Globalisation of the union movement is being seen by business as a generally positive trend reports Nicholas Way.

For seven years, the Federal Government has never missed an opportunity to declare that unions are a spent force. Their membership is falling and their influence waning in many industries, especially in the private sector, where fewer than 20% of workers are in a union. In many sunrise industries, unions simply cannot get a foothold. The ACTU’s secretary, Greg Combet, implicitly acknowledged these harsh realities after Australian Bureau of Statistics figures showed that union membership fell 69,000 in the year to August 2002 after two years of meagre growth in 2000 and 2001.

Unions take the lead

1. In the global economy, capital is more mobile than labor, but this does not mean that industrial relations are confined to the national context.


2. When globalising, managers often find themselves in a different relationship with the union movement. The international labor movement can be useful to companies that are re-establishing damaged reputations.


3. Codes of conduct that have been devised by the organised labor movement are being signed by many corporations.


4. The international labor movement is providing useful forums for discussion about many of the tensions of globalisation, and it is educating domestic unions.


Managers seeking to operate in the global market would be unwise to assume that the Australian situation is replicated elsewhere. Union influence is not restricted to the domestic front; globalisation of capital has been matched by unions’ recognition that many labor-related issues demand an international response. This global role is not a new phenomenon; Australian unions have always played a prominent role in the Geneva-based International Labor Organisation, for example. But the focus has changed. In past decades, the international focus was politically motivated, reflecting the Cold War divide. Today, unions are far more focused on achieving practical outcomes on specific labor issues.


What makes this union activity on an international level particularly interesting is that it can occur in concert with capital. It is a small case of workers and managers of the world uniting – nothing revolutionary, but a trend none the less and one of the ambiguities of globalisation.


For the ACTU president, Sharan Burrow, there is no better example than the decision by the clothing and footwear manufacturer Nike to sign a legally binding national agreement with the Textile Clothing and Footwear Union (TCFU) about industry working standards.


In recent years, few companies have been subject to such public scrutiny as Nike has over employment conditions in its factories, especially in Third World countries, and it was harming the Nike brand in developed countries. Nike’s employment practices changed. Tony Balfour, managing director of Nike Pacific, said in a letter to Burrow after signing the Sports and Corporate Wear Ethical Clothing Deed with the TCFU in June: “Nike has a global code of conduct and monitoring system in place, aiming to protect the rights and entitlements of the contract factory workers who make Nike product.


Robyn Jareaux”Australian manufacturing will continue to be subject to conditions of the code [that] outlines standards to ensure fair, safe, healthy workplaces and promotes the wellbeing of the contracted workforce. The code is monitored by the United States Fair Labor Association, Nike personnel and external auditors. Although the deed with the TCFU will be monitored by the union, Nike will continue its internal and external monitoring, thus allowing an additional layer of compliance to the process in Australia.”


Nike employees’ wages and conditions have received blanket media coverage. Not so the Ivory Coast cocoa-growing industry, in Africa, where child and forced labor is often the norm.


Last year, a foundation was established involving the International Union of Food (IUF), most multinationals in the chocolate and cocoa industry, and three non-government bodies. Its aim, according to the foundation’s co-president and IUF general secretary, Ron Oswald, is to “oversee and sustain efforts to eliminate the worst forms of child and forced labor in the growing and processing of cocoa beans and their derivative products”.


None of the parties, including the ILO, which has given the foundation its support, is expecting miracles. Where there is entrenched exploitation, change comes slowly. But Burrow says the fact that multinationals are prepared to stand and be counted on issues such as child and forced labor is a positive sign. She says time will tell. “But in the many talks I’ve had with businesses on these issues … there is a genuine commitment to get change.”


To illustrate the point, Burrow cites the signing of about 25 codes of conduct on labor-related issues between global union federations, such as the IUF and the International Metalworkers Federation, and multinational companies. International heavyweights such as the German car makers Volkswagen and DaimlerChrysler, the South African mining group AngloGold, the German construction company Hochtief and the Spanish telecommunications company Telefonica have signed up in recent years. Significantly, all but three of the 25 companies – AngloGold, the New Zealand dairy products group Fonterra and the US agricultural group Chiquita – have headquarters in Europe, where companies are more comfortable with a bipartisan approach to labor-related issues.


