DECENT WORK AND EXPORT PROCESSING ZONES:
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1 DECENT WORK AND EXPORT PROCESSING ZONES: AN ILO PERSPECTIVE Claude Akpkavie Senir Adviser, ILO Bureau fr Wrkers Activities
2 Definitin EPZs are industrial znes with special incentives set up t attract freign direct investment, in which imprted materials underg sme degree f prcessing befre being exprted again Zne frmats: EPZ Special ecnmic znes Free trade znes Industrial free znes Maquiladras Special ecnmic znes Bnded warehuses Technlgy and science parks Financial service znes Free prts
3 special incentives Ecnmic Exemptins frm exprt taxes / duties n imprts Tax hliday package (taxes n prfits; prperty tax; municipal taxes; VAT; etc.) Exemptins frm freign exchange cntrls Free repatriatin f prfits Infrastructure facilities; electricity; water; Administrative facilities and services prvided Scial* Limitatins n wrkers rights especially freedm f assciatin (right t rganise; industrial actin; ) Cst/Benefit f EPZ strategy* (factr in scial upgrading/dwngrading resulting frm EPZ strategy)
4 EPZ evlutin in time Names: free trade znes; special ecnmic znes; bnded warehuses; free prts; maquiladras; develpment znes; special ecnmic znes; etc. Type: assembly plant; single prcessing plant; high tech; finance znes; free prt; turist resrt; call centres; Frm: EPZ as a defined zne enterprise-type EPZ / plant anywhere freign investrs in cuntry Sectrs: labur intensive (garments, textiles) capital intensive (electrnics) services (call centres)
5 Why Gvernments set up EPZs Attract freign direct investment Create jbs emplyment Technlgy transfer Diversify the ecnmy Transfer skills Diversify the ecnmy Earn freign exchange EPZs as an interim slutin fr cunty-wide refrm etc
6 Trends and Criteria fr evaluatin f EPZ strategy: Trends n what EPZs have helped sme cuntries t achieve: increase exprts (China, Hungary, Philippines, Malaysia, Mauritius ) Diversify the ecnmy Attract freign investment, pen ecnmy (China) Create Emplyment (including use f migrant labur-mauritius) Absrb yung wmen int frmal ecnmy jbs frm agriculture / infrmal ecnmy Mve t higher value-added prductin (Malaysia, Mauritius ) Criteria fr evaluatin frm a labur & scial pint f view: D EPZs meet internatinally recgnised standards f Decent Wrk? D EPZs meet labur standards f similar enterprise type in the nn-epz frmal ecnmy?
7 ILO: Decent Wrk Prmting jbs an ecnmy that generates pprtunities fr investment, entrepreneurship, skills develpment, jb creatin and sustainable livelihds. Guaranteeing rights at wrk t btain recgnitin and respect fr the rights f wrkers. All wrkers, and in particular disadvantaged r pr wrkers, need representatin, participatin, and laws that wrk fr their interests. Extending scial prtectin t prmte bth inclusin and prductivity by ensuring that wmen and men enjy wrking cnditins that are safe, allw adequate free time and rest, take int accunt family and scial values, prvide fr adequate cmpensatin in case f lst r reduced incme and permit access t adequate healthcare. Prmting scial dialgue Invlving strng and independent wrkers and emplyers' rganizatins is central t increasing prductivity, aviding disputes at wrk, and building chesive scieties.
8 Decent wrk : Emplyment Estimates f the develpment f exprt prcessing znes N. f cuntries with EPZs N. f EPZs Emplyment (millins) n.a n.a n.a f which China n.a n.a n.a ther cuntries with available data n.a Surce ILO (2003; 2008)
9 Decent Wrk: Emplyment Significant emplyment grwth (thugh sme lsses in sme cuntries due t cmpetitin t attract FDI int EPZs) Net emplyment creatin r simple mvement frm dmestic ecnmy t EPZs? (case f Mexic) Quality f emplyment (decent emplyment) issues: High turnver f wrkers (average career max 5 years) Skills upgrading? Hiring and firing regime suspect Wrking cnditins Labur management relatins etc.
