Apparel industry in Sri Lanka

Sri Lanka is among the top apparel exporters in the world after China, Europe, Bangladesh, Vietnam, India, Turkey, Hong Kong, Indonesia, Cambodia and the United States. The apparel industry brings USD 5.6 billion and accounts for 44% of the total exports of Sri Lanka. According to the Board of Investment (BOI) 15% of the labour force of the country is employed in the apparel industry. It also accounts for 33% of the workforce in the industrial sector.

The export-oriented apparel industry was developed with the introduction of the open economic policy in 1977. It was the main industry established in the manufacturing enclaves that were created in the form of Export Processing Zones (EPZs) and industrial parks. They offered special concessions to investors, starting in Katunayake in 1978. Currently there are 12 EPZs and industrial parks in the country (Katunayake, Biyagama, Koggala, Malwatta, Wathupitiwala, Mirigama, Polgahawela, Mawathagama, Kandy, Horana, Sithawakapura and Mirijjawila), and a majority of garment factories are located in or around them. As a result, areas with a huge concentration of internal migrant workers could be seen for the first time. Although the concept of manufacturing enclaves was started as early as 1978, the conduct of the investors and the lives of the workers have not undergone significant structural changes during the past four decades.

Nature of manufacturing enclaves

Manufacturing enclaves in their current form, started after the Second World War, became popular in countries such as South Korea and Taiwan in 1960s-70s. Currently there are about 3,500 such zones around the world, where nearly 670 million people are working. Manufacturing enclaves are based on the hypothesis of global mobilisation of capital. The basis of the manufacturing enclave is to increase the profit margins of production. This is achieved through drawing the attention of the investors in the developed countries to the countries with cheap labour, rampant unemployment and in need of capital investment. Measures such as tariff concessions for import of raw materials, concessions on income tax, streamlined simplified administration, concessions in acquiring land, infrastructure and security are offered to encourage investors.

The workers in these manufacturing enclaves, who are in the bottom end of the global value chain, face many challenges including minimum job security, long and excessive work hours, health issues caused by fatigue, unsafe and hazardous working conditions and minimum social welfare protections. Losses arising out of global economic crises are mitigated by increasing production targets in the guise of increasing efficiency, resulting in excessive exploitation of labour. There are instances where the monthly income of a garment worker is lower than the price of a single unit of garment that they have produced and are being sold in the branded stores in the Western countries. The capacity of the worker is not improved in this process. Thus, their labour is hardly different from that of an unskilled worker. The majority of these workers are from rural or urban families that are living either below or around the poverty line and are facing severe unemployment issues.

These internal migrant workers are forced to live in boarding houses that are maintained in minimum hygienic conditions or urban slums around manufacturing enclaves. In addition to precariousness of their work, workers are subject to discrimination in these temporary settled areas. The majority of these workers are young women who face gender-based discrimination as well as sexual exploitation, violence and social stigma. Trade union activism is either discouraged or prohibited in manufacturing enclaves and, in some instances, the labour laws of the country are relaxed within these enclaves to encourage investment. Thus, these are enclaves to exploit cheap labour. Because of the minimum trade union activism, the workers are left destitute in the event of arbitrary termination of employment. Thus, it is hard to find a worker who has been working under the same employer for more than five years within these manufacturing enclaves. Most of the workers, after sacrificing the second decade of their lives to these factories, return to their hometowns in ill-health resulting from unsafe and excessive working conditions. Those who leave are replaced by a similar and younger group of workers who migrate to the cities in search of employment.

Effect of the first wave of COVID 19

Conditions in the manufacturing enclaves in Sri Lanka have remained almost same during the past 40 years. This was revealed by the unfortunate incidents that the workers faced during the COVID 19 pandemic. They were the group of workers who were one of the first to be affected when curfew was declared in March. The workers stayed in their boarding houses thinking that the curfew will be short term. On the other hand, the factories were in operation until the last moment possible and curtailed the workers’ opportunities to return to their hometowns. The workers faced severe food shortages as the curfew extended to months.

Because of their low salary and precariousness of work, the workers live in cycle of debt, borrowing food items from the nearby shops and settling the debt with their salaries at the end of the month. The shop owners rejected their requests to borrow food items with the closing of factories during the curfew. Consequently, the workers were living in hunger soon. The decline of consumption in the West due to pandemic prompted popular brands of clothing to cancel orders. The importation of raw materials was also affected by the spread of the pandemic in the countries that produced them. As a result factories started to terminate employment of the workers and reduce their salaries. Later, due to government and trade union interventions, factory owners were compelled to pay either the workers’ basic salary (which is very low as their total salary consists of the basic salary and various allowances) or Rs. 14,500 during the lockdown period, although Rs. 29,100 is needed for one person to live a month and Rs. 42, 900 for a family of three.

With the lifting of curfew in May, several factories restarted their production. Many employers had made several requests to the Labour Task Force (which consists of the state, employers and four trade unions) to curtail rights of workers as a measure to recover the loss incurred due to the pandemic. Amending the minimum working conditions and holidays, payment for overtime hours at the same rate as regular hours and increasing the maximum number of hours a worker can be employed per week were among the requests made. It should be noted that although the employers were quick to transfer their loss incurred on the workers, they had not shared the profit of receiving GSP Plus with the workers. The second wave of COVID 19 came in this context.

