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OCR for page 55
Employers
T. DAMU INDIAN HOTELS COMPANY, INDIA
Mr. Damu began his presentation by questioning whether the devel-
opment of international labor standards (ILS) takes into account the vast
~lifferences between countries in their socioeconomic, demographic, and
political systems:
Unlike developed nations, where technological advancement is an advantage
over labor, which is limited or unavailable and costly as well, one of the
biggest strengths of developing countries is the abundant availability of cheap
labor. However, there are some issues such as surplus, unskilled, and low-
productive labor; unbridled employment guarantees; minimum wages not
linked to productivity; the onus of providing health, welfare, and social secu-
rity; too much freedom of association and collective bargaining, which have
come to stay like the legendary holy cow in Hindu society.
In addition to these differences within countries, Mr. Damu said that
there are also variations in the way that multinational corporations behave
when operating within the global economy:
Unfortunately some of the industries in the developed nations, including the
United States, which are to be a model for the developing nations in regard tO
compliance with ILS, are themselves often found flouting the standards.
These corporations, while adhering to ILS in their own countries, follow
double standards dishonestly and surreptitiously in their environmental, la-
bor, and human rights practices abroad, especially in the third world coun-
tries where they put Up their factories and industries.
55
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56
INTERNATIONAL PERSPECTIVES
After questioning the relevancy of ILS in the developing world and the
difficulties of applying the standards fairly, Mr. Damp spoke about some of
the obstacles to successful monitoring and improved compliance, particu-
larly within the informal economy. While organized industry in India "by
and large complies with the core and substantive labor standards, in the
unorganized industry, compliance and monitoring of compliance fared lack-
ing." For example, Mr. Damu said that because of poverty, child labor
exists in almost all informal industries.
When there are lapses in compliance within the formal sectors, Mr.
Damu attributes this to "a failure of the monitoring machinery of the gov-
ernment since it is more a rule than an exception in these cases where there
is predictably a secret collusion between the employer and the trade union
and/or invariably between the employer and the power corridors of govern-
ment." Mr. Damu suggested that reliance on information from govern-
ment, employer, and worker organizations—such as that received by the
International Labour Organization's (ILO) regular supervisory mecha-
nisms- is not sufficient to adequately monitor the "ground reality." Saying
that there is, in particular, "too much reliance on reports from each Mem-
ber State on the position of its law and practice," Mr. Damu called for
change in the form of"direct supervision and intervention." He proposed
that a mechanism be formed in each formal industrial sector, perhaps un-
der the guidance of an ILO representative, which would involve the tripar-
tite partners in monitoring. Mr. Damu also suggested that improved com-
pliance might result from an ILS certification program, offering some form
of"substantial incentives or internationally recognized merit points" to
motivate industries and individual representatives to implement or moni-
tor labor standards.
SIFISO DLAMINI FEDERATION OF SWAZILAND
EMPLOYERS, SWAZILAND
Mr. Dlamini said that Swaziland has a "very bad history" in regard to
compliance with labor standards, and the current situation indicates that
these problems may be at their peak. It is important to consider the consti-
tutional crisis, discussed by Mr. Sithole in Chapter 4, which has resulted in
a further breakdown in the rule of law, as seen in the government's recent
refusal to recognize decisions of the highest courts in the country.
Although Swaziland has ratified numerous ILO Conventions, imple-
mentation—in both the formal and informal economies—has been diff~-
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EMPLOYERS
57
cult to achieve. There have been "serious compliance problems," and
Swaziland has appeared before the CEACR (Committee of Experts on the
Application of Conventions and Recommenclations) numerous times, Mr.
Dlamini said. There are also problems in the emerging garment and ap-
parel sectors of the country. Benefits of the African Growth and Opportu-
nity Act and the European Union's Generalized System of Preferences have
also drawn investors, including many from China and India, who hope to
take advantage of duty-free incentives. The compliance problems of these
industries, Mr. Dlamini said, are "polluting the business environment" in
Swaziland.
