Introduction
The situation of the trade union movement has changed quite drastically in the last twenty years or so because power relations in society have changed.
Whenever we talk of social relations, or industrial relations, we are talking about interests, which oppose each other in power contests. The outcome of such contests, whether they are reflected in collective agreements, in legislation or in any other rules that regulate the coexistence of opposing social forces, depend on the existing relationship of power and they evolve as these power relations change.
There have been several major shifts in global power relations between social forces in the last century. The last two are the most important to consider in this discussion because they have directly shaped our thinking and our experience. The first happened in the late 1940s and was a consequence of World War II; the second happened forty years later and this is what we are referring to when we talk about globalisation.
At the end of WWII, unions were in a strong position, politically and industrially. In the three or four decades following WWII, power relationships had been negotiated basically at national level, where the power of capital was limited by national legislation and by dependence on domestic markets. Trade union rights were taken for granted and were incorporated in all post-war legislation. Social reconstruction took place on the basis of “social partnership”, meaning roughly a trade-off between social peace and the recognition of labour rights, as well as the consent of business to participate politically and financially (through taxes) in building an egalitarian welfare State. This was the pattern that would prevail in the industrialised world for the next thirty years or so.
The ground started shifting under our feet in the 1980s. The end of the Cold War coincided, broadly speaking, with the end of the post-war economic boom. Mass unemployment started appearing in the industrialized countries in the early 1980s after the first “oil shock” of 1974; the Berlin Wall fell in 1989 and the USSR was dissolved in 1991.
At the same time, in little over ten years, the world economy underwent a fundamental change, moving from an aggregate of national economies linked together by a network of trade, investment and credit, to an integrated, borderless global economy.
There have been revolutionary changes in telecommunications and transport, driven by transnational capital, which is also the chief beneficiary of these changes. They have immensely increased the power of capital by increasing its mobility, while the autonomy and the power of the national State has been steadily shrinking and, by way of consequence, the power of all institutions acting within the framework of the national State and depending on the national State, such as political parties and unions.
In the global labour market, workers of all countries have been compelled to compete against each other, with huge wage spreads ranging from one to one hundred. Workers in all industrialized countries, in Europe, North America and Japan, have experienced outsourcing and relocation to low wage countries in the last ten years. But now, even workers in low wage countries are experiencing job losses to lowest wage countries: Mexico, Central America, South East Asia and Eastern Europe are losing jobs to China. Of which more later.
Martin Kannegiesser, the president of the German Metal Employers, recently declared that for the German metal industry to remain competitive, workers will have to take pay cuts and work longer hours. In every country, employers are telling workers the same thing. A whole new vocabulary has been created. “Reform” used to mean progress. Today it means social regression: cuts in benefits, dismantling of social protection. Workers’ rights and union contracts are referred to as “labour market rigidities” and introducing “flexibility” means dismantling such rights.
The American business magazine “Business Week” is asking itself if the world is not becoming “one giant global labour pool”, which has started to affect white collar and professional jobs in the United States, so far not threatened by international job competition.
But, the article says, “as low-wage countries developed the ability to produce things such as apparel, electronics and textiles, Americans in those industries found themselves competing with people who’ll work for a tenth of their pay. This has exerted downward pressure on US factory wages that continues today. … That’s why the spread of global labour competition to the top of the skill ladder could be so significant. The ability of US companies to find architects, engineers, programmers and financial analysts in places like India for a fraction of what they cost at home almost certainly will create a dampening effect, sooner or later, on the pay of the 80 percent of US employees who until now have been unaffected by such global job competition.”
Labour in Western Europe is facing the same problem. As you are no doubt aware, Norwich Union is about to shift 3,700 customer service and back-office jobs to India. There are many more examples. The estimate is that 730,000 financial services jobs and 100,000 telecom jobs will migrate from Western Europe in the next four years. The same has been true for manufacturing for some time. Germany, for example, like other West European countries, lost much of its textile and consumer-electronics industry to Eastern Europe and Asia in the 1980s and 1990s. Now, according to an employers’ survey, 54 percent of German machinery makers said they plan to shift some production abroad in the next two years, compared with 24 percent who have done so in the last two years.
