Ireland adopts the exploiter’s charter EU Services Directive becomes law*

Communist Party of Ireland, Wednesday, 20 January 2010

http://www.communistpartyofireland.ie, mailto:cpoi@eircom.net  

SOCIALIST VOICE

Publication of Dublin District, Communist Party of Ireland

The Commission that produced the ‘country of origin’ principle, which was removed from the final text of the Directive, will clearly return to it as a matter of course.” So said the former EU Commissioner for the Internal Market and Services, Charlie McCreevy.

On 29 May 2006—exactly a year after the French people rejected the “European Constitution”—EU institutions agreed a text for a controversial Services Directive. A period of three years was granted to member-states within which to comply—despite the fact that no electorate in Europe has voted for it.

Directive 2006/123/EC, on services in the internal market, came into force on 28 December 2009. The Tánaiste and Minister for Enterprise, Trade and Employment, Mary Coughlan, informed Dáil Éireann on 22 September that she proposed to bring the directive into effect by means of a statutory instrument. (It is believed that a number of statutory instruments will have to be issued, as there is so much amending legislation.) This was to ensure that neither house of the Oireachtas would have an opportunity to discuss the proposed controversial legislative provisions and to avoid alerting the public to their implications. This method was adopted despite the fact that, in the words of the consultation document, “as a result of the screening process, a number of existing pieces of legislation and other rules are being changed to bring them into line with the Directive.”

Changes to existing legislation and rules should be achieved through primary legislation and should come before the Oireachtas in the normal way. There is no mandate for the transposition of the directive by statutory instrument, which changes national law “by administrative means or by both administrative means and Regulations”; but this method—conveniently for the Government in the present climate—confers an element of secrecy on the whole process.

The Services Directive itself is a mechanism for introducing “free market” competition to all services within the European Union, including health and education, as originally envisaged within the rules of the rejected European Constitution—later to emerge as the Lisbon Treaty. The directive involves abolishing controls, democratically decided by national parliaments, that impede the free movement of services.

In order to establish this new order the directive gives the EU’s own European Court of Justice the power to decide which national laws are “illegal” if foreign companies do not have total access to service markets in the host country. This facilitates, in the words of the General Secretary of SIPTU, Joe O’Flynn, “very powerful vested interests that are promoting an agenda that gives big business, and employers in particular, the power to exploit ever larger markets without having to accept any responsibility for the social consequences.”

The original text of the directive, first presented by Frederik Bolkestein, then Commissioner for the Internal Market, in 2001, contained the so-called “country of origin” principle, which exempted foreign companies from the laws of host countries they operated in. Under these arrangements, all minimum wage levels and health and safety standards could be ignored in the pursuit of profit. As a result, companies registered in EU member-states with minimal labour standards could undercut pay and conditions secured by workers in other member-states.

Not surprisingly, this provoked huge trade union protests throughout Europe and raised concerns of widespread “social dumping” that would spark a “race to the bottom” in wages and conditions.

These concerns proved to be a big factor in the French rejection of the EU Constitution, which was followed by widespread calls for the ditching of the offending directive. However, within the undemocratic structures of the European Union only the unelected Commission can initiate or withdraw legislation.

Following these protests, more than four hundred amendments were presented to the European Parliament, including demands for the removal of all mention of the “country of origin” principle and for health care, public transport and social services to be removed from the directive.

These amendments, which left 85 per cent of the original directive intact, were eventually agreed in February 2006 and were claimed by Sarkozy as a great victory for French diplomacy and for democracy in the European Union. Nevertheless, the European Trade Union Confederation stated that “the proposals would speed up deregulation, seriously erode workers’ rights and protection, and damage the supply of essential services to European citizens.”

Then the incoming Commissioner for the Internal Market, Charlie McCreevy, honestly declared that the amendments counted for very little and that the original intention of the directive remained. He told the Council of Ministers: “Article 16 fully recognises the right to provide services on a cross-border basis and sets out clearly the kind of requirements on incoming service providers that have to be abolished in line with ECJ [European Court of Justice] case law.”

McCreevy has also indicated that the European Commission was working on legislation for other sectors exempted from the directive, including health care—as well as returning to the “country of origin” principle. “The Commission which produced the ‘country of origin’ principle, which was removed from the final text of the Directive, will clearly return to it as a matter of course,” he said.

Moreover, in the “reformed” directive there is no “country of destination” principle, nor any clear protection for national standards. And companies no longer have to register in host countries and can move to the most favourable locations to circumvent national standards.

Any final decisions on the interpretation of EU law and the directive will be exercised by the European Court of Justice, the EU court.

The Services Directive is part of the drive to impose a single market within the European Union in order to complete the “free movement of capital, services, people” as laid down in the EU treaties. Cheap migrant labour can be cynically used to batter down hard-won national standards and undermine collective bargaining rights established by trade unions over many years.

We have already seen the process in action in the Irish Ferries strike, where cheap foreign labour displaced Irish seafarers, and when the TEEU found Polish workers at the ESB’s Moneypoint Station being grossly exploited by German contractors and being paid as little as €5 an hour. In another instance the union discovered Serbian electricians being paid as little as €3.81 an hour.

The Laval, Viking, Rüffert and Luxembourg judgements vividly show how the European Court of Justice is seeking to undermine trade union collective bargaining rights. The European Commission openly backs these union-busting cases and claims that national labour laws contravene the principles of the single market. These and other EU rules are designed to allow big companies the freedom to move assets and services anywhere within the European Union, where labour costs are lowest, and to force labour to meekly follow in the search for work.

It is this conjunction of interests between the Commission and its court, the ECJ, that has seen the “country of origin” principle reintroduced piecemeal by the back door. The effect of this, though yet unknown, can only be detrimental to the interests of workers in Ireland and throughout the European Union.

The General President of SIPTU, Jack O’Connor, said of the Bolkestein Directive that /“the scale of the threat to employment standards is still not widely appreciated here.”/ He emphasised that it is /“critically important that civil society rejects the ‘law of the jungle’ and asserts the principle that we don’t need our infrastructure to be built, our goods transported or our services provided by paying people slave wages . . . The proposed Directive would allow companies from member states with minimal labour standards to undermine those won by workers in other member states and indeed undermine companies that have hitherto provided such services by adhering to such standards. The Directive would also allow Irish companies to relocate operations in member states with low standards and continue to trade in the Irish market.”/

These words apply just as pertinently to the combination of the Services Directive and ECJ judgements, and they sound a salutary warning to Irish workers that the struggles ahead will be difficult.