KARACHI: The chairmen, office bearers and representatives of seven Industrial Town Associations viz.: Korangi, Landhi, SITE, Federal B Area, North Karachi, SITE Superhighway, Bin Qasim as well as value-added Textile Export Associations: PHMA, PRGMEA, PAKSEA & PCFA, have expressed strong reservations on the draft labour policy, prepared by the Government of Sindh, without their consultation.

A joint meeting of these associations was held to discuss the draft Labour Policy (A Framework of Industrial Relations), Government of Sindh and recommendations of 1st Sindh Tripartite Labour Conference held on 11th December 2017 in Karachi. Representatives of these Associations including president of Korangi Association of Trade & Industry Tariq Malik, president SITE Association & Pakistan Hosiery Manufacturers & Exporters Association’s chief coordinator Jawed Bilwani, president of Federal B Area Association Babar Khan, president Landhi Association Islamuddin Zafar, president SITE Super Highway Association Dr Shaikh Kaiser Waheed Magoon, president North Karachi Association Shahid Sabir, president Bin Qasim Association Salim Dada, Pakistan Readymade Garments Manufacturers and Exporters Association’s chairman Shaikh Shafiq, Pakistan Cotton Fashion Exporters Association’s ex-chairman Khawaja Usman and former chairman of Pakistan Knitwear and Sweaters Exporters Association Rafiq Godil participated.

The Associations unanimously rejected the recommendations of first Sindh Tripartite Labour Conference and conveyed strong reservations on various contents of draft Sindh Labour Policy which was prepared one-sidedly without consultation of all stakeholders in Karachi. They said the industries of Karachi hold majority share in employment generation as well as largest contribution in revenue generation of Sindh. They demanded the Sindh Government to immediately take all stakeholder Associations on board instead of only few persons.

The Association strongly rejected the recommendation to enhance minimum wages up to Rs 25000 per month and strongly felt that instead of increasing the minimum wages, Government should formulate a strategy to control the prices of consumer goods. They articulated that wages in Pakistan are already high as compared to regional competing countries. In 2014 the minimum wage for an unskilled worker was Rs 11000 per month, the exchange rate of rupee (PKR) to USD was Rs 101 (USD1) and CPI Inflation was 8.62%.From 2014 to 2017 the dollar exchange rate increased by 9% from Rs 101 to Rs 110.55. Annual percentage changes in Consumer Price Index (CPI) Inflation shows huge decline. In 2013-14, CPI was 8.62% and in 2016-17 it was 4.16%.The dollar exchange rate increased by 9% and CPI reduced to 4.16%, but the minimum wage has been increased by 36% from Rs 11000 to Rs 15000 which is already higher. If minimum rate of wages for unskilled workers would be increased by 9% as per increased exchange rate of dollar from 2014 to 2017, presently our minimum wage should be Rs 12,000. They said that in interior Sindh: in villages and small cities; minimum wages should be checked as they learnt that minimum wages in interior Sindh is less than Rs 10,000. They urged that Rs 15000 minimum wage that was approved by the Government should be implemented there.

They said that current minimum wages per month in Bangladesh is $68; in India it is $115; while in Pakistan it is $135. Pakistan’s Minimum Wages is 98% higher than Bangladesh and 17% higher than India. Similarly, Pakistan’s Industrial Gas Tariff is 126% higher than Bangladesh; 62.87% higher than India and 26.5% higher than Vietnam. Pakistan’s Industrial Electricity Tariff is 22.2% higher than Bangladesh & India and 37.5% higher than Vietnam. Water Tariff in all cities of Pakistan is $0.50, however, in Karachi is $2.30. These costly inputs have a strong impact on cost of manufacturing and cannot be ignored.

They said that the dynamics of export-oriented industries are also totally different from general industries. The garments are the most labour-intensive sector of the economy and its nature of work is also different from labour involved in other industries. The export-oriented industries operate on the basis of their orders being placed by the foreign buyers and their manufactured products are based on seasons. Hence, the labour involved in export industry is also seasonal having different skill sets for different products. Due to this fact, export industry cannot be run on 100 percent salaried workers. Majority of these workers is illiterate female workers. Different labour with specialized skill sets is needed to meet the requirement of particular orders. Due to the reason, contractual/ seasonal, labour is hired in export industry and therefore contractual labour cannot be eliminated. For example, in peak production an export industry requires 500 labourers but when order completes the industry does not operate and its labour declines to 05 only.

They said the draft also speaks about applying workers’ authority to appoint an auditor to inspect any account, records, premises or stores of a factory. How come this shall apply to export industry and under what intention? Also this consideration for other general industry in private sector is also inappropriate. Export industry comes under final tax regime. Similarly, draft covers to remove all restrictive provisions on trade union formation which is a sensitive matter which needs to be discussed by all stakeholders. They were of the view that the Sindh Government’s attempt to pass the said draft Labour Policy in haste without consultation of the industrial town associations and export-oriented associations shall have strong repercussions as their concerns have not been addressed in it. The Associations also see such unilateral attempt to bulldoze the existing industry and increasing trend in export. It will also act as a fatal blow on new industrialization. They said our beloved country doesn’t afford such detrimental acts which will lead to capital flight and shifting of industries to other provinces as well as abroad. After passage of the 18th Constitutional Amendment, there is a competition among provinces. Hence, for more industrialization in Sindh an industry-friendly labour policy needs to be constituted. —PR