A Case Study Illustrating the Relationship between Core Labour Standards and Trade, International Competition and its Impact on Working Conditions in the Indian Garment Export Industry

Abstract

Presentation of the study With support from the Swedish International Development Corporation Agency we conducted a minor field study in India as a part of our Master Thesis in International Public and Labour law at the School of Economics and Commercial Law, Göteborg University. The aim of our minor field study was to review the issues relating to the impact of globalisation on labour standards, focusing on India's garment export industry as a case study. Our field study concentrates on the view of the manufacturers in the labour intensive garment industry, since their views are significant because as employers, they implement labour standards and compete in the global market. A debate has taken place on whether or not a social clause should be included in the framework of the WTO. The social clause would link international trade with basic worker's rights. A breach of the basic labour standards agreed in international conventions, such as the eight core labour standards conventions from the ILO, would give other states a right to impose trade sanctions upon the breaching party. The overarching aim of such sanctions should be to ensure and promote the respect of the core labour standards worldwide. However, sanctions may not be the best way to advance labour standards; they may not even improve the situation in developing countries at all. Many developing countries strongly oppose any such measures. Our objective has been to gain a deeper understanding of international labour and trade law from India's views concerning core labour standards and trade, trade sanctions, international competition, and its impact on working conditions. Our main questions at issue were: What is the attitude of the manufacturers towards working conditions in general and what problems do they face regarding labour issues? How do manufacturers view trade unions, bonded labour, child labour and discrimination? What is the relationship between manufacturers, sub-contractors and buyers? What is the situation concerning consumer pressure, buyers demand and codes of conduct? From where do the manufacturers' competitors come, what do they think of international competition and do working conditions play a significant role in where investors go? How do quotas affect manufacturers and what do they think of the phase out of the MFA? Would a social clause and trade sanctions in the framework of the WTO de facto ensure an increased compliance with core labour standards? We started by giving the reader a theoretical framework and context, in which the empirical findings could be understood. In chapter two we discussed the regulation of the WTO system, followed by a discussion in chapter three of the ILO system for promoting the core labour standards. In chapter four we discussed the suggested attempt to link these two systems through the incorporation of a so-called social clause in the framework of the WTO. Moreover, there are other means to promote core labour standards, which we briefly described in chapter five. In order to understand the legal context in which the Indian manufacturers operate, chapter six contains a brief introduction to Indian labour law, especially the core labour standards. The field study including our empirical findings constitutes chapter seven. In chapter eight our analysis and conclusions are found. Finally, chapter nine contains a summary.