Saturday, 8 June 2013

Regulating Corporations without Borders


As the recent tragedies in Bangladesh can attest, multinational corporations (MNCs) have been able to run a bloody racket – moving production from jurisdictions with relatively strong labour protections for workers (like Canada) to developing nations where workers have few, if any, labour protections. The result has been incredible profits for large MNCs and immense human suffering for workers around the world.

For workers and unions to respond to this particularly insidious aspect of globalization has proven difficult. As reported in an earlier post, the ability of MNCs to shift the means of production with ease undermines the negotiating power of unions and throws the balance between labour and capital severely out of whack. MNCs have, by and large, used this imbalance to exploit the desperation of workers from developing countries and to force concessions from unions from more developed nations. But the labour movement is not without hope and may yet have a strong a sustainable response to a situation which once seemed dire.

International Framework Agreements (IFAs) have been increasing in both use and popularity on the world stage, providing some counterbalance to the gross power MNCs have enjoyed since trade became internationalized. IFAs are agreements negotiated by companies and workers’ representatives. These agreements seek to address the imbalance by imposing international labour regulations. Of course, a slew of ILO Conventions and OECD Guidelines for MNCs have also sought to set international labour standards, but as we have seen via Canada’s blatant disregard for many ILO Conventions it has ratified, these attempts at setting international labour standards have met with limited success.

What sets IFAs apart from other attempts at regulation is their inclusiveness of workers in the regulation of labour. Where the ILO Conventions must be agreed to and ratified by governments, IFAs operate at the company level. IFAs represent an agreement between companies and workers’ representatives. This is not to say the ILO doesn’t play a pivotal role. It does. The ILO’s core conventions on labour standards are often incorporated into IFAs which seek to define basic labour standards for the workers involved.

Where IFAs can be an improvement upon the system of relying on governments to uphold their international labour commitments is found in the fact that IFAs directly involve workers. IFAs are agreed to by workers’ representatives and companies. Workers’ representatives are involved at every step, from implementation to monitoring. Workers have a voice and some say in their own treatment.   

Why, some wonder, would MNCs ever agree to involve the workers in the creation of IFAs that would limit the ability of MNCs to exploit the vulnerability of workers for their own gains? One crucial reason is public pressure. Tragedies like those in Bangladesh have amplified negative public perception of the practices of MNCs. This impacts their bottom-line - hence the willingness to negotiate IFAs.

The importance of IFAs cannot be overstated. Companies need the endorsement of workers in order to restore their public image and workers need companies to negotiate IFAs if they are to achieve the labour rights they deserve. The relationship is one of symbiosis. IFAs have the potential to bring a day when respect for the labour rights of workers will become synonymous with good corporate governance – when the value of company’s stock will be influenced not just by its quarterly financial statements, but also by the treatment of its workers. IFAs, in other words, may yet correct the imbalances brought about by globalization and restore the rights workers have lost in the turbid waters of the new economy.    

Monday, 3 June 2013

A New kind of Toolbox

Buckling under the strain of years of oppressive management, workers across America at fast-food chains and Walmart stores have been demanding improved wages and working conditions[1]. 

This is not exactly unprecedented. Walmart workers have been known to stage short protest strikes lasting one or two days before. Of course, Walmart has always proven large enough to absorb these strikes and to resist any calls for change being made by its workers. Recently, however, workers, with the support of workers’ rights group, OURWalmart, and the UFCW, have increased pressure on the company by staging longer protest strikes. Walmart workers at various stores across America went on strike on Tuesday, May 28. The strike is expected to continue at least until June 7th, the date of Walmart’s annual shareholders’ meeting.[2]

While a Walmart spokesperson has dismissively referred to these strikes as a “publicity stunt”, it’s clear from past practice that Walmart is unlikely to regard these strikes in such a non-threatening way. Walmart has been so steadfast in its anti-union stance over the years it has become notorious for firing, harassing or otherwise intimidating workers who would seek to organize. The result is that not a single Walmart worker in America has union representation[3].

This is reflected in a report from Congressman George Miller (D-CA) to the U.S. House of Representatives, which notes that Walmart has even issued “A Manager’s Toolbox to Remaining Union Free”. The Toolbox gives managers a list of “warning signs” to look out for. If a manager notices workers having “frequent meetings at associates’ homes” and/or “associates who are never seen together suddenly start talking or associating with each other”, the Toolbox indicates that the workers might be organizing.

Managers who see such “suspicious” activity are provided with a hotline to call to alert the company. Once alerted, Walmart deploys specialists who descend on the store to spoil any efforts by workers to organize. And where the old standbys of fear, intimidation and harassment don’t give these so-called specialists the means to quell the fervour of workers for labour rights, Walmart may use other means to avoid unionization. In 2000, for instance, when workers of a meat-cutting department at a Walmart store in Texas successfully voted for union representation, Walmart simply eliminated its meat-cutting departments entirely[4].

That Walmart can get away with this has raised more than a few eyebrows, with Human Rights Watch calling the company “a case study in what is wrong with U.S. labour laws.”[5] The Walmart Toolbox is designed to keep workers down and maintain this broken system, one in which poverty, sorrow and fear are at once means and ends in themselves. The striking workers are trying to use their own toolbox to fix a broken system, one in which fair wages, optimism and courage will become the new normal.

If these workers succeed in getting more decent wages it could have a profoundly positive effect not only on America, but on North America as a whole. The idea is simple: workers earning more money will have more money to spend and will help stimulate the economy. In this sense, the workers are fighting not only for their own economic well-being; they’re struggling to spur an economic recovery that has eluded our political leaders for years now. There are over 1 million Walmart workers in the U.S. The rising tide of their calls for improved wages and working conditions might just be the high tide that raises all of the boats in our economy.