Report on TUC Delegation to India May 2006

Background

1 A TUC delegation led by General Secretary Brendan Barber together with Judy McKnight - NAPO General Secretary and TUC Women's Committee Chair; Michael Leahy - Community General Secretary; Leslie Manasseh - Connect Deputy General Secretary; and Sam Gurney - TUC European Union and International Relations Department visited India between 7 - 12 May 2006. The delegation met with representatives from Indian unions, business, NGOs and government in Bangalore and Delhi.

2 The delegation was originally planned as part of a tripartite visit alongside representatives of UK business, the Secretary of State for Trade and Industry and DTI officials following the model of a visit to China in October 2004, however due to the government reshuffle on 5 May the DTI party had to withdraw at the last moment. With the assistance of the High Commission in Delhi we were able to rearrange key sections of the planned itinerary and proceeded with a revised trade union visit.

3 The TUC has generally had close links with four of the main Indian Trade Union Federations The Hind Mazdoor Sabha (HMS) and Indian National Trade Union Congress (INTUC) which are both affiliated to the ICFTU and the main centres linked to the largest Indian Communist Parties, the All-India Trade Union Congress (AITUC) and the Centre of Indian Trade Unions (CITU) which were members of the Commonwealth TUC. The AITUC is affiliated to World Federation of Trade Unions whilst CITU has no formal international links at present and had expressed interest in joining the new international that will be created following the merger of the ICFTU and WCL later this year. We have generally had less contact with the Hindu nationalist BJP aligned Bharatiya Mazdoor Sangh (BMS) or the World Congress of Labour affiliate in India the Confederation of Free Trade Unions of India (CFTUI).

4 Many of the federations have recently been focusing more on the majority of Indian workers who are employed in the 'informal economy' with major organising efforts in sectors such as forestry and anti-child labour initiatives. As well as the established national federations a range of other organisations have also been seeking to organise workers in various sectors of Indian economy including bodies like the Self-Employed Women's Association (SEWA). Other groups sometimes linked to Global Union Federations such as UNI are aiming to organise workers in the newly emerging service sector areas such as call centres and IT/BPO (Business Process Outsourcing) employees.

Purpose of visit

5 As with China (although with certain key differences i.e. a democratic government and presence of independent unions) India has been experiencing rapid economic growth in recent years with GDP growth running at around 6-8% annually. It has seen a huge increase in its service sector mirroring the growth of Chinese manufacturing sector. IT, Telecoms and other high tech industries have developed rapidly and a number of Indian corporations are now global leaders in these fields. The impact of outsourcing in the service sector is obviously one of the most visible impacts of globalisation on our membership in the UK.

6 Whilst GDP growth in India is predicted to remain at around 8% per annum with inflation stable at 4% more than 300 million people remain living on less than a $1 a day. 54% of the population are under the age of 25 with important implications for employment generation. Britain remains the second largest investor in India whilst India is the 8th largest investor in the UK (the UK receives 60% of all Indian investment into the EU) and 500 Indian based companies are now operating here.

7 In political terms India's overall size and rapidly strengthening economy mean that she is playing an increasingly important role in international institutions such as the World Trade Organisation where Indian commerce minister Kamal Nath has helped to bring together the 'G20 group' of major emerging developing nations including Brazil, China and South Africa as a powerful counterweight to the positions of the EU, US, Japan and Canada within the international trading system. Up until the early 1990s India had remained largely outside the main institutions of the global economy.

8 There were a range objectives for the visit including:

• visiting UK companies operating in India with particular emphasis on looking at their approach to employee relations and labour standards;
• meeting Indian companies and business leaders looking to expand into the UK market;
• strengthening our ties with Indian trade union federations; and
• assessing the impact of Indian economic development both in respect of the significance to the UK economy, the international trade system and development and poverty reduction in India, with particular emphasis on women in both formal and informal economy employment.

9 The visit formed part of increased work aimed at developing relationships with trade union movements/workers organisations in all of the major emerging economies and linked in with recent delegations to Brazil and China.

Bangalore

10 The initial two days of the trip were spent in Bangalore, one of the key hubs for India's expanding IT service sector. Meetings were held with Logica CMG, Nirvana Business Solutions and John Crane. The three companies were chosen to give a representative sample of operations in the Bangalore area, Logica is now Europe's 2nd largest IT firm and operates a range of out-sourced functions in the Bangalore area, Nirvana is an Indian company also in the outsourced service sector whilst John Crane is a UK manufacturing company with a major new facility in Bangalore.

