Tiziano Treu Official Site Home Biografia Articoli Documenti Interviste Libri Notizie Foto & Video Contatti

Globalization and human rights

Social clauses in trade agreements and in international exchanges among companies

Globalization in its various aspects, international trade in the first place, has a major impact on all aspects of personal and collective life .It puts in contact not only different economies but also national social and regulatory models

Globalization and human rights


Social clauses in trade agreements and in international exchanges among companies


1. Economic and social rationale in international trade


Globalization in its various aspects, international trade in the first place, has a major impact on all

aspects of personal and collective life .It puts in contact not only different economies but also national social and regulatory models, hence the varieties of capitalism.

This statement is far from irrelevant because it challenges the separation between the economic and socio political spheres which has been a basic tenet underpinning most decisions of public institutions and even of the social parties.  The growing influence of global trade on the national systems may be a factor challenging this traditional separation between the two spheres because it alters the precarious balance by the which national institutions have tried to conciliate the economic imperatives with social and personal interests.

The conflict between the commercial logic of trade and the socio economic interests of the various national constituencies has not been reduced by the positive economic performances of globalization

On the contrary, it has increased in recent years, as shown by the popular protests in many countries and on the other side by the protectionist reactions of many European states traditionally open to international trade and lately of the US government.  

How these reactions will influence the future of international trade and of globalization is an open question. Equally uncertain is the impact of global trade and of its regulation on the social models of the trading countries.

The confrontation of the commercial logic of trade with social rights has been historically exorcised, as it is shown by the separation between the spheres of competence of the ILO and of the WTO. Nevertheless, or due to this separation, the WTO has become the major object of the social protest against globalization. And the ILO has been left to elaborate its social norms in isolation, and without the advantages and the sanctions of commercial treaties-


The diffusion of social clauses 


The diffusion of social clauses has been gradual and promoted by the parties of the trade agreements, following the national circumstances and priorities.

The existing reviews of the agreements and of social clauses carried out mainly by American scholars  confirm the varieties of their content which depend on many variables: the economic characters of the periods (crisis-growth), the different economic and social conditions of the parties and their geopolitical position.

The coverage and the signatories of the trade agreements are also different. One can distinguish bilateral, multilateral agreements and mega treaties for macro regions, beginning with the pioneer NAFTA and more recently CETA and TPP. Another difference relates to the contents of the agreements. Some are concerned with the promotion and regulation of investments (international investments agreements-IIAS) and bilateral investments agreements (BITs). Others regulate commerce (Free trade agreements) or economic partnership (economic partnership agreements).

The social clauses, or social chapters, have not only grown in number so as to become a common trait of these agreements but have acquired great substantive and procedural complexity.


Different systems and sources of social regulation. General system of preference (GSP),International organizations .Transnational collective agreements     

Social clauses on which this paper is concentrated, are not the only source of international social regulation.  Another important instrument to connect global trade with social rights is the so called Generalised system of preferences (GSP) by which a country recognizes preferential treatment, concerning tariffs or other benefits, to developing countries on the condition that they respect and apply certain social standards.  This instruments which may be defined a milder approach to the social clause, has been widely used also by the European union which has repeatedly updated its regulation, lately with reg,732/2008.This regulation has introduced a mix of incentives and sanctions directed to promote in the countries concerned not only the respect of the standards but also a sustainable development and good systems of governance.

Social principles of different contents have been introduced in international relations by a variety of international institutions. The ILO has a general competence in setting basic social standards to be respected by all member countries .The United nations  has approved the Human Rights council’s Guiding principles on business and human rights , con il Un. Global compact of shared values  and principles (UNGC) approved in  2000 and with the Guiding principles  on the responsibility of  transnational corporations (Ruggie2003,2013)  The OECD has approved the Guidelines  for multinational enterprises .Social rights and standards have been sanctioned by the European convention on human rights ((ECHR) and by  the European charter of fundamental rights.

In the last two decades many large enterprises have adopted voluntary codes of conduct and other practices inspired to the ‘corporate social responsibility ‘. Finally social rights of various contents have been included in transnational collective agreements, signed between multinational enterprises and workers representatives, mainly works councils. The relevance of these agreements for the social regulation of trade  depends not only on the importance of the signing multinational enterprises but also on the fact that  these firms  often decentralize internationally  their production and consequently their employment along the value chain.

The private nature of these latter sources of regulation has exempted them from any state legislation and control. Moreover these multinationals have usually paid little or no attention to the labor policy of their suppliers because they consider themselves buyers of products and not employers. In fact the public attention towards the violations of social standards committed by these enterprises or by their suppliers has been raised by the protest of civil and social organizations present in the countries of the suppliers and sometime also of the headquarters of the multinational.


2. Social clauses: economic motivations and sustainable development


The variety of existing regulatory systems reflect different principles and motivations .The original motivation is strictly economic  and follows the principle whereby fair trade  does not allow comparative advantages based on the reduction of  social standards, which are considered  to distort fair competition.

This principle which still supports many trade and investments agreements has been considered inadequate to explain the  complexity of factors influencing international trade and economic development. Comparative research indicates that competitive advantages depend on many variables, technological .institutional etc, beyond labor costs . For this reason the ILO has always stressed the fact that the diffusion of labor standards cannot rest only on commercial sanctions but must be promoted by different instruments linked to the  national contexts of the country concerned ,namely technical assistance to apply  the same standards and to labor market services, support to local development, support to better access to financial services, to contrast to informal and illegal economy. The national context must also be taken into account  in order to identify and graduate the standards applicable , beyond  those basic rights which  must be respected unconditionally. The range of these unconditional rights is defined differently in the various clauses, e.g. it is uncertain whether the right of strike should be included  .

