies
through periodic review.(100)
In
a recent speech to NGOs, the Minister of Foreign Affairs stated that the
Canadian strategy would include "support for universal standards
of rights and improvement of international rules, covenants and agreements."(101)
Canada would achieve this by "taking a leadership role" in developing
further multilateral rules which "govern labour standards and human
rights," supporting "multilateral forums to implement collective
measures," and ratifying conventions.(102)
Many of these initiatives mirror those suggested above. Whether through
diplomatic and financial encouragement or through the regulation of codes
of conduct, unilateral legislation, or bilateral and/or multilateral initiatives
to strengthen international standards, the Canadian government does indeed
have some serious options available if it is committed to developing more
effective policies that will address international human rights and working
conditions in the global marketplace.
BIBLIOGRAPHY
Alston,
Philip. "Labor Rights Provisions in US Trade Law: Aggressive
Unilateralism?" Human Rights Quarterly 15, 1993, 1-35.
Axworthy,
Lloyd. "Notes for Address at the Consultations with Non-Governmental
Organizations in Preparation for the 52nd session of the United Nations
Commission on Human Rights." Ottawa, 13 February 1996.
Broadbent,
Edward, President, The International Centre for Human Rights and Democratic
Development. "Globalization: The Democratic Challenge." Speech
at the Conference "Globalization, Trade and Human Rights: The Canadian
Business Perspective." Toronto, 22 February 1996.
Bronson,
Diana and Stéphanie Rousseau. "Working Paper on Globalization and
Workers' Human Rights in the APEC Region." International Centre for
Human Rights and Democratic Development, 26 October 1995.
Canadian
Exporters' Association. "Human Rights." Written Statement to
the Subcommittee on Human Rights of the House of Commons Standing Committee
on Foreign Affairs and International Trade. November 1995.
Cavanagh,
John. "Codes of Conduct of Corporations: What Appears to be Working."
DRAFT. Institute for Policy Studies and the Transnational Institute, Washington,
D.C., September 1995.
"Child-Labour
Plan Brings Heavy Price." The Globe and Mail (Toronto), 25
March 1996, p. A5.
dAquino,
Thomas, President and Chief Executive, Business Council on National Issues.
"Globalization, Social Progress, Democratic Development and Human
Rights." Notes for Address to the Conference "Globalization,
Trade and Human Rights: the Canadian Business Perspective." Toronto,
22 February 1996.
de
Wet, Erika. "Labor Standards in the Globalized Economy: The Inclusion
of a Social Clause in the General Agreement on Tariff and Trade/World
Trade Organization." Human Rights Quarterly 17 (1995), 443-462.
Dongfang,
Han. Speaking Notes for the Conference "Globalization, Trade and
Human Rights: The Canadian Business Perspective Conference." English
Translation. Toronto, 22 February 1996.
Elwell,
Christine. "Human Rights, Labour Standards and the New WTO: Opportunities
for a Linkage - a Canadian Perspective." Essays on Human Rights and
Democratic Development #4. International Centre for Human Rights and Democratic
Development, 1995.
Fair
Trademark Canada. "Transfair International." (Information Brochure).
Government
of Canada. Government Response to the Recommendations of the Special
Joint Parliamentary Committee Reviewing Canadian Foreign Policy.
Ottawa, February 1995.
Hutchinson,
Moira. "Comparison of International Labour Rights Policies: The U.S.
and Canada." Steelworkers' Humanity Fund. April 1995.
International
Centre for Human Rights and Democratic Development (ICHRDD) and the Business
Council on National Issues (BCNI). Briefing Note for the Conference "Globalization,
Trade and Human Rights: The Canadian Business Perspective." Toronto,
22 February 1996.
Kalmen
Kaplansky. "The International Labour Organization." In Human
Rights in Canadian Foreign Policy. Robert O. Matthews and Cranford
Pratt (eds.). McGill-Queen's University Press, Kingston and Montreal,
1988, p. 115-134.
