Financial Times

Sri Lanka risks losing export tariff concessions – union
New BOI team accused of violating labour rights
The Board of Investment (BOI), often disturbed by changes when a new regime or management team takes over, is once again rocked by claims of a violation of labour rights.

The new management of Sri Lanka’s main investment promotion body has been accused of going back on an earlier decision of discontinuing the practice of using contract labour to replace dismissed workers.

Anton Marcus, Joint Secretary of the Fee Trade Zones & General Services Employees Union in a letter to President Mahinda Rajapakse, has said that due to the change of attitude at the BOI, there is a feeling that it has become an institution that encourages investors to violate workers rights as they wish. “This policy is a direct violation of international labour standards and Sri Lanka’s risks losing the export tariff concessions which it has received,” he said.

The union also complained that Investment Promotion Minister Rohitha Bogollagama has discontinued the services of international labour consultant Ram Thiagarajah who was instrumental in preparing the BOI Manual on Labour Standards and Employment Relations, and forced former chairman Saliya Wickremasuriya to quit. The latter along with Thiagarajah had helped initiate internationally-accepted labour standards in BOI enterprises.

Labour rights have been granted to employees of BOI approved enterprises within and outside FTZs since 1994. When the EC announced the EU GSP Special Incentive Arrangements for the Protection of Labour Rights in January 2001, Sri Lanka expressed interest in seeking benefits under these arrangements which meant following international labour standards and rights.
When these were put in place, the government was able to satisfy the EU requirements for the grant of EU GSP benefits and EU GSP + scheme on a temporary basis for six months on account of the Tsunami.

The quota free duty free benefits for 7, 200 items of export to EU countries has now been granted to Sri Lanka, making it imperative for the BOI to ensure strict compliance of ILO Core Labore Standards in BOI and FTZ enterprises in order for Sri Lanka to continue to receive this benefit and be competitive, a statement from the union said.

It said that last year serious labour rights violations were committed by two enterprises in Biyagama FTZ. The first case (GP Garments- Belgium Enterprises) involved the dismissal of 479 workers and the second case (Workwear Limited- Pakistan Enterprises) involves 249 strikes.

The then BOI Chairman Saliya Wickramasuriya on consultant Thiagarajah’s advice imposed restrictions on the recruitment of contract labour to replace the dismissed workers in both these cases.

“In consideration of the deterrent measures taken by the BOI Chairman, the trade unions concerned did not raise the issue of violation of trade union rights by the two enterprises with the ILO and the EU,” the statement said.

However with the administration of the BOI coming under Minister Bogollagama a new trend appeared to emerge to deny labour rights to employees to workers. “The minister has already ordered the zone management to permit Workwear Limited to employ contact labour in place of the 249 dismissed striker disregarding the former chairman’s restrictions and without consulting the JAFF and the Ministry of Labour,” it said.

The union said the minister is heavily influenced by his advisor Lal Kumara who is also member of the BOI and a former employer of the BOI. The trade union is urging that Lal Kumara be removed from the BOI board; that consultant Thiagarajah be retained; that the BOI policy on Labour Rights as embodied in the BOI Manual on Labour Standards and Employment Relations be effectively implemented without any change; and that Workwear Limited and GP Garments be required to reinstate the 479 workers (GPGarments) and 249 strikers dismissed for union activities (Workwear Limited)

The union threatened to take this issue internationally and call on the EU to suspend the EU GSP + benefits granted to Sri Lanka if these conditions are not met. Senior BOI officials or the minister were not available for comment.

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