The Role of the New NAFTA Institutions: Regional Economic Integration
June 19-20, 1998
U.S. DEPARTMENT OF LABOR
Special thanks to our co-sponsors for making this conference possible:
U.S. Department of Labor (National Administrative Office)
We wish to thank Delmira Iñiguez, Maribel Larios, Fernando De Paolis, Shea Cunningham, and Melanie Myers who provided generous time and skills in the preparation of the report. Special thanks go also to Irasema Garza, Lewis Karesh and John Mondejar of the National Administrative Office of the U.S. Department of Labor. We also wish to acknowledge Lauren Aiko Kawasaki for lending us precious technical equipment. Finally, thank you to all conference participants who offered insightful comments to the on-going discussion on the role of the new NAFTA institutions.
TABLE OF BOXES
The purpose of this conference was to comparatively assess the effectiveness of all the newly created NAFTA institutions: the Commission for Environmental Cooperation (CEC), the Commission for Labor Cooperation (CLC), the Border Environmental Cooperation Commission (BECC), and the North American Development Bank (NADB). In particular, the organizers were interested in evaluating the incorporation of a key feature that has recently been placed high on the agenda of international organizations: public participation and accountability. Building on this evaluation, the organizers also wanted to create a forum for discussing potential future agendas for transnational, inter-institutional, and cross-issue cooperation in North America. Looking to the future, the conference focused on the challenges of sustainable and equitable development, transnational institution building, and enhancing the role of civil society. In addressing these issues, we sought to take advantage that this conference's character served as a unique milestone opportunity that brought together for the first time the heads of all these new NAFTA-related institutions, with unions, NGOs, academics, and concerned citizens from all three countries.
The idea for this conference emerged through discussions among researches at the UCLA NAID Center and the staff of the Commission for Labor Cooperation and the US National Administrative Office. The debate surrounding President Clinton's fast-track authority to negotiate further trade agreements was raging. Most of the allies of the "NAFTA Plus" coalition that was created before the congressional approval of NAFTA in 1993 did not support President Clinton's request for fast-track authority in 1997. (1) Four years after the implementation of the new NAFTA institutions, an overarching and honest review was seen as very timely. The conference has brought together all the NAFTA institutions gave them the opportunity to jointly exchange experiences with one another as well as collectively exchange evaluation of these institutions with the public.
What have we learned so far about the formation and the implementation of these various institutions under NAFTA? As was made clear in the conference presentations, all these institutions emerged from the a very unique political dynamic that brought forth on their agenda a new set of actors that were not traditionally part of trade agreements. These new actors pushed for dealing with issues of labor, environment, and economic development as an integral part of transnational trade agreements. How have these various institutions met these challenges of meeting their administrative mandates as well as establishing a working relationship with civil society constituents? In many ways both the formation and the implementation phases of these institutions faced common challenges of dealing with the deficits of international cooperation on labor, environmental, and border development issues. But they also faced a common unique political context in which institutions have had to respond to the technical and political challenges raised by new constituents, and therefore have had to create mechanisms for interactions with civil society as part of their ongoing activities.
Starting from a comparative analysis of the experience of each of the organizations, we then focused on the elaboration of means of collaboration between the institutions. Each of the new institutions has focused on one or another of the issues that needed to be addressed as a part of North American integration: labor, environment or economic development. None of the institutions, however, has an overall perspective that links these various issues as part of their day-to-day operations. The institutions have yet to be charged by their governments with elaborating explicit ways of cooperating to comprehensively link-up the diverse questions of labor and environment, for example, or economic adjustment with health and safety issues.
Not only do these institutions face the challenge of establishing creative means to foster public participation at different levels, but they have to find effective ways to interact with national governments. These new institutions are multilateral, but they operate in a context of national sovereignty. National governments were not very clear from the beginning as to the long-term mission and future expectations for these institutions. After all, this type of institution building is still a very uncharted domain in the North American context. As these new institutions develop interests of their own, however, they are now beginning to be actors themselves in the arena in which governments interact with one another, and in the way in which civil societies interact with one another. I dare say that we are now entering into a next phase in the formation of these institutions where a long-term vision for North America can come from the institutions themselves, in cooperation with governments and civil society. This emerging dynamic is really what this conference was all about. Where do we go from here? The report offers some suggestions that I hope will be useful for all actors: NAFTA institutions, governments, NGOs, unions, businesses, researchers, and citizens alike.
1. Hinojosa Ojeda, Raul, "The Labor Market Impacts of North American Economic Integration on Latino, Black and White Workers." In Antonio Gonzalez (ed), A Latino Review of NAFTA, Part 1: NAFTA and the Side Agreements on Labor and Environmental Standards. U.S.A.: William C. Velásquez Institute. July 1997. Raul Hinojosa-Ojeda "North American Integration Policy Formation From the Grassroots Up: Transnational Implications of Latino, Labor, and Environmental NGO Strategies" UCSD Conference July, 1998
Consul General Campbell opened the conference with very insightful remarks outlining the background to the North American Free Trade Agreement (NAFTA), and the special qualities of the side agreements. While they responded to a political need, these institutions represent a new form of international democracy, which gives citizens of one nation the standing to seek to ensure enforcement of the laws of other countries. Negotiations of the labor and the environmental side agreements took place in a changed political environment. The new Clinton Administration in the United States brought a new dynamic to which Canada responded with good will. Civil society also took an increasingly important role and pushed for further development of NAFTA to include concerns about labor and the environment. Civil society was already an important element in the way the governments were developing NAFTA, even before it became increasingly visible in the context of the side agreements. Consul General Campbell indicated that the side agreements are fully consistent with the political climate reflected in the preamble of NAFTA, which states that the three governments resolved to "promote sustainable development; strengthen the development and enforcement of environmental laws and regulations; and protect, enhance and enforce basic workers' rights."
In this new era of globalizations, governments face the challenge of promoting competitiveness and opening to the world economy. NAFTA provides a tool to this end. Consul General Campbell characterized NAFTA as bringing economic integration, but little political integration, and noted that trade policy increasingly impacts people in the areas of domestic regulation as well as bringing down trade barriers. The changed environment for the enforcement of domestic law as a result of the institutions created by NAFTA enabled citizens in one country to have the legal standing to intervene in the law enforcement of other countries. Consul General Campbell drew attention to this innovation inherent in the side agreements, and mentioned that while it pressures government to demonstrate continuing transparency, it does not impede national sovereignty as long as governments keep abiding to the rule of law.
Consul General Campbell concluded her remarks by pointing out a double challenge facing governments. On the one hand, governments need to elaborate economic policies promoting competitiveness in the global economy. And on the other hand, governments are required to be responsive to civil society and encourage public participation.
The focus of this conference could not be more timely or important. This past year we have already witnessed a heated debate over whether to grant the President new Fast Track trade negotiating authority. In the next few weeks, the Congress will vote on an international financing package to replenish the International Monetary Fund (IMF), which has been severely depleted by the ongoing financial crisis in Asia. We will also soon be voting on extending Most Favored Nation status to China. The disturbing monetary problems that currently beset the Yen and, earlier this year the Ruble, only heighten the sense of urgency with which we undertake these debates.
While these international policies differ in many significant respects, their impacts on the world's economies, and on our own communities in the United States, cannot be denied. In an ever expanding global economy, we no longer have the luxury of ignoring international policy and economic trends. These policies and trends affect virtually every segment of our daily lives. They affect the price of food we eat, the type of jobs we work, the wages we earn, and the very health and safety of the communities in which we live.
But there is fundamental tie that binds all of these issues. There is a thread that runs through every international agreement and debate since the passage of the NAFTA. It is the reason why we are all here today. For the tie that binds all of our efforts is the recognition that the international movement of goods and capital cannot be controlled or promoted without also addressing its impact on human rights, its impact on labor, and its impact on the environment.
Whatever you think of NAFTA, no one can deny that it has forever changed the way in which we view international cooperation. Never again, will the United States enter into a trade agreement, without first insisting that the rights of workers are secured and that our environment is protected. Never again, will the United States participate in multilateral efforts to stabilize faltering economies, without first insisting that those efforts be transparent and democratic.
One simply has to look at NAFTA's institutions to see how the international debate on policy and trade has been changed. The North American Agreement on Labor Cooperation (NAALC) is a prime example. It represents the first time in this country's history that labor standards accompany a trade agreement. For the first time, the United States institutionally recognizes that labor conditions in one country have an impact on the domestic concerns of another. For the first time a trade agreement acknowledges that unless workers are free to select the union of their choice, they will not be adequately represented and will not be able to negotiate collective bargaining agreements that require employers to pay adequate wages and benefits.
I am not saying that the manner in which these issues are addressed will always be sufficient. In fact, there are many people who believe that NAFTA did not provide adequate labor and environmental protections. Some of NAFTA's most vocal critics are here today. I include myself among those critics, particularly as it relates to the implementation of some of its provisions. But I am confident that the protections provided by NAFTA are only the foundation from which future agreements will have to build. I also believe that any efforts that fall short of these benchmarks, are doomed to failure.
Unfortunately, President Clinton learned this lesson the hard way. Last Fall, President Clinton tried to obtain Fast Track authority to negotiate new trade agreements with Chile and the rest of Latin America. The President was warned that the effort would fail unless he proposed legislation that strongly addressed labor and the environment. But he moved forward with a proposal that was limited in these areas, and the proposal was defeated. His efforts failed for two simple reasons: he sought legislation providing fast track authority that fell short of the minimum labor and environmental standards established by NAFTA.
Instead of working to ensure that the institutions created by NAFTA were diligently implemented, the Administration allowed some of them to languish in bureaucratic limbo. Instead of heeding the lessons of experience gained with NAFTA, the Administration bowed to the wishes of the Republican majority in Congress who sought to roll back the worker and environmental protections provided by the Agreement. I know it was not easy for the President to work against the majority of Democrats in Congress on this issue. It was difficult for us to work against him. But the genie cannot be put back in the bottle. The rights of workers and the protection of the environment are too important for partisan politics to prevail.
Some say that the Fast Track debate was a stinging defeat for the President and the Republican majority in Congress. Perhaps they are right. But I look at the debate another way. I look at the debate as a victory, not a defeat. It was a victory for working men and women. It was a victory for our environment. It was a victory for progress. The defeat of Fast Track was a victory because it solidified the notion that protecting workers and the environment could never again be disregarded as a fundamental element of global trade.
The lesson learned during the debate over Fast Track is one that will not soon be forgotten. Already we have seen the redoubling of efforts to ensure that the institutions created by NAFTA are given every opportunity to succeed. More resources are being provided and unprecedented attention is being paid to the institutions that are so important to our future trade relations. I only regret that this lesson was learned so late. Because these institutions have proven that if properly implemented and enthusiastically supported, they can work. They must work. They will work.
A prime example of this progress is the NADB's environmental office. The NADB was created to help finance environmental infrastructure along the U.S.-Mexico border and to provide economic assistance to communities suffering job loss due to NAFTA. The NADB's environmental office has made slow but steady progress. It has had to overcome numerous structural and legal impediments endemic to the communities in which it operates. But the Bank's staff has diligently and creatively sought practical solutions to these fundamental problems. I believe that today the NADB's environmental office is on its way to fulfilling the promise of its founders.
The history of the NADB's Domestic Window is another story altogether. The day President Clinton unveiled his Fast Track proposal, the Domestic Window had not approved a single loan. More than four years after the NADB had been established, the Domestic Window was a complete failure.
Congress had fulfilled its commitment by fully funding the Bank within its first four years of existence. But the Administration allowed the institution to languish. Why did this occur? I firmly believe that the Domestic Window was not fully implemented because the Administration feared it would highlight the loss of jobs caused by NAFTA. It feared that this attention would harm future trade efforts. The fast track debate demonstrated that this was a shortsighted view.
Since the defeat of Fast Track, an amazing change has taken place with the Domestic Window. Loan guidelines have been finalized, eligibility criteria has been established and loans have finally begun to be approved. Today, more than 100 loans have been approved in 17 states, for over $50 millions dollars. These loans have saved or created more than 2,500 jobs. All of this activity occurred in just the past six months. You could say the Fast Track debate was a lesson well learned.
This lesson is also being heeded in the IMF debate. As I stated earlier, Congress will soon vote on an international financing package that would replenish the IMF. But unlike the Fast Track bill, the legislation is a model of progress. It will increase transparency and accountability within the IMF. It will provide greater labor protections and pay more attention to the environment. The IMF debate is not over. But we have already succeeded in helping to shape all future international policy debates.
Because of NAFTA and the institutions it created, there will never be another debate about international trade or financial policy that does not take into account issues of worker displacement, wage depression or the impact of such policies on health, safety and the environment. The establishment of institutions whose very missions are to seek cooperation and agreement is indeed historic. I also believe that such institutions will be a necessary element of all future international discourse.
This conference represents a timely opportunity for the leaders of the NAFTA institutions to collectively reflect, on who are together in one place for the first time, and on how the promise of free trade and economic integration can be fulfilled. The men and women participating in this conference have the knowledge, the expertise and the experience of the past five years to build upon the foundation for progress NAFTA has provided. The reality is that these institutions provide blunt instruments with which to promote and protect workers and the environment. It is your responsibility to hone these tools so that we can continue to progress.
As NAFTA negotiations illustrated, North American integration poses important challenges for labor, the environment, and economic development. The result was the creation of a set of new North American institutions to address these challenges. The institutions were designed to address specific needs, and range from trinational, to bilateral, and to national organizations. For the first time, four years after NAFTA, representatives of these institutions were gathered around the same table to share experiences in institutional-building, and to share knowledge on their respective domain of action. This session offered a comparative analysis of the structure and performance of these institutions. The ultimate goal of this conference was to think about strategies for further cooperation between the three NAFTA countries, the different institutions, the three societies, as well as to cross-fertilize domains of action that are often considered distinct: labor, environment, trade, and economic development.
In the months preceding the final vote on NAFTA by the House of Representatives in the United States, a contingent of new actors interested in labor and environmental impacts, struck a pact with the U.S. leaders in the NAFTA negotiations. The agreement would have probably failed if governments had not agreed to sit at the table and include issues usually considered independent from trade negotiations: labor, the environment, and economic development.
Out of these pressures rooted in civil society, emerged the new NAFTA institutions. What was particularly important in the United States at the time, was that pressures from civil society seized the opportunity to go beyond a simple rejectionist stance and proposed instead an alternative policy structure to address the effects of economic integration on labor, the environment, and local economic development. These institutions were sold to the public as being part of the solution to the problems caused by trade liberalization. Expectations were quite high. Conferees were asked to reflect on possible ways to bridge the gap between these promises and the enormous challenges faced by new institutions with the clear mandate of establishing close links with civil society. Six general themes came out of this discussion:
A) NAALC in Comparison to NAFTA
The parallel I want to make is this: when looking at the North American Free Trade Agreement, there is a certain pattern that combines domestic rules with international procedures. An example of this is the dispute-resolution process in chapter 19, which is copied from the previous dispute-resolution process in the Canada-US Free Trade Agreement. I think the Canadians are the ones who brought this forward. They were complaining against anti-dumping and subsidy issues. When this was the case, the Canadians could bring their complaints to American trade authorities in order to have the possibility to bring the case to American courts. However, Canadians felt the process was unfair and biased because complaints about U.S. behavior were judged under the American system. A binational resolution seemed more appropriate. Therefore, a system of binational panels dealing with trade issues was negotiated in the Canada-US Free Trade Agreement. This mechanism was transposed in chapter 19 of NAFTA. It uses domestic trade laws, as well as a binational panel that interprets domestic trade law and renders the decision. Thus, it combines an international procedural mechanism with national rules.
