The Hindu Business Line : Corporate exploitation of women

The Oxfam report reveals how the giant retail outfits in the West have benefited from the globalisation of production to the detriment of the workers, especially women, in developing countries.

THE Confederation of Indian Industries' (CII) move — coincident with the International Women's Day on March 8 — to constitute a committee of senior industry members to sensitise corporates to gender equality and study various aspects of the economic empowerment of women came soon after the release of an Oxfam report titled "Trading Away Our Rights: Women working in global supply chains", which brings into stark relief the plight of women working in garment and food production industries.

The former, essentially an expression of intent, received much coverage in the Indian media while the latter, an assemblage of researched facts, did not. The Oxfam report, based on the experiences of workers in 12 countries — Bangladesh, Chile, China, Colombia, Honduras, Kenya, Morocco, Sri Lanka, South Africa, Thailand, the UK and the US — reveals how the giant retail outfits in the West have benefited from the globalisation of production to the detriment of the workers, especially women, in developing countries.

Tariff reductions have substantially brought down trading costs and resulted in the proliferation of export processing zones (EPZs) — from 80 in 25 countries to 3,000 in 116 countries — over the last 30 years. The EPZs compete with those in other countries and even their own to offer incentives to investors. However, according to the Oxfam report, labour flexibility and workers' rights, among other issues, have been degraded or lost in the process.

It cites a survey by the International Confederation of Free Trade Unions which says that the EPZ workers in at least 16 countries have fewer trade union rights than those outside.

Massive retail companies based in the developed world press into service computer and Internet technologies to communicate across extended supply lines and deploy just-in-time techniques — affecting producers who, in turn, attempt to protect their margins by pruning labour costs.

In this context, Oxfam quotes the World Bank as saying: "Local firms may not capture the benefit of the transfer technology and increased productivity through networks if multinationals have a wide choice of production locations and a monopolist position in the purchase of supplies (one buyer choosing among many producers). In this situation, competition among suppliers may drive prices down and the benefits of local firms' productivity improvements will accrue to the multinational. Buyers use devices such as the Internet and reverse auctions to cut prices charged by the suppliers. The suppliers compete amongst themselves to offer the cheapest rates to the buyers..."

All this impacts the workforce. In Chile, for instance, 75 per cent of the women in the agricultural sector are hired on a temporary basis to pick fruit. They put in more than 60 hours a week during the season — but one in three still earns below the minimum wage. And then again, fewer than half the women employed in the Bangladesh textile and garment export sector have a contract protecting their interests. The majority get no maternity or health coverage.

In China's Guangdong province, one of the fastest growing industrial areas in the world, young women put in 150 hours of overtime every month in the garment factories, but 60 per cent of them have no written contract and 90 per cent no access to social insurance.

A look at the beneficiaries of this system. Oxfam illustrates by examining the operations of El Corte Ingles, the retail company that controls 90 per cent of the department stores in Spain. The company has more than doubled its pre-tax profits since 1997. Iduyco, a sourcing company, procured over 12 billion items from around the world for El Corte Ingles annually. It uses 11 small- to medium-sized producers in Morocco to produce garments for El Corte and other Spanish retailers. These factories employ 6,500 women to produce clothes. Over the last three years, the factories have reported that the prices paid to them have fallen by roughly 30 per cent a year. However, in the same period, the lead time for supplying the goods has been reduced from 14 days to between five and seven days — among the shortest in the industry.

Many women workers are on revolving three-month contracts which give them no security and few rights. In the busy season, they have to put in overtime of even 16 hours a day and, more often than not, they are not paid in full. Oxfam observes that "to attribute such fundamental shifts within economic and social relations to the subjective moral shortfalls of a few CEOs and government leaders is to blind oneself to reality" and goes on to state that "no single company or government can make the changes needed to ensure that poor people, and especially women, benefit from jobs in global supply chains."

Be that as it may, it should prove amusing to see how the captains of industry, who have been vigorous in their defence of the off-shoring of low-end IT-enabled assignments to India on the basis of labour arbitrage, will now respond to the exploitation of women workers in developing countries by many of the retail giants of the developed world — a practice which too has its underpinnings in the same arbitrage.