TPP in Focus: Securing the Rights of Workers

Mar 23, 2015

 

This is part a series of blog posts about the Trans-Pacific Partnership trade agreement.

TPP represents an opportunity to improve worker rights in countries like Vietnam, Mexico, Malaysia and Brunei but only if the Agreement includes the right obligations, ensures full implementation, and strong enforcement.

After more than a decade of effort, in May 2007, House Democrats succeeded in securing the incorporation of strong enforceable labor provisions in U.S. free trade agreements for the first time. 

What has become known as the “May 10th Agreement” provides that internationally recognized labor rights will be incorporated into U.S. trade agreements – and made enforceable through the same dispute settlement mechanism that applies to the other obligations in those agreements. The parties to these trade agreements commit, on a reciprocal basis, to adopt and maintain in their laws and practice, the five basic labor rights, as stated in the International Labor Organization’s (ILO) Declaration on Fundamental Principles and Rights at Work. Those principles are to provide for: 

  1. Freedom of association. Freedom of association means the right of workers and employers to freely form or join organizations that promote and defend their interests at work, without interference from one another or the government.
  1. Effective recognition of the right to collective bargaining. Collective bargaining is a voluntary process through which employers, or their organizations, and trade unions, or workers’ representatives, discuss and negotiate their relations and interaction at the workplace (e.g., pay and other terms and conditions of work).  The effective recognition of the right to collective bargaining means that governments must permit workers’ organizations to be independent – from the control of employers, employers’ organizations, and the government – and allow the process of collective bargaining to proceed without undue interference by the authorities. Both freedom of association and effective recognition of the right to collective bargaining are considered by the ILO to be fundamental rights of workers as well as important contributors to economic development and growth.
  1. Elimination of all forms of forced or compulsory labor. Forced or compulsory labor occurs when work or service is exacted from a person by individuals, private enterprises, or governments that have the will and the power to impose severe deprivations on that person, such as physical violence or sexual abuse, restricting the person’s movements or imprisonment, withholding wages or identity papers to force the person to stay on the job, or entangling the person in fraudulent debt from which the person cannot escape.
  1. Effective abolition of child labor and a prohibition on the worst forms of child labor. Child labor is work that exposes children to exploitation or harm (physical, mental, or moral) and impedes their opportunities for development and education. An important part of effectively abolishing child labor is to fix and enforce a minimum age or ages at which children can enter into different kinds of work. The worst forms of child labor refer to slavery, trafficking, debt bondage, and other forms of forced labor; forced recruitment for use in armed conflict; prostitution and pornography; and use of children in illicit activities, such as drug trafficking. 
  1. Elimination of discrimination in respect of employment and occupation. Discrimination in employment and occupation means treating people differently and less favorably because of characteristics that are not related to their merit or the requirements of the job. These characteristics can include race, color, sex, religion, political opinion, national or social origin, age, disability, and sexual orientation. 

The current TPP negotiation

There is reason to expect that the May 10th standard will be incorporated into the TPP agreement and that some additional obligations will be added, such as a requirement that each TPP country have a law establishing some minimum wage. 

The outstanding issue is how we ensure the effective implementation of these obligations when it comes to countries like Vietnam, Mexico, Malaysia and Brunei which have such a poor track record on worker rights. These countries must bring their laws into compliance under the obligation and the TPP must also have a specific plan in place for the challenges presented by each country to ensure compliance.

Consider the following challenges:

  1. Vietnam

One of the most significant features of Vietnam’s current system for labor relations is the primacy of the Vietnam General Confederation of Labor (VGCL) in that system.  The VGCL is controlled by the Communist Party. All worker organizations are required to affiliate with the VGCL, to register with the VGCL in order to be recognized, and to be managed by the VGCL. The VGCL is responsible for representing workers in collective bargaining and individual worker’s disputes; holding and leading legal strikes; and working with government agencies on labor relations, occupational health and safety, and other matters. As a result, unions are not independent in Vietnam and workers in Vietnam are not afforded the freedom to organize and join unions of their choice.

Beyond this foundational dissonance between the reality in Vietnam and the internationally-recognized labor principles of freedom of association and the effective recognition of the right to collective bargaining, there are also reliable reports of the pervasive use of forced labor and child labor (as well as other abuses), especially in the brick and garment industries, despite the existence of laws prohibiting it. 

  1. Mexico

Mexico has been a party to the North American Free Trade Agreement (NAFTA) since 1993 which did not contain strong and enforceable labor standards. TPP provides an important opportunity to, in essence, renegotiate NAFTA. For that opportunity to be realized, TPP must ensure that Mexico fully implements its TPP labor commitments by making the necessary changes to its law and practices.

Mexico undertook a national labor reform effort that took effect in December 2012. Nevertheless, labor conditions in Mexico still present serious concerns in light of the core, internationally-recognized labor rights.