In terms of social dialogue within Swaziland, the Industrial Relations
Act of 2000 created the Labor Advisory Board. The major problem of the
board is that, although it is tasked with advising the minister of labor, the
government representatives appointed by the minister control the agenda.
As Mr. Dlamini said, this arrangement does not work because "you can't
have the minister actually telling the board how to advise him."
Despite all of the problems in Swaziland, the Federation of Swaziland
Employers (FSE) has tried to remain neutral and mediate disputes between
the workers and the government. However, because the government has
refused to recognize the need for corrective action, the FSE is beginning to
withdraw from its mediation role, and currently the only meaningful social
dialogue is of a bipartite nature between the workers and employers. To-
gether with other civil society groups, such as teachers, churches, and activ-
ists, workers and employer groups have created the Coalition for Concerned
Civic Organizations. This has had the effect of damaging the FSE's rela-
tionship with the government. However, he said, the FSE has accepted the
fact that the only way to improve the situation in the country is to join the
workers and others in their challenges to the government.
ROLANDO FIGUEROA THE NON TRADITIONAL PRODUCTS
EXPORTERS ASSOCIATION, GUAM
Mr. Figueroa gave an overview of the textile and garment export indus-
try in Guatemala, which employs nearly 140,000 persons. The textile sec-
tor, he said, has been important in absorbing many from the agricultural
sector who lost work during Guatemala's coffee crisis. However, the indus-
try faces severe competition from Asia, Africa, and those countries covered
by the Andean Trade Pact, and this has resulted in employment reductions.
As a response, Mr. Figueroa said, "the sector's vision is to consolidate the
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58
INTERNATIONAL PERSPECTIVES
garment and textile sector's competitiveness in order to compete worldwide
by positioning Guatemala as the regional center for the garment and textile
industry and by turning it into one of the main generators of gross domes-
tic product, foreign currency attraction, and employment generation." In a
country with a high rate of illiteracy, it is important, he said, that the textile
industry is one that "generates employment at all levels."
Industry standards on the environment and labor, Mr. Figueroa said,
are promoted through a Code of Ethics established in 1996. Compliance
with the code is verified through external audits, which are financed by an
employers' association rather than by the companies themselves. "This is
done," he said, "with the purpose of supporting small and medium enter-
prises so they can export and grow and improve their conditions."
Mr. Figueroa concluded by discussing the idea that "complying with
the law is the starting point for corporate citizenship." This compliance, he
said, improves investor confidence because "no customer abroad is going to
risk placing work in companies in Guatemala or in the region if Ethe com-
paniesl do not comply at least with the basic or minimum domestic labor
legislation."
. . .
JENEFA K. JABBAR- BANGLADESH GARMENT
MANlJFACTURERS AND EXPORTERS ASSOCIATION,
BANGLADESH
Ms. Jabbar focused on the role of the Bangladesh Garment Manufac-
turers and Exporters Association (BGMEA) in addressing labor standards
issues in the garment sector of Bangladesh. The BGMEA is the largest trade
association in Bangladesh, representing nearly 2,800 garment factories with
1.8 million workers. Overall, she said, exports from the garment sector of
Bangladesh account for 76 percent of foreign exchange earnings. With the
cooperation of the ILO and United Nations Children's Fund, the BGMEA
has undertaken several projects to eliminate child labor, offering vocational
training programs and stipends for school attendance. The BGMEA has
also been active in promoting health and safety measures in factories, but
there are still challenges in implementing codes of conduct within the gar-
ment sector. She attributed this in part to the content of the codes and their
applicability in Bangladesh: "The codes have been formulated in the U.S.,
and sometimes Ethey] have not incorporated the perspectives of third world
. ,,
countries.
Ms. labbar added that sometimes the codes of conduct take prece-
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EMPLOYERS
59
dence over national law when disputes arise "and that's where you see some
of the harshness because some standards may be adaptable to western stan-
dards but may not be compatible at this time for third world countries."
The different standards imposed by various buyers also complicate imple-
mentation for factory owners, she said; consequently the BGMEA has pro-
posed a partnership with the ILO to develop a unified code of conduct for
the entire industry.
