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Report for the WTO General Council Review of the trade policies of Chile (Geneva, 23-24 September 1997)

ICFTU Online
24 September 1999

Introduction

Earlier this year, the ICFTU published reports on the respect of internationally recognized core labour standards in Fiji, Paraguay and Benin, on the occasions of the trade policy reviews of those countries by the World Trade Orgaization (WTO). The ICFTU is preparing this series of reports in accordance with the Ministerial Declaration adopted at the first Ministerial Summit of the World Trade Organization (WTO) (Singapore, 9-13 December 1996), in which the Ministers stated: "We renew our commitment to the observance of internationally recognized core labour standards.(1)"

This report on Chile, prepared in consultation with the ICFTU affiliate the Central Unitaria de Trabajadores (CUT)(2) , considers in turn the situation with regard to respect of each of the core labour standards in Chile.

EXECUTIVE SUMMARY

In many areas of human rights at the workplace, Chile’s law and practice require further government efforts in order to respect the commitments to fundamental workers’ rights supported by Chile in the Singapore WTO Ministerial Declaration.

Chile has not ratified either of the main ILO Conventions on trade union rights, Conventions No. 87 and No. 98(3) . Free trade unions can now operate in Chile, contrary to the situation under the Pinochet dictatorship from 1973 until 1989, but there remain many weaknesses in the protection of freedom of association and the right to organize. These concern, in particular, trade union membership in the public sector; very limited rights to form unions in sectors such as agriculture, construction and ports; and significant limitations to the right to strike. These limitations weaken trade union bargaining potential and deprive many workers of the benefits of union membership. This in turn undoubtedly affects Chile’s position in international trade.

While Chile has ratified both the main ILO Conventions in the area of discrimination(4), there is extensive evidence of discrimination against women.

Chile has not ratified the main ILO Convention on child labour(5) and there is evidence that child labour is a problem in the informal sector. However, the government is undertaking a multisectoral campaign to eliminate child labour throughout the country.

Chile has ratified one of the two main ILO Conventions on forced labour(6) . Forced labour is not a generalized problem, although Chile has been criticized by the ILO for certain violations of the Conventions on forced labour.

INTERNATIONALLY-RECOGNIZED CORE LABOUR STANDARDS IN CHILE

I. Freedom of Association and the Right to Collective Bargaining

Chile has never ratified either ILO Convention No. 87 (1948), the Freedom of Association and Protection of the Right to Organize Convention or ILO Convention No. 98 (1949), the Right to Organize and Collective Bargaining Convention. A proposal to ratify Convention No. 87 is currently before the parliament.

Under the Pinochet dictatorship which ruled Chile from 1973 to 1989, trade unions operated under extreme restrictions. Indeed, during the first part of the dictatorship from 1973 to 1980, strikes were entirely illegal and collective bargaining suspended. The effect of the absence of trade union protection on workers’ living standards can be seen by looking at the share of wages in gross national product (GNP), which fell from 52.2% in 1972 to 36.7% in 1989.

These restrictions were to some extent repealed through various new labour laws passed under the new civilian administration after 1991. There nowadays exist several trade union centres. However, in general the new laws have been insufficient and various grave restrictions to the exercise of trade union rights remain in force. Furthermore many judicial institutions remain biased against trade unions as a result of the military dictatorship.

There remains a ban on trade union membership by public employees. Such workers must join associations rather than trade unions. In practice, such government employee associations are provided with broadly similar rights to trade unions. But the ban on trade union formation deprives the workers concerned of the possibility of uniting with others in generalized disputes or to benefit from joint actions and constitutes an interference in their freedom of association.

The present Labour Code makes it difficult for trade unions to organize in many sectors and so most workers continue to be covered by individual contracts as they were under the Pinochet regime. Following union actions including a complaint to the ILO Committee on Freedom of Association, workers in agriculture, construction, ports and the entertainment industry are now permitted to form unions. But their right to collective bargaining remains very limited as it is dependent on employers agreeing to negotiate with unions of temporary workers. Employers may also include a clause in individual employment contracts for supervisory personnel that stipulates that they are not allowed to participate in collective bargaining.

Ministers still have to approve the formation of a trade union and the election of its leaders, restrictions which have no parallel for employers’ organizations. The level of persecution of prospective trade unionists is such that trade union organizing is forced to take place under very clandestine conditions. There have been cases of workers being dismissed as a result of holding work stoppages to support their claims concerning wages and occupational health and safety. In at least one case, the IMS building enterprise, such dismissals after union protests about insufficient safety standards were followed shortly afterwards by the accidental death of two workers in 1995. Commenting on that case, the ILO Committee on Freedom of Association concluded that there was evidence that these dismissals were of an anti-trade union nature and emphasized the need to broaden protection against acts of anti-trade union discrimination.

