Chapter 13

LABOR DISPUTES

Mark Anstey(1)

Preventive diplomacy has been defined as

"...action to prevent disputes arising between parties, to prevent existing disputes from escalating into conflicts and to limit the spread of the latter when they occur"(UN 1992)

It is

"employed to forestall policies that create social and political tension. These policies include human rights violations (such as denial of individual's freedom of expression, or right to a fair trial) or discrimination against people on grounds of ethnic, linguistic or religious identity or political belief...(it is) by definition low key, undramatic, invisible, but it is cheaper than peacekeeping or war" (Glover 1995)

Although claims that preventive diplomacy provides an inexpensive, effective, relatively risk-free means of conflict reduction have been challenged as simplistic and exaggerated (Lund 1995; Stedman 1995), the concept of conflict prevention remains attractive to many. Recent contributions make a distinction between 'prevention' (connoting conflict containment through dispute settlement and conflict resolution) and 'prevention' (directed at removing causes of conflict and promoting conditions in which collaborative and valued relationships control behaviours) (Burton 199). Efforts are directed at replacing exchanges of short term political expediency with long term policy development founded on informed analysis - it involves tackling problems before they become conflicts.

Viable preventive diplomacy or conflict prevention is concealed precisely because of its effectiveness - it resides in the processes and institutions of stability. Modern systems theories suggest however that such states are but temporary in the life of evolving systems which progress through periods of disorder and order. Increasingly there is awareness that where early systems theories viewed fluctuations and disturbances in functioning as symptoms of trouble, that in fact such periods serve as an essential trigger for organisational renewal. Far from perceiving the 'normal state' of systems as one of stability, cycles of instability are seen as part of the coherence of larger systemic or organisational adaptation and survival. Wheatley (1994) argues that equilibrium is neither the goal nor the fate of living systems. They need non-equilibrium for their survival and growth and to develop responses to new internal and external conditions. Adaptive social systems and organisations are resilient rather than stable in character and driven by purpose. Structures are only manifestations of what is required to achieve goals at any given time - they are functional to purpose. Social systems are the products of interaction between environmental conditions and strategic choices made by their stakeholders as they seek to protect and advance their interests. As a consequence they must be understood as malleable and having the capacity to assume many forms. Within cycles of equilibrium and disequilibrium stakeholders make choices regarding the organisation of their system. The span of such decisionmaking includes choices such parties make regarding how they will deal with current and future conflicts. Decisionmaking in the labour relations arena plays an important role in shaping larger social systems not least in the manner parties choose to deal with inherent conflicts of interest under diverse conditions. It is suggested here that interest in regulating, containing and preventing conflict may only be shared amongst system stakeholders under certain conditions - in others one or more may have an active interest in escalating rather than preventing or regulating conflict. As such interest in designing and sustaining conflict prevention systems cannot be assumed to be of automatic interest to stakeholders who somehow find themselves in conflicts 'which they wish they could end if only they could see a way to do so'. Indeed as much as conflict may emerge as a consequence of changing conditions, so may conflict may be actively engineered and its energy utilised by one or more parties to reconfigure relations.

Labour relations systems as examples of conflict prevention

Dunlop (1958) made an early (and often ignored) distinction between conflicts played out within systems and those associated with tensions over the shape of such systems. In the postwar period labour relations in many developed countries have been expressed through the medium of collective bargaining arrangements which have the appearance of regular, set-piece exchanges with well-defined boundaries and rules of play. These characteristics have tended to conceal the conditions and levels of confrontation in which such systems took root. It is argued here that such labour systems represent examples of relatively successful conflict prevention in which key societal stakeholders took steps not only to contain and regulate deep societal conflict, but also to forestall and reduce conflict through multi-tiered levels of exchange in the engine rooms of national economies. They represent the transformation of conflicts 'over' systems into conflicts 'within' systems.

Communist and developing nations have reflected different configurations of development, strategic capacities, power relativities and choices between the key stakeholders associated with labour relations systems (state, business and labour). Largely the configuration has been one in which the state has been the key powerholder and the most influential in shaping the wider society and the labour relations system within it (Siddique1989; Henley 1989). However in many such nations conditions have shifted sufficiently in recent decades for unitarist systems to be challenged and a search for more democratic systems of governance obliged. In other words these nations are involved in struggles 'over' systems design. Exchanges in the labour relations arena reflect such struggles and are often vital to their outcomes. Labour in recent times has played a significant role in struggles for the restructuring of social and political systems - South Africa and Poland are salient examples but experiences in many countries in South America, Eastern and Southern Europe, Asia and Africa are also illustrative (Anstey 1997; ILO 1994: Shadur 1994; Valenzuela 1989). In designing new labour dispensations congruent with the values, structures and systems of democracy such countries have looked to the systems of developed economies and the guidelines provided by the conventions and recommendations of the International Labour Organisation (ILO).

Even as new democracies attempt to install the systems which have served the developed economies so well for conflict management purposes for the last fifty years or so however, there are signs that their viability and usefulness for those systems are under revision. There is argument that the conditions which spawned and sustained their characteristic institutions and compromises are in a process of rapid and fundamental change, and that new arrangements recognising this reality are required.

Internationally then labour relations systems have reached an important juncture. In many nations which have never enjoyed the freedoms and collective bargaining institutions associated with democracy there are strong drives to this end; in those nations which have, conditions which sustained them for decades have been eroded. In both instances it may be argued that there is a rise in processes of conflict 'over' the shape of systems rather than the management of conflict 'within' systems. This global reality is recognised in Kuruvilla and Ericksen's (1996) punctuated equilibrium theory which proposes that after their introduction labour relations systems within nations tend to hold for long periods until conditions arise which oblige rapid and fundamental change. During such periods the system is 'up for grabs' as it were offering opportunities for governments, labour and business to reshape systems rather than simply play out existing ones - indeed they have to design a new system because the old is redundant in the face of new conditions.

The exploration of preventive diplomacy in this book is concerned with its process elements in different issue areas. Under consideration is the manner in which parties' vision of stakes is shifted from a zero- to a positive-sum situation, how attitudes are shifted from conflictual to accommodative and the tactics used to bring these changes about. Cycles of stability and instability characterise systems as key stakeholders make strategic decisions to protect or further their interests under changing conditions. All parties may have strategic interests in preventing, containing, or regulating conflict under certain conditions, but equally all may see advantage in escalating tensions in others. When all parties perceive their interests to be served best through system maintenance then conflicts tend to be of a 'within system' character. However changing conditions or perceptions of strategic opportunity may prompt any of the stakeholders to pursue its interests in a manner which disrupts the 'balance' of relations, and this may oblige a fundamental revision of the system as a whole. Relations are transformed into a conflict 'over' the system.

Within the cycle of relations from equilibrium to disequilibrium then parties' perceptions of stakes, attitudes toward one another, and strategic and tactical capacities and proclivities are in constant change. Stability in a system may be measured by the extent to which all its stakeholders perceive their interests to be best served through the maintenance of that system and the institutions and processes which they introduce to preserve it. These would represent to an extent the institutions of effective conflict prevention. The desire to create such institutions however is rooted in periods of intense conflict - it is the joint recognition of the realities of destructive conflict which prompts recognition of the need for its effective management, prevention and reduction. Any investigation into conflict prevention then must span periods of stability and instability in a system's life, and consider the durability of arrangements under changing conditions.

The labour relations systems of developed economies provide useful insights into the design of effective conflict prevention systems, the rationale and compromises on which they are founded and the conditions under which they have proven sustainable. They emerged from a period of fundamental conflict between stakeholders, stabilised effectively for several decades, but in the context of changing conditions are currently in a process of revision. In developing countries conditions which have facilitated unitarist or state dominated systems have changed in many instances to oblige a shift from authoritarianism to democracy. The manner in which the tensions inherent in such transformations is managed is key to the evolution of conflict prevention and management in emerging democracies and their consolidation.

LABOUR RELATIONS SYSTEMS IN DEVELOPED ECONOMIES

The origins of labour relations systems in developed economies

Towards the end of the last century the world moved into a period of turmoil. The decline of monarchies and the emergence of the nation state strengthened nationalist sentiments; powerful forces of imperialism expanded nation state tensions into global conflicts; gaps between productive, distributive and consumption capacities facilitated successive economic depressions. New mass production technologies underpinned the emergence of factories collected thousands of people in places of work for the first time, giving rise not only to a major dislocation of traditional societal structures and problems associated with rapid urbanisation, but also new points of ideological mobilisation around concepts of class. Within and between nations it was a period of major and often very violent conflict. Hobsbawm (1995) has termed it the 'age of catastrophe'. The evolution of modern labour relations systems occurred within this context. Trade unions, often mobilising around visions of a radical restructuring of capitalist economies emerged as a powerful force for change acting in concert with socialist and communist parties, and posing a serious threat to traditional modes of political and economic governance.

The origins of modern labour relations systems in developed economies lie in compromises reached in the early part of this century between owners of capital seeking to entrench ownership and control of the means of production and anxious to reduce disruption of manufacturing processes in the new mass-production factories; militant labour movements resistant to exploitation and capable of stopping production processes through collective action; and governments anxious to promote economic growth and achieve conditions conducive to social and political stability. Within this context the evolution of collective bargaining and various forms of employee participation can be understood as a form of national pact between key parties in economies in which they agreed to limit their powers for mutual harm in both their own and each other's interests. Strong ideological stances gave way to social compromise, maximalist demands were muted through institutionalised collective bargaining. The question of relevance here is why the parties should make such choices. What factors facilitated a muting of demands and positions and the transformation of conflicts over systems into conflicts within systems?

Collective bargaining as a means of conflict regulation

Firstly the parties vision of stakes shifted largely as a consequence of a joint realisation of interdependence. Much as employers resented intrusions by organised labour and resisted socialist ideologies they needed predictability in the production process - and to this end, a reliable labour input. Much as early trade unions were committed to a vision of radical restructuring in which capitalist exploitation would be eradicated - workers needed ongoing employment and wages. Pragmatism prevailed. Emerging labour relations systems were almost universally characterised by a compromise in which trade unions achieved recognition, access to workplaces for organising and representation purposes, the right to periodic bargaining over terms and conditions of employment and in many instances the right to strike over such matters at such times; employers were relieved of constant wage demands, given a degree of predictability in production, and protected from wildcat action on matters falling within agreements; and the state achieved a level of regulated stability in the economy securing viable production processes and revenues. Collective bargaining offered two basic means of joint control: market control (removal of wages from competition) and managerial control (regulation of behaviour in workplaces through negotiated procedural agreements) (Flanders 1975).

Secondly, in growth economies the prospects and benefits of regulated conflict through collective bargaining were perceived to be larger than those offered by unilateralism or radical restructuring through confrontation. The change in perceptions of stakes was enabled in no small measure by the prolonged postwar growth of the economies of Europe and the USA allowing rising standards of living, increasing wages and full employment (pie enlargement with benefits for all). Confrontational attitudes were softened through a process which acknowledged the inherent conflict of interests in labour relations but regulated them through jointly agreed rules in a manner which offered mutual benefits. Unilateralism gave way to management by consent; rigid free market and socialist ideologies found a compromise in concepts of social democracy, welfare capitalism, and active labour market policies.

Collective bargaining systems assumed multiple forms internationally, finding a 'fit' with social, economic and political conditions across countries. In Europe multi-employer collective bargaining emerged as the predominant form. Employers already had a long tradition of cooperation as a consequence of mutual efforts to cope with volatile markets (bulk buys; joint warehousing; cartels) and in the face of powerful centralised labour movements this cooperation was simply extended into the formation of employer organisations. Centralised bargaining offered employers and unions best opportunities to remove wages from competition as well as economies of scale in bargaining, training, and benefit funds. In addition small and medium employers saw it as the means of neutralising the workplace from a direct union presence. In the USA joint employer activity was constrained by anti-trust laws. To smooth markets and control business conditions mergers and buyouts replaced European cartels and employer bodies giving rise to the huge corporations at the centre of the national economy. In addition unlike Europe the emerging American labour movement was fragmented and local unions were jealous of their autonomy. Indeed the AFL could only establish itself on the basis of union autonomy and decentralised policies (Sisson 1987; Dulles and Dubofsky 1984).