There is also the example of the chapter on intellectual property rights. There is a reliance on domestic intellectual property protections that are provided for domestic intellectual property interests. There are some general principals expressed in this NAFTA chapter, but the actual enforceable protections are domestic property law protections. Nevertheless, there are procedures by which governments can consult with each other and even resolve disputes as to whether or not the other countries' intellectual property protections are being applied consistently.
The chapter on technical barriers to trade uses yet again a similar approach. In order to avoid using product standards as artificial trade barriers, the countries did not decide to set up a common set of technical standards. Each country continues to set its own products standards, but there are new procedures for assuring compatibility, equivalency, and for facilitating the resolution of problem areas. The central point is that there is a general commitment to avoid using technical barriers to trade. Here again, it indicates a reliance on domestic rules as well as international procedures.
This kind of approach is used in the labor and environment side agreements as well. They rely on domestic authority for the rule making. But there are also new international procedures to resolve problems based on general commitments about enforceability and efficiency of domestic rules.
The NAFTA sets a context for these other agreements. It is the context of a free trade agreement and not one of a customs union. In customs union, each country accepts to have a common external tariff, which of involves setting a common international trade policy. We do not have this in NAFTA. Each country defines its own international trade policy outside the framework of NAFTA. Each country can sign free trade agreements with other parties if they choose to do so. Thus, NAFTA is more limited than a customs union, even within the area of free trade. Moreover, it is clear that NAFTA is not a political union such as the European Union, which is composed of the European Commission, the Council, the Parliament, the Courts, and so forth. It is important to bear this in mind, this is the context in which the side agreements were negotiated.
B) International support for the rule of law
The Labor side agreement provides an international support for the rule of law. This is very important in the current context. Many people are arguing that globalization gives corporations, who can operate multinationally or transnationally, the ability to move around employment and investments, thus escaping domestic or national jurisdictions. Furthermore, it is often argued that corporations pressure their own government not to enforce the law through the threat of closing down. The academic literature provides such cautionary notes about globalization. The purpose of the side agreements in North American is to have an international level of support for the application of the law. To encourage each party to the agreement and to support them in fully applying their laws, the side agreements serve as a counter-balancing pressure enabling governments to ensure that the public good is served in the application of law. The side agreements serve to ensure the formation of a zone, at least in North America, where a common commitment to the rule of law is protected from the negative pressures of globalization. This notion is one of the really excellent innovations in this agreement. It really does underpin the responsibility of governments, their own constitutional responsibilities to enforce their laws, in a new way and in a new international sense. And yet it does not conflict with their domestic sovereignty to make their own rules and to enforce them.
In this accelerated phase of globalization, the global environment is often mentioned as an example to illustrate the necessity of transnational cooperation to address issues that clearly ignore national borders. Yet, at the same time, the environment is a very local issue. Clean-up projects, toxic catastrophes, health and safety conditions, endangered species, over-population, or clear-cutting, are just a few examples of environmental transformations whose consequences are felt locally.
The North American Free Trade Agreement (NAFTA), being part of the process of economic globalization, had to face these environmental challenges. The North American Agreement on Environmental Cooperation (NAAEC), known as the Environmental side agreement, was designed to address regional environmental concerns. The Commission for Environmental Commission (CEC) was created under this agreement, and is the only trinational institution addressing ecological issues. However, the NAFTA negotiations also prompted the development of binational institutions on the US-Mexico border, the Border Environmental Cooperation Commission (BECC) and the North American Development Bank (NADB). What is interesting about this set of institutions is their complementarity. Whereas the CEC focuses on trinational cooperation and information dissemination, the BECC and the NADB emphasize local sustainable infrastructure development.
The new North American environmental institutions were created to respond to political pressures. Nevertheless, after four years of implementation, more and more entities worldwide are looking at North America to find some interesting ideas on how to manage economic integration without harming the environment.
Conferees were asked to reflect on these new institutions; to identify the challenges they are facing and possible solutions to help reduce the gap between their promises four years ago and their accomplishments; and to reflect on strategies for further cooperation. These institutions follow the principles outlined in the Rio Declaration on sustainable development adopted during the 1992 Earth Summit. But from principles to reality, a gap needs to be bridged by institutional developments such as those witnessed in North America. This session was very useful in pinpointing major challenges. The CEC, the BECC, and the NADB are designed around three broad principles:
The workshop highlighted the formidable task of responding to these three broad principles enshrined in the North American environmental institutions:
These institutions, most participants agreed, are playing an important role in facilitating communication between many parties at all levels of government and between different agencies and civil society. There was a consensus that more involvement was needed, both within the institutions and at conferences like this one. Some NGOs were concerned by the fact that the NAFTA institutions did not specifically develop principles of corporate ethics and accountability.
The CEC criticized the fact that there still have not been a meeting between environmental and trade ministers that would help bridge the gaps between trade and the environment.
Four Years Later: NAFTA and the Environment
The objective of this presentation is to provide a critical discussion of the work of the NAFTA institutions related to the environment. Such discussion is directed at issues of transnational cooperation and cooperation between supranational, national, local institutions, and non-governmental organizations (NGO's). The role of NGO's in this analysis is fundamental because as in the case of Environmental Health Coalition, they often interact in local issues and have a direct perception of "real" progress or lack thereof with respect to cooperative environmental issues.
The Environmental Health Coalition (EHC) is a grassroots environmental organization dedicated at the protection of human and environmental health in San Diego-Tijuana Region. Some of its principal objectives are the protection, prevention and reduction of human and environmental threats created by toxic use and, the education and empowerment of communities affected by toxic pollution. For 18 years, EHC has been at the forefront of local environmental issues facing the Tijuana-San Diego border environment. Through community assistance and empowerment, binational policy advocacy and technical support, EHC has achieved a great deal of knowledge and experience, as well as success. EHC, as a non-governmental organization, welcomes further discussion on the role of the NAFTA institutions and their effectiveness four years after their creation. The underlying theme in this presentation is to challenge the NAFTA environmental institutions to take a more effective approach at solving border environmental problems. It is the position of the EHC that at the present time, the NAFTA institutions have produced only minimal results to protect, correct or improve the severe environmental and human health conditions along the U.S.-Mexico border. With the current industrial growth along the border, these problems will only increase in number and in complexity if effective and hones binational cooperation is not reached. The following case studies illustrate this lack of effective and hones cooperation to correct an environmental problem.
Case Study #1: Metales y Derivados
Metales y Derivados was a lead smelter and recycler of lead-based batteries located in the city of Tijuana, Baja California, Mexico. It operated in Mesa de Otay Industrial Park from 1982 until its closure in 1994. Its parent company, a U.S.-based wholesale metals corporation by the name of New Frontier is a San Diego, California-based company still in existence. New Frontier's principal operation in Mexico under Metales y Derivados consisted of recovering lead, copper and phosphorous through the smelting of used lead acid batteries and other scrap materials that were brought from the United States into Mexico as recyclable products.
The owners and operators abandoned the company in Tijuana after continuous complaints from the nearby residents and repeated sanctions by the government, leaving piles of hazardous waste behind. It is estimated that Metales y Derivados accumulated approximately 6,000 metric tons of lead slag, waste pole of by-products, sulfuric acid, and heavy metals such as antimony, arsenic, cadmium, and copper.
Lead affects almost every organ and system in the human body. It is a well-documented neurotoxin, which most severely affects young children. Lead predominantly affects the central nervous system and some of its harmful effects include premature births, smaller babies, decreased mental ability in the infant, learning difficulties, and reduced growth in young children. In adults, lead can cause abortion and damage to the reproductive system. It may also decrease reaction time, cause weakness in fingers, wrists, ankles, and can affect memory. At high levels, lead can cause kidney dysfunction, coma and even death. (See Agency for Toxic Substances and Disease Registry (ATSDR)( Lead Fact Sheet, CAS# 7439-92-1 April, 1993).
Sulfuric acid is commonly used as an electrolyte in batteries. It is a strong or absolute irritant chemical. Due to its strong dehydrating and corrosive properties, sulfuric acid reacts with many organic materials with which it comes into contact. This reaction causes, upon contact, immediate and severe tissue damage, respiratory damage as well as irreparable eye damage. Low level exposure to sulfuric acid causes irritation to the eyes and mucous membranes such as nose and respiratory tracts. Frequent respiratory infections, emphysema, and digestive disturbances have been related to long term exposure to sulfuric acid. (See Toxological Profile for Sulfur Trioxide and Sulfuric Acid, Draft for Public Comment, U.S. Department of Health and Human Services, ATSDR September, 1997).
Arsenic is found as an impurity in many metals and is a by-product of lead smelting operations. Arsenic compounds are corrosive to the skin. Skin abnormalities may be attributed to arsenic exposure such as discoloring or spots on the skin, and skin cancer. Other effects related to arsenic include liver and kidney injury, impaired nerve function and birth defects. (See Agency for Toxic Substances and Disease Registry (ATSDR) Public Health Statement, Arsenic, March, 1989). All of these hazardous wastes remain on the site completely exposed to the natural environment as the result of Metales' toxic reckless operations and abandonment. Seasonal winds and rainfall can carry these wastes to nearby communities.
Colonia Chilpancingo, one of those communities, is located approximately 150 yards from the Metales site. The community rests down hill from the toxic site and Petitioners contend that health problems can be caused or are being exacerbated by the Metales hazardous waste site.
Role of NAFTA Institutions:
Metales y Derivados operated in the midst of the creation of the La Paz Agreement. This Agreement called for the return of hazardous wastes from U.S. companies operating in Mexico. Later, in 1988, the La Paz Agreement was incorporated into Mexican law under the General Law of Ecological Balance and Environmental Protection (General Law). The owners and operators of Metales, recklessly disregarded these and other laws and left a toxic nightmare in Mexico.
In 1994, the NAFTA institutions were created: the Commission for Environmental Cooperation (CEC), the North American Development Bank (NADB), and the Border Environmental Cooperation Commission (BECC). To date, none of the institutions have addressed issues related to illegal toxic waste sites such as binational enforcement, cleanup technology exchange and emergency response communication similar to the Metales y Derivados case despite the severity of the environmental and health damage they pose.
BECC and NADB
The BECC and NADB were created to finance environmental infrastructure projects along the border. Besides the notable interagency's current lack of effective cooperation in fulfilling their funding purpose (as only 2 projects have been financed out of 28 certified), these institutions have other limitations. Most importantly, they were not designed to finance projects that could not be repaid, as in the case of Metales y Derivados and other toxic waste clean up projects despite the dire need to clean up existing sites and prevent new ones from being created.
The CEC on the other hand, offers different approaches to address environmental issues in a cooperative way. Its 1996 Annual Program incorporates language that could justify direct CEC activities to in cases such as Metales y Derivados. The Program states in part: "[t]he CEC approach to protecting human health and the environment focuses on reducing pollution risks and minimizing the impact of existing pollution across the continent." (CEC 1996 Annual Report, pg. 15). This means that the CEC could potentially focus resources to address the clean up of toxic waste sites. However, so far it has been up to the people to "request" the CEC to act pursuant to its Annual Program rather than the CEC acting pro-actively. The citizen's petition process under Article 14 and 15 of the North American Agreement on Environmental Cooperation (NAAEC) provides the avenue for people to complain when a NAFTA country may not be effectively enforcing its environmental laws. However, this process is exhausting on the part of the petitioner who bears the burden of proof, is lengthy, is highly discretionary on the part of the CEC to issue responses and follow ups, and even on the best case scenario, it only has the power to conduct a "factual record". Even when the Secretariat prepares a factual record (which is not a decision), the CEC has the discretion to publish it or not.
Accordingly, A Metales y Derivados petition would face great obstacles before the CEC can render a favorable determination. Under the actual CEC process, it is unlikely that any remedial action would take place in a short term as the result of a citizen's petition under the NAAEC.
Case #2: Pacific Treatment Environmental Services
On July 6, 1997, a mixture of chemical substances ignited into flames from Pacific Treatment, a U.S.-owned company that operated a transfer station for hazardous maquiladora waste. Firebombs exploded in the air over the neighboring factories of Otay Mesa Industrial Park in Tijuana, Mexico. Over two hundred tons of hazardous waste burned, including organic solvents such as toluene, acetone and xylene, paint dust, solid materials contaminated with solvents and paint, dirt contaminated with oil and empty chemical drums. The fire released toxic fumes that blew directly into residential neighborhoods fewer then 300 yards away. Based on the type of businesses serviced by Pacific Treatment, it is likely that chlorinated solvents were also present and burned.
The negligent operations by Pacific Treatment created another environmental nightmare for the nearby residents of Colonia Chilpancingo. Ironically, Pacific Treatment was located across the street from Metales y Derivados.
The incident highlighted several serious breakdowns in binational environmental cooperation. The public became aware for the first time the Tijuana lacks the necessary basic infrastructure to adequately respond to chemical emergencies. For example, in Mesa de Otay Industrial Park, one of the largest and oldest industrial parks in the city, not one single fire hydrant was operational to fight the fire. Moreover, the Tijuana fire department did not have the proper equipment to respond to a chemical fire and did not have any information about the type of chemicals and wastes stored at Pacific Treatment.
Residents in the surrounding community complained of strong odors during the fire and in the days that followed. Neighborhood residents reported health problems such as headaches, vomiting, eye and skin irritation and inability to sleep. Exposure to the chemicals released is known to produce long term health effects ranging from reproductive problems to damage of internal organs and nervous system. But the actual damage to the environment and to public health, as the result of the negligent operations of Pacific Treatment remains unknown.
The Role of NAFTA's Institutions
The NAFTA institutions were not originally designed nor are currently equipped to respond to emergency situations such as the Pacific Treatment case. However, these institutions should promote further cooperation among local, state and national entities responsible for emergency preparedness. Instead, the Pacific Treatment case highlighted the lack of effective and honest binational communication and cooperation. For instance, U.S. environmental authorities learned about the fire from the media, rather than from their Mexican counterparts despite the fact that existing protocol requires both countries to notify one another when a chemical accident occurs along the border.
The NAFTA environmental institutions were viewed by the public as the institutions that would cure the region's environmental problems. After four years since their inception, they are far from achieving such monumental task. Here in the San Diego-Tijuana border region, we are able to see their deficiencies through concrete cases such as Metales y Derivados and Pacific Treatment.
To bring about greater cooperation and consequently greater effectiveness in solving transnational environmental problems, these institutions must first recognize their own limitations. By recognizing their limitations, these institutions may better educate the public and may avoid creating false expectations that often lead to the loss of credibility. Only then, can these institutions focus on providing real options to cooperative environmental protection efforts.
The NAFTA institutions must also define "cooperation" and must be able to measure its progress. Communities affected by pollution are becoming more frustrated when these institutions proclaim solid cooperative relationships while cases such as Metales y Derivados and Pacific Treatment prove otherwise.
Perhaps fewer but specific projects can bring measurable outcomes. The full implementation of a clean up project, a pollution prevention program or even an effective tracking mechanism for the movement of hazardous wastes and materials across borders can all provide definite measurable outcomes of cooperation.
Finally, the issue of corporate responsibility and how it is to be addressed by the NAFTA institutions remains for further discussion. It is an underlying theme of outmost importance because it is here where most of the change will need to take place. So long as corporations consider labor and environment as a cost rather than as a long term investment, they will continue to find ways to undermine environment and health to maximize profits. The NAFTA institutions will have to undertake the issue and begin a shift in consciousness as we further expand free global markets.
