Paragraphs 13-20 of the Declaration
(1) Please describe action taken by MNEs to increase employment opportunities and standards and to cooperate with government and workers' organizations in combating unemployment.
(2) In order to keep their manpower plans in harmony with national social development policies, do MNEs undertake appropriate consultations before starting operations?
(3) What steps have been taken by multinational enterprises to give priority to the employment, occupational development, promotion and advancement of nationals employed by them?
(4) Have multinational enterprises contributed to the local development and use of appropriate technology and to technology capable of generating both direct and indirect employment? If so, please cite any examples.
(5) What has been the policy and practice of MNEs with regard to the use of local raw material, local manufacture of parts or local processing of raw materials?
Antigua and Barbuda, Argentina, Australia, Bahamas, Bangladesh, Barbados, Belgium, Brazil, Cambodia, Canada, Chad, Chile, Colombia, Costa Rica, Czech Republic, Dominica, Ecuador, Egypt, Estonia, Ethiopia, Finland, France, Gabon, Grenada, Hungary, India, Ireland, Italy, Japan, Jordan, Republic of Korea, Kuwait, Luxembourg, Malaysia, Mauritania, Mauritius, Mexico, Namibia, Netherlands, New Zealand, Nicaragua, Nigeria, Pakistan, Poland, Portugal, Romania, St. Vincent, Slovakia, Slovenia, Spain, Sri Lanka, Swaziland, Sweden, Switzerland, Syrian Arab Republic, Thailand, Trinidad and Tobago, Tunisia, Turkey, United Kingdom, United States, Venezuela, Zambia, Zimbabwe.
According to the Government, MNEs in Antigua and Barbuda have not taken any specific action to increase employment opportunities and standards and to cooperate with Government in combating unemployment. There is need for MNEs to hold consultations before starting their operations. They have not taken steps to make employment a priority. While they contribute to the local use of appropriate technology, this is not on a large enough scale to generate significant employment. MNEs have no policy to promote the use of local raw materials.
The Government of Argentina states that the information contained in its reply to the fifth survey is still applicable. It adds that the Employment Act No. 24.013 (copy provided) applies to both national and multinational enterprises. It sets out new modalities for recruitment as well as emergency procedures for preventing mass lay-offs. The principal objective is to create productive employment and to have vocational training constitute a fundamental component of employment policies.
The Government reports that MNEs in South Australia have participated extensively in programmes to combat unemployment and that they make full use of training programmes developed in conjunction with government agencies and workers' organizations. Before starting operations, all enterprises in the Australian Capital Territory consult the relevant government agencies on investment-related matters. In South Australia, MNEs generally hold consultations with the Department of Industry, Manufacturing, Small Business and Recreational Development, with the aim of acquiring a better understanding of the business environment and laws of this State. Examples of three MNEs (named) that held such discussions for the purpose of making investment decisions, are given. As regards the employment, occupational development and promotion of nationals, the policies and practices of MNEs must conform to the local and national laws relating to employment and non-discrimination in employment (example of South Australia cited). The transfer of technology by MNEs in Queensland has created direct and indirect employment. Since the proximity of Queensland to high-grade agricultural and mining resources is a key "pull factor" for investors, most MNEs obtain raw materials from local sources, thereby creating backward and forward linkages with domestic enterprises and generating jobs. Over the past five years, 2,500 direct jobs were created by multinationals receiving support under the Queensland Major Project Incentives Scheme. The Government of South Australia is of the view that MNEs have made a significant and positive contribution to local development, technology transfer and employment. According to the 1990 Australian Workplace Industrial Relations Survey, 21 per cent of the country's private sector workforce were employed by enterprises with head offices located abroad.
The Government of the Bahamas notes that several MNEshave significantly expanded their activities and this has led to a rise in the demand for labour, particularly in construction and related industries. Several thousand new permanent jobs have been created. Working conditions have also been improved. MNEs do hold consultations prior to starting their operations in order to keep their manpower plans in harmony with national social development policies. They have instituted training and retraining programmes from which actual and potential employees benefit. MNEs have contributed to the local development and use of appropriate technology (three enterprises cited as examples). Those in the hotel and tourism industry have contractual arrangements with local enterprises for the supply offurniture and agricultural products.
