Trade unions say GSP+ extension means income security for thousands

Workers, employers working together to avert a catastrophe

By Dilshani Samaraweera

Leading trade unions in the country have agreed to support the extension of the GSP+. The unions say this is because the GSP+ scheme ensures employment for thousands in the country and has the potential to generate more jobs and contribute towards reducing poverty. “We, as trade unions, do not want to see job losses. We want as many people as possible to be employed …especially young people in this country,” said the General Secretary of the Sri Lanka Nidahas Sevaka Sangamaya, Leslie Devendra.

“If the GSP+ scheme is not extended, our country will become less competitive in export markets because of our increasing domestic costs. So this could mean that factories may have to cut jobs. The bigger ones will survive, but small factories may even have to close down. So thousands of people, mostly poor and working people, will be affected,” said Devendra.

Trade unions also point out that in addition to economic impacts, unemployment also generates adverse social impacts in the form of social unrest and higher crime rates. “Employment is very important, especially for young people. We know from experience that young people will look for extra legal methods to obtain social justice if they feel deprived,” said Devendra.

Earlier this week the country’s major trade unions and biggest private sector employers met, to discuss their positions on the European Union’s (EU) GSP+ trade scheme. The meeting was organised by the Association for Dialogue and Conflict Resolution (ADCOR) in association with the Employees Federation of Ceylon( EFC).

The official statement issued by ADCOR after the meeting stated that: “In the discussion which followed, it was seen as a consensus that everyone wished to see the continuance of the GSP+ and it was also suggested that this forum should make its position known to the government - that it wished that the government and its officials be united in its position to secure the GSP+ as it was not a political issue but a necessity for the poor of the country on whose account the concession was actually provided.”

The trade unions have also decided to convey their opinion to President Mahinda Rajapakasa. “We decided to meet the President himself and explain to him why the GSP+ is important for this country. We want to ask him to take measures to comply with labour conventions and human rights conventions, so that the GSP+ can be extended,” said Palitha Athukorala, Chief Organiser of the Jathika Sevaka Sangamaya (JSS).

The GSP+ scheme is a preferential trade scheme granted to Sri Lanka by the EU. It allows Sri Lanka to export 7,200 items ‘duty free’ into the EU. The scheme has helped boost exports to the EU by enabling local manufacturers to remain competitive despite increasing domestic costs. The GSP+ scheme is to be reviewed towards the end of this year. The review would decide whether Sri Lanka continues to enjoy GSP+ concessions, of duty free exports, for another three years, or not.

The European Commission office has so far maintained that the extension of the scheme depends on the implementation of 27 international conventions. These conventions apply to the areas of human rights, environmental standards and core labour rights. Sri Lanka was awarded the GSP+, among other things, on the basis of having ratified these conventions.

However, given the highly publicised allegations of human rights violations in the country and also allegations of labour rights violations by some trade unions, there is concern that the GSP+ may not be extended at the end of this year.

It’s about jobs

So far the biggest user of the GSP+ scheme has been the local ready-made garment industry. However, trade unions and government officials say that other sectors of the economy are also now using the trade scheme. This has increased the number of people dependent on the GSP+ for employment and income security.

“It is not only the garment factories. There are also other sectors using the GSP+. There are farming families that are dependent on the GSP+ because they are supplying goods to companies that are using the GSP+ to export fruits and vegetables into Europe,” said Devendra.
The Ministry of Export Development and International Trade confirmed that although at a much smaller scale than garments, the local agricultural sector is also slowing starting to use the GSP+ to develop markets in Europe.

“We are exporting vegetables like gherkins into Europe using the GSP+. We are also exporting fish, like tuna. In addition we are also exporting things like gems and jewellery,” said the Secretary to the Ministry of Export Development and International Trade, S Ranugge. However, the total number of persons dependent on the GSP+ is not known.

Officials representing trade unions and employers at the meeting.

“The garment industry is the biggest employer using the GSP+ scheme. But other sectors are also now using the scheme, but we don’t have figures on exactly how many people have jobs related to GSP+ exports. We know that the number of direct jobs is over 270,000 because the garment trade says they provide direct employment to that amount of people. But the garment sector also generates ‘indirect employment’ on top of direct employment. So the number of people dependent on the GSP+ at this point could be quite a big amount,” said Ranugge.

Government’s call

Given the growing importance of the GSP+, trade unions and private sector employers are calling on the government to take action to ensure the scheme is extended. Trade unions and employers point out that the GSP+ scheme’s extension is based on government level interaction with European authorities. They also point out that implementation of laws, is also a government task and therefore, it is up to the government to implement the laws pertaining to the 27 relevant international conventions.

However, to support the extension of the GSP+, trade unions have agreed to drum up international goodwill for Sri Lanka’s cause. The unions say they can help improve Sri Lanka’s international image, which in turn could help convince the European authorities to extend the GSP+. But they want the government to play its part.

For starters, the trade unions want some improvements on implementing core international labour standards. “There are issues on human rights violations. But there is very little time left now, to change opinions before the review. So, for a start, if the government can do something to improve implementation of labour laws, we can ask the international trade union networks to support us. This will help to send out the right signals, that the country can be trusted to address human rights issues as well,” said Athukorala.

The trade unions are compiling a paper for the government and also employers, on specific areas for better implementation of labour rights. “In 2005, when we got the GSP+, we were supposed to implement various things. Very little has been done in this regard. For instance, garment factories are very hostile towards trade union formation. The government was also supposed to implement laws, which it has not done. So both employers and the government must be willing to make these improvements,” said Devendra.

Private sector employers say they are willing to cooperate with the unions but the government must take action to convince the relevant authorities to extend the GSP+. For instance, the biggest employer in manufacturing in Sri Lanka, the garment sector, says it upholds all national laws including labour laws. However, garment factory owners point out that it is up to the government to introduce relevant labour laws and to implement them.

“We are willing to talk to trade unions any time. The criteria to form trade unions are set out by the labour laws of this country. We, as an industry body, have always upheld the law. But it is the government and their relevant agencies that are authorised to implement national laws, not us. So the government and the Labour Department, must take necessary action when there is violation of labour laws,” said Chairman of the Joint Apparel Association Forum, Ajith Dias.