Helsinki (22.10.2001 - Pirjo Pajunen) SAK economist Peter J. Boldt believes that greater consideration will be given in future to ethical points of view in world trade. These aspects include environmental matters and the position of employees.
"Over the last few years the atmosphere of discussion has changed radically. Ethical production will inevitably increase."
Boldt warns that these changes will take place slowly, however. There is currently more talk about desirable objectives than actual concrete action. Nevertheless, it is a good thing that instruments already exist for applying pressure on enterprises to allow for ethical points of view, and new initiatives are steadily appearing.
"The quickest way to alter production rules is to influence enterprises directly. Some enterprises have their own codes of conduct but all too often these are not public. Transparency is increasing, however, and to achieve still greater transparency enterprises will have to be lobbied.
In Boldt's opinion the best way to influence enterprises is to focus on their sense of reputation. Businesses do not want to be known for damaging the environment, treating employees inhumanly or using child labour.
"Nowadays a bad reputation brings its own punishment rapidly in the form of impaired financial performance. Business leaders understand this better than mere appeals to morality."
Although the OECD's new ethical codes for multinational enterprises (MNE) are only recommendations, Boldt notes that in any case they give the organisation the opportunity to publicly deprecate enterprise that infringe the codes.
Boldt regards consumers as the trade union movement's most important ally in the struggle for ethical production. Investors are also increasingly interested in the ethical aspects of enterprises. For example it already is quite common in decisions on insurance company investments to find investigations of whether an enterprise respects the ethical norms.
"Major corporations can also be allies of the trade union movement. The economic pressures associated with management by reputation lead MNEs to allow for ethical norms", Boldt says.
Developing countries opposed to change
Over the last few years the World Trade Organisation - WTO has become a symbol of the global economy. Its next ministerial conference will take place in Qatar in early November. Boldt will participate in the meeting as an expert member of the Finnish delegation. He is cautiously optimistic that the conference will be able to agree on the start of a new negotiating round. The previous ministerial conference in Seattle failed because of violence and disagreements between the Member States.
The International Confederation of Free Trade Unions (ICFTU) will arrange an international day of action before the Qatar conference to apply pressure for its demand that core labour standards form part of the WTO rules. Boldt does not believe that the demand will succeed in Qatar, although the European Union and Finland are in agreement with the trade union movement and favour the inclusion of core labour standards and environmental norms in the WTO rules.
Such inclusion is opposed most fiercely by the developing countries. In future, however, this attitude may become more temperate.
"Many developing countries have noticed that their own enterprises suffer if they fail to respect ethical norms."
This is what happened, for example, in the Pakistani carpet industry when child labour was forbidden by an ILO convention and the organisation began a campaign to support this goal.
Over the last few years the trade union movement has repeatedly called for dialogue between the ILO and WTO. In Boldt's view the tripartite ILO is the central organ in efforts to strengthen ethical norms in world trade. The problem is that the ILO cannot directly influence enterprises but can only apply pressure on its Member States.
Boldt believes that early pressure from the enterprise side will make global economic regulators such as the WTO ready to change their way of working. So far progress has been achieved only at the World Bank. This important development financier is set to commit itself to respecting core labour standards.
* Published originally in the SAK monthly magazine Palkkatyöläinen, edition no. 8-2001