MANILA, THE PHILIPPINES - By now, it's an old story. An electronics, textile or shoe multinational company closes a factory in an industrialized country and moves its operations to a Third World nation. At its new factory, the company hires the most desperate and vulnerable members of the population: women and girls from the provinces. It pays these women extraordinarily low wages, subjects them to dangerous and fast-paced work and crushes any efforts they make to organize themselves.
In Southeast Asia, the story has been repeating itself for more than two decades, and it shows no sign of stopping any time soon. But in countries where the history of labor abuses is long and where women workers have accumulated experience and seniority in some runaway factories, foreign companies are increasingly developing new tactics to maintain control over their workforce.
Indonesia: fighting repression
With Indonesia having only recently begun its push for export-oriented industrialization and its intense wooing of foreign manufacturing investment, domestic and foreign companies operating in Indonesia still seem to rely on the old methods of labor repression. The space for independent organizing is very narrow; workers' organizing efforts are routinely met with military force (one Indonesian organization estimated the average amount spent by factories for military "protection" at three times the cost of wages), and most of the approximately 5 percent of the workforce which is unionized belongs to the government-controlled SPSI. Now, however, developments inside and outside of Indonesia are placing significant stress on the country's system of labor repression.
One of the most significant recent events was the May 1993 murder of a woman trade union activist named Marsinah, which has galvanized Indonesian non-government organizations (NGOs) to demand that the Indonesian government enforce basic labor rights.
Marsinah, a 25-year-old factory worker for the Indonesian company PT Catur Putra Surya (PT CPS), disappeared on May 5 in the midst of labor strife at a PT CPS factory that produces watches for export; her dead body was found three days later, on May 8. She had been an organizer and leader of a PT CPS workers' strike to demand better wages and working conditions.
Military involvement in the case has been pervasive. Three days before her disappearance, the local military, which had been sitting in on company-worker contract negotiations, called 12 PT CPS employee leaders into a meeting and told them they were fired. Marsinah was among those who loudly protested the firings. The military has been investigating Marsinah's murder, even though preliminary, unconfirmed reports place a company car near the time and site of her disappearance, and both military and company vehicles near the place where her body was dumped.
"The case is representative," says Tati Krisnawaty of the Solidaritas Perempuan (Women's Solidarity for Human Rights), "in that the military repressed workers and protected the company rather than workers."
But non-governmental and student activists are working to ensure that Marsinah's death marks more than the government's single-minded drive to export-oriented industrialization. More than two dozen women's, labor and other NGOs have formed a solidarity committee for Marsinah. A June 1993 statement by the Committee demanded a fair and impartial investigation of the murder and that there be no harassment of Marsinah's family. Krisnawaty, whose organization is a member of the Solidarity Committee, says NGOs from various sectors and student activists throughout Java, the most populous Indonesian island, are working together on a campaign to prevent the military from intervening in labor disputes and to ensure that the rights of women and men Indonesian workers are respected.
Indonesian women's rights and labor activists received a boost in late June, when Mickey Kantor, chief of the Office of the U.S. Trade Representative (USTR), announced he would revoke Indonesia's Generalized System of Preferences (GSP) trade benefits in early 1994 unless the country improved its respect for basic labor rights. The decision of the Office of the U.S. Trade Representative came in response to petitions filed by the New York-based human rights group Asia Watch and the Washington, D.C.-based International Labor Rights Education and Research Fund.
While the USTR rarely follows through on threats to revoke GSP privileges, the threat alone is often enough to persuade governments to afford greater respect to labor rights.
Whether the Indonesian government will respond with real improvements is unclear. Since the USTR's announcement, the Indonesian government has banned the first nationwide conference scheduled by a new trade union federation, reportedly on the grounds that the new federation did not qualify as a union because it had not been established by workers. The federation, the Indonesian Prosperous Labor Union, claims to have 100,000 members, with roughly 40 percent of its factory-level leadership positions filled by women.
The Philippines: subcontracting blues
The tactics practiced by the Indonesian government and employers in Indonesia remain current in other Southeast Asian nation, but they have joined by a host of other, more sophisticated and subtle strategems.
At the huge Gelmart garment factory in metropolitan Manila, the workers - 90 percent of whom are women - are represented by the United Workers of Gelmart Industries union, an affiliate of the National Federation of Labor (NFL), which in turn is affiliated with the militant Kilusang Mayo Uno (KMU) labor center. The bras, swimwear and infant wear that U.S.-owned Gelmart produces in the Philippines are sold to a variety of clothes companies and retailers, including Playtex, Walmart and K-mart.
