Check your privilege

Check your privilege

Do we need a new law to protect Zohra Bibi?

The recent Zohra Bibi incident in Noida on 12 July led to the unfolding of a series of events, exposing the fault lines of class that characterise urban India. This was an incident that yet again exposed the power of the middle and upper middle class over the working class and how this defines public opinion.

The 2015 Draft National Policy for Domestic Workers places the number of domestic workers in the country at 30 million. With two thirds of the workers in urban areas, Tier I and Tier II cities have the highest demand for domestic workers.

India’s largest cities in the past several decades have expanded exponentially, in many cases have merged with satellite cities, like Noida and Gurgaon around Delhi, with multi-storied apartments in gated colonies to accommodate the influx of the growing middle class and industrial working class in these cities. On the other hand, a large section of the rural landless are migrating in search of work in these growing cities and constituting a reserve army that creates conditions for low wage and poor working conditions.

Domestic work: Workplace control by Employers

We all know it is difficult to unionise domestic workers and much has been written on why.

Workplaces of domestic workers can be classified into three broad categories in order to understand strategic unionising:

  • Live-in workers in standalone residences or in flats in gated apartments/ apartment blocks
  • Live-out workers in standalone residences/ flats in un-gated areas
  • Live-out workers in flats in gated apartments/ apartment blocks

Live-in workers in Tier-I and II cities, are mostly workers brought in or trafficked from the poorer states of Jharkhand, West Bengal, and states in the North east through organised networks of agents. They are bound to their agents through complex relations of debt and family complicity and are placed by these agents across a city and hence are difficult to access for organising.

Live-out workers in un-gated areas live near these areas or in cases where cities have been ‘cleaned’ of slums, they are forced to come to these areas from the resettlement colonies where they live. Their workplaces are disconnected and scattered with each contract of work being negotiated individually with no interface with any collective body of residents. Even monitoring of work and worker is done individually by the employers. Here access to workers may be easier but effort required to organise would be higher and negotiations would have to be with individual employers.

However, with a growing number of workers being employed in gated apartments/ apartment blocks in the large cities, it may be seen as a strategic point of entry for unionising live-out workers in these gated apartments.

The gated apartments, as we saw in the infamous Mahagun Moderne apartment in Noida where Zohra bibi was accused of theft, confined and then the issue was communalised when her family and neighbours gate crashed to find her and finally their slum razed to the ground, have the following characteristics:

  • Administered by powerful Resident Welfare Associations (RWAs)
  • RWAs are empowered to hire security services to ensure security of residents; entry and exit from gates are monitored by security personnel; security guards frisk all workers and check their belongings at entry and exit; CCTVs are installed to ensure security of residents
  • RWAs issue identity cards to domestic workers who are allowed to work in the apartment/ apartment complex after police verification
  • Many RWAs also fix rates of wage of domestic workers working in the apartment complex
  • Many RWAs allocate separate toilets and drinking water facilities for domestic workers within the apartment
  • RWAs act as dispute resolution bodies in case of dispute between residents and between residents and non-residents.

Thus the RWAs are representatives of residents and hence in the case of domestic workers, representatives of employers within a defined geographical boundary with power to appoint and dismiss, fix wages and working conditions, control and monitor. If employers’ interest can be protected and represented through the RWAs, the gated apartment complex represented by the RWA should be treated as an integrated employer that provides employment to the several domestic workers. This would ensure employer accountability and responsibility. It therefore should be the responsibility of RWAs to ensure basic rights of domestic workers within their premises to:

  • Minimum wages: Many states have already notified hourly minimum wage for domestic workers.
  • Equal wages for equal work
  • Payment of wages by 7th of every month
  • Weekly off
  • Medical leave and Annual leave
  • Bonus
  • Protection under the Sexual Harassment of Women at Workplace Act: RWAs should set up an Internal Complaints Committee within the apartment complex.

If the RWA employs 20 or more workers, not just domestic workers, the workers should also be covered under:

  • Employees State Insurance including paid Maternity leave: The government has already proposed that domestic workers will soon be included in ESI scheme with employers contributing Rs. 200 as a pilot scheme in Delhi and Hyderabad. (This proposal though is in violation of the ESI Act, where employers’ contribution must be linked to wage and not some absolute amount.)
  • Provident Fund: There is also a proposal to extend PF to unorganised sector workers.