McDonald,
Corinne and Gerald J. Schmitz, Research Branch, Political and Social Affairs
Division, Library of Parliament. "Main Points from the Testimony
Received during the First Phase of Hearings: September - December 1995."
Prepared for the Subcommittee on Human Rights of the House of Commons
Standing Committee on Foreign Affairs and International Trade. Ottawa,
15 February 1996.
Mendes,
Errol P. "Trade Linkages to Human Rights, Good Governance and Labour
Standards in the Asian Context." Speech to the Asia Pacific Heads
of Mission. Vancouver, 13 January 1995.
Rossignol,
Michel. "Sanctions: The Economic Weapon in the New World Order."
Background Paper #346E. Research Branch, Library of Parliament, Ottawa.
Revised January 1996.
Smith,
Gare (Deputy Assistant Secretary for Labor and External Affairs at the
U.S. Department of State). "Introduction of the Model Business Principles
before the International Labor Organization." 9 November 1995.
Thompson,
Bob. "Ethical Trading and Sourcing." The Corporate Ethics
Monitor, Vol. 7, Issue 6 (November - December 1995).
Todd,
Dave. "Don't Link Trade and Worker Rights, Report Says." Ottawa
Citizen, 27 June 1995.
Weston,
Ann. The North-South Institute. "Notes for a Speech on Trade, Labour
Standards and Human Rights." Given at the Human Rights Network, University
of Ottawa, 13 October 1995.
APPENDIX
GOVERNMENT RESPONSE TO THE RECOMMENDATIONS OF THE
SPECIAL JOINT PARLIAMENTARY COMMITTEE
REVIEWING CANADIAN FOREIGN POLICY
(1)
Hon. Lloyd Axworthy, "Notes for an Address at the Consultations with
Non-Governmental Organizations in Preparation for the 52nd session of
the United Nations Commission on Human Rights," Ottawa, 13 February
1996, p. 1.
(2)
Ibid., p. 2.
(3)
International Centre for Human Rights and Democratic Development (ICHRDD)
and the Business Council on National Issues (BCNI), Briefing Note for
the Conference "Globalization, Trade and Human Rights: The Canadian
Business Perspective," Toronto, 22 February 1996, p. 1,
[Toronto Conference].
(4)
Ibid., p. 3.
(5)
Dave Todd, "Don't Link Trade and Worker Rights, Report Says,"
Ottawa Citizen, 27 June 1995.
(6)
Briefing Note, Toronto Conference (1996), p. 3.
(7)
Thomas d'Aquino, "Globalization, Social Progress, Democratic Development
and Human Rights," Notes for an Address to the Toronto Conference,
22 February 1996, p. 1-3.
(8)
Ibid., p. 4.
(9)
Ibid., p. 6.
(10)
Ibid.
(11)
Christine Elwell, Human Rights, Labour Standards and the New WTO: Opportunities
for a Linkage - A Canadian Perspective, Essays on Human Rights and
Democratic Development #4, International Centre for Human Rights and Democratic
Development, Montreal, 1995, p. 3.
(12)
Briefing Note, Toronto Conference (1996), p. 3.
(13)
Han Dongfang, Speaking Notes (English Translation), Toronto Conference,
22 February 1996, p. 5.
(14)
Ann Weston, "Notes for a Speech on Trade, Labour Standards and Human
Rights," Meeting of the Network on International Human Rights, University
of Ottawa, 13 October 1995, p. 1.
(15)
Edward Broadbent, "Globalization: The Democratic Challenge,"
Toronto Conference, 22 February 1996, p. 1.
(16)
For a succinct review focusing particularly on U.S. manoeuvres, see Oxford
Analytica Ltd., "World Row Brews over Push to Link Trade, Labour
Rights," The Globe and Mail (Toronto), 18 March 1996,
p. B9.
(17)
Ibid., p. 4-5.
(18)
The suggestion dealing with international trade agreements is examined
in detail below in the section on multilateral initiatives.
