In The Long Shadow of the Rana Plaza

IN THE LONG SHADOW OF THE RANA PLAZA
19-03-2015

In 1881, when Bangladesh, India and Pakistan were ruled by the British Empire, the imperial government of Britain tried to enact a law called the Factories Act. The law mainly sought to regulate working conditions and especially tried to regulate the working of children below the age of nine. It was immediately met with opposition from the local industrialists and textile merchants. They said that curbing child labour was aimed at reducing their competitiveness and was in fact intended to protect the local manufacturing of Britain. Under severe pressure from their local social reformers and socialists, the UK had enacted the Factories Act regulating working children in the 1819 Cotton Mills Act. Now, these socialist groups combined with other interest groups (with varied motivations and included British industrialists) and got similar laws enacted in the Indian sub-continent as well.
More than a century later, the same arguments are repeated by businessmen, governments, and even certain academics in the Indian sub-continent when there were attempts to introduce worker-protection clauses into trade agreements. The example shows that the arguments against improving working conditions seldom change over time.

Manufacturing consent at the highest levels in favour of businesses has probably become easier over time - and respective governments (and even some unions) were convinced that the social clause has to be avoided at all costs. The attempts at including social clauses were discarded for the time being and if anyone lost from this – it was only the workers - for there is little doubt that the comparative advantage in question (that of low wage workers) would have diminished even with such clauses being present.

For all those who had been predicting a 'race to the bottom', if they had any doubts as to what the bottom looked like, the rubble of Rana Plaza is probably what it looks like. The Rana Plaza building that collapsed on 24^th April, 2013 in Savar, Bangladesh resulted in the deaths of 1129 garment-manufacturing workers with 316 still missing.

Impressively, global unions like the UNI and IndustriALL immediately swung into action and managed to get almost 200 clothing firms (mostly European) that had been outsourcing to Bangladesh to sign The Accord (on Building and Fire Safety) in order to offer safer working conditions⁷. The effort itself showed the monumental difficulty in getting such companies to agree to such guidelines. Certain firms including the US-based Walmart (which is notorious for its anti-union practices) still did not budge citing fears of legal liabilities if they agreed to any safety regulations¹.

Cheap Labour, Cheap Buildings and Cheap Lives

Around 80% of Bangladesh's and nearly 60% of Pakistan's export revenues come from garment manufacturing. The garment industry in Bangladesh employs around 4 million people of which nearly 80% are women. Bangladesh offers one of the cheapest work-forces in the world with the women employed there being paid an average of around 4000 takas per month (roughly EUR 40 or USD 50) where the GDP per capita is 5030 takas per month. To put these wages in perspective, this is around half the amount that is paid to garment workers in India as well as in Pakistan – and around one-fifth the wages of Chinese garment workers. As if this wasn’t enough, it is seen in hindsight that the rush by garment manufacturers was not only for the low wages but also for the poor regulations that were on offer.

While there may be nothing new in this behaviour of manufacturers, the scale of the current spate of tragedies has been unprecedented. In the last 8 months, five large-scale industrial accidents have taken place in export-oriented factories - where a total of 1,567 workers (mostly women) have died^{2,3 and 4}. All of the tragedies have occurred in this zone of similar labour laws ie Bangladesh-India-Pakistan. The scale of mis-management in this zone makes China's sweatshops appear like 'low-wage worker' utopias in comparison. The problems that affect the workers in this zone though, are similar. Like India, it is generally understood locally that it is not the absence of labour laws in the region but the lack of enforcement that is the culprit. Bangladesh for example, with a workforce of around 75 million, has a total of 95 health and safety inspectors⁵.

