MUMBAI: In Marcello Malentacchi's most recent opinion column, published today (January 15), the IMF general secretary says the World Social Forum, which will open tomorrow in Mumbai, shows there is a window of opportunity for the world's progressive social forces to come together not just to protest, but also present alternatives for the present unjust economic system.

However, asks Malentacchi, will it be possible to maintain the high interest and enthusiasm of WSF delegates much longer? He says that "to go beyond verbal critiques of globalisation, programmatic pronouncements and lobbying, trade unions must assume their responsibility."

Access the entire opinion column on the IMF website to read about IMF initiatives for economic alternatives.

GENEVA: Some 50 delegates from affiliated unions in Australia, Japan, Singapore, North America and Europe gathered in Geneva on November 10-11 to participate in the IMF's second seminar on organising non-manual workers.

With the structural and technological transformation of industries in the metal sector, major changes have taken place in the composition of the labour force, with non-manual occupations accounting for an ever-increasing share of employment. Greater emphasis, therefore, must be placed on making unions relevant to these workers who, just like their manual colleagues, are bearing the brunt of ruthless competition and corporate restructuring.

The purpose of the IMF seminar was to examine the needs of non-manual workers, and discuss ways to provide collective representation while responding to requests for a more tailored approach. Participants also sought to respond to the question of how to better integrate these structural changes in IMF activities and policy.

Working time, work/life balance and equality issues were high on the agenda, as were training and career development. Special attention was also paid to the need to design communication methods and strategies both for recruitment and retention of members, and services to members, ranging from legal advice to the availability of help lines and call centres, were discussed.

As a follow-up to this seminar, the issue of non-manual workers will be dealt with in other regions which could not be represented at this meeting.

AUSTRIA: The joint negotiating team of the Austrian Metal and Textile Workers' Union (GMT) and the White-Collar Workers' Union (GPA) has been successful in concluding a new agreement for over 50,000 production and non-manual workers in the electrical and electronics sector.

After what the unions described as "intense negotiations", the following items were among the results:

• a new, integrated pay system for blue- and white-collar workers;
  
• an increase in effective wages of 2.5 per cent over the next 18 months with the higher fixed pay increase coming into effect from the first day; the pay increase falls also due for earners of the collectively agreed minimum wages;
  
• a distribution option at plant level whereby companies choose to raise total pay by either 2.9 per cent or at least 2.3 per cent while distributing 0.6 per cent individually;
  
• due to the introduction of an integrated pay system for blue- and white-collar workers, an increase in the minimum wage will be postponed until May 1, 2004, when the scheduled wage hike will be at least 2.6 per cent, with an elimination of the lowest wage group.

The integrated pay system was considered the key issue in the bargaining. It will take effect on May 1, 2004, and provide for automatic bi-annual pay rises for both categories of workers, blue and white collar. The distinctions, however, between the two categories will remain, as reflected in separate collective agreements and works councils.

Bargaining for metalworking in the small crafts and trades sector, which opened on October 20 and affects over 10,000 production workers, is continuing.

BY JENNY HOLDCROFT

The Export Processing Zone of San Pedro de Macorís, east of Santo Domingo in the Dominican Republic, is restricted with gates, razor wire and armed guards. Workers are locked in all day, including during the half hour they are permitted for lunch, and kept there at night until work quotas are completed.

At maquiladoras in Tijuana, Mexico, workers earn around US$1 per hour, wages so low that workers are forced to live in houses they build from packing cases, in communities without sewerage or running water. Women and men work 3_ nightshifts per week of 12 hours each. During each shift they are allowed one 10-minute break and one half-hour meal break.

These are two — unfortunately typical — snapshots from the increasingly growing practice of Export Processing Zones. These zones may carry different names — “Maquiladoras,” “Free Zones,” “Free Ports” or “Special Economic Zones,” but most if not all of them are about two things: tax and duty breaks and cheap, unorganised labour.

The concept of EPZs is not a new one, but in the last 10 years there has been a rapid expansion in the number of countries with EPZs, in the overall number of EPZs, and in the number of workers employed there (see table on page 25).

The main industries operating in EPZs are electronics and garments, while automotive companies also have a significant presence. Major transnationals, including General Motors, Ford, DaimlerChrysler, Toyota, Nissan, Fiat, General Electric, Siemens and Philips, have a presence in EPZs, not to mention the many smaller companies that supply them. According to the OECD, transnationals employ most of the workers in the world’s export processing zones.

It is a typical characteristic of EPZs that trade union rights are restricted. Whether this is by law or by a lack of enforcement of existing laws, the result for workers is the same. Few unions have been able to successfully organise EPZ workers.