The Government of Bangladesh states that foreign investors are always welcome and MNEs already in the country are encouraged to expand their activities. MNEs cooperate with the Government and workers' organizations in combating unemployment. Some have undertaken expansion and development programmes and introduced new technology, in order to increase production and productivity, generate direct and indirect employment and promote workers' welfare. They hold appropriate consultations with various government agencies before starting operations, to keep their manpower plans in harmony with the Government's social development plans. MNEs use local raw materials as well as locally manufactured parts or locally processed raw material as far as possible. As a matter of national policy, the Government also encourages them in this respect.
According to the Government, MNEs are encouraged to establish operations in Barbados. These enterprises expand their activities in different sectors of the economy, thereby increasing employment opportunities. Some have also been involved in the "work experience programmes" which are particularly beneficial to youths. The appropriate government agencies hold discussions with MNEs in order to ensure that their manpower plans are in harmony with national social development policies. MNEs are granted permission to operate only after they have met all basic requirements as articulated by law, or custom and practice. While nationals comprise most of the workforce in MNEs, the management structure remains primarily dominated by expatriates. None the less, the granting of work permits ensures that employment opportunities for nationals are protected. MNEs have contributed both directly and indirectly to local development, by creating employment in different economic sectors and transferring skills -- e.g. in the fieldof computer technology. MNEs are encouraged to use local raw material and manufacture parts locally. However, they will do this only if universal standards are met. The availability of raw materials in commercially viable quantities is limited in the country. The Barbados Workers' Union reports that before starting their operations, MNEs consult with the Barbados Investment Development Corporation on matters concerning wages, hours of work, annual leave and social security. No steps have been taken to give priority to the employment, promotion and advancement of nationals. MNEs do not contribute to the local development and use of appropriate technology and the nature of their activities (e.g. information processing, electronics and telecommunications) is such that it does not offer much scope for the use of local raw material.
The Government of Belgium notes that the take-over of an enterprise by a multinational nearly always results in the loss of jobs, as such an operation implies the restructuring of the acquired enterprise. As a result, an argument often heard in labour disputes, relates to the feeling of insecurity -- i.e. the potential threat to employment -- that stems from the international character of MNEs. MNEs, like national companies, benefit from the advantages provided by Government or administered by the social partners, in order to reduce unemployment. The existing infrastructure for providing information and assistance services is well developed. The National Labour Council states that MNEs are subject to the national regulations and adequately integrated into the Belgian industrial relations system. None the less, certain problems have arisen in a limited number of cases, where MNEs did not comply with Belgian practices with respect to social dialogue and consultation. For instance, in certain cases of closures or restructuring, workers were not adequately informed before the decision was taken. In the interest of transparency, an Act was passed on 13 April 1995, with a provision (section 82) which obliges any foreign enterprise setting up a branch or subsidiary in Belgium to make publicly available, relevant information concerning the enterprise before starting operations.
According to the Government of Brazil, MNEs have made a great contribution by bringing in private investment capital, stimulating industrial development and exports, utilizing local raw material, components and services, and creating jobs. The Government, employers and workers have their own fora in which to discuss matters pertaining to production and work. The effects of MNEs on employment vary considerably depending on personnel policies, the choice of technologies, the use of raw materials and other local resources and the capacity of local producers to fit into the production chain. Given that MNEs tend to raise the capital intensity of their activities, it would seem reasonable to expect a decline in direct employment in the industries concerned. MNEs attach great importance to occupational development and many of them have in-house systems for the raining and development of staff. Wages and benefits are among the best in the local context even though wages are noticeably lower than those paid in the home country. Many MNEs also give special advantages (unspecified). The introduction of advanced technologies by MNEs almost always results in a rise of new activities and the revitalization of those that have lost their dynamism. Developments in the automobile industry provide good examples of the positive impact of MNEs on employment and the economy. However, the processes of economic globalization and market integration are bringing about changes in the practices of MNEs as regards local sourcing and production. They are either locating their operations in countries with much lower production costs or importing raw materials and components from such countries. The Single Central Organization of Workers points out that over the past five years employment in industry in Brazil fell by 30 per cent. The introduction of new technologies results in job losses and MNEs do not hold consultations with workers' organizations on matters relating to manpower plans. The prices paid for local raw materials are very low and in those cases where they are extracted, there is no regard for the protection of the environment. As regards parts, particularly for use in the motor vehicle industry, most are imported. This policy, which has led to the closure of several domestic enterprises and inevitably the loss of jobs, is also being adopted by MNEs in the electrical and electronics industries.