Whatever its form the core purposes and processes of collective bargaining remained the same. The process represented the formalised means of regulating conflictual relations in the engine rooms of national economies within a jointly recognised interdependence and commitment to the national economy. The systems which developed represented strategic choices on the part of key actors to limit confrontation recognising that it was in their own interests to secure the interests of the others in a form of 'national bargain' (Reich 1992; Sisson 1987). The rules of the game having been established, the parties played within them for decades prompting perspectives of labour relations as a form of regulated adversarialism for purposes of system maintenance rather than as a vehicle for societal transformation. Indeed collective bargaining systems represented some success in efforts to translate 'conflicts over' into ' conflicts within' social systems given legitimacy through compromise. The effectiveness of collective bargaining as an institution of conflict regulation in many systems was enhanced by introducing specialised agencies of conciliation, mediation and arbitration to facilitate relations, promote settlement searches and determine outcomes in dispute situations. The Federal Mediation and Conciliation Service (FMCS) in the USA and the Advisory, Conciliation and Arbitration Service (ACAS) of Britain are examples. Within systems of collective bargaining then stakeholders tend to centre their energies less in the legitimacy of the market system more in the concept of an equitable distribution of its fruits. Across Europe and the USA this was facilitated and strengthened through a post war 'period of plenty' - rising employment, wages and standards of living.

The systems which have been configured around institutionalised negotiation are a reflection of facilitative conditions and strategic choices made by key stakeholders in which they recognised their interdependence and perceived the returns on regulated conflict to be greater than those offered through struggles 'over' the system. While some adopted a minimalist approach in this regard (British voluntarism) others actively built systems of articulated conflict management designed to limit conflict through extensive negotiation at all levels of society (Swedish centralised self-management). The idea of a 'negotiated economy' was to forestall policies and actions which create social and political tension, to prevent disputes arising, and to limit the escalation and spread of those which did.

Beyond collective bargaining: tripartism and enterprise participation as forms of societal conflict prevention

Many European countries went a good deal further than relying on the regulated adversarialism of collective bargaining. Institutionalised forms of tripartism were introduced as an alternative to robustly open pluralism which was perceived as too conflictual, costly and destabilising, allowing governments to consult employers and unions on social and economic policy and to coordinate collective bargaining at other levels in the economy (Treu 1992; Slomp 1992). Neocorporatist arrangements reflected a desire to reduce the costs of looser pluralist systems through joint management of national resources in the national interest. Participation at a national level allows peak organisations to regulate or coordinate relations in accordance with a country's needs. Such arrangements represent efforts to bring key stakeholders together into national consensus building processes for purposes of conflict reduction and containment.

This was the shape of arrangements in the 'centralised self-management' model of Sweden to the 1990's, and which continues to prevail in a social corporatist system such as Austria's. Research indicates that during the 1970's and early 1980's economic performance was strongest at both ends of the spectrum: neo-corporatist systems (Scandinavian countries and Austria) and decentralised labour systems (USA and Canada). It was worse in those countries (Britain and Italy) whose labour systems were of an intermediate character, reflecting interest organisations strong enough to impose conditions on bargaining but not internally disciplined enough to sustain delivery to the conditions of national bargains. However in a changing global economy with raised pressures for cost reduction, and flexibility in business practices the neocorporatist systems have been outperformed by decentralised systems which allowed greater room for enterprise level trade-offs and flexibilities at the point of production and sensitive to specific business conditions (Dell'Aringa and Lodovici 1992).

In Germany a system of institutionalised codetermination and consultation was introduced at the level of the enterprise. Again its roots of representative dualism lie in compromises achieved between the state, capital and organised labour at the turn of the century. Collective bargaining is largely centralised at sectoral levels and is the domain of trade unions which enjoy a right to strike over collective bargaining matters. At the level of the enterprise however collective bargaining is supplemented by an extensive system of employee representation on the supervisory boards of companies, and as regards daily operational matters through works councils with wide-ranging rights to information and consultation. No rights to strike exist at this level but alternative forms of dispute resolution are provided for in the form of binding and nonbinding arbitration. The ethos is one in which the management accepts limitations on its right to manage unilaterally, employees on their right to use weapons of 'industrial warfare' (Weiss 1989; Streeck 1994; Anstey 1997). The system represents a joint recognition that while there may be tensions over the distribution of wealth created through corporations, it is in the parties' joint interests that wealth is generated - captured in a German observation that 'the cow must be fed before it can be milked'.

LABOUR RELATIONS SYSTEMS IN DEVELOPING ECONOMIES

In recognising the significance of collective bargaining, tripartism and employee participation as forms of societal conflict regulation (prevention, containment, reduction) it must also be recognised that these have not been the experience of the majority of nations. In most communist and developing nations state dominated systems have prevailed with patterns of tight controls over trade unions and restrictions or prohibitions on collective bargaining. In most, authoritarian governments have tended to argue that economic growth is paramount and demands priority over the extension of political or civil liberties - these might be granted when society 'is ready for them, and can afford them'. Indeed it has been argued in the context of development programmes that workers' interests are best secured through state controls rather than the activities of trade unions which tend to be both too small and too sectional to be effective. In seeking the necessary balance between growth and equity the state is perceived as better placed to shape the economy in the interests of the population as a whole (Shadur 1994; Park 1994). In such contexts organised labour has been interested not only in achieving the freedoms and rights of trade unions in developed economies but often in fundamental political change, and where it has managed to gain a foothold in such countries it has often played an important role in transitions to democracy. Labour movements in such countries have been, and continue to be, vitally involved in conflicts over the shape of social systems rather than simply playing within established and accepted 'rules of the game'. In such contexts conflict prevention or regulation measures may be seen as inappropriate or 'too early', muting conflicts whose energy is necessary for larger societal transformation. Here labour is engaged in struggles which trade unions in developed economies moved beyond decades ago, but under quite different economic and political conditions.

Conditions in developing countries have tended to limit strategic choice ranges. Weak industrial development has given rise to dual economies characterised by high levels of subsistence agriculture, low levels of manufacturing employment, and economies centred in state activity - factors unconducive to the emergence of strong civil society. Scarce resource economies make it difficult to deliver to the spread of key stakeholders and their constituencies. In such systems there has historically been a tendency on the part of stronger powerholders to impose an order rather than negotiate one, and to limit negotiation within its operations. Such systems have delivered political stability and economic growth in many nations for periods of time (South Africa; Brazil, South Korea, Taiwan for example) but they are founded on the capacity of a single dominant actor rather than societal legitimation. Under certain conditions such systems become unsustainable in the face of pressures for legitimacy - other stakeholders become powerful enough to make demands for system change. One of these factors is industrial growth which strengthens both middle and working classes and contributes to a rise in class conflict. In such configurations organised labour may become an important actor in reshaping power relations within nations.

Political transitions as processes of transforming conflicts 'over' into conflicts 'within' systems

Recent decades have witnessed a thrust away from authoritarian rule to democracy in many countries in Eastern Europe, South America, Asia and Africa. A broad pattern of negotiated political transitions from authoritarian rule to democracy has emerged, typically involving shifts through phases of softening within an authoritarian regime, liberalisation, and pacting before fully democratic founding elections. Following elections interest is centred in consolidating democracy often in difficult economic and social conditions (O'Donnell and Schmitter 1986; Stepan 1986; Ethier et al 1991; de Villiers 1993).