Ms. labbar also discussed the delays in adopting labor law reform in
Bangladesh. Starting in 1992, efforts were undertaken to consolidate all of
the country's labor laws, and in 1994 a draft labor code was completed.
Despite the involvement of the ILO and the agreement of unions, employ-
ers, and the government, this labor code has not yet been able to pass
through Parliament.
Ms. labbar concluded by noting that difficulties also arise in the moni-
toring of garment industry codes of conduct. The quality of monitors can
vary widely, leading to inconsistencies in the enforcement of the codes. In
an earlier session, Ms. labbar gave the example of monitors mistakenly
identifying child laborers in factories, sometimes leading to the closure of
the facility. Because Bangladesh sloes not have a birth registration system,
identifying underage workers is a "judgment call," and Ms. Tabbar attributes
misidentification to several factors: "First of all, workers in our country are
malnourished. Second, the person monitoring may have no perception of
the law. Third, the person monitoring may not be trained or have that
. · · · ..
expertise In monltormg.
JANIA IBARRA MARQUE~NATIONAL ASSOCIATION OF
PRIVATE ENTERPRISES, En SALVADOR
Ms. Marquez focused on child labor in El Salvador. Although "most
Latin American countries present a series of common social and economic
problems," she said, "their conditions and magnitude vary from country to
country according to the context." In El Salvador, the end of armed con-
flict, the democratization process, and the stabilization of the economy at
the beginning of the 1990s allowed for a rapid recovery of the economy.
Although economic growth has slowed since 1996 because of"internal and
external situations and natural disasters," Ms. Marquez pointed out that
the country has made strides in reducing poverty: The rate of extreme pov-
erty declined from 29.3 percent to 16.8 percent between 1993 and 1999.
Despite this macroeconomic progress, there are still issues, such as child
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60
INTERNATIONAL PERSPECTIVES
~ ~Box~5-1 ~
:~ Child Labor~:in :EI Salvador
~ I; Multipurpose Household ~~;~urv - ::~2001) ~ ~
~~ i, ~ ~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~ ~ ~~ ~~
;: ~~Part~icip~ion of working chi~id:re~n~pges~1O to ~1~4) by senator:
~:~ :~ id: Agriculture ~::~:
Commerce
A::: ~In:dustry~: ~ ~ ~
Ail- :(:)l:her ~~ ~ ~~ ~::~:
~ ~~ .
: i:: ~ ~ ~~ ~~ :~ i: ~ ~ ~ ~ Act: i: Hi. ~~ i::
: ~:~ ILO-iPEC:~2001~ ~~ ~
: ~~ ~ ~~ : ~ am: ~~ ~~ :::: ~ I:: ~ ~ ~~ : : : :: ::: ~ :::: :
~Ch~araGten~esofchildworke~rs~(agesSto~17) ;::
: ~~ ~~. ~ Ch~i~ld~laborers,~total~: :; ~~:~ : ~~ ~ ~~ ::~ :: ~ ~;~ ~:~222,479
. ~Gender~ofworking~ch~ildren~ ~~:
: ~~Boys:~70°JO: ~~ ~ ; Girts 30% ~ ~~ ~ ~ ~ ~~ ~~ ~~ ~ :
~ ~ ~:~ ~~. ~~Locat~on~of~work ~~ ~~::~ :~ ~:~ ~ ~~:
`~ ~~ ; ;~ : ~Urban~:~35.3%~ ~~ ~ ~~ Rural: 64.7% ~ :~:
:: ~ i:: ~~ :
~ ::53% i: :
: : :
:: :~:~;~:~26%: : i:
~ ~ :
~5%
:- ~ 6Yo ~ aft: :
. ~ ~
::
.
::
labor, that demand attention in E1 Salvador. Ms. Marquez said that there
are two main sources of information on child labor in the country: the
Multipurpose Household Survey and the ILO's International Programme
on the Elimination of Child Labour (IPEC). Information on the scope and
nature of child labor in El Salvador from both of these sources is shown in
Box 5-1.