(19)
John Cavanagh, "Codes of Conduct of Corporations: What Appears to
be Working," Draft Working Paper, Institute for Policy Studies and
the Transnational Institute, Washington, D.C., September 1995, p. 4.
(20)
Weston (1995), p. 4.
(21)
Cavanagh (1995), p. 4.
(22)
According to Bob Thomson, "label monitoring networks, together with
their church, union, consumer and business membership bases, provide consumers
with independent information and assurances that product claims are not
just marketing hype." See his article "Ethical Trading and Sourcing,"
The Corporate Ethics Monitor, Vol. 7, Issue 6, November -
December 1995.
(23)
Ibid., p. 5-6.
(24)
Weston (1995), p. 4.
(25)
Ibid.
(26)
Programs such as Fair Trademark Canadas involvement in "Transfair
International" work to "establish ... a mark which certifies
fairness in trade ... license a label for products which meet international
criteria, for sale by Canadian companies ... educate the public, retailers
and government about fair trade benefits ... [and] work ... with international
movements in research and policy advocacy." See Fair Trademark Canada
information brochure. For an additional brief summary of the issue of
product labelling, see the Research Branch paper prepared for the Subcommittee
on Human Rights by Corinne McDonald and Gerald J. Schmitz, "Main
Points from the Testimony Received during the First Phase of Hearings:
September - December 1995," 15 February 1996, p. 10.
(27)
Cavanagh (1995), p. 9.
(28)
Weston (1995), p. 4.
(29)
"Child-Labour Plan Brings Heavy Price," The Globe and Mail
(Toronto), 25 March 1996, p. A5. For an analysis of some possible constructive
alternatives, see John Stackhouse, "New Solutions Fashioned for Child
Workers," The Globe and Mail (Toronto), 26 February 1996,
p. 1 and A13.
(30)
Briefing Note, Toronto Conference (1996), p. 5.
(31)
Weston (1995), p. 4.
(32)
Gare Smith, Deputy Assistant Secretary for Labor and External Affairs
at the U.S. Department of State, "Introduction of the Model Business
Principles before the International Labor Organization," Washington,
D.C., 9 November 1995.
(33)
Ibid., p. 2.
(34)
Ibid.
(35)
Ibid., p. 4.
(36)
Moira Hutchinson, "Comparison of International Labour Rights Policies:
The U.S. and Canada," Steelworkers' Humanity Fund, April 1995 (see
appendix).
(37)
Ibid., p. 4.
(38)
Ibid., p. 2-5.
(39)
Philip Alston, "Labor Rights Provisions in US Trade Law: Aggressive
Unilateralism?" Human Rights Quarterly 15, 1993, p. 1
and 3-4. See also Elwell (1995), p. 8-11.
(40)
Of nine principal ILO conventions, Canada has ratified four (number 87
on freedom of association, 105 on forced labour, and 100 and 111 on discrimination),
whereas the United States has ratified only one. Canadas failure
to ratify the remaining five conventions (two on freedom of association,
one on forced labour, and one on minimum age) has been attributed to difficulties
in making provincial legislation compatible with international standards;
this justification is similar to the American reasoning which highlights
incongruities between federal and state powers. See Hutchinson (1995),
p. 7, and Elwell (1995), p. 60-61, for lists and examination
of these conventions.
(41)
Alston (1993), p. 32.
(42)
Government of Canada, Government Response to the Recommendations of
the Special Joint Parliamentary Committee Reviewing Canadian Foreign Policy,
Ottawa, February 1995, Section 3.7, p. 38.
(43)
Weston (1995), p. 2.
(44)
Alston (1993), p. 16 and 22.
(45)
Ibid., p. 22-23.
(46)
Elwell (1995), p. 27.
(47)
Cavanagh (1995), p. 7, and Diana Bronson and Stéphanie Rousseau, "Working
Paper on Globalization and Workers' Human Rights in the APEC Region,"
International Centre for Human Rights and Democratic Development, 26 October
1995, p. 8.
