INTERNATIONAL CONFEDERATION OF FREE TRADE UNIONS (ICFTU) INTERNATIONALLY RECOGNISED CORE LABOUR STANDARDS IN SRI LANKA REPORT FOR THE WTO GENERAL COUNCIL REVIEW OF THE TRADE POLICIES OF SRI LANKA (Geneva, 3 and 5 March 2004) EXECUTIVE SUMMARY Sri Lanka has ratified all eight core ILO labour Conventions. In view of problems in implementation of these conventions, and particularly its restrictions on the trade union rights of workers, determined measures are needed to comply with the commitments Sri Lanka accepted at Singapore, Geneva and Doha in the WTO Ministerial Declarations over 1996-2001, and in the ILO Declaration on Fundamental Principles and Rights at Work. Sri Lanka has ratified the ILO core Convention on the Right to Organise and Collective Bargaining as well as the core Convention on Freedom of Association and Protection of the Right to Organise. Some legal restrictions exist however, and in practice the right to organise and the right to collective bargaining are often violated, especially in the free trade zones. Sri Lanka has ratified the core ILO Convention on Equal Remuneration and the core Convention on Discrimination. Discrimination is prohibited by law but there are some legal shortcomings. In practice discrimination occurs. Women are concentrated in a few low-wage and low-skill sectors and differences in wages between men and women persist. Sri Lanka has ratified the ILO core Convention on the Worst Forms of Child Labour, and the core Convention on Minimum Age. Child labour is prevalent in Sri Lanka, in particular in agriculture and manufacturing. Sri Lanka has ratified the Convention on the Abolition of Forced Labour and the Convention on Forced Labour. Forced labour exists mainly in forms such as forced prostitution and forced domestic labour. Finally, it should be emphasised that Sri Lanka s government stated that it respected core labour standards fully, when it made its ultimately successful application to benefit from additional trade preferences under the Generalised System of Preferences (GSP) of the European Union (EU). In view of the monitoring which the EU has said it will undertake, Sri Lanka will need to implement far-reaching measures in order to take due account of the problems raised in this report, and to bring its law and practice into line with genuine respect for internationally-recognised core labour standards.
2 INTERNATIONALLY RECOGNISED CORE LABOUR STANDARDS IN SRI LANKA Introduction This report on the respect of internationally recognised core labour standards in Sri Lanka is one of the series the ICFTU is producing in accordance with the Ministerial Declaration adopted at the first Ministerial Conference of the World Trade Organisation (WTO) (Singapore, 9-13 December 1996) in which Ministers stated: "We renew our commitment to the observance of internationally recognised core labour standards." The fourth Ministerial Conference (Doha, 9-14 November 2001) reaffirmed this commitment. These standards were further upheld in the International Labour Organisation (ILO) Declaration on Fundamental Principles and Rights at Work adopted by the 174 member countries of the ILO at the International Labour Conference in June 1998. The ICFTU affiliate in Sri Lanka is the Ceylon Workers Congress (CWC). Approximately 25% of the workforce and more than 70% of the plantation workforce (most of them upcountry Tamils) are members of a union. More than half of union members are women. Approximately 20% of the non-agricultural workforce in the private sector is unionized, most of them in large firms. Unionization among public sector employees is high. Sri Lanka is a small economy with a population of 19 million people. In 2002 its GDP was US$ 16.6 billion and per capita GNP was US$ 850. Around 25% of the population lives below the poverty line. In 2002, agriculture accounted for 20.1% of GDP. Industry accounted for 26.3% of GDP, of which manufacturing made up 15.9%. Services accounted for 53.6% of GDP. The export sector accounted for 36.2% of GDP in 2002. Total exports in 2002 amounted to US $4,699 billion, of which tea was US$ 660 billion, other agricultural goods US$ 319 billion, and manufactures US$ 2,424 billion. Imports in 2002 accounted for US$ 6,106 billion, of which food was US $696 billion, fuel and energy US$ 789 billion and capital goods US$ 1,170 billion. Sri Lanka has a market based economy and its trade policy is part of Sri Lanka's overall development strategy to achieve diversification of its industrial and export base to achieve export-led growth. Sri Lanka introduced free market policies in 1977 including liberal trade policies, relatively low tariff levels, dismantling of price controls, removal of government subsidies, privatization of state owned enterprises, encouragement of foreign direct investment, liberalization of the current account, and advanced intellectual property protection laws. These policy measures have been intensified over the last two decades. The government states that its external trade policy is directed towards increasing valueadded exports; identifying new markets while maintaining and expanding existing markets; and developing Sri Lanka into an international trading, trans-shipment and financial centre. Sri Lanka is part of the Indo Lanka Free Trade Agreement between India and Sri Lanka and the South Asia Preferential Trade Agreement (SAPTA) of the South Asian Association for Regional Co-operation (SAARC). 2