11 A roundtable was also held with representatives from five firms at the local Confederation of Indian Industry offices. The managers present expressed general support for the liberalisation of the Indian economy, but complained that labour laws had not been modernised to match. They felt that the need to obtain government permission to open and close factories or to make lay-offs was a major factor in retarding expansion of formal sector employment. They also cautioned the delegation to remember that despite growth in both manufacturing and service sectors around 65-70% of people still worked on the land (a fact that was repeated at a number of meetings during the visit) and that in fact much of the current GDP increase was jobless with economic growth being based on the increased productivity of existing employees in the service sector. They stated that they favoured a free-market system but with an improved social security social safety net. In regard to industrial relations all their companies had unions in place (one manager had come with a union representative from his plant) and that with the increased impact of globalisation improved management-worker communications were more essential than ever. A state level forum existed to facilitate tripartite dialogue. In addition to this India urgently needed to improve its infrastructure to enable it to compete with China.

12 On the union side the delegation meet with two of the newer organisations attempting to organise the IT and call centre sectors, the IT Professionals Forum and UNITES the later being established by the regional structure of UNI (the Global Union Federation covering many service sector unions) and now with established operations in around 7 Indian cities. Organising in the new sector was proving difficult, but not impossible with both open and covert opposition from employers despite claims by some employers that the sector was so good to staff there was no need for unions many issues were being raised around which organising could be undertaken including pay, hours, the position of women and the nature of recruitment processes. However the delegation saw examples of technology in a number of the workplaces visited which make organising extremely hard such as call centre software which recorded every conversation by all staff and crossed reference to a database of 150+ words to ensure that employees didn't deviate from set scripts. As the delegation saw on a number of visits the high number of applications for each job in the sector, 500+ make blocking anyone who might be seen a 'bad influence' far easier.

13 The final meeting in Bangalore was held at the offices of the Association of Women Entrepreneurs of Karnataka (AWAKE) an NGO with major projects aimed at empowering women in the Karnataka region. AWAKE had been undertaking training and support for women in the state for 23 years and now numbers some 1200+ members. It bases its approach on the slogan 'empowerment through entrepreneurship' Various case studies were presented with a key element being how to persuade male family members to allow women to take part and support in obtaining credit to begin operating. Some training on labour standards was provided, but it was clear that this was not seen as a major priority and in a number of those present expressed the view that businesses were already over regulated.

Delhi

14 In Delhi the delegation visited the main site of Xansa a major UK-Indian joint venture which specialises in outsourced back office support. The delegation meet with senior management led by the Xansa CEO and visited the teams dealing with Barclays and British Gas accounts. Xansa personnel gave a series of presentations aimed at showing the benefits of off-shoring to both departure and destination countries estimating for example that £1.5 billion had been made available for reinvestment in recent years due to overall savings made by using India as a software base. Following questions they estimated that 80% of their clients made use of off-shored facilities with the rest opting not to off-shore for social/political reasons (mainly a mix of local government and some national govt departments). However their client base did include numerous government departments including; ODPM, DFES, Office of National Statistics, DWP and NHS alongside major businesses such as Royal Mail, BT, Boots and Yorkshire Water.

15 It was stressed that whilst lower costs had in past been criteria for moving work to India now it was more about adding value to service provision, the ability to access new revenue streams, manage risk and be more advanced technologically than the competition. A series of questions were asked about working conditions (there were no recognised unions). In respect to the future they estimated that next year around 2500 new jobs would be created in India with around 500 in the UK (although it was not clear if the UK jobs were in fact new or simply transferred employees from other companies). The visit finished with a presentation on the role of Corporate Social Responsibility in Xansa's work they are for instance committed to give at least 1% of all profits to local schools and have been involved in various Tsunami relief programmes (levels of corporation tax paid were not discussed).

16 A bilateral meeting was held with the minister of Labour and Employment Mr Shri K Chandra Shekhar Rao and a number of his main advisors, including those dealing with the informal economy, minimum wage, labour legislation and arbitration systems. The General Secretary stressed the importance placed on links with India and the need for increased contact. Minister Rao began by discussing how important he believed it was to maintain an effective tripartite system at a time when the Indian economy was continuing to experience such rapid change. Reform was needed, but the full impacts of globalisation were yet to be understood. Indian business was keen to abolish the law which states that in plantations, mines and factories if more than 100 people are laid off the government must first give approval, he stated they were asking for a model closer to Chinese practice, but the government remained unconvinced.

17 Bipartite committees in key sectors such as coal and steel helped to foster better relations as did the standing tripartite national labour conference. He noted that 93% of the workforce were in the 'informal economy' and that at present social protection was the responsibility of state governments although a national commission was being appointed to look into this and a bill would be proposed aiming to provide some medical insurance, maternity benefits and some pension provision. Discussion took place on the main issues of concern to workers in India and the Britain. Questions were asked on a range of topics including; calculation of the minimum wage, which is set at a state level and designed to provide a minimum threshold. On equal pay the minister cited some progress under he Equal Remuneration Act, but added that it remained a real problem in particular outside metropolitan areas. On the fear of jobless growth it was noted that most growth was taking place in services whereas the major areas of employment in manufacturing and agriculture were remaining largely stagnant.

