TABLE OF CONTENTS
04Foreword
06
History of Special Economic Zones
13
Special Economic Zones in the Philippines
30
Four Decades of Development – Or Deterioration?
44
Organizing Experiences in Special Economic Zones
51
IWS WU:
Effective Leadership and Union Democracy at Work
64
Daiho Workers’ Union:
Militance, Flexibility and Education - Instruments for the Defense of Workers’ Rights
73WAC:
Experiences in Organizing at the Cavite Economic Zone
84
Golden Will Fashion:
Organizing Contractual Workers
91
NXP Workers’ Union:
Union-building Amidst Corporate Restructuring
99
Aurora Special Economic Zone:
Community Opposition to the Establishment of an Ecozone
109 Hanjin Workers:
Bonding for Mutual Aid
120 Amado Kadena Workers' Union:
Sour Taste of DOLE Pineapples
134 Mactan Export Processing Zone:
Forging Alliances, Community Organizing
144 Experiences at the Baguio City Economic Zone:
The Ebb and Flow of Worker Organizing
154 Acronymns sed
155Bibliography
159Acknowledgement
04
Foreword
FOREWORD
A key component of the implementation of neoliberalism in the Philippines was
the establishment of Export Processing Zones -- enclaves which housed foreign
companies engaged in semi-processing of products for export, and which were
granted numerous incentives and privileges by host countries.
The Marcos dictatorship established the first four export processing zones in the
country in the late 70’s. From this, traditional ‘export processing zones’ evolved other
forms and types of enclaves that would eventually be rather generically referred to as
“special economic zones,” or simply, SEZs, which received the same privileges as EPZs.
These most rapidly expanded under the Macapagal-Arroyo presidency. Under the
present administration of Benigno Aquino III, the number of SEZs has reached 243 as
of March 2011.
The rapid expansion of economic zones in the country and the massive conversion
of agricultural lands that accompany it, urge a review of the adverse consequences of
this program on the national economy and the country’s natural resources. Equally
important is determining the impact on labor rights, particularly the right to free
association, which is labor’s most basic instrument for defending its rights and
interests.
The study is an overview of the current features of special ecozones in the
Philippines, and the various changes in the concept and practice in the establishment
of these zones. This section also attempts to present the impact on various aspects of
the economy.
The authors hope that this small study shall contribute in filling in the dearth of
materials dealing with workers’ organizing efforts inside ecozones. For, while studies
regarding labor conditions inside ecozones are numerous, very few have attempted to
illustrate or discuss the ways by which workers can effectively organize and advance
their interests under the generally restrictive conditions inside these enclaves.
Ripples and Rising TIdes
We hope that this study will spur further researcher and analysis on the issue of
special economic zones in the country, which will help in drawing up alternative
policies that are more favorable to labor rights and that can bring about real,
sustainable development.
Crispin B. Beltran Resource Center (CBBRC)
Workers’ Assistance Center (WAC)
Ecumenical Institute for Labor Education and Research (EILER)
With the support of
Stichting Onderzoek Multinationale Ondernemingen (SOMO)
05
06
Organizing Experiences in Economic Zones
HISTORY OF SPECIAL ECONOMIC
ZONES
The end of World War II during the second half of the 1940’s, saw the US as the
economically dominant and most powerful country in the world.
It suffered very little loss compared
to other countries, benefiting in fact
from the manufacture and sale of war
equipments to countries in Europe
and Asia. A few years after the war, big
US corporations had a monopoly over
production technologies and the export
of manufactured goods as countries from
Europe and Asia were only beginning to
recover from the ravages of war.
Since it had a monopoly of global
trade and owned 75% of monetary gold
in the world, the US was able to impose
the US dollar as world currency (Peet,
200). The dollar became the basis for
currency valuation in the international
market. All global transactions – trade,
investments and banking – were now all
based on the US dollar.
The Bretton Woods Agreement,
IMF and the World Bank
To establish a global economic system
at the end of WWII, the US led a summit
of 40 countries to establish a world of
expanding trade, rapid foreign exchange
and economies responding to the needs
of the US.
At the end of the three-week
conference in Bretton Woods, New
Hampshire in July 1944, the delegate
countries signed an agreement that
tied their respective economies to the
US economy. The US dollar was then
declared as a global standard for trade.
The International Monetary Fund
(IMF) and the International Bank for
Reconstruction and Development
(IBRD), now known as the World
Bank, were also established during this
conference.
The IMF was set up to regularize
currency exchange rates among member
countries and ensure international
stability by lending to member countries
during periods of crisis in their Balance
of Payments (BOP).
The World Bank, on the other
hand, was established to help in the
reconstruction of countries, particularly
Europe, by facilitating capital
investments, especially economies
destroyed by the war and needing aid in
setting up infrastructures and facilities.
07
Ripples and Rising TIdes
Marshall Plan and Intensified
Competition
The war brought considerable damage
and widespread hunger to the European
peoples, especially those in major cities
such as Warsaw, London and Berlin.
As the US dollar became the dominant
currency, it became cheaper for the US
to establish factories in Europe, Asia and
Africa. Surplus capital was created, which
the US exported to Europe and other
Asian countries. This led to the rapid
growth of Transnational Corporations
(TNCs) in these countries.
To strengthen its economic foundation
in Europe, the US implemented the
European Recovery Program (ERP),
more popularly known as the Marshall
Plan, from 1947-1951. US$13 billion
in economic and technical support was
provided to war-torn countries that had
become members of the Organization
for European Economic Cooperation.
The Plan became a key factor in the
integration of European economies when
it eliminated restrictions to trade across
Europe.
The Plan succeeded in rebuilding
Europe by 1960. Japan’s economy
likewise grew during this period. In the
meantime, US corporations in Europe
rapidly expanded. By 1965, the US
controlled 80% of computer production,
24% of the motor industry and 15% of
synthetic rubber in the European market
(IBON, 2005). The Shannon Free Trade
Zone was set up in 1956 in Ireland which
served as an important transit point for
US manufactured goods into Europe.
The renewed growth of the European
and Japanese economies spurred
competition among TNCs, driving
companies to invest in research for the
modernization of production and to find
ways of lowering costs. Modernization
of production technologies intensified,
helping to create an increasing surplus
of products. TNCs needed to lower
production costs to keep up with the
intensified competition and overcome the
crisis of overproduction.
To slash production costs, TNCs cut
down on labor costs by transferring
aspects of production to countries with
huge pools of reserve labor. This practice
was called “global outsourcing,” or
international subcontracting.
But TNCs transferred only those
aspects of production that were light
and labor-intensive. Aspects pertaining
to control and growth of capital and
technology remained in the home-front
or base countries of TNCs.1
From Import Substitution
to Export-Oriented
Industrialization
During the period of colonialism,
most colonies were exporters mainly
of agricultural products which have
low-value added while importing
machinery and other capital goods from
industrialized countries.
1 On a global scale, 84% of R&D employees of
TNCs remained within the US in 1999; other R&D
employees of US TNCs were based in industrialized
countries such as Germany and the United
Kingdom in Europe, and Japan. Among employees
belonging to R&D are researchers, engineers,
scientists, etc. (Moris, 2004)
08
Upon achieving political
independence, however, many of these
former colonies attempted to undertake
their own path to industrialization,
from the 1950’s to early 1960’s, through
import substitution. This strategy
aimed at reducing the importation of
foreign commodities through local
manufacturing.
This strategy, however, did not
succeed because the former colonies
remained tied to the importation of
heavy machinery for production from
industrialized countries, due to the
absence of a domestic industrial base.
The former colonies mainly implemented
a limited form of protectionism by
imposing high tariffs, raising exchange
rates and the imposition of quotas on
imports. Eventually, these countries had
to turn again to foreign loans.
By late 60’s to early 70’s, these
countries turned to export-oriented
industrialization under IMF-World
Bank prescription. A key program was
the setting up of the first few export
processing zones, particularly in Asia and
Central America.
The Kaoshiung Export Processing
Zone was set up in Taiwan in 1966. It
was a 68-hectare enclave which housed
companies that manufactured hairdryers,
sewing machines, garments, semiconductors and electronics.
The Maquiladora was set up in
Mexico in 1965, along the US-Mexico
border, after the US abolished the
Bracero Program, which legalized the
employment of Mexican agricultural
Organizing Experiences in Economic Zones
A TNC is a large corporation that
operates internationally. It has a parent
company that is most often based in
developed countries while maintaining
so-called affiliates in other countries—
branches, subsidiaries, representatives
or other types of corporate extensions
operating under the parent company. The
parent company has the power to make
decisions concerning all aspects of the
business. Furthermore, the profit that is
generated by all corporate operations is
remitted back to the parent company.
It is often the case that TNCs maintain
a monoply over one or more industries
internationally. Due its wealth of capital
and its international presence, the parent
company is in a position to forumlate plans
and make decisions that have consequences
for the countries in which their affiliates
operate without taking these countries’
own needs into consideration. The TNCs
have far-reaching economic power and the
ability to influence the economic policies the
countries in which they operate.
workers in the US. The Maquiladora
program was envisioned to provide
employment by attracting local and
foreign investments for exporting semiprocessed products.
Implementation of the
Neoliberal Policy
US corporate profit has been exUS
corporate profit has been experiencing
a 50% drop in rates of profits since
the 50’s. Manufacturing shrank, and
unemployment increased. The US
09
Ripples and Rising TIdes
witnessed an oil crisis in the 60’s when
the Organization of Petroleum-Exporting
Countries (OPEC) declared an embargo
in 1973, causing oil prices to skyrocket in
the US and other countries. This pushed
the US economy into stagflation as the
oil shock inflated prices at a time when
the real economy was in a downturn. US
war spending in Indochina likewise bore
heavily on the economy, along with the
concessions it gave its allied countries in
the anti-communist crusade.
As a way out of stagflation, the US and
other industrialized countries focused on
lowering costs of production and gaining
greater control over the economies of
underdeveloped countries. From the
Keynesian policy of high social spending,
the US and other industrialized countries
turned to neoliberalism.
Through the IMF-World Bank,
neoliberalism further “opened up” the
economies of underdeveloped countries
to foreign capital. From loans meant
to aid reconstruction and recovery
from war, the twin institutions shifted
toward huge “development loans” to
underdeveloped countries.
The crisis also resulted in the increased
BOP deficits of former colonies, turned
neocolonies, which have long been
facing unequal trade relations with
industrialized countries. The former once
again turned to the IMF-World Bank to
prop up their economies.
In the 80’s, the IMF prescribed
Structural Adjustment Programs
(SAPs) in exchange for more aid to
avert bankruptcy of underdeveloped
economies. A key component of SAPs
was the implementation of a strategy of
“export-oriented industrialization,” which
involved the establishment of export
processing zones.
The IMF and World Bank, including
the US Agency for International
Development (USAID), promoted
economies based on the global market,
with “minimal” state intervention and
adhering to the tenets of liberalization
and privatization.
It was also within the framework of
SAPs that the World Bank implemented
its policies. The World Bank focused on
development loans for infrastructural
projects that would supposedly bring
about development in underdeveloped
countries. These included the
construction of dams, roads, ports,
bridges and airports. In reality, such
projects served to prepare the stage for
the entry of big TNCs, mainly to be
housed in EPZs, in underdeveloped
economies.
According to the IMF-WB, EPZs
can bring these benefits to their host
countries:
• employment for domestic labor that
would otherwise be unavailable in a nonindustrial country;
• transfer of skills and knowledge
from foreign corporations to local
workers;
• transfer of technology from foreign
to local corporations;
• development for underdeveloped
regions;
• development of sectors considered
“vital” to the national economy such
10
as electronics, communication and
information technology.
The establishment of EPZs facilitated
the transfer of low value-added but laborintensive stages of manufacturing to
underdeveloped countries such as those
that can be found in the garments and
electronics industries that catered to the
needs of the industrialized countries.
Governments of host countries
competed in granting numerous
privileges and incentives to foreign
investors, such as exemptions from
tariffs and other forms of taxes. Included
in these incentives was a guarantee of
“industrial peace,” which in the case of
some countries, even meant exemptions
from national labor laws.
Governments and private developers
likewise established infrastructures
and facilities that were better than
the national average; often, they also
provided police protection to ensure that
production inside the ecozone is not
disrupted by labor unrest.
It was during this period that the rapid
expansion of EPZs in various parts of
the globe took place--in the Philippines,
India, Indonesia, Bangladesh, etc.
But the rapid implementation of
neoliberalism was not to happen without
the transformation of former communistruled Russia and China toward the
capitalist path. China, in particular,
implemented “economic reforms” within
the frame of liberalization which signaled
the integration of the Chinese economy
into the global capitalist system.
Organizing Experiences in Economic Zones
Among the reforms that China
undertook was the setting up of
numerous EPZs along the coastal part of
the country. First to be set up were the
EPZs in Shenzhen, Zhuhai, Shantou and
Xiamen in 1980. Next were the enclaves
in 14 coastal towns, and in the province
of Hainan in 1985. In 1992, there were
a total of 60 EPZs in the country. By
2007, 30 out of the 42 million globally
employed by EPZs can be found in
China. (Fu and Gao, 2007).
The Current Situation
In 1975, there were only 25 countries
with EPZs employing a total of 800,000
workers. By 1986, the number rose to
47 countries with a total of 1.9 million
workers. The number even doubled in
1997, with 94 countries and a total of
4.5 million workers employed in EPZs
globally. (Cling and Lettily, 2001)
By 2008, according to a report
prepared for the ILO in March 2008,
EPZs and other types of special economic
zones have risen to a global figure of
3,500 in 130 countries, employing a total
of 66 million people (ILO, 2008).
The same report stated, however, that
EPZ employment constituted only a small
fraction of the national employment
figures in host countries, and a mere
0.5% of global employment figures. The
same report likewise stated that the socalled “export-oriented industrialization”
strategy only worsened the dependence
of underdeveloped economies on foreign
capital.
11
Ripples and Rising TIdes
Shannon Free Trade Zone
While the opening up of certain parts of
the world to facilitate free trade was already
practiced during ancient times, the Shannon
Free Trade zone can be considered the
“blueprint” of modern economic zones.
The 50’s was a decade of Ireland’s
opening up to the world economy.
Ireland catered to the industrial needs of
Europe, which was then recovering from
the destructive effects of WW II. The
Shannon Free Trade Zone was set up near
the Western coast, beside the Shannon
International Airport, which was then
a strategic point for the free flow of
manufactured US goods to various parts of
Europe.
Companies in the zone engaged in the
semi-processing of imported raw materials,
which were then exported. The Irish
government granted tax privileges to the
largely US-owned companies engaged in
manufacturing and international services.
Ireland’s economy expanded in the
90’s due to computer exports. A third
of computers sold in Europe came from
Ireland, but said manufacturing was
mainly low-tech assembly and repacking of
imported computer parts.
By 1994, ten TNCs controlled 75%
of value added to the products, and 40%
of economic growth was due to the
manufacturing sector.
Along with rapid economic growth,
came a housing bubble which saw the prices
of housing increasing to as much as 250%.
The country’s foreign debt also increased
due to the deregulation of the banking
industry. It was at this point when Ireland
was dubbed the “Celtic Tiger” by advocates
of neoliberalism.
Despite the economic growth, however,
workers’ wages went on a downward trend.
Taxation likewise increased 40% from 1987
to the mid-90’s. Worker strikes, already
happening in the 70’s, saw an upsurge.
Only a decade after, however, with the
onslaught of the economic and financial
crisis in the US and Europe, the roar of the
“Celtic Tiger” was said to have weakened
--many factories closed shop and moved
to other countries with even lower wage
costs, unemployment soared to 13.4%,
housing prices fell, and many properties
were foreclosed; the government became
immersed in foreign debt.
Under the tutelage of the IMF, the
Irish government implemented “austerity
measures” which involved cuts in social
spending. The government implemented
a US$69 billion “bailout” for the banking
industry--certainly a huge amount for a
country comprised by only 4.5 million
people.
12
Nevertheless, governments and other
advocates of neoliberalism continue to
promote the purported benefits of EPZs
to host countries, asserting that it was
only necessary to implement reforms in
order to maximize these benefits.
Despite its failure to bring about
development, governments of so-called
Organizing Experiences in Economic Zones
“emerging economies”--many of whom
are former socialist countries--are still
actively promoting this strategy under
IMF prescription. This provides the
US and other Western industrialized
countries new grounds for the extraction
of raw materials and the exploitation of
cheap labor. ■
13
Ripples and Rising TIdes
SPECIAL ECONOMIC ZONES IN THE
PHILIPPINES
Since the Spanish colonial rule, the
Philippine economy has been tied to the
export of raw materials for the needs of
the international market. Agricultural
products such as coffee beans, sugar and
tobacco were the primary exports.
US colonial rule intensified the
country’s export orientation. To facilitate
the speedier transport of agricultural
products, the colonial government set
up refineries for sugar and petroleum,
and other infrastructure. The mining
industry was given impetus with the
extraction of gold and other minerals
for US industrial needs, which was then
rising as one of the leading industrial
nations in the world.
The destruction wrought on by WWII
on the Philippines paved the way for
US “aid” into the country. Along with
the Tydings Rehabilitation Act came the
Bell Trade Relations Act, which gave
parity rights to US corporations for the
exploration of mineral and other natural
wealth of the country, allowing them to
own and manage public utility companies
and granting them the right to immediate
profit repatriation.
This continued under the LaurelLangley Agreement, which, while
ending in 1974, had already succeeded
in legalizing US corporations’ almost
unrestricted access to Philippine natural
wealth.
The Philippines received $550
million from Japan as war reparations
as provided for by the Treaty of Peace
between Japan and countries it occupied
during WWII. By the end of the 1940’s,
however, the war reparations fund had
been depleted due to the unrestricted
importation of luxury goods, public
projects and graft and corruption in
government.
To stem the outflow of dollars from
the country, the Philippine government
imposed importation controls in 1949, as
well as on foreign exchange in 1953.
To circumvent these restrictions, US
corporations established subsidiaries in
the country. Most of these were factories
for the assembly and repackaging of
imported materials using imported
machinery.
As imports were not reduced and only
took on other forms, the BOP deficit
reached $58 million from 1951-1957. The
country was forced to borrow from the
IMF in 1955 and from the World Bank
in 1957. The two financial institutions
imposed the conditions of eliminating
14
Special Economic Zones in the Philippines
import controls, which the Philippine
government implemented in 1962.
management of the Free Trade Zone
Authority. In 1972, only two months
after the declaration of Martial Law,
Marcos signed Presidential Decree (PD)
66 which established the Bataan Export
Processing Zone (BEPZ), the first EPZ in
the country.
Export-Oriented
Industrialization
The country’s external debt, however,
ballooned within three years, from $257
million in 1962 to almost $600 million in
1965.
To enable the country to pay its debts,
the World Bank recommended the
Export-Oriented Industrialization (EOI)
strategy, which consisted of three main
policies:
• export diversification instead of
import controls;
• “free trade” instead of
protectionism;
• economic liberalization to attract
foreign investments.
The EOI was then envisioned to attract
foreign direct investments through
the establishment of export-oriented
businesses that would help the country
earn dollars.
Under PD 66, companies exporting
more than 70% of their products were
given the following privileges:
• tax exemptions, including tax
credits for domestic capital equipment,
exemption from taxes for imported raw
materials and equipments, export taxes
and provincial and municipal taxes;
• priority in Central Bank
allocations for foreign exchange for
export;reducedrates for both land lease
and water utility fees;
• government expenditures for
infrastructure and buildings which will
be leased to companies at very low rates;
• accelerated depreciation on fixed
assets .
Next to be established were the EPZs
in Baguio, Mactan and Cebu.
The Marcos dictatorship enacted
Republic Act 6135 (Investments
Incentives Act) and RA 5186 (Exports
Incentives Act) which guaranteed, among
others, the right of foreign capital to
repatriate their profits, freedom from
expropriation and reacquisition, and the
granting of tax credits and exemptions.
The establishment of these EPZs
systematized the country’s integration
into the network of TNCs for
international subcontracting. Exports
shifted from the traditional raw
agricultural materials to semi-processed
goods.
A key to attracting foreign investments
was the setting up of Export Processing
Zones (EPZs). The town of Mariveles,
Bataan in Central Luzon was converted
into a Freeport Zone under the
Corazon Aquino Presidency
With the downfall of the Marcos
dictatorship and the succession of the
Aquino presidency, the government
promoted, under the tutelage of
15
Ripples and Rising TIdes
the IMF-World Bank, the slogan
of “Recovery and Reconstruction”
purportedly to lift the country out of
the economic stagnation wrought about
by the Marcos dictatorship. Part of the
slogan is the advocacy of “free trade” and
minimal state intervention for the free
flow of capital, which set the stage for
the rapid implementation of the policies
of deregulation and liberalization in the
country.
right to “monitor” the IE’s compliance
with national labor laws.
Under the slogan “lifting the
countryside from poverty,” the Cory
Aquino regime encouraged the
conversion of vast tracts of agricultural
lands, such as the Hacienda Luisita
owned by the Cojuangcos, into
commercial and industrial estates.
This administration likewise hastened
the liberalization of various sectors of
the national economy under the tutelage
of the IMF, and in compliance with
the General Agreement on Tariffs and
Trade of the World Trade Organization
(GATT-WTO).
Industrial estates (IEs) are vast tracts
of lands with roads, water system,
facilities for electricity, communication
and other physical infrastructures,
which were built primarily for the use
of an industrial community. IEs receive
incentives similar to that of EPZs.
The Ramos presidency enacted RA
7844 or the Exports Development Act
of 1994 to encourage exports by the
private sector through incentives such
as exemption from customs duties,
duty-free importation of machinery and
income tax holidays.
The IEs, in contrast to EPZs, were
opened up to the private sector. Ownerdevelopers entered into joint ventures
with foreign companies. An example
would be Central Techno Park inside
Hacienda Luisita, which is a joint venture
between Itochu Corporation, a big
Japanese firm, and the Yuchengco and
Cojuangco families.
It likewise enacted RA 7916 or
the Special Economic Zone Act of
1995, which established the Philippine
Economic Zone Authority (PEZA). RA
7916 abolished the Export Processing
Zone Authority (EPZA), which was
created under PD 66 during the Marcos
dictatorship.
The IEs are not under PEZA
regulations. The owner-developers may
set their own rules and policies for the
zone, although PEZA claims to have the
Ramos Administration
The Ramos administration shed all
lip service to national industrialization.
Instead, it pushed for the expansion of
the service industry, striving to create
what it termed a “globally competitive”
labor force.
Moving away from the term Export
Processing Zone as defined by PD 66, RA
7916 used the term “special economic
zone,” which indicated an broadening
of the categories of businesses that were
eligible to receive incentives:
16
• Special Economic Zones or
ecozones – selected areas that are or
will be developed as agro-industrial,
industrial tourist/recreational,
commercial, banking, financial or
investment centers;
• Industrial Estate – lands developed
according to a comprehensive plan under
a single and sustained management, and
with provisions for basic infrastructures
and facilities. An IE may or may not
yet have established factory buildings
and facilities for the use of an industrial
facility;
• Export Processing Zones – a
specialized IE outside of customs
territory (whether physical or
administrative), largely for the
production of export goods. Companies
located inside EPZs were allowed to
import capital equipment and raw
materials without tariff, taxes and other
import restrictions;
• Free Trade Zones - a separate and
policed place adjacent to a seaport or
airport where imported products may
be unloaded for immediate transfer or
storage, repacking, mixing or selection
without tariff except if the goods are to be
transferred from one Free Trade Zone to
another.
Ecozones may be set up through the
initiative of :
• private companies;
• the local government with the
support of National Government; and
• the National Government.
Other expanded benefits include :
• Allowing the sale of goods to the
local market;
• Extension of loans to private
ecozone developers from the savings of
the funds of the Office of the President;
• Privately-owned IEs may maintain
their autonomy, with PEZA limited to
monitoring functions;
• Government support for up to 50%
of expenses for the training of skilled
and unskilled labor or management
development programs.
RA 8748 amended RA 7916, which
exempted companies or locators inside
ecozones from local and national
taxes, except for property taxes for the
developer. Instead, they now have to pay
a five percent (5%) annual remittance
based on their gross earnings that will be
divided into: three percent (3%) for the
National Government and two percent
(2%) for the local government that has
jurisdiction over the ecozone.