3 Generalised System of Preferences of the European Union (EU) In April 2002, Sri Lanka s application to benefit from additional trade preferences under the GSP of the EU was accepted for consideration by the European Commission. In January 2004, the Commission announced that the application had been successful and that as of 1 February 2004, Sri Lanka would benefit from enhanced GSP preferences until the end of 2005. The Commission added that Sri Lanka s respect for core labour standards would be carefully monitored over that period. In view of that monitoring, it is clear that if Sri Lanka wants to maintain its preferences, it will have to take far-reaching measures to amend its law and to bring its practices into compliance with respect for core labour standards. I. Freedom of Association and the Right to Collective Bargaining Sri Lanka ratified ILO Convention No. 87 on the Freedom of Association and Protection of the Right to Organise in 1995, and Convention No. 98 on the Right to Organise and Collective Bargaining in 1972. All workers have the right to form unions, including public sector workers. Seven workers may form a union, adopt a charter and elect leaders. The Industrial Disputes Act grants compulsory recognition to any union which represents more than 40% of workers at a given workplace. It also forbids employers from firing a worker as a result of his or her union activities. In practice however, the right to organize and form unions is often discouraged. Forming a trade union requires the trade union to ask for recognition, which requires a threshold of 40% of workers in a workplace. The Commissioner of Labour then conducts a referendum by secret ballot. These referenda are usually time-consuming and often do not achieve their intended objectives, as the employers in many cases (e.g. Lanka Walltiles Ltd.) keep on changing their work force figures, so that the 40% requirement is never achieved. Public services unions are not allowed to establish federations. Young workers are not allowed to become union members until the age of 16 but their employment is allowed at the age of 14. The law provides for the right to collective bargaining, but very few companies practice it. The common process for collective bargaining is first to get 40% membership and get a list with all the names. The vote must be conducted based on a list of employees furnished by the employer. Workers have the right to strike in the private sector, but this right is not extended to public sector workers. Civil servants can submit their complaints collectively to the Public Service Commission, but they have no legal grounds to strike. However, strikes are common and the government has taken no punitive action in recent times. The President of Sri Lanka may designate by a Presidential Order any service provided by any category of workers in public services as essential, thus giving him or her the power to outlaw strikes. Essential services in Sri Lanka cover the supply and the distribution of food or 3
4 drink, supply of water and electricity, postal, telephone and broadcasting services, airport services and health and rubbish collection services. In addition, the President declared as essential services the garment export trade in 1989, the electric power industry in 1996, postal services in 1998 and medical services in 1999, thus making their strikes illegal. Yet such sectors can hardly be considered to fall under the ILO s internationally-recognised definition that essential services are those the interruption of which would endanger the life, personal safety or health of the whole or part the population. This provision has not been activated in recent times with respect to public sector employees. Sri Lanka has three Free Trade Zones, at Katunayake, Biyagama and Koggala, employing more than 100,000 workers, most of them women from rural areas. In theory, workers in export processing zones (FTZs) are granted the same rights to join unions as other workers. There are, however, widespread violations of trade union rights in Sri Lanka s Free Trade Zones. Access for trade union representatives to EPZs is very difficult. Union members face intimidation, including threats of beatings by security guards. The zones are managed by the Board of Investment (BOI), which sets wages and working conditions and discourages union activity. The BOI has no mandate to deal with industrial relations, and the Ministry of Labour is the only authority that is competent to be involved in labour relations disputes. However, the Labour Commission, under pressure from the BOI, fails to prosecute employers who refuse to recognize or enter into collective bargaining with trade unions. For many years, employers in Sri Lanka s EPZs have used the creation of employees