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Inside the Vienna Consensus

“The Vienna Consensus” has a fairly benign ring to it. It only takes on a threatening aspect when linked to the Washington Consensus of 1989–the 10-point plan for economic reform imposed so disastrously by the International Monetary Fund–in a new report from the Amsterdam-based Transnational Institute.

Subtitled “The EU’s free trade agenda for Latin America and the Caribbean,” the report outlines a cynical ploy by big business to lobby the trade summit here recently. Ever since the 1999 Seattle protests that broke up a meeting of the World Trade Organization, “the Washington Consensus” became activists’ shorthand for unbalanced, business-directed global governance. The TNI report delves into the explicit intentions of the EU-Latin America Business Summit–providing a list of recommendations from the conference to the governments’ summit–as well as more subtle tactics such as having top decision-makers deliver keynote addresses to the 300 attendees of the Business Summit.

This undue influence has led to skyrocketing corporate profits (and salaries) and other forms of corporate excess: Only months ago, for example, Nike offered $103 million a year to the German national football club for rights to produce replica jerseys with the Nike brand prominently displayed. In retaliation, Adidas stole the University of Michigan from Nike for $7.5 million a year, an amount called “almost unfathomable” by Paul King, the University of Washington’s senior associate athletic director for business and finance.

Accompanying these excesses are inevitably the familiar pattern of environmental degradation, stagnant, poverty-level wages and an eviscerated legal/regulatory apparatus. The neo-liberal “consensus,” after all, was to get government out of the way to let the market work its’ magic. Resistance may seem quixotic, and hard to justify, yet it goes on, year after year by groups in the so-called developing countries, sometimes in concert with Northern groups such as the Clean Clothes Campaign.

I visited the CCC’s Vienna office last Spring, to catch up on the local efforts to bring reliable information to consumers and–against all odds–pressure big apparel and shoe brands to improve the workers’ lot. While the “shaming” campaigns have largely lost their bite–due to expensive “corporate responsibility” programs that seem to have bamboozled a compliant press–there is still the odd “sweatshop” story that stays in the news for awhile. Such is the case with a Gap sub-supplier in India, caught in October using children who had been sold into virtual slavery.

Paradoxically, the CCC has gotten caught in the crossfire when, last year, the Indian government unashamedly backed international jeans suppliers Fibres and Fabrics International and its 100% subsidiary Jeans Knit Pvt Ltd (FFI/JKPL) which had launched a libel action against the group’s Dutch and Tamilnadu affiliates.

The local CCC office group has been developing ties with the workers attempting to build free trade unions in Cambodia. While it is hard to be optimistic about workers’ struggles–even in our own prosperous countries–I do believe that research and resistance can produce results. I have seen it first-hand in Indonesia.

In the late-80s, with a small “Human Rights” grant from the U.S. Agency for International Development, we interviewed thousands of workers at 200 factories around Jakarta to monitor compliance with the minimum wage of 87 cents a day. When we found substantial wage cheating (over 50%), even the tightly controlled press unleashed a firestorm of criticism (“World Shoe Giants Rape Worker Rights”) of undercutting a legal wage already far short of the poverty level for a single adult. With the help of the international attention, compliance improved and the government-set minimum wage was increased almost 25% a year for the next 5 years.

Many workers have led protests and defied serious threats. One Nike contractor was handed a list of two dozen employees organizing a protest in support of the minimum wage ($1.30 a day at the time)–the work of the local military command who interrogated workers for several weeks. All the organizers were fired.

Five years later, the Indonesian Supreme Court found that the workers had a legitimate right to protest and should not have been dismissed. By that time, the factory had passed into the hands of the most notorious and reviled Suharto crony, Bob Hasan (now in jail), whose Astra Group was the largest Indonesian producer of Nike shoes. Hasan forced the desperate workers–this was just after the Asian economic crisis–to accept about 20% of the back wages owed to them, while he was donating $18,000 a month to the Indonesian Wrestling Federation. Nike never acknowledged that the contractor had done wrong to fire those workers. To the contrary, the company used every opportunity to denigrate their activism.

The courageous resistance of workers and environmentalists in the South is well-documented by cross-border partners from the rich countries–such as the CCC and TNI. As we are seeing in the U.S. Presidential race, the stories of corporate depredations has turned even Republicans against unrestrained “free trade” and orthodox neo-liberalism; trade agreements have become a much harder sell. So it was that during the Business Summit here in Vienna, a “counter-summit” took place at which social movements and Non-Governmental Organizations targeted some of the corporate representatives meeting across town. The “Linking Alternatives 2” Social Encounter Forum presented evidence of BBVA (Spanish bank) endangering fragile Amazonian and Andean ecosystems; Unión Fenosa (electric) labor rights (27 union activists killed during struggle against privatization in Columbia’s Caribbean coastal area) and destruction of indigenous people’s water resources, and Telefónica was charged with labor rights violations in Peru and irresponsible rate increases in Peru and Chile. In all, 25 cases were discussed, making any kind of “consensus” between businesspeople and government partners ring pretty hollow in the global court of public opinion.

JEFF BALLINGER is teaching and researching industrial relations at Webster University in Vienna. He can be contacted at jeffreyd@mindspring.com

 

 

 

 

 

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