In addition to supporting surveys in El Salvador, Ms. Marquez said,
IPEC has implemented intervention programs in several key sectors, re-
moving approximately 5,000 children from work. This includes 2,000 chil-
dren working in the coffee sector and 2,500 in the fireworks industry. Pri-
ority sectors for future programs indude commercial sexual exploitation,
fishing, landfills, and sugarcane.
The IPEC programs have been supplemented by private-sector and
nongovernmental organizations' activities. In November 2002 the Minis-
try of Labor, IPEC, the Sugarcane Association, and the Sugar Foundation
(FundLaz~icar`) signed a memorandum of understanding concerning the
eradication of child labor in the sugarcane industry. Fundazucar has under-
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EMPLOYERS
61
taken several projects in the growing areas, offering aid to schools to make
education more attractive to children. Because of the link between parental
poverty and child labor, Ms. Marquez said, the organization has also pro-
moted alternative income strategies for adults—such as working in orchards
or animal husbandry and has started an adult literacy program in the
cutting centers, with the intention of making parents aware of the impor-
tance of sending their children to school.
JORGE D. GARDU~O MORALES~EMPLOYERS' UNION OF
THE REPUBLIC OF MEXICO' MEXICO
Mr. Morales offered an overview of four major statistical instruments
available in Mexico that may be useful in monitoring the labor market.
First, the National Institute of Geography and Computer Sciences (INEGI)
manages censuses and surveys, gathering a range of information on families
and companies. Much of this information—as well as notes on methodol-
ogy is available through the INEGI website.l Second, the Mexican Insti-
tute of Social Security (IMSS) provides valuable information through its
administrative records. The IMSS gathers information on that portion of
the population (approximately 78 percent) who are covered by social secu-
rity in Mexico. The remaining population is covered by the State Workers'
Service (14 percent), other public institutions (5 percent), and private medi-
cal services (3 percent). The records of the IMSS "are used as a reference to
learn about diverse employment indicators and salaries in the formal sector
of the economy."
Mr. Morales noted that the Mexican Secretariat of Labor—discussed
in Chapter 3 by Mr. Segovia—also collects data on the composition and
conditions of employment, compensation, and "the evolution of employer-
worker relationships what we call 'labor justice."' The fourth source of
information is the Bank of Mexico, which generates data relevant to the
labor market, induding the consumer price index and the variation in prod-
ucts that fill the family shopping-basket. Mr. Morales said that this Na-
tional Consumer Price Index, which is published every two weeks, is im-
portant to the decision-making process on setting the minimum wage.
i~NEGI's website is located at www.inegi.gob.mx.
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INTERNATIONAL PERSPECTIVES
BINOD BAHADUR SHRESTHA FEDERATION OF NEPALESE
CHAMBERS OF COMMERCE AND INDUSTRY, NEW
Mr. Shrestha presented an overview of Nepal's experience with the core
labor stanclarcis. More than 40 percent of all children are classified as eco-
nomically active. This includes 500,000 children between the ages of 5 and
9 and 1.5 million children between the ages of 10 and 14; these children
work mostly in the informal economy. He added that an estimated 127,000
of these children are involved in the "worst forms" of child labor. As a
response, Nepal has been cooperating with ILO-IPEC since 1995, and
Nepal along with Tanzania and El Salvador has been selected for a
Time-bound Programme, which aims to eliminate the worst forms of child
labor by 2005 and all forms of prohibited chill! labor by 2010.2
Mr. Shrestha said that the problem of forced labor is linked to the
country's traditional agricultural system, rural indebtedness, and the "occu-
pationally segregated caste system." While the Kamaiya system of bonded
labor practiced mostly in western Nepal was declared illegal as of.lune
2000, it still exists, and the government has launched several rehabilitation
programs.3 Mr. Shrestha added that there has been an increasing threat of
trafficking, particularly for sexual exploitation, with an estimated 7,000
girls being smuggled out of the country each year.