These newer garment factories in the sub-continent follow a prototype. First and foremost, to showcase to their clients, they are located in major cities pulling low-wage workers from the surrounding rural areas. Due to the high real-estate costs, the factory buildings are usually built very close to the walls of the compound to make use of the entire available area. The compound-walls, in turn, are usually high and topped with barbed wire or broken glass to increase security. To increase the land utilisation and worker density, the buildings are constructed up to many floors. While adequate ventilation and light is usually provided (for precise garment manufacturing), what is critical is that there are few entry and exit points. The windows while providing light are heavily barred and the few points of entry and exit have multiple barricades and checkpoints. At the same time, these exits are wide enough to allow only one person through at a time. This is in order to facilitate the rigorous security checks that are carried out on the workers every day. Either there are no other exits or all other exit points are locked up.

For those who are aware of the Triagle Shirtwaist tragedy in the United States (where 146 workers died in a garment factory fire), the above buidling design will be sickeningly familiar. This factory prototype provides high space utilisation and security (for employers) but is very low on safety for workers. If all the accidents had anything in common, it was that the workers were trapped inside the buildings due to the lack of exits - effectively turning the buildings into 'prisons' with few chances of escape even in life-threatening situations. If so many lives have been lost, it is due to the specific structural similarities in the building design and regulations. While over-worked workers, poor wages and low-quality workspaces are the norm in this side of the world, it would now appear that these are secondary issues.

Considering a Safety Floor

While the insertion of social clauses into trade agreements and the right to association are still the best solutions, the option of enforcing a bare minimum set of industry-specific Operational Safety and Health (OSH) should be considered more closely. It is revealing that most ILO member states have not ratified the Convention on OSH (C155) including Bangladesh, India and Pakistan. In countries, zones and industries where the right to association is not safeguarded, the alternative would be to include a set of corresponding OSH implementations as a minimum within trade agreements – simply because workers either do not have the knowledge resources or do not have any alternate means to associate and demand them as and when they are required.

The increased flexibility in the relocation of supply chains has meant that only a trans-national trilateral entity like the ILO has the required range of influence over different governments, trade bodies and transnational employers' organisations. For example, the only sign of alarm shown by the Bangladeshi employers association (BGMEA) after the building collapse was when the European Commission threatened to remove the Duty Free – Quota Free (DFQF) facility that had been extended to them by European markets⁶. The US government also followed with a threat to revoke the duty-free access to its market. What happened in Bangladesh could be another country next time around - the companies involved could be different and the industry in question could be an altogether different one.

There can be few arguments against the implementation of minimum safety standards in the supply chain of any responsible globalised operation. Not only that, minimum OSH standards are something that do not vary across the world, including in societies that claim to 'think differently' on such issues. To fulfil such a requirement would ensure that workers around the world are protected at the very basic level instead of repeating the tragedies that led to the most elementary lessons over the years.

REFERENCES
1) http://www.nytimes.com/2013/05/23/business/legal-experts-debate-us-retailers-risks-of-signing-bangladesh-accord.html

2) http://www.irishtimes.com/news/death-toll-in-pakistani-fires-hits-314-1.736233
3) http://edition.cnn.com/2012/11/25/world/asia/bangladesh-factory-fire/?hpt=hp_t1

4) http://www.dhakatribune.com/bangladesh/2013/may/25/savar-death-toll-reaches-1129

5) http://www.ulandssekretariatet.dk/sites/default/files/uploads/public/Asien/Landeanalyser/labour_market_profile_2012_-_bangladesh_web.pdf
6) http://news.priyo.com/2013/05/24/bangladesh-must-consider-eu-warning-promptly-exper-76692.html
7) http://bangladeshaccord.org/

CHILD LABOUR - India, ILO and the 21st Century

The size of the Indian population between the ages of 15 to 60, at around 700 million, is the second largest amongst all countries in the world (in 2011). If you add the world's largest population of children in the age bracket of 5 to 14 as potential workers, around 200 million, then what you have is a serious distortion to an already large aggregate supply of labour. According to the 2001 Census - the last time the Indian Government officially calculated the employment of children in the labour market - there were around 12 million child labourers. This was an absolute increase of over 1 million from the previous Census (1991) figures. According to child-rights organisations working in this sector and the calculations offered by other independent NGOs, this is a conservative estimate with the actual figures being around 5-6 times higher due to the definitional limitations. While creating a severe downward pressure on wages in the labour market, child labour also causes a disruption in education which is often permanent and difficult to rectify thereafter. Indeed, labour market reform is critically dependent on the eradication of child labour. The continuing problems that plague the Indian workers and worker's rights would remain as long as they are unable to ensure that child labour is fully eliminated from Indian labour markets.