Among the most serious problems for labor conditions in Mexico is the prevalence of “protection unions” and “protection contracts.” A protection union is an employer-controlled union. Protection unions enter into collective bargaining with employers and conclude contracts – known as protection contracts – that set out terms and conditions for work that workers are usually unaware of, did not have input in, and often do not provide benefits beyond the legal minimum. In addition, Mexico’s system of labor boards, which are responsible for registering unions, approving strikes, and resolving labor disputes, is notoriously inefficient, politicized, and corrupt. This means that freedom of association and the right to collective bargaining are severely compromised in Mexico. Recent reports have also documented the persistence of forced and child labor in Mexico, especially in the agricultural, industrial, and informal sectors.

  1. Malaysia

A variety of sources report that, despite laws that formally prohibit it, forced labor and conditions indicative of forced labor are endemic in various sectors in Malaysia. Those sectors include: plantation agriculture; fishing; construction; garments; and electronics – an industry employing over a quarter of Malaysia’s workers and representing nearly a third of Malaysia’s exports. Malaysia has a substantial population of foreign workers that come primarily from countries in south and southeast Asia. Foreign workers in Malaysia are particularly susceptible to debt bondage, with extremely high recruitment fees and passport confiscation by employers contributing to the problem. Malaysia’s laws also provide for a considerable amount of governmental discretion in canceling unions and in placing restrictions on strikes, which means that freedom of association and the right to collective bargaining have yet to be fully established in Malaysia.

  1. Brunei

Brunei is a small country with a population of approximately 400,000 and an economy based primarily on oil and gas production. Brunei’s laws and practices relating to the core international labor standards and the state of Brunei’s labor conditions are un-developed and uneven. Other than one union composed of petroleum workers, Brunei does not have any other active unions or worker organizations. On their face, Brunei’s security laws provide the government with enormous latitude to impinge on the freedom of association and right to collective bargaining of workers. Brunei also has a relatively large number of foreign workers who are vulnerable to abuses and exploitation. Although Brunei’s laws prohibit forced labor, foreign workers are often excluded from the few protections that are provided by the law.

A Path Forward for Ensuring the Protection of Worker Rights in the TPP

The labor provisions setting standards on worker rights are among the several important issues currently outstanding in the TPP negotiations.

Recent experiences in Guatemala, Honduras, Colombia and Bangladesh illustrate the importance of both strong obligations and a vigorous plan for implementation and oversight. For instance, shortly after a Bangladeshi clothing factory collapsed, killing more than 1,000 people in April 2013, the United States removed preferential tariff treatment for certain Bangladeshi products. Nearly two years later, however, the Government of Bangladesh has still not passed labor laws to bring the country into compliance with basic ILO standards and has yet to even implement regulations for previously passed labor laws. The Guatemala and Honduras agreements contain the weak pre-2007 standard of “enforce your own law” but cases have still lingered for years and not been brought to completion. And in Colombia where a Labor Action Plan was agreed to but not incorporated in the actual trade agreement progress continues to be slow. Enforcement in particular remains a major concern, as companies use a variety of means to avoid directly hiring workers. Moreover, workers who press for their rights continue to be exposed to violence, including murder, and the government has made little progress in address impunity.

These experiences illustrate how important it is that we get the labor provisions in TPP right. Once the U.S. gives up its leverage through the comprehensive tariff reductions envisioned in TPP we will no longer have the leverage to bring about meaningful and long-lasting changes in these countries. Worker rights is important for the workers in these countries, and to the development of middle class economies where we can sell U.S. goods and services, and it is also important to U.S. workers and businesses who should not compete with others on the basis of suppression of workers.

It is vital that the labor chapter is negotiated effectively. Not only because of the challenging dynamic of including a command economy like Vietnam, but because of the major integration which exists between the U.S. and Mexico and which very much impacts the U.S. industrial base.

This means, among other things, the TPP must do the following:

  • TPP should include obligations to: (1) adopt and maintain measures to implement internationally recognized labor rights; and (2) enforce its labor laws. Those obligations should be subject to the same dispute settlement mechanism that applies to the other obligation in the TPP Agreement. The TPP Parties should agree to implement the obligations and to ensure the meaningful enforcement of those obligations, including by:
    • providing that workers shall have the right to freely form and join an autonomous and independent union of their choosing and that a union shall not be required to affiliate with any particular confederation and shall be free to form and affiliate with any confederation of its own choosing.
    • requiring each TPP Party to adopt all measures necessary to bring its laws and regulations into compliance with the TPP Agreement, and to have adopted any new procedures and institutional changes needed to implement such legal reforms, before the implementing bill is submitted to Congress; and
    • with respect to any TPP Party that must substantially transform its labor regime to comply with the labor obligations in the TPP Agreement, establishing from the date of entry into force of the TPP Agreement an independent panel of experts to regularly examine and publicly report on the Party’s compliance with its labor obligations in the TPP Agreement, with a focus on the transformational reforms, based on input from the Parties and interested stakeholders and on any other relevant information and reporting.  If the panel determines that the Party is not in compliance with its obligations, that determination shall be treated as a final report of an arbitral panel under the dispute settlement chapter, and the matter shall be addressed in accordance with the subsequent procedures laid out in the Agreement, such as through an agreement to eliminate the non-conformity in the first instance or, as a last resort, to suspend benefits under the Agreement.

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114th Congress