According to the INTO, "A Time-bound Programme (TBP) is essentially a set of tightly
integrated and coordinated policies and programmer to prevent and eliminate a country's
worst forms of child labour within a defined period of time. It is a comprehensive approach
that operates at many levels, induding international, national, provincial, community, and
individual or family. TBPs emphasize the need to address the root causes of child labour,
linking action against child labour to the national development effort, with particular em-
phasis on economic and social policies to combat poverty and to promote universal basic
education and social mobilization." See the ILO-IPEC website, http://www.ilo.org/public/
english/standards/ipec/timebound/index.htm, for more information.
3"Under the Kamaiya system, a labourer agrees to work for a landlord on the basis of an
oral contract for one year, for a wage that is generally paid in kind. Typically, a Kamaiya
would receive a share of the produce from the land cultivated by him. But as the land is
monocropped, the Kamaiyas barely eke Out a living. They are often forced to take loans from
the landlord and the family must work for the landlord until the loan is repaid. Children over
live often serve the landlord as cowherds. Kamaiyas often end in a vicious circle of debt and
bondage, passed down from one generation to the next." ILO-IPEC website, www.ilo.org/
public/english/standards/ipec/about/factsheet/factsl 1.htm.
OCR for page 63
EMPLOYERS
2500 -
2000 -
u'
500 -
a
._
- ~ 000 -
.m
Cal
~ 500-
O -
63
_
472 472
1
g95 995
_
1183
1115
8
n
1 627
1 1 3
1 045
2054
1 840 _
11
i ~
Bolt
1 795
l j9
. id_
do:
3' 760
1994 1995 1996 1997 1998 1999 2000 2002
Years
Bunions Registered Registration Cancelled Active Unions
FIGURE 5-1 Trade union trends in Nepal, 1994-2002.
As for freedom of association and collective bargaining, Mr. Shrestha
said that "with the reinstitution of multi-party democracy in 1990, Fill
freedom has been provided for the operation of trade union activities."
Figure 5-1 shows a '`dramatic rise" in the registration of unions between
1994 and 2002.
Mr. Shrestha conduded with a brief description of the "labor market
mismatch" in Nepal. The demand for labor in the formal sectors has been
shrinking, with 90 percent of workers now found in the informal economy
of Nepal. With a population growth rate of 3 percent, the labor supply is
growing, but these potential workers are unskilled and illiterate, he said.
The results have been low wages and productivity, high unemployment,
increased searches for overseas work resulting in "brain drain" and the
displacement of Nepalese workers by foreign workers. Mr. Shrestha noted
that the severity of the problems of unemployment and underemployment
has been revealed in a recent study of the conflict situation in Nepal, show-
ing that 27 percent of the people joining the Maoist insurgency cited un-
employment and poverty as their primary reasons for taking up the fight
against the government.
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INTERNATIONAL PERSPECTIVES
F.K SIDDIQUI-
EMPLOYERS' FEDERATION OF PAKISTAN, PAKISTAN
Mr. Siddiqui discussed several areas of concern and progress relating to
labor standards compliance in Pakistan. Noting that his country has been
"struggling very hard to come out of the economic trap befallen on it by the
vicious cycle of population, poverty, and pollution," Mr. Siddiqui stated
that "all is not well" with Pakistan's implementation of labor standards. For
example, minimum wage laws are not applied evenly throughout the coun-
try, certain labor regulations are not applicable in the Export Processing
Zones, and there has been an "extensive use" of the Essential Services Main-
tenance Act to deny certain rights to public utility service workers.
On the other hand, Mr. Siddiqui said, tripartite committees have been
constituted to combat bonded and child labor, and they are working on a
"long-term agenda of completely eliminating child labor through a na-
tional program of rehabilitation and youth training. Considerable success,
in fact, has been achieved in this field which is visible in certain sectors such
as Ethe production of] footballs and surgical instruments."
