Analysis of the CAFTA Labor Chapter Enforcement Mechanisms

Similar documents
Central America and the U.S. Face Challenge and Chance for Historic Breakthrough on Workers Rights

CRS Report for Congress

Deputy Undersecretary (ILAB), Sandra Polaski

Overview of Labor Enforcement Issues in Free Trade Agreements

CRS Report for Congress

Free Trade Agreements (FTA) and Global Framework Agreements (GFA) Pong-Sul Ahn ILO ROAP, Bangkok

Appendices PART 5. A Laws and the struggle for decent, healthy, and fair work B Common chemicals and materials Resources...

What are the problems particular to the region/ to particular countries within the region?

THE MUTUAL LEGAL ASSISTANCE PROCESS IN EL SALVADOR

Convention on the Elimination of All Forms of Discrimination against Women

1) Labour and decent work in international declarations and trade agreements

Labor Provisions in U.S. Free Trade Agreements Case Study of Mexico, Chile, Costa Rica, El Salvador and Peru

Shawna Bader-Blau, Executive Director, Solidarity Center. Testimony before the Senate Standing Committee on Human Rights, Parliament of Canada

AGREEMENT ON LABOUR COOPERATION BETWEEN CANADA AND THE REPUBLIC OF HONDURAS

Bill 47, The Making Ontario Open for Business Act, 2018 What does it do to Labour & Employment Laws in Ontario? BACKGROUND

Comparative Case Analysis of the Impacts of Trade-Related Labor Provisions on Select US Trade Preference Recipient Countries

Trade and Labour in Free Trade Agreements An Exploration of the Evolution

Report of the second meeting of the Board on Trade and Sustainable Development to the Civil Society Dialogue Forum

Labour conditions and health and safety standards following the recent factory fires and building collapse in Bangladesh

Preferential market access in recent years has been linked to such goals as limiting civil conflict, arms sales, job losses and worker exploitation

Hidden Chains. Recommendations

TPP: The Largest and Most Dangerous Trade Agreement You ve Never Heard Of

Political Resolution IndustriALL Global Union s 2 nd Congress Rio de Janeiro, Brazil, 5-7 October 2016

Brussels, Belgium 13 June 2018

Submission by the. Canadian Labour Congress. to the. Department of Foreign Affairs and International Trade. Regarding

LABOUR MIGRATION IN ASIA ROLE OF BILATERAL AGREEMENTS AND MOUs

US Advocacy for Reform of the WTO - Progress or Posturing?

III. Resolution concerning the recurrent discussion on social dialogue 1

Consular Staff and their Role in Protecting the Rights of Migrant Workers

CHAPTER TWELVE TRADE AND SUSTAINABLE DEVELOPMENT

A Briefing on the Situation of Women in Cambodia May 2005

PROTOCOL AMENDING THE FREE TRADE AGREEMENT BETWEEN THE REPUBLIC OF ALBANIA AND THE EFTA STATES

Thailand: New Ministerial Regulation offers better protection of domestic worker s rights

Transition to formality

WHY NATIONS TRADE? Simple trade model TRADE, TRADE AGREEMENTS, & IMMIGRATION. Differences in factor endowments. Benefits from economies of scale

Convention on the Elimination of All Forms of Discrimination against Women

Resolution No. 7 Civil and Human Rights

PROTOCOL AMENDING THE FREE TRADE AGREEMENT BETWEEN THE EFTA STATES AND THE REPUBLIC OF SERBIA

3) The European Union is an example of integration. A) regional B) relative C) global D) bilateral

Political Resolution IndustriALL Global Union s 2 nd Congress Rio de Janeiro, Brazil, 5-7 October 2016

Progress in Implementing Chapter 16 (Labor) and Capacity-Building under the Dominican Republic Central America United States Free Trade Agreement

Economic and Social Council. Concluding observations on the combined third, fourth and fifth periodic reports of El Salvador*

Freedom of Association and the Right to Bargain Collectively in Mexico

Proposal for a COUNCIL DECISION

Trade Promotion Authority (TPA)/Fast-Track Renewal: Labor Issues

Trade Promotion Authority (TPA) Renewal: Core Labor Standards Issues

Recommendation of the Council for Development Co-operation Actors on Managing the Risk of Corruption

Trading Up: Labor Standards, Development, and CAFTA. Recommendations for addressing labor concerns to ease CAFTA s ratification

Labor Standards, Development, and CAFTA

AGREEMENT ON LABOUR COOPERATION BETWEEN CANADA AND HASHEMITE KINGDOM OF JORDAN PREAMBLE

29 May 2017 Without prejudice CHAPTER [XX] TRADE AND SUSTAINABLE DEVELOPMENT. Article X.1. Objectives and Scope

1. GENERAL REMARKS, BACKGROUND AND LEGISLATIVE FRAMEWORK

Committee on International Trade

Fact Sheet Gender Implications of the European Union - Central American Association Agreement

Peter McAllister Executive Director, ETI

Labour Provisions in Trade Agreements. Design, implementation and stakeholder involvement. 6 December to 13.00

THE TRANS-PACIFIC PARTNERSHIP AGREEMENT MODEL LABOUR & DISPUTE RESOLUTION CHAPTER

THE POTENTIAL OF ILO CORE CONVENTIONS IN PUBLIC PROCUREMENT

EU-MERCOSUR CHAPTER. Article 1. Objectives and Scope

4,324 migrants in Malaysia and Thailand have received counselling, information, education or training on safe migration and rights at work

Zero Tolerance Protocol

ITUC 1 Contribution to the pre-conference negotiating text for the UNCTAD XII Conference in Accra, April

Global Panopticon Peer Review as a Tool of International Governance

EU Generalised Scheme of Preferences (GSP+) European Union Delegation

Convention on the Elimination of All Forms of Discrimination against Women

A. Regarding Recommendations Accepted by the Government

The central american free trade agreement: Effects on labor in the maguila sector

Peru s Experience on Free Trade Agreement s Equivalence Provisions

INTERNATIONALLY RECOGNISED CORE LABOUR STANDARDS IN BARBADOS

WRONG TURN FOR WORKERS RIGHTS:

ILO inter -regional project: Improving safety and health at work through a Decent Work Agenda

HOW TO MAKE TRADE BENEFIT WORKERS? Core Labour Standards Plus Linking trade and decent work in global supply chains

BACKGROUND ON US AND EU APPROACHES TO LABOR AND ENVIRONMENT CHAPTERS IN FREE TRADE AGREEMENTS

Resolution concerning a fair deal for migrant workers in a global economy 1. Conclusions on a fair deal for migrant workers in a global economy

International Dialogue on Migration Inter-sessional Workshop on Developing Capacity to Manage Migration SEPTEMBER 2005

Convention on the Elimination of All Forms of Discrimination against Women

Economic and Social Council

31/ Protecting human rights defenders, whether individuals, groups or organs of society, addressing economic, social and cultural rights

Despite its successes, a few challenges remain to be addressed to bolster the EPS program in meeting the needs of migrants and their employers.

A. Additional sources consulted for the Special Rapporteur s report

CRS Report for Congress Received through the CRS Web

International Trade Union Confederation Statement to UNCTAD XIII

Governing Body 325th Session, Geneva, 29 October 12 November 2015

COMMISSION OF THE EUROPEAN COMMUNITIES

Article XXVIII* Modification of Schedules

Sime Darby Human Rights Charter

Examining Human Rights in the Context of ASEAN Regional Migration

Draft Subject to Legal Review for Accuracy, Clarity, and Consistency June 18, 2004 CHAPTER FIFTEEN LABOR

May 1. Draft Migrant Worker Management Act, B.E, used in hearing. Migrant workers and dependents, June 2017

GUIDING QUESTIONS. Introduction

BANGLADESH SUSTAINABILITY 4: SITUATION WORSENING, TIME FOR ACTION IS NOW

Literature Review On The Decent Work in the Informal Economy in Cambodia

Economic and Social Council

I-During the reporting period, a series of measures are taken to improve the legal framework, such as:

CAFTA and International Human Rights in El Salvador: Is the United States Acquiescing to Widespread Workers' Human Rights Violations?

TITLE 8. EMPLOYMENT CHAPTER 1. EMPLOYEE REVIEW CODE

Immigration policies in South and Southeast Asia : Groping in the dark?