RA 7196 legalized the almost limitless
conversion of lands for the setting up of
ecozones in virtually every region in the
country. This includes:
1. Morong, Hermosa, Dinalupihan,
Orani, Samal and Abucay in Bataan;
2. Ibaan, Rosario, Taysan, San Jose,
San Juan and Lipa and Batangas cities in
Batangas;
3. Cagayan de Oro in Misamis
Oriental;
4. Iligan, Lanao del Norte;
5. Saranggani;
6. Laoag, Ilocos Norte;
7. Davao and Samal, Davao del
Norte;
8. Oroquieta, Misamis Occidental;
9. Tubalan Cove, Davao del Sur;
17
Ripples and Rising TIdes
10.Baler, Dinalungan and Casiguran,
including the waters and islets of Aurora;
11.Naga and Iriga in Camarines Sur,
Legaspi and Tabaco, Albay, and Sorsogon
in Sorsogon;
12.Bataan Island in Batanes;
13.Lapu-lapu in Mactan, Balamban
and Pinamungahan, Cebu and Toledo in
Cebu, including its waters and islets;
14.Tacloban City;
15.Barugo, Leyte;
16.Buenavista, Guimaras;
17.San Jose de Buenavista, Hamtic,
Sibalon, and Culasi in Antique;
18.Catarman, Bobon and San Jose in
Northern Samar;
19.Ternate, Cavite;
20.Polloc, Parang in Maguindanao;
21.Boac, Marinduque;
22.Pitogo, Zamboanga del Sur;
23.Dipolog City-Manukan Corridor,
Zamboanga del Norte;
24.Mambajao, Camiguin Province;
25.Infanta, Real, Polillo, Alabat,
Atimonan, Mauban, Tiaong, Pagbilao,
Mulanay, Tagkawayan, and Dingalan Bay
in Quezon;
26.Butuan City and Agusan del
Norte, including its waters and islets;
27.Roxas City, including its waters
and islets in Capiz;
28.San Jacinto, San Fabian,
Mangaldan, Lingayen, Sual, Dagupan,
Alaminos, Manaoag, Binmaley in
Pangasinan;
29.Autonomous region;
30.Masinloc, Candelaria and Sta.
Cruz in Zambales;
31.Palawan Island;
32.General Santos City, South
Cotabato and its immediate environs;
33.Dumaguete City and Negros
Oriental, including its waters and islets;
34.Ilocos Sur;
35.La Union;
36.Laguna, including its waters and
immediate environ;
The Bases Conversion and
Development Act (RA 7227), which
was adopted in 1992, allowed the
conversion of the US bases in Clark and
Subic into ecozones and freeports. The
aforementioned Act likewise established
the Subic Bay Metropolitan Authority
(SBMA) and Clark Development
Corporation (CDC), which were tasked
to manage these zones.
ODA Loans for Ecozone
Infrastructures
To aid the rapid development of
ecozones in the country, the government
adopted RA 8182, or the Official
Development Act of 1996, which exempts
ODA from the country’s foreign debt
limit of $10billion, provided that these
ODA prioritize infrastructure projects,
countryside development and ecozone
development as provided for by RA7196.
By the end of 1996, ODA loans had
reached $12.13 billion. These loans came
from the Japanese government ($5.9
billion or 52%), World Bank ($3.2 billion
or 26%) and the Asian Development
Bank ($2.7 B or 22%). Around 77% of
over-all ODA loans went to infrastructure
projects (NEDA, 1996).
From 1996-1998, at the end of the
Ramos presidency, an average of 75%
of total ODA loans were being spent on
infrastructure projects.
18
Special Economic Zones in the Philippines
Table 1. Establishment of Special Economic Zones
based on Administrations
Status and Classification
Marcos Aquino Ramos Estrada Arroyo
Operating
Manufacturing
4
wd*
31
4
Information Technology
46
200
42
66
4
123
Tourism Special Economic Zone
9
Medical Tourism Park
1
Medical Tourism Center
1
Idineklara
Manufacturing
23
24
90
24
28
Information Technology
56
Tourism Special Economic Zone
2
Agro-Industrial Economic Zone
4
Being Developed
184
Approved
474
Newly Approved**
340
*no data available
**current minus approved
source: PEZA
In 1997, however, the Asian financial
crisis occurred, reducing the inflow of
foreign investments into the country. In
2001, a political crisis occurred, ousting
the two-year old Estrada presidency. The
government of Gloria Macapagal-Arroyo
succeeded via constitutional ascension.
Gloria Macapagal-Arroyo
Regime
The Arroyo administration spelled out
in its Medium-Term Development Plan
(MTPDP) for 2001-2004 policies which
continued to rely on exports and on
attracting foreign investments.
The government carried out huge
public spending on infrastructure
projects purportedly to facilitate the
speedier flow of goods and services.
19
Ripples and Rising TIdes
Table 2. EPZ Companies based on Industry Categories
(December 2010)
Industry Category
Bilang
Radio, Television and Communication Equipment and Apparatus
216
Real Estate Activities
213
Warehousing and Storage
172
Fabricated Metal Products, Except Machinery and Equipment
168
Call Centers
159
Rubber and Plastic Products
123
Software Development
119
Garments and Textiles
107
Business Process Outsourcing
103
Electrical Machinery and Apparatus, N.E.C.
84
Manufacturing, N.E.C.
44
Medical, Precision and Optical Instruments, Watches and Clocks
44
Automotive and Motorcycle Products
43
Engineering, Architectural and Other Design Services
43
Recycling
43
Other IT-enabled Services
32
Food Products and Beverages
31
Paper and Paper Products
29
Machinery and Equipment, N.E.C.
28
Electricity, Gas, Steam and Hot Water Supply
25
Others
226
source: PEZA
It enacted the Comprehensive and
Integrated Infrastructure Program (CIIP)
with a total cost of Php1.7 trillion for
the years 2006-2020 alone. Loans came
mostly from the World bank, the Asian
Development Bank (ADB), Japan Bank
for International Cooperation (JBIC)
and China Eximbank. The government
gave sovereign guarantees for these loans
( Senate Economic Planning Committe
Office, October 2006).
The types and number of ecozones
receiving incentives expanded the
fastest during Arroyo’s presidency.
Almost half of existing ecozones were
approved during her term. It was also
her presidency that registered the highest
number of approved ecozones when
20
compared to the total number approved
by previous presidencies. Even businesses
such as SM Cyberzone 1 and Robinson’s
Place in Novaliches were granted ecozone
status by Arroyo.
The granting of ecozone status in
such large numbers was in line with
the Agreement on Subsidies and
Countervailing Measures (ASCM)
signed by members of the World Trade
Organization , including the Philippines,
in 1994. The agreement prohibited
the granting of subsidies to export
establishments as well as the use of local
instead of imported materials. So as not
to be considered illegal or discriminatory
under the agreement, the government
had to grant incentives on a nationwide
basis and to companies other than those
engaged in exports.
National Overview of Special
Economic Zones
In December 2010, there was a total
of 239 EPZs, and others still awaiting
approval through a presidential
proclamation. A number of other
ecozones were also still being developed
(PEZA Website).
There are four (4) public EPZs: the
Bataan Export Processing Zone, Mactan
Economic Zone, Baguio City Ecozone
(BCEZ) and the Cavite Economic Zone
(CEZ). These are under the jurisdiction
of PEZA.
There are also four (4) “Special
Economic Zones” under different
administrative agencies: the Cagayan
Special Economic Zone and Freeport in
Special Economic Zones in the Philippines
Table 3. EPZ Companies
based on Type of
Enterprise
(December 2010)
Type of Enterprise
Bilang
Export Enterprise
1093
Information Technology
Enterprise
504
Facilities Enterprise
236
Logistics Service Enterprise
171
Tourism Enterprise
24
Utilities Enterprise
15
Agro-Industrial Enterprise
3
Medical Tourism Enterprise
3
Domestic Market Enterprise
2
Free Trade Enterprise
2
Source: PEZA
Cagayan, the Zamboanga City Economic
Zone in Mindanao, the Subic Bay
Freeport Zone in Zambales and the Clark
Special Economic Zone in Pampanga.
These receive the same privileges
and incentives as those under PEZA
jurisdiction.
Ownership of ecozones have also been
opened to foreign capital through joint
ventures. A study covering 38 ecozones
revealed that Filipinos owned 18 of said
ecozones, while 20 others were joint
ventures between Filipino industrialists
and foreign corporations mainly from
Japan and the US. An example would
be Laguna Technopark in Southern
Tagalog, a joint venture between
Ayala Corporation and the Japanese
corporations Mitsubishi and Kawasaki
Steel.
21
Ripples and Rising TIdes
Table 4. Summary of
Operating SEZ
(December 2010)
Classification
Number
Size (Ha)
Agro Industrial 13
294.07
IT Parks and
Centers
148
517.48
Manufacturing
64
38439.63
Medical
2
2.87
Tourism
12
717.57
TOTAL
239
39971.62
Source: PEZA, 2010
Table 5. Summary of SEZ
being Developed
(December 2010)
Classification
Number Suze (Ha)
Agro Industrial
3
82.37
IT Parks and
Centers
60
196.73
Manufacturing
26
5114.55
Medical
0
0
Tourism
7
224.98
TOTAL
96
5618.63
Source: PEZA, 2010
In December 2005, there was a total
of 1,094 firms in various ecozones in the
country. The number increased to 1,965
locators in February 2009 (Office of the
President, 2009). At the end of 2010,
there were a total of 2,052 locators on
PEZA’s list.
According to the types of ecozones,
operating ecozones are divided into 148
IT parks and centers, 64 Manufacturing,
13 Agro-Industrial, 10 Tourism and two
(2) medical ecozones as of December 31,
2005. Ecozones being developed include
60 IT Parks, 26 Manufacturing, seven (7)
Tourism and three (3) Agro-Industrial.
While there are more IT parks/centers,
manufacturing ecozones occupy a far
bigger land space. Of the total hectarage
occupied by currently operating
ecozones, which totals 39,971.62
hectares, Manufacturing ecozones
occupy 96% or 38,439.63 has.
Of the 1,624 investor companies
in the SEZs, 580 are Japanese-owned,
followed by Korea (245), with the
US coming in third (231). The most
numerous are Filipino-owned (776).
However, while the US only ranks
third, it is still the biggest investor in the
country at $4.5 billion in 2009. (IBON)
Based on industry category,
companies investing in Radio, Television
and Communication Equipment and
Apparatus are first (216), with Real Estate
Activities as second (213) and third
comes Warehouse and Storage (172).
Based on Enterprise, Export
companies are first (1093), with
Information Technology enterprises
second (504) and Facilities enterprise
coming in third (236).
Labor Force
Ecozones registered a total
employment figure of 1,520,968 workers
from January-August 2008. Based on
the October 2008 Labor Force Survey,
22
Special Economic Zones in the Philippines
this number constitutes only around six
percent (6%) of the 22 million workers in
the industrial and service sectors in the
country.
character of industries located inside
ecozones, and accompanying labor
flexibilization schemes widely practiced
in many companies in ecozones
undermine basic labor rights such as
those pertaining to fair wage, job security,
free association and safe working
conditions.
Most of these workers are in low
value-added manufacturing, with
electronics at the top for several years,
followed by garments. The Information
Technology sector was the third biggest
employer.
The IT industry however became the
leading sector in terms of employment in
August 2009 as massive retrenchments in
the garments and electronics industries
occurred due to the 2008 global
economic and financial crisis.
Labor Conditions
One of the myths promoted by
advocates of ecozones is that workers
enjoy better working conditions in
companies located inside ecozones.
This may be true in some large
companies that have strong labor unions
that actively work for their members’
interests, but the basic export-oriented
First, as export-oriented enterprises
rely on the vagaries of the international
market, employment becomes subject to
market demand. Most export industries
expand their workforce when there
is high demand in the international
market for their products; the number
is reduced or downsized when demand
is down, which may lead the company
to downsize, temporarily close down or
even move to other locations with much
lower labor costs.
Secondly, prevalent labor
flexibilization schemes deprive many
workers of their just wage and benefits
and have made working conditions
increasingly difficult while stymieing
worker protest.
Table 6. Employment in SEZ
2007
2008
2009
2010 (Enero-Nob)
Direct
593108
608387
606350
728318
Indirect*
889662
912581
n.d.**
n.d.**
Total
1482770
1520968
n.d.**
n.d.**
* Labor power from other companies provided for SEZ investors (e.g. subcontractors, brokers, cargo handlers/
forwarders, canteens/restaurants, banks, utilities, construction, janitorial and maintenance services)
** no data available
Source: PEZA, 2009 at The Philippine Star, 2011
23
Ripples and Rising TIdes
Table 7. Average Direct Employment based on Industry
(August 2009)
Industry
Average
employment
Wage
(Milions PhP)
General Manufacturing
186,122
18,302.666
Electronics and Semiconductors
188,261
24,937.869
Real Estate, Renting and Business Activities
1,030
137.294
Information Technology Services
192,835
46,337.411
Hotels and Restaurants
70
6.463
Education
37
23.006
Electricity, Gas and Water Supply
333
99.782
Other community, social and personal
service activities
165
15.985
Transport, storage and communications
16,182
2,344.359
TOTAL
585,035
92,204.835
Source: PEZA
Contractualization, which has
become prevalent with the onslaught
of neoliberalism, has further pushed
wages down with the availability of even
cheaper labor. Aside from the core of
regular workers, many workers even in
bigger and more profitable companies
are hired as contractuals, apprentices,
learners, casuals, fixed-term or projectbased. They perform work that is usually
also done by “regulars.” The difference
lies in the fact that they usually receive
lesser pay, and often do not receive
benefits enjoyed by those on regular
status. There are even reports of learners
who do not receive wages.
In the case of the International
Wiring Systems, a third of its workers are
contractuals. In DOLEFIL, this reaches
73%, while organizers estimate the
figure at the Baguio City Economic Zone
(BCEZ) to be around 70%.
Flexibilization also includes schemes
such as compressed workweek and
job rotations. “Multi-skilling” is also
commonly practiced according to the
needs of production, without workers
receiving additional pay. Production lines
are merged to cut down on manpower. In
other cases, companies hire “production
support members” who may be required
to perform any task in the production
process.
According to PEZA, ecozones directly
employed around 608,387 workers in
2008. However, the bigger number of
912,581 “indirectly-employed” ( see
table 6) is comprised by casuals and
contractuals employed in subcontracting
24
Special Economic Zones in the Philippines
Table 8. Average Direct Employment in SEZ based on
Regions (August 2009)
Region
Employment
Wage (Millions PhP)
Central Luzon (III)
23,703
2,708.392
Southern Tagalog (IV)
265,166
31,073.186
Bicol (V)
1,029
140.286
Western Visayas (VI)
3,057
601.365
Central Visayas/Cebu (VII)
100,308
9,667.365
Eastern Visayas (VIII)
3,368
480.246
Southern Mindanao (X)
3,577
612.449
Davao (XI)
12,836
1,772.139
SOCSKSARGEN (XII)
221
15.998
Cordillera Autonomous Region
8,473
1,893.061
National Capital Region
164,297
43,240.348
TOTAL
586,035
92,204.835
Source: PEZA
and other agencies providing various
types of services to ecozone locators.
A 2006 study involving six (6)
companies inside Laguna Technopark,
Inc. (LTI) revealed that contractuals
receive 9-63% lower wages as compared
to regulars. Many benefits enjoyed by
regular workers such as meal allowances,
free shuttle services, health cards, etc.
are not enjoyed by contractuals who
constitute a bigger percentage of the
workforce in these companies (CTUHR,
2006).
If some workers enjoy the minimum
wage as mandated by law, the absence
of a national minimum wage due to the
Wage Rationalization Act results in a
wide disparity of wage levels for workers
performing the same work. This Act
has made a national wage fight difficult
because decisions for wage increases are
now dependent on regional wage boards,
which can only decide for their respective
jurisdiction.
In the case of Laguna Technopark,
for example, which straddles the towns
of Santa Rosa and Binan in Laguna
province, workers at the Binan side of
the enclave receive P320 as a minimum
wage while those on the Santa Rosa side
receive only P298.
Furthermore, with the privatization
of ownership of ecozones, many of these
are able to impose their own policies
and wage systems without sanction from
the state in cases of labor standards
violations.
Government agencies tasked
purportedly to monitor implementation
25
Ripples and Rising TIdes
of international labor standards lack teeth
in performing their functions. In 2003,
the number of business establishments
in the country was estimated to have
reached 810,362 but the Department of
Labor and Employment only have 198
inspectors who are projected to be able to
inspect 48,000 or only around six percent
(6%) of the total number.
In 2004, the Department of Labor and
Employment implemented the Labor
Standards Enforcement Framework
(LSEF) which was supposedly an
alternative mechanism for labor
inspection. The program identified
three ways of monitoring labor laws
implementation:
• Self-Assessment for establishments
with 200 or more workers, or those with
Collective Bargaining Agreements (CBA)
whatever the size of their workforce;
• Regular Inspection for those with
10-199 workers;
• Training and Advisory Visits
for those with 1-9 workers, or those
registered as Barangay Micro Business
Enterprise (BMBE) whatever the size of
their workforce.
Nevertheless, LSEF implementation
remained low in 2004-2006 because
it covered only around 11% of target
establishments. There are also no
sanctions for non-participation by
companies falling under the SelfAssessment category (Hirose and Vitasa,
2007).
“No-Union, No-Strike Policy”
There is no formal declaration, but
a “no-union, no-strike’ policy de facto
exists in many of these enclaves, even
those under the jurisdiction of PEZA.
This is done through a combination
of direct restrictions on workers’ actions
inside the ecozones, direct repression of
workers’ strikes and a so-called “regime
of social control” (Mckay, 2004) that
extends to workers’ communities around
or near the ecozone.
While the state professes “minimum
intervention,” it actually plays a vital
role in the repression of workers’ actions
through its police and other armed
forces, local government units and even
labor laws that are supposed to protect
labor rights.
According to PEZA, there are 71
unions in 63 companies in 22 ecozones
in the country (Roundtable Discussions
on Freedom of Association in SEZs,
October 2010). At first glance, this seems
to point to a favorable condition for
labor organizing in ecozones. But this is
actually a negligible figure if compared
to the total number of ecozones, which
stands at 239 in December 2010. This
means that unions can only be found in
only around nine percent (9) of ecozones
in the country. Compared to the over-all
number of locators, 63 companies only
constitutes 3% of 2054 registered locators
in December 2010.
At the Laguna Technopark 1, there are
around 107 companies and an estimated
70,000 workers in mid-2009, but unions,
many of which are considered “yellow”
or company-sponsored, can only be
found in 24 companies. There are also
no known unions at the Mactan Export
26
Special Economic Zones in the Philippines
Processing Zone and BCEZ in Baguio
according to organizers interviewed by
the study in 2010.
An example would be the Toyota
Special Economic Zone at the Laguna
Technopark in Santa Rosa, Laguna. It is
comprised by Toyota Motors Philippines,
which is engaged in car assembly, and
four other corporations, which supply or
manufacture parts for Toyota Motors.
On the other hand, almost all sectors
inside the enclaves belong to some
form of organization that promote
their respective professional interests.
For enclave owner-developers, there is
the Philippine Ecozones Association
(PHILEA). For the individual capitalists,
there are associations based on location,
nationality and industry. Professional
management associations exists for those
at the management levels.
At the Mactan Export processing
Zone, for example, investors are gathered
into the Mactan Export Processing
Zone Chamber of Exporters and
Manufacturers (MEPZCEM). Human
Resource Managers of the zone also have
the MEPZ Human Resource Association
(MEPZ-HRA), which acts on behalf of
companies inside MEPZ. In August,
2007, for example, MEPZCEM and
MEPZ-HRA submitted a joint resolution
rejecting worker demand for a wage
increase due allegedly to the “tight”
financial situation of companies inside
the zone. A month earlier, however, the
two associations launched a grand sports
festival that aimed to “promote unity
between exporters and manufacturers”
(Aboitiz Land, 2007)
“Enclaves within enclaves”
There are cases of “enclaves
within enclaves,” which are usually
subcontracting arrangements between a
main foreign-owned corporation and its
subcontractors.
According to organizers from the
Cordillera Labor Center, two other
smaller companies, Pythos Technology
Philippines and Pycon Technology
Philippines, both subcontracting
agencies, can also be found inside the
Texas Instruments Compound at the
Baguio City Ecozone.
Another form of an “enclave within an
enclave” can be found at the Clark Special
Ecozone where the government leases
portions of the land to a foreign investor
at dirt-cheap prices. The investor in turn
leases portions of the leased land to other
investors.
The main investor then acquires the
right to impose his/her own policies and
restrictions within the leased portion,
including the right to build additional
enclosures and employ his/her own
security forces while retaining the right
to protection by the local police and
security forces employed by Clark
ecozone.
Under such situations, it becomes
doubly difficult for organizers to reach
workers due to the layers of security
and police forces the former have to go
through to be able to enter the premises,
if entry is allowed at all.
27
Ripples and Rising TIdes
The Role of the State in Worker
Repression
Labor control also occurs outside the
zone in which the local and national
governments play a key role.
As part of their employment
generation program, local governments
often organize labor recruitment events
for SEZs and other companies within
their jurisdiction. These activities often
serve as venues as well for promoting
anti-union ideas among the job
applicants.
There are also reports of local village
officials talking to parents of workers to
discourage their children from joining
unions; there are likewise reports of these
officials talking to owners of boarding
houses where workers live to prohibit
activities such as labor education and
meetings within their premises.
An important element in the state’s
role in worker repression is the use of
layers of readily-deployable security,
police and military forces inside and
around these enclaves that are used to
suppress worker protest actions and
undertake anti-union campaigns in
surrounding communities.
In the case of Laguna Technopark,
aside from the security agency emirates
hired by the Ayalas, owner-developer
of the said ecozone, each locator or
company also employs its own security
force, aside from the PEZA police, and
other police or military units such as
the LIPAG (Laguna Industrial Park
Action Group), Regional Special Action
Force (RSAF) and the 202nd Infantry
Battalion, which has set up a detachment
beside Toyota Corporation and which
undertakes “Civic-Military Operations”
in nearby communities. In Mactan,
Cebu--where the more significant EPZs
are located--can be found the Mactan
Benito Ebuen Air base and the Naval
Forces Central.
Among the cases of human rights
violations against workers documented
by the Center for Trade Union and
Human Rights (CTUHR) are those
of violent dispersals of picket-lines,
surveillance and harassment of union
leaders.
According to the CTUHR, there
were 24,228 cases of worker labor rights
violations in 2010. Around 13,913 or
57% were committed against workers
from ecozones. The data only covers 11
companies inside five (5) ecozones.
Of this number, 6,713 were cases
of anti-union discrimination and
harassment, more than 500 were cases
of illegal dismissal and 7,200 suffered
reduced workweeks.
Other instances include the May 2008
case of gun-pointing by a member of the
Philippine National Police (PNP) and a
security guard of the Calamba Premiere
International Park (CPIP) in Bgy.
Balatino. Calamba City in Laguna where
workers of Sensuous Lingerie, Inc. where
staging a protest action at the CPIP main
gate.
Union leaders of the International
Wiring System, Inc. at the Luisita
Industrial Park have been the object of
28
Special Economic Zones in the Philippines
threats and harassment by members of
the military and hired goons. Soldiers
have organized anti-communist lectures
in surrounding communities, implicating
the union leaders and activities.
Unidentified men also visited the homes
of the leaders in the wee hours of the
morning to ask them about their union
activities. These were the subject of
complaints filed by the union with the
International Labor Organization (ILO)
in 2008.
workers who have to daily lift heavy
items, the combined weight of which
sometimes amount to 233 kilos per hour.
On August 6, 2007 masked men
fired at the picket-line of workers from
PhilsJeon Garments, Inc. at the Cavite
Economic Zone. The armed men also
abducted two male union leaders who
were later found gagged and blindfolded
in an isolated area of the province.
When legal authority is needed, the
Department of Labor uses Assumption
of Jurisdiction (AJ) and other laws, even
at the stage of filing of Notice of Strike
(NOS) to preempt or crush worker
strikes.
Health and Safety
Reports of unsafe working conditions
and workplace accidents contradict
PEZA’s claims that occupational health
and safety standards are generally upheld
within the ecozones.
A case in point is that of Daiho
Philippines, a plastics manufacturing
firm, which continues to use polyvinyl
chloride (PVC) despite the ban on the
material due to its carcinogenic effects
and dangers to the environment. There
are also cases of hernia among male
The situation is worse at Hanjin
Philippines, a shipyard located inside
the Subic Freeport Zone. According to
Task Force Hanjin, there were a total
of 5000 cases of workplace accidents
and 40 deaths from 2006-2009. Work
pace acceleration is usually done by the
company in order to meet deadlines in
shipbuilding contracts. Shipbuilding is
normally allotted only three months.
As a result, workers are often obliged
to work anywhere from 12-48 hours.
When the issue was publicly exposed
by non-governmental organizations,
the DOLE admitted to having failed
to monitor labor conditions as Hanjin
has refused entry to the Department’s
inspectors. It was only in 2009 when the
Department was finally able to conduct
an inspection after a public outcry over a
worker’s death. The DOLE then reported
that Hanjin committed several labor
standards violations including the lack
of safety nets and gears, lack of seminars
on workplace risks and dangers, lack
of safety officers and a 24-hour clinic
or doctor to attend to injured workers.
There were also reports of stale food
served to workers and cases of malaria.
These are but a few of the largely
undocumented cases pertaining to
workers’ health and safety inside
ecozones. Many cases remain
undocumented, such as miscarriages
among women, cancer, heart diseases,
body pains, urinary tract infections
and over-fatigue due to the hesitation
of workers to report their situation
29
Ripples and Rising TIdes
out of a fear of dismissal, inadequate
compensation from the company in case
of illness and the lack of a comprehensive
and systematic monitoring and
documentation system by government
agencies.■
30
Development or deterioration?
