The TPP Labour chapter (the basis to renegotiate NAFTA today) does not guarantee workers’ fundamental rightså
Alberto Arroyo Picard
Introduction
In many countries, including the United States, one of the strongest opponents of free trade agreements have been trade unions, which is not new. Ever since the debate prior to the ratification of the North America Free Trade Agreement (NAFTA), President Bush was unable to get the votes he needed in Congress, partly due to the opposition of trade unions. His democratic electoral opponent, Bill Clinton, promised unions that, if he won, he would negotiate two parallel agreements, a labour agreement and an environmental agreement. And this was an important factor in Bill Clinton’s electoral win. In effect, a parallel labour agreement was negotiated,[1] a fact considered a victory for trade unions. However, the contents of those agreements disappointed trade unions, which maintained their rejection, a fact shown by NAFTA’s really narrow margin of approval in the US Congress. And the impact of Free Trade Agreements (FTAs) in the 23 years since NAFTA’s initial approval has fueled the opposition.
In the early years after NAFTA’s approval, the discussion in many trade unions revolved around the contents to be included in the labour chapters or clauses so these could really protect workers’ collective and individual rights under FTAs. However, during the debate itself to come up with alternatives to the Free Trade Area of the Americas (ALCA), the conclusion was reached that even the “best” or “ideal” labour chapter or clause should not translate into a full support for FTAs. The main argument was that the neoliberal economic model, turned into supranational legislation as a result of FTAs, has a very limited capacity to create jobs and makes the few existing jobs more precarious[2]. At best, a good labour clause would only safeguard rights for the few formal and unionized jobs preserved. For this reason, the final position adopted is one of opposition to the economic model protected by FTAs. The idea is not to improve it with labor clauses, but prevent FTAs from being approved. This was the trade unions’ position and that of the rest of social organizations throughout the Americas grouped under the Continental Social Alliance[3].
Notwithstanding the above, today the discussion is coming back to life in some trade union sectors. FTA negotiators and propagandists are seeking to neutralize the opposition from trade unions, assuming an enhanced and binding labour chapter with mechanisms to enforce it can be included. The Trans-Pacific Partnership Agreement (TTP in Spanish or TPP in English) labour chapter is presented as a leading edge component and a response to criticism from trade unions. The propaganda claims that, in this case, the labour chapter protects both individual and collective rights, and also that it is binding and subject to the general dispute settlement mechanism under such agreement. The TPP was formally defeated, but efforts are being made to revive it for North America, without the United States, as part of NAFTA’s renegotiation[4].
The objective of this article is to expose the lies behind those claims and, to that end, we are conducting a simple yet detailed analysis of the articles of Chapter 19 on the TPP’s labour aspects. If not read carefully and completely, the text of that chapter may lead to the perception that everything said in the propaganda is actually based on its clauses.
First, we will see how, in fact, it fails to address all the labor rights included in the documents of the International Labour Organization (ILO). Second, despite being formally binding, it is unlikely to involve sanctions from an operational standpoint. Third, and more importantly, the potential sanctions do not benefit workers, but companies. And fourth, it continues to focus not on defending labor rights, but preventing the so-called Labour Dumping.
1- What is the TPP’s Labour Chapter actually protecting[5]?
Apparently, it protects all the same rights protected by the ILO, considering article 19.3 literally states, “Each Party (that is, country) shall adopt and maintain in its statutes and regulations, and practices thereunder, the following rights as stated in the ILO Declaration”.
However, it does so only in the general terms of the 1998 declaration. Let’s see:
The definitions sections (Art. 19.1) states, “ILO Declaration means the International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work and its Follow-up (1998)”. This is reaffirmed in note 3 to paragraph 1 of the same article 19.3 referred to earlier, which explicitly states,“The obligations set out in Article 19.3 (Labour Rights), as they relate to the ILO, refer only to the ILO Declaration”.
The 1998 ILO Declaration is very general[6], and upon stating that the TPP only refers to the “Declaration”, it does so to exclude the regulations and technical standards the ILO has been issuing to operationalize the broad principles and fundamental rights included in the Declaration. The 1998 Declaration is basically a Declaration of General Principles, because not all the countries, among them the United States, have ratified all the ILO fundamental conventions.
