Special Economic Zones in the OIC Region:
Learning from Experience
31
Box 11 - Workers Rights in India’s SEZs38 39
3.4.2 Environmental Impacts
Criticisms of SEZ development has historically included environmental concerns, with the
experiences of the Mexican maquiladora plants, being the most notorious for environmental
degradation. In the Mexican experiences, a combination of weak monitoring and enforcement
by local and national environmental authorities combined with the rapid growth of maquiladora
plants beyond the capacity of waste treatment infrastructure, resulting in significant adverse
environmental impacts on local communities outside the SEZs. It was also observed that there
was a perception that environmental laws could be weakened within the maquilas because of
their priority sector status.40
It is acknowledged however that as SEZ development has moved from single factory EPZ
programmes such as within Mexico and Mauritius towards models of industrial park
development it has become easier for developers to provide more effective facilities and utilities
38 Mansingh, P, Suneetha, E and Sreejesh, N (2012) Trade Unions and Special Economic Zones in India. ILO.
39 Parwez, S (2014) Modified Labor Welfare Measures for Special Economic Zones and Implications.
40 Williams (1995) The Maquiladora Industry and Environmental Degradation in the United States–Mexico Borderlands.
Within India, studies have found that whilst in practice general labour laws are upheld through
the Special Economic Zones Act 2005, in practice labour laws and welfare measures are virtually
non-existent. The ability of workers to organise trade unions and undertake strikes is
undermined by the labelling of economic activity within these zones as a ‘public utility service’
and thus strikes constitute an illegal activity. This has led to trade union activity being widely
discouraged within India’s SEZs and the adoption of poor wage levels, below minimum wage in
many cases, and long working hours adopted as typical practices.
It is recorded that within Indian SEZs there is a large proportion of workers operating under
casual or informal contracts and as such can be hired and fired frequently. This has led to high
labour turnover, absenteeism, stress, fatigue, low productivity and labour unrest. There are also
recorded observations of wage malpractice with only permanent employees securing minimum
wage salaries whilst contract and informal workers are in the form of daily, monthly or piece rate
payments. This has also led to unregulated working hours and excessive overtime practices are
observed given the unsure nature of the contract employment and fear from workers of losing
their jobs if they are unable to meet production targets. A report within the Falta SEZ found that
workers often worked 12 hour days but their employment cards were only punched for 8 hours.
Health and safety practices within many Indian SEZs were also found to be inadequate, with
dehydration, heat stroke, heat rashes and gastrointestinal common medical issues, particularly
during the summer months where high productions targets make it difficult for workers to take
on adequate quantities of fluids and food.