Doing away with this grave injustice towards children should be among the top priorities of Indian labour law reformers. Yet, infamously, India is one of only 9 countries in the world to not have ratified the International Labour Organisation (ILO) Convention No. 182 – regarding the 'Elimination of the Worst Forms of Child Labour'. Due to the variations in the definition of child labour across the world, this particular Convention was created by the ILO to prohibit children from working in the most dangerous and hazardous professions. Of the 183 countries that are members of the ILO, 174 have ratified this Convention. In this regard, India is now in the company of countries such as Somalia and Myanmar who are yet to ratify this particular ILO Convention (as on September, 2011). This is a glaring lapse for a country that wishes to be counted amongst the leading economic powers. This Convention prohibits children from being used in “slavery, armed conflict, prostitution, production of pornography, drug trafficking and work which by its nature or circumstances - is likely to harm the health, safety or morals of children” (ILO, 1999). These are the worst occupations that any child may be deployed in and its prevention in all societies should be a priority. It is, therefore, surprising that India has accorded little attention to this and continues to neglect a legal focus on this.

EDUCATION IN INDIA AND CHILD LABOUR

India has been attempting to provide free and compulsory education for all its children since its independence in 1947. The Constitution of India, published in 1950, decreed in Article 45 of the Directive Principles of State Policy, that the Indian State should provide free and compulsory education for all children until they complete the age of fourteen. The State was advised to do this compulsorily for the the next 10 years - in the hope that the entire next generation of chlidren would be fully educated. This was not to be! Sixty years after the country's founders' attempts and after the partial successes of the multitude of schemes and policies, the Indian Government passed the Right to Free and Compulsory Education (RTE) Act in April, 2010.

Nearly three decades back, the failure to provide free education to all children and the prevailing magnitude of child labour had prompted the Government to form the 'Gurupadswamy Committee' in 1979, whose report and recommendations led to the passing of the Child Labour (Prohibition and Regulation) Act, 1986. The committee's report clearly stated that it saw little option other than to ban child labour in hazardous areas of work due to the continuing problems of poverty in India. The Government of India (GOI) has since identified 18 occupations and 65 processes that are classified as hazardous and bans the employment of children in these identified areas. It must be noted that children are defined as those below 14 as per this law. The contradiction with most other Indian laws - where minors are defined as those below the age of 18 - must not be missed. To complicate matters, the Child Labour Act seeks to ban children only from the occupations listed in this law. This often creates loop-holes in the nature of jobs being done, which unscrupulous employers wilfully exploit and consequently law-enforcement becomes problematic.

Though there have been a number of positive moves in the direction of improving the condition of child labourers, India is still very far from achieving a complete elimination of this malaise. The Government launched the National Child Labour Project (NCLP) in 1988 to rehabilitate child labourers. The rescued children are placed in the specially formulated NCLP schools where informal education and vocational training, leading to their mainstreaming, is imparted while also providing supplementary nutrition and health-care services. This was a targeted initiative – where the districts with the most number of child labourers were first identified and NCLP schools opened in these districts. From 12 districts in 1988 to 100 districts in 2001, the scheme has expanded to cover 300 districts and around 9,500 schools.

The Indian Ministry of Labour and Employment (MoL) points out in its Results Framework Document (RFD), that since child labour is an off-shoot of poverty, the welfare schemes of other Ministries such as the Rural Development, Urban Affairs and Poverty Alleviation, Railways, Women and Child Development are all converged to strike at the root of the problem of child labour (MoL – RFD, 2010-11). This belief that the poverty-alleviation programmes implemented by other Ministries will solve the child labour problem - is displayed in the RFD, where the least number of initiatives are under Objective 3, the section regarding child labour. The responsibilties for tackling child labour are specifically shared by the MoL with the Ministry of Women and Child Development. Consequently, this leads to a situation where neither Ministry assumes full responsibility. Ideally, the interaction of children with the labour market and places of work should be monitored, regulated and the enforcement done by the MoL, while the subsequent holistic education of children in schools and homes should fall under the purview of Ministry of Women and Child Development. The MoL is currently running several thousand primary schools which is obviously beyond its areas of expertise and should be avoided.