Four year's later, passionate arguments for and against NAFTA need to be reassessed. Labor is an area that has indeed prompted very passionate debates. This conference provided the opportunity to discuss three aspects of NAFTA-related labor debates: I) the labor side agreement (NAALC); II) one of the first cases under the agreement - Sprint; and III) the Secretariat's study on plant closure and freedom of association. In all of these, the difficulties of unionization have been stressed by conferees. The newly created NAFTA labor institutions seek to specifically address the issues of labor rights in a cooperative spirit. This entails looking at labor issues within an interdependent web of judicial (or legal), economic, political, and social contexts unique to each of the three countries, but ultimately influencing the other parties to the agreement. Conferees highlighted several challenges facing labor cooperation in North America:
The North American Agreement on Labor Cooperation (NAALC) is a historic agreement. In the United States it represents the first time in which labor standards accompany a trade agreement. The agreement has been severely criticized by various constituencies in the U.S. Labor groups have argued that the agreement is too weak and does not afford protections for individual rights. The business community thinks it is too intrusive and interferes with the ability of companies to conduct business. Regardless of these opposing view points, the fact is that the agreement has gained notoriety and more and more organizations are turning to the agreement as a means to address labor concerns arising in any one of the NAFTA countries.
In general, the NAALC institutions were created to promote labor rights in North America. The NAOs are the domestic institutions that were created by the agreement (as opposed to the international institution which is the Commission for Labor Cooperation). The NAOs are mandated to carry out a number of functions. Specifically, the agreement calls for the receipt and review of public communications or submissions. The submission process has been the area that has been very active with the U.S. NAO. Given the time constraints, I will limit my remarks to this area.
In the area of submissions, each NAO has evolved differently, primarily because the agreement itself (art. 16.3) envisions that each NAO shall review matters according to its domestic procedures and also because there have been great differences in the number of cases that have been presented to each respective NAO. In the United States, the NAO has received nine submissions; all submissions have dealt with labor law issues arising in Mexico. With the exception of one, all submissions have raised industrial relations issues, that is issues concerning freedom of association and the right to organize.
In the United States, public hearings are a standard means by which our government provides a forum so that citizens can raise concerns to government officials. Following this tradition, the U.S. NAO routinely conducts public hearing as a means of gathering information to assist us in the review of submissions.
What have been the contributions made by this review process in the promotion of labor rights in North America?
The labor conditions in one country impact on the domestic concerns of another. This was really the impetus behind the creation of the agreement. For example, we see that in the current GM/UAW situation, the UAW is accusing GM of wanting to move operations to Mexico, where wages are not only lower, but where independent unions have had difficulty in gaining registration and recognition. Of course, the UAW's underlying concern is the same as those voiced during the NAFTA debate. The belief is that unless workers in the NAFTA countries are free to select the union of their choice, they will not be able to negotiate collective bargaining agreements that require employers to pay adequate wages and benefits. Employers, will therefore, relocate, leaving thousands of workers in the United States unemployed, while at the same time, not meeting their obligations to workers in Mexico. Without addressing the merits of this argument, I would just like to point out that it is not surprising, therefore, that almost all of the cases brought before the U.S. NAO have raised issues of freedom of association.
Some of the features of the agreement:
The agreement authorizes the country reviewing the submission to assess whether the country in question is abiding by the terms of the NAALC. The agreement is premised on the basis that through cooperation and dialogue the NAFTA countries should be able to address labor issues and remedy areas of concern. The Agreement also provides for a dispute resolution process to deal with cases that cannot be resolved through consultations. In cases of raising minimum wage, health and safety and/or child labor issues, and where a government fails to cease violating the agreement that government can be subject to fines and suspension of trade benefits.
The agreement has created an international forum so that citizens of the NAFTA countries
can bring forward labor concerns. It forces governments to address labor law issues and explain
to the international community why it treats issues in a particular way. This has in turn
contributed to domestic dialogue and debate that is often already taking place within a country.
It provides transparency and sunshine. There has been substantial media attention given to a
number of the cases brought before the NAOs. Prior to the enactment of the NAALC, there did
not exist a forum to address these issues nor was there substantial amounts of U.S. media
attention devoted to labor cases in Mexico (or vice-versa).
What the agreement does not provide for
The NAALC does not impose harmonized labor standards on the countries. Each country agrees to enforce its own laws and to promote a set of eleven fundamental principles.
It creates institutions and a process which can be used by any person to raise labor concerns arising in the territory of another NAFTA country. This means that U.S. citizens cannot raise labor law concerns arising in the United States with the U.S. NAO. This is because the NAOs do not replace the domestic institutions (NLRB) created to address labor disputes. Because the agreement preserves sovereignty, the NAOs are not empowered to adjudicate individual rights. The existing domestic legal institutions are not replaced by our review process. This is an important point and one that is often not understood by constituents who believe that the NAALC institutions can remedy individual rights. Part of the confusion stems from the fact that issues raised are reviewed in the context of cases arising in a specific company, where individual workers may have been wronged.
Obviously, the changes we have witnessed in Mexico cannot be attributed entirely to the NAALC process; however, I believe that the process contributed to these changes.
We have encountered a number of challenges throughout the implementation process, and these will undoubtedly continue. They are all somewhat related:
(1) Somewhat of a contradiction in the Agreement is that it recognizes that the NAFTA countries are sovereign nations and that they maintain that sovereignty, while at the same time it allows international oversight of domestic labor law enforcement. Creating a system which balances these two interests has been challenging. This tension has not necessarily been negative. It has enabled countries engaged in the review process to creatively address issues.
(2) Some groups, particularly in the United States, would like the role of my office to include adjudication of individual rights in the submissions presented to us. Obviously, this would offend notions of sovereignty to say the least; this fact has made it difficult to sell the benefits of this agreement. On the other hand, some in the business community view our role in the review of submissions as too intrusive in the affairs of other countries and interfering with the ability of business to function in the other countries. But as I stated earlier, the Agreement is gaining recognition, and internationally, it is often mentioned as an option by workers engaged in labor dispute.
(3) Mexico's primary concern in the implementation of the agreement has been that the review of submissions, in particular, will have a negative impact on foreign investment. The challenge that will continue is how do we go forward with this important dialogue on labor standards given these concerns.
Finally, since we are all represented here today, it is important we focus on how we can fully utilize and coordinate all of the NAFTA institutions in order to assure that working conditions and living and environmental standards are maintained and improved as trade and economic integration increase throughout the Hemisphere.
Building Cooperation: The Canadian Experience
First of all, cooperation is such a pleasant, positive word. It just rolls off our tongues very nicely. And we don't think about what's behind it. But it is not a superficial word, it does require a lot of effort. We are talking about building consensus on issues that are very sensitive. We are talking about positive engagement among equals, each from our own national perspective. Together, we are trying to forge something new that we call cooperation. And it must go beyond the surface if it is to last in the longer term.
It was launched almost over night, with no history. We did not even know each other as officials. There was no history between the labor officials in Canada and Mexico. There was a bit of history between Canada and the U.S., but primarily on industrial relations issues and between our labor boards.
I think in four years, we have gone from birth to toddler. I don't think we have gone beyond the toddler stage and maturity will come later in the relationship. We do have a new institution in an age where governments are reluctant to fund new bodies. We have growing pains right now, and that is normal. We may have fewer in the upcoming years. But there are, or should be, or could be, however you wish to look at it, difficult issues coming ahead. The question will be: Will the institutions survive and should they survive? Are they accomplishing what they were meant to, or doing something different that is just as valid?
There is tension within the agreement and tension between the three countries. You have two conflicting objectives, one of cooperation and one of resolving disputes, albeit resolving disputes in a cooperative fashion. I think that it healthy.
Areas of cooperation in the NAALC
(1) Council: The Council consists of three ministers who had no shared history of working together. There are elections and there are cabinet shuffles. Ministers move around. They may have little opportunity to create an in-depth relationship. Ministers have met every year and they are discussing more than this agreement. The goal is to develop a vision of a joint approach. The Council Designees bear the burden of day-to-day management of the Agreement. As senior officials, they are responsible for the work program of the Secretariat and develop the strategies needed to meet set goals. In four years, they have created a functioning institution. I didn't say it was perfect and I didn't say it was mature. But its functioning. And we are told that it has in fact been setting records in terms of how fast it was established and began to function. Information sharing is critical as well as to know who the players are.
(2) Secretariat: The Secretariat is in charge of promoting the agreement, make it better known and making sure actors know what they can do under it. It is also expected to produce a comparative body of knowledge on labor law and labor markets.
(3) National Administrative Offices: The NAOs don't exist in the environmental cooperation agreement. They are in charge of cooperative activities and receiving public communications. In terms of the cooperative work program, I think we have been very ambitious. We held over 30 activities in four years. But, as could be expected, we have been a bit unfocused. I think this is understandable in that early on we wanted to do as many activities as possible, we wanted to show we were there and working. We were not necessarily strategic about it. I think that is not a bad thing either in the sense that it let us build a common base, the knowledge, the understanding and a bit of getting to know each other and being comfortable working with each other. We have this knowledge; we need to be more strategic in the longer term. We are currently completing a four-year review of the implementation of the Agreement and taking stock of both results to date and expectations for the future.
Challenges for Canada
In Canada, Environment Canada, Human Resources Development Canada, and the Department of Foreign Affairs and International Trade, have been in constant interaction. Ever since the early days of negotiations, we keep each other informed and we do meet and talk. We try to have some coherence to our external position on labor and to carry this position forward in terms of the labor agreement here, but also with Chile in terms of labor cooperation, the World Trade Organization, the MAI, the ILO, and other international organizations. We face some challenges:
In Canada, 90% of the workforce is under provincial jurisdiction. I think it's necessary to say, provincial jurisdiction does not mean one legislation, it means ten different sets of legislation, one in each of the provinces. And provinces have governments of different political stripes. It was necessary to create an internal agreement which every province is invited to sign. Every province participated in the design of the model of the agreement, but today only three provinces have signed it. We continue to promote adherence but have not been successful yet everywhere. That means that all provinces can participate in our governmental committee, although only the consensus. But there are limitations on dispute resolution procedures in response to public communications as a result of not having specific percentages of the work force covered.
We have established a network with labor unions, academics, labor practitioners and other interested groups, but business participation is not as strong as we would wish it to be. Although we did not have a formerly announced advisory committee until fairly recently, we have had an ad hoc committee, and in addition any time we plan a public event we had a steering committee with business and labor and academic representatives who help us in defining the program, the themes, identifying speakers, promoting the agreement to each other, and encouraging participation.
Just looking ahead, Kim Campbell yesterday mentioned civil society, John McKennirey talked about public international participation. Canada has already chosen to extend the model we have here. We signed the Canada-Chile agreement on labor cooperation in February 1997 and it came into effect July 6 of the same year. We are already undertaking research, study, and cooperative activities with Chile. We have also been strong proponents of the need to hear the views of Civil Society within the Free Trade Area of the Americas process and to promote labor cooperation within the Summit of the American initiative. In Canada, we have had a lot of discussion lately about what we mean by civil society, what we mean by public participation. The counter to public participation is often what we see as self-selected groups. Here you can think of some NGOs, some other organizations who represent one point of view. When they speak to the government, they represent their own interest. But the government has the obligation to hear what the broader society has to say. What the public has to say. New instruments are appearing from the public. We need to hear from both.
On February 15, 1992, the principal telecommunication unions of North America, that is former CWC but now CEP of Canada, CWA of the United States, and STRM, formed a solidarity alliance for mutual help. The alliance aims at strengthening our respective organizations by forming a systematic and permanent union working relationship enabling better exchange of information, knowledge and experiences, as well as the realization of conjunctive activities and coordination of organization and mobilization. This alliance established a precedent of international solidarity with full union autonomy. Furthermore, during the NAFTA negotiations, these unions have developed labor strategies, which have permitted us to face the challenge of increasing economic integration. It is important to note that there are different opinions on what the best way of achieving this would be. But in brief, this alliance has been formalized with the exchange of experiences through formal visit to the two other countries.
At the end of 1994, our friends from the CWA informed us about the attitude adopted by Sprint - partner of TELMEX - towards the unionization intentions of a group of Latino workers, mostly female heads of household, working at La Conexión Familiar (LCF), a telemarketing plant offering services to the Hispanic population. Workers were paid about $7.00 an hour, $5.00 less than Sprint workers that were doing the same work. Workers at La Conexión Familiar did not receive their commission fully. The unionization campaign organized by CWA was received positively by the 235 workers.
In overt violation of a basic civic right, freedom of association, the plant closed down on July 14, 1994, exactly one week before the union vote. This election took place on July 22. Sprint sent loudspeakers to notify the workers they were dismissed. The plant justified its gesture by arguing that LCF was losing money, when a few months earlier it had hired a new President who was paid about $225,000 for the duration of his contract, on top of additional benefits and $800,000 for remodeling expenses of administrative offices. This closure was openly violating United States law, which require sending a prior notice of 60 days and severance pay.
In the weeks preceding the closure of the plant, there was a deplorable work ambience, according to the statements of affected workers and the reading of Judge Gerald A. Wacknov in case 20-CA-26203. In this case, the employers recognize having instructed supervisors to report workers who sympathized with the union. During many occasions, company representatives made sensitive comments on the fact that Sprint was a company "union-free" and ought to stay that way. Judge Wacknov ruled that Sprint was guilty of violating the law when threatening its employees of closing the plant because of union activities. Moreover, he ruled that disloyal practices were conducted. He further asked the company to send a copy of the resolution forcing the company to cease its anti-union activities to each worker's house. The Judge also instructed the company to refrain from threatening the workers, in written or oral form, from closing down the plant because of unionization; from questioning them about their union activities; from asking them to distribute anti-union material; from creating the impression it monitors union activities; from implementing changes in working conditions; or from intervening, coercing or restraining the full exercise of workers' rights.
In spite of CWA's documentation and verification of more than 50 charges of illegal activities conducted by Sprint, and despite the fact that the company recognized having violated the law when its Vice-President falsified documents in order to "demonstrate" that Sprint was considering closing LCF much before union activities started, the sentence only required Sprint to send the written citation. It didn't consider the restitution of work or the payment of lost salary and benefits. The punishment did not represent the gravity of the legal violations that had been committed.
It was striking at the reading of the citation how severely the Judge criticized workers' declarations, which he considered poorly reliable since many of them used the same figures of speech, and since there were errors of pronunciation and syntax. On the other hand, the company's testimony was given full credit, despite the use of a "falsified" document by one of its Vice-Presidents intending to demonstrate that the company had financial problems and needed to close down the plant because of this, and not because of union activities. Moreover, other public officials have recognized "having perfumed the pig" by presenting financial data as optimistically as it was ethically possible. I wonder if this attitude would have been the same if most workers had not been Latinas or if they had relied on university studies.
Given the gravity of this, the CWA and STRM met in Mexico City in January 1995. They discussed, amongst other issues, the necessity of filing the case with the National Administrative Office (NAO) of the NAALC signed by Canada, the United States, and Mexico in 1993. The National Assembly of STRM representatives unanimously approved this decision. The complaint was presented to the Mexican NAO on February 9, 1995. On May 31, 1995, the Mexican NAO, amongst other activities, emitted a notice making two recommendations: 1) to deepen the analysis of the relationship between freedom of association and the right to organize with plant closures; and 2) to conduct a ministerial consultation with Robert B. Reich of the United States and Santiago Oñate of Mexico.
On February 27, 1996, public hearing were held in San Francisco. Francisco Hernandez Juárez, General Secretary of the STRM, stated he was confident in the unity and solidarity of workers and their organizations, as well as in equal dialogue, in negotiations, in justice, in the rule of law, and in the institutions as the best means to resolve employer-employee problems. He manifested his preoccupation with the fact that LCF was a small example of the systematic anti-union attitude adopted by Sprint, a multinational with which Telmex maintained a strategic alliance. He further argued that multinationals ought to adapt to codes of conduct promoted by diverse organizations such as the Post, Telegraph and Telephone International (PTTI), now the Communications International (CI). He asked that the current case be resolved favorably for the workers and that Sprint should not be able to open a plant in Mexico if it did not respect the rights of organizations and workers. Many other union representatives from all levels were present and exposed similar concepts. As suspected, Sprint representatives maintained that there were no violations of the law.