In this vision the promotion of basic social rights in international trade is an instrument not only to regulate competition but also to promote a more balanced and sustainable growth . This approach has influenced  to a different extent the  contents of commercial agreements  and  contributed to insert the social clauses in the chapter  on sustainable development next to the clauses on environment protection: see the Declaration on social justice for a fair globalization adopted by the ILO on June,10,2008. Moreover the same approach is reflected in the terminology adopted in this respect which  has changed  from labor standards  to human rights at work: a change which is not merely linguistic. In fact while labor standards sounds rather technical and limited strictly to working conditions( wages ,hours etc) human rights implies broader values which pertain to the human being as such ,to be recognized also when it is at work.(Bellace 2014). The implications and limits of a human rights based approach to labor policy have been widely debated at the Capetown World congress of the ISLSSL, in 2015 .

 The  influence of this approach in  the actual contents and even more in the practice of global trade agreements has been rather limited , and indeed remained often only on paper .A wider  conception of  human rights at work is present in the European social model as illustrated in many official documents also concerned with  international trade. A case in point  are the  directives to the TTIP European negotiators approved by the European  council in 2013 inspired to the report of the  High level working group on job and growth . The actual impact of these directives on the negotiations is not known due to the scarce publicity given to the bargaining process.


The reactions of the public opinions 


The public opinions of the countries involved in trade negotiations have been seriously preoccupied of the possible negative impact on the working conditions and also on broader economic interests. Some reactions are supporting the return to protectionist policies as it is demonstrated by the opposition of the Trump administration to the TPP and to the continuation of the negotiations of the TTIP and by the European difficulties in ratifying the CETA. The reactions to globalization have indeed a much broader spectrum and impact since they are destabilizing the very political equilibrium of some nations.

The preoccupations of the public opinion are so deeply rooted that are not canceled by the formal assurances which have been given by the European governments on the specific contents of the TTIP.

In fact the directives to the negotiators clearly forbid the acceptance of any clause which could allow a reduction of the social and environmental standards adopted in the European countries. Indeed the Lange report is even more specific because it guarantees the safeguard not only of the European common standards but also of the labor standards of the individual members states, which are indeed quite different also in Europe. The implementation of this guideline would be indeed rather problematic, but the issue will not be tested, at least for the time being, given the end of the negotiations.

The Lange report is even more ambitious  because it commits the parties of the Treaty not only to defend the acquis communautaire but also to promote all the targets in the field of employment and social conditions set by the document Europe 2020 , and more broadly to contribute to sustainable development.

Promotional clauses of this kind which are present in some other Treaties do not imply specific obligations of the negotiating parties but commit the member states to be active in the pursuance of the agreed upon targets. However an observance of these commitments by the States would greatly contribute to reduce the preoccupations of the peoples for the possible negative consequences of global trade and to support the trust in the future of globalization.


3. Different categories of social clauses


According to the ILO  the presence of social clauses in international treaties has grown from 4 clause in 1995 to 21 in 2005 and to 58 in 2013.The Treaties where these clauses  are present amount to over 5,5% of the total global trade; they are most common in Treaties between countries of the North and of the south of the world but they are growing also in treaties among emerging countries particularly of Asia.

40% of the clauses are conditional, ie supported by sanctions for their violations, the others are promotional .Many combine the two types of content .

The variety of regulatory techniques is a sign of vitality but implies heterogeneity and uncertainty of contents.

Conditional clauses provide different sanctions and procedures of enforcement (see below) Promotional clauses provide institutional forms of dialogue between the parties of the treaty for the respect of the social rights and for the monitoring of the relevant behaviours, short of specific sanctions.

Another type of categorization distinguish between post - ratification conditionality, when the clauses commit the parties to respect the terms of the treaty under some penalty, and pre - ratification conditionality when the respect of social standards is a precondition to the signing of the commercial treaty; these latter clauses are less common and their effectiveness is measured by their capacity to promote labor reforms prior to the agreement. This capacity may be strengthened if the benefits of the treaty are conditioned to the continued implementation of the reform bilaterally ascertained, as it is the case in the concession of some financial aids to the beneficiaries countries.


Different contents and languages


The difference of the language and content of the social clauses has implications on their legal and social impact .

Many social clauses, particularly in the early treaties, are drafted in aspirational not binding language. They often express merely the  will to respect  the standards of the home country without any reference to the international standards .Other clauses stress with some ambivalence  the right of each signing party to regulate in its own right the matters of public interest ,among which are usually included the regulation of employment relations and of health and safety.

Recent agreements, particularly the CETA and TPP, have adopted a more assertive language in the definition of the commitments of the parties and better organized procedures to monitor their implementation, to solve the disputes and to establish the sanctions for the violations of the obligations.

A critical issue has to do with the types of rights which are included in the social clauses. The commitments vary from the respect of the “basic rights” or of the “internationally recognized labor rights”, to the observance of the core labor standards of the ILO. This obligation usually refers(CETA,TPP) to the four fundamental principles sanctioned  at the ILO conference of 1998, freedom of association, right to bargaining, prohibition of  forced and child labor, prohibition of all kinds of discrimination.

In other cases the commitment is wider and implies the observance of the eight core conventions of the ILO which specify the principles of 1998. The right to strike is usually not mentioned, apart from the CETA.