Typically a nexus of economic, political and social conditions alerts a governing regime to the reality that authoritarian rule is becoming increasingly untenable. Internal divisions emerge between softliners and hardliners, the former recognising the boundaries of authoritarian rule and the need for popular legitimation at some future point. When they achieve dominance within government reforms may be initiated in the form of liberalisation steps which do not go as far as full democratisation but offer civil freedoms and protections to citizens from the state (O'Donnell and Schmitter 1986). The labour arena may assume centre stage in the change process for a number of reasons.

Firstly, sufficient development has often occurred for the mobilisation of a working class movement with meaningful strategic influence in the engine room of the economy. Secondly, in closed political systems it is often the only arena allowing room for mobilisation, even though tough restrictions may exist over trade unions and collective bargaining. Activism in the form of strikes demands a response beyond simple repression. Employers require stable motivated workforces to ensure uninterrupted production, an interest shared by governments seeking growth economies. Unlike political activity work cannot be banned, workforces cannot be collectively arrested or removed. The removal of leaders may quell resistance for a period but often simply incites further disruption. In the absence of political space then labour movements often offer opposition groups an important vehicle for mobilisation and tight links often emerge between trade unions and political interests (Valenzuela 1989).

Early reforms by authoritarian regimes tend to soften an oppressive system but leave power in the hands of a current regime. It is designed not to relinquish power as much as to change the perceptions of citizens regarding those who wield it. It seeks to take the heat out of a situation without a fundamental reconfiguration of power relations between stakeholders. In Poland the Gdansk Accords in 1980 conceded the right to form trade unions outside the official state structures, the right to strike and extended civil liberties. In South Africa early reforms in the 1980's took the form of a softening of petty apartheid and pass laws, the extension of labour rights to all employees, and the introduction of a tricameral system of parliament with 'common' and 'own' affairs. The formula was one which still excluded the black population but sought to coopt coloured and Asian people. In both the intent of the government was to ease repression in the hope that it might defuse opposition and reframe relations on its own terms. Not surprisingly then, opposition groups have an interest in mobilising against or exploiting rather than applauding such reforms. Indeed they are seen as dangerously cooptive and as having the potential to divide and mute opposition with cosmetic changes which do not address fundamental injustices.

The moment is important strategically with a struggle for control over attitudinal elements of the exchange - a government seeking to convince citizens of its commitment to meaningful reform and opposition groups resisting reforms as cooptive and seeking to obstruct powerholders' efforts to translate perceptions of the conflict into a positive sum game. It is a reminder that achievement of a shift from zero to positive sum may be elusive, residing as much in parties' perceptions of each other's intentions as in substantive compromises of position. Accommodative moves may have or be perceived to have adversarial or cooptive motives. Similarly even if offers of movement are understood to have merit they may be rejected if one or more see strategic advantage in escalating the conflict rather than joining in a settlement search. Thus opposition groups may retain a strategic interest in discrediting change initiatives and hardening attitudes even as genuine reforms are underway. The key for reformists is less what represents significant change from their own perspectives, more what will be sufficient to tempt opponents into joining a process of systems redesign, at what time and under what conditions. Stakes must be defined and understood in this light.

While partial change may be rejected as cooptive and insufficient to transform the conflict into a positive sum game, it does offer openings for further pressure on the regime. Opposition groups may see tactical opportunities and greater rewards in hanging tough, increasing pressures and discrediting reform initiatives. Powerholders may in turn respond by aborting reform processes. It is a delicate moment. Somehow opposition groups must discredit reforms in a manner which sees them improved on rather than discarded; they must somehow reward reformist elements even as their offers are rejected. At the same time powerholders have an interest in securing control over the process even if they are committed to change. Consequently repression may often accompany reform with the transition process reflecting an oddly disjointed dance between reform and repression, and negotiation and insurrection rather than a smooth trajectory.

In Poland the rise of Solidarity represented a 'social movement' unionism which pushed beyond labour reform for political change, escalating strike action to a point where the state banned it and reverted to martial law in 1981. Solidarity was obliged to pursue its interests underground and it was only later in the decade that it reentered formal negotiation forums on the basis of leverage provided by widespread strike action and international pressure. In South Africa a succession of labour and political reform initiatives was met with strike action by a fastgrowing trade union movement representing disenfranchised black workers. Even as reforms continued and collective bargaining increased the state continued to detain labour leaders and suppress union activities. In many other countries' transitions (South Korea, Taiwan, Argentina, Brazil, Chile for example) sharp increases in labour unrest accompanied by student and other protest action were salient as they moved towards democracy. The effectiveness of such mobilisation as Valenzuela (1989) points out is based on strength of the union movement, the degree of centralisation of the labour system and the labour movement, and the extent of freedoms labour enjoys. In other words the capacity to raise the stakes must be present. Beyond this however much depends on the strategic choices of labour as the transition progresses.

Pre-election pacting

As O'Donnell and Schmitter (1986) point out, even as militance obliges a transition forward, so it may put it at risk, discrediting reformists, reinforcing the fears of conservative elements, raising the potential of a rightwing coup, disrupting the economy and evoking a flight of capital. The means through which the process is stabilised through to full democratisation is quite often through short term pacting arrangements at political, military and social and economic levels. Such pacts represent mutual guarantees on the part of powerholders that they will temporarily restrain their capacity for inflicting damage on each other in their own and other interests, and to foster progress in the transition. They represent the moment of interaction at which all stakeholders realise they are at risk - there is no returning to the previous system and power needs to be carefully used in order to secure a future in which their interests are secured. This may require accepting 'old enemies' as partners in a negotiated system rather than simply seeking their elimination.

