Workshop on Employers Organizations at Colombo

WORKSHOP ON

EMPLOYERS ORGANIZATIONS: ENHANCED EFFECTIVENESS IN MEMBERSHIP

COLOMBO, SRI LANKA --- OCT 4-5, 2011

A two day workshop is being organized on 4th & 5th of Oct 2011 at Colombo, Sirilanka. The workshop is being jointly organized by DECP, ILO and ITC (Turin) ILO. The workshop aims at boosting the effectiveness of Employer’s Organizations in South Asia and sharing of information, practices and strategies adopted by different employer’s organizations with specific focus on:

1. Membership promotion/retention.
2. Lobbing with governments to create a more conducive environment for business and national competitiveness.
3. Provision of relevant services to members geared towards enterprise competitiveness and sustainability.
4. Revenue building will facilitate in the adoption of more meaningful and effective strategies by national Eos.

The workshop is expected to contribute to:

• The better understanding of the comparative and international context in which the EO function and the challenges with which they are confronted;
• The creation of networking between EO’s from the same region
• The capacity to develop strategies for better internal management on the basis of peer review and information on best practices
• The preparation of common positions on policy issues which are similar for several EO’s of the region

Day 1

Introduction

The present economic situation in the region and challenges for development, especially for the private sector

Challenges and strategies for EOs in: Membership Promotion/Retention,

Lobbying/Advocacy,

Services & Revenue Building.

(what are the issues and what can be done to overcome them?) sharing of practices among EOs (what has been done)

Strategic Action planning to address challenges pertaining to Membership Promotion/Retention, Lobbying/Advocacy, Services and Revenue Building

Day 2

Labour issues relating to trade & Role of EOs in addressing such issues
Discussion & sharing of initiatives among EOs

Way forward in addressing labour issues in Trade: What EOs can do and How? Areas for sub regional EO Networking way forward for sub regional EO Networking

The workshop activities have been structured in a manner that the participants will be asked to determine the precise topic for discussion. These will concern both the external actions of the EO (such as national policies for competitiveness, trade and labour, ILO related issues etc etc) and the internal issues related to the management of the EO (such as membership strategies, services for members, governance, revenue etc.

Since the participants are expected to make interventions on each of the issues therefore a BRIEF on these issues have been prepared for perusal of President EFP backed up by relevant documentation (appropriately flagged).

BRIEF FOR COLOMBO MEETING

International Labour Standards (ILS) with respect to export sector both within and outside the Export Processing Zone

There is no direct International Labour Standard(s) pertaining to export sector. However, the export sector has to comply with International Labour Standards under Social Audit.

Main conventions are:

• Night Work Convention C4, C6, C41, C89 & C90
• Weekly rest (Industry) Convention C14 & C106
• Forced Labour Convention C:29 & C105
• Right to Organise & Collective Bargaining C:98
• Equal Remuneration Convention C:100
• Discrimination (Employment & Occupation) C:100
• Equality of Treatment (Social Security) Convention: 118
• Minimum Age Convention C: 138
• Worst Forms of Child Labour Convention C:182

The ILS are presently not practiced in the Export Processing Zones of Pakistan.

Details of the above conventions are at Annex-I.

The present economic situation of Pakistan and challenges for development, especially for the private sector (Data with respect to economic situation for the financial year ended in June, 2011 be taken from the Economic Report as published by the State Bank/Govt. of Pakistan?

The economy of Pakistan has been undergoing a stabilization phase for the last 3 years. The restoration of macroeconomics stability is important and necessary to provide the platform for generating growth, jobs, and improving the quality of life of people.

Pakistan is basically an agrigarian country but, the manufacturing sector has been major contributor towards promoting economic growth, employment generation, competitiveness and trade development in the globe. Overall there is a decline of GDP growth to 2.4% comparing to 2010 growth of 3.8%. In the manufacturing sector, demand for products particularly textiles, auto, fertilizers, cement and POL remained strong but due to many constraints supply could not meet the demand.

The Industrial sector (Large scale Manufacturing) growth face many constraints without overcoming following challenges, this sector cannot grow to the desired level:

1. Energy Shortage
2. Inflationary pressure
3. Implication of Fiscal Deficit
4. Security (Law and Order)

In the energy sector, Gas supply constraints have become more binding. The shortage is affecting broader economic growth. For example textile units generally rely on natural gas not only for power generation but also for production. Fertilizer output and power generation have been affected by gas-load management in particular. Similarly, the power shortage has created production constraints in several industries in large scale manufacturing, small scale/cottage industries and other trading house. However, recently it has been decided to direct gas supply to fertilize sector, recognizing the importance of stable agricultural input prices and saving of foreign exchange on imported fertilizer.