The Government of Cambodia indicates that in a context of national reconstruction following more than 20 years of war, MNEs contribute to resolving unemployment by recruiting young people to a considerable extent. MNEs cooperate with the Government and undertake consultations prior to starting their operations to keep them in line with national social policies. MNEs organize training courses, send their trainees to developed countries for further training, and contribute to the local development of technologies in the field of woodwork -- more specifically cabinet-making. They also use local bamboos to make plywood for export.
The Government reports that there have been no country-wide studies on the employment effects of MNEs in Canada. In 1992, MNEs were said to account for about 35.9 per cent of the workforce, as opposed to 34 per cent in 1986. In the Province of British Columbia, the involvement of MNEs in infrastructural development projects is expected to contribute to job creation, and the upgrading of skills and acquisition of expertise in new fields. MNEs are therefore urged to contribute to the development and use of local technologies and to invest in the occupational development of local workers. There is an emphasis on providing jobs and apprenticeships for youths, women, persons with disabilities and indigenous peoples, through the conclusion of government-private sector contracts for various infrastructural development and transport projects. The activities of Canadian MNEs operating abroad are consistent with the Tripartite Declaration. The Montreal-based, Telecommunications Executive Management Institute of Canada, which is jointly funded by government and the private sector, has trained more than 600 senior and middle managers working in the telecommunication field in several developing countries. The Government of the Province of Quebec notes that almost three-quarters of all private enterprises with more than 500 workers are MNEs. Of these 46 per cent have their headquarters in Canada and 28 per cent are subsidiaries of foreign-owned companies. During 1994, there were job losses of 2 per cent in subsidiaries of foreign MNEs in Quebec and 1 per cent in Canadian multinationals. These were offset by employment created by several new MNEs, with the result that in 1995, employment in the foreign-owned subsidiaries increased by 5.5 per cent and in those with headquarters in Canada, by 0.5 per cent. In contrast, employment in public enterprises fell by 3.5 per cent. Interestingly, the largest growth of jobs was in large enterprises with non-unionized workers. Government's role as regards job creation by MNEs is difficult to assess. Quebec's industrial development strategy puts the accent on promoting SMEs which are known to account for as much as 70 per cent of job growth, stimulate export-oriented industry and enhance the involvement of workers in the enterprise. The strategy also emphasizes the promotion of leading, technologically advanced industries that could compete on world markets and the favouring of industrial activities that respond to regional development priorities. These initiatives, together with the decentralization of active labour market policy formulation, have opened up possibilities for the social partners, including representatives of MNEs, to identify and discuss employment-related priorities for reducing joblessness in Quebec. In most cases, MNEs hold consultations with Government, usually at the initiative of the latter. These talks help to create a favourable climate for labour relations. Just over 10 per cent of the 150 long-term collective agreements signed in Quebec since 1994 are in MNEs. Their average duration is 67.5 months. Ninety per cent of financing for industrial projects comes from enterprises in Quebec which play a critical role in job creation, technology transfer, skills development and gaining access to foreign markets. In a bid to boost productivity, large MNEs have reduced staff, largely through voluntary departures and early retirement. A survey by the Ministry of Employment, which included MNEs, revealed that companies which had taken that course of action experienced improvements in labour relations and in the internal flow of strategic information. The