The big picture is therefore that transnational capital has emancipated itself from society and can seek ever-increasing profits where it pleases. It does so in the name of competition, but it has redefined the terms of competition: a profit rate of 5 percent used to be considered as satisfactory; the benchmark rate now is 15 percent, and any production unit that fails to meet this target risks closure. Distinctions between financial capital and productive capital have become meaningless as transnational corporations move their capital to tax shelters, participate in speculation involving billions of dollars or pounds every day and massively evade taxes.
In other words, transnational capital is reordering the world economy in its own interests. In that, it has the support of the leading world power, the most reactionary government the US has had for about eighty years, and of the leading European governments, including of course the British government, through the International Financial Institutions, the World Trade Organization and the institutions of the European Union.
To attract transnational capital, or to prevent it from leaving, States underbid each other, in a downward spiral of steadily deteriorating wages and conditions, social welfare cuts, mounting unemployment and restrictions on human and democratic rights.
The immediate consequences have been growing social inequalities, social disruption, the undermining of social protection, the spread of poverty world wide, and new and growing threats to the environment, potentially life threatening for humanity. For the first time in modern history, governments and their international institutions, leaders of business and opinion, those who run the global economy and global society, do not hold out to humanity a promise of progress, however insincere, of rising living standards, of more freedom, of a better quality of life, but the contrary. They keep telling us it’s going to get worse.
That is a tremendous change. They are no longer afraid or even embarrassed to deprive humanity of hope.
Yet, there is nothing inevitable about any of this. Globalisation as a product of technological change may be inevitable, but the political response to it, how society deals with it, only depends on political decisions and these, in turn, are shaped by power relations in society.
This, then, is the big issue, the challenge before the labour movement and before all those who believe, as we do, that the world economy must serve human needs and purposes, that is, the common welfare of humanity. The challenge is to show the way to a global economy at the service of the common welfare, and to become organized at a global level to prevail in the power struggle which will determine whether the world, in the next twenty years or so, will become a fit place to live in for the vast majority of humanity.
Rebuilding the Movement
We do not now have the kind of international labour movement that is capable of meeting the challenges of globalisation. The International Confederation of Free Trade Unions (ICFTU) sees itself largely as a political lobby with the international institutions on what has been described as “the increasingly bizarre assumption that such instances would be influenced by being lobbied by union institutions, with decreasing weight and power, and with virtually no presence in the dominant or alternative public spheres internationally.”
Most of the global union federations (GUFs) are fighting defensive battles and when they have a general perspective or strategy at all, it is mostly limited to their jurisdiction; as for the European Trade Union Confederation (ETUC), it takes its policies from the EU Commission. The main problem of all international labour organizations, however, is that they have remained in fact loose associations of national unions, which think and react in national terms, at a time when capital is international, and thinks and acts globally. They are unable to develop a common strategy, only a lowest common denominator.
What we have to do now is at the same time very simple and very difficult; in any event, it requires a great deal of work. We have to reinvent and internationalise the international movement, and the place to start is ourselves, where we are: in our enterprises, in our works councils, in our unions. Some of the things I am about to tell you will therefore be very simple, others not so simple.
What we have to do means working in the institutions we have as they now are, because we have no other starting point, but with a will and a perspective of changing them into something closer to what an effective labour organisation ought to be. That, in turn, means learning to know these institutions, how they operate, what their strengths and weaknesses are, how they can be made stronger and, if need be, more responsive.
It means identifying and using the points of leverage where focused action can make a difference, then building on these actions to go further, with a coherent strategy. A strategy means thinking ahead and in the long term, plotting the course from A to Z, then finding out how to get from A to B, and so on.
