A global perspective of social and economic indicators and their impact on workers and their trade unions in the Asia Pacific. Martin Ferguson President, ACTU.

1. Introduction

On behalf of the ACTU, welcome to Australia and I congratulate the ICFTU-APRO on this timely initiative. I wish to outline Australian developments both locally and abroad including the ACTU’s contribution to the ICFTU-APRO campaign for the social charter. Can I say at the outset that the ACTU believes strongly in the merits of international unionism. The task for working people to organise and stand up for themselves has always been hard – but I think that international bodies such as APRO give us confidence and the means to make the task easier. Never forget that unions have always had international links and that workers have stood up for their brothers and sisters across the world long before the likes of IBM, and Union Carbide were ever invented. The global challenge is nothing new to us and I think international unionism and bodies such as the ICFTU-APRO will become more, not less, important in the years ahead.


The ACTU too faces great challenges on the domestic front – given the rapid changes that Australia has gone through in the past decade – as well as on the international front. In fact, the way Government, Unions and Companies operate now, domestic and international distinctions have become increasingly blurred. Industrially, we operate with a national and global framework in mind. This is in strategic part, due to the integration of Australia into the Asia Pacific region and the enormous growth of this region. This is the focus of the first part of my presentation.

2. The Asia-Pacific Region – Economic and Social Change

In terms of economic growth, it is an exciting decade for Australia as our economy builds on its already substantial integration into the Asia-Pacific region. The Asia Pacific is the fastest growing economic region in the world and will continue to be so through to the 21st century.


The Asia-Pacific has quite clearly been the engine of the world’s economic growth in the last decade. For example just taking the economies of Thailand, Malaysia, Indonesia, Taiwan and the Republic of Korea alone, you have a market of 330 million people with a combined GDP of $US700 million – which is two and a half times bigger than Australia’s and is predicted to grow by 7% this year and the next.


Just a simple look at Australia’s trade figures shows how much has changed in the past two decades with respect to our economic relationship with this region. Taking the ASEAN countries alone, in 1973/74 Australia exported 7.7% of its total exports to this group. In 1993-94 the total share had risen to 13.8%. Likewise, in terms of imports 3.2% of total imports came from this group in 1973/74 whilst in 1993/94 it had grown to 7.8%.


In North East Asia too, Australia’s trade share has strengthened. For example in 1973/74 only 0.9% of Australian exports were sold to the Republic of Korea, in 1993/94 this had risen to 7.3%. Even in the case of imports, only 0.5% came from Korea out of the Australian total in 1973/74 whilst 2.9% came in 1993/94. Japan, of course, has continued to be strong and China will no doubt be an important player in the future.


The changing direction of Australian trade also illustrates the importance of the Asia Pacific Economic Co-operation (APEC) region in world trade. The APEC region is increasing its share of world trade – the share grew from 37% in 1983 to 44% in 1993 (Bureau of Industry Economics, 1995). To a large extent this reflects the rapid growth in intra-APEC trade. This also explains dependence on the APEC region for its trade – in 1993/94 APEC bought 76.1% of Australian exports and sold 69.5% of total imports to Australia.


Whilst it is important to know the facts of trade development and economic growth in the Asia Pacific – we need to know what is it all for?


Economists from the early 19th Century British theorist David Ricardo to the free trade gurus of the 1990s will tell you how free trade and ‘comparative advantage’ will ‘maximise economic welfare’ for all nations who trade. However, few of these economists have explained how the benefits of trade will be distributed to ordinary working men and women (rather than being captured by a elites in the nations who trade). All economists say it will make all nations better off but they have no answer as to who will benefit and who will lose within each nation.


However, unionists have always known this – the opening up of world trade and removing international impediments to the flow of international commerce is only beneficial if it raises the living standards of working families. You need the means to distribute the benefits of trade. The ICFTU noted this, when it referred to the Havana Charter of 1948. It stated:


“The ‘trickle down’ theory of trade policy does not work. There are no automatic mechanisms by which increased exports lead to improved wages and conditions…


Increased exports do provide the resources for improvements but only trade unions through collective bargaining or governments through adequately enforced labour laws can ensure that increased trade does really lead to higher standards of living”.


This is as true a statement in 1995 as it was in 1948. Whilst the Australian union movement actively assists companies in developing competitive export-orientated industries we are doing so to ensure that the benefits are shared with the Australian workforce. Likewise the Australian union movement supports the efforts by our union counterparts in the region to ensure that the benefits of economic and trade expansion accrue to working people. Free and independent trade unions are the main democratic mechanism to see that free trade benefits the workforce.


We know about the rapid trade and economic growth in the region but what is occurring in our societies? What are the social implications of the robust growth of the region?


