EPZs have enjoyed significant concessions like exemption from duties and income tax, low cost factory space, and liberal import of capital goods, raw materials components, office equipment, drawings, blueprints, etc. In return, they are expected to fulfil their export obligations and achieve prescribed levels of value addition over cost of imports.

Attracting foreign exchange has been the leit motif behind establishing EPZs to create jobs; transfer new skills and expertise to local human resources; create backward and forward links to raise the standard of local enterprise; introduce new technology, and stimulate strategic sectors like information technology, tourism, infrastructure and human resource development-even to kick-start the economy as a whole.

While many ofthe objectives behind the creation of EPZs may have been achieved, the cost at which these are being met is cause for concern. According to the Comptroller and Auditor General of India, most EPZ units have not meet the prescribed export obligations and/or value addition. The duties and interest recoverable from these units exceeds Rs 2,000 crore. Many units boast a negative value addition over import costs. Still others have closed shop without fulfilling their export obligation or any value addition, depriving the exchequer of over Rs 500 crore. It is not unusual for EPZ entrepreneurs to sell imported raw materials in the domestic market after importing more than what is allowed (and even what is not permitted); or, fall short in value addition and undervaluation of goods.

Now comes a report on the condition of the EPZ workers. Brought out by the Society for Participatory Research in Asia (PRIA), a New Delhi-based NGO, the report suggests that insulating EPZs from their surroundings prompts investors toblink at labour laws. In effect, because of the forex they fetch, EPZ investors have become holy cows whose wrong-doings must be ignored at all costs.

The latest move to convert EPZs into FTZs will make Indian labour laws inapplicable to them. FTZ proponents, among them many bureaucrats of the commerce ministry, argue that exempting FTZs from the purview of labour laws is the practice all over the world.

The fact that wages in the EPZs are a casualty should not be surprising. Indeed, poor labour standards are the biggest asset of EPZs in India. The ministry of commerce actually boasts of this. A brochure brought out by the Noida Export Promotion Zone reads: ``...make your mark in the international market ...experienced and highly productive workforce is available at relatively low wages.'' The study ascribes the rampant abuse of labour laws to the fact that the EPZ workers are not organised. But for one exception, EPZ do not have a workers' union. While attempts (even violent) by investors to preventworkers from organising unions are not uncommon, the study shows that the government, too, subscribes to this anti-trade union view, at least in the EPZs. This dilemma is multiplied due to the walled enclaves that the zones are-where trade unionists are not allowed. Only workers with proper identification are allowed inside. EPZ authorities have modified labour laws to the investors' benefit. For instance, EPZs are declared public utilities under the Industrial Disputes Act. Unions are not banned, but strikes are illegal unless preceded by a stipulated reconciliation process involving the Labour Commissioner's Office, which is favourably inclined towards investors.The PRIA study also reveals that no industry in the EPZ has a well-defined health and safety policy. Nor are workers provided with sufficient protective equipment. While a majority of units have primary first aid facilities, no one is trained in providing first aid. Accidents are common, but rarely compensated for.

The work-places, too, areinhospitable. Says PRIA researcher Sanjeev Pandita, ``Coolers were not provided at a welding shop-floor because a lower room temperature would mean inferior finish. Dehydration is common. Workers perspire heavily, but cannot take enough water due to work pressures. Nor are salt tablets provided.''

In the garment industry, lack of proper ventilation appears to be the rule rather than the exception. Respiratory disorders are common among workers (mostly women) due to inhalation of the polymer fibres that is used in the inner lining of the jackets.

The less said about wages, the better. Indian EPZs boast of their low cost labour-by far the lowest-in the world. The prescribed minimum wage in the Chennai EPZ is Rs 1,200 (US$ 30), but payments are lower at about Rs 800 (US$ 20). This is far from the wages EPZ workers earn in other Third World countries-Honduras (US$ 75), Nicaragua (US$ 85), or Guatemala (US$ 88)-Pandita points out.

Given their export-oriented nature, it becomes imperative to view the poorlabour conditions in the EPZs in light of the labour clause of the GATT Agreement. If things do not improve, it will not be surprising if one day the produce from Indian EPZs gets singled out for a ban. In such an event, all the strain that the exchequer is having to bear just to keep the EPZs in good humour will become meaningless. Besides, the very raison d'etre behind the need for an EPZ will be defeated.