The Legalisation of International Labour Standards in Trade Agreements: A Case Study of the Labour Provisions in the EU–Vietnam Free Trade Agreement

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Faculty of Law Spring 2020

Master’s Thesis of Transnational Labour Law 30 ECTS

The Legalisation of International Labour Standards in Trade

Agreements

A Case Study of the Labour Provisions in the EU–

Vietnam Free Trade Agreement

Author: Caroline Edwall

Supervisor: Assistant Professor Caroline Johansson

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“We cannot develop at the expense of social justice. We cannot compete without a floor of basic human standards. If this is true inside our own society, it is true for the world as a whole.”

Nelson Mandela, President of the African National Congress, 1994¹

1 Mandela.

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Abstract

International Labour Standards (ILS) has a prominent place in the current debate of globalisation. There has been an increased usage of ILS in different contexts, as references in domestic courts and international courts, as provisions in companies’ code of conducts and as provisions in trade agreements. The purpose of this thesis was to examine the usage of ILS as provisions in trade agreements and whether ILS provisions in trade agreements can lead to increased legal enforceability. The EU–Vietnam Free Trade Agreement was brought up to illustrate how ILS can be used as provisions in a trade agreement. The thesis was conducted by focusing on four different areas, firstly the legal enforcement of ILS within the ILO framework, the ILO Declaration and through International Public Law. Secondly, by examining the linkage between the ILS and trade and EU’s trade strategy. Thirdly by studying the EU–Vietnam Free Trade Agreement by using three dimensions, obligation, precision and delegation. Lastly by a discussion of the legal enforcement of ILS through trade agreements.

In short, the conclusions of this thesis are that there are several limitations in order to foster compliance with ILS, within the ILO as well as through trade agreements.

Especially the lack of a legal body within the ILO and the fact that labour provisions are not subject to the regular dispute mechanism in trade agreements nor subject to the dispute mechanism of World Trade Organisation has been pointed out as problematic. Due to the lack of empirical research on the post ratification effects, de facto and de juro, it is difficult at this initial stage of ‘the experiment of labour provisions in trade agreements’

to draw conclusions. However, the need to foster a universal floor of fundamental labour rights are equally as urgent as it was a hundred years ago when ILO was founded and when the debate on labour provisions and trade was initiated.

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Acknowledgment

First and foremost, I want to thank my supervisor Caroline Johansson for the support throughout this process. And then, my supervisor and colleagues at the Embassy of Sweden in Vietnam all deserve a special thanks for the support during my internship. It was a privilege working with you.

Secondly, I would like to thank my family, Mom, Dad, Josefin & Christian, for always supporting and encouraging me to pursue my dreams. Thank you for always believing in me and especially for the love and support during these last months. Me writing a master thesis during Covid19 isolation was definitely a challenge for all of us, thank you for being there every single step on the way.

I also want to thank my role model in life my grandmother, Barbro Mogren. You are one of my best friends. I am so glad that I got to share my time in Uppsala with you and compare it to your time in Uppsala in the 50s. It is a true honour to be the grandchild who studied law at the same street as your father wanted you to “study” to become a better housewife, but you obviously refused and wanted to travel instead. I love you for that, and whenever I am in doubt, I think of what you have told me so many times, kvinnor kan.

Thanks to all my friends, with whom I cannot live without. To all my friends I met in Uppsala, thank you for being my Uppsala family. Especially I would like to thank Clara, my sister, that I met in law school and the person who have been the sunshine and my rock throughout these years. Thank you for dragging me to lectures when I could not do it myself. When life happened, you lifted me up like no one else. I would never have graduated without your support; I hope you know that. And a special thanks to my thesis partners, Matilda & Ida. You are both a true inspiration, and I am so glad that I got to share my internship and thesis period with the two of you. Emma, Cecilia & Bea, you mean the world to me and I love you.

Caroline Edwall Uppsala July 2020.

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Abbreviations

CSR Corporate Social Responsibility

CPTPP Comprehensive and Progressive Agreement for Trans-

Pacific Partnership

GATT The General Agreement on Tariffs and Trade

EU European Union

EVFTA EU–Vietnam Free Trade Agreement

ICJ International Court of Justice

ILO International Labour Organisation

ILO Declaration The ILO Declaration on Fundamental Principles and Rights at work.

ILS International Labour Standards

NGO Non-Governmental Organisation

TSD Trade and Sustainable Development

UN United Nations

VCLT Vienna Convention on the Law of Treaties

WTO World Trade Organisation

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1 Introduction

“Economic globalization means legal globalization.”

– David Kennedy²

1.1 Labour Rights in the Era of Globalisation

The world has never been smaller. Information, people and goods are moving cross- border faster and easier than ever before, and the global economy has merged into one.

The globalisation has drastically changed the arena for businesses. Transnational companies and global supply chains are spreading out all over the world, and companies can produce products in the most cost-efficient countries in the world. According to the International Labour Organisation (ILO), the global supply chains account for one-in-five jobs throughout the world.3 Products that earlier were produced in one country are now made up of components that have crossed dozens of borders before the final product reaches the hands of the consumer.⁴ Even though globalisation has created great opportunities and benefited many, concerns have also been raised with regard to the potential negative impacts.⁵ If globalisation is the source of prosperity or is aggravating inequality and injustice, is still to this day a vexing debate.⁶ Concerns in relation to potentially negative outcomes in the labour market through downward pressure on employment and labour conditions have also been raised.⁷ A common view is that globalisation increase the pressure to cut costs, including labour costs.⁸

A case that got attention in the global media was the case of the Rana Plaza. The Rana Plaza building in Dhaka, Bangladesh collapsed and cost over 1,000 textile workers their lives and injured more than 2,500 people. The disaster of Rana Plaza is one of the

