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Workers in the Supply Chain of Electronics Industry in India: The Case of Samsung

 

Surendra Pratap

Abstract

This paper attempts to analyse the dynamics of the electronics industry and the fate of electronics workers in India in the broader context of the problems of India’s economic development in the new global politico-economic regime. The electronics industry recorded a significant growth after liberalization. However, the nature of this growth is raising serious concerns. The growth is mainly in IT services, and not in electronics manufacturing. Moreover, whatever is the growth in electronics manufacturing, it appears to be more import intensive. The value added in this industry in India is merely 5-10 per cent. All electronics giants with manufacturing bases in India, such as Samsung, LG, Dell and Hewlett Packard, import 90 per cent of parts from overseas. In the case of Samsung the majority of the components are imported from Korea, Singapore and China.Current government initiatives in the form of a new electronics policy and the new manufacturing investment zones policy are an attempt to accelerate the growth in electronics manufacturing. The size and scale of operations of the majority of electronics manufacturing units in India remain small, and the huge majority of them are in the informal sector. Moreover, a significant portion of jobs in the formal sector are also informalised. The huge majority of units engages less than 40 workers each and therefore is exempted from various labour laws including the Furnishing Returns and Maintaining Registers statute. Further relaxations in labour laws are extended to electronics industries under various schemes in most of the states of India. The expansion of this industry in India is comparatively new and therefore the majority of the workforce in this sector is mostly first generation workers.

There are rarely any trade unions in electronics sector. However, recent strikes in some electronics manufacturing plants show that the process has started. The working conditions in the industry are some of the worse. The majority of workers receive only minimum wages. There are serious problems of occupational health and safety. Samsung in Noida (Uttar Pradesh) is using the strategy of exploiting the apprentice workers in a big way. There are no agency workers in this factory. However, the ITI apprentices constitute about 50 per cent of the workforce. There is a significant difference in wages of regular workers and apprenticeship. It seems that this is going to be a general trend in the industry. To organize the electronics industry workers, it is necessary to focus on the cluster of electronics manufacturing plants emerging in various regions. Awareness building campaigns among workers in these clusters and among the students of ITIs that are supplying the apprentices to these clusters can be used as an initial strategy to create common platforms of electronics industry workers and ITI students.

For the full paper, please download the attachment below


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Samsung: Designed for humans, produced in deaths

Samsung: Designed for humans, produced in deaths | Tomoko Nishino | Scoop.it

Samsung: Designed for humans, produced in deaths — Behind the world’s leading maker of electronics

Samsung’s dark story went even deeper than a case of profit maximization at all costs – it proved to be a spectacular example of the unholy alliance between business and government that has become prevalent in capitalist economies around the world.


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Riots, suicides and more in Foxconn factories

Riots, suicides and more in Foxconn factories | Tomoko Nishino | Scoop.it

If you want to understand why iPhones are made in this corner of the world, look no further than Li Yue.

When I met the effervescent 21-year-old, she was lined up at a kiosk outside the gates of the massive assembly plant owned by Foxconn. Li, wearing a white T-shirt and blue jean shorts and carrying a pink parasol to beat the heat on a scorcher of a June day, was among a group of a dozen or so candidates applying for a job with the Taiwanese firm. Not a specific job, mind you. Any job. 
It's not as if Li, who just finished her first year as a student at Henan Police College, didn't have much going for her. She was bright and engaging. She spoke more than passing English. And she conveyed an eagerness to get started.


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Indian workers at riot-hit car plant win pay hike

Indian workers at riot-hit car plant win pay hike | Tomoko Nishino | Scoop.it

India's top carmaker Maruti said Wednesday it has given workers at a plant where employees went on a deadly rampage a 75 percent pay hike as it seeks to mend labour relations.

Workers at the Manesar plant will see their monthly pay and allowances climb by about 18,000 rupees ($336) over three years, making them among the top-earning factory workers in the country.


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Workers Rally Against Indonesia's Outsourcing System in Jakarta Protest | The Jakarta Globe

Thousands of workers marched on foreign embassies in Jakarta on Wednesday in the latest labor protest demanding the end of Indonesia’s controversial contract worker laws.

