| #161. Today there are no immigrant workers in the zone.
Between the two extremes of zones where normal labour standards are respected
and those where no laws are applied, except the law that might is right, some
countries offer a more mixed picture. In Malaysia, according to the Penang
clothing workers' union, workers have the right to form a trade union and to
negotiate collective agreements, and the right to strike is unrestricted.
| 161. Today, after 9 years the TDZ has begun to recover from
the disaster which resulted from 1) an unfortunate mistake in accepting this
devious Hong Kong client and 2) what can only be called "overkill" by the
Australian trade unions in punishing the zone for the mistake through political
action at Canberra.
Reduced to less than 100 export workers in the
zone by the demise of Hengyang, and having used up two key charismatic zone
leaders in the lengthy political process, TDZ Darwin in the past 36 months has
finally returned to normal. As of January 1997 there are 28 tenants of which 16
entered the zone in the last 3 years. The newest is a medium sized brewery
seeking niche markets in Asia. Others include a packaging company, engineering
businesses, chemical manufacturers, producers of intelligent power systems,
international financial consultants, customs clearance agencies and traders in
food and live cattle exports. TDZ is now back in its rightful place as a leader
in Northern Australia development
|
| 162. But special legislation for the zones is
designed to ensure "industrial peace" and to prevent production being
disrupted. When an enterprise is granted "pioneer" status by the ministry,
strikes are banned as soon as a dispute is taken to an industrial tribunal or
submitted to a minister. The government has formulated strict rules for the
registration of trade unions, particularly in the electronics industry, where
they are virtually banned.
| 162. This refers to Penang, Malaysia, which was discussed at
the end of paragraph 161.
|
| 163. The union's report also points out that that pay and the
working environment are better in the EPZ factories than in others.
| 163. The local union confirms the higher pay and better
working environment in EPZs. Why is the ICFTU against EPZs? Doesn't it believe
its members?
|
| The political system
|
| 164. There is usually a direct link between the type of
political regime in the host country and the social and trade union situation
in the zones.
| 164. This is undoubtedly true, but is irrelevant in an attack
on EPZs unless it can also be shown that EPZs are a function of repressive
regimes, which has not been shown.
|
| 165. In a report written following a subregional seminar
organised in April 1995 in Central America, the ILO stated unequivocally
"precarious contracts, piece work, extremely long days, poverty wages, the
violation of the freedom of association and other inhuman practices are not the
exclusive preserve of a certain enterprises in the maquila industry, but are
part of the deep rooted culture of the exploitation of human and natural
resources in our countries".
| 165. We suspect the ILO report was referring to maquiladoras
and not implicating EPZs. From what is said, we believe the statement was made
by a local Central American speaker and not officially by the ILO, even though
it was at an ILO seminar.
This statement is excellent proof that the
EPZs are not at all the problem, and that the focus on EPZ is
misplaced.
|
| 166. The export processing zones are also
"enclaves" and as such are not only separate from the economy of the host
country but are also seemingly exempt from its legislation. In the Dominican
Republic for example, the 1992 labour code guarantees the right to organise and
protects against acts of antiunion discrimination. But in the 31 export
processing zones in the country, which employ some 180,000 people, employers
systematically ignore the labour code and the authorities are incapable of
enforcing it.
| 166. President Balaguer issued a separate decree to create
each of the Dominican Republic Zones over a number of years. Hence the rules
were not always the same for all zones. In the early days it was decreed that
the EPZs must pay wages below those in the domestic territory. This nearly
destroyed the EPZs at the time since the client companies could not expect to
get the best workers, which is what they wanted. The government rescinded the
order. The government of the Dominican Republic is unable to enforce its labor
regulations on any sector of the economy. As the ICFTU reports the State Sugar
Council refuses to negotiate with its union. The EPZs, where four collective
bargaining agreements have been signed, are a bright spot in a dismal union
performance in the Dominican Republic.
|
| 167. In 1995, the ICFTU revealed in its annual survey of
violations of trade union rights that "while over 100 trade unions had been
formed in the zones, many of which had been recognised by the government, no
collective agreements had been signed and the majority of trade union
representatives had been dismissed". A collective agreement was finally signed
a little later. To evade labour laws and to prevent workers organising,
enterprises practice "submaquilacion", known in Central America as "Hormiga"
(ant) maquilas or pyramids. Trish O'Kane, in the review Pensamiento Propio,
explains how it works in Guatemala:
| 167. Customs permits subcontracting outside EPZs under control
in several countries. Taiwan and Korea are notable for the high value-added
levels of their EPZ exports, and part of the reason is such sub-contracting.
