GSP+ and worker rights

The article was published on 30 April 2017 by the DAWN.

Threats to GSP+ status for Pakistan and data on compliance with core labour standards.

While there are fears Pakistan may lose its GSP+ status once the next EU review report is to be published at the start of 2018, it would be appropriate to get the facts about the country’s current labour rights situation.

Under the GSP+ tariff preferences are conditional upon the ratification and implementation of 27 international conventions, including the ILO’s eight core Labour Standards. The first report, published in 2016, referred to some anecdotal evidence suggesting GSP+ as an incentive for furthering compliance with ILO standards. Has compliance really improved?

Pakistan has already ratified all the eight core standards of the ILO that are classified in four themes: freedom of association and the right to collective bargaining; elimination of all forms of forced or compulsory labour; abolition of child labour; and elimination of discrimination in respect of employment and occupation.

Interestingly, there is no state corroborated data on any of the core labour standards. Trade union density (a measure of prevalence of trade unions among the wage and salaried employees) ranges between one to three per cent depending on the source.

The Pakistan Statistical Yearbook 2014 quotes that in 2008 the total trade union membership was 0.245 million while the Pakistan Workers Confederation estimated, in 2012, the total membership as 1.8m. The government stopped collecting and publishing trade union and other industrial relations figures after 2008.

Similarly, there is no reliable data on collective bargaining coverage in the country. A 2014 ILO Study found the number of collective bargaining agreements as 749 in 2012, meaning that only workers in 749 enterprises were covered by collective bargaining.

Different ILO studies estimate that there are over one million bonded labourers in brick kilns and over 1.8m sharecroppers are bonded in the agriculture sector.

The Global Slavery Index 2016 estimates 2.134m (up from 2.058m in 2014) people are trapped in modern forms of slavery in Pakistan. In terms of absolute numbers, Pakistan is ranked 3rd (out of 167 countries) in this index after India (18.354m) and China (3.388m).

The last national Child Labour Survey in Pakistan was held in 1996, which indicated that there were 3.3m (8.3pc of the 40m) economically active children (aged 5-14). More than 70pc (2.4m) of these children were boys.

Though no new child labour survey could be held during the last 21 years, the Labour Force Survey (2014-15) provides useful insights. Of the 5.24m ‘children in employment’, 3.708m are engaged in child labour, with 40pc of such children in hazardous work.

The current average wage for men is Rs15,884 while for women the average wage is Rs9,760 per month. This indicates that for every Rs100 earned by men, women earn only Rs61.45. Interestingly, the hourly gender wage gap is estimated as 26pc, indicating that women’s wages are 74pc of men’s.

Over the years, only child labour numbers have fallen from 4.043m in 2010-11 to 3.708m in 2014-15. The gender wage gap has hovered around 40pc for a decade. Statistics on trade unions, collective bargaining coverage and bonded labour are not corroborated by any state institution.

Since no easy data is available on the core labour standards, we turn to the ‘cash standards’ which measure working conditions. These include minimum wages, working hours (limitations on hours of work and overtime) and occupational safety and health standards; and are referred to as cash standards since these raise the business’s costs of production.

Half of the workers earn less than the minimum wage while the ratio for women workers earning less than the minimum wage is around 85pc. More than 40pc of them are working excessive hours (over 48 hours). Men’s ratio to work excessive hours is five times higher than women.

The incidence of occupational diseases/injuries is 4pc for the overall economy, higher for male workers (4.70pc) than for female workers (1.69pc). This incidence indicates that every 25th worker faces an occupational accident or injury. The ratio increased from 3.49pc in 2010 to 4pc in recent years.

Does this situation indicate that the GSP+ status is under threat? If we learn from others’ experiences, the situation does not seem as dire.

The European Union has withdrawn trade preferences in the last 20 years for three countries only: Myanmar (on exaction of forced labour); Belarus (stringent restrictions on freedom of association and the right to collective bargaining) and Sri Lanka (for violation of human rights conventions).

Research shows that the EU withdraws trade preferences on breach of labour standards only where the ILO has clearly held that such breaches are systematic, serious and persistent. All the three cases are state-led violations.