Section I: The NAALC in General
A preliminary listing of various features of the NAALC will make it easier to then understand the meaning and scope of its institutions and, in due course, the forms of action resulting from it.
- Features of the Agreement
The NAALC, which is complementary to the NAFTA, may be seen as what is commonly called a "social clause" in agreements to liberalize international trade: it deals with workers' rights, not for workers directly but in correlation with the establishment of the North American Free Trade area (Preamble). It was an innovation for the three countries in question, and even in a much wider context. The implementation of the Agreement in its early years must therefore be assessed in light of the fact that initially it was a new departure both for its signatories and for areas affected by it.
Having said that, there are three aspects or features of the Agreement which merit particular attention, on account of the significant influence they may have on its implementation.
First, both as to the substance of the law and its application, the approach is trinational and not supranational (Article 49). As one writer aptly put it, the Agreement "places governments not in a vertical relationship to an international body but in a horizontal relationship to each other."1 In other words, as has also been remarked, "Instead of yielding sovereignty over the content of their labor laws and standards, the NAFTA countries shaped the NAALC to open themselves up to trinational scrutiny of their enforcement regimes."2 However, that does not prevent relatively precise procedural standards being created by the Agreement itself governing the application of labor law in each of the three countries; these are requirements which each of the Parties must comply with in the operation of its administrative and judicial systems, though they are formulated by an external source. Moreover, as we shall see, the Agreement provides for the intervention of independent third parties, evaluation committees of experts (Article 23) and Arbitral Panels (Article 29), to deal with various problems involving "technical labor standards." This adds another supranational aspect to an Agreement, which is in general still trinational in other respects.
Second, the Parties indicated their desire to use cooperation and mutual consultation to ensure that the Agreement is given full effect. Article 20 requires such a cooperative approach in general terms: "The Parties shall at all times endeavor to agree on the interpretation and application of this Agreement, and shall make every attempt through cooperation and consultations to resolve any matter that might affect its operation."
Third, implementation of the NAALC rests with the Parties themselves. This applies to cooperative activities (Article 11), cooperative consultations and evaluations (Part IV), as well as the resolution of disputes (Part V). The opportunity offered to members of the public, individuals or groups, whether union, employer or otherwise, to submit to the various NAOs for their consideration communications on questions dealing with labor legislation is thus a significant derogation from the otherwise public- or government-driven implementation of the Agreement. The detailed consideration of the processing of such public communications made during the period in question (Section III, infra) will show how important this window to the public is.
A certain degree of confusion appears to emerge from reading the Agreement as a whole. Thus, as already indicated, as the Agreement is in the nature of a "social clause," it is not concerned with workers' rights in themselves, but with the mutual relations they may have with the liberalization of trade between the three countries. To illustrate, the NAALC opens the way to third-party intervention (Articles 23 and 29), and thus in some cases to a method of compensation, only to the extent that persistent practices relating to technical labor standards are "trade-related." Although in the aforementioned list of its objectives the Agreement speaks of "improving working conditions and living standards in each Party's territory" (Article 1(a)) and "promoting to the maximum extent possible the labor principles set out in Annex I" (Article 1(b)), it also recognizes the right of each Party "to establish its own domestic labor standards, and to adopt or modify accordingly its labor laws and regulations," as it is the duty of each Party to "provide for high labor standards" (Article 2). Similarly, the Agreement requires each Party to "promote compliance with ... its labor law" (Article 3(1)), while at the same time it affirms "full respect for each Party's constitution" (Article 2) and makes allowance for various manifestations of "a reasonable exercise" of discretionary governmental authority (Article 49).
Finally, as we have seen, the Agreement is in general framed in terms of cooperation between the Parties and, in particular, contemplates the development of a wide range of cooperative activities between them (Article 11); that does not preclude drawing up a detailed and compulsory method for resolving disputes (Part V). All this may result in a large number of special pleas and may even contribute to a certain overall balance; nonetheless, the very structure of the Agreement is not devoid of potential areas of conflict. Only subsequent analysis of the first years in which it was in effect (Sections II and III, infra) will indicate to what extent these areas of uncertainty have in fact become apparent.