Perceptions of stakes then are centred in a mutual recognition that unless carefully managed a lose-lose scenario might easily eventuate. A jointly recognised potential for a no-win situation then precipitates a win-win solution search - mutual gains founded in self-interest. In tactical terms some key judgement calls are required as regards toughness, terms and timing. The existing shape of any given society has an important influence on such choices. South Africa's trade unions escalated strike action and hung tough on participation with the apartheid government until such time as meaningful progress had been achieved in political negotiations. However bilateral pacting took place with organised business a good two years before political reforms, signalling a willingness to entertain such relations 'on terms'. This provides an interesting contrast to the Polish experience. The Gdansk Accords were achieved between Solidarity and the state. The absence of a private sector made this the only option. However in South Africa the existence of a strong business sector provided opportunities for pacting at the level of civil society before participation with government. The foundations for such an arrangement were laid through the experience of collective bargaining, adversarial though it had been. The bilateral accord provided not only a base for an economic pacting process but facilitated further pacting - business and organised labour together with the churches crafted a comprehensive non-aggression pact in the form of a National Peace Accord which assisted in attenuating violence in the political change process. Once political reform was meaningfully underway organised labour used its strength not only to bolster political opposition groups in the political negotiation process, but to strengthen its own position in a future democracy - it entered an alliance with the African National Congress and the South African Communist Party, but also secured participation in a National Economic Forum where it rather than its political partners held sway in economic and social policy development. These tactical choices not only secured and strengthened the labour movement but civil society through and beyond the political transition process. Organised labour may spearhead popular upsurges in political transitions but strategically they have an interest in surviving the wider change process and locating a position of influence in a viable democracy. This reality of organisational conservatism makes them potentially useful partners in conflict prevention initiatives.

The emergence of a vibrant multi-tiered labour relations system was a key component of South Africa's political transition process in both the liberalisation/upsurge and pacting phases. In the face of strategic labour initiatives business had to organise itself more effectively, locate a meaningful political role for itself and iron out clear labour relations values and positions - a further contribution to strengthening civil society. Steadily South Africa's labour movement shifted from hanging tough in conflicts 'over the shape' of South Africa to hanging tough on issues 'within' its emerging system. Where mass action was used to reject government and its reforms in the 1980's, current action is directed not at the legitimacy of the legislature but at influencing the laws it passes. There has been a strong shift from non-participation to active participation.

The labour movement in South Africa then actively laid a base to preserve its own strength and independence post elections, and sank the foundations for long term influence at a social policy level. It did not wait to be invited to do so by a new government but proactively generated forums and processes prior to full democratisation as it ceded leadership of the country's transformation to political parties. In this process of 'strategic participation' labour was able to pressure and then reward progress towards a democracy, open options for itself and the wider society and then entrench a multi-tiered system of participation through which it could exert influence from a social policymaking level to the shopfloor. Business, anxious to reduce potentials for state interference and to counter labour's influence with the government became a willing partner in the process. In these choices the dangers of simply repeating a state corporatist system in new form were averted to an extent. A struggle 'over ' a system was reframed to one 'within' a system.

OLD AND NEW DEMOCRACIES IN CONTINUING CHANGE: IMPLICATIONS FOR CONFLICT PROVENTION

It has been argued to this point that social systems are best understood as being in a process of ongoing change passing through periods of stability and disequilibrium obliged by changing environmental conditions and the strategic choices of their key stakeholders. The review of conditions, compromises and processes associated with the emergence of labour relations systems in both developed and developing economies indicates that at certain points key stakeholders made choices which translated conflicts 'over' into conflicts 'within' a social system. There is evidence across developed countries that profound conflict existed between labour, business and the state in the early part of the century. By mid-century however most had transformed intense conflicts into 'national bargains' founded in collective bargaining and increasingly sophisticated systems of participation extending from social policymaking to the factories. Equally in the case of many developing nations there is more recent experience of the transformation of conflicts 'over' to conflicts 'within' systems in a succession of transitions away from authoritarian rule to democracy. In both it is argued that conditions arose which eroded the capacity of existing powerholders to govern unilaterally in both political and economic spheres. As organised labour acquired strength so it obliged accommodation within a decisionmaking systems of companies and countries. Tactically it used its strength initially to disrupt existing systems, but at certain points it saw greater advantage in participating in the design of structures and processes for purposes of conflict regulation and prevention. This shift in perception was reciprocated by business and the state to facilitate the shaping of 'national bargains' in various forms.

The compromises associated with the design of labour relations systems have had an important role in embedding old democracies and in assisting in transitions to new democracies. However, just as developing nations have reached the point of industrial democracy achieved decades earlier in developed nations there are signs that these systems are under revision in such countries. It is not simply a matter of achieving a milestone in democratic development. Conditions have changed to the extent that a new search is underway for viable labour systems. Old democracies face a crisis in redesigning systems with which they had become comfortable over decades, and indeed are now cited as obstacles to competitiveness. New democracies face crises of consolidation - transitions are not simply uniformly to democracy. History is littered with examples of weak democracies collapsing to authoritarian rule - the experiences of Germany, Spain, Italy, Chile, and Venezuela at various points all speak to this.

The last section of this chapter then gives consideration to the factors giving rise to a revision of modern labour systems and the prospects of systems of conflict prevention and regulation within these.

A rapid change in conditions and shifts in the balance of labour relations systems

Across Europe and in the USA there is evidence of a change in the balance of 'national bargains' and the organisations, structures and processes which underpinned them. There has been a decline in union densities, a decentralisation of collective bargaining and a decline in strike activity (Anstey 1997; van Ruysseveldt and Visser 1996; Ferner and Hyman 1992; Kochan et al 1986; Jackson et al 1994; ILO 1989). Wage increases have steadily fallen in European collective agreements since the 1970's, as they have in the USA. Unemployment is rising and increasingly collective bargaining agendas are as much concerned with job security and benefit retention issues as they were with wage increases a few decades ago. With Sweden's vaunted social accord in the lead, the social accords of Europe are under revision, even decline (Treu 1992; Slomp 1992; Kjellberg 1992; Pestoff 1992).

From the 1970's conditions have arisen which profoundly alter the balance of the 'national bargains' in developed economies (Reich 1992). Economic growth slowed. Manufacturing has given way to service based economies. Regional economies are being organised to replace nation state arrangements. Transnational corporations have disrupted the balance of interdependence between national workforces and national corporations; new technology is reconfiguring needs for and dependence on certain forms of labour; flexible employment practices and outsourcing continue to erode the traditional base of union mobilisation; lean production systems reduce workforces and place increased pressure on those who remain; organisational restructuring and reengineering processes have cut across decades of traditional structures and grading systems sweeping away the foundations for 'job unionism'. After decades of secure employment and rising wages in developed nations many employees face a future of declining employment standards and job security. The collective agreements and arrangements with employers thrashed out through decades of collective bargaining in an effort to secure employment standards have been cited as a core obstacle to achieving the flexibilities needed to compete with Asian manufacturers and to secure their jobs. The trade unions which had negotiated these deals face problems of identity and declining memberships. Serious questions have been raised as to the sustainability of labour standards in a global economy. (Anstey 1997; Sengenberger 1994; Sengenberger and Campbell 1994; Reich 1992; Heckscher 1988; Dicken 1992).