This type of subcontracting also helps the maquila integrate with the rest of
the economy. The ICFTU obviously objects to any practice that does not support
its repressive view of EPZs.
|
| 168. " A North American or Korean enterprise contracts only
one enterprise in Guatemala, but this one company sub-contracts work to other
enterprises which in turn have subcontracts with other people, families,
workshops or associations of workshops. While the majority of maquilas are in
the capital, some villages on the high plateau have been turned into
"maquiladora villages". The employers turn to the indigenous population which
has a long tradition of producing textiles and clothing and where people often
have their own sewing machines. The Indians work piecerate and are less
expensive than big enterprises."
| 168. The example given is in Guatemala and the work is
outside the EPZs. This can be done with only very simple
products and quality control can be a headache for management of the factory.
Another way to express this is that the
Maquilas are helping even the rural villages in their quest for development,
and far from being an enclave offer the local population a opportunity to
benefit from the global market for their labor.
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| Wages
|
| 169. As most of the industries situated in the EPZs belong to
the modern sector of the economy and depend on the international market, it
would be reasonable to expect that wages are relatively high. In reality, pay
is usually as bad or worse as in local enterprises: in the Philippines, the
minimum wage in Manila in 1995 was set at 5.27 dollars per day, yet it was only
4.9 dollars per day in the zones, with average salaries in the EPZs amounting
to 6.7 dollars.
| 169. The example given is in the Philippines. It is not clear
whether the wages include fringe benefits. The conclusion is confusing because
the average wage in EPZs is said to be $6.7 which is higher than in the
domestic minimum of $5.27. Perhaps the $4.9 figure is a training wage,
authorized in most countries around the world during the period when a beginner
is learning. It may also be true that the Manila minimum was not the national
minimum and did not apply to the more rural areas in which the zones were
located. In any event, the pay is higher on average, so the point made is the
EPZs are a good place to work.
|
| 170. "Conditions inside and outside the zones" notes the
Confederation of Filipino Workers, are virtually the same. The only difference
is that the zones provide games and recreation areas. They also provide food
and lodging for their workers."
| 170. That's a pretty big difference! Food, lodging, and
entertainment are the main expenses of a worker. Such fringes make a huge
difference in disposable income. Fringe benefits do make a difference in the
lives of workers in EPZs.
|
| 171. An ICFTU/APRO study carried out at the beginning of 1995
confirms that "30 per cent or less of workers in the zones in six Asian
countries earn wages below the legal minimum for their occupations in their
countries, with the exception of Malaysia. And when wages in Sri Lanka and
Bangladesh do reach the minimum level, it is usually only thanks to many hours
of overtime."
| 171. The question is whether that was due to the legal
training wage. It would be helpful if ICFTU were to supply the table listing
the countries and their respective percentages.
|
| 172. In the Dominican Republic, wages in the EPZs were until
recently a little lower "by law" than the minimum wages in enterprises outside
the zones. This anomaly was recently revised and at the beginning of 1995 the
general minimum wage was DR 264 pesos per week, i.e. about 20 US dollars.
| 172. Plus fringes. See our 166.
|
| 173. In El Salvador, according to the human and trade union
rights project, employers resort to various stratagems to avoid paying the
minimum wage.
| 173. Not clear if this is in an EPZ.
|
| 174. "Officially," write the authors of the report on
maquiladoras, "wages in the EPZs are slightly higher than the monthly minimum
wage (1,155 colons, or 133 dollars, in 1995). However, in the textile industry,
and particularly in the maquiladoras, a recent study by Gilberto Garcia and
Marisol Ruiz on conditions for minors shows that while women officially receive
the minimum, their salary is divided by 30 in order to determine their daily
rate of pay, but they are paid twice a month, for only 14 days, so that they
receive even less than the minimum wage".
| 174. Confusing maquiladoras with EPZs? Because of the running
together of sentences (deliberate?), it is not clear that the tricky company
methods of cheating on salary are in maquiladoras, OR in the textile industry.
