INTERNATIONALLY-RECOGNIZED CORE LABOUR STANDARDS IN FIJI

REPORT FOR THE WTO GENERAL COUNCIL REVIEW OF THE TRADE POLICIES OF FIJI

International Confederation of Free Trade Unions
(Geneva, 9-10 April 1997)

Introduction
EXECUTIVE SUMMARY
INTERNATIONALLY-RECOGNIZED CORE LABOUR STANDARDS IN BENIN
I. Freedom of Association and the Right to Collective Bargaining
II. Discrimination and Equal Remuneration
III. Child Labour
IV. Forced Labour

Introduction

In December 1996, the Ministerial Summit of the World Trade Organization (WTO) in Singapore made the statement that, "We renew our commitment to the observance of internationally recognized core labour standards." Member states of the WTO, the vast majority of which are also members of the International Labour Organization (ILO), should therefore ratify and apply core labour standards. Failure to do so has adverse consequences for the working women and men of countries where those standards are not observed and undermines the contribution that increased trade through the opening of markets can make to employment and living standards in other countries. In addition abuse of basic labour standards undermines the credibility of a rule-based multilateral trading system.

One method by which the WTO, in cooperation with the ILO, can contribute to reinforcing the Singapore commitment to internationally recognized core labour standards is through the examination of the effects of non-observance in the context of the regular country trade policy reviews. Labour standards should be considered among the trade-related issues which are discussed by the WTO General Council when it undertakes a debate of the trade policies of WTO members.

The first such trade policy review since the Singapore WTO Ministerial Summit will take place on 9-10 April 1997. The country under discussion will be Fiji. As its own contribution to the follow-up of the Singapore decision, the International Confederation of Free Trade Unions (ICFTU) has prepared this assessment of the situation with regard to internationally recognized core labour standards in Fiji. This report, prepared in conjunction with the ICFTU affiliate the Fiji Trades Union Congress (FTUC), considers in turn each of the core labour standards, describing the existing situation in Fiji and identifying the backward and forward links between international trade and the respect of core labour standards in Fiji.

EXECUTIVE SUMMARY

The Fijian government’s violation of core labour standards is an important part of their international trade and investment strategy. Fiji has ratified one of the main ILO Conventions on trade union rights. It has, however, been subject to strong criticism by the ILO and in March 1997, the ILO began consideration of fresh evidence of non-respect of freedom of association in Fiji. Fiji’s violation of trade union rights has serious repercussions in the export sector where many workers are deprived of their fundamental rights and consequently have low wages and poor working conditions. Employers have forced down labour costs, which has been partly responsible for the rapid expansion of Fiji’s manufactured export sector and for shifts in production from other developing countries to Fiji. The government has further argued that it cannot improve labour rights as Fiji needs a cheap labour force to attract foreign direct investment and so increase exports.

Fiji has not ratified either of the main ILO Conventions on discrimination. There is extensive evidence of discrimination, both of a gender and racially-based nature. In the urban sector, discrimination against women is partly responsible for their readiness to accept low wages and poor working conditions in tax free zones, while the resultant low labour costs contribute to Fiji’s export drive. In the rural sector, which accounts for over 40% of Fiji’s exports, the leases of tenant farmers are subject to occasional renewal, resulting in great insecurity for Indo-Fijians. They are faced with the risk of losing their livelihood or being resettled elsewhere against their wishes without any guarantee of compensation.

Fiji has not ratified the main ILO Convention on child labour, which is a growing problem. In general, child labour is concentrated in the small-scale sector including the agricultural sector, which is highly export-dependent.

Fiji has ratified the main ILO Conventions on forced labour. Forced labour in the form of bonded labour, slavery or the abuse of prison work systems is not a problem in Fiji. However the ICFTU and the FTUC are concerned that aspects of a contract labour system for workers from the People’s Republic of China may have elements of compulsion and should be reviewed by the Fiji government and the ILO.

INTERNATIONALLY-RECOGNIZED CORE LABOUR STANDARDS IN FIJI

I. Freedom of Association and the Right to Collective Bargaining

Fiji has ratified one of the main ILO Conventions on trade union rights, Convention No. 98. It has, however, been subject to strong criticism by the ILO in the past for its non-respect of Convention No. 98. In March 1997, a new complaint was introduced at the ILO. Fiji’s violation of trade union rights has serious repercussions in the export sector where many workers are deprived of their fundamental rights and consequently have artificially low wages and poor working conditions. The consequent reduction in labour costs has been partly responsible for shifts in production of various exported goods from other developing countries to Fiji.

