Thursday, August 21, 2014

Labor Mobility Under the AEC Promises Big Gains and Bigger Challenges

Today the International Labor Organization and the Asian Development Bank released a report on labor issues in the ASEAN Economic Community (AEC).  The report noted the major economic gains that could be achieved through the community, through the 14 million new jobs created through economic integration.  However, it does note that only a small portion of the labor force will be affected by labor mobility by the immediate onset of the AEC:

On labour migration, the report found that migration within ASEAN currently focuses on low and medium skilled workers, a flow which is likely to increase in response to demand, particularly in the construction, agricultural and domestic work sectors.  The report also notes that the free flow of skilled workers that will come in with the AEC affects less than 1 per cent of total employment on average and will not satisfy demand. To attract and retain their skilled workers businesses will need to compete on the basis of productivity and develop institutions to better link wages to productivity.

The report also notes that the resulting economic gains will not be evenly distributed unless there are policy changes in the region:

Unless decisively managed this could increase inequality and worsen existing labour market deficits - such as vulnerable and informal employment, and working poverty. To counter this Member States need to develop policies and institutions that support inclusive and fair development. In particular, there is an urgent need to improve the quality, coverage and sustainability of social protection, starting with the establishment of a social protection floor for all.

The report goes on to propose binding commitments by the ASEAN member states that would protect labor rights:

Migrant protection and migration management are among other key issues for ASEAN. If countries are to reap the benefits of labour mobility they will need to prioritize three critical areas: ratifying, implementing and enforcing international Conventions; extending the coverage and portability of social security; and implementing the ASEAN Declaration on the Protection and Promotion of the Rights of Migrant Workers.

As I have posted earlier, these types of policies related to services may eventually become the most controversial aspects of the AEC.  If ASEAN workers obtain these rights under international and ASEAN agreements, what mechanisms will be established to protect those rights under domestic laws and ASEAN agreements?  Will ASEAN workers be satisfied with those mechanisms, and if not, will they seek additional protections and other rights?  Most importantly, are the ASEAN member states and the ASEAN institutions prepared to do any of this?  In all likelihood, not in the immediate future.

Thus, the aims of the ILO/ADB report are noble, but achieving them will have to wait until ASEAN develops stronger institutions to deal with these issues, as I noted earlier:

Because it touches so many key issues for regional integration and development, the movement of natural persons will be the last major hurdle for the AEC and other regional economic integration projects.  However, because of the less mature political and social development within ASEAN, it will take that much longer to achieve in Southeast Asia. 

The labor mobility issue is therefore something to consider for the post-2015 AEC agenda, but given the political and social sensitivities involved, may take years to address.

Wednesday, August 20, 2014

ASEAN Seafood Industry Casts Wide Net In Drafting Industry Standards

In another example of ASEAN’s private sector moving ahead with ASEAN Economic Community (AEC) integration efforts.  Seafood associations in ASEAN have drafted an “ASEAN Shrimp Farming Standard” for the shrimp industry, a major industry in Southeast Asia, as reported here:

A steering committee of 14 industry and non-government stakeholders designed the draft standard to be a workable tool for the shrimp industry in ASEAN to improve the sustainability, environmental and social performance of farming, especially at the small-scale, and receive recognition in key export markets.

The draft standard complements existing national good aquaculture practices and aims to align with internationally accepted environmental and social standards, including the Monterey Bay Aquarium’s Seafood Watch® Programme sustainability assessment criteria and the Aquaculture Stewardship Council standards.

The process for developing the Shrimp Standard for ASEAN aims to align with the ISEAL Alliance’s globally recognised guidelines for setting environment and social standards.

The draft standard is split into farm, hatchery and feed mill standards which cover traceability, shrimp health, sustainable stock sourcing, sustainable feed sourcing, environmental impact management and good labour management.

Unusually for an ASEAN industry-wide effort, the draft standard’s organizers have posted the draft standard on the internet and requested public comment via the internet.  Comments can be posted here and are due by October 10.

Usually ASEAN-wide industry efforts are at an elite level, such as the ASEAN Cosmetics Directive.  That effort resulted from the joint efforts of national-level cosmetics associations over 10+ years.   Only after that long and sustained effort did the ASEAN member states adopt the Cosmetics Directive on a region-wide basis.

Hopefully this more open, broader approach to ASEAN industry wide standardization efforts will be repeated more often, as it will increase the “buy in” by local companies and convince ASEAN member states of the need to adopt such standards.  Broader, public efforts may be easier for industries such as seafood which are export-oriented (e.g., focused on extra-ASEAN exports) and not dependent on intra-ASEAN competition, which will give rise to conflicts within the region.  Nevertheless, private sector-initiated efforts like the Shrimp Farming Standard and the Cosmetics Directive will have a greater chance of adoption within the industry and by the ASEAN member states.

Monday, August 11, 2014

ASEAN Around the Horn


In this post I provide some brief ASEAN updates: