Workers as partners: Changing the culture of EPZs

Bangladesh has been under pressure from the US government to expose our EPZs to the right to organise trade unions since the early 1990s. The US government has been responsive to its own powerful trade union lobbies, led by the AFL-CIO, the apex body of trade unions in the US. Some element of this intervention by the AFL-CIO is influenced by the invisible protectionism practiced by the US labour movement to protect jobs in the US from exports from low-wage countries. It is fallaciously presumed that wages in Bangladesh and elsewhere are low because of weak trade unions and the use of child labour. Whilst we should not ignore the inhumanity of employing child labour to do an adult's job and the humanitarian impulses underlying the Harkin Bill as well as the AFL-CIO initiative, it would be naive on our part to ignore the protectionist agenda underlying these initiatives. We should also recognise the disingenuousness in the posture of the government of a country where trade union membership remains one of the lowest in the developed world and has been in sharp decline over the last half century. Today US policy, reflected in the philosophy of the World Bank, supports flexible labour markets. This is a euphemism for promoting the use of non-unionised and casualised labour which can be hired and fired at the whim of the market.

Whilst it would be satisfying to the dignity of Bangladesh to expose the hypocrisies associated with the promotion of trade unionism in our country by our development partners, the GOB remains too vulnerable in its external relations to enjoy the luxury of such heroics. However, in responding to external pressures to remove children from the work place and to accord the fundamental right of organisation to workers in the EPZs, we could at least contextualise our response within a coherent policy framework. The current policy to ban unionism in the EPZs derives neither from a policy design, or law, or even any political discussion in parliament. It should be kept in mind that there is no provision in the EPZ charter which prohibits trade unions. The prohibition derives from executive orders framing rules and regulations governing the EPZs. Thus, the legal validity of the ban is questionable and possibly violative of the Bangladesh constitution because it discriminates against a category of citizens. This assault on the human rights of a section of our citisens was enacted by an earlier undemocratic regime which felt no obligation to respect human rights. It remains less clear why successive democratic regimes in the 1990s have continued to condone this violation of the human rights of our workers.

Under pressure from the US government the GOB, under the first Khaleda Zia government, made a commitment to rescind the ban on trade unions in the EPZs. When this commitment was not maintained by the GOB, the US government again raised the issue with the Awami League regime. After extensive negotiations, the then GOB agreed to promote the formation of Workers Councils in the respective enterprises in the EPZs and gave an assurance that full trade unionism would be permitted there by January 1, 2004. The US Ambassador in Dhaka is now holding the GOB to this commitment but it appears that the current government is seeking more time to fulfill its obligations. The chances are that the US government has become impatient with our prevarications and is preparing to withdraw our GSP privileges.

The dilemma of successive GOBs stems from the determination of the foreign investors in the EPZs, principally the business houses from the Republic of Korea and Japan, to hold the GOB to its commitment to ban trade unions in the EPZs. But we must note that both Japan and ROK have strong labour movements in their own countries. In ROK, successive military regimes had suppressed the labour movement which inevitably came to play an active role in the struggle for democracy. The democratic renaissance in ROK, thus witnessed a strong assertion of workers rights. ROK's trade unions remain well organised, politically connected and far more militant than anything we have witnessed in Bangladesh since 1971. No regime in Korea would today dream of supporting any move to exclude any part of the country from the right to unionise. Nor indeed would Japan today deny such a right to its own workers. It is thus not clear whether the respective governments of Japan and ROK back or even condone the demand of their investors to keep the GOB to its commitment to ban trade union in the EPZ. Perhaps this question can be put to their respective Ambassadors in Bangladesh and this dilemma faced by Bangladesh can be shared with the media as well as the parliament in both ROK and Japan.

Again without condoning the contradictions and vacillations underlying the policies of the GOB, it is suggested that this special problem should actually be addressed at an international level since Bangladesh is not the only country to be asked to usurp the human rights of a section of their citizens. The problem is a global one since investors in Bangladesh's EPZs, faced with the prospect of unionisation, threaten to move their investment to another country less mindful of the rights of their workers or impervious to pressure from the United States.

I have taken the liberty of suggesting to the Director General of ILO Juan Somavia, that ILO convene a joint meeting with the OECD, the rich man's club located in Paris, to design a global policy to establish the right of workers to unionise as a universal human right. Today the USA, Japan and the Republic of Korea are all members of the OECD. From the OECD they attempt to take common positions on everything from democracy, to corruption, to the violation of human rights. It would be logical for the OECD to take a common position on the right to unionise so that all over the world prospective investors would operate on a level playing field rather than blackmail vulnerable developing countries to suppress the rights of their workers.

Let me conclude this discussion by locating the problem within the specific circumstances of Bangladesh. What risks would emerge for our Korean and Japanese investors if the right to unionise was conceded in the EPZs? To cite the example of the negative aspects of unionism in the SOEs is no argument. We need a deeper understanding of the factors underlying the behaviour of workers in the SOEs and the specific role of the unions. However, the labour regime faced by private investors remain far removed from the SOEs in Bangladesh. Today, in fact, Bangladesh is one of the most under-unionized countries in Asia. Even though the workers in the readymade garment (RMG) sector outside the EPZ have the right to unionise, less than 10 per cent of the workers are unionised. I have not heard of many cases where in RMG factories which are unionized they have faced serious labour problems which have prejudiced their export competitiveness. Indeed in virtually every well managed company from Apex Tanneries, to Square, to some of our multinationals, trade unions have behaved responsibly and harmonious worker-management relations have prevailed. It is only in badly managed firms, with irresponsible owners or official neglect and politicization as in the SOEs, that labour relations have become problematic.

Under the above circumstances the GOB should go ahead and extend the same right to the workers in the EPZs to unionise as is available to workers everywhere in Bangladesh. The Bangladesh constitution no more recognises the divisibility of such rights than the Japanese or Korean constitution. Whether our foreign investors will close their factories in the EPZs and migrate to Vietnam or Lesotho will depend less on the extension of this right and much more on what follows after this right is conceded. As with the rest of Bangladesh's export sector outside the EPZs, some workers will form unions others may not. It thus has to be seen whether those factories exposed to unionisation find their export competitiveness and profitability reduced or indeed enhanced. I cannot conceive of a situation where any foreign enterprise, with or without unions, which continues to make profits, will aspire to move out of Bangladesh.

In the final analysis workers have the most durable stake in an enterprise because it remains the sole source of the survival of their families. When a factory closes down its owner can draw on other sources of enterprise or savings to sustain themselves. A worker in Bangladesh, a country faced with massive underemployment and limited work prospects, enjoys no such luxury. To deny workers the right to unionize in the expectation that they will threaten the very sources of their survival does violence to reason. In most cases when labour resorts to militancy there is a likelihood that some deep acts of injustice have aroused them to action.

It is therefore suggested by me to Yongone and other leading investors in the EPZs as well as to Bangladesh's own entrepreneurs that rather than investing their efforts in challenging the right of workers to unionise they should seek to make their workers partners in the future of the enterprise. The owners should accordingly consider inviting the workers to participate in some management decisions and should eventually encourage them to acquire an equity stake in their enterprises. Workers who are invested with a durable stake in the viability of the enterprise will be committed not just to raise the efficiency of the enterprise but can contribute to enhancing the quality of corporate governance which is today being projected as a key objective of enterprise management.

Rehman Sobhan is Chairman, Centre for Policy Dialogue.