Promoting EPZs

Various groups have been formed to promote the EPZ concept, including the World Federation of Free Zones, the World Economic Processing Zones Association and many country level associations. To sell EPZs to investors they make frequent reference to the ‘bureaucratic procedures’ and ‘red tape’ that can be avoided by creating and investing in EPZs. Naturally, they do not mention that these bureaucratic procedures, to be avoided at all cost, include labour laws to protect workers and guarantee them their rights.

In fact, the impact on workers’ wages and conditions is not a question that is considered as a cost of investment in EPZs. Proponents of the EPZ model boast of ‘Profitability for All Parties: The Investor, the Economy and the Region’ — the workers who contribute their labour to generate the profits are not considered to be among the parties whose interests are at stake.

And yet the impact of EPZ employment on workers’ rights, on their pay and conditions is enormous.


Impact on employment

The International Labour Organisation is sufficiently concerned about the economic and social effects of EPZs that for over 20 years it has monitored their impact on employment. It has also questioned their role in social and economic development in the host countries, noting the lack of information available on whether jobs generated by EPZs are of a long-term nature and the real extent of skills transfer. The ILO has found that in Mauritius over the past 10 years 35 firms have opened in EPZs each year, but the same number have closed down.

In the maquiladoras of Mexico, 250,000 jobs were lost between January 2001 and June 2002, some 15 per cent of the maquila workforce. The companies simply packed up and moved to where wages are even cheaper. The $1.20 hourly rate in Tijuana cannot compete with the 40 cents per hour that workers in China make. Likewise in other low-wage countries such as Indonesia, Thailand and even Vietnam, China is setting the benchmark for low wages and substandard working conditions that many companies simply cannot resist. The pressure is on countries to compete on wage costs or risk losing vital foreign investment to the lowest bidder.

And this is the great deceit of globalisation. The promise that transnational corporations will bring infrastructure, skills development and economic growth to the countries they choose to invest in gives way to the reality that there are few lasting benefits and devastation when the corporations leave.


Challenging the dogma

Unions are fighting against the persistent dogma of the business community that decent wages and conditions are barriers to investment.

When the Malaysian government set up EPZs, it banned the formation of national unions in the electronics industry as an incentive to foreign electronics companies to invest in the development of that sector. According to the Trade Union Advisory Committee to the OECD (TUAC), 96 per cent of all workers in seven EPZs are employed by foreign transnationals, and electrical and electronics firms account for 65 per cent of all EPZ employment. There is still no national electronics union in Malaysia.

TUAC also points out that minimum wages are not enforced in Malaysian EPZs on the grounds that foreign investors would relocate. Similarly, a UN report stated that:
“It is primarily in the EPZs that workers’ rights to join a national union for collective bargaining and/or to strike are largely restricted by governments, based on the belief that unions will discourage foreign direct investment in the industry."

Yet the ILO has found that companies are quite capable of adapting to local conditions where countries have an established trade union presence in EPZs and collective bargaining takes place. In fact, such countries “do not appear to have suffered any loss of investment and have the same investor profile as countries which lack trade union infrastructure. In the Philippines, for example, 59 per cent of zone investment is in the electronics sector, and many of the leading electronics firms have increased their investments despite the presence of trade unions in the zones.”

The Global Unions’ group [including the International Confederation of Free Trade Unions (ICFTU), the Global Union Federations (GUFs) and the Trade Union Advisory Committee (TUAC) to the OECD] has endorsed a statement submitted by national unions to their governments for the 5th WTO Ministerial Conference in Cancún in September 2003. Among other measures, it calls for a clarifying statement to the effect that the weakening of internationally recognised core labour standards in order to increase exports, as in EPZs, is an illegitimate trade-distorting export incentive that is not permissible under WTO rules.

Acceptance of such a statement would be a huge change of heart for the WTO, whose director-general in 2001 said that "I see the reflection of the free zones in almost every part of the world actually as a testimonial to the importance of the free zones to facilitate free and fully competitive trade, which is one of the principles of the World Trade Organisation."


Women workers

While workers in EPZs in general face low pay and poor working conditions, EPZs are notorious for their exploitation of women workers, who account for as many as 90 per cent of the workforce in some zones.

Typically, women’s wages are 20 per cent to 50 per cent lower than those of males working in the same zones. Long working hours coupled with overtime and nightshifts lead to women leaving EPZ employment before they reach the age of 25. Accounts of women being forced to undergo pregnancy tests abound.

