COLOMBO — The workers of Ansell Lanka, an Australian glove maker, Ceramic World Industries, a Korean producer of porcelain figures, and Alitex, a Saudi-Pakistani terry towel manufacturer, had been gathering by the power station near the Biyagama Free Trade Zone since early in the morning of September 5, 1994. Numbering about 7,000, they were poised to commence a protest march to Colombo. There, they intended to present a petition to the newly elected People’s Alliance government of Prime Minister (now President) Chandrika Kumaratunga, which they hoped would consider their grievances favorably.
Before departing from the free zone, workers representing employees at each of the three factories explained the objective of the march and the main grievances of the Ansell Lanka workers, whose factory had been closed. The workers demanded a salary increase of 50 percent, an increase in their permitted annual sick and leave time to 35 days and that the companies hire all workers on a permanent basis.
Around 7:30 a.m., the workers decided to start the march. But by this time the police from the Free Trade Zone and nearby stations had arrived on the scene. The police blocked the road with a huge truck and advised the workers not to proceed.
According to K.A. Vasanthi of Ansell Lanka, when the workers peacefully proceeded with the march, the police first fired tear gas and then started shooting. Vasanthi suddenly felt her right leg and right upper arm becoming numb. She noticed that a nearby colleague had fallen and that blood had seeped all over his white shoe. Then she realized that the police had shot them. Her left ankle was shattered by a gun shot injury, and two of her fingers were permanently damaged.
The angry workers fought back against the police attack, burning a police jeep. By the end of the clash, eight workers had received gunshot wounds and many more were injured. The workers’ hopes that their grievances would be redressed by the new People’s Alliance government lay shattered. Today, 85 of the protesting workers remain out of work.
Expanding the Zone
The Ansell Lanka story is a typical one for multinational factories operating in the Sri Lankan free trade zones. First, workers present management with basic demands. These are ignored or discussed over days and months. Eventually, the workers start protesting and the police crush the protests. The factory is closed. The Board of Investments, which is in charge of the administration of the zone, then intervenes and starts negotiations to bring back the defeated workers. The factory is re-opened on terms and conditions set by management.
Little appears likely to change under the People’s Alliance government, which embraces the open economic policy advocated by the International Monetary Fund and the World Bank.
Sri Lanka’s free trade zones are governed by the Board Of Investments (BOI, formerly known as the Greater Colombo Economic Commission). Established by an act of Parliament in 1978, the BOI is an autonomous body functioning directly under the president of Sri Lanka. The BOI is entrusted with wide-ranging statutory powers to vary, modify or exempt enterprises from the application of laws relating to inland revenue, exchange control and customs.
The BOI has established three free trade zones. The first, the Katunayake zone, was established in 1978 and covers an area of approximately 200 hectares. Located adjacent to the Katunayake International Airport, it is 38 kilometers away from the capital city of Colombo. There are 87 enterprises there. The Biyagama zone was established in 1986 and is located 25 kilometers away from Colombo in the Western Province. It is being developed in two phases. The first phase, now completed, covers an area of approximately 50 hectares and houses 43 enterprises. The third zone is situated 125 kilometers from Colombo in the southern port city of Galle and has an area of 91 hectares. It has only 11 enterprises under its administration.
The companies operating in these zones manufacture garments, cut and polish diamonds and manufacture jewelry, rubber- and leather-based products, ceramics, light engineering goods, artificial flowers and similar low value-added goods.
In 1992, Parliament declared the whole island a free trade zone. According to this law, any enterprise which promotes exports can apply to be governed by Board of Investment regulations, even if the factory is located outside the demarcated free trade zones. Approximately 75,000 workers are now employed in the three zones, and another 47,000 work in projects outside the zones that are registered with the BOI. About 100,000 workers are employed in a special garments factory program which operates under the same general rules as companies registered under the BOI.
Not all BOI-registered companies are foreign owned, but the largest ones are foreign. South Korea is the biggest investor, with 62 companies registered under the BOI; Hong Kong follows with 49 companies; Japan has 27. Germany has 21 companies and the United Kingdom 19.
Long hours, low wages
AAs would be expected, an essential attraction for companies investing in Sri Lanka under the BOI regulations is low labor costs. Anton Marcus, president of the Lanka Industrial, Transport and General Services Union, says workers are paid a meager salary which is just enough to survive on. The low wages, he says, force them to seek additional income by working overtime and sacrificing leave.
