Facing the perils of low standards
As global trade intensifies the world’s major buyers, especially the US and EU, have set forth requirements for exporting countries to comply regarding labour standards, human rights and labour rights.
There have been complaints from a number of developing countries (exporters) against the developed countries (importers) that have enforced such new non-tariff barriers (NTBs), namely products and manufacturing standards, trade-related environmental measures and labour standards.
These requirements can be viewed as protectionism against developing countries which risk trade boycotts if their products are made under poor labour conditions. Developing countries often complain the importing countries have abused labour standards to protect their own labour markets by trapping trade partners with increasing manufacturing costs from the upgrading of those standards.
Currently, Thailand is engaged in several negotiations with its trade partners worldwide. It is thus crucial that the authorities realise the importance of labour issues in international trade and have appropriate negotiating strategies before signing trade agreements.
Labour standards are regulations that are applied to the way workers are treated, including employment conditions and workplace practices such as wages, working hours, holidays and safety. Human rights, freedom of association, elimination of forced labour and elimination of discrimination are also included. Such standards aim to achieve equal protection, good quality of life, job safety, healthy labour relations, and strong work morale.
Labour standards in Thailand can be categorised into three different groups. First, the International Labour Standard with the focus on Core Labour Standards of the International Labour Organisation (ILO).
Second, the National Labour Standard such as the Labour Protection Law, Labour Relations Law, as well as Thai Labour-Standards declared by the Ministry of Labour in 2010.
Third, the Private Enterprises’ Labour Standards or codes of conduct and requirements created by private firms, NGOs and some multinational companies.
Another universally accepted set of labour standards is the USA’s Trafficking in Persons Report (TIP Report). The TIP Report is the US government’s principal diplomatic tool to engage foreign governments on human trafficking. It is also the world’s most comprehensive resource of governmental anti-human trafficking efforts.
Here, I will focus on the ILO’s Core Labour Standards (CLS) comprising a soft law laid out in various conventions. If ratified, each convention comes into force for that country.
The CLS consists of four labour standards — freedom of association and the right to collective bargaining; the elimination of forced and compulsory labour; the abolition of child labour; and the elimination of discrimination in the workplace.
These standards are specified in eight fundamental conventions. They are the Freedom of Association and Protection of the Rights to Organise Convention, the Right to Organise and Collective Bargaining Convention, the Forced Labour Convention, and the Abolition of Forced Labour Convention.
Others are the Equal Remuneration Convention, the Discrimination (Employment and Occupation) Convention, the Minimum Age Convention, and the Worst Form of Child Labour Convention.
Thailand has ratified five of them. They include the conventions on forced labour, the abolition of forced labour, equal remuneration, the worst forms of child labour, and minimum age.
Thailand has not ratified three conventions on freedom of association and discrimination. But other countries also have yet to sign on to some of those conventions.
China and South Korea, for example, have not ratified the conventions on freedom of association and forced labour. India has not ratified the convention on child labour. Australia, New Zealand and Japan have ratified all four standards, though not all conventions.
In trade negotiations with these countries as a group, Thailand may not have many troubles with India, China, and South Korea as they are basically in the same position as Thailand on labour standard issues.
On the other hand, Australia and New Zealand, having ratified all standards, might have the upper hand in trade negotiations.
According to the TIP Report 2013, Thailand is in a shaky position with labour standards. As of June 19, 2013, Thailand is ranked on the Tier 2 Watch List (a poor position, next to the last). The report divides nations into four tiers: Tier 1, Tier 2, Tier 2 Watch List, and Tier 3.
China is on the last tier while all the above-mentioned nations are ranked higher than Thailand. The report said “Thailand is a source, destination, and transit country for men, women and children subjected to forced labour and sex trafficking.”
Thailand has been placed on the Tier 2 Watch List for a fourth consecutive year because the government has not shown sufficient evidence of increasing efforts to address human trafficking compared to the previous year. It has been granted a waiver for a second time from an otherwise required downgrade to Tier 3. This year, Thailand faces the grim prospect of being downgraded to Tier 3.
Srawooth Paitoonpong is a senior research fellow at the Thailand Development and Research Institute. Policy analyses from the TDRI appear in the Bangkok Post on alternate Wednesdays.