Globalization, Decent Work and Ownership:
The ILO Perspective
Mark Levin
ILO Cooperative Branch
Let me first express my deep appreciation to the
Capital Ownership Group and its Executive Director for inviting me to address
this important assembly and to deliver the warm greetings of the International
Labour Organization and of its Director-General, Juan Somavía. It is indeed a
great privilege to be here and to share with you some ideas about
globalization, decent work and ownership.
The International Labour Organization is very pleased to be associated
with this conference and looks forward to learning from your deliberations and
your conclusions.
I have been asked to speak on the topic
“Globalization, Decent Work and Ownership: The ILO Perspective”. Weighty stuff
indeed! The ILO, as you probably know, is a specialized agency of the United
Nations established in 1919 to promote social justice and internationally
recognized human and labour rights. Today, the ILO has a total of 176 member States
from across the globe. The ILO has a tripartite structure - its governing
institutions, the International Labour Conference and the Governing Body, reach
decisions on the basis of discussion and negotiation between government,
employer and worker representatives. The ILO provides a unique opportunity for
different views on the social and economic challenges of the day to be aired -
and for decisions affecting the working lives of billions of people worldwide
to be taken through consensus. We consider that the breadth of opinion
expressed within the ILO is a valuable asset.
What I would like to do in this short presentation is
to share with you some thoughts about the great globalization debate, describe
the ILO’s Decent Work agenda as a means of humanizing globalization and say
something about how we see the ownership issue in this context. I would like to
conclude with some thoughts about why the ownership “lobby”, if I can use this
term, has had so little influence so far on global debates and what might be
some ways to push the ownership issue forward.
In this forum I do not need to describe what
globalization is all about - there are others who have already done that very
successfully. Clearly, globalization has brought widening opportunities, great
prosperity and development for some economies. Economies and individuals that
have been able to take advantage of the expanding global marketplace have
benefited considerably - as a result many see globalization as an instrument of
progress.
However, we should also be cognizant of some
unpleasant facts from the world of work - the ILO estimates that more than a
billion women and men are unemployed, underemployed or what we term the working
poor. Some 120 million migrant workers and their families have left their homes
in search of finding a job elsewhere. The informal economy absorbs six out of
every 10 new jobs created globally, mostly in unprotected, low-income,
self-employed service sector occupations. Everywhere, the cost of occupational
injuries and illnesses is heavy. Blatant violations of trade union rights are a
sad reality in many countries and more than 120 million children aged 5-14
years are working full time in developing economies - I could go on but I think
the picture is clear.
Is globalization to blame for all this? Clearly not,
but to quote the ILO Director-General’s statement to the recent World Summit on
Sustainable Development in Johannesburg, “the present form of globalization is
exacerbating rather than bridging social divisions within and between
countries”. He continued: ”Many throughout the world are deeply disturbed, and
downright angry, at the failure to reverse these trends”. Many people believe
that globalization itself has raised insecurity, eroded rights and created
increased fears of exclusion and vulnerability.
In order to study these issues in depth, to move the
debate forward from conflict to consensus and to ensure that the process of
globalization works for all, the ILO has established a World Commission on the
Social Dimension of Globalization. The 25 member Commission is co-chaired by
Ms. Tarja Halonen, President of the Republic of Finland, and Mr. Benjamin
William Mkapa, President of the United Republic of Tanzania. Members of the
Commission include distinguished individuals from around the globe and from a
variety of constituencies. From the United States we have Ms. Ann McLaughlin
Korologos, Professor Joseph Stiglitz and Mr. John Sweeney. The Commission began
its work in early 2002 and is expected to release its final report during the
course of 2003. In common with other international commissions of this nature,
its deliberations will remain private for the moment to allow the members to
develop their ideas freely. It will be drawing on expertise from around the
world, including from the multilateral system, but also from a wide range of
actors through consultations at regional and country level. The task of the
Commission is to consider how to make globalization a more inclusive process
that promotes development. Issues of concern to people in their daily lives
such as work and unemployment, poverty and deprivation, economic development
and social justice are being addressed. We can expect the Commission to come up
with ideas about how to promote greater policy coherence among global
development actors. In this context, I
read recently that the newly elected Director-General of the World Trade
Organization, Dr Supachai Panitchpakdi, has said that he would seek to achieve
global coherence between the WTO and other international bodies, including the
ILO - a statement that bodes well for the future although we will see how this
pans out in reality.