Vasanthi Dahanayaka is a 28-year-old employee of the Laws Garments and Knitting Factory, a jersey and t-shirt manufacturer which is owned by a Hong Kong-based company and located in the Katunayaka zone. Dahanayaka, who has worked in the same factory for seven years, complains that her monthly salary of $50 is totally inadequate. She earns an additional $30 a month by working overtime and holidays, and by foregoing vacation time. According to the BOI guidelines, a normal working week consists of nine hours per day from Monday to Friday, including a one-hour meal or rest break, and a short, six-and-a-half hour working day on Saturday.
Workers at other factories report comparable low pay and pressures to work overtime. Nirmali Gamage has worked for six years at the Hong Kong-owned Atlas Glove. Her monthly salary is $45, and she says she is compelled to work on all statutory holidays, including Poya days. (Poya day is a full moon day which is a religious holiday for Buddhists.) Ms. Jayawardana, general manager of Atlas, denies that Atlas employees are compelled to work on holidays. Only volunteers work holidays, she claims.
Sriya Ahangama, secretary of the Women’s Centre, a workers’ collective located near the Katunayake Free Trade Zone, contends that management purposely establishes mandatory production quotas above achievable limits, thereby forcing employees to work overtime without extra compensation.
Chandrika, a 23-year-old worker at the Sri Lankan-owned Katunayaka Garments in the Katunayake Zone, says she and her 1,800 co-workers must work on Poya days and public holidays, and are denied their legally-entitled leave. If a worker is absent for two or three days, the company immediately fires them, she says. The Katunayaka Garments employees are supposed to work 11-hour days and are given difficult production targets. If they do not reach the targets, they are kept beyond the scheduled number of hours without being paid overtime, Chandrika says.
Y.S. David, group personnel manager for Katunayaka Garments, denies that the company fires workers after being absent for two or three days, saying the company respects the stipulated 42-day leave quota. He acknowledges that the company sets production targets, but contends that workers are allowed to leave at the end of the day even if these have not been attained.
As inadequate as free trade zone wages may be, they are significantly higher than those of neighboring countries such as Vietnam and Bangladesh, says Tuli Coory, executive director (investments) of the BOI. But at Sri Lanka’s current wages, he says, investors prefer Sri Lanka because of the quality of work and adaptability of its workers.
Still, as is the case with overtime pay, zone companies appear to routinely deny workers many of the benefits to which they are statutorily entitled. BOI guidelines require, for example, that companies issue workers a letter of appointment which constitutes a written contract embodying terms and conditions of service. Dahanayaka and many other zone workers say they have not received letters of appointment — meaning they have no job security, she says.
While an employee is working with a company, both the employer and employee make contributions to an Employees Provident Fund (EPF), and the employer alone contributes to an Employees Trust Fund (ETF). Dahanayaka says she has no idea whether her EPF or ETF is being deposited. And her case is typical. Coory says that BOI has developed a system to check up on the employer contributions, which are supposed to be deposited in the Central Bank of Sri Lanka.
WWorkplace safety and difficult working conditions are persistent problems in the zone factories as well. Gamage works in the silk screening section of the Atlas Gloves factory. She and her co-workers work with paints, solvents and reducing agents. Many workers in this section have suffered burns or developed skin diseases. A number of workers say they have complained about working conditions to management, but no action has been taken. Atlas Glove’s Jayawardana claims that no worker from the silk screening section has complained to her of burns or skin diseases. She says that, except for paints, no chemicals are used in this section and that it has proper ventilation and is fitted with exhaust fans. When spray guns are used for painting, workers are given masks, she adds.
At the Sri Lanka factory of Toroids International, a Swedish-British multinational, about 200 women workers manufacture transformers for electrical equipments. The workers wrap copper wires around a steel core, a task that leaves the employees exhausted at the end of a day’s work, according to Swarna Liyanage, a Toroids worker. A normal shift is eight hours, but workers often do double shifts, working 16 hours straight. Asked about the length and difficulty of the overtime days, Caryl Swahn, director of Toroids, says workers have demanded overtime work. And now, she says, new machines are being introduced to do the most difficult work.
Trampling on worker rights
F Free trade zone workers who try to organize to improve working conditions must overcome both their employer’s refusal to recognize genuine unions and the omnipresent company-union structure.