It means learning to think and act globally, thinking together with fellow-workers in other countries, especially those countries where your jobs have gone, as well as those who have faced similar problems, to find ways of acting together. All workers, all over the world, have similar interests; how can we express this overarching common interest, despite the seeming contradiction where the loss of one is supposed to be the gain of the other? Who are these workers, what are their thoughts, feelings, struggles, how do they perceive their situation, how do they perceive us?
It means mastering the communications technology that makes such knowledge possible. Let us use the technology that made their globalisation possible to build ours.
Practising Internationalism
Let us go back to the points of leverage. A key element in any international trade union strategy has to be organizing and the transnational corporations (TNCs) are key to organizing.
Let us remember that the TNCs are today the leading world power, not only because they dominate the world economy but because, either
through their lobbies or directly, they exercise a dominant influence on the leading governments of the world, on the international financial institutions, on the World Trade Organization and on the EU.
At present, worldwide trade union density is about 13 percent among wage earners (163 million trade union members out of 1,300 million workers within the wage system – if the informal economy is included, the percentage would be very much lower, perhaps around 5 percent). Clearly, one of the main strategic goals of the labour movement must be to increase the number of trade union members, and the place to start is where it strategically makes the greatest difference.
Although the 73 million workers directly employed by TNCs world wide represent only a minority (a much larger minority if subcontracting is included), it is the most internationalised segment of the world working class and the best placed to make a difference in the over-all power relations between labour and business. Trade union organization in the TNCs is crucial to shifting global power relations.
International organising at TNC level is a natural development. Because in TNCs international management is ultimately responsible for decisions such as outsourcing and relocation of production, local workplace representatives have been increasingly faced with collective bargaining responsibilities directly with international management. They therefore need to exchange experiences and information with unionists in other countries, often in remote parts of the world, and seek or respond to practical forms of international solidarity.
The main channel for this work is the Global Union Federations (GUFs). There are ten of them: some have started co-ordinating union activity within TNCs decades ago, others have started recently. The outcome of such co-ordination has ranged from simply exchange of information to international industrial action, some of it quite effective, but these have remained isolated instances.
A more systematic approach started in the late 1980s, when global federations started concluding international agreements with leading TNCs. They are now known as International Framework Agreements (IFAs) and they deal with general questions of principle: workers’ rights and international labour standards.
Typically, they commit the company to respecting ILO core labour standards: freedom of association and of collective bargaining, elimination of forced and child labour and freedom from discrimination, in some cases also the rights of union representatives at the workplace.
IFAs also create a joint international council that meets regularly (at least once a year), where the workers’ side is in general represented by a delegation of the unions involved in the given TNC together with global federation staff. This council is a forum where both sides can raise issues of concern. At a minimum, this serves the purpose of communication and exchanging information, in some cases it can take the form of de facto negotiations.
To be effective, all IFAs must also include agreement on systems for monitoring, verification and the handling of complaints and disputes. This can include agreement on the regular dissemination of company information to the unions, the establishment of regular channels of global negotiation between management and unions, social auditing procedures, etc. Meetings of the joint council, serve, among other purposes, that of controlling the implementation of the agreement.
IFAs are not in any way a substitute to collective bargaining at local or national level, but are designed to ensure fundamental workers’ rights in all the company’s workplaces. They open spaces for member unions to conduct their own negotiations under better conditions and with international back up. In that respect, they are also an organizing tool, especially in those parts of a company’s operation where unions are weak or non-existent. But ultimately their usefulness as an organizing tool depends on the commitment of the unions involved.
Here I have to tell you a story. The IUF was the first global federation to negotiate and to sign IFAs, the first with Danone in 1988 and the second with the French hotel chain Accor, in 1995. In my twenty-seven years as IUF general secretary I have had very good experiences with our British member unions and two disappointments; one of them had to do with the Accor agreement. We had insisted that, like at Danone, all workers’ representatives on the joint council had to be union members (lay members and union staff) and management had agreed.