new policies of MNEs contribute to job creation, higher productivity and better quality products. In most cases, there has been an improvement in labour-management relations based on mutual confidence. Opportunities for communication between workers in different occupational categories have improved. None the less, workers complain that they have little influence in matters pertaining to business strategy and investment decisions, which are normally decided at the headquarters of MNEs. As regards working conditions, these do not systematically get better by virtue of the introduction of new practices at the workplace. However, improvements are under way as regards recruitment procedures, remuneration systems and mobility with the enterprise. Sixty per cent of MNEs allow staff to enhance their skills through further training. In the case of other enterprises, the figure is 42.5 per cent. Those enterprises that have changed their work organization base their training on the "total quality principle". Forty-one per cent of MNEs give leave for training, as opposed to an average of 32.1 per cent of other firms. Nineteen per cent of MNEs finance training whereas 17.2 per cent of other enterprises do. MNEs have sought to mitigate the negative employment effects of technological change. When changes are introduced, 40 per cent continue to pay the same wage (at least in the short term). In the case of other firms, it is 21.1 per cent. Seventeen per cent of MNEs as opposed to 18.7 per cent of other enterprises cover the costs of training and retraining workers to carry out new duties. However, only 9 per cent of MNEs as opposed to 16 per cent of other companies guarantee continued employment under such circumstances. MNEs are at the head of subcontracting networks and the major users of such arrangements. Whereas one-quarter of MNEs resort to subcontracting only 6.8 per cent of other enterprises do. Subcontracting has contributed to a fall in unionization rates in Quebec. However, the Labour Code guarantees the recognition of unions in enterprises regardless of whether there has been a reduction of their activities. Thirteen per cent of MNEs as opposed to 2 per cent of other enterprises guarantee that there will be no dismissals as a result of subcontracting. Nine per cent of MNEs in contrast to 7 per cent of other companies, give double assurance that there will be no dismissals and that union representation will be maintained, in keeping with section 45 of the Labour Code and the provisions of certain collective agreements. The rationalization of MNEs' operations has had an effect on their policies concerning local sourcing. Some have resorted to international subcontracting, others to strategic alliances in research and development activities and others have reconsidered their subcontracting arrangements with local enterprises. Certain multinationals which have just-in-time production systems have set up subsidiaries close to their customer enterprises.
The Government of Chad reports that no action has been taken by MNEs to harmonize their manpower plans with national social development policies and no consultations are held before starting operations. In fact, MNEs, in violation of the national legislation, use foreign labour even when there are qualified locals. They do not contribute to the development and local use of appropriate technology and no effort has been made to use local raw material and components.
According to the Government of Chile, MNEs play an important role in promoting economic growth and employment. In 1995, inward FDI flows amounted to US$3,500 million. The climate for foreign investment is being enhanced by creating political, social and economic stability, as well as providing fiscal and economic incentives. Prior to the setting up of operations, consultations between investors and public sector authorities take place in the Foreign Investments Committee, to which MNEs must submit their project proposals for approval. When it comes to the use of different factors of production, the Government leaves these decisions to MNEs, which are best placed to make the choice in keeping with their own interests and capacities. There are no specific data on the jobs created by multinationals.
