ADDRESSING LABOUR ISSUES IN FREE TRADE ZONES IN NIGERIA

1. ADDRESSING LABOUR ISSUES IN FREE TRADE ZONES IN NIGERIA MRS OMOLARA OLANREWAJU

2. INTRODUCTION • Free Trade Zones (FTZs)or Export processing zones(EPZs) range from simple ‘free ports’ where goods can be unloaded and loaded without customs, to Chinese style ‘special economic zones . A typical pattern is an enclave, often physically fenced off, frequently on the coast and close to a port. • FTZs/EPZs generally use tax and tariffs exemption as well as streamlined regulation to attract foreign direct investment and boost exports.

3. PREVALENCE OF FTZs • According to Jesper Nielsen, an International advisor of the United Federation of Danish workers, Free Trade Zones have swelled in number over the last 30-40 years to a global total of more than 5,000 zones. A recent Congressional Research Service Report for the US Congress also stated that FTZs/EPZs exist in 135 countries, employing about 66 million workers worldwide. • In Nigeria, there are formally 24 EPZs today of which 11 are operational to some extent, 10 are under construction and 3 have merely been declared. • The Calabar Free Trade Zone was the first of the FTZs to be established in Nigeria in 1992 and became operational when it commenced operations in November, 2001. • Onne Oil and Gas Free Trade Zone is dedicated to oil and oil related activities and became operational in Year 2000.

4. RATIONALE BEHIND ESTABLISHMENT OF FTZs • Creation of jobs, • earning of foreign exchange; • boosting of the export sector; especially nontraditional exports; • raising the quality and performance standards of local industry; • development of poorer, distant or backward regions and communities; • kick starting the national economy (through the establishment of backward and forward linkages between EPZs and the local economy); • attracting strategically important technologies; and promoting enterprise or entrepreneurship.

5. LEGAL FRAMEWORK FOR FTZs IN NIGERIA:NIGERIA EXPORT PROCESSING ZONES ACT NO 63 OF 1992 The Act makes elaborate provisions in the General Regulations for : • incentives and concessions. • Establishment of Banks in the Zones. • Establishment of dedicated Free Zone Customs, Police and Immigration Command to deal with aspects of movement of goods and persons into and out of the Zone, • Dispute resolution.

6. PROVISIONS IN THE ACT TO ADDRESS LABOUR ISSUES. • PART 10 ON HUMAN RESOURCES PROCEDURE:- ZONE MANAGEMENT SHALL IN COLLABORATION WITH THE MINISTRY OF LABOUR AND PRODUCTIVITY, ESTABLISH A LABOUR AND EMPLOYMENT SERVICE DEPARTMENT IN THE ZONE. • THE SAID DEPARTMENT SHALL REGULATE THE LABOUR MARKET AND SUPERVISE MATTERS RELATING TO THE TERMS AND CONDITIONS OF EMPLOYMENT, SAFETY, HEALTH AND WELFARE OF WORKERS IN THE ZONE.

7. RESOLUTION OF DISPUTES: • ALL DISPUTES BETWEEN AN EMPLOYER AND AN EMPLOYEE ARISING FROM THE WORK PLACE AND THE CONTRACT OF EMPLOYMENT SHALL FIRST BE SETTLED AMICABLY BY THE AGREED GRIEVANCE PROCEDURE AND WHENEVER DISPUTES ARE NOT SETTLED AMICABLY, THE MATTER MAY BE REFERRED BY EITHER PARTY WITHIN TEN DAYS TO THE BOARD OF SETTLEMENT OF DISPUTES

8. IN ALL CASES, WHERE A DISPUTE IS NOT SETTLED BY THE BOARD, EITHER PARTY OR ITS REPRESENTATIVE IS OBLIGED TO REPORT THE DISPUTE TO THE HEAD OF LABOUR AND EMPLOYMENT SERVICES DEPARTMENT OF THE ZONE WHICH SHALL INVOKE THE PROVISIONS OF THE TRADE DISPUTES ACT CAP 432 OF 1990 WITH A VIEW TO SETTLING THE DISPUTE.

9. COMPOSITION OF THE BOARD • THE EMPLOYER IN QUESTION OR HIS REPRESENTATIVE • THE EMPLOYEE IN QUESTION OR HIS OR HER AUTHORISED REPRESENTATIVE • A REPRESENTATIVE OF ZONE MANAGEMENT WHO SHALL BE THE CHAIRMAN • THE HEAD OF THE LABOUR AND EMPLOYMENT SERVICES DEPT OR HIS REPRESENTATIVE IN THE ZONE.

