Can Labor Catch Up With Globalization?

Unions Are Forming New Alliances Across Continents
To Protect Worker Rights in Multinational Corporations

By Robert A. Senser

This article appeared in the July-August 2001 issue of the Foreign Service Journal, monthly magazine of the American Foreign Service Association, a union for State Department employees.  The title and subtitle above are as published in the magazine.
It had the earmarks of a David and Goliath confrontation.  A small local union in the little Alabama town of Sylacauga was taking on a giant multinational based in Paris. And a 28-year-old factory worker who had never crossed the Atlantic, Keith Fulbright, was flying off to Brussels, London, and Paris -- on his own vacation time -- to line up European support for his union’s cause.

But the David from Alabama was not aiming to slay this Goliath. Keith Fulbright did go forth armed -- with a French-subtitled videotape that portrayed the plight of his union through the words of a dozen rank-and-file members.  One of those members explained the terms of the confrontation. "We aren’t against the company," he said, “but we all like to be treated fair. I feel like the only way we can accomplish that is with the union."

That union, Local 3516, the only union in Sylacauga (pop. 15,000), was fighting for its life.  A merger negotiated in Europe in 1999 pushed two plants located across the street from each other, one unionized and the other not, into the same corporation, a leading international producer of industrial materials named Imerys.  Thanks to this transaction, the unionized workers became a minority of the merged work force, now totaling 400 workers. Imerys decided that it would no longer recognize the union, which had represented workers at the unionized plant for 29 years; it argued that the union was not qualified to speak for its workers.

Fulbright’s European assignment in January 2000 was to challenge that position. A skilled worker at the non-union plant, he was joined by Joe Drexler, an experienced staffer of Local 3516’s national union, the Paper, Allied-Industrial, Chemical, and Energy Workers’ Union (PACE).  With the help of the video, they told Belgian, British, and French labor leaders of worker support for the union and management’s opposition to it. "Unions must work together,” Drexler said, “to keep multinationals from destroying us."  Their presentations were especially effective in France and Great Britain, where Imerys has a record of friendly cooperation with unions. At several of the company’s largest plants in Britain, union stewards began wearing stickers saying, "Stop Imerys Union Busting in the U.S."

The participation of an ordinary American worker in a solidarity mission to Europe was a new twist on a technique that has worked well in the United States:  bringing in rank-and-file workers from Central America to testify at college forums and Congressional hearings about abuses in factories producing for U.S. consumers.  Fulbright’s innovative mission was a turning point in an intensive year-long campaign to win support for the union’s cause.  Two other initiatives illustrate the scope of that campaign.

In March last year union dignitaries descended on Sylacauga to speak at a large barbecue and rally. One flew in from Brussels -- Fred Higgs, the general secretary of the International Federation of Chemical, Energy, Mine, and General Workers’ Unions, or ICEM for short, the “global union” with which PACE is affiliated. Higgs told the rally that ICEM, with 20 million members world wide, was putting its full weight behind the workers in Sylacauga. He called Imerys a "chameleon corporation" for trying in America what it would not dare attempt in Europe, and promised: "We’ll make it so hot for Imerys that they will be looking for a solution." In a public demonstration of solidarity, some 250 persons with Higgs at the lead marched a mile through town before peacefully dispersing at the Imerys factory gates.

Then, in May last year, Drexler and European labor leaders took their story directly to the annual meeting of Imerys shareholders in Paris. Although Sylacauga was not on the agenda, it unexpectedly dominated the last half of the meeting. The shareholders heard presentations from the floor that sent a shudder through the audience, according to the Paris newspaper Liberation.  A French-speaking ICEM representative who held the proxy of Walden Asset Management, which owns 4,000 shares in Imerys on behalf of socially concerned clients, pointedly asked: "Mr. Chairman, why is your company involved in anti-union practices in the United States while at the same time your company is improving its relations with unions in Europe?"  In response Imerys CEO Patrick Kron promised that "the company would not campaign against the union."

Meanwhile, the labor movement at various levels used the power of the World Wide Web to communicate the union’s message well beyond its own immediate constituency.  People far and wide could read all they wanted to know (in English and French) about the struggle, including details of Imerys’ corporate history, excerpts from a manual Imerys used to train managers on keeping the plant "union-free," and the text of a PACE-ICEM complaint filed with the State Department charging violations of the Guidelines for Multinational Enterprises adopted by the Organization for Economic Cooperation and Development (OECD).

