Labour
administration
As indicated above, the vast majority of EPZs
are covered by the national labour laws of the country and, given that the
factory premises were purpose built and modern, the physical conditions of
work inside the zones are frequently better than those available outside.
However, labour administration inside the zones is inconsistent. In the zone
visits conducted during the course of the Action Programme it was made clear
that the Department of Labour is generally not equipped to monitor the zones
effectively. There are simply not enough labour relations and health and safety
officials, transport and other resources to extend their activities to the
zones. In addition, the Department of Labour in many cases has decided that
the zones are a low priority compared to other, more problematic sectors of
the economy. Many zones have their own systems of labour administration, often
staffed by ex-officials of the Department of Labour working in cooperation
with the Department. In some cases the Department of Labour provides training
and technical standards to the zone administrators in order to ensure that
their activity conforms to national standards.
Bangladesh provides a typical example of the situation described above. The study on EPZs conducted for the ILO concluded: "Given the current state of labour administration in Bangladesh, the above-mentioned statutory conditions of employment of labour are hardly enforced in the private manufacturing sector, particularly in the case of small and medium-sized units. On the other hand, due to the very nature of operation of EPZ units and the quality of oversight provided by the BEPZA, these stipulated non-wage entitlements are essentially ensured for the workers in the zones. Rather, a number of large EPZ enterprises offer a number of supplementary benefits to their workers -- remaining cognizant of the fact that such additional costs would be recouped through productivity gains."
Despite the various attempts to ensure that zones are covered by some form of labour administration, the ILO officials on mission were regularly made aware, by zone administrators, investors and workers, of a series of abuses or infringements of the law which were going unchecked. These fell into the following categories:
Zone administrators were concerned with this situation because of the potential for conflict and controversy, but also because such delinquent enterprises were often abusing the other privileges of the zone regime such as the tax and duty concessions. However, they rarely admonish such enterprises for fear of driving them out and losing investment and jobs. Those enterprises that do observe the regulations object to the unfair competition that such transgressions represent, in that bad enterprises use them to achieve a short-term cost advantage. In Sri Lanka the Department of Labour is responsible for the administration and enforcement of all labour laws. In addition, the Board of Investment has an Industrial Relations Department in each zone. An ILO mission studied the work of one such department and verified that they do indeed conduct factory visits which cover issues such as wages, holidays, night work, benefits, social security deductions, ventilation and hours of work. Zone investors interviewed in the course of the same mission, however, alleged that the Industrial Relations Department was not sufficiently strict with employers, particularly regarding non-payment of Employees' Provident Fund and Employees' Trust Fund contributions.