councils, promoted by the BOI, to hamper the creation of free and independent trade unions and to prevent them from exercising their right to collective bargaining. The employees councils are not regulated by law and lack minimum safeguards which trade unions are entitled to under the Trade Unions Ordinance. Representatives are not freely elected, the councils are not independent and they are favoured over trade unions. The Councils are funded by the employer, without workers needing to make a financial contribution unlike a union, where members are required to pay dues to finance the union s activities. Furthermore the councils can replace trade unions in collective bargaining if the latter does not represent 40% of the workforce and the former does. Unions and councils are thus put into a position where they have to compete for bargaining rights, unions being clearly at a disadvantage in view of the favourable treatment given to the councils. The Industrial Disputes Act of December 1999 is supposed to protect workers against acts of anti-union discrimination in taking up employment and in the course of employment. However, many serious cases of anti-union discrimination and non-recognition of trade unions have been reported since the adoption of the Act. These cases have been at enterprises in Free Trade Zones such as Fine Lanks Luggage, producing clothes for many international companies, where 858 workers lost their jobs for forming a union when the company closed its doors in 2000. The enterprise reopened in 2001, employing a smaller number of staff including 60 of the original union members, who were rehired under stringent conditions and had to withdraw their names from the court case against the factory for the suspension of their jobs and agree to a 4
5 probation period and who could not claim back pay for the period they were locked out the factory. At the Bensiri Rubber Products Branch, an Indian owned company producing surgical gloves and hot water bottles for export. A union was formed in April 2000, but despite representing 60% of the workers, management refused to recognize the union and formed an Employees Council to bypass the union. Meetings called for by the Labour Commissioner were not attended by management. Dulon Zipper, a Korean owned company making zippers for the local market and for export, has still not recognized a branch union, formed in December 2000 with over 90% of the workers belonging to the union. Meetings that have been called for by the Labour Department have not been attended by management. Skyspan Asia, producing fabric fireproof membrane structures for export, has stopped paying 52 workers, all union members and leaders, stating the reason was excess employees. Topstar Branch, a Korean-owned textile factory, producing power loom and knit fabric for export, has a union with 60% membership among the workers, but the company has refused to recognize the union. Outside the Free Trade Zones, violations of the right to organize also take place. One example is Samyang Lanka, a Korean-owned factory operating in an industrial estate located near Colombo, which manufactures porcelain goods for export. In 2000, some 300 company workers went on strike against non-payment of the monthly attendance bonus and the discriminatory mode of payment of their salaries. After the strike they were only allowed back to work by signing a letter agreeing to obey the instructions of management. In 2003 at a Japanese-owned sports glove company, more than 400 out of 750 workers joined a union. The managers dismissed the leaders and instructed the members to sign a letter disavowing their union membership. Lanka Walltiles Ltd. is currently refusing to recognize trade unions, despite the fact that a verification conducted by the Commissioner of Labour at Balangoda established that there was union membership of above 40%. The government does not stop anti-union persecution nor provide adequate protection against anti-union discrimination. Many complaints have gone unattended. In addition there are no time limits required of labour authorities within which complaints should be made to the Magistrate s Court after this complaint has been made to the Department of Labour. Furthermore, maximum penalties for unfair labour practices are too low to provide sufficient deterrence. In 2003 workers at the Jaqalanka Ltd. Factory in the Katunyake Free Trade Zone were subject to intimidation and harassment, aimed at preventing them from casting their vote in favour of the recognition of their union as a collective bargaining agent. There were instructions to workers by supervisors to boycott a ballot election, and the company made huge efforts to deter workers from entering the polling area, while intimidating them. In consequence the union lost the election. Only after an international trade union campaign to bring pressure to bear on the government was a trade union recognized at Jaqalanka. 5