Fiji ratified ILO Convention No. 98 (1949), the Right to Organize and Collective Bargaining Convention, in 1974. However, it has not ratified ILO Convention No. 87 (1948), the Freedom of Association and Protection of the Right to Organize Convention.

Apart from restrictions to union rights in government employment, the right to freedom of association was generally respected in Fiji prior to the two coup d-états of 1987. These induced a severe recession, partly due to the departure of some 30,000 Indo-Fijian professionals and their families, during which Fiji’s gross domestic product (GDP) contracted by 11%. In an effort to boost economic recovery, the government put in place a new industrial policy in the late 1980s which introduced tax-free zones to boost exports and inward foreign direct investment. This was coupled with a failure to enforce trade union rights provisions in existing labour law, exacerbated in 1991 by amendments to the labour law to further restrict trade union activities. The objective was to create a cheap workforce deprived of any say over working conditions and, thus, stimulate low-cost production for exporters. This resulted in a tripling in foreign investment, which came from a variety of countries including Australia, New Zealand, the People’s Republic of China, Singapore and Hong Kong, and a massive expansion in export processing in Fiji. By 1993, the export promotion scheme was employing over 12,000 people or 13% of the country’s wage-earning workforce.

While the law of Fiji prohibits discrimination against workers for union activities, it does not mandate that workers fired for their union activities be reinstated. This has particularly serious repercussions in the export sector where many workers are deprived of their fundamental rights. Even though tax free zones are subject to the same law as the rest of the country, in practice it has been extremely hard to organize the workers there. In various companies such as Footwear International, Niranjan Autoport, Lotus Garments Ltd, Apparels Fiji Ltd, Justcham, Emperor Gold Mining Co. Ltd and Hennessy, unions were formed but not accorded recognition by the employers. The workers were either sacked or made redundant. In some cases, the matters remain awaiting court decisions.

The 1991 labour laws worsened the situation for workers. In summary, they comprised a series of measures designed to weaken trade unions. New restrictions were introduced on the right to strike and on recognition of trade unions, legal check-off facilities were eliminated and certain categories of workers were excluded from union membership rights. In particular, it was made illegal to start an industrial dispute in order to achieve recognition of a union in a workplace, which meant that employers were able to dismiss would-be union members without any possibility for strike action to support their claim to freedom of association. The new laws encouraged the organization of rival unions to those affiliated to the FTUC, primarily for ethnic Fijians. These rival unions are in effect sponsored by allies of the government with the aim of disrupting the ability of the FTUC and its affiliates to provide effective representation for all workers, regardless of ethnic origins.

The 1991 labour laws were strongly criticized by the ILO Committee on Freedom of Association, which in 1992 stated in its formal Conclusions responding to the complaint against the government of Fiji submitted by the ICFTU and the Public Services International (PSI) that the government should take the necessary steps to bring its legislation into line with the internationally-recognized standards on freedom of association.

Despite the ILO’s recommendations, labour law has not been improved since 1992. In 1994 the government introduced selective and minor amendments to the 1991 laws, leaving the most serious violations of core labour standards still in place. Although a tripartite body, including the Labour Minister and representatives of the FTUC, worked for some four years and reached a consensus on labour law reform, the Cabinet formally decided in February 1997 to ignore its recommendations. In March 1997, the ICFTU introduced a new complaint at the ILO concerning Fiji’s violation of trade union rights.

The overall effect of Fiji’s failure to respect international conventions on freedom of association is clear by looking at the relative shares of national income distribution. The share of wages in GDP declined from a high point of 54% in 1983 to 37% in 1993, while capital’s share rose from 38% to 50% over that period. This is a massive change in the relative distribution of income over such a short time.

The effect can further be gauged by looking at the main export sector of manufactured garments, which has undergone a sustained expansion due to the stimulus provided by low labour costs in the tax-free zones. Manufactured garments account for 20-25% of Fiji’s exports. Most garment sector workers are female. Wages are relatively low in this sector, conditions of employment poor and there is no security of employment. Sexual harassment, denial of maternity leave and denial of annual leave are typical features of working conditions in the tax free zones. Numerous companies have avoided payment of contributions to the supposedly compulsory superannuation scheme.