Just a few observations come to mind. For example, firstly, the urbanisation of the region which is accelerating. At least double the number of people live in cities that did 20 years ago. This puts enormous pressure on urban populations and urban infrastructure.


Secondly – literacy. Education policies have assisted literacy, basic education and skills development in raising the human capital stock of the society and the resulting productivity benefits. However, levels of illiteracy still exceed 50% in the most populated countries of Asia.


Thirdly – in many countries in the region the agricultural labour surplus is fast diminishing and employment is not being created fast enough beyond agriculture to find work for those displaced workers. This has put pressure on the urban labour market and has also forced labour mobility across the region. Labour mobility is a key issue in the region – as the rights of guest workers are often ignored. The union movement needs to work together across the region to ensure that labour mobility does not cause problems for both guest workers and workers of the host countries.


Historically, unions often find solutions to minimise the social impact of such changes.


Finally, it must be remembered that despite economic growth, that one third or the total population of the South and East Asian region still survive in conditions of severe poverty. This causes problems for workers in poverty – particularly women workers and children. Child labour is still rampant, as is child prostitution, ill treatment of young women (including girls) and terrible health deficiencies. This means a terrible burden is carried by women in the workforce and as carers for their families. And this occurs as women are gaining a greater share of employment growth in the region – meaning increased responsibility in terms of both work and family.


What does this mean for unions in the Asia Pacific?


First unions are needed to ensure that the benefits of economic growth and free trade are shared amongst the workforce. Free trade should not only bring increased wages but also non wage benefits (such as pensions, health care, child care), and ‘social wage’ benefits such as education, hospitals, and increased infrastructure for our bursting cities.


Second, unions are needed to campaign against the social problems of the region – child labour, child prostitution, forced labour, poverty, illiteracy and the devastation of communities.


Third, unions are a force against political authoritarianism and abuse of human rights. Trade unions are the main mechanism for democratic action – take Solidarity in Poland in 1981 that lead to the collapse of the Eastern bloc, or the efforts of non-racial trade unions in South Africa that led to the collapse of apartheid. These economic and social changes in the Asia Pacific bring challenges to government to meet the political needs of current and future generations.


Throughout the region, governments will not be able to revert to authoritarian military solutions to repress trade unions and other forces for democracy (of course I am not saying they will not try, particularly the more despotic among them). It is no accident that for example in Korea, the growth of independent trade unions has been accompanied by pressure for democratic change. Commentators from the region have noted the demand for democratic rights by the population together with trade union rights. The talk of ‘blue’ issues (worker rights issues) was commentated on by respected Asia Business journalist Florence Chong who said that in the Asia Pacific:


“Labour will become as significant through the 1990’s and into the next century as the environment became in the 1980’s”.


[Quoted in The Australian 24 August 1994]


Labour issues in the region have indeed become important – for example the coverage of strikes and industrial issues in Asian based newspapers has risen dramatically in this decade and will continue to do so. For the old authoritarian order – labour is an issue like democratic change – one that just will not go away.

3. Australian Economic and Social Change and Its Implications for Trade Unions


Australia is undergoing great changes – economic, social and industrial. Fortunately, Australian trade unions have always been part of the mainstream of those changes and in recent years initiators of change.


The Australian trade union movement has been able to participate in economic policy making through the ACTU-Federal Government Accord. The Accord is essentially a consultative process on economic and social policy that the Accord parties – the ACTU and the Federal Labor Government engage in to bring a negotiated agreement. The Accord is one of the longest running incomes policies in the world – it has endured since Labor returned to power under Bob Hawke in 1983.


The current Accord Agreement (Accord Mark VII) was negotiated in 1993 when Australia, was still recovering from the effects of recession. Accord Mark VII ‘putting jobs first’ committed the ACTU and the Government to 500,000 jobs in three years (by March 1996). The employment target was met one year earlier, and unions will continue to work together with the Government to implement its employment program ‘Working Nation’.


In addition to the employment priority, the Accord has also ensured a low inflation rate in Australia relative to our major trading partners and that all wage and economic policies take into account employment, prices, the external account and international competitiveness. The wage earners of Australia have made a significant contribution to Australia’s employment growth, low inflation rate and improvement in international competitiveness since 1983.


But the Accord is not just a tool of economic management. It is about a means of meeting social goals.


The Accord, through the ‘social wage’ has delivered benefits that were out of the reach of working Australians twelve years ago. For example:


1. Health Care – the original Accord provided for Medicare (introduced in 1984) a universal and fair health insurance system – providing all Australians with access to excellent hospital care and local physician treatment. The system is financed by an income tax levy. This has increased access to health care for working families.


