Crisis brews in factories over GSP Plus stalemate

‘Black tea’ blow adds to bitter tales of hapless free trade zone workers
Leon Berenger in Katunayaka, Pix by Nilan Maligaspe

At first, they took the milk away and it was followed by sugar. Thousands of factory workers at the Katunayake Free Trade Zone are now served with only black tea and their bosses are describing it as a ‘cost-cutting’ exercise.

Even before the real effects of losing the GSP+ tariff concessions could start hitting Sri Lanka’s export sector, the workers are already being dished out with what they could expect in the coming days and anyone found complaining will be shown the door.

Chandi Dissanayake, a young mother of one, is among the many thousands of apparel workers who is currently forced to sip black tea during the allocated breaks, since her employer no longer supplies milk or sugar, citing hard times as a result of the global economic meltdown earlier and the upcoming GSP+ crisis.

Workers seek counselling at the local trade union office in the FTZ.

It is not only the milk and sugar that have been taken away from the workers but many other incentives as well such as overtime payments, attendance bonuses, subsidised meals, transport facilities etc, says Dissanayake, who has put in 12 years of hard work into the zone. Her monthly wage at present is Rs.12, 500.

“When our wages are raised by a mere Rs50 or 100, those in the supervisory capacity and above receive increments starting from Rs 2,500 upwards. This creates a lot of heartburn among most of the staff.

“Complaints of this kind of unfairness is outlawed by the management, and the employee risks being sacked or singled out for harassment,” she alleged.

“But, since I am a senior hand, I have taken the fight to the management, largely with the help of the trade unions who have remained supportive to our cause from the start and their presence is encouraging to all of us.

“Many of us would have been thrown out by now if not for the intervention of the trade unions which have a wide understanding of the country’s labour laws and related regulations forcing the respective managements to give a hearing and even redress,” Ms. Dissanayake pointed out.

Despite all this, the management still maintains a bias attitude towards the workers, known to be active with the trade unions. Such workers are given difficult shifts and their overtime hours are also slashed, she said.

Earlier, each worker was provided with a minimum of 60 hours’ overtime which brings an additional payment of a little above Rs 4,000 depending on the individual’s net salary and years of service.
“This has now been slashed to a mere 20 hours which is a pittance in terms of our earnings,” Ms. Dissanayake added.

Her views were endorsed by several other factory workers who spoke to The Sunday Times, and one of them, A M P Sujatha Navaratne, plans to quit the zone and migrate West Asia.

Sujatha Navaratne

“We are ignorant about all these GSP Plus issues and whatever they call it. But the damning ground situation is that matters have not been that worse during my 20 years of employment in the zone,” she said.

“At first they provided us with free meals on duty, but now they are charging us Rs 8.50. This price may sound very little and affordable but when one considers our paltry salaries this Rs 8.50 is felt right down the line,” the mother of two said.

“Another saddening experience was during the recent floods that hit the area, a large number of boarding houses rented out by the workers, mostly females, were inundated and they lost their belongings to the swirling waters.

While relief such as cooked food and tents were given to the people of the area, thousands of factory workers were overlooked as they were from outstations and not registered residents.

“This is how the local officialdom, from the Grama Niladharis onwards treated the FTZ workers during the floods, and to make matters worse even our employers had little or no sympathy towards our plight,” Ms. Navaratne said.

She said workers, who could not turn up for work because of the deluge, were later forced to work extra hours to avert pay cuts.

“Many workers are also jittery over the shift in attitude among the regional banks in the area and other money-lending institutes who are reluctant to approve soft loans owing to the looming uncertainty in the zone,” adds Sumana Wanigabada from Tissamaharama.

She said that even the in-house ‘Seettus’ (monthly draw) among the workers were on a steady decline because future work could not be guaranteed anymore, with employers poised to retrench staff at any moment.

Sisila Kumaratunga, attached to a factory turning out fishing equipment, said that the management had been faltering in payments over the past few months, with monthly wages being doled out in stages.
“They (the management) say that this was due to a drop in overseas orders but work goes on as usual at the factory with the same quantity being turned out daily.

S T I Kumari

“The management has also informed us that the factory was facing financial difficulties with banks refusing to provide incentives. Whatever the truth may be at the end of the day it is us the workers who will be affected,” Mr Kumaratunga, who has been with the factory for the past 18 years, said.

Board of Investment (BOI) spokesperson Dilip Samarasinghe said that there might be issues affecting the workers but refused to elaborate saying he needed time to check the facts on the ground.

“There are several legal issues and other industrial regulations and these will have to be checked out before commenting on the matter,” he said.

And concerns at the FTZ come just days ahead of a planned visit to the country by a high-powered US team to look into the welfare and living conditions of the workers before deciding on extending the GSP tax concessions on exports to that country.

Trade unionists are upbeat on the visit because they are convinced that the employers will be forced to have a “serious re-think” about their attitude towards employees.

Anton Marcus of the Free Trade Zone and General Services Union warned that the government was maintaining a relaxed attitude to convince the US delegation with more false promises as they had done in the past.

“This time it will not work since we have compiled a comprehensive dossier that will force the Government to have a re-think on their current position taken towards the workers rights if it does not want to face a similar crisis like the European Union (EU) issue,” Mr. Marcus said.

Chandi Dissanayake

“Palitha Athukorale, president of the Progressive Union, warned that unlike the EU conditions the US concessions are tied up with workers’ welfare and their rights a damning report from the visiting delegation to the State Department could harm future trade between the two countries.

The US delegation is led by Michael J Delaney, Assistant Trade Representative for South Asia, and the visit comes after Washington accepted a petition from the American Federation of Labour and Congress of Industrial Organisations (AFL-CIO) to review the standards of workers’ rights in Sri Lanka.

Meanwhile, Labour Ministry Secretary Mahinda Madihewa told The Sunday Times that the government had already briefed the US officials on workers’ rights and welfare. The issue is a pre-condition for more tax concessions and he was confident that the talks would be successful.

“Sri Lanka can boast to be one of the very few countries in the Asia Pacific region with a clean record on workers’ rights. The US visit and their subsequent finding will not be a threat to future US trade concessions,” Mr Madihewa said.

Employees anxious as ‘nuts and bolts’ plant shuts down

S. H. A. Wijeysiri

A group of 117 workers attached to a BOI company that turns out nuts and bolts is anxious over their future employment after the management decided to shut down the factory, citing financial difficulties.

The workers, who are currently on paid leave, fear that the employer will slip out of the country without paying any compensation.

S H A Wijeysiri, a spokesperson for the group, said the management had begun dismantling the heavy machinery and planned to take it out of the FTZ in three stages.

“This is the single largest factory of this nature in the whole of South Asia,” he added. “The fear is that once this is done we will be dumped minus due compensation etc. We have already taken the matter up with the BOI and the Labour Department but there has been no response,” he said.

A BOI spokesperson said he was not aware of this particular case. But he said the board would look into the issue.

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