U.S. and France Apparently at Odds Over Labor Rights
March 27, 2004 - The New York Times
by FLOYD NORRIS


The dispute, which appears to pit France against the United States,
centers on whether the organization will endorse giving workers a role
in corporate management, as they have by law in some European countries
but do not have in the United States.

It had appeared that the organization would remain neutral on that
issue, but France has proposed adding language that says giving workers
such roles should be "encouraged.'' That has drawn the ire of business
groups but has the strong support of trade unions. An official at the
United States mission to the organization said on Friday that he had
just learned of the dispute and said he was not sure how the
organization would proceed. He declined to state the American position.

The O.E.C.D. is made up of 30 countries, most of them highly
industrialized, and operates by consensus. As a result, any country that
is strongly opposed to an initiative can block it.

The organization has had principles of corporate governance since 1999
and announced plans in January to expand and enhance them. It had
planned to announce the final version of those principles last week, but
that announcement was canceled, ostensibly because of a scheduling
conflict. The principles are scheduled to be adopted formally when
ministers from the 30 countries meet in May.

The principles are not binding in any country, but they have served as
models for emerging countries seeking to establish rules for corporate
governance. Unions hope, and some businesses fear, that if the
organization were to support rights of workers to be involved in
corporate governance, it would make it easier to establish and protect
rules requiring such a role in both developed and developing countries.

While specifics vary by country, many European countries give workers
places on corporate boards or other bodies, and in some cases their
participation has proved to be crucial. On Thursday, the chief executive
of Infineon, the German semiconductor manufacturer, resigned after
running afoul of some board members. The union that has representatives
on the board said he had been criticized at a board meeting for both an
"overbearing leadership style" and for "rigorous outsourcing."

The organization's new rules do not mention workers as such but refer
instead to "stakeholders," a category that includes creditors as well as
workers but is understood to refer to workers in the provisions under
discussion.

The existing principles state: "Performance-enhancing mechanisms for
employee participation should be permitted." In context, that means
participation in corporate governance, and the plan had been to leave
that sentence unchanged.

John G. Evans, the general secretary of the Trade Union Advisory
Committee to the organization, said that France had proposed changing
the word "permitted'' to "encouraged'' and added that he understood that
some other European countries agreed. He said he would have liked to see
additional changes but supported the French proposal.

Business leaders have encouraged countries to resist that change,
saying that the very effort to make changes at this late date threatens
the ability of the organization to complete work on the principles in a
timely manner. They have called on the organization to remain neutral on
the question of employee participation in corporate governance.

"It is not the role of the O.E.C.D. corporate governance principles to
impose unique national mechanisms on other countries that have developed
different but equally valid corporate governance systems," said Thomas
R. Vant, the secretary general of the Business and Industry Advisory
Committee to the organization.

Labor unions in some countries have hoped that the discrediting of
corporate executives might work to their benefit. "You almost need a new
slogan," Mr. Evans told a conference on corporate governance at the
French-American Foundation on Friday. "Capitalists and workers unite in
the struggle against managers."

The American official said he would wait to hear from the chairwoman of
the organization's working group on the principles, Veronique Ingram, an
official of the Australian treasury department, on what steps might be
taken to reach consensus. The Australian mission said she was in
Australia and could not be reached for comment.