Vol. XI, Bulletin No. 4                                                     April 3, 2006

LABOR UNREST SHOCKS VIETNAM
Factory Workers Launch Series of Wildcat Strikes,
Boldly Demand Dissolution of Government's 'Unions'

In an unprecedented challenge to the ruling Communist Party of the Socialist Republic of Vietnam, 11 worker representatives are pressing the government to restore "the legitimate rights" of Vietnam's working men and women.  In a manifesto-like declaration bearing the 11 workers' signatures and places of work, they demanded the dissolution of the Party/state-controlled labor organization and the elimination of  Party cells from the private factories where they work. 

Their statement, issued in February, followed a January wave of unauthorized strikes in manufacturing plants producing for export.  Estimates on the numbers of workers involved range from 20,000 to 60,000 in all sections of the country.

"The government was caught by surprise at how angry the employees were over their low wages," Thuyen Nguyen, a worker rights activist in San Francisco who has extensive contacts in Vietnam, told reporters for the CorpWatch website.

In response to the strikes, the government announced in February it would increase the federally mandated minimum wage from $40 to $55 a month in Hanoi and Ho Chi Minh city and by lesser amounts in smaller cities, effective April 1 -- a delay that prompted further wildcat strikes.  But worker discontent went beyond low pay.

Workers Assert Their Right To Organize and To Protest Abuses

U.S. media reporting on events in Vietnam is paper-thin.  It took a Vietnamese-language newspaper in California to disclose the first information to the U.S. public about the daring worker declaration. Apart from insisting that Party organizations get out of their factories, the declaration also:
Vietnam ranks among the Southeastern Asia's lowest in the wages and benefits that it provides its working men and women.  Europeans and American companies that contract out work to factories in Vietnam claim, perhaps correctly, that they provide better conditions than found at other local plants.  But that did not prevent many of their workers from going on strike.

Fate of Strikers and Strike Leaders Not Clear 

At this time it is not clear whether the government has taken any retaliatory action against the strikers or against the 11 workers who risked signing the February declaration. Vietnam normally does not treat dissenters with kindness.  In fact, it often punishes them with prison and house arrest.

According to U.S. government records, Vietnam currently inflicts such punishments on at least 22 persons  for political or religious reasons: six are in prison and 16 others are in some other form of detention, such as house arrest.  One of the prisoners is a physician, Dr. Pham Hong Son, whom the government convicted of "espionage" for translating an essay on democracy from a Department of State website.

"I bluntly told GVN officials that the American people will not understand why a country that wants to have better relations with us would imprison someone for translating an article on democracy,"  Barry Lowenkron, assistant secretary of state for democracy, human rights, and labor, who visited Vietnam in February, testified before a House subcommittee on March 29.  He was providing an update on official meetings called the "U.S.-Vietnam "Human Rights Dialogue."

It is time to be somewhat blunter. Dialogue is fine, but by itself it does not carry any weight, especially not when dealing with a Communist power. But the U.S. does have opportunities to be more effective in using its influence.

Using American Influence for Universal Freedom and Human Rights

At present, for example,  the United States and the Vietnam are engaged in negotiations over the terms of  Vietnam's accession to the World Trade Organization.  It is true, shamefully so, that the WTO agenda excludes human rights issues, but there is no reason why they could not be raised in a corridor dialogue. Say about the wisdom of releasing the likes of Dr. Pham Hong Son and of respecting Vietnamese worker demands for freedom.

"I believe that American Presidents ought to confidently use American influence for the good of the world, and that includes demanding universal liberty and human rights and human dignity."
     -- President George W. Bush at Freedom House conference in Washington, D.C., on March 29.

How Trade Grows U.S. Trade Deficit
The AFL-CIO is pressing for a moratorium on new trade agreements "until we can rewrite them to protect and advance workers' interests."