2 Professor of Law. Quote from Kennedy D, Mystery of Global Governance, p 848.

3 Figure from 2015. ILO, Linking jobs in global supply chains to demand, p 7.

4 Hepple, p 5.

5 Addo, p 39.

6 ILO, Rules of the Game, p 8.

7 ILO, Corporate social responsibility in international trade and investment agreements, p 1.

8 Addo, p 77.

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worst industrial accidents on the record, and the case awoke the world to the poor labour conditions in the garment sector in Bangladesh. Millions of people, with some of the lowest wages of the world, are exposed every day to an unsafe work environment, as the Rana Plaza.⁹ In the information society news about cases like Rana Plaza spread fast, and public awareness is higher than before. The civil society is pressuring actors in the international arena to ensure that basic human rights are respected throughout the supply chains all over the world. It is inevitable that the new economy means that labour law is not just the concern of a particular state, rather a global matter.¹⁰ Transnational labour law is, however, not a new issue of the era of globalisation. ILO was founded in 1919 and has since then played an important role in achieving social justice through International Labour Standards (ILS).¹¹ Conversely, there has been a drastic shift in the usage of ILS during the last decade. ILS are now referred to in domestic and international courts¹², in private companies’ codes of conducts and in trade agreements.¹³ This thesis will focus on the increased legalisation¹⁴ of ILS in trade agreements¹⁵. The legalisation process refers to the shift from ILS solely as a voluntary set of rules, towards legally enforceable standards. The rapid increase of provisions in trade agreements dealing with labour standards has been described by the Director of ILO research department as “somewhat surprising and largely unexpected” development.¹⁶ The most recent trade agreement that the European Union (EU) signed in 2020 is the EU–Vietnam Free Trade Agreement (EVFTA). I will conduct a case study of the EVFTA in order to examine if and how ILS can be legally enforceable through trade agreements.

9 ILO, The Rana Place Accident and its aftermath.

10 Hepple, p 9.

12 Teklè, Labour Rights and the Case Law on European Court of Justice: what role for international Standardsp 237.

13 ILO, Rules of the Game, p 25.

14 The terminology “legalisation” of soft law is taken from Abbott et al. methodology, refers to the continuum from soft law towards hard law. See Section 1.4.2.

15 In this thesis I will use the term “trade agreement” which include all types of preferential agreements such as free trade agreements.

16 ILO, Social Dimension of Free Trade Agreements, p V.

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1.2.1 Main Purpose

The main purpose of this thesis is to examine the usage of ILS as provisions in trade agreements and whether ILS provisions in trade agreements can lead to increased legal enforceability. The EVFTA will be brought up to illustrate how ILS can be used as provisions in a trade agreement and to give a concrete example of the increased usage of ILS. In light of the main purpose, I intend to:

• Define ILS de lege lata and examine how the ILS are legally enforceable through the ILO Constitution, the Declaration on Fundamental Principles and Rights at Work and International Public Law.

• Examine the linkage between ILS and Trade. Study how ILS are used in EU trade agreements focusing on legal enforceability.

• Examine how ILS are used in EVFTA and the legal enforceability of ILS in trade agreement.

1.2.2 Hypothesis

This thesis focus on the legalisation of ILS and the increased usage of ILS in free trade agreements. ILS aims to create a common, universal floor of fundamental labour rights and derive from the belief that economic development shall not develop at the expense of workers.¹⁷ Initially, it is important to clarify that this thesis is written out of the presumption that ILS is one of the solutions to destructive competition in the globalised economy, that affects countries’ ability to enact labour laws.¹⁸ The idea is that ILS is a tool to prevent the well-known ‘race to the bottom’. The term ‘race to the bottom’ refers to the claim that companies prefer to produce in legal environments that offer the weakest protection for labour, to lower their production costs. The economic pressure leads to a competition between states to lower their labour standards in order to attract businesses and investments.¹⁹ Although many countries may want to increase social protection in

18 Menashe, p 56.

19 Willborn, p 369.

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response to the globalisation, they often believe that they are unable to do so due to the threat of being undercut by competing countries.²⁰ As a consequence of the increasing mobility of capital and businesses, governments are often deterred from promoting a higher level of labour standards and rights. Effective global labour regulation through ILS has been presented as one of the solutions to prevent a race to the bottom.²¹

Nevertheless, it is essential to address that there is no global consensus that this presumption is to be true.²² There is an alternative conception of labour rights and ILS as an obstacle that interferes with the open marketplace and therefore sacrifices and hinders, the economic efficacy.²³ Some economists contend that the fast economic growth in developing countries (arising from trade) will automatically lead to improvements of the labour laws domestically and that it, therefore, is no need to regulate on labour matters.²⁴ In other words, the ‘race to the bottom’ will be solved naturally by the market. Many politicians in developing countries are also critical to ILS. They view ILS as a form of social imperialism to exclude competition by demanding labour standards that the developed countries ignored themselves in the process of industrialisation. ²⁵

However, empirical evidence suggests that workers-protective labour laws can have beneficial economic effects. The studies suggest a “positive link between employment protection, productivity and innovation”.²⁶ The benefit becomes clearer over the long term. The studies do, however, not provide evidence that the positive outcome of labour regulations derive from ILS, but rather labour standards in general. The empirical evidence also shows that the labour regulation needs to be adjusted to the different levels of development in countries as well as combined with other labour market reforms to get the positive economic effects of labour regulations.²⁷ The conclusions from these studies are that ILS are necessary and not an obstacle to economic development.