It is against the background of the challenges and
opportunities posed by globalization that the ILO has developed the concept of
Decent Work to encapsulate our primary goal today which is to promote
opportunities for women and men to obtain decent and productive work, in
conditions of freedom, equity, security and human dignity. Thus, Decent Work
implies access to employment in conditions of freedom, the recognition of basic
rights at work which guarantee the absence of discrimination or harassment, an
income enabling one to satisfy basic economic, social and family needs and
responsibilities, an adequate level of social protection for the worker and
family members, and the exercise of voice and participation at work, directly
or indirectly through self-chosen representative organizations.
How can the Decent Work agenda serve as a platform for
thinking about globalization and about the needs of developing countries? In a
recent article in the International Herald Tribune, the Director-General of the
ILO outlined what he called some “common sense approaches that can make
globalization more equitable”. Here they are:
•
Concentrate
on creating opportunities for decent work and income in rural areas and large
cities through an enabling environment for investment and skills development,
particularly for self-employment and for micro, small and medium enterprises.
•
Move away
from the bubble and speculation of the casino economy fuelled by primacy of
financial markets, toward a real economy based on savings, investment and
creativity that generate solid companies and quality jobs.
•
Promote
social entrepreneurship and socially responsible investment funds. Put strict
limitations on the linkage between pension funds and stock markets. Protect the
value of savings.
•
De-link
economic growth from environmental degradation by investment strategies for
sustainable development made possible by new environment-friendly technologies.
•
Invest
heavily in information technologies and, through development cooperation,
enable poor countries to access these technologies.
•
Place policy
options on a sound footing by promoting social dialogue among workers and
employers and civil dialogue with representative voices of society.
•
Inject
fairness and accountability into the international trading and financial
systems.
Much of this is indeed “common sense”, or should be,
but regrettably the promotion of this agenda is an uphill struggle. Employment
promotion is far from being at the top of the list of many of the major
multilateral development frameworks. The ILO faces a major challenge, for
example, to ensure that employment concerns are taken account of in the World
Bank-driven "Poverty Reduction Strategy Papers" (PRSPs) which, in the
words of the Bank, "describe a country's macro-economic, structural and
social policies and programs to promote growth and reduce poverty, as well as
associated external financing needs. PRSPs are prepared by governments through
a participatory process involving civil society and development partners".
Many major donor countries are committed to this process, as well as the UN and
its specialized agencies. The ILO is mainly concerned with what we call
"mainstreaming the Decent Work agenda" which involves pushing ILO
concerns about workers' rights, employment creation, social protection and
social dialogue onto national policy agendas. The ILO has specifically focussed
on strengthening the ability of the social partners (employers’ and workers’
organizations) to participate more effectively in the PRSP process. The ILO is
also active in contributing towards the achievement of the UN’s Millennium
Development Goals which aim to halve by 2015 the proportion of people whose
income is less than $1 a day.
What has all this got to do with ownership? In my view, everything.
I am certainly not going to lecture this distinguished
audience on the benefits of employee, or workers’, ownership. It would,
however, perhaps be timely to remind ourselves of the main claims regarding
both quality job creation and retention. In my understanding the argument is
based on six key ideas:
1.
Workers’
ownership saves jobs by preventing enterprise closure
2.
Workers’
ownership motivates people to be more productive
3.
Companies
with substantial workers’ ownership out-perform those without it
4.
Workers’ ownership
enables people to participate
5.
Participation
contributes to creating healthier communities
6.
Broadened
ownership of capital has the potential to mitigate some of the negative effects
of globalization by anchoring the ownership of productive assets at the
community level.
In general terms, the greater the degree of ownership
and participation in decision-making, the more likely it is that workers’
ownership will achieve these goals. All things being equal therefore, if we
look along a spectrum of ownership models, genuine workers’ cooperatives would
probably demonstrate the highest degree of ownership and participation in
decision-making, while minority employee share-holding with little
participation would probably be the least.
This perhaps explains why the ILO has traditionally been mainly engaged
at the cooperative end of the workers’ ownership discussion.
