Results of TUAC Survey of Affiliates and Others
on the Effectiveness of the National Contact Points
Introduction
"Member Governments shall set up National Contact Points
for undertaking promotional activities, handling inquiries and for discussions
with the parties concerned on all matters related to the Guidelines so
that they can contribute to the solution of problems which may arise in
this connection. The business community, employee organisations and other
interested parties shall be informed of the availability of such facilities."
(1991 Second Revised Decision of the Council on the Guidelines for
Multinational Enterprises).
"When Guidelines issues arise, the onus on attempting a settlement
is particularly on the National Contact Point; hence, the effectiveness
of the Guidelines depends to a large degree on that of the Contact Points.
This effectiveness differs from country to country." (OECD Report
on Trade, Employment and Labour Standards, Paris 1996).
In February of this year TUAC surveyed (see Annex 1 for questionnaire)
its affiliates and other interested trade union bodies on matters relating
to their experience with the National Contact Points (NCPs). As a forerunner
to the 1997 OECD review of the Council Decision on the Guidelines, the
questionnaire was broadened to include questions on the Chapters of the
Guidelines dealing with Employment and Industrial Relations and Environmental
Protection.
This survey should not be viewed as an exhaustive study of the NCPs (some NCPs are in place that do fulfil their remit, on which the relevant
TUAC affiliate has not responded to the survey). Neither should it be viewed
as an authoritive statement on the way in which governments implement,
and multinational enterprises (MNEs) adhere to the Guidelines. Nevertheless,
the responses to the survey should cause concern among governments over
the way in which some NCPs operate, and the way in which the Guidelines
are implemented across the OECD. Part I of this paper notes the various
trade union organisations that responded to the survey, and reviews the
replies to the questions on the NCPs. Part II reviews the survey responses
on matters relating to the Guidelines' chapters on Employment and Industrial
Relations, and Environmental Protection. Part III summarises the main findings
of the paper and sets out the next steps for the OECD with the NCPs and
the wider issue of the Guidelines.
Response to the Survey
In total TUAC received 15 replies to the survey from the following organisations.
National Affiliates - 11 from 8 countries: Belgium (CGSLB, CSC), Czech
Republic (CMKOS), Denmark (AC Denmark, LO Denmark), Italy (CGIL), Mexico
(FESEBS), Sweden (LO Sweden, TCO Sweden), United Kingdom (TUC), United
States (AFL-CIO).
Partner Organisations - 1 - Hungary (MSZOSZ).
International Trade Secretariats - 3 - International federation of Chemical,
Energy, Mine and General Workers' Unions (ICEM), Public Services International
(PSI), Postal, Telegraph and Telephone International (PTTI).
National Contact Points: Breakdown of Responses
The following responses were received from TUAC affiliates, its partner
organisation and ITSs concerning 6 questions related to the NCPs.
Question 1. Has the NCP in your country consulted the trade unions
on its terms of référence ?
The Swedish NCP is reported to be the only one to consult trade unions
proactively on its terms of reference. The Belgian NCP does so reactively.
All other affiliates replied negatively.Trade unions in the Czech Republic,
Hungary and Mexico are unaware of any NCP.
In sum 2 respondents replied positively and 10 negatively.
Question 2. Has the NCP involved trade unions in its work? if yes,
has this been on a permanent basis or only ad-hoc ?
The Swedish NCP systematically involves the trade unions in its work.
The Belgian NCP involves the unions on a ad-hoc basis. All other affiliates
replied negatively.
In sum 2 respondents replied positively, and 10 negatively.
Question 3. Has the NCP actively assisted in solving specific cases
brought to its attention ?
NCPs are reported to have been actively involved in solving cases in
Belgium, Sweden, and the UK. However, in these cases this followed trade
union pressure, and the outcome has not always been positive. Positive
outcomes include Sweden and the UK. Belgian unions have raised concerns
about the process and outcome of certain cases. These concerns can be traced
to the conduct of the business representatives, and also that of the NCP.
In the US, concerns have been raised over the failure of the NCP to assist
actively in solving certain cases brought to its attention; in one instance
this followed a positive outcome in the CIME. Moreover, there appears to
be a generalised lack of follow-up and unwillingness to contact relevant
unions once a case has been filed with the NCP. In Mexico the lack of a
NCP has militated against a case being raised where a MNE has clearly breached
the provisions of the Guidelines. All other respondents suggest that the
NCP has fallen into abeyance.
In sum 5 respondents replied relatively positively, and 7 negatively.
Question 4. Has the NCP taken up any cases on its own initiative
?
All respondents stated that to the best of their knowledge no NCP had
taken up a case on its own initiative.
In sum no respondents replied positively.
Question 5. In which way has the NCP assisted the trade unions in
promoting knowledge of the Guidelines ?
