Newly-united private sector unions demand labor reforms in Free Trade Zones

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Workers at a textile maquila in a Salvadoran Free Trade Zone. Photo credit: Center for Labor Rights

On September 12, representatives of El Salvador’s private-sector unions presented a proposal to reform the Zona Franca Law to the Labor Commission of the National Legislative Assembly. The proposal targets the notoriously poor labor practices of companies operating in the nation’s Zonas Francas, or free-trade zones, where foreign-based multinational corporations operating export-oriented assembly factories, known as maquilas, receive major tax exemptions and other financial privileges. These free-trade zones were created in the late 90s to attract foreign investment as part of a wave of neoliberal economic reforms pushed by the United States along with the Salvadoran business elite and right wing parties.

Currently, the sanctions imposed by the Ministry of Labor for wide-spread abuses in these free-trade zones, from the withholding of salaries or pension deductions to the violation of workers’ freedom of association, are so minor that most companies prefer to pay a small fine than comply with the law. Under the proposed reform, companies that refuse to comply with labor laws would lose their tax exemptions: for three months upon the first offense and permanently upon the second.

The proposal was drafted and presented by the newly-formed private-sector union federation FUERSA, which represents workers from across the private sector, including textile and electronics maquilas as well as call centers, all of which operate under the Zona Franca Law. The FUERSA federation joins the ranks of other new allied federations of public and municipal unions. Member unions hope these federations, the fruits of a strengthening and revitalized Salvadoran labor movement, will serve as tools for greater working class participation in public policy discussions.

FUERSA members timed their proposal to coincide with the presentation of a package of proposed reforms and new laws related to foreign investment drafted by the private-sector dominated Social Economic Council (CES) and President Mauricio Funes’ Chief of Staff, Alex Segovia.

Estela Ramirez, Secretary General of FUERSA, explained their concern when they learned that the CES and Segovia’s proposals had been negotiated with the Salvadoran Chamber of Textile, Sewing, and Free-Trade Zone Industries (Camtex) and the big-business National Association of Private Business (ANEP). “The workers, the organizations that we represent as affiliates in the textile industry, they have not been taken into account,” said Ramirez. FUERSA’s proposed reforms represent their demand to make workers’ voices heard.

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