The campaign worked. In a secret ballot election conducted by the National Labor Relations Board on June 22 last year, the union scored a 205 to 181 victory to represent Imerys’ 400 workers in Sylacauga.

Lessons from Sylacauga
Adapting to globalization is a crucial challenge facing the labor movement around the world, from the small unions in towns like Sylacauga to global union confederations like ICEM. To remain close to their constituents, unions function largely on a geographically limited basis. Modern corporations do not; they cut a wide swath across multiple political geographies, far beyond the range of traditional union structures.  To bridge that gap for the struggle in Sylacauga, unions mobilized local, national, and international resources within the labor movement itself while also pursuing an external campaign by appealing to Imerys stockholders, the OECD, and the general public via the Web.

That pattern comprises the framework of a larger union plan to cope with globalization, not only by greatly strengthening their own internal networks across international boundaries but also by reaching outside those ranks to enlist the cooperation of non-governmental organizations, intergovernmental agencies, and even multinational corporations.  In short, the lesson for unions is that, without losing their workplace roots, they, too, must globalize.

Unions have not kept pace with today’s vast, shifting global production system, comprising 63,000 multinational parent firms with 690,000 foreign affiliates and thousands of cross-border mergers and acquisitions a year. "We’re 20 years behind," says Kenneth S. Zinn, ICEM’s North American regional coordinator.  Despite that immense lag, he is optimistic about catching up.  "We have no choice but to fulfill our obligations to workers and the communities where they live."

Happily, the environment for catching up has improved in recent years.  The idea that working people everywhere have basic rights is becoming more widely accepted than ever, at least in principle. More than 90 years of missionary work by the U.N.’s International Labor Organization is finally winning some converts among the elite, including the leaders of some multinational corporations and some international agencies. Last year U.N. Secretary General Kofi Annan convinced CEOs of 50 multinational corporations to join human rights organizations and trade unions to embrace a global compact in support of worker rights, including freedom of association and the effective recognition of the right to collective bargaining. And in his January 2000 swan song after three years as chief economist of the World Bank, Joseph Stiglitz delivered an address loaded with ideas considered radical for someone with his background in mainstream economics and in the top ranks of an international development organization. Stiglitiz’ key point: "Labor unions and other genuine forms of popular self-organization are key to democratic economic development.”

New initiatives with new partners

Recent activism by the labor movement and its allies is partly responsible for generating this more favorable environment for worker rights, and unions are taking advantage of it by pursuing new arrangements with new partners to meet worker needs in the global economy. The major organizations involved in this endeavor are “global unions” (such as ICEM), which are international associations of individual national trade unions grouped by industrial or occupational sectors.  Now ten in number, the global unions, traditionally called International Trade Secretariats, have updated their technologies, hired new people, and restructured themselves to handle a large range of global issues, including world environmental policies.  Their size alone (ICEM covers ten sectors) is bound to impress, and it puts them into a position to pursue labor strategies on a global scale. For example, ICEM and some other global unions are pressing individual multinationals to adopt formal "framework" agreements that 1) set the broad labor policies that cover all the corporation’s workplaces, even those without a union and 2) establish procedures for regular meetings between management and union representatives.

Take the global framework agreement signed last July between ICEM and the Freudenberg Group, the German-based conglomerate which makes components for other manufacturers, particularly in the auto, engineering, and footwear industries.  The agreement, covering 30,000 people in 41 countries, commits the corporation to respect the ILO’s core labor standards in all the worksites of Freudenberg and its subsidiaries. Unlike internal codes of conduct adopted by many corporations these days, the Freudenberg-ICEM agreement is fully verifiable by the union.

"We see here our future," says Truus Erkins, a Dutch trade unionist who sits on Freudenberg’s European Works Council. In the future that he foresees, the standards of European workers will be eroded by globalization if workers in the U.S. and elsewhere are denied the protection of a union contract. Erkins was one of the four members of the Freudenberg European Works Council who visited the U.S. last year to learn about labor conditions in general and specifically in Freudenberg’s unionized and non-unionized facilities in the United States. A U.S. industry journal, Rubber & Plastic News, praised Freudenberg "for demonstrating a social conscience...[and] for being smart."

ICEM also negotiated a framework agreement with Statoil, the Norwegian-based oil company, in 1998. Other global unions have made similar arrangements with some employers or employer groups in the international shipping, garment, metal, and other sectors, although so far they have reached only a tiny number of the world’s multinationals.