Our problem was that in Britain not a single one of the then 26 Accor hotels was organized. We told management: that’s no problem, we’ll get them organised, and management agreed not to oppose the unions. So we called a meeting of the T&GWU and the GMB, which was attended by the general secretaries and the national officers of both unions, and we spent an afternoon dividing up the Accor hotels between the two unions: Finally it was agreed that the T&GWU would take thirteen, and GMB would take thirteen. We congratulated ourselves on this positive outcome in the spirit of comradeship, went home and nothing happened. Absolutely nothing.
It eventually transpired that neither union was serious about it. The hotel industry was not their priority, and neither union was prepared to commit the kind of resources a serious organising campaign would have involved. I was very disappointed, as you can imagine, mostly because the two unions had been handed a TNC on a silver platter and, regardless whether they regarded the hotel industry as a priority or not, did not appreciate the strategic importance of the organising opportunity provided by an international agreement.
So: check the existing agreements with companies where the T&G is involved, and use them! Better yet, initiate such agreements and use them as organising tools.
Some companies have adopted codes of conduct, which in some cases cover the same ground. The fundamental difference, of course, is that IFAs are basically collective bargaining agreements with mutually agreed rights and responsibilities, as opposed to codes of conduct, which are unilaterally proclaimed by management and can therefore also be unilaterally revoked or amended by management. No union at national level would accept a unilaterally proclaimed code of conduct as a substitute for a collective bargaining agreement, and it is no different at international level.
There are about thirty IFAs at this time and their number is constantly growing. As the number of companies involved continues to expand, the global federations face a major expansion of their workload and rising expectations from their affiliates. The negotiation and subsequent monitoring and servicing of each IFA require considerable effort and expense, yet the financial and human resources of most global federations are severely limited.
You would think that out of global strategic considerations the general trade union movement would support the structures that are at the cutting edge of creating a new power balance with transnational corporations through collective bargaining: the global federations and their company councils, and which really need that support. That is not happening, or not nearly enough. Global federations do have access to project money, but in general that is tied to conditions that are hard to fit into a global strategic agenda. In the end, the global federations have to rely on a small number of committed and aware affiliates.
A contributing factor to the confusion of priorities may be the emergence of the European Works Councils (EWCs), as a result of the EU directive of 1994. With respect to the EWCs, I want to signal three issues which are important from the point of view of an international labour strategy: the negotiation issue, the trade union issue and the geographical issue.
The negotiation issue arises because the directive has not established the EWCs as negotiation bodies: their function is “information and consultation”. It is, however, in the interest of unions that negotiations, in some form, should take place. The important point here is that the content of what happens in an EWC depends on a mutual agreement of the social counterparts and not necessarily by what the directive says. Unions can and should therefore push for what is consistent with their objectives and their interests, rather than voluntarily conforming to rules invented by others that work to their disadvantage.
The trade union issue arises because the EWC directive is a much-diluted version of the original draft of 1980, which would have given trade unions statutory representation rights. In its final and present form, it does not mention trade unions at all, so that unions have had to fight to nail down the right of union officials to be part of the EWC and to ensure that the lay members should be union members themselves. Where this has not succeeded, sometimes because the European Industry Federation, which negotiated the agreement, was more concerned with the quantity of agreements signed rather than their quality, EWCs remain vulnerable to management manipulation or become outright management-dominated fakes.
The main reason why the trade union presence, and specifically international trade union presence, is necessary, is because it represent the long term general interest of workers, whereas works council representatives are not necessarily committed to defending more than the specific interests of the workers of their enterprise as it appears to them at the time of the meeting.
When each delegation comes to the meeting determined to defend its short-term interests, if need be at the expense of others, this can easily lead to a free-for-all where management can impose its own decisions. Whenever workers’ representatives meet internationally, it is their obligation to reach a position reflecting the long-term general interest of all involved, and, in order to do so, to negotiate the necessary compromises among themselves. Once this is done, they confront management with a united position. Any other scenario is a recipe for defeat.
