By Feizal Samath
COLOMBO, Feb 14 2003 (IPS)

As the government speeds up investor-friendly labour laws, Sri Lanka’s trade union movement believes the country is sinking under the spell of the International Monetary Fund and World Bank, and is threatening to pull out from an apex labour advisory group.

Trade union representatives declared late on Thursday that they would be forced to withdraw from the National Labour Advisory Council (NLAC), a vital, representative group that looks at labour issues. They accused the government of sneaking legislation into parliament at the behest of the IMF and World Bank, without even consulting the council.

The NLAC, chaired by the government and has representatives from employers, employees and trade unions, acts as a consultative body on labour matters.

Trade unions have boycotted NLAC meetings since August after the government pushed through legislation aimed at dismantling archaic laws and allowing more overtime to women workers, including night work.

The unions were livid last month when the government attempted to ram through amendments to the termination of employment act and the industrial disputes act, both of which turned out to benefit employers more than workers.

"We just can’t allow this to happen. The government is not discussing with labour unions or civil society these amendments which are detrimental to the workers on top of other issues," thundered M Shah, general secretary of the powerful Ceylon Bank Employees Union.

Unionists and human rights workers also fear that the World Bank/IMF-proposed Poverty Reduction Strategy Policy (PRSP), which is expected to be implemented by the government after a major donor conference in Tokyo in May, would further erode workers’ rights by throwing out farmers from small, uneconomic plots and handing them over to multinationals under flexible labour laws.

"Civil society was not consulted on this document. These are World Bank and IMF policies which have failed elsewhere. They are not only taking away the rights of workers but the rights of everyone," argued Sarath Fernando, coordinator of the Movement for National Land and Agricultural Reform (MONLAR).

He spoke as trade union workers carried out evening protests against the privatisation of the state-owned Sri Lanka Insurance Corp. Privatisation of state enterprises, urged by the IMF, is also a bone of contention by the unions.

Since Prime Minister Rail Wickremesinghe’s United National Party (UNP) swept to power at parliamentary polls in December 2001, the ruling party has vowed to dismantle archaic labour laws and rules that deter foreign investment.

Foreign investors, donors, the World Bank and the IMF have often complained about the ”rigidity” of Sri Lankan laws, which they say favour employees and make it difficult to lay off workers during an economic crisis or when companies are in bad shape.

Already, trade unions are mounting protests and making use of rising costs of living to garner more support from all quarters.

The high cost of living, triggered by fuel costs which are rising every month, has complicated matters for the government that is trying to provide some relief through a wage hike by mid-year.

The international labour movement is also throwing its weight behind local protests over violation of trade union rights and freedom of association, warning that IMF and World Bank policies have ruined many a country and only led to deprivation; not prosperity.

"We think the implementation of the PRSP will reduce Sri Lanka to poverty; not reduce poverty in Sri Lanka," noted Earl Brown, a legal counsel covering Asia for the American Federation of Labour-Congress of Industrial Organisations Solidarity Centre (AFL-CIO).

Brown, part of an international mission to study current labour reforms and its impact on workers and their rights, told IPS that the demand for labour flexibility in Sri Lanka had little support from the majority and there was no evidence to show that labour reforms would help economic development.

In fact, according to Debiyana Kar, a research associate at the Washington-based Centre for Economic Policy Research who was also on the mission team, labour productivity in Sri Lanka has increased in the past five to 10 years and was on par with U.S. productivity levels whereas real wages here have declined.

She said the IMF-led PRSP is also being tried in sub-Saharan Africa, while its pension reforms introduced in Argentina in 1994 triggered the crisis there.

Tim Ryan, AFL-CIO’s Asia Regional Coordinator, said Sri Lanka was being led on the low road to development which resulted in low wages, low standards and widespread violation of rights.

"The high road to development leads to good jobs, higher standards and improving living conditions,” he said. ”None one can beat China at the low wages game because it is done by an authoritarian regime that does not care about rights. Sri Lanka is not like that and is more democratic. So it should not take the low development route as prescribed by lending agencies."

Brown praised the peace process but cautioned against finding economic solutions that do not meet the aspirations of the people.: "Sri Lanka should take its time, pick a solution that is suited for this country instead of being pushed around by a bunch of international bankers.”

AFL-CIO has filed a petition under the U.S. Generalised System of Preferences (GSP) against Sri Lanka for failing to allow freedom of association and formation of trade unions in the country’s Export Processing Zones (EPZs).

It is urging the U.S. government to influence and pressure the Sri Lankan government to implement the core ILO conventions, including freedom of association and a right to collective bargaining.

Trade unions are banned in the country’s EPZs while workers’ councils – which trade unions say are guided by management thinking – look after the interests of thousands of mostly female employees.

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