A detail note on Energy Crises in Pakistan is at Annex-II.

Inevitably brought pressure on the interest rate thereby discouraging the private sector to make investments or sustain the financing cost. This has posed a challenge for economic management and growth. The WPI (Wholesale Price Index) is primarily driven by inordinate spike in cotton prices because of its huge weight in the index. The CPI (Consumer Price Index) has recorded cumulative increase (upto May 2011) is 14% as against 11.6% in the comparative period of last year.

The Fiscal deficit of 4% of the GDP although lower than the previous year still poses challenges. The deficit had to be met from revenue generation from direct and indirect taxes. Lowering the taxes would have caused a relief to the industrialists resulting in more growth and development. Which, under the existing scenario it is not possible.

The law and order situation in Pakistan has an adverse impact on the growth and development of economic activities in every sector of the industry, trading, commerce, etc. This has particularly hit Karachi which is the Hub of the economic activities of Pakistan.

It is therefore concluded that the overall Large Scale Manufacturing (LSM) posted a growth of only 1.6% during this year (Jan – March 2011), substantially lower than 4.4% in the corresponding period of 2010.

Many industries, particularly POL, Cotton, cloths, Cement and Fertilizers registered an improvement in profit margins during the period, mainly due to rising global prices. However, while corporate profitability improved across the board, this was not reflected in production growth. In cotton cloth and fertilizer for instance, effective capacities have affected due to gas shortage. In contrast, cement production was cut down apparently due to low demand from construction sector and limited export opportunities.

Going forward, energy shortage will continue to be a challenge/hurdle for manufacturing growth, particularly for textile, glass making and fertilizer units. The situation can be controlled through exploring the liberal use of alternate source of energy in Pakistan.

Lobbying/Advocacy/Services/Revenue Building – what are the issues and what can be done to overcome them?

Lobbying/Advocacy: For Lobbying/Advocacy a clear cut understanding is necessary on issues and on the ways and means to resolve them. An understanding is also required of the assistance needed from the concerned authorities or from the EFP Members. To proceed in the right way an Action Plan has been developed and Committees formed for action in four different areas. The Committees are now to meet and develop strategies for addressing the issues.

Services: For image building of EFP it is necessary that EFP Members are satisfied with the services provided by EFP and that EFP comes upto their expectation as a mother body of employers. However, the EFP Secretariat lack’s capacity and expertise in the areas of services need to be provided to members. Now, a strategy is being developed through the Action Plan for the strengthening of the Secretariat Functioning.

Revenue Building: The revenue is build through membership fee and the services EFP provides to members. Since services need to be improved the Action Plan prepared by EFP provides a strategy for the increase in IR and HR Services, OHS Services, initiation of Social Audit, Auditing of Global Compact, timely response to members and providing some new services to members etc. Expectation is 20% increase in revenue generation through these services. With the required services in place we may expect increase in membership. 50 new members are planned to join EFP up-to June 2012. The better and improved services will also encourage existing members to remain EFP members and thus through the process additional revenue generation is expected.

Additional 20% revenue are also expected form Conferences & Seminars Sponsorship and recovery process.

Challenges & Strategies for EFP in Membership Promotion/Retention?

Members have a high expectation of receiving good services from EFP for smooth running of their business. In order to meet the expectations EFP has based on the Action Plan developed in Turin made Action Plan Implementation Committee to enforce and monitor the plan for enhancement of effectiveness of the Working of EFP; Image Building, Satisfying members needs; Branding, attracting/retaining membership developed an Action Plan as strategic recourse to EFP image buildings.

Labour issues relating to trade and EFP’s role in addressing such issues?

The Action Plan developed by EFP provides obtaining information regarding member needs in the Labour and IR areas. A questionnaire is to be developed and action to be taken for the gap to be identified of what is being offered presently and the expectation of the members.

A detailed Action Plan prepared by EFP on Lobbying, Services, Membership Retention and Revenue Building is at Annex-III.

In order to facilitate discussion during the workshop a brief on EFP (Annex-IV) and relevant material on Quality of Products and services through decent work
(Annex-V) and a brief on Equal Opportunities Employers (Annex-VI), have been added to the folder and a brief on Sialkot trade issues (Annex-VII) .