Although many instances have given reason to the 177 workers, Sprint spent millions of dollars to avoid that justice be made. The National Labor Relations Board (NLRB) ordered Sprint to re-hire the workers and pay back salaries and benefits. This ruling was revoked by the Federal Appeal Court. The struggle continued nevertheless.
On July 14, 1997, to commemorate the third anniversary of the dismissal, CWA organized simultaneous demonstrations against Sprint in different American cities and other places around the world where Sprint operates. The degree of inter-union cooperation was noteworthy. It served as an example to help prepare the International Day against Ameritech, scheduled for June 24, 1998.
One of the decisions coming out of the First continental Meeting of the Inter-American Women's Committee of the PTTI, held in Mexico City on June 11-14, 1997, was to submit an open letter from women union workers to Mr. William Esrey, Director General of Sprint Corporation. The letter announced the women's decision to join LCF's activities and support the workers. The letter was also signed by companion communication, bank, electronic, streetcar, and Social Security workers, amongst others. It was publicly unveiled in July 1997. In August of the same year, during the XXVII World Congress of the PTTI, now called Communications International held in Montreal, Quebec, Canada, there was a demonstration of more than a thousand delegations. There is an on-going campaign organized by the Communications International to denounce and combat the anti-union practices of Sprint. The goal is to show the wide public the true face of a company that spends millions of dollars on advertisement and promotion of a good image. It proposes, for example, that unions should know about Sprint's activities in order to tell consumers not to use its services and choose and independent company affiliated with Global One instead.
These energies helped gain a recent victory in Northern California, where more than two thousand Sprint workers won their right to union representation in May 1997. Since then, Sprint's strategy consists of threatening not to sign the contract meticulously negotiated, and challenging the union's right to choose its representatives to the negotiation table.
Within the context of the four-year review process of the side agreements, I propose the following to make the labor side agreement more effective:
(1) It is necessary to simplify the procedures to submit public communications. Only unions with ample legal and economic resources can undertake such an endeavor. However, the majority of violations are directed against groups that are trying to get their union recognized, and thus that do not have such resources.
(2) In Mexico, we say "Justice delayed is not justice." It is thus necessary to establish time limits in the reviewing process and in the implementation of the recommendations coming out of the review process.
(3) In this sense, we ought to make sure the labor side agreement's resolutions are enforced. This requires a serious analysis of the impact of possible trade sanctions, because the experience to date, illustrates that they harm workers twice more than the companies. This is because the burden of trade sanctions usually fall on the shoulders of the poorest. We need to find ways to apply the sanctions directly on the faulting companies.
(4) We need to strengthen the trinational cooperation and exchange of knowledge mechanisms in the field of labor relations, but also in terms of putting together public communications and analyzing resolutions.
(5) It is necessary to modify the current classification of labor principles eligible to go through the entire review process of the NAALC. Currently, freedom of association and the right to organize, the right to bargain collectively, and the right to strike can only be subjected to the "review and consultation" level of treatment, while they are the most frequently violated rights.
(6) It is necessary, finally, to promote the formation of "experts" coming from a union background in order to be able to analyze public communications from the perspective of the world of work.
These are proposals coming out of my desire to perfect an instrument which, despite its limitations, has permitted to increase the inter-union bonds between American, Canadian, and Mexican organizations. These bonds have helped forming concerned workers and have given us a forum of denunciation with a world impact. The only thing missing is to find a way to use these advances to concretely benefit workers.
What did the Council of Ministers commission?
The Council of Ministers commissioned a study on the effects of sudden plant closings on freedom of association and the right to organize in each country. The major research questions were:
Questions and methodology
(1) What are the primary consequences of sudden plant closings on the right to organize a union and the ability of unionized workers to adapt and respond to the current situation?
(2) How can the principle of freedom of association and the question of plant closings be analyzed within each country's system? How to better enforce domestic law and prevent these types of action?
(3) What is the record of labor tribunals and courts on these issues in each country?
(4) How do laws and policies mitigate the economic effects of sudden closings on workers?
The Ministers have given us the responsibility of a "hot potato". We decided to produce a report that respects the principles of the agreement on labor cooperation. We compared principles of compliance to the law in each country. It is fundamental at the end of the 20th century to establish a scheme of North American integration that respects both the legal and the economic perspectives of each country. The study endeavored to outline the judicial, economic, and political principles underpinning the integration of Mexico, Canada, and the United States.
In North America total plant closures are not common. This study used data for a period of five years between 1992-1996. We found that within Mexico there have been extensive plant closings, but mostly due to the economic crisis faced by this country. There have been, however, some instances where the "mutual consent" clause of the Mexican Federal Labor Law, which classifies the case as a conflict of economic nature and exempts it from the labor law framework, have been used. But overall, our study has found that complete plant closings in relation to union organizing drives are rare. More common in the United States context are partial plant closings, such as involving a reorganization of a specific department or lines of production.
The second most important conclusion is that the usage of threats of closing the plant in the context of a union organizing campaign is quite common in the United States. In the case of Mexico, it is more difficult to analyze the use of this kind of threats because the instruments to test the employer's motivation in closing the plant are rarely used.
In sum, the overall recommendation is that the reinforcement of cooperation in all three countries strongly helps to create a more efficient enforcement of labor rights and a more effective administration of these laws.
The Commission for Labor Cooperation's study, Plant Closings and Labor Rights, (1) which was presented to the Council of Ministers as a follow-up to the "Sprint" case, raises some important questions regarding the rights of workers when faced with plant closings and layoffs. Although the main issue examined in the study is the relationship between plant closings and union activities, worker displacement in general is also discussed. For this reason, the focus of these comments will not only be on the impact of plant closing on freedom of association, but also on the more general context surrounding employment insecurity and the insufficiency of present legislation in addressing the challenges posed by a rapidly evolving labor market. More specifically, the plight of unorganized labor when faced with layoffs needs to be explored to bring to light the scant protection afforded workers with little or no bargaining capacity. As well, the adequacy - or inadequacy - of present legislation in Quebec (and elsewhere) for the protection of workers in so-called "non-standard" employment needs to be reviewed in a context of increasing employment insecurity experienced by growing numbers of workers. Finally, some suggestions are offered on further activities, which could be foreseen under the North American Agreement on Labor Cooperation (NAALC) to gain a better understanding of these issues.
A preliminary remark is in order as to the division of legislative powers in Canada. Workers in Canada are in the majority covered by provincial labor legislation, since the employer-employee relationship is constitutionally governed by provincial legislative action, with the exception of a few sectors of activity representing approximately 10% of the working population, which is covered by federal law. The following comments will therefore mostly be restricted to the situation in Quebec, one of the few Canadian provinces to have adhered to the North American Agreement on Labor Cooperation. (2)
Since the Plant Closings and Labor Rights study provides a relatively exhaustive description of the pertinent legislation and judicial doctrine in North America, it is not necessary to retrace the legislative framework surrounding plant closings due to union activities. It is however important to point out that Quebec has weak protection in this respect compared to other jurisdictions. In principle, following a 1981 Quebec Labor Court decision, (3) an employer is free to close down his establishment to avoid having a union in the workplace. The closing must of course be permanent and not a subterfuge: the work must not be performed by sub-contractors, for example, and the company cannot close temporarily only to take up business soon after. Other Canadian jurisdictions offer better protection in this regard and condemn plant closings based on anti-union animus.(4) On the other hand, Quebec has historically adopted avant-garde legislation compared to most other Canadian jurisdictions in several respects: anti-strike-breaker legislation and the legislative extension of collective agreements (5) to certain non-unionized workers are two examples. The present judicial doctrine on plant closings to avoid unionization would therefore appear to be anomalous in the context of the Quebec labor relations legal tradition.
It bears reminding that plant closings for union activities, or the threat of closure, are but one manifestation of the employment insecurity experienced by workers and of the precariousness of workers' bargaining power. Plant closings, mass layoffs or the threat of layoffs, not because of union activities, but because of economic imperatives, restructuring and technological change, are also affecting workers. This is particularly true of workers who are not covered by a collective agreement, especially those employed in small companies, (6) and who only have the law (7) to fall back on to ensure the respect of a minimal number of rights. In Canada, close to five times more unorganized workers lost their jobs for economic reasons between 1993 and 1997 in comparison to unionized workers. During the same period, ten times more non-unionized workplaces shut down. (8)
In the case of mass layoffs in Quebec of more than six-months, the employer is obliged to advise the Ministry of Labor (and not the employees) of the time-frame for the layoffs and the number of employees affected. (9) If less than ten employees are to be laid off, the employer is under no obligation to notify the Minister. These layoffs can be for economic or technological reasons. The Government can create a "reclassification" committee to help workers return to the labor market through job placement assistance and retraining. These committees are obviously more easily created in large, unionized companies. If an employer decides not to provide adjustment measures for his employees, the law provides for only very weak enforcement powers. These adjustment measures would appear to be more curative than preventive, since they do little to limit worker displacement.
In a non-unionized context, an employer is under no obligation to justify the choice of workers to lay off according to criteria such as seniority. The only potential limitation of this management right is that the employer cannot use these layoffs to get rid of certain workers for reasons not related to economic or technological imperatives, i.e. he cannot use the layoffs as a pretext for unjust dismissals. (10) The workers' only due is prior notice of layoff: one to eight weeks depending on the number of years of service. There are no legal provisions for additional severance pay in Quebec in such cases. Older workers are especially vulnerable since their chances of finding other employment are slim. The disappearance in 1997 of the federal-provincial Program for Older Worker Adjustment has exacerbated the financial insecurity of the 55 to 64 year old age group, leaving many older workers who have been permanently laid off with no other choice but to bridge the gap between the end of unemployment insurance benefits and eligibility for government pensions with welfare benefits. Also, the threat of layoffs and plant closure discourages unorganized workers from claiming rights such as overtime pay, let alone negotiating on an individual basis for improved working conditions. Following a series of legislative reforms during the 1990s, (11) more stringent eligibility requirements for unemployment insurance (now called "employment insurance") benefits have also increased workers' financial insecurity, often forcing them to become more passive in the workplace in order not to increase the risk of job-loss.
As well, employers are under no obligation to train workers in the use of new technology or to attempt to reduce the number of layoffs or to find alternative solutions. Recent legislative measures have however been introduced in Quebec to encourage professional training. One such measure is the compulsory 1% payroll allotment for the training of workers already in place. (12) Another is the possibility of creating apprenticeship schemes whereby employers can, under certain conditions, hire apprentices of any age who must receive training to develop transferable skills and to increase their "employability." (13) It should be noted that these apprentices can initially be paid below the statutory minimum wage, and that the law does not provide for any obligation on the employer's part to keep the worker after the apprenticeship period is finished. Despite these recent initiatives, it cannot be said that the right to professional training exists in Quebec law, or that employers must retrain workers rather than lay them off and replace them with other, more qualified, workers.
Another issue which needs to be addressed is the inadequacy of labor legislation, not only in Quebec, but generally, in protecting workers in "non-standard" employment. The term "non-standard" could be considered a misnomer because its forms - contract work, part-time employment, multiple jobs, self-employment, homework, on-call work, etc. - are becoming increasingly prevalent. (14) In Quebec law, and in Canada generally, there are no legislative restrictions on these forms of employment, and employers can use them in their restructuring strategies to increase internal flexibility without impediment in an non-unionized context. Self-employment is steadily rising and encouraged by governments through different programs and financial incentives. Homework, both voluntary and involuntary, has doubled since the early 1980s in Canada. (15) The end result is that more and more people are falling outside of the ambit of protective labor legislation. Laws on collective bargaining, minimum employment standards, unemployment insurance, health and safety, workers' compensation, as well as other private benefit programs such as company pension funds and collective insurance, have as their premise the nine-to-five, permanent, one employer-one establishment job. This no longer reflects the reality of the labor market.
The mainstreaming of non-standard employment poses important challenges, particularly for unions and government. Statistics show that the unionization rate is declining or stagnant in North America: (16) the vast majority of workers are not covered by collective agreements. The service sector, where over 90% of job growth is occurring in North America, has been a very low unionization rate. At the same time, the number of workers who are "unionizable" is decreasing, either because they no longer meet the definition of "employee" or "salaried worker" in the legislation (the self-employed, for example), or because they simply cannot be located to participate in union organizing campaigns (salaried homeworkers, for example). New legislative models for union organizing are therefore needed to prevent an increased marginalization of workers and to promote collective bargaining power and solidarity among them.
What are the prospect for improving the situation of unorganized workers in an era of regional economic integration? The North American Agreement on Labor Cooperation has had a decidedly beneficial effect on the exchange of information on labor matters in the three countries, especially among government, organized labor and employers. The Commission on Labor Cooperation has processed and made available vast quantities of information, which has led to a greater understanding of each country's legal culture and framework. Seeing that there are other ways of doing things is the first step toward finding innovative solutions to better protect workers. To date, the main focus of the activities under the NAALC, be they cooperative activities or the submissions ("complaints") process, has been on issues related to freedom of association. There has thus been increased scrutiny of the exercise of this right in Mexico, Canada and the United States, through such cases as the "Sprint" case which gave rise to the Commission's study on plant closings and union activities.
Notwithstanding these positive aspects, the NAALC has so far brought about little scrutiny of the situation of unorganized workers regarding a number of issues. The impediments to unionization created by the expansion of non-standard employment and the inadequacies of labor law in addressing this situation is one example. Another is the exploration of legislative measures to provide an effective protective framework, on all fronts, for "atypical" workers. As well, the establishment and the efficiency of adjustment and workplace training programs to ensure a minimum of employment and financial security for unorganized workers need to be examined. Increased involvement of non-union workers' organizations and NGOs is essential in the national policy-making process and in North American cooperative activities. While it is true that the NAALC in no way obliges the Parties to the agreement to change their labor laws - on the contrary, national sovereignty on policy-making is one of the cornerstones of the agreement - it does encourage the exchange of information and ideas on ways to improve the situation of workers. Cooperative activities must therefore more fully take into account the situation of unorganized labor, both from a legal and social perspective, with particular emphasis on especially vulnerable workers.
1. See Commission for Labor Cooperation, Plant Closings and Labor Rights: The Effects of Sudden Plant Closings on Freedom of Association and the Right to Organize in Canada, Mexico, and the United States (Dallas: Bernan Press and the Commission for Labor Cooperation, 1997).
5. See the Collective Agreement Decrees Act (R.S.Q., c. D-2) which permits the extension of collective agreements to non-unionized workers in certain industries. The decree system is presently under review: two industrial decrees have recently been abolished, and the decrees in the garment sector have also been targeted for repeal.
7. A series of laws provides for limited protection in the case of unjust or discriminatory dismissals, and for minimum prior notice in the case of lay-offs. See for example: the Quebec Labour Standards Act, R.S.Q. c. N-1.1, arts. 82ff, 122 and 124; the Quebec Charter of Human Rights and Freedoms, R.S.Q., c. C-12, arts. 10, 16 and 49; the Quebec Civil Code, S.Q. 1991, c. 64, arts. 2085ff.
10. In Quebec, non-unionized workers cannot be dismissed without just and sufficient cause if they have three years of service for the same employer. Economic necessity is considered to be a just cause in Quebec case law. See the Labour Standards Act, R.S.Q., c. N-1.1, art. 124.
