Trade unionists, employers, HR professionals, risk officers and anti-corruption activists should unite to end the protection contract system in Mexico

On September 22, 2015, eight multi-national clothing and sportswear companies - including Adidas, American Eagle, New Balance, Nike, Patagonia, Puma, PVH and The Walt Disney Company - sent a letter to Mexican President Enrique Peña Nieto calling on him to outlaw the practice of labor protection contracts in Mexican labor relations because the practice violates international labor norms.

As a practice that intersects the fields of labor rights, human resources management, corporate social responsibility and corporate compliance (including anti-bribery compliance), eradicating the protection contract system will require a multi-pronged, multi-sectoral approach.  Trade unions, worker rights activists and CSR advocates must appeal not only to international labor norms but also to anti-bribery laws and norms.  They must ally themselves with company risk officers, HR professionals and anti-corruption activists to rid Mexico of the invidious practice of protection contracts.

The problem of labor protection contracts in Mexico

Labor protection contracts are part of a decades old practice in Mexico whereby companies enter into "collective bargaining agreements" with individuals claiming to represent trade unions prior to the commencement of operations.  These so-called collective bargaining agreements are registered with state labor boards before employees are hired and without their inscription or agreement.  As outlined in the letter from the Brands to the President of Mexico and discussed in the press release issued by global union INDUSTRIALL, the International Labor Organization (ILO - a UN organization) found in 2012 that labor protection contracts violate international norms on Freedom of Association.  Frequently when workers unite to organize their own union in Mexico, they find that there is already a collective bargaining agreement in place which serves as an obstacle to organizing a truly representative trade union.  In March 2015, the Fair Labor Association published an issue brief on labor protection contracts to educate its constituency.

The link between labor protection contracts and risk of illegal bribery of government officials

Not only do labor protection contracts vitiate employment relationships and distort the collective bargaining process, however.  Surely labor protection contracts do not come for free.  Companies doing business in Mexico must ask themselves to whom are payments for labor protection contracts made, and where does the money end up?  Labor boards in Mexico - where all collective and individual labor disputes are mediated and adjudicated - are tripartite, meaning that they consist of a government representative, an employer representative and a trade union representative.  More frequently than not, the trade union representative sitting on the local labor board is a leader in the "official" trade union with which the company entered into a protection contract.  There is a high possibility that some or all the funds paid in consideration for the protection contract will end up in the pockets of the trade union representative acting in his or her official capacity as a government official on the labor board - creating risk of violating anti-bribery laws for the multi-national company doing business in Mexico.

Bribery of foreign government officials is prohibited by the U.S. Foreign Corrupt Practices Act (FCPA), the Canadian Corruption of Public Officials Act (CFPOA) and anti-bribery laws passed by every OECD member state (including Mexico) in compliance with the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.  To better understand the international anti-bribery framework, see this 2010 web resource produced by the Association of Corporate Counsel as well as this guide to the CFPOA produced on the Business Anti-Corruption Portal.  It should be highlighted that the Canadian government now has wider powers to take legal action against Canadian companies for violations of the CFPOA, as discussed in this April 22, 2014 article in the National Law Review.

Multi-national companies that subcontract work to manufacturers in Mexico may assert that their risk of violating foreign bribery laws is mitigated by the fact that they may not themselves enter into labor protection contracts or make payments to trade union officials sitting on labor boards.  Yet, as discussed in this October 2013 article in Bloomberg Law by FCPA experts on mitigating third party risk in anti-corruption compliance, companies can be held liable for bribes paid by third party agents and contractors.  Companies that invest directly in Mexico and participate directly in payments as a quid pro quo for a protection contract may find themselves in direct violation of anti-bribery laws and truthfulness in books and records requirements.

With the possibility of tens of millions of dollars in legal fees and fines, as well as the risk to reputation and company brand, is taking the risk that a subcontractor may be directly or indirectly paying bribes to government officials sitting on labor boards really worth it?

A path to a solution - partnering with the Mexican anti-corruption movement

Eradicating a protection contract system which has been embedded in HR practice and labor law administration in Mexico for decades will not be an easy task.  Worker rights activists and CSR advocates should not consider themselves alone in the struggle, however.

As discussed by Mauricio Merino Huerta in his June 2015 paper published by the Wilson Center Mexico:  The Fight Against Corruption, the anti-corruption movement in Mexico has been gaining strength in the wake of scandals and tragedies in the last few years.  Merino highlights the work of the Accountability Network, an alliance of a variety of academics and organizations dedicated to the eradication of public corruption in Mexico.  This network has had a number of successes - in particular the passage of national legislation by the Mexican Congress creating a National Anticorruption System that was signed into law on May 27, 2015 (Merino, p. 16).

Joining or partnering with the Accountability Network to raise the profile of the protection contract system in Mexico is just the first step to passing laws and implementing policies to eradicate protection contracts in Mexico.  Worker rights and CSR advocates should also pursue partnerships at the regional and international level.

The next stop should be the OECD itself, where INDUSTRIALL and other international trade unions and worker rights advocates can partner with the OECD's Trade Union Advisory Committee (TUAC) and conscientious employers like the Brands that signed the letter to the President of Mexico can partner with the Business and Industry Advisory Committee (BIAC)  to table text explicitly prohibiting the practice of protection contracts with consequences for companies, manufacturers and employers alike.'

Don't be a rube!  Training of human resources professionals, financial auditors and CSR auditors is needed

It is critical - in fact an absolute necessity - that human resources practitioners both within and outside Mexico be sensitized to the risks protection contracts pose not only from an HR perspective but from a corporate compliance / anti-corruption perspective.  In Mexico, it may simply be that it has been "done this way" for so long that the practice is accepted without conscious thought.  For companies that subcontract or invest in Mexico, it may be simply a matter of HR managers being ignorant of human resources practice in Mexico and relying too heavily on their in-country counterparts.  Human resources management professionals cannot accept at face value assertions that making payments to an "official trade union" before ground has broken on the factory and employees have been hired "is just the way we do things in Mexico."

Two organizations that might be good partners for implementation of this type of training and sensitization program would be the North American Human Resource Management Association (NAHRMA) and the Society for Human Resources Management (SHRM) which offers periodic Global Human Resources Management certification courses and recently established international membership fora outside the United States.  Organizations of financial and CSR auditors can also be partners in the fight to eradicate the protection contract from Mexico's labor relations system by developing methodologies for matching payments to trade unions with dues deducted from workers' pay - or not as the case may be.  The presence of payments to trade unions without matching deductions from workers' pay could be an indicator of the existence of a protection contract - or if union dues are deducted without workers' assent or knowledge.

The protection contract system in Mexico violates international labor norms, decreases the credibility of Mexican legal institutions empowered to enforce labor law, creates financial and compliance risk for international companies doing business in Mexico and diverts resources from the pockets of workers.  It is a relic of a bygone era that has no place in a transparent, modern Mexico.  It is time for everyone at the table to unite and bring an end to it.

Great new policy brief from MPI on health and welfare of left-behind children of Asian labor migrants

Yesterday Kolitha Wickramage, Chesmal Siriwardhana and Sharika Peiris released a great policy brief on the health and welfare of children left behind by moms and dads who migrate from countries like the Philippines, Indonesia, Thailand, Sri Lanka and Vietnam to work in Gulf nations like Saudi Arabia.

Released by the Migration Policy Institute on October 1, 2015, Promoting the Health of Left-Behind Children of Asian Labour Migrants: Evidence for Policy and Action (Migration Policy Institute 2015) includes a solid human rights law framework that balances the rights of children with the right of parents to migrate, cites fascinating (and seemingly rare) studies of nutritional and mental well-being of left-behind children (with surprising outcomes based on cultural and policy maker attitudes) and highlights effective policies in some migrant sending nations.  One of the issues the paper sheds light on is the stress on migrants' parents and husbands who are left behind to hold the family together when moms migrate for work - as well as the pressures placed on the entire family when moms return home after suffering an injury or abuse while working abroad.

All in all, a great read with a lot of things to think about in just a few pages.  Clearly more studies about the health and welfare outcomes for children and family members left behind are needed, as well as creative policies at the local, national and regional level.  Definitely check out this paper!

Voice and Transparency in Aaronson's May 2015 paper "New Ideas to Empower US and European Workers in TTIP"

Earlier this year I had the opportunity to participate in an exciting survey administered by Susan Aaronson of the George Washington University Elliott School on how best to incorporate worker rights in the Transatlantic Trade and Investment Partnership (TTIP), a free trade agreement being negotiated between the United States and the European Union.  One of Dr. Aaronson's primary projects is Make Trade Policy More Trusted, Transparent and Accountable at the GWU Institute for International Economic Policy.  Participating in the survey gave me and the other 22 respondents a chance to get some of our ideas and recommendations into trade and labor policy discussions while TTIP negotiations are ongoing.  Some of the ideas I had that made it into the final paper were (1) inclusion of provisions to address human trafficking; and (2) emphasis on utilization of creative international cooperation mechanisms like the Joint Public Advisory Committee which has been an innovative and effective mechanism for public involvement in the North American Commission of Environmental Cooperation.

Susan Aaronson's resulting paper Working by Design New Ideas to Empower US and European Workers in TTIP was released at a joint ILO-GWU conference held in Washington, DC on May 14, 2015.  In addition to the findings and recommendations resulting from the survey, the paper captures some of the misgivings many have about the possible negative impacts the TTIP could have on workers' rights, particularly on strong labor and social welfare protections in most European Union member states.  The paper also captures key differences in the US and EU approaches to labor rights in free trade agreements (See p. 7).

One of the most compelling recommendations from the survey is that labor, human and social welfare rights should be considered and incorporated throughout the text of the US-EU free trade agreement (instead of in just a single chapter) as a way to advance labor rights and increase employment (See pp. 12, 21).  Aaronson points to a proposed "regulatory coherence" chapter that could have a negative impact on worker rights as its aim is to "ensure that domestic regulations, such as environmental regulations, health and safety standards or workplace regulations do not distort trade" (p. 13).  She cites a 2015 ETUI policy brief written by Aida Ponce titled TTIP:  fast track to deregulation and lower health and safety protection for EU workers as an example of how a US-EU free trade agreement regulatory coherence chapter might lower workplace standards in the EU.  Two other proposed chapters that could have a negative impact on worker rights are the proposed services and investment chapters.

The paper also includes some other survey recommendations of note such as:

• Improvements to the labor dispute process under TTIP (p. 22); 
• Periodic (every 5 years) reporting on the TTIP's impact on the realization of ILO core labor rights (p. 23);
• Specific exclusion of minimum or living wage laws, collective bargaining agreements, public procurement standards and public health and welfare regulations from the Investor-State Dispute provisions (p. 21);
• Establishment of an independent Secretariat to resolve disputes, issue reports, conduct research and engage in innovative projects to promote worker rights (p. 23); and
• Improved transparency in the TTIP negotiation process to allow the public to better understand how the agreement will expand employment and protect labor rights (p. 24).

The Working by Design paper takes a hopeful stance on ways the TTIP might be used to improve the lives in hundreds of millions of workers in the U.S. and Europe.  Nevertheless, I am left wondering if strong worker and social protections in almost every EU member state might be interpreted as trade distortions under a less than artfully crafted US-EU free trade agreement, leading to erosion rather than improvement of standards.

Finally, while I enjoyed the ILO-GWU conference (and picked up some useful tidbits of updated information) where the Working by Design paper was released, I wonder if the traditional conference format of 15-minute speeches and audience questions is the best way to come up with genuinely creative ideas.  In over 15 years of speaking at and attending international and comparative labor and employment conferences, only once have I attended an event that had an alternative format which captured and improved upon the ideas of the participants - the First Hispanic Forum on a Safe and Healthy Environment held in Orlando in 2003.  At the First Hispanic Forum on a Safe and Healthy Environment, participants were divided into 3 groups where we worked with facilitators to discuss and develop our ideas into a final set of recommendations which were then merged together in a single document on the final day of the Forum.  Maybe the next step in the Working for All work stream should be the First Global Forum on New Ideas and Innovative Strategies to Enhance Economic and Social Benefits in Trade Agreements - where the audience teaches the speakers rather than the other way around.

Can free trade work for all? Canada throws down gauntlet as U.S. attempts to avoid labor obligations imposed on its trade partners

One of the purposes of the May 14, 2015 conference Working for All? New Ideas and Innovative Strategies to Enhance Economic and Social Benefits in Trade Agreements co-hosted by the GWU Elliott School and the International Labor Organization was to shake up Washington policy discussions about incorporation of labor, human rights and social welfare concepts in free trade agreements.

For me, remarks made by Pierre Bouchard (Director of Bilateral and Regional Labour Affairs, Canada) were the highlight of the conference.  Bouchard used the event to highlight a tricky negotiation point with the United States Trade Representative regarding labor provisions in the Trans-Pacific Partnership currently under negotiation.  While the U.S. has made strides in strengthening labor provisions in free trade agreements negotiated after NAFTA, in fact the U.S. has inserted a footnote in each of the post-NAFTA free trade agreements to make sure these broader FTA labor provisions do not apply to the 50 U.S. states, the District of Columbia and U.S. territories like Puerto Rico.  This actually decreases the level of obligation the U.S. agreed to in the NAFTA labor side agreement (NAALC) which contains no such limitation.*  Canada, unlike recent U.S. trading partners like Peru, Singapore, Bahrain and the Central American nations, seems to have both the leverage and the willingness to press this point with USTR.  For U.S. labor rights advocates who have utilized the NAALC as a tool to press for improved labor law enforcement at the federal and state level, it is critical that the Government of Canada prevail on this point.  Hopefully other trading partners in the TPP support Canada in this endeavor if for no other reason than the U.S. should not impose international labor obligations on its trading partners that it is not willing to commit to itself.

Other remarks to highlight during the conference include:

• The Trans-Pacific Partnership eliminates labor law exemptions for Export Processing Zones in member states (Carol Pier, Deputy Undersecretary, International Labor Affairs, U.S. Department of Labor).
• Globalization and trade have traditionally been engines of inequality and their gains have not been broadly shared (Lance Compa, Senior Lecturer, Cornell University).  Compa also shared his experiences with the Fruit of the Loom labor rights framework in Honduras.
• Switzerland and China have negotiated a free trade agreement with labor provisions (Silvia Formentini, Trade and Sustainable Development, European Commission).
• Chile has negotiated free trade agreements with labor provisions with, in succession, Canada, the U.S., the EU, Japan and now China.  As a comparatively smaller country and economy, Chile must adopt different tactics with each of these trade partners (Pablo Lazo Grandi, Permanent Mission of Chile to UN in Geneva).
• Canada ratified the ILO Forced Labor Convention (No. 29) as a result of negotiating a free trade agreement with the EU (Pierre Bouchard).
• Freedom of Association has been seen as a barrier to the Right of Establishment and Investment in the EU (Tonia Novitz, University of Bristol.  For more information, see this 2010 European Parliament briefing note The Impact of the ECJ Judgments on Viking, Laval, Ruffert and Luxembourg on the Practice of Collective Bargaining and the Effectiveness of Social Action or Novitz's 2008 piece A Human Rights Analysis of the Viking and Laval Judgments). 
• The EU Employer Federation is in favor of ILO standards in the Transatlanltic Trade and Investment Partnership/TTIP (Thomas Zielke, Representative of German Interest and Trade).

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 * In fact, a number of NAALC complaints filed with Canada and Mexico allege ineffective labor law enforcement by  U.S. state authorities as well as federal authorities - particularly the Washington Apple, De Coster Egg Packing, New York Workers' Compensation cases (not to mention the North Carolina Public Workers case which is still pending with Canadian authorities).

All hype or maybe some light? May 14 ILO Conference on New Ideas on incorporating labor and human development issues in Free Trade Agreements

The draft agenda is out for the May 14 Conference Working for All? New Ideas and Innovative Strategies to Enhance Economic and Social Benefits in Trade Agreements, co-hosted by the International Labor Organization and George Washington University in Washington, DC.  Speakers include a number of thought leaders and policy makers in the subject area.  Will it all be hype and more of the same ideas everyone has had for the last two decades?  Or will there be genuine dialogue leading to transformative ideas for future policy development and action?  Don't forget to register - and if you can't attend, tune in here for analysis and response.

Save the Date! May 14, 2015 All Day ILO Conference in Washington, DC on labor issues in trade agreements

On May 14, 2015 at George Washington University in Washington, DC the International Labor Organization is holding an all-day conference addressing labor issues in trade agreements.

Working for All? New Ideas and Innovative Strategies to Enhance Economic and Social Benefits in Trade Agreements

9:00 am to 5:00 pm 

 

Participation is free, but prior registration is required.  Please register here ILO Conference Registration Link before May 4, 2015.

This event is part of the ILO's Project on Project on Labour Standards in Trade Arrangements, co-funded by the Governments of Canada, Switzerland and Finland. For more information, contact Marialaura Fino (fino@iloguest.org) or Marla CorleyCoulibali (corley@ilo.org).

New Book! NAFTA and the NAALC Twenty Years of North American Trade-Labour Linkage (2015)

The 20th anniversary edition of the NAFTA and NAALC monograph in the International Encyclopaedia of Laws, Labour Law and Industrial Relations by Lance Compa and Tequila Brooks provides an up-to-date retrospective on all of the citizen petitions filed under the NAFTA labour side agreement since 1994. The monograph includes early petitions filed about trade union rights at the Honeywell and Echlin plants in Mexico, the McDonald's case in Canada and the Washington Apple and DeCoster Egg cases in the United States as well as more recent petitions filed about migrant worker rights under the H-2A and H-2B visa programs in the US. In addition to being the most complete compilation of NAALC cases in existence today, NAFTA and the NAALC Twenty Years of North American Trade-Labour Linkage outlines the internal mechanics leading to the filing of a 2000 NAALC petition with the Government of Mexico about unequal treatment of migrant workers in the US, and describes changes in the treatment of petitions by US, Mexican and Canadian authorities over the last 20 years. It also contains a chapter that compares the NAALC to the OECD Guidelines for Multi-National Enterprises and highlights recent North American cases filed under the OECD Guidelines including the relatively lesser known 2004 Yucatan Markey Tex-Coco Tex petition which was dual filed under both mechanisms. Finally, the 20th edition introduces a new chapter that compares labour provisions in US and Canadian free trade agreements negotiated since 2000 and discusses recent labour petitions filed under the US-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) and US free trade agreements with Bahrain and Peru.

February 2015, 200pp, softcover

ISBN: 9789041160102

To purchase a copy, find it at

• Kluwer Publishing: Compa & Brooks, NAFTA and the NAALC Twenty Years of North American Trade-Labour Linkage (2015)
• Amazon: Compa & Brooks, NAFTA and the NAALC Twenty Years of North American Trade-Labour Linkage (2015)

2014 Study on Green Jobs impact of water treatment infrastructure in the US suggests path to Green Jobs Strategy in North and Central America

A technical report on the projected job creation impacts of recent Clean Water Act rules released by the Water Environment Foundation in September 2014 projects that investments in the water utility and waste water infrastructure will result in close to 300,000 jobs in 30 communities in the US over the next decade.  These jobs range from those requiring just a high school education (sales, production, maintenance, construction, administration) to those requiring college and advanced level training and education (civil and environmental engineering).  EPA Administrator Gina McCarthy highlighted the connection between sustainable economic and environmental development during her speech at the Water Environment Foundation's conference in New Orleans on September 29th.

It is no wonder that the environmental policy community is focusing on the job creation and economic impacts of water infrastructure improvements in the wake of ongoing impacts of the 2008 financial crash and ensuing economic crisis.  Necessary improvements to our nation's water and waste water treatment infrastructure will not happen unless state legislatures are convinced that these improvements are financially feasible.  This focus on job creation by the environmental policy community demonstrates once again that environmental protections can be good for the workforce if they are implemented hand in hand with effective education, labor market and training policies.  The report falls short by not incorporating racial and gender analysis more explicitly into its discussion, however.

What stands out about the communities analyzed in the report is that many are located in areas of high unemployment among African Americans and other minorities - particularly the Washington, DC metro area, Camden, Philadelphia, Cincinnati, Detroit, Kansas City Missouri, Baltimore and Atlanta.  A February 2013 article by Sherrell Dorsey on green jobs for African Americans in Black Enterprise magazine highlighted the 14% level of unemployment in the African American community and noted that African Americans in the US may be unable to participate in the green economy without the necessary education, training and access.  Dorsey quoted former EPA Administrator Lisa P. Jackson who pointed out that promoting a public health perspective as well as access to training and creative, non-traditional educational programs will have an impact on African American participation in the the green economy.  An April 2013 article by Dr. J. Marshall Shepherd in Ebony magazine emphasized that African Americans will be excluded from a "new generation of professionals that understand changing weather patterns, climate science, wind and solar engineering, environmental sustainability, and mitigation-adaptation strategies" without improved representation in science, technical, engineering and mathematical careers.  Access to green jobs is also an issue for women (US DOL program on Women and the Green Economy) and Latinos (NCLR study on overlap between green economy and Latino communities) in the US.  In addition to highlighting high unemployment and a desire for access for green jobs in their communities, Native Americans are leaders in US movement to build a green economy through initiatives like the Navajo Green Economy Trust, solar and wind energy development on native lands and green development initiatives in native communities.

The connection between environmental protection, water treatment and other utility infrastructure improvement and job creation has international and regional as well as national implications.  This is especially the case in the NAFTA and CAFTA-DR regions, where viable regional institutions have been established to address environmental issues in North America (North American Commission for Environmental Cooperation) and Central America and the Dominican Republic (CAFTA-DR Secretariat for Environmental Matters) but not to address regional labor and employment issues.  Despite arguments made in free trade policy circles that agreements like the NAFTA and CAFTA-DR are supposed to improve economies and create jobs, viable regional institutions to help member states design regional job creation strategies, educational policies and improved labor law enforcement do not exist under NAFTA and CAFTA-DR.  The tri-national labor secretariat established under the NAFTA was ineffectual in (and, arguably, disempowered from) assisting member states in designing regional employment policies and job creation strategies.*  Tying job creation to environmental issues such as water infrastructure development within the regional frameworks under the NACEC and the CAFTA-DR SEM may be the most effective way to get jobs on regional policy agendas in North and Central America.  It is also a way to tap innovative regional policy and idea generation through the NACEC's Joint Public Advisory Committee mechanism, to generate excitement about environmental infrastructure development and a new Green Jobs strategy for North and Central America.

Just as a Green Jobs strategy can be a way to secure financing for important improvements to water and waste water treatment infrastructure and afford access to employment for under-served groups in the US, a Green Jobs strategy can have similar impacts while opening a sustainable path to regional job creation strategies in North and Central America.  International advocates can rely on job creation and economic improvement arguments to spur public and private investment in infrastructure improvements in Latin America and elsewhere. According to an October 2013 article by Juan José Gregorio in BNAmericas, inadequate water and waste water treatment facilities in Latin America - particularly in Central American countries and to a lesser extent in Mexico - pose both public health and environmental risks.  Close to $20 billion in financing is needed to bring water and waste water treatment up to par in Latin America.  Considering that $23 billion in investment to improve and maintain water and waste water treatment facilities in just 25% of the US covered in WEF's study, $20 billion does not seem to be a huge amount of money to have such positive impacts throughout Latin America.  As demonstrated by the WEF's study, investment in improvement of water and waste water treatment facilities can contribute not only to positive environmental outcomes, but to positive economic and jobs outcomes as well. 

The example of WEF's 2014 study sets a clear path for regional policy makers in North and Central America.  Regional institutions such as the North American Commission for Environmental Cooperation and Central American Secretariat on Environmental Matters can be important mechanisms for establishing a Green Jobs initiative in North and Central America that has a positive impact on public health, the environment and employment.  North and Central American Green Jobs strategies will not be effective, however, unless regional policy makers generate and incorporate innovative ideas and programs to ensure that members of local communities have access to creative training and educational programs to equip them to take advantage of Green Job opportunities.  Thus, an effective regional Jobs Strategy in North and Central America will require the involvement of environmentalists, labor market experts, utility infrastructure experts, education policy specialists as well as community groups, labor, human rights, environmental and women's rights activists and advocates.

*  In fact, the NACLC closed in August 2010.  In the wake of the lack of viability of sustainable regional labor cooperation and policy development under the NAFTA, negotiators of the CAFTA-DR decided not to establish a labor cooperation institution similar to the CAFTA-DR Secretariat for Environmental Matters.

REFERENCES

Aspinwall, Mark, Side Effects:  Mexican Governance Under NAFTA’s Labor and Environmental Agreements, Stanford University Press, Stanford, California, 2013.

Biggers, Jeff, "Native America and Green Jobs: Spring Wind Rising from Sand Creek," The Huffington Post, February 2, 2009, available at http://www.huffingtonpost.com/jeff-biggers/native-america-and-green_b_156027.html. 

Dorsey, Sherrell, "Few See a Path to Green Industry for African Americans," Black Enterprise, February 20, 2013, available at http://roarmag.org/2014/06/labor-environmental-movements-coalition/.

Gregorio, Juan José, "Latin America needs US$19.6bn in water treatment plants, IDB expert says," BNAmericas, October 14, 2013, available at http://www.bnamericas.com/news/waterandwaste/latin-america-needs-us196bn-in-water-treatment-plants-idb-expert-says.

LaDuke, Winona, Supporting a Green Future in Native American Communities, Dream of a Nation, available at http://dreamofanation.org/img/Honor-the-Earth.pdf.

McDermott, Mat, "We Want Renewable Energy & Green Jobs Too: Native American Groups Tell Obama," Tree Hugger, January 7, 2009, available at http://www.treehugger.com/renewable-energy/we-want-renewable-energy-green-jobs-too-native-american-groups-tell-obama.html.

Shepherd, J. Marshall, "Why African Americans May be Left Out of the 21st Century Job Market," Ebony, April 15, 2013, available at http://www.ebony.com/career-finance/why-african-americans-may-be-left-out-of-the-21st-century-job-market-498#.VDlBphZ7bv8.

Singley, Catherine, Bright Green:  Five Metropolitan Areas Where the Latino Workforce and the Clean Economy Overlap, National Center for La Raza, February 2013, available at http://www.nclr.org/index.php/publications/bright_green_five_metropolitan_areas_where_the_latino_workforce_and_the_clean_economy_overlap/.
 
Water Research Foundation, National Economic and Labor Impacts of the Water Utility Sector, September 2014, available at http://www.waterrf.org/Pages/Projects.aspx?PID=4566.

Enabling women's participation in the workforce in India, Afghanistan, Sweden, Turkey, Brazil, the US and around the world

Thought I would share the ABA-UNDP International Legal Resource Center's contribution to the UN Women E-Discussion on Enabling Environment and Legal Incentives for Women's Employment from earlier this year.  The report contains essays by lawyers on issues women face accessing employment and working in a variety of countries, including Afghanistan, Pakistan, India, Sweden, Brazil, the US and the United Kingdom.  Very interesting reading!  And shows how much more work is to be done.

Here's the link:  Empowering Women: Enabling Environment and Legal Incentives for Women's Employment (January 2014)

Giving women more access to the globe's purse strings

Usually this blog focuses on the have nots and have littles, but I wanted to share my recent contribution to the comments made by the ABA-UNDP International Legal Resource Center as part of the UN Women E-Discussion on "Making Financial Markets Work for Women."  More about this E-Discussion can be found at the following link: Making Financial Markets Work for Women.

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Making Financial Markets Work for Women by Making Working in the International Finance and Banking Sector Work for Women

Contribution to UN Women E-Discussion Make Financial Markets Work for Women

June 2014

            The International Finance Corporation and other Bretton Woods institutions have made a point of researching and designing programs to improve women's access to banking and financial services as part of a set of initiatives related to the Women's Economic Empowerment movement in international policy circles.  Examples of the work being done by the IFC and other Bretton Woods institutions can be found on the website of the IFC's Gender Secretariat, where research studies focus on how to better incorporate women in the working world as entrepreneurs and employees and the benefits of better inclusion of women in the business sector.

            Despite the ascension of Christine Lagarde to the role of Managing Director of the International Monetary Fund and that of Janet Yellen to the role of Chair of the United States Federal Reserve, there appears to be inadequate comparative research about the role women can play as managers, executives and directors of the international and national finance and banking sectors, not just employees and consumers of banking products.  The International Labor Organization, the IFC and World Bank should work together to gather the quantitative and qualitative information about ascension of women to board and upper level executive positions in the world's banks, especially in nations important to the international finance and banking sector such as the United States, Brazil, India, Singapore, Switzerland, Luxembourg and the United Kingdom - to name a few.  It is not enough that international and national policy makers consider how to make banking accessible to women.  They should consider that sharing control of the globe's purse strings is a critical component in women's economic empowerment.

            One set of tools utilized by many nations to address access of women to management, executive and leadership roles in the private and public sector are those in the field of employment equity (Canada), positive action (European nations and the EU), affirmative action (United States, India, South Africa and Brazil) and quotas (Norway and India).  For example, in Canada, the banking sector is regulated at the federal level, so all banks that operate in Canada are subject to that nation's federal Employment Equity Act and are required to submit periodic reports on achievements and challenges in employment equity.  Scotiabank's Employment Equity Report to Canadian officials for 2012 reported that while 66% of Scotiabank's employees are women and half of its professionals are women, only about one third of Scotiabank's senior managers are women (Scotiabank, 2012 Employment Equity Narrative Report, Toronto, Ontario, p. 4).  The report shows improvement since 2008 when only 24% of Scotiabank's senior managers were women, but acknowledges that improvements must still be made.  In other countries, like Brazil, more sound, publicly available research and information is needed about women's participation in executive and management positions in the Brazilian banking sector.  A 2009 study published by the Amsterdam Institute for Advanced Labor Studies (AIAS) indicates that women constitute 36% of that nation's legislators, senior officials and managers (Maarten, et al., An overview of women's work and employment in Brazil, AIAS, Amsterdam 2009, p. 50.).  While this study provides an overview of participation of women throughout the Brazilian economy, it does not separate information about the private and public sectors and does not provide detailed information about women's participation in upper level positions in the banking and finance sectors in Brazil.

            In 2011, Rohini Pande and Deanna Ford produced an intriguing background paper entitled Gender Quotas and Female Leadership as part of the 2012 World Development Report on Gender Equality and Development (2011 Pande & Ford Gender Quotas).  Pande and Ford found that while career paths have broadened for women around the world, there has not been a proportionate increase in female leaders.  They also found that gender quotas in Norway's legislative branch have led to more female legislators and more legislative attention to issues that are important to women.  More research would have to be done, but it would be a productive task for the IFC and its Bretton Woods brethren to explore whether an increase of women in directorships on the boards of finance companies and banks would have a similarly positive effect on policies that afford greater access to banking and financial services for women.  While it is a common stereotype that women tend to be less corrupt than men in leadership positions, Pande and Ford cite studies providing evidence that women have been less corrupt than men in the administration of local governments in India (p. 20).  They also note that the lack of a female presence on company boards results partially from the lack of a female presence among top executives in companies.  While Pande and Ford discussed companies in general, the ILO, IFC and World Bank could initiate research on whether this is also the case in particular in the banking and financial services sectors and, more importantly, what can be done about it.

            Literature on the gender gap in leadership and management of the banking and financial sectors in the United States and United Kingdom tends to focus on the small number of women in leadership roles and obstacles to women's advancement.  For example, Catalyst found that in 2012, 23% of senior officers in finance and banking companies and that 18% of board directors in the US were women, although 40% of all banking and finance employees were women (Catalyst, Women in Financial Services).  The Institute of Leadership & Management in the United Kingdom found that women encounter a number of obstacles to progressing to leadership roles in the banking industry in the UK (Institute of Leadership & Management, Women in Banking).  These obstacles include discrimination in promotion, ineffective performance management systems that make who you know rather than what you can do important factors in advancement, lack of female role models, inflexible workplaces and the need for a strong presence of women on the boards of directors of companies in the banking and finance sectors.

            In contrast to the banking sectors in New York and London, which were the epicenters of the global financial crash in 2008, India's banking sector emerged relatively intact.  Aman Dhall and Ravi Teja Sharma of The Times of India attribute better management of India's banks to the presence of a higher number of women in top executive and board positions (Dhall, Aman & Ravi Teja Sharma, "What makes women successful in the Indian banking industry," The Times of India, September 19, 2010, ).  Dhall and Shama point to the hiring of promising female business school graduates by international banks entering the Indian market in the 1980s and 1990s.  Many of these women advanced to top executive and board-level roles.  According to the article, in present day India, three out of the top eleven bank executives in India are women.  Bankers attribute the success of women bank managers in India to affirmative action policies, an emphasis on human resources policies that benefit all employees and family support.  The article indicates that many of the women who advanced to top positions in India's banking sector have paid help at home, making the reader wonder if there may be financial barriers to ascension in bank management.

            While the global literature on women's participation at executive and board levels in the banking and finance sectors is incomplete and requires additional attention, it is clear that women do not participate at top levels in proportion to their participation as bank employees and customers.  Existing literature points to a path ahead for research focused in particular on women in management and executive roles in the banking and finance sectors.  More research must be done to identify the reasons for successful results in some countries like India and inadequate progress in other countries like the United States and the United Kingdom.  It is not just a matter of affording women more power to control the purse strings in the global banking and finance sectors.  As the biography of Liberian President Ellen Sirleaf Johnson shows, leadership in the banking and finance sectors can translate directly into leadership in the political arena, and vice versa.  When she was not jailed for her political activism in Liberia, President Sirleaf Johnson spent much of her life in exile in top level positions at the World Bank and as Director of Citibank in Kenya.  One factor in her success as President and as a crusader against corruption who renegotiated a number of unfair contracts entered on behalf of Liberia by her predecessors may have been her extensive experience in the global finance sector.

Lack of clarity in North American policy leaves injured truckers in legal limbo

As predicted by observers over a decade ago, the lack of clarity in North American policy governing workplace injuries suffered by truckers who cross international borders under the NAFTA Trucking provisions has left injured truckers in legal limbo.  This legal limbo has empowered Mexican employers to attempt to utilize laws implementing the NAFTA and NAALC to argue that they need not comply with state workers' compensation laws once they cross into the United States, causing their employees uncertainty and lengthy delays in payment for medical treatment incurred in the US when they are injured.

Implementation of the NAFTA Trucking provisions by the US has been partial and highly contested.  After a number of starts and stops over the past two decades, in July 2011 the US Federal Motor Carrier Safety Administration (FMCSA) reissued regulations and implemented a pilot program allowing some Mexican trucking companies to begin long haul operation in US territory.  The Mexican National Chamber of Transporters, CANACAR, has filed a request for arbitration under the NAFTA in response to what it feels is inadequate compliance with NAFTA's trucking provisions.

Part of the confusion over workplace injuries arises from jurisdictional issues governing compensation for on-the-job injuries in the US and Canada.  While in Mexico, compensation for workplace injuries is a matter of federal jurisdiction, workers' compensation in the US and Canada is a matter of state and provincial jurisdiction.  FMCSA regulations are not crystal clear on the requirement that Mexican trucking companies operating in US territory obtain workers' compensation insurance, although the language of the regulations seems to strongly imply that obtaining state workers' compensation insurance is a requirement for entering US territory.  While each US state and Canadian province has its own workers' compensation statute, interstate motor carriers operating in the US can obtain workers' compensation policies that allow them to operate in a number of states.  As I argued in my article in 2006, however, federal border authorities must include workers' compensation coverage in their checklist when allowing Mexican trucks to enter US territory.

Earlier this year, the Arizona Court of Appeals issued a decision in a workers' compensation case that provides more clarity on the issue.  In its January 14, 2014 decision in Porteadores del Noroeste S.A. de C.V. v. Industrial Commission of Arizona/Valenzuela, the Arizona Court of Appeals held that the Mexican trucking company employer in question was required to obtain workers' compensation insurance as required by Arizona law and specifically rejected the employer's somewhat specious argument that the NAFTA and NAALC pre-empted the exercise by the State of Arizona of jurisdiction over Mexican trucking companies operating within Arizona territory.

In 2010, Adan Valenzuela, a Mexican citizen operating a long haul truck for a subcontractor of the Mexican trucking company Porteadores del Noroeste S.A. de C.V. was involved in a trucking accident in the State of Arizona.  While Mr. Valenzuela received wage and medical benefits from the Mexican Institute of Social Security as required by Mexican law, he also incurred tens of thousands of dollars worth of medical bills for emergency and other medical care in the US and Mexico.  Mr. Valenzuela's Mexico-based employer had not obtained workers' compensation insurance as required under Arizona law, so the Arizona Uninsured Workers' Fund paid some but not all of the medical bills incurred by Mr. Valenzuela as a result of his workplace injury.  Mr. Valenzuela and his attorney Wes Montrose filed a claim with the Arizona Workers Compensation Commission which was granted.  The Arizona Court of Appeals upheld the Commission's decision to award Mr. Valenzuela's claim based on fundamental public policies underlying the Arizona Workers' Compensation Act.

The Porteadores decision of the Arizona Court of Appeals is an important precedent emphasizing that Mexican and Canadian long haul trucking operators must obtain proper workers' compensation insurance policies while operating in US territory.  Nevertheless, it took almost 4 years for Mr. Valenzuela to be fully compensated for his injuries.  More clarity in regulatory and policy guidance from North American and federal authorities in Mexico, the US and Canada would prevent future injured workers from having to wait such a long time for full compensation in similar cases.

Thoughts on recent report on Haitian migrant workers on Dominican sugarecane plantations: Is the time right for a Social Security Agreement between Haiti and the Dominican Republic?

The U.S. Department of Labor's recent report on working conditions for Haitian migrant workers in the Dominican sugar industry highlights a shift in the way U.S. DOL's Office of Trade and Labor Affairs (OTLA) reviews petitions submitted under the labor chapters of U.S. free trade agreements.  Just 15 years ago, the OTLA's predecessor (the National Administrative Office - NAO) declined to review a petition from the Florida Tomato Exchange alleging that farmers in Mexico utilized child labor to grow and harvest tomatoes, reasoning that the U.S. tomato producers did not supplement their allegations with additional facts.  Such a high standard made it difficult for NGOs, human rights organizations and trade unions - and even business trade associations - to persuade the U.S. DOL to examine lapses in labor law enforcement if they lack the budgetary or technical capacity to produce the kinds of facts that would persuade the U.S. DOL to accept a petition for review.  Thus, an opportunity to address child labor in agriculture in Mexico - along with the unfair trade implications of child labor - was lost 15 years ago.  The shift in the OTLA's methodology may make it easier for advocacy groups to file petitions and bring more attention to child and forced labor issues among U.S. trade partners.

The report also shows that over 200 years after Haiti became independent, Haitian migrant workers still work in slave-like conditions on Dominican sugarcane plantations.  Although the report does not explicitly address the issue of racism, it appears that Haitian sugarcane workers and their families are continually exposed to racial, ethnic and national discrimination in the Dominican Republic.  The Inter-American Commission on Human Rights (IACHR) denounced a recent decision of the Supreme Court of the Dominican Republic that denied and revoked citizenship status of Dominicans of Haitian descent born in Dominican territory.  According to the IACHR, the court decision strips tens of thousands of people of Dominican citizenship. Discrimination against Haitians and Dominicans of Haitian descent plays a role in the prevalence of child and forced labor in Dominican agriculture.  Lack of legal clarity about the citizenship of Haitians born in the Dominican Republic perpetuates child labor and poverty and will make it even more difficult for employers, worker rights organizations, NGOs and government authorities to find a solution to child labor in Dominican agriculture.  I would argue that the situation also hampers sustainable economic development in both Haiti and the Dominican Republic because it precludes access to education and social security among a significant immigrant community in the Dominican Republic.  Access to education and social security could improve the labor market outcomes for Haitians and alleviate poverty in both countries.

The $10 million grant issued by the U.S. Department to address child labor in agriculture in the Dominican Republic is a major step forward in the types of remedies and solutions available as a result of labor petitions filed under U.S. FTAs.  Such grants greatly increase the potential positive outcomes of such petitions, showing that it is possible for civil society to utilize the labor petition process under FTAs to affect the international aid process.  Nevertheless, the facts discussed in the OTLA's report cry out for even more creative and innovative regional solutions - such as negotiation of a broad ranging Social Security Agreement between Haiti and the Dominican Republic, as well as an internationally funded program and campaign to provide documentation to all unregistered children of Haitian descent born in the Dominican Republic.

A number of obstacles exist to the negotiation of a Social Security Agreement between Haiti and the Dominican Republic, but the time and circumstances may be right for the international community to press for just such an agreement.  Although Haiti and the Dominican Republic share both an island and a labor market, a December 10, 2013 article in the St. Maarten Island Times highlights how the relationship between the two nations has deteriorated in light of the recent citizenship decision issued by the Dominican Supreme Court.  In addition to international approbation by both the U.S. OTLA and IACHR, the Dominican Republic's action has been condemned by the Caribbean Community and Common Market (CARICOM), which as a result of the Supreme Court decision has deferred the Dominican Republic's application for full membership in the regional organization. Potential trade sanctions under the CAFTA-DR resulting from mistreatment of Haitian migrant workers as well as the prospect of full membership in CARICOM can be utilized as leverage by the Organization of American States, CARICOM and international trade partners such as the U.S. and  European Union to bring the Dominican Republic to the table to negotiate a Social Security Agreement with Haiti and address other issues related to the two nations' joint labor market and unresolved citizenship issues.

While the darkest hour may be before the dawn, the dawn may not come for Haitian migrant agricultural workers in the Dominican Republic if the international community does not seize this rare historical opportunity to press for a Social Security Agreement between these two island nations.

Can NAFTA and CAFTA be used as tools to eliminate indigenous child labor in the Americas?

Sara Shahriari's November 20, 2013 article in Indian Country Today  highlights the prevalence of indigenous child labor in the Americas - particularly exploitation of indigenous child laborers in the Bolivian mine industry.  Indigenous child labor is also prevalent in agriculture throughout the Americas, as highlighted in these studies in Mexico, Guatemala, Honduras, Peru and Costa Rica.  Indigenous girls face particular challenges, as exemplified by this 2008 UNICEF report about the lives and status of indigenous girls in Guatemala.  According to the Mexican National Council to Prevent Discrimination (citing official  government statistics), there are 3.6 million children working in agriculture in Mexico, over a third of which are indigenous - with indigenous child workers suffering additional levels of discrimination on account of their racial and cultural heritage.  Indigenous children also toil in mines and agriculture in Colombia and Peru.  U.S. agriculture employs hundreds of thousands of indigenous workers from Mexico and Central America and child labor is prevalent in U.S. agriculture, but it is unclear what percentage of child workers in U.S. agriculture are indigenous.

In addition to International Labor Organization conventions prohibiting child labor and ILO resources on indigenous child labor - not to mention the ILO's Guidelines on Combating Child Labor among Indigenous and Tribal Peoples cited in Shahriari's article - labor chapters in a number of free trade agreements between the United States and Latin American countries - such as the North American Free Trade Agreement (NAFTA), Central American Free Trade Agreement (CAFTA-DR), U.S.-Peru Free Frade Agreement and U.S.-Colombia Free Trade Agreement - prohibit child labor and discrimination on the basis of race.  The labor provisions in these free trade agreements (FTAs) contain mechanisms for members of the public to file international complaints that can lead to trade sanctions.

There has been skepticism among NGOs and trade unions about the effectiveness of the labor provisions in these FTAs, especially the NAFTA labor side agreement.  Although the NAFTA labor side agreement has been in force for 20 years, there has yet to be a petition filed under the agreement that focuses specifically on the issue of child labor in agriculture, despite the fact that prohibition of child labor is one of 3 out of 11 labor principles which can lead to trade sanctions under the NAFTA labor side agreement. While some petitions filed under the NAFTA labor side agreement have involved racial and ethnic minorities (such as the 2005 Puebla petition, where a number of the workers were indigenous, and the 2006 North Carolina petition, where the majority of the workers were African American), no NAALC petition to date has focused on racial discrimination per se.  Thus, the issue of systemic racism has yet to be formally addressed under the NAFTA labor side agreement - or under any of the other FTAs the U.S. has with nations in the Americas and elsewhere.

A report issued by the U.S. Department of Labor under the CAFTA-DR in September 2013 regarding child labor, forced labor and racial discrimination against Haitian migrant workers in the sugar cane fields of the Dominican Republic is a positive indication that FTA labor provisions may be a useful tool for addressing labor by indigenous and other children in the U.S., Mexico, Central America and South America.  This is the first report issued by the Office of Trade and Labor Affairs (OTLA - the U.S. Department of Labor office tasked with accepting petitions alleging a trade partner violated the labor chapter of an FTA) to address and discuss at length the issues of forced labor and child labor in agriculture.  The petition and findings led to the commitment by current Secretary of Labor Thomas Perez (who is himself of Dominican heritage) of a $10 million project to improve labor conditions in the sugar sector in the Dominican Republic .

While there are numerous existing international and national programs designed to address child labor in the U.S. and Latin America, petitions filed under the above-mentioned FTAs regarding the issue of indigenous child labor could have a significant impact by drawing attention and resources to indigenous child laborers.  An FTA labor petition can get indigenous advocates a seat at the table in policy discussions related to child labor.  It would also afford indigenous advocates and their allies the opportunity to affect and change the bases for policy conversations about indigenous child workers - particularly in addressing and dispelling stereotypes about indigenous parents and families and their motivations for having their children work alongside them or sending their children to work instead of school.  Advocates could make specific education and labor policy proposals and use FTA labor petitions as leverage to get their proposals and ideas on the desks of policy makers.  Under the NAFTA labor side agreement, it is possible to cross-file petitions.  Indigenous and child advocates could file a petition with the U.S. Department of Labor regarding child labor in agriculture in Mexico and at the same time file a petition with Mexican labor authorities regarding child labor in agriculture in the U.S. - and file both petitions with Canadian labor department to involve an international third partner to see through the Gordian knot of U.S.-Mexico relations and leverage creative Canadian policy mechanisms to address common issues in both of Canada's trade partners to the south.  Such a cross- and dual-filed petition might lead to a call for an Evaluation Committee of Experts (ECE) - the 2nd of 3 tiers of dispute resolution under the NAFTA labor side agreement - to draft an independent report about indigenous child labor in agriculture in the NAFTA region.  Similarly, the regional structure in the CAFTA-DR could be leveraged to design policies to combat indigenous child labor at the regional level in Central America.  While the U.S., Mexican and Canadian labor departments have 20 years of experience in accepting and addressing petitions filed under the NAFTA labor side agreement, it is a process that may be new to Central American nations.  Strategically, it might be interesting to dual file indigenous child labor petitions under the CAFTA-DR with Central American nations - for example, filing a petition in Costa Rica about the treatment of indigenous child laborers in Guatemala, or one in Honduras about the treatment of indigenous child laborers from Honduras in Costa Rica - as well as in the United States, to leverage the financial and institutional resources of the U.S. Department of Labor.

Finally, utilizing FTA labor provisions to combat indigenous child labor in the Americas may increase the vitality of these provisions and their capacity to foment positive policy development and exchange on a regional level, especially in the NAFTA region.  Since there is general consensus that child labor implicates fundamental human rights, dual-filed petitions may increase engagement between authorities and advocates across borders to address and eliminate indigenous child labor, including affording the opportunity to child labor specialists in Mexico, Central America and South America to lend their expertise, experience and language skills to their counterparts in the United States.  The NAFTA labor side agreement is in particular need of revitalization, as traditional and more recent disputes between the U.S. and Mexico in the area of labor policy - as well as mutual lack of enthusiasm among the 3 trade partners' labor authorities and social partners - have rendered the agreement's potential for innovative labor market and human rights policy fallow.  As child labor in agriculture is a difficult issue to combat in both the U.S. and Mexico, a dual and cross-filed petition on the issue of indigenous child labor might provide the common ground North American labor authorities need to rebuild their strained and tattered relations.  Since the North American labor departments closed down their joint tri-national labor secretariat in 2010, the labor ministers of the three trade partners have not held North American Labor Council meetings or engaged in cooperative activities as required by the NAFTA labor side agreement.  Since not a single one of the three trading partners has completely clean hands in the areas of racial discrimination against indigenous peoples or child labor in agriculture - but all three countries have active programs to eliminate both - working together to resolve a common issue of basic human rights may afford them an opportunity to rebuild their relationships and eventually engage in North American regional labor policy and research in a more productive fashion and on more sound footing than in the early years of their relationship.

Indigenous child labor in agriculture is an issue in which the cooperative mechanisms engaged in as part of the dispute resolution processes under FTA labor chapters - such as meetings, studies, bringing people to the table and financing special programs - may actually work.  Petitioners would have to craft the petitions and their requests for remedies to include their ideas for what kinds of programs and dialogue they want.  For example, advocates could ask for the participation of educational authorities and experts and have a set of ideas ready for what kinds of social dialogue they want and who should participate.

While the history of application of FTA labor chapters has shown the processes and outcomes to be less than perfect, recent reports and activities exemplified by the 2013 Dominican Republic Sugar Cane Industry report and ensuing action plan show that workers may have some vindication of their allegations and some productive outcomes as a result of petitions.  And, as demonstrated by action by the Centro de Migrante and its allies, petitions filed under FTA labor chapters in conjunction with legislative initiatives related to agricultural labor visas in the United States can lead to administrative and legislative progress on important human rights issues as well as the energizing of communities.