FOUR DECADES OF DEVELOPMENT –
OR DETERIORATION?
It has been almost four decades since the first EPZ was established in the country.
If PEZA is to believed, EPZs have
substantially contributed to Philippine
economy due to the export earnings
brought by companies inside the zones.
According to PEZA, around PhP1.502
trillion of foreign investments have
entered the country via ecozones since
1995-2009. More than 80% of export
earnings in 2004 also came from
companies located within these zones.
In 2010 alone, registered investments
in ecozones have reached P204 billion,
17% higher than the P175 billion
registered in 2009. These figures are
the highest so far since 2001, according
to PEZA. For 2011, PEZA expects
investments to rise by 10%, to around
P224.84 billion (Osorio, 2011).
An examination of data and statistics
regarding the national economy almost
40 years after the first EPZs were
established, however, does not reveal a
flattering picture.
After being second only to Japan
in terms of manufacturing output
and economic growth in the 50’s,1 the
Philippines in 2009, has slid to 13th place
among its Asian neighbors based on
Gross Domestic Product (GDP) (IMF,
2009).
Because the Philippines remained tied
to exports while being dependent on
imported materials for manufacturing,
economic growth has likewise been
subject to the unstable conditions of the
international market.
Within the last 30 years, Philippine
economy suffers loses whenever crises
occur in capitalist countries or their
neocolonies. This can be seen during
the Latin American crisis of ‘84-’85;
in 1991 when a crisis occurred due to
the Iraq-Kuwait war; during the 1997
Asian financial crisis; in 2001 due to the
1 Philippine manufacturing reached a 14.05%
growth from 1946-1953. In fact, it already reached
a point when industry was begin to outpace
agriculture in 1960. This was considered the
“Golden Age” of manufacturing (Yu, 2004).
However, most of the industries set up were for
the manufacturing of consumer goods, while
machineries and other capital inputs remained
imported. While importation of luxury goods went
down to 40%, capital goods importation went up by
80% (Rosello, 1989).
31
Figure 1. GDP Growth by Economic Sector
(1997 to 2nd Quarter of 2009)
Source: National Statistics Coordination Board from Lim (2010)
dot-com bubble and the 2008 US crises
(Lim, 2010).
While foreign direct investments
increased in the 80’s, it has been on
a downward trend since the ’84-’85
crisis up to the present. The Philippines
likewise receives the smallest share of
the pie compared to its Asian neighbors
Thailand, Singapore, Malaysia and
Indonesia.
Instead of industrialization, the
share of industry likewise diminished,
particularly manufacturing, in the
economy. Instead the economy witnessed
the rapid rise of the service sector.
Balance of Trade (BOT)
From 1999 to 2003, the BOT deficit
worsened. Imports rose while export
earnings varied. From a favorable balance
in 1999-2000, the country experienced
deficits from 2001-2003: from US$907
million in 2001 up to US$1.265 billion in
2003 (Castell, Marvin. n.d.).
The US remains the biggest trading
partner of the country garnering 19.9% of
total trade in the country. Nevertheless,
income from exports to the US only
amounted to $7.263 while imports from
the US totaled $7.4 billion or a deficit of
$137 million.
Among exports to the US, electronics
was at the lead with $3.481 billion.
However, manufactured electronic
products also constitute the biggest
imports from the US at 77% or $5.708
billion (ibid). Thus, trade deficit from
the US alone already amounts to $2.27
billion.
32
Development or deterioration?
Figure
2. Share of Agriculture, industry and Service; and
Manufacturing
and Construction Subsectors

Source:
National Statistics Coordination Board from (2010)
While
total exports rose by 33.8%,
In 2010, total OFW remittances



from $38.42 billion in 2009 to $51.43 
reached $18.763 billion, according to the
billion in 2010, total imports likewise
Central Bank (Gomez, 2011).
rose by 26.9%, from $43.092 billion in
2009 to $54.702 billion in 2010. BOT
This should be a welcome
registered
a deficit of $3.27 billion.
development for the country’s long
term economic growth. A study by
the Asian Development bank found
OFW
Remittances
out, however, that most of these OFW
The long history of unequal trade
remittances are spent on food and other
has led the country to
relations
consumer products, generating
very little
experience persistent BOP deficits.
investments and domestic capital growth,
thereby creating very little long term
For
the
first
years
of
decade
2000,
benefit for the economy.
however, the country’s BOP registered
a surplus.
According to the IMF, the
current
account
balance grew in 2003Budget Deficit
Almost
2004 by465.28%
there seem
40
to
the
rapid
years
after,
due
increase of OFW remittances as per
to be no end to the national budgetary
Central
Bank figures (Gomez, 2011).
deficit of the country.
33
Table 9. Philippine Foreign Trade, 1999-2003,
(FOB in $million)
Year
Total Trade
Export
Import
Balance of
Trade
1999
65,779.35
35,036.89
30,741.46
4,294.43
2000
72,569.13
38,078.25
34,490.87
3,587.38
2001
65,207.00
32,150.00
33,057.00
-907.00
2002
70,634.68
35,208.17
35,426.51
-218.34
2003
73,197.96
36,231.21
37,496.50
-1,265.30
Source: IBON, 2010
From P11.1 billion in 1995 when
the the government enacted the Special
Economic Zone Act, the deficit increased
to almost P300 billion in 2010 (IBON).
duty exemptions granted by PEZA. This
accounts for 47.2% of the total amount of
lost taxes due to exemptions (Landingin,
2006).
One factor in the ballooning of the
public deficit is the low collection rates
from corporate taxes.
The burden is eventually passed on
to the people: in 2006, as prescribed
by the IMF, the government raised
the Value-Added Tax from 10 to 12%
to compensate for the low collection.
But the problem remained unsolved:
collection again decreased to 7.2% from
January-March 2009 (Lim, 2010).
According to then president Fidel
Ramos himself, in his second State-ofthe-Nation Address in 1993, government
revenue losses rose from P3.3 billion
in 1986 to P25 billion in 1992 or 2/3
of the capital budget of the National
Government in 1993.
The problem of low tax collection
is often attributed to corruption and
inefficiencies by the Bureau of Internal
Revenue (BIR) but there has been no
review of the adverse consequences
of the numerous tax privileges and
exemptions granted to locators within
ecozones.
Data from the Board of Investments
(BOI), reveal that lost taxes amounted
to P133.6 billion in 2004 due to tax and
Endless Debt Cycle
A more important factor to the
seemingly unsolvable budgetary deficit,
however, is the issue of gargantuan
foreign borrowings for infrastructure
projects undertaken by governments
since the Marcos dictatorship.
Under the concept of establishing
“industrial corridors,” almost all of the
infrastructure projects--from roads,
bridges, airports, etc.--are meant to
facilitate the unbridled operations of
34
Development or deterioration?
Figure 3. Growth of OFW Remittance
Source: IBON
foreign and local big business, especially
those within ecozones.
The result is the skyrocketing of the
country’s foreign debt. In September
2010, the country’s external debt
reached $59.8 billion, with public debts
constituting 75% of the total. (Agcaoili,
2011).
According to Margarito Teves,
Secretary of Finance during the Arroyo
presidency, P300-P320 billion is used
annually for the country’s interest
payments alone.
One of the main sources of foreign
debts is Official Development Assistance
(ODA) from foreign governments and
international financial institutions.
From an average of US$741 million
from 2003-2005, ODA figures increased
to US$1.3 billion in 2006, with 2007
figures registering an additional $1.26
billion (ibid). In December 2010, ODA
loans have amounted to US$9.61,
according to the National Economic and
Development Authority (NEDA).
Not all these projects, however, are
able to bring about their promised
benefits. Many are unable to meet
deadlines and still many others do not
even see completion, resulting in even
bigger project costs than the original.
This, in turn, becomes an excuse for
government to seek additional foreign
loans for the same project.
A study done by the Philippine Center
for Investigative Journalism in 2008
revealed that seven (7) out of ten (10)
35
Table 10. Government Budget Deficit as a Percent of GDP
Year
GDP, current prices
(Billion Peso)
Deficit (Billion
Peso)
% of GDP
1990
1,077.2
(37.2)
(3.5)
1995
1,692.9
11.1
0.6
2000
3,354.7
(134.2)
(4.0)
2005
5,444.0
(146.8)
(2.7)
2010
8,006.5
(269.8)
(3.9)
Source: ADB Key Economic Indicators-Philippines 1999 and 2003 (1981-1986); DOF Fiscal Update (19872008), 2010 data from Bangko Sentral ng Pilipinas
ODA-assisted projects do not deliver
on their promised benefits. The study
covered 71 out of 161 projects funded
by the World Bank, Japan Bank for
International Cooperation (JBIC) and the
Asian Development Bank. The projects
cost a total of US$6.6 billion. (Landingin,
2008)
Figures for capital outflow however,
do not yet include the amount of capital
repatriated by TNCs within ecozones
where facilities exist for immediate profit
remittances by these corporations to their
parent companies.
To ease the burden of debt payments,
government will have to impose more
taxes. The result is an endless cycle
of more debts and more taxes for the
people.
One of the sterling promises for the
setting up ecozones is jobs creation.
Whatever capital flows into the
country, however, is easily outstripped
by capital outflows. From the 70’s up to
2002, it is estimated that $US 131 billion
has fled out of the country, or 2.8 times
the country’s total external debt (Beja,
2006). 2
2 Economists have varying methods for
computing total capital flight but they all agree on
the conclusion that the figure is staggering, and is
even increasing along with the country’s foreign
debt. According to Beja (2006), capital outflow grew
even rapidly increased after neoliberal policies were
implemented in the country.
Unemployment
Forty years after, however, the
country is experiencing one of its worst
unemployment crisis ever. From a 5.4%
average rate of unemployment from
1971-1980 and 9.8% in the 90’s, the
country’s average unemployment rate
has reached 11.2% for 2001-2009 (IBON,
2010).
Mass unemployment, even in
provinces or cities where EPZs were
established, has remained a problem.
A glaring example is CALABARZON,
where the biggest number of ecozones
can be found, but unemployment
remains at a high 9.5%, and 16.9%
36
Industrial Corridors
In her State of the Nation Address in
2006, then President Gloria MacapagalArroyo outlined her program for the
country’s development.
The Medium Term Public Investment
Program of the Arroyo presidency identified
five “super regions,” aiming to attract more
foreign investments by setting up “worldclass” infrastructure and transport systems
linking the entire archipelago.
The five “super regions” include: the
North Luzon Agribusiness Quadrangle,
Metro Luzon Urban Beltway, Central
Philippines, Mindanao Industrial Corridor
and the ‘Cyber Corridor.’
For the Metro Luzon Urban Beltway
(LUB), there were 44 projects that included
the construction of major roads and
expressway extensions linking Northern
and Central Luzon to Metro Manila and
the Southern Luzon region, all the way up
to Mindoro and Marinduque. These also
covered projects for air and sea transport
systems.
The LUB will be implemented under
a Private-Public Partnerships program.
Funds will come from the private sector
and international banks such as the Asian
Development Bank and the World Bank.
The project will cost a total of P180 billion.
Among the major projects of the LUB
are:
Central Luzon
Tarlac-Nueva Ecija-Aurora Dingalan
Port Road Rehabilitation, Subic-ClarkTarlac Expressway, Diosdado Macapagal
International Airport, the Subic Bay Port
Development Project, Tarlac-Pangasinan-La
Union Toll Expressway (TPLEX) Project,
Pampanga Interchanges Project, Panday
Pira Access Road, Aurora Pacific Economic
Zone (APECO) Facilities Development,
Dingalan International Port
Metro Manila
Metro Manila Urban Rail Network
(North and South Rail), MRT-LRT Loop,
C3 NLEX-SLEX Connector Road Project,
C5 Road, Edsa Rehabilitation, Naia
Terminal 3, Manila North Road Widening
Project, Feeder Airports Development
(Baler and Iba)
Southern Luzon
Batangas Port Development Project (
Phase 2), STAR Tollway, Southern Tagalog
Arterial Road, Marikina-Infanta Road
Project, South Luzon Expressway Expansion
Project, Manila-Cavite Toll Expressway
Project, Lucena Port Terminal, Kawit Port,
Marinduque Port,
Northern Luzon
Cagayan Valley Road (CVR) Widening
and Upgrading Project
37
Ripples and Rising TIdes
underemployment rates in January 2010,
according to the DOLE itself.
CALABARZON also has one of the
highest numbers of Overseas Filipinos
Workers (OFWs) . Almost half of the
country’s OFWs come from the region,
Central Luzon and the National Capital
Region. It was not surprising, therefore,
that when the US financial crisis
occurred in 2008, the greatest number
of OFWs who were displaced and who
applied for the governments emergency
Figure 4. Total Capital Flight, 1970-2002 (Million Dollars,
1995 Constant Prices)
Source: National Statistics Coordination Board from Lim (2010)
Figure 5. Total Foreign Debt (Million Dollars)
Source: Bangko Sentral ng Pilipinas (2011)
38
Development or deterioration?
Table 11. Share of Infrastructure Development in ODA
Year
Total ODA*
Number of
infrastructure debts
Value*
Share in total
2006
9.5
71
5.5
57%
2005
10.2
87
6.6
65%
2004
10.7
106
7.3
69%
2003
10.9
110
6.9
69%
2002
11.9
116
7.2
67%
2001
13.2
127
9.1
69%
2000
13.3
129
8.8
66%
*Billion dollars
Source: NEDA, 2001-2007
loan assistance program for displaced
OFWs came from CALABARZON.
Data from the National Statistics
Coordination Board (NSCB) also
reveal a rising poverty incidence in
CALABARZON from 9.2% in 2003 to
10.3% in 2009.
The October 2008 economic and
financial crisis in the US and other
capitalist countries, which caused a
drop in demand for electronic products,
garments, automotive spare parts,
furniture, toys, etc, led to downsizing
and closures of many factories inside
SEZs, and thus, massive retrenchments
affecting around 213,417 workers in the
country.
Massive Land Conversion
The establishment of numerous special
economic zones has also meant the
massive conversion of agricultural lands
into commercial or industrial use.
Data from the Department of Agrarian
Reform (DAR) show that 33,707 hectares
of agricultural land have been converted
from March 1988 to June 1995. In June
1997, converted land has reached 56,965
hectares since 1988, or an increase of
23,258 hectares in only two years. Most
of the conversions occurred in Southern
Tagalog, which has the greatest number
of ecozones (Kelly, 1998).
According to the Bureau of
Agricultural Statistics, the country
now only has 9.56 million hectares of
agricultural land, of which only 4.858
million hectares can be considered arable
land in 2009.
From being the number one exporter
of rice in the 70’s, the Philippines has
now become the world’s biggest importer
of rice in the world (Ibon, 2008).
According to PEZA, there are
required environmental clearances from
the Department of Environment and
Natural Resources in the establishment
of ecozones and industrial waste disposal
39
Table 12. Number of Workers Affected by the Financial
Crisis and Given Aid by DOLE
(October 2008-December 2009)
Region
Total Affected
Total provided
with aid
Percent
NCR
39,416
24,434
62.0
CAR
2,654
2,464
92.8
Ilocos (I)
14
14
100.0
Cagayan Valley (II)
304
97
31.9
Central Luzon (III)
32,302
10,947
33.9
CALABARZON (IV-A)
71,582
34,110
47.7
MIMAROPA (IV-B)
1,262
1,253
99.3
Bicol (V)
797
797
100.0
Western Visayas (VI)
651
418
64.2
Central Visayas/Cebu (VII)
53,083
970
1.8
Eastern Visayas (VIII)
74
66
89.2
Zamboanga (IX)
1,843
1,132
61.4
Northern Mindanao (X)
1,833
145
7.9
Davao (XI)
379
179
47.2
SOCSKSARGEN (XII)
322
57
17.7
CARAGA
6,901
5,829
84.5
TOTAL
213,417
82,912
38.8
Source: DOLE
systems to ensure environmental
protection. Ecozone developers are also
required to secure a permit from the
National Water Regulatory Board for the
use of water, including the construction
of water systems such as wells.
The PEZA has also established its own
environmental safety group, which is
tasked to oversee private organizations
contracted by enclave operators/owners
to undertake tests on the waste disposal
system. The private organizations are
required to submit evaluation reports to
the agency.
Data is unclear, however, as to the
effectiveness of government monitoring
of ecozones’ adherence to these
requirements due to the inadequacy
of staff and operational resources.
Moreover, the law imposes very little in
the way of penalties for non-adherence:
the violator is given a few days to correct
the violation, and payment of a small fine
of P500 for every day of violation.
40
Development or deterioration?
Table 13. Converted Agricultural Land from March 1988
to June 1995
Region
Approved
Unapproved
Exempted
Total
CAR
38
0
9
47
Ilocos (I)
70
2
0
72
Cagayan Valley (II)
166
7
26
198
Central Luzon (III)
2,223
348
703
3,274
Southern Tagalog (IV)
7,029
305
13,022
20,358
Bicol (V)
178
59
45
281
Western Visayas (VI)
1,325
227
431
1,984
Central Visayas/Cebu
(VII)
208
164
6
378
Eastern Visayas (VIII)
76
90
302
468
Zamboanga (IX)
241
0
38
279
Northern Mindanao (X) 913
201
2,576
3,690
Davao (XI)
1,971
217
99
2,286
SOCSKSARGEN (XII)
300
0
92
393
Philippines
14,738
1,620
17,349
33708
Source:: Department of Agrarian Reform, from kay Kelly
A 2003 survey conducted in 38
enclaves revealed that most of these
ecozones utilize more than one way
of delivering water supply to locators.
Each ecozone supplying water to its
locators usually has five (5) deepwells
averaging anywhere between 25 – 600
meters deep. But there are ecozones that
directly construct their own deepwell
without the necessary permit from
PEZA or the National Water Regulatory
Board. Many of those surveyed use
188,000 cubic meters per month on
the average, but there was one (1) case
of a water-intensive ecozone that uses
one (1) million cubic meters per month
(Bateman, 2003).
Industrial wastes from ecozones,
however, constitute the bigger problem.
While the same study revealed that most
of the ecozones claim to have water
treatment facilities, it can be noted
from the survey’s results that the effluent
waters eventually end up in nearby lakes,
rivers or lagoons.
In 2009, residents of Sta. Ana in
Cagayan protested over the failure of
officials of the Cagayan Special Economic
Freeport Zone to solve the illegal disposal
of garbage and effluents from two
casinos operating inside the ecozone. The
residents complained that the casinos
dispose of their garbage into a lagoon
in Barangay Tangatan, which used to be
41
Figure 6. Total Number of Poor Families in CALABARZON
Source: National Statistics Coordination Board
Figure 7. Poverty Incidence in CALABARZON
Source: National Statistics Coordination Board
42
fishing grounds for around 100 families
in the area (Gascon, 2009).
Residents and indigenous peoples of
Casiguran, Aurora on the other hand
have threatened to file a case against the
Aurora Pacific Economic Zone (APECO)
due to alleged land-grabbing of around
13,000 hectares of agricultural land in the
area (Silverio, 2011).
Massive dislocation of communities
not only happen in the countrysides.
Many of the fragmented cases of
demolition of urban poor communities
occurring in the cities are also driven by
the establishment of ecozones or support
infrastructures for these. In Cebu, there
is a case of an entire barangay or village
being demolished when the Mactan
Export Processing Zone I was established
in 1986, and the establishment of MEPZ
II likewise threatens surrounding
communities in affected areas.
In fact, even PEZA itself is not exempt
from the issue of land-grabbing. A
number of the lands it currently occupies
remain untitled due to contesting claims
from original owners or residents. In
Baguio, a Commission on Audit report
in 2008 revealed that titles to 29 lots have
not been transferred yet to PEZA due to
lack of papers and claims filed by other
parties.
Who Really Benefited ?
More than 40 years since the
establishment of the first EPZs,
widespread poverty and hunger remains.
A recent survey done by the Social
Weather Station revealed that there has
Development or deterioration?
been no change in Filipinos’ perception
of poverty in the country for the past 26
years. Almost 53% of Filipino families
still consider themselves poor. This is not
much different from the results of the
original survey done by the Development
Academy of the Philippines in 1983,
when almost 55% of families considered
themselves poor. CALABARZON itself
registers an increasing poverty incidence
rate from 2003 to 2009, from 9.2% to
10.3% of the population, according
to data from the National Census and
Statistics Board.
Forty years later, we see a picture of
a country still tied to the problem of a
seemingly insurmountable economic
crisis where the people are mired in
poverty, the economy remains largely
agricultural, the country neck-deep in
debt and relying only on labor export to
keep the economy afloat.
If anyone had benefited from the
establishment of special economic zones,
it is foreign capital, big local capitalists,
big landowners and high officials in
government.
Foreign capital is able to operate at
minimal infrastructural and labor costs,
which enables them to maximize profits
without fears of disruption in production
due to worker protests. Immediate
repatriation of capital likewise frees them
of any worries during times of political
crises.
Government funding for
infrastructure for EPZs, tax
holidays for locators, the virtually
unregulated repatriation of capital,
43
labor flexibilization and the nature
of production that is essentially subcontracting of semi-processed and
low-value added products all spelled out
a formula that only benefited locators
inside these enclaves.
High government officials likewise
benefited from the establishment of
ecozones in the country, and in the
virtually unbridled foreign borrowing to
fund the setting up of infrastructure for
these ecozones.
Huge public funds from foreign
borrowing became milking cows as
government officials derive kickbacks
or commissions from public biddings
for infrastructural projects or when
applications for ecozone status require
their approval. Numerous scandals have
been exposed involving top government
officials since the time of Marcos up to
the Arroyo presidency. In fact, the World
bank halted the release of ODA for 11
infrastructural projects in 2008 due to
issues of graft and corruption.
For big landowners, land conversion
became a golden opportunity to jack up
the value of their land. An example is
Hacienda Luisita, where land was valued
at P44,000 per hectare in 1989, but now
costs Php1million, based on the figures
presented by management on September
2010, in its negotiations with peasant
organizations fighting for agrarian
reform. The increase was substantially
brought on by the conversion of vast
portions of the hacienda into industrial
use.
Instead of development, these
special economic zones have only
brought the country to a chronic crisis
of underdevelopment, the country
remaining backward and agrarian,
export-oriented while import-dependent
and with no hope for ever building a
sustainable domestic industrial base. ■
44
Organizing Experiences in Economic Zones
ORGANIZING EXPERIENCES IN
SPECIAL ECONOMIC ZONES
The history of organizing in special economic zones in the country began at the
Bataan Export Processing Zone, during the iron fist rule of the US-backed Marcos
dictatorship.
Marcos’ military rule banned workers’
strikes and implemented General Order
No. 5, which prohibited all forms of
public gatherings. It established the
National Labor Relations Commission
(NLRC), which required that all labormanagement conflicts be subject to
compulsory arbitration. This law likewise
banned the collection of strike funds.
Stevedores in Navotas, on the Northern
tip of Manila, and the urban poor
alliance, Zone One Tondo Organization
(ZOTO), launched a series of protest
actions. Among the most well-known of
this period was the strike at La Tondena,
Inc., which pushed the dictatorship to
issue PD 823 banning support for the
strike.
The dictatorship next implemented
Presidential Decree (PD) 143, which
extended working hours and nullified the
Blue Sunday Law. PD 148, on the other
hand, reduced maternity benefits for
women workers from 14 weeks to a mere
six (6) weeks.
To assuage the simmering unrest,
Marcos issued PD 851 in December
1975, which granted 13th month pay to
workers and narrowed down the strike
ban.
On May 1, 1974, or less than two
years after the declaration of Martial law,
Marcos issued PD 442 or the Labor Code
of the Philippines. The government set
up the first few export processing zones
and granted numerous privileges to
multinational corporations.
But these repressive laws failed to
stymie labor unrest. Many workers staged
strikes such as those at Mead Johnson, a
multinational food and drug corporation.
In 1981 came the lifting of Martial
Law. Marcos adopted BP 130, formerly
known as Cabinet Bill 45 or the new
labor relations law, which delimited
strikeable issues to economic issues
and unfair labor practices. This law was
more repressive, however, as it gave
the Minister of Labor the power of
Assumption of Jurisdiction (AJ) over
strikes that affect the “national interest.”
It also required the filing of a Notice of
Strike (NOS) and a mandatory 15-30 day
cooling-off period after the filing of NOS.
It also imposed a 2/3 vote requirement
Ripples and Rising TIdes
for staging a strike. In essence, all these
restrict the right to strike.
The Anti-Scab and Picketing Law
or BP 227 was signed into law on June
1, 1982 by then Minister of Labor Blas
Ople. The law in effect granted freedom
of ingress-egress to companies where
workers are on strike. This law likewise
prohibited strikes in public utilities,
energy generation and distribution,
banks, hospitals and export-oriented
industries, which includes those in EPZs.