12. Acto to Foster the Development of Manpower Training, R.S.Q., c. D-7.1., arts. 3ff. See generally Fernand Morin and Jean-Yves Brière, Le droit de l'emploi au Québec (Cowansville: Wilson & Lafleur, 1998) at 699 ff.
Canada, the United States, and Mexico are three very different countries with distinct political and social cultures. Each country has responded differently to the challenges brought by NAFTA. In a spirit of cooperation, it is very interesting to compare the national programs emerging in terms of trade adjustment and workforce training. NAFTA does not mean the same thing for the three parties, thus the mechanisms put in place to smoothen the transition have varied and naturally grew out of each country's institutional legacy. Americans, for instance, worked on mechanisms to cope with shift in employment patterns and geographical location of investments. Mexicans have focused on getting out of the deep economic crisis while creating a culture of sustainable productivity and training for development. Canadians saw NAFTA as part of a broader trend of globalization that restructures labor markets. They worked on broader social issues such as education, employment services, tax policies, and competitiveness. Both Mexico and Canada have emphasized inter-agency cooperation and a multilevel approach from the local to the national. Given these different ways to tackle with the challenges of NAFTA, it is fruitful to exchange ideas and cooperate while respecting sovereignty.
The experience of the United States is particular because of the story of pre-NAFTA political pressures. The "NAFTA-Plus" coalition formed of Latino and environmental groups coalesced with key US Democratic members of the House of Representatives in November 1993, and forced the establishment of new sets of transnational institutions as a part of the "NAFTA Plus" legislative package. The strategic coalition was decisive in determining the slim congressional majority for the agreement. Such coalition was not formed in Canada, where many civil society groups, particularly in English Canada, strongly opposed NAFTA and chose to retreat form any negotiations of side agreements. The situation in Mexico was mostly determined by the deep economic crisis. Development and growth was the prime motivation to sign the agreement for the well-being of the country.
With the increasing pace of globalization, these national institutions are very important as they are acting as buffer for social policies, labor rights, and sustainable development. The popular belief about globalization states that it puts enormous pressures on national states to cut on these policies. Nevertheless, within the context of NAFTA, national states have been able to create their own institutions without too much fear of capital and employment flight. This is due, in part, to the cooperative climate provided by the labor and the environmental side agreements, and to their mechanisms to ensure respect of the rule of law. As Ricardo Ochoa, of the Mexican Secretariat of Finance and Public Credit indicated, NAFTA has institutionalized the relationship between the US and Mexico.
Nevertheless, as Dalil Maschino, Senior Economist at the Secretariat of the Commission for Labor Cooperation, pointed out, even if governments were successful in implementing these crucial programs, it does not take into account structural changes in labor markets. The field of application of labor law usually targets full-time regular jobs, thus leaving the informal and quasi-informal workers on their own. New policy tools are required to help part-time workers, home workers, self-employed workers, workers in the underground economy, adjust to the new North American economy. This is true, one could add, for all three countries and not only for Mexico, as there are some parallels to be drawn between Mexico's informal sector, and Canada and the United States' quasi-formal sector.
The United States provides assistance in two major areas: community economic development and worker training assistance.
The CAIP involves the coordinated efforts of the United States Government and the North American Development Bank (NADB). NADB established an Office in Los Angeles, California for the purpose of assisting the United States Government with the development and implementation of the program.
The program operates as a "development catalyst" - assisting where shortfalls exist in capital availability in commercial lending markets for start-up or expansion efforts within communities that have experienced significant job losses. It combines the efforts of the NADB with certain Federal agencies, local financial institutions and financial intermediaries to meet financing needs for business opportunities.
The CAIP was established to encourage and foster economic opportunities within communities that have been impacted with job losses that are connected with the implementation of the North American Free Trade Agreement. Thus, before the program is able to provide capital, applicants must provide information that demonstrates significant economic impacts within the community that is a discrete geographical area. This requires evidence of two factors:
(1) evidence of significant job losses associated with the passage of NAFTA (since January 1994), and
(2) evidence that the area has not adjusted to the job losses through the existence of other employment opportunities.
The program seeks to encourage the creation of private sector employment opportunities within communities that have experienced job losses that are associated with the passage of NAFTA. It is intended to operate as a community development bank. Borrowers must be able to repay the financial assistance provided by the program, and must evidence an inability to obtain such financing from other sources on reasonable and timely terms and conditions. (Source: www.nadbank.org/nadbank/english/caipp.htm)
"Trade Adjustment Assistance programs go back to 1962 and the Trade Expansion Act of 1962 when it was first recognized that certain worker groups could bear the disproportionate burden of the short term adverse effects of liberalized trade. The current major trade adjustment assistance program was enacted as part of the Trade Act of 1974. The TAA program was modified significantly in 1981 and 1988 as its emphasis shifted from being primarily an extended income support program to focusing increasingly on assisting worker readjustment through development of new skills, which are more marketable in the new global economy.
In 1994, a new NAFTA-Transitional Adjustment Assistance program (NAFTA-TAA) was enacted as part of the NAFTA implementing legislation. Whereas the regular TAA program covered workers displace by imports from any country, the NAFTA-TAA program focuses on workers displaced by imports or shifts of production to Mexico and Canada. In establishing this program, the Congress sought to further emphasize the retraining aspect of adjustment assistance by applying enrollment deadlines and training participation rules which do not exist in the regular TAA program."
Workers certified as eligible are entitled to:
There is also assistance available for "secondary workers" under Title III of the Job Training Partnership Act (JTPA). This provides assistance to workers who are employed by firms, which supply directly affected firms or finish products of directly affected firms.
There is a "concern that the NAFTA-TAA program is "underutilized" because a relatively small number of workers receive benefits under NAFTA-TAA. In fact, the vast majority of workers who are certified under both programs elect to receive their benefits under the less restrictive TAA program."
"Both the TAA and the NAFTA-TAA programs are scheduled to expire on September 30 of this year. Although the Congress is expected to approve a two-year extension of the programs, the President wants more than just an extension. He is proposing a five-year extension as well as several legislative and administrative expansions and enhancements of the program:
Administratively, the Administration is committed to further expanding outreach in order to increase the visibility of the TAA and NAFTA-TAA programs and, particularly, the secondary workers provision that I mentioned previously. Also, the Department is currently implementing a performance measurement system which will track the outcomes for workers who receive TAA and NAFTA-TAA benefits and services"
(Source: Presentation by Don Beale, NAFTA-Transitional Adjustment Assistance Program)
Mexico had to rebuild its economy after being hardly hit by the profound economic crises of 1982 and 1995. In the past decade, the Mexican economic policies shifted from a closed to an open economy. Today, Mexico is the first exporter in Latin America, and tenth in the world. "We are the United States' third commercial partner, and the Mexican market is the second market for North American products in the world," said Ricardo Ochoa of the Secretariat of Finance and Public Credit ( Secretariá de Hacienda y Crédito Público de Mexico ). Mexico has adopted an economic policy that seeks to increase the volume of Foreign Direct Investments flowing into the country. NAFTA negotiations were part of Mexico's willingness to open its economy to the world. The results show that it helped the country raising itself out of the deep economic crises it went through.
NAFTA also had positive effects on Mexican compliance to higher environmental and labor standards. "Since the signature of NAFTA, 57% of Mexican enterprises have invested to comply to environmental standards," said Mr. Ochoa. Moreover, "the maquiladora industry has registered a 72% decrease in violation of environmental regulations, and an increase of about 40% in fulfillment of environmental norms." In the domain of labor, Mr. Ochoa indicated that between 1993 and 1996, in the midst of the crisis, the fiscal budget of the Secretariat of Labor and Social Planning ( Secretariá de Trabajo y Previsión Social ), has increased by 20% in order to enforce labor standards.
Mexico strongly supports the NADB. It is a very important instrument to address environmental problems on its northern border. NADB's Institutional Development Cooperation Program (IDP), and its environmental infrastructure program, are two very important tools for Mexico. The Mexican Domestic Window of the Bank had a slow beginning, in part because of the economic crisis. Mexico has decided to use the existing institutional infrastructure in order to reduce the operational costs of the program. So far, two or three projects have been certified.
Mexico has also implemented a program for employment, training and defense of labor rights called Programa de Empléo, Capacitación y Defensa de los Derechos Laborales 1995-2000, that came out of consultations conducted by the Secretariat of Labor and Social Planning in April 1995. The program aims at facilitating cooperation between all participants in the labor market, at fostering sustainable labor productivity and a culture of quality production, better salaries and health and safety conditions, as well as to develop mechanisms of defense of labor rights. Basically, the program is designed to help the labor force develop high productivity rather than relying simply on a low-cost factor. It includes the participation of many governmental Secretariats and the development of different sub-programs:
(Source: www.stps.gob.mx/300/300 0054.htm)
Given that in Canada, only 10% of the labor force falls under federal jurisdiction, each province has different labor laws and different adjustment programs. Only Alberta, Prince Edward Island, Manitoba, and Quebec have signed the North American Agreement in Labor Cooperation (NAALC). Quebec being the biggest province to adhere to the NAALC, and being known for having some of the best labor laws in North America, the following examples are restricted to that province.
With a labor force of 3.7 million people, a quarter of the total Canadian labor force, Quebec has an unemployment rate of 10.5%. No specific adjustment programs were implemented after adhering to NAFTA. However, as Yvon Boudreau from the Ministry of Employment and Solidarity of Quebec ( Ministère de l'Emploi et de la Solidarité du Québec ) indicated, "negotiations in the ratification of the agreement created the climate, the dynamic, a mind-set that helped to speed-up government reforms and incorporate adjustment programs. NAFTA has set in motion forces that are pushing economies to be more competitive. In fact, competitiveness has become the daily watch word for us." Quebec has decided to focus on the broader issues of improving labor force skills and helping companies adapt to the new reality, rather than targeting individual workers or specific areas. The government's five priorities in the post-NAFTA years are:
(1) Competitive economy: Quebec has a culture of exportation, it exports 56% of its GDP and is one of the most open provincial economy in Canada, which exports 42% of its GDP (Source: Ministère des Finances du Québec 1995).
(2) Healthy public finances: The government's project is to have a balanced budget in the year 2000
(3) Competitive tax policies: Quebec has a more competitive combined tax rate for corporate revenue (38%) than New York (45.8%), California (39.8%), or Ontario (44.6%) (Sources: Price Waterhouse and Ministère des Finances du Québec).
(4) Improvement of labor force skills:
(5) Efficiency of employment services:
(Source: Presentation by Yvon Boudreau, Ministry of Employment and Solidarity)
NAALC is based on the assumption and conviction that domestic labor standards play a positive role in facilitating the adaption of the labor markets to North American economic integration. They establish a threshold for companies trying to adapt to competitive pressures by cutting labor costs below acceptable levels. Labor standards also protect the competitiveness of firms that choose to compete by investing in capital, technology, and human resources. Full compliance with labor standards is therefore as important as the technical level of these standards. It is usually assumed that traditional enforcement policies (such as an efficient administrative treatment of the complaints, visits of work places by inspectors and easy accessibility to labor courts) are sufficient to obtain full compliance.
However there are two reasons why traditional administrative measures are not sufficient to guarantee full compliance with labor standards. First, in labor intensive industries with many small firms, the promotion of compliance also requires the active participation of the key players in the industry, in particular at the level of the relationships between large companies and their contractors. New administrative policies relying on these kinds of partnerships will have to be developed, probably at the level of specific industries.
The second reason, which is the object of this communication, is that there are segments of the labor market that are (partially or totally) located outside the field of application of labor legislation. This is mainly due to the fact that, in many developing and in industrialized countries, labor laws and regulations have essentially been formulated in reference to a normative model of employment. Most vocational training policies and human resource development programs offered by a company have also been elaborated for this model of reference. This normative model assumes for a full time, year round job, working for one employer, in a place managed by the company, with various aspects of the conditions of work and remuneration determined by labor legislation. But this sector is far from being the only source of employment since it coexists with the informal and "quasi formal" sectors.
The informal and "quasi formal" sectors
In developing countries a large share of the active population works in the informal sector. Consequently, this working population is excluded (partially or totally, depending on the specific laws, programs, and categories of employment) from the active labor market policies. The main categories of employment in the informal sector are: (1) employers and salaried workers in the micro-enterprises (usually less than 5 workers); (2) self employed workers; (3) unpaid family laborers; (4) piece rate laborers; and (5) domestic workers.
There is also a "quasi-formal" sector in Canada in the United States. In Canada, jobs in this sector are usually referred to as Non Standard Forms of Work (NSFW). In the United States, Alternative Work Arrangements and Contingent Employment are the expressions frequently used, but they include fewer categories of employment than the NSFW. The non standard sector includes: (1) self employment, with its usual subcategories: incorporated and unincorporated employers, and incorporated and unincorporated own account workers; (2) temporary workers, directly hired by companies or provided by temporary agencies on a short term basis, and leased employees provided by a leasing firm for an indefinite period; (3) part time salaried (volunteer and involuntary); (4) home-workers working for companies contracting out part of their work; and (5) workers in the underground economy. This sector differs from the informal sector in Mexico, in particular in its genesis, but it also has important similarities that are presented below.
For the workers involved, the informal sector in Mexico, and the "quasi formal" sector in Canada and United States have positive aspects. These sectors contribute to alleviating the burden of unemployment for the individuals and families involved, and provide opportunities for on-the-job training experiences. They offer an option to those who have joint responsibilities, such as work and family or work an education, or need a supplementary income. They also allow those who want more leisure activities to do so by having a shorter work week. Furthermore, this sector is the main entry into the world of entrepreneurship for those with little capital. On the product markets, the informal and the "quasi formal" sectors contribute to the supply of a variety of goods and services at a price affordable by low level income groups. These sectors also allowed companies to tailor their supply of services to new needs, such as the demand for stores and other services available almost twenty four hours per day, seven days a week.
For enterprises, the advantages of hiring "temporary, part-time and subcontracted workforce" (Belous 1989:20-48) are not limited to lower wages, benefits and contributions to social programs. It also allows them to increase staff during peak time and to reduce it when market demand decreases, to acquire a particular skill required temporarily, to replace regular employees who are sick or on vacation, to avoid laying off its regular employees, etc. Subcontracting allows management to concentrate on its core activities, to decouple the salary level of some groups of workers from the average firm level, to avoid unionization, etc.
However, the informal and the "quasi formal" sectors raise serious questions on the efficiency of implementing public programs for manpower, labor standards, and company human resource policies. This is a source of concern, especially when we take into account the fact that between 15% and 40% of the working population is involved in these sectors and that the increased international economic integration puts additional demands on these public and private labor programs.
The informal sector beyond the field of application of the labor legislation
The informal sector was first analyzed as a temporary phenomenon. Its existence was due to the small size of the modern sector compared to the size of the population and its labor force. In the long run, a sustained development should lead to the absorption of all the labor force by the formal sector. In the meantime, in a context of high structural unemployment, any income generating activity was useful for families excluded from the formal sector. Thus, the first descriptive definition of the informal sector used in the ILO study on Kenya (1972) emphasized characteristics related to the easy accessibility of these activities. They allow job seekers unable to find work in the modern sector to create their own job through the development of self-employment and micro-enterprises, mainly in commercial and service activities. Survival of the family, and not the accumulation of profit, was perceived as the goal of most of the activities undertaken in the micro-enterprises of the informal sector (Guergil 1988). As a result, the productivity of these activities was considered to be minimal (Moser 1978), and work in this sector has been equated to under-employment (PREALC 1985).