In terms of the ILO’s Decent Work agenda, therefore,
workers’ ownership provides "productive work in conditions of freedom,
equity, security and human dignity" while anchoring capital locally and
increasing economic democracy. For this
reason the ILO has been actively engaged in supporting cooperative development
since the establishment of a cooperative technical service in 1920, deriving
its mandate from the ILO's Constitution which provides for consultations with
recognized non-governmental international organizations including those of
agriculturists and cooperators. It is interesting to note that the first ILO
Director-General, Mr. Albert Thomas, was a member of the Executive Committee of
the International Co-operative Alliance, which as the global voice of the
cooperative movement maintains a consultative status with the ILO. Deepening the dialogue between the ICA and
COG could bring real benefits.
The ILO, then and now, has viewed cooperatives as
important tools for improving the living and working conditions of both women
and men. The ILO sees cooperatives as businesses that are based on a broad set
of democratic and egalitarian values. Since cooperatives are owned by the users
of the services they provide, they make decisions that balance the need for
profitability with the welfare of their members and the community, which they
serve. As cooperatives foster economies of scope and scale, they increase the
bargaining power of their members providing them, among others benefits, higher
income and social protection. Hence, cooperatives accord members opportunity,
protection and empowerment - essential elements in uplifting them from
degradation and poverty. The ILO has thus always supported the development of
cooperatives as important vehicles in meeting its goals and has the largest
technical cooperation programme on cooperatives within the UN system.
With the ILO's recent consolidation of its focus on
Decent Work, the Cooperative Branch has placed greater emphasis on the
employment creation activities of cooperatives and their capacity to provide
social protection, especially to the marginalized sectors of society. The
organizational flexibility of cooperatives to reach out to the informal economy
provides a good opportunity to improve the conditions of work in this otherwise
unprotected sector. It is noteworthy
that the very values and principles on which cooperatives are based –
self-help, self-responsibility, democracy, equality, equity, solidarity, social
responsibility and caring for others - find congruence with the notion of
Decent Work.
At this June’s International Labour Conference in
Geneva, the ILO adopted a new international labour standard on the Promotion of
Cooperatives - Recommendation No. 193. A Recommendation is a policy guide to
member States and is not legally binding as in the case of a Convention.
Nevertheless, from past experience we know that ILO Recommendations find their
way into the law books and government policies of many of our members. The main
features of Recommendation No. 193 are as follows:
•
Recognition
of the global importance of cooperatives in economic and social development
(cooperatives are after all the largest non-governmental movement on the planet
with nearly 800 million individual members)
•
Reaffirmation
of the cooperative identity based on values and principles
•
Equal
treatment for cooperatives vis-à-vis other types of enterprise
•
Definition of
the government's role in creating a supportive policy and legal framework, and
in facilitating access to support services and finance, without interference
•
An active
promotional role for employers', workers' and cooperative organizations
•
Encouragement
of international cooperation
We hope that this new Recommendation will be of great
service to the cooperative movement and to the ILO's global tripartite
constituency and we look forward to working closely with our partners to
promote the new instrument. Already a number of ILO member States are
considering revising their laws and national policies to take account of the
provisions of Recommendation No. 193.
We believe that the cooperative methodology provides a
proven response to many of the world's current economic and social problems and
challenges, not least in the fight against poverty and social exclusion. The
ILO believes that Recommendation No. 193 will serve as a useful tool in the
struggle to promote Decent Work through cooperatives.
So much for the good news, but what about the bad
news?
Well, unfortunately, there is quite a lot of bad news.
Despite these “self-evident truths”, the cooperative agenda, let alone a
broader employee ownership agenda, has little impact today on the major global
development frameworks - those promoted by the UN, the Bretton Woods
institutions and the major donor countries. I am not going to go into all the
reasons for this, suffice to say that misuse of the cooperative idea by many
developing and formerly socialist countries, coupled with the market
fundamentalism of the 1980's and 1990's have, without much doubt, turned many
people off cooperatives. I believe, however, that we are now seeing a change of
perspective, a pendulum swing if not a paradigm shift, as the failures and
excesses of individualistic, market-driven “solutions” become apparent. The ILO
Recommendation is already serving to renew interest in cooperatives among
members of the development community within a new people-driven development
paradigm. Incidentally, the debate on cooperatives in the ILO has by and large
been promoted and driven by the workers’ constituency, indicating renewed
interest and commitment on their part. Nevertheless, I would advise strongly
against complacency. We are a long way from the “Promised Land”.
