Trade Union-IFI Interim meeting 9 March 2010 Consistent with the dialogue protocol established between the international trade unions and the international financial institutions (IFIs) in 2002, the organizations met in March 2010 to review the state of relations before the next high level meetings. The meeting was chaired by Michael Krupinski, World Bank Alternate Executive Director for a constituency of European and Central Asian countries that include Switzerland, Azerbaijan and Poland. Peter Bakvis, Director of the ITUC/Global Unions Washington Office, introduced the agenda of the meeting, including the submission of a proposal to further develop the trade union-ifi protocol. Vasuki Shastry, Chief of the Public Affairs Division in the External Relations Department of the International Monetary Fund, characterized the relationship as a model to be replicated, noting the high-level commitment, scaled-up country level engagement, joint work on a range of global issues, and Global Unions participation in the IMF governance reform process. Arup Banerji, Director of the Social Protection and Labour Unit at the World Bank highlighted the importance of the dialogue between the IFIs and the trade unions. He described the relationship with Global Unions as one that has matured over time through both formal and informal avenues, noting the commitment to a two-way exchange of information, recognition of shared goals, and Global Unions participation in consultations leading up to the World Bank s new disclosure policy. Global Unions & the IMF Shastry described how, since the financial crisis struck in October 2008, the IMF has scaled up crisis lending and has been actively coordinating with the G-20 to provide assistance to crisis-affected countries. Mandated by the G-20 Leaders, the IMF has explored how the financial sector can make a fair and substantial contribution to meet the financial burdens imposed on governments by the financial crisis, including consideration of a financial transaction tax (FTT), a key concern of Global Unions. The global economic and financial crisis has prompted a substantial overhaul of the IMF lending framework, most notably with the creation of the flexible credit line (FCL). Informal discussions were underway to see how the FCL could become a viable option for more countries. Shastry noted that changes in the IMF s policies and lending instruments require decisions by its shareholders. In that respect, the ongoing governance reform aimed at shifting at least a 5 percent in quota shares to dynamic emerging market and developing economies from overrepresented to underrepresented countries was a welcome step as well as completing the next review of quotas by January 2011. Bakvis observed that the IMF made a serious error in not anticipating the financial crisis, which ITUC had raised in a 2007 report about problems in financial regulation as well as a meeting with the IMF in March 2008. Trade unions are disappointed that counter-cyclical policies have been applied only selectively and that only three countries have been considered eligible for the FCL, believing that condition-free lending should be more broadly available. The ITUC also favours expansion of the debt cancellation programme. Trade unions ask that in 2010 the IMF refrain from premature calls for fiscal consolidation, and encourage employment creation strategies rather than exit strategies. To address the substantial debt that has been generated through necessary economic stimulus programmes, the IMF should encourage the equitable sharing of this fiscal burden through the creation of a mechanism such as an FTT. Trade unions welcomed a positive change in the IMF s approach to capital controls, and believed that it should continue to work towards regulating capital movement.