Some treaties contain broader commitments but stated in general terms, such as the will to guarantee acceptable working conditions (wages, hours etc) or the commitment to pursue the indications of the decent work agenda of the ILO. Similar commitments, which were advocated by the European council, are present e.g. in the CETA and some investments agreements .

Their effectiveness is totally dependent on the good will of the negotiating States.


4. Procedures and enforcement


All commentators stress the decisive importance of the procedural aspects of the treaties. Procedures of enforcement of dispute resolutions and of monitoring have been developed over time in all trade agreements. The European directives to the negotiators of the TTIP indicated a further procedure directed to evaluate the sustainability impact (SIA) of the effects of the social chapter; the procedure was based on the  art 9 of the European treaty (TFUE)  and  supposed to involve the social parties, the ONG and the Social and economic committee of the EU .

Apart from many different details the procedures of the trade agreements have developed some common traits . The procedure is multistep and is activated by the negotiating parties ,namely the States,  through institutional channels. All necessary documents and arguments are submitted by the parties but also by various organizations. The case is treated through consultation between the parties possibly accompanied by hearings. Arbitration or judgment by panel of experts are sometime provided but rarely used.

A model of procedure rather articulated is adopted by the TPP which distinguish two parallel tracks, one directed to favor the implementation of the various clauses and one finalized to resolve the disputes arising under the Treaty.

Two similar parallel procedures have been adopted by the CETA. This agreement innovates in some respects, in particular it provides not only bilateral consultations between the parties, but also a review panel of experts and civil society advisory groups entitled to submit opinions and recommendations. Moreover public authorities, in particular labor inspectors are in charge of controlling the implementation of the various contents of the social clauses. In case of non acceptance of the judgment of the experts the claimant may suspend the obligations of the Treaty of an equivalent importance or may ask for monetary compensation of an amount indicated by the panel-


The clause ISDS 


A most discussed clause of the Treaties is the so called ISDS( Investor state dispute settlement) .The original model was promoted by the USA in the Treaties with some developing countries after the decolonization to protect the interests of the USA investors ,avoiding the jurisdictions of those countries which were considered non reliable. In the process of time this clause has been widely used also beyond the original scope and is now present in over 2750 treaties with a parallel growth of arbitrations: in 2015, they are over 600, but the number is underestimated because many arbitrations are not disclosed.

The ISDS clause has been often criticized for various reasons: because the criteria of the judgment of the arbitrators are left undefined and most important because  the clause deprives the national jurisdictions of the power to judge important disputes , in favor of arbitrators who are held too close to the interests of the great multinational companies. The risk is great that the judgments of the arbitrators go against major State policies democratically decided, with possible negative consequences also financial. 

Some treaties like the CETA prevent this risk by stating that the States which are party to the agreement reaffirm their full sovereignty in the matters of labor standards-This statement implies that the State decisions on the labor standards cannot be considered an undue interference in the decisions of the foreign investors   and that the same investors cannot  have any legitimate expectation that the standards existing at the time of the investment could not be changed subsequently (which is usually the claim of the investors using the ISDS clause) A justified claim could be raised only if the foreign investor was subject to discriminatory treatment vis a vis national investors .

In fact the past experience has suggested to fix specific rules to  limit the power of the arbitrators, to pretend greater transparency in the procedures and the possible presence of independent experts. Similar  requests were advanced by the European council to the negotiators of the TTIP. And the CETA establishes a specialized Tribunal to adjudicate these disputes ,  composed of professional and impartial members, bound to  decide according to the principles of international  law  and to follow the rules of transparency of the UNCITRAL. The decisions of the tribunal can be appealed ( art 18.8 and ff)

The reported decisions taken according to the ISDS procedure are rather few because  most of them are not disclosed. Moreover many disputes of this kind are settled consensually by the parties,

The two decisions most quoted concerning labor disputes, but known only in part, well demonstrate their potential   impact on national labor laws. In the case Centerra vs Kyrgyz Republic the investor claimed that the law of that country which had raised workers salaries caused an increase of labor costs (6 million dollars a year) and that this increase was not considered in the negotiation of the Treaty. The case appears to be decided in 2009.

In another case the French multinational Veolia accused Egypt of two violations of the treaty with France ,one consisting in the anticipated breach of a commercial contract, one in the increase of minimum legal wage which reduced the  profitability of the investments decided by Veolia.


The weakness of the procedures


In spite of the importance attributed to the procedures of the commercial Treaties these procedures are the weakest link of the agreements, particularly of the social clauses.

The weakness is in part due to the vagueness of the commitments written in the agreements .E.g. it is often unclear whether a violation of the clause to be relevant must concern an economic sector included in the treaty or it has to positively influence the investments or the commerce between the parties . 

Some agreements (CETA,TPP) state that the violations to be relevant must be  serious and  systematic or that they must depend on a recurring course of action or inaction. These provisions may reduce the impact of the social clause  because in some Treaties with countries  reluctant to respect the labor standards  the sanctions for the violations has been avoided simply because the violating state  has ‘ taken steps’ to remedy the violation or the monitoring procedures have decided to  continue the review of the relevant behaviors.

Other limits of effectiveness depend on the fact that the instruments of enforcement are cumbersome and left to the initiative of the negotiating States and of their bureaucracy. Moreover  the  procedures relating to  labor disputes  are traditionally less  rigorous  than those applicable to the implementation of the commercial clauses of the treaties .The latter are followed by the public administrations dealing with trade and investment issues  which particularly in the USA  are more influential and better equipped than labor administrations.