Consequently, no labor legislation has really been implemented in a sector considered as temporary (from a historical perspective) and undesirable (compared to the normative model of reference). In addition, economic units in this sector were considered unable to support the administrative and financial costs of the contributions to social programs and regulations. However, over the years, the informal sector has not decreased its share of the labor force. Several explanations have been put forward. It has been argued that the oversupply of labor was fed by a rural-urban migration leading to a "hyper urbanization" (Bairoch 1973) and increasing the employment in the urban informal sector. At the same time, demand for salaried labor has been moderated by the relatively high capital intensity or by the technological content of the investments done in the modern sector (Tokman 1982). Finally, in the 80s, the international crisis and its resulting adjustment policies have pushed the expansion of employment in the informal sector (Tokman 1990: 117).
Nevertheless, the persistence of this sector did not spark the development of labor policies and programs tailored for it. This is partly due to the fact that the ease of entry and exit, the small scale of operations, the use of labor-intensive techniques of production, the skills acquired outside the formal school system, and the existence of unregulated and competitive markets (ILO, 1972: 6), etc., dilute the efficiency of implementing any administrative policy. Some have even argued that the informal sector has developed precisely because economic agents wanted to escape the administrative burden and the financial costs of government regulation (De Soto, 1986). Although reductive, this view is consistent with other empirical observations showing that economic agents in the informal sector have a lower rate of compliance with regulatory requirements (Madonaldo 1995). Also, the large number of small units and their high rage of turnover limit greatly the efficiency of traditional policies used to enforce labor regulations. Finally, in Mexico, one half of the people working in this sector are by their own account self-employed (STPS 1995: 89) and therefore not salaried in the traditional sense of the law.
For all these reasons, "in the majority of the cases, work relations are not covered by the regulations and are not protected" (Klein & Tokman, 1988), although "the bulk of informal enterprises lies in a "gray" or intermediate zone between the extremes of complete legality and illegality" (Mesa Lago 1993). In particular, there is "little or no division between labor and capital as factors of production" and "labor relations - where they exist - are based mostly on casual employment, kinship or personal and social relations rather than contractual arrangements with formal guarantees" (ILO 1993, 5). Thus, "the informal sector neither complies with, nor benefits from, the regulation of the economy; workers in the informal sector do not receive, for most of the part, the benefits conferred to workers by rights of a formal employment relation" (Schoepfle & Perez-Lopez 1993: 249). However, it is usually agreed that "efforts to extend labor protections to the informal sector that are exclusively enforcement-oriented are bound to fail (...). It would merely increase costs of informal firms and force the majority of them to go out of business, thereby shutting off an important source of employment in developing countries" (id: 274).
The solutions proposed are generally oriented toward an increase in the productivity and the efficiency of these economic units through microeconomic assistance. However, finding "intermediate" solutions to reach several employment categories of the informal sector has now become more important for two reasons. First, these workers should also benefit from the programs designed to ease by the opening of the economy. Second, links between segments of the informal sector and the formal sector might be increasing through the development of domestic and international sub-contracting.
The "quasi formal" sector: in the "gray area" of public and private labor programs
For a long time, comparisons between the informal sector in developing and industrialized economies have been limited to the underground economy. Fiscal evasion and non compliance with the labor regulations were among the main objectives of the "underground" enterprises. Thus, from a policy perspective, the basic problem was to find adequate administrative measures in order to ensure full compliance with labor standards (U.S. 1992, Fortin et al. 1996).
However, labor markets in industrialized countries have always been characterized by a broader duality. Since the 70s, theorists have written abundantly on the division between a primary labor market, with high wages and benefits, career paths, training programs and unionization, and a second labor market for "peripheral workers" (Morse 1969). In this "secondary labor market", salaries and conditions of work were inferior to those of the primary market and the stability of the employment relationship was weaker (O'Connor 1973, Harrisson and Sun 1979). Among the explanations of this duality, we can mention the existence of social discrimination (Gordon et al. 1982), technological change and fluctuations of the market (Piore 1983), and the need for the large enterprises to have more flexibility in their work relationships, and organization of work under higher competitive pressures (Aglietta 1978, Boyer 1986). The challenges set by the existence of a "secondary" labor market were mainly to find ways of increasing the productivity of small and medium businesses, and improving the rate of compliance with the labor regulations.
Over the last twenty years, non-standard forms of employment have been growing at a higher rate than total employment. These changes in the structures of the labor market took place as two recessions (at the beginning of the 80s and 90s) led to a reduction in the number of standard jobs, while the periods of economic expansion did not create enough standard jobs to absorb all the job seekers. For example, between 1976 and 1995, total employment increased by 39.5% in Canada, while the increase was 57% for voluntary part-time, 69.4% for the self employed unincorporated, 175.3% for the self employed incorporated and 520.8% for the involuntary part time (Ministère du Travail 1998: 23). As a result, in 1995, close to 40% of the population employed was not holding a regular, full time salaried job (Ministere du Travail 1998: 21, Statistics Canada 1997). In 1995, it was estimated that approximately the same percentage of the work force had a non-standard job in the U.S. (BLS 1997, Polivka 1996)
The evolution of the labor market has an important consequence: a growing share of the work force is partially covered by labor laws, regulations and manpower development programs, a situation similar to that of the informal sector. In some cases, labor laws or regulations do not apply at all. The situation is complicated by the heterogeneity of the employment categories included in the "quasi formal" sector and in the informal sector. For example, self-employed workers are an important component of these sectors. By definition, this group is outside the scope of most of the labor legislation, although many subgroups of the self-employed do perform tasks similar to those done by regular employees, sometimes in the same workplace. The situation of the other components of the "quasi formal" sector with respect to labor regulations varies greatly. It depends on the specific category of employment, on the particular law, regulation and standard, and of the alternatives legally available to an employer to avoid implementing a specific regulation (Summers 1997). This is a source of concern when compliance with labor standards is supposed to play a role in the process of adaptation to the internationalization of the economies.
Another characteristic of the "quasi formal sector", also found in the informal sector, is the explicit lack of long term perspective of the employment relationship between a worker and a specific employer. This relatively weak and/or short term nature of the employment relationship limits the accessibility of these workers to vocational training programs and benefits offered by the companies, in particular by the firms choosing the "high road" to adapt to globalization. The terms of the contract of employment are also much more flexible than in the standard model, with the "flexibility" applying to the numbers of hours worked weekly, duration of the contract, remuneration, and job assignments. Consequently, workers might not accumulate the minimum number of hours or months required to benefit from various labor regulations, and companies do not have an incentive to invest in the development of their skills. This is a source of particular concern in a context where public human resources development programs should ease the adaptation to economic changes associated with increased international economic integration.
Finally, income and benefits in the "quasi formal" sector are generally lower than what would have been earned for a similar work in the formal sector (Hipple and Stewart 1996, Statistics Canada 1997). This increases the concern for the fairness of the distribution of the gain resulting from international economic integration.
The additional pressures coming from the increasing international economic integration
Empirical studies of the links between the "non formal" labor market and the increasing opening of economies are fairly limited. Nevertheless, "contingent employment is a term coined only a decade ago by labor economist Audrey Freedman to describe the range of employment relationships that had developed to meet employers' perceived need for flexible arrangements to control labor costs in a global economy" (Grunewald 1995: 725). Thus, in the North American context, "the fear was that NAFTA would cost core jobs and only add jobs at the periphery" (Roberts, Hyatt & Dorman 1996: 235). In fact, the relationships between the "world" economy and the informal or "quasi formal" segments of the domestic labor market seem to be mainly indirect.
Several transmission channels have been identified. The first is the increased uncertainty regarding the expected demand and costs of production due to a larger number of competitors and to a faster propagation of any technical change occurring in other countries. As a result, flexibility in the number of employees and in the total salary costs is now more important, increasing the tendency to replace "core" employees by contingent workers.
The second is the way by which some firms react to imports, in particular in industries with no comparative advantage; they try to stay in business by contracting out in the informal or "underground" sectors or by not complying with labor standards such as minimum wages, premium for overtime, etc.
The third transmission mechanism is the double effect of the unequal distribution of the gains and the costs of trade. On one hand, as the income of the groups benefitting from international economic activities increases, so does the demand for business and personal services, in particular in a large metropolis. The supply of these services is usually done by very small enterprises, self-employed and temporary or piece rate workers. On the other hand, workers who loose their job and cannot find a new one with an equivalent salary feed the demand for low price goods and services, which tend to be supplied by economic units of the informal or "quasi formal" sectors. In that sense, international economic integration is a catalyst of the formal/quasi-formal dynamics of the labor market (Sassen 1998).
For several decades, labor policy was equated with full employment macroeconomic policy, income security programs, and expansion and enforcement of labor standards. Then, in the 80s, increases in the flexibility of employment contracts, wages and working conditions, and decreases in benefits provided by unemployment insurance became important components of the jobs strategy recommended by the OECD (1986a, 1986b). It progressed over the last ten years (OECD, 1997), and increases in the flexibility of status and remuneration has been partly provided by the growth of the "quasi formal" sector. However, two specialists writing about the European labor market, noted: "While changes in labor and social law have sought to encourage the growth of non-standard forms of employment by cutting employers' hiring and termination costs, the lack of protection for these forms of "atypical" work has given rise to a greater degree of social discrimination and inequality" (Deakin & Muckenberger 1992: 142).
Labor markets were not regulated in North America as they were in Europe, and the changes in labor regulations have not been dramatic. However, there also seems to be a growing consensus on the usefulness of a new component of labor policy bridging the gap between the flexibility of the labor market and needs associated with international economic integration, in particular to calm the growing fears provoked by economic "globalization" (Rodrik 1997).
All segments of the work force, including those of the "quasi formal" sector should be covered by basic labor standards, whatever their technical level, for reasons mentioned earlier. The characteristics of the "quasi formal" sector will probably require new administrative policies for compliance, including the establishment of "strategic plans" with the most dynamic actors of the industry, and assistance to very small enterprises on this matter. Moreover, people working in the "quasi formal" sector should have full access to public programs for vocational training and benefit from skill development programs offered by companies, especially since a greater mobility in the labor market increases the importance of marketable and recognized skills. It also increases the importance of the "portability" of some benefits such as insurance or pension as the person changes employer.
The exploration of alternative policy measures for the "quasi formal" sector will require a better knowledge of this sector. First, in the legal area, there is a need to know more about the inclusion (or exclusion) of each category of "quasi formal" sector workers (including the self-employed and voluntary non-standard workers) in the various laws, regulations, and labor standards. A review of the inclusion and/or exclusion of the different Non-Standard Forms of Work categories from the programs for manpower development and vocational training would also be useful.
On the statistical side, average income, age and gender distribution are generally well documented for some categories. However, the categories surveyed are not exactly the same in different countries. Also, much less is known about the characteristics of temporary contracts, job assignments and relationships between temporary and permanent workers (Schroeder 1995: 736). Wages and salaries have been investigated in surveys done by the public statistical agencies. However, data on the benefits of these workers is rare. Surveys and case studies could bring valuable information, and longitudinal series are essential to evaluate "the long term consequences of non traditional employment" (Ferber and Waldofogel 1998).
In practice, one of the problems comes from the diversity of the categories of employment making up the "quasi formal" sector. This makes it more difficult to identify priorities and the best ways to move forward. Also, this heterogeneity, and the absence of durable work relationships makes it more difficult to organize in order to defend the workers' specific interests. For the same reason, they are under-represented at the institutional and political levels. As a result, initiatives will probably have to be undertaken by the ministries of labor. Cooperative activities and sharing the experiences on the results obtained and the problems met in the implementation of different programs always increases the slope of the learning curve. Giving a voice to organizations expressing the concerns and preoccupations of companies and non unionized workers on these matters also would certainly help.
Aglietta, Michel (1978), "Panorana sur les théories de l'emploi," Revue économique, no 1, pp. 80-119.
Bairoch, Paul (1973), Urban Employment in Developing Countries: The Nature of the Problem and Proposals for its Solution, Geneva, International Labor Office.
Belous, Richard (1989), The Contingent Economy: the Growth of the Temporary, Part-Time and Subcontracted Workforce, Washington, D.C.: National Planning Association, 116 pages.
Boyer, Robert (1986), "La relation salariale entre théorie et histoire," in: Salais and Thévenot (editors), Le travail: marchés, règles, conventions, Paris: Economica, pp. 295-312.
Bureau of Labor Statistics (1997), Employment and Earnings
Charmes, Jacques (1987), "Débat actuel sur le secteur informel," Revue Tiers-Monde, vol. XXVIII, no 112, October-December, pp. 855-875.
____ (1990), "Une revue cirtique des concepts, définitions et recherches sur le secteur informel," in: Nouvelles approches du secteur informel, Paris, OCDE, pp. 11-51.
De Soto, Hernando (1986), El otro sendero. La revolucion informal, Editorial El Barranco, Lima, Peru. (English version: The other path: The invisible revolution in the Third World, New York: Harper & Row, 1989).
Deakin, Simon and Ulrich Muckenberger (1992), "Deregulation and European labour markets" in: Albert Castro, Philippe Mehaut and Jill Rubery (editors) International Integration and Labour Market Organization, New York: Academic Press, pp. 136-149.
Ferber, Marianne & Jane Waldofogel (1998), "The Long Term Consequences of non Traditional Employment," Monthly Labor Review, May, pp. 3-12.
Fortin, Bernard, Gaetan Garmeau, Guy Lacroix, Thomas Lamieux and Claude Mont-marquette (1996), L'économie souterraine au Québec, Sainte Foy: Presses de l'Université Laval, 115 pages.
Grunewald, Mark (1995), "The Regulatoru Future of Contingent Employment: An Introduction," Washington and Lee Law Review, vol. 52, no 3, pp. 725-729.
Guergil, M. (1988), "Algunos alcances sobre la definicion del sector informal, " Revista de la CEPAL, no. 15, August.
Harrisson, Benett & Andrew Sun (1979), "The Theory of "Dual" or Segmented Labor Markets," Journal of Economic Issues, vol. XIII, no 3, September, pp. 687-706.
Hipple, Steven & Jay Stewart (1996), "Earnings and Benefits of Workers in alternative Work Arrangements," Monthly Labor Review, October, pp. 46-54.
ILO (1972), Employment, incomes and equality, a strategy for increasing productive employment in Kenya, Geneva.
ILO (1993), Resolution concerning statistics of employment in the informal sector, Fifteenth International Conference of Labor Statisticians, Geneva, January 19-28.
Klein, Emilio and Victor Tokman (1988), "Sector informal: una forma de utilizar el trabajo como consequencia de la manera de prodicir y no viceversa," in Estudios Socialogicos, XVI, January-April, p. 206.
Maldonado, Carlos (1995), "The Informal Sector: Legalization or Laisser-faire," International Labour Review, vol. 134, no 6, pp. 705-728.
Mesa-Lago, Carmelo (1993), "Social Security and the Informal Sector in Latin America: the case of Mexico," in: Work Without Protection: Case Studies of the Informal Sector in Developing Countries, G. Schoepfle and J. Perez Lopez (editors), Work Without Protections: Case Studies of the Informal Sector in Developing Countries, Bureau of Internatioal Labor Affairs, U.S. Department of Labor.
Ministère du Travail du Quebec (1998), "L'évolucion de l'emploi atypique au Québec," encart, Le marché du Travail, volume 19, no 5, mai, pp. 13-88.
Morse, Dean (1969), The Peripheral Workers, New York: Columbia University Press.
Moser, Caroline (1978), "Informal Sector or Pretty Commodity Production: Dualism or Dependence in Urban Development?", World Development, 6, September-October, pp. 1041-1064.
O'Connor, James (1973), The Fiscal Crisis of the State, New York: St. Martin's Press.
OCDE (1990), Nouvelles approches du secteur informel, Paris.
OECD (1997), Implementing the OECD Jobs Strategy: Member Countries' Experience, Paris.