20 McCrudden & Davies, p 46.

21 Menashe, p 57.

22 Hepple, p 1.

23 Deakin, p 174 f.

24 Hepple, p 1.

25 Ibid, p 2.

26 Menashe, p 58.

27 The studies are summarized in, Menashe, p 58.

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There are also studies that show that foreign investors rank workforce quality, political and social stability above low labour costs. ILO also states that there is little evidence that countries which do not respect labour standards are more competitive than countries that respect them. This would mean that there might not even be a race to the bottom and that it instead might be a ‘race to the top’ among investors today.²⁸

At this initial stage of the thesis, it is crucial to shed some light on the economic aspect of ILS, since the economic arguments tend to hinder the legal discourse on the matter. The economic perspective on legalisation of ILS in the era of globalisation is undoubtedly a very important perspective in order to get a broad and comprehensive picture of the reality. However, the economic perspective will not be examined further in this thesis. In this thesis, I will assume that ILS are important in the era of globalisation and as Kennedy stated, that “the economic globalisation means legal globalisation.”²⁹ The hypothesis of the thesis is that ILS should be used to balance the economic growth and trade on the one hand and the rising labour standards and social justice on the other hand.³⁰

1.3 Delimitations

There has been a shift in the usage of ILS. Parallel to the state initiatives, there are several voluntary private instruments that regulate on sustainable development issues, including labour matters. The private initiatives are extremely important to reach a more sustainable development; however, these private initiatives will not be examined further in this thesis.

Instead, this thesis will focus on state regulations and international organisations which are the parties of trade agreements.

Another limitation that has been conducted in this thesis is that even though the Trade and Sustainable Development Chapters (TSD Chapters) include provisions on environmental issues, I will only examine and focus on the labour provisions.

29 Kennedy, Quote from Mystery of Global Governance, p 848.

30 Hepple, p 2. Hepple states that most governments and policymakers share this opinion.

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Since I will examine the use of ILS within EU Trade Agreements, it is necessary to touch upon trade law. World Trade Organisation (WTO) is the organisation that is responsible for the global rules of trade between nations. I will provide a brief overview of WTO and its function in transnational labour law. However, I will not in-depth analyse other parts of the WTO framework like the dispute settlement.

The EVFTA that will be examined in this thesis was initially combined with an Investment Protection Agreement (IPA). In 2018, Vietnam and the EU decided to split the two agreements due to facilitate the ratification process. The IPA provides a new investment court system (ICS) to resolve disputes between EU–Investors and Vietnamese authorities. The IPA has not been ratified by all the Member States of the EU and will therefore not be examined in this thesis.³¹

1.4 Methods

In this thesis, I will employ two different methods, the Legal Analytic Method and Abbott’s et al. Analysis Method. The Legal Analytic Method will be used throughout the whole thesis to study the accepted legal sources within the field of International Labour Law. Abbott’s Analysis Method will only be used in chapter six to analyse the EVFTA.

The following sections aim to explain the two methods.

1.4.1 Legal Analytic Method

The legal analytic method is used to define the law through authoritative sources.³² The method has a two-pronged approach. Firstly, to describe the recognised law, de lege lata.

Secondly, de lege ferenda on how the law should be.³³ In this thesis I will only focus on de lege lata.

In order to study the recognised law, de lege lata the legal sources must be identified. Transnational labour law is the body of international legal norms which regulates issues concerning work. For the last 30 years, transnational labour law emerged alongside struggles to understand and address the implication of globalisation. The

31 For more information on the IPA, see for example Bourgeois, G Legislative Train “A stronger Europe in the World – EU Vietnam Investment Protection Agreement.”

32 Olsen, p 122.

33Kleineman, p 21 & 26.

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transnational labour law has been described as fragmentary and has emerged to protect labour rights by identifying the spaces for actions, it operates within, between and beyond states. The national law and transnational law are deeply intertwined.³⁴ The transnational labour law covers the rules of law established at the international level and the procedural rules, such as rules on the adoption and implementation at the national level.³⁵ The primary sources of transnational labour law derive from ILO; the ILO Constitution, The Declaration of the aims and purposes of the ILO (Declaration of Philadelphia) and the ILO Declaration on Fundamental Principles and Rights at Work (ILO Declaration). These legal sources will be studied in this thesis. Since international labour standards will be examined in relation to trade agreements, other international sources will also be examined in this thesis, such as the international public law, the law of the EU and the law of the WTO. These sources will, however, only be examined briefly. Apart from the conventions and Treaties of transnational labour law, another legal source is the body of

‘case law’ of ILO. If a Member State requests a formal interpretation of a Convention, various ILO organs offer interpretations which are treated as a body of ‘case law’ which gives content to the obligations imposed by the legal instruments of ILO. The formal interpretations are published in the ILO’s Official Bulletin and communicated to all Member States of ILO.³⁶ However, the purpose of this thesis is not to examine the interpretation of the ILO conventions and therefore, the body of case law of ILO will not be used in this thesis.

1.4.2 Abbott et al. Analytic Method

In chapter six of this thesis, I will cover the use of ILS in the EVFTA. To get a better understanding of the labour clauses in the EVFTA, and to what extent the clauses are enforceable, one can use an analytic framework presented by Abbott et.al. The method aims to analyse the continuum between soft law and hard law. Hard law arises from being subject to administrative or judicial interpretation through a domestic judicial system. The

34 Blackett & Trebilcock, p 3 f.

35 Swepston, p 141.

36 Pittard & Butterworth, p 51.

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laws are legally enforced through a judicial system.³⁷ Soft law, on the other hand, describe areas within international law where traditional sources of law are deemed inadequate.³⁸ It is often described as standards and norm-setting aims provide a framework from dialogue and cooperation.³⁹ The method was developed to understand international organisations, for example, the United Nation (UN) and WTO. However, the method has been used to understand trade agreements as well.⁴⁰ The method has also been used to examine the involvement of civil society in the implementation of EU trade agreements.⁴¹ The analytic method of Abbott et al. is based on three dimensions; obligation, precision and delegation. Abbott et al. define it as follows:

“Obligation means that states or other actors are bound by a rule of commitment or by a set of rules or commitments. Specifically, it means that they are legally bound by a rule or commitment in the sense that their behavior thereunder is subject to scrutiny under general rules, procedures, and discourse of international law, and often domestic law as well.

