John Evans, General Secretary TUAC (Trade Union Advisory Committee to the OECD)
The Report of the Finance Ministers’ Deputies to the G8 Finance Ministers meeting, held in Lecce in June 2009, called for “a rethinking of the foundations of the global economic and financial system” in the light of the “worst crisis since the Great Depression”. Given the appalling human cost of the crisis - a probable 60 million more people unemployed globally and an extra 230 million pushed into extreme poverty - trade unions can only concur.
Beyond the re-regulation and more effective supervision of financial markets and institutions, such rethinking must also encompass the rules and oversight of the market system more generally. As a result trade unions are closely following the development of the G20 and G8 initiatives aimed at preventing excesses of the market and ensuring more balanced economic development.
The “Charter for Sustainable Economic Activity”, being prepared by a G20 Task Force and due to be discussed at the Pittsburgh G20 Summit in September, needs to be comprehensive in scope and incorporate economic, financial, development, environmental and social instruments, including most importantly the “decent work” agenda and the relevant labour standards of the International Labour Organisation (ILO).
The G8 Finance Minsters’ “Lecce Framework” for a “Global Standard of Common Principles of Propriety, Integrity and Transparency of International Economic and Financial Activity”, which appears to be designed to be one chapter of the Charter, brings together international instruments that govern private sector conduct. The Framework focuses on corporate governance, market integrity, financial regulation and supervision, tax cooperation, and transparency of macroeconomic policy and data. While these elements are necessary, they are not sufficient. Trade unions consider it essential that the Lecce Framework, in view of its focus on the private sector, incorporate the ESG (Environment, Social and Governance) standards on which private sector conduct must be based, if we are to achieve a shift to a new paradigm of economic development. The OECD Guidelines for Multinational Enterprises should therefore be comprehensively incorporated into the Framework, alongside other relevant OECD instruments – at the moment they are merely referenced in the Deputies’ report for Lecce.
These instruments have the potential to send a strong political message on the political priority given to the social and labour dimension of governance and development and provide a sustainable framework within which to strengthen inter-institutional cooperation and overall policy coherence. However, their actual impact will depend on their effective implementation, including the strengthening of existing instruments (the building blocks), achieving buy-in from governments and the adoption of a rigorous monitoring mechanism.