According to the Government, the measures adopted by MNEs in Colombia, to increase job opportunities, enhance the quality of employment and cooperate with Government and workers in the fight against joblessness, are in line with the Government's programme to promote social progress. MNEs have a legal obligation to improve working conditions continually. Before starting their operations, MNEs meet with government experts to assess their requirements for local personnel and their subcontracting arrangements with local companies. The law stipulates the proportion of nationals and foreigners that must be recruited. MNEs must respect the laws concerning the rights of individual workers as well as those of the workforce as a whole, and to this end, the State informs them of this obligation on a regular basis. MNEs must train local workers to use new technologies. Training plans must be presented and the activities must contribute to the development of infrastructures which would help to promote the economic and social progress of the community or region where they are located. This is particularly emphasized with respect to telecommunications, and energy-based and mining industries. MNEs create job opportunities, particularly for unskilled persons. Enterprises providing producer services to the petroleum industry have also created a number of direct and indirect jobs. Moreover, SMEs have developed, and they supply intermediate products and raw material to MNEs in various industries. The National Association of Manufacturers (ANDI) reports that MNEs in Colombia have helped to alleviate unemployment by creating new industries. It agrees with the Government's comment concerning prior consultations and adds that MNEs get in touch with employers' organizations such as ANDI to inform themselves about the legal framework governing FDI and other aspects of their activities in the country. As regards the hiring and promotion of nationals, the results have been positive. New technologies are introduced gradually and they have a demonstration effect on local enterprises. With the internationalization of the economy there is increasing emphasis on productivity, competitiveness and quality. To the extent that the quality and price of locally made products are competitive, MNEs will resort increasingly to local sources. The General Confederation of Democratic Workers (CGTD) states that there are 646 MNEs in Colombia, of which 119 are currently going into liquidation. Of the 646 MNEs, only 245 have permanent workers among their combined workforce of 23,685. The CGTD cites the examples of three MNEs to illustrate what it considers to be a "worrisome" development -- i.e. the decline in the number of permanent local workers. Of the permanent workers in the three enterprises mentioned (names given), 90 per cent are non-nationals. The CGTD is of the view that MNEs do not set up operations in a country in order to cooperate with the government in the fight against unemployment. Their decision to invest is based on the outcome of feasibility studies and considerations of the profitability of the venture. MNEs act in response to their own concerns and not with a view to fulfilling the obligations prescribed by ILO Conventions. Not all MNEs contribute to the development and use of local technologies. In the absence of adequate information, the CGTD surmises that MNEs tend to import most raw materials and parts from the parent company.
According to the Government, MNEs in Costa Rica collaborate in national initiatives to increase employment and create better quality jobs, in the pursuit of the expansion of their activities. Consultations on manpower plans are not institutionalized; they may be undertaken as part of enterprise-specific studies carried out by individual MNEs. As a result of the training of local workers, there has been a gradual replacement of expatriate staff in middle-level and senior professional positions. There are no known examples of MNEs having adapted their technologies to the local context. Local raw materials are used when required, and if economic considerations justify such a choice.
According to the Government of the Czech Republic there is no difference in the conduct of MNEs and local employers as regards employment. Acquisitions have been accompanied by staff cuts and organizational changes in a bid to boost productivity. New investment and growth in output have led to a gradual increase in employment and greenfield investments have generated new jobs. The role of MNEs in the labour market is largely positive. They provide some degree of economic stability and frequently locate their undertakings in areas with relatively low levels of employment. Since unemployment is generally low, the adoption of specific job-creation measures is not considered necessary at this time. Formal consultations with representatives of MNEs before they start operations have taken place only in exceptional cases. With respect to the promotion and advancement of nationals employed by MNEs, top management is usually from the home country, while middle management positions are generally open to Czech nationals, who are trained and given opportunities for promotion. Under present conditions, the introduction of new technologies has not contributed to job creation. The Czech and Moravian Chamber of Trade Unionsconfirms that there was a significant decline in employment following the acquisition of Czech companies by foreigners, largely because of the need to rationalize operations and restructure companies to make them efficient. Employment in certain MNEs (names given) which made greenfield investment remained relatively stable. Several MNEs have HRD programmes. Given the low level of unemployment, the Government does not have an active employment policy, neither does it consult with, or seek to stimulate the interest of MNEs to invest in less developed regions or in areas where jobs are to some degree lacking. However, consultations with regional labour offices have made it possible for persons made redundant to be placed in other jobs. Some linkages have been generated by the operations of MNEs, through local subcontracting; however, these are decreasing as local suppliers are replaced by foreign ones. Another noticeable phenomenon is the rising number of workers in small-scale service enterprises and other businesses that have sprung up in areas near to where MNEs are located. On the whole, the technologies used by MNEs are comparable to average European standards, and in a few cases, particularly in greenfield investment projects, they are more advanced. There are no policies regarding the use of local raw materials, or laws governing the protection of natural resources. This has led to a degree of environmental degradation resulting from the activities of some MNEs involved in operations requiring raw materials from local sources.