Precision means that rules unambiguously define the conduct they require, authorize or proscribe.

Delegation means that third parties have been granted authority to implement, interpret, and apply the rules; to resolve disputes; and (possibly) make further rule”. ⁴²

1.4.3 Criticism of Abbott et al. Analytic Method

Even though the analytic framework of Abbott et al. have been used to a great extent to analyse international organizations and free trade agreements it has also been criticised for being “too narrow conception of international law” ⁴³ on the basis that the framework relies too heavily on one branch of legal theory, the positivism of H.L.A. Hart⁴⁴ and one branch of international relations theory, the neoliberal institutionalism.⁴⁵ According to the positivist tradition of international law, the law cannot be soft: it either is law or not law.⁴⁶ The theory, is said to ignore the broader perspective of law, and law “a social phenomenon deeply embedded in the practices, beliefs, and traditions of societies and

37 Abbott et al, p 416 f.

38 La Hovary, p 321.

39 Campling et al, p 361.

40 For example, Van den Putte et al., Van den Putte.

41 For example, US and EU Trade Agreements, and EU and Republic of Korea, Van Den Putte.

42 Abbott et al, p 401.

43 Finnemore & Toope, p 743, Kwakwa, not 103.

44 Hart.

45 Finnemore & Toope, p 743, Kwakwa, not 103.

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shaped by interaction among societies”.47 It has also been argued that the definition of

‘obligation’ is circular and does not provide any theory of how it may be generated or become internalized. Legitimacy is, according to the critics, a critical source of obligation.

The need for a greater focus on the process of law instead of the product is also expressed as criticism of the analytic framework. The framework has also been defended.⁴⁸ It is essential to be aware of the critic of the method to get a greater understanding of the method. However, for the purpose of this thesis, it is not necessary to go into depth of the arguments of both sides, but rather keep in mind that the method has flaws. Since the method is well used for the purpose to understand international law and analyse trade agreements, I will use the method in this thesis for this very purpose.

1.5 Outline

Following this introductory chapter, the thesis will start in the second chapter with a presentation of International Labour Standards (ILS) and the International Labour Organisation (ILO). In the chapter, I will focus on the legal enforceability of the ILS through the ILO Constitution, the ILO Declaration and International Public law, in order to provide a background of the current system of ILS. In the chapter, I will lay out the foundation of ILS which the following chapters are built upon. In the third chapter, the linkage between ILS and trade is examined. The chapter centres around the EU’s trade strategy and the usage of labour provisions in trade agreements. The chapter will end with a discussion on the legal enforcement of ILS in trade agreements. In chapter four, I will present the case study of the EVFTA. The case study is conducted by using the Abbott et al. analytic method on the legalisation. Since the EVFTA is a trade agreement between Vietnam and the EU, a brief overview of the legal system in Vietnam, as well as a background of the EVFTA, is presented. The last chapter summarizes the conclusions in the thesis and analyses the findings in the thesis.

47Finnemore & Toope, p 743.

48 See for example Glodstein et al.

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2 International Labour Standards

“The failure of any nation to adopt humane conditions f labour is an obstacle in the way of other nations which desire to improve the conditions in their own countries”.⁴⁹

- ILO Constitution 1919

2.1 Introductory Remarks

In this part of the thesis, I will examine the International Labour Standards (ILS). The purpose of this chapter is to provide a background on ILS and the current mechanism and framework that regulates ILS. It is essential to study the existing framework to get a comprehensive understanding of the current trend of increased usage of ILS in different contexts. In this chapter, I define ILS de lege lata and consider how ILS are legally enforceable through the ILO, the ILO Declaration and International public law. I will finish this chapter by evaluating international labour standards and their legal status.

2.2 International Labour Organisation 2.2.1 Motives and the Founding Principles of the ILO

ILO is the UN agency for the world of work. ILO establishes ILS to promote rights at work and encourage decent employment opportunities and social protection. ILO strives to strengthen the social dialogue on work-related issues.⁵⁰ There were several motives behind the founding of ILO in 1919. Firstly, there were humanitarian motives. The working conditions of the early 20^th century was indefensible, and it was seen as a general problem in most countries. Secondly, the poor working conditions lead to political tensions due to the rising dissatisfaction among the workers. Thirdly, there were also economic motives. The countries that initiated social reforms got a competitive disadvantage due to the increased production costs. Last but not least, world peace was a leading motive behind the founding of ILO.⁵¹ ILO was founded as a part of the Treaty of

49 The Preamble of the ILO Constitution, para 3.

50ILO, Rules of the Game, p 17.

51 Hertzfeld Olsson, p 60 f & ILO, what it is, what it Does, p 4.

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Versailles⁵², along with the League of Nation and as an integral part of the peace process.⁵³

The Preamble of the ILO Constitution lays out the founding principles; that

“universal peace can only be established upon social justice”⁵⁴ and “the failure of any nation to adopt humane conditions of labour is an obstacle in the way of other nations which desire to improve the conditions in their own countries”.⁵⁵ These founding principles are still a part of the ILO Constitution today. More than 100 years after the founding of ILO, the organisation has a prominent place in the current debate on ILS in the era of globalisation.⁵⁶ The Declaration of Philadelphia, adopted in 1944, states the aim and purposes of ILO.⁵⁷ It can be summarized as a two-pronged approach, firstly to promote human rights in the world of work. The approach is clearly demonstrated through the well–known principle “Labour is not a Commodity”⁵⁸. It states the principal motive of ILO; that people should not be treated like inanimate commodities. Other labour rights derive from this principle, for example, freedom of expression and association.⁵⁹ Secondly, stressing the importance of economic growth by fighting poverty⁶⁰ and affirming everyone’s right to economic security and equal opportunities.⁶¹ In other words, the Declaration of Philadelphia states that ILO shall promote fundamental rights at work but not in a way that hinders economic development.

