Thursday, July 28, 2016

SEZ's screws the workers

Over the past 50 years, more than half of the world’s countries have carved out pieces of their territories to hand over to foreign investors as special economic zones (SEZs). The International Labor Organization (ILO) estimates that more than 66 million people—most of them young migrant women—work in the world’s more than 3,000 SEZs. “Any country that didn’t have an SEZ 10 years ago either does now or seems to be planning one,” the World Bank’s Thomas Farole told The Economist in 2015. But while the success of such zones is often gauged by how much foreign money they attract, or how much economic growth they generate, the voices of the millions of workers that power these spaces are seldom heard.

Typically, the carrots offered investors are special tax and tariff breaks, as well as cheap land, water and electricity. In some countries these enclaves also confer exemptions to national labor laws. In Pakistan, workers are forbidden to strike or take other industrial action in these enclaves. In Togo, government labor inspectors struggle to enter the zones because of laws restricting their access. The website of the Nigeria Export Processing Zones Authority declares: “There shall be no strikes or lock-outs for a period of 10 years following the commencement of operations in the zone ... and any trade dispute arising within a zone shall be resolved by the Authority.” But even when this is not the case, these zones have become hotspots for workers’ rights violations. 

Although China didn’t open its first SEZ until 1980, its zones are among the most famous. Today, China contains as many as 40 million—almost two-thirds—of the world’s SEZ workers. Shenzhen, China is one of the world’s oldest and largest SEZs and offers the promise of a steady supply of cheap, biddable labor. To entice foreign investors into Shenzhen, the central government gave the zone the power to set its own tax and other business incentives. But Shenzhen had something else to offer foreign firms looking for cheap places to make their products: a labor force of millions of migrants from rural China. China’s hukou system of household registration, introduced in the late 1950s to curb urbanization, severely curtails these migrants’ rights. Hukou ties access to services, such as subsidized healthcare and education, to place of permanent residency. Migrant workers can rarely get that place altered. To supply factories with a constant stream of labor, migrant workers were issued temporary resident permits—but only if they had a job. With their legal residency tied to their employer, losing their job meant exile—or a risky, undocumented existence. The hukou system made it hard for workers in Shenzhen’s factories to fight back and secure better conditions

Shenzhen covers almost 800 square miles and its total economic output is equivalent to or greater than that of Ireland or Vietnam. Its tens of thousands of factories have produced millions of iPhones, handbags, jeans and more for export around the world. Once an SEZ’s workforce mobilizes and begins to make demands, companies can simply move on to a new frontier. The ILO calls SEZs “a symptom of the race to the bottom in the global economy.” In Shenzhen, factory closures and redevelopment are leaving migrant workers jobless, homeless and desperate. Many of the policies pioneered there, like short-term labor contracts and performance-based wages, have since been rolled out nationwide.
Jonathan Bach, associate professor and chair of the global studies program at the New School in New York, explains that the problem for Shenzhen now is no longer, ‘How do you get as many workers into Shenzhen as you can?’ but rather, ‘How do you get the low-skilled workers demanding higher wages out?’. Instead of the workers who used to do that lower-level work simply being retrained, you have companies just moving to wherever they can find that low-level work,” he says. “That’s the whole name of the game in the global economy: to play countries off one another. And the idea of the special economic zone was sort of to allow countries to have different jurisdictions, even within their own national jurisdictions.” An example is  the iPhone manufacturer Foxconn as a company “moving all over China, trying to get a better deal.” The practice is parallel to the way U.S. states have enticed factories with development deals and anti-union laws in the so called “right-to-work” Southern republican-controlled states.

In 2014, the China Labour Bulletin, an NGO based in Hong Kong, recorded more than 1,300 labor disputes across China. In 2015, that number rose to over 2,700—including more than one a day in Shenzhen and neighboring areas in Guangdong province. Many were prompted by factory closures, with workers accusing bosses of cheating them of full severance and social insurance payments.

Under Cambodian law the right to organise is supposed to be guaranteed. No employer, government agent or citizen may impede union activity. Inside the walls of Cambodia’s largest special economic zones, however, In These Times’ reporters saw a system designed to tightly control the workforce by keeping workers fenced in and unions out. More than a dozen workers and labor activists confirmed that, while it's not easy to independently organize anywhere in Cambodia, the law is flagrantly violated in SEZs. The result is seething discontent. Most of Cambodia’s labor force is represented by “yellow unions,” which are linked politically to the ruling party and effectively represent the government and employers, rather than workers. Cambodia’s bloc of independent unions is relatively small, but it scares Cambodia’s powerbrokers. Union leaders have been beaten, imprisoned on trumped-up charges and murdered. While it is hard to organize anywhere in Cambodia, every independent union member who spoke with In These Times said it is even harder inside an SEZ. Firing workers for organizing is illegal in Cambodia. So is hindering organizing efforts. In These Times identified eight multinationals whose products are reportedly made in Cambodian SEZs, including PPSEZ and Manhattan SEZ. Six, including Apple and Puma, have corporate codes of conduct supporting union rights.

The obstacles to organizing have not stopped the rise of worker militancy in Cambodia. The main complaint is not working conditions—though some unions have demanded things like fans and clean water—but rather, low wages. At the end of 2013, thousands of workers joined a national strike to demand a minimum wage increase from $85 to $160 a month. The government eventually increased the wage to $140 to staunch the uprising. One of the main foes of a higher minimum wage is the Garment Manufacturers Association in Cambodia (GMAC) who’s Secretary General Ken Loo, declared “I don’t believe in a minimum wage; I believe in market forces. Hardworking workers could be earning a lot more, but they have to subsidize the lazy bums.”

Ath Thorn, president of the Cambodian Labor Confederation, is not surprised that no one wants to talk about unions. In February 2012, three women were shot at a protest for higher wages in the Manhattan SEZ. The incident happened in front of the Taiwanese-owned Kaoway Sports factory, whose clients include Puma. Since then, Thorn says, “They are really strict. Now they do not allow our union to organize over there.” But making independent organizing impossible has had unintended results. “From time to time, this zone is very interesting,” says Thorn. “If they want to increase their salary, they mobilize without a leader and join together. If they want to do something now, they will strike in the whole zone. But when we are not allowed easy access inside, it’s not managed there, so violence happens during every protest.”

Taken from an In These Times article


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