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Questions to ask about workers’ rights under CPEC

Iftikhar AhmadUpdated September 18, 2017

Foresight is overestimated. What we presumably lack is hindsight. A lack of hindsight may lead us towards right-less employment growth under the China Pakistan Economic Corridor.

There is no doubt that the CPEC investment will stimulate GDP growth and lead to employment generation in the country, even though there are no clear estimates of how much.

In recent years the number of Pakistani workers finding employment abroad has decreased leading to lower remittances. Once the CPEC succeeds, it is very likely that it would signal Pakistan as a viable and attractive investment destination and could help attract further investments.

But growth under the CPEC leads to multiple questions that need to be addressed on a priority basis.


What kind of employment can we expect to be created under the various CPEC projects? Is there an agreement on percentage of new-project-based-jobs that will go to each country? If yes, then, how many estimated jobs (skilled and unskilled) would go to Pakistan? And whose labour laws shall be applicable in all these projects?

In all planned economic zones (currently 9 zones), will Export Processing Zones (EPZs) rules or Special Economic Zones (SEZs) rules be applicable?

Pakistan has experienced jobless growth for decades. Let’s not get into the quagmire of right-less employment growth under CPEC

It is relevant to mention here that EPZs are exempt from the general labour laws of the country while Special Economic Zones Act 2012 requires implementation of general labour laws.

Even with that, what is the guarantee that the government will not formulate new rules exempting these SEZs from current labour legislation? What is the guarantee that the delegated powers (by the Board of Investment to the Provincial SEZ Authorities) under the SEZs Act will not be abused in a way to frustrate worker rights?

Will the government also exempt SEZs from application of general labour laws? Will government place these industrial parks under the Essential Services Maintenance Act to curb trade union activities?

Furthermore, will more Chinese investment lead to increased casualisation of the workforce and decreased trade unionism (which is already at the abysmal level of 3pc of the employed workforce)? And will the Chinese companies accept a higher cost of doing business in Pakistan than in China?

For example, the overtime compensation rate is 150pc of the normal wage rate in China while it is 200pc in Pakistan. The prescribed annual leave is five days in China during the first 10 years of service while it is 14 days in Pakistan after the first year of service.

These are the kind of questions that the government should respond to.

As a nation, we should not get lost in the rhetoric of development that has been a part of CPEC long before its inception and we should not allow the development strategy to undermine and eclipse workers’ rights. Goal eight of the Sustainable Development Goals requires ‘full and productive employment and decent work for all’.

This goal is achievable only if workers engaged in all CPEC related projects are given their right to organise, to bargain collectively, to strike, be free of bonded and child labour, and free of all kinds of discriminatory treatment in employment and occupation.

If the adage, ‘past behaviour is the best predictor of future behaviour’ has any merit, we should look at Chinese investments around the world and the situation of workers’ rights there.

There have been instances of “tense labour relations, hostile attitude by Chinese employers toward trade unions, violation of workers’ rights, poor working conditions, and unfair labour practices” in the Chinese firms operating in Africa.

If most of the workers, especially the support staff, are engaged as casual workers they will not be able to benefit from legal guarantees of minimum wage, social security and other allowances.

Similarly, while the CPEC will definitely create employment opportunities for millions, it is the State’s responsibility to ensure this work ‘decent’ and free of all kinds of exploitation as required under the 1973 Constitution of Pakistan.

The prerogative to protect workers’ rights in the country should be part of agreements and MoUs being concluded with China.

It is the job of negotiators from Pakistan to include labour exceptions in the investment agreements which means that certain sectors and subject matter (such as protection and promotion of workers’ rights) can be excluded by the overall investment protection guaranteed to Chinese investors in order to allow the State to meet its public policy objectives.

Pakistan has experienced jobless growth for decades. Let’s not get into the quagmire of right-less employment growth under the CPEC.

The writer is currently working as a Labour Specialist with the WageIndicator Foundation

Published in Dawn, The Business and Finance Weekly, September 18th, 2017


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