The women workers at Gelmart are overwhelmingly from the provinces, but Gelmart has been in the Philippines since 1952 and its employees are not very young, or new to the job. Most Gelmart employees appear to be in their thirties, and the majority have been with the company for more than 10 years, according to Rodolfo "Ogio" Aronas, the president of the Gelmart workers' union.
The Gelmart union had traditionally been a company union, but that changed in the mid-1980s, when the NFL entered the picture. After the union affiliated with the NFL, says Cora Distura, secretary of the Gelmart union, things changed dramatically. Workers' wages went up and are now high by Philippine garment industry standards (though even now they only average around $6 a day), working conditions improved, the company lost it right to force pregnant women to work at night and excitement about the union increased, she says.
Despite the gains, the workers still have numerous complaints. Working in the plant is hard, and the temperature is very hot. The most common illness suffered by the workers are urinary tract infections, contracted because workers fear they will fall below their production requirements if they leave their posts to go to the bathroom. The workers want better medical coverage, more vacation time and greater retirement benefits.
But it is unclear if the union will be able to win these or other gains, since its strength is being undercut as Gelmart replaces retiring workers with contract workers. Gelmart is hiring new workers as five-month contract employees, according to Aronas, who do not work with the company long enough to qualify to join the union or enjoy the protections it can afford members.
Contract workers and subcontractors (outside of the walls of the factory) have become the union's greatest problem, and the union has not yet developed an effective strategy for dealing with these new threats.
Malaysia: cooperation and cooptation
In Malaysia, where there is no militant labor strain but also less military involvement in the workplace than in either Indonesia or the Philippines, foreign and especially U.S. electronic firms have been employing thousands of low-wage women workers in free trade zones for two decades. Irene Fernandez, director of the Tenaganita (Women's Force), an NGO based in Kuala Lumpur, the Malaysian capital, estimates there are currently 150,000 women workers in the nation's electronics industry.
The biggest foreign multinationals - companies such as Motorola, Texas International, Intel, National Semiconductor and Harris (formerly RCA) - follow the national labor regulations, pay relatively decent wages and provide government-required benefits plus some additional rewards. Nonetheless, working conditions at these large companies are often dangerous, says Fernandez, and "in terms of hazards at the workplace, workers find they have very little recourse." When workers go to company doctors with work-related injuries or illnesses, she says, the doctors often give them aspirin and tell them to rest and then return to work. Recently, she reports, there have been a rash of apparently work-related deaths at Texas International, but detailed information is hard to obtain, in part because Texas International tends to provide good life insurance plans for employees, and family members often believe that challenging the company in any way will jeopardize their insurance payment.
Corporate anti-union efforts in Malaysia are multifaceted, aimed at diffusing labor-management conflict and generally not dependent on military or police involvement. Company managers, says Fernandez, often project an air of informality, introducing themselves by their first names and claiming to maintain an "open-door" policy. Many workers who go in the open door to voice complaints or concerns, however, find that the managers use the policy to find out which workers are assertive. And those who speak up face harassment or dismissal, Fernandez says.
More intricate corporate anti-union policies are also being introduced. Companies may set up joint consultative councils, which Fernandez says are "another facade to make it seem as though dialogue between management and workers is taking place." A key problem is that the company selects the representatives to the councils and appoints workers who have strong pro-management orientations. According to Fernandez, quality control circles are prevalent, as are a vast array of other efforts to mute labor-company conflict, including: motivation programs, leadership trainings (led largely by U.S. trainers) and profit-sharing incentives. The basic goal, concludes Fernandez, is to convince workers that "they don't need their own organizations," that they can rely on the company or the company manager, their "big godfather."
The future of Southeast Asian women manufacturing workers is not bright. While some runaway multinational companies have demonstrated a willingness to stay in their adopted homes even as wages and benefit levels rise slightly, virtually all of the electronics and low-technology manufacturing firms operating in the region have shown a deep antagonism to unions. The supplementing of physical intimidation with more sophisticated anti-union techniques - the use of subcontractors, quality control circles and similar methods - presents a new set of challenges to independent labor and women organizers, challenges which their colleagues in the industrialized countries have not, for the most part, met successfully.
Formerly medium- to large-size domestic corporations based in the Newly Industrialized Countries (NICs) of Taiwan, South Korea, Hong Kong and Singapore, as well as future NICs Malaysia and Thailand, are branching out in search of new markets and new production bases.
