INTERNATIONAL CONFEDERATION OF FREE TRADE UNIONS

I F G
International Facilitating Group
on Financing for Development

Presentation by Gemma Adaba to the Hearings with Civil Society – 28 October, 2003.

INTRODUCTION

It is clear that the current architecture of global governance is failing to deliver on a number of important policy outcomes. It is failing to deliver on financial stability, on equity and a just distribution of the world’s wealth, on employment growth and decent jobs, on equitable access to essential social services and public goods, such as water, food, health services, and affordable drugs for life-threatening diseases such as HIV-AIDS. In this connection, the poverty of a large majority of the world’s workers remains of serious concern for us in the International Confederation of Free Trade Unions, the organization which I represent. The Confederation is made up of 231 affiliated organizations in 150 countries and territories, with a total membership of 158 million workers.

In the Monterrey Consensus, the international community agreed on the need for greater policy coherence between the Bretton Woods Institutions (BWIs), the WTO and the United Nations System in support of development. It was agreed that an effective system of reform of global governance institutions would be the means to that end. In the eighteen months since Monterrey, no serious advances have been made in this critical area of the Financing for Development (FfD) agenda. We believe that the Millennium Development Goals (MDGs) will not be attained if serious consideration is not given to this aspect of the FfD agenda. Convinced of this, the Global Governance Working Group of the International Facilitating Group (IFG) on Financing for Development held an Experts’ Group Meeting from 21 to 22 July, 2003, from which emerged a background policy paper: "A Political Agenda for the Reform of Global Governance," which is before this meeting. (http://www.un.org/esa/ffd/1003-IFG-on-govern.pdf )

I wish to highlight the main messages and recommendations of that paper:

REFORM OF THE INTERNATIONAL FINIANCIAL INSTITUTIONS (IFIs)

The influential global players, the IMF, the World Bank and the WTO should make provision for effective voice and participation of developing countries in decision-making and norm-setting.

Voting power within the BWIs should be reallocated so as to ensure that the institutions represent the interests of the whole membership, and that the blocks of borrower and creditor countries have an equal allocation of votes. The reallocation should ensure that the proportion of basic to total votes is equitable, and kept constant in new quota increases.

The constituencies represented by each Executive Director (ED) within the Bank and the Fund should be reshaped to ensure a more even distribution of countries among EDs. A ceiling of no more than ten countries per constituency should be established.

Board members should express their positions with formal votes. Agendas, transcripts and minutes of World Bank and IMF Board meetings should be made publicly available to parliamentarians, civil society groups, academics, etc. except when strictly required to avoid harm that could result from such disclosure.

The heads of the BWIs should be selected through a transparent process that involves all member countries, and the candidates should be assessed on merit, regardless of their nationality. Geographical and gender diversity in top positions should be widely encouraged.

REFORM OF THE WTO

The United Nations, including the Office of the High Commissioner for Human Rights and the International Labour Organization should develop a process for ensuring the recognition and legal primacy of human and labor rights agreements over WTO rulings, and for ensuring the coherence of trade and investment agreements with human and labor rights provisions.

Steps should be taken by national governments to bring greater coherence to the international system by integrating the WTO within the United Nations system so that it reports to the ECOSOC or a similar body charged with coordinating of economic, environmental and social policy.

STRENGTHENING THE UNITED NATIONS

If an effective system of global governance is to take shape, a strategic long-term vision is needed, for making the UN the locus of the high-level summits on key issues facing the global community, a function that the G-8 now attempts to fulfil with limited, ad hoc, non-democratic participation from selected third countries. It is necessary, however, to envisage practical solutions over the short and medium term, and to use these as building blocks towards the realization of the broader strategic vision of democratic global governance.

ECOSOC Reforms

With the aim of giving clear political legitimacy and direction to its work, the ECOSOC should appoint, from its membership, an Executive or Steering Committee comprising three or four countries from each geographical region. The Committee would assist the Council in all matters pertaining to policy coherence, and in particular, the follow-up to the Monterrey Conference, including the preparations for the annual spring ECOSOC high-level dialogue with the Bretton Woods Institutions and the WTO. An important function of the Committee would be to engage, from the United Nations side, the World Bank, the IMF and WTO at the intergovernmental or political level, in a dialogue on global political, economic and social issues.

Full support should be given to the proposal made by the Secretary General in his Report to the General Assembly (2003; para 185), for the setting up of study groups. These should take the form of thematic Expert Working Groups that will allow for adequate participation by a wide range of stakeholders, including governments, multilateral institutions, the UN system, civil society, the business sector, and independent academic experts. A task of the proposed Executive Committee should be to coordinate the composition of these expert groups, and develop a mechanism that will guarantee effective working arrangements between the groups and ECOSOC.