The demonstrators massed at the Hotel Indonesia traffic circle Wednesday morning before marching to the South Korean and Japanese embassies in protests against Korean tech-giant Samsung and Japanese carmaker Toyota. Labor unions accused both companies of using contract workers in a process locally referred to as "outsourcing."

“We’re going on a long march to the Korean Embassy because Samsung employs many workers with the outsourcing method,” president of Confederation of Indonesian Trade Union (KSPI) Said Iqbal said.

The union planned to hold a rally outside the Japanese Embassy before moving to the National Police headquarters to protest the arrest of demonstrators, Said said.

Under Indonesia's outsourcing system, employees are contracted to work for a company by a third-party agency. Although they work alongside regular employees, outsourced workers often lack access to health care, holiday pay and pension funds. 


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[Korea] Ulsan labor protest making a splash

[Korea] Ulsan labor protest making a splash | Tomoko Nishino | Scoop.it

Two irregular workers have camped out high atop a pylon, drawing attention to their plight...

As demonstrations on top of a steel pylon in Ulsan by in-house subcontractor employees of Hyundai Motor entered their third day on Oct. 19, more groups have stepped forward to stand in solidarity with the strikers and expressed support for their actions.

 

In particular, the union of regular workers and groups of temporary workers at Hyundai Motor along with various workers’ unions from Ulsan area have been actively demonstrating their unity with the strikers, holding candlelight vigils and tent sit-in demonstrations.


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Samsung Under Investor Pressure Over Child Labor

Samsung Under Investor Pressure Over Child Labor | Tomoko Nishino | Scoop.it

Global activist funds have taken issue with the employment of child labor by Samsung Electronics Co. Ltd.,the Hankyoreh, South Korea’s independent daily, reported Sept. 18.

“We sent an inquiry to Samsung in August when allegations of Samsung’s use of child labor in China first surfaced,” the newspaper quoted a source of APG Asset Management, of the Netherlands, as saying.  “Employment of child labor won’t be tolerated.  If the allegations turn true we will discontinue investment [in Samsung].”


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Mining Sector and its Future in India

Introduction

India is endowed with huge resources of many metallic and non-metallic minerals. Since independence in 1947, there has been a rapid growth in the mineral production both in terms of quantity and value. Currently, India produces as many as 87 minerals, which include 4 fuel, 10 metallic, 47 non-metallic, 3 atomic and 23 minor minerals (including building and other materials).

The mining activities are extremely poorly regulated despite the fact that as early as 1948, the founding fathers of the constitution realized this need. During the Constitutional debates, they saidas early as in 1948, “Industrialisation has brought in its wake an ever-increasing demand for mineral resources. These resources are non-replenishable and mostly scarce. Proper control over regulation and development of mines and minerals is therefore, a matter of national concern.” Today over 80,000 mines operate illegally as against nearly 10,000 legitimate leases. Only a third of the legal mines actually report to the Indian Bureau of Mines, the regulator.

Within two decades of liberalised economy, much in contrast with the Constitutional objectives, mining as a sector has come to be associated with scams, conflicts, violence and ecological degradation. 

A Quick Overview

Mining of major minerals was a forte of the Public Sector Undertakings until the nineties when the country embarked on the economic policy of privatization and globalization.  New ways are being devised for exploitation of the resources and to hand over wealth of the nation for small short-term gains. The rapidity with which the global interests want to usurp these resources is reflected to the stock markets and it is with an exponential rate that mining is devouring lands and livelihoods of many communities. In the case of coal, the private sector was a key player until it was nationalized in the seventies again to be opened up in the last decade and as of today nearly twenty per cent of the known coal reserves of the country have been handed over to the private sector.  Most mineral resources are co-terminus with Forests and Schedule Areas and mining has become a major source of destruction of the environment and livelihoods of the local communities and has reached alarming proportions. Some key facts:

1.       Mining has a low contribution to the economy. GDP from mining has never exceeded 5% of the GDP even after liberalization. In comparison, small and medium enterprises contributed significantly (29%), employing more people and affecting less people.

2.       Out of the estimated or known coal reserves of 267 billion tones, 48 billion tonnes, almost one-fifth are allocated to high networth companies in what is now being debated as the biggest scam around natural resource allocation amounting to illegitimate corporate benefits of over 40 Billion USD.