The Obama Template of May 10, 2007 has declared that the procedures concerning labor matters must be examined according to the same procedural rules applicable to commercial disputes.

Another important difference between labor and commercial clauses concerns the sanctions for the violations of the obligations. The sanctions for the violations of the labor standards are generally applied with great caution, ranging from measures of moral suasion and of social pressure up to suspension or loss of preferential treatments or even blockage of import. This latter sanction has been used in front of very serious violations of social and human rights, usually in GSP procedures . The procedures for the enforcement of social clauses have usually provided not the suspension of treaty benefits but only monetary compensations within a maximum ceiling and with the possibility of reductions . 

Even after the 2007 Template this difference in the application of sanctions has continued due to the reluctance of the States to enforce effectively the social clauses. Both the CETA and TPP have reaffirmed the principle that all enforcement procedures must follow the same rules. But their effectiveness remains to be tested because the actual implementation still depends on the initiatives of the States and of their bureaucracies. This is a major difference with the ISDS clauses where the private investors have a right of their own to sue for the enforcement of the obligations under the treaty.

This weakness of the social clauses is often denounced by the trade unions and by other civil associations and is confirmed by the practical experience which shows that the implementation of social clauses is hardly pushed by State authorities. In general the impulse to the procedure is linked to political factors such as the strategic importance of the State involved or its political conditions, often in relation to the interest of the USA administration of a given period .

As mentioned already the amount of public resources devoted to the monitoring and the enforcement of the social clauses which is usually inferior to that devoted to the implementation of the commercial parts of the treaties. This difference is particularly important because the social regulations include in the treaties, differently from the commercial obligations are not directly actionable by the workers but depend exclusively on the state initiative.


5. Uncertain outcomes


Researches on the application of the Treaties have multiplied but are still insufficient, also due to the scarce transparency of the sources, to give a meaningful account of the various experiences. The results are at best uneven and variable according to the national contexts .

The first surveys of the application of the GSP decided by the USA indicate a few cases of suspension and of abolition of benefits against violations of social rights by developing ,usually poor or politically troubled countries. In some case the sanctions have been revoked following partial or substantial improvements in the labor legislation.

The ILO reports indicate that the most effective commitments of the labor chapters, particularly by the developing countries, are those concerning capacity building programs, exchange of good practices, promotional activities, social and public communications. The pre-ratification commitments have contributed to improve the legislation of some countries, particularly concerning trade union freedoms. More uncertain is the impact of the procedures of enforcement of social clauses on the actual improvement of labor standards.

The implementation of the CETA and TPP will be a particularly important test for the future of the social clauses in international trade because the clauses of these Treaties are called to function not only in developing countries but also in modern labor markets. And it will be possible to verify how this new social and economic context, so different from that of the first trade agreements, will, influence, positively or negatively, the effectiveness of the social commitments of the parties and in general the economy of the interested countries.


The (possible) pattern setting value of the CETA 


The importance of the CETA  is linked both to  the central position of transatlantic trade and to the historic relations also in social traditions between the two areas. The importance of the TTIP would have been much greater, given the role of the USA and  the very difference of its social system with the European  model ; but these negotiations are suspended with no chance to  continue for the time being.

The value of well shaped treaties, like CETA and in different respects TPP , is  so much greater in the present times when global trade seems to be stagnating and could be  sustained  by convergent regulations by major countries not only in labor but also in economic matters. A meaningful convergence will have to face quite a few obstacles not only  between Europe and USA , where the differences are marked in both areas, but  also with Canada .These differences have  been quite visible during the negotiations of both the CETA and TTIP  and in the process of ratification of the former. The judgment of the experts has been far from unanimous about their  possible economic and social impact . The attention is now concentrated on the implementation of the CETA as a testing ground for the future of trade agreements and their social clauses  in the Atlantic hemisphere.


6. International exchanges among companies


Global trade has been growing not only by initiative of the States via commercial treaties but also because the new international organization of production has opened greater opportunities for exchanges between multinational firms. These enterprises have been able, due also to new technologies, to organize their activities in different countries through various channels: controlled companies but also supplier firms which are legally autonomous but in fact linked to the multinationals by stable commercial ties . This is a new vector of  globalization which receives from the multinationals not only economic impulse but also contractual regulations. 

These rules are of private nature and consequently separate from the contents of the commercial treaties between the states. In fact even when they include some labor issues these are concerned mostly with the economic conditions of employment.  Social clauses are sometime present and they usually confirm or possibly improve the standards included in the official treaties.

Specific clauses are particularly important in the matter of union rights, whose regulation is finalized to improve collective labor relations and to guarantee the social peace in the productive units. The private character of these clauses allows great flexibility and variety of contents. The procedures of enforcement are also different from those of the commercial treaties and rest mostly on the capacity of the companies and possibly of the unions to guarantee their effectiveness.

The multinational enterprises can exert wide discretion in these regulations for two reasons: one, the weak presence of trade unions in international relations, two, the reduced regulatory capacity of the national States. These empty spaces are filled by multinational companies with mainly soft types of regulations, like codes of conduct, guidelines, which are sometimes shaped in the context of international organizations (see the OECD guidelines and the Global compact)




Company regulations and corporate social responsibility


These soft regulations often make reference to   the principles and conventions of the ILO. Usually they are based on the idea of the corporate social responsibility and reflect the culture and values of the enterprise . But in spite of this, the content of these rules must take into account to some extent the characters and legislation of the national context where they are to be applied. The pressures of the public opinion and of the social organizations have often influenced the evolution of the conduct of these companies and sometime managed to bloc their practices when in violation of core labor standards. 

