FRAMEWORK AGREEMENT ON THE SOCIAL CLAUSE

Adopted on 28 June 1996

1. INTRODUCTION

• The Trade and Industry Chamber of Nedlac has been deliberating the issue of a link between labour standards and trade since June 1995. This followed the commitment by the social partners (government, labour and business) in the then National Economic Forum to explore the social clause in the context of trade liberalisation in South Africa and the General Agreement on Tariffs and Trade (Gatt) Uruguay Round trade negotiations.

• The social partners have tabled their respective views on the social clause in their submissions to the Trade and Industry Chamber. Further deliberations took place in a tripartite working group set up to negotiate the issue and develop a strategy for implementing it.

• The deliberations on the issue have focused mainly on the proposal by labour, supported by business, that a social clause linking market access to respect for labour standards be included in all South Africa's bilateral and multilateral trade agreements, including with countries in southern Africa and in the World Trade Organisation (WTO).

• The social partners met on 20 April 1996 to consider a framework for an agreement on the issue, and agreed on the elements set out underneath as part of such an agreement.

2. SOUTH AFRICA'S COMMITMENT TO PROMOTING HUMAN RIGHTS

• The social partners in Nedlac reaffirm their unequivocal commitment to human rights and workers' rights, both within South Africa and internationally. This is consistent with the history of the struggle for human rights in South Africa, and is the cornerstone of South Africa's new democracy.

• The social partners further reaffirm the principle that economic growth and development must be underpinned by a commitment to social justice, including respect for universally recognised labour standards.

• The social partners affirm that trade and investment liberalisation and the integration of the South African economy into the global economy must promote economic and social progress and not undermine social protection.

• To this end, they commit themselves to working together within the tripartite framework of Nedlac to ensure the ratification and observance in South Africa of the core ILO conventions embodying universally recognised labour standards.

• These conventions are:

1.  
   1. Number 29 on forced labour (1930).
   2. Number 87 on freedom of association and the protection of the right to organise (1948).
   3. Number 98 on the right to collective bargaining (1949).
   4. Number 100 on equal remuneration (1951).
   5. Number 105 on the abolition of forced labour (1957).
   6. Number 111 on discrimination (1958).
   7. Number 138 on minimum age (1973).

• The social partners note that South Africa has ratified conventions 87 and 98. On 30 August 1995, the Nedlac Executive Council recommended that South Africa ratify conventions 29, 105 and 111 during the 1996 parliamentary session.

3. THE SOCIAL CLAUSE IN THE INTERNATIONAL CONTEXT

• The social partners acknowledge that the liberalisation and globalisation of trade and investment are accompanied by pressures for the harmonisation of economic and social regulatory regimes, including labour standards. This is particularly true in the case of closer regional co-operation.

• The social partners in South Africa agree that the inclusion of a social clause in trade agreements should not be abused as an instrument of trade protectionism.

• The social partners recognise the relationship between trade and worker rights: increased liberalisation of trade should be accompanied by the harmonisation of labour standards, and the observance of core ILO conventions. This will allow a process of greater integration to become one of levelling up rights and conditions of workers, rather than levelling them down to the lowest prevailing standards.

• The social partners affirm that responses to the impact of liberalisation and globalisation on labour standards and jobs must be on a multilateral basis involving shared responsibility between developing and developed countries, and among governments, labour and business.

• They note that proposals by certain countries to introduce social clauses in the WTO have been strongly opposed by developing countries, and that a stalemate and polarisation exist on the issue in the WTO.

• They further note the debate in the ILO Governing Body's Working Party on the Social Dimensions of the Liberalisation of World Trade. They take account of the tripartite consensus in the ILO to deal with the issue on the basis of promoting the universal ratification and observance of the core ILO conventions.

4. SOUTH AFRICAN SOCIAL PARTNERS' APPROACH TO RATIFYING ILO CONVENTIONS

• The social partners agree that universal ratification and observance of the core ILO conventions is an essential basis for a universal framework for dealing with the social dimensions of the liberalisation of trade and investment.

• They believe that if all countries who are part of the multilateral trading system ratify and strictly observe the core ILO conventions, a framework of minimum social protection will have been put in place for global trade and capital flows.

• In this regard they note the ILO's campaign for universal ratification of the core conventions. As part of the campaign, the director-general of the ILO has written to all ILO member states, including South Africa, urging ratification of these conventions. The ILO campaign involves a review of the ILO conventions to make them consistent with current trends and to address the difficulties that stand in the way of their ratification and observance by ILO member states.

• The social partners in Nedlac agree that the South African delegation to the ILO be mandated to reflect the spirit of this agreement and to lead the initiative to enforce compliance of ILO conventions.

5. PROMOTING RESPECT FOR LABOUR STANDARDS REQUIRES A MULTIFACETED    STRATEGY BY SOUTH AFRICAThe social partners are aware that government's proposals for a social clause in bilateral trade agreements, with Malaysia, Thailand, Philippines, and Cuba, have been opposed by each of these countries, resulting in a stalemate in the conclusion of agreements with these and other countries.

• The social partners agree that political, substantive and technical difficulties involved in promoting universal respect for labour standards call for a creative and multifaceted strategy.

• The social partners agree that as an immediate step South Africa must, on a tripartite basis, actively support the ILO campaign for universal ratification and observance of the core conventions.

• This will involve, among others, South Africa encouraging its trading partners at the bilateral, regional and multilateral levels to ratify the core ILO conventions.

• At the bilateral level, government agrees to propose to its partners in bilateral trade negotiations a side-letter to trade agreements, or a memorandum of understanding jointly committing the contracting parties to ratifying and observing the core ILO conventions, and to collaborating at the multilateral level to achieving the same. Such a commitment will be made subject to a provision for regular review.

• Government also agrees to advance this bilateral approach at the occasion of its hosting of the Unctad IX conference taking advantage of the fact that several countries have indicated their wish to conclude bilateral trade agreements.

• The social partners agree that, as a next stage in the campaign, South Africa must pursue, on a tripartite basis, the commitment to ratification and observance of the core ILO conventions with countries in the southern African region.

• The social partners recognise that, in the light of the regional development imperatives and the role of South Africa in this regard, the southern African region has a special importance and priority in the campaign for promoting universal ratification and observance of the core ILO conventions.

• The social partners note that the Labour and Employment Commission of the South African Development Community (SADC) and the Social Charter of Fundamental Rights of Workers in Southern Africa are part of the instruments that can be used in the promotion of labour standards in the region.

• The social partners agree that South Africa will advance the cause of universal respect for labour standards in Unctad and promote the issue in its leadership role as the presidency. To this end, government invites labour and business to join the South African delegation to Unctad IX for part of the duration of the conference in order to canvass the views on, and challenges of, attaining universal respect for labour standards, and in particular the proposal for social clauses in trade agreements.

6. DEVELOPING A TRIPARTITE STRATEGY FOR EXTENDING THE CAMPAIGN AT ALL LEVELS

• The social partners agree that in addition to the processes outlined above, a tripartite strategy for extending the campaign for promoting respect for labour standards at the bilateral and multilateral levels will be developed. The Nedlac secretariat, in liaison with government will coordinate and facilitate the process.

7. MECHANISMS FOR ONGOING CHAMBER INPUT AND REPORT-BACKS

• It is agreed that this agreement be monitored by the Trade and Industry chamber through ongoing report-backs from government on all trade negotiations.