Bataan Export Processing Zone:
Organizing Under a Repressive
Rule
Opposition to the Bataan ecozone
already began a few years even before the
construction of BEPZ. In 1969, residents
of Barrio NASSCO (National Shipyard
and Steel Corporation) and Barrio
Camaya were already protesting the
demolition of their communities.
It was only in 1972, however, after
the declaration of Martial Law when the
government was finally able to crush
the opposition. The dictator issued
Presidential Decree 66 which established
the Export Processing Zone Authority
(EPZA) and legalized the demolition
of Barrios NASSCO and Camaya.
Construction work on the ecozone then
began.
BEPZ was purportedly modeled after
the Kaoshiung Export Processing Zone
set up in Taiwan in 1966. Kaoshiung is
said to have propelled Taiwan from a
backward, agricultural country into an
“industrialized” country in the early 70’s.
45
With a total land area of 345 hectares,
BEPZ was only 160 kilometers from
Manila. It took advantage of the strategic
location of the Bataan peninsula, which
can be easily reached from the capital by
land, sea and air transport.
As part of the so-called “decentralized
industrialization” program of the Marcos
dictatorship, BEPZ was comprised
by industrial facilities at the core of
infrastructure, and tenement housing for
workers that would partly constitute a
“viable industrial community.”
The Federation of Free Workers
(FFW) and the National Federation of
Labor Unions (NAFLU) led early efforts
to organize unions inside the zone.
Religious organizations, such as the Rural
Missionaries of the Philippines, aided the
effort by providing resources and venues
for meetings. Since the dictatorship
banned gatherings, the workers held
meetings under the cover of prayer
meetings and bible study sessions.
Since union offices were also banned,
organizers did their tasks by immersing
in the tenement housing for workers,
which became melting pots for the
discussion of workers’ common issues
and grievances. The meetings and
discussion groups became venues as well
for discussing the general situation of the
country under Martial Rule.
In the mid-70’s, the FFW set up the
first union, but this was easily crushed
when the government launched a
crackdown against the labor movement.
46
Despite the ban on strikes, workers
at Ford Ensite, Ltd. staged the first strike
at BEPZ on March 5, 1979 on issues
of deadlock in CBA negotiations and
management’s suspension of the union
president. Around 417 striking workers
were arrested and detained for two
days at the Provincial Command of the
Philippine Constabulary in Balanga,
Bataan. The strength of the union,
however, and support from the nearby
communities, pressed authorities to
release the workers. Although half were
not reinstated to their work, the company
eventually gave in to their demand for a
wage increase.
some began to set up union offices in the
town of Mariveles.
On June 7, 1982, came the first zonewide strike for export processing zones
in the country, and anywhere else in the
world. Prior to this, women workers at
Inter-Asia Garments launched a strike
that was brutally dispersed by police
forces of the Marcos dictatorship.
The assault against the women
workers aroused the anger of workers
from other companies. Around 10,000
workers staged walkouts and other forms
of protests in 23 factories in support of
the striking workers. Public attention
on the zone-wide strike eventually
forced management to grant the women
workers’ demands. The action also
http://www.flickr.com/photos/f_welman
The number of strikes inside BEPZ
increased in the 80’s. Despite the ban,
Organizing Experiences in Economic Zones
Ii was in homes like these that the issues and concerns of workers of BEPZ in the
1970s met. The realization that their problems were united taught them the necessity of
linking arms in advancing a single struggle.
47
Ripples and Rising TIdes
resulted in the formation of a zonewide alliance which was to be known as
BEPZ-AMBA-BALA.
What factors led to the successful
zone-wide strike?
According to Roy and Maria, both
labor organizers at BEPZ in the 80’s,
this was the result of years-long careful
and clandestine organizing work in
various factories inside the zone. At its
peak, around 85% or workers inside the
ecozones were organized into unions or
other forms of worker organizations.
Organizing work began in 1978 using
various forms and methods. In some
cases, they immediately set up a union,
in others, religious associations. Union
organizers also secretly worked within
“yellow” or company-sponsored unions,
with the objective of transforming these
into genuine workers’ unions.
These factors therefore ensured
a broad influence among workers,
which the more advanced section of
the workers’ ranks was able to utilize at
the right time, paving the way for the
zone-wide strike despite the politicallyrepressive conditions of the time.
Furthermore, the nationwide
resistance and disgust of the Filipino
people against the Marcos dictatorship
softened the ground for soliciting the
sympathy even of Filipinos working
in management ranks inside the zone.
In Bataan, for example, the Bataan
Nuclear Power Plant, another flagship
project of the dictatorship, galvanized
the residents of the province in a broad
resistance to the project. Filipinos in
management ranks in the zone, therefore,
saw the company-level fight of workers
as part of the national struggle against
the dictatorship and its political and
economic policies that were wreaking
havoc on the people’s lives and the
nation’s future.
Neoliberal Attack on Labor
No genuine change ensued, however,
after the downfall of the dictatorship.
Corazon Aquino ascended to the
presidency, and workers, especially in the
Visayas and Southern Tagalog, continued
to wage strong fights for their economic
demands.
The change in form of government,
however, from an open dictatorship
to one that professes to be “liberal
democratic” challenged the capabilities of
the labor movement to effectively discern
and unite in their analysis of the basic
character of the Aquino government. The
resulting disunity occurred amidst the
“economic restructuring” implemented
by the Aquino government, essentially
a shift toward the implementation
of neoliberal policies in the country.
Under the Aquino government, the legal
framework for a more vicious attack
against labor was completed.
These changes confused and divided
the ranks of organized labor, weakening
its capacity to apply correct tactics in
organizing. It failed as well to grasp the
consequences of changes in labor laws
and in national economic policies on
workers’ legal and political battles.
48
With the weakened militancy of
the labor movement, yellow unionism
saw an opportunity to benefit from the
“trilateralism” promoted by the Aquino
government, signing a covenant that
guaranteed “industrial harmony and
peace.”
In the name of “industrial peace,” the
Aquino government implemented the
Herrera Law or Republic Act 6715 as an
amendment to the repressive Labor Code
of the Marcos dictatorship.
Instead of abolishing the repressive
features of the Code, however, RA
6715 further narrowed the legal bases
for worker strikes and expanded
requisites for the setting up of unions.
This law likewise virtually legalized
labor-only contracting, aiding what
was then the growing practice of labor
contractualization in the country.
The government likewise abolished
the national minimum wage through
the Wage Rationalization Act, which
decentralized the power to approve wage
increases to regional wage boards.
This more repressive Code and the
Wage Rationalization Act had adverse
consequences for the labor movement.
It gave more teeth to worker repression
as it granted a blanket of authority to
the Secretary of Labor in the exercise of
the power of Assumption of Jurisdiction
(AJ), which may be issued even before
the strike is staged.
The succeeding Ramos presidency
paved the way for the full implementation
of neoliberalism, including the legal
bases for the virtually unlimited land
Organizing Experiences in Economic Zones
conversions for the establishment of
economic zones in the country.
Workers’ Organizing in
Ecozones: A Rising Tide?
The number of worker unions and
strikes rapidly decreased from its peak
during the Marcos dictatorship up to the
early years of the Aquino presidency.
From 371 strikes involving 111,265
workers in 1985 and 581 in 1986
involving 169,479, the number of strikes
and lockouts was reduced to eight (8) in
2010, which are “wildcat” in nature or
those which did not file notices of strike
(Business World Online Edition, 2011).
From 1990-2000, the number of
unionized workers only increased by
23% compared to 43% during the period
of 1980-1990 (Bureau of Labor and
Employment Statistics, 2002).
The government has been quick to
use these data to assert that workers are
“tired” of fighting, and in fact are now
setting up other types of organizations
such as Labor Management Councils
(LMCs) and cooperatives.
According to the Institute of Labor
Studies of DOLE, despite the rapid
decrease in in the number of unions,
registered workers’ associations have
risen rapidly. From 267 in 2000 with a
membership of 9,376, the figures have
increased to 3,681 organizations in
2009 with an individual membership of
148,970 (Alcantara, 2010).
Ripples and Rising TIdes
But these statistics do not distinguish
between cooperatives and associations
truly set up by workers themselves and
those which are actually subcontracting
agencies, which became prevalent
with the spread of contractualization
in the country. Many of these agencies
register as cooperatives in order to
circumvent legal prohibitions against
labor-only contracting such as the “labor
cooperatives” that supply manpower to
pineapple giant DOLEFIL.
Continuing labor unrest is evident
in the number of complaints filed with
relevant government agencies from
January to September 2010:
• Five (5) cases of work stoppage
involving 2,234 workers
• 364 cases of preventive mediation
filed with the National Conciliation and
Mediation Board, 18 of which actually
developed into filing of notices of strike/
lock out and/or actual strikes/lockout
• 37,511 cases of compulsory
arbitration filed with various Regional
Arbitration Branches of the National
Labor Relations Commission
Moreover, while the number of strikes
remained insignificant, the number of
workers involved doubled, from 1,510
in 4 strikes in 2009 to more than 3000 in
2010.
From 2004 to 2009, according to
PEZA, there were 195 complaints filed
by workers, 160 cases of preventive
mediation, 85 notices of strikes and seven
(7) actual strikes. The numbers may
seem insignificant compared to the total
workforce employed by ecozones, but
one must remember the constraints that
49
workers inside zones have to overcome in
order to air their protests.
Interviews with union leaders
conducted by the study point to a picture
of workers inside ecozones trying
to overcome the difficulties of union
building in the face of a comprehensive
attack on labor rights with the onslaught
of neoliberal policies in the country.
In various ways, workers are
organizing inside the zones, from
setting up informal groups for mutual
aid, participation in management
mechanisms while building their strength
in order to set up unions, to organizing in
surrounding communities and factories
in order to unite the various struggles
being staged by workers into a common
bond.
Initially, successful experiences
in organizing contractuals are an
important development in countering the
divisiveness of this scheme on workers’
ranks and in the fight, as well, for higher
wages.
From isolated and fragmented
organizing efforts, we can draw an
important lesson – that the successful
organizing of workers inside ecozones
requires a determined and coordinated
effort not only at the local level but at the
zone-level and beyond.
Like the conditions workers faced
during the Marcos dictatorship, workers
are beginning to realize the need
for creativity and flexibility in their
organizing approaches, considering the
repressive conditions inside the ecozones.
50
It remains to be seen, however, if
the ripples now forming inside these
ecozones will create a rising tide in the
immediate future.
Organizing Experiences in Economic Zones
At the moment, workers will have to
rely only on their wise judgment and
determination, and on the lessons of
history, in order to draw up a path that
truly serves their interests. ■
51
Ripples and Rising TIdes
IWS WU:
effective leadership and union democracy at work
How can a labor union resist the maneuverings of company management and
threats from elements of the state’s armed forces and still manage to stay militant and
true to its avowed objective of upholding workers’ rights and interests?
For fourteen years now, the Laban ng
Demokratikong Manggagawa (LDM) has
managed to win the workers’ trust and
confidence as evidenced by their victory
in union elections, and by their capacity
to mobilize workers against management
efforts to subvert their leadership.
The LDM has held leadership of the
International Wiring System workers’
union, leading the fight for better
pay and working conditions, and
painstakingly building the unity of both
regular and non-regular workers inside
the workplace and beyond.
Not even the harassment campaign
launched by elements of the Philippine
military, over which the union has filed a
complaint with the International Labor
Organization (ILO) in 2008, has deterred
the IWS WU from continuing to gain
strength and scoring economic victories
for the workers.
Moreover, the IWS WU has not
confined itself to the concerns of its
members within its locality, it has also
actively supported the fight of other
oppressed sectors as well – that of the
farm workers of Hacienda Luisita who
have long been fighting for ownership
of the land they have been tilling for
decades.
Company Profile
The International Wiring Systems
(Phils.) Corporation is located inside
the Luisita Industrial Park at Hacienda
Luisita in San Miguel, Tarlac City.
It is a subsidiary of Sumitomo Wiring
Systems based in Japan and manufactures
wiring harnesses for Japanese automakers
(Honda, Mazda , Mitsubishi, Toyota) and
Ford Motors.
The Company was incorporated in
July 1990 as a 100% Filipino-owned
corporation, but later entered into a joint
venture agreement, in October of the
same year, with two leading Japanese
Companies, Sumitomo Wiring Systems,
Ltd. and Sakata Inx Corporation (now
Siix Corporation).
Average wage in IWS is anywhere
between P13,000 to P18,000 per month,
plus many other benefits that the union
has won through collective bargaining
Organizing Experiences in Economic Zones
iIlang-Ilang Quijano / PinoyWeekly.org
52
agreements with management over the
past several years.
In fact, regular workers at IWS
consider themselves as “workers with
higher status” as they enjoy wage rates
provided by law and work in much better
conditions, compared to contractual
workers or those from other companies
inside the zone, or even that of Central
Luzon.
Women are given a maximum of 30
days’ maternity leave (60 days in case
of caesarian births). The union has also
managed to win a six-day paternity leave
benefit for male workers. Workers also
enjoy hospitalization benefits.
The manufacturing of wire harnesses
is a labor-intensive process. Product
specifications vary as per customer needs.
Despite the worldwide trend for
automation, the manufacturing of wire
harnesses is expected to remain largely a
manual process in the foreseeable future
due to the tedious labor necessary in
many parts of the production process.
These include, for example, routing
wires through sleeves, taping with fabric
tape, and crimping terminals onto
wires, particularly those that require
more than one wire into one terminal.
These are tasks that will be difficult
for machines to undertake, and the
superiority of a dexterous human hand
is therefore indispensable to the entire
manufacturing process.
Production Process
The production process begins with
the receiving section where component
materials are inspected before being
distributed to the different departments.
53
Ripples and Rising TIdes
The Luisita Industrial Park (LIP)
The Luisita Industrial Park I was
established in 1991 as a ‘special economic
zone’. Comprised by around 120 hectares,
its owners have described it as “Hacienda
Luisita growing into the 21st century”.
Smaller Filipino-owned companies
such as Purefoods, Universal Robina
Corporation (instant noodles and snack
food), and Jollibee Foods can also be found
within LIP.
Designed as an “integrated urban
complex” , it claims to combine the ease
of operating business with the amenities
of luxurious, modern living that serves not
only Central Luzon, but intends to be an
economic hub for Asian investors as well.
LIP alone contributes around 40%
of Central Luzon’s income, mainly from
exports by these companies within the Park.
The LIP was set up within the framework
of the Central Luzon Development Program
(CLDP) , which aims to promote a “triad
growth center” in Central Luzon for the
provinces of Tarlac and Pampanga , and the
City of Manila.
LIP is divided into phases :
a. Luisita Industrial Park (LIP) 1 – is
currently operational with the following
major investors :
i. Sumitomo Wiring Systems
ii. International Electric Wires Phils.
Corp.
iii. Sanyo Semiconductor
Manufacturing Philippines, Corp.
iv. Phelps Dodge Philippines ; and
v. Avantex Mill
b. The second phase is called Central
Techno Park. It is comprised by 300
hectares but still has no major locator.
LIP 2 is owned and operated by Luisita
Industrial Park Corporation which is
a joint venture among the Cojuangco
family, the Yuchengco-owned Rizal
Commercial Banking Corporation (RCBC),
Agila Holdings and Itochu, a Japanese
Corporation.
As a ‘special economic zone’ Luisita
Industrial Park does not fall under the
direct jurisdiction of the Philippine Export
Zone Authority (PEZA).
As an autonomous entity, LIP therefore,
like other privately developed industrial
estates, is free to formulate and carry out its
own rules and policies, provided, according
to PEZA regulations that these “are not in
conflict” with prevailing labor laws and
policies in the country.
54
Organizing Experiences in Economic Zones
Next comes the Wire Processing
Group, which cuts the wires in cutting
machines into sizes or lengths depending
on product specification.
The wires then undergo middle
inspection and later are issued to various
assembly lines on conveyor belts.
This is the more labor-intensive part
of process – where the wire harnesses
are assembled using corrugated tubes,
silicone, grommet, connectors and
protectors according to product model
specifications. Around 50% of the plant’s
workers are in the assembly lines. There
are around 100 lines working on three
shifts, with each line composed of 20-30
workers. This also involves the use of
chemicals until the wire harness is fully
assembled.
The harnesses will then undergo first
visual inspection and will pass through
circuit boards before being passed on for
second or even third, inspections. Finally,
a much smaller number of workers
will pack the products for delivery or
shipping.
The production process for wire
harnesses is fraught with health and
safety hazards. Accidents have in fact
happened inside the factory, causing
workers’ fingers to be cut off as they try
to cope with the speed by which the
blades operate. There have also been
cases where tiny parts such as terminals
accidentally fly off and hit workers’ eyes.
Allergies to hazardous chemicals have
also happened.
To prevent further accidents, the
union demanded several improvements
in the workplace and the provision of
safety gadgets, which were granted by the
company management. There is a joint
union-management health and safety
committee, which meets regularly to take
up issues related to occupational safety.
“Kaizen”
The IWS management professes
adhering to a philosophy of “Kaizen” –
incremental but constant improvements
in the manufacturing process
purportedly aiming to encourage worker
participation in production improvement
programs. If found useful, the worker
would be paid around P20 for an idea.
Ideas that get to be really implemented
are paid higher amounts.
“Employee participation plays a very big role in the
company's implementation of improvement programs. Employees
contribute ideas through the KAIZEN program. These ideas were
evaluated and implemented found useful and workable. Ideas
can be prevention of accident, faster and surer execution of work,
cost effectiveness, reduction of wastes, improvement of work
and services, and many others related to the job and the work
environment.”
- IWS Philippines website
iIlang-Ilang Quijano / PinoyWeekly.org
Ripples and Rising TIdes
But kaizen ideas that get to be
approved are those that mainly help
the company cut costs. In many cases
production is made more efficient but
there is an accompanying reduction
in manpower. Ideas that pertain to the
improvement of worker conditions, on
the other hand, such as how to make the
load of pregnant women workers lighter,
for example, are passed over.
Forms of Employment
In September 2008, IWS employed
6,048 workers, 3,116 of whom are union
members, 2,442 are contractual and
497 are managerial and supervisory
employees. The number of regular
workers is currently down to around
3142, with around 1000 contractual
workers, the latter number reduced after
management implemented a series of
retrenchment moves. Around 60% of the
workforce is comprised by women.
55
Aside from the contractuals however,
are the other non-regulars:
• On-the-Job Trainees (OJTs),
also called learners, number around
38. OJTs are students who have been
recommended by Hacienda Luisita’s
Training Center. Though they perform
the same tasks that workers at the
assembly line do, OJTs only receive P68
daily transportation allowance;
• Apprentices who are paid P100 per
day. These come from training centers
run by the city government. After around
five months, the company may opt to
hire them and they become “fixedterm” employees who are then paid the
minimum wage
• Project-based employees who are
hired to work on specific product models.
Project contracts may range from 2-5
years, after which their services are
terminated. Such employees also receive
minimum wage.
The International Wiring System
Workers’ Union (IWS WU)
The IWS Workers’ Union (IWS WU)
was for a long time affiliated with the
Federation of Democratic Trade Unions
(FDTU), which in turn was closely allied
with the Trade Union Congress of the
Philippines (TUCP), a known yellow
labor center in the Philippines. It was
then officially known as IWS WU-FDTU.
There was not much union activity,
however. While the workers did get wage
increases, union officials rarely consulted
them about CBA negotiations which were
virtually an exclusive affair involving
only the officials and management
representatives.
56
But worker dissatisfaction grew
because of the known “bad habits” of the
union president such as gambling and
womanizing. Members were also fined
P100 for not attending union meetings,
amounts which were never accounted for
by the officers.
In 1996, a group of dissatisfied
union members formed the Laban ng
Demokratikong Manggagawa (LDM),
identifying themselves as “genuinely
pro-worker, militant” union leadership,
and challenged the IWS WU-FDTU
leadership in a local election. The LDM’s
full slate won a landslide victory over
the incumbents. In the same year, the
LDM-led union concluded a collective
bargaining agreement with the company
management where they won an increase
in the workers’ minimum wage, other
economic benefits, and companyrecognized fulltime union organizing
status for two of its union officials, which
greatly aided their union organizing
efforts.
Giving Birth to Other Workers’
Unions
It was in 1996, too, when the newlyelected set of officers’ were put to the task
of helping set up a separate union at their
newly-established sister company.
IWS management decided to spin off
a section that produces wires and cables
for Kawasaki Motors. The latter was to
become a separate company under the
name of International Electric Wires
Corporation (IEW).
Organizing Experiences in Economic Zones
Twenty rank-and-file and middlemanagement employees from IWS were
transferred to the new company, even as
the new management began recruiting
and training new workers from around
the villages of Hacienda Luisita.
Instead of resisting the move, however,
the IWS union saw it as a chance for
expanding the ranks of organized labor.
Aided by the newly-elected IWS union
officials, the twenty transferred workers
immediately filed an application with the
Department of Labor and Employment
(DOLE) for a separate union. The DOLE
approved their application – giving birth
to the IEWP Employees Union.
To immediately establish a center
of leadership for their fledgling
organization, the members agreed to just
appoint a set of nine (9) union officers,
with a resolution to hold elections later.
In the same year, they went into
their first negotiations for a Collective
Bargaining Agreement (CBA) with the
IEW management. Aware of their still
inferior strength, the union decided
to limit their demands to benefits they
already enjoyed at IWS, which they knew
their new company would be willing
to give. The union won their demands
and today continues to lead IEW
workers’ fight for better pay and working
conditions.
Test of Leadership
The first real test for the IWS WU
leadership came five years later, in 2001
when, during the CBA negotiation
57
Ripples and Rising TIdes
Hacienda Luisita
Hacienda Luisita is located within the
province of Tarlac in Central Luzon. It was
originally a sprawling sugarcane plantation,
and today remains one of the biggest
concentration of land ownership in the
country. It is comprised by around 6,453
hectares.
Owned by the Cojuangco family - which
counts among its members the late Corazon
Cojuangco Aquino, former president of the
country and icon of the EDSA I revolution
- the hacienda remains the lifeblood of
the province’s economy , and a source of
immense wealth and political power for its
owners.
Located right in the center of the
municipality of San Miguel, the Hacienda
is well-secured by the presence of a major
military camp a stone’s throw away from
the hacienda’s main entrance – Camp
Sevillano Aquino.
Comprised by eleven (11) barangays or
villages with an estimated total population
of around 33,000 in the 90’s, Hacienda
Luisita employs around 5000 workers, who
mostly come from these these surrounding
villages. In fact, a manpower training center
has been set up right in the heart of the
hacienda to provide a ready source of skilled
manpower for companies locating in the
special ecozones of the said place.
One of the prime business activities in
the hacienda is the Central Azucarera de
Tarlac (CAT), described by its owners as
an “integrated” manufacturing plant that
produces both raw sugar and sugarcane
by-products such as molasses, alcohol and
liquefied carbon dioxide. CAT used to
be the prime revenue-generating activity
at the hacienda prior to the conversion
of around 3,000 hectares of the land into
industrial and commercial use. The latter
was implemented by the Cojuangco family
in an effort to increase revenues from its
landholdings and evade agrarian reform.
Prior to EDSA I, Hacienda Lusista
was already embroiled in a controversy as
tenants campaigned for land reform. The
peasant groups cited the basis for which
the Cojuangco patriarch, Jose Cojuangco,
Sr., was originally granted a loan in 1957
continued on p. 58
period, the IWS management ordered a
one-hour work stoppage and organized a
meeting inside the plant.
heading of the signed papers to one of an
impeachment procedure against the then
union president.
Workers were asked to vote “Yes” or
“No” on paper to the CBA provisions
being negotiated on. The “yes” vote
won overwhelmingly. To their surprise,
however, unscrupulous management
representatives later changed the
Management appointed a set of
provisional officers. The FDTU also
sent a letter to management a day after
the meeting was held, stating that the
provisional officers were the FDTU’s
“recognized” officials.
58
continued from p. 57
by the Government Service Insurance
System (GSIS). This was to “buy
Hacienda Luisita to pave the way for the
sale to bona fide planters on a long-term
basis, portions of the hacienda.” In
1986, a regional trial court ordered that
Luisita be distributed to the tillers, but
the Cojuangco family filed an appeal,
and instead implemented a ‘stock
distribution option’ (SDO) scheme as a
way of “sharing ownership” with its tenant
farmers. When Corazon Aquino became
president, the government dismissed
the case against the Cojuangcos on the
ground that Hacienda Luisita was going
to be covered by the “new” land reform
program that the Aquino government was
going to implement.
Even prior to carrying out the SDO
scheme, however, owners of Hacienda
Luisista had already issued orders for
farmer tenants to cease planting activities
on around 400 hectares of Barrio Balete,
where now the Luisita Industrial Park
Phase I stands.
Today, Hacienda Lusita has grown
into the most important industrial
and commercial center in Tarlac and
surrounding provinces. It houses
not only the CAT, but a host of other
establishments such as Plaza Luisita Mall,
two industrial parks, a deluxe hotel
(Central Park Hotel), the Luisita Golf
and Country Club and several high-end
residential communities.