Some European multinationals influenced by the continental social model  have agreed to consult or to negotiate these rules with the trade unions; in a few cases  formal agreements have been concluded with the European works councils which are the only workers representative channel recognized by the European Union and which have often exercised their power even beyond their official prerogatives.

This network of rules negotiated or participated with the workers representatives have become another vehicle of transnational diffusion of common social principles.


7. Transnational agreements


Collective bargaining which has been historically linked to national constituencies has recently begun to go beyond the national borders, in different forms.

Framework agreements between the peak organizations of European employers and unions  have regulated  broad social issues ,often finalized to shape European directives. Quite a few sectional agreements have set the basic rules for the enterprises and workers of specific industrial and service sectors. A growing number of agreements, more or less formalized, have been signed by large companies often multinational with the unions present in their plants and more often with the works councils   .

This variety of agreements confirms the plurality of instruments used to extend beyond the national borders the practices of industrial relations which were originally adopted at the national level but which now are loosing ground within the original domain due to the effects of globalization. This extension of collective agreements beyond the national borders meets many obstacles both factual and legal. In fact the organization of the social parties are still nationally based and deprived of supranational powers. On the other hand supranational agreements have no defined legal status and consequently must base their effectiveness only on self help.

The agreements concluded by the multinational firms have acquired greater diffusion also due to the trend to decentralize industrial relations force which is common to many countries . They  can have more direct effects  than sectional agreements because they can be implemented directly, also transnationally, by the decision of the companies which are party to the agreement. 

The contents of transnational agreements are quite variable; they may concern only some relations between the negotiating parties or also the regulation of the individual employment relations. The agreements concluded by European multinationals often confirm the ILO basic labor standards but also fix broader and more favorable employment and social conditions.

When these agreements have binding regulations and not merely programmatic statements, the problem arises  of  defining their legal effects within the national borders and in countries different from that of the bargaining parties.

This question has received hardly any legal test, because the parties tend to solve their disputes under the agreements through their own channels without resorting to national tribunals, and because the national courts have been quite reluctant to decide labor cases arising and or developed in other countries, i.e. to admit an extraterritorial application of national labor legislations.


8. Pilot cases


Few cases are known, mainly originated in the USA and promoted by American lawyers, due to the great number of treaties concluded by the USA but also because the common law of torts and of contracts allows more than civil law innovative applications of the legal institutions. Innovative solutions have been adopted particularly in serious cases of violation of fundamental human and labor rights .

These pilot cases are quite exceptional so far, but they show the potentials of some legal techniques to apply basic rules beyond national borders overcoming the principle of territoriality of the law which is valid also in the USA .

One pilot case arise from an accusation by trade unions against the Dow Chemical for the use of pesticides in Costarica in violation of USA legislation. The supreme court of Texas admitted its jurisdiction and decided in favor of the unions on the ground that the firm decisions were taken in Texas, that the workers were American employed by an America company operating on land of its property for exporting bananas to American tables. In spite of these important principles the difficulty to bring sufficient evidence and the prospect of a lengthy procedure for the final decision suggested to the lawyers of the workers to settle the case for (a considerable amount of) damages.

A second case was originated by a collective dismissal of workers and of trade unionists by a company operating in Guatemala but owned by an America company. Given the refusal of the firm to respect the order of reinstatement of the court of Guatemala the workers lawyers sued the USA company in Florida asking for the enforcement of the order of reinstatement on the basis of the traditional principle according to which the courts of different countries accept to apply their respective orders in their own jurisdiction. The suit plus the pressure of the public opinion and of the authorities of Guatemala forced the company to accept the judge order.

An extraterritorial application of the USA law can be found in an NLRB decision which ordered an injunction in favor of an American employer (with damages) to stop a solidarity boycott organized by a trade union in a different State .But the US. court of appeal reversed the NLRB decision  arguing that  extraterritorial effects can be recognized only by the law itself not by the judges nor by the NLRB .

An important  solution  drawn from the commercial treaties  has been advanced  in a dispute raised by the American AFL  against Cina,  The union argued that the non respect of  fundamental labor rights amounts to an unfair labor practice and that it  can give rise to  commercial sanctions according to sect.301 of the US Trade Act of 1974 .

Another decision (Filartiga) which demonstrate the potential of this case law concerned a case of violence and homicide perpetrated by the authorities of Burma. The decision of a US Court of appeal, based on an Act of 1789 against piracy, admitted its jurisdiction arguing that the torture perpetrated by public officials violates universal norms protecting human rights and consequently must be punished irrespective of the nationality of the persons affected. This precedent has been used to base a law suit against an American multinational operating in Burma with the argument that the local courts were not adequately protecting the workers victims of serious violations of their rights .

A last case deals with a suit by an Korean union against a company decision (dismissal) taken in violation of a group agreement. The case was brought to a court in New York against the American mother company of the Korean firm accusing the violation of the collective agreement and the interference of the mother company on the local management. The judge has acknowledged the violation of the agreement, but has not decided for the responsibility of the mother company adducing a specific exception.

The first cases mentioned are based not on clauses of commercial treaties but on norms of the country of the mother company (the USA) which are held to be applicable also to fact occurred in another jurisdiction.

