GLOBALIZATION AND SOCIAL SUSTAINABILITY THE FORESTRY & WOOD INDUSTRY ON THE MOVE Tripartite meeting, Geneva, 17-21 September 2001 Peter Poschen & Mattias Lövgren Forestry and Wood Industries, ILO International Labour Office, 2001 ILO 1
AN INDUSTRY ON THE MOVE? SOME INDICATORS Trade is outgrowing production World market prices Foreign direct investments (FDI) ILO 2
WORLD TRADE DEVELOPMENT 1990-1999 World merchandise exports vs. GDP [volume, 1990=100] 180 160 140 120 100 90 92 94 96 98 99 Source: WTO ILO 3
WORLD OUTPUT VS. TRADE WOOD PRODUCTS 1990-99 Includes: -Industrial roundwood -Sawnwood -Wood-based panels 150 140 130 120 110 100 90 Production Export Import 80 1990 1995 1999 Source: FaostatForestry Forestry Data ILO 4
Foreign Direct Investment US AND FINNISH FOREST INDUSTRIES 1982-98 Source: Uusivuori and Laaksonen-Craig 2000 ILO 5
PRICE DEVELOPMENT WOODEN FURNITURE 1990-96 96 Source: Kaplinsky & Readman 2000 ILO 6
WHY GLOBALIZATION? Economic reasons: Geographical presence Unit costs Transport and communications technology Tariffs and trade barriers Sectoral aspects ILO 7
SECTORAL ASPECTS Concentration of purchasing power: Publishers, retailers: construction material, DIY furniture (e.g. IKEA) Environmental reasons and wood supply: Tropical timber Plantations tions Recycling ILO 8
PLANTATIONS TIONS The share of plantation- grown timber will increase substantially Today 35% Tomorrow (2040) 50% ILO 9
WHERE ARE WE HEADING? Development of demand: Modest growth, major redistribution urban South East Asia, Eastern Europe Change in structure: Concentration into larger units Relocation to the south and to the east: New markets, low-cost production, raw material ILO 10
IMPLICATIONS FOR DECENT EMPLOYMENT STATUS Global forest-based employment: 47 million person-years (full-time equivalents) of which: Formal industrial sector: 17 million Informal sector: 30 million WORK ILO 11
EMPLOYMENT - TOP 15 COUNTRIES 6'000'000 5'500'000 5'000'000 4'500'000 4'000'000 3'500'000 3'000'000 2'500'000 Furniture Pulp and paper Wood industries Forestry 2'000'000 1'500'000 1'000'000 500'000 China Russian Federation 0 ILO 12 United States of America Indonesia Japan Brazil India Germany Romania United Kingdom Canada France Spain Malaysia Italy
EMPLOYMENT TRENDS Industrialized countries: Stagnation/fall/rationalization e.g. Finland Developing and transition countries: Growth: Uruguay Stagnation: Chile Resource shortages: Indonesia R.S. & transition: China Transition: Russian F. ILO 13
ANNUAL WAGES PER EMPLOYEE Purchasing Power Parities - USD 45'000 40'000 35'000 30'000 25'000 20'000 Paper and Products Wood Industries Furniture 15'000 10'000 5'000 0 Canada United States Austria Finland United Kingdom Sweden ILO 14 Rep. of South Africa Chile Brazil Malaysia Philippines Ghana Indonesia India Fed. rep. of Russia
DEVELOPMENT WAGES MALAYSIA (1994=100) 150 145 140 135 130 125 120 115 110 105 100 1994 1995 1996 1997 1998 Manufacturing Wood sub-sector Furniture ILO 15
QUALITY OF EMPLOYMENT No sign that globalization directly affects wage levels Outsourcing strong and negative influence, e.g. forestry contractors Skill development critical in ICs and DCs ILO 16
SOCIAL DIMENSION OF SUSTAINABLE DEVELOPMENT Social dimension has to be incorporated into policies related to the forestry sector Shared international vision for policies & strategies ILO texts, development of criteria & indicators for sustainable forest management Certification Growing attention to social components of sustainable development ILO 17
DECENT WORK AND A SUSTAINABLE RESOURCE BASE Deforestation Causes are social and economic in nature A hands-on way to protect resources -Codes of forest practices ILO 18
GLOBALIZATION, DECENT WORK & SUSTAINABILITY NOT NECESSARILY CONTRADICTORY Vision and best practices for forestry contractors taking shape Promotion of SMEs in ICs & DCs - in traditional industrial districts, e.g. Sweden - as a part of a sector programme, e.g. Brazil Social dialogue -an instrument and a right - many new opportunities due to sustainable development debate Growing number of initiatives to promote sustainability ILO 19
POINTS FOR DISCUSSION What are the main developments in the forestry and wood industries and which factors are driving these changes? What are the implications of these changes for decent work in the sector in terms of quantity and quality of employment, rights at work, social protection and social dialogue? What should governments, employers and workers do in order to contribute to socially sustainable development in the forest and wood industries at international level, nationally and in enterprises? How could the ILO best assist the constituents in their efforts to implement socially sustainable development in the forestry and wood industries? ILO 20