New Aspects of European Integration: Corporate Social Responsibility, Social Dialogue and the Workin

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New Aspects of European Integration Corporate
Social Responsibility, Social Dialogue and the
Working Environment in the Baltic States An
Interdisciplinary Approach

• Seminar 1 European Social Model

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Structure of Seminar

• A few words about the Marie Curie chair
• The European Social Model - a common core of
  values?
• Achievements of ESM to date?
• Maastricht, 1992, Amsterdam Treaty 1997,Lisbon
  Summit 2000
• Revised European Social Charter for Fundamental
  Social Rights 2000
• Strengths and weakness of the model
• The ESM under attack the neo-liberal offensive
• Community response the Lisbon Agenda
• ESM a realistic agenda for the enlarged Europe?

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The Marie Curie chair

• Marie Curie chair holder
• Charles Woolfson

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Brief profile

• Reader, Faculty of Law, University of Glasgow
• Member of Glasgow Baltic Research Unit
• Former Marie Curie Experienced Researcher
  Fellowship holder, Lithuania
• Specialisms in labour relations, corporate
  responsibility and regulatory issues of working
  environment

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What is the Marie Curie chair?

• A new action under 6th Framework Programme -the
  Marie Curie mobility actions
• Forty awards in total to be made 2002-2006
• Covering social and natural sciences at a
  European level (including accession states)
• Total budget 20 M Euros. Total of 30-40 new
  chairs with 80-120 PhD theses supervised

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Academic character of Marie Curie chair

• The chair holder shall be a world-class
  researcher of any nationality, with outstanding
  past achievements in international collaborative
  research
• The subject(s) to be taught should be of a
  leading edge and/or multi-disciplinary nature.
• and correspond to directions in research, which
  are relevant for Europe.

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Duties of Marie Curie chair

• To give lectures and teach research courses to
  students at graduate and/or postgraduate levels
• To carry out research and supervise research and
  doctoral thesis work
• to demonstrate the attractiveness of research
  careers - via providing mobility and personal
  career advice to younger researchers.

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Specific proposed programme of EuroFaculty Marie
Curie chair

• A key objective of the chair teaching and
  research programme is promoting
  multidisciplinarity between -
• industrial sociology/industrial relations
• legal and regulatory studies
• administrative and political science (European
  Integration, enlargement)
• working environment studies (occupational health
  and safety, work/life well-being)

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Accessing Student Resources and the Evaluation
Questionnaire

• E mail woolfson_at_eurofaculty.lv
• Web http//www.eurofaculty.lv/MarieCurie
• Link Student Resources
• Password Student
• Login Info

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1. What is the European Social Model?

• The term European Social Model (ESM) has been
  used in policy circles in Europe but lacks a
  precise definition.
• Despite this, the idea of ESM informs much of
  policy making in social matters at European
  level.
• Thus, the European Summit (Lisbon 2000) member
  states adopted a formal position
• the European Social Model with its developed
  systems of social protection, must underpin the
  transformation of the knowledge economy

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Basic Elements of European Social Model (ESM)

• Basic elements of social model a social
  dimension guaranteeing a basic minimum of social
  protection available to every worker in the
  European Union
• Founded on Corporatist social democratic values
  a balance of market and social priorities
  so-called social market economy
• Given strength by Directives which enhance
  minimum standards of social protection in the
  European Union Framework Directive on Safety and
  Health at Work, Transfer of Undertakings, Working
  time, and Posted Workers Directive

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2. Basic definition

• The ESM is a set of European Community and
  member-state legal regulations, but also a range
  of practices aimed at promoting a voluntaristic
  and comprehensive social policy in the European
  Union (Daniel Vaughan-Whitehead, 2003).
• Elements of formal legal instruments and
  compliance mechanisms
• Elements of voluntary practice and
  self-regulations

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Examining the ESM in the specific area of working
environment

• social dialogue, labour relations, employee
  rights to participation in CEE
• health and safety of employees in the workplace
• corporate social responsibility, that is, the
  behaviour of companies in the area of social
  questions of employee welfare and wider societal
  impacts of business

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3. A common core of values?

• At the Nice summit (December 2000) of EC heads
  of state the common core of values of the ESM
  was identified-
• the European Social model, (is) characterised
  in particular by systems that offer a high level
  of social protection, by the importance of social
  dialogue and by services of general interest
  covering activities vital for social cohesion, is
  today based, beyond the diversity of the member
  states social systems, on a common core of
  values

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• What are these common European values?
• Make a list..