____ (1986a), Labor Market Flexibility, A Report by a High Level Group of Experts to the Secretary-General, Paris.
____ (1986b), Flexibility in the Labor Market, Paris.
Piore, Michael (1983), "Labor Market Segmentation: To What Paradigm does it Belong?", American Economic Review, May, pp. 249-253.
Portes, Alejandro and Lauren Benton (1987), "Desarrollo industrial y absorcion laboral: une reinterpretacion," Estudios Sociologicos, V, II, pp. 111-137.
Polivka, Anne (1996), "Contingent and alternative work arrangements, defined," Monthly Labor Review, October, pp. 3-9
PREALC (1985), Mas alla de la crisis, Santiago de Chile, Internatioal Labor Office.
Roberts, Bryan (1989), "Employment Structure, Life Cycle and Lige Chances: Formal and Informal Sectors in Guadalajara," in: A. Portes, M. Castells, and L. Benton (editors), The Informal Economy, Baltimore: The Johns Hopkins University Press, pp. 41-59.
Roberts, Bryan, Doug Hyatt & Peter Dorman (1996), "The Effect of Free Trade on Contingent Work in Michigan," in: Public Choices: Free Trade among NAFTA Nations, Karen Roberts and Mark Wilson (editors), Michigan State University, Institute for Public Policy and Research, pp. 235-260.
Rodrik, Dani (1997), Has Globalization Gone Too Far?, Washington, D.C.: Institute for International Economics.
Sassen, Saskia (1998), Informalization in Advanced Market Economies, Geneva, International Labor Organization, Issues in development, discussion paper no 20.
Secretariá del Trabajo y Previsión Social (1995), Tendencias de la Estructura Economica y el Sector Informal en Mexico, cuaderno del trabajo num. 10, 186 pages.
Schoepfle, Gregory and Jorge Perez-Lopez 1993, "Work and Protection in the Informal Sector," in G. Schoepfle and J. Perez Lopez (editors), Work Without Protections: Case Studies of the Informal Sector in Developing Countries, Bureau of International Labor Affairs, U.S. Department of Labor, pp. 247-279.
Schroeder, Patricia, "Does the Growth in the Contingent Work Force Demand a Change in Federal Policy?" Washington and Lee Law Review, vol. 52, no 3, pp. 731-38.
Statistics Canada (1997), "The Self-Employed," Labour Force Update, vol. 1, no 3, Autumn.
Summers, Clyde, "Contingent Employment in the United States," Comparative Labor Law Journal, vol. 18, no 4, Summer pp. 503-522.
Tokman, Victor (1982), "Unequal Development and the Absorption of Labour: Latin America 1950-1980," CEPAL Review, 17, pp. 121-133.
____ (1990), "Le secteur informel en Amérique latine: quinze ans après," in: OCDE, op. cit., pp. 11-132.
U.S. Department of Labor (1992), The Underground Economy in the United States, paper prepared for discussion at joint DOL-STPS seminars on the informal sector, Mexico City, February 27-28 and June 18-19, 1992.
According to participants, the conference was a timely and fruitful exchange. It provided the opportunity to all those involved in the new NAFTA institutional framework at all levels, as well as to those active in different NGOs, academia, and the general public, to exchange ideas and information on their experience in the past four years. Trade, labor, and environment tend to be considered separately. NAFTA and the two side agreements are explicit on cross-country cooperation, but not on cross-issue cooperation. The exception is the environmental side agreement's mandate to foster cooperation with the Free Trade Commission. But the CEC's efforts were not fruitful yet.
In order to foster more transnational, inter-institutional, and cross-issue cooperation, the conference discussions highlighted the need to further reflect on:
Potential Future Agendas of the NAFTA Institutions for Further Cooperation
Develop a collaborative program between the BECC, NADB, and CEC to study and finance the introduction of new technologies for emission reductions of industries along the US-Mexico border, and to explore potential implications for, and lessons from, the US-Canadian border.
Develop a collaborative program to study, implement and possibly finance the upgrading of health and safety conditions within companies along the U.S.-Mexico border. This program could be a collaboration between the CEC, CLC, the NAOs and the BECC/NADB. National government agencies could also be involved in sharing their existing public research on introducing and enhancing new technologies and practices for reducing exposures to hazards and improving working conditions.
The NADB, and BECC along with the US NADB-CAIP and the Mexican NADB "Domestic Window" could collaborate on identifying and financing projects in the "related matters" area of the NADB's three top priorities for border financing. These could include binational economic development projects, which contain an environmental as well as job creating and labor upgrading dimensions.
The NADB-CAIP could collaborate with the US NAO and the US Department of Labor NAFTA-TAA Program to jointly implement community-oriented projects that would combine both labor retraining expenditures and community economic development investments.
The CLC, along with the support of the Mexican, US, and Canadian NAOs, could cooperate to jointly conduct a series of trinational sectoral and regional case studies of the relationship between trade, investment, technology and labor standards, rights and conditions.
As a follow-up to the previous point, the US NADB-CAIP and Mexican NADB "Domestic Window" could collaborate with the US NAO and Mexican NAO, either on a national or international scale, to study jointly and implement an investment program designed to help industries involved in international trade to upgrade and meet national health and safety standards, as well as other national laws on labor rights and conditions.
The Mexican NADB "Domestic Window" and the US NADB-CAIP could jointly conduct binational sectoral and regional case studies designed to lead to collaborative investments in particular communities on both sides of the border that are facing linked processes of economic adjustment. Such is the case, for example, in the Northern California's and West Central Mexico's food processing industries, as well as the Southwestern United States' and East Central Mexico's garment industries. Binationally organized US and Mexican NADB "Domestic Windows" funding projects could also be designed to mobilize other types of binational financial resources, such as immigrant remittances, which could be used to finance project in the low income and migrant intensive areas most impacted by economic adjustments on both sides of the border.
All the NAFTA institutions could agree to host a series of joint events and activities on a regular annual or semi-annual basis, including: (1) bringing together legislators from the three countries to discuss labor and environmental issues; (2) bringing together the advisory boards of the various institutions to discuss ways of improving public participation; and (3) rotating the geographical location and sharing of expenses for these meetings.
All the NAFTA institutions could agree to establish a commonly administered mechanism for regular information exchanges between all the NAFTA institutions, including a common format for Web Site linkages.
Benjamin Aaron joined the staff of the UCLA Institute of Industrial Relations in 1946. In 1960, Aaron joined the faculty of the UCLA School of Law. During that same year, he became director of the Institute of Industrial Relations, a position he held for 15 years. He became Professor of Law Emeritus in 1986. Since 1946, Aaron has served an arbitrator of labor disputes in virtually every major industry. In 1981, he was the recipient of the American Arbitration Association's Distinguished Service Award. In 1996, he was elected a charter emeritus member of the College of Labor and Employment Lawyers. Aaron is the author of numerous articles on labor law and industrial relations, and the editor of various works on domestic and comparative labor law.
Don Beale received his Bachelor of Science degree in International Economics from Virginia Tech in 1968. After serving two years in the Army, including a tour duty in Vietnam, he joined the U.S. Department of Labor's Office of Trade Adjustment Assistance (OTAA) in 1973. As an Economist with OTAA, progressed to the positions of Assistant to the Office Director in 1982. Between the 1983 and 1997, Mr. Beale held positions as Grant Officer and Budget Officer with the Department' Employment and Training Administration. In 1997, Mr. Beale returned to the Office of Trade Adjustment Assistance as Acting Director. Since his appointment, he has not only managed the TAA and NAFTA-TAA programs, but has also participated in the development of administrative and legislative improvements to both trade adjustment programs.
Stephanie Bernstein is a partner in the Montreal law firm, Campeau, Ouellet, and Associates, which specializes in social and labor law. She has worked for the past ten years with organizations for the defense of unorganized workers, particularly those in vulnerable situations such as low-wage earners, recently-arrived immigrants and domestic workers. She has also been doing research on gender issues in labor and social policy at the Universite du Quebec a Montreal Law Faculty.
Yvon Boudreau is currently Assistant Deputy Minister, responsible for labor and employment policies for the Ministry of Employment and Solidarity of Quebec. Mr. Boudreau believes that the elaboration of labor and employment policies is first of all a collaborative process with labor realities in each region. Thus, these policies ought to be designed by local and regional actors themselves. Before joining the Ministry of Employment and Solidarity of Quebec, Mr. Boudreau worked as a councilor and manager in various sectors of the public administration: Secretariat of the Summit on the Economy and Employment; Environment and Fauna; Labor; Training; Employment Integration; Municipal Fiscal Affairs; and Fishery.
Jorge Bustamante was born in Chihuahua, Mexico and received his Ph.D. in Sociology from Notre Dame University. He has an extensive teaching career and has taught at the Universidad Autonoma in Mexico, the Colegio de Mexico, Riverside, California, in Paris at the Institut d'Etudes Politiques, Notre Dame University and at the Colegio de La Frontera Norte. He has over 200 publications to his name which cover issues related particularly to international migration, U.S.-Mexico relations, and the Mexican population in the United States; these publications can be found in Mexico, United States, Germany, France, Switzerland, Japan, Venezuela and Argentina. Dr. Bustamante has contributed to the editorial section of the newspaper Excelsior for the last 12 years and has also frequently been quoted in international media on issues related to migration. In 1994, the President of Mexico awarded him the National Award for Demography. He is currently President of the Colegio de la Frontera and also serves on the Joint Public Advisory Council of the Commission for Environmental Cooperation.
Javier Cabrera Bravo is the General Manager of the Border Environmental Cooperation Commission (BECC). Trained as a political scientist specialized in International Affairs from the University of La Havana, Cuba, and the UNAM, Cabrera has occupied many political positions: President of the National Commission of the UNE-FNOC Political Program (1992), National Coordinator of the Forum on Democracy of the Red Cuidana UNE (1992), Technical Secretary of the International Affairs Commission of the National Plenary of the UNE (1991). Prior to his appointment at the BECC, Cabrera served as the Coordinator of International Affairs General Attorney Office for the Protection of the Environment (1994-1997). He also served as the Director of International Studies in the Foreign Policy Office of the President of the Republic of Mexico (1992-1994). Cabrera has contributed to many periodicals, such as the Revista Tiempo and the Periodico el Dia. He was also columnist for the first page of the newspaper Uno mas Uno (1984-1988).
Kim Campbell was sworn in as Canada's nineteenth, and first female, Prime Minister on June 25, 1993. Trained as a lawyer and as a political scientist specializing in international politics and Soviet government, the Right Honorable Kim Campbell's career spans academia, the practice of law, administration, and elected Office at all three levels of government. In addition, she had experience in private business ventures in Vancouver before going to Ottawa. In the short period of time that she served Canada's highest Office, Prime Minister Campbell cut the size of the federal cabinet by one third and restructured the government ministries to make them more responsive to the policy needs of the 1990s. Internationally, she participated in major meetings including those of the Commonwealth, NATO and G-7. Kim Campbell became the first woman to be named Minister of Justice and Attorney General of Canada in 1990. She was educated at the University of British Columbia and the London School of Economics. She is a member of the bar of British Columbia and Ontario. In December 1993, Ms. Campbell was elected an Honorary Fellow of the London School of Economics. In October 1997 Ms. Campbell was appointed a Senior Fellow at the UCLA School of Public Policy and Social Research. She currently serves as the Consul General of Canada in Los Angeles.
Lance Compa is a Senior Lecturer at Cornell University's School of Industrial and Labor Relations, where he teaches courses on labor law, employment law, and international rights. He also practices international labor law in Washington, D.C. for trade unions and human rights organizations. Before coming at Cornell in 1997, Compa was the first Director of Labor Law and Economic Research (the top-ranking U.S. appointment) at the new Secretariat of the North American Commission for Labor Cooperation (CLC) in Dalla, Texas. Prior to his 1995 appointment to the CLC, he taught labor law, employment law, and international labor rights at Yale Law School and the Yale School of Management from 1990-1995. Before turning to international labor law practice and teaching, Compa worked as a trade union organizer and negotiator, principally for the United Electrical Workers and the Newspaper Guild. Compa has written extensively on international labor rights, corporate social responsibility, trade unionism, politics, economics and other topics for a variety of law reviews and journals of general interest.
Janine Ferretti joined the Commission for Environmental Cooperation in November 1994 as Director. In March 1998, she was named Interim Executive Director. Before coming to the CEC, she was Executive Director of Toronto-based Pollution-Probe, a national non-profit research group dedicated to protecting the environment. Ms. Ferretti brings to her current position 17 years of experience in the environmental field, including research with the International Union for the Conservation of Nature and natural Resources in Bonn and the Environment Liaison Center in Nairobi. She has been involved with a variety of national and international issues. She previously held several committee positions, including Co-Chair of the New Directions Group, Vice-Chair of the Ontario Round Table on Environment and Economy and was a member of Canada's International Trade Advisory Committee and of the National Round Table on Environment and Economy.
Jonathan Fox is Associate Professor of Social Sciences in Latin American and Latino Studies Program at the University of California, Santa Cruz. He is author, editor or co-editor several books, including: The Challenge of Rural Democratization (Frank Cass, 1990), The Politics of Food in Mexico (Cornell, 1992), Transforming State-Society Relations in Mexico (Center for US-Mexican Studies, 1994), Decentralization and Rural Development in Mexico (Center for US-Mexican Studies, 1996) and, most recently, The Struggle for Accountability: The World Bank, NGOs and Grassroots Movements (MIT, 1998). He works with a wide range of grassroots organizations, public interest groups and funding agencies on issues of participation and accountability.
Irasema T. Garza was appointed by the Secretary of Labor to head the U.S. National Administrative OFFICE in August 1994. Her primary responsibility is to ensure implementation of the North American Agreement on Labor Cooperation (NAALC) provisions, including oversight of labor law enforcement in the other NAFTA countries and conduct of cooperative consultations with Canada and Mexico on issues related to trinational labor laws and policies. In January of 1994, Ms. Garza was appointed by the Secretary of Labor as the Executive Director of the Commission on Family and Medical Leave at the Department of Labor, Ms. Garza was magistrate for the 22nd Judicial Circuit Court of Michigan, and served in this capacity from 1982-1993. Ms. Garza is a native of the Rio Grande Valley of South Texas. She currently resides in Silver Spring, Maryland, with her husband and two children.
Antonio Gonzales is President of the Southwest Voter Registration Education Project (SVREP) and the William C. Velasquez Institute (WCVI). SVREP and WCVI are two paramount national Latino political and economic empowerment organizations. Gonzales assumed Presidency of both organizations in 1994. A graduate of U.S. History of the University of Texas, San Antonio, he also conducted master course work in Latin American History at UC Berkeley. Gonzales worked as an organizer in south and west Texas through 1988, before transferring to SVREP-California in 1989. A native of California, Gonzales led SVREP's organizing efforts in California and Arizona through 1989. He also created the Latin America Project (LAP) for WCVI in 1988. Gonzales put WCVI on the map as the first national Latino organization to include U.S.-Latin America relations in the U.S. Latino agenda. Key Gonzales initiatives included: sending delegations to observe Nicaraguan and Salvadorian elections in 1990 and 1991; and leading the Latino Consensus on NAFTA movement that led to the creation of the NADB in 1993.
Raul Hinojosa-Ojeda is an Assistant Professor of International Political Economy in the Department of Urban Planning at the UCLA School of Public Policy and Social Research. Born in Mexico and raised in Chicago, he received a B.A. (Economics), M.A. (Anthropology) and Ph.D. (Political Science) at the University of Chicago. He is the author of numerous articles and books on the political economy of regional integration dynamics in various parts of the world, including debt, trade and migration and relations between the U.S., Mexico and other Latin American countries. He has been a visiting scholar at the Inter-American Development Bank, the World Bank, and at several academic institutions in Mexico and the United States. He is also the founding research director of the North American Integration and Development (NAID) Center at UCLA. Together with Rep. Esteban Torres of California and others, Dr. Hinojosa-Ojeda is an originator of the proposal for the North American Development Bank.
