By Brian Campbell, ILRF Attorney, and Lise Johnson, ILRF intern
Millennium Challenge Corporation’s (MCC) Board
of Directors will meet tomorrow to determine
which countries are eligible for hundreds
of millions of dollars in US government grants from the Millennium Challenge
Account, a foreign assistance program established in 2004 with the goal of reducing
poverty by promoting sustainable economic growth. This year, the MCC faces a
difficult decision whether to again select the Philippines as a potential partner
country and whether to continue negotiations with the Philippine government
that began this past summer. While much of the Board’s discussion about the Philippines will no doubt be focused on the increasing
in the Philippines, the
Board should consider one other significant trend in the Philippines, the
systematic undermining of workers’ rights by the Philippine government; all in
the name of economic growth.
When Congress created the MCC in 2004, it required that any country wishing to negotiate with the MCC for grants must demonstrate a commitment to 12 core criteria (listed in Section 607 of the MCC statute) that are necessary preconditions to ensure that MCC aid will effectively promote sustainable and equitable economic development. One of the 12 criteria Congress mandated the MCC to evaluate is whether a country is promoting “economic freedom, including a demonstrated commitment to economic policies that respect worker rights, including the right to form labor unions.”
When the MCC Board meets tomorrow to discuss whether the Philippines has met this requirement, it should look beyond the numerical indicators, which are not designed to evaluate the workers’ rights criteria, and look at the experience of the Philippine trade union movement and the challenges it faces organizing unions and protecting workers’ rights.
First, the intricate system of evaluation that the MCC has designed, where the Board examines 17 numerical indicators designed by outside organizations such as Freedom House, the Heritage Foundation, and the World Bank Group, does not effectively evaluate whether potential MCC partners respect workers’ rights. Only one of the 17 indicators used by the MCC includes an evaluation of a country’s respect for workers’ core labor rights, the Civil Liberties indicator. Designed by Freedom House, the Civil Liberties indicator is based on the surveys it conducts for its annual report, Freedom in the World, and is only one of 15 different criteria used to examine civil liberties protections. Thus, despite Congress’ express intent to see labor right protections examined as one of the 12 core criteria, Freedom House’s Civil Liberties indicator treats workers’ rights as a footnote, just one of myriad civil liberties concerns. It does not view workers’ rights as a core aspect of economic freedom. While respect for workers’ rights may be indicative of respect for civil liberties, civil liberty protections do not indicate that workers’ rights are respected.
Second, though Congress clearly envisioned respect for workers’ rights as a fundamental economic freedom, the only indicator within the MCC’s “Encouraging Economic Freedom Category” that even addresses issues related to workers’ rights is the Regulatory Quality Indicator. The RQI, though, is not intended to promote respect for workers’ rights. Rather, it encourages countries to promote policies that expand “flexible labor markets”, which is often used as a euphemism for a move toward labor contracting and additional restrictions on the ability of workers to form unions and exercise their rights at work.
Based on the indicators, or even the cursory treatment of workers’ rights in the State Department’s country report, it is not surprising that in March the MCC first designated the Philippines eligible to negotiate for hundreds of millions in aid despite its dismal track record in respecting the right of workers. Had the MCC Board examined further, though, it would have found that all is not well for the workers and trade unions in the Philippines.
The International Labor Organization (ILO), which is the UN body tasked with monitoring labor standards, has resoundingly criticized the Philippine government (check out paragraphs 1180 to 1240 this report) for its failure to protect workers’ rights. In response to complaints brought by Philippine trade unions to the ILO’s Committee on Freedom of Association, the ILO has formally requested that the Philippine government allow it to send an investigative team to look into the serious violations of freedom of association trade unionists face, including murder, military harassments by government forces of the workers’ democratically elected trade union representatives, government regulations which prevent workers from striking, and government policies that prevent workers from organizing. Seeking to forestall yet another likely damning finding to go along those of the Melo Commission and the UN Special Rapporteur, the Philippine government and the Employers Confederation of the Philippines (ECOP), which represent many of the businesses that may benefit significantly from additional MCC funding, has refused the ILO’s request to send a high-level mission to get to the bottom of the labor rights violations. So for now, Philippine unions brace for continued, unchecked, government sponsored labor rights violations conducted with impunity and with no end in sight.
Labor violations in the Philippines have not escaped the attention of other US Government agencies, as well. Currently, the United States Trade Representative (USTR) has two cases pending under the General Systems of Preferences trade review process related to the Philippine governments systematic undermining of workers rights. Surprisingly, while the USTR GSP Committee has placed the Philippines under review for labor rights violations, along with Niger, Bangladesh, and Uzbekistan, apparently the USTR, which sits on the Board of the MCC, has not seen fit to raise labor rights concerns in any of the discussion regarding Philippine eligibility. While it may seem odd that the left hand doesn’t know what the right hand is doing at the USTR, perhaps the simplest explanation is that the USTR Trade Practices Sub-Committee (TPSC) includes representatives from the Department of Labor, which is the US government agency responsible for working closely with the ILO as well as monitoring respect for labor rights by our trading partners as required by our free trade agreements and trade preference programs. Despite the MCC’s core responsibility to evaluate workers’ rights protections, the DOL was excluded from the MCC Board when it was founded in 2004. This decision apparently stemmed from the Bush Administration’s contempt for international labor standards as evidenced by its yearly efforts to cut the DOL’s International Labor Affairs Bureau budget. Without any labor expertise represented on the MCC Board, it is unlikely labor rights will ever be evaluated as one of the 12 core eligibility criteria as Congress envisioned.
Tomorrow, the MCC Board should closely evaluate the assessment of the ILO Committee on Freedom of Association and the GSP Committee of the United States Trade Representative before continuing its engagement with the Philippine government. Furthermore, the MCC should wait before rewarding the Philippine government any money until the ILO, which has the needed expertise in assessing labor rights, is allowed to conduct its investigation into labor rights violations in the Philippines. Workers’ core labor rights are not just a good idea dreamed up by Congress. They are key, fundamental preconditions for equitable economic growth.