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• Democracy (not totalitarianism)
• Individual rights (as against purely collective
  rights)
• Free collective bargaining (free trade unions
  not dominated by the State or Party)
• Equality of opportunity (Gender and race
  discrimination avoided)
• Social welfare and solidarity (social support
  for the needy and poor, and inclusion)
• In summary, a social dimension is necessary for
  economic and social cohesion and therefore also
  for political stability and economic performance.

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4. Other elements of the ESM

• Key assumptions
• ESM is embedded in a market economy
• The notion of quality the assumption that
  competitive advantage and performance can be
  boosted by quality in working conditions and
  social policy in general.
• A role left to public authorities to manage and
  moderate the impacts of the free market on the
  weaker and more vulnerable sections of society
• Specific concern to reduce social inequalities

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Examples-

• At Community level, use of Structural Funds to
  reduce inequalities between regions
• Social protection programmes European
  Employment Strategy to promote labour market
  developments eg training, human resource
  development
• Promotion of workers and citizens rights
  through various forms of social charters
  (non-binding declarations) spreading theses
  values throughout the Community

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5. Key Treaty Maastricht Treaty 1992 (Treaty of
the European Union)

• Maastricht Treaty 1992 (Treaty of the European
  Union) (Signed by 11 member states with UK
  opt-out)
• Social Protocol a new legislative framework -
  annexed to Maastricht Treaty progressed social
  policy in three areas
• i. extension of the competences of the Community
  on social issues
• ii. introduction of qualified majority voting
  (QMV) in new areas (such as health and safety at
  work, working conditions, information and
  consultation, equal opportunities
• iii. recognition and extension of the social
  partners role and rights.

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Maastricht Treaty

• Overall effect allowed European institutions to
  take the initiative on social issues that were
  formerly the prerogative of individual states
  resulting in significant advances in safety and
  health at work legislation through a Framework
  Directive and daughter directives and in social
  dialogue discussions at Eruopean level.

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6. Amsterdam Treaty

• Amsterdam Treaty 1997 (coming into force in 1999)
  calls for a more Social Europe addressing
  concerns about unemployment and social exclusion.
  Incorporation of the Maastricht Social Protocol
  into the Amsterdam Treaty(Art 138)
• The Social Protocol is a political instrument
  that contains moral obligations to guarantee the
  respect of certain social rights -related to
  labour market, vocational training, equal
  opportunities and the working environment. On
  social protection and worker participation
  decisions still unanimous.

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7. The Lisbon Agenda

• The meeting of European heads of state at Lisbon
  in 2000 produced a new agenda.
• An attempt to reconcile the contradictory
  objectives of promoting greater economic
  competitiveness in Europe, with preservation of
  previous forms of social protection.
• To create the most competitive dynamic
  knowledge-based economy in the world

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• Three elements stressed at Lisbon Council-
• the interaction between economic, social and
  employment policies
• the role of new instruments of European
  policy-making (the Open Method of co-ordination)
• an European Social Agenda assessed annually by
  the Commission

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European labour law is relevant in protection of
workers rights and equal opportunities

• Workers rights extended mainly in the area of
  the social dimension of industrial change and
  restructuring in cases of closure, mergers,
  buyouts or changes in enterprise external
  organisation.
• Directives on collective redundancy, transfers
  of undertakings, and employer insolvency. Also
  Directives on employers obligation to inform
  workers on the conditions applicable to the work
  contract, and on fixed-term (temporary) work and
  on Posting of Workers abroad for temporary
  periods of employment. A new directive of
  Provision of Services currently under process of
  consultation
• Directives on the European Company Statute,
  European Works councils and information and
  consultation in enterprises of more than 50
  employees. The largest number of Directives and
  instruments are in occupational health and safety.

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Health and Safety in European law

• Article 118A of the Treaty of Rome (incorporated
  as Article 137 of the Amsterdam -Treaty- the
  Commission with the Member States will develop
  clearly defined policy on prevention of
  occupational accidents and diseases.
• An issue of quality of life, of efficiency and
  productivity and also the prevention of
  distortion of competition. Costs of accidents and
  ill-health arsing from work estimated between 2.8
  and 3.6 of member states GDP.
• Key instrument Framework Directive 89/391/EEC
  which contains basic provisions regarding the
  organisation of health and safety at work and the
  responsibilities of employers and workers.
  Subsequent legislation protects workers form
  risks related to exposure to chemical, physical
  and biological agents at work with specific
  directives on harmful substances such as
  asbestos.

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Health and Safety at Work Directives and measures

• A key Directive is on the organisation of working
  time (93/104/EC), plus further working conditions
  measures regarding protection of pregnant women,
  young people at work.

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8. Social Charters

• Community and the Member States defined
  fundamental social rights on the basis of two
  texts-
• the European Social Charter signed at Turin on 18
  October 1961 and
• the 1989 Community Charter of the Fundamental
  Social Rights of Workers.
• These fundamental social rights mainly concern
  employment, living and working conditions, social
  protection, social dialogue and the combating of
  exclusion.

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Revised European Social Charter for Fundamental
Social Rights 2000

• Article 31
• Fair and just working conditions
• 1. Every worker has the right to working
  conditions which respect his or her health,
  safety and dignity.
• 2. Every worker has the right to limitation of
  maximum working hours, to daily and weekly rest
  periods and to an annual period of paid leave.

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10. Strengths of the ESM

• The ESM while attempting to endorse common
  societal values also leaves open key aspects for
  local adaptation by member states (the principle
  of subsidiarity)
• recognising the diversity of local and national
  conditions (multi-level governance and decision
  making processes)

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• ve virtues of adaptability and flexibility in
  policy making within a common framework.
• ve attempt through a common set of standards and
  values to prevent social dumping or free
  riding - to attract foreign investment by
  offering lower levels of protection to citizens
  and workers eg on safety and health at work.

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11. Weakness of the ESM

• -ve complex and ill-understood policy model which
  lacks transparency and relevance
• -ve subsidiarity is often used by member states
  to block new Community policies and instruments
  and resist binding social regulations
• -ve remuneration, the right of association, and
  the right to strike or lock out are not addressed
  at Community level. While these issues are
  addressed in the non-binding Revised European
  Social Charter for Fundamental Social Rights 2000
  this does not create enforceable rights

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12. The ESM under attack the neo-liberal
offensive

• The ESM founded on social democratic values (a
  social welfarist Europe a balance of market and
  social priorities)
• Attack from within
• - powerful individual member states such as UK,
  Italy and Germany hostile to ESM, especially
  during the 1980s and 1990s, but still today (the
  Third Way of Tony Blair, Germany Hartz IV
  reforms).
• - UNICE the European Employers Federation
  afraid of too much regulation as a burden on
  business

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ESM under attack

• Major international financial institutions (IMF,
  World Bank, European Bank for Reconstruction and
  Development) argue that European competitiveness
  depends on being able to compete in the global
  market place ie with cheaper sourced products
  from SE Asia, China etc

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The nature of the attack on the ESM-

• - New forces of globalisation make the ESM an
  outdated concept of the 1960s and the 1970s
• - Social welfarist approaches stifle individual
  initiative and free market enterprise (the nanny
  state)
• - Social protection measure introduce harmful
  rigidities into the labour market which
  undermine necessary flexibility and
  competitiveness (eg minimum wages, too high
  unemployment benefit levels, unwillingness to
  accept lower pay and benefits eg reduced state
  pension rights and increased working age).

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13.The ILO as a standards setter in labour and
employment conditions

• All EU member states have ratified both the main
  ILO Conventions on trade union rights (87 and 98)
• In general, trade union rights are respected in
  law and practice in the 15 long-standing EU
  member states. However, in particular in the new
  member countries violations of trade union rights
  take place, and labour legislation does not
  always conform to the ILO Conventions.

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• All EU member states except Estonia have ratified
  both the main ILO Conventions in the area of
  discrimination and equal remuneration.
• All EU states except the Czech Republic, Estonia
  and Latvia have ratified both ILO Conventions
  against child labour.
• All EU member states except Latvia have ratified
  both the main ILO Conventions on forced labour.
• But ILO enforcement mechanisms are weak in the
  area of labour protection.

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Some Indicators of Social Development

• Employment distribution
• Purchasing power
• Poverty indicators
• GDP per capita
• Average wages
• Unemployment
• Active Expenditures on labour market policies

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Poverty Indicators in Latvia

• Central Statistical Bureau (2004) records a
  rising Gini co-efficient - 36 in 2003 compared
  to 30 in 1996, with a S80/S20 Quintile share
  ration of 6.1 in 2003.
• The level of deprivation on a 7-item scale by
  country ranks Latvia at 2.07, just ahead of
  Turkey, Bulgaria and Romania. This can be
  compared to a Candidate Country Average of 1.40
  and an EU 15 average of 0.64.