The catch is that, by adopting the 1998 ILO Declaration, it is suggested that the Agreement abides by the ILO standards. But this is not the case.
The Declaration does not include the 8 fundamental conventions, nor the four administrative standards that regulate the activities of labor inspection authorities, or the 177 “technical” standards. The term “technical” sounds like something less important. However, they have a broad scope. They regulate a series of individual rights, for example, the right to protection from layoffs in general and for specific groups, such as pregnant women; the right to vacation pay; the right to health care, unemployment and disability insurance, as well as private pension funds; the right to protection from work-related accidents (from chemical or radioactive substances, noise, shocks); the right to compensation in case of work-related accidents and occupational diseases; the right to regular work schedules, breaks and regulation of night work; the right to regulated subcontracting; rules for domestic labour, workers from native peoples and migrants; and the rights and obligations of private employment agencies.
The above is not only our interpretation; it is also explicitly mentioned in Article 19.3.1, “Labour Rights”, which only describes 4 rights, not all of the ILO’s 8 basic conventions, not to mention their technical standards of application:
- “freedom of association and the effective recognition of the right to collective bargaining;
- The elimination of all forms of forced or compulsory labour;
- The effective abolition of child labour and, for the purposes of this Agreement, the prohibition of the worst forms of child labour; and
- The elimination of discrimination in respect of employment and occupation” (art. 19.3.1)
Paragraph 2 (art. 19.3.2) further defines the scope of the rights covered by this TPP Labour Chapter: “Each Party shall adopt and maintain statutes and regulations, and practices thereunder, governing acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and health”. It no longer refers to collective rights.
The footnote to this same paragraph further reduces its scope with respect to the labour rights it purports to protect: “For greater certainty, this obligation relates to the establishment by a Party in its statutes, regulations and practices thereunder, of acceptable conditions of work as determined by that Party (country)”. This explicitly means that, as already mentioned, it is not as determined by the ILO in its technical standards.
In summary, each country has the obligation to abide by its national labour statutes and provide “acceptable” work conditions.
2.- Trade competition, and not labour rights, is what truly matters.
In fact, none of the FTAs’ labour chapters or clauses expresses an interest in workers’ rights. Instead, they seek to protect foreign business people, while attempting to prevent labor rights violations from turning into what we could call social dumping (unfair competition).
Footnote 4 to the same article 19.3.1 reads, “To establish a violation of an obligation under Article 19.3.1 (Labour Rights) or Article 19.3.2, a Party (country) must demonstrate that the other Party has failed to adopt or maintain a statute, regulation or practice in a manner affecting trade or investment between the Parties (countries)”. This is repeated numerous times in the different articles.
3.- Is the TPP labour chapter really mandatory, and does it include sanctions?
- a) Apparently yes, considering section 12 of article 19.15 reads, “The requesting (complaining) Party may request the establishment of a panel under Article 28.7 (Establishment of a Panel) and, as provided in Chapter 28 (Dispute Settlement), thereafter have recourse to the other provisions of that Chapter”.
- b) However, as stated in paragraph 3 of the same article, this can only be done after a lengthy friendly dispute settlement process (which is the focus of a significant portion of the chapter): “No Party shall have recourse to dispute settlement under Chapter 28 (Dispute Settlement) for a matter arising under this Chapter without first seeking to resolve the matter in accordance with this Article”.
It is worth noting that the article refers to the general dispute settlement mechanism under these agreements, and not to the best-known and most controversial one, which includes an investment chapter entitled “Investor-State” and is a lot tougher, binding and with significant consequences for those losing before an arbitration panel.
Priority is given to a solution discussed and negotiated between States, which means rights violations can be negotiated.
- The key dispute settlement mechanism is a “cooperative labour dialogue” on any matter arising under this chapter (art. 19.11).
- To facilitate such dialogue, the parties establish a Labor Council composed of high‑level representatives of the TPP member countries (there are no trade union representatives, not even as a consultative element).
- Official contact points are designated in each member country to facilitate communication.
- Cooperation plans in the field will be established and reviewed, and there is a long list of potential areas for cooperation.
- Finally, any country can request a labour consultation (art. 19.15); and the other party will make every attempt to give at a mutually satisfactory response to the matter under consultation. It is only in those cases where the matter is not resolved through this mechanism that a “Panel” can be requested under Chapter 28 on Dispute Settlement.