10 prfile f wrkers Majrity are Wmen up t 90% are wmen in sme cuntries Tend t be rather Yung Migrants Generally Pr (minrities; discriminated grups?) Therefre face issue like: Discriminatin Harassment Accmmdatin Transprtatin frm wrk t hstel (especially night shift) Family respnsibility issues Pregnancy tests still existing?) Pay equity; etc. Prfile is a mixture f Gender / Yuth / Pverty / Migratin status / Ethnicity
11 Decent wrk: Rights Regulatry framewrk = subsidy / incentive t attract FDI Law : majrity f cuntries extend cverage f labur law t EPZ Practise: majrity f cuntries d nt apply the law in practise Freedm f Assciatin and Cllective bargaining (FOA/CB): legal exemptins n uninisatin in znes; refusal f access t znes t trade unins representatives; legal restrictins n the right t strike; interference f gvernments and emplyers in the affairs f trade unins; acts f anti-unin discriminatin (reprisals, harassment, blacklisting) restrictins t cllective bargaining
12 Rights Discriminatin Harassment Accmmdatin Transprtatin frm wrk t hstel (especially night shift) Benefits and career develpment; Frced labur: Frced vertime Pressure frm buyers n utsurced suppliers (tight delivery schedules; prduce at lw prices; etc.) leads t crushing lng wrking hurs and frced vertime Stress and high turnver
13 Decent wrk: Scial prtectin Maternity prtectin Extent f scial security cverage in law and in practice fr EPZ wrkers Wages Wrking Hurs (vertime) Leave and Rest perids Facilities and family respnsibilities: existence and reality f facilities like crèches, clinics, sanitatin, cafeteria, (night) transprtatin, husing Health and Safety (rare exemptins) Study in Central America n key prblems facing wrkers: Wmen: 1) wages 2) maternity rights 3) pay vertime 4) lengthy shifts Men : 1) maternity rights 2) wages 3) pay n rest days 4) vertime pay
14 Decent wrk: Scial dialgue Majr area f deficit (thugh there are sme gd examples) Linked t the deficits in relatin t FOA/CB Emplyers push fr slidaristas assciatins; wrkers cuncils; wrker management cmmittees; etc. as a substitute t unins Labur inspectin generally weak prhibited frm entering znes in sme cuntries Sme emerging gd practices! Nicaragua Sri Lanka (GSP+) CSR related issues (rle f buyers; IFA; )
15 EPZ strategy and develpment plicy EPZs as a key hub f Glbal Supply Chains EPZs represent a sizeable share in cuntry exprts Outsurcing pressures: tight delivery schedules and pressures frm buyers t prduce at lw prices frces utsurced prducers t underpay wrkers / inflict crushing lng wrking hurs / vilate labur rights ILO tripartite actrs: gvernments emplyers wrkers Gvernments: generally favurable (investment, jb creatin, exprts, etc.) Emplyers: supprt EPZ- Cmpare EPZ jbs with nn-epz jbs/ mre recently against Enclave strategy fr cuntry-wide rllut f refrms / discriminatin f nn-zne firms Wrkers: Clse dwn EPZs / Nrmalise rights and labur relatins in EPZs /rganising unins / Lw rad t creatin f decent jbs Hwever sme degree f agreement that: Preference fr an integrated (industrial) develpment strategy as against an enclave apprach f EPZ Frward and backward linkages that are key are ften largely missing frm EPZ strategy Mre research is needed Statistics Impact f WTO rules Cst/benefit analysis f EPZ strategy
16 New frntier f EPZ - India EPZs t Special Ecnmic Znes (SEZs) (April 2000) EPZ = an industrial enclave SEZ=integrated twnship with fully develped infrastructure, streamlined prcedures and administratin fr mnetary, trade, fiscal, tariffs and labur plicies SEZ strategy ging hand in hand with big land acquisitins 583 SEZs have been apprved(2011) Currently there are143 peratinal SEZs 24% f these SEZs are in the IT sectrs Ttal investment in SEZs: $42 billin Land grabs leading t scial mvements Share f SEZ exprts in ttal exprts = 29.7% Legal exemptins in labur law in SEZs (restrictins f entry int znes by unins; prhibitin n strikes; limits n pwers f labur curts; in practice, unregulated wrking hurs; etc).
17 Cncluding remarks Sustainability bearing in mind: Lng term cst-benefits f EPZ strategy High turnver f firms in EPZs (Mauritius: ver a 10 year perid, 35 firms clsed and 35 firms pened every year) High turnver f EPZ wrkers (maximum 5 years) Jbs: Quantity issues - Quality issues Link Ecnmic and Scial upgrading/dwngrading f EPZs Labur relatins and wrkers rights in EPZs is critical Enclave strategy vrs Natinal industrial strategy Cst-benefits f EPZs is critical EPZ: develpment strategy sme critical factrs fr success: Nature f state: develpmental states fare better Backward and frward linkages between EPZ and hst ecnmy Skills upgrade f labur frce Technlgy transfer Glbal supply chains : what new regulatry framewrk is needed thrughut entire supply chain June 2016: ILO General discussin n Glbal Supply Chains!
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