6 Conclusions While workers have the right to organise and form trade unions, including public sector workers, in practice this right is not respected, especially in free trade zones where organising is suppressed by management and by the Board of Investment. The law provides the right for collective bargaining, but in practice companies try to avoid recognising unions and collective bargaining. Workers have the right to strike but this right is restricted for public sector workers. II Discrimination and Equal Remuneration Sri Lanka has ratified Convention No. 100 on Equal Remuneration in 1993, and Convention No. 111 on Discrimination (Employment and Occupation) in 1998. Women have no legal protection against discrimination in the private sector. The Constitution provides guidance for protection but usually cannot be invoked directly by persons requiring protection against discrimination. Women are often paid less than men for work of equal value and experience difficulty in rising to supervisory positions. Although wage rates that discriminate on the basis of sex were removed from the majority of sectors in the 1980s, differences in wages remain in the tobacco trade and in the cinnamon trade (different time/piece rates). Trade unions have shown the example of the existence of men s rates and women s rates in Koggala EPZ factories, where male packers receive 1,800 rupees per month and female packers receive 1,525 rupees. It is also reported that the National Labour Advisory Council has not considered the problem of equal pay for the last five years. The ratio of estimated female income to male income is 0.5, according to the UNDP. Women are under-represented in many disciplines, and are mainly employed in low-wage and low skilled work. Most are concentrated in plantations, local traditional industries, garment industries, assembly lines, sub-sectors of education and health services, and domestic services. The quality of employment for women has deteriorated since the end of the 1970s. There has been a tendency for women to lose stable employment in the formal sector and to be forced into marginal economic activities and unprofitable self-employment, while the percentage of unpaid family workers that had declined to 6.5% in 1981 rose to over 20% in the 1980s and the 1990s, according to CIDA. Many women now work in the informal economy. According to an Employment Survey in 2000, 25.8% of women employed in the public sector do unskilled work, whereas 43% have clerical jobs. Less than 1% are supervisors and very few are employed in managerial jobs (4.1%). In the private sector, women are concentrated in the unskilled (40%) and semi-skilled categories (44.4%). Few women have jobs as supervisors (2.3%) or managers (0.9%). However, the Ceylon Workers Congress (CWC) recently concluded an agreement with the Employers Federation of Ceylon (EFC) which should increase the number of promotions of women workers to supervisory levels. 6
7 Women often face sexual harassment in the private sector. A 2001 study by ILO Colombo described the problems of sexual harassment in tea plantations where hundreds of thousands of workers are employed, and 90% of the leaf pluckers are women. They work in groups of 20-40 under a male supervisor. The women working in tea factories also have male supervisors. The report stated that all forms of sexual harassment were prevalent. State policy encourages self-employment as a response to women's unemployment. Women have been major participants in these programmes but have generally enjoyed only minimal economic returns as they lack critical inputs such as access to technology, vocational skills development, management training and market information. Consequently, loan payment rates are high, but there has been little significant increase in income, and relatively few women have been able to move out of low productivity, low-income self-employment into better employment. A report by the American Center for International Labor Solidarity entitled The struggle for workers rights in Sri Lanka gives a description of working conditions in the EPZs, based on interviews with hundreds of EPZ workers from dozens of factories. The main findings are: - their work involves repeated, rapid, strong use of hands and eyes for hours of unremitting work each day, leading to chronic physical and visual ailments; - unknown working hours; - they often have to walk home in the dark to their boarding houses, where they live with 4 to 8 people in a single room, with constant worries about their personal safety; - their production quota are impossible to meet during a regular working day with full break and lunch periods, so they must skip lunch and work through their breaks to meet these quotas; - they face constant demands for daily and weekend overtime, often reaching 12-14 hours a day; - they build up personal leave time only to have management deny them the right to use the leave when they wish; - they have sharp restrictions on bathroom use, conversation, rest breaks and other rights. Some discrimination against persons with disabilities exist, in practice, in employment, education and in the provision of state services. Around 1 million Tamils live in the upcountry areas of Sri Lanka and have suffered discrimination in government employment and government services due to their status as noncitizens of Sri Lanka. In 2003, new legislation was introduced providing for all Tamils of Indian origin in the upcountry areas to become citizens of Sri Lanka, on the basis of a declaration that they are not citizens of another country. 7
