Impact of Trade Liberalisaton on the Impact of Trade Liberalisaton on the Workforce: FTA, ASEAN and Workforce: FTA, ASEAN and ThailandThailand

Asian Regional Workshop on FTA: inclusive trade policies n post-Asian Regional Workshop on FTA: inclusive trade policies n post-crisis Asiacrisis Asia9 December 20099 December 2009

Junya YimprasertThai Labour Campaign

Network Against Exploitation & Trafficking of Migrant Workers - NAT

Migrant Workers Union

email: junya@thailabour.org

Sources articles: Race to the Bottom: Exploitation of workers in the global garment industryORGANIZING UNDER THE NEOLIBERAL TRADE POLICY OF Special Economic ZoneThai Labour Campaign Annual Review 2007‘Voter’s Uprising’ that is changing perceptions in THAILANDASEAN: Past, Present and FutureLabour Trafficking Business

www.timeupthailand.blogspot.comwww.thailabour.org

Who responsible for workers?Who responsible for workers?

Thai Democracy!Thai Democracy!

Since 1932 the people of Thailand have had to face more than 2020 attempted or successful military coupscoups. The people have had to deal with 1818 constitutions and 2727 Prime Ministers, most of them military generals. In the 77 years since 1932 only one elected Prime Minister has managed to complete the full 4-year term (the now self-exiled, convicted, embattled Thaksin Shinawatra)

Thailand and FTAsThailand and FTAsThailand has always fully participated in

the regional and global trade. Look back in the history, in 1855

Thailand was forced to sign the Bowring’s Treaty with the UK, which was in effect for over 70 years.

After signing with the UK, Thailand had to conditionally sign the same kind of treaties with 14 other countries: US, France, Denmark, Portugal, Netherlands, Germany, Sweden, Norway, Belgium, Italy, Austria-Hungary, Spain, Japan, and Russia.

Thailand workforcesThailand workforces According to the 2003 National Statistic Survey, Thailand has

67,941 villages with 9,388,780 households, in which 5.3 million Households are farmers, mostly small scale farmers.

In November 2009, the Matichon Newspaper gave figures stating that 86.7% of Thai farmers are indebted: 42.8% from agricultural investments and 22.8% from household needs, with an average debt / family of 243 000 Baht (5,000 Euro) , of which 44% of the debt is with private money-lenders.

◦ Thailand has 146 million acres of land, of which 60 million is farmland. The average holding per family is 10 acres, but most small-scale farmers attempt to manage with 5 acres.

The economic cycle of small farmers in North-East ThailandThe economic cycle of small farmers in North-East ThailandThe economic cycle of small farmers in North-East ThailandThe economic cycle of small farmers in North-East Thailand

ASEAN is different from the EUThailand as an example

EU is totally rely on employment protection and market economy but ASEAN are rely on living on the natures and food sovereignty culture

Most figure is from Eurostat, except on the civil servants, which is using estimate figure , the same as of Thailand

CLIMATE CHANGE CLIMATE TRADING

Revolution struggle struggle fall struggle strengthening in for for of the against grass-root Russia independence democracy Berlin Wall corporate power solidarity

100 YEARS of . . . . . . . . . . . . . .worsening poverty

Foreign Direct Investment / Export Oriented Industrialisation EOI

League of Nations UNITED NATIONS

ILO UNIFEM GENDER MAINSTREAMING

World War I World War 2 Cold War Neo-liberal capitalism War against civilians ??

‘GREEN REVOLUTION’deforestation, dams, forced irrigation, cash-crop mono-cultures /GMO

IMF + World Bank GATT World Trade Organisation WTO

EEC NAFTA & AFTA FTA

gambling with other people’s lives

1914-1918 1939-1945 1960ies 1970ies 1989 1992 1995 2001 2003

?

?

THAILAND under NEO-LIBERAL FREE-TRADE

•The relocation game of Transnational Corporations (TNCs) has pushed many governments in the producing countries to compete with each other and provide better incentive promotion programmes for the garment industry.