There is a shortage of recent evidence but the most comprehensive study so far carried out, dating from 1990, showed that while many factories required excessively long hours (sometimes for 24 hours at a time), 81% of the factories did not pay overtime rates, in violation of Fiji’s Employment Act. Work was frequently required during weekends and public holidays without overtime pay. The same survey found that the average wage was at most Fiji $1200, compared to the official poverty line of $3000 for a family of four. Large-scale violation of health and safety and sanitary legislation was prevalent, such as inadequate ventilation and sanitary facilities. Instant dismissals, random strip searches of women, clocking in and out when visiting toilets and refusal of sick pay or annual leave pay were all found in the sector.

A significant proportion of the workforce in the garment sector are overseas contract workers. In 1997, some 2,000 out of the 12,000 workers in Fiji’s garment industry are contract workers, many of whom are illegally in the country. Most are from the People’s Republic of China, with two-year contracts through agencies in China. More than half their pay is generally transferred to blocked accounts in China by management to pay the "employment agency" fee. The workers live on the premises under control and surveillance of the employers and barely leave the site. The ICFTU and the FTUC are concerned that this system could contravene Fiji’s laws against forced labour (see below).

In conclusion, the violation of fundamental workers’ rights in the area of freedom of association is clearly an important factor in the cost of Fiji’s exports and so has a significant effect on Fiji’s position in international trade. By 1993, the tax free export sector contributed US$ 75 million out of Fiji’s total GDP of US $885 million. The scale of the activities in Fiji’s export sector has certainly been responsible for shifts in production of various exported goods from other developing countries - notably the Cook Islands - to Fiji. A substantial proportion of the industry imports materials for basic assembly within the country, without significant backward linkages into the domestic Fijian economy.

There also exists a converse relationship between trade and workers’ rights, in that the government has argued to the FTUC that it cannot improve labour law as Fiji needs a cheap labour force to attract foreign direct investment and so increase exports.

II. Discrimination and Equal Remuneration

Fiji has not ratified either of the main ILO Conventions in this area. There is extensive evidence of discrimination, both of a gender and racially-based nature. In the export sector, much of this is linked to the employment and exploitation of women, which provides an additional factor reducing the costs of Fiji’s exports.

Fiji has ratified neither ILO Convention No. 100 (1951), Equal Remuneration, nor ILO Convention No. 111 (1958), Discrimination (Employment and Occupation).

Women make up about a quarter of the paid workforce. Despite constitutional provisions prohibiting discrimination, women are generally paid less than men, even for similar jobs. Discrimination is also evident at the moment of recruitment, which leads women workers to be concentrated in lower paid jobs.

This discrepancy is especially notable in the garment industry. Most of the garment industry workers are women and this sector today accounts for over 30% of women’s employment, up from 10% in the early 1980s. Women workers are therefore especially affected by the poor wages and working conditions in this sector detailed in Section I above.

Discrimination also takes place on a racial basis. The population of Fiji is divided roughly evenly between indigenous Fijians and Indo-Fijians, who together make up 96% of the population. In the rural sector - of great significance to Fiji’s trading position, as sugar accounts for some 35-40% of Fiji’s exports - Indo-Fijians face discrimination resulting from the land tenure arrangements, instituted by the British colonial administration and little changed since then. Indigenous Fijians own about 83% of the land, the state another 8% and non-ethnic Fijians the remaining 9%. Indo-Fijians therefore have to lease land from the ethnic Fijian landowners and work as cash crop farmers. Their leases are subject to occasional renewal, which results in great insecurity for Indo-Fijians. They are faced with the risk of losing their livelihood or being resettled elsewhere against their wishes without any guarantee of compensation.

A degree of racial discrimination is also evident in the urban sector, although there is no obvious link to trade. In the private sector, commercial activities are predominantly undertaken by Indo-Fijians. However, this would not appear to correlate with any discrimination. In the public sector, the government’s use of "affirmative action" policy to advance ethnic Fijians has resulted in discrimination against Indo-Fijians. For example, their promotion possibilities are much reduced and Indo-Fijians now represent only 10% of the highest levels of the civil service.

In summary, there are worrying links between international trade and discrimination in Fiji. In the urban sector, discrimination against women is partly responsible for their readiness to accept the low wages and poor working conditions in tax free zones, while in turn the resultant low labour costs contribute to Fiji’s export position. In the rural sector, tenant farmers are faced with extremely insecure employment as a result of the land tenure system. It is not clear, however, whether there is any effect resulting from discrimination on the prices of Fiji’s exports of sugar.

