EU GSP+ offers little benefit for workers in Pakistan

Pakistan has been a beneficiary of the European Union's Generalized Scheme of Preferences (GSP+) since 2014. Over the past few years, both sides have deepened their trade ties. About 33% of Pakistan's exports are now destined for the EU, with the total value of these exports increasing from €4.5 billion ($5.47 billion) in 2013 to €7.5 billion ($9.1 billion) in 2019.    

To enjoy GSP+ benefits, countries are required to implement 27 international conventions related to human rights, labor rights, protection of the environment and good governance.

While the scheme has boosted trade ties between the EU and Pakistan, human rights activists, labor unions and workers believe that the intended socio-economic benefits have not trickled down to the labor force and vulnerable groups in the South Asian country.

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"The wealth accumulated by exporters has increased income inequality instead of decreasing it," said Abdul Qadir, a labor expert.

Under GSP+, it is imperative that economic and social benefits gained through the scheme translate into greater protection of human and labor rights. However, EU assessment reports show that while some provinces have demonstrated an improvement in compliance with labor conventions, living wages, occupational safety and labor inspection have seen little improvement, especially in sectors like agriculture, construction and mining.

Androulla Kaminara, the EU's ambassador to Pakistan, told DW: "The EU has agreed on a comprehensive and ambitious program with the Federal Ministry of Human Rights, consisting of three pillars. Institutional development, capacity building and awareness raising that are essential for the promotion of human rights." 

Low political will a barrier

Even though Ambassador Kaminara underlined that Pakistani authorities are keen on continuing the GSP+ scheme, rights activists and workers say Prime Minister Imran Khan's government has so far failed to fulfill its promises of providing a living wage and improving labor rights.

On November 18, PM Khan visited Faisalabad, the country's industrial hub, where he met with the business community and urged them to ramp up investments without worrying about policy shifts. He assured them that his government was determined to revive industrialization in the country.

At the same time, the Labour Qaumi Movement (LQM), a rights group, organized a protest in the city demanding better protections for workers.

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The government is all the more willing to help already wealthy industrialists, but there is a lack of political will to uplift and protect poor workers, Abdul Latif Ansari, LQM chairman, told DW.

"As per GSP+, all workers should be given social security cards but so far hardly 10% of the workforce in Pakistan have them. While the world has moved from minimum wage to a living wage, we are still being forced to take to the streets to demand the right to a minimum wage," said Ansari.

In 2014, Ansari was shot and injured in a bid to stop the LQM from helping the power-loom, kiln, industrial and commercial workers of Faisalabad.

The Pakistan Workers' Federation (PWF) has also issued a letter to PM Khan, demanding minimum wages, especially in light of COVID-19 and increased work precariousness. "The working people are deeply dismayed because their governments have ignored them to provide wage relief in the year 2020 budgets," the letter stated.

Furthermore, the group demands a hike in the statutory minimum wage, from the current 17,500 Pakistani rupees (€92, $111.8) to 40,000 rupees (€211, $256.3), due to rising inflation and economic hardship.

Zahoor Awan, general secretary of PWF, told DW that Pakistan's 400 labor unions only have 600,000 workers from the formal sector.

"We need greater unionization but despite signing conventions, our judiciary is anti-worker. Worker exploitation is the rule, especially in informal sectors like agriculture, where forming unions isn't possible," said Awan.

Inadequate and ineffectual inspections

LQM's Ansari pointed out that exporters are lobbying for an "inspection-free" business environment, which will likely further jeopardize worker safety and rights.

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This is despite the adoption and implementation of the Occupational Safety and Health Risk (OSH) legislation as part of GSP+.

"We are conscious that the Labour Inspectorate System needs to be revamped by the provinces," the EU ambassador said, adding: "We are engaged with the government on these issues."

Pakistan ratified the Labor Inspection Convention in 1953.

EU reports point out that although the number of provincial inspectors has increased, it still remains low. Labor union leaders also attest to the lack of inspections due to corruption and a lack of compliance.

It is reported that one in 25 workers faces an occupational accident and due to a lack of unions and social security, many injured or killed do not receive the compensation they are entitled to.

COVID-19 and labor protection

The pandemic caused by the novel coronavirus has disproportionately affected daily wage and factory workers in Pakistan as they are not protected by contracts. Labor union leaders believe that exporters benefiting from GSP+ should put in place greater safeguards for workers in emergency situations.

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LQM noted that some MNCs gave employees paid leave during the lockdown as they have to adhere to European Union trade policy, setting a precedent for the rights and protection of workers.

"The pandemic has also created a shortage of some 150,000 textile workers in the country. Instead of worker exploitation, this is a chance for the government to invest more in training and incentives to make this industry fairer," Ansari stressed.

The EU says it supports the implementation of international labor standards in sectors like textiles and leather manufacturing, which are major contributors to the Pakistani economy.

"The EU works closely with ILO and Government of Pakistan so that core labor rights are central to the government's thinking in addressing emergencies such as the COVID-19 pandemic," said Ambassador Kaminara.