How Global Agreements Can Boost Worker Organizing

No matter where you are in the world, the balance of power between labour and capital is always tilted towards the latter. Companies and big corporations in particular have financial resources, the support of political parties and states, and, over the last five decades or so, an international economic architecture designed to favour them over their employees. Indeed, globalization has led to the rollback of many of the hard-won achievements trade unions fought so hard for in the first half of the twentieth century.

Against this backdrop, trade unions, along with their allies in the international Left, need to ask how we can shift the balance of power, assess the efficacy of our current tools, and develop new ones with the potential to overcome our current impasse. Moreover, we need to address how we can regulate multinational corporations in a context where even ostensibly progressive governments often fail to do so.

One tool that has emerged in recent decades are so-called “global framework agreements” (GFAs) or global agreements, which are established between multinational corporations and global union federations (GUFs) to ensure fundamental rights for workers regardless of where in the world they are employed. Although legally non-binding, they have proven to be a crucial instrument in improving the conditions of workers particularly in South and North America, as well as in Asia, Africa, and Eastern Europe, and are an important tool in the labour movement’s arsenal.

International Capital Runs the World

The rise of multinational corporations has gone hand-in-hand with waning social and economic power on the part of trade unions since at least the late 1970s. Across the globe, unions have often managed to maintain their strength in declining pockets of manufacturing and the public sector at best. Despite our economies turning into so-called “service-based economies”, trade union organization and collective bargaining coverage has remained rather weak in the private services sector.

Some sections of the Left have responded to the challenge of globalization by rehashing the old slogan of “nationalization”. While nationalizations are a necessary tool in the fight for a better world, most nationalizations in recent decades have simply socialized losses, while multinational corporations continue to dominate every economic activity. At the same time, the global Left has placed little emphasis on strengthening national due diligence laws, such as Germany’s recent Supply Chain Due Diligence Act, making it easy for pro-business and conservative forces to water down any regulation that would hold companies accountable for their behaviour in the Global South.

In that sense, the argument put forward in classic books such as Naomi Klein’s No Logo that multinational companies epitomize contemporary capitalism like no other institution remains true. Nevertheless, despite the pervasiveness of multinational corporations in contemporary capitalism, the Left has failed to take microeconomics or the company as a unit of analysis seriously in its strategic considerations.

Yet, without understanding the separation of ownership and management, how is one to effectively rally against “the bosses”? By treating financialization in purely historicist terms, rather than as a vector of capital’s strategy to overcome crisis, we are left with ideology and dogma rather than practical tools to widen the cracks in capitalism’s edifice.

Multinational corporations play a huge role our daily reality in the Global North, whether it is our friends’ and families’ use of Facebook, Apple, and Google, us wearing Nike or Adidas, going shopping at H&M or Zara, or local government’s use of multinational cleaning and private security companies. In turn, these same corporations use their market power to set wages, terms, and conditions for millions of workers across the globe. It is in this context that the Left and the labour movement need to develop strategic alternatives as well as targeted responses to meet the challenges that multinational companies pose to democracy, economic justice, and the environment.

Fighting for a Different Framework

So, where do global agreements figure into all this? GFAs are agreements between multinational corporations and GUFs such as UNI Global Union, IndustriALL, the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Associations (IUF), the International Transport Workers’ Federation (ITF), or the Public Services International (PSI). The first GFA was signed in 1988 between the IUF and the French multinational Danone.

Today, there are more than 300 global agreements covering nearly all economic sectors, 80 percent of which are with Europe-based companies. Through these agreements, companies commit themselves to core International Labour Organization (ILO) standards throughout their operations, non-interference in union organizing campaigns, union access, swift recognition, remuneration above nationally agreed minimum wages, and superior health and safety standards.

Why would companies sign on to agreements that seemingly increase the costs of their operations? In many instances, bottom-up trade union campaigns twinned with top-down pressure on companies’ investors have paved the way to get a seat at the table and negotiate GFAs. Institutional investors’ increased interest in tightening up a company’s environmental, social, and corporate governance (ESG) reports has played into the hands of unions, enabling them to use the separation between company owners and management to their advantage. The former point is important to stress, as it is also unions’ ability to organize and mobilize that will ensure successful implementation and monitoring of a global agreement.

One dimension that seldom receives attention is to what extent GFAs have helped workers to establish new unions or launch organizing drives for existing unions.

While trade union action ought to be centred in the discussion on global agreements, it would be naïve to ignore the fact that some sections of capital have an interest in developing better relations with trade unions. From a business standpoint, commitments to global labour standards can provide multinational companies with a competitive advantage across other companies’ supply chains. It also can mitigate human rights and labour risks in their operations, thus preventing the possibility of public scandals or reputational damage.