The geographical issue arises because the directive formally only applies to EU countries, but leaves agreement on the actual coverage of the council to the social counterparts. Most companies seek to limit the EWCs to the EU only (the issue here is not so much Norway and Switzerland but Central and Eastern Europe, where unions are weak, wages low and conditions miserable). The union interest is of course to secure the maximum coverage, ideally of every single operation of the company regardless of its location. Thus some EWCs are confined to the EU, some cover all of geographical Europe and at least three are worldwide in scope.
Unsurprisingly, it is the global federations who have fought hardest for maximum coverage whereas some European unions have bought into the “Europeanist” agenda and obediently restricted themselves to the letter of the directive.
In summary: the so-called “social dialogue” that has developed at EU level cannot be part of a useful international trade union strategy unless the issues described above are addressed and solved in a way consistent with trade union interests.
I am very pleased to be in this course with my old friend Dave Spooner, general secretary of the International Federation of Workers’ Education Associations (IFWEA), an organisation of which I had the honour of being the president until last year, and perhaps later Dave will want to tell you something about a method the IFWEA has developed to strengthen the global organizing capacity of unions, particularly in transnational corporations: this is the International Study Circle project.
Simply put, an International Study Circle (ISC) involves bringing together groups of participants based in several countries (local study circles) through the Internet. These local circles work simultaneously on the same subject, which can be a transnational corporation. Between meetings, each group has access to materials on the Internet, including the results of discussions and work completed by the other groups in their previous sessions. In this way, a union network can be created in a company linking local unions in different countries through Internet, which remains as a permanent international union structure – a virtual company council – after the ISC has run its course. It does not replace meetings, but it keeps up the exchange of information and contacts between meetings
Flanking Alliances
As crucial as organizing in the transnational corporations may be, it is not the only area where unions have to organize and it is not, by itself, sufficient to change global power relations. To do that, unions have to relate to society at several levels and in several ways. This requires alliances with other social actors; the international trade union movement needs the strength that comes from such alliances.
Let us not forget that we are witnessing today is not only an unprecedented concentration of political and economic power in the hands of transnational capital. We are also witnessing an unprecedented movement of popular resistance against the new world order of transnational capital. In February last year, over ten million people were demonstrating in the whole world against the war in Iraq.
This has never happened before in history. And it did not come out of nowhere. Unfortunately, it did not come out of the trade union movement. But it would be inconceivable without the worldwide demonstrations against the World Trade Organisation, which preceded it.
It would be inconceivable without the meetings of the World Social Forum of Porto Alegre and Bombay, now in its fourth year. This is the Global Justice and Solidarity Movement, growing out of many movements of resistance and revolt in all parts of the world with the battle cry: “another world is possible”.
That’s what we used to say, wasn’t it?. It was the labour movement which first proclaimed that “another world is possible”, if we can remember that far back. Now our organizations need to be part of this Global Justice and Solidarity Movement, as many of our members already are. For that, the trade union movement needs to clarify its political principles in terms of its original values and objectives. There is no time now to do more than to just signal the main issues. I will try to do this briefly as I conclude.
The first is the human rights issue. This looks simple on the surface: of course we are for human rights and of course we will oppose any dictatorship that oppresses its people. Really?
The biggest dictatorship in the world today, and the most dangerous to the labour movement, is China. It attracts a major part of world wide foreign direct investment, including many British companies. It is becoming the ultimate destination of the huge movement of relocation and outsourcing we looked at earlier. Why? Its “competitive advantage” is extraordinarily low labour costs. Chinese workers are among the most exploited in the world. How does this come about? Very simple: free trade unions are prohibited in China.
Chinese workers cannot organize to defend themselves. What are called “trade unions” in China are State-controlled organisations that are part of the system of repression that keeps the workers down, exactly as in the old Soviet bloc.
You might think that consequently an international labour strategy should be to help bring about free trade unions in China and that the labour movement, where it is free, should do everything to support those incredibly courageous Chinese workers who are trying to organize independent and free trade unions despite the repression: most of them are currently in jail or in labour camps. That is not what is happening.