"While every trade deal is sold as a market-opening agreement, the reality is that each new agreement just digs deeper into the hole we're in," the AFL-CIO executive council said in a statement adopted at its meeting in San Diego on February 27. The council charged that using "a false model for trade -- excessive protection of corporate rights and a flimsy fig leaf for workers, farmers, and the environment" -- has produced these negative results on the U.S. trade deficit::
The AFL-CIO proposed that Congress levy "a temporary import surcharge to help bring our trade deficit under control."  The full text of the statement, "Time for Bold Action on Trade," is available online.

Reebok's Revealing Human Rights Report
Reebok's 2005 human rights report opens with this affirmation: "For nearly two decades, human rights have been an integral part of our culture and a great source of pride for us."  But will its human rights work survive now that U.S.-based Reebok has merged with Germany's leading designer and marketer of sports footwear and apparel, adidas?

Anticipating that question, Paul Fireman, Reebok International chairman and CEO, who agreed to sell Reebok to adidas for $3,800,000,000, writes in the human rights report: "As an ally in the on-going and important effort to protect the rights of workers, adidas also holds many of the same values that we have here at Reebok.  By joining together, our ability to continue to make progress....will only increase."

The future, however, is never certain, especially not in the competitive world of international commerce and finance. In the meantime, the Rebook human rights report, for all its emphasis on the "considerable progress" made, reveals the difficulties inherent in trying to integrate worker rights into an immense commercial structure.  In Reebok's case, that's a global supply chain that reaches across 50 countries, from Albania to Zimbabwe, involving 725 factories owned by other firms, with more than 500,000 workers who cut, sew, screen-print, embroider, dye, stock-fit, wash, assemble, package, and perform other tasks to make goods that display the Reebok, Rockport, CCM, Jofa, Koho, and Greg Norman brand labels. 

"As a company operating in the global marketplace, we believe we have an obligation to act in a socially responsible way," Reebok says in its report. To fulfill that obligation in its myriad business operations, it has created a large human rights policymaking, monitoring, enforcement, record-keeping, and educational infrastructure.

Human Rights Program Remains a 'Work-in-Progress'

Despite that large infrastructure, says Reebok, "full integration of human rights guidelines...is a work-in-progress."   For one thing, Reebok's human rights guidelines have not been extended to its Greg Norman or other non-Reebok and non-Rockport brand names, which accounted for 10% of Reebok's 2004 revenues. A small matter perhaps, but it does prompt some questions, capsulized into one: "Could Reebok be dreaming an impossible dream?"

After all, Reebok has been trying to bring human rights reforms to quite a universe:  to about 725 factories that it does not own, with a half million workers and managers that it does not employ, often in countries with basic values that Reebok does not share. Take China. 

What on earth has Reebok been doing in China?  Making money surely.  But promoting human rights standards?

Some Indicators of How China Responds To Human Rights Guidelines

China has the largest concentration of Reebok-supplying factories -- 167 out of 725. Sprinkled throughout the 76-page report are signs of China's slow response to Reebok's human rights interventions:
In a fascinating first-person report, Sherry Yuan, a Reebok human rights manager responsible for 40 factories in five Chinese provinces, provides a snapshot of reactions to her monitoring work.   "I love my job," she writes, "but it can be very frustrating, especially when there is nothing I can do. For example, even when I have helped reduce [compulsory] working hours in factory once, the problem occurs again because of the pressure of the industry....I hope other brands will come on board so that I am not always seen as the bad guy with factory management."

Will the merger with adidas help her out?

Former Neo-Conservative at the Crossroads

In his new book, "America at the Crossroads," Francis Fukuyama, professor of international political economy at John Hopkins University, says that the world today lacks effective international institutions to grapple with its serious global political and economic problems. 

In a chapter on "Rethinking Institutions for World Order," Fukuyama  writes: "As a result of more than 200 years of political evolution we have a relatively good understanding of how to create institutions that are rulebound, accountable, and reasonably effective in the vertical silos we call states.  What we do not have are adequate mechanisms of horizontal accountability among states."  (The italics are mine.)  In another section of the book, he explains:

"We do not now have an adequate set of horizontal mechanisms of accountability between the vertical stovepipes we label states -- adequate, that is, to match the intense economic and social interpenetration that we characterize today as globalization."

