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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 organizationssuch 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- mentationin both the formal and informal economieshas 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:~70JO: ~~ ~ ; 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 adultssuch 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 informationas 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 Labordiscussed in Chapter 3 by Mr. Segoviaalso 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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62 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.

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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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64 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 agreementssuch 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.