Making human rights profitable: Wishing the Philippines a prosperous 2016!

Two years in a row the EU and the Philippines had a special Christmas: just before last Christmas, we announced the start of our Free Trade Agreement negotiations – a milestone in our relations that will bring our commercial relationship, now worth around P800 billion of trade in goods and services, to its potential, which should be double at least– but more about that later this year.

Christmas 2014 was special too as it was the moment the EU granted the Philippines ‘GSP+’ preferences, or to put it in EU-language: “access to EU’s Generalised Scheme of Preferences’  Special Incentive Arrangement for Sustainable Development and Good Governance”. Or, in better understandable English: “zero percent import duties for most goods exported to the EU.” This has given the Philippines a strong competitive advantage compared to the region.

Results are noticeable: exports to the EU increased by around 19 percent in euro values at a time when exports to all other major export markets were dropping significantly. It also meant higher exports for some key sectors of interest to the Philippines: exports of animal products under GSP increased by 157 percent; fish by 41 percent and prepared foodstuffs by 72 percent.  Exports of footwear doubled!

Did it come for free? Not really. Commercially we do not ask for any returns as the EU wants to support the Philippines in its growth through industrialisation and (export) diversification and making the economy less vulnerable to external shocks. However, we do ask, namely to discuss implementation of 27 international conventions that we both find important and have ratified: on human rights; labour; environment; and governance.

This week, the European Commission will adopt its report on the implementation of these Conventions. It follows the good discussions we had with the Philippines during the last year; showing a government, encouraged by a very active civil society, that is able and willing to discuss sensitive issues of human and labour rights. As a newcomer to the country, I see officials are handling this very well with on the one hand a recognition of areas where action needs to be targeted, for instance on dealing with extra judicial killings or labour rights in the tuna industry; while on the other hand convincingly showing a commitment to deal with those issues. With a special role of Philippines’ civil society, showing democracy in its truest sense by people who are able to and use their ability and freedom  to speak their minds.

Let me give you two examples: on labour rights, the EU met with the Department of Labor and Employment;  industry and  trade unions in General Santos where a lively and engaged discussion took place in the open on how workers could be protected better by changing the pay structure from a profit sharing to a minimum wage + profit sharing one; and to find ways to avoid contract workers not directly employed not being protected. DOLE is taking these issues very seriously and facilitating solutions that work for workers and industry. The EU recognises the progress the current administration is making to improve awareness and implementation of labour and employment policies, and to ensure compliance with the eight fundamental ILO conventions.

Also on human rights, there is a lot to deal with, but the Philippines has strengthened the country’s human rights legal framework since 2010 and the number of extra-judicial killings and enforced disappearances have substantially declined since. And I am happy that the Philippines continues to work on this: the launching of a national monitoring mechanism for extra-judicial killings is an important step forward in this direction. I look forward to the National Action Plan on Human Rights to be renewed and endorsed shortly. Similarly the Philippines is making good progress on issues of governance and environmental protection.

Besides being part of GSP+ conditions, do these actions really matter for business?

I think they do, and for three reasons:

Companies want to operate in a good business environment, respect for human and labour rights; and good governance are all important parts of companies’ decision to invest. The Philippines can easily double the amount of investments it receives, and the jobs they create, by continuing its path of reforms and sustaining peace in the country.

Second, companies more and more need to control their supply chains to ensure that what they sell is sourced in a legal, preferably sustainable and ethical way. Doing so adds value on European markets; not doing so – as we have seen in the recent past – is detrimental for business and can lead to the end of a company. Compare the stock-listed companies of two decades ago with those of today and you will find that many no longer exist.

Third, they add value to people’s work. While creating jobs is very needed in the Philippines, quality jobs that can provide a decent living; pay for healthcare, education and development are what the Philippines should aim for.

I am very proud that the EU is contributing to this.