(48)
Cavanagh (1995), p. 6.
(49)
Erika de Wet, "Labor Standards in the Globalized Economy: The Inclusion
of a Social Clause in the General Agreement on Tariff and Trade/World
Trade Organization," Human Rights Quarterly, Vol. 17
(1995), p. 443-462.
(50)
Elwell (1995), p. 22.
(51)
In general, the Souths comparative advantage has been dependent
on lower wages as a legitimate way to attract foreign investment.
(52)
Elwell (1995), p. 21.
(53)
de Wet (1995), p. 449.
(54)
Elwell (1995), p. 41.
(55)
Alston (1993), p. 2, note 2.
(56)
de Wet (1995), p. 447.
(57)
Ibid., p. 450. See also Elwell (1995), p. 55.
(58)
As cited in de Wet (1995), p. 451.
(59)
Elwell (1995), p. 15.
(60)
Briefing Note, Toronto Conference (1996), p. 4.
(61)
Weston (1995), p. 3.
(62)
Bronson and Rousseau (1995), p. 7.
(63)
Cavanagh (1995), p. 14. See also Elwell (1995), p. 7-8.
(64)
de Wet (1995), p. 455.
(65)
Kalmen Kaplansky, "The International Labour Organization," in
Robert O. Matthews and Cranford Pratt (eds.), Human Rights in Canadian
Foreign Policy, McGill-Queen's University Press, Kingston and Montreal,
1988, p. 115.
(66)
Bronson and Rousseau (1995), p. 9.
(67)
de Wet (1995), p. 446.
(68)
"...Conventions which are well-ratified ... could therefore serve
as a minimum core." Ibid., p. 453.
(69)
Ibid.
(70)
Ibid.
(71)
Ibid., p. 454.
(72)
Ibid., p. 446.
(73)
Elwell (1995), p. 4.
(74)
Cavanagh (1995), p. 16.
(75)
de Wet (1995), p. 459.
(76)
Ibid., p. 458.
(77)
Ibid., p. 456.
(78)
Briefing Note, Toronto Conference (1996), p. 4. See also de Wet (1995),
p. 456.
(79)
Ibid.
(80)
de Wet (1995), p. 462.
(81)
Ibid., p. 456.
(82)
Elwell (1995), p. 33. See also de Wet (1995), p. 458, note 55.
(83)
Elwell (1995), p. 33.
(84)
de Wet (1995), p. 456.
(85)
Ibid., p. 460.
(86)
For an in-depth look at the use of sanctions by Canada, see Michel Rossignol,
"Sanctions: The Economic Weapon in the New
World Order," Research Branch, Library of Parliament, Background
Paper BP-346E, revised January 1996.
(87)
Ibid., p. 2.
(88)
Elwell (1995), p. 35.
(89)
Canadian Exporters' Association, "Human Rights," November
1995.
(90)
Rossignol (1996), p. 11.
(91)
Cavanagh (1995), p. 17.
(92)
Elwell (1995), p. 22.
(93)
Errol P. Mendes, "Trade Linkages to Human Rights, Good Governance
and Labour Standards in the Asian Context," Speech to the Asia Pacific
Heads of Mission, Vancouver, 13 January 1995.
(94)
"If binding legal obligations under international law to observe
universal human rights does [sic] not provide sufficient basis for compliance
with these norms, trade and open markets alone will not change the behaviour
of some of [Canada's trading] partners." Ibid., p. 3.
(95)
Bronson and Rousseau (1995), p. 17. A similar argument has been advanced
by Weston, p. 6: "Increasing trade on its own is not enough. ...
trade policies can play a part -- though in many cases it will be limited."
(96)
Mendes (1995), p. 3.
(97)
Ibid., p. 4.
(98)
Ibid., p. 9.
(99)
Briefing Note, Toronto Conference (1996), p. 5.
(100)
Elwell (1995), p. 63.
(101)
Axworthy (1996), p. 4.
(102)
Ibid.
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