Impacts of the EU-India FTA on Human and Social Rights Civil Society and the EU-India FTA 22 nd January 2014

1. EIAS WorkshopIn Cooperation with the UniversitéLibre de Bruxelles (ULB)In Partnership with Ambekar Institute for Labour Studies (AILS)and Maniben Kara Institute (MKI) With support of the European Union Delegation to India Impacts of the EU-India FTA on Human and Social Rights Civil Society and the EU-India FTA 22nd January 2014 Chanda Korgaokar, EIAS

2. Impacts of the EU-India FTA on Human and Social RightsCivil Society and the EU-India FTA • It is assumed that free trade and removal of regulations on investment will lead to economic growth, generate employment opportunities , thus help reduce poverty and improve quality of people in the country. • However, past evidences shows that these agreements may allow transnational corporations (TNCs), more freedom to exploit workers environment and the society at large by manipulating the national and global economy to suit their interests. • In this context, the proposed EU-India Free Trade Agreement (FTA) has generated considerable interest. Chanda Korgaokar, EIAS

3. Impacts of the EU-India FTA on Human and Social RightsCivil Society and the EU-India FTA • In the year 2011, Ambekar Institute of Labour Studies organised two special seminars to discuss the possible impacts of the EU-FTA and how the CSOs can play role in protecting the interests of those who will bear the negative impact of this trade agreement. The following were the conclusions of those meetings. • The conclusion of the FTA between the EU and India is expected to give an enormous boost to EU-India economic cooperation but its potential – and unavoidable – impacts on social and labour conditions have not been evaluated in a fully comprehensive and transparent manner. • From this perspective, the proceedings followed in the on-going negotiations show several shortcomings from Indian civil society's point of view, which need to be addressed before the agreement becomes operational. Chanda Korgaokar, EIAS

4. Impacts of the EU-India FTA on Human and Social RightsCivil Society and the EU-India FTA • THE TALKS HAVE BEEN MARKED BY A LACK OF TRANSPARENCY -There has been insufficient transparency in the process and major sections of civil society have not been duly consulted. • The potential consequences of a far reaching trade liberalisation on vast sections and fragile sectors of the informal economy (which employs 92% of the working population) have been given insufficient attention . • The issues related to internal, as well as trans-border migration and the expected employment impacts of inter-sectorial movements as a result of the FTA, have received insufficient consideration. • Another question, which relates to the human and social rights domain and has not been given serious consideration, is whether Corporate Social Responsibility can be promoted in the context of the FTA as an instrument to enhance sustainable development, human and labour rights. • It was therefore concluded that the relevant CSOs prepare and establish their own role and capacity regarding the monitoring and independent reporting on social and human rights impacts irrespective of the scope of the relevant provisions of that may or (may not)be included in the final texts of the FTA itself. Chanda Korgaokar, EIAS

5. Impacts of the EU-India FTA on Human and Social RightsCivil Society and the EU-India FTA • Against this backdrop, since September 2012, the 3 partner organisations EIAS, AILS and MKI, in order to enable the civil society to participate meaningfully in monitoring and evaluating the process and impact of projected FTA, launched the project. • It consists of 4 interrelated and complementary pillars of activity, namely: i) Research; ii) Policy development and advocacy; iii) Capacity building and iv) Network building. Chanda Korgaokar, EIAS

6. Impacts of the EU-India FTA on Human and Social RightsCivil Society and the EU-India FTA • To begin with as part of the process of contributing towards redressing the civil society dialogue deficit on the FTA and alleviating the negative frustration amongst a number of CSOs, the partner organisations launched comprehensive research and data collection on the possible social dimensions and potential impacts of the FTA with the participation of other CSOs namely • “Nirman”(Mumbai) (Construction workers) • StreeMuktiSanghatana (SMS) working for the upliftment of vulnerable women (Waste Pickers) • Social & Labour Research Foundation (SOLAR) - The Employers Federation of India (Mumbai). ((Industrial units) • The “Centre for Environment Education” (Pune) (Environment) • The “Development, Education and Research Foundation (CDEAR)” (Indore) (Farmers) • Self Employed Women’s’ Association (SEWA) (Agricultural and Garment workers) Chanda Korgaokar, EIAS

7. Impacts of the EU-India FTA on Human and Social RightsCivil Society and the EU-India FTA • The research aims at analysing and presenting the prevailing situation regarding various issues related to socio-economic aspects of the FTA and which are of primary concern to the selected groups of the population. • It includes issues viz. employment, training needs, and conditions of work, social security, freedom of association, scope for collective bargaining and capacity building of the stake holders focusing on informal sector. • It concentrates on bringing out the status of labour legislations, relations between the employer and employees, cooperation between the trade unions, and status of labour rights at enterprise level, government policies and programmes and assess the capacity of the stake holders to take up the issues that will arise out of the India-EU FTA. Chanda Korgaokar, EIAS

8. Impacts of the EU-India FTA on Human and Social RightsCivil Society and the EU-India FTA • The Food and Agriculture Organization (FAO) estimates that women produce between 60 and 80 percent of the food in most developing countries and are responsible for half of the world’s food production. In rural India, the percentage of women who depend on agriculture for their livelihood is as high as 84%. Women make up about 33% of cultivators and about 47% percent of agricultural laborers. • India has made a name for itself as a garment manufacturing centre of global renown. The textiles and garments industry contributes 16.63% of India’s export earnings; around 45% of this comes from garment exports alone. The garments industry provides employment to around 3.5 million people across the country. While some garment workers are employed in factories or workshops, a large proportion of garment and textile workers are “homeworkers” — subcontracted workers who carry out paid work for firms/businesses or their intermediaries, typically on a piece-rate basis, within their own homes . Women represent a significant majority of the homeworkers who cut and stitch garments together for the global apparel trade. The home-based garment workers form the bottom most layer of this industry. This segment of the garment industry operates mainly through contractors. Chanda Korgaokar, EIAS

9. Impacts of the EU-India FTA on Human and Social RightsCivil Society and the EU-India FTA • Construction industry employs the second largest bulk of workforce in the form of informal sector. Any kind of FTA with EU will have a very big repercussion negatively or positively on the lives of these workers. • The informal recycling sector in India is in fact well-structured and has a huge presence, especially in mega cities. This sector is responsible for the recycling of around 70% of plastic waste and up to 56% of all recyclable waste generated in India. On the basis of all information collected during the research, the author estimates that the informal sector recycles about 10 million tons of recyclable waste per year. the total number of people involved in informal recycling in India to be 2.86 million, i.e. 0.75% of the urban population (377 million) or 0.23 % of the total population of India (1,210 million). Numerically waste pickers in India possibly outnumber those in any single country in the world Chanda Korgaokar, EIAS

10. Impacts of the EU-India FTA on Human and Social RightsCivil Society and the EU-India FTA • Conclusions • FTAs are important for economic growth because they encourage global economic transactions without which we will be isolated from the outer world- unless we are very strong in our fields of economic activities which is not the case anyway. More scope of economic activity with wider market would obviously generate more revenue. This will increase the opportunities for the local populace in terms of employment and investment opportunities • The foreign investment, knowledge and technology will result in increased productivity and economic gain to certain section of people. For e.g. it would be an opportunity to provide adequate skills, training and employment to youth (there is a huge percentage of people under 30). • EU India FTA is likely to support domestic sectors such as textiles and garment, gems and and jewelry and shipping. • FTA is expected to be disadvantages for sectors such as agriculture and allied activities, automobile, drugs and pharmaceutical, retail, SMEs etc. • India proposed to open public procurement for the European Union, which is expected to have adverse impacts for small and medium enterprises (SMEs) in India associated with various government departments for supplies of various items. Chanda Korgaokar, EIAS