- c) General scope of application of litigious disputes (art. 28.3.1)
- Disputes regarding the interpretation of the Agreement
- Regarding measures another country deems inconsistent with an obligation under the agreement.
- When a State considers there is a measure that, although inconsistent with this agreement, impairs benefits it could have reasonably expected to accrue to it under Chapter 2 (National Treatment), Chapter 3 (Rules of Origin), Chapter 4 (Textiles and Apparel Goods), Chapter 5 (Customs Administration and Trade Facilitation), Chapter 8 (Cross-border Trade in Services), and Chapter 10 (Government Procurement) and others. Note that it fails to make reference to Chapter 19 (Labour).
- Regarding agreements reached between countries to exit this Agreement (Art. 28.3.3).
- d) Arbitration Panels (arts. 28.7 through 28.21)
Powers (art. 28.8) and functions (art. 28.12) of the Arbitration and eventually sanctioning Panel:
To begin with, it is important to clarify that the powers and functions of Arbitration Panels are really left to the discretion of the disputing States, considering that, under article 28.12, these depend on the terms of reference agreed by the two States upon creating the Arbitration Panel.
Their powers are:
- “examine, in the light of the relevant provisions of this Agreement, the matter referred to in the request for the establishment of a panel under Article 28.7.1 (Establishment of a Panel)”. Note that the applicable statute is only the text of this Agreement and not the ILO agreements directly.
- “make findings and determinations, and any jointly requested recommendations, together with its reasons therefor, as provided for in Article 28.17.4 (Initial Report)”
Functions:
- “A panel’s function (art. 28.12) is to make an objective assessment of the matter before it, which includes an examination of the facts and the applicability of and conformity with this Agreement, and to make the findings, determinations and recommendations as are called for in its terms of reference and necessary for the resolution of the dispute” (the underlining is ours).
- The panel will prepare an initial report that the responding State can still challenge (art. 28.17).
- It will then prepare a final report that should include (as long as it is included in the terms of reference or mandate for its creation) the conclusions or determinations regarding the matter in dispute.
e) Panel conclusions (arbitrators that involve a sanction).
- Determine if the measure at issue applied by the responding State is inconsistent with a Party’s (country) obligations in the Agreement;
- Determine “if a Party (country) has otherwise failed to carry out its obligations in this Agreement”; or
- Determine if, regardless of whether the measure adopted by the responding State is inconsistent or not with the agreements under the TPP, the measure at issue is causing nullification or impairment of benefits the requesting Party could have reasonably expected in the spirit of article 28.3.1(c) (Scope);
- f) On the possibility and type of sanctions:
“Whenever possible”, eliminate the non-conformity or the nullification or undermining of the benefits reasonably expected as a result of the measure requested under the agreement. If the text says “whenever possible” (end of art. 28.19.2), is it binding or not?
The disputing parties shall “endeavour” to agree on the reasonable period of time to fulfill the above; otherwise the chair of the panel will determine such period.
Art. 28.20 (a) states that the responding Party (country) can notify that “it does not intend to eliminate the non-conformity with the agreement or the nullification of benefits claimed by the requesting party” (again, I ask, Is it really binding?). In this case, it must negotiate a mutually acceptable monetary compensation.
The key question is “What is an acceptable compensation for violating labor rights used as dumping?” (which is what all that is really about).
In addition, the compensation is for the complaining country that considers that labor standards have led to an unfair competition, a situation that does not benefit the responding country’s workers.
Paragraph 2 of article 28.20 estabishes the possibility of suspending benefits in other areas if the responding party has not agreed to the compensation within a period of 30 days after the period for developing compensation has begun or it has failed to observe the terms of the agreement. Paragraph 3 raises the possibility for the complaining party to suspend benefits of equivalent effects to the responding party in other areas of the agreement (to be able to use this sanction there is a series of considerations and requirements that there is no time to address here).
This type of sanctions can be a real pressure for a country not to reduce labor standards with social dumping purposes, but the sanction will not compensate for or repair the harm caused on workers.
G) How do these sanctions benefit workers?