The Sri Lankan government spent millions on providing infrastructure for companies in EPZs but they did not build any hostels to house the influx of migrant workers, mainly from rural areas all over the island. A women’s organisation working in the zones says “the majority of these migrant workers are young women in their late teens and early twenties who are herded together inside small rooms in temporary structures. The majority sleep on the floor.”

Legislation restricting night work for women in Malaysia has been cancelled to allow factories to operate 24 hours a day. Women in EPZs work excessive hours: more than 90 per cent work more than 48 hours per week and in some instances they are required to work a further eight hours’ overtime after their eight-hour shift. Promotion prospects are low for women, who are predominantly employed as semi-skilled or unskilled workers.


Hard to organise

Existing labour laws either don’t apply or are flouted with impunity by employers. In Bangladesh, the zones are exempted from the Industrial Relations Ordinance and investors are informed of the absence of unions as an incentive to invest (see also article on page 30).

The companies that choose to locate in EPZs are looking for cheap labour and exemptions from social obligations, good reasons to strongly resist union attempts to improve wages and conditions. In Sri Lanka, the law requires that unions be recognised in a workplace if 40 per cent or more of the workers belong to the union; yet employers still manage to refuse to recognise properly registered unions, in violation of the national law and of ILO Conventions Nos. 87 and 98. The Free Trade Zone Workers’ Union (FTZWU) has formed eleven branches of which only one has been legally recognised. Of the ten branches pursuing recognition through the courts and through campaigns, four have been crushed.

EPZs are often set up in economically deprived areas where labour is cheap and workers are more fearful of losing their jobs if they make demands. Many workers in the maquiladoras of northern Mexico have relocated from even more economically deprived areas and can even less afford to put their jobs at risk.

The predominance of women in EPZ employment is a further barrier to union organisation.

Trade union responses

Organising in EPZs calls for ingenuity and flexibility to overcome the not inconsiderable obstacles put in the way by governments and employers who would rather keep unions out of the zones.

In Maharashtra, India, a small woman in her thirties, Sanjita Jabwala (name changed), is an organiser in the Santa Cruz EPZ. She can freely enter the area, thanks to an identity card that the union has managed to get her. Organising workers in the EPZ is a difficult and dangerous task as Sanjita has to face the hostility of the employers and the mafia-like yellow unions.

In the Dominican Republic, IMF affiliate FENATRAMIM has a method of organising in the EPZs that involves making contact with the workers outside of the workplace. Two or three leaders are identified in each factory who then get the home contact details of the other workers on the pretext of inviting them to a fiesta. Once the initial contact has been made in a social situation, organisers visit the employees at their houses to discuss the union.

Brazilian affiliate CNM/CUT is involved in a project in the Manaus EPZ to strengthen the presence of the union in Nokia. The project starts by training 15 workers who could become union representatives in the workplace and aims to eventually form a World Council of Nokia members and to negotiate an international framework agreement (IFA) with the company. The intention is that the union organisation will be able to spread to other companies within the Manaus EPZ.

In some countries unions specialising in organising within EPZs have been formed, such as the Free Trade Zone Workers’ Union in Sri Lanka and FENATRAZONAS in the Dominican Republic.

EPZs are one of the most difficult organising challenges faced by unions. Persistence and a certain amount of creativity are urgently needed to reach this exploited group of workers. Transnational corporations will take advantage of low labour standards and wages to increase their profits to the extent to which they are able. The labour movement must unite to raise labour standards across the globe and prevent corporations from playing one country’s workers off against another’s.

That is why one of the IMF’s priorities is to implement international framework agreements (IFAs). These are agreements between the global labour movement and transnational corporations (TNCs) at a world level. Most EPZ employment is with TNCs and IFAs provide an opportunity to influence their employment practices in the zones.

But IFAs alone are not enough. The best way to improve conditions for workers, especially women workers, trapped in these low-wage jobs is to build a strong labour movement throughout the world.

AUSTRIA: The IMF’s Austrian affiliate, Gewerkschaft Metall-Textil (GMT), will join the national trade union confederation ÖGB in a 24 hours “massive defense strike” on Tuesday, June 3d. The strike follows earlier country-wide protests and strikes over government plans to increase the national retirement age. The strike is scheduled to take place from 0.00-24.00 hours with work stoppages focussing on the public transport and in the private industry sector. Although the trade unions and their social partners had tried to defer changes in the proposed legislation so that a solution of mutual consent might have been found, the government rejected any delay and introduced a draft law to Parliament on April 29. If passed, the legislation will prolong by five years the period for pension contributions — from 40 to 45 years. The president of the Austrian metalworkers’ union, Rudolf Nürnberger, says “the government draft means extensive cuts in future pensions of up to minus 41 per cent.”