2.2.2 The Tripartite Structure of ILO

ILO became a specialised agency of the UN in 1946. ILO has 187 Member States and is built upon a unique ‘tripartite’ structure, which brings together the representatives from three different parties; the governments, the employers and the workers. The three

52 Part XIII, of Treaty of Versailles; Preamble of ILO Constitution

53 ILO, what it is, what it Does, p 4.

54 The Preamble of the ILO Constitution, para 1.

55 Ibid, para 3.

57 The Declaration of Philadelphia.

58 Article 1 (a) of the ILO Declaration of Philadelphia.

59 Article 1 (b) of The ILO Declaration of Philadelphia.

60 Article 1 (c) of the ILO Declaration of Philadelphia.

61 Article II (a) of the ILO Declaration of Philadelphia.

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constituents address issues related to labour and social policies on equal footing.⁶² The International Labour Conference (the Conference) sets out the ILO’s broad polices. The Conference is held once a year, and the three constituents are a part of the Conference.

The Conference adopts new international standards, the work plan of the ILO and the budget.⁶³ Between the Conferences, ILO is led by the Governing Body, which consists of 56 persons; 28 representing governments, 14 representing employers and 14 representing workers.⁶⁴

2.3 International Labour Standards

According to ILO, the ILS are a result of a discussion among governments, workers, employers and experts from around the world. The ILO “represents the international consensus on how a particular labour problem could be addressed at the global level and reflect knowledge and experience from all corners of the world”⁶⁵. The ILO presents the

‘legal nature’ of the ILS as; “means that can be used in legal systems and administrations at the national level and as a part of the corpus of international law.” ⁶⁶ ILS are legal instruments drawn up by ILO’s constituents. The legal aspects of the ILS will be examined in section 2.4.

2.3.1 The Increased Usage of ILS

The usage of ILS has shifted drastically over the last decades. References to ILS are now common in many different contexts.⁶⁷ For example, the majority of the top 500 companies in the United States and the United Kingdom have adopted some sort of codes of conduct which refer to principles derived from the ILS.⁶⁸ A part of the increased usage in the private sphere, there has also been an increased usage of ILS in domestic courts since the 1990s. Domestic courts worldwide have increasingly had a recourse to international labour law and the ILS of ILO to settle employment-related disputes. There has also been an increase of cases relying on the pronouncements of the ILO supervisory bodies,

63 Article 3, 14, ILO Constitution and ILO, Rules of the Game, p 17.

64 Article 7, ILO Constitution.

66 Ibid, 17.

67 IBA Global Employment Institute, p 6.

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particularly the Committee of Experts and the Committee on Freedom of Association.⁶⁹ The references to international labour law have not been confined to domestic jurisdictions. The same shift has been seen in regional courts, such as the European Court of Human Rights, the Court of Justice of the European Union and the Inter-American Court of Human rights.⁷⁰ International Monetary Fund and the World Bank grants developing countries support or tariff preferences from the US or the EU, if the country can produce evidence that they are observing basic labour standards.⁷¹ Lastly, the increased use of ILS have also been seen in trade agreements.⁷² The transnational labour law and ILS are therefore, in some ways, more important than ever before.

2.3.2 The Core Conventions

There are almost two hundred conventions of the ILO that together constitute the ILS.

Among these, the ILO Governing Body, has identified eight core conventions.⁷³ The eight core conventions cover the essential principles of labour law. The core conventions include fundamental principles in the relationship between employer and employees. The core conventions were selected based on two criteria. Firstly the fact that they were regarded as a fundamental component of basic human rights, and secondly that they play a role in supporting the efficient function of labour markets.⁷⁴ In other words, they were selected in line with the aims and purpose of ILO set out in the Declaration of Philadelphia.⁷⁵ As of 1^st of January 2019, there were 1,376 ratifications of the core conventions, representing 92 per cent of the possible number of ratifications.⁷⁶ The eight core conventions of ILO are:

69 Teklè, Labour Rights and the Case Law on European Court of Justice: what role for international Standards p 237.

70 For further information on the increased use of ILS in Regional Courts see Teklè, Labour Rights and the Case Law on European Court of Justice: what role for international Standards & Teklé The Contribution of the ILO’s International Labour Standard System to the European Court of Human rights Jurisprudence in the Field of Non-Discrimination.

