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OUTCOME OF THE MEETING

1. The OECD Ministerial Council meeting took place against the background of strong differences between the United States and other OECD countries on recent trade measures. Behind the façade of the positive communiqué language on meeting the Doha deadline of 2005 for the completion of negotiations, Trade Ministers themselves seem less confident, especially over any failure to make progress ahead of the 10-14 September 2003 Fifth WTO Ministerial Meeting in Mexico. The US Administration was the target of criticism from the Ministerial Chair and European governments due to recent moves on steel and agriculture. The chief US trade negotiator, Robert Zoellick, was not present at the meeting.

2. Ministers were generally upbeat about the state of the global economy, though the communiqué is less sanguine and importantly states that monetary policy should continue to support growth. This stands in contrast to recent comments of the European Central Bank that the role of monetary policy should be restricted to maintaining price stability not supporting growth and employment. Meanwhile, differences are emerging between key European states notably on fiscal policy and the Stability and Growth Pact (SGP), differences which appeared to be amplified by the recent electoral gains of the far-right, and its uncertain impact on the future direction of policy.

3. Nevertheless, the communiqué contains important policy messages in a number of areas for TUAC affiliates (economic and social policy; and elements of global governance), and trade unions in developing countries. Much of the communiqué is devoted to development and separate statements were issued on the OECD role in development and NEPAD. Again these appear to be excessively complacent with the assumption that the Monterrey Conclusions have led to increased resources for development assistance and the ball is now in the developing countries camp to improve governance.

4. Though faced this year with a more limited TUAC and BIAC input into the Ministerial meeting, the consultations themselves were marked by an unusual degree of convergence between the labour and business speakers in a number of areas. Chief among these was the unanimity that the global economy faces serious downside risks, and that stimulatory measures were still needed in key regions. Both sides urged in reconsidering the SGP a short-term expansionary monetary and fiscal stimulus for Europe. There was also agreement that more work is needed to promote the OECD Guidelines for Multinational Enterprises - an opportunity missed by the Ministers.

5. The Ministerial overlapped with the OECD Forum 2002. There was an increased number of trade union speakers at key Forum events, with a number of other participants intervening from the floor. The TUAC secretariat will shortly survey the views of trade union participants and affiliates on the Forum that will feed into the OECD discussions around the future shape and direction of the Forum itself. This self-assessment will also allow more effective trade union input in the 2003 Forum.

6. The introductory language of the communiqué economic section (paragraph 3) speaks of an OECD-wide economic recovery this year (including Japan), led by the US. Beyond that optimism, however, importantly emphasis is given on the need for "monetary policies to remain supportive of non-inflationary growth" (paragraph 4). This is an important recognition of the role that monetary policies need to play to support growth and not simply control inflation. This is an improvement on recent statements by the European Central Bank. Without mentioning Japan by name, it states "where price deflation persists monetary policy needs to provide ample liquidity". Fiscal policy is mentioned in passing, but consolidation should be dependent upon economic recovery.

7. Structural reform is highlighted within the communiqué, yet it does not emphasise the past de-regulatory agenda. On this theme, no reference is made to labour market flexibility which has become the code word for "negative" de-regulation, while education and training are highlighted as important for job creation and equal opportunities. Pension reforms are placed within the context of the fiscal challenge of ageing societies, and the text on encouraging the employment of older workers, states that "life-long learning is vital in this regard" (paragraph 4).

8. A shift appears to have taken place on the role of the OECD monitoring process as regards economic performance. The Organisation has been asked to increase its monitoring of this, within the framework of the Growth Study, which was seen by TUAC as more balanced in its treatment of labour markets compared to the follow-up of the earlier Jobs Strategy, which the OECD is requested to "assess". Some of the findings of the Growth Study challenged the deregulation recommendations of the Jobs Strategy. The economic and social aspects of migration have been singled out for further study by the Organisation, both in terms of their impact on home and host countries.

9. A mixed message emerges on OECD work to enhance the integrity of corporations, financial institutions and markets (paragraphs 9-12). On the one hand, the Secretary-General’s background note to Ministers, and the descriptive language to this section, highlights the fragility and legacy of past deregulation (scope for financial crime, money laundering, bribery, illicit tax practices, corporate misuse, financing terrorism, etc.). Yet, the future direction of OECD work to address these problems is patchy. On the positive side, the OECD will seek to improve transparency and accountability on corporate and financial governance, including through regulation. However, specific action is limited. As regards the OECD Principles of Corporate Governance, the focus has changed from their being reviewed to their being assessed, though this will be brought forward from 2005 to 2004. As part of this, the Organisation will survey developments in corporate and financial sector governance to identify lessons, and implications for the assessment. The TUAC Secretariat will seek to clarify the implications of this. The OECD and the Financial Action Task Force (FATF) are merely encouraged to strengthen co-operative work, including on combating tax crime, while the FATF’s work to combat money laundering and terrorist financing is commended.

