6 US Senators Condemn Bank's Publication "Doing Business Report 2007" for labor standard violations

Oct 13, 2006

October 13, 2006

President Paul Wolfowitz
The World Bank
1818 H Street, NW
Washington, DC 20433
USA

Dear President Wolfowitz:
The World Bank's publication "Doing Business 1007: How to Reform," the Bank's largest circulating publication states, "Publishing data on the ease of doing business inspires governments to reform." Investors use the publication to decide where to invest and governments use it as a guide to attracting investment, making it very influential. We are concerned that this year's edition appears to discourage countries from upholding established standards of worker rights as set by the International
Labor Organization (ILO).

The report ranks countries on various indices of the ease of doing business including "Employing Workers." In this category, countries which do not have a minimum wage and do not restrict the number of hours an employee can work are ranked high. Rewarding lax or non-existent labor standards contradicts ILO policy, which encourages countries to establish a minimum wage and regulate hours of work and to pass and enforce laws protecting freedom of association and collective bargaining.

The U.S. government also encourages trading partners to abide by these principles through the Generalized System of Preferences and Trade Promotion Authority. The U.S. Department of State evaluates minimum wage and hours of work laws in preparing its annual report on country human rights practices and in implementing the ILO Fundamental Principles and Rights at Work.

Examples from "Doing Business" include:

*Saudi Arabia, a country which does not allow freedom of association, the right to organize nor collective bargaining, all violations of ILO Fundamental Principles, has the best possible score of 0 for both Difficulty of Hiring and Difficulty of Finding on the Employing Workers index.

*Georgia is singled out for making the "most far-reaching reforms" by easing the number of hours counted as overtime, discarding premium pay for overtime and eliminating the requirement to notify unions before firing redundant workers.

*The Marshall Islands and Palau, neither of which are members of the ILO, are including in the top ten countries for Employing Workers. The Marshall Islands have no legislation concerning maximum hours of work or occupational safety and health and Palau has no minimum age for employment.

The mission of the World Bank is to alleviate poverty. We fail to see how praising countries for failing to guarantee a minimum wage and overtime pay lifts people out of poverty. We do not think that discouraging adherence to ILO standards in this or any other World Bank publication is appropriate or constructive.

We applaud recent changes at the International Finance Corporation which incorporate the ILO Fundamental Principles in project finance and strongly encourage all other units of the World Bank to use their power and influence to raise working standards, rather than lower them.

A statement from you clarifying the Bank's support for the protection of worker rights would help alleviate the perception that the Bank endorses lower standards. In the future, we ask the World Bank to coordinate its public statements regarding labor issues with the ILO.

Sincerely,
Senators Richard J. Durbin; Joseph R. Biden, Jr.; Byron L. Dorgan; Christopher Dodd; Paul S. Sarbanes; Daniel K. Akaka

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