When Congress created the MCC in 2004, it required
that any country wishing to negotiate with the MCC for grants must demonstrate
a commitment to 12 core
criteria (listed in Section 607 of the MCC statute) that are necessary
preconditions to ensure that MCC aid will effectively promote sustainable and
equitable economic development.  One of
the 12 criteria Congress mandated the MCC to evaluate is whether a country is
promoting “economic freedom, including a
demonstrated commitment to economic policies that
respect worker rights, including the right to form labor unions.”

When the MCC Board meets tomorrow to discuss
whether the Philippines has met this requirement, it should look beyond the
numerical indicators, which are not designed to evaluate the workers’ rights
criteria, and look at the experience of the Philippine trade union movement and
the challenges it faces organizing unions and protecting workers’ rights.

First,
the intricate system
of evaluation that the MCC has designed, where the Board examines 17 numerical
indicators designed by outside organizations such as Freedom House, the
Heritage Foundation, and the World Bank Group, does not effectively evaluate
whether potential MCC partners respect workers’ rights.  Only one of the 17 indicators used by the MCC
includes an evaluation of a country’s respect for workers’ core labor rights,
the Civil Liberties indicator. Designed by Freedom House, the
Civil Liberties indicator is based on the surveys it conducts for its annual
report, Freedom in the World, and is only one
of 15 different criteria used to examine civil liberties protections. Thus,
despite Congress’ express intent to see labor right protections examined as one
of the 12 core criteria, Freedom House’s Civil Liberties indicator treats
workers’ rights as a footnote, just one of myriad civil liberties concerns. It
does not view workers’ rights as a core aspect of economic freedom. While
respect for workers’ rights may be indicative of respect for civil liberties,
civil liberty protections do not indicate that workers’ rights are respected.

Second,
though Congress clearly envisioned respect for workers’ rights as a fundamental
economic freedom, the only indicator within the MCC’s “Encouraging Economic
Freedom Category” that even addresses issues related to workers’ rights is the
Regulatory Quality Indicator. The RQI, though, is not intended to promote
respect for workers’ rights. Rather, it encourages countries to promote policies
that expand “flexible labor markets”, which is often used as a euphemism for a
move toward labor
contracting and additional restrictions on the ability of workers to form
unions and exercise their rights at work.

Based
on the indicators, or even the cursory treatment of workers’ rights in the State
Department’s country
report, it is not surprising that in March
the MCC first designated the Philippines eligible to negotiate for hundreds of
millions in aid despite its dismal track record in respecting the right of
workers. Had the MCC Board examined further, though, it would have found that
all is not well for the  workers and trade unions in the Philippines. 

The
International Labor Organization (ILO), which is the UN
body tasked with monitoring labor standards, has resoundingly criticized the
Philippine government (check out paragraphs 1180 to 1240 this
report) for its failure to protect workers’ rights.  In response to complaints brought by
Philippine trade unions to the ILO’s Committee on Freedom of Association, the
ILO has formally requested that the Philippine government allow it to send an
investigative team to look into the serious violations of freedom of
association trade unionists face, including murder, military harassments by
government forces of the workers’ democratically elected trade union
representatives, government regulations which prevent workers from striking,
and government policies that prevent workers from organizing. Seeking to
forestall yet another likely damning finding to go along those of the Melo
Commission and the UN
Special Rapporteur, the Philippine government and the Employers
Confederation of the Philippines (ECOP),
which represent many of the businesses that may benefit significantly from additional
MCC funding, has refused the ILO’s request to send a high-level mission to get
to the bottom of the labor rights violations. 
So for now, Philippine unions brace for continued, unchecked, government
sponsored labor rights violations conducted with impunity and with no end in
sight.

Labor
violations in the Philippines
have not escaped the attention of other US Government agencies, as well.
Currently, the United States Trade Representative (USTR)
has two cases
pending under the General Systems of Preferences trade review process related
to the Philippine governments systematic undermining of workers rights. Surprisingly, while the USTR GSP Committee
has placed the Philippines
under review for labor rights violations, along with Niger,
Bangladesh, and Uzbekistan,
apparently the USTR, which sits on the Board of the MCC, has not seen fit to
raise labor rights concerns in any of the discussion regarding Philippine
eligibility. While it may seem odd that the left hand doesn’t know what the
right hand is doing at the USTR, perhaps the simplest explanation is that the
USTR Trade Practices Sub-Committee (TPSC) includes representatives from the
Department of Labor, which is the US government agency responsible for working closely
with the ILO as well as monitoring respect for labor rights by our trading
partners as required by our free trade agreements and trade preference
programs.  Despite the MCC’s core responsibility
to evaluate workers’ rights protections, the DOL
was excluded from the MCC Board when it was founded in 2004.  This decision apparently stemmed from the
Bush Administration’s contempt for international labor standards as evidenced
by its yearly
efforts to cut the DOL’s International Labor Affairs Bureau budget. Without
any labor expertise represented on the MCC Board, it is unlikely labor rights
will ever be evaluated as one of the 12 core eligibility criteria as Congress
envisioned.

Tomorrow,
the MCC Board should closely evaluate the assessment of the ILO Committee on
Freedom of Association and the GSP Committee of the United States Trade
Representative before continuing its engagement with the Philippine government.
Furthermore, the MCC should wait before rewarding the Philippine government any
money until the ILO, which has the needed expertise in assessing labor rights,
is allowed to conduct its investigation into labor rights violations in the Philippines. Workers’
core labor rights are not just a good idea dreamed up by Congress. They are
key, fundamental preconditions for equitable economic
growth.