On the contrary: many unions in democratic countries, in Europe, in North America, Australia, not to speak of Japan, have developed relations with the Chinese State labour organizations which they call “constructive engagement”, in some surprising instances with amazing servility, totally oblivious that they are talking to representatives of the State, not of the workers, that such representatives have no authority or legitimacy because they are under instructions from the State and not from their purported membership and that therefore nothing they can tell them will make any difference.
Somehow, in this instance and in some others, normally accepted trade union principles and values cease to apply. Whatever the reasons, be it unconscious racism, political romanticism, defending company interests or trade union tourism, they have nothing to do with a global union strategy that makes sense in terms of basic trade union objectives.
The trade union movement cannot have credibility on human rights issues as long as it maintains double standards and campaigns selectively on an opportunistic basis.
The second big issue is the women’s issue. The relationship between the historically male dominated trade union movement and women workers has always been problematic. It is improving slowly as more women join unions (in many industrialized countries most of new union members are women).
But there is another dimension to this issue that I would like to briefly signal: that is the growth of the informal economy, where employment is unregulated and unprotected, and workers are often self-employed. This is becoming a major issue in many European countries and especially in Third World countries where workers in the informal economy are a growing majority. With the informal economy representing a majority of the labour force in developing countries, and a significant and growing proportion in industrialized countries, it is impossible today to conceive of organizing a majority of workers on a global scale without serious organizing in the informal economy.
You will hear later in this seminar from Lameck Kashiwa about organising informal workers in Zambia, a remarkable success story I am happy to say. These are mostly men, in fact many of them former miners. But a great majority of workers in the informal economy are women and in this context unions need to form partnerships with women’s movements. Also, women in informal employment have formed their own unions: one of the best known is the Self Employed Women’s Association in India, which now has 700,000 members, but there is a growing number.
An international strategy of the labour movement must make organizing in the informal economy a priority and needs to create the alliances that are essential for that purpose.
A final word about politics. As we all know, in many countries the relationship between the trade union movement and its historical allies, the social-democratic and labour parties, has become difficult.
Yet, the trade union movement needs a political dimension. In the present situation, restoring the political dimension to the trade union movement cannot mean re-establishing allegiances and much less dependencies with respect to existing political parties, nor taking control of a political party.
For reasons which cannot be elaborated here, but which have to do with the declining autonomy of the nation-State with respect to transnational capital, the traditional labour parties are backing away from the trade union movement. The relationships of the past, be they transmission belts (both ways), electoral machine politics or corporatist agreements at the top become more difficult to maintain and produce diminishing returns everywhere.
This does not mean that the trade union movement does not need a political dimension: on the contrary, all trade union activity is political by nature and we have urgent political tasks: stopping privatisation and deregulation, repealing anti-union legislation imposed on us by disgraceful governments and maintained by other disgraceful governments. One such piece of legislation is the virtual outlawing of solidarity strikes, particularly international solidarity strikes, in most industrialised countries. In a globalised economy, that is precisely the right to strike we most need, and that we must take back.
What it does mean, is that the politics of the trade union movement have to be reinvented, taking as a point of departure the interests of its members at the point of production. One might say that democratic socialism has to be reinvented, from and by the trade union movement, as an alternative to the “new world order” of transnational capital rather than as an ambulance service to its victims.
This is not an enormously complicated undertaking. The starting point should be to define the legitimate purpose of any form of social organization, whether local or world wide, in other words, to affirm that enterprises, or an economic system, have legitimacy only to the extent that they serve human welfare in the widest sense of the term (the satisfaction of basic needs, and these do not only include food, shelter and clothing but they also include justice, equality, freedom, access to culture, the rule of law). These values and basic principles together constitute a program of radical democracy diametrically opposed to the currently hegemonic neo-liberalism, and this should become the basic program which the labour movement will defend at all levels with all appropriate means.
I thank you for your attention.
T&GWU Seminar: Globalisation, Development and International Trade Union Movement, Eastbourne, April 16-23, 2004