Furthermore, the Colombian government has attempted to systematically undermine worker rights' by allowing businesses to take advantage of labor subcontracting and outsourcing schemes. Lack of regulation of company run "labor cooperatives" and subcontracting agencies have denied large numbers of workers the right to organize, bargain directly with their employers, and receive other benefits entitled to regular workers. Subcontracted Colombian sugar workers went on strike for 56 days, aiming to gain back their right to bargain collectively.

At the same time the Board selected Colombia, it renewed its commitment to negotiate a similar grant, worth up to $841 million, with the Philippine government. The Philippines, for those who don't know, is the second most dangerous country in the world for trade unionist. The decision to grant the Philippines continued eligibility comes in the face of growing criticism that the Philippine government and the Employers Confederation of the Philippines have been stonewalling requests by the ILO to send a high-level mission to investigate the murder of trade union leaders, military harassment of democratically elected trade union leaders, and copious other freedom of association violations. The Philippines is also under review by the United Stated Trade Representative's General Systems of Preference sub-committee because of its failure to enforce internationally recognized workers' rights, a precondition for the GSP program. Also, like in Colombia, economic development in the Philippines prioritized labor subcontracting and use of labor cooperatives, which undermine the workers' rights to organize a trade union.

As we noted last week prior to the Board meeting, when Congress created the MCC in 2004, it required that any country wishing to negotiate with the MCC for grants must demonstrate a commitment to 12 core criteria (listed in Section 607 of the MCC statute) that are necessary preconditions to ensure that MCC aid will effectively promote sustainable and equitable economic development.  One of the 12 criteria Congress mandated the MCC to evaluate is whether a country is committed to "economic freedom, including a demonstrated commitment to economic policies that respect worker rights, including the right to form labor unions." To implement this mandate, though, the MCC buried the workers' rights requirement in its Civil Liberties indicator rendering it essentially meaningless. Furthermore, any protections for the workers' rights criteria are seemingly undercut by another indicator, the Regulator Quality Indicator, which rewards the expansion of "flexible labor markets."

The Board's selection of the Philippines despite widespread labor rights violations, at least, can be tenuously defended on the basis that Philippine government passed the Civil Liberties indicator, though its downward trend in the past few years should be of great concern. Colombia, on the other hand, has never passed the Civil Liberties indicator, or the Rule of Law indicator, or the Voice and Accountability indicator.

The Board's decision last week raises serious concerns about whether the MCC is simply playing politics with US foreign assistance decisions. Prior to the Board meeting, the Center for Global Development, while attempting to predict the outcome, noted that Colombia will likely be chosen because the United Stated Trade Representative, who sits on the MCC board, will push for Colombia's inclusion as one of her final acts. One last gift to Colombia from an Administration embittered by the standoff with Congress over the passage of the US-Colombia Free Trade Agreement because of the widespread labor rights violations. The same could be said for its Philippine decision, where the US government was able to open up its second front in the War on Terror in 2002 after promising hundreds of millions of dollars in US trade privileges and aid packages. Since then, activists in the Philippines have increasingly become targets for assassination and military harassment.

The designation of Colombia and the Philippines should raise red flags, and Congress should take a hard look at how the MCC has been implementing its statutory responsibility to ensure that the MCC only chooses countries that are committed to respecting workers' rights. Before any compact with Colombia or the Philippines is approved, Congress should ensure that both the Philippine and Colombian government are committed to ensuring that internationally recognized workers' rights are respected, and even promoted, to better ensure that economic development is both equitable and sustainable.