Fukuyama, a disillusioned neo-conservative, has founded a magazine, the American Interest, and a Website with the same name, as forums for developing ideas for what he calls "realistic Wilsonianism," which he describes as a worldvision that differs from neo-conservatism by taking international institutions seriously. 

Aiming To Fill a Gap in Thinking about Foreign Policy

The state, he agrees, remains the only source of power that can enforce a rule of law.  "But," he adds, "for that power to be effective, it must be seen as legitimate; and durable legitimacy requires a much higher degree of institutionalization across nations than exists currently....None of the existing schools of foreign policy provides adequate guidance to get us there."

Fukuyama's new foreign policy think tank is an initiative intended to help us get there. In that journey, Fukuyama and his colleagues would be wise to look into a debate that has been raging for several years in the UN Commission on Human Rights and will continue in the new Human Rights Council.  That debate centers on what human rights norms, if any, should be applied to the global conduct of multinational corporations.

The beauty of this debate is that it has produced many arguments, pro and con, and in between, on issues at the heart of trying to put globalization under some sort of rule of law, and that much of that argumentation is available on-line.

The debate got started nearly three years ago after a subsidiary body of experts of the Human Rights Commission approved a document called "Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights."  After a two-year campaign of opposition from the U.S. government and business organizations, the Commission voted overwhelming last year to continue working toward a global set of standards, and asked UN Secretary General Kofi Annan to appoint a special representative to study conflicting views and to come up with his recommendations by spring 2007. (See "'Special' Treatment for UN Global Norms.")

Critique of Global Norms as Exaggerating Their Binding Force

John Ruggie, professor of international affairs at Harvard's Kennedy School of Government, whom Annan appointed as his special representative seven months ago, submitted an interim report in February. It disappointed some human rights advocates strongly committed to the Global Norms document..

Ruggie's 22-page report  pummels the Norms as flawed with "exaggerated legal aims and conceptual ambiguities."  His major criticism is that they take "existing State-based human rights instruments and simply assert that many of their provisions now are binding on corporations as well" -- an assertion with "little authoritative basis in international law, hard, soft, or otherwise."

He states that his approach to his mandate is "principled pragmatism."  By that he means "an unflinching commitment to the principle of strengthening the promotion and protection of human rights as it relates to business, coupled with a pragmatic attachment to what works best in creating change where it matters most -- in the daily lives of people."  Under that approach, for example, he has enlisted the help of the International Organization of Employers to compile effective ways of dealing with dilemmas encountered in "weak governance zones" -- countries with governments unwilling or unable to enforce compliance with the countries' own legal standards.

Identifying the Forces Driving Increased Focus on Transnational Corporations

"At least three distinct drivers," Ruggie writes, "are behind the increased attention on transnational corporations" -- and by implication behind his own mandate.  "The first is simply the latest expression of one of the oldest axioms of political life: the successful accumulation of power by one type of social actor will induce efforts by others with different interests and aims to organize countervailing power."   The other two driving forces:
Ruggie also has this warning: "The widening gap between global markets and the capacity of societies to manage their consequences may pressure political leaders to turn inward yet again [as they did in the aftermath after World War I], pulled by economically disadvantaged but politically empowered segments of their publics, as a result of which assertive nationalism or intolerant fundamentalism may emerge as the promised means for providing social protection.  Embedding global markets in shared values and institutional practices is a far better alternative."
 
Contributing to that outcome, he adds, is the "broadest macro objective" of his work in the remaining year of his mandate.