The possible reactions to such a proposition would be:

 Reactions of EmployersPossible response
1Each domestic worker is employed individually by the household that hires herThat may be true but the RWA conducts security checks on her, issues identity cards to her, monitors her entry and exit, fixes her wage in some cases and ensures her dismissal from the apartment in case of gross misconduct.
2RWAs do not have the mandate to hire any worker. They do not have employer-employee relation with anybody.RWAs hire agencies in most apartments that provide workers, such as cleaning workers, maintenance workers, security workers, including estate managers.
3RWA cannot take responsibility for workplace conditions.Since many employers deny access to toilets and drinking water to the workers working within the apartment complex, the RWAs allocate toilets and drinking water facilities for service providers.
4RWAs do not have the right to dismiss workers.If a worker commits a grave act of misconduct, the individual employer fires her, but in case of serious misconduct, the employer also ensures that she is not given access to the apartment complex. Thus RWAs exercise power to deny access to employment to serve their interest.
5RWAs do not monitor the domestic workersCCTVs are installed and checked by representatives of the RWA. Security personnel hired by RWAs frisk domestic workers. Text, Whatsapp messages are used to monitor movement of domestic workers within an apartment.
6PF, ESI apply to factories, shops and not to residential apartmentsTrue in the strict sense of the law but the law can also be opened for interpretation on establishing existing clear employer-employee relation.

 Looking beyond and Stretching the existing laws

 In April 2013, Brazil passed a constitutional amendment that placed domestic workers among the other categories of workers mentioned in article 7 of chapter II of the Brazilian Constitution, which provides for social rights. Only in 2015, after enactment of the Enabling Law of 1 June, was it possible to state that the occupational activities of domestic workers were fully defined and regulated.

Constitution of South Africa too guarantees rights of domestic workers as universal rights.

RightsBrazilS Africa
Compensation in the event of dismissal without just cause××
Unemployment insurance×
Time of Service Guarantee Fund (FGTS)×
Wages not less than the minimum××
Bonus for night work20%
Wage protection×
Family-Wage×
8 hour workday and 44 hours a week×– 45 hours per week

– 9 hours for a 5 day work week

-8 hours for a 6 day work week

 

OvertimeAt least 1.5 times1.5 times
Work in a place where standards of hygiene, health and safety are met×
Right to collective bargaining×
Insurance against work-related accidents×
Equal remuneration×
Night workAt least 10% of the ordinary daily wage
Annual Leave3 weeks leave per year
Sick leave1 day for every 26 days worked
Maternity leave4 months
Prohibition of wage discrimination against workers with disabilities×
Prohibition of employment of minors of less than 16 yearsAt night, dangerous, or unhealthy work Less than 15 years

Why is this important for India?

  • India has not ratified the Domestic Workers Convention (C189) which among its other provisions requires ratifying countries to ensure minimum wage protection for domestic workers, regulations for occupational health and safety and social security of workers.
  • India has only managed a put together a National Domestic Workers Policy that is only a guiding document for states and not legally binding.
  • All organisations/ unions of domestic workers and working with them have been demanding a robust legislation specific to the domestic workers that encapsulates the specificity of the employment.

The concern for the specificity of the employment and the belief that it requires a special law comes from the underlying principle of protecting the right of employers to privacy. It is time to think of laws for workers that protect the interest of the workers and not their employers. This was never a problem in any other employment and in the demand for laws in these areas of work as there was no underlying need to protect employer interest in the mind of those demanding the law. With all policy makers, those advocating for the law, almost without exception, being employers of domestic workers, there is always a conflict of interest that has been the greatest barrier to the regulation of this sector.

There is no reason why the domestic workers cannot be brought under the ambit of all labour laws, like in Brazil, that relate to them.

There is no reason for unions to wait for a new law to regulate employment conditions of domestic workers.

There is no reason for unions to wait to negotiate with employers for better wages and workplace protection.