The last decision, in spite of the conclusion negative for the workers, open the way to the possibility of enforcing contractual obligations against multinational firms based in the USA . The arguments adopted here, if shared, can confirm the binding effects of collective agreements signed by multinationals not only for the signatory parties and their employees, but also for the various firm subsidiaries. The unitary legal relevance of the enterprise groups which has been recognized in various ways  by many courts also Italian within the national borders  would be extended across the borders .It  could be an important innovation allowing collective agreements to operate also as a transnational source of  labor regulations , and to follow the transnational projections of the enterprise, instead of being  bypassed by the initiative of the multinationals.

A similar transnational consideration of the enterprise groups can hardly be relevant for the social clauses of the commercial treaties , because the  rules of implementation of these treaties, as shown above,  are controlled   by the signatory States and the ensuing disputes are subtracted to the national courts jurisdiction and reserved to internal conciliation and arbitration procedures .


9. Possible innovations


The pilot cases just mentioned have a limited direct impact but might have the value as precedent for the future.

The importance of the issues considered by global treaties has raised a wide public attention and stimulated the search for innovative practical solutions directed to remedy to the weaknesses of their implementation, particularly that of the social clauses. Some of these solutions, advanced mainly in the Anglo-Saxon countries, deserve to be mentioned.

A general argument directed to justify the  transnational effects of  fundamental social rights has been advanced by A. Supiot (2016) .The argument proceedes from the rule  stated in the  ILO  declaration of 1998 whereby all States members of the ILO, even if they have not ratified the conventions, have the duty deriving  from their membership to apply and promote the principles  concerning the fundamental rights sanctioned by the same conventions. The violation of this duty by a member State bound to observe it should legitimize other partner States to react with commercial countermeasures, such as the suspension of GSP and the non application of specific clauses and benefits of the bilateral treaty.

This position which has been widely discussed , is an attempt to justify the binding effects of fundamental social rights of the ILO even beyond and in absence of specific clauses of the Treaties, for all state members of the ILO  including those, like the US, which have not ratified some of the core ILO conventions .The legal implications of  this argument are wide-ranging  even though the practical impact  depend on the initiative  of the States and on their interest  to pretend the respect of the fundamental rights from their  competitors in order to prevent them from taking advantage of practices of social dumping.

According to other  commentators a broad interpretation of art XX of GATT on the General Exceptions might allow the protection of human rights and of the basic social standards because it can legitimize the adoption of protective measures by  the States not only internally but also in the commercial relations with other States .

According to a similar  type of arguments one could argue that, given the importance of labor conditions for competition, the non observance of basic labor standards by some States and  the tolerance of their violations may hinder  the observance  also by other States, which  do not want to suffer a competitive advantage .


10. Multiple instruments and strategies for international social regulation


The weakness of social clauses and of their enforcement procedures cannot be corrected only with some improvements of the existing system. A new perspective is necessary in order to pursue the objective of these clauses which is to contribute to a better social regulation of globalization. To this end are necessary not only more precise and consistent legal norms but a set of public policies and administrative practices adopted by the national states vis a vis global trade and international markets.

The materials and the experiences accumulated in recent years may be useful, but need to be better finalized and harmonized. Innovative types of regulations are to be searched different from those  adopted in the building of national legislations and also in the European community; the very dichotomy hard -soft law might not be exhaustive .Innovation is necessary because the scope of application of the rules is different from that of the national legislations, the parties are not those of the employment relations but public institutions which are also the sources of regulation and then responsible for the implementation of the standards.

The search for new solutions might have to reconsider not only the role of the legislators and of the representative bodies but also of the bureaucracies and the technical agencies which are decisive in the preparation of the dossiers and in the negotiation among States. In fact these negotiations last through the periods of many governments and parliaments, as shown by the seven years of negotiation of the CETA; and equally long lasting are the procedures of implementation of the agreements. The formation of the European directives and regulations gives full evidence of the importance of the technical and inter-institutional procedures and of their difference from the national parliamentary processes.

The diversity and complexity of negotiating international Treaties are even greater when the regulations must have a wider scope than the relatively homogeneous European space.

On the other hand the international rules created by the Treaties produce their effects only indirectly i.e. through the national institutions and consequently are influenced by this intermediation. Moreover the framing and application of the social clauses have to take into account, even more than other clauses of the treaties, the pressures of social actors and of multiple stakeholders.

The involvement of this variety of stakeholders is a necessary condition for framing acceptable regulations and for sustaining an effective implementation. The ILO recommendations confirm the importance of the fact that the stakeholders be fully involved both in the phase of negotiation and in the implementation of the social clauses .

A second condition deriving from the experience has to do with transparency and information. A full knowledge of the possible alternatives of the negotiation and of the implications for the interested parties is important for winning the resistance to change and for reaching a true consensus. The lack of transparency and of information has proved to be a major obstacle in many negotiations, including those for the TTIP.

The implementation of the social clauses equally requires continuous information through all the institutional and social channels .An active presence of these stakeholders, beginning with the unions and the ONG, in the procedures of implementation would greatly increase the effectiveness of the clauses, and compensate for the inertia of the negotiating states. Many experts have suggested to give powers of initiative to these stakeholders in the various steps of the procedures in order to reinforce their effectiveness . This would give the stakeholders the same right of action that is recognized to private investors in the ISDS procedures. Such a right of initiative of social actors would facilitate also the courts intervention in labor disputes, as shown by the pilot cases mentioned above.

The intervention of independent mediators and arbitrators has also been proposed as a means to improve the application of social clauses and make them more acceptable to the stakeholders and to the public at large.