Reaching Another Set of Global Players

To cope with globalization, unions today are negotiating with another set of powerful players in the global economy: intergovernmental institutions. Unions have always represented workers in dealings with employers and governments; now, they have greatly expanded their efforts to represent worker interests in institutions such as the World Trade Organization, the International Monetary Fund, the World Bank, and regional multilateral banks. They are asking those institutions to follow the precedent of the OECD, in which labor, like business, has a voice through an advisory committee. Such a change would enable union representatives to influence policies and projects that affect workers’ lives and their right to organize and bargain. Some knowledgeable experts, including Economist Joseph Stiglitz, agree with the labor charge that the present policies of international financial institutions often undermine worker rights, especially the right to organize and bargain.

Promoting workers rights in the rules that govern the global economy has long been a major priority of the world union body, the International Confederation of Free Trade Unions, which groups national union federations like the AFL-CIO, and of global unions such as ICEM.  Historically, they have successfully concentrated these efforts on the International Labor Organization, where, uniquely in the UN system, they are partners with employers and governments. But their five-decade-long, on-and-off effort to match the influence business has in the World Trade Organization and its forerunner, the General Agreement on Tariffs and Trade, has been an utter failure.

Labor’s efforts at the World Bank and at the International Monetary Fund have done a little better. During a half century of life, the World Bank and IMF, founded, funded, and controlled by governments, have operated under a vision limited by governments and the financial fraternity close to governments.  Only recently have they come to grips with the role of civil society, the network of private institutions operating in the landscape between individuals and the state. The World Bank now has civil society specialists on duty in Washington and in about 75 of its 90 offices in the developing world. And according to information the Bank's top officials gave union leaders, the Bank now does take several core ILO rights  -- anti-slavery, anti-child labor, and non-discrimination -- into account in its activities, but not freedom of association and collective bargaining.

Despite setbacks, the union campaign to reform intergovernmental institutions is now a high priority, increasingly pursued in formal or informal cooperation with non-governmental groups sharing the goal of making the bureaucracies more sensitive to the needs of civil society.  For example, last year the Asian Development Bank agreed to a dialogue with a network of trade unions, non-governmental organizations, and academics from Indonesia, Malaysia, the Philippines, and Thailand, grouped together as the Asian Labor Network on IFIs.   At the end of an open-ended session with five network representatives at ADB headquarters in May 2000, a senior official,  Ayumi Konishi, expressed warm appreciation for the discussion.  He said that the ADB welcomes outside input, "especially to challenge our assumptions," and that it needs to engage in "dialogue on overall issues—we have not done this."

Opposition to Labor's Global Initiatives

The labor movement’s strategy of seeking dialogue with major centers of global power meets resistance from inside the power centers, of course, but also from small groups on the outside convinced that multinational corporations and international agencies are hopelessly beyond reform.  After several union leaders (including ICEM’s Higgs) joined corporate CEOs in launching Kofi Annan’s Global Compact, a group of human rights and environmental activists expressed a relatively mild form of this dissension. They publicly criticized the compact as a sham, a means for corporations to “wrap themselves in the flag of the United Nations to ‘bluewash’ their public image while at the same time avoiding significant changes to their behavior.”

If labor’s reform strategy fails to achieve significant changes in behavior (and not just in rhetoric) fairly soon, the present criticism, which is still isolated and subdued, will become louder, more radical, and perhaps more influential.  Meanwhile, unions throughout the world are following a non-radical strategy to deal with the transformations wrought by the global economy.  Will that strategy make a difference where it counts the most -- in the places men and women work, both in industrialized and developing nations?

In Sylacauga, the results are mixed.  In early February, seven months after the union’s election victory, Imerys and the union signed a three-year collective bargaining agreement with pay increases of about 3% each year, plus improved benefits. A few weeks later, the two sides came into conflict after management unilaterally adopted two sets of personnel policies, including employee guidelines listing 39 infractions that would lead to discharge or lesser penalties.  A flurry of worker grievances followed, as did a complaint from the union to the National Labor Relations Board that the company wasn’t playing fair because it failed to negotiate the policies.

Says Keith Fulbright, now president of the Sylacauga union: “It’s a struggle.  But we’re getting an education in how to cope.”

Human Rights for Workers: Bulletin No. VI-xxxxxx 2001
Robert A. Senser, editor
Copyright 2001 (Send e-mail)

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