Will ‘Rising Powers’ lower global labour and environmental standards?

By Khalid Nadvi

image by photoeverywhere.co.uk

A recent special issue in Oxford Development Studies explores how new players from the Rising Powers (mot notably China, Brazil and India) may challenge the global ‘rules of the game’ on social and environmental issues. In his introductory article on “Rising Powers” and Labour and Environmental Standards, Khalid Nadvi outlines what makes the Rising Powers special and in what ways they affect global labour and environmental standards.

Who are the Rising Powers?
First, who are the Rising Powers and why should we care about them? The Rising Powers include the emerging economies of Brazil, China, India, Russia, and South Africa (often referred to as the BRICS) amongst others. They matter because of their expanding role as new drivers of growth in the world economy; their increasing significance not only as arenas for global production but also of consumption; their interdependent relationships with the rest of the world in terms of trade and capital flows and environmental impacts; their expanding clout in forums of geopolitical and global economic governance; and, their potential as ‘models’ of economic and social development for other developing and transition economies. Calling these countries “Rising Powers” is a matter of perspective and not unproblematic – after all some of them were historically key players in the world economy long before Western countries became rich and powerful. Nevertheless, over the past three decades, we are observing significant changes in the global economic and geopolitical power balance, with new (or re-emerging) players challenging the dominance of Western countries. In this context, there are six distinctive criteria that define a country as a Rising Power. These include:

• strong economic growth since the 1990s 
• significant participation in global trade 
• a large domestic market 
• strong state involvement in the economy 
• availability of local private and public capital for investment 
• growing space for civil society in public-private discourse 

These six factors make the Rising Powers different from other developing countries that have experienced strong economic growth and have caught up with more technologically advanced economies, such as South Korea. These characteristics also explain why Rising Powers may be able to change global governance dynamics around a variety of issues, including on labour and environmental standards.

How will the Rising Powers affect labour and environmental standards in the global economy?

image by wikimedia

Concerns about sweatshop labour, climate change and environmental pollution have prompted the adoption of labour and environmental standards in international trade over the past decades. This has been largely driven by governments, companies and civil society in Western countries. In contrast, some of the growth in Rising Powers like China occurred precisely because they started exporting cheap products, competing in the world market on low wages, and prioritising economic growth over social and environmental concerns. Does this mean that the Rising Powers will provoke a global ‘race to the bottom’ on labour and environmental standards? Or alternatively, as these countries become more prosperous, will domestic demands for better working conditions and environmental protection increase, and will this be reflected in a more active engagement by Rising Power states and firms in the global governance of labour and the environment?

The collection of articles in this special issue sheds light on different actors and processes within the Rising Powers that could potentially impact the global governance of labour and environmental standards. For instance, Guarín and Knorringa explore the influence of new middle class consumers on private standards, such as fair trade certification or environmental standards. Complementing this consumer-focused perspective, Brandi investigates how Chinese firms and government actors engage with international environmental standards on limiting carbon emissions. The articles by Coslovsky and by Peña on Brazil explore the enforcement of labour laws by the Brazilian government and the international engagement of Brazilian actors in private standard-setting networks on social and environmental issues, underlining the growing consensus around well enforced minimum norms in Brazilian society. In contrast, Mezzandri reminds us of the possible limits on improving social compliance through an in-depth study of Indian garment clusters.

image by Toa55/FreeDigitalPhotos.net

Overall, the special issue highlights four areas that call for further research. First, consumers in the Rising Powers, particularly among the rapidly emerging new middle classes, may or may not attach importance to ethical aspects in their consumption decisions. Do these new consumers pay attention to ethically certified products? Second, Rising Power firms are increasingly taking on positions of lead firms in global value chains and global production networks. Will they come under similar pressure as many Western multinational companies to address social and environmental issues in their supply chains, and how will they respond to these? Third, civil society in the Rising Powers could potentially take on similar roles as Western NGOs running anti-sweatshop campaigns. Or will they address social and environmental issues very differently – or simply not be very important players at all? Finally, given the strong role of the state in the Rising Powers, governments are likely to be important players in setting rules on labour and the environment. How do these Rising Power states influence labour and environmental standards, both through national regulation and in global fora on social and environmental standards? These factors deserve further exploration in order to improve our understanding of how the Rising Powers influence the rules of the game on sustainability in international trade – and to find out whether Western concerns about a race to the bottom on labour and environmental standards are justified.

The special issue in Oxford Development Studies, Volume 42, Issue 2, 2014 aims to contribute to this debate. Links to individual articles can be found on the publisher’s website or on the Rising Powers and Interdependent Futures website.