Simply the conditions which underpinned the balance of collective bargaining have been eroded. The new conditions are conflict generative: job insecurity; falling terms and conditions of employment; raised work pressures; tougher management. However the traditional means of expressing collective dissatisfaction have become dangerous to implement. In a global economy a strike which removes national manufacturers from the market for a period may simply open the door to customers to buy imported products. New technology may see permanent replacement of jobs. Owners of capital may close factories and invest in other countries offering attractive incentives. There is an emerging recognition on the part of labour that the strategic power of the strike has narrowed considerably, and its usage has become far more circumspect. In a global context labour's strategic strength increasingly may lie in its capacity to offer skilled and uninterrupted work rather than in its capacity to stop work. Capital is internationally mobile, labour (apart from very skilled labour) is not. Employers have achieved a new dominance in labour relations systems even as they are themselves in a crisis of competitiveness (Anstey 1997; Kochan et al 1986; Reich 1992; Kester and Pinaud 1996).

Implications for collective bargaining and employee participation as vehicles for conflict prevention and regulation

Traditional collective bargaining played out in the context of national corporations and national economies is being rendered dysfunctional in a global economy for purposes of market control. Wages have reentered the employment equation on an international scale and in a context of global economic dualism labour solidarity is an unlikely achievement - and certainly not at the standards achieved by organised labour in developed nations. While it may no longer offer the same substantive securities however, collective bargaining as a process does offer important societal options for conflict reduction and management purposes. The question is whether existing relations and processes might be effectively utilised to respond to the challenges associated with new forces for change. The international trend to decentralise bargaining arrangements has assumed many forms, but it reflects an employer desire and capacity to push wage determination to the point of production in the context of a global economy in which individual enterprises must achieve competitive strength in an international rather than a nation state context. European unions have traditionally located their influence at centralised levels within national economies (national or sectoral) and wield collective power most effectively from this vantage point. The reshaping of bargaining systems does not suit traditional union interests in centralising collective power in national economies and reflects a loss of influence in the design and implementation of collective bargaining systems.

In addition collective bargaining has traditionally been centred in issues of distribution through institutionalised, regulated adversarialism. This was functional during periods of growth when a seemingly ever enlarging pie could be apportioned in a manner in which all stakeholders' interests were met. However slowed growth has limited redistributive capacities. Labour satisfaction with the fruits of collective bargaining have been tempered, and the capacity of the system to deal with matters of production (pie enlargement) is in question. Here the participative systems of countries such as Germany may prove more useful. Whichever way it is turned the mix is a difficult one for organised labour. It requires a redefinition of goals and roles precisely at the moment that its strengths are declining and traditional forums of influence are being eroded.

Earlier discussion indicated extensive use of tripartite arrangements as a means of conflict prevention internationally. They became institutionalised in diverse forms in many European nations and have been salient in the efforts of many developing nations to introduce and consolidate new democracies (Anstey 1997; Slomp 1992; Alvarez 1994; Trebilcock 1994; Treu 1992). In all forms they represent preventive thinking as regards societal conflict. However several researchers argue strongly that their effectiveness is premised on particular economic and social conditions (Sheahan 1986; Ducatenzeiler1990; Morgado 1992; Alvarez 1994; Trebilcock 1994). Unravelled these conditions represent a specific mix of beliefs, interorganisational arrangements, internal organisational qualities and capacities, and economic conditions. The institutionalisation of tripartite arrangements in Europe was facilitated through national commitments to rebuild postwar economies which bridged traditional labour-management divides, and boosted by prolonged economic growth which provided a context for full employment and rising wages. Powerful centralised organisations of employers and labour accorded each other legitimacy and were accorded high status by governments as social partners in a process of national compromise on ideological and substantive levels. However the conditions and belief systems which favoured social concertation on the part of government, labour and business are changing.

Firstly the balance of interdependence in the labour management relationship has been realigned in favour of employers. A global labour surplus, new technologies and forms of work organisation have in many senses reduced a dependence on labour for production purposes. Secondly the products of the system of institutionalised conflict regulation in the developed economies (detailed collective agreements applying across sectors and enterprises, rigid procedures, high wages) have been identified as an obstacle to competitiveness - yesterday's means of competitive advantage have been cited as obstacles to today's. Thirdly one of the consequences of societal reshaping is that trade unions in a reconfiguring work scenario cannot deliver to pacts with the discipline of previous eras. In such a context the need for pacts and their value to employers has dissipated. Several examples are illustrative.

Some countries have never managed to achieve a viable system of tripartism. In Britain the incomes policies of 'labour friendly' governments proved unsustainable in the face of ongoing economic crises and in the face of an undisciplined but militant labour movement which insisted on pushing demands at enterprise levels beyond those achieved at centralised levels. Unlike the multi-tiered disciplined strength of the Swedish labour movement the British labour movement has found itself progressively sidelined on both political and collective bargaining fronts. Italian pacts have foundered on similar grounds, as have those of developing countries with labour movements which are powerful enough to stamp a presence on the national economy but not so powerful or internally coherent as to be able to deliver to any national deals.

In other nations long traditions of concertation are under challenge. The Swedish system of centralised self-management which prevailed from 1938 has been seriously eroded as a consequence of inter alia: slowed economic growth and increased pressures for competitiveness; a shift from manufacturing to service employment with consequent divisions in the labour movement; an inability on the part of labour to deliver to a solidaristic wage position owing to these emerging divisions; loss of commitment on the part of employers to centralised agreements in the face of pressures for competitiveness and flexibility at enterprise levels in conjunction with labour's inability to deliver to a centralised deal; and the election to power of conservative governments. In short the shape of institutionalised social concertation lost its 'fit' with emerging national and international conditions. In Australia a long tradition of tripartism was expanded considerably under Labour Party governance between 1983 and 1996. The government sought to minimise the conflict and costs of unilateral restructuring through a series of accords with organised labour. This strengthened the trade unions and steadied levels of strike action. However the overall results of the Accords were equivocal and by 1994 some commentators warned that the arrangement might have run its course in terms of positive results (Isaacs1994). Already there was evidence in the Accords of awareness that wage determination would have to become decentralised. In 1996 a conservative government won election, heralding the end of pacting arrangements.

