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GSP Plus status: will we retain it?

Less than a year from today, the GSP Plus status granted to Pakistan would be reviewed by the EU. Pakistan had ratified the EU-specified 27 UN-ILO conventions but did little to set up mechanisms for compliance with their stipulations although it is imperative for sustaining the GSP concession; responsibility for this failure rests with the state and the business community.

Only on December 15, did the government establish a Treaty Implementation Cell in the Commerce Ministry to report on the progress made on promulgation of ratified UN-ILO conventions before EU’s review thereof, beginning January 2016. Meanwhile, ILO’s Country Director for Pakistan has pointed out several areas that need further focus of the government.

On paper, there are no major compliance gaps in implementing ILO’s 1948 Convention on Freedom of Association & Protection of the Right to Organise; what need containment are acts that help organise employer-dominated worker unions, or tactics that make worker unions subservient to employers or their organisations.

The 1951 ILO Convention on Equal Remuneration requires paying male and female workers equally for work of equal value. The 1958 ILO Convention against Discrimination in Employment & Occupation forbids any distinction, exclusion, or preference based on race, colour, sex, religion, and political tilt that impairs equality of opportunity, or treatment at work, but it continues to be violated.

The 1957 ILO Convention on Abolition of Forced Labour forbids employment turning into slavery, and the one Abolition of Slavery, Slave Trade & Institutions & Practices Similar to Slavery, mandates abolishing debt bondage. Yet, loosely defined terms of service prevent repayment of debt. Besides, miseries caused by unpaid wages, physical and sexual abuse, and locking up, go on.

Child labour too goes on. The 1973 ILO Convention on Minimum Age specifies age of 18 years for any job, which by its nature or the circumstances wherein it is performed can damage the health, safety, or morals of young workers – aspects that to be determined by national laws, regulations, or by competent authorities in consultation with concerned employers and worker organisations.

Ongoing disasters (eg fire in Karachi’s timber market and in a plaza in Lahore last week, and in a factory in Baldia Town in 2012) reflect sustained neglect of work insecurity though the British era Factories Act remains in force. Regulatory authorities approve flawed factory designs either because they can’t foresee the risks such design foretells, or in exchange for illegal benefits.

In factories using inflammable items as raw material or for fuelling their production plants, firefighting set-up must be well spread, operational all the time, and emergency exits must be adequate. Also, routine firefighting drills must be conducted to ensure employees’ correct response to emergencies, but regulators don’t periodically verify compliance with these requirements.

Besides these lapses, regulators don’t ensure that emergency services are adequate, well-equipped and manned by operators familiar with handling emergencies (fires, storms, floods, etc) with minimum loss and activity disruption, and have strategies for restoring post-emergency normality ie removal and disposal of damaged materials, structures, etc.

Security set-ups for preventing crimes, especially terrorist acts, and access of activity disrupting groups into industrial districts, are inadequate. These gaps in industrial regulations and institutional arrangements are danger signs that could be cited by the EU for at least temporarily suspending the GSP Plus concessions.

In 2014, on the World Day for “Safety & health at work”, President of the Employers’ Association admitted these gaps but blamed ceremonial inspection by the regulators of electrical wiring (short circuiting wherein caused many fires) and boilers (whose bursting caused tragedies), although much more must be done by the factory owners themselves.

We are also non-compliant with GSP Charter-specified UN conventions on environmental safety mandating protection of biodiversity – containing pollution of the atmosphere, seashores, rivers and land – by establishing protected areas for restoring degraded ecosystems, and create awareness about sustainable use of biodiversity to contain the risks posed by organisms modified by biotechnology.

Conversion of mangroves into residential areas, constructing roads and other physical infrastructure therein, and deforestation for meeting energy needs exposes the absence of a national biodiversity strategy, and a concerted effort for devising a national environmental protection plan for the forestry, agriculture, fisheries, energy, and transport sectors.

The UN Convention on Organic Pollutants classifies Persistent Organic Pollutants (POP) as highly dangerous chemicals in the leftovers of industrial processes. This convention needs credible implementation because our industrial sector is oblivious of its obligations in ensuring that chemical secretions don’t pollute sewerage systems, rivers, and seashores.

We must steadily eliminate the production of POPs and their environmental releases. POPs are highly stable and last for decades before becoming ineffective; meanwhile they keep leaching chemicals into the soil, poison water resources and human and wildlife, and cause lethal exposures due lack of well-designed sanitary systems, recycling technology, and expertise therein.

The 1992 UN Convention on Climate Change requires limiting greenhouse concentrations at levels that prevent dangerous anthropogenic interference with the climate by cutting these emissions. But oil-fired units producing 54% of the electricity, factories, and transport vehicles compound the greenhouse effect. Switching over to coal-fired power units could make things worse.

China, which injected huge filtration technology into its coal-fired power generation system, couldn’t contain the greenhouse effect, and finally decided against expanding this sector. What can we achieve in terms of filtering these emissions, is a million-dollar question, although containing the greenhouse-effect is a key condition of the GSP Charter.

In terms of their needed varieties to check industrial relations, occupational safety, environmental pollution and preserving biodiversity, regulatory authorities are inadequate. Nor does their manpower have the requisite knowledge of global conventions, expertise for industry-specific inspection, and consciousness of their responsibilities.

Nor do businesses feel obliged to share the burden of undoing this setting by complying with the conventions that will ensure retaining the GSP Plus concessions. The fact, however, is that what delays decision-making and action implementation for requisite organisational revamp, is the lack of co-ordination between concerned ministries.

The latest Global Competitiveness Report shows that Pakistan’s competitiveness has been sliding in recent years. While business and industry suffered the impact of terrorism, energy shortages, and the Rupee’s slide, equally causative was the lip service businesses paid to complying with ILO and UN conventions. It is time they realised their obligations in this vital context.

The UN and the ILO will be willing to assist in revamp and reorganisation of regulatory mechanisms, and must be associated with the gigantic task of building a credible regulatory system that gains EU approval – this exercise that must be completed before January 1, 2016 requires purpose-oriented co-ordination between all the stakeholders.

EU’s reaction to lifting of the moratorium on death penalty is being cited as the likely reason for withdrawal of the GSP Plus status although none of the 27 UN-ILO conventions requires such a moratorium. The error was not stating clearly that death penalty will be imposed only on committers of terrorism, not all sentenced to death. EU could take a softer view of Pakistan’s failure to implement the 27 conventions, and not withdraw the GSP Plus concession, but may not do so now because moratorium on death penalty has been lifted. The real risk Pakistan confronts is its failure to implement the ratified conventions.

A. B. Shahid, "GSP Plus status: will we retain it?," Business recorder. 2015-01-06.
Keywords: Economics , Economic issues , Social issues , Social problems , Social system , Economic system , Economic growth , GSP plus , UN-ILO conventions , Business activity , Economy-Pakistan , Forced labour , Sexual abuse