ExChains: Building solidarity along the Global Garment Supply Chain

When we from the global south meet workers and their representatives from the global north, the first thought that come to our mind: How will they support us in our work given their position of advantage? and to the minds of those from the global north: How do we help our colleagues in the global south? Their working and living conditions are abysmal and we can help them. This notion of inequality has troubled solidarity efforts for years even where there is political commitment. Thus, this has also been translated into the strategies adopted by organisations to extend solidarity. Further, in most cases, the solidarity efforts have been a one-way street with the global south being the receiver.

The global supply chain of the garment industry has been written about at length by many. The discussion has in most cases focused on the miserable conditions of the workers at the production centres which are in the global south, with Bangladesh being the focus, especially following the Rana Plaza incident. However, the condition of workers all along the supply chain is as miserable if we assess the conditions relative to other workers in their country and not in absolute terms. The workers, in the stores of brands such as H&M, Zara, Primark, GAP, etc, who sell the garments that are produced in the global south is as precarious as those who produce these. Most jobs are not permanent, with very little social security, no guaranteed hours of work, low wages, harassment at work and most importantly, with limited union rights and very little bargaining capacity. There is no reason or indication to believe that the condition of the workers in between the two ends of the chain would be any better.

Buyer-driven Global Value Chain

Garments is a “buyer-driven” global value chain unlike a producer-driven one, where profits come from scale, volume and technological advances. In the global garment value chain, profits come from combinations of research, design, marketing, and financial services that allow retailers, designers and marketers to act as a strategic link between factories in the global south with their main consumer markets in the global north (Gereffi & Memedovic, 2003). The corporates that develop and sell brands thus have considerable control over how, when, and where manufacturing will take place, and how much profit accrues at each stage (Fernandez-Stark, Frederick and Gereffi, 2011). The main aim of the supply chain is to maximize and concentrate profit.

As the above figure will show if we divide the value along the supply chain, 99% of it is appropriated as profit share, with the retailer taking 50% of the total value, the brand taking another 25%. In cases where the brands are retailers themselves as H&M, Zara, Primark, GAP, etc, 75% of the total value is appropriated by them as profit. 13% of the total value is appropriated by the manufacturers, usually in the global south and 11% by transporters etc. The remaining 1% of the total value is the wage share. The inequality in profit sharing between the global north and south is also evident in this figure. 75% of the total value goes to the global north and 13% remains with the global south. This value extraction by the brands/ retailers in the global north is made from every level of the supply chain, starting with the production to the process of selling it. Thus this appropriation affects workers both in the production process and those engaged in selling these. This thereby makes it essential for workers and their organisations along the supply chain to build united struggles in order to expand the wage share.

Can we increase the share of wages without increasing price?

Campaigns in the past and present have always focused on the misery of workers in the production of garments and hence have appealed to consumers, workers and non-workers, to not perpetuate this exploitation of garment workers in the supply chain and therefore to buy responsibly. Responsible buying has meant the expression of willingness of consumers to pay more for the same garment. This unfortunately, even if well-meant, cannot translate to changing the conditions at work either for those producing the garments or those selling these. This usually means an increase in the size of the cake, i.e. the value created, for the brands to make larger profits and at best may increase the wage share marginally. But, this never can alter the nature of the distribution of the profit as it does not even aim to change it. Thus, price increase cannot be a solution, given the extreme inequality of control over profit distribution along the supply chain. Neither wage nor conditions of work can change without changing this inequality.

Can Auditing and CSR change this?

Not possible. The reason is very simple. Audit is commissioned by the brands/ retailers, paid by them, and controlled by them. The audits are useful tools to fool consumers and make them feel less guilty about buying the products and often more willing to pay more. Thus audits legitimise the existing practices and help increase ‘brand value’ and hence higher profits. The same holds true for all CSR initiatives.

Further, audits inherently incorporate conflict of interest with the audit being paid for by the company commissioning it. There is no reason to believe that in a capitalist society, a company will invest its resources in an exercise that will not generate more profits. It would be eliminated as ‘waste’ if it did not generate higher profits.

Shopfloor Unions as Negotiating agents

To change this, new strategies must evolve that aim to change the inequity along the supply chain.

Wage share can change. Conditions of work can change. It can change by changing relations of control. And relations of control can change by building union power at every level along the supply chain. Unions can increase the wage share through struggle.

Will this increase cost of production and lead to production relocation?