10. There is a welcome sense of greater urgency on needed measures by governments to implement and enforce the OECD Anti-bribery Convention, that also reflects the trade union frustration with slow progress. Weaknesses are flagged up on its enforcement, gaps in implementation legislation in some countries, or deficiencies in implementation legislation elsewhere. Frustrations are expressed also on aspects of the follow-up work, including around the monitoring, and implementation monitoring process. Reflecting this, Ministers have called for a report in 2003 that assesses and sets out solutions to fill any gaps in the Convention and associated OECD instruments. TUAC welcomes this, and will press for the incorporation of whistleblower protection in any revised Convention. We have also urged the OECD to implement the proposal by the International Chamber of Commerce for a stakeholder work programme (including TUAC) on private to private bribery, including through subsidiaries, the supply chain and facilitating payments. Similarly, we support action on the bribery of foreign political parties and officials, and candidates to political office, to stamp out bribery through tax havens, and money laundering.

11. The OECD Guidelines for Multinational Enterprises are mentioned in passing. Ministers agreed only to "continue to promote (their) implementation", and "in areas such as transparency and anti-corruption". Insufficient resources and effort are currently being devoted by the OECD to follow-up work on the Guidelines. The profile of the OECD was further weakened by this lost opportunity to strengthen their enforcement and to extend their applicability and coverage to such areas as export credits. TUAC will be present in a range of meetings on the Guidelines in June this year, and will press governments’ for action on these issues.

12. Overall, while the momentum has been maintained on OECD work to strengthen aspects of the global governance system, governments are clearly now at a crossroads requiring choices on where to go next. There is a greater sense among governments of the full costs of corporate and financial sector liberalisation and de-regulation, and that self-regulation is no panacea. However, they are unsure as to how and where to extend the much needed and effective soft and hard law regimes to inject some real bite into the global corporate governance regime.

13. As noted, the atmosphere of the Ministerial was influenced by the trans-Atlantic row over steel and agriculture which was the main focus of press coverage. Language was inserted into the communiqué stating "All OECD members have the responsibility to ensure that the multilateral trading systems functions effectively" (paragraph 13), a cryptic reference to recent trade measures by the US Administration.

14. The communiqué alludes to the tight post-Doha timetable for negotiations and states "we intend to conduct negotiations according to the agreed schedules, and conclude them by 1 January 2005" (paragraph 13). The treatment of the social dimension of trade is weak, it is asserted that "liberalisation can be conducted so as to minimise the social costs for adjustment, support environmental protection and preserve the right of governments to regulate in the public interest" (paragraph 14). The communiqué does "welcome the creation of the ILO World Commission on the Social Dimension of Globalisation and will seek to contribute constructively to its activities" (paragraph 14). TUAC will be arguing for an effective input from a range of OECD Committees and Departments, including the Trade Committee.

15. Otherwise the OECD reached an agreement with the WTO to build up a database on WTO-related technical assistance and capacity building. It is recognised that this could be most beneficial "if combined with sound policies and good governance" (paragraph 15). The OECD essentially views its role as analysis sharing or as a WTO analytical basis: "By sharing its work with civil society and non-member economies, the OECD can help broaden the constituency for trade liberalisation and strengthened WTO rules, build bridges and facilitate multilateral trade negotiations". However, given the limited social elements in the OECD’s trade work this process looks like a one-way street. Of particular importance could be for the OECD to offer a wider choice of development policy options, rather than a one-size-fits-all policy.

16. The communiqué appears self-congratulatory on its "forward-looking agenda on trade and development" (paragraph 2). Its "forward-looking agenda" emphasises structural reform and is missing one essential ingredient: the social pillar. The downside of the impact of structural reform is not addressed, when even the IFI’s have recognised the negative outcomes of certain structural reforms, and nowhere is there a call for an assessment of the social impact of structural reform on the poor. The central theme of this OECD Ministerial was partnership, growth and development but the role that civil society and workers organisations play as strong social partners in development was missing.

17. The lack of a satisfactory social dimension in the development section of the communiqué shows how much work there is still to do in order to raise the level of awareness across OECD governments Directorates and Committees, including the DAC on the need for policy recommendations that weigh the impact on the people who bear the burden when economic policies fail. This is further reflected in the lack of reference to the upcoming World Summit on Sustainable Development in South Africa, despite a major focus on it by the OECD Environment Directorate. Further, the OECD cannot talk about human rights in one part of its work and ignore them in the others, especially in the ministerial where policy coherence is so crucial. For example, in paragraph 6, referring to "our fight against terrorism" it stresses policies that safeguard human rights and democratic values. But those same rights and values appear absent from the policy recommendations carried in the press statement from the DAC High Level Meeting and the OECD communiqué itself. The favourable language on human rights and a rights-based approach to development contained in the DAC Poverty Reduction Guidelines should have been a basis for a more positive approach in the communiqué. Democracy and good governance, so essential to poverty reduction and sustainable development, cannot take place without strong social partners and basic freedoms.

18. In a separate statement the OECD Ministers welcomed the New Partnership for Africa’s Development (NEPAD). The Ministers agreed to increase African participation in OECD work, exchange views on peer review mechanisms and assess best practice approaches to sustainable development. It is essential that the "governance" element of NEPAD’s work is firmly built on the respect of human rights and core labour rights. The NEPAD must become a real partnership between African governments and their people in which there is shared ownership. The OECD should conduct an early forum meeting to include African trade unionists in this process. The TUAC will work with its Global Union partners to achieve this.