3.       Bauxite mines allotted to companies like ANRAK, NALCO, VEDANTA, and JINDAL could last them for a century. Most of these mining blocks are in the Schedule V areas which have protection under the constitution and by Samata Judgment. The States have circumvented these protections by taking lease by state corporations and entering into JVs with private companies.

4.       Mining in several blocks will only begin 5 decades from the date of clearance which is a clear indication of sacrificing resources in one-go and also negating the chance of communities to assert their rights.

5.       The input of resources into production stream is huge – e.g. inputs for 1000 kg primary aluminium production requires >5000 kg of bauxite ore, 13,000 litres of fresh water, 27500 litres of sea water, 15,711 kWh of electricity consumption. It clearly depicts that mining of a mineral is not limited to the mineral alone, it is highly intensified resource use of other resources or raw materials.

6.       Occupational hazards in mining industry are under reported, unreported and fail to recognize the huge costs at the society level. Underground coal mines result in 1 death for 2.5 mT of coal mines. A huge proportion of coal mine workers suffer from Coal Workers Pneumoconiosis (around 25% of coal workers). Noise pollution (>90dB) is a huge neglected aspect which is increasingly affecting workers as the mines are mechanized and the protective gears do not respond to working conditions or are not appropriately suitable to conditions.

7.       The reclamation costs are being estimated at least 4% of the coal production costs, areas impacted by coal fires is increasingly affecting a large conglomerate of settlements. With the introduction of coal bed methane i.e. emptying the last residues, the kind of water evacuation is likely to damage land at large scale. Even at micro levels of processing and disposal there is 1 death per 5 mT of Coal input and 1.3 disabling injuries per mT.

8.       Villages in the mining regions are getting devoid of drinking water due to increased competitive use of water by industry and mining. It is not mining alone, once we see the downstream industry we realize that huge quantum of water is being gulped by the industry – e.g. it is estimated that this water can serve 300 million populations. On the other hand, the slippages in rural drinking water supply are huge i.e. the overall quantity and quality problem is glaring. 42% of households in villages of India have no electricity where as the industry is consuming the major share of electricity.

9.       With heavy mechanization, the labour or employment is decreasing whereas in small scale mining labour norms are flouted both in terms of remuneration as well as provision of facilities.

The impacts are widespread and diverse, and have created socio-economic and cultural impacts over different geographies and ecosystems – from the Western Ghats which is an UNESCO Heritage Site and a Global Biodiversity Hotspot to Stone Quarries of Rajasthan where silicosis is a blight on a huge population still emerging from the cover of denial by the government, and from coal mines in Meghalaya leading to Acid Mine Drainage to beach sands in Kerala causing cancer from radiation.  Even constitutionally protected tribal areas Scheduled Areas, (Schedule V and VI), where a large proportion of the mineral wealth of the country rests, have not been spared of this onslaught. 

The current trend is to promote more mining and a complex set of factors external as well as internal are driving more investments. India opened up its FDI in mining without any bottlenecks for the investors in 1991. The policies initially aided the State and later, the corporates, as promoter of economic growth and private profitability by rapidly abstracting mineral wealth of the country. Various actors have invested into the sector, including national and international companies, banks, equity funds, and also “round-tripping” of illegal funds etc. It is now predicted to almost doubling its current size within the next 15 years. The irony is while the mining is being promoted, there is no polluters pay principle in practice which is building a huge cost towards environment. The regulatory regime is in place but these are again skewed by executive decisions to promote investments. Moreover monitoring is not effective thus leading to lowest compliance.

Government of India’s Priority and Our Concerns

The National Mineral Policy of 2008 banks upon inviting high investments into the mining sector and has promised of a Sustainable Mining Framework. Although there has been mention about impact on people, land acquisition and compensation, it is hugely oriented at looking mining as an economic opportunity. This is reflected in the new bill, through which a single mining lease could be as large as 100 km2; renewal of leases is being replaced by extension bequeathing it till the deposit lasts which will make miners squat for long; there is a growing dilution of provisions which favours ownership to communities to only profit sharing that too through a highly bureaucratic setup.

The push is to change government policies and make them favourable to industry, thus the mining companies and the State are equally alienated from the host communities. The financial transactions are very opaque, with investments banks which are large in number channelizing funds which is difficult to track. The whole issue of capital mobility and its role in expanding mining is still poorly understood.