By establishing global unions as an interlocutor, global agreements can also help to solve coordination problems with trade unions across the company’s value chain, something that the late Marxist sociologist Erik Olin Wright previously underlined.

More Than Just Corporate Social Responsibility?

Are these reasons enough to label global agreements a Trojan horse for Corporate Social Responsibility (CSR) or ESG reporting, as some critics argue? Are they simply window-dressing on corporate websites?

Labour scholars Rémi Bourguignon, Pierre Garaudel, and Simon Porcher claim that global agreements represent alliances between CSR managers of transnational corporations and central actors within trade unions. They argue that CSR managers use global agreements to mobilize unions to monitor the implementation of CSR policies and “supervise subsidiaries”. This is necessary because, as businesses’ complexity increases and their value chains span continents, large multinational corporations need to grant a certain autonomy to country managers with the aim of maximizing profits. At the same time, however, this “decentralization” renders it more difficult to implement and maintain ethics policies, which are written at corporate headquarters and monitored through sample audits and whistle-blower policies.

Similarly, other critics make the case that global agreements are nothing more than cosmetic changes to the current reconfiguration of capitalism, known in academic circles as “stakeholder capitalism”. A closer look, however, reveals that stakeholder capitalism has neither changed companies’ profit-maximizing motive, let alone defused conflicts between different stakeholders up and down a company’s value chain. Moreover, this claim is premised on the belief that companies themselves are in the best position to address the negative externalities of their business models through private regulation.

Accepting the imbalance of power between multinational corporations and trade unions means accepting that unions will be subordinate in global labour relations. However, that does not have to mean that global agreements are simply “social washing”, as critics call it, if unions focus on using their institutional access and power to expand worker power at the workplace. In that regard, it remains crucial that unions ensure that global agreements are legally binding. This is the best way to ensure that they are not relegated to a CSR or ESG exercise within multinational companies.

Unfortunately, however, many GFAs remain voluntary in nature, and do not include provisions for workers and their unions to enter arbitration if issues cannot be resolved at the local level. According to Felix Hadwiger, only 10 percent of all global agreements contain a “reference to mediation or arbitration procedures”. Thus, as Michael Fichter and Jamie K. McCallum argue, “private regulation of labour relations on a global scale” remains limited in scope.

For that reason, my own global trade union federation, UNI Global Union, has continued to develop global agreements to include binding dispute resolution, mediation, and arbitration mechanisms in line with International Labour Arbitration and Conciliation Rules. These rules were developed in the wake of the Rana Plaza disaster and subsequent Bangladesh Accord, and provide both parties with speedy and efficient dispute resolution arising under international labour agreements.

Social Partnership or Union Power?

Much of the criticism of GFAs is premised on unions signing non-binding global agreements and the belief that these agreements are not used to expand worker power within multinational companies. The lack of implementation is attributed to the fact that rather than using their institutional access and power to expand organizational power, agreements remain “within the limits of a labour-management relationship” based on “social partnership” and amount to “institutionalized setting of dialogue”. The language of these global agreements often enshrines social partnership, something the Left has rightly criticized for its tendency to favour good relations with the company over developing global worker power and international solidarity.

This institutionalized dialogue is rendered difficult not only by the voluntary non-binding nature of GFAs, but also the internal organizational dynamics within the companies themselves. As global agreements are often within the remit of Human Resources (HR) departments, discussions and decisions do not move further up a company’s hierarchy or downward to country and local management. As Reynald Borque, Gregor Murray, Antonin Hennebert, and Christian Lévesque explain, HR often functions as a “utility department … particularly prone to the silo effects”. This results in union officials trying to convince HR managers to convince their own bosses, creating choke points for effective implementation and exercise of union power outside of the institutionalized dialogue setting.

Global agreements are most important in those countries where weak labour legislation exists. Here, they can function as a bridge or crowbar to expand workers’ and union rights across a company’s global operations.

A further contradiction for unions arises from the fact that unions need to ensure that companies invest financial and human resources into implementation of the agreement. As a result, the progress that is made is not always visible, let alone attributable to union action. Instead, it leads to companies mainstreaming certain elements and clauses of the agreement, which blocks unions from being able to sell their progress as a victory that could empower and give confidence to workers.

Instead, the company takes the credit for becoming a better employer. This is also the case in companies where global unions have campaigned for global agreements but failed. Here, companies often engage in internal change due to exogenous pressure, yet without creating an institutionalized global social dialogue.

Nevertheless, the point that GFAs can be used to facilitate and expand union power within a company and its value chain is not lost on labour researchers. According to Jocelyn Barreau, Christelle Havard, and Angélique Ngaha Bah, the goal of global agreements is to gain bargaining and organizing rights as well as improve working conditions. From this perspective, global agreements can give unions new tools to expand the scope of collective agreements as well as force a debate on the bread-and-butter issues unions encounter at a local and national level.