71 Hepple, p 11

72 ILO, Rules of the Game, p 28 f.

73 Ibid, p 23.

74 Addo, p 97.

75 See section 2.2.1.

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• Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87)

• Right to Organise and Collective Bargaining Convention, 1949 (No. 98)

• Forced Labour Convention, 1930 (No 29) and its protocol 2014

• Abolition of Forced Labour Convention, 1957 (No. 105)

• Minimum Age Convention, 1973, (No. 138)

• Worst Forms of Child Labour Convention, 1999 (No. 182)

• Equal Remuneration Convention, 1951 (No.100)

• Discrimination (Employment and Occupation) Convention, 1958 (No.111) 2.3.3 The ILO Declaration

In 1998, ILO adopted the ILO Declaration⁷⁷, making the core convention of ILO universal. The idea was to establish some fundamental principles applicable to all citizens around the world, regardless of the countries’ level of economic development. ⁷⁸ The preamble states that economic growth is not sufficient to ensure equity, social progress and the eradication of poverty. Therefore, the ILO needs to promote strong social policies, justice and democratic institutions. It stipulates that it is urgent to “reaffirm the immutable nature of the fundamental principles and rights embodied in the Constitution.”⁷⁹ Article 2 declares that “all Members, even if they have not ratified the Conventions, have an obligation, arising from the membership of the organisation, to promote, realise and respect (…) the fundamental rights”. The member states have an obligation to respect “in good faith and in accordance with the Constitution, the principles concerning the fundamental rights which are the subject to those Conventions”⁸⁰. In the ILO Declaration it is once again stated that whereas economic growth is essential, it is not sufficient to ensure social progress, eradication of poverty and therefore stressing the need to promote strong social policies along with the economic development.⁸¹ The bridging of the economic and social divide is once again captured.⁸² The ILO Declaration is a non-

77 ILO, Declaration on Fundamental Principles and Rights at Work.

78 Addo, p 105.

79 ILO, Declaration on Fundamental Principles and Rights at Work, Preamble, para 7.

80 Ibid, Article 2.

81 Ibid, Preamble, para 2.

82 Addo, p 108.

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binding instrument which refers to binding constitutional obligations as well as to binding conventional obligations.⁸³

2.4 The Legal Aspects of ILO and Legal Enforceability of ILS

The fundamental principles stated in the ILO Declaration are rights that every citizen possess, and all Member states have an obligation to respect them. The other legal instruments (the ILS of ILO) are the conventions and recommendations. The conventions need to be ratified by the Member States in order to become legally binding.⁸⁴ The recommendations are not open for ratification, but to give guidance to policy, practice and legislation.⁸⁵ Conventions and recommendations are drawn up by representatives of the ILO’s Constituents and are adopted at the Conference, by a two-thirds majority vote.⁸⁶ According to Article 19 (5) (d) and (6) of the ILO Constitution, all Member States are required to submit standards adopted by the Conference to the competent authority in the Member State (usually the Parliament) within twelve months for consideration. The Member State can then choose to ratify the convention or decide not to ratify it, either way; the Member State has an obligation to communicate the decision and any planned actions to the Director-General.⁸⁷ If the Member States decides to ratify a convention, it will generally enter into force one year after the ratification.⁸⁸ The ratification means that the Member State undertakes to apply the convention in national law and practice and report to ILO on its application regularly.⁸⁹ If a Member State violates a convention that they have ratified, they can be held responsible through the ILO complaint procedure.⁹⁰

The conventions aim to respect the fact that countries have different cultural and historical background as well as various legal systems and levels of economic

84 Article 19 (5) (d) (e) ILO Constitution.

85 ILO Handbook of procedures relating to international labour Conventions and Recommendations p 2.

86 Article 19 (1) and (2) ILO Constitution

87 Article 19 (5) (d) (e) ILO Constitution

88 Each Convention contains a provision as to how it comes into force. Often Convention comes into force 12 months after its ratification. ILO Handbook of procedures relating to international labour Conventions and Recommendations p 18.

89 Article 19 (5) (d) ILO Constitution.

90 See section 2.4.3.

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development. Some conventions have ‘flexibility clauses’ giving the States the possibility to lay down temporary lower standards than those customarily prescribed. The Member State is usually required to declare to the Director-General of the ILO that they will use flexibility option. It is not permitted to make reservations to ILO Conventions. ⁹¹

2.4.1 ILO Supervisory Mechanism – Regular System

To ensure that Member States implement ratified Conventions, ILO has developed a supervisory system. The ILO’s system of supervision is diversified and consist of two supervisory mechanisms: (1) regular system for supervision and (2) special procedures.⁹² In relation to Freedom of Association, ILO has decided that the principle needs further supervision and has therefore set up a Committee on Freedom of Association.⁹³

The regular system of supervision contains an obligation to annually report on the measures that the Member States have taken to implement the ratified conventions.⁹⁴ In respect of the eight core conventions and four governance conventions, the governments of the Member States must submit reports every three years. The report shall include the measures that the Member State has taken in law, de juro and practice, de facto to apply the ratified conventions. In respect of other conventions, the member states must submit reports every six years.⁹⁵ Governments are required to submit copies of the reports to the employers’ and workers’ organisations. These organisations may comment on the reports and send their comments to the ILO.⁹⁶

A pillar of the ILO regular supervisory system is the Committee of Experts on the Application of Conventions and Recommendations (The Committee of Experts). The Committee of Experts examines the governments’ reports on ratified conventions. The Committee of Experts consists of 20 jurists appointed by the Governing body, and the role of the Committee is to provide an impartial and technical evaluation of the application of ILS. The Committee of Experts publishes an annual report which includes comments on compliance with Member States Constitutional obligations, observations

92 Ibid, p 106.

93 Ibid, p 114.

94 Article 22, ILO Constitution.

95 ILO Handbook of procedures relating to international labour Conventions and Recommendations p 20.

96 Article, 23 (2) ILO Constitution.

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on the application on ILS and a General Survey on a subject selected by the ILO Governing Body. ⁹⁷

The Report of the Committee of Experts is examined by the Conference Committee on Applications of Standards (Conference Committee) as well. The Conference Committee consists of the tripartite constituents. The Committee selects a number of observations, draws up conclusions and recommendations for the government and publish a report annually.⁹⁸ According to ILO, the Committee of Experts kept track of a number of cases of progress with noted changes de juro and de facto. In 2019 over 3,000 cases of progress have been noted. The Committee of Experts also examines if a Member State has fulfilled its obligation to submit the adopted instrument to the legislative body for consideration. The reports have no legal consequence and the Committees have no legal possibility to adopt measures if a Member State does not fulfil their obligation. However, the Member State strives to fulfil its obligation in order to avoid critical comments from the Committees in the reports, that are available on the Internet to millions of users.⁹⁹