Meetings between leaders of countries are necessary and useful, if they do not aim at replacing international organisations that have been set up for global governance. Once again it is time for the “Big” economic powers to meet and decide how to rule the entire world. The place for the event is Evian, France (just 30 kilometers outside Geneva). This time, Bush, Koizumi, Chirac, Blair and the others have decided to spend one day to “consult” some of the other countries. That is why Algeria, Brazil, China, Egypt, India, Malaysia, Mexico, Morocco, Nigeria, Saudi Arabia, Senegal, South Africa and Switzerland have been invited. To make the event look even more legitimate, the UN, World Bank, International Monetary Fund and the WTO have also be included for the consultations. The ILO, the organisation with the best democratic structure, has not been invited, and we know from past experience that workers’ rights don’t interest the “Big”. The criteria used to select the countries and organisations to be in Evian are a secret and will probably remain so. Furthermore, the G-8 has no rules. It meets and decides the agenda without any kind of democratic process or transparency. Undoubtedly, there are things absent from this meeting’s agenda which should be discussed but within the framework of the UN and under the chairmanship of its secretary-general, such as:

• how to write off the well over US$2,000 billion external debt of developing countries;
• how to introduce a special tax on speculative financial transactions;
• how to create jobs for the more than 200 million jobless;
• how to reform international financial institutions and make them democratic and transparent.

These fundamental issues need to be debated if the powerful leaders are serious about solving the problems which are afflicting most of the world’s population.

GENEVA: Undoubtedly, says Marcello Malentacchi, IMF general secretary, in his opinion column published today (May 28), what will be absent from the agenda of the G-8 Summit on June 1-3, and which needs discussion but within the framework of the UN, are fundamental issues such as:

• writing off the huge external debt of developing countries;
• introduction of a special tax on speculative financial transactions;
• job creation for the many millions of jobless;
• reform of international financial institutions.

These are issues to tackle if the G-8 leaders are serious about solving the problems afflicting most of the world’s population. Read the full text of the IMF general secretary’s opinion under the associated link.

BELARUS: The IMF’s two Belarus affiliates, the Automobile & Agricultural Machinery Workers’ Union (AAM) and the Radio & Electronics Industry Workers’ Union (REI), held a protest action on May 22 against “the impoverishment of the people.” If the number of participants — 1,000 — may seem modest, under the conditions existing in Belarus this was really an achievement. Government authorities tried to prevent the action, and even the management of one of the companies involved informed its workers their wages would be paid during the time the action was taking place. Others were told they would lose their jobs if they participated in the protest. Challenging the conditions of general silence and submissiveness in the country, people attended the meeting to express their distrust of the government.

GREAT BRITAIN: Although the British government has presented a long-awaited draft Bill on corporate manslaughter to legislate for victims of corporate killing, the IMF-affiliated GMB union says the proposed legislation does not go far enough. The union welcomes the tightening of law regarding workplace health and safety but underlines the weakness of the draft legislation as it will only target companies themselves for failure to set or maintain standards leading to death. The law will not be directed towards the criminal liability of individual directors. A GMB spokesperson stated that “failure to target individual directors or others responsible for running companies will constitute a weakness in the legislation. Nothing will focus the mind of company directors more than the threat of imprisonment. This must be explicit within the legislation. We await the details with interest and will respond fully.” Worldwide, union pressure continues to mount in the campaign to improve health and safety at work, and being able to punish corporate criminals is part of this struggle.

CANADA: Reacting to the decision announced on May 22 by DaimlerChrysler to drop plans for a new assembly plant for pickup trucks in Windsor, Ontario, the head of the Canadian Auto Workers union, Buzz Hargrove, expressed anger and deep disappointment. In a press statement released by the CAW, the union’s president said that the new plant could have been a “major decision to reverse the downward trend of auto, the most important industry in the country,” but he blamed the federal and provincial governments for not doing enough to make sure the plant became a reality. Although the automaker said the project for the Windsor plant would not be economically viable, the union believes the two issues standing in the way of implementing the investment agreement, which had been reached during bargaining in the fall of 2002, are lack of federal and provincial government support, and the rising value of the Canadian dollar. The CAW president has written to Canada’s prime minister, Jean Chrétien, to urge him to convene a meeting of the key stakeholders in the project for the Windsor plant, in order to consider the economic hurdles to the project and work together to see if the obstacles can be overcome. Windsor is just across the border from Detroit, USA. According to the Detroit News and just-auto.com, the Chrysler group is trying to cut costs and boost revenues at a time when U.S. car and truck demand is down 4 per cent so far this year, and its own sales reduced 7.2 per cent.