- Institutional Aspects
Implementation of the Agreement depends on certain institutions for which it provides, some permanent in nature, others temporary or ad hoc institutions.
The permanent institutional framework created by the Agreement is an original combination of a central body, the Commission for Labor Cooperation, and national institutions.
a. The Commission for Labor Cooperation
The Commission consists of a Ministerial Council and a Secretariat. The Council, comprising labor ministers of the Parties, is the governing body of the Commission (Article 10). Among its duties is the promotion of a wide range of cooperative activities between the Parties (Article 11; Section II, infra, will deal with this aspect). It must also be seen as responsible for the effective operation of cooperation, evaluation and dispute resolution machinery on account of its manifold interventions in those areas (see to this effect Articles 26, 28, 29, 30, 39 and 40). It has made its own rules and procedures (Article 9(2)) and has also created detailed rules and procedures for the ECEs (Article 24); similar rules are also being developed for arbitral groups (Article 33). The Council has not yet had to intervene in the proceedings of experts or arbitral panels (as will be seen in Section III, infra) but this is a situation that could change in years to come. The Council has regularly held annual meetings (Article 9(3)(a)); however, there have been no extraordinary sessions. At the same time, as will be seen (Section III, infra), the processing of public communications has given rise to separate Ministerial Consultations.
The important point is that, whenever the highest labor authorities of the three countries met or otherwise consulted together, the Agreement was an opportunity for the creation of a trinational ministerial forum that would probably not otherwise have existed, at least judging from the experience of the years preceding its implementation. This impact is of the first importance since the most essential objective is to ensure a healthy relationship between the liberalizing of trade between the three countries and the working conditions and labor relations within them.
The Secretariat, which also forms part of the Commission, is responsible for assisting the Council in exercising its functions (Article 13). On a day-to-day basis, it may be regarded as the Commission's working arm. However, it should be noted that, unlike the Secretariat of the Commission for Environmental Cooperation, this Secretariat does not receive public communications containing allegations that the applicable national law of one or other of the three countries is not being implemented. This solution of nonintervention by the Secretariat in such contentious situations has the advantage of enhancing long-term independent research activities for which the Secretariat is responsible under the Agreement (Article 14). So far as its own organization is concerned, the Secretariat, starting from zero, has been able in these initial years to build a capacity for handling requirements corresponding to the initial phase of implementation of the Agreement. This is true both as to its staff, the composition of which is balanced in terms of scientific and national origin, and its physical organization, an aspect that is indicated by the creation of a modest documentation center.
It may be doubted, however, whether with limited staff (Article 12(3)) and physical resources at their present level, the Secretariat will be able to provide adequately for the development of the various forms of action included in its mission in the coming years, in view of the size of the labor market in question and its trilingual nature. We are thinking here in particular of the requirement (discussed in Section II, infra) that it provides a significant amount of basic comparative research of an empirical, legal and institutional nature. This should not be a simple question of coordinating national inputs but, to a much greater extent, of centralized and independent work which should be done by the Secretariat itself, assuming of course that it has the resources to do this work.
The national institutions in question are first of all the National Administrative Offices (NAOs). The three NAOs form part of the departmental organization of each of the states in question. In each case it appears that they have the resources to adequately carry out their duties, at least at the present level of activity. Sections II and III, infra, will discuss respectively in each case the accomplishments of the NAO in the field of cooperative activities and its involvement in the handling of public communications. We will also see to what extent the NAOs have worked together during the period in question on these two types of activity, as well as with the Secretariat, as provided in the Agreement. The governmental nature of the NAOs calls for one immediate comment, as regards the handling of public communications, a field of activity which has had a quite decisive effect on a gradual acceptance of the Agreement in labor circles, as will be indicated in Section III, infra. If this procedure of public communications being reviewed by the NAOs is to be objective and seen to be so, it must be subject in general, including the preliminary stage of deciding whether to accept communications, to rules of procedure which are both clear and accessible to the public. Each of the three Parties has in fact set up its own rules. In each case these rules naturally bear the imprint of a distinct quasi-judicial and national administrative tradition. However, greater uniformity in these three sets of rules would be desirable, as each NAO is responsible for considering matters arising in the territory of another Party, and moreover often at the instance of submitters that include organizations originating in the country of that Party (as will be seen in Section III, infra). For example, with respect to holding a public hearing, the Mexican rules allude to the possibility of organizing "sesiones informativas" (Article 7); the Canadian rules state different possible formats for the examination, including "public meetings or consultations" (Article 5(a)), whereas the American rules indicate that the NAO Secretary "shall hold promptly a hearing on the submission, unless [he/she] determines that a hearing would not be a suitable method for carrying out the Office's responsibilities" (Article H 3). Allowing for different perceptions derived from distinct national traditions and culture, such an explicit relative presumption in favor of a public hearing, in itself, appears a salutary countervailing element to an otherwise discretionary governmental process. It will help establish public confidence in the process.