Promotional activities with trade unions are rare. A hand book was produced
in Swedish in 1988, but the 1994 OECD 'green book' was not: other activities
are scarce. Information and the 1994 'green book' is supplied upon request
by the Belgian NCP, but few other activities are undertaken. A request
by the Danish unions that the 'green book' be translated into their native
language was refused on the grounds of costs. All other respondents replied
negatively.
In sum 4 respondents stated that limited promotional activity had occurred,
and 8 replied that no promotional activities had occurred.
Question 6. On the basis of trade union experience with the NCP,
in what way could their performance be improved ?
The responses to the survey suggest that the following inter-linked
measures be enacted at the national level to ensure that the NCPs better
fulfil their remit. Where no NCP exists, immediate steps should be taken
to overcome this anomaly. Governments where necessary should invest the
political will and resources to raise the profile and visibility of the
NCPs with trade unions, and to ensure that this work be conducted in a
proactive way. As part of this process TUAC will stress to its affiliates
the importance of active participation in the work of the NCP.
Employment, Industrial Relations, and Environmental
Protection
A range of questions relating to the operation of the Guidelines' Chapters
on Employment and Industrial Relations plus Environmental Protection (see
Annex 1 for questions) were included in the survey. The responses will
give the CIME a 'snap shot' view of the perceptions that trade unions have
on way in which MNEs are operating within the OECD area, ahead of the 1997
review of the Council Decision on the Guidelines.
Outside of the US, most MNEs operating in the countries where TUAC affiliates
and others responded to the survey appear to be adhering to most of the
provisions of the Chapter on Employment and Industrial Relations. Problems
seem to relate to paragraphs 3, 6 and 8, and increasingly paragraphs 1
and 2 (basic trade union rights). This shows that the same issues raised
by TUAC in cases and consultations since 1979 continue to be relevant.
The following is a summary of the comments received.
Belgium : in general the conduct of most MNEs is in line with
the provisions of the Guidelines. Specific problems relate to information
disclosure (§ 3); the provision of reasonable notice of changes in
operations (§ 6); and unfair influence (§ 8). Taking the first
two points together, MNEs rarely voluntarily provide information, and notice
of changes in plant operations in line with the provisions of the Guidelines.
The use by management of threats to re-locate operations are increasingly
used to influence the outcome of negotiations.
Czech Republic : in general the conduct of most MNEs is in line
with the provisions of the Guidelines. There are, however, increasingly
noticeable differences between those MNEs with a European home base and
others, with the latter becoming problematic in many areas. In general
MNEs investing in "green field" sites, irrespective of their
country of origin are also becoming a problem. The same problems as noted
above (Belgium, §§ 3 and 6) are widespread and increasing, as
are problems relating to unfair influence (§ 8).
Denmark : in general the conduct of most MNEs is in line with
the provisions of the Guidelines. Of late, problems have been encountered
by Danish trade unions in securing trade union rights in line with the
Guidelines with certain inward investors from the US.
Hungary : in general the conduct of most MNEs is in line with
the provisions of the Guidelines. Non-European MNEs are increasingly seen
as a problem by the unions in many areas relating to the Guidelines, notably
those from Japan and the US. The same problems apply in relation to "green
field" sites as noted above in the Czech Republic. Similarly, the
same problems as noted above (Belgium, §§ 3 and 6) are widespread
and increasing, as are problems relating to unfair influence (§ 8).
Italy : in general the conduct of most MNEs is in line with the
provisions of the Guidelines. MNEs are, however, increasingly breaching
the provisions on unfair influence (§ 8) to influence the outcome
of negotiations.
Mexico : trade unions have encountered, and are increasingly
encountering severe problems with MNEs in all areas relating to the provisions
of the Guidelines. This is especially so in the Maquiladoras regions. Those
MNEs with a home base in North America and Asia are said to be the most
difficult for trade unions to deal with. The problem is compounded by inter
alia the unwillingness of the government to support the implementation
of the Guidelines, as evidenced by the lack of a NCP, combined with a perception
by the respondent to the survey that the government is willing to allow
MNEs to suppress labour standards in order to secure inward investment.
Sweden : in general the conduct of most MNEs is in line with
the provisions of the Guidelines. Specific problems in relation to paragraphs
3 and 6 as noted above (Belgium) are on the increase.
United Kingdom : in general the conduct of most MNEs is in line
with the provisions of the Guidelines. The same problems as noted above
(Belgium, §§ 3 and 6) are growing. Certain MNEs of Asian origin
are breaching the Guidelines in relation to trade union rights (§§
1 and 2). The use by management of threats (§ 8) to re-locate operations
are increasingly used to influence the outcome of negotiations.