5 Points on the Sorry State of Globalization
After 10 years of monitoring international labor developments as editor of Human Rights for Workers, plus many more prior years of doing the same at the AFL-CIO Asian Institute and in the U.S. Foreign Service, I've been reflecting on how to formulate my own analysis of globalization today.  I have boiled my views down to these five propositions:
  1. Under the expanding international governance by the rules and institutions of free trade and investment, international business has acquired a wide array of global rights and privileges that are balanced by no -- or at most very minor -- matching responsibilities and accountability.  That is an empirical statement, based on the policies and practices of the World Trade Organization and of other parts of the global economic infrastructure, particularly the large and growing network of bilateral and regional trade and investment agreements.
  2. The resulting disconnect between global rights and global responsibilities has created an imbalance of power that protects and advances the interests of business and allied elites, to the disadvantage of other "stakeholders," particularly the many millions of vulnerable working men, women, and children and poor communities unable to protect their interests.  That too is an empirical statement, based on an accumulation of convincing evidence from reliable academic, media, NGO, and other sources.
  3. The disconnect between global rights and global responsibilities, and the resulting imbalance of power, is wrong, grievously so.. That is a moral judgment, based on basic principles of fairness and common decency.  But moral principles are not self-executing.
  4. Although some business and opinion leaders, conscious of the disconnect, are embracing the need for reforms, reform initiatives are still experimental and fragmentary.  That is an empirical statement, based on the lack of significant progress -- and the many obstacles faced -- by pioneering initiatives during the past 50 years.
  5. Thanks to improved global communications, the sharp contrast between human values and the realities of globalization, including the rising inequality between the poor and the fabulously rich, is becoming more visible and more objectionable, with explosive consequences likely if gross human exploitation continues. That is a social/political assessment, based on present trends, including the abysmal failure of global policymakers to take the lead in promoting change for the common good.  To put it in Fukuyama's terms, their task is to help develop "adequate mechanisms of horizontal accountability" across national borders "to match the intense economic and social interpenetration that we characterize today as globalization."
Email: ILO Standards and Trade Sanctions
In last month's HRFW article, "Google Lesson: Rights, No Responsibilities," I wrote that the UN International Labor Organization (ILO) has been deliberately kept "frozen in its 1918 mode, radically unfit to cope with the global economy."  Here is a comment emailed by Kimberly Elliott, co-author with Richard Freeman of the book "Can Labor Standards Improve under Globalization?"
I think you are right that more needs to be done to make the ILO more effective, but I would reiterate the skepticism expressed in my book with Richard Freeman about using trade sanctions as a broad tool to enforce labor standards. I am not ideologically opposed to the idea of using trade sanctions to enforce ILO standards; indeed, we recommend a limited role for sanctions against trade-related and egregious violations of core labor standards. 

But I don't think that broader uses of sanctions to generally enforce labor standards would work. The example that I point to is intellectual property, where my interpretation is that US trade threats have had some "success" in getting countries to pass stronger IP protection laws but little if any success in getting countries to effectively enforce those laws -- look at U.S. relations with China! It takes political capital as well as real, scarce, resources to enforce laws, and countries will strongly resist doing that until they view it as in their interest.

Moreover, external pressures are often ineffective because it is too hard to identify clear, tangible violations and therefore difficult to make sanctions threats clear and credible. So the parties end up in endless negotiations over the meaning of compliance. I think a similar dynamic would occur with labor standards. The bigger problem with the ILO right now is that both the pressure on it to do more and the resources that might help it do that have been largely withdrawn since George Bush succeeded Bill Clinton in the White House.

Kimberly Ann Elliott,
Research Fellow, Institute for International Economics

In their book, published by the IIE three years ago, Elliott and Freeman urged that Export Processing Zones (EPZs) be transformed into models of "globalization at its best."  Among their recommendations: "EPZs or firms within them that egregiously violate core [labor] standards should face the threat of trade restrictions."  See "The Global Siamese Twins."

Export Processing Zones today remain models of globalized exploitation, especially of young women. Meanwhile, U.S. trade negotiators are using bilateral and regional trade agreements to extend and expand the WTO's agreement on Trade-Related Intellectual Property Rights (TRIPS). These protectionist rules, though often not enforced, are sufficiently observed to help reap fabulous rewards for the property owners, especially the pharmaceutical industry. Actually, there are sound policy and practical reasons why countries resist complying with the regulation-heavy TRIPS and its even more protectionist replicas. See "U.S. Comes to the Aid of Rich Drug Firms."

Human Rights for Workers: Bulletin No. XI-4    April 3, 2006
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Robert A. Senser, editor
Copyright 2006
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