The Government of India has recently taken other positive steps like passing the RTE Act in 2010. The Act requires that the Government ensure that all children have a schooling for at least 8 years. Coming somewhat belatedly, the RTE Act has been welcomed and criticised in equal measure. The Act guarantees that all children have the fundamental right to access education for free. It must be pointed out that the success of this law would be directly proportional to the elimination of child labour. Children in working conditions are in a poor position to make choices regarding their schooling. It is in this regard that the widening of the Child Labour Act to include all occupations must be considered - which could then pave the way for India to ratify the ILO Core Convention No. - 138 – the broader Core convention regarding the minimum working age.

CHILD LABOUR ECONOMICS

Child labour is one of the major factors that causes the inter-generational transmission of poverty. One of the main reasons for the failure of the poverty-elimination approach is that child labour and poverty are often inextricably inter-linked. While poverty could be the initial cause forcing a child to earn for their family, it is the very same children that then go on to become the next generation of the poor due to their inability to upgrade their knowledge and skills. This leads to a vicious cycle of poverty which becomes extremely difficult to break. For example, a family that is below the poverty line may be forced to send its children out to work – before they complete their education - to earn a supplemental income. Since the child can no longer complete their education, they get forced to do the low-paid unskilled work which causes them to remain poor throughout the remainder of their working life, like their parents would have. There is a strong negative effect of child labour on school attendance rates and a significant correlation is found between the levels of economic activity of children aged 7-14 years and youth literacy rates in the 15-24 age bracket (Allais and Hagemann, 2008). Child labour therefore significantly affects the quality of the workforce.

The economic discourse has overwhelmingly been in the consensus that poverty is the primary reason for the supply of child labour (Van and Basu,1998; Grootaert and Kanbur, 1995; UNICEF, 1986). The data in a recent report however, contradicts this position. Education, as a variable, shows a stronger effect on the decrease in child labour since a significant number of the richer households are also seen sending their children to work. The report finds that around 20% of working children belong to families in the richest and second richest quintiles of the population (VVGNLI, 2010). But more critically, it found that over 95% of the child labourers come from families where the head of the household has managed less than 10 years of education. In fact, 75% of all child labourers in India are from families where the head of the household is either illiterate or has only managed to complete primary education (ibid 21).

Most studies, however, search for the relationship between economic growth or the effect of trade on child labor participation rates – completely missing the link and the beneficial effects of education. It is a widely held belief that with economic growth would come an increase in wages and therefore a decline in child labour. The prominent focus, it would appear, on economics and trade linkages has obfuscated other approaches which could be faster and more effective. Another little known area is the nature of demand for child labour - which should logically grow along with increases in adult wages. Some studies have shown that economic growth increases the demand for child labor. Without government intervention, a labour market becomes receptive to child labor (Swaminathan, 1998).

FURTHER ACTIONS AND DIRECTIONS

It is imperative that the elimination of child labour combined with the provisioning of education is given a sustained focus amongst the poverty alleviation programmes. This is the best way to ensure that the cycle of poverty and illiteracy is broken and that there is a skilled and qualified workforce that can fully leverage India's demographic comparative advantages. While the actions taken by other Ministries are important to reduce poverty, it is only in conjunction with the removal of child labour that this goal of poverty elimination and universal education can possibly be achieved.

India is now one of the largest economies in the entire world. The poor economic condition of the country was the excuse given for the existence of child labour. This claim is no longer valid. That child labour persists strongly through the sustained economic growth of the past 15-20 years is an area of serious concern. Child labour can only be reduced through a combination of elementary schooling, a reduction of poverty levels, higher wages for workers along with legal re-enforcement. The Government should therefore strengthen the legislation against child labour along with the other labour-related areas.