Albert Jacquez has over 16 years of management experience and work in transportation, trade and financial policy. He is currently the chief of staff for U.S. Representative Esteban E. Torres, where he is responsible for the management, development and implementation of all legislative initiatives. He provides oversight and guidance for all Appropriations Committee work, including the Transportation and Foreign Operations and Export Financing Subcommittees, Torres' primary committee assignments. During congressional consideration of NAFTA, Jacquez developed the legislative strategy and negotiated the substantive provisions of the North American Development Bank (NADB). Mr. Jacquez has been listed among the top "100 Influential Hispanics" by Hispanic Business Magazine and named one of the 50 most influential men and women in Washington by the American Banker.
Patricia Kurczyn Villalobos received her Ph.D. in Sociology at the Universidad Autonoma in Mexico and two Degrees in Comparative Law at the Faculte de Droit Comparatif de Strasbourg, France. Among many other activities, she served as Director of the Social Rehabilitation Center of the Mexican Federal District, Coordinator of the Local Board of Conciliation and Arbitration of the Mexican Federal District, Chief of Legal Affairs at the Administrative Office of the Federal Electricity Commission, Chief of Documentation Unit for the International Year of Women in 1975. Dr. Kurczyn has taught labor law at the Universidad Iberoamericana in Mexico City and at the Universidad Americana de la UNAM and takes part in the Instituto de Investigaciones Juridicas in the same University, conducting research on social law and sociology of the worker. She has also participated in six trinational conferences related to NAFTA.
Leoncio Lara Saenz currently serves as the Director of Consultations and Evaluations at the Secretariat of the Commission for Labor Cooperation (CLC). He was Senior Legal Counsel for the Commission between 1995-1997. Immediately prior to his arrival at the Secretariat of the CLC, he served as an Attorney General for the State of Hidalgo, Mexico (1993-1995). Dr. Lara was also very active in academia. He was General Counsel at the National Autonomous University of Mexico (UNAM) from 1991-1993 and at the Metropolitan Autonomous University from 1978-1980. Dr. Lara founded the Instituto de Investigaciones Juridicas at the UNAM in 1970 and served as a Senior Tenured Researcher in 1992. Founding Professor of the Judicial Research Methodology of the Law Faculty of the UNAM, Dr. Lara has demonstrated his active involvement in legal research. Dr. Lara served as the Vice-Undersecretary for the Ministry of Education from 1986-1988, where he was in charge of labor relations in SNTE, the National Teachers Union, Dr. Lara has written more than 60 articles and 7 law books.
Cesar Luna has been the director of the Border Environmental Justice Campaign of the Environmental Health Coalition since 1995. He is responsible for the coordination and implementation of all aspects of the campaign, including: working with activists in Tijuana and Mexicali and coordinating joint efforts related to binational toxic pollution; promoting dialogue with governmental agencies with pertinent jurisdiction on both sides of the US-Mexican border; and integrating programs designed for environmental education, community empowerment, and pollution abatement and prevention. Mr. Luna is a 1995 Graduate of the University of San Diego School of Law (J.D.), and of the University of California, Santa Barbara where he completed a B.A. in Environmental Studies and a B.A. in Spanish Literature.
Hugh Loftus was appointed Director of the Los Angeles Office of the North American Development Bank (NADB) in June 1996. The L.A. Office is responsible for the implementation of the Community Adjustment and Investment Program of the NADB, created to assist communities which have had job losses since the passage of NAFTA, due to plant relocations or changing trade patterns with Canada or Mexico, attributable to NAFTA. Prior to his appointment, he was Senior Vice President and Manager of Community Development for First Interstate Bank of California. He has been in banking for 30 years with an emphasis in the fields of community and economic development lending. He has served on the Board of Directors for numerous local, state and national organizations and currently serves on loan committees for the City of Los Angeles and the State of California. He is a past President of the California Association for Local Economic Development and Vice President of the National Council for Urban Economic Development.
Dalil Maschino is a Senior Economist with the Secretariat of the Commission for Labor Cooperation since October 1995. Before moving to Dallas, he was a Senior Researcher and Policy Advisor with the Quebec Ministry of Employment and Solidarity. The reports and publications in which he has been involved for several years deal with the analysis of the relationships between the opening of the economy and the deregulation of certain industries, on the one hand, and the impacts of wages, working conditions and the organizations of work in the enterprise, on the other hand. Between 1981 and 1995, he has taught at the University of Quebec in Montreal (UQUAM). More recently, he has taught a class on the relationship between continentalization of the North American economy and domestic labor markets at the University of Texas, Dall and at the UCLA School of Public Policy and Social Research. Dr. Maschino received his Ph.D. from McGill University (Montreal, Canada).
John S. McKennirey was appointed to be the first Executive Director of the Secretariat of the Commission for Labor Cooperation in April 1995. In 1993, Mr. McKennirey was Canada's chief negotiator for the North American Agreement on Labor Cooperation, which established this new Commission. At that time, he was Director General of Policy and Strategic Analysis for Canada's Department of Labor. Immediately prior to his current appointment, Mr. McKennirey was Director General of the Staff Relations and Compensation in Canada's Department of National Revenue, where he was responsible for labor relations and compensation for the largest federal government department in Canada, with some 45,000 employees. Mr. McKennirey has held a number of other senior positions in the Canadian public service, including Director General of Federal-Provincial Relations at Human Resources Development Canada. In 192, he served on the federal-provincial Secretariat for the Charlottetown Accord constitutional negotiations. In 1988, he was named the first Director of the Indian Taxation Secretariat in the Department of Indian Affairs and Northern Development where he was responsible for establishing the innovative Indian Taxation Advisory Board.
Victor Miramontes was born in El Paso, Texas. After completing a Bachelor and Master of Arts degree in economics at Stanford University, he earned his J.D. from Stanford Law School in 1979 and is a member of the California and Texas Bars. Since then, he has combined law and banking in a distinguished career of business and public service. On October 28, 1994, Mr. Miramontes was named Deputy Managing Director of the North American Development Bank in San Antonio, Texas. He was then appointed as the Bank's Managing Director, effective as of March 1, 1997. Before joining the Bank, he served as Development Manager for La Quinta Inn; Vice President specializing in public finance for Paine Webber; First Vice President for Laredo National Bank; Founding partner of Cisneros Asset Management Co.; and Vice President and Regional Manager of the Asset Management Division of Wells Fargo Bank. Mr. Miramontes' civic activities include: Vice Chairman of the San Antonio Water System; Chairman of the Board of the Alamo Public Telecommunications Council; Member of the Solid Waste Advisory Committee for the City of San Antonio Electric Utility; Participant in the Austin-San Antonio Corridor Council Water Task Force and Economic Development Committee; Participant in the establishment of the U.S.-Mexico Chamber of Commerce, Southwestern Chapter; and Member of the San Antonio Ad Hoc Water Finance Committee.
May Morpaw joined the Canadian Public Service in 1976 and has held positions in areas public information and communications services, federal-provincial relations in the areas of culture and communications technology. Ms. Morpaw spent two years as the Director of Research and Policy in the Women's Bureau of Labour Canada. In 1992, she assumed responsibility for Canadian implementation of the Canada-Mexico Memorandum of Understanding on Cooperative Labour Activities signed in May of that year and coordinated federal and provincial participation in joint activities in the areas of occupational safety and health, employment standards and labor statistics. In 1993, she was a member of the Canadian team that negotiated the North American Agreement on Labor Cooperation (NAALC). When the NAALC came into effect in 1994, Ms. Morpaw was named Secretary of Canada's National Administrative Office. In 1996, she was also the lead Canadian negotiator for the Canada-Chile Agreement on Labor Cooperation, which complements the bilateral trade agreement. In July 1997, Ms. Morpaw became the Executive Secretary of the Canada-Chile Agreement.
Ricardo Ernesto Ocho Rodriguez is currently the Director of International Financial Institutions for the Mexican Secretariat of Finance and Public Credit. He also served as an advisor to the Executive Director for Mexico at the World Bank, and as a Senior Councilor to the Executive Director for Mexico at the Interamerican Development Bank. Moreover, he was Assistant Professor at the Escuela Superior de Economia of the Instituto Politecnico Nacional, Mr. Ochoa holds a Master's in International Public Policy from the School of International Studies at Johns Hopkins University, a Master's in Science from the Escuela Superior de Economia of the Instituto Politecnico Nacional, and a Bachelor in Economics from the Universidad Autonomia Metropolitana.
Sarah Richardson is the Program Manager for NAFTA/Environment at the NAFTA Commission for Environmental Cooperation in Montreal. In this capacity, she will design and manage projects related to the North American Free Trade Agreement at the CEC. Among other things, this includes the management and delivery of the NAFTA Effects program, which is a multi-year task to culminate in the design and implementation of a methodology for assessing the environmental effects of the trade agreement in North America. Previously, Sarah was the Foreign Policy Advisor at the National Round Table on the Environment and the Economy, an advisory body to the Prime Minister of Canada on sustainable development. In that position, she examined critical policy questions raised by the relationship between trade and the environment, among other foreign policy issues. Sarah has published numerous articles and reports on issues of trade and the environment, international institutions, and sustainable development. She has a B.A. (Hons.) in International Relations from the University of Toronto, an LLB from Dalhousie University, Halifax, and an LLM from Columbia University in New York.
Virginia Rodriguez-Jones began her work in the labor movement in 1967 when she went to work for Cesar Chavez and the United Farm Workers union in Delano, California. Following her ten years organizing for the Farm Workers' Union, she became an organizer for the Communications Workers of America (CWA) in 1981. Virginia is currently Organizing Coordinator for CWA District 9.
Alicia Sepulveda Nunez is a member of the "baby-boomer" and "68'er" generation who still believes that the world can become a better place for all. She was one of the founding members of the Sindicato del Personal Academico de la Universidad Nacional Autonoma de Mexico in 1971-1972, while working as a teacher of Mexican History and Universal History at the Colegio de Ciencias y Humanidades de Atzcapotzalco (1971-1974). In 1990, she became a member of the National Joint Training Commission. In 1996, she was elected as Foreign Secretary and Recording Secretary of the National Executive Committee, until the year 2000. Moreover, she is currently the coordinator of the Political Commission of the UNT, Union Nacional de Trabajadores, a new labor body founded in 1997 by more than 150 unions. She is also Vice-Chair of the Interamerican Women's Committee of the Communications International, and the Regional Advisor of the Communications International and a substitute member of its World Committee.
Harley Shaiken has taken a unique road to academia, working first as a machinist and autoworker. His research concerns changes in work, technology, and global production and their impact on education. Dr. Shaiken's honor includes the Outstanding Teaching Award of the University of California, San Diego (1991). He has been a member of the National Research Council Committee on Robotics in the United States and Japan, and a fellow in the U.S.-Japan Leadership Program of the Japan society. He is currently on the advisory panel for a study on Multinational firms and the U.S. Technology Base being conducted by the Office of Technology Assessment of the U.S. Congress. Harley Shaiken is also affiliated with the Institute of Industrial Relations and with the Center for Latin American Studies at UC Berkeley, and is a research associate at the Center for U.S.-Mexican Studies at the University of California, San Diego. He is the author of several books, including Mexico in the Global Economy (1990); Automation and Global Production (1987); and Work Transformed: Automation and Labor in the Computer Age (1985).
Mark J. Spalding is a consultant/attorney in Del Mar, California. He primarily handles international environmental policy and law projects. Mark holds a bachelor's degree with honors in history from Claremont McKenna College, a law degree from Loyola Law School and Master of Pacific International Affairs degree from the Graduate School of International Relations and Pacific Studies (IR/PS) at UCSD. He has a national and international reputation as one of the foremost experts on NAFTA's environmental components and institutions, and actively participated in the negotiations and drafting of the Environmental Side Agreements to the NAFTA. As a Research Fellow at the Center for US-Mexican Studies at UCSD, his research focuses on the implementation of these side agreements. He is the Chair of the California State Bar, Environmental Law Section's International Environmental Law Committee. Mark is an Adjunct Professor at the University of San Diego's School of Law and a Guest Lecturer at IR/PS. He is the Executive Editor of the Journal of Environmental and Development at UCSD. His research has been widely published at the international level and in local publications. In his spare time, Mark saves whales.
Lynda Taylor is the public sector representative on the BECC Board of Directors. She actively participated in NAFTA negotiations and on the resulting side agreements. For the last 18 years she has worked for the Southwest Research and Information Center, a non-profit organization committed to environmental issues. She is currently head of a border project at the Center. Among other issues, Ms. Taylor has extensive experience in working with the border communities on issues related to air quality, incinerators, landfills, transportation of toxic waste, use of sludge resulting from wastewater treatment, radioactive waste, and water. She has also dedicated her efforts and time to the Albuquerque/Bernalillo County Air Quality Control Board, the Board of High Country News, the League of Conservation Voters of New Mexico and the National Board of Friends of the Earth. Ms. Taylor also has been extensively published in several environmental journals and has received numerous awards, such as the YMCA Woman of the Year and Friend of the Land Award from the State Land Commissioner.
Esteban E. Torres is the U.S. Representative for district 34 in the House of Representatives. During the debate on NAFTA, the former labor leader and U.S. Ambassador brought a new approach to the debate. Congressman Torres advocated the creation of the North American Development Bank. Working closely with Treasury Secretary Lloyd Bentsen, Labor Secretary Robert Reich and U.S. Trade Representative Mickey Kantor, Torres crafted a provision which made NAFTA workable. In the 102nd Congress, Torres chaired the House Banking Subcommittee on Affairs and Coinage. Since 1990, Torres has led congressional efforts to update and reform the 1970 Fair Credit Reporting Act. He was also instrumental in incorporating his Truth-In-Savings legislation as part of a banking reform bill that was signed into law by the President in December 1991. As a nationally recognized environmental leader, Congressman Torres has authored market incentive legislation to encourage the recycling of used oil, tires, newsprint and lead acid batteries. He is currently a member of the U.S. Committee for UNICEF, the Council on Foreign Relations, the California Democratic Executive Committee, and serves on the board of the Pan-American Development Foundation, Southwest Voter Research Institute and the National Association of Latino Elected Officials. He also serves as an official congressional observer to the Geneva Arms Reduction Talks and is an active member of the U.S. Congress-European Parliament Committee.
FRIDAY, JUNE 19,1998
Welcome: Claudia Mitchell-Kernan, Senior Vice Chancellor UCLA
10:00-12:00 A Case of Labor Issues and NAFTA Institutions - Sprint and the CLC Study on Plant Closings and Freedom of Association
Moderator: Benjamin Aaron (UCLA Law School)
1:30-3:15 The Challenges of the New NAFTA Institutions
Moderator: Raul Hinojosa-Ojeda (North American Integration and Development Center,
3:45-5:30 Four Years Later: NAFTA and the Environment
Moderator: Mark J. Spalding (Graduate School of International Relations and Pacific
sponsored by the Latin American Center and the International Studies and Overseas Programs at UCLA
SATURDAY, JUNE 20, 1998
9:00-10:45 Four Years Later: NAFTA and Labor Cooperation
Moderator: Harley Shaiken (UC Berkeley, Center for Latin American Studies)
11:00-12:45 Four Years Later: NAFTA and Trade Adjustment/Workforce Development
Moderator: Antonio Gonzales (William C. Velesquez Institute)
Keynote Speaker: Congressman Esteban Torres
2:30-4:30 Where to go from here? Reflections on Cooperation
Moderator: Jonathan Fox (UC Santa Cruz)