The governmental nature of the NAO finally contributes all its importance in each case to the possible input of the National Advisory Committee (Article 17). All three countries have set up such committees. The composition of the committee must include nationals of the country in question and representatives of its labor and business organizations. It should adequately reflect the plurality of views and interests prevailing from time to time in these circles. As to a Governmental Committee, which each party may convene (Article 18), only Mexico and Canada have up to now availed themselves of this possibility, and the U.S.A. should do likewise.
Ad hoc institutions are created from time to time solely in each case to inquire into a particular question; they refer to Evaluation Committees of Experts (ECEs, Article 23) and Arbitral Panels (Article 29). Neither type has been formed during the period in question. However, ECEs should be dealt with on account of the importance of the part that they might one day have to play in implementing the NAALC.
Evaluation Committees of Experts
The Evaluation Committees of Experts -- the same is true of Arbitral Panels -- are designed to make possible an independent analysis of patterns of practice by the Parties in the application of their technical labor standards. Their activity thus occurs at a completely different level from the NAOs, as well as that of Ministerial Consultations; unlike these procedures, it brings a broader perspective to the situations under consideration. So far as these two supranational procedures themselves are concerned, the intervention of the ECE, though it is a necessary stage before proceeding to the arbitral stage, in the few cases which allow it (Articles 27 and 29), it occurs in a quite separate process from that corresponding to arbitral intervention, which is itself contentious in nature. Intervention by the ECE, which is "nonadversarial" (Article 23), is an example of the "cooperative consultations and evaluations" dealt with by the Agreement in a separate part (Part IV) from that reserved for the resolution of disputes (Part V). In this respect the intervention of the ECE appears to correspond more closely to the general desire for consultation and cooperation, which as we have seen should generally characterize the implementation of the Agreement.
Two factors could explain the absence of any ECE action during the period in question, despite the inherent advantages of the procedure. To begin with, the first three Labor Principles -- freedom of association and protection of the right to organize, the right to collective bargaining, and the right to strike -- do not offer any basis for ECE intervention. As we shall see in Section III, infra, these are principles that accounted for a really overwhelming proportion of the activity by NAOs and Ministerial Consultations on public communications during the four years in question. In the light of experience gained from this period of implementation, it would appear that the Parties should examine the advisability of maintaining an exclusion of such practical importance in light of the experience gained from these four years, especially as there seems to be no compelling logical explanation in support of it.
Second, this absence of ECE intervention up to now with respect to matters presently covered could perhaps result from the existing practice of Ministerial Consultations. Such Ministerial Consultations are indeed a prerequisite to intervention by an ECE (Article 23). Ministerial Consultations have in fact only taken place following NAO recommendations, themselves the result of certain public communications; they have only been, as one might say, "reactive." Nonetheless, the present wording of Article 22 of the Agreement is broad and allows plenty of scope for Ministerial Consultations that may be characterized as "proactive," that is, consultations regarded as desirable by the ministers though there has been no previous review of a public communication by an NAO.
There should also be more exchange of information outside the communication process, which is usually limited to a single exchange. If such a "proactive" approach were adopted in the appropriate circumstances, patterns of practices by any Party could subsequently be more fully scrutinized by independent experts within the framework and procedures established by the Agreement itself. As such, the intervention of an ECE is not to be considered equivalent to independent expert advice that may generally be sought by the Council under Article 9(5) (a).