LEGAL DEFENSE TRUST MICHAEL P. STONE, GENERAL COUNSEL 6215 River Crest Drive, Suite A, Riverside, CA Phone (951) Fax (951)

Workers United Canada Council Submission to Ontario s Changing Workplaces Review

A COMPARATIVE STUDY OF LABOR RIGHTS IN GUATEMALA AFTER THE ENACTMENT OF DR- CAFTA

Transcription:

Testimony Regarding the Central America Free Trade Agreement (CAFTA) Prepared by Bama Athreya, Deputy Director International Labor Rights Fund April 12, 2005 The International Labor Rights Fund (ILRF) would like to thank the Committee on Ways and Means, US House of Representatives for the opportunity to present testimony related to the Central America Free Trade Agreement (CAFTA). ILRF is deeply concerned about ongoing labor rights violations in Central America. We believe the agreement will force the developing nations of Central America to compete against one another to attract limited new US investment by offering low wages and foregoing enforcement of labor and environmental laws. A strong and enforceable labor chapter might have served to mitigate this race to the bottom. However, as currently written, the CAFTA labor chapter will not serve to deter labor rights abuses, nor will it effectively deter national governments from downgrading their existing labor laws. Thus, as currently written, CAFTA can only lead to further degeneration of the labor rights situation in Central America, with no effective mechanism available to counteract downward pressures. Analysis of the CAFTA Labor Chapter Enforcement Mechanisms Although the CAFTA labor chapter refers to the ILO Declaration on Fundamental Principles and Rights at Work, the agreement does not bind any of its Parties to ensuring that internationally recognized worker rights are incorporated into national laws, or that they are properly enforced. The language of the agreement is merely aspirational, directing parties to strive to improve their laws, but providing no effective reward or sanction for countries in this regard. Indeed there is no language in the agreement that would prevent or sanction countries from reforming their laws in such a manner as to abrogate the internationally recognized worker rights. The agreement is thus a step backward from the earlier trade arrangements with each country under the Generalized System of Preferences (GSP) program. While imperfect, at least the GSP program does require beneficiaries to be able to demonstrate that they are taking steps to ensure that workers enjoy the internationally recognized rights to associate and bargain collectively, to abolish child labor, to abolish forced labor and to provide the right to decent wages and working conditions. In contrast, CAFTA merely requires countries to be enforcing their existing laws, however inadequate those laws may be. Given the history of the Central America region, we find it disingenous to suggest that these countries can be entrusted with enforcement of their own labor laws. ILRF and its partners throughout the region have conducted extensive research on labor law implementation in Central America, dating back to the late 1980s. During the past two decades ILRF has used this research to support GSP petitions related to Honduras, El

ILRF CAFTA Testimony April 2005 2 Salvador, Costa Rica and Guatemala. ILRF and its partners conducted new research on labor law enforcement in the region in 2003 and 2004, and found evidence of systematic failures to enforce labor laws in all Central American countries. The systematic problems identified included a lack of political will at the highest levels, corrupt and inefficient labor ministries and courts, and intimidation and harassment of workers who attempted to utilize legal channels to protect their rights. The language of the CAFTA labor chapter, which, as we have mentioned, is largely aspirational, ignores the realities of legal enforcement in these countries. The single enforceable provision of the chapter, on labor law enforcement, does not give us reason to believe that governments will improve in this regard. The process for invoking a review of a country s compliance is too weak, opaque and limited to create real change in labor law enforcement. The CAFTA labor chapter effectively sets the fox to guard the henhouse, by creating a review process that can only be invoked by another government that is party to the agreement. Specifically, a review of one country s labor law enforcement can only be triggered if another CAFTA country files a request for such a review. Given that there is an extremely poor pattern of law enforcement throughout the region, it is extremely unlikely that any one country would file a complaint against another, for fear of retaliation. In short the very mechanism of the CAFTA labor chapter creates the preconditions for a conspiracy of silence among all parties to the agreement on the issue of labor law enforcement. Civil society actors, in particular workers and their representative organizations have no means by which to affect this process. The process can only be triggered by a national government, and there is no mechanism created by which a civil society organization can petition its government to initiate such a review. Moreover, the agreement does not even provide the general public with information about the outcome of a review, should one ever take place. Thus there is no way that the general public in any of the CAFTA countries can ever know whether or not the review process, if ever invoked, actually resulted in any meaningful dialogue on the issues identified. In contrast, the existing GSP provides for a public review process. Any individual or organization can utilize this process, which is comparatively transparent and accessible, by filing a submission to the Office of the US Trade Representative. Throughout the past two decades a handful of organizations, including ILRF, the AFL- CIO, and Human Rights Watch have researched and filed lengthy petitions documenting labor rights abuses in GSP recipient countries. Although not all of these cases were successful, nevertheless, the cases obliged both the US administration and regimes in the targeted countries to respond, point by point, to allegations of abuse. In Malaysia in 1991, an ILRF petition succeeded in convincing the Malaysian government to recognize union rights in the electronics sector. A 1996 AFL-CIO petition on Thailand succeeded in pushing the Thai government to recognize the right of state enterprise workers to form trade unions. A 1997 petition against Cambodia, filed separately by both the AFL-CIO and ILRF, persuaded the Cambodian government to ratify a new Labor Code. This process, while admittedly limited in effectiveness, is at least superior to the CAFTA process in its relative public accessibility and transparency. The fact that the existing