Possible, but not necessarily true. Sourcing decisions of brands/ retailers are not merely decided by labour cost. It is more often decided through a detailed analysis of advantages, including of skills of workers, technological investment. This is clear from brand decisions to continue to produce in Bangalore with a higher minimum wage and not shift to Chennai with a lower minimum wage. Also internationally, this is evident from the decision of brands to continue to source from China and not shift to Bangladesh despite significant increase in the wage gap between China and Bangladesh.

How will shopfloor unions reach Retailers/ brands?

The understanding of solidarity that has existed within the trade union movement also needs to change.

Solidarity has to be a two-way street with garment workers in the global south standing up for the retail workers in the global north and the reverse.

As sourcing practice of brands determine the conditions of work and wages along the supply chain, it is critical to build negotiation strategies to change these practices. These negotiation strategies need to be coordinated along the supply chain. New links need to be built to connect workers. And these strategies need to be rooted in the workers where the change should happen.

The union and organisations/ platforms in the global north supporting unions in the global south have often replaced them as bargaining agents and negotiated for them. This has created a relation of unequal power between the unions in the north and in the south and in many cases even undermined the unions in the south. This too needs to change.

ExChains Network of Garment and Retail workers

The ExChains network is one initiative to bridge this gap and build solidarity both among garment workers and their unions in South Asia and with retail workers and their works councils and union in Germany.

In a series of meetings with Works Councils and with Ver.di, the union of the retail workers in Germany, the leadership of garment workers’ unions in India and Bangladesh developed a joint charter of demands for negotiation with the managements of H&M and Primark. This was the first concrete step towards building joint strategies of negotiation and organizing. The network aims to build a strategy of mutual support and solidarity along the supply chain based on shop floor actions and negotiations. This encompasses common demands, cross-border learning about organizing strategies as well as joint activities to support struggles of each other.

The regularisation battle of Contract Safai Workers

The Supreme Court on 7 April 2017 upheld a Bombay High Court order of 22 December 2016, regularising 2,700 contract workers employed by the solid waste management department of Brihanmumbai Municipal Corporation.

In 2007, the Kachra Vahatuk Shramik Sangh had filed a case for permanency with the Industrial Tribunal on behalf of 2,700 BMC contract safai workers. The tribunal ruled in favour of these workers after seven years on 13 October 2014 and ordered the BMC to regularize all 2700 workers with arrears from 2007. The BMC challenged this order in the Bombay High Court.

The High Court, on 22 December 2016, after two years ruled in favour of the workers and declared the BMC contract as “sham and bogus”. The BMC challenged the High Court order in the Supreme Court.

The Supreme Court, while upholding the Bombay High Court ruling stated, that BMC engaged in such a paper arrangement only to avoid giving permanency to the workers and hired them through labour contractors. The SC further noted that the work performed by these workers is integral to the services of the municipality, is done round the year,  and is directly supervised and controlled by the BMC, the principal employer in this case.

By the order, all 2,700 contract safai workers have been declared permanent employees of the BMC, with retrospective effect from 2014. This means the workers should be paid their arrears from the date of the Industrial Tribunal order.
A permanent BMC safai worker earns around Rs 22,000 a month against Rs 10,000 of a contract worker. The arrears (difference in salaries paid to permanent and contractual workers) would work out to about Rs 3.6 lakh per worker if calculated from October 2014 and to about Rs 7 lakh if calculated from 2007.

Apart from the 2,700 workers who have just won permanency, 3,000 contract workers of BMC wait in line in three separate similar industrial disputes.

State of Safai workers in some other cities

Bhopal: Contract safai workers work for 9 hours every day, with 1 hour of mandatory unpaid overtime. There are two shifts of work – the first shift begins at 6:00 am and ends at 3:00 pm and the second shift begins at 5:00 pm and ends at 2:00 am.

The wages are paid according to 2 different kinds of work contracts: (1) a 25 day contract and (2) a 89 day contract. Though the workers are always paid at the end of a month and each worker works for 30 days every month, their contracts differ and their payments too, based on the contracts. The workers on 25 day contracts work for 30 days but are paid for only 25 days in the month. These workers are hired through contractors and these contracts were first floated in 2003. 5 days of wage are lost by the workers every month.