18 The Ministerial meeting was followed by the first of two roundtables. The initial meeting was organised by the Confederation of Indian Industry, chaired by Mr VK Mathur, MD of Inapex and included senior business figures and the leadership of five of the main trade union federations INTUC, HMS, AITUC, CITU and BMS. The General Secretary began by noting that people across the world were feeling the pressure of the current model of globalisation and that it needed to be changed and shaped to provide economic and social benefits for all with a redefined balance between flexibility and security. Dr Sanjeeva Reddy President of the INTUC expressed his pleasure that a TUC delegation was visiting and expressed his commitment to renewing historic ties. He noted that whilst workers have always faced problems the impact of globalisation on the working class across the world made it even more essential that we forged ever closer links. He went on to say in the Indian context that everyone said they wanted reforms to the labour legislation, but no one agreed on which reforms.

19 Presentations were given on successful examples of partnership working by unions and management in the UK and India with the examples of Corus Steel in the UK and JCB in India being used to show how unions and management working together produce far more successful results. It was clear that this was one of the first such events to bring union and business leaders together in Delhi in what the chair called a 'dispassionate environment ' and he concluded that it had been extremely productive and that more such meeting meetings were needed.

20 The second roundtable was specifically for Indian unions and wider civil society (with representatives from over 20 NGO'S) and focused on globalisation, trade and the WTO Doha round. The event was chaired by Dr Veena Jha from the United Nations Committee on Trade and Development. She noted that the share of Agriculture in terms of GDP had fallen from 58% to 21% whilst Services had risen from 31% to 52%, but that within the service sector around 1 million people were in fact providing over half of India's GDP growth. Speakers took up the theme of the threat of growth without employment creation and the lack of protection for workers outside of the formal economy with several noting that despite 56 national and 106 state labour laws alongside ILO conventions workers were not benefiting from India's economic development. There was also discussion around work to organise those in the informal economy. A lively debate then took place on the necessity for unions and wider civil society to work together in shaping the direction of globalisation and the role of union movements in the developed world in providing support and a voice for colleagues in developing countries.

21 In the last meeting in Delhi the TUC delegation met with Renana Jhabvalq, National Coordinator of the Self-Employed Womens Association (SEWA) and a number of colleagues. SEWA which has recently applied to join the ICFTU as a national trade union centre is an example of the new structures which are seeking to represent workers in India. Originally founded in 1972 in Gujarat in the west of India to represent contract/home working women in the textile sector or were experiencing difficulties joining existing unions it has since grown across sectors and states with around 800,000 members and an extensive co-operative organisation including banking and micro-credit facilities, but still plays a major role in collective bargaining for groups of women in various sectors such as load carriers and fruit sellers. They now classify members under four broad categories;

• street traders;
• home based workers;
• people who sell labour; and
• small producers.

22 Following extensive consultation with members a list of the key priorities which they wanted to address were drawn up; 1) employment, 2) income, 3 access to assets i.e. houses, land, livestock, 4) services i.e. childcare, healthcare, insurance 5) education, 6) leadership 7) organising and self-reliance. Because of their avowedly anti-communal position in regard to both religion and caste (they estimate membership is 25% Muslim and 1/3 Dalit - 'untouchables castes') they have faced a number of attacks from the Hindu nationalist state government in Gujarat.

23 All of the major Indian union federations have approached them about joining their organisations, but due to historic and political differences and their specific role in organising and representing women (men can be associate members) they have chosen to remain independent.

24 In addition to the meetings with Indian colleagues the delegation discussed the general situation in India with High Commissioner Sir Michael Arthur and other colleagues from the High Commission. Sir Michael also hosted a dinner to which representatives of UK and Indian business, union leaders, and academics were invited for what proved to be a lively and interesting discussion. A number of interviews with Indian press were also conducted during the visit.

Next steps

25 The visit was extremely useful in regard to renewing old contacts and building new links. The delegation were able to see the most dynamic elements of the Indian economy and gain a greater understanding of some of the pull factors driving off-shoring whilst at the same time witnessing the shear scale of India's development needs particularly in terms of work on the provision of greater social support and physical infrastructure and the importance of job creation. The challenges confronting Indian trade unionists as they attempt to organise new sectors of the formal economy such as IT staff and call centres and the millions of workers in the informal economy were also made clear.

26 In practical terms our next steps include:

• participation by the main Indian trade union centres in the trade seminar to be held in South Africa around the end of the year;
• further discussions with the post in Delhi about possible support, via the Global Opportunity Fund, for policy level exchanges on key areas of concern, such as Indian labour market reform and role of unions in influencing governments in international trade policy;
• assessing the possibilities for practical assistance for organising work, possibly via direct assistance for sister unions channelled via the Global Union Federations; and
• further discussions on how to strengthen union-to-union links during the ILO conference and Commonwealth unions meetings.

27 Particular thanks are due to the High Commissioner and colleagues at the High Commission who ensured that the delegation ran smoothly and arranged an interesting and varied programme.