Problems in sustaining tripartism are not only evident in developed economies. It was argued earlier that pacting processes have value in stabilising negotiated transitions to democracy. There is argument that new democracies are best consolidated through grand coalitions and national consensus building rather than the adversarialist politics associated with developed nations in the west. Advocates of this thinking suggest that the test for a consolidated democracy should be evidence of open and accountable government rather than alternations of power through election. The links between government and civil society become critical as a check and balance on government unilateralism and abuses of power. The liberal democracies and market economies punted in structural adjustment programmes are perceived as inappropriate to the conditions which prevail in many developing nations. A shift to market economies, accountable and lean government may be required for growth purposes but such shifts might also create conditions of greater inequality, social hardship and political instability, at least in the short term (Friedman 1994; Sandbrook 1993).

Social pacting initiatives have had some limited success in South America (Alvarez 1994; Morgado 1992) and Spain (Martinez Lucio 1992; Douwes Dekker 1990; de Villiers and Anstey 1995). The paradox of many new democracies is that the conditions which indicate the greatest need for national consensus through social accords are those that are least conducive to their success. Underdevelopment spawns weak business and labour organisations; prolonged repression often fragments their organisation; stressed economies limit their capacity to deliver to the stakeholders. Pre- electoral pacts are different to post-election ones. Where the former serve to hold interest groups in place during the final stages relinquishing authoritarian rule, the latter are expected deliver more substantively to their stakeholders.

Labour conflict was attenuated for a period in a newly democratic Spain through pacting arrangements. Trade unions (UGT) aligned to the ruling party (PSOE) at first supported pacting initiatives perceiving it as serving to consolidate a new democracy, and affording it influence at the highest levels of decisionmaking on social, economic and labour matters with the promise of substantive benefits. The communist unions (CCOO) resisted participation eroding the viability of pacts by making demands beyond those agreed with UGT and striking in pursuit of these. Steadily the substantive benefits hoped for by UGT failed to materialise. Indeed unemployment rose even as requests for wage restraint were made by government and employers. In the face of these conditions it became untenable for UGT to continue supporting tripartite pacts and it moved closer to CCOO, participating in industrial action to pursue its demands. Ad hoc efforts to achieve social pacts in Argentina and Brazil in the 1970's and 1980's were shortlived and in both newly democratic governments eschewed pacting after early flirtations with the idea, preferring the option of government driven structural adjustment programmes. In both organised labour rejected demands of wage restraint and privatisation. Labour unrest greeted Argentina's Austral Plan and Brazil's Cruzado Plan in the 1980's. The new democratic governments perceived greater economic benefits to reside in pursuit of structural adjustment programmes despite labour resistance than in seeking a compromise with trade unions. The trade unions saw dangers of cooption and few deliverables in the pacting option. However there is evidence that despite resistance to government policy organised labour did not challenge the democratic system as such. In Argentina organised labour backed Alfonsin in facing down a coup threat despite his unpopular economic policy. In this sense it can be argued that conflict had been successfully shifted from an 'over' to a 'within' system mode (de Villiers 1993; Munck 1989). In Venezuela a broad tripartism founded in the historical alliance between the governing party (Accion Democratica) and the labour movement (CTV) proved reasonably successful in attenuating conflict from 1958 until a slow down in the economy in the 1980's. However the 1981 tripartite National Costs, Prices and Salaries Council formed to concert prices and incomes and the balance of social failed with both organised labour and business leaving its ranks. In 1989 a tripartite National Agreement: Concertation was founded with broadly the same mandate but with equally little success in an increasingly unstable political and economic environment.

In South Africa pre-election pacting was carried forward and entrenched as a cornerstone for the development of a social democracy in the establishment of a statutory tripartite body, the National Economic Development and Labour Council (NEDLAC) in which business, labour and the state seek a consensus on all economic and social policy issues. The body has managed to achieve agreement over several new labour relations laws but not without difficulty with tensions between the parties being reflected particularly on substantive matters and in the use of mass action tactics by organised labour at various points. All stakeholders have voiced concern over the viability of NEDLAC at various times and its future is under constant scrutiny in the media.

SYSTEMS OF CONFLICT REGULATION AND PROVENTION UNDER REVIEW

The first part of this contribution argued that as a consequence of changing environmental conditions and strategic choices by stakeholders social systems are in a constant process of transformation punctuated by periods of stability and instability, order and disequilibrium. Periods of apparent stability are those in which stakeholders perceive the benefits of mutual accommodation to outweigh those of confrontation, and in which they participate in structures and processes designed for purposes of conflict prevention and regulation. In other words all major actors perceive value for themselves in reducing, containing and limiting the expression of conflict, and in seeking an accommodation of others' interests. Within pluralist systems inherent conflicts of interest are recognised as normal but there is a shared desire to regulate the expression of differences, and to prevent and limit the consequences of conflicts. Labour relations systems in most developed economies have been premised on pluralist principles, values and institutions. In most instances such systems have their roots in periods of intense conflict. People become interested in preventing and regulating conflict when their interests are jeopardised by its escalation. The origins of systems designed to limit and manage conflict then lie in decisions made by key stakeholders during periods of high tension. Usually the conflict is a consequence of changing conditions which see the rise of interest groups powerful enough to challenge existing power relations. To the extent that they are excluded from the mainstream of societal decisionmaking they have an interest in disrupting its functioning, and to the extent that they have power they are capable of ensuring that this happens. Often they mobilise under visions of total systemic reorganisation. However to the extent that other parties have power they may realise that such objectives are not only unobtainable in pure form, but if pursued will incur major negative consequences. Powerholders recognise concurrently that blunt repression will not secure their interests. In the ensuing interactional crisis the risks and benefits of accommodation are evaluated against those of ongoing confrontation. To the extent that they outweigh escalated conflict relations they may be transformed into a search to secure own interests through securing those of opponents. Further, strong drives may be evidenced to jointly design a system which actively seeks to prevent, reduce, contain and regulate conflict expression. These are the goals of collective bargaining and employee relations systems traditionally associated with the developed economies of Europe and the USA and to an extent in the new democracies of the developing world.

Such systems carry important lessons as regards the conditions and choices conducive to the design and sustenance of viable conflict prevention and regulation mechanisms. Recent shifts also indicate the nature of conditions which erode such arrangements in cycles of systemic stability and instability.