Sri Lankan law provides that seven people can join together and form a trade union. Once registered with the Department of Labor, factory-level branch unions, for the same and different employers, are permitted to join together to form a single union for a common trade. The law also permits trade unions to employ full-time officers. Although BOI officials and the government contend that the free trade zones are subject to normal labor law, Jayanthi Dandeniya, founder of the Kalape Api (We Workers of the Zone) organization, says that none of the trade union rights are respected in zone factories and that zone companies refuse to recognize national unions.
Instead, zone unions are, even according to the BOI, “in-house” unions, known as joint councils, which cannot link up with national unions. Leaders or representatives for the joint councils are elected with the blessing of management. Joint council representatives never get a chance to interact with other trade unionists, and thereby gain experience in collective bargaining or knowledge of trade union regulations. In almost every case, Dandeniya says, joint council leaders end up as obedient servants of management who do not even bother to communicate the substance of their discussions with management to their members.
On the rare occasion when a joint council operates independently and in the interest of workers, Dandeniya says, the company dismantles it and fires its leaders. In recent years, she says, this has happened at Fastner, Floral Greens Lanka and Terrylanka of the Katunayaka zone.
Finally, free trade zone workers do not have the practical opportunity to appeal to the Labor Department for redress of their grievances. Labor disputes are first referred to the BOI. BOI officials always resolve the disputes favorably to management, Dandeniya charges.
Workers who forge ahead despite these organizational barriers must overcome yet another set of hurdles: the police and free trade zone security forces intervene in zone labor disputes on behalf of management regularly and brutally. Even the former inspector general of police has acknowledged that the Sri Lankan police feel that they are on the side of the employers. Recently, the government has made matters worse by establishing a special Central Police force for rapid deployment in labor disputes.
The new Central Police introduced themselves on December 30, 1994, when members of the force attacked and injured several workers from Korea-Ceylon Foot Wear Company, located in the Katunayaka zone. There had been unrest at the factory for several months, following an incident in which a worker died when a machine crushed his head. On December 30, the workers went on strike, but remained in plant. According to E.M.P. Ekanayake, an employee of the factory, the special force entered the factory premises at about 5 p.m. When Central Police officers asked the male workers to leave the factory, the women workers came forward to protect the men. Suddenly, the police closed all the doors and switched off the lights. They threw tear gas canisters at the workers. Then the police entered, assaulting and shooting workers. Trying to lift a woman who had fallen, Ekanayaka was shot in the leg. He reports seeing a number of police officers kicking a female worker who had fallen on the ground.
Ekanayaka remains in the hospital with his left leg in a full cast. The police arrested five workers, who are now out on bail. The police admit they used tear gas, but denied shooting at the Korea-Ceylon Foot Wear workers.
Incidents such as the Korea-Ceylon Foot Wear assault, while not rare, are infrequent. The structure of company unions and the atmosphere of intimidation sharply limits collective protests, so police do not usually have occasion to make their presence felt. However, when police do intervene in labor disputes, their actions are typically brutal. According to Freddie Gamage, coordinator of the Organization for Human Rights in Sri Lanka, a list of recent police violations of workers’ rights includes the following:
• In 1989, Floral Greens Lanka union leader H.M. Ranjith and his legal adviser Lionel Fernando suddenly disappeared. Strong evidence, including statements from a current deputy minister, suggests that police officials from the Katunayake Police Station arrested these two and killed them on the instructions of Priyani Paldano, personnel manager of Floral Greens Lanka.
• On November 27, 1992, police assaulted and dispersed representatives from several organizations who were distributing leaflets in front of the main entrance of the Katunayake free trade zone. These organizers were the first ever to distribute leaflets in the Katunayake zone.
• On December 14, 1992, Katunayake police brutally assaulted the mostly female workforce of the Smart Shirts Factory as they assembled near the factory premises. When the injured workers were admitted to the Negombo Base hospital, police asked the doctors to discharge them before they had recovered. When Britto Fernando, a municipal councillor and organizer of Kalape Api, went to see the workers in the hospital, he was arrested.
• In 1993, when Atlas Gloves workers picketed near their factory, police broke up the protest and Britto Fernando was again arrested.
• In August 1994, workers at the Degulanka factory in the Katunayaka zone launched a protest campaign, with two workers climbing on to a water tank and starting a fast. Police quickly intervened, assaulted the workers and broke up the protest.
In the face of police violence, intimidation, company unions and other obstacles, prospects for Sri Lankan workers in free trade zones improving their level of pay and working conditions do not appear bright. But, with the help of groups like Kalape Api and the Women’s Centre, workers continue nonetheless to organize in search of a better day.