But why do they accept this deduction when wages are so low? The choice and the number of jobs available to a dalit (SC) worker continue to be extremely limited and this employment option, since independence, has been one of the largest absorber of dalit workers in regular government employment with job security and dignity. Their hope is to move to the 89 day contract and then to be regularised as a permanent safai worker with retiral benefits.

The 89 day contract is, as the name suggests, a contract that spreads over 3 months in which the wage loss is for 1 day in 3 months as against 15 days in the 25 day contract. However, even in the 89 day contract, a worker has to work 30/31 days every month for full wages. The 89 day contract workers are workers who were on the rolls of the municipal corporation as casual workers in 2003 when the first contract was floated. They are, today, contract workers directly employed under the Municipal Corporation, while the 25 day workers are employed by contractors. The one day in their 3 month contract is treated as a break in employment or a layoff and then they are rehired. This is to ensure discontinuity in service in order to ensure no claim can be made for regularisation under the Contract labour (Regulation and Abolition) Act, 1970 and subsequent Supreme Court orders.

In Bhopal Municipal Corporation, the Statutory Minimum Wage for unskilled workers in local authority work in August 2015 was Rs. 239.95 per day. But the safai workers were paid as per the “collectorate rate” (a rate fixed by the collector of the city) which was fixed at Rs. 197 with no paid weekly off.

Rajkot: The contract workers in Rajkot are provided work for 4 hours daily. There are three systems of contract in Rajkot: (1) Mitra Mandal – Self help groups of men; (2) Sakhi Mandal – Self help groups of women; and (3) Contract workers under Contractors. Their shift begins at 6:30 am and ends at 10:30 am, except for the Sakhi Mandal for whom the shift starts at 6 am.

Sakhi Mandals: According to the contract of the Rajkot Municipal Corporation with the Sakhi Mandals, each unit of a Sakhi Mandal must complete a door to door garbage collection from 300 households/shops. Each unit of a Sakhi Mandal comprises of 8+1 members who should be paid Rs.13 per month from each door they collect the garbage from.  

 

Over and above this payment, the Sakhi Mandal is paid an additional Rs. 2000 by the Municipal Corporation for their services. This means, each unit of a Sakhi mandal is paid a total of Rs. 3900 + 2000 = Rs 5900 per month for their 4 hour service every day of the month. This further means that each member of the Sakhi Mandal earns a maximum of Rs. 655.55 per month, which is nowhere near the minimum wage. In fact, it is less than 2 days of minimum wage for safai work in the city the Rajkot.

The monthly fund earned by the members of the Sakhi Mandal is kept in a bank and the members can borrow from this fund at times of economic exigency at a nominal interest rate which again becomes an earning for the Mandal. Thus, the members of the Mandal are not paid a wage on a monthly basis at all.

Kanpur: In Kanpur Municipal Corporation, the statutory minimum monthly wage for a Safai worker in August 2015 was Rs. 8741 (Rs. 7500 monthly pay + 885 PF + 365 ESI). But, the contract awarded to the contractor was signed at a rate of only Rs. 5969 per worker, inclusive of all government taxes. There was no additional provision of PF or ESI specified in the contract.

Delhi: The erstwhile unified Municipal Corporation of Delhi (MCD) was trifurcated in 2012 into NDMC, SDMC and EDMC. There are around 60,000 safai karamcharis working in the 3 Delhi Municipal corporations.

There have been several strikes since 2015 of the municipal safai workers. The reason for the strikes have primarily been – non-payment of wages and arrears due to lack of funds.

Workers hired through private contractor are the worst off. They are paid about Rs.5,000 a month and have no protective equipment and are made to perform the most hazardous tasks. More than 3,500 sewerage workers have died between 1996 and 2015 in Delhi alone. The 2008 Delhi High Court order on a public interest litigation petition directed the civic bodies to provide adequate protective gear and free medical care, compensate for occupational diseases, and create separate funds for statutory provisions like provident fund and gratuity. The civic authorities have hardly followed any of these judicial instructions properly.

The East Delhi Municipal Corporation where the longest strikes have taken place employs around 25,000 sanitation workers out of which around 17,000 are permanent. The EDMC has renamed the municipal contract sanitation workers as ‘paryavaran sahayaks’ but the payment of wages has not regularised.

Where have all our women gone?

