US and SL to address Worker Rights: A new beginning?

CMU recommends implementing National Workers’ Charter as a best response on the issue of workers’ rights
By Natasha Gunaratne

Nurses at the National Hospital wearing black bands as a prelude to a strike action demanding a series of worker rights. Their action came against the backdrop of a US trade union petition that sought a review of GSP status to Sri Lanka’s exports to the United States, claiming that the country’s labour rights were not upto international standards.

Labour rights violations in Sri Lanka’s export industries dominated headlines this week as the United States announced that it has accepted a petition to review worker rights in Sri Lanka after an annual review of the US Generalized System of Preferences (GSP).

This statement came ahead of Sri Lanka losing its GSP+ concessions on August 15 after the government did not respond to a request by the European Union (EU) for a written undertaking on the implementation of a series of measures which are part of the general rules for the approval of GSP+ concessions for a second round.

European Commission Ambassador Bernard Savage told the Sunday Times on Thursday, that the ‘practical date’ of July 1 was set by the EU for the proposal to be submitted but said it would look entertain the proposals even on Monday. The written undertaking includes the release of political prisoners, abrogation of the Prevention of Terrorism Act and the appointment of independent commissions. The apparel industry which is a leading foreign exchange earner has said it is prepared for the withdrawal of GSP+ concessions with several industry leaders saying they do not expect the government to adhere to EU conditions.

The European Commission clearly states that GSP+ beneficiaries must have ratified and effectively implemented 27 specified international conventions in the fields of human rights, core labour standards, sustainable development and good governance. Countries like Pakistan, which has come under scrutiny for child labour violations in export industries such as the manufacture of footballs, has lost GSP+ concessions. The International Labour Organization (ILO) which has run a sustained campaign to eliminate child labour through its International Programme on the Elimination of Child Labour (IPEC) estimates that around 3.3 million children in Pakistan between the ages of 5 and 14 are employed in various forms of labour.

Pakistan does, however, have US GSP concessions and according to the Office of the United States Trade Representative, imports from Pakistan in 2007 and 2008 totalled US$135 million and US$183 million respectively.

A statement from the US Embassy in Sri Lanka said that in 2008 as part of the annual review process, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), an American trade union, filed a petition with the US Government requesting a review of worker rights in Sri Lanka. The AFL-CIO resubmitted an updated petition last year which the US Embassy said it shared with the Sri Lankan government several months ago.

The US Embassy stated that any person may file a request to review the designation of any beneficiary country with respect to any of the designation criteria. The US GSP, a programme designed to promote economic growth in the developing world, provides preferential duty-free treatment for over 3,400 products from 131 designated beneficiary countries and territories, including Sri Lanka. Sri Lanka benefited from GSP treatment on approximately $116 million worth goods in 2009. Products covered under the GSP programme include machinery, electrical goods, chemical products, agricultural products and jewellery. Most textiles and apparel are not eligible for preferential benefits under the programme.

The US Embassy further noted that countries eligible for GSP benefits must meet several criteria. These criteria include whether and the extent to which the country has taken or is taking steps to empower workers with internationally-recognized rights including the right of association; the right to organize and bargain collectively; a prohibition on compulsory labour; a minimum age for the employment of children; a prohibition on the worst forms of child labour; and acceptable conditions of work with respect to minimum wages, hours of work and occupational safety and health.

With the US government’s acceptance of the petition, a process will begin. There will be a public hearing, likely in August, to discuss the worker rights issues raised by the AFL-CIO in its petition. The government of Sri Lanka will be invited to participate in the hearing. Before the hearing, the US and Sri Lankan government will engage in a dialogue on any areas of concern with respect to worker rights.
The US Embassy said the acceptance of the petition is not a decision to revoke GSP nor does it set a deadline for a decision on action on GSP privileges. It is the beginning of a formal, collaborative process to work with the Sri Lankan government to address the concerns in the petition and work to improve support of and adherence to worker rights. GSP privileges will continue throughout the process.

Founder President of the National Chamber of Exporters (NCE) Patrick Amarasinghe said he believed the US might be taking up this issue as an excuse to restrict imports from Sri Lanka. Mr. Amarasinghe, who is also a former Chairman of the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL), said various non-tariff barriers had been brought in by different countries under various slogans to restrict imports. “It’s quite apparent that there is an organized campaign against us,” he said. “The local trade unions need to take up some of these issues but the US unions are bringing it up to restrict imports.”

Mr. Amarasinghe said the garment industry and all exporters who benefited under the GSP concessions would be affected. “These are good lessons for us. We should now pull up our socks and not be dependent on subsidies and benefits from other countries.” He added that Sri Lanka must change its internal policies which are affecting productivity in the country.

Sri Lanka’s Trade Union Confederation (TUC) said the US GSP complaint accepted by the US government is a direct result of poor labour conditions and non-compliance with international labour standards of the International Labour Organization (ILO), especially by apparel sector employers and the Sri Lankan government. The TUC statement said the complaint draws attention to poor enforcement of labour laws in Export Processing Zones and the apparel sector and restrictions to form union federations consisting of public-private sectors amongst others.

