The businesses in Pakistan are not fully equipped to comply with the international labour and social standards which dented export earnings to the tune of $3 million in 2007, a report said.
Competitiveness of business enterprises is a key concern in Pakistan as exporters are under immense pressure to stay in the world market due to poor labour, environment, safety and health standards. In the international market, quality standards of a product are also judged in the light of international labour and social standards in vogue in the exporting country.
For example, the ban on exports of seafood by the European Union clearly indicates that the country has lost precious $128 million foreign exchange, reason being substandard seafood ,while EU has already imposed 100 percent check on import of frozen fish products from Pakistan.
Under the World Trade Organisation regime, 'Technical Barriers to Trade' (TBT) arise whenever an exporter is required to comply with particular requirements of the importing country. Such requirements may entail consideration of health and safety of consumers and requirements to do with environmental protection.
In this world, which is heading towards economic integrity, the countries that have strengthened their links with the global economy through trade and investment have generally grown more rapidly over a sustained period, while one of the major hindrances for the low-income countries towards adopting this path is the limited enterprise capacity to comply with international buyers' requirements.
International buyers are increasingly demanding compliance to labour, environment, safety and health and other social standards, along with demands for product quality and reliability.
Keeping the above in view, Punjab Resource Management Program (PRMP), assisted by Asian Development Bank (ADB), has been specially designed for promotion of the core labour, environmental and quality standards. It has now been extended for five years as a cluster program with Punjab Government Efficiency Improvement Program (PGEIP) that focuses on development of the private sector.
The strategy made by PGEIP will focus on some certain themes including international labour standards (ILS), occupational health and safety, issues related to women work force, environmental standards, WTO and other quality standards.
ILS address the diverse issues including freedom of association, occupational health and safety, forced and bonded labour, child labour, social security, labour inspection, tripartite consultation, vocational guidance, employment policy, non-discrimination, wages, work duration and maternity.
The recent recall in USA of Chinese-made toys due to high lead level indicates the major challenges of quality, product safety, food handling and other manufacturing standards, the compliance of which is essential to remain competitive in the global arena.
The report says that even informal and agriculture sectors are being increasingly covered by the global standards. An example is the Better Cotton Initiative, started by major garment importing companies who intend to improve the standards at the tail end of their supply chain.
The businesses are faced with a two-pronged dilemma. On the one hand, they are faced with the issue of costs of compliance with international standards on labour, environment and quality. The businesses lack the requisite capacity to handle the costs associated with compliance of these standards. On the other hand, the costs of non-compliance are also significant.
The report says that globally about 2.2 million workers suffer serious non-fatal injuries and another 160 million workers suffer from short or long-term illness from work-related causes. Those in favour of universal labour laws advocate that weak labour standards could give exporters a comparative advantage.
Pakistan has committed to update domestic labour policies. However, upon examining closely, one finds many gaps and discrepancies within the policy framework. There is an urgent need to concentrate more on international standards of labour to increase output while putting a better input than ever before.
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