Organizing Experiences in Economic Zones
The workers launched protest actions.
They pinned ribbons and staged a
noise barrage to force management
to recognize the duly-elected leaders.
They also later staged protest pickets in
front of relevant regional and national
government labor agencies.
Company officials subsequently filed
an interpleader case with the DOLE,
asking the Department to rule on the
legitimacy of the appointed, provisional
leadership. Within a week’s time after
the plant meeting, management and the
appointed provisional officers concluded
and signed the CBA for the year July 1,
2001 to June 30, 2004.
The impeached officers protested
management’s illegal action and filed
a petition with the DOLE Regional
Office in Central Luzon for a special
election. They also filed a complaint with
the Court of Appeals. While the cases
were pending, the impeached workers
continued to work on the members’
work-related grievances. To stop the IWS
WU operations which the elected officers
represent, management withheld the
union dues deducted from the wages of
union members and refused to pay the
wages of two fulltime union officers as
provided for by the CBA.
The Director of the DOLE Regional
Office intervened in the case, calling for a
referendum to solve what he termed as a
“leadership crisis.” The referendum was
to call for a new election of officers. The
Director’s proposal, however, failed to
get a majority vote from the workers. The
workers likewise staged protest actions
inside the company premises.
59
Ripples and Rising TIdes
Special elections were held August
2002, organized and facilitated by the
DOLE. The impeached workers, except
for the president, participated and won
overwhelmingly over the managementbacked slate.
The Hacienda Luisita Massacre
But issues outside the company
premises were also to confront the IWS
union. In 2004, on orders of the owners
of Hacienda Luisita, elements of the
Philippine military and goons in civilian
clothes massacred the striking farm
workers of Hacienda Luisita. It was an
issue that sparked national outrage and
would be remembered in the country’s
recent history as one of the bloodiest
incidents of peasant unrest.
The workers of IWS were deeply
affected, since many of them either came
from the hacienda itself or were kin to
the victims. They thus knew of the longstanding problems of agrarian unrest.
The union called for a protest march to
show the workers’ solidarity with victims.
There was an outpouring of material and
moral support from the IWS workers for
the striking farm workers.
The massacre may have achieved its
owners’ agenda of immediately crushing
the peasants’ strike for land reform and
other improvements in their economic
conditions. But it only fostered even
deeper ties of solidarity among the
working class families of the Hacienda,
and between them and the workers of
IWS as well. The workers’ support for the
peasant strikers were to continue in the
following years. In December 2007, the
union donated two hand tractors and
seeds to the farm workers who have since
renewed their campaign for land reform.
But then came the harassment
campaign. It was around this period
when elements of the Philippine military
and men in civilian clothes began a
campaign of harassment and witchhunting against officials of the IWS WU.
Soldiers from the nearby military camp
visited their homes, often in the wee
hours of morning.
The military also organized
community fora invariably accusing
the union officials as “communists”
and discussing matters related to labormanagement relations in the company.
The union officials stood firm, however,
and even attended the community
fora, asserting the fact that they were
duly-elected officials of the union.
The witch-hunting campaign failed to
acquire teeth among the union members,
community residents and local officials
who continued to consult union officers
about problems and issues confronting
the community.
Disaffiliation
In February 2004, the court of Appeals
issued a decision on the complaint filed
by the impeached officers, reinstating
them as the lawful officers of the IWS
WU.
On March 5, 2005, IWSWU
disaffiliated from the Federation of
Democratic Trade Union (FDTU)
and applied for an independent union
registration at the Department of Labor
60
and Employment (DOLE). It remains
independent and non-affiliated to the
present.
The FDTU did not take the
disaffiliation easily. The Federation
president sent a letter to the IWS
management insisting on another worker
leader as its recognized union official.
Capitalizing on this letter, the IWS
management filed another interpleader
case with the DOLE, asking what it called
as “intra-union dispute” between IWS
WU-FDTU and the newly-independent
IWS WU be resolved.
Strengthening the Organization
Even prior to the impeachment,
however, the IWS WU had become aware
of the growing need to consolidate its
leadership and ensure greater worker
participation in union affairs. This
was particularly true for the task of
strengthening the union organization;
management moves of backing yellow
leaders were increasingly becoming
a threat to the genuine, pro-worker
character of the union leadership.
From a small set of nine (9) union
officials, the union resolved to expand
the number to fifty (50), all duly elected
by the workers. The fifty officers are to
constitute the Board of Directors and
Executive Committee of the union,
subject to the powers of the General
Membership Assembly (GMA), which
stands as the union’s highest policymaking body. The GMA convenes once
a year.
Organizing Experiences in Economic Zones
The union likewise resolved to
appoint 1-2 shop stewards per line in the
production process (i.e., a ratio of about
1-2 stewards: 31 workers). The number
of shop stewards currently reaches 200.
Anyone from among the union members
who is willing to set aside some time may
be appointed.
The shop stewards’ function as the
“eyes and ears,” as well as “arms” of
the union officials. They see to it that
workers’ complaints and grievances, such
as forced overtime or non-remittance
of social benefits are brought to their
supervisors’ or higher management’s
attention, or to a union officer.
They also ensure that workers within
their scope are informed of any major
decision, undertaking or announcements
by union officials in between union
meetings. Sometimes they also initiate
small, informal group discussions about
labor or national political concerns.
A Chief Shop Steward convenes his
members as necessary.
To further involve union members
in various union concerns, several
committees were likewise set up, where
the chairmanship was usually taken up
by a member of the Board or Executive
Committee.
Utilizing All Avenues for Worker
Rights
Despite the strength it has already
mustered, the IWS WU still utilizes even
the Labor Management Council, a body
set up and controlled by management, to
fight for workers’ demands.
61
Ripples and Rising TIdes
The union even demanded for its
inclusion in one CBA negotiations, and
was successful. It is now called UnionManagement Council (UMC).
“There are so many concerns, you
can’t bring them all up during the CBA
negotiations,” says a union officer. “It is
therefore, to the workers’ advantage that
a mechanism for continuous dialogue
between the union and management be
present.”
The UMC meets once a month.
“Admittedly, company policies take up
most of the UMC’s agenda. But there
have been many cases in which we
were able to stop the company from
implementing what we deem to be antiworker schemes such as the random drug
testing program, which we feel might be
used as an excuse for illegal dismissals,”
said the officer.
Resumption of CBA
Negotiations
As management filed for the
interpleader case in 2005, the union
officials led several protest actions within
the company premises. One action was
even witnessed by a representative of the
DOLE.
Union officials surmise that this
prompted the National Conciliation
and Mediation Board (NCMB), an
attached agency of the DOLE, to initiate
a conciliation meeting sometime
in 2006, while the interpleader case
was still pending. An agreement was
reached between management and the
IWS WU for proceeding with the CBA
negotiations.
Following a series of talks, a new
CBA was signed by on October 25, 2006.
Among the major achievements in the
2006 CBA negotiations are:
1. Integration of the cost-of-livingallowance and wage increment based
on the Wage Orders issued by Regional
Tripartite and Wages Productivity
Commission (RTWPB) into the existing
wages of IWS regular employees
irrespective of their union membership;
2. Wage increase and several other
economic benefits;
3. A Union-Management
Grievance Panel composed of five
(5) representatives; from the UNION
and five (5) representatives from
Management. The Grievance Panel shall
function as the clearinghouse for all
problems affecting union-management
relations;
4. That in cases of retrenchments,
the Last In First Out policy shall apply
except for union officers down to the
committee leaders who will always be the
last to be fired;
5. Automatic union membership for
all regular workers.
The Fight Against
Contractualization;
One of the major achievements by
the IWS WU concerns the fight against
contractualization of labor.
Driven by renewed market demand
for its products, the IWS management
rapidly expanded its workforce by hiring
skilled workers on a contractual basis.
62
From a mere 300 in 2001, the number of
contractuals rapidly expanded to around
3000 during the last quarter of 2001 to
first quarter of 2002.
The union decided to take up the
issue at the UMC as it was not CBA time
then. Management argued the need for
“flexibility” in production because of the
fluctuations in demand. It was also, they
say, one way of creating many jobs.
The union on the other hand argued
that contractualization was a threat to
their job security, and that contractual
workers were in fact working more than
what was required by the Philippine
Labor Code. They also argued that
regularizing the contractuals was not
going to hurt the company’s finances.
After all, the company’s financial
statement showed that the total value
of workers’ wages and benefits took up
only a small fraction of the company’s
earnings. The company’s domestic sales
to Honda Philippines alone already
averaged a whopping P100 million a
month in 2004 based on the volume of
delivery, argued the union officials.
While negotiations on the issue were
going on, the union decided to reach out
to the contractuals, organizing seminardiscussions on labor laws and genuine
unionism.
They knew how important it was to
the union’s strength that a certain level of
unity be developed between the regular
and non-regular workers; that fighting for
the contractual workers’ regularization
builds the contractual workers’
confidence to air grievances and support
Organizing Experiences in Economic Zones
for union affairs, in turn broadening the
union’s base of support.
Thus, during the CBA negotiations
in 2006, the union triumphed in having
many contractuals regularized. During
the last CBA negotiations in 2009,
the union successfully fought for the
regularization of 325 contractuals,
bringing the total number of union
members to 3142 compared to around
800 in 1996 when the IWS WU first
wrestled union leadership away from the
FDTU.
Combining Militance and
Flexibility
To what factors can the continued
confidence of the workers in the IWS
WU officials be attributed?
“Undoubtedly, our union leaders have
integrity… They are uncompromising
when it comes to workers’ welfare. As
long as we have leaders like them, the
union remains strong,” a shop steward
said during a focused group discussion.
But union officials see it in a more
complex light.
“First, is the question of democratic
leadership. The union is the worker’s
organization. This is where an ordinary
develops the capacity and consciousness
to fight for his or her own interests and
later on, that of his/her co-workers.
Union officials, to be able to lead
effectively, should ensure members’
participation in every aspect, especially
in the decision-making process,” said a
union officer.
Ripples and Rising TIdes
Another stated: “We do not enter into
fights that we know we cannot win….
in our fourteen years of leadership,
we have had not had any opportunity
to stage a strike. This does not mean,
however, that we are not ready to use it
as a weapon when the situation calls for
it. For example, during the 2001 CBA
negotiations, our then union president
impulsively declared a deadlock on the
floor. It was not a collective decision, and
other officials felt it was going to expose
our weakness – we were not ready at that
time to stage a strike. We threatened to
file a Notice of Strike but also privately
criticized him.”
A third union official explained: “We
try to combine militance with flexibility
in every possible way we can. We use a
range of tactics for every major fight we
get involved in. For example, we combine
mass protest actions inside company
premises with our legal battles. It is the
same during CBA negotiations. While
the union officers sit at the negotiating
table, the members provide the muscle
63
as they actively watch the negotiations,
collectively expressing their approval
or disapproval as the case may be.
Sometimes both members and officers
even wear red armbands, and seeing the
massive support we get from the union
members somehow forces management
to accede to our demands. Then, we
ensure assessments at all levels of the
union after every fight in order to draw
up lessons from our experiences. These
assessments become valuable learning
grounds for all union members and
leaders.”
All leaders agree, however, that there
is still much work to be done. “We lag
behind in education work,” says one
union official. “So far, we have been
able to lead the fights for better pay and
benefits very well, but we are sure there
will be greater fights ahead and there is
no better way to prepare workers other
than to raise their social consciousness
and understanding of workers’ common
interests,” the official concluded. ■
64
Organizing Experiences in Economic Zones
DAIHO WORKERS’ UNION:
militance, flexibility and education
defense of workers’ rights
- instruments for the
“Of course we are aware of the risks to our health. We feel it in our bodies. But over
time you just learn to ignore the fumes…we have families to feed.”
– Tonyo, a male worker from Daiho
Daiho Philippines, Incorporated is
a plastics company that specializes in
the processing and manufacturing of
plastic parts for computers. It is part
of the Daiho international network of
companies which was first set up in 1937
in Japan.
Daiho has several factories in Asia and
one in the Czech Republic in Europe.
The company’s plastic products are used
in home electronics, office equipments,
housing and the automobile industries.
Its main bankers include Sumitomo
Mitsui Banking Corp., Bank of TokyoMitsubishi, Ltd., UFJ Bank Limited and
Mizuho Bank, Ltd.
A major supplier of Epson, Daiho
Philippines also manufactures plastics
products for local companies such as the
International Wiring System Philippines.
It also manufactures wiring harness for
Nissan automobiles and plastic parts for
the Fujitsu ATM machine, which is its
most expensive product.
Its first factory was set up in 1998
at the Binan area of the Laguna
Technological Park. A second factory
was later established at the Lima
Techonological Park in Batangas province
in 2001.
Working Conditions
Daiho Philippines currently employs
around 350 regular and 52 contractual
workers in its two factories in Laguna
and Batangas. Around 75% of its
workforce is women engaged primarily in
the inspection and packing process. The
remaining male workforce is assigned to
so-called “technical” areas of production.
Workers on regular status are
generally paid the minimum wage. But
as a result of the regionalization of wage
standards, workers at the Laguna Park,
including those of Daiho, receive a higher
minimum wage (currently at P320 or
roughly $6.50 per day) while those from
the Batangas plant receive P298 for
the same type of work. There are also
apparent differences in wage rates for
men and women: Operators, majority of
whom are women, receive P320 a daily
minimum wage; those in the “technical”
areas of the production process, who
are mostly men and on a monthly-paid
65
Ripples and Rising TIdes
status, receive a higher P365. Workers at
the Batangas plant, however, receive P298
and are considered “daily,” regardless of
the nature of their work.
Like many other factories operating in
EPZs, Daiho hires and fires contractuals
and casuals according to production
needs; so-called manpower agencies
supply such workers as necessary.
Most of them are assigned to the
injection department but of late, they
are also being assigned to the so-called
“technical” department.
There are three (3) work shifts, and
while technically, the 8-hour work
prevails, overtime work is also very
common.
Of late, the company has implemented
a “multi-skilling” program where male
workers called “production support
members” are assigned to various tasks,
depending on production requirements.
At present there are twenty (20) so-called
“psm” who are on regular status and five
(5) on contractual status.
Environmental Policy and Work
Safety
According to its website, Daiho is
aware of the numerous environmental
and occupational safety hazards
associated with plastics manufacturing.
Thus, the company professes to a
policy of environmental management
in compliance with the provisions of
the International Organization for
Standardization (ISO), promising
to monitor and control their energy
consumption and domestic waster
emissions. They also pledge to
conducting employee education and
training on its environmental policy.
But how the company seeks to
implement this avowed policy may be
gleamed from the conditions within
which its workers labor within the
company.
The main method for producing
plastic products in Daiho Philippines is
injection molding where plastic pellets
are fed into a hopper machine that melts
the pellets and feeds it down into the
injection machine. This in turn feeds the
melted plastic into specified molds.
Temperatures of the melting plastic
can range from anywhere between
220-300 Celsius degrees, raising
temperatures within the production
area to uncomfortably hot levels. The
process also emits hazardous chemical
fumes that only circulate within the
production room since there is no
exhaust system. This is contrary to
internationally prescribed measures
for controlling hazardous emissions in
plastics manufacturing. This was what the
company meant perhaps when it pledged
not to contribute to environmental
pollution: let the workers inhale the
fumes.
Next step in the process involves
steaming the molded plastic products for
cooling.
These are then picked up by robotic
machines which place the products onto
a conveyor belt. Depending on the size
of the molded product, cycle time may
66
range from 8-12 seconds. This poses
risks to the worker because of the speed
and precision required in picking up the
product for inspection and sealing in
plastic bags.
Once passed second inspection and
quality control, the products are then
ready for delivery.
The use of PVC in plastics
manufacturing is already banned in
other parts of the world. While officially
denied before inspection officials of the
Department of Labor and Employment
(DOLE), the company has actually
retained production of this commodity
because it commands a high price.
To meet ISO requirements, the
company organizes annual safety
seminars for its workers and a safety
committee regularly conducts patrols
within the production area. The company
also provides annual medical check-ups
but only for workers on regular status.
Most of the medical findings involve
urinary tract infections (UTI) and
respiratory problems. There are also cases
of hernia among men, due perhaps to the
lifting of heavy loads of up to 233 kilos
per hour on the average.
How do the workers cope with
the health hazards?
Although complaints related to muscle
pain and over-fatigue are common, most
workers, especially those on contractual
status, do not report their physical or
health problems for fear of losing of
their jobs. There have been cases of
Organizing Experiences in Economic Zones
miscarriage among the women workers
but these have gone on undocumented
and uninvestigated.
Recently, management has also cut off
the workers’ supply of bottled or mineral
drinking water, supplying them with
tap water instead, which management
insisted was safe to drink.
The workers have attempted to bring
many of these issues for grievance
procedures. While they were able to win
concessions, such as the provision of
seats for pregnant women, these victories
have been limited compared to the many
problems they are confronted with.
Management acknowledges the issues
that the workers raise, but there have
been very little improvements in their
working conditions.
Early Attempts at Organizing
Attempts to form a workers’ union
in Daiho-LTI began in 2001 but it was
not until 2003 when several illegallydismissed contractual workers solicited
the assistance of the Center for Workers’
Education and leadership Development
(CWELD), a Laguna-based labor
institution. The institution assisted
them in their legal battle and provided
education seminars on union organizing.
The dismissed workers, eventually
reinstated by the company, were to renew
efforts at educating workers through
small, clandestine circles about the need
for a workers’ union.
The consciousness-raising efforts were
to continue for 3-4 years more. All this
67
Ripples and Rising TIdes
time, the company would implement
retrenchment programs. These, however,
would not hinder the steady growth
of the organizers’ influence among the
workers.
In 2007, perhaps sensing the workers’
simmering unrest, management initiated
the formation of a “Labor-Management
Cooperation” - which it said would
be a mechanism for dialogue and by
which labor problems can be addressed.
Management refused to call it a “council,”
however, as labor-management councils
were more often associated with union
formations.
This move by management threw
the workers into a quandary: should
they totally reject it and denounce it as
management’s attempt to diffuse their
organizing efforts? Or should they take
the more pragmatic stance of accepting it
and turning it around to their advantage?
The small group of organizers held
intense discussions.
On one side were those who believed
that the scheme posed dangers, as it can
be used by management as a justification
that a union was no longer needed. Most
LMCs were also chaired by management
representatives with only one or a
handful of representatives from labor.
They were also aware of the dangers of
worker leaders eventually being coopted
– as so many yellow union leaders
are – when dialogues are held within
the confines of small, managementcontrolled bodies.
On the other were those who urged
for a more pragmatic stance. They,
too, believed the dangers it posed, but
they were just not ready yet to openly
declare the union. There were still
legal requirements to fulfill, and more
importantly, there was still the need to
gauge their effectiveness at mobilizing the
majority or at least a significant section of
the workforce.
The group eventually decided to
participate in the LMC. But their
participation will be hinged on
management accepting their terms. They
agreed to use it as a “launching pad”
for fighting for their demands and for
getting all the workers to join the various
actions that would be necessary in the
course of their participation. They would
use it as a venue for raising workers’
consciousness until such a time that they
have mustered enough strength to openly
declare their union. Discussions among
the workers were secretly held in small
circles to convince them of the objectives
and tactics for participating in the LMC.
They also determined their demands and
chose their representatives.
The workers presented their terms
to the company management. First of
their key demands was the setting up of
a structure that would facilitate broader
worker participation and representation
in the LMC. These included:
A. Equal number of seats between
management and labor representatives;
B. Leadership positions at all levels
of the LMC were to be equitably
68
Organizing Experiences in Economic Zones
shared between labor and management
representatives;
discussions between the worker leaders
and management representatives.
C. A steering (or executive) committee
composed of a chairman, vice-chairman,
secretary and treasurer. Each position
would be held by a worker with a
corresponding representative from
management who sits in an advisory
position;
By this time, however, organizing work
at the Laguna plant was nearing a peak.
There were also unplanned, spontaneous
actions by workers who were finding
conditions inside the plant increasingly
unbearable.
D. A labor representative from each
department in the production process;
E. Committees to address the specific
concerns of workers. These included:
wage and benefits committee, family
welfare, cooperative, health, ethics,
canteen, and women .
Second, the workers refused to include
the question of “quality” production
knowing that it will only serve
management’s objective. Instead they
insisted on bringing up workers’ issues
during LMC meetings.
Third, the worker leaders also insisted
on relaxing the qualifications for the
labor representatives. Management
insisted that the labor representative
should have a record of perfect work
attendance; the workers insisted that
workers with two days’ absence should be
acceptable. Management insisted that the
representative should have had no record
of any disciplinary action; the workers
rejected this. The workers prevailed on
both counts.
The “LMC” became fully functional
in 2008, after a year of negotiations and
Women workers were particularly
exhibiting a growing militance.
There were instances of chanting and
sloganeering within the production line
when conflicts with their supervisors
arose.
Management organized an official
launching of the LMC. The workers used
this as an opportunity to press for their
demands for a wage increase. Prior to
the formal opening, they read a prayer
leaflet that contained workers’ pleas for
better pay and better working conditions.
Management representatives however
were incensed, calling the workers’
actions a “sacrilege.” They filed a case of
insubordination against the union leaders
who refused to stop reading the leaflet
even as management representatives were
ordering them to do so.
This did not stop the workers from
launching further “silent” protest actions.
They brought the issue to grievance
procedures. Management later decided
not to issue a written reprimand.
As part of their campaign for a
wage increase, they launched blackribbon wearing campaigns. During
the 2007 Christmas party organized by
the company, the workers wore black
69
Ripples and Rising TIdes
My name is Mercy, a graduate of a twoyear office management course. I am the
eldest in a brood of four.
I first applied for work in this company
in 2006. It was my first job, and I was only
18 years old.
I was hired on ‘casual’ status as a mchine
operator. After a month I was transferred to
the soaking department (now the steaming
department). Management said my heavy
physical build was more suitable to my new
assignment.
At the soaking department, I realized
what ‘suitable’ meant. At that time, the
soaking process involved putting the
products into hot water, after which I lift
them out of the water using a strainer. The
weight of the products would be much
heavier after being submerged in water. At
one time, I sprained my wrist from lifting
what must have been a total of 100 kilos.
I was transferred to the material control
department until I completed the required
length of service for those on probationary
status. My contract ended, however, and I
was out of work for nine months.
In 2007, I was recalled by the company.
I was assigned to the material control
department, again on casual status.
It was on a night shift when one of the
worker leaders began talking to me about a
workers’ union. I did not understand much,
however.
Then I overheard some workers talking
about joining a May 1 rally. I decided to
join, but since it was my first time, I was
surprised to hear my co-workers chanting
slogans about the “liberation of workers
from exploitation”.
Later on, an issue arose at the Batangas
plant. I joined the workers who organized
a picket protest at the plant gates. When I
returned to work, however, I sensed some
displeasure from our supervisors. I thought
of resigning and asked the help of a coworker in drafting a resignation letter but
he discouraged me from doing so. I stayed
home for three days without informing my
supervisor.
Our worker leaders must have interceded
with management on my behalf. They
visited me at my house. My parents were
there, and it was then when I learned that
I come from a family of union members :
my grandmother, it turned out, was a union
leader during her time; so was my father.
I decided to return to work. My
supervisor spoke to me and asked if I was
indeed planning to resign. I said I decided
to stay. He did not file any case against
me, and only asked me to submit a written
explanation.
Once a supervisor shouted at a female
worker inside the production area for no
clear reason. The worker cried. We urged
her to write an incident report but the
supervisor heard us. The following day, he
came out with an “NG” or “No Good”
evaluation of one of our products and asked
us to submit a written explanation.
continued on p. 70
70
Organizing Experiences in Economic Zones
continued from p. 68
We refused.
The next day, while working in my
line, I saw the supervisor. I felt a gnawing
resentment within me I could not
contain.
As he passed by, I couldn’t resist
shouting slogans about workers’
liberation, and that women should
also learn to fight and be militant. To
my surprise, another female worker
responded. When I looked, I saw that
my co-workers were smiling, and another
worker who happened to pass by nodded
and smiled at me.
Now I realize how important it is
for workers to bond together. I have
decided to join the union and have
even volunteered to help our leaders
especially in attending hearings about our
complaints. I used to think that workers
should love their work no matter what,
but now I realize how far more important
it is to be steadfast and committed to the
fight for workers’ rights.#
shirts and remained silent throughout
the speeches delivered by management
representatives.
These silent protests, and the leafletreading tactic, were designed to get the
attention of the company president whom
the workers wanted to directly negotiate
with. They eventually succeeded. Union
officials also surmise that these actions
eventually pushed management into
holding regular monthly meetings of the
LMC. Management saw how widespread
the workers’ support for their leaders was
– and this was something that had to be
pre-empted.
The worker leaders on their part
were only too aware of this. Their initial
actions provided a breakthrough, and
workers were now less afraid to come
out openly. Their organizing efforts
intensified.
Aware of the greater fight ahead, the
leaders also put a premium on workers’
education. With the help of labor
institutions they conducted education
sessions on genuine trade unionism and
other issues related to labor. Around
80-90% of the workforce attended the
discussions, and these contributed
invaluably to raising the workers’
confidence and enthusiasm in fighting for
their rights.