•Power is mostly in the hands of the many TNCs who have tried to cut costs as much as possible, and change their production chains to be more effective in achieving shorter production times, faster delivery, less risk, less overproduction or overstock, and cheaper overall production costs.

Family -C

Family -D

Factory A in

Bangkok

Family - BFamily

- E

Sub-contractBangkok

Sub-contractBangkok

Sub-contractMae Sot Sub-contract

Mae SotSub-contract

Korat

Sub-contractBangkok

Sub-contractBangkok

Subcontract

Sub-contract

Corporate supply Chain

Cheaper/ faster/ longer hours

Brand

Brand

Just in Time production

GOV’TsAsia

GOV’TsAfrica

GOV’TsLatin

America

Control

workers

Current Outsourcing

pattern of global Brands!

Current Outsourcing

pattern of global Brands!

Factories

Gov’t only to facilitate

trade & investm

ent

Control workers

CSR – Codes of Conduct

BrandAgents

Supply Chain M

anagement

Li&Fung Supply chain management

For this kind of customer, we might have to buy fibre from a Korean factory, then dye and weave in Taiwan; thus, we must select fiber and then send it to Taiwan. For a Japanese company, they have the best zip and button but it’s manufactured in China. So we go to YKK, a big zip company in Japan, to order directly from factories in China. Then, we consider the quota system and labour situation, so we choose that final production and garment should be done in Thailand, so we send all the materials to Thailand. Since our customers need on time delivery, we divide orders among five Thai factories…. Within five weeks after receiving the order, 10,000 clothes reach stores or shops in Europe. All the clothes are the same quality and the material seems like it’s from only one factory. This is a new type of value added. It is a real production of the world which we have never seen before. The brand tag says ‘Made in Thailand’ but they’re not Thai products.80

80 Supply Chain Management: Hong Kong Style, Harvard Business Review, sept October 1998

“We do not want to be an important part of the factory. Just 30 percent can make us the biggest customer of the factory. Another aspect we need is flexibility so we need not to have any factory depend only on us. We also gain interest from the factory if it has other customers.”

Fibre from Korean factory, dye and weave in Taiwan, Zip from China, produce in Thailand [quota and working condition].

The brand tag says ‘Made in Thailand’ but they’re not Thai products.

Li & Fung model of agents

Foreign Direct Investment in ThailandForeign Direct Investment in Thailand

FTA = SEZs = Economic FTA = SEZs = Economic CorridorCorridorFreedom of association – Collective

Bargaining PowerWage floatingMajority of workers are under

‘unprotected working environment’Energy policies - Conflict in the local areasRelocation of manufacturingMake-up figures – no people in the

picturesAccess and control over natural resources

Thailand/ASEAN FTAThailand/ASEAN FTA

www.thaifta.com

FDI Promotion and workers’ FDI Promotion and workers’ rightsrights

BOI said that it has finalized its plans to support investment in Body Fashion (Thailand) Ltd., a lingerie and swimwear manufacturer operating under the Triumph trademark, that now ranks of among Thailand’s most essential productive forces. Triumph is also the biggest manufacturer in the Asia Region. The company plans is to increase its productive force of clothes (i.e. lingerie, swimwear, etc.) to two million items, with a 75.5 million THB in investment in the Nakhon Sawan Factory.

Naew Na Newspaper, World Business News Brief-July 8, 2008

Triumph Thailand laid off 1,951 high wage/unionised /old age workforce, while receiving BOI’s support with the reason to give employment of 2,000 workers in the cheaper zones/ununionised factory, 300 kms north of Bangkok

FTA and Labour rightsFTA and Labour rightsThe freedom of AssociationThe freedom of Association

FLEXIBILITY

• Subcontracting, pressure on workers/

USING VULNERABLE WORKERS, CHILDREN, IMMIGRANTS, PRISONERS

•Employment in temporary, part-time, contract system

• Target/ piece rate system

• Increase speed, work like machine, less time to eat, to pee, or to rest.

