The World Development Report and the perils of ignoring unions


The World Bank recently published the 2014 edition of its flagship World Development Report (WDR). This year’s WDR focuses on the role of communities, enterprises and governments in the proactive management of risk.

The report places significant emphasis on the role of paid work as a pillar of ‘resilience’ in the face of risk. It is encouraging to see that the Bank accepts that not just any kind of work fits the bill here. For the purposes of risk management, it argues, “jobs that provide secure and increasing income and a safe working environment are preferable to jobs that do not carry those benefits.”

Yet, despite job security, wages and safety at work being the stock in trade of the world’s most significant and ubiquitous civil society organisations, trade unions, the role that the labour movement can play in managing social and economic risk merits no more than a single sentence in the entire 326-page publication.

Of course, ignoring the potential of unionisation and collective bargaining is not new for the Bank.

My experience of the views of World Bank Group staff – and I should say that this does not include anyone directly involved in the production of the WDR – is that although they are comfortable with the official policy of opposing the repression of independent worker organisation, they tend to be very cautious about actively encouraging it.

They believe that union action is frequently politically and economically counterproductive. From their perspective, encouraging unionisation looks like a risky way to manage risk.

Of course, there’s no point trying to pretend that unions are always perfectly benign.

Sometimes they use their influence in politically motivated attempts to resist organisational plans and strategies that are in fact rational and reasonable.

Sometimes they just can’t see the wood for the trees and resist change because they haven’t realised that in the long run it would be good for their members.

Sometimes they even end up tied in to political structures characterised by corruption, crime or violence.


Good news from Uganda

Sometimes. Most of the time, though, what happens is more like this:

In 2006 the International Finance Corporation (IFC), the World Bank’s private sector lending and investment arm, agreed to provide funding for a hydroelectric power plant at the Bujagali Falls in Uganda.

The Uganda Building Union, with support and encouragement from the Building and Woodworkers International Union (BWI), approached the main contractor asking to be recognised as the representative of construction workers on the project.

Meetings were held, votes were taken, members were signed up and recognition was eventually granted.

The union and the company negotiated a series of collective agreements and worked together for the five years it took to build the plant. At its peak there were more than 3000 workers on the site, a large majority of whom were union members.

The union negotiated about pay and holidays, about safety equipment and accident compensation. It helped to ensure that workers were recruited fairly, with no bias towards or against different ethnic groups.

It made sure that proper accommodation and other facilities for workers were available. It insisted that there was an HIV/AIDS information and screening programme on site.

What is more, the union used the surplus revenue from the extra members it recruited during the project to build a training centre in the grounds of its offices just outside Kampala.

An agreement was struck with a local vocational school to run courses in the building trades for young people and the Uganda Building Union Training Centre opened for business in August this year.


Invisible unions

The trouble is that despite this kind of highly positive impact, the IFC, like the rest of the World Bank Group, remains reluctant to take any steps towards actively encouraging union organisation.

Since 2006, the IFC has required its clients and their contractors to permit independent worker organisation where it arises, but in practice the policy amounts to little more than opening the door a crack.

In the Bujagali case all IFC had to do was to stand back and let the contractor and the union get on with it, but there are many other situations where for a long list of reasons unionisation remains an impossible dream for workers, even if on paper it is permitted.

This brings us back to risk assessment.

The trouble is that within the IFC’s monitoring and evaluation processes, the positive impact of union work is totally invisible.

Of the eight social and environmental monitoring reports produced over the life of the Bujagali project, not one so much as mentions the union.

The IFC’s development impact calculations will not factor in the degree to which the relationship between the contractor and worker representatives contributed to the smooth running of the project and helped to ensure that a long list of undesirable impacts on workers and the local community were avoided.

They will certainly not factor in the long-term impact of the new building trades training centre.

With this kind of information failing to find its way into the World Bank evidence base, it is hardly surprising that the WDR excludes from consideration the possibility that systematic support for and capacity-building work with trade unions and other workers’ organisations could make a significant contribution to the management and reduction of social and economic risk.

The evidence about the positive impact of independent worker representation and collective bargaining on social and economic development is simply not put onto the scales.

For this reason, and whatever its other merits, the WDR 2014 is bad policy science.

My advice to next year’s WDR team is that before they start to write their report they sit down with some of their colleagues from the International Labour Organization (ILO).

Maybe at that meeting they could discuss the ILO’s research on the impact of collective bargaining on low wages, and on the impact of raising the wage floor on economic development and resilience in the face of risk.

They could ask about the strong and internationally consistent correlation between union presence and safer workplaces. And then perhaps they should call up the Uganda Building Union and ask if they can visit that training centre standing proudly on the road from Kampala to Entebbe.

They might learn something there, too.


Conor Cradden is a research fellow at the University of Lausanne in Switzerland. This article draws on research funded by the Swiss Network for International Studies, a publicly funded grant-giving body based in Geneva. The author is writing in a personal capacity.