Trade and Human Dignity in the Workplace

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1 EUROPEAN COMMISSION Karel De Gucht European Commissioner for Trade Trade and Human Dignity in the Workplace Conference: EU Imports and Human Dignity in the Workplace, European Parliament/ Brussels 9 July 2013 SPEECH/13/623

2 Chairman Mitchell, Members of Parliament, Fellow speakers, Ladies and gentlemen, The origin of human dignity is the subject of some debate. For many the concept is religious. Human dignity in this view derives from the idea that people are equally created by a higher power. For others, the source of a person's dignity is his or her ability to act along moral lines as opposed to mere instinct. This fact distinguishes us from the animals and earns us the right to be treated with dignity. For still others, like utilitarian philosophers, there could be no denying the existence of human rights derived from dignity, as they are necessary tools to maximise collective human happiness even if they cannot agree with the idea of an externally created or intrinsically possessed notion of dignity proving categorically that if human dignity didn't exist, we would have to invent it. And that is in fact the point. Despite these distinctions, all these schools of thought agree on the importance of human dignity for any successful human society. Which is why human dignity is at the core of our system of human rights. Its protection is affirmed at national level in many constitutions at European level in the Charter of Fundamental Rights and internationally in the Universal Declaration of Human Rights. And it is mentioned at the very beginning of these documents as nothing less than the foundation stone for everything that follows. Article 1 of the Charter reads, "Human dignity is inviolable. It must be respected and protected." So while it is only since the Lisbon Treaty entered into force in 2009 that there has been an explicit link between EU trade policy and the principle of human dignity, it has clearly been an important guiding idea for us for many years before that and certainly as part of our societal values for several generations. Trade with the connections it establishes between consumers and companies in Europe and workers, business and customers around the world raises a number of issues about human dignity. Perhaps the best way to look at them is through an example. On 24 April this year, the Rana Plaza building in Savar, Bangladesh collapsed. More than one thousand people were killed. This is not the only such tragedy in the recent history of Bangladesh or elsewhere for that matter. But it is a tragedy to which we are directly connected through the shoes and clothes we wear. Because, the scale of the ready-made garment industry in Bangladesh would simply not exist without trade. The sector works by importing textiles processing them to add value and selling them to international clothing companies 2

3 who eventually bring them to market on the high streets of Europe and in the shopping malls of America: 80% of Bangladesh's exports are from the clothing sector. Some have been tempted to say that if there were no international trade in clothing then this accident would not have happened. But of course that is not the whole story, for two reasons. First, because the basic problem here is not trade but safety and labour standards. The tragedy happened because basic safety standards were not respected. The tower itself was poorly built. Worse, perhaps, factory supervisors sent employees into the building that morning even though the walls were already cracking. And second, because the role of trade in Bangladesh is much wider, and more positive than this incident suggests. Bangladesh may be one of the world's least developed countries. But, slowly over the last few decades things have been getting better. Since 1980: Per capita national income has expanded almost three-fold, Life expectancy at birth has risen by fifteen years, And average years of schooling have more than doubled. This progress has been steady, real and measurable and trade has been an essential part of it. Bangladesh's exports have expanded from just under 600 million euro a year in 1980 to almost 18 billion a year in Total trade now represents just under half of Bangladesh's GDP. This example perfectly illustrates the difficult issues that confront us when we think about trade and human dignity. When we governments and businesses try to learn lessons from a situation like this one we are faced with two unavoidable facts: trade's connection to a specific intolerable situation and its wider link to the hopes for economic progress of some of the world's poorest people. They must both inform our efforts to ensure that trade supports and does not undermine human dignity. So what can be done? And by whom? In the end, those who have the most influence on the conditions of workers in factories are the companies that run them. In the Bangladeshi case, the fundamental problem were the compromises made by the local clothing producers and by the construction companies that built the building. If we are truly to improve the situation across the developing world then these are the people whose minds need to be changed. And the people with most influence over these suppliers are the companies that buy from them. As the old saying goes: the customer is always right. This is why the private sector in developed world also has to play its role. 3