But what about other non cooperative-specific forms of
employee ownership? Apart from a few exceptions it appears that employee
ownership has had little impact, if any, on international thinking and policy
making on globalization and development. I would like to quote from Vic
Thorpe’s excellent background paper to this conference: “It is significant that
worker ownership discussions have been virtually absent from this year’s
activity (both official and unofficial) surrounding the World Summit on
Sustainable Development in Johannesburg. The subject is not really on the
radar-scopes of either the government institutions or of the campaigners for a
new approach to world development and distribution, although it has a great
deal to offer”. How right you are, Vic! If the benefits of broad ownership are
so obvious to us why don’t others realise the truth? In North America and in
Europe ownership is on the agenda, if not very high up the agenda, with one or
two exceptions. Developing countries are not really engaged in non-cooperative
employee ownership schemes – cooperatives are on the agenda but not always very
high up. One of the reasons of course, is the structure of the typical
developing economy, which has a very small industrial base and a very large
informal economy. This is why ESOPs and other types of employee ownership
schemes have difficulty in getting their message across in the developing
world. I would be happy to be proven wrong but it seems that the large
development agencies are really not in the loop either.
I am not sure I have the explanation for the low
profile of democratic ownership in international debates on globalization and
development, let alone having a ready-made recipe for turning this situation
around. I am rather hoping that Friday’s strategy discussion will shed some
light on the issue. Probably though we can point to the ideological crisis of
the Left following the collapse of State socialism as a principal cause,
coupled with a lack of confidence and the absence of an effective communication
strategy. The prevailing wisdom is unfortunately that solutions based on
solidarity are somehow relics of the past and not relevant to the rough and
tumble of today’s marketplace. We should recognize that there are those who regard
cooperatives, majority employee ownership and participation as totally
"inappropriate" in the new world economic order. These practices
"do not fit" the current paradigm of the individualistic,
competitive, liberalized and globalized market place. I would of course argue
exactly the opposite - the growing crisis of unequal globalization, or what
Ravi Naidoo has called “neo-liberal globalization” gives ownership a tremendous
opportunity precisely because it provides alternatives based on both economic and
social objectives, values and a community and people orientation. You can
accuse me of being overly optimistic but the growing mainstream disquiet
surrounding the negative aspects of globalization may provide the platform for
an “ownership offensive”. This is why this conference is so timely.
Because of its mandate, the ILO is in many ways the
“natural home” of employee ownership in the multilateral system. However, I
would be fooling you if I were to tell you that all in the garden is rosy.
Apart from our cooperative development programme the ILO has no ongoing work
items in the field of employee ownership. If COG wishes to have an impact on
ILO thinking and policies a number of things have to happen. Nearly a year ago,
COG’s Executive Director, Deb Olson, paid a very successful visit to the ILO
and met a number of senior officials, including the Director-General. Following
up these contacts will be very timely. As I have mentioned before, however, the
ILO is a tripartite organization and responds to requests from its
constituents. If governments and/or the social partners - employers’ and
workers’ organizations – show an interest then the International Labour Office
will respond. It is well known that both of the social partners have, for
different reasons, reservations about employee ownership. Employer attitudes to
employee ownership can be characterized as a qualified "yes, but...",
appreciating its value for improving employee loyalty, productivity and
profits, which are the exact reasons why many trade unionists are suspicious.
Employers often fear that workers' involvement in decision-making will
compromise managerial prerogatives and thus prefer minority stock ownership
schemes, usually for managers only. Trade unions, on the other hand, often fear
role conflict and a loss of interest in the results of collective bargaining.
They also often lack positive experience of employee ownership. Despite the
suspicions, trade union attitudes can also be characterized as “yes, but...”.
Certainly, however, there is enough interest among both employers and workers
to warrant a campaign to sensitize them further.
Where do we go from here? I
have tried to outline how the ILO views globalization, decent work and
ownership and have expressed a few of my own thoughts about how COG might push
its way up the policy agenda. There are a number of available opportunities for
action. International organizations are not hermetically sealed - in fact they
often welcome new and different ideas. I believe that it is realistic and
feasible to design a comprehensive strategy, involving the individuals and
organizations represented here, to show why ownership is an “old-new idea”
whose time has come. I believe that engagement in the international debate on
globalization will pay off not only for those countries and communities not
familiar with the principles and practices of ownership but also for those
already involved. Promoting the message also strengthens the promoters
themselves. This conference is
therefore very timely indeed and I am extremely happy to be able to explore the
way forward together with you.
With these words I wish you,
on behalf of the ILO, a very fruitful and successful conference. Thank you.