Ecosystems are getting disturbed beyond their resilience, like the river ecosystem is getting hugely affected, so is the wildlife corridors. The interrelationship between governance of a welfare state and mining is marred by huge gaps and strange complicated structures. The glaring anachronism in terms of neglect of mapping human, botanical, zoological and atmospheric resources is huge; the result of which is these overlying resources are not accounted and treated as overburden by companies and government.  Thereby the whole process is damaging the huge potential of community and undermining the wealth of the ecosystem.

By and large in the mining operation and investment world, the key beneficiaries are investors, banks, owners, politicians and contractors, consultants and reclaimers. The cost is being paid by local communities, workers, environment, ecosystem and small investors.

The first Industrial Policy Resolution adopted in 1948 codified the national policy in respect of mines and minerals. Mining sector also received due attention in the second 'Industrial Policy Statement' issued in 1956. As a follow-up measure to Industrial Policy Resolution of 1956, the Mines Minerals Regulation and Development Act 1948 (MMRD) was repealed and MMRD Act 1957 was enacted. Under this Act the Mineral Concession Rules 1960 and the Mineral Conservation and Development Rules 1958 (MCDR) were issued. The new Industrial policy in 1991 oriented towards market liberalisation.

 The National Mineral Policy 1993 was an exercise to keep the mineral sector tuned to the restructuring measures adopted in the trade and fiscal sectors.  The new Mineral Policy declared in March 1993, has made a radical departure from the earlier policies by throwing open the mineral sector to private companies and by allowing equity participation by foreign companies in joint venture in mining promoted by Indian Companies. Further Amendments in MMRD Act, 1957 in 1999 was brought in to reflect the changed emphasis on “development” rather than “regulation” and was amended to MMDR Act. 

The slow pace of Foreign Direct Investments (FDI) in the mining sector even five years after the liberalization of the investment regime, the lack of enthusiasm for investment in prospecting shown by the domestic private sector, and the lack of resources with public sector agencies meant that the sector was unable to significantly contribute to growth. During the Mid-term Appraisal of the 10th Plan in the Planning Commission, it was observed that the 1993 policy had not been able to achieve the aim of encouraging the flow of private investment and introduction of high end technology for exploration and mining because of procedural delays, etc. A need for review of NMP, 1993 with a High Level Committee on National Mineral to review the situation led to the National Mineral Policy (NMP), 2008, which confers lot more concessions to investors while also expressing the need for environmental and social safeguards. A new Bill, the Mines Minerals Development and Regulation Act 2011 has been introduced in the Parliament and is currently under the scrutiny of the Parliamentary Standing Committee.

The provisions regarding working conditions and workers are covered by the Mines Act 1951 which is also being reviewed. Surveys conducted in few selected mines recently by Directorate General of Mines Safety show that a significant number of persons employed in the mines are suffering from occupational diseases including Silicosis, Coal Workers’ Pneumoconiosis, Noise Induced Hearing Loss, etc. Because of the acute shortage of Occupational Health Inspectors, a complete picture of the occupational health status in mines is not available. Moreover, the persons employed in mines are exposed to number of hazards at workplace which adversely affect their health. Some of the important ones are dust, noise, vibrations, heat, humidity etc.

The long-term programmes in every sector of the economy in India are still governed by and large by the Plan Programmes. Occupational Safety and Health at workplaces has been declared a priority area for formulation of activities in the XII five year plan, the Planning Commission had set up a Working Group on Occupational Safety and Health (OSH) under the chairmanship of Secretary, Ministry of Labour and Employment.  The report concludes on the existing situation “In spite of many initiatives, the standards of safety in mines have not yet reached to a worldwide accepted norm of Zero Harm at Workplace. Further, there are periodic occurrences of disasters in coal mines.

This calls for fresh initiatives with use of modern technologies and tools, scientific data acquisition, analysis and formulation of action plans on each identified thrust areas, proper implementation and effective monitoring of results. In the area of statutory enforcement, result based inspections and enquiries, compliance tracking system and on-line monitoring of processes are proposed to be undertaken through various plan schemes proposed during the XII Five Year Plan.