The fact that Australian companies are absent from the list should not be taken to mean that management is hostile to unions’ international role. Indeed, there is a belief among managers that having unions exposed to global economic realities is positive for business. The Australian Chamber of Commerce and Industry’s (ACCI) director of workplace policy, Peter Anderson, describes the international activities of unions as an “opportunity and challenge” for business.


“When unions operate in forums overseas they get to understand the dynamics of a global economy, they appreciate the economic realities facing our companies on the international stage. This can only be positive, as unions appreciate we are not operating in our own little corner of the world, insulated from the economic realities of the global economy,” Anderson says. There is no better example of this, he says, than the car industry, where there has been a realisation that, in an open economy, the only way for the industry to survive is to export. “It’s not just management that has realised this. Unions, too, understand their members’ jobs are tied to exports.”


More economically literate unions are the upside for Anderson. The downside is when unions attempt to use international forums to impose industrial or political solutions on local companies. “Take the union case against Rio Tinto in recent years, for example. Unions orchestrated an international public relations campaign against the mining giant on a range of corporate governance issues. But the reality was they were taking aim at Rio Tinto’s use of individual contracts at its Australian mine sites.”


At a broader level, Anderson worries about the role of the ILO, the tripartite organisation of unions, employers and governments that is the sole survivor from the League of Nations. “I see the organisation providing a forum for serious debates about key workplace issues, such as child labor. But I don’t think the ILO should be overly prescriptive in solutions it devises for these issues.


“In the first place, they simply won’t be relevant in many countries. But I also worry that unions want to make the ILO a regulatory body, an international parliament if you like, that imposes its solutions on national governments. That’s not how the ILO should work.”


Peter Colley, national research officer with the mining and energy division of the Construction Forestry Mining and Energy Union (CFMEU), disagrees with Anderson’s assessment of the Rio Tinto case. Colley argues that the union-orchestrated campaign against the London-based miner on issues of corporate governance and labor standards is a prime example of a successful international union campaign against a company. (Among other issues, the union alleges Rio Tinto breaches ILO convention 87, on freedom of association, and convention 96, on the right to collectively bargain.)


Colley says: “The industry now largely comprises a few major corporations with global operations. This makes it imperative for unions such as the CFMEU and the United Mineworkers Union in the US to act in concert when we believe these companies are breaching core labor standards.”


The assessment of the union campaign against Rio Tinto rests very much in the eye of the beholder. Colley insists it forced the company to shift ground, a view management does not share. And Rio Tinto has no intention, at this stage, of signing a global agreement with the International Federation of Chemical, Energy, Mine and General Workers Unions. But the fact the company has agreed to meet the unions once a year to discuss issues might reflect a changing attitude.

The Burma thorn

Few issues create as much heat in union circles as the military regime in Burma, an international pariah because of its violation of human rights and continuing imprisonment of Opposition Leader Aung San Suu Kyi. And in their efforts to force regime change, unions have pressured companies to stop operating there.


The ACTU president, Sharan Burrow, recently held talks with British American Tobacco (BAT), which has manufacturing plants in Burma, in her capacity as president of the Asia-Pacific chapter of the Brussels-based International Confederation of Free Trade Unions. BAT put its case for remaining in Burma, but unions internationally are united in their opposition and, according to Burrow, the company has agreed to stop operating there.


It is not an isolated case. In many OECD countries, similar talks are being held with companies. In the United States, for example, legal action was initiated against the oil company Unocal for alleged knowledge about the use of forced labor in Burma. The Belgian-French oil company TotalFinaElf, the world’s fourth-biggest oil and gas producer, also has been the subject of legal action over labor issues in Burma.


Nicholas Way

(2003) 25:44 Business Review Weekly 13-19 November p64