SATUCC Resolution on EPZs - Worker's activities

SATUCC RESOLUTION ON EXPORT PROCESSING ZONES

Southern African Trade Unions note the introduction of Export Processing Zones (EPZ) in various countries of Southern Africa. Unions1 believe that EPZ's are a weak and inefficient strategy for economic investment and growth whose costs to national economies and populations and to regional integration greatly outweigh any perceived benefits. Unions note that the impact of EPZs in the SADC region will be to deepen division and competition between SADC member states and to undermine the essential and difficult process of regional economic integration.

Trade unions in the region observe from the international experience of EPZs that:

EPZs are an inefficient, costly mechanism for job creation

EPZs do not yield significant real foreign exchange earnings due to high imported contents of EPZ goods and generous provisions for repatriation of profits

EPZs do not stimulate growth in the domestic economy, do not provide skills or technology transfer and may further undermine domestic industry where leakages take place into the host country from the highly subsidised EPZ sector.

EPZs attract and lead to industrial monocultures and do not encourage industrial diversification and intersectoral linkages

EPZs create an extremely distorted profile of tax, infrastructure and service subsidies and concessions that are not only withheld from domestic industry, but that are in fact subsidised from domestic industry, posing a further cost to national enterprise.

Trade unions reject the use of concessions on labour, environmental and health standards as incentives to investment, as has emerged in the EPZs everywhere. No economic measures, including that of EPZs should undermine labour, environment and health standards, and the sustainable management of domestic resources. National labour, health and environmental laws should apply without derogation in EPZs. SADC should also establish standards in these areas that harmonise these national standards and define the responsibilities and liabilities between member states.

However trade unions note that even where labour and environmental laws apply in EPZs the nature of EPZ production undermines the development of a stable industrial relations climate and basic rights to union organisation, as:

Enclave EPZs limit the access of unions, control the movement and undermine the rights of workers in the name of controlling the flow of goods
The enclave and controlled nature of EPZs limits the physical access of government inspectorates and trade union health and safety officials
EPZs employment practices create insecure employment, unskilled and contract jobs for local employees, while skilled and managerial jobs are reserved for foreign employees
EPZ jobs bring women into employment but generally in insecure, low skill jobs, and do so deliberately to undermine worker unity
EPZ companies have a short term horizon linked to the life of the economic concessions, and may have moved on by the time labour, health and environmental liabilities emerge.
Governments in the region have limited or no access to information on the past performance of EPZ companies to reduce exposure to companies with poor practices or criminal records
Through tax concessions EPZs do not contribute to local infrastructural, resource management and health costs and thus impose a subsidy on local companies and populations
EPZ customs concessions make it difficult to monitor and regulate the flow of hazardous goods, including across national borders
There may be resistance within the state to monitor and enforce labour, environmental and health standards to avoid sending negative signals to investors.

Trade unions thus note that EPZs undermine the conditions for national decision making over human and natural resources essential for sustainable development in the region. This is reinforced by the lack of substantive consultation with domestic employer and labour groups that precede the introduction of EIPZ Acts.

It is thus our position that the EPZ policy is not only a substantial threat to industrial democracy and sustainable development within our countries, but establishes a competition between SADC member states for investment that will not only lead to a downward spiral of labour and environmental standards, but can also lead to competition on concessions and to retaliatory tariff, transport and trade measures. Such measures will undermine the climate of political and economic co-operation necessary for regional economic integration. SADC has already taken a position that multilateral co-ordinated liberalisation within the region would yield greater advantage over unilaterial liberalisation of states, but EPZs contradict this policy as an extreme form of unilateral liberalisation.

We therefore urge our governments and local employers in the region to move from short term, potentially costly and relatively ineffective measures like EPZs to intensify the work towards developing co-ordinated industrial, social, resource management and labour market policies in the region that enable Southern Africa to integrate into the global economy NOT on a disadvantageous 'one-by-one' basis but as a stronger regional block.

Should EPZ policies be implemented, we believe that the SADC Employment and Labour sector should monitor and seek report from member states on the measures that they have put in place to apply labour, environmental and health laws in EPZs where they do exist, and that SADC should further monitor and report on the real impact of such EPZ policies on regional economic and trade integration.

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SATUCC RESOLUTION ON EXPORT PROCESSING ZONES

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