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GDP PER CAPITA AT PURCHASING POWER PARITY (EURO)
Source THE WORLD BANK, Washington, D.C. 2002
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Unemployment rates 1990-2002
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Two Strategies for Development

• Current Baltic Labour Use - Soviet Comparisons?
  More, but not always better use of labor
• making use of underutilized labor, especially for
  heavy industry
• Baltic States have underutilized labor,therefore
  less incentives to use most effectively
• Incentives for more productive organizing of
  labor will come with the push factor of higher
  wages managers need to improve economic
  organisation

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• Wages and Productivity will Move together. More
  product can be produced using more labor, but at
  price of inefficiency
• Labor mobility without matching safety and wages
  could result in stagnation in rich countries,
  whose high wages serve as push factor for the
  innovations we all enjoy
• Will allow poorer nations wages to rise, as they
  come closer to the stagnating rich nation
  economies
• But the race to the bottom will be on as new
  sources of cheap labor are sought.

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Corporatism Government, employers and labour

• State sponsored organizations help develop
  Swedens mineral resources and Finland does it
  with forestry
• Develops economies of scale a better use of
  economic resources on a large scale
• Get prices wrong in order to get development
  right!
• Create cooperation between labor, business, and
  government. Make the right mix, or equilibrium
  between these forces a balance of power.

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• State directs cheap credit to key sectors.
  Accelerates their development
• State bureaucracy powerful, but based on merit
  (not corruption or favoratism).
• Scandinavian model differed from East Asian model
  in that labor given more power. Asian model uses
  the state to suppress worker wage demands.
• Market and international competition used in both
  models to ensure competitiveness.

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Breakdown of Corporatism 1970s 1980s

• Deep Economic Crises of 1970s
• Overproduction/Crisis of profits
• Eurodollar market
• Rise of opportunistic capitalism as less profit
  made from growth paper profits
• Soviet threat to the West diminishes, thus
  removes incentive to develop co-operation
  involving all partners
• Labor demands more precisely at point when
  Corporatist model is under stress. Cooperation
  begins to breakdown

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Results

• Global growth slowdown
• East Asia only exception
• exception to this was the Philippines pursuing
  liberal policies and achieving lowest growth in
  region
• Russia, Baltics, Belarus, Ukraine, China, and
  South Asia now fast- growing regions
• Latvian growth linked to Russia
• Return of Russian demand with post neoliberal
  ruble launched recovery
• High oil prices

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Lessons

• Corporatist models directing investment to key
  industries and allowing a balance of power
  between labor, capital, and state, were effective
  in the Scandinavian model
• Economic liberalism policies to promote
  globalisation
• Since 1990s world economy has been marked by low
  growth, instability, and a drift to de-regulation

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Discussion on the ESM - A realistic agenda for
the enlarged Europe?

• Can the ESM be transposed into the CEE new member
  states?
• What might be the internal political, economic,
  administrative, social barriers to transposing
  the ESM?
• What might be the external political, economic,
  administrative, social barriers barriers to
  transposing the ESM?
• Do we need a European Social Model?

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Implementation Theory

• Key policy goal of the Lisbon strategy has been
  to reduce the administrative burden of business
  (European Council, 2000).
• SARFS
• a mix of chronic political instability, fiscal
  crises, complex policy demands, unresponsive
  decision-making processes, and poor policy
  management capacity at the centre, contributing
  to high levels of executive policy
  unreliability which, in turn, has slowed the
  pace of reform (Evans and Evans, 2001, p. 935).

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Veto Points

• Exogenous pressure to conform to the requirements
  of the European acquis.
• The trajectory of reform has been an imposed one,
  in which the accession states were required to
  meet externally imposed regulatory frameworks and
  standards
• veto points emerging in a domestic context,
  which may compromise the successful transfer and
  imposition of EU requirements.

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Barriers to Implementation

• Veto points, whether de facto or
  institutionalised, exist if -- the policies
  underpinning the proposed institutional rules are
  not clear enough to offer a coherent
  institutional model, and if domestic preferences
  do not converge towards reform (Dimitrova, 2002,
  p. 2)
• Conditionality and asymmetry in the
  enlargement process make the possibility of
  institutionalised veto points unlikely.

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Informal veto points

• Absence of formal institutional veto points
  should make EU-led institution-building
  successful
• there is still the question of whether major
  political actors are united around ideas about
  the new institutions, so that the new rules have
  the chance to endure without being immediately
  contested (Dimitrova, 2002, p. 6).

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The domestic reform fit

• If EU requirements fail to correspond with the
  domestic reform fit, for example, because
  domestic consensus is inspired by different
  ideas, or because there is no consensus on
  reform, the newly imported rules are likely to
  be contested and even changed.