The TUC added that the AFL-CIO submitted the complaint to the US government as all efforts of local unions to address issues with the Sri Lankan labour authorities failed despite repeated attempts. The TUC said the complaint is inundated with solid and verifiable evidence relating to a plethora of violations of labour standards such as restrictions on freedom of association and collective bargaining, anti-union discrimination and non-enforcement of labour laws. A key issue raised in the complaint is Sri Lanka’s non-compliance with the recommendations of the ILO quasi-judicial body’s decision on the restriction of the right to strike.

The TUC also noted that the US government held extensive high-level consultations with government representatives, trade unions and apparel sector employer organizations over the last 18 months prior to accepting the complaint. Therefore, the decision to conduct the review is not ad hoc but based on credible information.

General Secretary of the Ceylon Mercantile, Industrial and General Workers Union (CMU) Bala Tampoe is urging the government to implement in law the National Workers’ Charter. Speaking to the Sunday Times this week, Mr. Tampoe said he is not only speaking as the General Secretary of the CMU but as a member of the National Labour Advisory Council which he sat on with President Mahinda Rajapaksa in 1995 when the President was then Labour Minister. Mr. Tampoe said if the Charter is implemented, rights will at least be enforceable by law and will serve as the best response to the US government or any other government on the issue of workers’ rights in Sri Lanka.

Today, many workers’ rights cannot be enforced because existing laws are inadequate and the Labour Department does not implement them. Mr. Tampoe said laws for the protection of labour exist but with regard to basic ILO conventions, particularly freedom of association and collective bargaining, they are only acted upon to a limited extent by employers. “The vast majority of workers in the private sector are unorganized and when they try to organize, the present laws in the country and the way in which they are applied by the Labour Department doesn’t benefit them at all.”

The CMU raised the issue of implementing the Charter with the Ministry of Labour in the national labour advisory council during the first meeting under the new minister Gamini Lokuge held on May 1 2010. Mr. Tampoe said the Charter was originally promulgated by former President Chandrika Kumaratunga in 1995 when President Rajapaksa was then Labour Minister. “The National Workers Charter was drafted by Mahinda Rajapaksa and presented to President Kumaratunga in 1995,” he said. “I played an active role in drafting that Charter.”

Mr. Tampoe said the Charter has state guarantees with regard to the right to join unions, protection of workers’ rights among other issues. “At the moment, the Charter has not been made law even though the present government has an absolute majority in Parliament.” Another meeting with Minister Gamini Lokuge is scheduled for July 20 2010 during which Mr. Tampoe said the CMU, with the other unions, may take a common position.

The EU has also come out supporting the appointment of the UN Panel of Experts to advise the UN Secretary General on the issue of accountability with regard to any alleged violations of international human rights and humanitarian law during the final stages of the conflict in Sri Lanka. The declaration was made this Thursday in Brussels by High Representative Catherine Ashton on behalf of the EU on the appointment of the Panel of Experts.

The EU statement said commitment on human rights and accountability was a key point of the Joint Statement issued by President Mahinda Rajapaksa and the UN Secretary General Ban Ki- moon during his visit to Sri Lanka in May 2009. The EU is encouraging the Sri Lankan government to cooperate fully including through the Lessons Learnt and Reconciliation Commission appointed by President Rajapaksa, with the members of the Panel.

An industry leader who did not want to be named said the loss of the GSP+ concessions would result in 10% losses on cost for companies. “It is huge because the margins are so thin today.” He said the industry is hopeful that the government would engage and address the issue with the EU in some positive way, even if it does not involve agreeing to the conditions but to compensate the industry for the loss. He said the issue is geopolitical and it is not fair for the industry to expect the government to submit a written undertaking because they involve constitutional changes.

He said apparel exporters have highlighted the need to bring about a solution and retain the facility for some more time to the government but no action has been taken. “Signals have been given that the industry should gear themselves to face but the industry has understood this and the need to get ready through more productive and effective operations.”

Another apparel industry leader who addressed the US GSP issue said the US has only decided to accept the complaint and it may take several years before any outcome is reached. He also said that garments, with the exception of items such as silk gowns, are not exported under the US GSP programme. “This is a non issue.”

The Central Bank of Sri Lanka (CBSL) commented on the recent developments, saying that it has regularly cautioned all stakeholders about the inherent uncertainties surrounding the continuation of the GSP+ facility and advised all to prepare for the ineviability of the discontinuation of the scheme.
Apparel exports to EU countries constituted around 50% of total apparel exports in 2009. Of such exports, approximately 60% benefited from the GSP+ scheme while the balance was exported to the EU without GSP+ concessions. On a net basis according to CBSL statistics, the total value of the benefit to the buyers in the EU as a result of the GSP+ concessions has been estimated at around 78 million Euro.

The CBSL said it now believes that focused and long-term preparations to face the emerging conditions, in addition to the firm level actions taken towards diversifying markets, negotiating with buyers, enhancing productivity, and reducing finance and input costs, has gradually offset the possible decline in competitiveness arising from the withdrawal of the GSP+ concessions. The CBSL further noted that Sri Lankan industries have proven their resilience amidst challenges on earlier occasions.

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