It does not say the tricks are played in EPZs. The EPZ pays a higher wage,
however.
|
| 175. Employers use many tricks to maximise their profits: they
delay payment of the "aguinaldo" (year-end bonus), issue bad cheques, calculate
the Christmas salary on the basis of the minimum wage only, etc. Whether they
it is above or below the minimum wage, the money earned by workers in the EPZ
is is not sufficient to cover their basic needs.
| 175. Name the companies that do these things. Giving bad
checks and delaying payment of the aguinaldo (Christmas bonus), as we have seen
at Transitron in Tamaulipas, Mexico, is a very bad idea. It leads to strikes,
locking managers in their offices for four days, and other such activities.
It should have been in the newspaper. Or is
this hearsay, or made up?
The last sentence suddenly says the money
earned, even in the higher paying EPZs, is not enough. But it is more than the
workers in the rest of the country get.
|
| 176. In Guatemala, in 1994, the average monthly
wage was 543 quetzales, yet two years earlier the cost of the basic food basket
was estimated at 815 quetzales.
| 176. Now we have the data to which the last sentence in the
ICFTU paragraph 175 referred. It obviously has nothing to do with EPZs; and is
a national average wage in one year compared to a basket of food in a different
year -- a figure with no particular meaning in the discussion if at all. We
have already found out that EPZs tend to pay more than national average, and
that meals may be included by the employer.
|
| #177. The Subic Bay zone in the Philippines also seeks to
circumvent pay legislation. According to a report in August 1995 by Charles
Gray, director of the AFL-CIO's international affairs department, "employers in
the zone regularly pay less than the legal minimum wage, keeping workers at
apprenticeship level well beyond the legal time limit. Other workers complain
of forced deductions from their pay packet without their consent."
| 177. Please tell us how many workers and the names of their
companies which kept them at training wage levels beyond the "legal" limit
(training varies in each industry). Workers have deductions forced without
their consent by governments all over the world, such as social security,
housing funds, tax withholding, etc. which they may not like, but which must be
done through no fault of the employer. Other forced deductions include union
dues. Is this what Mr. Gray was talking about??
|
| #178. In the electronics assembly plants in the Santa Cruz
zone in Bombay (India), notes the ICFTU and APRO survey, the women workers are
not employed by the enterprise but by intermediaries who take commission on
their wages. Every nine months the workers in the zone receive a pay slip with
the name of another employer, which prevents them getting an indefinite
contract. The employers' Mafia has the complicity of the government in its
manoeuvres.
| 178. India is complex and has its own systems of doing
business under its own laws. Intermediaries are not an invention of the EPZs.
The Government EPZs follow this pattern. The Santa Cruz Electronics Export
Processing Zone does little electronics manufacturing. Its largest business is
in diamond polishing and jewelry manufacture. It is also a center for
international computer programming using highly educated mathematicians.
|
| 179. Social security is by no means guaranteed either. In
Central America, notes an ILO report (sub-regional seminar 1995), many
enterprises do not pay their contributions to the social security institutions.
Others delay their payments into the system even though they have already
deducted them from the workers' pay slip. There are also anomalies in terms of
the categories declared to the authorities and actual level of pay to the
worker, to avoid having to pay higher social security contributions for higher
categories.
| 179. Where in Central America? What companies? These
unsupported general statements from an ILO seminar do not attain standing by
mentioning they were made at an ILO seminar. Nor do they permit the ICFTU
condemnation of EPZs. Slapdash performance!
|
| 180. "Some of the multinationals in the export processing
zones however provide better conditions than national enterprises. According to
the All Pakistan Federation of Trade Unions "working conditions, salaries,
extralegal benefits and industrial relations are generally better than in
national enterprises".
| 180. Of course they do. Which is why ICFTU should support EPZs
rather than castigate them.
|