Introduction

Some 27 million people currently work in some 850 export processing zones (EPZs) worldwide, and an increasing number of governments are considering establishing EPZs in their countries. Foreign investment is a crucial component of zone investment, and governments are increasingly competing with each other in offering generous incentives and privileges to attract investors and entrepreneurs. Zone-operating countries hope that EPZs will contribute to overall economic development and employment creation. However, they often encounter social and labour problems in the process, particularly in situations where investors have been allowed to depart from basic labour standards. Given the widespread lack of adequate and appropriate institutions for labour-management relations in EPZs, social and labour issues can become matters of major concern.

The ILO has been concerned with social and labour issues in EPZs since the early 1980s. It started publishing working papers and articles on the subject in 1981, with some 62 appearing over the next 15 years, including two recent publications on EPZs in Central America.⁽¹⁾ The topic was dealt with by numerous ILO bodies and meetings, particularly those concerned with multinational enterprises and with the textile, clothing and footwear industries.

The Programme and Budget for 1996-97 made provision for an Action Programme on Social and Labour Issues in Export Processing Zones. Paragraphs 80.10 and 80.11 stated: "The long-term goal of action in this field is twofold: the creation of an industrial relations climate conducive to attracting and expanding investment in EPZs; and the operation of these zones in such a way that they contribute to the development of an environment in which foreign and domestic investments yield positive results for all those involved directly and indirectly by the activities of EPZs. This requires respect for basic international labour standards in EPZs and the establishment of tripartite national machinery to ensure social dialogue concerning their operation. As a first step towards the achievement of these objectives, a tripartite meeting of EPZ-operating countries will be held to discuss the problems which have been identified and possible ways of addressing them."

The International Tripartite Meeting of Export Processing Zone-Operating Countries will be held in Geneva from 28 September to 2 October 1998. The agenda of the meeting, as determined by the Governing Body, is :

1. Evaluation of the performance of EPZs from a social, labour and economic perspective.

2. Identification of priorities for improving social and labour relations in EPZs.

3. Guidelines for improved social and labour relations in EPZs.

This report serves as a technical background paper for that meeting.

The approach taken in conducting the Action Programme has been to identify the most effective and innovative practices on the part of government agencies, employers and workers, and to draw conclusions and recommendations from them based on concrete experience.

The material for this report and the other outputs of the Action Programme was collected in the course of missions to Bangladesh, China, Costa Rica, Dominican Republic, Honduras, Ireland, Madagascar, Malaysia, Mauritius, Mexico, Morocco, the Philippines, Singapore, Sri Lanka, Tunisia and the United States. Information was also collected on southern Africa and on the Caribbean. The enterprises studied were mainly in the textile, clothing and footwear, electrical and electronics sectors, and ranged from local family-run enterprises to giant multinationals.

In the course of the Action Programme, support was given to a number of ILO-organized seminars and workshops on EPZs, including a tripartite Consultation on Export Processing Zones and Export Industries in the Caribbean held in Belize in October 1997, and the Subregional Tripartite Seminar for Countries of Central America, Panama and the Dominican Republic on Social and Labour Issues related to Export Processing Zones held in San José, Costa Rica, in November 1997. Outputs of the Action Programme include a manual on how to improve labour relations and human resource management in EPZs, a guide on improving the situation of women workers, a manual on organizing workers, a homepage on the Internet, numerous working papers and information brochures and a book on the impact of globalization on social and labour conditions in EPZs.