There are several steps that the Indian Government can take to ensure progress in this area. When the Child Labour Act was first passed in 1986, it envisaged a fine of Rs 10,000 for the errant employers. However, there has only been a marginal increase in the fine to the current Rs 20,000. The penalties for the employment of children should be raised high enough to be a significant deterrent for unscrupulous employers. The responsibility for the verifications regarding the age of the worker should also rest upon the employer.

Widening the scope of the child labour legislations to include all professions and trades would give little room for unscrupulous employers to evade the law and would be the highly beneficial. Bridging the various ages specified in the labour laws would also go a long way in enhancing the ability of the law-enforcement machinery to identify wrong-doing besides simplifying the related laws on the whole.

Currently, NCLP Schools provide a stipend of Rs 100 per month to rehabilitated children. In contrast, according to the NGOs working in this sector, a child can earn around Rs 50 a day. Therefore, this stipend should be increased to a higher level. This could possibly be widened to include payments for school-going children from 'Below Poverty Line' families. Innovative schemes of this nature were implemented in Brazil as the 'Bolsa Escola' and in Mexico as part of the 'Opportunidades' programmes. Similar schemes, adapted for India, should provide a viable alternative for addressing the possibility that banning child labour would lead children into more hazardous occupations.

CONCLUSION

The ILO has two Core (or Fundamental) Conventions regarding the child labour. India is one of the very few countries that is not a signatory to either of these. One of them (Convention No. 138) deals with restrictions on the working age, while the other, Convention No. 182, deals with employment of children in hazardous occupations. Significantly, it should be noted that China – which is the only other country with a similarly large population - has ratified both of these Conventions. In fact, India is the only major economy to not have ratified either of these two Conventions.

It must be recognised that child labour lies at the core of several of India's major social problems. Not only is it an outgrowth of poverty - it also contributes to future poverty! It has a major impact on literacy and education levels in the country. This in turn, has further implications on the quality of the workforce, employability and the size and health of the population. The success of educational schemes such as the Sarva Shiksha Abhiyan (SSA) and the RTE will be proportional to the ability of the State in keeping children out of the work-force. It is therefore a matter of utmost urgency and one that needs to be addressed with enlightened vigour. Indeed, there are few better areas where labour reforms can be directed.

REFERENCES

Allais, Federico Blanco and Frank Hagemann (2008) - “Child labour and education: Evidence from SIMPOC surveys,” Geneva : Pp (v).

Grootaert, C. and R. Kanbur (1995) - "Child and Labour: An Economic Perspective." International Labour Review, 134(2) : 187-203.

ILO (1999) – Text of the convention C182 - Worst Forms of Child Labour Convention, Viewed on October 6, 2011 ( http://www.ilo.org/ilolex/english/index.htm )

Ministry of Labour and Employment, Government of India : Results Framework Document (RFD) 2010-11 - , Viewed on October 6, 2011 ( http://labour.nic.in/reports/RFD10-11.pdf )

Swaminathan, Madhura (1998) - “Economic Growth and the Persistence of Child Labor: Evidence from an Indian City” World Development, Vol.26, No8 : 1513-1528.

UNICEF (1986) - “Children in especially difficult circumstances: Annexe - Exploitation of working children and street children,” UNICEF, Executive Board, Session, Report E/ICEF/1986/CRP.3. New York.

Van, P. and K. Basu (1998) : “The Economics of Child Labor,” The American Economic Review, Vol.88, No3 : 412-27.

VVGNLI (2010) - V.V.Giri National Labour Institute - Rehabilitation of Child Labour in India, New Delhi : 20-21.

ILO Ratifications - INDIA

India has ratified 41 out of 188 ILO Labour Conventions.

AND
among them are 4 of the total 8 Fundamental (or Core) Conventions namely C29, C100, C105, C111.