In the discussion, other union participants suggested that the forthcoming IMF report on the Global Economy Beyond the Crisis Framework for Sustainable Growth and on an FTT provide concrete evidence of IMF policy shifts and raised questions about the working relationship between the IMF and the Financial Stability Board (FSB). The IMF stated that there was a clear division of labour between the organizations, but on financial regulation views differed and work remained ongoing. Trade unions expressed interest in providing inputs in devising IMF s policies and participating regularly in the Article IV consultation process as well as during program reviews. Shastry responded that the IMF aimed to hold regular meetings with the trade unions at the country level. Global Unions & the World Bank Pamela Bigart, Lead Procurement Specialist at the World Bank, noted that in 2005 two of the core labour standards (CLS) those on forced labour and child labour were included in the General Conditions of Contract (GCC) for the Bank s Standard Bidding Document for Works (SBDW), applying on a mandatory basis to all international competitive bidding (ICB) for works financed under Bank-supported projects. Another two standards (workers organizations and non-discrimination/equal opportunity) are included in the Special Conditions of Contract (SCC) which are applied on a non-mandatory basis. The Bank has active and ongoing reform initiatives in dialogue with governments to raise awareness of CLS and encourages the use of all four CLS even when countries are using their own bidding documents. Under a current pilot program preparing the Bank to move towards the use of country procurement systems, which would not require the use of the Bank s SBDW, the Bank will encourage the use of the CLS for works financed under any pilot projects. Bakvis inquired about updates on the work between the different multilateral development banks (MDBs) for harmonizing the CLS language in the SBDW, and mentioned inputs from Building and Woodworkers International and ITUC. Bigart responded that there has been a lull in attention paid to the issue of CLS but that a new staff person had been hired to work on this area, along with issues related to environmental and socially responsible procurement. The World Bank agrees that it should play a leadership role in this process. Friederike Rother of the World Bank Social Protection and Labour Team reported that terms of reference have been drafted for a secondment to SPL for a research project on the impact of labour market reforms on labour market outcomes in response to concerns raised by trade unions and the ILO regarding the Doing Business publication. Bakvis noted that the search for a prospective applicant was underway and making an effort to meet the World Bank s donor criteria that the candidate come from Africa or an IDA country in another region. Both organizations agreed that the secondment process has been quite useful, though ITUC noted that the final products seem to have had varying degrees of impact. The ITUC also observed that trade unions have submitted proposals for further secondments (one regarding the telecom sector) but funding seems to be an obstacle. John Garrison of the World Bank External Affairs department discussed the high quality of dialogue with trade unions in the broader context of the World Bank s relations with civil society. He attributed this to the formal protocol, regular high-level meetings, regular staff secondments, and technical workshops. The relationship functions well because of the Global Unions broad membership base, organizational structure, macro-economic knowledge, experience and capacity to negotiate and be pragmatic when necessary, and consistent engagement and able representation through the Washington Office. This engagement has established a productive working relationship despite continued policy disagreements in some areas, and is based on an acknowledgement of the respective institutional roles and policy perspectives. Through this process the Bank and global unions have been able to identify and agree on a
set of common development goals which include equitable economic growth, job creation, and poverty reduction. The challenge we face now is to consolidate the relationship at the global level and decentralize it to the country level. Tara O Connell of the World Bank Education Team reviewed the 2006-2008 collaboration between the World Bank, Education International, and the ILO to combat HIV/AIDS through work with teachers unions. Richard Seifman from the World Bank's Africa Region noted that the World Bank and trade unions had engaged in HIV/AIDS activities and dialogue in multiple sectors other than education, in particular the transport sector as well as in the private sector. The ITUC described the priorities of the Global Unions AIDS Programmme (GUAP), which will be headed by EI, and welcomed the World Bank s assistance for some activities, both at regional and country level. Neil Gregory of the World Bank Finance and Private Sector Development unit discussed the underway revision of the methodology of Doing Business. An external advisory group, including trade unionists, employers and the ILO is mandated to recommend revisions of the Employing Workers Indicator (EWI). Gregory noted that there will be changes to the EWI for next year s report and more are anticipated. Bakvis, who is one of the members of the advisory group, noted that the group has also been asked to