However all these so called measures being taken up as a priority will not be having much implications until the Mines Act is made more stringent and companies and government agencies are held accountable.

Towards a Way Ahead

Mining is one of the most environmentally and socially destructive economic activity. It has a low contribution to the GDP but the conflict it engenders is enormous and widespread. Our country today has the dubious distinction of having illegal mines significantly outnumbering the legal mines. A new Mines Mineral Development and Regulation Act is on the anvil and it calls for far reaching reforms in the mining sector. The future should usher in an era of Mineral Development with development as the focus rather than the current attitude of exploiting minerals for mere profit.

The key emphasis has to be on

1.       Rationalising and regularization of the on-going mining activities on a war footing;

The unacceptable situation of illegal mining must be put to an end. Irrational exploitation of differing grades of ores for short term gains has to be restrained. Illegal mining of minor-minerals particularly of river-bed across the country have been destroying the river systems and needs urgent attention. This calls for a total moratorium on new leases and ensuring “zero-tolerance”.

2.       Increasing investments on exploration of all resources and have a detailed map before embarking on deeper exploration and even in that process especially through non-invasive technologies and augmenting the reserves both on-land and within our exclusive economic zone in the oceans;

Exploration investment in the country is abysmally low and does not even constitute two per cent of the global exploration investments and needs to be raised significantly.

There are very little resources going into developing new exploration methods. While our EEZ extends to 200 km from the coast, current investments are restricted only to search for oil and gas and disturbing the near shore environment.

3.       Enhancing the efficiency of the mining activities and generating more resources from “brown-field” expansion rather than opening up new “green-field” areas;

Small pocket deposits in forested regions are being opened up creating patchiness and larger impact on the forest corridors while efficiency improvements and expansion of existing deposits are being neglected. This has to be a high priority.

4.       Enabling and emphasizing on local value addition and restricting export of minerals;

Though every state government talks about value addition, in the name of lack of technology or that mining is a stand-alone industry important minerals are being exported with very little benefit to the state or the communities. Value addition must be the norm rather than as an exception.

5.       Developing a widespread understanding of the strategic value of different minerals and ensuring conservation of requisite quantities of such minerals;

The strategic value of various minerals must be recognized and specific efforts must be made to conserve minerals essential for the country’s future. Minerals such as bauxite, titanium, several heavy metals which will be crucial for future development of materials need to be assessed for our long term needs rather than for profits to corporates in the current period.

6.       Ensuring strict compliance of all the environmental, social and labour laws governing mining activities and several environmental, social and labour laws are constantly violated in several mining contexts.

The laws should be made convergent with proper oversight authorities. The blight of occupational diseases such as asbestosis and silicosis must be eliminated.

6.       Enabling evolution of economic opportunities not dependent on mining.

The long term consequences of climate change and strategic future mineral availability should form the key consideration in the development of minerals. It is important to recognize that mineral bearing areas do not suffer from the classic situation of “resource curse” which is seen across the globe. In order to do this effort must be made to identify economic opportunities which are not dependent on mining.

A Reflection

We recognize that the minerals will be ours forever if we restrain mining but the wealth of the soil and other biota will be lost forever if we mine the minerals below them. Mechanisms like paying the Net Present Value as compensation do not reflect the true long term value of the ecosystem services which the terrain and the plant and animal resources provide. The future must make these important elements in the design.

These are issues that several organisations, networks and alliances be it mm&P in India, JATAM in Indonesia and AIMES in Africa, ATNC, ANREOV, JSAPMMD, NGO Forum on ADB, MAC and several other groups in Latin America are grappling with and confronting as realities.  There are varied strong protests in the entire life-cycle where alliances have had a positive presence. We are against Greenfield mining, we want the existing mines to work as per rules and regulations and we want mine-closure to happen properly including the rehabilitation of the workers. We want our countries to move away from an economy dependent on mining in the short run. 

The real change has to be in the development paradigm.  We need greater information exchange and relationships with the communities to evolve this new paradigm. Otherwise we will run the risk of ending up only in targeting governments and investors and institutions jointly, delay the activities and denigrate their behaviour and definitely seek justice to the specific communities and yet feel inadequate. It is indeed a long way to go for the transformation we are seeking!


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