Meetings of the LMC were held once
a month.
The workers initially demanded a
P125 wage increase. They also launched
a “silent” campaign by wearing t-shirts
during company outings and social
71
Ripples and Rising TIdes
events that bore slogans for a wage
increase.
However, this demand was eventually
rejected by management, citing financial
limitations. Their other demands were
eventually granted. These included:
- correction of wage distortions.
Government-issued wage increase
orders were now to cover both daily and
monthly-paid workers
- granting liberty to the union
president to shuttle between the two
factories which aided their organizing
work at the second factory
- other benefits such as: a threemonth salary loan, 14th month bonus,
additional 2 days vacation leave for those
with tenures of five years up and - an
increase in the bonus for perfect work
attendance for the year (from P2,500t to
P3000T )
Management’s refusal to grant their
basic demand for a wage increase caused
widespread disillusionment among
the workers. They began to realize the
limitations of their powers in a body
that was still essentially controlled by
management – that of the LMC.
This, on the other hand, sped up
efforts at organizing. Their experiences
with the LMC taught them even more the
need for an organization that was totally
controlled and led by workers, setting
the stage for the establishment of the
Workers Union of Daiho (Phils.), Inc. –
Independent (WUDPI-IND).
Birth Pangs
In January 2009, the workers filed for
a certificate of union registration with the
Department of Labor and Employment
(DOLE).
They resolved to have one union for
the Laguna and Batangas plants, opting
to just set up a task force that would
coordinate and jointly plan actions at the
two factories.
The union succeeded, but
management representatives questioned
the legality of the union registration,
citing a technical flaw: the union
registration did not state the address
of the Batangas plant. The union’s
registration was canceled by the Bureau
of Labor Relations.
This was contested by the union. But
just the same, the workers prepared
to register under a new name should
management insist on non-recognition.
“Nip in the Bud”
Mid-January 2009, the company
implemented a Voluntary Resignation
Program (VRP) and submitted an
establishment termination report to
the DOLE, citing financial reasons.
Very few workers availed of the VRP
however. The termination report also
provided an excuse for another round
of retrenchment. It was clearly a case of
illegal dismissal since management did
not observe the one month termination
notice.
The worker leaders did some research
on the company’s finances. Financial
72
statements it submitted to government
agencies reflected a continuing
profitability despite the global crisis. Thus
they knew that the company measures
were designed to pre-empt the formation
of the union.
Earlier, the workers noticed the
presence of an increasing number of
security guards watching their gatherings
and taking pictures of union leaders. The
workers also felt the tightening watch of
management representatives: a worker
who fell asleep during working hours
was given 30 days’ suspension; several
workers who have been doing overtime
work for two consecutive weeks refused
a further two-hour overtime work being
required by management. They were
charged with illegal mass action and were
all fired, including the secretary of the
union.
In February 2009, more than a
hundred workers were dismissed by
management. A phalanx of company
and PEZA security guards herded the
workers in batches into a room where
the latter were given termination notices.
The second batch of workers, which
included top union officials, protested.
They were locked up inside the room for
several hours without food, and their
IDs punctured which meant they can no
longer enter the zone premises either for
transactions with Daiho, or to apply for
a job in another factory. The dismissed
workers filed a case of illegal dismissal.
On the same month, the union filed
a case of preventive mediation with the
National Conciliation and Mediation
Board (NCMB). But the retrenchment
Organizing Experiences in Economic Zones
measures continued.The union filed a
notice of strike sometime in March of the
same year.
In October, the union received a
favorable decision on a Petition for
Certification Election they had filed
earlier with the Office of the Secretary
of the DOLE. But the union was
saddled with a problem: many of its
active officials and members have fallen
victim to the company’s retrenchment
measures. They bided their time despite
the favorable decision, choosing instead
to test their remaining strength by calling
for a local election. It was a no-contest.
Union officials considered it a success as
more than 70% of the workers renewed
their confidence in the union’s leadership
by participating in the elections.
In January 2010, the certification
elections were held. The union won
despite management attempts to obstruct
their victory.It was a time for renewing
efforts at organizing; for replacing the
leaders they have lost and for another
round of vigorous education work among
their co-workers.
Soon after, however, the union would
face what would perhaps be their biggest
challenge: rumors of an impending
factory closure. Whether the union will
be able to hurdle this test remains to be
seen. As one union official, however,
puts it: “We might not always win in our
economic struggles, in our fight to defend
our jobs…but wherever we may find
ourselves in, you can be sure we will be
there to organize workers, help them cast
off their fears and open up their minds to
the need for unity …”■
73
Ripples and Rising TIdes
WAC:
experiences in organizing at the cavite economic zone
1995 was a different year.
The Philippine government was
then setting up the CALABARZON
“industrial corridor” as a model for
industrial development in Southern
Tagalog. The government set up
economic and industrial zones to attract
foreign investments to the region. Among
the first to be set up was the Cavite
Export Processing Zone (CEPZ, now
officially called Cavite Economic Zone or
CEZ) in Rosario, Cavite.
In the zone’s initial years, activism and
protests were but silent whispers inside
the zone.
On November 30, 1995, Fr. Joe
Dizon, an activist priest and labor rights
advocate, established the Workers’
Assistance Center (WAC) in response to
calls for aid from workers inside CEPZ
for a just and decent working conditions.
Fr. Joe had chosen this date, as it was
also the birth date of Andres Bonifacio, a
national hero who was of working class
origins.
Fr. Joe, as he is fondly called,
established WAC as a socio-pastoral
program of the Most Holy Rosary Parish
in Rosario, Cavite, where he was parish
priest. WAC’s objective was to provide
services and aid for the protection and
advancement of workers’ rights and
welfare as human beings and forces in
society. Fr. Joe derived guidance and
inspiration from the social teachings and
doctrine of the Catholic church which
upheld human dignity over capital.
WAC’s establishment was a bold and
timely step because workers were silently
suffering from violations in basic labor
rights inside the economic and industrial
zones. They were unaware of their rights,
and thus were completely at the mercy
of capital. The “No Union, No Strike”
policy of the previous local government
led by Juanito Remulla had instilled fear
among workers over their safety and
job security. The said administration,
together with the Philippine Economic
Zone Authority (PEZA) and capitalists
inside the ecozones had inculcated the
idea among workers that complaints and
unionizing will only result in company
closures, unemployment, the blacklisting
of workers, and red scare.
Thus, workers had no institution to
run to for help. They were hesitant to
turn to the Department of Labor and
Employment (DOLE), fearing that their
jobs will be compromised once the DOLE
summons the company. There were also
instances when the DOLE simply advises
Organizing Experiences in Economic Zones
google earth
74
Sattelite view of the Cavite Export Processing Zone where the WAC operates to help
workers organize.
them to just accept the company’s offers
of settlement, as filing labor complaints is
an arduous process. On the other hand,
the local government has no power nor
jurisdiction over workers’ issues inside
the economic zone.
WAC was besieged by complaints
when it started operations. The
complaints were primarily about illegal
dismissals or suspensions, substandard
wages, non-remittance of Social Security
System payments, restrictive and
unjust provisions in company rules and
regulations, which in some cases virtually
deny workers time to even urinate or
smile during working hours; inadequate
ventilation which forces workers to bring
their own electric fans, various forms
of sexual harassment and verbal abuse
by managers, supervisors or company
owners, non-payment of overtime work,
and the prevalence of apprenticeship
and fire-and-rehire after five (5) monthly
contracts.
WAC’s first service was a legal
assistance program. This linked WAC
staff with many workers and raised the
workers’ consciousness about their basic
rights and ways to defend these rights.
WAC, however, saw that it was not
enough to provide aid and services to
resolve or stop cases of violations of
labor rights. A more urgent task was
consolidating the collective strength
of workers inside the factories so they
can defend and uphold their rights and
welfare.
A study conducted by WAC in 1996
at the CEPZ found that all sectors
who are unavoidably adverse to labor’s
interests were organized, but workers
themselves were not. Capitalists were
organized under the Cavite Economic
75
Ripples and Rising TIdes
Zone Investors Association (CEZIA) and
other associations. THE DOLE, PEZA,
the provincial government and security
forces – the PEZA police, PEZA guards
and the Philippine National Police also
cooperated with one another in an
organized way.
Thus, WAC saw at an early stage the
need to place organizing at the core of its
work. All other services and programs
served this central program.
The setting up of unions became
the primary objective of WAC’s
organizing work. Workers who were
not yet prepared were aided in setting
up associations, which they are ready
to uphold as an initial expression of
their collective unity. WAC upheld and
promoted the slogan “Collective Work,
Collective Defense” among the workers
it served.
In its 15 years of existence, WAC has
already set up 50 unions and provided
services to more than 30,000 workers. It
was also able to establish two subcenters
in strategic industrial places of Cavite
– in Carmona in 1997 and General
Trias in 1998 in response to requests for
assistance to workers in other economic
zones in the province. In 1999, WAC
likewise established a subcenter in the
nearby province of Batangas where
economic zones were rapidly increasing.
Despite the successful servicing
of workers, the number of workers
reached and assisted was still limited.
Nevertheless, this was already a big
step from the few unions under the
Federation of Free Workers, Alyansa ng
Manggagawang Obrero and the local
Kristo Manggagawa when WAC started
in 1995.
Workers’ Situation at the CEPZ
WAC’s choice of programs and
services were based on a solid
understanding of the objective conditions
of workers inside the zone.
From June to November 1996, a team
of researchers carried out data-gathering
activities among workers from the zone.
The group also interviewed officials of
government agencies and representatives
of investors from the enclaves.
The results of the study strengthened
earlier investigations done by WAC from
April to May 1996 and by the Urban
Missionaries Foundation in 1995. It
gave a broader and deeper picture of the
situation of workers at the CEPZ. The
conclusions and analysis of the study
gave body and soul to the individual
complaints previously received by the
Church and WAC from workers.
The study showed that complaints
regarding substandard wages, unpaid and
forced overtime work, illegal dismissals,
restrictive company rules and regulations
or CRRs, non-payment of benefits and
unreasonable production quotas were
only some of the grave forms of abuses
experienced by workers inside the
economic zone.
Capitalists were unhindered in their
exploitation of workers due to the lack
or inadequacy of workers’ understanding
about labor rights. This was made
76
worse by the lack of protection from
government agencies and conflicting
labor laws and regulation. This is aside
from the “black propaganda” against
unionism waged by authorities and their
instilling of fear among workers that
complaints will lead to joblessness and
being tagged as communists.
Job insecurity inside the ecozones
was also one of the findings of the study.
A regular status was not an assurance
of work. The retrenchment of workers
whenever management chooses to do
so, the character of production which
was dependent on orders from foreign
brands and distributors, the general
orientation of industries toward export,
the general situation of unemployment
in the country, the special incentives
granted investors inside the economic
zone and the lack of genuine workers’
organizations were conditions which
promote job insecurity.
The study likewise encountered cases
of labor contractualization which has
since become prevalent.
WAC published the results of the
study in 1996 in a pamphlet entitled “The
Situation of Workers inside the Cavite
Export Processing Zone.” It was simply
called AKMC in Pilipino.
The AKMC served as a first step in a
study program that WAC organized to
help workers understand their working
conditions in the entire zone and link
these to the general conditions of workers
in the country.
Organizing Experiences in Economic Zones
The AKMC quickly paved the way
for union-building as it raised workers’
consciousness on the varying forms of
abuse and exploitation inside the factory
and broke up their fear of unionism. It
also opened their minds to the issues and
adverse consequences of globalization on
the labor sector.
Organizing Tactics
There were 36,000 workers and
166 operational establishments when
WAC started services for workers at the
CEPZ. No more than five percent (5%)
was organized in 10 chartered unions
under the Trade Union Congress of
the Philippines (TUCP) and AMO.
This small percentage quietly prevailed
without the knowledge of what they
called their mass membership. Although
some purportedly had CBAs, most
were inactive. Workers do not know the
officers since most of these were only
assigned by the federation.
Management often and widely used
anti-KMU propaganda at CEPZ during
that period although majority of the
workers do not have concepts of red
and yellow unionism, and there was no
KMU-affiliated union existing then.
There was also a strong undercurrent in
campaigns conducted by management
that unions were banned. PEZA also
frequently advised workers to avoid
unionism in order not to lose their
jobs. In general, workers had a negative
concept of unions – it meant repression,
joblessness, factory closures, and union
leaders selling out workers’ interests.
77
Ripples and Rising TIdes
Along with fostering a better
understanding of unionism and collective
action, WAC likewise exerted efforts
to break workers’ silence and any fear
sowed by long periods of repression and
name-calling against unionism. WAC
recognizes that for workers to realize
their collective strength, they will have to
gather, discuss and derive strength from
one another.
WAC promoted its services by
distributing leaflets in front of CEPZ
and workers’ boarding houses in nearby
communities. The leaflets explained
WAC’s services and programs for
workers. Since it was a church program,
it quickly and easily attracted many
workers especially among the religious.
It was also not a problem for church
organizations, politicians, parents and
other workers to air their complaints
to WAC because of its reputation as a
religious institution.
WAC continued to promote its
programs and services inside and outside
CEPZ and at the boarding houses. Walkin workers started to pour in. From these
and other workers whom organizers
had come in contact with, and workers
being provided legal assistance by WAC,
sprang unionists who would expose the
oppressive working conditions in the
biggest economic zone in the country.
At an early stage, WAC promoted the
social teachings of the church through
bible study, prayer meetings, retreats,
recollections, and holy masses. Through
these activities, workers realized the
importance of the dignity of human
beings and the need for action and
struggle to uphold this. Most of all, these
gatherings served to link a big number of
workers.
WAC consciously took note of
workers’ birthdays, and held simple
celebrations at the WAC office. These
became effective methods for initially
gathering workers, and holding initial
discussions and investigations into
workers’ conditions. Along with these,
WAC also organized picnics, regular
visits to boarding houses, research
interviews, workshops, discussion fora,
concerts and cultural programs in order
to reach the biggest number of workers.
In all gatherings, workers exchanged
views and experiences, discussed various
issues in the workplace, and came up
with moves they can undertake.
Solidarity of Cavite Workers
One problem in the initial stage of
organizing was the form of organization
to be taken due largely to the fact that
workers’ minds were not yet prepared for
unionizing. Although not yet widespread,
contractualization was already
prevailing in many companies inside
the zone through five-month contracts,
particularly in the garments and
electronics industries. Aside from this,
is the prevalence of hiring apprentice,
learners, probationary and “pakyaw”
(usually home-based subcontracting
arrangement), which conflicts with
the employment of regulars. Labor
Management Councils also existed which
hindered the development of unions
among regular workers.
78
From such conditions arose the
Solidarity of Christian Workers or
“SCW.” It served as a tactical formation
for the early stage of organizing in the
workplaces when workers were not yet
prepared for unions. Because SCW was
not a union, but an association organized
by the church, workers readily took to it.
Even managements were not averse to it,
until the Arroyo government came into
power in 2001.
The first chapters of SCW were
established at the Philips Export
Industries and Horei Philippines in 1996.
Workers from 26 factories attended its
first assembly in April 1997. In a special
convention held in April 1998, SCW was
renamed Solidarity of Cavite Workers, as
the term Christian in its original name
discriminated against non-Christian
workers such as Muslims. It was also in
this convention when SCW was affirmed
as a provincial alliance of workers to
be composed of individual workers,
SCW chapters in factories, unions of
any political color, and other worker
associations.
It was in 1998 when SCW broke the
silence and fear of workers when the
SCW chapter at Samma Corporation,
with a membership of 100, held a protest
march in front of the PEZA office at
CEPZ to oppose massive suspension and
retrenchments due to the workers’ refusal
to do overtime work.
Through the SCW chapter, workers
were given opportunities and experiences
in running their own organization
inside the workplace, lead and manage
its membership, plan and implement
Organizing Experiences in Economic Zones
activities, launch non-production related
actions, negotiate with management
representatives, and work on the
requisites for setting up a union. More
than 90% of unions established by WAC
started out as SCW chapters.
SCW chapters are established
when there are already 25 members.
Employment status in the workplace
is not a hindrance – contractuals,
apprentice, casuals, “pakyaw” – are all
accepted as members. Even when the
union has been established, the SCW
chapter is allowed to exist in the same
factory as an organization of non-regular
workers and those not yet prepared to
join unions.
SCW chapters’ main task is to recruit
members, join and encourage others to
attend education seminars and activities,
help in the conduct of social investigation
and contact-building in other factories.
SCW implemented the slogan
“Cooperation, collective defense” in
advancing their legitimate demands. “The
fight of one is the fight of all” became a
concrete call in all local fights involving
the union and SCW chapter.
SCW chapters gave birth to unions
inside CEPZ and other ecozones in
Cavite, and from these unions and
chapters rose fulltime organizers. From
1996-2001, WAC was able to organize 30
independent unions and SCW chapters.
Other Important Support Work
for Organizing
WAC’s proximity to CEPZ proved
advantageous to organizing. WAC’s
Ripples and Rising TIdes
office became an alternative place for
workers while they while away their
time before going home. They were able
to easily consult organizers regarding
issues in the workplace. “Immersion”
programs became a regular activity for
the institution.
In a few cases, WAC opened its
dormitory, which was also located inside
its office, to selected active worker
leaders from far places in order to help
organizers train them as instructors
and ask their support in conducting
worker education seminars. Through
this, fulltime organizers, propagandists
and instructors rose from among SCW
members.
Individuals who had been aided by the
Legal and Paralegal Assistance Program
of WAC also helped in organizing. In
exchange for the free services rendered
for their cases, they helped link WAC
with their co-workers. From their efforts,
WAC was able to set up unions in some
factories.
On the other hand, WAC’s newsletter,
Manggagawa Manlilikha (literally –
Workers, Creators) linked workers from
different factories. It not only brought
news, stories, information and analysis
on workers’ issues. Organizers and SCW
chapters also used it to establish contacts
and broaden their links in more factories.
The support of other sectors and
institutions for WAC’s objectives also
helped a lot in building workers’ strength.
This inspired and strengthened workers’
resolve whenever they came into conflict
with company management over their
79
rights and welfare. They knew they were
not alone in their fight.
Along with the organizing of unions
and SCW chapters, WAC also established
support mechanisms for workers
from among the professionals sector,
sympathetic politicians and personalities
from the different churches in Cavite
and religious groups. In August 1997,
WAC and SCW established the Friends
of Workers (FOW), and followed this
up with the establishment in 1999 of
the Cavite Workers-Church People’s
Conference (CWPC).
The two organizations played an
important role in all the succeeding
union struggles of workers, even during
the period of strikes in 2001. These
groups solicited financial and material
support, worked for the release of
arrested and imprisoned unionists,
mobilized church people for picketlines
and strikes and held negotiations with
the local PEZA administration and
capitalists, alongside the unions.
The support of FOW and CW-CPC
members continued even in their
personal capacity. Among the exceptional
cases were Atty. Jose Ricafrente, current
Mayor of Cavite; Atty. Ernesto Andico
who, until his death in 2010 provided
free notary services from 1996 to workers
serviced by WAC, and Vice-Mayor
Jingjing Hernandez of Rosario.
International linkages likewise
provided support for WAC’s work in
organizing workers and helping them
defend their rights to unionize. Some
SCW chapters were quickly transformed
80
into unions, and several unions
triumphed in their local fights due to the
support of international NGOs, laborrelated institutions and unions from
overseas, and WAC’s funding partners.
Almost all of the workers’ and union
fights serviced by WAC in CEPZ from
1996 had an international component.
Among these were petition-signing in the
form of “action alert,” sending of letters
to owners of fashion brands, a Canadian
Trade Mission in 2007, up to launching
of campaigns and mobilizations to parent
companies of local firms who are the
subject of workers’ complaints.
An exceptional case of support lent
by international campaigns were for the
simultaneous strikes at Phils Jeon Inc
and Chong Won Fashion Inc, a Wallmart
supplier, which experienced a series of
harsh attacks and dispersals by PEZA
police and the PNP under the orders of
PEZA from September 2006 until August
2007. The PEZA police filed criminal
charges against 31 strikers and two (2)
WAC organizers. These two cases were
presented by the Korean Confederation
of Trade Unions (KCTU) to the ILO
Convention of 2007. The KCTU
and WAC likewise filed complaints
at the Korean Contact Point of the
Organization for Economic Cooperation
and Development (OECD) in August
2007.
The international campaign over the
two strikes were supported by various
NGOs, consumer organizations and
unions from the US, Canada, Europe
and Asia. Eight of the major fashion
brands in the US who were asked to
Organizing Experiences in Economic Zones
assume responsibility over the violence
at the Chong Won strike, and even giant
retail store Walmart through its Code of
Conduct, sent letters to then President
Arroyo expressing their concern over the
violent dispersals of the strikes.
While the two strikes failed, the
international campaign succeeded in
exposing to the international public the
oppressed situation of workers and the
brutal repression of the right to organize
at CEPZ. The campaign also succeeded
in dismissing the criminal charges files
against the strikers. It also helped expose
the repressive and anti-worker character
of the Arroyo government.
Decisive Role of PEZA
It was WAC’s policy in the defense
and upholding of workers’ rights, and in
resolving conflicts, to keep the doors of
dialogues open and reach out to different
parties involved in, or are exerting
influence over, the issue.
Inside CEPZ, it was PEZA, rather
than DOLE, which played a decisive role
in many cases related to the jobs and
rights of workers because it exercises
administrative supervision over the zone’s
locators. Dialogues and negotiations
with PEZA’s intervention, combined with
workers’ protest actions became more
effective and provided quick resolutions
to unionized workers’ problems. Even
workers from non-unionized factories
are able to air their complaints, as long as
they do so collectively.
On the other hand, PEZA’s decisive
role is also more dangerous than that
Ripples and Rising TIdes
of DOLE. It can easily mobilize its
own security forces – the PEZA police
and security guards – aside from the
Philippine National Police in order to
intervene in protest actions and strikes.
The experience in the two strikes at
Chong Won Fashion Inc and at Phils
Jeon Inc in 2006 and the union strikes at
JRA Philippines (Jordache) and Kosiphi
International in 2003 were decisively and
brutally ended by the armed PEZA forces
and not by the contradictions between
the workers and the capitalists.
In strikes, protests and vigils held in
front of runaway shops, and even on
occasions when workers filed charges
against the PEZA administrator in
CEPZ and two chiefs from its Industrial
Relations Division, WAC maintained its
professional relations with PEZA, and
never severed lines of communication
with the said agency.
Except for strikes which are under
the jurisdiction of DOLE, WAC seeks
PEZA’s intervention in resolving conflict
between workers and capitalists. As long
as it does not compromise the union
and workers’ rights and welfare, WAC
accepts PEZA’s initiatives as solutions for
the resolution of the case. Nevertheless,
if PEZA is indecisive and seems to favor
the capitalists’ side, WAC does not stop
workers from launching their own protest
actions against PEZA.
Through PEZA’s decisive intervention
and the union’s collective action, even
non-unionized workers were able
to achieve their demand against the
companies’ non-payment of 13th month
pay and PAG-IBIG fund, non-issuance
81
of separation pay or incorrect payment
of by capitalists who attempt to evade
this responsibility, non-payment of SSS
premium and refund, delayed payment
of wages, recovery of machinery which
runaway shops tried to sneak out, a stop
to long and forced overtime, and in some
cases, the reinstatement of dismissed
workers.
For cases filed by individuals or a
small group of workers, WAC writes to
companies regarding the complaints and
also puts forward recommendations for
the resolution of the case. It was WAC’s
standard procedure to furnish the CEPZ
administrator a copy. When companies
do not act on the complaints, WAC
writes to the CEPZ administrator for his
intervention.
In cases involving many workers
or which concern the union’s interest,
WAC advises workers to petition PEZA
regarding their complaints and request
that the agency facilitate a dialogue with
the capitalist. They address the letter to
the CEPZ administrator, with a copy
furnished to the director-general based
at PEZA’s national office. But when the
PEZA national office does not respond,
WAC supports the workers’ protest
action.
The non-confrontational and
professional manner by which WAC
deals with PEZA is but using PEZA’s
mandate to ensure industrial peace and
a challenge to the frequent statements of
PEZA to WAC that “workers rights are
non-negotiable.” Likewise, by keeping
communication lines open with PEZA,
workers are able to exhaust possibilities
82
rather than immediately file the case with
DOLE which takes years to resolve cases.
Victories and Limitations
WAC’s first gains in organizing
workers at CEPZ were at the Japan
Mufflers Corporation in 1007. The
union was made up only of 23 members
from 35 rank and file workers. It was
during a CBA negotiation when the
Japanese capitalist decided to shut down
the company and render separation
payments to workers to avoid continued
losses. WAC used this first union as an
example to encourage other workers not
to fear unionism because it is a right.
SCW as a tactical formation was
a successful tactic which gave rise to
unions which broke the fear, and later
on, strict capitalist control over workers.
