Spread over 103* acres of land and fortified by high walls, the Cochin Special Economic Zone is an imposing presence in the vicinity of the headquarters of Ernakulam district, Kerala. The public has no free access to the SEZ; entry into the Zone is perhaps more difficult than to the restricted areas of the Southern Naval Command, also in Cochin. The Zone has its own water supply system, power supply and effluence-treatment plant. It has 79 factories manufacturing ready-made garments, rubber gloves, electronic items, software, hardware, food items and jewellery. More than 7000 people work in these factories.
In 1965* the first Special Export Processing Zone was set up in Kandla. Seven more began functioning in the subsequent years at Mumbai, Chennai, Surat, Falta, Kochi, Noida and Visakhapatnam. The primary objectives of the Special Zones are earning of foreign exchange and employment generation. These zones are foreign territories in India as far as Indian customs and excise duties are concerned. The units set up in the Zones are exempt from these duties and import duties. An import licence is not required for importing raw materials or components. Customs examinations are kept to the bare minimum, and self-certification is sufficient. Income tax exemption is also allowed for the first ten years. The Central and State sales taxes and service taxes too are not applicable to these units. Supplies from the the rest of the country are treated as exports, and domestic suppliers are eligible for export-related benefits.
Cochin's SEZ is the smallest one, and according to trade union sources has comparatively better working conditions than the others. And about 60% are women, indicating that there is labour to be had for both sexes. But while there is plenty of work to go around, these aren't jobs to be envied. Approximately 55% of the total workforce is made up of contact workers, who do not enjoy any of the benefits and privileges that regular employees do. The Contract Labour (Regulation & Abolition) Act 1970 specifically prohibits employing contract workers in activities which are "permanent and perpetual" in nature. Almost all the activities conducted by the units in the CSEZ are permanent and perpetual in nature and yet the practice of employing contract workers goes unabated. Workers are paid as low as Rs. 35 to 75 a day, and are often made to work more than the stipulated eight hours for no extra payment; the rules of the Minimum Wages Act offer no protection to contract workers. Worse, they have to part with anything between Rs. 10 to 15 daily to the contractor as his commission. Recruiting agencies get paid for the contracted amount from the companies in the Zone. It is they who then make the payments to the workers on a monthly basis after deducting their commission.
The workers, once they enter the premises do not have any contact with the outside world. The work atmosphere is oppressive; the eerie stillness of work is only occasionally broken by a woman asking for permission to use the toilet. "There are restrictions even in going to the toilet. The supervisor will shout if we take more than a few minutes," says Sajitha, a semi-skilled worker in a ready made garment unit. "How much ever hard we work, we are scolded and shouted at in front of others. There are very few days when I've not cried." The workers are reluctant to talk, and are afraid of being quoted. Sajitha [not her real name] and other women workers who spoke about the intimidating atmosphere in the Cochin zone insisted on changing their names when quoted.
Most of the women workers come from far away places and are often the only bread winners of their families. Groups of five or six of them rent a room and live together with very limited facilities. A frugal meal of rice and a curry cooked once in a day is shared among them as breakfast, lunch and supper. "We took up this employment with great hopes, but now feel trapped," says Seena who has been working in a garment factory for the last five years. "We cannot give up and go back as our families are totally dependant on us and there are very few alternatives." Despite employing more than 3500 women, the zone does not provide accommodation facilities nor are there any crèches. Transportation facilities are inadequate. The workers are taken by vehicles to the factories for the morning shift, but they are left in the lurch once the shift is over. "After the night shift, we are taken in a vehicle and all of us are forced out in front of the first house where some among us stay. All the rest run for their life in the dead of the night," says 25-year-old Mallika working in a ceramic unit. The lofty ideals of each zone developing into townships catering to all the needs of the work force including housing, education, medicare remain only on paper.
Often the shifts run 10-12 hours a day to achieve production targets, without the workers receiving any overtime allowances. "My health is ruined working continuously to complete the stipulated number of pieces. They won't allow me to take a day's leave to go to the doctor," mourns Mini john, a contract worker in a glove-making unit.