2. Superannuation – twelve years ago the presence of superannuation was for executives and the well off. The rest of the workforce had to rely on the old age pension. The Accord provides a levy on employers to make contributions to workers superannuation accounts. This has spread retirement plans to most of the workforce. (From 40% in 1983 to over 90% today).


3. Child Care – In 1983 child care for working families was barely available. This burdened working mothers in particular with only 46,000 subsidised child care places. In February 1993, the Government committed itself to the creation of 104,500 subsidised places made up of:


– Family day care

– Community based long day care

– Occasional care

– Private long day care

– Non-profit and employer sponsored long day care

– Multi-functional centres

– Outside school hours care.


With this commitment, there will be 299,500 child care places in total by 1996/97.


Income tested child care assistance is available to parents who use both government established centres and commercial child care centres. Subsidies range up to about $100 per week per child.


In addition a Family Payments Package (eg Dependent Spouse Rebate) has been introduced to assist working families with children.


4. Tax Reform – In 1983 the taxation system was riddled with tax avoidance and evasion and burdening the low to middle income earner. The tax system has been reformed to ensure that non-PAYE tax payers pay the fair share. The main elements of tax reform have been:


– substantial personal income tax easing;


– reductions of poverty traps;


– taxation of fringe benefits, payable by employers;


– removal of tax deductibility for entertainment expenses;


– introduction of substantiation requirements for employment related expense accounts;


– introduction of capital gains tax on real capital gains;


– rationalisation of the wholesale sales tax;


– new foreign tax credit system;


– imputation system for company dividends.


5. Other Social Wage Benefits – In addition other social wage benefits have included: termination change and redundancy, education and training reform, family assistance, social welfare reform and labour market programs.


The Accord has been a means for unions to initiate change and enable Australian workers to benefit from economic and social developments. It allows the harsher elements of economic change to be softened by provision of consultative mechanisms and by the process of a safety net to avoid the growth of poverty that has occurred in other industrialised societies.


The union movement has ensured that the economic and social benefits are available to all – we are an inclusive movement. This is particularly so with disadvantaged groups in the labour market. For example:


1. Women – The ACTU has initiated provisions for family leave, family related work initiatives (such as child care), affirmative action (AA) and equal employment opportunity (EEO).


2. Youth – Because of the burden of unemployment that falls on the young – particularly teenagers the ACTU has initiated various initiatives in terms of traineeships, the national training wage, and other labour market programs.


3. Migrant Workers – Australia is a multicultural country and this is reflected in our workforce. Many workplace are “mini-United Nations” with a variety of nationalities and languages spoken. Accordingly, the union movement has developed programs to assist migrant workers, particularly those of non-English speaking backgrounds (NESB), including English language training, skills training and other initiatives. This is important as migrants have a greater likelihood to join unions than native born Australians – the union movement itself is a mini-United Nations here in Australia. (43.8% of overseas born workers are union members compared to 41.5% of Australian born workers – (Source: ABS Cat 6342.0, August 1993).


4. Aboriginal and Torres Strait Islanders – One of the great changes in Australian society has been in Aboriginal and Torres Strait Islander Affairs with the ‘Mabo’ decision of the High Court and subsequent Government initiatives by Prime Minister Keating. Australia is coming to terms with its horrific treatment of its indigenous people through a process of reconciliation between black and white Australians. The Mabo decision and the subsequent package of the Native Title Act, Land Fund and Social Justice Package will go some way to restoring dignity and self determination to Aboriginal and Torres Strait Islander people. The ACTU strongly supported these initiatives lobbying hard in the face of a hostile Senate and reactionary State Conservative Governments (such as WA).


In the labour market too, indigenous Australians are the most disadvantaged groups. The ACTU for its part has Aboriginal Employment Development Officers (AEDO’s) in every state and territory to promote employment for Aboriginal workers and make sure they get a fair share of employment opportunities.


I have outlined the ACTU response to changes in Australia in the last decade – now I wish to turn to the ACTU’s program in the Asia Pacific.

4. What Australian Unions Should be Doing in the Asia Pacific Region

The ACTU, in order to strengthen its ties with the region has formulated an ‘Asia Strategy’ through its International Committee. The ACTU’s Asia Strategy is guided by four tasks:


– to strengthen relations with the trade union movement in the Asia region;


– to participate in enhancing Australia’s social and economic integration in the region;


– to encourage affiliates to participate on industry specific regional initiatives; and


– to encourage the development of independent and representative trade unions in the region.


In terms of Australia’s integration with the region, I want to say at the outset that the ACTU recognises the great diversity amongst nations in the Asia-Pacific.