Various restrictions on the right to strike remain from the Pinochet era. Although anti-union discrimination is in theory illegal, employers have dismissed workers for attempting to engage in union activities under the guise of general redundancies. Companies frequently invoke this so-called "needs of the company" clause to fire workers after a union has signed a new contract, particularly when negotiations have resulted in a prolonged strike.

To overcome all the above restrictions on trade unions, the CUT recently proposed a comprehensive labour law reform to enhance trade union rights. The government did not accept these proposals, preferring instead to prepare its own proposed new labour law which has been rejected by the CUT as it is seriously deficient, particularly concerning the exercise of the right to collective bargaining in different branches of activity. The new code remains in any case blocked before parliament, generating grave uncertainty as to the prospects for free trade union activity in Chile and indicating the weakness of the attempts by the democratic legislature to revoke legislation passed at the time of military rule.

Government actions have recently extended to intimidation of trade unions at a national level. On 23 October 1996, police using tear gas, truncheons and armoured cars attacked workers arriving at the assembly point for a demonstration organized by the CUT national centre. This occurred despite the union having received prior authorization for the demonstration, which had been called to support demands for pay rises by public sector workers.

Although Chile has export processing zones (EPZs), Chile is not a country where trade unions are outlawed in EPZs and indeed the same national labour laws are applicable there.

In conclusion, restrictions on freedom of association and the right to collective bargaining in Chile undoubtedly have a negative impact on the level of unionization in Chile.

II. Discrimination and Equal Remuneration

While Chile has ratified both the main ILO Conventions in this area, there is extensive evidence of discrimination against women.

In 1971, Chile ratified ILO Convention No. 100 (1951), Equal Remuneration and ILO Convention No. 111 (1958), Discrimination (Employment and Occupation). However, there is extensive evidence of discrimination.

The Labour Code of 1994 prohibits discrimination on the basis of race, colour, sex, religion, political opinion, national extraction or social origin. However, the government of Chile has failed to respond to ILO requests for information on how it ensures the application of the principle of equal remuneration for men and women workers for work of equal value. A study by the national women’s service (SERNAM) found that the average earnings of female heads of household are only 71% of those of male heads of household. Women with no schooling received a salary that was 87% of that of their male counterparts with no schooling, while female heads of household with university qualifications earned only 57% as much as their male contemporaries. In order to alleviate this disparity, SERNAM elaborated a Plan of Equality of Opportunity for Women in 1993 and has set up a pilot programme providing occupational training for women and child care.

Discrimination persists in some occupations concerning access to employment. This is partly linked to the reluctance of employers to recruit women in order to escape from legal obligations concerning maternity leave. There are cases of women being required by their prospective employers to take pregnancy tests before being accepted for employment.

Under the Pinochet military dictatorship there were many cases of political discrimination at the workplace, which could result in politically motivated dismissals. Partly as a result of a complaint to the ILO Committee of Experts on the Application of Conventions and Recommendations, the government of Chile has undertaken a process of review of such cases and payment of compensation to those concerned.

It is clear, therefore, that grave discrimination persists in Chile. There is a need for further research to determine any possible link between discrimination and the price of exports. There is no evidence to indicate that international trade worsens the situation of discrimination in the case of Chile.

III. Child Labour

Chile has not ratified the main ILO Convention in this area and there is evidence that child labour is a problem in the informal sector. However, the government is undertaking a multisectoral campaign to eliminate child labour throughout the country.

Chile has not ratified ILO Convention No. 138 (1973), the Minimum Age Convention. For people in the formal sector, legal provisions are adequate. The law states that education is compulsory up to the age of 14 and is free. Children 14 years of age may work legally with the permission of their parents provided that they have competed their elementary education and that the work is not physically strenuous or unhealthy. Labour inspectors enforce these provisions in the formal sector and compliance in that sector is good.

However, 25% of the population still lives below the poverty line and many people can only find employment in the informal sector. UNICEF have estimated that approximately 107,000 children between 12 and 19 years of age are in the workforce in the informal sector. The majority of these are from single parent households headed by women. These children generally work more than 40 hours per week and do not attend school.

In response to this situation, the government has set up a multisectoral national campaign to eradicate child labour. There is now a proposal before parliament to ratify Convention No. 138.