The expert groups will be charged with addressing concrete proposals coming out of the FfD Conference and its follow-up process, and exploring how the agreements and commitments reached in Monterrey could be effectively implemented. They should carry out research on core substantive policy issues of the FfD agenda, and report back to the ECOSOC, with specific recommendations. The policy papers developed by the expert groups should be disseminated to governments, international organizations and the public at large. The involvement of civil society organizations in this process will help to enhance the ongoing policy work of the UN.

Involvement of UN Funds and Specialized Agencies

The Annual high-level meetings of ECOSOC with the Bretton Woods Institutions and the WTO should then become the major forum for ensuring the consistency and coherence of the monetary, financial and trading systems in support of development. Coordination and coherence on global governance issues will be further enhanced by the establishment of substantive engagement with the other specialized agencies and funds of the UN, in the context of the Annual high-level meetings : UNCTAD, ILO, UNDP, UNIFEM and the Office of the High Commissioner for Human Rights, as well as through multi-stakeholder processes involving civil society and the business sector.

Towards an Economic and Social Security Council (ESSC)

Over the medium-term, the proposal to establish a permanent global Economic and Social Security Council within the structure of the UN should be vigorously pursued. This would involve changing the Charter, but this should be entirely feasible. One possible scenario that has been suggested is that the Council could have a limited number of seats – e.g. 25 – in a well balanced rotation system, whereby no seat would be permanent or carry veto power. It would provide a long-term strategic policy framework to promote development, secure consistency in the policy goals of the major international organizations, and promote consensus-building among governments on possible solutions to issues of global economic and social governance.

Reforms at the Level of the General Assembly

Over the longer term, the General Committee of the General Assembly which is hardly functional at the present time, could be re-activated to become an annual summit-level decision-making body on global economic and social governance. Activating the General Committee in this way does not involve a change in the UN Charter. The President of the General Assembly could simply invite member states of the General Committee at the appropriate level, ministerial or Heads of State, to attend a meeting at the beginning of the Assembly session. The General Committee is regionally representative, each of the permanent five members of the Security Council is a member, and it has only 28 members. It is proposed to make the President of the ECOSOC a member of the Committee, making it a G-29. It is therefore small enough to hold in-depth discussions, and to have effective decision-making capacity. Such a meeting of the GA General Committee would have the capacity to be effective and representative, without the need to change the UN Charter or to operate outside of it.

Establishing New Relationship Agreements

Current opportunities for interaction between the UN system, the BWIs and the WTO, including the participation of NGOs, trade unions and other stakeholders should be reinforced and extended, including the model of hearings and roundtables initiated in the FFD follow-up process by the ECOSOC and the GA.

The Relationship Agreements that currently link the World Bank and the IMF with the UN should be renegotiated , and a similar Relationship Agreement to link the WTO and the UN should be created. These agreements should: a) clarify the responsibilities of the IMF, World Bank and WTO to the UN, and b) enhance the ability of the UN to ensure that international financial and trade institutions fully respect the jurisdiction of other agencies, funds and bodies, including those with non-economic mandates.

Establishing a Hierarchy of International social policies, norms and standards

Within the UN framework, a forum for resolution of jurisdictional disputes should be established. Indeed, given the primacy of social development objectives for the global community as outlined in the UN Charter, a hierarchy of international social policies, norms, standards and laws should be established as an accountability framework within which global policy-making should operate. Policies in the economic, financial, trade and investment fields should be developed in accordance with the precautionary principle, and the consistency principle. That is, they must do no harm to the set of principles and standards embodied in the international human and labor rights framework and the UN Internationally agreed development goals. Further, they should not undermine these principles but rather seek explicitly to promote them.

The United Nations should be recognized as the custodian of the body of social instruments under its Charter, and as the organization within the global governance framework charged with ensuring compliance with them. The United Nations should use its convening authority to bring the key global governance actors together to review issues of coordination in the application of the body of social instruments, and in ensuring compatibility of economic, financial and trade policy with them. To this end, the UN should make use of its strengthened framework via ECOSOC over the short-term, and later the ESSC and the G-29, to build up an effective system of global economic and social governance, operating according to the principles of transparency, accountability and democratic participation, including the participation of representatives of civil society organizations.

General Assembly access for non-governmental organizations

The time has come to seriously consider proposals that have been put forward with the aim of providing consultative rights for non-governmental organizations within the GA. These should be modeled on the consultative rights and arrangements existing at the level of ECOSOC through ECOSOC Resolution 1996/31. The consultative rights accorded to NGOs in ECOSOC should thus be extended to the General Assembly, allowing NGOs to play a critical role as advocates for the strengthening of the social dimensions of global governance.