10. LABOUR ISSUES IN FTZs • The most general complaints raised by most trade unions pertain to the difficulty in organizing and acquiring recognition in the free trade zones. • The process of granting recognition to unions for collective bargaining purposes is marked by excessive delays and many union members are harassed and/or fired in the meantime. As a result, workers are afraid of being identified with unions.

11. LABOUR ISSUES (contd) • The FTZs have been characterized by the lack of social dialogue between employers’ and workers’ representatives. • higher level tripartite social dialogue at the National Labour Advisory Council regarding the zones has also been very limited. • Working days are longer (9 instead of 8 hours). Holidays and leave are grudgingly given, particularly by some of the companies. • an observed tendency to avoid female labour . it is inferred that this has to do with granting maternity leave.

12. ILO REPORT ON LABOUR ISSUES IN FTZs • In a 2008 Report, the ILO examined labour practices by multinational corporations covered by free trade agreements. It found that while labor conditions are sometimes better inside zones than in other sectors of the economy, poor working conditions in terms of overtime, occupational health and safety, wages and freedom of association remain in many zones.

13. WHO REPORT ON FTZs • .ACCORDING TO A STATEMENT BY THE WORLD HEALTH ORGANISATION, ‘;EPZs HAVE BEEN ASSOCIATED WITH HIGH LEVELS OF MACHINE-RELATED ACCIDENTS, DUSTS, NOISE, POOR VENTILATION AND EXPOSURE TO TOXIC CHEMICALS. • JOB STRESS LEVELS WERE FOUND TO BE HIGH, ADDING FURTHER RISK. • IT WAS ALSO REPORTED THAT ACCIDENTS, STRESS AND INTENSE EXPOSURE TO COMMON HAZARDS ARISE FROM UNREALISTIC PRODUCTION QUOTAS, PRODUCTIVITY INCENTIVES AND INADEQUATE CONTROLS ON OVERTIME..

14. SOME EXAMPLES FROM OTHER COUNTRIES • According to statistical information provided to the ILO by the Sri Lankan Government, trade unions have only been established in 37 of the 287 enterprises operating in Sri Lankan FTZs. • only two collective agreements have been signed at the time of that Report. • Employees councils do exist in 149 enterprises although none have collective agreements in place.(at the time of the Report). • Report of intimidation of workers who want to join Unions by both the Management of the enterprises and the Board of Investment

15. IN FTZs IN NICARAGUA, ONE OF THE FIRST SHIFT WAS TO CHARACTERISE THE UNIONS AS NON GRATIA AND TO TOTALLY BAN UNION ORGANISATION IN THE ZONE. THOUGH THIS MOVE WAS UNCONSTITUTIONAL, GOVERNMENT OFFERED NO RESISTANCE. • SPEAKING BEFORE THE ILO, ALBA PALACIO FROM THE NATIONAL WORKERS FRONT OF NICARAGUA, DENOUNCED THE FACTORIES IN THE COUNTRY’S FTZs AS ‘PERMANENT SOURCE OF HUMAN RIGHTS VIOLATIONS’

16. SOME OF THE MOST EXTREME EXAMPLES OF ANTI-UNION REPRESSION IN EPZs CATALOGUED BY THE ICFTU INCLUDE: • THE USE OF ATTACK DOGS TO SUBDUE WORKERS IN NAMIBIA, • DEATH THREATS ISSUED TO BANGLADESHI WORKERS BY THE MANAGING DIRECTOR OF A FACTORY • REMOVING UNION REPRESENTATIVES FROM A WORKPLACE AT GUN POINT

17. LABOUR ISSUES IN FTZs IN NIGERIA Not too different from what obtains in other climes. • PROLIFERATION OF CASUAL LABOUR/CONTRACT EMPLOYMENT. • CURTAILED ACCESS TO MONITOR WORKERS CONDITIONS OF SERVICE AND WELFARE. • WEAK SOCIAL DIALOGUE MECHANISMS WITHIN THE DYNAMICS OF LABOUR AND EMPLOYMENT RELATIONS IN THE ZONE, WHERE IT EXISTS AT ALL.

18. TRADE UNIONISM IS A VERY CONSTRAINED PHENOMENON IN THE EPZS. SEVERAL UNIONS HAVE TRIED TO ORGANIZE IN THE DIFFERENT EPZS WITH LITTLE SUCCESS. FOR EXAMPLE, OF THE OVER HUNDRED COMPANIES OPERATING IN THE OIL AND GAS FREE ZONE, ONLY FIVE ARE UNIONISED • ALMOST TOTAL ABSENCE OF TRIPARTITE STRUCTURES. • IN SOME CASES, WHEN WORKERS SIGN UP FOR UNION MEMBERSHIP, THEY ARE SACKED UNDER ONE PRETENCE OR THE OTHER WHILE SOME OF SUCH WORKERS ARE TRANSFERRED AWAY FROM WHERE THEY COULD MOBILIZE OTHER WORKERS.

