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Sunday, August 21, 2016

The World Bank’s new labour safeguard

  16 August 2016

Included in the updated Environmental and Social Framework that the Bank’s executive board adopted on 4 August, this ’labour safeguard’ needs strong compliance measure to protect working people from the exploitation of corporate greed.

The other banks that already have a labour safeguard include the African Development Bank, European Bank for Reconstruction and Development and the WB’s own private-sector lending arm, the International Finance Corporation (IFC).
For the World Bank to catch up with most other development banks, not to mention bilateral aid agencies, it will need careful guidance notes on interpretation and implementation. Where the WB’s labour safeguard is weaker than those at the other banks we want to see coherence.
Foremost among the flaws is the lack of any reference to the International Labour Organization’s fundamental rights conventions, which define the core labour standards (CLS) endorsed by the other banks.

The WB safeguard commits to prohibiting child labour, forced labour and discrimination in Bank-financed projects, but for the fourth CLS, freedom of association and right to collective bargaining, it adds the qualification that these rights must be respected only ’in a manner consistent with national law’.
If freedom of association, the heart of democratic rights and freedoms, is absent or imperfectly protected in the country’s legal framework, the Bank could allow working men and women in WB-financed projects to be at a higher risk of violation of their rights than those working in projects funded by others. This goes against the universal nature of the CLS as affirmed in the ILO’s Declaration of Fundamental Rights at Work adopted by all ILO member countries in 1998.
Another flaw is the shifting of the responsibility to identify risks of child labour, forced labour and dangerous working conditions in primary supply chains from the Bank and the borrowing countries to the supplier. This actually represents a dilution from an earlier version of the draft WB labour safeguard published in August 2015.

The Bank has announced that it will take up to 18 months for ‘intensive preparation and training’ before the safeguard becomes fully operational in early 2018.

Among the steps that it will take are the preparation of Guidance Notes that will give specific instructions to WB staff and borrowers on how the labour and other safeguards must be interpreted and applied. We ask that the Bank consult the ILO and the International Trade Union Confederation (ITUC) in the preparation.

This call has been heard by the Bank’s president Jim Yong Kim who phoned me after the adoption of the new policy to talk about implementation of the labour safeguard and told me of the Bank’s intentions to consult trade unions and the ILO extensively as the guidance note is prepared as well as for the other measures to operationalise the safeguard.

The WB president can benefit from the ITUC and Global Union Federations’ experience with labour safeguards at other development banks which shows that they have a real impact in ending labour rights violations when banks take the following steps:

(1) ensure their staff are properly trained on labour issues; (2) make clear to borrowers that the standard is obligatory and the precise actions they must take for their labour practices to be in compliance; (3) work in close cooperation with workers’ organisations that can inform the bank of potential safeguard violations.

Early consultation with trade unions on risks of non-compliance in new projects is probably the most effective practice for preventing violations.

The ITUC will continue to campaign for the World Bank to address the weaknesses in the new policy when it comes up for a scheduled revision in a few years. In the meantime, accepting the premise that denial of workers’ rights and unsafe working conditions are incompatible with goals of eliminating poverty and reducing inequality, the Bank must take serious measures to make sure that its labour safeguard is applied rigorously throughout all the projects and activities that it finances.
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