Government’s Role

Why the G20 Labour and Employment Statement Matters

30 May 2017

By John Morrison, Chief Executive, IHRB

The recent G20 Labour and Employment Ministers statement, issued under the German chair of the G20 during 2017, has not received much media attention. Such statements come and go, not many stick in the mind. One of the exceptions was the scrabble to respond to the 2008 financial crisis. It was perhaps an act of poetic justice that the US held the main summit that year, but it was an important basis from which the world’s leading economies could respond to the crisis.

So why the fuss about a recent statement from the year of the German chair, in particular as the leader’s summit doesn’t take place until July? (Expect more jostling and sharp elbows for that photo.)

There are a number of reasons why the ministerial statement, “Towards an Inclusive Future: Shaping the World of Work” is a big deal.

Globalisation Under the Spotlight, Again

First, globalisation itself is once again under the spotlight as it was with the “Battle of Seattle” over trade nearly two decades ago, and with the more recent financial crisis. True, for some globalisation has always been seen as a central problem - fuelling economic divisions within many nations and disrupting traditional industries, and existing patterns of trade and investment. There have always been many losers as a result of a more interconnected global economy, alongside the many winners. Added to this, the effects of automation and big data are disrupting traditional labour markets in ways we have yet to fully understand.

So the leaders of the G20 had to say something. We can expect Chancellor Merkel to make a passionate defence of globalisation when the leaders come together in July, emboldened by recent election results in France (a G20 member) and the Netherlands (a non-member). The Iranian elections (a large and significant non-member) are also not irrelevant, where the reformists won comfortably and even the main hard line party was no longer advocating that Iran should close its borders to international trade.

We should expect calls for a rules-based globalisation underpinned by fundamental agreements on environmental and social standards.

We should expect calls for a rules-based globalisation underpinned by fundamental agreements on environmental and social standards.But Merkel is unlikely to promote the unfettered globalisation of the past thirty years. Rather, we should expect calls for a rules-based globalisation underpinned by fundamental agreements on environmental (in particular the Paris Climate Change Agreement) and social standards. The Labour and Employment Ministers statement gives us an insight into what the latter means in practice, and hence its importance.

Labour and Human Rights Frameworks as a Foundation

Second, the commitment to uphold labour standards and human rights in global supply chains might look basic but it is unprecedented. Whilst it is true that the G20 is not a law-making body, it does shine an important light on existing international law and where we might expect to see more in the years ahead. The recent G20 statement in some significant ways went beyond the G7 statement issued in Baden Baden in 2015.

References in the G20 statement to the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Rights at Work and the OECD Guidelines for Multinational Enterprises are welcome, in particular when many of those governments endorsing the latter are not even OECD members.

The commitment to uphold labour standards and human rights in global supply chains is unprecedented.

The UN Protect, Respect, Remedy framework on business and human rights is clearly foundational in how Governments will be making their claim to be developing a more ethical globalisation. The G20 statement gives examples of all three pillars: from the role of the state in tackling complex issues such as modern day slavery or gender discrimination, to the importance of business in helping to secure a living wage in traditionally low paid sectors such as the apparel industry to remedy such as the National Contact Point system of the OECD.

Collective Action as a Means

“Collective Action” is a clear theme that emerges – where government can lead but rarely is the sole implementer. The German Textile Industry covenant between industry, trade unions, NGOs and government is a precursor of more such examples, and the Netherlands, the best G20 member it doesn’t have, sets the pace for Germany here.

“Collective Action” is a clear theme that emerges – where government can lead but rarely is the sole implementer.

The third reason this statement matters is answered just by reading the list of G20 members who agreed to it. Read the list and then remind yourself of the business and human rights commitments the statement represents for a broad range of countries, some under populist, nationalist and protectionist leadership - Australia, Argentina, Brazil, Canada, China, the European Union, France, Germany, Indonesia, India, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom and the USA. These governments represent not just the lion’s share of the global economy (85% of the world’s GDP), they account also for two thirds of its citizens. There is every indication that Argentina, which chairs the G20 in 2018, will pick up where Germany leaves off on crucial issues such as Modern Day Slavery, perhaps beginning to explore some of the main disclosure and due diligence steps that both governments and business should take. This at a time when some governments, such as Australia, are already considering their own legislation on modern day slavery to follow that in the US and UK.

Unanswered Questions

Much of the statement also relates to the future of work itself. Here the G20 only scratches the surface. With high levels of youth unemployment in many economies, the statement raises as many questions as it answers. How will new technologies create better access to, and more equality in, the labour market? Where will new jobs come from when international business is creating fewer and fewer of them?

Finally, it is important to note that the statement does not yet defeat the short-term logic for greater protectionism we are seeing amongst some of G20 members – from Brexit to Trump – but it Is a start in the right direction.

Watch for the speeches to come from the likes of Macron, Trudeau and Merkel herself.

 

(Image: NumberTen/cc/flickr)

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