Mr. Siddiqui added that, from a "purely employers' perspective, the
biggest impediment in standards compliance has something to do with the
very nomenclature of what we call 'international labor standards. By its
very name, these standards show a major tilt toward labor or workers and
the protection of their rights." In suggesting the term "international em-
ploymer~t standards," he said that protection of the "rights of employers to
manage enterprises effectively" is needed in order to help social partners
work together to create job opportunities in the country.
Mr. Siddiqui concluded by describing a "new dimension of social dia-
logue" following the formation of the Workers-Employers Bilateral Coun-
cil of Pakistan. Established in 2000, WEBCOP is intended to provide a
forum for workers and employers to collaborate on certain initiatives,
induding
.
recognizing enterprises at the regional or national level with strong
records of compliance;
· introducing a system of compliance certification for enterprises ob-
serving core standards in order to produce role models for other businesses;
and
· developing training programs for managers, union leaders, and
workers "with a view to sensitize them to the needs of standards compli-
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EMPLOYERS
65
ance and its positive impact on enterprise growth and the quality of work
life.'
ANDRE VAN NIEKERK BUSINESS SOUTH AFRICA,
Sou rH AFRICA
Mr. van Niekerk presented the business perspective on international
labor standards and their enforcement, focusing on three broad observa-
tions. The first is that there are different forms in which ILS can be ex-
pressed, implemented, and monitored. Second, irrespective of the regula-
tory form, it iS meaningless to talk about labor standards unless they are
effectively and efficiently monitored. And finally, in the context of trade
and tracle agreements, while labor standards have an obvious social value,
they should not be used for protectionist purposes or to call into question
the comparative advantage of developing countries.
In South Africa, as in most countries, labor standards are primarily
expressed through domestic legislation. What may be unique about South
Africa, Mr. van Niekerk said, is the recognition afforded to international
obligations, both in the constitution and the principal statutes. The South
African Constitution, he said, may be the only one that establishes fair
labor practices as a constitutional right. And this incorporation of interna-
tional standards into domestic instruments gives rise to a number of sources
for indicators of compliance, including judgments in the Constitutional
Court, the Labor Court, and civil courts.
Aside from inclusion within the statutory framework of South Africa,
labor standards are being addressed through private standard-setting initia-
tives. International framework agreements—such as the recent agreement
between Anglo Gold (a South African mining multinational) and the ICEM
(International Federation of Chemical, Energy, Mine and General Work-
ers' Unions)—have addressed core ILO standards through bargaining. Cor-
porate codes of conduct have also become increasingly popular, although
they have been criticized for providing for self-regulation.
Although most countries seem to have the legislative environment for
the standards, Mr. van Niekerk said, many of them lack effective enforce-
ment mechanisms. He emphasized that enforcement is a matter for the
state. While businesses should comply with the laws, they should have no
role in policing those laws and "cannot be held accountable for the failures
of governments . . . Corporate social responsibility is not an alternative to
proper government, nor is it a mechanism by which government can avoid
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66
INTERNATIONAL PERSPECTIVES
its responsibility tO itS citizens." That does not mean, he aclded, that em-
ployers and employers' organizations cannot play a constructive role in
shaping the institutions that are responsible for monitoring and enforcing
labor standards.
One of the major changes introduced by the 1995 Labor Relations Act
was the introduction of statutory institutions, such as the specialized Labor
Court and the Commission for Conciliation, Mediation and Arbitration,
with a tripartite governing structure. The act requires that all disputes be
submitted for conciliation before adjudication or industrial action; this has
been a particularly effective means of implementation, Mr. van Niekerk
said. Despite case overloads in certain regions of the country and recent
cli~lculties in providing dispute prevention programs, settlement rates have
been good.
Mr. van Niekerk concluded by saying that implementing labor stan-
darcls through South Africa's new conciliatory approach has been more suc-
cessful in resolving disputes than the "cumbersome and inefficient" ap-
proach of using the criminal courts. However, he said, institutional capacity
is still a "major obstacle" to the implementation of labor standards, requir-
ing a~lditional resources, particularly with regard to labor inspection.
A.
Representative terms from entire chapter:
child labor