Giving the power of initiative in these procedures to social and civil organizations may stimulate the public authorities to use all the available legal tools to implement the clauses of the treaty. But it cannot have a direct impact on the enterprise decisions concerning the respect of the social standards. In order to reach this result further steps are needed. The multinationals enterprises should accept more stringent social obligations than those resulting from the codes of practice; the States could require the enterprises to abide by the same social standards included in the trade agreements and/or to give binding force to the principles of corporate social responsibility  .

This solution would represent a profound change with respect to the present status of the social clauses because it would modify their exclusive interstate logic and make them directly actionable by the social parties.

The same result would be reached by the diffusion of transnational collective agreements concluded by multinational firms and containing not only economic and normative conditions but also the commitment of the firms to respect the core social standards fixed by the ILO.

The ILO, which is already involved in the implementation of social clauses with tasks of monitoring, fact finding and mediation (so the CETA), could contribute directly to the enforcement of these clauses as arbitrator indicated by the parties to the treaties. Similar proposals have been advanced by some experts .

The effective formation and implementation of social clause is not a merely technical question. It calls into question the role and the strategies of the States for the future of globalization.

The experience shows that improving the social rules of international economic relations is a difficult objective. In order to pursue effectively this objective the States should give it high priority in their political agenda. And they should use accordingly a variety of instruments and techniques with more continuity and consistency that it has been done so far. The same objective should have priority in the strategies of the social parties and of civic organizations which would project their actions beyond the national markets where they have been tested in the past. 

The weak powers of the international organizations in our field need to be supported by the subsidiary intervention of organized groups of interest. They operate with private instruments of consensual origin: transnational collective agreements, partnership initiative, guidelines, investment and commercial agreements. The capacity of these private initiatives to influence and regulate the markets will depend on the social pressure which they will mobilize vis-a-vis all the stakeholders and the very various centers of public policy making.

The target should be to make the best use of these various instruments to build a network of social rules capable of operating effectively across and beyond the national borders. This will be a gradual process,which will not be immediately capable of taking labor costs out of global competition, as the national systems of labor law and industrial relations did in the last century for their national jurisdiction. But a multilevel network of social rules of different nature and origin, supported by social and institutional consensus, will contribute to that end avoiding that global competition takes advantage of the violation of basic human and social rights.

This innovative path for promoting transnational social regulations needs institutional ingenuity but must be supported and framed in a broader perspective as indicated above, namely in a political and social strategy finalized to promote a sustainable development and to correct the socially negative consequences of globalization .

The defense of acquired social rights in some countries is not sufficient. If not framed in this broader perspective it may risk to be accused of protectionism by less developed countries, as it has been already the case.  The sanction and promotion of social rights, in order to be accepted and credible, need to be inclusive, i.e. accompanied by positive measures conducive to balanced growth and by an equitable distribution of wealth between nations and social groups. Old and new groups need to be protected from the possible consequences of globalization. The losers of globalization can be found in different sectors of the population, from the traditional working class to some sectors of the once stable middle class and recently to the masses of migrants which are moving from poor to richer countries of the world .

Europe and the United States, due to their economic importance and for their cultural and social traditions, could take the lead in pursuing these objectives. But this responsibility is been shared more and more by other emerging and newly central nations.



REFERENCES



Arthurs, H. (2001), Reinventing Labor Law for the Global Economy, in Journal of Employment and Labor Law, vol. 22, pp. 271-292.

Bellace, J.R. (2014), Human Rights at Work: The Need for Definitional Coherence in the Global Governance System, in International Journal of Comparative Labour Law and Industrial Relations, vol. 30, n. 2, pp.175-198.

Benedek, W. (2007), The World Trade Organization and Human Rights, in W. Benedek, K. De Feyter, F. Marrella (a cura di), Economic Globalization and Human Rights, Cambridge: Cambridge Univ. Press.

Blankett, A. e Trebilcock, A. (a cura di) (2015), Research Handbook on Transnational Labor Law, Glos: Edward Elgar Publishing.

Blanpain, R. (1979), The OECD Guidelines Per Multinational Enterprises and Labor Relations, Alphen aan den Rijn: Kluwer.

Blanpain, R. (2014), Multinational Enterprises and Codes of Conduct: The OECD Guidelines for MNEs in Perspective, in R. Blanpain (a cura di), Comparative Labor Law and Industrial Relations in Industrialized MarketEconomies, Alphen aan den Rijn: Kluwer Law International, pp. 195-221.

Ceruti, M. e Treu, T. (2010), Organizzare l’altruismo. Globalizzazione e welfare, Bari: Laterza.

Compa, L. (1993), Labor Rights and Labor Standards in International Trade, in Law & Policy in International Business, vol. 25, pp. 165-191.

Compa, L. (1998), The Multilateral Agreements on Investment (MAI) and International Labor Standards: A Failed Connection, in Cornell International Law Journal, vol. 31, pp. 683-712.

Compa, L. (2001), Workers’ Freedom of Association in the United States under International human Rights Standards, in International Journal of Comparative Labour Law and Industrial Relations, vol. 17, n. 3, pp.289-308.

Compa, L. (2002), Pursing International Labor Rights in US Courts, New Uses for Old Tools, in Industrial Relations, vol. 57, n. 1, pp. 48-76.

Compa, L. (2015a), Labor Rights and Labor Standards in Transatlantic Trade and Investment Negotiations: A US Perspective, in Economia & Lavoro, vol. 49, n. 2, pp. 87-102.