8 Conclusions The legal framework on workplace discrimination does not provide enough protection against workplace discrimination, and discrimination widely occurs, including lower wages for women compared to men, with some exceptions such as the plantations sector. Women are mainly employed in low wage and low-skilled work. Sexual harassment is commonplace. III. Child Labour Sri Lanka ratified Convention No. 138, the Minimum Age Convention in 2000 and Convention No. 182, the Worst Forms of Child Labour Convention in 2001. The Employment of Women, Young Persons and Children Act of 1956 prohibits the employment of children under the age of 14. Education is compulsory, according to the law, between the age of 5 and 14. Education is free and net primary school enrolment is 97%. However, an IPEC/ILO child activity survey in 1999 found that out of 4,344,770 children in the age cohort of 5 to 17 years, 21% were engaged in some form of economic activity in addition to attending school, while 6% were engaged solely in an economic activity and did not attend school at all, although some of these children may have been over 14 and hence employed legally. Most children are employed in the informal economy. Most working children live in rural areas (95%). 52% of working children are younger than 15, and 91,615 children are younger than 9. 77% of child workers are unpaid family workers. 63.3% of working children are employed in agriculture, 14.8% in manufacturing, 10.8% in trade and hotels, 2.0% in construction, 5.4% in personal services and 4.1% in industrial crop production such as tea, coconut fibres, tobacco wrapping, and rubber production. Some 19,111 children work as domestic workers, 70% percent being girls and 79% from rural areas. There are reports of child domestic servants being employed in 8.6% of homes in the Southern Province. They are often deprived of education and subject to physical, sexual and emotional abuse. Child prostitution is prevalent in Sri Lanka. The government estimates the number of child prostitutes at around 2,000, although others estimate the number much higher. PEACE, an NGO, reports that at least 5,000 children in the age of 8-15 are exploited as sex workers, in particular in certain coastal resort areas. A National Child Protection Authority was established under the National Child Protection Authority Law (1998), whose major functions include recommending legal, administrative or other measures for the effective implementation of the national policy for the prevention of child abuse, as well as monitoring the implementation of laws relating to all forms of child abuse. 8
9 Conclusions Child labour in Sri Lanka is prevalent, mainly in the informal economy and especially in agriculture, domestic work and child prostitution. However, school enrolment is generally high and education is free. IV. Forced Labour Sri Lanka ratified Convention No. 29, the Forced Labour Convention in 1950, and Convention No. 105, the Abolition of Forced Labour in 2003. The law prohibits forced or bonded labour, but there are reports of some rural children employed in debt bondage as domestic servants in urban households, and that some are abused. Trafficking of persons is prohibited. However, Sri Lanka is both a country of origin and of destination of trafficked persons, mainly women and children, both for the purposes of forced labour and sexual exploitation. Some Sri Lankan women, who work as domestic servants in Middle Eastern countries, have been forced into domestic servitude or sexual exploitation. Some Thai, Russian and Chinese women have been trafficked into Sri Lanka for the purpose of sexual exploitation. There are also reports of boys between 8 and 15 being forced into prostitution. Conclusions Forced labour is prohibited by law. In practice however some forced labour occurs by rural children working as domestic servants. There are also reports of trafficking of women and girls for forced prostitution and of forced child prostitution in tourism. 9
10 Final Conclusions and Recommendations 1. It should be emphasised that Sri Lanka s government stated that it respected core labour standards fully, when it made its ultimately successful application to benefit from additional trade preferences under the Generalised System of Preferences (GSP) of the European Union (EU). In view of the monitoring which the EU has said it will undertake, Sri Lanka will need to implement farreaching measures in order to take due account of the problems raised in this report, and to bring its law and practice into line with genuine respect for internationally-recognised core labour standards. 