The Role of TUAC in the OECD

The OECD (Organisation for Economic Co-operation and Development) is an inter-governmental organisation made up of primarily industrialised market economy countries. It was established in 1962 as a successor to the institutions involved in the Marshall Plan notably the OEEC. Some 200 Committees and working groups backed up by a secretariat based in Paris do the main work of the OECD. They bring together government officials and occasionally Ministers from the member countries. In addition to being a research and statistics body for its members, its main function is to act as co-ordinating body for policy formulation between its members. Although focused on economic issues, the OECD covers most areas of government policy with the exception of defence. The OECD Committees therefore span most government ministries. Informally, it helps to create and define an “ideological” centre of gravity for economic and social policy for the industrialised world.

There are relatively few formal powers of the OECD but the process of peer group pressure on members gives a fair amount of leverage. In a few areas the OECD does go beyond the indirect role of policy co-ordination and has negotiated formal legally – binding agreements – the majority of these are in the area of financial markets, capital flows and in the area of the environment. The OECD recently concluded a legally binding treaty on outlawing the bribery of foreign officials in business transactions. The most spectacular area of the failure of negotiations was the inability of OECD governments to conclude Multilateral Agreement on Investment in 1998. 

The membership of the OECD was traditionally made up of countries of broadly similar economic and social systems - “industrialised market economies” and until 1989 was a form of economic NATO. However, since the early 1990s the membership has expanded to thirty – taking in Mexico and Korea and also the four “Visograd” countries in Central and Eastern Europe (Czech Republic, Hungary, Poland and now most recently Slovakia). An outreach programme has also established a range of meetings with non-members and a number are signatories of different OECD agreements or are observers on OECD Committees. The OECD also acts as a co-ordinator of ODA development assistance programmes from the side of the donor countries through the Development Assistance Committee (DAC).

The trade union advisory committee (TUAC) was established in 1948 as an advisory body to the Marshall Plan and subsequently continued in a similar role to the OECD after 1962. With the exception of the tripartite structure of the ILO and the formal consultative mechanisms within the European institutions the TUAC–OECD structure is the most formalised and systematic trade union interface with any of the global economy institutions. It has therefore often been used as an example or precedent when the international trade union movement has been seeking greater access to other institutions such as the Bretton Woods Institutions and the WTO.

The TUAC is financed almost entirely by membership affiliation fees, although receives some administrative support from the OECD e.g.– meeting rooms, some limited interpretation and publications. It is itself made up of trade union confederations from the OECD member countries coming from both the ICFTU and WCL families, and currently some 95% of membership are from ICFTU affiliates. We are delighted that our most recent affiliate is KOZ-SR. It has three and a half policy staff and three administrative staff approximately 400 trade union representatives take part in OECD on TUAC meetings in an average year. The TUAC has not played the role of an international trade union confederation in the sense of the ICFTU, WCL or ETUC. Its objective has not been to become an exclusive body of trade unions in the industrialised countries, but rather to help co-ordinate trade union policies vis-a-vis the global economic institutions and also serve as a tool for influencing governments at the international level. In the development of responses to globalisation therefore it has also provided a point of access to governments for trade unions from non-member countries. This covered issues as central as trade union rights for example when Korea joined the OECD.

The prime goal of the TUAC is to increase trade union influence and ensure that their views are taken account of at the OECD and in the discussions at the OECD. At the same time TUAC has the opportunity to be part of intergovernmental discussions and can thus also act as a source of information to unions on how government policy making may be likely to affect them – in both a positive and a negative sense. The more intensive access to government officials also involved in other international institutions has also allowed this intelligence to be used in other institutions and dialogues. TUAC has played an active role in the efforts to influence the Bretton Woods institutions and WTO described above. The TUAC also provides a point of internal discussion between the three main blocs of industrial country unions – North America/ Europe/Japan on economic and social policy questions, although bilateral dialogues have also now been developed through the North Atlantic dialogues and the ASEM process. 

The role and functioning of TUAC has varied as the role of the OEEC/OECD has changed over the last 50 years. In the 1950s, the TUAC was heavily involved in the tripartite structures of the OEEC such as the European Productivity Agency, engaged in the process of European post-war reconstruction. In the 1960s the OECD was focussed on macro-economic policy co-ordination and Keynesian in its orientation. At this time the TUAC discussions often covered issues such as responses to Prices and Incomes Policies. As noted above at that time the TUAC comprised the European Regional organisation of the ICFTU and the forerunner of the WCL. In the 1970s the OECD was involved in the response to the first oil price shock and the International Energy Agency was created as oil-importing countries’ response to the OPEC cartel. It was also at this time that the OECD Guidelines on Multinational Enterprises were first developed. During the 1980s the OECD shifted again to be monetarist and supply side in its outlook with the impact of the Reagan and Thatcher Governments. It was the leading exponent of labour market flexibility and fiscal and monetary conservatism. TUAC’s role therefore shifted to be on the defensive, using some of the heterogeneity of the OECD’s departmental and Committee structure to counteract the supply-side orthodoxy, in a way that was easier than in the institutions dominated by Finance Ministries. In the late 1990s the OECD was in a process of change again with a shift now away from deregulation to one of “shaping” globalisation and international economic governance. This is again affecting TUAC’s role.