United States : trade unions continue to encounter problems with
many MNEs on most aspects of the Guidelines. The US is one of the most
open economies in terms of FDI. While in the past inward investors were
traditionally more receptive to unionisation (though not in all sectors),
the picture is changing now. MNEs are increasingly taking advantage of
the labour laws in the US to frustrate the collective bargaing rights of
workers. Approximately 7,000 organisations exist that offer companies (MNEs
are specifically targeted) advice on circumventing unionisation. So called
"right to work" States are basing their strategies to attract
inward investment on the suppression of trade union rights (the State of
South Carolina has a unionisation rate of less than 3 per cent). The provision
of information is scant, and MNEs routinely threaten re-location (increasingly
to Mexico since the signing of the NAFTA agreement) as a means to influence
the outcome of negotiations.
Environmental Protection
The responses to the survey suggest that most MNEs operating in European
OECD countries adhere to the provisions contained in the Chapter on Environmental
Protection; however, TUAC and its affiliates have pointed to the weakness
of this Chapter, and noted that a revision is required. Furthermore, because
of the general nature of this Chapter it is difficult to obtain an objective
view of the way in which its provisions are adhered to by MNEs, TUAC would
suggest that a more structured review process is warranted that would involve
trade unions, and aim at appropriate revisions.
The following comments were made in response to the survey. Few concerns
were registered in Belgium, Denmark, Italy (except with non-European home
based MNEs), Sweden, and the UK. Concerns were raised about MNEs operating
in the Czech Republic and Hungary regarding adherence to the health and
safety aspects of the Chapter (which are not strong enough anyway), most
notably in the construction sector, in addition to environmental problems
in the natural resource sector (Czech Republic).
Serious concerns were raised by the respondents in Mexico and the US.
Most related to the activities of MNEs operating in and around the Maquiladoras
zones on the border regions between the two countries, although MNEs are
said to violate the provisions of this chapter in other areas of both countries.
Specific reference was made to problems associated with an increase in
water and air pollution, hazardous waste dumping, and health risks such
as cholera, typhoid and birth defects. As regards the provisions of the
Chapter on health and safety, and cooperation with the competent authorities
in line with the Guidelines, there is a serious concern in both countries
that even these relatively weak provisions are frequently breached.
Summary and Next Steps for the OECD
The results from the TUAC survey on the NCPs indicates, for the most
part, that they are failing to fulfil their remit as set out in the 1991
Second Revised Decision of the Council. Three problems were identified
with the NCPs. Firstly, respondents from new Member countries (Czech Republic,
Hungary and Mexico) stated that no NCP exists. TUAC expects that the Republic
of Korea will upon its becoming a Member of the OECD move speedily to create
a NCP. Secondly, a majority of other respondents stated that in their view
the NCP had lapsed into abeyance. Thirdly, where the NCP appears to function,
it is reactive, has few resources, and is not seen as a priority for action
by the controlling government department.
There is a clear need for further work to rectify these anomalies. The
Executive Summary to this paper sets out a range of proposals to
achieve this in a way that would generate a higher commitment from all
parties, including trade unions to the NCPs and the Guidelines. TUAC would
like to discuss these with the CIME.
Turning to the implementation of the Guidelines' Chapters on Employment
and Industrial Relations, and Environmental Protection, the responses to
the TUAC survey suggest that for the most part MNEs are adhering to the
provisions contained therein. It is also significant that the OECD Report
on Trade, Employment and Labour Standards noted that the majority of MNEs
did not see the suppression of trade union rights as a key factor when
deciding investment locations. However, worrying trends are now appearing,
such that there is an increasing divergence in the behaviour of MNEs worldwide.
On the one hand there are those with a good record on compliance with labour
and environmental standards, and on the other hand there are those seeking
to avoid compliance as a means to securing competitive advantage.
Specific examples of this negative trend of behaviour have been highlighted
in the TUAC survey. These include widespread problems with information
disclosure, the use of threats to re-locate operations as a means to influence
the outcome of negotiations, and in some countries non-respect of trade
union rights, and non-compliance with environmental standards. This has
to be seen against the background in many instances of a failure of the
NCPs to play their role in ensuring that the Guidelines are adequately
implemented.
As the pace of globalisation increases so to will the competitive pressures
faced by MNEs. The danger is that the negative trends outlined above will
become more widespread. In this new paradigm labour standards will increasingly
come under pressure from those MNEs that seek to undermine workers' rights
as a means to maintain their competitive position. This will in turn put
pressure on those MNEs with a good record on labour rights issues. The
so called 'race to the bottom' will be cemented in place. Governments now
more than ever need, therefore, to ensure that the Guidelines are implemented,
and adhered to by MNEs.
The 1997 wider review of the Council Decision on the Guidelines will
examine the issues raised by trade unions in response to this survey, and
TUAC will play its part in this. In the meantime, TUAC would propose that
the OECD initiate a work programme to include, inter alia :