This Women’s Day let us not talk of women and how they work but let us talk of why they do not work? Why they leave the labour market? Why is the participation of women in the labour force in India one of the lowest?

India: Labour force participation of women is about 24% generating about 17% of the GDP according to a recent estimate.

The National Sample Survey data show that labour force participation rates of women aged 25-54 have stagnated at about 26-28% in urban areas, and fallen substantially from 57% to 44% in rural areas, between 1987 and 2011.

Several reasons have been given for this decline: (i) increased school enrollment of girls; (ii) lack of employment opportunities for women; (iii) increase in household income leading to change in preference; and (iv) invisibility of women workers and hence mis-measurement of female labor force participation. (ILO, 2014)

In 2014 the ILO adopted a new definition, based on the recommendations of the 19th International Conference of Labour Statisticians (October 2013), to include all the activities that constitute the unpaid care economy and household chores.

chart1

NSSO data on employment however does not still include the categories of workers who “attend to domestic duties only” and who “attend to domestic duties and were also engaged in free collection of goods (vegetables, roots, firewood, cattle feed), sewing, tailoring, weaving, etc for household use”. As a result a large section of working women remains undocumented. If such women are counted among workers, women’s workforce participation rate in 1999-2000 would increase from 35% to 89% in rural areas and 17% to 81% in urban areas while in 2011-12, the participation rate would be 85% in rural areas and 80% in urban areas (Jayati Gosh, 2016). In this case the decline in participation rate is not significant and can be attributed to many factors including the agricultural crisis in the rural areas. So what has actually happened is not a decline in women’s participation in work, but a shift from paid or recognised work (in most cases in rural areas from agriculture and in urban areas from low wage sectors) to unpaid care work.

But some other key facts that explain the shift or the reason for this shift:

  1. Most women are employed in low wage – low value added sectors, mostly in informal employments.
  2. Most care work, of children, aged, differently-abled, both paid and unpaid, are performed by women;
  3. Average life expectancy is increasing leading to increasing number of dependents in need of care.
  4. Public expenditure on social sector has remained at best stagnant, with expenditure on health at 0.3%, and on education at 0.47% of GDP.
Research shows that job losses and public spending cuts in social benefits and services are typically offset by the additional time and effort devoted by women to care giving and other unpaid work, with women acting as a “safety net of last resort” in economic downturns (Elson, 2014; UNRISD, 2010).

With limited public provision and disappearing social provision of care, the burden of care for children, old and ill continue to be the responsibility of women. This is, however, not just because women are seen as care givers in a patriarchal society. Most women work in low wage sectors. But this is not skill related. The institutional framework of wage setting, the tripartite mechanism, is male dominated which views women’s work at best as supplemental to family income. As a result, sectors which primarily employ women workers have low wages. In times of exigency, it thus makes perfect economic logic in a family unit, that the woman with a low wage withdraws from the labour force to cut the loss of income of the family. Thus, in every occasion of illness or any other need, it is the woman who takes a day off to take care.

Labour force participation of women is critically linked to three main issues:

  • Sharing of Care work by Men to make the necessary shift from viewing women as the ‘safety net of the last resort’. To do this it is essential to:
  • Ensure Wage parity across sectors to make it as costly to withdraw women from the workforce as men – ensuring wages in sectors dominated by women are at par with sectors dominated by men.
  • Paid Parental leave for care giving – Except for the time needed for recovering from childbirth and exclusive breastfeeding, much of the care work that a small infant needs is not directly related to women’s biological role and can be divided between both parents. High childcare costs can be a further disincentive to start or return to work for a second earner in a dual earning couple
  • Care credits – Many – mostly developed –countries have introduced policies to recognize and reward periods of caregiving through pension credits. France extended pension credits to fathers (Fultz, 2011).
  • Increasing Public Social Spending to shift the burden of care from women to the public care system
    • Increased public spending on health and improvement of services, through regular employment of healthcare service providers.
    • Increased public spending on child care facilities (Increased budget for ICDS and regularized work and increased wages for Anganwadi workers) for quality child care.
    • Increased public spending on and improved quality of school education and mid day meal through regularization of services of teachers and support staff to prevent school drop outs, especially of girl children to take care of household responsibilities in order to ensure their mothers can work
    • To ensure pension pegged to the last drawn wage or the minimum wage, whichever is higher, for informal workers through progressive taxation (Arjun Sengupta Committee recommendation, Unorganised Sector Social Security Act)
    • Unpaid volunteer work in public services (honorarium work) to be recognized as waged work and paid at government pay scales.