Effect of the second wave of COVID 19

The second wave was initially identified within a garment factory. As the workers had revealed to the newspapers, they had reported their symptoms to the factory management but they had been ignored and made to continue working in unsafe conditions causing excessive fatigue. As there was no trade union activism in this factory, the issue did not get raised beyond that. Consecutive governments had continuously promoted Employee Forums, which consisted of representatives of workers and employers, instead of trade unions. They were made up of workers who were loyal to the employer and did not intervene decisively on issues of workers. The second tragedy of the workers unravelled with 69 of them being detected to have been infected with COVID 19 (currently the figure has exceeded 1,500).

Lives of these workers within and outside the factories are neither safe nor hygienic. Boarding places with 50-60 workers in heavily congested facilities are common around the manufacturing enclaves. A pandemic such as COVID 19 easily spreads in this context. Even within such a risky situation, priority was not on increasing the workers’ health conditions or conducting more PCR tests on them or arranging quarantine facilities (home quarantining is not practically possible in congested boarding houses) but on using their labour for uninterrupted production. Workers were asked to report to work even during the curfew using their identification cards issued by the factory as curfew passes. Within one week COVID 19 infected persons were reported from the boarding houses, increasing the severity of the situation. Some factories had to be temporarily closed due to infections being reported and workers again became vulnerable as grocery shop owners refused to issue grocery items on debt.

The most serious issue was created by the unorganised nature in the process of quarantining contacts of infected workers. Providing quarantine facilities and conducting PCR tests took place under extremely chaotic conditions, as there was no preparation to face a situation where quarantining would have to be conducted in congested and unhygienic places such as boarding houses. During interviews with the media and at press conferences, various organisations supporting workers of manufacturing enclaves revealed that the stigma associated with the workers is causing a negative impact. In some incidents, infected persons were looked down as carriers of the disease. Several reports emerged where they were treated like criminals. In certain instances they were forcefully being rounded up to be taken to the quarantine facilities. They were treated as though being infected was a crime they had committed and quarantining is a punishment for it. The process had completely ignored that these workers were a group of people who earn a sizable share of the export income in the country, and their rights were disregarded.

Labour arrangements that intensify vulnerability

While workers in manufacturing enclaves are being mistreated, there is a group of workers among them who face the most extreme level of discrimination. These are the workers who are employed by third party labour supplying companies, who are referred to as manpower workers. This group has significantly increased during the past decade. They are not considered as employees of the factory where they are working. They are employed via a company acting as a broker and are working for a daily basis of payment by the factories. They receive a daily wage and are not entitled to benefits such as Employees’ Provident Fund or any other benefits. Thus, the first measure the factories take during a crisis in production is to dismiss these workers. Nobody is responsible for them. As they are not entitled to protection, they can be employed under hazardous conditions. The employer gains the benefit of dismissing them without any payment and at any moment when production is halted due to curfew or any other situation. They are not protected even within the settings where trade unions operate because trade unions cannot enlist workers who do not have a specific employer. They are not even represented in the Labour Task Force.

Workers belonging to this category operate in the most hazardous working conditions without any rights. The manpower workers represent the most vulnerable category among the workers in manufacturing enclaves. The framework of manpower labour arose under the concept of flexible labour, which was developed to increase the flexibility and adaptability of the labour force. Now it has become clear that this labour arrangement creates conditions for extreme exploitation. Consecutive governments have encouraged this type of labour arrangements. Factories too prefer them as they can be exploited more easily. On the other hand, in a situation where workers of manufacturing enclaves are stigmatised as carriers of disease, the manpower workers could be further stigmatised, as they move from one factory to another every day, spreading the disease. This labour arrangement, which is unregulated, unsafe and without a proper employer, is the worst form of labour arrangement during a pandemic.

A world where pandemics become a global norm

The COVID 19 pandemic has compelled us to rethink our development model, nature of our labour force and the labour arrangements we promote. But the tendency is to mostly look for pragmatic solutions for the workers’ issues and not go beyond that. We cannot ignore the long lasting structural issues as pandemics are becoming a global norm.

It is questionable today whether manufacturing enclaves are as beneficial to the countries as expected. Most countries have realised that these enclaves cannot be considered as the engines of development. Although manufacturing enclaves could be useful in countries facing extreme poverty and unemployment, they lose importance in the long term, as they exploit the labour force and weaken it. Countries such as South Korea and Taiwan, which embraced manufacturing enclaves in the 1960s and 70s, do not rely on them anymore. This trend is being followed by countries that embraced the model thereafter. They have realised it is a model that enables external capital to exploit the labour and land resources of a country. But we are heading in the opposite direction. We are still promoting manufacturing enclaves and propagate labour arrangements that further exploit workers. As we expect to overcome the COVID 19 pandemic as a society, we need to pay attention to the long term structural factors, such as our development model and labour arrangements, in addition to the short term measures. Sadly, we do not seem to be working well at either end.

Vidura Prabath Munasinghe is a lawyer and a Senior Researcher at the Law & Society Trust

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