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Brussels, September 29 1998 (ICFTU OnLine): According to a recent report (1) by the International Labour Office, as global competition for jobs and foreign investment intensifies export processing zones (EPZs) are proliferating worldwide. A few decades ago, there were only a handful of EPZs, now there are more than 850 of them. The majority of zones are to be found in North America (320) and Asia (225) but numbers are now rising in the developing regions, such as the Caribbean (51), Central America (41), Middle East (39) and will probably increase throughout the world. In the Philippines, for example, there are 35 zones in operation at present, and another 83 due to open shortly.

While recognising the huge potential for economic development and job creation provided by the zones, the ILO believes that this rapid proliferation raises serious questions as to the conditions faced by the 27 million workers (90 per cent of whom are women) that they employ and should give rise to serious thought among the countless development strategists who consider their expansion as a quick way for the developing countries to acquire the industrial skills and resources needed to compete on the world market.

The ILO believes that while the EPZs are unquestionably huge generators of employment, particularly for women in developing countries, too many of them still have a reputation for poor wages, working conditions and industrial relations systems. Furthermore, although the combination of direct investment, employment and the transfer of technology should in theory stimulate the development of the host country, the fact is that so far there is virtually no linkage between the EPZs and these countries’ economies. It is true that the countries that have invested in the EPZs tended to look upon the low-skilled processing and assembly of imported spare parts as a necessary first step, before moving on to higher value-added manufacturing, but only a few (such as Malaysia, Mauritius and Singapore) have succeeded thanks to this investment in creating a wide range of domestic export industries. These and other concerns relating to the development potential of EPZs are being examined an international tripartite meeting of export processing zone-operating countries, which began on September 28 and continues until October 2 in Geneva. Employer, worker and government representatives of ten countries are taking part(2).

The delegates are examining ways to improve wages and working conditions while increasing productivity and creating linkages between the EPZs and the national economies of the countries that host them. Particular attention is being paid to the plight of the women who work in these zones. They make up the majority of the workforce in the EPZs but suffer more than men from their drawbacks: long working days, low wages, a lack of social facilities (such as child care, for example) and the often harsh nature of the work. In EPZs the world over the workforce is usually predominantly female, but in some activities such as the textiles, garment manufacturing and electronics assembly, women make up 90 per cent or more of the workers.

The ILO warns that the low value placed on human resources in the EPZs will prevent an increase in productivity and any improvement in the quality of jobs. "Labour relations and human resource development remain two of the most problematic aspects of zone functioning". The mechanisms for improving labour standards often leave a lot to be desired: "The classical model of labour legislation, with a "floor" or framework of minimum labour standards and free trade unions and employers coming together to negotiate binding agreements is extremely rare in the zones." In short, as the ICFTU has frequently denounced, trade unions are all too often considered as "undesirable" in the export processing zones and employers will stop at nothing to make that understood. In El Salvador, for example, trade union organisations complain of the extreme difficulties they face when they try, secretly, to organise the workers. The Comutras-CTD trade union has 300 cases of women workers dismissed simply for trying to form a union.

According to Mr. Auret Van Heerden, the principal author of the ILO report, "the frequent absence of minimal standards and poor labour-management relations have predictable outcomes such as a high labour turnover, absenteeism, stress and fatigue. Low rates of productivity, excessive wastage of materials and labour disputes are still too common in the EPZs." Disputes which sometimes have a positive outcome. This summer, a group of young women workers from a Korean maquila (a company operating in an EPZ) in Guatemala won a resounding victory by succeeding in setting up the first trade union in an EPZ in Guatemala.

This trade union fight for the defence of workers’ dignity is also in the long term economic interests of the countries that host EPZs. The ILO insists that only the EPZs with a high quality workforce and stable labour relations will be able to meet the high standards for speed, cost and quality in the world economy. If the full employment and productivity potential of EPZs is to be met, a proper human-resource development strategy will be needed. If EPZs are to realise the full knock-on economic effects desired by the host countries, greater linkages with the domestic economies need to be forged. Finally, much needed investments in social infrastructure, particularly of the sort needed by women workers (for example, child care services, safe transport, and sanitary working and living conditions), could go a long way to making employment in the EPZs more stable and attractive.

(1) Labour and social issues relating to export processing zones. International Labour Office, Geneva, 1998. ISBN 92-2-111357-4. Price: 15 Swiss francs.

(2)Bangladesh, Barbados, China, Costa Rica, Dominican Republic, Mauritius, Mexico, Philippines, Sri Lanka, Tunisia.

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