examine the Paying Taxes Indicator, and the possible development of a new Workers Protection Indicator. If this work is carried forward, it could contribute to the Bank adopting a more balanced assessment of labour regulations, which the ITUC hopes the Bank will do. Bakvis noted that in addition to creating the advisory group on the EWI, the Bank removed the indicator from its overall country performance framework (known as the Country Policy and Institutional Assessment) and instructed staff to no longer use the EWI in the Bank s policy advice. Mayra Buvinic of the World Bank Gender and Development department summarized the conclusions of the January 2009 World Bank-trade union technical meeting on gender, observing persistent gender discrimination in the labour market in all regions, and a paucity of empirical documentation on regulation and best practices to expand women s opportunities. Participants at that meeting had agreed that there is a need for a new social contract between workers, employers and the state which recognizes child care is not only women s work, and which establishes maternity and other family-friendly policies, and which will require public sector financing. It is also urgent to expand social protection for the informal sector, extending benefits based on residency and not on working status. Thirdly, the design of stimulus packages needs to generate economic opportunities for women as well as men. Francesca Ricciardone of ITUC/Global Unions Washington Office reviewed the early stages of work underway to develop a joint report on gender best practices, including a recent meeting between Public Services International, EI, ITUC and the World Bank. Assessing Process and Next Meetings The ITUC/Global Unions Washington Office submitted a proposal to further develop the trade union-ifi protocol, observing that current mechanism lacks a commitment to meaningful consultations with trade unions before decisions are taken and has little relevance to much of the current engagement taking place. The trade unions stressed that the trade union dialogue with the World Bank should be expanded beyond the work done through the Bank s SPL team, given that many other Bank departments have an impact on employment and working conditions. ITUC suggested that a working group of IFI and ITUC staff develop a draft document regarding a revised mechanism in advance of the next high-level meetings. James Howard, director of economic and social policy at the ITUC, raised the relationship of the Trade
Union Advisory Council to the OECD as one model to consider. It has the strength of committing the organizations to engagement on difficult issues as well as easy ones, and carries greater consistency. Ruben Cortina, President of UNI-Americas, noted that a structure of regular meetings between the trade unions and the Inter-American Ministers of Labour has resulted in important advances. Grigor Gradev, Regional Secretary of ITUC-Pan-European Regional Council, noted positive relationship-building from a January 2010 meeting with the IMF and also earlier meetings with the IFC, although unions remain uncertain what continuing engagements will achieve. Maria Svorenova expressed trade union disappointment in at a country consultation in Slovakia, where Bank staff appeared to have little interest in trade union research and concerns. Noriyuki Suzuki, Regional Secretary for ITUC-Asia Pacific stated that regional affiliates now visit IFI regional offices on a regular basis, and appreciate the support of the World Bank and the ITUC Washington Office in this endeavour. He recommended inviting the other MDBs to participate in the high-level union-ifi meetings, noting that this has had a positive impact in the past. David Robalino of the World Bank SPL team agreed that relations should occur at country, regional, sectoral and headquarters levels, adding that at the country level there is often a lot of activity happening outside the formal dialogue (depending on the local actors and governments). He observed that the World Bank has every incentive to consult with unions, especially with regards to pensions, labour regulations and social protection issues. He suggested that the World Bank could further encourage engagement with unions and provide training to both staff and union leader to facilitate exchanges. He suggested that meetings between unions and the Bank take the form of workshops rather than seminars. Robalino did not endorse the creation of a working group at this stage on the basis that the sort of fundamental change in policies suggested was beyond the scope of the Interim Meeting and required consultations with senior management and the Boards. However, the Bank s representative emphasized that due to the new disclosure policy the unions will enjoy increased access and ability to comment on Bank documents, particularly CASs. Shastry noted that the IMF had moved away from establishing targeted working groups and recommendations, realizing that it was more effective to interact with trade unions on a broader range of issues. Recent communication had been strong and rapid, and the IMF welcomed continuing this engagement in the future. To that end, the IMF looked forward to exploring feasible proposals and was prepared for their immediate implementation, within the constraints of government sovereignty. He agreed that unions should be consulted regularly as part of the Article IV process. With regards to a TUAC-style model of consultation, Shastry