According to the Dominica Employers' Federation (DEF) there has been no noticeable change as regards action by MNEs to increase employment opportunities and standards, since the last survey. The DEF holds consultations with MNEs on a voluntary and case-by-case basis. MNEs may consult either with the DEF or the Association of Industry and Commerce. The experience with respect to the employment and promotion of nationals has been positive. Although a number of foreign enterprises have expatriate Chief Executive Officers, many also hire nationals as senior executives and chief executives. While occupational development initiatives are frequently aimed at top management, clerical staff and production workers, this is not the case with respect to middle and junior managers. More efforts are needed to develop middle management staff. Most MNEs use production technologies from the home country. As regards the use of local raw materials and parts, the reply to the fifth survey still applies.
The Government of Ecuador reports that the country has ratified Convention No. 122 and it implements a policy designed to promote full, productive and freely chosen employment. Experience has shown that enterprises collaborate satisfactorily for the attainment of these goals. There are effective mechanisms to facilitate tripartite consultations with a view to harmonizing the interests of the social partners with government policy in the fields of employment and social development. Tripartite sectoral committees meet on a yearly basis to fix and revise minimum wages and salaries by sector, taking into account the cost of living. There is a National Salaries Board (Consejo Nacional de Salarios) on which employers' organizations and central trade unions are among those represented. This consultative body has an advisory function with regard to the elaboration and application of wage policies. Enterprises can belong to chambers of manufacturers in their respective fields of activity, and foreign enterprises generally take an active part in these bodies. Enterprises which have more than five workers and also employ foreigners must ensure that at least 80 per cent of the workforce is Ecuadorian. National economic policy is aimed at liberalizing trade and developing highly competitive export industries.
According to information given by the Federation of Egyptian Industries, employment in certain enterprises in the pharmaceutical industry has increased considerably. Efforts to upgrade the competence of local, technical and administrative employees have been made in certain cases (examples named) through advanced training. In the metal trades sector (enterprises named), employment has been created as a result of internal reorganization, reinvestment in increased production activities and training. In a number of instances, enterprises undertake consultations to harmonize their manpower plans with national social development policies. Certain companies in the pharmaceutical industry and the metal trades give priority to the recruitment of nationals, who in some cases comprise the entire workforce, with the executive director being the only expatriate. Concrete measures are taken to promote nationals and there are enterprises in the metal trades (named) which supply the Government with information on their manpower needs, and carry out training programmes at different levels of the enterprise. Certain companies support the development and use of local technology by upgrading local products to meet international standards and introducing new scientific know-how in the country. There are pharmaceutical companies that use local inputs as long as they are available. Certain enterprises in the metal trades, on the basis of scientific research, have also been successfully using local raw material. There are enterprises which are attempting to reconcile the use of local raw material with requirements concerning product quality and environmental protection.
The Government of Estonia states that the role of MNEs in the national economy has been small and there have been no special initiatives for creating employment. According to the Estonian Association of Trade Unions, there is no doubt that the establishment of MNEs (especially in less developed areas) has contributed to job creation. To a large extent MNEs operate outside Estonia's employment policy. Multinationals use local raw materials, particularly wood and agricultural products.
In order to promote economic and social development and combat growing unemployment, the Government of Ethiopia is endeavouring to create an atmosphere conducive to foreign and national investment. Policies for creating a market economy and encouraging inward FDI have been formulated and are being implemented. Labour Proclamation No. 42/1993 has also been promulgated. Various employment- and income-generating projects are being designed and undertaken in the different administrative regions. A large sum of money has been allocated for rural infrastructural development and one of the administrative regions (identified) has set up a 23 million Birr (over US$3.6 million) revolving fund for job creation schemes. A national employment policy is under consideration and a special programme for the Promotion of Employment of Women and Youth is being implemented. An Employment Service Capacity Building project, aimed at strengthening the Employment Service Office and reducing unemployment, is in operation. The number of MNEs in the country is insignificant. There has been no study of the employment, occupational development, promotion and advancement of nationals in MNEs. However, it is believed that social development policies are taken into consideration by MNEs before starting operations and the general situation indicates that these enterprises contribute to local development, including through the creation of jobs for skilled and unskilled labour (example of one car assembly plant (identified). There is no policy as regards the local sourcing, manufacture of parts and processing of raw material.