The last convention ratified was the C127 Maximum Weight Convention, 1967 on 26-03-2010.

(Source: ILO Database of International Standards - 31. 10. 2011)

Convention	Ratification date	Status
C1 Hours of Work (Industry) Convention, 1919	14:07:1921	ratified
C2 Unemployment Convention, 1919	14:07:1921	denounced on 16:04:1938
C4 Night Work (Women) Convention, 1919	14:07:1921	ratified
C5 Minimum Age (Industry) Convention, 1919	09:09:1955	ratified
C6 Night Work of Young Persons (Industry) Convention, 1919	14:07:1921	ratified
C11 Right of Association (Agriculture) Convention, 1921	11:05:1923	ratified
C14 Weekly Rest (Industry) Convention, 1921	11:05:1923	ratified
C15 Minimum Age (Trimmers and Stokers) Convention, 1921	20:11:1922	ratified
C16 Medical Examination of Young Persons (Sea) Convention, 1921	20:11:1922	ratified
C18 Workmen's Compensation (Occupational Diseases) Convention, 1925	30:09:1927	ratified
C19 Equality of Treatment (Accident Compensation) Convention, 1925	30:09:1927	ratified
C21 Inspection of Emigrants Convention, 1926	14:01:1928	ratified
C22 Seamen's Articles of Agreement Convention, 1926	31:10:1932	ratified
C26 Minimum Wage-Fixing Machinery Convention, 1928	10:01:1955	ratified
C27 Marking of Weight (Packages Transported by Vessels) Convention, 1929	07:09:1931	ratified
C29 Forced Labour Convention, 1930	30:11:1954	ratified
C32 Protection against Accidents (Dockers) Convention (Revised), 1932	10:02:1947	ratified
C41 Night Work (Women) Convention (Revised), 1934	22:11:1935	denounced on 27.02:1950
C42 Workmen's Compensation (Occupational Diseases) Convention (Revised), 1934	13:01:1964	ratified
C45 Underground Work (Women) Convention, 1935	25:03:1938	ratified
C80 Final Articles Revision Convention, 1946	17:11:1947	ratified
C81 Labour Inspection Convention, 1947	07:04:1949	ratified
C88 Employment Service Convention, 1948	24:06:1959	ratified
C89 Night Work (Women) Convention (Revised), 1948 (and its Protocol)	27:02:1950	ratified
C90 Night Work of Young Persons (Industry) Convention (Revised), 1948	27:02:1950	ratified
C100 Equal Remuneration Convention, 1951	25:09:1958	ratified
C105 Abolition of Forced Labour Convention, 1957	18:05:2000	ratified
C107 Indigenous and Tribal Populations Convention, 1957	29:09:1958	ratified
C108 Seafarers' Identity Documents Convention, 1958	17:01:2005	ratified
C111 Discrimination (Employment and Occupation) Convention, 1958	03:06:1960	ratified
C115 Radiation Protection Convention, 1960	17:11:1975	ratified
C116 Final Articles Revision Convention, 1961	21:06:1962	ratified
C118 Equality of Treatment (Social Security) Convention, 1962	19:08:1964	ratified
C122 Employment Policy Convention, 1964	17:11:1998	ratified
C123 Minimum Age (Underground Work) Convention, 1965	20:03:1975	ratified
C127 Maximum Weight Convention, 1967	26:03:2010	ratified
C136 Benzene Convention, 1971	11:06:1991	ratified
C141 Rural Workers' Organisations Convention, 1975	18:08:1977	ratified
C142 Human Resources Development Convention, 1975	25:03:2009	ratified
C144 Tripartite Consultation (International Labour Standards) Convention, 1976	27:02:1978	ratified
C147 Merchant Shipping (Minimum Standards) Convention, 1976	26:09:1996	ratified
C160 Labour Statistics Convention, 1985	01:04:1992	ratified
C174 Prevention of Major Industrial Accidents Convention, 1993	06:06:2008	ratified

Ratified: 41

Conditional ratification: 0

Declared applicable: 0

Denounced: 2