The ACTU’s view of economic and social change in the Asia-Pacific region, the ACTU’s involvement in Asia, and the issue of Trade and Labour rights – including the issues of ‘the social clause’.

A Trade Union Perspective

1. Introduction

First of all, I am delighted to speak to this forum on “Taking Australia into Asia: Trade Investment and Human Rights” sponsored by Community Aid Abroad (CAA). The ACTU sees organisations like CAA as very important in the campaigns for social justice around the world. The more work that unions and NGO’s can do together, particularly on issues like trade and human rights the better it is for all concerned – particularly those who are at the mercy of authoritarian regimes and other anti-democratic forces around the world.


For this workshop I wanted to outline the ACTU’s view of economic and social change in the Asia-Pacific region, the ACTU’s involvement in Asia, and the issue of Trade and Labour rights – including the issues of ‘the social clause’.

2. Economic And Social Change In The Asia Pacific Region

One of the most exciting prospects of coming years is the growth of the Asia-Pacific economy. Already the Asia-Pacific region is the fastest growing region in the world. We hear much of ‘the Asian Tigers’ now and the emergence of ‘the Dragon’ (China) in the future.


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 DGP 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. This comes against the background of a world economy where exports have grown faster than world GDP over the past two decades.


How has Australia responded to the emergence of the Asian Tigers (and increasingly the Dragon)? Australia has decided to get with the strength to become part of the region’s economic activity.


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 free market won’t do it by itself. 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 1996 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.


The rapid economic growth of the region is well documented but what are the social implications of these changes? What is happening to our societies and our communities?


Just a few points come to mind:



  • Urbanisation – the movement of population from rurally based-economic activity to the fast growing cities if evident. At least double the number of people live in cities than did 20 years ago. This has put pressure on urban infrastructure and indeed the urban labour market – forcing labour mobility across the region.




  • Labour Mobility – this is a key issue across the region as the rights of guest workers are often ignored – the union movement needs to work together to ensure that labour mobility is managed so as not to cause problems for both guest workers and the rights of workers in host countries.




  • Education/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.




  • Communications – the technological developments in communication of the past decade or so have been monumental and with the rapid economic growth of the region, more and more people are gaining access to it. This means a larger market for information and ideas. This has affected peoples’ aspirations in terms of economic comforts (consumer goods) and access to democratic expression and opinion. This has had important implications for the breakdown of authoritarian rule – whether it be in Eastern Europe now closer to our region, such as Burma. This goes hand in hand with the right to join unions – freedom of association will be demanded along with freedom of expression.




  • Poverty – Finally, it must be remembered that despite economic growth, that one third of 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 do these economic and social changes mean for trade unions in the region?


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.


In summary, independent trade unions are an important social mechanism to ensure that society benefits from economic growth in terms of employment, wages, health care, child care and health and safety standards. Equally, independent trade unions are an important force for building and sustaining a democratic society. It is no accident that throughout the world 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 presence of free and independent trade unions means that 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). This is important to our region and indeed throughout the world.

3. Trade And Labour Rights

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.


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 a Social Charter for Democratic Development. 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). It has been an integral part of the ICFTU’s campaign since its information.


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 crackdown on labour rights. 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. As it is occurring now in the Republican primaries in the USA with the candidature of Xenophobic Protectionist Patrick Buchanan


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 when LDC’s set up Export Processing Zones (EPZs) that ban unions. LDC’s compete on this basis not on the basis of quality productivity etc. Typically it is developing countries that are played off in this way.


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 former GATT head 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 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.


The ACTU participated in a Tri-partite Working Party on Labour Standards in the Asia Pacific Region. This was chaired by former Trade Minister, Michael Duffy, MP. The Report is yet to be released by the Federal Government.


The ACTU argued strongly for a social clause in the Working Party. However, there was opposition to the social clause from the rest of the Working Party on the grounds that there is not an international consensus for it – particular in ASEAN.


However, the ACTU has had some success on the Working Party in terms of:



  • support for core labour standards in Australia’s aid program;




  • rigorous evaluation of aid recipients’ projects with respect to labour rights;




  • incorporation of labour rights into International Financial Institution programs;




  • support for an activist ILO in the Asia Pacific region;




  • promotion of labour rights in UN as part of human rights;




  • consideration of a constructive dialogue on core labour standards in APEC;




  • support for NGOs in labelling schemes for products free of exploitative labour;




  • voluntary code of conduct to promote observance of labour standards by Australian companies operating overseas (including sub-contractors).



The implementation of these measures depends of course on the events of March 2nd!

5. Summary

Thank you for the opportunity to address this workshop. The ACTU will push on with the social clause debate, the code of conduct, a labour rights focus on Aid, labelling and other issues. The ACTU is also advantaged by the excellent development work by APHEDA around the world and also by individual affiliates (eg the CPSU in Vietnam and the Philippines, the CFMEU in Vietnam, ANF in Malaysia and the in the Pacific etc.). Our activity with the ICFTU-APRO and SPOCTU in particular, and the ICFTU in general also gives us strength amongst friends in the region.


Finally the more work we can do with CAA and other NGO’s the better – as labour issues are integral to social justice issues in the developing world in our region, and around the world.


Speech by Tim Harcourt, Research Officer, ACTU to Community Aid Abroad Conference: “Taking Australia Into Asia: Trade, Investment And Human Rights”. Held at YWCA Office, 489 Elizabeth Street, Victoria. 11.45am, Friday 23 February, 1996.