Compa, L. (2015b), Labor Rights and Labor Standards in Transatlantic Trade Investment Negotiations: An American Perspective, in C. Scherrer (a cura di), The Transatlantic Trade and Investment Partnership (TTIP): Implication for Labor, 2014, Munchen-Merig: Rainer Hampp Verlag.

Compa, L., Vogt, J. (2003), Labor Rights in the Generalized System of Preferences: A 20 Year Review, in Comparative Labor Law and Policy Journal, vol. 22, pp. 199-238.

Ebert, F., Posthuma, A. (2011), Labor Provisions in Trade Arrangements Current Trends and Perspectives, International Institute for Labor Studies, Discussion Paper series. 

European Parlament (2016), TTIP and Jobs, Directorate General for international policies, Policy Department.

Faioli, M. (2015), The Quest for a New Generation of Labor Chapter in the TTIP, in Economia&Lavoro, vol. 49, 

Giubboni, S., Peruzzi, M. (2013), La contrattazione collettiva di livello europeo al tempo della crisi, in M. Carrieri, T. Treu (a cura di), Verso nuove relazioni industriali, Bologna: Il Mulino.

Hepple, B. (2003), Diritto del lavoro, diseguaglianze e commercio globale, in DLRI, n. 3-4, pp. 341-372.

ILO, International Institute for Labor Studies (2013), Social Dimension of Free Trade Agreements, Geneva.

Marchesiello, M. (2016), L’arbitrato internazionale nelle dispute investitori- Stato: una nuova idea di giustizia o creazione di un suo mercato globale, in Politica del diritto, vol. 47, n. 1-2, pp. 129-146.

OECD (1996), Trade Employment and Labor Standards: A Story of Core Workers Rights and International Trade.

Onida, F. (2009), Standard sociali e del lavoro nella rule of law internazionale, in G. Amato (a cura di), Governare l’economia globale. Nella crisi e oltre la crisi, Roma: Passigli. 

Pantano, F., Salomone, R. (2008), Trade and Labor within the European Union. Genaralized System of preference, J. Monnet working papers, New York University School of Law.

Perulli, A. (a cura di) (2013), La responsabilità sociale dell’impresa: idee e prassi, Bologna: Il Mulino.

Perulli, A. (2014), Fundamental Social Rights. Market Regulation and EU External Action, in International Journal of Comparative Labour Law and Industrial Relations, vol. 30, n. 1, pp. 27-47.

Perulli, A. (2015), Commercio globale e diritti sociali. Novità e prospettive, in RGL, n. 4, 

Perulli, A. (2016), Global Trade and Social Rights, Changes and perspectives, International Society for Labor and Social Security Law, ISLSSL paper, n. 4-5, in www.ISLSSL.org.

Prislan, V., Zandvliet, R. (2014), Mainstreaming Sustainable Development into International Investment Agreements: What Role for Labor Provisions?, in R. Hofmann, C. Tams, S. Schill (a cura di), International Investment Law and Development, Glos: Edward Elgar Publishing. 

Rehfeldt, U. (2013), La posta in gioco nei canali multipli di rappresentanza. La contrattazione collettiva aziendale transnazionale, in M. Carrieri, T.Treu (a cura di), Verso nuove relazioni industriali, Bologna: Il Mulino.

Roccella, M., Treu, T. (2016), Diritto del lavoro nell’Unione Europea, Padova: CEDAM.

Rogowsky, N. (2005), Socially Sensitive Enterprise Restructuring, ILO Geneva.

Ruggie, J. (2003), The United Nations and Globalization. Patterns and Limits of Institutional Adaptation, in Global Governance, vol. 9, pp. 301-321.

Ruggie, J. (2013), Just Business: Multinational Corporations and Human Rights, New York: W.W. Norton & Company.

Schuler, R., Jackson, S.E., Tarique, I. (2007), Human Resource Management in Context, in R. Blanpain (a cura di), Comparative Labour Law and Industrial Relations in Industrialized Market Economies, Alphen aan den Rijn: Kluwer Law International, pp. 95-134.

Sciarra, S. (2009), Transnational and European Ways Forward for Collective Bargaining, Working papers Massimo D’Antona, n. 73.

Smit, P. (2016), The Future of Labor Law in a Globalized or Regionalized World, in Bulletin of Comparative Labor Relations, vol. 92, pp. 145-158.

Supiot, A. (2016), What International Justice in the Twenty first Century?, in Labor Law and Social Progress, Bulletin of Comparative Labor Relations, n. 92, pp. 1-18.

Treu, T. (2007), Responsabilità sociale delle imprese: condizioni e forme di promozione, in A. Perulli (a cura di), L’impresa responsabile, Macerata: Halley.

Treu, T. (2016), Labor Law and Sustainable Development, Keynote Speech at the American Congress of the International Society for Labor and Social Security Law, Panama, in Working Papers M. D’Antona, n. 130/2.

Vogt, J.S. (2014), Trade and Investment Arrangements and Labor Rights, in L. Blecher, N.K. Stafford, G. Bellany (a cura di), Corporate Responsibility for Human Rights Impact: New Expectations and Paradigms, New York: ABA Book Publishing.

Wettstein, E. (2012), CSR and the Debate on Business and Human Rights:Bridging the Great Divide, Business Ethics Quarterly.

World Bank, Doing Business, 2015, Going Beyond Efficiency, Washington, DC: International Bank for Reconstruction and Development.



Vuoi saperene di più?

Compila il seguente form. Ti risponderemo il prima possibile!

Privacy: