[Congressional Record Volume 140, Number 107 (Friday, August 5, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 5, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
       FURTHER EXPLANATION OF LEGISLATIVE INTENT OF SECTION 1621

                                 ______


                          HON. BERNARD SANDERS

                               of vermont

                    in the house of representatives

                         Friday, August 5, 1994

  Mr. SANDERS. Mr. Speaker, I would like to include the following 
material as further explanation of the legislative intent of ``Section 
1621--Encouragement of Fair Labor Standards'' of the ``Foreign 
Operations Appropriations Conference Report'':

 Background and Explanation of Need for Worker Rights Provision in the 
         Fiscal Year 1995 Foreign Operations Appropriations Act

       The various multilateral financial institutions already 
     attach various conditions to their loans. For example, the 
     Inter-American Development Bank and the World Bank currently 
     require borrowing countries routinely to charge their 
     industrial loan clients the prevailing interest rates that 
     are reflected in financial market conditions, to remove 
     barriers to new international investment, and to lower 
     tariffs.
       Why then shouldn't the contracts made by the multilateral 
     financial institutions also require the borrowing countries 
     and industrial establishments that receive loans and credits 
     to adopt and enforce laws to ensure the free exercise of 
     internationally-recognized worker rights for their workers, 
     especially when the borrowing countries have legally 
     obligated themselves under international and national laws to 
     uphold and protect these fundamental rights?
       At present, the multilateral financial institutions make no 
     effort to monitor the worker rights policies and labor 
     practices of the industries and host countries being 
     financed. Even if worker rights violations and abusive labor 
     practices were to be discovered, the lending institutions 
     have no remedies now without worker rights provisions in the 
     loan contracts.
       In short, the African Development Bank and Fund, the Inter-
     American Development Bank, the World Bank, and all of the 
     other multilateral financial institutions currently have 
     binding rules with respect to the protection of investment 
     capital and private property rights, but anything goes with 
     respect to human rights in general and internationally 
     recognized worker rights in particular.
       This says much more about the badly distorted priorities at 
     work now with respect to international lending and the 
     current operations of the multilateral financial institutions 
     than it does about their logic or our shared values. Now is 
     the time to begin to redress such unbalanced, bizarre 
     reasoning and skewed priorities.
                                  ____


 Rationale for Requiring That International Financial Institutions To 
 Condition Their Assistance Upon International Respect and Enforcement 
              of Internationally Recognized Worker Rights

       (1) The U.S. must underscore the crucial importance of 
     building international respect for fundamental worker rights 
     as an essential building block of broad-based, sustainable 
     development (i.e. why single out worker rights from other 
     human rights?).
       First of all, there has been a general human rights ``voice 
     and vote'' directive for the U.S. representatives in the 
     multilateral financial institutions on the books for several 
     years seemingly without much effect. So it is time to go 
     further to achieve real change.
       Second, there is a clear and uniquely economic relationship 
     between the free exercise of fundamental worker rights or the 
     lack thereof and the climate for investment. That 
     relationship also transcends national borders.
       Third, it is also true that the systematic denial of basic 
     worker rights and the suppression of minimum labor standards 
     require an authoritarian regime. Consequently, a threshold 
     concern for internationally recognized worker rights will 
     invariably lead to greater concern for the overall character 
     of any national government.
       Fourth, international development policy, including its 
     lending and investment dimensions, must be viewed as a 
     whole--as a seamless web involving economics, the 
     environment, politics, social relations, and human rights.
       (2) What is meant by internationally recognized worker 
     rights is clearly defined under both international and U.S. 
     laws.
       First, during the Reagan Administration, the U.S. State 
     Department clearly spelled out the definition of 
     internationally recognized worker rights for purposes of 
     reporting to the Congress and enforcing various U.S. laws. 
     Appendix B of the U.S. State Department Annual Human Rights 
     Country Reports spells out in detail for everyone's 
     understanding what is meant by this terminology. (Copy 
     attached.)
       Second, the statutory definition of internationally-
     recognized worker rights mirrors basic worker rights and 
     labor standards spelled out in the bedrock conventions of the 
     International Labor Organization [ILO], which was established 
     in 1919.
       As a matter of law, any country that belongs to the ILO and 
     has ratified an ILO convention is legally bound to implement 
     national laws to carry out the purpose of that particular ILO 
     convention. More basic than that, more than 160 countries 
     belong to the ILO and with that membership comes de facto 
     acceptance of freedom of association for all workers. It is 
     noteworthy to look at international law and the record of 
     international acceptance of these rights as stated in the 
     fundamental ILO conventions.
       With regard to freedom of association, at least 110 
     countries (including Gabon, Bulgaria, China, and Singapore) 
     have ratified Convention #11 (1921) dealing with the right of 
     association. More than 100 countries have also ratified 
     Convention #87 (1948) pertaining to the freedom of 
     association (including Chad, Hungary, Russia, and Haiti) and 
     protection of the right to organize.
       With respect to the right to organize and bargain 
     collectively, 120 countries (including Bangladesh, Indonesia, 
     and Romania) have ratified Convention #98 (1949) pertaining 
     to the right to organize and bargain collectively.
       On forced labor, 115 countries (including Angola, Malaysia, 
     and Thailand) have ratified Convention 105 (1957) calling for 
     the abolition of forced labor.
       Regarding the establishment of a minimum age for the 
     employment of children, 75 countries (including Albania, 
     Ivory Coast, and Singapore) have ratified Convention #5 
     (1919) fixing an age of 14 years as a minimum age to cover 
     wage earners.
       Clearly, even if countries have not ratified these ILO 
     conventions, there is no misunderstanding as to what 
     constitutes internationally recognized worker rights.
       Third, the first four elements of the official definition 
     of internationally recognized worker rights are straight-
     forward and self-explanatory. The fifth element (acceptable 
     conditions of work with respect to minimum wages, hours of 
     work, and occupational safety and health) is very 
     deliberately phrased more flexible to allow taking into 
     account a country's level of economic development in its 
     application.
       (3) There are ample precedents in current U.S. law for 
     linking respect for internationally recognized worker rights 
     to trade, aid, and investment policies. In fact, a first 
     precedent vis a vis a multilateral financial institution for 
     such worker rights linkage was enacted in 1988 when the U.S. 
     joined the Multilateral Investment Guarantee Agency [MIGA]
       During the past decade, seven different laws have been 
     enacted to link respect for internationally recognized worker 
     rights to different facets of U.S. bilateral and multilateral 
     trade policies.
       1983--Added to eligibility criteria for countries wishing 
     to participate in the Caribbean Basin Initiative [CBI I];
       1984--Added to mandatory and discretionary eligibility 
     criteria for countries to be eligible for duty-free tariff 
     treatment under the Generalized System of Preferences [GSP];
       1985--The Overseas Private Investment Corporation [OPIC] 
     prohibited from insuring/assisting projects in any country 
     that denies internationally recognized worker rights;
       1988--Provisions added to the Omnibus Trade Act of 1988 to 
     treat as an actionable unfair trade practice the systematic 
     denial of internationally recognized worker rights by any 
     trading country as a means of gaining competitive advantage 
     in international trade;
       * * *--U.S. stipulates as a condition for joining the 
     Multilateral Investment Guarantee Agency (MIGA) that that new 
     international agency which is associated with the World Bank 
     not insure/support projects in countries that do not extend 
     internationally recognized worker rights to their workers;
       --Worker rights provisions made a principal U.S. 
     negotiating objective for the GATT;
       1990--Strengthened worker rights provisions in the 
     mandatory and discretionary eligibility criteria for 
     countries to be eligible for the revised Caribbean Basin 
     Initiative (CBI II);
       1992 and 1993--Prohibition enacted in the Foreign 
     Operations Appropriations Act blocking all executive agencies 
     dispensing any form of foreign assistance from supporting any 
     project in any recipient country that contributes to the 
     violation of internationally recognized worker rights in that 
     country.
       (Pending in 1994)--Same prohibition on any foreign 
     assistance activities as enacted in 1992 and 1993.
       (4) The U.S. is not attempting to impose our labor 
     standards and worker rights on the rest of the world with 
     this amendment. Rather we are as matter of policy urging that 
     the multilateral financial institutions and borrowing 
     countries they assist adhere to the fundamental worker rights 
     and labor standards they have legally bound themselves to 
     uphold under international and their own national laws.
       While the U.S. may not have ratified many of the ILO 
     conventions that underpin the statutory definition of 
     internationally recognized worker rights, every one of those 
     rights and labor standards is legally protected by our 
     Constitution or by U.S. statute and bolstered by extensive 
     case law. There is nothing hypocritical about legislating 
     such linkages because we are requesting that other nations 
     protect the same internationally recognized worker rights 
     that we have also committed ourselves to under a combination 
     of international and national laws.


                          concluding argument

       The vital question we must ask ourselves is this: whether 
     the increasingly heated contest among all nations for 
     investment capital from the multilateral financial 
     institutions and elsewhere in the 1990s and beyond ought to 
     be subject to binding rules to protect and enforce the 
     fundamental rights of workers as is already the case for 
     investors, corporate managers, and entrepreneurs?
       Now is the time for the U.S. to get serious and begin 
     conditioning our continued participation in further 
     replenishments of the resources of the African Development 
     Bank and Fund, the Inter-American Development Bank, and all 
     other multilateral financial institutions on a fundamental 
     commitment by these institutions (1) to review borrowing 
     country respect for internationally recognized worker rights; 
     and (2) to require respect for these rights as an integral 
     part of any assessment of a country's economic performance.
       This is good human rights policy. Promoting international 
     respect for worker rights affirms a U.S. commitment to 
     ethical values in the way nations and people should interact. 
     In effect, working people everywhere should be treated with 
     human dignity and not contempt.
       This is good investment and lending policy. Public support 
     for an open investment system is increased and the appeals of 
     isolationism and protectionism are reduced when workers are 
     not pitted against one another in dog-eat-dog competition 
     that rewards only the overseers of the exploited.
       This is good foreign policy as the U.S. strives to 
     encourage the formation of democratic traditions and 
     institutions for freedom-loving people throughout the world. 
     Political, civil, and worker rights are indivisible. Show me 
     a society that protects the free exercise of worker rights 
     and I will show you a society on the path to more democratic 
     rule.
       Finally, this is a good international development policy in 
     an era of global economic integration. The time has come to 
     recognize that actively promoting international respect for 
     fundamental worker rights is a critical ingredient for 
     boosting global purchasing power and, therein, will be 
     discovered a crucial catalyst for achieving sustainable real 
     growth for developing and developed countries alike in the 
     21st century.