Some observers in Asia worry that these corporations will be even less responsible than the well known multinationals. Because of their anonymity, they have more freedom to operate with little regard for the people or the environment of countries in which they operate. And because many of these companies primarily sell components or raw materials to other companies, they are often insulated from public pressure in the their home countries and from the countries of final sale, often the United States, Europe and Japan.
Why leave home?
Rising wage levels have hurt NIC-based corporations which have historically relied on wage differentials to compete with higher technology Japanese and U.S. producers. Instead of investing in research and development to compete on an equal footing with industrialized countries, many of the companies faced with this dilemma have decided to move operations to lower wage rate countries in the region, such as Thailand, Malaysia, Indonesia, Vietnam and mainland China.
This strategy is evidenced by the exodus of companies from South Korea and Taiwan in the last few years. In the early 1980s, for instance, Pusan, Korea was a leading global center for shoe manufacturing. Companies such as Nike and Reebok subcontracted much of their production to firms in and around Pusan. By 1990, most low-cost shoe manufacturing had left Korea. Foreign competitors gobbled up some of the market share, but Korean companies maintained a large portion - from their factories in Indonesia, Thailand, Malaysia and China.
It is now quite apparent that the Four Tigers are on the move. Hong Kong is the leading investor in China. Taiwan is the leading investor in Vietnam. And South Korea is a leading investor in Indonesia. Although Singapore is expanding into nearby Indonesian Sumatra, for a number of reasons, its companies have generally been slower to invest in nearby countries: the Singapore government is now trying to encourage domestic countries to invest abroad.
Exploit your neighbors
The impetus to go multinational often stems from a simple assessment of a neighbor's resources. For example, a 1989 Thai logging ban drove Thai companies to look to their neighbors for new sources of wood. They have since become heavily involved in the clearcutting of the hardwood forests of Burma, and more recently of Cambodia. Thai gem mining companies have also secured major concessions with the Burmese military junta SLORC, and with the Khmer Rouge in Cambodia. Thai energy companies are also currently working on a number of major deals with Laos and Burma.
Several of Thailand's older, more established conglomerates are also expanding throughout the region. The CP Group, a large agribusiness conglomerate, is investing heavily in Southern China, as well as in shrimp farms in Cambodia and Vietnam. Thai banks are establishing themselves throughout the region.
Vietnam - the new frontier
In Vietnam, one of the world's hottest new markets, the NIC multinationals are leading the way towards development based on their own histories of natural resource depletion, environmental degradation and establishment of labor-intensive industries. Taiwan tops the list of countries with direct foreign investment in Vietnam, with more than $1.1 billion invested. Hong Kong is ranked third, and South Korea is ranked fifth. All three are ahead of Japanese and projected U.S. investment.
Taiwanese, Korean and Hong Kong companies are setting up cement plants, textiles facilities and low-tech consumer products factories, as well as a number of natural resource extraction industries. The five largest companies in Vietnam are owned by Chingfong (Taiwan), Vedan (Taiwan), Orion (South Korea), Very Good International Group (Hong Kong) and Paradise Development (Taiwan).
There are almost no institutions or social movements to hold these companies accountable for their performance in Vietnam. One World Bank consultant asserts that Korean companies are mainly setting up operations in Vietnam, particularly in the cement industry, that are too dirty even for their own country, which has serious environmental problems of its own. The first workplace strikes in modern Vietnamese history have all been in Korean factories, where workers claim the Korean managers regularly hit and kick workers, and where minimum wage rules are frequently ignored.
The future of the new multinationals
Are these multinationals any different than their larger and more famous forebears in Japan, the United States and Europe?
In many ways, maybe not. But as consumer, environmental and labor groups have begun to make inroads in placing market pressure on corporations, it is clear that these new NIC multinationals will be much more difficult to monitor and pressure for changes. Subcontracting firms' anonymity and insulation from the marketplace makes them much harder to influence.
These corporations have also shown almost no willingness to acknowledge the legitimacy of environmental and social concerns, as even the large multinationals purport to do.
With Increasing collaboration between the old and new multinationals, the old companies may shunt off their "dirty work" on to their Southeast Asian allies. Already, U.S., Japanese and European companies are increasingly forming joint ventures with the new multinationals. Finding it easier to have Thai companies pull out logs and deal with a repressive regime, for example, Japanese companies are content to purchase wood once it has reached the safety of Thailand. Similarly, Nike, which subcontracts with mostly Korean companies to run its factories, would prefer not to deal with striking Indonesian workers directly.
If cooperative arrangements between the old and new multinationals proliferate, activists may find the new multinationals spell new problems.
- Dara O'Rourke