4 The recent Accord on Fire and Building Safety in Bangladesh is an excellent example of exactly this. The legal strength of the accord and the fact that more than sixty major companies European ones in particular have signed up are very significant breakthroughs. This is just the beginning however. And Bangladesh is just one country. We need to see the expansion and strengthening of systems like this to cover a much larger share of trade. The next question is about government's role. As with the private sector, the people with most power to improve working conditions and respect for the environment in developing countries are the governments of developing countries. In this specific case, I believe that the Bangladeshi government now has a clear understanding of the need and urgency to improve both the content and enforcement of its labour standards and factory safety. They do understand that failure to achieve a visibly improved situation will put at risk the country's enjoyment of duty-free and quota-free access to the EU market. But even if that is the case it would be too easy for me to say that developed country governments, including the European Union, have no responsibility here. We do. And it is a responsibility we take seriously. European trade policy of course is an economic policy. Its primary goal is to boost growth in Europe. But precisely because it flows from the principle of human dignity it can also be used to foster sustainable development The main way that trade can do that is also economic: Trade creates growth. And growth raises living standards. This is what is happening in Bangladesh and in many other parts of the developing world. That is why the EU offers trade preferences to developing countries through the Generalised System of Preferences and to least developed countries through the Everything But Arms initiative. We are also in a range of free trade agreement negotiations with developing countries from the Economic Partnership Agreements with African Caribbean and Pacific countries to deep and comprehensive free trade agreements with countries in our own neighbourhood... and a series of FTAs with significant partners in Latin America. All of these agreements will have broad, positive economic effects, and these are crucial to strengthening democratic institutions, individual freedoms and the rule of law. Beyond this however there is more we can do, because under the right conditions trade policy can also be a lever to change behaviour. So our trade agreements become part of the overall institutional relations with developing countries which require respect for human rights 4

5 commit our partners to encourage high levels of labour and environmental protection and not to lower standards as a tool to attract trade & investment and require the effective implementation of the core conventions of the International Labour Organisation and the main multilateral environmental conventions Our preference schemes also support sustainable development in similar ways. To benefit from GSP countries need to respect the principles of core international human rights and labour conventions. And under the GSP Plus scheme we offer even wider access to the European Union market to countries who go further by ratifying and implementing additional conventions on the environment and good governance. In our recent reform of GSP we have also strengthened the monitoring mechanisms for these commitments so they are even stronger today than they were in the past. We can all agree that these are powerful incentives for our trading partners to improve labour and environmental conditions. But we also need to remember another factor. Stability is an important part of the way trade boosts development. So when we think about closing the European market to those exporters in order to press for improved conditions, we also need to think of the wider consequences. Because closing the market is quite a blunt instrument. It would hurt the wider population even if it were only aimed at unscrupulous employers. But just because it is difficult does not mean that it cannot happen. For example, if countries persistently and seriously fail to implement the conventions linked to Everything But Arms then the EU could find itself obliged to take a decision it would rather avoid. None of these problems is easy to solve. But I am confident that we are slowly making progress. However, events like the Rana Plaza disaster do change things. The message I have taken is that more intense work is needed in Bangladesh in particular. When news reached us that some international buyers were ready to suspend contracts with Bangladeshi suppliers over justified labour safety concerns, I understood that we had an opportunity to promote deep engagement to obtain the change we need. I am therefore pleased to announce that we were able after some very hard work with the government of Bangladesh and the ILO to launch a "Compact" to improve labour rights, working conditions and factory safety in the ready-made garment industry in Bangladesh through a set of time-bound actions. Here are some examples of the commitments: The Bangladesh Labour Act needs to be reformed to strengthen workers' rights especially freedom of association and the right to collective bargaining. It must also improve occupational health and safety. We expect the new law to be in place by the end of the year and hope it can be adopted by the parliament of Bangladesh next week. There is also a commitment whereby the law will be revised to apply to all workers, including those in Export Processing Zones. Building and fire safety in ready-made garment factories must be improved by additional inspectors need to be hired by end

6 Within the same timeframe, a skills and training programme to rehabilitate workers injured in the Rana Plaza tragedy or rendered unemployed will need to be set up with the support of the ILO. The ILO will be involved in supporting and monitoring the implementation of this and other commitments. We were fortunate to count on their valuable expertise and hope that in time, these efforts will help Bangladesh qualify for the ILO's Better Work Programme. Bangladesh shall not be the first and last attempt we will make to help support responsible international supply chains. Without taking much more of your time, I would like to briefly announce that later this year, I expect the College to adopt a proposal to promote responsible EU supply chains for a targeted set of minerals. The aim of this initiative would be to allow legitimate trade in minerals with conflict-stricken countries while seeking to ensure that armed belligerent groups do not reap financial gains out of this trade. I see conflict mitigation as an important way to allow peace-seeking people to live with dignity. I thank the European Parliament for placing the spotlight on human dignity in the workplace and hope that it will stay on for a long time. I also look forward to working together with you to keep the link between trade and human dignity as brightly lit as possible. 6