TUAC meets in a Plenary Session, twice a year consisting of all affiliates, and five working groups back up this work. TUAC’s current priorities - adopted by the Plenary in successive work programmes are:

- Employment and economic issues and in particular work on the OECD growth project and public sector questions;

- Globalisation and labour standards including following up the OECD report on Trade and Core Labour Standards and integrating labour issues into the Development Assistance Committee’s work on Poverty Reduction;

- Corporate regulation and multinationals and in particular the follow-up and implementation of the Revised OECD Guidelines for Multinational Enterprises, corporate governance and anti-corruption work;

- OECD relations with non-member countries and recent members, notably the maintenance of the OECD monitoring process of labour rights in new members such as Korea.

- Sustainable development including climate change and general preparations by OECD for the RIO+10 sustainable development review, as well as work with the UN and responsible health, safety and environmental bodies (this work is co-financed and carried out jointly with the ICFTU).

The openness of the OECD to trade union views varies between Committees and Departments and also over time. As with the Bretton Woods institutions, since the 1980s it has been extremely difficult to make an impact on the thinking of the Economics Department, which remains focussed on deregulation and supply side orthodoxy. In 1998 the then President of the TUAC Bob White summed this up at the 50th Anniversary Seminar of TUAC: “The OECD has always played an important role in setting the economic policy agenda of member governments, through research and through discussions which lead to the development of a consensus. Unfortunately, OECD work in the 1980s and 1990s has been dominated by neo-classical “free market” philosophy and the organisation has seen growing unemployment largely as a function of labour market “rigidities”, rather than as the result of the restrictive macro-economic policies it has prescribed. The OECD has also tended to uncritically embrace market liberalisation, as in free trade, deregulation and privatisation, minimising the need for governments to put a social context around markets if they are to result in shared progress. TUAC has had some influence on the internal debate within the OECD, and those who follow the work of the organisation closely will know that it is far from monolithic. The TUAC role will, hopefully, become more central now that it has become clear that the radical liberalisation agenda has failed to build a stable and growing international economy, and has fuelled growing inequality and exclusion. The OECD could and should be at the cutting-edge of developing a new, more balanced consensus over the necessary role of both markets and regulation in a democratic society, and TUAC will continue to push the organisation in that direction”.

Paradoxically, however, parallel to the continuing difficulty to influence Economic and Finance Ministries, there is a growing openness from other parties in the OECD to have a dialogue with trade unions and also to take account of our views. This has been seen particularly in those departments - such the Financial Affairs who were affected by the outcome of the MAI and already stated there has been some success in shifting the direction of overall policy to the “re-regulation of globalisation”.

In assessing “what works” in getting trade union views across a number of factors are important:

- The origin of the OECD TUAC relation were in the immediate post-war reconstruction period of the Marshall Plan when governments needed the support of unions to get the plan implemented. Despite the political changes, the OECD currently still has an initial philosophy of dialogue with both sides of industry and consultation. Although this is less intense than in the European Institutions. TUAC does have a consultative status with the OECD, which means that activities are part of a continuing process and not one off events. Indeed in the last five years there has been an intensification of TUAC’s input with more in-depth engagement in the OECD with a number of Committees.

- To be effective, work requires the co-ordination of action at the OECD level by TUAC with activity at the national level by affiliates and in particular when it is necessary to develop pressure by unions on their governments to adopt stances at the OECD which can be mutually reinforcing of the union position.

- On key issues there is also a need to link campaigns at the OECD to wider campaigns of the trade union movement (such as debt relief and core labour rights) and close partnership exists in particular with the ICFTU.

- It has proved useful to form alliances with other groups - on occasion with NGOs and environmental groups and on occasion with the BIAC and individual employers.

- Physical proximity to the OECD is important with sufficient staff to be interacting effectively (TUAC has three full time policy staff and one position shared with the ICFTU which has proved to be a minimum to function).

We are looking forward very much to developing a strong and close relationship with our new affiliate KOZ-SR.