suggested the ITUC make its suggestions known to the G-20. Garrison explained that the needed and often successful engagement outside the protocol was a characteristic of the decentralized nature of the World Bank Group. Due to the decentralized nature of the Bank and the fact that the participation policies are not mandatory, but rather follow good practice, he noted that the Bank can be inconsistent in terms of its policy consultation efforts. The Bank also attempts to be sensitive to local contexts and for this reason the quality of Bank union relations vary among regions and countries. He noted that while trade union-wb relations continues to be critical at times, the protocol has allowed for a much improved quality of policy dialogue, increased trust, and even some examples of collaboration. The challenge now is to decentralize this good practice developed at the global level to the country setting. He suggested incorporating a trade union component into staff
training carried out by the Civil Society Team on how to engage civil society and that we could jointly develop a guidance note on how to promote increased relations at the country level. Trade union representatives agreed that for future meetings a workshop format would be preferable to a seminar format in order to develop clear conclusions and timetables for future action. They also observed that while country governments have ultimate responsibility for policy decisions, the IFIs have influence in these processes and they should set an example as to the importance of consulting trade unions, whose members are directly affected by the policy choices. Conclusion Peter Bakvis proposed the next High-Level Meeting (HLM) be held in early 2011. Among other topics, it should address the themes of crisis response, food security, follow-up to technical meetings on gender and pension reform, a presentation and discussion on the new sector strategy for SPL in line with a revised Doing Business labour strategy, global imbalances, and CLS in Bank lending. It should also address the current protocol mechanism. Shastry agreed that January 2011 would be a good time for the HLM, and proposed framing the themes for the meeting in broad terms at least until September or October of 2010 in order to reflect changes in global economic outlook. In the coming months, the IMF will also develop ideas on how to make the Annual Meeting more interactive, and will work on scaling up its country-level engagement. Robalino thanked the trade unions and their country representatives for a fruitful discussion and added that the HLM could address the issue of focal points, which had been set up to activate the trade union- World Bank relationship outside of just the Social Protection and Labour unit. The focal point mechanism should be demand driven and different mechanisms to improve the current effectiveness of focal points could be discussed.
INTERIM MEETING ON DIALOGUE BETWEEN ITUC/GLOBAL UNIONS AND THE IFIS 9 March 2010 Washington, DC World Bank, J Building (701 18th St. NW) Meeting Room JB1-075 Meeting languages: English, Spanish AGENDA 14:30-14:45 Introductions and Review of Decisions Taken at January 2009 High-level Meeting Meeting Chair: Michal Krupinski (Alternate Executive Director for Switzerland/Azerbaijan/Poland) Speakers: Peter Bakvis (ITUC/Global Unions); Vasuki Shastry (IMF); Arup Banerji (World Bank). 15:15-15:45 Session 1: IMF Presentation of Progress Achieved Since High-level Meetings IMF will present for 20 minutes addressing its commitments to help borrowing countries confront the global economic crisis, to promote an internationally coordinated fiscal stimulus, to develop greater capacity to foresee and deter future economic shocks, and to strengthen the consultative process with trade unions. The presentation will be followed by a 10 minute trade union response, before being opened for a general discussion. Speakers: Vasuki Shastry (IMF), Peter Bakvis (ITUC/Global Unions). 15:45-17:00 Session 2: World Bank Presentation of Progress Achieved Since High-level Meetings World Bank speakers will address progress towards (1) integrating core labour standards in procurement documents, (2) continuing trade union secondments, (3) strengthening consultative process, (4) the Doing Business review process, (5) following-up to January 2009 meeting on gender, (6) reporting on joint HIV/AIDS initiatives from the WB's Education and Transport Sector. Each WB speaker will present for 10 minutes and will be followed by a trade union speaker for 5 minutes, to be followed by discussion. WB Speakers: (1) Pamela Bigart, (2) Friederike Rother, (3) John Garrison, (4) Neil Gregory (IFC), (5) Mayra Buvinic, (6) Tara O'Connell. Trade Union Speakers: James Howard (ITUC); Peter Bakvis (ITUC/Global Unions); Francesca Ricciardone (ITUC/Global Unions).
17:00-17:15 Coffee Break 17:15-17:45 Session 3: Assessment of the TU-IFI Dialogue Mechanism Established in the 2002 Protocol 1. What are areas where the mechanism works best? 2. What are areas that might be improved? 3. Looking forward, what might be the next steps? Speakers: Peter Bakvis (ITUC/Global Unions), James Howard (ITUC), Vasuki Shastry (IMF), David Robalino (World Bank). 17:45-18:00 Session 4: Discussion of possible agenda items for upcoming High-Level Meetings and Future Thematic Meetings. 18:00-18:10 Concluding statements by Trade Unions, World Bank, IMF. Speakers: David Robalino (World Bank), Vasuki Shastry (IMF), Peter Bakvis (ITUC/Global Unions).