Why use OECD Guidelines for the Garment Supply Chain

The pursuit of higher profits and low cost centres led to a fragmentation of the supply chain of garment with the producers being located in the global south and the consumers, mostly in the global north.  The global garment brands, mostly companies in the US or in European countries, source their products from suppliers in the global south. These suppliers are divided into multiple layers, with regulation declining as we go down the different tiers of production. The global brands do not disclose their complete list of suppliers or their sourcing price as both these are used by the brands to push competing suppliers in the global south towards a race to the bottom, thereby squeezing the producers in the south for a greater share of profits for the brands.

While for the workers, most of them are first generation women from rural areas with no or very little idea about wages and rights at work. To complicate matters, most workers live in fear of losing their jobs and hence unionisation is very difficult.

Trade Unions have used and continue to use:

  1. Shop floor or/and street protests to put pressure on employers to negotiate with them. This has become increasingly difficult as workers employed in precarious jobs find it tough to both join and sustain struggles in fear of losing their jobs;
  2. Legal strategy but in most cases, cases drag on and once again it becomes difficult for workers to sustain this. Further, in recent years, the judiciary too has delivered, if at all, very little and late; and
  3. international campaigns of ‘naming and shaming’ to exert pressure on global brands, especially in the garment industry. These campaigns have yielded results in denting the image of the brands to their consumers. But, these campaigns simultaneously blame consumers in the global north for buying low cost garments. Low cost garments are bought by working people of the global north who with declining wages and increasing cuts in social security cannot be made to feel guilty for buying low cost garments. The problem lies in how the profit from these garments is distributed along the supply chain and what proportion of it is lopped up by the brands. Thus increasing cost of garments would not get translated into higher wages and better working conditions for workers. It would only mean higher profits for the global brands. Thus it is time to shift the blame from the consumers to those who take production decisions along the supply chain.

But these strategies together and severally have 2 problems: (1) they may not work at all; or (2) they deal with a case in isolation and do not address the systemic problem. Thus, it is critical to supplement the ongoing struggles with new parallel strategies. One such strategy to exert direct pressure on multinational enterprises is to use the complaints mechanism available within the Organisation for Economic Co-operation and Development (OECD).

The OECD is an intergovernmental economic organisation providing a platform to identify good practices and coordinate domestic and international policies of its members. Most European countries, Australia, Japan, South Korea and the USA are members of the OECD. The OECD, in 1976, adopted Guidelines for Multinational Enterprises that are recommendations addressed by governments to multinational enterprises. They provide voluntary principles and standards for responsible business conduct consistent with applicable laws. Each OECD country should set up a National Contact Point (NCP) that will be responsible for the promotion of the Guidelines at the national level,  handle all enquiries related to the Guidelines in that specific country, including investigating complaints about a company operating in, or headquartered in that country. The NCPs should dispose a complaint within 12 months from the date of filing of the complaint. This time bound remedy can help unions in resolving industrial disputes and even to put pressure on multinational companies. The OECD guidelines allow unions to negotiate with the principle producers – the MNEs and make them accountable for their conduct along their supply chain.

Most global garment brands like Zara, H&M, Gap, PVH, Nike, Adidas, Walmart, A&F, C&A, etc are all companies operating in, or headquartered in OECD countries, and thus violations of labour rights along their supply chain can be reported at the relevant NCP. This could be used as a strategy to pressurize the global brands to be accountable for the working conditions in their supply chain and negotiate with the workers and their organisations at their suppliers. In 2016, the Pragatisheel Cement Sangharsh Samiti, a union of contract worker at Holcim, a Swiss Multinational cement company, with its plant in Chattisgarh, was able to use the complaint mechanism successfully to regularise employment for its membership.

On 8 February, the OECD released a new due diligence guidance for supply chains in the garment and footwear sector.  The guidance is meant to provide practical support to MNEs on their implementation of the due diligence recommendations and associated provisions in the Guidelines. Thus this could also be used by garment workers and their organisations to file complaints against brands in cases of violation of local labour laws and other international labour standards as recommended under the Guidelines.