• Deregulation of labour law for investment WTO, -FTA, regional/ bilateral trade agreement,

• Investment privilege package, EPZs

Politician, authorities/

Legal proceeding/

Union Busting advisors/Management, personnel

HIGHEST PROFIT/

CHEAPEST COST

Reducing risks, using fewer workers, cheapest wages, no liability, no

responsibility, no direct employment, etc.

Supervisors Mafia, gangsters/

To much OT. No time for

education and organizing/

• Increase Production

CAPITALISTs/ • SUPPLY CHAIN MANAGEMENT

• Informalisation - home based workers

• Outsourcing,

• Multi-skill

• “Just in time”

Wage scale in Thailand, 1993 - 2009

7.5 USD

3 USD

4.5 USD

6 USD

-

2,000.0

4,000.0

6,000.0

8,000.0

10,000.0

12,000.0

wa

ge

s

ea

rnin

gs

wa

ge

s

ea

rnin

gs

wa

ge

s

ea

rnin

gs

wa

ge

s

ea

rnin

gs

baht/day baht/month baht/month baht/month

daily monthy piecework Average

Series1

Source: Labour Standard Department, Ministry of Labour, Thailand

Average wages of textile and garment workers in Thailand in difference wage systems

Daily Monthy Piecework Average

baht/day baht/month baht/month baht/month

wages earnings wages earnings wages earnings wages earnings

1 605.

18 8 .2

861

28

9 ,74 7 .

6

2 ,93

09. 30,

642.

5,36

43.

6,10

05.

Building Alternative Sustainable Building Alternative Sustainable Livelihoods!Livelihoods!

Industrial workers- 6 mils

Company/services [hotel, bank, department stores, etc] 4 mils = 10 mills 27%

Seasonal – farmers/farm 14 mil], construction [2 mil], drivers[1 mil] - 13 mils = 36%

state employed workers

2 mils = 5%

State Enterprises workers

500,000 prs. = 1.6%

Subcontracted labour/ home-base - 10 mils = 27%

Migrant workers – 2 mils =5%

Level of benefit & security• Highest/ monthly wage

• welfare/benefit – family, housing, subsidies

• pension program

• Credit to commercial bank loan

• 5 days/week/ many holiday

•Monthly wage for white collar

•mostly minimum wage

• minimum welfare and benefit, not cover family

• mostly, no pension program

• not credit to commercial loan paying 5-20% interest

• Daily wage – minimum/underpaid

• irregular working hour/

• valuable for all kind of exploitation and cheating

• no welfare & benefit

• no bargaining rights

• no credit to commercial loan paying 5-20% interest

Set back

Forward Looking

Privatisation

Right to hire & Dismiss fully in the hands of employers

Most attempts to CBA are cracked down

Labour protection & relation laws are outdated

Not covered by labour relation/ protection laws

No CBA rights

Outsourcing/ subcontracting

Stop pension system

Welfare State

People Party

Self-reliance Agriculture

Control mean of food production

Protect environment

Regulate labour laws

Democratisation

Social security system

Labour force 36 mils

Unemployed + elders –1.5+2 mils = 4-5%

FTA &FTA &ASEANASEAN

Free Free Trade – Trade – SPZs o SPZs o of the of the Greater Greater Makong Makong Sub-Sub-region region (GMS)(GMS)

ASEAN Security Community –

ASC

ASEAN Economic Community –

AEC

ASEAN Social -Cultural Community -

ASCC

environment

Labour protection

rights

Civil society

welfare, education?

?

High level gov’t

officers

ASEAN members Gov’t +

big economic nations

Business

sectors

High level gov’t

officers

Military generals

USA

ASEAN three pillars

ASEAN three pillars

1945

1967

2003

36 years

ASEAN Human Rights body

Country Gross domestic product2/ at current

prices

Population % Gross domestic product per capita

at current prices

Foreign direct investments inflow

  US$ million persons   US$2/ US$ PPP 3/ US$ million US$ million

 Top GDP/capita 2008  2008 2008 2008 2008 2007 2008Singapore 182,102.7 4,8   37,629 49,338 31,550 22,802