Changing environmental conditions may have an impact on one or more of the stakeholders which erode the capacity or willingness of one or more stakeholders to influence or contribute to conflict reduction or regulation mechanisms. The interdependence of the actors is reduced and some may even begin to see others, or negotiated arrangements with others, as obstructive to their efforts to pursue or protect their interests. At this point some may begin to see greater advantage in terminating relations, redesigning negotiation forums, ignoring such forums or merely paying lipservice to them. This would seem to be the current global reality within labour relations systems. Reshaping of businesses in response to pressures for competitiveness has seen a rise in transnationalism, a shift to a global economy, the introduction of new technologies and forms of work organisation which have combined to weaken the strength of trade unions and reduce dependence on labour. The reshaping of the parties has given rise to the 'old national bargains' losing 'fit' with conditions, and even being identified as the obstacle to effective system adaptation. Employers have found increasingly that they do not need labour's consent to pursue their interests, labour has found it increasingly dangerous to use the strike weapon. Even as conditions have become more conflict generative in many senses, it has become more dangerous to express such conflict through traditional mediums such as the strike. Arguably then strikes are not in decline internationally because of the success of conflict prevention mechanisms founded in a joint commitment to preserve relations, but simply because one stakeholder (business) has reduced its dependence on another (labour) and there is no means by which the latter can respond with hostility without incurring further damage to itself. The drop in manifest conflict does not mean a reduction in latent conflict then. Tensions are likely to find expression in other areas - rising crime, social and political unrest. We may be witnessing an era where the centrality of the labour pact in securing national stability is being sidelined. Its value potential for conflict prevention has been eroded even as related social tensions are in evidence.

In closing it is perhaps important to recognise that while there is evidence of a systemic shake-up underway in the labour relations arena this hardly indicates the end of work, or employment relations or interdependence between major stakeholders. The openings created by shifts in power relativities may tempt employers for instance to believe that their best interests might be pursued outside deals with organised labour. Trade unions' slow response to new conditions and reluctance to proactively reshape bargaining and participation options with employers and the state may have fostered such perceptions. Rather than simply discarding systems of collective bargaining, tripartism and enterprise participation as outmoded or obstructive, consideration might be given to using existing systems and relationships as a basis for renewal and strategic redirection. If the institutions of conflict prevention that have taken so much effort to build are cast aside what will take their place? Might it not be wiser to seek their regeneration and empowerment in the larger social interest? To the extent that all stakeholders are unable to find common cause or capacity on this front however such potentials may be lost in a return to system redesign founded on adversarial rather than accommodative tactics. The question is not whether some useful systems of conflict prevention are losing 'fit' with changing conditions and whether a period of system stability is in the process of ending, it is whether existing arrangements might not be more effectively used as a foundation for designing and building new societal mechanisms for managing the transition process. If they can there is prospect for discussion about building conflict prevention systems to manage periods of conflict 'over' as well as 'within' systems. If not then conflict prevention remains the product of choices made during escalated conflicts which carry a system through a period of stability before losing their usefulness in an emerging new conflict configuration which itself throws up new stakeholders, new power relations, and awaits negotiation into a new but temporary period of stability.

APPENDIX 1: SUMMARY OF KEY PROPOSITIONS EMERGING FROM CONSIDERATIONS OF CONFLICT PROVENTION AND ON LABOUR RELATIONS SYSTEMS

PHASE 1: Changing conditions: systemic conflict and instability

* changing conditions give rise to new stakeholders and shifts in stakeholder strengths within societies;

* if a stakeholder's interests are not met within the existing frame of a system and it has no participative influence within it then its energies are likely to be directed at disrupting the status quo, and quite often with stated objectives of radical restructuring of the entire system;

* existing powerholders resist such objectives through a mix of coercive and cooptive tactics expressed through reforms designed to change but not fundamentally reconfigure relations (i.e. to change perceptions of the system but to retain control)

* at this point the conflict is 'over' the design or shape of the system itself:

- parties perceive greater potential benefits in eliminating others' claims than accommodating them

- perceptions of others' intentions of elimination foster hostile attitudes

- coercive tactics are employed to eliminate claims of others to participate in system design or control;

* to the extent that powerholders or claimants perceive the possibility of a straight 'win' in the contest, or that defeat is preferable to compromise (matters of honour) conflict can be expected to continue and to escalate.

PHASE 2: Conditions and choices underpinning the design of conflict regulation and prevention structures and process

* even where such perceptions and attitudes exist however, pragmatism founded in building, strengthening and sustaining own organisational capacities to meet primary goals and needs is likely to be evident amongst all parties - translating into short term pacting or accommodation even as long term goals of mutual elimination are adhered to;

* steadily or suddenly parties jointly recognise power relativities in the conflict are such that:

- while they cannot be entirely defeated, neither can they defeat the other party

- continuation of the conflict in confrontation mode will be costly and inhibit achievement of own primary objectives and needs

- own interests might be best secured through accommodation of interests of other stakeholders

- others' interests must be secured sufficiently to transform a desire to eliminate

own interests to a willingness to participate in and preserve a system;

* parties extend participative legitimacy to each other in the realm of system redesign directed at accommodation of interests - the first step in transforming conflicts 'over' into conflicts 'within' systems;

* parties actively design and participate in forums and processes centred in preventing, limiting, containing and regulating conflict often involving ongoing negotiation and problem-solving processes rather than ad hoc exchanges - negotiation is institutionalised;

* parties limit demands on each other in order to preserve the functionality of the wider system (national v sectional interests);

* parties limit use of pressure tactics to the pursuit of demands to test boundaries of possibility and commitment to positions rather than eliminate others;

* self-constraint is rooted in a perception that own interests are best served through system maintenance rather than its destruction;

* parties not only share such perceptions and beliefs but have organisational capacity to deliver to system maintenance;

* steadily relations become transformed from winning issues to securing relationships;

* the transformation of perceptions and attitudes is premised on conditions which are conducive to all stakeholders perceiving the rewards of conflict prevention, reduction and containment as more rewarding than its escalation;

* the conflict is now 'within' rather than 'over' the system.

PHASE 3: Conditions and choices recycling conflicts 'within' into conflicts 'over' systems

* shifts in conditions are such that:

- one or more parties perceive meeting others' needs as jeopardising own interests or survival

- one or more parties perceive greater advantage to lie in obstructing others' interests than in accommodating them

- one or more parties' capacity for leverage in pursuing its interests is weakened

- one or more parties' capacity to deliver to arrangements designed for joint benefit purposes is weakened

* perceived values of institutions of conflict prevention and regulation are diminished and may even translate into perceptions that escalated conflicts are necessary to terminate relations or redesign the system as a whole and participation and influence within it.

* at this point there is a potential return to conflict 'over' a system but options open for using established relations of joint endeavour as a platform for managing a way through a period of new systemic uncertainty.

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