Private Sector


IFC to “consider” inclusion of core labour standards

Immediate implications for support of Haiti free trade zone

23 September 2003

by Peter Bakvis, ICFTU, in Dubai

At a 23 September meeting in Dubai during the IMF and World Bank annual meetings, Peter Woicke, Managing Director of the World Bank’s private sector lending arm, the International Finance Corporation (IFC), told ICFTU representatives that the IFC would adopt all of the core labour standards as standard conditions for all IFC loans. He said that the IFC would be aiming to adopt the new policy on labour standards within the next four to six months when it puts in place a new safeguards policy. Currently the IFC requires that borrowers abide by two of the four standards, namely those concerning the prohibition of forced labour and child labour. Almost a year ago, the ICFTU made a written submission during a review of IFC‘s safeguards policy, recommending that the corporation make inclusion of all of the core labour standards into loan conditions. Today’s announcement by Woicke is the first in which the IFC has committed to requiring that all IFC-funded projects abide by these standards.

The ICFTU raised the specific case of IFC‘s intention to finance a garment manufacturing complex owned by the Grupo M company to be built in a new export-processing zone located on the border between Haiti and the Dominican Republic. While initially expressing their faith that the company’s declared intentions to respect employees’ freedom of association and consumer reluctance to buy “sweatshop” goods were sufficient guarantees, Woicke and other IFC representatives later promised to examine the possibility of including in the loan contract with Grupo M a requirement to abide by the core standards. The ICFTU provided information to Woicke about Grupo M’s record of having used intimidation and violence against workers who have attempted to organize unions in the company’s other factories located in the Dominican Republic. In light of the high risk that the project could lead to violation of the standards, the ICFTU urged the IFC to include them in the loan contract for this project and not wait until the IFC has adopted them as standard loan conditions. The IFC managers agreed to consider this suggestion.