III. Child Labour

Fiji has not ratified the main ILO Convention in this area and there is evidence that child labour is a growing problem. In general, child labour appears to be concentrated in the small-scale sector and there are some indications of child labour in the agricultural sector, which is highly export-dependent.

Fiji has not ratified ILO Convention No. 138 (1973), the Minimum Age Convention. The law of Fiji states that children under the age of 12 may not be employed in any capacity and that no-one under the age of 17 may be employed in industry or work with machinery. School attendance is not mandatory and UNESCO figures show that the gross school enrolment ratio stood at 64% in 1992.

The Labour Department of Fiji stated in February 1997 that they were aware of an increased recourse to child labour in the country. There are few studies of child labour as such, but the dropout rate in schools provides a reliable proxy indicator for child labour. This would indicate that some 20-30,000 children are almost certainly engaged in child labour. The financial position and social status of parents and large class sizes are factors which have been identified by the FTUC as accounting for the increase in child labour in Fiji.

Two main forms of child labour are apparent in Fiji. The first is homeless children working in the informal sector. The second is child labour undertaken by family members working on family farms or businesses. The second category includes many in the rural sector who are engaged in some degree of export production, primarily sugar.

International trade has a strong link with poverty in Fiji due to the inequitable distribution of the benefits of exports, which as indicated above is due in part to the lack of trade union rights, resulting in low levels of wages, and in part to gender and racial discrimination. There is therefore a causative link between trade and child labour in Fiji, in view of the important role of poverty in explaining the phenomenon of child labour. Increased trade, in the absence of active measures to eliminate child labour, has been associated with an increase in the number of children at work. However, the opposite relationship probably does not apply, in that the scale of child labour is unlikely to be such as to cause a large-scale reduction in the export costs of Fiji.

IV. Forced Labour

Fiji has ratified the main ILO Conventions in this area. There is no evidence of forced labour in Fiji in its most common forms, but certain aspects of child labour and the treatment of overseas contract workers have elements of compulsion which require attention.

Fiji ratified ILO Convention No. 29 (1930), the Forced Labour Convention in 1972 and ILO Convention No. 105 (1957), Abolition of Forced Labour in 1974. Forced labour is specifically prohibited in the Constitution of Fiji.

Forced labour in the form of bonded labour, slavery or the abuse of prison work systems is not a problem in Fiji. However the ICFTU and the FTUC are concerned that aspects of a contract labour system for workers from the People’s Republic of China may have elements of compulsion and should be reviewed by the Fiji government and the ILO. It should furthermore be noted that the ILO Committee of Experts on the Application of Conventions and Recommendations has suggested that under some circumstances child labour could amount, in effect, to forced labour.

CONCLUSIONS

The Fijian government’s violation of core labour standards is an important part of their international trade and investment strategy. This is in direct contradiction to the commitments accepted by Fiji at the Singapore WTO Ministerial Meeting and its obligations as a member of the ILO. Not only does it deprive Fijian working women and men of a fair share of the benefits of trade and investment liberalization, it also undermines the competitive position of other countries and the credibility of a rule-based multilateral market system. The WTO should therefore call upon the Fiji government to respect the Singapore commitment and introduce the long-promised revisions to labour law needed to bring it into line with international obligations, requiring important changes in such areas as the legality of industrial disputes in cases of trade union recognition. The WTO should also request the ILO to intensify its work with the Fiji government and provide a report to the WTO Council on the occasion of the next trade policy review.

References

Fiji Constitution Review Commission (CRC), Report of the Fiji CRC: Towards a United Future, 1996.

Fiji Trades Union Congress (FTUC), various reports, including International Trade, Investment and Competitiveness: A Case Study of Fiji, 1995; Pay and Working Conditions of Garment Workers in Fiji’s Tax Free Factories, 1990; Structural Adjustment and Women, 1992.

ICFTU, Annual Survey of Violations of Trade Union Rights, 1993, 1994, 1995, 1996 and (forthcoming) 1997 editions.

ILO, Lists of Ratifications by Convention and by country, 1996.

ILO, 284^th Report of the Committee on Freedom of Association, 1992.

International Textile, Garment and Leather Workers’ Federation (ITGLWF), various reports.

Public Services International (PSI), Country Study: Fiji, 1995.

US Department of State, Fiji Facts, 1997.

US Department of State, Report on Human Rights Practices for 1996, 1997.