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GB.272/6
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SIXTH ITEM ON THE AGENDA
Report of the Subcommittee on Multinational Enterprises
1. The Subcommittee on Multinational Enterprises met on 17 June 1998, chaired by Ms. J. Perlin (Government, Canada). The Employer and Worker Vice-Chairpersons were Mr. B. Noakes and Mr. Z. Rampak respectively.
2. The Chairperson extended a warm welcome to all members of the Subcommittee, and recalled that this special meeting was being convened in line with a decision of the Governing Body in March, in order to expedite a decision on the request for interpretation of the Tripartite Declaration submitted by the Government of Belgium.
3. The representative of the Director-General (Mr. Abate, Chief, Bureau for Multinational Enterprise Activities), introducing the Office paper, recalled that the request for interpretation arose from the following events. On 27 February 1997 a senior executive from the corporate headquarters of a subsidiary in a town in Belgium had announced at a local press conference that the factory would be closed on 31 July 1997. On the same day an extraordinary general meeting of the local works council was informed that, due to the poor overall performance of the company and the consequential need to streamline production, the assembly plant would be closed. This information was later communicated to the staff and the authorities concerned.
4. The Government felt that the manner in which the MNE had acted contravened binding laws, provisions of the Tripartite Declaration and the obligation to engage in prior information and consultation with the workforce in order to mitigate the social consequences. It did not question the right of the employer to take the decision, nor did it, by making the request, intend to find a solution to the problem at hand. Its intention was to obtain an interpretation of a general nature, on the basis of what had transpired, in order that lessons could be learned for the future with regard to the "timing of an enterprise's obligations prior to a decision to close a factory, and the precise scope of the dialogue that must take place between the enterprise, the public authorities and the social partners' organizations before such a decision" that significantly affects employment "is made".
5. Paragraph 9 of the Office paper gave information on what the company had to say with regard to the Government's submission, of which it had received a copy from the Office.
6. The Officers of the Subcommittee met on 4 November 1997 to consider whether or not the request fulfilled the criteria for receivability as spelled out in the Procedures approved by the Governing Body. As they were unable to reach a unanimous decision, the matter was referred to the full Subcommittee, which, at its meeting in November 1997, had, on the basis of a majority opinion, declared the request receivable.
7. The interpretations requested concerned paragraphs 8, 10, 25, 26 and 51 of the Tripartite Declaration, and the corresponding questions were in paragraphs 18, 22, 27 and 34 of the Office paper.(1)
8. The interpretations to which the Officers were able to agree, following arduous negotiations, were in paragraphs 21, 26, 29, 33 and 36 of the Office paper. They unanimously recommended adoption of these paragraphs by the Subcommittee.
9. The Office regretted that it was unable, for reasons of economy, to present a Russian text as had been requested.
10. The Employer Vice-Chairperson stated that the document represented an agreement reached after difficult and lengthy discussions. The document had received the unanimous support of the Employer members of the Subcommittee. It was unnecessary to deal specifically with the text and content, other than to say that each request for interpretation had been dealt with and the conclusions had been agreed. He thanked the Chairperson and the Worker Vice-Chairperson for their efforts to bring about agreement on this issue. He recommended approval of the document as a whole.
11. The Worker Vice-Chairperson joined the Employer Vice-Chairperson in thanking all parties concerned in the work that had led to a consensus on the proposed interpretations. All parties had shown goodwill, in spite of the fact that they had different points of view on the matter. Their ability to find wording to satisfy different expectations was a testimony to tripartite cooperation, and in that same spirit, he recommended the adoption of the document as a whole.
12. The representative of the Government of Italy complimented the Officers for their hard work in preparing the paper before the Subcommittee. This was a document that would be helpful for the future, and he hoped that the Government of Belgium would be pleased with the answers that had been provided on the specific provisions and general character of the Tripartite Declaration. There was no question that a firm could close a branch, but it was also true that all laws and regulations had to be fully respected and all possible measures taken to protect the legitimate interests of the workers.
13. The representative of the Government of Canada expressed her Government's satisfaction at the compromise that respected the spirit and intent of the Tripartite Declaration. Her Government fully supported the recommendation of the Officers.
14. The representative of the Government of the Russian Federation underlined that his Government was pleased that, in a spirit of constructive cooperation and tripartism, a consensus could be achieved on such a complex matter. Unfortunately, his delegation found itself constrained, since a Russian translation had not, as requested, been provided. While it may well be that the Office faced financial difficulties to translate the document, the Tripartite Declaration and the issues being discussed needed to be widely disseminated. He therefore insisted that the Office endeavour to find the means to translate such texts, an undertaking in which his delegation would lend its cooperation and support.
15. The representative of the Government of Japan paid tribute to the efforts of the Officers, and confirmed that his Government was ready to accept the interpretation that they had proposed in the document.
16. The representative of the Government of the United States expressed his willingness to join in the consensus on the document, as well as his thanks for the more detailed elaboration of the facts. He hoped that in the future there would continue to be a full rendering of the facts so that the Subcommittee could have a more intelligent and better understanding of all matters coming before it for discussion and decision.
17. The representative of the Government of Namibia expressed his support for the adoption of the document, which represented a balanced interpretation that should serve the interests of all concerned.
18. The Chairperson stated that, on the basis of the statements made from all sides, it was clear that there was unanimity in recommending that the Governing Body approve the interpretations proposed by the Officers. This was a welcome event, which in very clear terms highlighted once more not only the significance of this voluntary text in helping prevent problems related to MNEs' activities, but also the commitment to, and support for, the Tripartite Declaration by the membership.
19. The Governing Body may wish to endorse the interpretations of paragraphs 8, 10, 25, 26 and 51 of the Declaration given respectively in paragraphs 21, 26, 29, 33 and 36 of document GB.272/MNE/1 in direct response to the specific questions addressed by the Government of Belgium.
Geneva, 17 June 1998. (Signed) Jean Perlin,
Chairperson and Reporter.
Point for decision: Paragraph 19.
1. GB.272/MNE/1.