The Credit Crisis may reflect concern with likely growing trade union power.



Anthony Ravlich

Chairperson

Human Rights Council Inc., (New Zealand, Asia-Pacific Region)

10D/15 City Rd.

Auckland City.

Ph: (0064) (09) 302 2761.

Website: www.hrc2001.org.nz



The credit crisis facing the world may be explained in part in the decisions made in recent years at the United Nations to place more emphasis on the economic and social interests of the trade unions and the working classes.



The draft Optional Protocol (OP) to the International Covenant on Economic, Social and cultural Rights (ICESCR), which is a complaints procedure for those suffering from social injustices, has been discussed in working groups over the past four years. The draft OP is due to be adopted by the UN General Assembly in October, 2008.

Economic, social and cultural rights include the rights to health, work, fair wages, education, housing, adequate standard of living and trade union rights. The draft OP allows States a ‘wide margin of appreciation’ in terms of where they wish to focus development.

States typically follow the policy directions decided at the UN and the draft OP reflects a major change in policy direction. Over the past 25 years the focus of development, particularly in liberal democracies, has been on the middle to upper classes of society and the Corporations. However, the draft OP allows States to broaden the focus of development to also incorporate the working classes and the trade unions. This would likely provide greater mainstream consent for the continuation of neo liberalism and globalization rather than simply relying on the War on Terror as a means of perpetuating neo liberalism (see my recent article on the internet: ‘Further oppression of the poor likely at the UN’). Economic, social and cultural rights, a previously marginalized set of human rights, will now not only provide greater protections for workers but enable the trade unions to better improve the lifestyles of members although remaining within the frame work of a neo liberal society and globalization. More rights will likely enable the trade unions to make more use of strike action to ensure a better redistribution of the wealth. They will also be able to make use of the OP to lay complaints of violations of human rights with the UN Committee on Economic, Social and Cultural Rights after having exhausted domestic remedies which the State is obliged to make available. And herein lies the difficulties faced by international financial investors now aware that any increase in strike action and complaints of human rights violations will likely diminish future profits. This may well have played a part in the present credit crisis resulting in the US government now proposing to nationalize a considerable amount of social investment.

The US camp at the UN discussions opposed the draft OP preferring the status quo of prioritizing civil and political rights and elite interests however by the end of the discussions the great majority of States supported the draft OP. Even though the US opposed the policy changes at the UN globalization means it is not immune from what happens in the rest of the world especially as US Corporations can be found in many countries of the world.

Washington is presently debating a possible 0 billion bailout of the financial services industry, which has been battered by mortgage defaults and tight credit conditions, and evaporating investor confidence. Loven et al explains the plan: “The Bush administration plan's centerpiece remained for the government to buy the toxic, mortgage-based assets of shaky financial institutions in a bid to keep them from going under and setting off a cascade of ruinous events, including wiped-out retirement savings, rising home foreclosures, closed businesses and lost jobs”. (Bailout deal breaks down; Paulson back to Capitol, by Jennifer Loven and Julie Hirschfeld Davis, Associated Press Writers, Friday September 26, 2008)

However the biggest losers of the credit crisis are likely to be the poor. UN Secretary-General Ban Ki-moon focused much of his speech at the UN on economic challenges and the U.S. financial meltdown which has spread around the world, saying "the global financial crisis endangers all our work -- financing for development, social spending in rich nations and poor, the Millennium Development Goals" to improve life for the poorest (U.N. Head: Global Financial Crisis Threatens Fight Against Poverty, Tuesday, September 23, 2008, Associated Press). Also UK’s Prime Minister Gordon Brown ‘is concerned the costs of the credit crisis, as well as the economic downturn, will mean that the developed world turns off the tap on funding to alleviate poverty’ (Gordon Brown plans financial crisis talks with George Bush, Patrick Wintour, guardian.co.uk, Thursday, September 25).



What makes matters much worse for the poor is that the draft OP provides little protection for the most disadvantaged. The UN Committee on Economic, Social and Cultural Rights devised protections, core minimum obligations, for extreme violations of these rights. However, the draft OP has omitted these core minimum obligations, which ensure an emphasize on such extreme violations as homelessness, extreme poverty etc., allowing States, given their ‘wide margin of appreciation’, to simply focus on the economic and social interests of elite groups and ignore the most disadvantaged if they so wish (a full discussion can be found in Chapter 5, Lack of Will for Social Justice for the Most Disadvantaged at the UN, of my recently published book, Freedom from our Social Prisons: the rise of economic, social and cultural rights, Lexington Books, Rowman & Littlefield Pub. ).