Exploitation is not limited to the blue collar jobs; even the sophisticated Information Technology jobs here come with a millstone around the employees' necks, in the form of 'traineeships'. Employees are appointed as trainees for eleven months on meagre wages, and then their employment is terminated. They are then reappointed again as trainees after a reasonable lapse of time and the trainee cycle continues for any period of time you are willing to let yourself be 'trained'.
The lot of permanent employees is also not much better. Although the Minimum Wages Act does apply to permanent work, only those industries that are brought under its purview by the government can be thus regulated, and so far the IT and Readymade Garment sectors have been left out. Thus the majority of workers in the Cochin Zone receive no effective protection under the Act. Many workers complain that the Provident Fund and Employees State Insurance contributions collected from them are not being remitted.
In order to 'facilitate the smooth functioning' of the zones and to stop 'outside interference' the powers of the labour department were transferred two years ago to the Development Commissioners, who are in charge of the administration of the zones. With that the last resort for redressal of grievances of workers has been taken away. The administration is vested in a Development Commissioner and a fairly large beaurocracy. The administration admits without qualms that their responsibility is only to see that the units function without any interruptions. "We cannot bother about the conditions under which the employees work nor about the contract labourers," says TV Chandran, one of the Assistant Development Commissioners of the Cochin Zone.
Not every employer in the CEZ, though, appears to be exploiting the workers; there are a few companies which pay their employees a decent salary. Tyco Eletronics Tools India (the Indian subsidiary of Tyco International, a US based multinational) is reportedly one among them. But, Mr Mazood Basha, the Unit Head of the firm which manufactures precision tools and employs highly skilled workers, declined to reveal the minimum or average level of emoluments. "If I reveal the exact figures there are chances of my competitors grabbing my trained personnel," he says.
Even though, Kerala has a tradition of militant trade unionism, the unions have not ben able to effectively protect the rights of workers in the zone, union leaders admit. Only about 1500 of the total workforce of 7000 are members of any trade union. There are trade unions in only 21 of the 79 units functioning in the Cochin Zone, the majority of them being led by the Centre for Indian Trade Unions (CITU). "Attempts to organize the contract workers have not born any fruit," admits Nasser, Joint Secretary of the CSEZ Workers Association (CITU) "They are afraid. They fear retribution from managements and contractors", he adds. The women workers also allege that they were tutored on what to say to the State Women's Commission and The Labour commission when they visited the Zone. They confess that they always abide by the management's instructions, for fear of reprisals, as also from apprehension that the company itself might close down, if they revealed the truth. "The work culture of the Zones is akin to that which existed during the Industrial Revolution in Europe; mindless exploitation," comments advocate Shiny, President of the Workers Union, an independent trade union.
The first Special Zone which bears any semblance to the present-day ones was set up in Spain in 1929 with the intention of increasing exports by value addition to the raw materials available in that country. It was also the time when an unprecedented depression was stalking the economies of the West. Skillful technicians were employed and they were a privileged class. But the International Monitory Fund and the World Bank highjacked the idea in the 1960s. They saw the Special Zones as a tool for penetrating the third world economies, and ever since the scenario changed.
Exploitation of labour in the Special Economic Zones is an international phenomenon and the International Confederation of Free Trade Unions (ICFTU) corroborates this. The Kenya Human Rights Commission recently launched a book "The Manufacturers of Poverty: The Untold Story of EPZs in Kenya", that has this to say: "jobs that pay poverty wages do not significantly improve the lot of workers, nor raise their economic status. They reflect the worst effects of globalisation and contrary to their objective of empowerment, end up becoming factories for the manufacture of poverty".
The interviews we had with the women workers of the Cochin SEZ are almost verbatim reproductions of the words of Grace Nyaeko, working in a SEZ in Kenya. She says "I've developed tuberculosis as a result of breathing in the dust that emanates from the garments I stitch. I've been suffering for three years now and the management does not care. They are only interested in the number of clothes I sew per day". Time off for medical check-ups has been denied, Nyaeko adds, as have overtime allowance for the occasions she stayed on at work in an effort to meet production dead lines.
Labour Notes South Asia points out how violations of the human rights of skilled workers is rampant in garment factories at EPZ Karachi. "These workers are paid ridiculously low wages. They have no job security. No medical treatment is provided". Whenever a foreign delegation visits the zone, the management conjures up false papers depicting an exaggerated salary structure. If a labourer reveals the truth, he loses his job, say the Notes.