Demonetisation – Why?

  1. According to an ASSOCHAM survey, demonetisation would leave quite a negative impact on SMEs, rural consumption and job creation in the immediate run.
  2. The All India Manufacturers’ Organisation (AIMO), representing over 300,000 micro, small scale, and medium and large scale industries engaged in manufacturing and export activities, in a study on the first 34 days since demonetisation, found that micro-small scale industries (MSI) suffered 35% jobs losses and a 50% dip in revenue.
  3. According to the Clothing Manufacturers Association of India (CMAI), “There was a drop of over 40 to 60 per cent in the market after demonetisation. However, while bigger brands have recovered well, smaller manufacturers and retailers, who largely deal in cash sales, have been affected more.”
  4. According to the data released by Society of Indian Automobile Manufacturers (SIAM), automobiles sales slumped by 19 percent in December. Passenger vehicles sales fell by 1.4 percent while scooters and motorcycles that form the bulk of rural household also registered 22 percent fall in the highest monthly drop.
  5. Confederation of Real Estates Developers’ Associations of India (CREDAI) and other sources in Tamil Nadu said nearly 1,000 major construction projects in Chennai and Kancheepuram districts have been hit. On an average, there will be anywhere around 100 to 200 workers at a single project.
  6. The All India Motor Transport Congress (AIMTC) has expressed how demonetisation has led to an unprecedented crisis for the trucking industry. The AIMTC, which represents almost 75 lakh truckers across the country, has reported on how the turnaround truckers time for truckers has increased as they are embarking on shorter trips. Moreover, there are still no provisions for cash payments on state highways and smaller municipal roads. The truckers are increasingly out of work as overall demand falls.
  7. As per a baseline survey conducted by the Tea Board of India, there are over 750 tea plantations in Assam employing about 65,000 workers and 273 plantations in West Bengal employing about 30,000 workers. On an average, a tea plantation needs Rs 10 lakh per week for wages to workers in cash. Demonetisation demobilized these weekly payments to tea workers despite several RBI circulars.
  8. The demonetisation announcement caused chaos in the travel and tourism industry. The sector grew at 2.8 percent last year, faster than it did worldwide (2.3 percent). It contributed to 6.3 percent of the country’s GDP and created 78 jobs for every million rupees invested, according to tourism ministry data (agriculture creates 45 jobs and manufacturing 18 for the same investment). The peak tourism season witnessed a significant hit with popular holidays destinations reporting at least 65% drop in bookings, an Assocham survey has noted. According to the findings, travel trade has reported around 40-45% drop in bookings for international tourists while business for the domestic travellers has gone down by well over 65%.
  9. India’s jewellery market, estimated at Rs 3 lakh crore, which is 85 per cent unorganised, was hit dueto  Almost 85-90 per cent of transactions in the unorganised jewellery market in India takes place in cash. Many of the small gold jewellery making units had shut shop as they could not pay wages to their employees. Thus demonetization not just affected the workers involved in this high skill employment, this move has favoured the organized big jewellery chains over the small ones.
  10. India’s Rs. 17 lakh crore agricultural and food markets, from the mandito the neighbourhood grocer, came to a standstill. Agriculture is impacted through the input-output channels as well as price and output feedback effects. Sale, transport, marketing and distribution of ready produce to wholesale centres, is mostly cash-dependent. Following demonetisation, many of these networks have operated less than their optimal capacity or have come to a standstill, depending upon location, market links and other factors. The input side is equally affected as many payments/purchases, such as seeds, fertilizers, implements and tools, are outright in cash. Prices crashed and fresh produce lay rotting. The small and marginal farmers are worst hit as they sell off their produce in the village itself. Similarly, value chains with minimal processing and direct consumer sales such as fruits and vegetables are hit. Most fresh produce is sold by small hawkers and street vendors. Since they take payment in cash and buy their wares from the mandi in cash, they are also affected severely.

The demonetization shock, as is evident in most sectors, was to wipe out small and marginal players in each sector, be it small and marginal farmers or street vendors or petty traders or even small industries and consolidate the market towards large corporations.

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