2. The government has to bring legislation in line with Convention No. 87 and No. 98 in order to extend the right to organise to all workers, including judicial officers, non-managerial prison employees and agricultural employees, and to decrease the minimum age for union membership from 16 to 14 years. In addition, the government has to extend the right to collective bargaining and the right to strike to all workers, including public sector workers. Finally, Emergency Regulations should be amended so that they refer only to essential services in the strict sense of the term or cases of actual national crisis for a limited period and to the extent necessary to meet the requirements of the situation. 3. The Government has to take measures in order to ensure freedom of association, in particular in the Free Trade Zones, where the role of the Board of Investment is undermining this right. The government must issue a public directive to instruct the Board of Investment to refrain from any involvement in labour disputes. The Ministry of Labour is the sole government agency competent to handle industrial relations questions. In addition, all union certification polls should be held within four weeks of the original request of the union for union certification. 4. The government should introduce a range of measures to improve law enforcement. First of all, it is essential that a maximum time period for the filing of complaints before the Magistrate s Court by labour authorities be clearly specified. Furthermore, workers and trade unions must be given the right to file a complaint directly to the Magistrate s Court in order to ensure they have unfettered access to legal remedy in cases of victimisation. Finally, the maximum penalty for unfair labour practices must be increased to provide sufficient deterrence. 5. The Government should instruct the Board of Investment to issue a formal revocation of the Guidelines for the Formation and Operation of Employees Councils it published in 2002, and undertake an overall review and reformulation of the Manual of the BOI. It must be clarified that where a trade union and an employees council co-exist in an enterprise, it is the trade union that should be the recognised collective bargaining agent for workers. 10
11 6. Wage inequalities and inequalities in access to employment exist between men and women. Legislation against discrimination in the private sector needs to be strengthened, and the Government should promote a more effective implementation of the principle of equal remuneration for women and men for work of equal value, in particular in the private sector and agriculture work. More effective measures have to be taken to improve access of women and girls to education and training. More effective measures are needed to reduce sexual harassment at the workplace. 7. The Government must provide legal protection against discrimination, in particular against workplace discrimination, for all citizens, including Indian Tamils and their descendants. 8. More progress has to be made to achieve the effective elimination of child labour. In particular domestic work and child prostitution have to be eliminated. 9. There is a need for the effective elimination of forced prostitution and trafficking of women and children. Forced domestic work has to be eliminated as well and the problem of forced labour by migrant workers has to be addressed. 10. In line with the commitments accepted by Sri Lanka at the Singapore, Geneva and Doha WTO Ministerial Conference and its obligations as a member of the ILO, the Government of Sri Lanka should therefore provide regular reports to the WTO and the ILO on its legislative changes and implementation of all the core labour standards. 11. The WTO should draw to the attention of the authorities of Sri Lanka the commitments they undertook to observe core labour standards at the Singapore and Doha Ministerial Conferences. The WTO should request the ILO to intensify its work with the Government of Sri Lanka in these areas and provide a report to the WTO General Council on the occasion of the next trade policy review. 11
12 References : - AFL-CIO, Petition to remove Sri Lanka from the list of Beneficiary Developing Countries under the GSP, December 2002 - Canadian International Development Agency (CIDA), Gender profile: Sri Lanka (August 2001) - European Commission, press release, 7 January 2004 - Global March against Child Labour, Worst forms of child labour Sri Lanka, http://www.globalmarch.org/worstformsreports/world/srilanka.html - Government of Sri Lanka, Trade policy of Sri Lanka, Government Website - Global Unions, WCL, ETUC, Report on the Observance of core labour standards in Sri Lanka, June 2002 - ICFTU, Violations of Trade Union Rights, Annual Survey, 2002/2003 - ILO, CEACR reports - ILO, Ratification of Core Labour Standards - International Textile, Garment and Leather Workers Federation (ITGLWF), various complaints to the ILO Committee on Freedom of Association - Solidarity Center, The Struggle for Worker Rights in Sri Lanka, Washington, 2003 - UNDP website, country development indicators - UNICEF website, country data - US Department of State, human rights country report 2003 - World Bank country statistics ****************** 12