19. To a large extent, workplaces or firms which had been characterized by robust pluralist industrial relations practice before becoming EPZs or moving into EPZs are more amenable to allow union organizing although some firms who have had unions in their organizations before, actually move to EPZs to avoid unionization.

20. CAUSES OF LABOUR ISSUES IN FTZs • POLICY PRIORITIES • THE KEY CHALLENGES SEEM PRIMARILY TO BE AT THE LEVEL OF IMPLEMENTATION RATHER THAN NORMATIVE DEVELOPMENT:. REGULATORY CAPACITY RESOURCE CONSTRAINTS OF HOST STATES OF FTZs.

21. WAY FORWARD • Nigeria has ratified the eight core conventions and its national legal framework contains stringent measures in respect of these and other rights and freedoms at work. However, despite this strong legal environment, there are problems in giving effect to some rights at work. There are deficits in ensuring the freedom of association, particularly in FTZs.

22. MEASURES TO BE TAKEN BY GOVERNMENT • ESTABLISH A LABOUR AND EMPLOYMENT SERVICE DEPARTMENT IN THE ZONES AS PROVIDED FOR IN THE NEPZA ACT. • TO PROMOTE TRADE UNIONISM AND COLLECTIVE BARGAINING IN THE FTZs, GOVERNMENT NEEDS TO REVIEW THE PENALTIES FOR UNFAIR LABOUR PRACTICES, AS EXISTING FINES ARE ABYSMALLY LOW • STRENGTHEN THE CAPACITY OF MINISTRY OF LABOUR TO ENFORCE LABOUR LAWS AND PROMOTE SOCIAL DIALOGUE • NEW APPROACHES VIS-À-VIS LABOUR PROTECTION AND INDUSTRIAL RELATIONS NEEDED BY THE MINISTRY OF LABOUR.

23. GOVERNMENT (contd) • REORGANISATION OF THE LABOUR INSPECTORATE TO IMPROVE THE DEGREE OF ENFORCEMENT OF LABOUR STANDARDS AND RIGHTS IN EPZS. • FREE ENTRY OF LABOUR INSPECTORS TO UNDERTAKE ROUTINE AND SURPRISE INSPECTIONS. • A MODERN APPROACH TO LABOUR ADMINISTRATION. -- COMPUTERISATION OF DATA ON LABOUR INSPECTIONS AS AN EFFECTIVE MECHANISM FOR MONITORING AND ANALYSING INSPECTIONS OF ENETERPRISES. THE PRESENT MANUAL, PAPER- INTENSIVE SYSTEM IS LOW IN PRODUCTIVITY AND INEFFICIENT

24. GOVERNMENT (contd) • INCREASING THE NUMBER OF SKILLED LABOUR INSPECTORS AND EQUIPPING THEM WITH NECESSARY SKILLS TO SECURE COMPLIANCE RATHER THAN POLICING ENTERPRISES. . • INTEGRATING LABOUR/HUMAN RIGHTS CONCERNS INTO THE DESIGN OF EPZ INVESTMENT INCENTIVES. • MULTI STAKEHOLDER MONITORING MECHANISM LIKE THE ONE SET UP DURING THE MEETING WITH THE MINISTRY OF LABOUR ON LABOUR ISSUES IN FTZs

25. MEASURES TO BE TAKEN BY THE UNIONS • RESPONSIBLE UNIONISM • EVOLVE AND IMPLEMENT A COORDINATED AND GLOBAL SOLIDARITY STRATEGY. • CONSISTENT PRESSURE ON GOVERNMENT TO ENTER INTO DETAILED TRIPARTITE CONSULTATIONS BEFORE THE ESTABLISHMENT OF ANY FURTHER FREE TRADE ZONES.

26. CONCLUSION • FTZs COULD BE BENEFICIAL TO THE ECONOMY AS WELL AS TO THE WORKERS IF ALL THE STAKEHOLDERS WORK TOGETHER. ECONOMIC AND SOCIAL GAINS SHOULD NOT BE TREATED AS BEING MUTUALLY EXCLUSIVE. • ALL PARTIES SHOULD DEVELOP INNOVATIVE METHODS TO ACHIEVE ECONOMIC GROWTH WITHOUT DECENT WORK DEFICITS.