World Bank takes step forward in recognizing labour rights

NUPGE says thousands of workers on IFC-financed projects will benefit

Ottawa (28 Feb. 2006) - James Clancy, president of the National Union of Public and General Employees (NUPGE), has welcomed a new commitment by the World Bank's private sector lending arm, the International Finance Corporation (IFC), to include respect for fundamental labour rights as a condition of future IFC loan arrangements.

The World Bank, which is controlled by 184 member countries, provides loans, technical assistance and policy guidance to developing countries around the world.

Its stated mission is global poverty reduction and the improvement of living standards. It is often criticized, however, for its various prescriptions for the alleviation of poverty in developing countries, the most widely implemented being Structural Adjustment Programs (SAPs).

Observers have long argued that in many countries, especially in Africa, the World Bank's SAPs has worsened the situation and brought greater poverty without creating jobs.

Respecting ILO Conventions

Last week the World Bank's IFC branch adopted a new loan performance standard on labour rights and working conditions. The new standard requires all private companies that borrow from the IFC to abide by the core labour standards as defined by eight core Conventions of the International Labour Organization (ILO).

The international trade union movement has consistently argued that these eight core labour standards should be included in all international trade agreements.

The core labour standards prohibit the use of forced labour, child labour and discriminatory practices, and require recognition of freedom of association and the right to organize and bargain collectively. The new IFC standard also obliges its clients to observe some other basic conditions, including health and safety standards, protection for contract workers, and a policy for managing reductions in employment.

"This is definitely a positive step in the right direction for the World Bank; after all, it does not have a reputation for recognizing the importance of promoting labour rights as part of its international development work," says Clancy.

"This standard will benefit thousands of workers in IFC-financed projects around the world."

Making the connection

"Promoting labour rights in international financial institutions like the World Bank is about making the connection between international human rights law and international economic law," Clancy adds.

"It's increasingly being recognized around the world that labour rights are human rights and that labour rights promote democracy and economic prosperity."

Clancy says it is critical that other branches of the World Bank follow the positive step taken by the IFC, especially its International Bank for Reconstruction and Development (IBRD) that lend to the public sector.

"Each year the World Bank provides billions of dollars to governments around the world for public sector development projects. We need to work with the international trade union movement to ensure that the World Bank holds those governments to the same international labour standards that it now holds all private companies that it lends money to," he says.

Since early 2005, the National Union and the United Food and Commercial Workers (UFCW Canada) have been running a national Labour Rights are Human Rights campaign to focus new emphasis and new action on the human rights of workers in Canada and around the world. NUPGE