In conclusion, the use of child labour is not of a scale such as to make a significant contribution to the price of Chile’s exports. There is evidence that the government of Chile is undertaking serious efforts to reduce child labour in the informal sector.

IV.     Forced Labour

Chile has ratified one of the two main ILO Conventions on forced labour. Forced labour is not a generalized problem, although Chile has been criticized by the ILO for certain violations of the Conventions on forced labour.

Chile ratified ILO Convention No. 29 (1930), the Forced Labour Convention in 1933. It has not ratified ILO Convention No. 105 (1957), the Abolition of Forced Labour Convention, but this is now in the process of ratification.

The Constitution and the Labour Code of Chile prohibit forced or compulsory labour. There is no indication of forced labour practices on any major scale in Chile.

However, the ILO Committee of Experts on the Application of Conventions and Recommendations has criticized Chile’s laws concerning "vagrants", according to which persons who have no fixed address or means of subsistence and who refuse to work are considered vagrants and are liable to imprisonment. The Committee has further drawn attention to the fact that if an unemployed person refuses to carry out relief work for the community, she or he loses the right to unemployment benefit. Both these situations constitute violations of the internationally agreed standards on forced labour under the definition of ILO Convention No. 29.

CONCLUSIONS

Chile's law and practice require further government efforts in many areas in order to respect the commitments to fundamental workers’ rights supported by Chile in the Singapore WTO Ministerial Declaration. There remain problems with regard to the right to freedom of association in Chile which have not yet been fully tackled, requiring further changes to the labour code on the basis of the recommendations formulated by the CUT trade union centre. Among other things, these should give workers in the public sector the right to form trade unions; extend unionization rights in the agriculture, construction, ports and the entertainment industries; and provide all workers with the right to strike without facing intimidation. Chile still faces serious discrimination against women and needs to step up its actions to comply with the ILO conventions on non-discrimination and promote equality for women. Chile also has a problem with child labour in the informal sector, although a multisectoral campaign to eradicate it is now underway.

Consistent with the commitments accepted by the government of Chile at the Singapore WTO Ministerial Meeting and its obligations as a member of the ILO, Chile should therefore provide reports to the WTO and the ILO on its legislative intentions in order to bring its labour law into conformity with internationally recognized labour standards in the area of freedom of association. The WTO should also request the ILO to intensify its work with the government of Chile in the areas of discrimination and child labour. Chile should provide a report to the WTO General Council on the occasion of the next trade policy review.

Furthermore, Chile should accelerate the process of ratification of ILO Conventions 87, 105 and 138 and initiate urgent steps to ratify ILO Convention 98.

(1) The full text of paragraph 4 of the WTO Declaration is as follows: "We renew our commitment to the observance of internationally recognized core labour standards. The International Labour Organization (ILO) is the competent body to set and deal with these standards and we affirm our support for its work in promoting them. We believe that economic growth and development fostered by increased trade and further trade liberalization contribute to the promotion of these standards. We reject the use of labour standards for protectionist purposes and agree that the comparative advantage of countries, particularly low-wage developing countries, must in no way be put into question. In this regard, we note that the WTO and ILO Secretariats will continue their existing collaboration."

(2) The Central Unitaria de Trabajadores (CUT) has a membership of 400,000 and is the largest of the three main trade union confederations in Chile. In total, trade unions organize approximately 15% of the workforce.

(4) ILO Convention No. 100 (1951), Equal Remuneration and ILO Convention No. 111 (1958), Discrimination (Employment and Occupation).

(5) ILO Convention No. 138 (1973), the Minimum Age Convention.

(6) ILO Convention No. 29 (1930), the Forced Labour Convention and ILO Convention No. 105 (1957), the Abolition of Forced Labour Convention.

References

Central Unitaria de Trabajadores (CUT), Informe para la Revisión del Consejo General de la OMC sobre Políticas de Comercio en Chile, 1997.

ICFTU, Annual Survey of Violations of Trade Union Rights, 1997.

ILO, Lists of Ratifications by Convention and by country, 1997.

ILO, Reports of the Committee of Experts on the Application of Conventions and Recommendations, editions from 1990 to 1997.

ILO, Reports of the Committee on Freedom of Association, recent years.

MacClure, Oscar, ¿Exclusión en Chile?, ILO, 1994.

Upham, Martin, Trade Unions of the World, 1994.

US Department of State, Report on Human Rights Practices for 1996, 1997.

List of country reports for WTO Council reviews