11. Impacts of the EU-India FTA on Human and Social RightsCivil Society and the EU-India FTA • Technically advanced EU firms are expected to grab the major chunk of business in India, creating Indian SMEs a tough competition. As a result, there is a strong possibility of major job losses in this sector in India. • India has huge potentiality in infrastructure building in areas like road, rail, ports, water ways and other public transport infrastructure, energy, broadband telecommunication network and drinking water networks etc. The experience and expertise of European companies in these fields would be an important asset to help fulfilling this demand and also for absorbing EU’s techniques and technologies. • There will be demand for raw material from India in the international market of European countries and that will bring in economic growth. • Opening up of markets will bring in improved technology whose benefits will be largely skewed to male labourers and farmers with large land holdings. It will displace female labour in the informal sector. For ex. In Agriiculture, Garment and Waste Picking industry. • Due to lack of proper infrastructure, lack of credit, small landholdings, lack of quality inputs and poor extension facilities Indian farmers’ productivity and quality in compared to developed countries like EU is low. The respondents fear that the opening up of the market through FTA will bring in cheap imports from outside and flood the market making their produce un-competitive. This will lead to loss of livelihood and income in massive scale and also lead to migration. The special import rules might also adversely affect the existing farmers/cooperatives who depend on dairy as the primary source or significant secondary source of livelihood. Chanda Korgaokar, EIAS

12. Impacts of the EU-India FTA on Human and Social RightsCivil Society and the EU-India FTA • Food Security: The producers were more concerned about food security issues that might arise due to the FTA. Generally small and marginal farmers in India first keep aside a portion of their produce for their own consumption before selling it in the market. This helps them take care of their immediate consumption needs and act as a Food Security buffer. The group feared that with opening up of market and increase demand for farm produce, the farmers will tend to sell their whole production lot to traders and processing unit due to lure of additional profit, leaving nothing for their families. In terms of distress they might not have the financial ability to purchase basic cereals and pulses from the market leading to hunger and malnutrition especially amongst women and children. • Many had apprehension that the labour legislations will remain on the paper and the present exploitative system of the unorganised sector will still govern the life. The present system of contract labour will become more exploitative with no accountability as they will take over the contract of supply of cheap labour to the international companies and hence the invisibility of principal employer in the industry such as construction will increase. • The study found that although the government is negotiating the FTA with the EU since 2007, it has neither published terms of negotiations nor has published draft agreement on its official website except a short note. • Sustainable development chapter is an essential part of the EU-India FTA, which calls on both the sides to agree on sustainable development and inclusive growth on the basis of shared values by including legally binding clauses on human rights, social and environmental standards and their enforcement. Trade Unions must have rights and mechanisms to be able to raise issues under the procedures of the agreement • Unless the community is consulted and taken into confidence, the FTA will only add to the misery of the small and marginal producers. Chanda Korgaokar, EIAS

13. Impacts of the EU-India FTA on Human and Social RightsCivil Society and the EU-India FTA • Recommendations • It is suggested that periodical reviews be taken on the bilateral agreements signed by India in the past with neighboring countries such as Bhutan, Japan, Korea, Bangla Desh, Sri Lanka etc. and be made available on the ministry’s official web site to protect interest of the stake holders. • Technology Transfer: The government should focus first on technology transfer from EU to India so that small producers can benefit through improved quality and production. Once the producers have the relevant technologies, than only we should open our markets. Otherwise small and marginal producers will not be able to compete on both quality and price. Also technology should be used to improve production and not displace labour by bringing in mechanized production practices. Our advantage is labour and if there is displacement of labour due to mechanization than the small and marginal women farm labourers will be affected the most. • Also we should only focus on those technology which help decrease costs of production and also technology which is affordable to poor producers. Crops which are labour intensive should be protected since the women will be majorly impacted if mechanization displaces labour. We should try to get expertise that can work hands on with our producers and infuse new and scientific ways of production Chanda Korgaokar, EIAS