2.4.2 Representation Procedure

Apart from the regular supervisory system, the ILO has a representation procedure, governed by Article 24 and Article 25 of the ILO Constitution. According to these articles, industrial associations of workers or employers has the right to present a representation against a Member State which have “failed to secure in any respect the effective observance within its jurisdiction of any Convention to which it is a party”¹⁰⁰. A tripartite committee of the Governing Body may be set up to examine the representation and write a report on the case.¹⁰¹ The reports are available on the ILO website.¹⁰² If the

97 ILO, Rules of the Game, p 106 and ILO Handbook of procedures relating to international labour Conventions and Recommendations p 35.

98 Ibid, p 107.

99 Ibid, p 108.

100 Article 24 ILO Constitution.

102 Article 25 ILO Constitution and ILO, Handbook of procedures relating to international labour Conventions and Recommendations p 36.

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government does not take necessary measures, the Committee of Experts may be requested to follow up on the case.¹⁰³

2.4.3 Complaints

ILO has a complaint procedure, governed by Article 26 and Article 34 of the ILO Constitution, under which a complaint may be filed against a Member State, for not complying with a ratified Convention.¹⁰⁴ Member States can default upon their legal obligations under ratified conventions, either by not bringing domestic law into conformity with ratified conventions, failure de jure, or failing by not implementing or actually applying the convection domestically, failure de facto. Both cases are captured by the ILO Constitution in Article 26.¹⁰⁵Another Member State which has ratified the same convention, a delegate of the International Labour Conference or the Governing Body may file complaints.¹⁰⁶ Upon a complaint, the Governing Body may set up a Commission of Inquiry, which carries out a full investigation of the complaint.¹⁰⁷ A Commission of Inquiry is the highest level of investigative procedure and is generally set up only when a Member State is accused of committing serious violations. Up until 2019, 13 Commissions of Inquiries have been set up.¹⁰⁸ If a Member State refuses to fulfil the recommendations of the Commission of Inquiry, the Governing Body may recommend the Conference to take further actions in accordance with Article 33. The article was invoked for the first time in 2000 against Myanmar to end the use of forced labour. Article 33 is the last remedy and the final action that ILO take in order to demand compliance.

In the following section, I will study Article 33 more in-depth by examining the case of Myanmar.

104 ILO, Rules of the Game, p 112.

105 Langille, p 509.

106 Article 26 (1) (4) ILO Constitution.

107 Article 26 (2) ILO Constitution.

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2.5 Evaluation of the ILO Supervisory Mechanism 2.5.1 The Case of Myanmar

The supervisory system of ILO set out in Article 26–37 have one last remedy in Article 33.¹⁰⁹ Article 33 on failure to carry out recommendation of Commission of Inquiry or ICJ states the following:

“In the event of any Member failing to carry out within the time specified the recommendations, if any, contained in the report of the Commission of Inquiry, or in the decision of the International Court of Justice, as the case may be, the Governing Body may recommend to the Conference such actions as it may deem wise and expedient to secure compliance therewith.”

Article 33 is ambiguous in its wording, and from a literal reading, it is unclear what kind of ‘actions’ the constitution refers to. Whether it is legal actions, economic sanctions or political pressure is not stated clearly in the article. In the history of ILO, Article 33 has only been invoked once; in the case of Myanmar.¹¹⁰ The case of Myanmar on forced labour is the most famous and fully litigated case in the legal history of ILO.¹¹¹ The case draws attention to the enforceability mechanism of ILO, and what kind of ‘actions’ that may be deemed wise according to Article 33. I will, therefore, shed light on the case of Myanmar and use the single case as a springboard to evaluate the legal enforcement mechanism of ILO.

The facts of the case of Myanmar are straightforward. Myanmar ratified Convention No. 29 on forced labour in 1955. Since then, Myanmar had a well- documented history of public forced labour on a massive scale. The facts were not in dispute, and the violation of the convention in Myanmar was both in facto and in juro a violation. In the 1960s, the Committee of Experts began its interaction. In 1993, Article 24, the representation procedure was invoked, and the process took two years to unfold.¹¹² In 1996 Article 26, a complaint, was invoked.¹¹³ In 1997 the Governing body established a Commission of Inquiry and the Commission found that Myanmar both in law and

110 ILO, Resolution Concerning the Measure Recommended by the Governing Body Under Article 33 of the ILO Constitution on the Subject of Myanmar. ILO Conf 88^th Sess June 14, 2000.

111 Langille, p 518 f.

112 See section, 2.4.2.

113 See section, 2.4.3.

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practice violated Convention No. 29 and therefore provided a specific legal recommendation that they deemed to be necessary. In 1998 Myanmar had, in accordance with Article 29, the choice to either accept the recommendations or refer the findings to the International Court of Justice (ICJ). Myanmar did not refer the case to ICJ. ILO, therefore, arrived at a legally binding determination that Myanmar had breached its obligation under the convention.¹¹⁴

At this stage of the process, ILO had only one last remedy, to invoke Article 33.

Normally, the final stage of a legal process, the legal tasks are carried out by a tribunal.

