[In 2000, three American academics, Archon Fung, Data O'Rourke and Charles Sabel, presented a new theory of international labour regulation known as Ratcheting Labor Standards ('RLS'). Though a number of responses to the theory have been published, none has sought to assess the real life effectiveness of RLS by applying it to a practical situation. This article uses the recent labour dispute at the Shangri-La Hotel in Jakarta, Indonesia to test some of the key elements and assumptions of RLS. The article discusses the scope of application of the theory, the limits of the social and market pressures upon which RLS depends', and the role of freedom of association under the theory. The case study reveals that some of the concerns levelled at RLS are unwarranted. However, the article ultimately questions whether RLS, in its current form, can be a viable alternative system of international labour regulation.]

CONTENTS I Introduction II The RLS Proposal A RLS Criticism of Existing Regulation B The RLS Proposal 1 RLS Principles 2 Regulatory Approach C Responses to the RLS Proposal III Labour Regulation in Indonesia and the Case of the Shangri-La Jakarta Hotel Workers A Interaction of RLS and the Domestic Context B Law and Labour Regulation in Indonesia C The Case of the Shangri-La Jakarta Hotel Workers 1 Events at the Shangri-La 2 Legal Intervention in the Dispute 3 Examination of the Case by the ILO IV Testing the RLS Proposal A Application of RLS to Service Sector Workers 1 Concern for All Workers? 2 The Dynamics of Consumer Concern 3 Ethical Consumerism and the Services Sector B The Impact of Social and Market Pressures on Firms C Freedom of Association under RLS V Conclusion

I INTRODUCTION

The characterisation of workers' rights as human rights has not always been apparent. This is despite numerous references to employment in international human rights instruments. (1) As Leafy has observed, a 'regrettable paradox' exists where the human rights movement and labour movement 'run on tracks that are sometimes parallel and rarely meet'. (2) The process of globalisation has had a profound impact on the conceptualisation of labour rights. Greater awareness of conditions in distant countries has helped to generate support for the protection of basic rights at work. Whilst evidence of deplorable working conditions around the world has increased significantly, a corresponding reduction in violations of fundamental rights has not eventuated. Consequently, the continued effectiveness of existing systems of labour regulation is now challenged. The inability of current regulatory approaches to respond to political and economic transformations around the world raises questions as to who should be responsible for implementing labour standards.

From the search for more successful strategies to combat labour abuses has come a new proposal for international labour regulation: Ratcheting Labor Standards ('RLS'). Describing the working conditions that exist in the current global context as 'repellent', the authors of the proposal, Archon Fung, Data O'Rourke and Charles Sabel, aimed to use the same forces of globalisation that have contributed to these conditions to...