Bearing this in mind, criticisms need to be developed on a case-by-case basis. By no means do they justify abandoning global agreements as a tool per se. Instead, these criticisms ought to be used to sharpen the available tools at hand with a view to developing global labour solidarity through a determined political and trade union praxis.

GFAs as a Tool to Strengthen Worker Organizing

Industrial relations and labour scholars have often focused on implementation, conflict monitoring, and resolution procedures as well as information dissemination, and communication, training programmes, and operational measures within global agreements. However, one dimension that seldom receives attention is to what extent GFAs have helped workers to establish new unions or launch organizing drives for existing unions.

Developing stronger global agreements through worker organizing could resolve the Left’s issue with “institutional power”, at least to some extent. In many cases, it would be possible for German, Swedish, or Spanish unions to use their institutional power to advance workers’ organizing rights and thus build what Erik Olin Wright and proponents of the power resource approach call “associational power”. In the context of lower levels of trade union density across Northern and Western Europe and less stringent labour market regulation, even unions in the heartlands could use some aspects enshrined in GFAs as benchmarks in local collective bargaining to strengthen their position.

Too often, the trade union movement across Northern and Western Europe relies on its institutional power even as membership numbers decline. Thus, trade unionists committed to organizing should use existing GFAs while campaigning and organizing for more with the aim of strengthening unions at home and rebuilding workplace and sectoral organization.

If the global Left and trade unions restrict themselves to organizing workplace-by-workplace, it will take hundreds of years to organize all companies and industries.

This fact is also highlighted by labour scholars who argue that the effectiveness of a global agreement depends on the extent to which the trade union alliance is able to mobilize organizational and institutional resources. That said, strong trade union alliances are a prerequisite to building bonds of solidarity between trade unionists from different countries, but they are no guarantee that unions will adopt perspective to expand power within a company.

Nevertheless, it needs to be stated that global agreements are most important in those countries where weak labour legislation exists. Here, they can function as a bridge or crowbar to expand workers’ and union rights across a company’s global operations, and at the same time provide a mechanism to regulate companies from below, or, as Felix Hadwiger argues, to “improve corporate accountability” through legal enforcement.

Regulating companies from below and improving corporate accountability can only work with strong unions ready to mobilize their members and wider communities up and down the supply chains. This means refocusing on organizing the unorganized in the same way the Left and the labour movement has done at different points in history. In order to do so, global agreements need strong provisions for workers to access trade unions and be able to organize. After all, one of the global Left’s challenges is that local and national legislation often does not support workers who want to start a union, whether in Alabama, Manchester, or Zimbabwe.

In the best of cases, workplace leaders and organizers drop out after facing two to three years of continuous opposition from local management. After signing a global agreement, they can continue to organize without fear of repression and thus build union structures where workers previously had no rights whatsoever. In other cases, workers who were not engaged in a campaign for a GFA can start to build a union off the back of an agreement. These kinds of cases underline that institutional power can be conducive to building sustainable forms of worker power.

Building with Both Hands

Trade unions’ and the broader Left’s preferred strategy of electing left-wing, progressive, or social-democratic governments in hopes that they will deliver much-needed labour reforms has rarely yielded results in recent decades. Unfortunately, these governments’ track record in delivering for and on behalf of unions remains rather weak. This sobering reality also has implications for socialist policy-making: namely, how do we use legislation and the law to create better conditions for workers to organize themselves?

It is in this context that global agreements can be elevated as a tool, insofar as they contain specific clauses on developing organizing rights. So far, there are not many other tools at our disposal to develop and sustain organizing drives and thus develop workers’ confidence across many parts of the world. This also means organizing at multinational corporations in strategic sectors with the view to winning a global agreement, so that other workers across Europe and the globe can build power as well.

With this in mind, a global agreement is not a telos, but rather a tool that has to be sharpened time again. It needs to be tested against reality and seen as a work-in-progress. If it fails to fulfil its purpose in regulating companies from below or organizing new unions, it needs to be thoroughly reassessed.

If the global Left and trade unions restrict themselves to organizing workplace-by-workplace, it will take hundreds of years to organize all companies and industries. While global agreements can be one means to rebuild worker and union power in a company, they are rather limited when it comes to transforming the wider economy or establishing new sectoral approaches. That said, the power of multinational corporations is so great today that establishing new rules within a multinational company also affects the wider ecosystem the company operates in, and can positively impact thousands of workers.

Thus, global agreements with multinational companies and sectoral bargaining at local and national level need to be viewed as complementary. Both are tools to equalize wages and conditions, thereby removing workers from competition with each other. It is through the combination of both that we can put the brakes on the race to the bottom and the exploitation of workers in the Global North and South.

The author thanks Adrian Durtschi, Eddy Stam, and Loren Balhorn for their input and comments.