World Bank President Paul
Wolfowitz announced yesterday that the Bank has now taken a decision
that all infrastructure projects funded by it in future would have fully
to respect the core labour standards of the International Labour
Organisation (ILO). Wolfowitz conveyed the decision at a meeting with
international trade union officials in Washington DC. Some US$8 billion
worth of projects funded each year will come under the new requirements,
which are aimed at ensuring workers' rights to trade union organisation
and collective bargaining, freedom from discrimination in the workplace
and the elimination of child labour and forced labour.
"This is an important step in the right direction, and we are pleased
that the World Bank has now accepted our proposal. It reinforces the
importance of fundamental workers' rights in the global economy, and
shows that the other economic and finance institutions must also meet
these standards in full", said ITUC General Secretary Guy Ryder.
The same standard has been applied by the World Bank's private-sector
lending arm, the International Finance Corporation (IFC), since May
2006. The union delegation also met with the Executive Vice-President
of the IFC, Lars Thunell, to discuss implementation of the labour
standards.
During their meeting with International Monetary Fund (IMF) Managing
Director Rodrigo de Rato, the union leaders raised serious concerns
about the growing global influence of hedge funds and speculative
private investment. De Rato responded by setting out the IMF's
intention to increase research and expertise concerning the impact of
hedge funds and financial speculation on real economic decision-makers,
and emphasised the crucial importance of macroeconomic stability in
establishing the basis for long-term, low-inflation economic growth.
The union delegation included representatives from 35 countries from all
regions of the world, including ITUC affiliates, Global Union
Federations and the Trade Union Advisory Committee to the OECD. They
took part in three days of meetings with de Rato, Wolfowitz, IMF/World
Bank Executive Directors and various other officials, to discuss the
impact of the institutions' programmes on decent work and on labour
conditions.
The trade union delegation pointed out serious inconsistencies at the
World Bank concerning its treatment of Core Labour Standards and other
labour issues. These included a World Bank report submitted last month
to the government of China in which the Bank advised the government that
it should not take seriously the question of "so-called "labour
standards"". The union delegation reminded the Bank that wide-scale
violation of the right to organize was taking place in China and was one
of the root causes of the burgeoning inequality in that country. By
advising China, an important Bank client, that it should avoid paying
attention to the Core Labour Standards, the Bank was contributing to
continued violation of the standards. The delegation also pointed to
the negative impacts of Chinese lending overseas, since it is done in
the absence of social and environmental standards, and in certain cases
even involves forms of indentured labour.
ITUC General Secretary Guy Ryder criticized the World Bank and IMF for
their continued use of the Bank's Doing Business publication as the
template for its country-level policy advice and conditionality on
labour market reform. "Doing Business defines almost all labour
regulations - such as hours of work, minimum wages, advance notice of
mass dismissals and protection against discriminatory practices - as
undue impediments to "doing business"", he emphasised. "We call on the
Bank to remove labour regulation from the mandate of the Private-Sector
Development department responsible for the publication."
In response, World Bank Wolfowitz agreed that the methodology of the
Doing Business publication would be reviewed, particularly with regard
to the debatable proposition that firing workers easily was a positive
element of business regulation. He undertook to look into the China
report, and agreed that any suggestion that China need not respect
workers' basic human rights was unacceptable.
Further discussions with the IMF and World Bank concerned the
recently-expanded debt cancellation initiative for low-income countries,
Bank support for workplace HIV/AIDS programmes and the steps both
institutions claim to have taken to reduce economic policy conditions
attached to loans and debt relief on questions such as privatization,
trade liberalization and public expenditure limits. The union
representatives welcomed progress in these areas and called on the
institutions to accelerate the reduction of conditionality that, in some
cases, had led to the Bank and Fund working at cross-purposes with the
UN system and impeding attainment of the Millennium Development Goals,
for example when governments are obliged to constrain social
expenditures so as to respect IMF-imposed public-spending caps.
This showed the need for the IMF and World Bank to work with the ILO and
other UN agencies in policy coherence initiatives, as proposed by the
World Commission on the Social Dimension of Globalization, which both
institutions have welcomed as have the ILO and other UN agencies.
Additionally, the ITUC presented the IMF a paper showing how
inappropriate policy prescriptions had driven several developing-country
governments, with the support of trade unions in these countries, to
avoid further borrowing from the Fund.
Both Wolfowitz and de Rato concurred with trade union condemnation of
corruption as an impediment to development, and spoke of the role that
trade unions can play in exposing and fighting such corruption.
