Call # 253 November 2002

Sri Lanka is the first South Asian country to have opted for an export-oriented economy and opened its borders to foreign investors, promising them low wages and the absence of free trade unionism. The Free Trade Zones created in the 1970s and 1980s have served as a base for this economic policy. These three zones (Katunayake, Biyagama and Kogalla) currently employ over 100,000 workers, mostly in the textile and clothing industry.

The Free Trade Zone Workers Union (FTZWU), founded on 23 January 2000 after years of efforts to organize and train workers, is the first Sri Lankan trade union based in a Free Trade Zone. Although trade union and collective bargaining rights are legally endorsed throughout the country, including in the Free Trade Zones, the FTZWU is still not recognized in the factories in which it is established.

Over 100,000 workers are currently employed in Sri Lanka’s three major Free Trade Zones.

75% of them are women aged between 20 and 30, mostly from rural areas.

Companies in the Free Trade Zones prefer hiring these young women rather than men, for very simple reasons: they are considered to be more flexible, easily manipulated, and less inclined to demand that their rights be observed.

These workers are forced to accept difficult working conditions which fail to comply with labour regulations and often endanger their health.

Their daily wage ranges from 1 to 1.5 euros, which places them, according to the World Bank’s own criteria, on the threshold of extreme poverty.

Compulsory overtime paid below the legal rate, excessive financial penalties(1), absence of safety equipment and of any form of protection, and sexual harassment are these workers’ daily lot.

TRADE UNION MOBILIZATION...

In this difficult context, workers in the Free Trade Zones have gradually organized and created the FTZWU. This trade union, consisting mainly of women, is the first of its kind in Sri Lanka’s Free Trade Zones.

Nearly three years after its creation, most of the 11 in-company branches of the FTZWU are still not recognized by the management of the factories concerned or by the Board of Investment (the regulatory and management agency of the Free Trade Zones), even though the trade union has complied with legal registration procedures and functions democratically and independently.

The national and international campaign for trade union rights in the Free Trade Zones, launched over a year ago(2), has finally enabled two branches of the FTZWU - in the Sky Pan Asia and Austin Gloves factories, respectively - to be recognized by management. But other sections have been broken up and threatened with possible closure of the factories in which they are established.

One such case is the FTZWU branch in the company Fine Lanka which was "broken" in March 2000. The company chose to close down the factory and dismiss its 858 workers, 90% of whom were union members, and then to open a new factory in 2001 in which it hired only non-unionized workers. A year later it seems that the company is again considering closing down its factory.

The scenario is the same at the Cosmos Macky factory, a Korean and Sri Lankan joint venture, where the trade union is struggling for recognition.

In the Biyagama Free Trade Zone, the Korean company Dulon Zipper, producing zips for export and for the local market, still refuses to recognize the trade union founded in December 2000, although 90% of its workers are members. A complaint has been filed with the Labour Commissioner but to date nothing has come of it.

... AGAINST SOCIAL DUMPING

The FTZWU’s mobilization is set in a difficult context in which the IMF, the World Bank, the Asian Development Bank and certain multinational corporations are calling for government measures for more "flexible" labour in Sri Lanka.

A reform bill on the number of hours of legal overtime has already been passed(3). Further reforms, demanded by the IMF as a condition for payment of the final instalment of a €250m loan, will limit the right to strike and will impose privatizations. Legal motives for dismissal will also be redefined.

Without official recognition by factory management, the in-company union branches of the FTZWU have no collective bargaining rights and cannot institute legal proceedings. Moreover, harassment, pressure on workers and threats of dismissal (close to 1,500 workers have already lost their jobs) undermine the union.

Full recognition of the FTZWU and of all its sections is essential for workers in the Free Trade Zones at a time when the country is under heavy pressure to trim its social rights.

1) Penalties are imposed for being late, illness, failing to meet production quotas, refusal of overtime, etc.

2 ) See Call N° 240 of 25 October 2001: Sri Lanka Free Trade Zones no go for unions

3 ) The number of hours of overtime authorized has been increased from 100 per year to 60 per month, without the voluntary nature of this work being specified.

For more information...

THE IMF IN SRI LANKA

As a solution to the economic crisis the Sri Lankan government subscribed to a €250m loan from the IMF.

The austerity measures imposed today by the IMF, and on which payment of the final instalment of the loan is contingent, are as follows:

  devaluation of the currency

  privatization of 35 public-sector companies to finance debt repayment

  reduction of the Education and Health budgets

  reform of social rights through more flexible labour regulations

  elimination of all impediments to direct foreign investment.

SOLIDARITY WITH THE FTZWU

The FTZWU is continuing its national campaign for trade union rights. The petitions it circulates and the demonstrations it organizes will be opportunities to show its opposition to the plans to reform social rights supported by the IMF and other organizations.

The executive team of Réseau-Solidarité has decided to respond to the appeal for financial support launched by the FTZWU, by immediately sending it €450. You can join our action if you wish to.

To write...

By letter: You can cut out or copy the letter below. This text is simply a suggestion; you can change it to suit your own style.

Don’t forget to date and sign your letter and to add your name and address.

By fax: 94 1 588 950

Mr.Samarasinghe

Honourable Minister of Labour and Employment

Labour Secretariat

Kilula Road

COLOMBO 05

SRI LANKA

Dear Sir,

It has come to my attention through Solidarity Network (10, quai de Richemont, France) that workers’ rights in Sri Lanka’s Free Trade Zones have been violated.

I support the FTZWU’s claims and urge you, as Minister of Labour, to intervene and to ensure:

  that those who invest in and operate businesses in your country’s Free Trade Zones immediately respect all workers’ rights, recognize trade unions and take into account workers’ demands;

  that officers in your department uphold the labour laws;

  and that working conditions in the Free Trade Zones and throughout the country are improved.

Yours faithfully,

(Signature)