Note that all this takes place between States; the complaining party is not the trade union affected by low labor standards in the other country (as is the case under the current NAFTA).
Also, as established in article 28.4, the complaining Party does not necessarily have to file a complaint under the TPP, but can select a different forum to settle the dispute, including another FTA to which the complaining party and the responding party are parties.
Furthermore, the term “trade union” is never used throughout the labour chapter, and it is only on a few occasions (in article 19.10.3 on Cooperation and art. 19.14.2 on public engagement) that the phrase “representative of its labour” is used in its place.
III General conclusions on the TPP for workers.
- a) Even a good chapter or the best of labour clauses, that is, a chapter or clauses that guaranteed all the individual and collective rights of workers, with the participation of trade unions in disputes, as well as truly binding and sanctionable to the benefit of workers, would not make FTAs or investment agreements acceptable, considering all labour rights are contingent on having a job, and 23 years of experience with FTAs have shown free trade and investment agreements constitute a model that lacks the capacity to create sufficient jobs. What is the purpose of having a labour chapter if there is a shrinking number of formal and unionized jobs?
- b) It is for this reason that international trade union organizations have expressed their opposition to the TPP. For example, Richard Trumka, the AFL-CIO President, wrote a blunt Letter to President Obama on June 29, 2016. And the Trade Union Confederation of the Americas expressed its opposition to the TPP through a resolution adopted at its Congress held on April 26-29, 2016.
- c) The TPP (and FTAs in general) violates international law.
Under international law, considered from a comprehensive perspective, human rights are above any other right. However, whereas under the TPP, and FTAs and investment agreements in general, rights granted to corporations are binding and have very effective supranational mechanisms to enforce and sanction them, in most cases economic, social, cultural and labour rights, as well as the rights of indigenous peoples, are simply relegated to non-binding recommendations. This is in violation of the international legal principle on the superiority of human rights. Countries cannot sign agreements that, in practice, violate international Human Rights laws.
While the United Nations Commission on Human Rights has the mandate to develop a binding legal instrument on the obligations of transnational and business corporations to respect human rights, FTAs intend to set a precedent contrary to that mandate. While the mechanisms and commitments under the TPP (and all of the FTAs) favorable to transnational companies are mandatory, the Chapters on Labour (Chapter 19), the Environment (Chapter 20), Cooperation and Capacity Building (Chapter 21), Development (Chapter 23), Small and Medium-Sized Enterprises (Chapter 24) and Transparency and Anti-Corruption (Chapter 26) are actually voluntary, non-enforceable, and are not subject to sanctions in case of failure to comply.
The TPP is a flagrant attack on the rights of the Peoples recognized by the International Protocol of the International Covenant on Economic, Social and Cultural Rights (PIDESC), considering it seeks to legalize plundering, patenting and the commercialization of biodiversity and bio-culturality, knowledge and the common rights of indigenous peoples, because it forces governments to subscribe agreements characterized by greed and profit (such as the International Convention for the Protection of New Varieties of Plants, UPOV-91) to the benefit of transnational corporations, and makes reference to other plundering mechanisms such as the Nagoya Protocol.
The juridical anomaly in the structure, contents and framework of trade agreements such as the TPP, which enshrines corporate rights and renders the peoples defenseless, has been clearly identified in a series of reports and declarations from 28 experts or rapporteurs of the UN Human Rights System.
On April 20, 2016, five rapporteurs and two international experts from the UN submitted a document to the 12 governments that negotiated the TPP, expressing their “concern over allegations of the harmful impact the TPP would have on the enjoyment of several human rights and fundamental freedoms” and, therefore, they recommended not to ratify it. The Mexican government has not released this document or their response. We know both documents thanks to their release by social organizations in Chile. Ten of the 12 governments (except for Canada and Australia) gave a joint response full of general statements, even though the questions from the UN Human Rights experts and rapporteurs raised specific objections based on international legislation.
This is something several UN experts or rapporteurs have been saying. For example:
In the July 2015 report of the UN Independent Expert on the promotion of an international democratic and equitable order, he states that “The Trans-Pacific Partnership (TPP) Agreement, as a result of being placed before Human Rights, is incompatible with international ordre public and contrary to provisions of the Vienna Convention on the Law of Treaties and good customs”.