WAC was able to utilize this as well in
factories to unite contractual and regular
workers against capitalist abuses. The first
protest march staged by an SCW chapter
at CEPZ in Cavite was the first signal
that workers’ silence at CEPZ had been
broken. This taught many workers it was
not enough to complain, they have to act
in unison and protest so that government
will act on their complaints.
By bringing WAC’s advocacy to
church people, professionals and
sympathetic politicians, it was able to
garner more support and services for
workers. While FOW and CW-CPC did
not last long, these organizations greatly
aided workers in overcoming their fear
of unionism during the first stage of
organizing at CEPZ.
Organizing Experiences in Economic Zones
International campaigns also
effectively helped solve workers’
complaints. It exposed to the
international public workers’ oppressed
conditions inside the biggest economic
zone in the country and the anti-worker
policies of the government to keep
workers silent, and labor cheap. It gave
striking workers hope during times when
the strike takes on a difficult turn, and
workers’ morale is low.
The assumption of Ireneo “Ayong”
Maliksi in 2001of the province’s
governorship re-started the
implementation of an anti-worker and
anti-communist “No Union No Strike” or
NUNS policy against the then advancing
union struggles at CEPZ. The NUNS
policy served as the counter-insurgency
program of the Maliksi administration
against the militant trade union
movement. It was implemented within
the frame of OPLAN BANTAY LAYA,
the counter-insurgency program of the
Arroyo government which was primarily
repressive and also had the objective of
publicly demonizing militant unionism.
Governor Maliksi created the
Cavite Industrial Peace Advisory
Group (CIPAG) which was tasked with
conducting red scare campaigns against
unions; threaten union or worker leaders;
disperse strikes, harass protest actions,
crush unions or connive with capitalists
in setting up yellow unions; connive
with corrupt DOLE officials, and destroy
WAC’s prestige among workers. The
Office of the Provincial Governor Office
(OPG) used its entire machinery and
the services of paid goons to implement
CIPAG.
Ripples and Rising TIdes
As a concomitant move, PEZA
implemented a zone pass requirement
which closed the doors to the formerly
free entry to CEPZ of SCW organizers.
The PEZA-DOLE-OPG-capitalist
connivance has been effective since 2001,
which made it difficult for the advance
of existing unions and restricted the
formerly relatively freer conditions for
unionizing inside CEPZ.
This connivance succeeded in
crushing the unions under SCW
leadership from 2001 until 2006 since
the strength established by the unions
were not yet strong, and the number
of unionized workers were still small
compared to the zone’s 50,000 workforce
83
then. Aside from this, all these unions
were forced to focus on their local fights
to withstand capitalist repression.
This was a big setback for the trade
union movement and organizing work
which WAC started in 1995. This was
only temporary, however. Even the
combined strength of the PEZA-DOLEOPG-capitalist connivance could no
longer contain workers’ dissent. The seed
of genuine unionism and militant forms
of struggle for workers rights and welfare
are quickly re-emerging due to the
continued prevalence of exploitation and
abuse of worker rights inside the biggest
ecozone in the country■
84
Organizing Experiences in Economic Zones
GOLDEN WILL FASHION:
organizing contractual workers
Golden Will Fashion Philippines, Inc (GWFPI) is located inside the First Cavite
Industrial Estate (FCIE) in Dasmarinas, Cavite.
The company manufactures fashion
apparel such as trousers, skirts and
blazers for well-known US signature
brands Ralph Lauren and Ann Taylor.
It is owned by Tungtex Holdings Ltd
which is based in HongKong. It started
operations at the FCIE in 1999.
From a mere 350 in 1999, the
company’s workforce grew to 1,400 in
2003, where around 800 are contractuals.
From 2000 until June 2008, there were
three (3) agencies supplying manpower
to Golden Will : RN Manpower, Recto
Cantimbuhan Veronica Jarata Agency
(RCVJ) and Value Jobplacement Corp.
(VJC).
Newhires have to meet a 78%
efficiency level in 15 days. Otherwise,
they are terminated from the company.
Those who meet this requirement are
asked to sign a five-month contract. After
five months, the workers are transferred
to the three agencies to circumvent the
law on the regularization of workers.
The workers are transferred to the three
agencies every five (5) months, or are
retained by a particular agency but are
made to sign contracts every five (5)
months. For each new contract, the
worker is required to submit new medical
clearances by the agency to assure
Golden Will that they are undoubtedly
still fit to work. Prior to the setting up
of the union, there were cases of workers
reaching six years of service but are still
on contractual status.
Aside from the contractuals, there
are also temporary workers and
apprentices who receive only 75% of the
legally mandated wage rates. They are
employed for only two months. This is
usually the case when production is at
its peak. They are usually assigned to
trimming, manual sewing for fixing jobs,
and marking. There are around 20-30
such workers.
Organizing in GWFPI started in 2002
due to basic issues such as low wages,
forced overtime and unreasonably
high quotas. Workers at GWFPI were
organized by workers from EMI-Yazaki.
However, management got wind of these
efforts. The company threatened to close
shop once the union was formed. It also
bribed some of the leaders and promoted
them to supervisory levels. This scheme
obliterated the workers’ efforts.
In 2002, the Workers’ Assistance
Center (WAC) assisted three workers
85
Ripples and Rising TIdes
at GWFPI who were illegally dismissed
by the company. The case was filed by
the workers with the National Labor
Relations Commission (NLRC). The
workers, with the support of WAC,
asserted their right to job security and
successfully proved that the company
violated Article 279 of the Labor Code. In
2004, the workers were paid backwages
by the company at were resintated as
regulars, except for one who has decided
to work abroad.
In the illegal dismissal case filed in
1995 by Rosemarie, who was dismissed
after seven (7) months of working
at the company. WAC asserted that
her dismissal was illegal based on
the provisions of Art. 280 of the Code
which states that workers are considered
regulars when they perform work that
is “usually necessary or desirable” in the
usual trade or business of the employer.
Rosemarie won the case but the company
appealed the case until it received a
favorable judgement from the Supreme
Court in September 2010 reversing the
lower court’s ruling.
The illegal dismissal case filed by
Bonifacia, also in 2005, revealed that
the agencies named in her employment
contracts were labor-only contracting
agencies since they to do not have
sufficient capital nor machinery and
also do not have immediate control nor
supervision over her work. Her case
clarified that the employer-employee
relations exist between the worker and
the employing company, and not between
the worker and a labor agency. The
Court of Appeals affirmed the April
2011 decision of the labor arbiter that
Bonifacia’s dismissal from work as a
regular worker was illegal.
Three more workers won a case of
illegal dismissal they filed against the
company when the NLRC issued an order
for the company to reinstate the three to
work while the case is being heard by the
courts.
In 2004, the Solidarity of Cavite
Workers (SCW) began to organize the
workers with the help of WAC. WAC
helped three (3) striking workers from
JRA Philippines, Inc (Jordache) work
with Golden Will and enlisted the help
of the reinstated workers. Together, they
formed the first organizing committee at
Golden Will.
Using their successes on the illegal
dismissal cases, the organizing committee
launched a strong campaign among
workers of Golden Will who have been
considered contractuals despite years of
service and encouraged others who have
been illegally dismissed to similarly file
cases against the company. SCW likewise
distributed copies of the favorable
decisions among the workers and
encouraged them to attend discussions
on worker rights.
The campaign resulted in amore cases
of illegal dismissal filed by workers until
the company was forced to terminate the
services of RN Manpower Agency and
VJC, retaining RCVJA , which by end
2007 had 400 contractual workers in its
name. Of this number, 173 workers were
made regulars by the agency, but not
Golden Will.
86
Organizing Experiences in Economic Zones
Art. 279. Security of tenure. In cases of regular employment, the employer shall not
terminate the services of an employee except for a just cause or when authorized by this
Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual reinstatement. (As amended
by Section 34, Republic Act No. 6715, March 21, 1989)
Art. 280. Regular and casual employment. The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an employment
shall be deemed to be regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer, except
where the employment has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the engagement of the employee or
where the work or service to be performed is seasonal in nature and the employment is for the
duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph:
Provided, That any employee who has rendered at least one year of service, whether such
service is continuous or broken, shall be considered a regular employee with respect to the
activity in which he is employed and his employment shall continue while such activity exists.
-Labor Code of the Philippines
From 2004 until the setting up of the
union, management was unaware of the
organizing efforts although it was rightly
suspecting a former SCW unionist
because of the respect that workers were
giving him.
OT-SCWs served as venues for
continuous education and consciousnessraising on labor laws and worker rights.
Recruitment also became a regular
activity. Workers were grouped according
to their residences.
At a time when organizing was
just being started, organizers first
set up organizing teams (OT-SCW)
in production lines such as cutting,
sewing and finishing. One OT-SCW
was composed of three (3) to seven (7)
workers and served as study cricles in
the early stages of organizing. This was
later transformed into SCW chapters at
Golden will.
On June 17, 2007 the SCW chapter at
Golden Will was established composed
of 334 members ( 203 regulars and 131
contractuals) out of the 1,280 rank and
file workers of the company.
According to SCW organizers, they
used the tactic of setting up SCW
chapters at a time when workers were
still preparing themselves for the setting
Ripples and Rising TIdes
up of a union. This was also a tactic
they used to reach not only the regular
but contractual workers as well who
normally constitute the bigger number of
the company’s workforce. SCW chapter
served as their organization as long as
the workers were not yet prepared for
a union. When the union for regular
workers is set up, the SCW chapters
remain as an organization of contractual
workers.
As a regular formation, SCW is a
provincial alliance composed of unions,
SCW chapters in factories and individual
members.
From 2006 until 2007, both regular
and contractual workers became actively
involved in recuritment of members
to the SCW chapter and in the secret
solicitation of signatures for union
membership. By mid-2007, around 40%
of regular workers who are considered by
law as part of the ‘Appropriate Bargaining
Unit’ (ABU), including 200 contractual
workers. Around 900 workers may be
considered part of the ABE during this
period.
The Golden Will Fashion Philippines,
Inc Workers’ Organization-Independent
(GWFPWO) was established on
August 5, 2007 through a general
assmebly attended by 265 members
from 419 individuals who signed up for
membership. The union immediately
filed a Petition for Certification Elections
(PCE) on September 28, 2007.
The experience at Golden Will Fashion
broke the prevailing practice of including
only workers on regular status in union
87
membership. GWFPWO’s constitution
states that union members include all
daily paid rank-and-file workers. This
category includes both regulars and
contractuals who, under Art. 280 of the
Labor Code, are considered regulars.
With such a membership composition
and using the provisions of Art. 280, the
establishment of the union became a
most concrete expression of the fight
against contractualization by the workers
at Golden Will.
The establishment of the union
and filing of a PCE was suceeded by
restrictions, harrassment and acts of
bribery by company officials on active
union members. Representatives of then
provincial governor likewise interfered,
in connivance with management and
gathered workers for meetings aimed at
forming a Labor-Management Council
(LMC) where all the selected officials
were from supervisory levels.
Workers protested the setting up of
a Labor-Management Council which
management used against the union.
According to WAC, workers may use
LMCs as a tactic at a time when workers
are still gathering strength, but not
when they are already in an advantaged
position and are ready for a union.
From September to December 2007,
management became more threatening
and deceptive in connivance with the
Office of the Provincial Governor (OPG).
On one hand, workers were threatened
with dismissals. On the other hand, it
offered additional wages to workers who
will resign from the union.
88
Failing to convince the workers,
management then called workers one
by one to a room where they were
made to sign papers withdrawing their
membership from the union. Those
who refused to sign were obliged to
work overtime or go on forced vacation
without pay. Those who signed were
offered incentives by management.
Management representatives also visited
workers’ residences, warning them to
disengage from the union. Management
likewise offered the union president a
promotion, but the latter refused.
The union came out with leaflets
airing their calls against the harrassment
and for the defense of the union. It also
launched a ‘boycott overtime’ protest
action. Management retatliated by
transferring all active members and
leaders into a single building to separate
them from the rest of the workforce.
Other unionists were transferred to
different production lines. These moves
by management made workers’ organized
actions difficult.
In January 2008, the DOLE came out
with a decision on GWFPI’s petition
for certification elections. The company
reacted by supporting the formation of
a yellow union through the Alyansa ng
Malayang Obrero (AMO, or Alliance of
Free Workers) which acted as a forced
intervenor in the PCE. With the support
of mamagement, AMO questioned the
decision of the labor arbiter allowing the
participation of contractual workers in
the preliminary election conference. The
arbiter, however, affirmed his decision
since the ABU includes the contractual
workers as provided for by Art. 280
Organizing Experiences in Economic Zones
of the Labor Code. Nevertheless, the
contractual workers were relegated to
being challenge voters. They constituted
178 votes, including 45 AMO members.
The certification elections were
held on May 5, 2008. GWFPWO
overwhelmingly won the elections
despite the five-day vacation leave
imposed by management until the day
of the elections. Out of a total of 654
registered voters, GWFPWO garnered
292 votes, AMO won 16 while the
no-union vote totaled 102 votes. There
were three (3) spoiled votes and the 223
challenge votes were no longer opened
due to the huge gap between the votes for
GWFPWO and AMO. The company’s
workforce had been reduced to only 800
workers during this period, including the
more than 200 contractual workers.
Management retaliated by dismissing
166 union members from the labor
contracting agency RCVJ. It also
terminated the latter’s services. The
workers organized protest actions in
front of the company and the ecozone.
They also launched a series of delegations
to mamangement, ribbon and placard
wearing as forms of protest. The
dismissed workers also filed cases of
illegal dismissal with the NCMB and the
NLRC.
CBA negotiations began in June
2008. Management however, refused to
respond significantly to worker demands
even after 20 meetings. It aslo continued
to harrass members and leaders even
during the negotiations. Halfway
through the negotiations, management
came up with trumped-up charges
89
Ripples and Rising TIdes
of theft of product jackets and vests
against 25 union leaders and members.
Management used this as an excuse to
unilaterally stop negotiations and dismiss
the workers in February 2009.
From January-February 2009, the
company implemented forced leaves for
400 workers. About 71 union members
accepted separation pays. The company
likewise dismissed more than 200
contractual workers.
From March to August 2009,
management declared a temporary
shutdown and offered separation pays
which many workers availed of. By
September 2009, Golden Will Fashion
declared a permanent cease of operations
due purportedly to losses and the lack of
work orders due to the global financial
crisis. By this time, only 140 of the
original union members had been left.
The final CBA negotiation session
was held on March 13, 2009 attended by
officials from the mother company in
HongKong.
The union no longer considered
staging a strike since production was
intermittent, and workers’ incomes had
already suffered due to the series of
forced vacation leaves. Many applied for
work as contractuals in other companies
while others, unable to find work,
returned to their provinces.
Golden Will, however, did not totally
close down. The workers learned that the
company only transferred to Noveleta,
Cavite on May 2009 under the name
Jhenton Fashion Apparel but still using
the same business address of Golden Will
Fashion at FCIE. The workers staged a
picket protest infront of the company in
Noveleta. Due to the protest, the town
mayor refused to issue a business permit
to Jhenton. The company again moved to
Victoria, Laguna.
Despite the closure, union members
who refused to accept their separation
pays staged a series of protest actions
infront of PEZA-FCIE and the PEZA
national office demanding that the
company return their machinery and
resume operations at FCIE. While the
machinery was returned, PEZA however
did not compel the company to return,
instead issuing a clearance for Golden
Will to close down. On the other hand,
the company deposited the separation
pay of those who refused to accept
payment, which they may withdraw
anytime through the DOLE.
In May 2010, the provincial fiscal
threw out the case filed by the company
against the 25 workers who were charged
earlier with theft, due to lack of evidence
and after a series of protest-actions at
delegations organized by the workers to
the Office of the Provincial Governor.
In June 2010, the remaining unions
decided to accept their separation pay.
Ten years of Golden Will’s operation
and six years of workers’ determined
struggles showed that it was possible to
organize and mobilize both regular and
contractual workers in a single union.
By challenging and using the law itself,
exposing contractualization as an antiworker scheme and sustained worker
90
unity, management was put on the
defensive and the workers triumphed in
their efforts to set up a union.
The successes of the Golden Will
workers’ union in organizing contractuals
is a big lesson for the labor movement.
Organizing Experiences in Economic Zones
On the other hand, it remains a big
challenge for the labor movement to
come up with a national fight for laws
that will put a stop to contractualization
and other schemes inimical to workers’
interest, such as those experienced by
workers at Golden Will. ■
91
Ripples and Rising TIdes
NXP WORKERS’ UNION:
union-building amidst corporate restructuring
It is seldom that unions are formed inside economic zones, and rarer still for one to
exist for over two decades.
However, such is the experience of
the NXP Semiconductors Cabuyao
Incorporated Workers Union currently
based at the Light Industry and Science
Park I (LISP I) based in Cabuyao, Laguna
in Southern Luzon.
As in the case of other genuine
workers’ unions, it has never been
smooth sailing for the union’s
membership. Changes in company
ownership, management clampdown, and
weaknesses in leadership, among other
issues, have all posed serious challenges
to the union.
What kept it afloat, however was the
wise use of union democracy and unitybuilding efforts to save the union from
compromise and eventual ruin.
The Birth of NXP SemiConductors Philippines
In September 2006, Royal Philps
Electronics – considered for decades
as a cutting-edge technology company
– announced that it has signed an
agreement with Kohlberg Kravis Roberts
& Co. (KKR), Silver Lake Partners and
AlpInvest Partners NV (together referred
to as “the consortium”) through which
the consortium will acquire an 80.1%
stake in Philips’ semiconductors business,
with Philips retaining a 19.9% stake.
The decision was spurred by losses
being incurred by the company in its
semi-conductor business, in turn the
result of decreased market demand due
to the global crisis of overproduction in
the information technology business.
For more than a decade, Philips
underwent a series of global corporate
restructuring which focused on
the streamlining of its operations,
including the sale of more than 100
subsidiaries, changes in top-level
corporate management, and cutting
costs, which meant massive job cuts. In
1996, Philips decided to sell its semiconductor business. The result was
NXP (“Next Experience After Phillips”)
Semiconductors.
NXP manufactures silicon system
solutions for mobile communications,
consumer electronics, digital displays,
contactless payment and connectivity,
and in-car entertainment and
networking, employing approximately
37,000 employees worldwide.
92
Organizing Experiences in Economic Zones
Table 14. Wage Increases
for Workers in NXP
Year
Wage Increase (CBA)
1983
20%
1984
30%
1985
10%
1986
15%
1987
10%
1988
10%
1989
10%
1990
10%
1991
20%
1992
18%
1993
13%
1994
17%
1995
18%
1996
P1000
1997
13%
1998
12%
1999
P1000
2000
10%
2001
10%
2002
P670
2003
8%
2004
8%
2005
P1000
2006
7%
2007
6%
Its integrated front-end facilities are
located in the Netherlands, Singapore,
China, USA, and Germany. Its facility in
France had been sold in 2009, its German
facility reorganized, and two of its Dutch
facilities are scheduled to close in 2010
and 2011.
Its back-end facilities, on the other
hand, can be found in Thailand, Taiwan,
Hong Kong, China, Malaysia and the
Philippines.
Their products are then marketed and
sold worldwide to a variety of original
equipment manufacturers, original
design manufacturers, contract design
manufacturers and distributors.
For 2009, the company reported
global sales amounting to $3.843 billion.
NXP Cabuyao
The operations of Phillips in the
Philippines began as early as 1920.
During the ‘60s, Phillips founded a lamp
and glass bulbs factory in the city of Las
Pinas.
In the years to follow, the company
diversified its operations in the said city,
including the setting up of a plant for its
semiconductor business.
To avail of the tax privileges offered
by the Philippine government to
ecozone locators, its semiconductor
operations transferred in 1995 to the
Light Industry and Science Park I (LISP
I) in Cabuyao, Laguna. Its facilities are
housed within two buildings inside a
12-hectare compound which is one of the
largest inside LISP, second only to that of
Procter & Gamble.
The factory currently employs a
total of 1,685 individuals, 301 of whom
93
Ripples and Rising TIdes
belong to management and supervisory
positions. Women comprise around 56%
of the company’s workforce.
Table 15. Average wages
among NXP Workers in
2008
Around 605 individuals (36%) do not
enjoy regular status. Around 136 were
hired through subcontracting agencies
while 469 are contractual workers.
Department
Monthly
Rate
Headcount
BCBS
15,005.82
367
GA
12,009.75
640
Most of its employees have been
working in the company for almost 15
years, even before the transfer to LISP 1.
POWER
14,411.54
531
The Birth of the Union
The first union of the workers of NXP
(then Philips) was founded on December
1, 1982 at the original plant in Las
Pinas. It was originally named Philips
Components Philippines, Inc. Workers’
Union.
SIPS
12,471.45
550
SUPPORT
14,691.01
40
TOTAL
13,295.51
2,128
The union aligned itself immediately
after registration with the National
Federation of Labor Unions (NAFLU),
which is in turn part of the Kilusang
Mayo Uno, a militant labor center in the
country. The company’s technicians and
quality inspectors were the pioneers of
union organizing in the company.
Figure 8. Distribution of NXP Workers According to
Lenght of Service
94
Organizing Experiences in Economic Zones
When the company transferred to
LISP 1 in Laguna, the union’s name
became the Philips Semiconductors
Workers Union –NAFLU-KMU.
union. A grievance desk also ensures that
workers can turn to the union leaders
when they are given disciplinary actions
by the company.
Its current name – NXP
Semiconductors Cabuyao Incorporated
Workers Union – is the result of the 2006
change in company.
“Corporate Restructuring” and
its impact on workers
In its 27 year history, the union
and the management has been able
to conclude a total of 10 Collective
Bargaining Agreements (CBA).
Other than the increase in wages (see
table), the union has also been able to
secure a number of economic benefits
for the company’s workers. These include
a daily meal subsidy, rice subsidy,
education subsidy, and out-patient
subsidy. The union has also been able to
secure free shuttle service for LISP 1 for
workers who live in Manila and other
nearby provinces.
Its members are also secured with
Personal Protective Equipment (PPE),
which is regularly monitored by the
Health and Safety Committee of the
Corporate restructuring would
have several repercussions on workers’
situation, however.
First impact on the union was the
increased difficulty of organizing
activities for the workers when the
company transferred to LISP 1. They now
had to contend with layers of security
forces – from the local police units
operating within and around the zone,
to ecozone security forces and down to
the company security guards who all kept
constant watch on worker movements
within the perimeters of the zone and
adjacent areas.
It is the recent buy-out however
that would have a more comprehensive
repercussion on workers’ situation.
“Private equity firms view the companies they target for
takeover as merely ‘a bundle of assets’, not as a service-provider or
manufacturer of goods, or as a place of employment. Management
focus is on manipulating this bundle of assets through financial
re-engineering to generate maximum, short-term cash outflow
and this is what drives management decisions on restructuring. In
this equation, workers figure primarily as expenses as assets are
unbundled, sold, mortgaged and resold. “
-International Union of Food, Agricultural, Hotel,
Restaurant, Catering, Tobacco and Allied Workers’
Association
95
Ripples and Rising TIdes
A quick look at corporate buy-outs
In 2006 private equity funds spent over
USD 725 billion buying out companies - an
amount equivalent to buying the national
economy of the Netherlands, or the
economies of Argentina, Poland and South
Africa combined - with billions of dollars
to spare.
These are generally conducted by private
partnerships that involve three main actors:
1) investors, 2) private equity firms and
3) the companies they purchase, known
as “portfolio companies.” KKR, one of
the main companies that bought Philips
semiconductors is among the world’s top
five private equity buy-out firms along with
Bain Capital (Bain), the Blackstone Group
(Blackstone), the and TPG (formerly Texas
Pacific Group) in terms of both size and
influence.
Like in many other multinational
corporations which were bought and now
is at the mercy of private equities, the
workers of NXP face contractualization,
diminishing regular workforce through
voluntary retirement programs (VRP),
and closure of company departments.
When Philips semiconductors became
NXP, the new management closed two
divisions of the plant which caused many
workers to lose their jobs.
They also offered early retirement
packages in order to reduce their
workforce that still has security of tenure.
This became a very tempting offer for
many, and even for union leaders who
have been working at the company for
“Private equity” is a broad term
that encompasses a range of strategies
for investing in industrial and service
companies whose common stock is not
traded on public stock exchanges.
In order to ensure the quick return of
investments, private equities impose labor
flexibility and contractualization, as well
as workforce downsizing by shutting down
plants and departments in the companies
that they buy.
Unlike publicly traded companies that
are subject to federal securities laws and
regulations, private equity buyout firms
operate virtually free of oversight and public
accountability, their profits and practices
largely hidden from view.
many years. It would, in fact, become a
contentious issue that the union would
eventually face.
The company has also stopped the
granting of regular status to its workers
and is now hiring employees either
through subcontracting agencies and
or through contractual arrangements.
The increased contractualization of its
workforce has had the effect of decreasing
the number of union membership as only
regular employees can become union
members.
At the start of this year for example,
management announced that they would
not be increasing workers’ wages as a
result of decreasing global sales.