ILRF CAFTA Testimony April 2005 3 GSP process will be replaced by the weaker CAFTA review mechanism will create further disincentives for the CAFTA governments regarding improvement of their labor laws and labor law implementation. Failure to Guarantee Non-Discrimination While the CAFTA labor chapter references the ILO Declaration on Fundamental Principles and Rights at Work, it fails to include any obligation of governments, even aspirational, with regard to the right to a workplace free from discrimination. This right is universally recognized as a core labor right and defined in ILO Conventions No. 100 and 111. We note that a large percentage of the workers expected to find employment in export-oriented sectors, such as the maquila industry, are women. Our research and that of our allies has found that these women workers are subject to discrimination through, among other problems, pregnancy testing as a precondition for employment, sexual harassment on the job, and non-provision of maternity leave benefits. In most instances they have limited legal recourse, and often are subject to social and economic pressures that make it in reality impossible to claim what legal protections they may have on paper. We urge Congress to insist that CAFTA and any future trade agreements reference the essential right to a workplace free from discrimination. Such a clause would help bring the attention of developing countries throughout the world to the plight and problems of vulnerable women workers. Downward Pressure on Labor Laws and Legal Enforcement in Central America In December 2004, ILRF and ASEPROLA, a Costa Rican labor rights NGO, cofiled GSP petitions against five Central American countries. We found that, despite the US Trade Representative s public claims to the contrary, even during the period of CAFTA negotiations, Central American countries, preparing for competition with one another for limited US investment, were taking steps to downgrade their labor laws. USTR has not yet responded to the request for review of these countries GSP privileges, and if CAFTA is ratified, then no such review will ever take place. We note below some instances, documented in these petitions, of legal reforms that would weaken worker protections in the region. Costa Rica: During the CAFTA negotiations, the Costa Rican government has taken steps to weaken existing national labor protections. In early 2004 the government introduced a project to reform the country's labor code. In particular, proposed legislation would modify working hours through a year-long calendar of work shifts and the weekly accumulation of working hours, eliminating the standard eight-hour workday. The proposed legislation would also eliminate the rights to mixed and absolute overtime hours, as it would allow employers to increase work hours at times of high demand, and lessen work hours in times of low demand. When introducing this legislation to the Costa Rican parliament, the government argued that such flexibilization of working hours and overtime rules was necessary in order to allow Costa Rica to remain competitive with the other Central American countries once the CAFTA was ratified. Public pressure on