Brunei Darussalam

14,146.7 0.4   35,623 48,180 260 239

Malaysia 222,057.2 27.9   7,970 13,748 8,401 7,318

 Sub total 420,314.6 33.1 6%     40,212 30,359 Middle              

Thailand 273,728.6 66.5   4,117 8,218 11,238 9,835

Indonesia 511,174.4 228.5   2,237 3,943 6,928 7,919

The Philippines 166,772.8 90.0   1,844 3,507 2,916 1,520

Viet Nam 90,700.8 86.0   1,053 2,817 6,739 8,050

Sub total  1,042,376.6 471.0 81%     27,821 27,323

Low              Lao PDR 5,289.0 5,8   918 2,407 324 228

Cambodia 11,081.6 14,6   756 1,910 867 815

Myanmar 27,182.0 58,5   465 1,166 258 715

 Sub total 43,552.6 78.90 14%     1,449 1,758

ASEAN 1,504,235.8 584.00 100 2,577 5,253

69,482 59,440

Capitalism indicator of richness

Capitalism indicator of richness

CountryTotal land area Total population1/ Population density1/

km2 persons per km2

2008 2008 2008

Lao PDR 236,800 5,8 mils 24

BruneiDarussalam

5,765 0.4 mil 69

Cambodia 181,035 14,6 mils 81

Malaysia 330,252 27.9 mils 84

Myanmar 676,577 58,5 mils 86

Indonesia 1,860,360 228,5 mils 123

Thailand 513,120 66,5 mils 130

Viet Nam 331,212 86 mils 260

The Philippines 300,000 90,mils 302

Singapore 707 4,8 mils 6,844

ASEAN 4,435,827 583,651 132

Eco-economic indicator of richnessEco-economic indicator of richness

ECONOMIC CORPORATION No. Of meetings First meeting/ dialogue

Culture and information 9 1969Investment 10 1969ASEAN economic ministers 42+ 6 AEM 1975Labour 20 1975Legal cooperation 6 1975Narcotics 21 1976Finance and banking 13 1977/2001Social welfare 6 1977Education 42+4 ASED 1977Agriculture and Forestry 29 1979Industry 53 1980Science and technology 12 1980Environment 10 1981Youth 5 1983Women 18 1988Health 8 1980Investment 10 1969Transport 6 1996Telecommunication/IT 3 2001

ASEAN Treaties/Agreements And Ratification 276 (as off Sept. 2009)

To win the support of the people the ASEAN To win the support of the people the ASEAN needs to focus on . .needs to focus on . .

Ensuring that the ‘economy first strategies’ of the last 40 years are replaced by ‘Democracy First Development Strategies’;

Promoting education in the principles, tasks and objectives of democracy, with special attention to empowerment of women;

Leading the way in helping people overcome violent, intra-regional conflict;

Supporting the working-class movement for human rights with programmes of re-employment that are aimed at returning dignity to the lives of all workers

Facilitating a major shift from mass-manufacturing of cheap industrial artefacts based on exploitation of the poorest-of-the-poor to making South-East Asia one of the world’s ‘Organic Food Banks’;

Assisting the tens of millions of small-farmer families and dislodged farming families, who still represent the majority of the population, in developing organic markets and building intra-regional solidarity around increased organic productivity.

1886 20001919 1948-49 1960’s 1975 1990 1998 2015

100 years of Capitalism

ILD

ILO

conventions UDHRGATT IWC

UNIFEMCEDAW CoC Global Compact

ESCRMDG

Farmers

Capitalism

CSR

ASEAN Cross-Cultural Institute

BIODIVERSITY

ORGANIC FOOD FOR THE WORLDORGANIC FOOD FOR THE WORLD

Cross-culturaleducation

Gender education

Pro-Poor policiesFreedom of Assembly Social welfare

GENDER EQUALITYLand reforms

Subsidies for organic farming

ASEAN International Women’s Day

2011

SOLIDARITY MOBILISATION

PEOPLE’S DEMOCRACY PEOPLE’S DEMOCRACY