In a different statement, the same expert says: “Trade must be made to work for human rights and development, and not against them”.[7]
The TPP is fundamentally defective and should not be signed or ratified unless mechanisms to guarantee the normative space of States are put in place.[8]
å Abstract from a longer article published in Revista Foro Universitario Quinta Época # 6 octubre-noviembre de 2016. Sindicato de Trabajadores de la Universidad Nacional Autónoma de México (STUNAM), pp. 48-57
W M.A. in Sociology. PhD in Social Sciences. Researcher at the Iztapalapa Metropolitan Autonomous University. Member of the Mexican Action Network against Free Trade (RMALC), which is part of the Convergence of Social Organizations and Citizens “México Mejor sin TTP” (Mexico Better without TPP”).
[1] An analysis of the limitations of NAFTA’s parallel Labour Agreement can be found in Alberto Arroyo y Jorge Calderón (Coordinadores) Tratado de Libre Comercio de América del Norte. Análisis Crítica y Propuesta. Published by RMALC. México 1993 Chapter XXIII (written by Alejandro Quiroz Soriano) pp. 273-278.
[2] See, for example, “TLCAN a los 20 años elaborado por las organizaciones sociales de México, Estados Unidos Canadá y Quebec”. Published in Spanish in Mitos y Promesas del TLCAN, Visiones desde los movimientos Sociales de América del Norte: Canadá, Quebec, Estados Unidos, México, available at http://www.rmalc.org/balance-de-los-20-anos-del-tlcan/
Also available in French in Réseau québécois sur l’d intégration continentale (RQIC), and in English: Institute for Policy Studies. In Spanish, it was also published in December 2015 by Ecuador’s National Polytechnic School in the book Encuentros: Actas Anuales del Departamento de Ciencias Sociales 2014-2015.
[3] This position is expressly adopted by consensus in the document of the Continental Social Alliance entitled “Alternatives for the Americas”. Fifth version published in 4 languages. Available in Spanish at: http://www.rmalc.org/historico/libros.htm (labour chapter, specific objectives, pp 47-48).
[4] A meeting to be held in Sydney on August 20-30, 2017[1] to discuss alternative paths to follow to revive the TPP has been announced. The options to be discussed are the following: 1) to preserve the text imposed before it was discarded by the US, except for the provision on its effective date, 2) modify the provision on its effective date and suspend the application of some of the most controversial provisions until the US rejoins the TPP, and 3) renegotiate some of the TPP provisions.
[5] http://www.gob.mx/cms/uploads/attachment/file/86487/19._Laboral.pdf All references to the different articles have been quoted in parenthesis in the same main text.
[6] The following analysis was inspired as is largely based on Dr. Werner Rügemer’s Tratado de libre comercio TPP: Patrañas en los derechos laborales. Translated from: “Transpazifisches Freihandelsabkommen TPP: Augenwischerei bei den Arbeitsrechten”. DGB Gegenblende 10.12.2015, bimonthly publication of the German Trade Union Confederation [DGB]. http://www.gegenblende.de/34-2015/++co++48531aaa-9f55-11e5-b148-52540066f352 Translated from German into Spanish by Raúl Claro
The history of the Declaration is the following: During the 1995 World Summit for Social Development, held in Copenhagen, a group of heads of state discussed the consequences of globalization on social and labor rights. They established four “fundamental rights” that referred to the eight ILO fundamental standards but did not include their Rules of Application. And they stated that, in the light of globalization, they wanted to take into consideration the diversity of conditions in different countries where several of the ILO standards have not been ratified. Therefore, they agreed upon a “social minimum standard for all” that was further outlined in the four “fundamental rights”. The World Trade Organization incorporated these rights in 1996. And in 1998, the ILO General Assembly voted the Declaration, which allows those States that have not ratified the Standards and do not abide by the Rules of Application (which are not included in the Declaration) to rely on the ILO.
[7] http://www.ohchr.org/en/NewsEvents/Pages/DisplayNews.aspx?NewsID=16650&LangID=E
[8] http://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=17005&LangID=E (Feb 2016).
VERSIÓN EN ESPAÑOL PUBLICADA EN BOLETIN ALTERNATIVAS RMALC No. 106 DEL 12 DE SEPTIEMBRE DE 2016