14. Impacts of the EU-India FTA on Human and Social RightsCivil Society and the EU-India FTA • Since EU countries have the necessary expertise in food processing, we should use this expertise to make sure that our farmer can move up the value chain. This can be done through exposure visits of producer groups/cooperatives to EU countries, training of village women in the importance and technicalities of food processing and setting up of producer owned Food Processing Centers. • We should look brining expertise to improve our agricultural infrastructure like storage and green house technology. At present due to lack of proper infrastructure produce like potato, tomato etc. have to be thrown away. Since some of the EU countries have well developed technical know-how, we should tap it to help create proper common infrastructure like storage at the block level so that small and marginal farmers can benefit from their use. • Since one of the major concern is regarding food security the government should ban exports of food crops like cereals and pulses which form a major part of the dietary composition of the majority of subsistence farmers. Only cash crops, horticultural crops and spices should be part of the FTA. Chanda Korgaokar, EIAS

15. Impacts of the EU-India FTA on Human and Social RightsCivil Society and the EU-India FTA • Government should insert sufficient clauses into the FTA about purchase of agricultural land for industries. Tripartite agreement should be done for any such land purchase between the Government, Corporates and Farmer Producer Organisations (FPO’s). Similarly the government should have a clear policy regarding use of wastelands by industry • All partnerships with industry should be looked at it from a longer term perspective and should benefit local producers. Efforts should be made that environmental destruction is minimized and the community paid back for any degradation through such instruments as carbon credits. • The Community should be made aware about both the positive and the negative impact the FTA might bring so that they have a major say in the way projects and initiatives are implemented at the village level. • Since agricultural land holdings are small, unless the producers are brought together under Farmer Producers Organisations (FPOs), they will not be able to gain any significance advantage with the FTA. The Government should make efforts through Non-profit organizations to organize women farmers into collectives so that they have ownership and say in the way trade can impact their lives. Chanda Korgaokar, EIAS

16. Impacts of the EU-India FTA on Human and Social RightsCivil Society and the EU-India FTA • For Home Based Workers [HBW] to benefit, the FTA should have provisions for setting up community based manufacturing infrastructure where HBW’s can come and work on their own terms. • Skills development of HBW’s should be a key component of the proposed FTA. Training of HBW’s on use of modern machines, repairing, finishing, material handling, pattern making, marketing and design, production and finishing will help them take advantage of the opening up of markets. • At the policy level, the Government should standardize wages across all states so that industries don’t go move out of one state to another taking advantage of costs. Since the plight of the HBW’s across India is the same, such policy help create loss of livelihood for HBW’s who have very limited options. Also the government should focus on providing insurance, health insurance and pension scheme to the HBW’s since after a certain age (40-45 years), the HBW becomes unproductive. • If the labour board for Constrution workers [and for other informal sector group] is universally formed all over the country and recruitment is done solely through the boards making it compulsory for all the workers to be registered, the employer- employee relationship will be more transparent and employer will be more visible. Chanda Korgaokar, EIAS

17. Impacts of the EU-India FTA on Human and Social RightsCivil Society and the EU-India FTA • The negative perceptions are based on lack of information or imaginings based on old colonial era. Hence better public awareness on part of the government as well as the partners in FTA to educate and inform on a large scale should be made part of any project under the agreement. • Dissemination of information about successful and unsuccessful projects needs to be made more visible through media as well as targeted group presentations of all the stakeholders. It is essential that such information is transparently made available through various channels. • Annually, at the EU India Strategic Partnership Summit, the CEO’s Round Table is organised which discusses the prospects of the bilateral EU-India trade relationship and expectations for the ongoing FTA negotiations. This political summit should also give an opportunity to CSOs from both sides to meet at similar kind of Round Table –CSOs Round Table - to set out their positions and shared support for the FTA and highlight areas of concern that political leaders should take into account. Chanda Korgaokar, EIAS