ILRF CAFTA Testimony April 2005 4 the Costa Rican government resulted in some modifications to the proposed legislation, which has not yet been introduced to the legislature. El Salvador: The emergency law for economic reactivation (LERE), which was introduced to the Assembly in 1999, has continued during the period of CAFTA negotiations to work its way through the legislative process in El Salvador. If approved, LERE would modify salaries and working shifts, and increase the allowed length of a trial period for new workers and the use of fixed-term contracts. These changes affect benefits currently guaranteed by labor law, including vacations and social security. The current Labor Code includes indefinite contracts and a 30-day test period (during which time the contract can be terminated). LERE would make fixed-term contracts and 180- day test periods the norm, which means that the social security payments for these workers are not made for almost 6 months. This drastically increases job instability, making it easier for employers to make workers work overtime without extra pay, and to dismiss workers without paying penalties or benefits. El Salvador is also considering new legislative measures that would weaken existing health and safety regulations. Panama: There is some evidence that Panama has continued to weaken its labor law regime during the past two years when it has been involved with trade negotiations with the US. (While not a CAFTA country, Panama has been negotiating a separate bilateral agreement with the US, with discussions regarding the possibility that Panama would dock on to CAFTA). In February 2002, a new regulation was passed that provides incentives to companies to hire "young workers" between the ages of 18 and 25. The incentives include temporary exoneration from certain legal protections for these workers. In particular, the regulations suspend the protections of certain articles of the Labor Code for such workers, in particular the protections for maternity benefits. Other reforms are in progress, although they have not yet been presented to the Panamanian parliament. These include an initiative to modify the Labor Code to eliminate minimum wages altogether, and a proposal to reform the country's social security benefits to increase the retirement age, quotas, and years of contribution to the system. The proposed social security reforms are expected to be presented to the Panamanian parliament in early 2005. Honduras: In its petition, ILRF and ASEPROLA noted that the USTR has failed to implement the terms of a Memorandum of Understanding negotiated with the Honduran government as a result of a 1995 GSP complaint. The MOU, if implemented would have resulted in important changes to Honduran labor law and its labor inspections system. Rather, the CAFTA negotiations have tacitly discouraged the Honduran government from implementing those commitments and created perverse incentives for labor law reform. Currently, the Honduran Ministry of Labor, working with employers' groups, is promoting a project to modify the labor law with reforms that would generalize fixed-term contracts. It would also make the payment for severance payable only on an annual basis so that it would not be possible to create special funds with these monies. A policy of freezing salaries continues, and Honduran employers are increasingly delaying negotiations with workers.

ILRF CAFTA Testimony April 2005 5 Guatemala: In 2003, USTR accepted for review GSP petitions filed by ILRF and by the AFL-CIO to review Guatemala's country eligibility based on its failure to uphold internationally recognized worker rights. These petitions cited the judicial impunity with regard to threats and violence against trade unionists in Guatemala, the systematic failure of the government to enforce existing labor laws, and the need for further reforms to the country's labor laws in order to bring it into full compliance with international standards. The new ILRF/ASEPROLA petition states that the review has failed to bring about meaningful progress in these three areas. The labor code reforms passed in 2001 did not bring Guatemala's labor practices up to acceptable standards, and some of these reforms have been reversed by Guatemala's Constitutional Courts. A number of promised legislative reforms have never materialized. A Better Alternative ILRF strongly urges that any new trade agreement with Central America contain a strong, transparent and enforceable labor rights mechanism. Sustained economic development will elude a vast majority of the populations of the Central American countries without such a mechanism. The key elements of a workable enforcement mechanism to apply upon the failure of a national enforcement system can be easily stated. First and foremost, any enforcement process must be democratic and transparent. A major criticism of the WTO enforcement panels is that they are closed to the public and operate in secrecy. CAFTA replicates this secretive model. All processes involving enforcement must be fully transparent, including a written public record of all proceedings and open hearings. There also needs to be a clear appeals process. Second, access to the enforcement process must be available to all interested parties, not just the government signatories to the trade agreement. The key constituency here is the workers themselves, most of whom are not currently represented by a trade union. They must have direct access to an enforcement process. Also, other stakeholders, such as NGOs and labor organisations, must have access to the process. Third, the enforcement process must make a distinction between violations that are attributable to private actors, including multinationals, and therefore require remedies more in the line of penalties, and those that are attributable to governments, and might be better addressed by trade sanctions. Penalties directed at companies, with the cooperation of the host government, will resolve most problems. This also leaves problem solving within the firm control of the individual governments and allows them to act to prevent any protectionist use of the enforcement process. If a country ultimately refuses to enforce its own laws, as per the commitment made in its own laws and the international standards, there must be a system of penalties to encourage compliance, with the ultimate sanction being exclusion from the benefits of the trade agreement. Finally, in keeping with the ILO standards, a model labor clause in CAFTA or any other trade agreement must include language recognizing the right of workers to a workplace free from discrimination, as defined by ILO Conventions No. 100 and 111.