The ACTU respects each nations’ different culture, tradition, history and values.


There is no way that the ACTU would advocate imposing our Australian practices or cultural traditions on to nations in the region.


However, having said that, the ACTU is part of the international workers’ movement and is actively engaged in the regions’ international trade union structures such as the ICFTU-APRO and the South Pacific and Oceanic Council of Trade Unions (SPOCTU). We have a commitment to these bodies to help ensure that workers rights are protected in the region. We will stand up for Workers rights, anywhere, anytime.


The ACTU also supports APRO’s work for the recognition of free and independent trade unions. This is vitally important in a world where infringement of trade union and human rights is commonplace.


The ICFTU’s annual report on violations of trade union rights documents well the abuses around the world and particularly in our region. The 1995 report shows things are not getting any easier – trade unionism is a dangerous occupational in some countries in the region.


In 1992-1994 Asia represented 29% of all individual and collective trade union rights violations around the world (greater than Africa at 28%).


For 1992-94 the violations in Asia consisted of the following:


– 51 murders of trade unionists


– 1,790 injuries to trade unionists


– 5,388 arrests and detentions


– 55,061 dismissals


– 225 incidents of Government interference in trade union’s collective rights.


These infringements in the region are of grave concern to the ACTU and if Australia wants to be integrated in the region in terms of economic fortunes then we will increasingly have something to say about how workers are treated. The violations of trade union and worker rights are symptomatic of other anti-democratic elements.


For example – the freedom of expression is under threat as well as the freedom of association. In Indonesia, press freedom and democracy is under threat following the gaoling of journalists, the crackdown on three of Indonesia’s prominent weeklies – Tempo, Detik and Editor, and the detention of the leadership of the Alliance of Independent Journalists (AIJ).


These threats to democracy by authoritarian regimes in the region have been condemned by the international community. The ACTU strongly adds to those calls for freedom of expression, freedom of association, and the need for independent journalists and other democratic elements to prosper in the region.


Some of the solutions to our problems as workers’ representatives in the region will be addressed by ICFTU-APRO’s Social Charter for Democratic Development. You will hear more about this today. This includes the social clause in ensuring that trading partners and fellow nations have a common acceptable consensus on supporting labour standards in their nations. Can I say this about the social clause – about which a lot has already been said (and will continue to be). There are six basic myths about the social clause:


Myth 1 – It is the invention of the Clinton Administration (In particular Mickey Kantor and Robert Reich)


In fact – it is as old as the ILO itself – first mentioned in 1919. It has featured in other international (not US) documents including the Havana Charter (1948).


Myth 2 – The Social Clause is Back Door Protectionism


The social clause is about protecting workers not markets. It is about protecting workers from authoritarian regimes, dangerous factories, child labour etc.


It is the ACTU’s view that support for the social clause is an insurance policy against a return to protectionism. It is our view that a social clause will enable countries to compete internationally on grounds other than causing a downward spiral in labour standards. This will maintain support for trade liberalisation in all countries, rather than returning to the protectionist measures of the 1930’s.


A social clause will prevent employers from denying workers basic rights, the right to organise and bargain collectively, the right to a safe environment and an improved quality of working life. It will also prevent governments assisting employers in the denial of labour rights. Instead, countries will have a common interest in the achievement of fair labour standards related to improved productivity and expanded trade and economic growth.


A social clause will allow countries to compete on a fair and efficient basis, rather than a lowest common denominator approach. It will also bolster community support for trade liberalisation (and illustrate the benefits of trade expansion) and help stave off a protectionist backlash to the WTO and other regional trade liberalisation measures.


Myth 3 – The Social Clause Protects Workers in Rich Countries to the Detriment of Workers in Poor Countries


In actual fact a social clause protects workers in poor countries being played off against each other by rich country employers. An example is the Textile and Clothing industries in the Cook Islands who lost all their industry to Fiji because of their relative labour standards. Had there been minimum labour standards in the South Pacific region, then the Cook Islands would not have lost their industry. Rather their industry would have competed on the basis of quality, productivity, product design etc., other than reducing labour standards.


Myth 4 – The Social Clause is Imposing Developed Country Wages Throughout the Region on Developing Countries


This is clearly a myth. Countries have difficulty regulating for minimum wages within their own national borders let alone across international boundaries. The social clause supports core minimum labour standards rather than minimum wages. These include prevention of child labour, prevention of forced labour, freedom of association, the right to organise, the right to bargain collectively, anti-discrimination in employment measures, and the right to work in a safe environment.


These elements are all consistent with ILO Conventions relating to basic human rights, Convention No’s 29, 87, 98, 100, 105, and 111.


