Blog: Spotlight on labour rights

Leonie Barrie | 15 November 2005

One of the highlights of a new report from the Fair Labor Association (FLA) is a special feature on the elimination of the Multi-Fibre Arrangement, its impact on labour rights, and FLA’s response to ensure compliance with the FLA Workplace Code in China.

In its 2005 Public Report the FLA points out that when the quotas were eliminated on 1 January 2005, many foresaw a “doom-and-gloom” scenario, in which US and EU markets would be flooded by cheap Chinese imports, while hundreds of thousands of workers lost their jobs in countries that could no longer compete with China.

However, it says that contrary to popular belief, China is not the cheapest location:

“China’s export strength goes beyond nominal wage costs and to additional factors such as a large and acquiescent labor force, an undervalued currency, government investment in the industry, near self-sufficiency in the raw materials required for textile production, advanced business networks, and good shipping connections. China provides an example of a country characterised by both widespread non-observance of the labour law and increasing efforts to improve standards.
• The inconsistent enforcement of labour law has left certain sectors and groups of workers exposed to abuses.
• China adopted a general Labor Law in 1994 and more recently promulgated two pieces of legislation that could facilitate the development of democratic structures to represent workers in consultations and negotiation, although its legal structure still limits freedom of association.”

Interestingly, FLA monitoring results show that China is no closer to the bottom in terms of labour standards than a number of other sourcing destinations. And also, whereas a number of the other key sourcing countries or regions are characterised by defunct or failed systems of regulation, the Chinese government is still actively seeking to improve its system of labour market regulation and labour law enforcement.