The ICFTU speaks of a typical Special Zone in Nicaragua: "The metal covered buildings lie under a leaden sky. Nothing in their appearance suggests there are human beings inside. They look like giant warehouses. Inside the only sound is the noise of machines. There is not a single human sound. From time to time, someone gets up and asks for permission to go to the toilet. The workers are only allowed to go once during their ten or twelve hour shift and even then their time is strictly limited. If they are absent for more than three minutes, the supervisor shouts for them to come back to work. Once the women have entered the building, the doors are locked. Nobody can leave or have any contact with the outside world".
The All China Federation of Trade Unions, the official trade union of China confirm the practice of low wages often below the legal minimum and just falls short saying that exploitation is the rule.
Regarding the exploitation of women, the ICFTU says they are used to allow for excessive "flexibility" reminiscent of the manufacturing methods of the second half of the 19th century in European towns. "Most women are confined to repetitive tasks in production while men move on fairly quickly to better paid supervisory jobs". It's pertinent to recall that the women workers of the Cochin SEZ complain of forever remaining 'helpers' even as their male counterparts move on to become 'operators'.
The International Labour Organisation (ILO) has over the years made many recommendations towards the improvement of the working of the SEZs. Surprisingly, countries like Dominican Republic and Nicaragua have implemented at least some of the suggestions, while India has not even made any attempts. On the contrary, the recently passed SEZ bill too had a clause in it which gave powers to the state governments to pass a bill bringing the Zones outside the purview of privileges like trade union rights, gratuity, bonus, maternity leave etc, which are conferred to workers as per the existing state laws. It was the stiff resistance of the Left parties that saw the removal of this clause.
A cost-benefit analysis is underway in most of the countries. These are some of the observations of the ILO in this regard: Investment has been narrowly concentrated in the electronic and clothing and footwear sector. Investors usually locate only simple processing tasks, thus limiting technology and skill transfer. Most of the jobs are low wage, low-skill jobs. Very little of the foreign exchange generated stays in the country. The foreign investment is not secure and could leave easily. The investors often import all their requirements procuring little from the local market.
An ICFTU study of six Asian countries including India reveals that almost two thirds of the foreign exchange earned through the SEZs is used up by these same Zones for import of raw materials and assembly parts. In a particular year the total foreign exchange earned by Srilanka through Special Zone export was 250 million dollars, while the imports they made accounted for 174 million dollars. The ICFTU states that it is very difficult to obtain import figurines from the governments while they trumpet the export earnings.
With the SEZ ACT 2005 getting the President's assent on June 23, and permission given to establish as many as 45 new zones in the private and joint sector, it is quite apparent that the future industrialisation of the country will be closely interlinked to and concentrated in the Special Economic Zones. A cost-benefit analysis of this approach is therefore imperative. But there is very little data available to conduct this study; neither the government nor the Zones themselves are conducting such an assessment. The Cochin Zone administration could provide only two figures: the government has spent Rs.96 crores so far on infrastructure development, and the total exports from the Zone were Rs.463 crores for the year 2004-05. The value of their imports, or the revenues lost by providing tax concessions and exemptions to units operating in the CEZ were not available with them.
However, some indicators are available from a study conducted by International Confederation of Free Trade Unions (ICFTU). The foreign exchange earned by all the 811 units in the 8 Zones put together came to only Rs 18,309 crores, (4.08 billion dollars) a mere 5% of India's exports during the fiscal 2004-05. but what of the quality of the jobs and at what enormous cost? As much as two-thirds of this is used by them for imports of raw materials and components. (See Box). Add to that the profits transferred from the country by wholly owned foreign companies, the revenue loss from tax concessions, and the hidden costs of the natural resources used up by the Zones - and the SEZs actually appear to be a net drain on the economy. That 100,650 people have gained employment may be cited as a saving grace, but this is also of a suspect nature, with workers exploited the way they are.
It's not clear, then, why the SEZs should be 'special' in any way, but that's a question no one is asking seriously. Like much else in the 'development' of the country, the theories behind the economic decisions have been embraced only to make those decisions; whether they have any merit at all is a question - and a burden - left to the workers. (Quest Features and Footage)
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