However, in the case of Myanmar, and according to Article 33 of the ILO Constitution, the decision on the remedy for violation of the law was handed from the ‘tribunal’ (the Commission of Inquiry) to the Governing Body. The Governing Body is a political body, not a judicial body. The Governing Body recommended the other political body, the Conference, what appropriate actions to consider.¹¹⁵ In the case of Myanmar, the Conference recommended the Member States “to take appropriate measures to ensure that the said member [Myanmar] cannot take advantage of such relation to perpetuate or extend the system of force or compulsory labour”.¹¹⁶ In accordance with the recommendation, the ILO Member States imposed economic sanctions.¹¹⁷ For example, the Congress of the United States passed a Burmese Freedom and Democracy Act 2003, imposing a general ban on imports from Myanmar.¹¹⁸ It has been argued that the case of Myanmar did not invoke real legal action.¹¹⁹ Instead, the remedies were passed on to the Member States, which took economic and political action against the State. ILO was, however, able to create pressure and to initiate a dialogue with Myanmar. Some improvement to at least some extent has been noted because of the ILO presence and since 2008 the Constitution of Myanmar contains provisions banning forced labour.¹²⁰

In conclusion, there were no sanctions directly from ILO, apart from the recommendation to the Member States to consider their relationship with Myanmar. Since

114 Langille, p 509

115 Ibid, p 518 f.

116 ILO, Resolution on the widespread use of forced labour in Myanmar.

117 Addo, p 94.

118 Burmese Freedom and Democracy Act of 2003, 50 U.S.C. § 1701, Pub. L. 108-61, §§ 1 to 9 (2006).

120 Ibid, p 520.

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the case of Myanmar is the only case where article 33 has been invoked and a ‘hard’ case considering the amount of proof behind the accusation of the violation, it is difficult to see that ILO in the future will take more excessive actions towards a State violating a Convention. ILO should, therefore, in my opinion, mainly be seen as a political tool to initiate dialogue and a mechanism based on the goodwill of the State and their willingness to comply, rather than a tool to demand compliance and legally enforce labour standards.

Worth noting is that the case of Myanmar took 30 years of persistent observation by the Committee of Experts before the Commission of Inquiry was established. The case of Myanmar demonstrates that the supervisory procedures of ILO, in at least the case of Myanmar, is cumbersome and slow. It also demonstrates that there is no legal body¹²¹, like an international tribunal that deals with the violations of conventions. Instead, the responsibility at the end of the process solely lies on political bodies and the Member States.

However, it is also worth noting that ILO, in many ways, has been leading the way for other international organisations.¹²² ILO was the first global agency to have a compulsory dispute procedure in relation to a violation of the conventions. The previous version of the Constitution, the 1919 ILO Constitution, even granted the Member States the right to impose an economic sanction for the default of other Member States’ failure to follow the recommendation of the Commission of Enquire.¹²³ The revision of the Constitution in 1946 removed ‘measures of an economic character’ and replaced it with the existing Article 33. The ILO Constitution’s procedures for complaints and legal enforcement was daring and still today no other international organisation have yet achieved the level of ‘bindingness’ of its treaties or convention. But however, it is important to remember that even though the ILO supervisory system is impressive on paper, it has not been as efficient in practice yet.¹²⁴ Currently, labour standards are a

121 The lack of a legal body within the ILO is discussed for example in Hepple and O’Higgins.

122 See for example Charnovitz, on what the WTO learned from ILO.

123 Article 419 1919 ILO Constitution. “In the event of any Member failing to carry out within the time specified the recommendations 8[…] any other Member may take against that Member the measures of an economic character indicated […] as appropriate to the case.”

124 Charnovitz, p 419 f.

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question of ethics to a great extent. The enforcement mechanism is more a tool to draw the international community’s attention to practices in Member states, as a mean of shaming them into changing. ¹²⁵

2.5.2 Evaluation of Compliance with Conventions

Another way to evaluate ILS is to study the number of ratified conventions and the number of ‘observations’ made by the Committee of Experts. By studying the ratified conventions and the number of observations, one can get an idea of the actual effect that ILS have and the level of compliance among the Member States. It provides some insight on the level of legal enforcement in the Member States. In order to get a comprehensive overview, it is necessary to consider both the number of ratified convention and the number of observations¹²⁶ (refers to serious or long-standing violation of a ratified convention).¹²⁷ It is crucial to study both the ratification level and the observation, since

‘of empty ratifications’ may give the misleading impression of compliance.¹²⁸ A study on these two parameters between 1989–2003 shows that the non-ratifying states also have a record of a higher non-compliance and the majority of these states are developing countries. The same study also showed that there is relatively little difference between high-, medium-, and low-developed countries in the ability to ratify the core conventions.

Worth noting is that the ILO reporting system does only focus on whether the domestic legislation complies with the international standards, not whether there is compliance in practice.¹²⁹ In an ILO Report on monitoring compliance with ILS from 2019, ILO highlights 18 cases with significant achievements, noted by the Committee of Experts, where governments have made impressive efforts to ensure compliance.¹³⁰ And between 1964 and 2013 the Committee of Experts had over 2,300 cases of progress noted.¹³¹

125 Addo, p 94.

126 The Committee of Experts can draw the attention of governments to the need of take action on certain provisions of conventions through observations, which are published in the report and direct request which are not published, but rather communicated directly to the governments. In the case of studying compliance, it is therefore only possible to use the observations.

127 Hepple, p 40.

128 Ibid p 41. The Concept of “empty ratification” was introduced by pathbreaking study by Landy (1966) Landy, EA, The Effectiveness of International Supervision: Thirty Years of ILO Experience. London.

Stevens.

129 Hepple, p 45 ff.

130 ILO, Monitoring Compliance with International Labour Standards, p 93.

131 Addo, p 96.

The Legalisation of International Labour Standards in Trade Agreements: A Case Study of the Labour Provisions in the EU–Vietnam Free Trade Agreement

Faculty of Law Spring 2020

Master’s Thesis of Transnational Labour Law 30 ECTS