Member area

Indonesia and Peru among countries that must strengthen and enforce workers’ rights

28 June 2024

Countries applying to join the OECD should have a strong track record on enforcing labour rights say trade unions.

Eight countries participate in the accession process to the OECD – which describes itself as a community committed to individual liberty, democracy, the rule of law, human rights, open and transparent market economy and sustainable economic growth and employment – expanding the number of OECD countries to 46.

The countries that have applied to join the OECD are Argentina, Brazil, Bulgaria, Croatia, Indonesia, Peru, Romania and Thailand. TUAC has collected information from trade unions in these countries and conclude that several of them need to significantly strengthen and enforce labour rights.

TUAC is concerned that the OECD is not putting enough emphasis on labour rights in the accession process, despite the fact that OECD accession ‘roadmaps’’ include several labour clauses:

  • “thorough exercise of individual and collective labour rights .. with a particular emphasis on fundamental labour rights including ILO Fundamental Principles and Rights at Work. ,
  • “policies to promote social dialogue”; and quality industrial relations based on collective bargaining with high coverage rates.
  • “evidence of commitment and effective measures to promote Responsible Business Conduct”.

“Trade unions insist that countries joining the OECD respect and enforce good labour standards and that the OECD makes membership conditional on the implementation of workers’ rights.”

— Veronica Nilsson, General Secretary, TUAC

In a paper submitted to the OECD, TUAC writes “The OECD should ensure that candidate countries adhere to and effectively implement these labour standards, and that fundamental labour rights, strong social dialogue systems and the promotion of responsible business conduct are given due attention in the accession discussions and processes.”

These concerns were also clearly set out by trade unionists from accession countries Bulgaria, Indonesia and Peru as well as Chile and Costa Rica at the annual OECD TUAC Liaison Committee attended by senior OECD officials including Secretary General Mathias Cormann.

Problems identified by unions in the candidate countries include excessive legal thresholds to allow a trade union, corporate malpractice including union-busting and employers abusing precarious employment contracts to retaliate against workers, criminalization of trade union activities, banning of strike actions, restrictions on union membership, excluding pay from collective negotiations and failure to promote collective bargaining coverage by extending sector agreements.

“While recognizing the enormous challenges that Indonesia faces to adopt the OECD Framework, we hail Indonesia’s efforts to achieve OECD membership. To deliver greater benefits, Indonesia needs to conduct risk assessment on the impact on the Indonesian economy as a whole. Indonesia also needs to follow the strong social dialogue tradition and practices of the OECD throughout the policy adjustment process. We, the labour unions, are ready to contribute, especially on current issues including environment and human rights due diligence, the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. This can only happen when workers' rights to collective bargaining are not restricted by the regulation and labor market system.”

— Rekson Silaban, Member of the Advisory Board of trade union KSBSI, Indonesia

“Accession to the OECD must lead to social and environmental justice with real respect for workers’ rights by governments and employers in every aspiring OECD country.”

— Nolberto Diaz Sanchez national advisor, CUT Chile

TUAC and trade unions in the accession countries call on the OECD to make the following recommendations to the candidate countries:

Bulgaria: Adopt a new strategy to extend sector-level agreements and review the national minimum wage setting strategy to ensure a minimum wage higher than 50% of the average wage.

Romania: Reform labour law to address excessive labour market flexibility and precarious work as well as safeguarding trade union representatives from dismissal and retaliation. A close follow-up of the December 2022 labour law reform should be implemented, to monitor whether the reduced threshold for a trade union to bargain at company level results in collective bargaining agreements being concluded by independent trade unions (rather than employer-dominated associations of workers).

Croatia: Make labour law deviations conditional on social partners accepting them in a sector-level collective agreement and introduce better legal protection for union representatives.

Peru: Introduce multi-employer collective bargaining and labour clauses in public procurement, excluding businesses that violate fundamental labour rights. Promote the principle of bargaining in good faith.

Indonesia: Review the Omnibus Law, which allow a continuous renewal of short-term contracts (of three months up to one year) and grants significant powers to the police to declare legitimate trade union activities to be criminal acts, and ensure the participation and consultation of trade unions in the review of this law. More generally, bring the unions to the table and involve them in all policy processes impacting labour markets and workers.

Brazil: Introduce tripartite structures to encourage social dialogue and to promote the application of the MNE Guidelines and a culture of social responsibility in companies.

Argentina: Guarantee the full and effective exercise of the rights to freedom of association, collective bargaining and strike. Support the call for an institutionalised tripartite social dialogue to build consensus on economic policy employment and social protection.

For more information see TUAC accession reports on Bulgaria, Croatia, Peru and Romania.