In April 2000, the Government of India announced the introduction of the Special Economic Zones (SEZs) policy for the country to enhance foreign investment, promote exports and ensure upward mobility of domestic enterprises and manufactures to compete globally. The SEZs received legal sanctity after the enactment of the SEZ Act 2005 by the Parliament in May 2005. The Act received Presidential assent on the 23 June 2005.

SEZs are geographical regions, which have economic laws more liberal than a country’s typical economic laws. The number of SEZs created worldwide continues to expand and the share of international trade flows and the number of workers employed are increasing.

When the idea of the SEZ was put forward and after the Act came into existence, India witnessed large-scale protests across the country, especially from Uttar Pradesh, Haryana, Maharashtra, Andhra Pradesh and West Bengal, where forceful acquisition of prime agricultural land, for creating SEZs, by state governments took place. However, it seems that Government of India is infected with the SEZ mania. The Board of Approval Committee of the Ministry of Commerce has approved 557 SEZs in the country, of which, as of 30 September 2008, 260 have been notified after the coming into force of the SEZ Act. Under the Act, the incentives offered to industries clearly indicate profiteering by industrialists at the cost of local people, food security, environment and the real development of the country. SEZs are tax havens. Indian SEZs need not pay income tax during the initial five years and have to pay only 50 per cent of their tax liabilities for the following two. The new policy also provides them with a tax holiday for a ten-year period.

SEZs engender labour insecurity and violate labour rights. According to estimates provided by the Ministry of Commerce, 4 million jobs will be created through SEZs by December 2009. However, about 60 per cent of the approved SEZs are in the IT sector. It, therefore, appears that SEZs only facilitate the displacement of labour into ‘safe zones` for those who clamour for flexible and pliant labour. When agriculturalists, farmers, sharecroppers and others were displaced, they had dreams of jobs in the SEZs. The few who got employment found that from being landowners, they were now unskilled labourers. And this, after selling their valuable land for much below the commercial prices!

All over the world, export zones have a history of blatant labour rights violations and the instances of labour exploitations in India are not any different. One should also take into account the fact that, theoretically, all factory and labour legislations were applicable to the Export Processing Zones (EPZs), which existed prior to the SEZ Act 2005. In spite of the fact that the EPZs were bound by legislation, trade union activities were practically absent and the entry of non-workers was restricted. Indulging in any union activity invited extreme forms of punishment, including physical attack and loss of jobs.

What implications do the SEZs have on labour? Is the employment sustainable? How are the basic rights of workers protected? The studies available on SEZs have several lacunae, and detailed case studies on SEZs and its impact on labour have been very rarely looked at. It is in this context that Labour File decided to focus exclusively on SEZ and its impact on labour in this issue.

Clause 5(f) of chapter 2 of the SEZ rules confers on the Development Commissioner (DC) the right to handle workmen-employer relations. The functions of the Labour Commissioner have also been handed over to the DC. When the specific role of the DC is the development and propagation of SEZs, how can one expect the DC to  uphold labour laws in SEZs?

Evidence suggests that a major share of the workforce in SEZs is women. As usual, the women are highly exploited with forced night shifts, no conveyance, no maternity leave, termination of jobs when pregnant, controlled toileting, sexual harassment, denial of right to organise, no scope for collective bargaining and low wages. Since, SEZs are not bound by laws, the minimum wages paid for both men and women are lower than those paid outside the zones.

“The structure of SEZs/EPZs is such that it establishes an unquestioned supremacy of capital within the enclaves, not only in the economic sphere but also in the political, social and cultural spheres’ evaluates Surendra Pratap in SEZs: The New War Zones of the Working Class. Ashok Ghosh, in SEZs  Spell Disaster for India, argues that SEZs are the outcome of the planned policy to make Third World countries forever dependent on the West, through the construction of an export-led economy, prescribed for the Third World in the name of development.

In Analysis of the Structure and the Practice of the Legal Machinery (with Reference to Labour) of SEZs, SH Iyer establishes that with the hi-tech industries suited to the process of globalisation, SEZs will not provide any employment to the local population and unskilled labour. Assessing the Economic Impact of SEZs, Jayati Ghosh establishes that the massive tax give-aways encourage investors to shift their production from other locations to SEZs, in order to benefit from the tax holiday. This means there is no benefit to the economy from the additional investment.

By declaring the SEZs as ‘public utility services’ under the Industrial Disputes Act 1947, dissent, trade union activities, democratic rights to protest and labour rights are under a tight leash, if not extinguished, states CR Bijoy in SEZ: Corporate Statehood Defined. Shalini Sinha, in At What Cost, For Whose Benefit? Women Workers in SEZs, establishes that because the industries are export-oriented and the emphasis is on minimising production costs to price the product competitively in the international market, women workers, who constitute 70-90 per cent of the workforce, bear the brunt of the competition in SEZs.

SN Tripathy in SEZs and Labour Administration affirms that without any defined accountability, most of the fiscal and executive powers of the state have been transmitted to the DCs, appointed by centre, in the name of policy relaxation for SEZs.

Analysing the situation of Migrant Workers in China`s Oldest SEZ, Diana Beaumont states that government policy, hostile to migrants, coupled with the problem of low wages, creates an extremely family unfriendly environment for migrant workers in Shenzhen.

The gains of expected industrialisation will be greatly offset by huge social losses in the country, in which a large number of people will lose their identity and living, predicts Mrinal K Biswas in Uncertain Future of the Dispossessed in SEZs. In Occupational Safety and Health in SEZs, Sanjiv Pandita laments at the zero facilities for the occupational health and safety of the workers, and states that since there is no dearth for job seekers, the SEZ management prefers to replace a sick worker with a fresh healthy worker than to provide the workers with facilities.

Besides regular columns, this issue of Labour File also carries an article by Manisha Bhatia on Health Hazards in Agro-based Industries: The Untold Saga of Female Workers in Punjab and a review by Sharit K Bhowmik of the book, Working in the Mills No More.

We dedicate this issue of Labour File to the displaced agrarian community as well as the workers in SEZs, who struggle to survive in the face  of so-called development policies.