Myth 5 – Labour Rights Have Nothing to do with the WTO


The ACTU says that the decisions taken in multi-lateral trade forums have everything to do with workers. The outcomes of negotiations to form the GATT and the WTO will impact on workers’ living standards throughout the world. As a result workers should have some input into those decisions. It is important that the social benefits of the GATT be maximised and the social clause is the appropriate mechanism to do this.


It is important that it be multi-lateral. Bi-lateral mechanisms in the past have often been inconsistent. For example the United Sates have used their trade laws unevenly on labour rights grounds in the past. For example the Reagan Administration took action against Nicaragua and Romania on labour rights grounds, but not against right wing Latin American countries. There must be consistency.


Labour rights should be sustainable over time and multilaterally enforced – not at the whim of one country or another when they are worried about their balance of trade.


Furthermore, it has been said the ASEAN Foreign Ministers and by Arthur Dunkel that social conditions and labour conditions should be addressed by other International bodies such as the ILO and that it is not a place for the WTO. The ILO cannot enforce labour standards on its own, it needs the WTO as trade is a potent pressure point for lifting social conditions and human rights. Likewise, the WTO needs the ILO’s 75 years of experience on labour standards – the ingredients of the social clause are there in ILO Conventions.


Together, the WTO and the ILO have the potential to raise social conditions and labour rights with trade and economic growth.


Unfortunately support for the ILO has not been forthcoming from ASEAN countries and indeed, in past years, from the United States. Social conditions have a legitimate place on the WTO agenda. This argument has been reinforced by their decision to develop a work program on trade and the environment as a priority because if the WTO believes that Dolphins matter in trade, then surely workers matter as well.


Myth 6 – Trade Expansion and Market Forces will Inevitably Bring Improved Labour Standards and Democratic Benefits with it


This view has been put by right wing economics commentators and politicians. I don’t have to tell a group of prominent unionists such as yourselves that improved wages and conditions and employee rights are not inevitable – they have to be fought for.


The economic expansion of our region has not stopped horrific industrial accidents (such as those in Thailand or China) or anti union crackdowns in Korea or the rape and murder of Indonesian unionist Marsinah, or the gaoling of Journalists in Indonesia.


These are not isolated incidents, the ICFTU Reported 51 murders of unionists in the region during 1992-1994. Decent working conditions and Democracy have to be fought for and free trade unions are the best vehicle to achieve it.


In Australia, the Government has set up a Working Party on Labour Standards in the Asia Pacific region, on which I sit with representatives of Government and Business. The working party will report in late 1995 – it will look at the social clause and other mechanisms such as, a company code of conduct to improve labour standards and worker rights in the region. This has given some strength to our concern for labour rights abuse in the Asia Pacific region.


Our affiliates have also been working hard in the region for example:


– the CPSU in Vietnam and the Philippines

– the CFMEU in Vietnam

– training for Nurses from Malaysia for the ANF


The work of APHEDA – the ACTU’s humanitarian overseas aid agency in the region and the ACTU has been actively supporting the work of the ILO in Asia. There are many practical things we can do to help in terms of occupational health and safety, skills training, language training, education which will allow workers, especially in developing countries to raise their own independence and skills base.


The ACTU has also asked the Federal Government to raise worker rights in its own diplomatic efforts. For example Prime Minister Keating and Foreign Minister Evans raised the issue of the gaoling of an Indonesian trade unionist when in Jakarta for the APEC summit last November.


International pressure can be put on countries who respond by improving their labour standards.


In addition it is important to remember that many Asian born trade unionists in Australia have brothers and sisters trying to survive those conditions in their countries of origin. They want Australian unions to speak up for their brothers and sisters whom have no one to represent them because they live under authoritarian rule.

5. Summary

In summary I thank you for your time and for coming to the ACTU.


The links with unions in Asia are vitally important to us.


The time when the only time an Australian trade unionist went overseas was to Europe (or perhaps the USA) twice in a working life time for a “recreational/cultural visit” has gone.


In the 1990’s our regional international links are practical and industrial – we are more likely to go to Tokyo (than London) for an industrial negotiation. Furthermore, there is a new generation of trade union officials who have close contact with the Asia Pacific, or are of Asian or Pacific Islander origin coming into our ranks. The union movement reflects the changes in Australian society as a whole.


The ACTU welcomes these changes and is committed to increased co-operation amongst free and independent trade unions in our region amongst our neighbours.


Thank you.


ICFTU-APRO Women’s Committee. ICFTU-APRO/JILAF Seminar On The Social Charter For Democratic Development. Martin Ferguson President, ACTU. Wednesday 14 June, 1995