96
Organizing Experiences in Economic Zones
Pigura 9. Distribusyon ng mga Manggagawa batay sa
Sahod
The union membership, however did
not accept the proposal because (1) they
knew that NXP Philippines was still
earning huge profits despite the economic
downturn and (2) it was actually they,
the ordinary workers, who carry the
heaviest burden resulting from the crisis,
as prices of basic commodities spiral and
standards of living deteriorate rapidly.
They also organized pickets inside
company grounds, using placards that
bore their calls and wore protest pins
inside company premises to show their
defiance. Visits and inspections by
representatives of the company’s foreign
offices were also taken as special events
for protest actions and a display of
militancy and union unity.
To counter the proposal, the workers
waged a series of concerted efforts that
showed their united strength. The union
called for a general meeting where the
workers discussed their plan of action.
They decided to stage a series of protest
actions inside the company.
Ultimately, the concerted actions
paid-off, with the company promising to
honor the wage increase as provided for
in the CBA.
The union members staged noise
barrages during break-times inside the
company cafeteria.
Using union Democracy to
Counter Opportunism and
Compromise
All throughout this period, however,
the union was battling ills that have
97
Ripples and Rising TIdes
permeated the ranks of the leadership,
and which was ultimately only defeated
by the vigilance of its own members
which in turn gave rise to a new set of
leaders.
One of its major weaknesses lay in
the fact that no local elections were held
throughout the 28 years of the union’s
existence, such that it only had one set of
union leadership for the entire period.
In 2006, management implemented
a Management-Determined Separation
Program (MDSP). Some of the union
members called on the leaders to oppose
the plan as this is to them, a form of
union-busting, and tried to dissuade
other workers from availing of this
program.
However, some of the union officials
themselves availed of the program.
In May 2009, management refused to
grant a wage increase as provided for by
their CBA on grounds of financial losses.
The union staged protest actions on the
insistence of members. Around 80-90%
of the workers in one shift participated,
but the union president and other
members of the Executive Board where
nowhere to be found.
In August, there was a call from some
of the members to hold a local election.
The incumbent officers, however, instead
called for an extension of their term until
2011, citing their achievements during
their 28-year term. The members held a
general assembly and approved the call
for a local election.
Later on, a petition-signing campaign
for a term extension of the incumbent
officers came up, but this was signed by
less than half of the union members.
Those who called for a local election also
countered that this was a defiance of the
democratic vote agreed upon during the
assembly. Management issued a position
agreeing to the term extension, but
the federation to which the union was
affiliated rejected the officers’ move.
The local elections were finally held.
An anonymous petition paper called for
a boycott of the elections, but by 3pm
in the afternoon, more than half of the
union members had already voted. A
new set of officers roundly defeated the
incumbents.
Thus, the union members, through
their vigilance and adherence to the
principle of union democracy had saved
their organization from compromise and
restored vitality in the union’s leadership.
Conclusion
The NXP workers’ experience is a
testament to the importance of vigilance,
collective action, and the wise use of
democratic processes. These ultimately
were the instruments that helped the
union meet the many challenges it faced.
These will also be the union’s
instruments as it forges ahead. The new
union officers foresee that the workers
are yet to experience the harsher
consequences of NXP’s corporate
restructuring. When that time comes,
they say, they will hopefully be wellprepared to meet the challenges head on.
98
In the meantime, they have set their
sight on consolidating their ranks,
drawing lessons from their weaknesses,
and renewing efforts at building the
workers’ understanding of the global
economic crisis in order to raise their will
to fight.
In 2006 private equity funds spent over
USD 725 billion buying out companies
– an amount equivalent to buying the
national economy of the Netherlands, or
the economies of Argentina, Poland and
South Africa combined – with billions of
dollars to spare.
These are generally conducted by
private partnerships that involve three
main actors: 1) investors, 2) private
equity firms and 3) the companies
they purchase, known as “portfolio
companies.” KKR, one of the main
companies that bought Philips
semiconductors, is among the world’s top
five private equity buy-out firms along
Organizing Experiences in Economic Zones
with Bain Capital (Bain), the Blackstone
Group (Blackstone), the and TPG
(formerly Texas Pacific Group) in terms
of both size and influence.
“Private equity” is a broad term
that encompasses a range of strategies
for investing in industrial and service
companies whose common stock is not
traded on public stock exchanges.
In order to ensure the quick return
of investments, private equities impose
labor flexibility and contractualization, as
well as workforce downsizing by shutting
down plants and departments in the
companies that they buy.
Unlike publicly traded companies that
are subject to federal securities laws and
regulations, private equity buyout firms
operate virtually free of oversight and
public accountability, their profits and
practices largely hidden from view. ■
99
Ripples and Rising TIdes
AURORA SPECIAL ECONOMIC ZONE:
community opposition to the establishment of an ecozone
The province of Aurora can be found on the eastern side of Luzon, along the
Pacific Ocean. It is comprised by eight (8) towns, with Baler as the capital. Among
the provinces surrounding Aurora are Quezon, Bulacan, Nueva Ecija, Nueva Vizcaya,
Quirino and Isabela.
Aurora is controlled by the Angaras, a
known political dynasty in the country.
This includes Senator Eduardo Angara;
his sister, Bellaflor Angara-Castillo,
provincial governor, and their brother,
Arthur Angara, mayor of the town of
Baler.
The province is rich in natural
resources. Aside from its aquatic
resoruces, it is also rich in mineral
resources because of its proximity to
the Sierra Madre mountains. It is also
one of few remaining provinces where
75% of its forests is still considered
‘virgin, untouched by human hands (The
Philippine Star,2010).
Production of rice, corn, coconuts and
fishing are the main sources of livelihood
for the residents. In 2008, rice production
is estimated to cover 11,280 hectares
(Orejas,2008). In fact, Aurora also
supplies rice to nearby provinces.
Aurora is also home to indigenous
peoples such as the Dumagats, Agtas and
Igorots.
Despite its natural wealth, however,
Aurora remains as one of the 20 poorest
provinces of the country.
Setting up a Special Economic
Zone
The Special Economic Zone Act of
1995 (RA 7196) RA 7196 designated
parts of Baler, Dinalungan and
Casiguran including its waters, islets
and nearby environment as areas for the
establishment of ecozones.
Two years after, or on December 10,
1997, Bella Angara, then congresswoman
of Aurora, and Senator Edwardo Angara,
respectively filed House Bill (HB) 5309
and Senate Bill (SB) 1978 proposing
the estabishment of the Aurora Special
Economic Zone. The two bills aimed at
declaring the entire province as a special
economic zone.
Congress railroaded approval for the
the proposed law but then President
Fidel V. Ramos was forced to veto the
approval due to opposition from the
Department of Trade and Investment and
the Department of Finance who believed
Organizing Experiences in Economic Zones
http://www.flickr.com/photos/ch4dwick
100
The coastlines and forests of Aurora are at a risk due to the construction of the
economic zone.
that the country cannot afford more tax
exemptions, and that the proposed zone
would pave the way for the proliferation
of smuggling in Aurora.
The residents also opposed the
proposed zone. The Multisectoral Action
Group of Aurora (MSAG) and the
local chapter of the Bagong Alyansang
Makabayan (BAYAN) were among the
leading organizations in the protest.
While the two bills proposed by
the Angaras did not push through, the
succeeding President, Joseph Estrada
signed Presidential Proclamation 233 in
January 2000 converting 28,000 hectares
of land, owned by Atty. Romeo Roxas
of Green Circle Properties Corporation,
into a special economic and tourism zone
– the Pacific Coast City Ecozone.
According to an article published by
the Philippine Center for Investigative
Journalism or PCIJ in 2005, said land
constitute the biggest privately-owned
land in the country. On the other
hand, Green Circle is one of only five
companies in the province which was
able to secure a Private Land Timber
License (PLTC) which allowed the
owner to undertake logging in private
lands, forests, alienable and disposable
land. The same article quotes Roxas as
denying that he was carrying out loggind
101
Ripples and Rising TIdes
Ang Pamilya Angara
The Angaras are among the richest and
most powerful families in the province of
Aurora. Currently, four members of the
family occupy key seats in the province's
local and the country's national government.
the successful overthrow of the Estrada
government in Edsa Dos.
First from the family to occupy a position
in the government are the brothers Juan
Angara who became Lieutenant Governor
of Aurora in 1951-55 and Mayor of Baler in
1934-1937 and 1944-1945; and Jose Angara
who became the province's representative in
the First Assembly of the 10th Congress of
the country in 1935-1938.
Paulit-ulit na nadadawit ang pamilya
Angara sa usapin ng iligal na pagtotroso.
The current Senator, Edgardo Angara,
the Mayor of Baler, Arthur Angara, and
the province's Governor, Bellaflor AngaraCastillo are children of Juan Angara.
Meanwhile, the current representative
of the lone district of Aurora in the House
of Representatives, Cong. Juan Edgardo
Angara is a son of Senator Angara.
According to his Statement of Assets and
Liabilities (SALN), Sen. Angara is the tenth
richest Senator with a total net worth of P70
Million.
He was Senate President from 1993-1995.
Under the Estrada Regime, Angara was the
Secretary of Agriculture from 1999-2001
until he was appointed Executive Secretary
by the President. However, he was able to
hold this office for a mere 14 days after
The family has consistently been dragged
in issues of illegal logging.
In 2004, Rogelio Rosal, then
spokesperson of the New People's Army said
the Angaras benifitted from nine logging
companies in the province.
Meanwhile, Fr. Edwin Aglipay said the
family received contributions from loggers
for the family's campaign funds during the
elections of the said year. Another priest,
Fr. Antonio Evangelio made the same
accusation.
All have been denied by the family (Diaz,
2004).
According to former Department
of Environment and Natural Resources
Secretary Heherson Alvarez, while the
family are not direct operators of illegal
logging, they are patrons of illegal loggers.
He added that Sen. Alvarez is a close
friend of Romeo Roxas, the owner of
Green Circle Properties and Resources
Inc, a known big logger in the province
(Cervantez, 2004).
102
operations in his land, but that he was
clearing his land.
RA 9490 : Aurora Special
Economic Zone Act
In 2006, Cong. Juan Eduardo
Angara re-filed HB 5309 as HB 10293
or the Aurora Special Economic Zone
and Freeport Act. His brother, Sen.
Edgardo Angara, simultaneously
filed a counterpart bill, SB 2603. The
two proposed laws would later be
consolidated into one in a joint session
of Congress. The bills were amended
after the The Department of Finance and
the Bureau of Customs reiterated their
cocerns about smuggling that harms the
local economy.
Among the requisites for the
establishment of an ecozone is an
official endorsement by the provincial
government to prove public support for
the project. In a letter on January 27,
2007, Gov. Bellaflor Angara submitted a
letter to the Provicinal Council of Aurora
requesting the said body to endorse the
project. In a special session on January
29, the Council expressed its approval
through Sanggunian Panlalawigan (SP)
Resolution No. 11. The resolution was
signed by the Governor herself, and
was quickly submitted to Senate and
Congress, completing the requirements
for the bill’s adoption. The proposed
bills (HB 5309) and SB 2603 were
consolidated and approved on February
19-20, 2007. It was signed by then
President Gloria Macapagal-Arroyo in
June 2007 as RA 9490 or the Aurora
Special Economic Zone Authority Act
(ASEZA) o f 2007.
Organizing Experiences in Economic Zones
According to advocates of ASEZA, the
zone will solve the problem of poverty
in the province by attracting ofreign
investments that would create jobs and
livelihood for the residents.
RA 9490 purportedly aims to
transform Aurora into a “self-sustaining
industrial, commercial, financial,
investment and tourism/recreational
center and suitable retirement/residential
area”.
In the planned land conversion
designed by well-known architect and
real estate developer Felino Palafox,
Jr. who also acted as chief architect
for ASEZA, vast agricultural lands
will be transformed into an industrial,
institutional, residential and tourism area
with its own seaport and airport facilities.
The zone will cover 500 hectares of
Barangays Esteves and Dibet and the
town of Casiguran and may still include
up to 2000 hectares of public land.
It will be managed by a Board of
Directors to be composed of one (1)
administrator, the provincial governor,
the congressional representative of
the province, Casiguran Mayor and
respresentatives of residents and foreign
investors from each company and two (2)
labor representatives.
Capital stock is estimated to reach no
less than P10 billion, 40% of which will
come from the private sector and 60%
from government.
The ecozone will be autonomous from
the local provincial government and in
Ripples and Rising TIdes
cases of conflicts, the decision of the zone
authority will prevail.
From ASEZA to APECO :
Expansion of the Ecozone
Two years after the adoption of
RA 9490, and while construction of
facilities for the zone was still ongoing,
the Angaras already exhibited interest
in expanding the zone’s coverage.
Congressman Angara filed HB 6213
while his father Senator Angara, together
with Sen. Miriam Defensor Santiago,
filed SB 3470. The two proposals
were consolidated and approved by
the legislature. It was signed by then
President Gloria Macapagal-Arroyo
into RA 10083 or the Aurora Pacific
Economic Zone and Freeport Act
(APECO) in April 2010.
APECO is divided into two phases
: Parcel I- comprised by 496 hectares
from the original ASEZA and Parcel II
comprised by 12,427 hectares covering
the towns of San Ildefonso, Culat and
Cozo. In sume, the ecozone would cover
around 12,923 hectares.
Parcel I will serve as a business center
inclduing industrial, institutional and
commercial centers. Parcel II will be
devoted to eco-tourism.
The following facilities will be set up
in the zone :
• Agricultural industries such as
coconut, wood, wine and food industries
• Seaport facilities such as
warehousing, container terminals,
seafood and meat processing;
103
• Facilities for light industries such
as boatbuilding, electronics, shoes and
other manufacturing industries;
• Financial commercial facilities
for banks, indusrance firms, business
establishments and condominiums;
• Commercial industrial districts
that will house IT parks, electronic hubs,
eateries, parlors and souvenirs shops.
At present, a 1,300 meter airport is
being constructed. A seaport with a
Roll-On-Roll-Off facility is also being
constructed through the expansion of
the local pier at Barangay Dibacong,
Casiguran. APECO has also opened
an office for foreign investors. Satellite
offices were also set up in Clark,
Pampanga.
Around P15 million was spent for
the zone’s perimeter fencing while
P157 million was spent for the runway,
a 4,800 sqm taxiway, terminal building,
administration building, fire station
and parking space. Funds came from
the Department of Transportation and
Communications.
A total of P1 billion, on the
other hand, has been alloted for the
construction of a Furniture Village,
which will be managed by the Industries
Development Corporation. The project
is touted to generate 6,700 jobs and an
annual income of PhP3.1 billion.
The ecozone authority and foreign
investors have so far signed 10
Memoranda of Agreement :
1. Promised 100 scholarship grants
of the UCPB-CIIF Foundation for
children of coconut farmers in Aurora
Organizing Experiences in Economic Zones
http://www.flickr.com/photos/gamhanan
104
For the fisherfolk from Brgy. San Ildefonso, the APECO spells the loss of their
livelihood.
2. Hiring of new graduates from
various schools in Aurora by the Asiapro
Multipurpose Cooperatives, a manpower
agency
3. Setting up of value-adding
linkages between local fishing porducts
and the international market by
PHILFOODEX, an organization in the
food industry
4. Setting up of value-adding
linkages between the local wood indsutry
of Aurora and the internatinal market
by IDC, a company that exports wood
products
5. Expansion of the use of
gyroplanes in Aurora by the Source Asia
Business
6. Sale of products from Aurora by
Fundacion Santiago
7. Invesments by Genius Billion
Development Ltd. in wind power
generation, buildings and trainings in
Aurora
8. Facilitating the sale of local
agricultural products in Aurora in the
international market by the East-West
Seed company
9. Distribution of equipment for the
local tilapia industry by TGA Farms
10.Establishment of Ro-Ro facililties
in Aurora by the NDC Maritime Leasing
Corporation
105
Ripples and Rising TIdes
Storms in Auroroa
Because of its geographic location, the
province of Aurora has constantly been
a victim of natural calamities. This is
made worse by continuous illegal logging
operations in the province that is seen as the
cause of flash flooding which has taken the
lives of many residents.
In fact, the province has been threatened
by many of the largest storms that has
entered the Philippine area of responsibility.
In 2004, almost 1,000 individuals died
because of flash floods and landslides in
the province after it was battered by storms
Violeta and Winnie.
In December 2005, ten barangays were
flooded by knee-deep waters in the town of
Casiguran.
Adverse Consequences
For the residents, the construction of
APECO has meant landgrabbing, and
therefore the loss of their livelihood and
displacement from their residences. It
also threatens food security as lands to
be converted are prime agricultural lands
devoted to rice and coconuts.
The freeport will cover the coasts of
Aurora which is projected to displace
hundreds of fisherfolk.
According to Alejandro Barcel, former
Barangay Captain of San Ildefonso, many
fishermen are now being displaced by the
fencing off of Aurora’s coasts by APECO
authorities.
A year after, two died and 170,000 lost
their homes because of flash flooding in the
towns of Dingalan, Dipaculao and Baler.
In July 2010, 111 familes were forced
to evacuated because of flash flooding as a
result of continuous downpour brought by
storm Caloy.
In the middle of 2011, the province
was battered by storms Bebeng and Falcon
which resulted in the displacement of
hundreds of families in the province.
The massive storms in the province,
according to the residents, is one of
the reasons why the construction of an
economic zone is unfavorable, even for
investors.
“Even titled lots aren’t safe. All
documents are useless, such as
Certificates of Land Transfers (CLTs),
Emancipation Patents (EPs), Certificates
of Land Ownership Awards (CLOA)
and Certificates of Ancestral Domain
(CADT) in the possession of indigenous
tribes,” according to a representative
of the Panlalawigang Alyansa ng mga
Magbubukid sa Aurora (PAMANA), a
provincial peasant alliance.
Elmer, a resident of sitio Reservation
in Barangay Esteves, cites the case of
105 hectares of land which APECO has
appropriated. The site, according to
APECO representatives, will be used
for the construction of the Aurora State
106
college of Technology (ASCOT) which
is part of the APECO project, citing a
proclamation for such use of the site that
was issued at the time of the American
occupation of the counry in the early
1900s.
Elmer further explained, the said site
is part of forest lands which residents
have been tilling since the 60’s. Tillers
are able to harvest as much as 100 cavans
of rice per hectare from the land grabbed
by ASCOT. Income from the harvest is
what they use to provide for their family’s
food and other basic needs.
The land has also been declared
a beneficiary of a water project by
the National Irrigation Authority
(NIA), which makes it ineligible for
land conversion as provided for by
the Comprehensive Agrarian Reform
Program. Even the Department of
Agrarian Reform (DAR) allegedly agrees
to the distribution of the land to the
tillers, according to residents who held
dialogues with the DAR.
At present, the DAR is only awaiting
the opinion of the Department of Justice
(DOJ) before finalizing its decision to
distribute the land to the tillers.
APECO is alo appropriating lands
in Bgy. San Ildefonso which have long
been tilled by the residents of the area.
The land is under the Integrated Social
Forestry Program of the Department of
Natural Resources and Environment.
The land is also ancestral domain to
the indigenous Dumagat peoples,a nd
therfore, based on the IPRA law, are
Organizing Experiences in Economic Zones
owned by them at are protected by law
against landgrabbing.
In the meantime, the APECO
administration does not offer any viable
relocation for those who will be affected
by the project. The 34 hectares promised
to 480 families are agricultural lands with
irrigation systems run by the National
Irrigation Administration. It is also a
riverine area and is thus, flood-prone.
In Bgy. Dibet, the APECO project has
caused the clearing of mangrove areas
which are breeding grounds for fish.
While the local government is
railroading the zone’s construction, it
has not conducted consultations among
the affected residents. According to
PAMANA, even the town mayor of
Casiguran was not priorly informed of
the local provincial council resolution
endorsing the project.
A fact-finding mission led by the
Kilusang Magbubukid ng Pilipinas
(KMP), Alyansa ng mga Magbubukid sa
Gitnang Luzon (AMGL) and PAMANA
found out that APECO purchases the
land from residents in the amount of
P60,000 per hectare.
Thus, the local government has, in
effect, upheld the interest of foreign
investors to the detriment of the peoples
of Aurora. According to Barcel, they are
now being called ‘squatters’ on the very
land they have grown up on and been
tilling for decades.
Ripples and Rising TIdes
Anomalous Project
According to Palafox, who was
originally approached by Senator Angara
himself to design the project, APECO
reeks of anomalies in the use of public
funds. He disclosed the information in
a hearing conducted by the Senate in
2010 over budgetary allocations for the
ecozone. (Geronimo, 2011)
Palafox revealed that the Commision
on Audit has not examined the Angaras’
use of public funds for the project.
According to him, he was forced to revise
his original design for the ecozone on
flimsy reasons, until he had come to
five different designs research. Instead of
utilizing existing infrastructure to lessen
costs, the local government insisted on
constructing the zone in an area which
necessitated the construction of new
roads, thereby causing additional and
unnecessary government expense.
Palafox also stated that the province
is prone to disasters. The quality of the
land is unsuitable for ecozones because it
is prone to liquification which may cause
destruction to buildings and other heavy
infrastructure. No background study,
feasibility study, business planning study,
engineering and hydrologic surveys,
airport planning survey and seaport
study were conducted, according to
Palafox.
Broad Alliance Against APECO
A broad multisectoral alliance called
the Task Force Against ASEZA currently
exists opposing the project.
107
The Task Force includes the clergy
from the Infanta Prelature, Justice and
Peace Action Group of Aurora, Bataris
Formation Center and the Multisectoral
Action Group. In late 2009, around
1000 residents of Aurora expressed their
opposition by placing placards infront of
the Aurora municipal hall.
But on June 26, 2010, an anticommunist group fired upon and lobbed
a grenade at a local church in Bianoan
where Fr. Jose Francisco Talaban stayed.
The priest has actively participated in
the opposition campaign against the
project. The perpetrators belonged to
Aniban ng mga Ayaw sa Komunista,
which is supported by the 48th Infantry
Battalion (IB) of the Philippine Army.
Other members of task Force ASEZA
also experienced various forms of
harrassment.
Some towns, according to residents,
have since been virtually under ‘martial
law’. Aside from the 48th IB, the
government has also deployed the 70th ,
71st and 56th IB to the province since the
start of the project. Officers of the 48th
IB have reportedly admitted that they
are in the province to protect the zone’s
construction.
Instead of cowing the people into
silence, however, popular support grew
even stronger, with the Catholic Bishops
Conference of the Philippines- National
Secretariat for Social Action (CBCPNASSA) issuing a statement condemning
the attacks and attempted murder of the
priest.
108
On January 2011, residents and some
local officials filed a complaint with
the Department of Justice against the
building of the ecozone, accompanied
by the erstwhile architect of the ecozone
himself, Felino Palafox, Jr.
PAMANA likewise plans to file a
case against Sen. Eduardo Angara, Rep.
Sonny Angara, Gov. Bellaflor AngaraCastillo and officials of APECO due to
the lack of public consultations which
is in violation of the Local Government
Code, the Comprehensive Agrarian
Reform Program Extension and Reform
, the Fisheries Code and the Indigenous
Peoples Rights Act. The Angaras’
membership in the APECO Board of
Directors was also clearly in conflict with
their responsibilities as public officials.
Organizing Experiences in Economic Zones
To date, the alliance has already
expanded to include several churchbased organizations such as the National
Council of Churches in the Philippines
(NCCP), the Promotion of Church
Peoples’ Response (PCPR), Discernment
Groups of the Roman Catholic Church,
Parish Pastoral Council- Nuestra
Senora de Salvacion, the Kapatirang
Simbahan para sa Bayan (Kasimbayan),
Ecu Voice convenors, the Kalipunan
ng Kristiyanong Kabataan sa Pilipinas
(KKKP); HARIBON Foundation, an
environmental group, and the human
rights group, KARAPATAN.
The alliance expects the fight against
APECO to be more intense in the coming
days. In the face of increasing brutalities
by the local powers-that-be, the people of
Aurora have only their strong unity and
determined fight to rely on. ■
109
Ripples and Rising TIdes
HANJIN WORKERS:
bonding for mutual aid
Along the western coast of Zambales province in Luzon, thousands of modernday slaves labor at a frenzied pace, building ships touted to be among the largest in
the world.
They are men at the prime of
their youth, coming from far-flung
impoverished provinces of the country.
They are willing to work for slave wages
and with little protective gear, making
the most out of their uncertain, and
often short chance to earn, all the while
enduring harsh treatment from their
superiors who speak in a foreign tongue.
Agusuhin, Barangay Cawag, Subic,
Zambales.
This is along the coast of Subic Bay
where Hanjin Heavy Industries and
Construction-Philippines (HHIC-Phil),
is located. Subic Bay was a former site
of a major US naval facility called the
US Naval Base Subic Bay, and is now the
location of an industrial zone known as
the Subic Bay Freeport Zone, managed by
the Subic Bay Metropolitan Authority
(SBMA).
Hanjin’s entry into the Philippines
is part of the company’s strategic
manuever to catch up with its Korean
rivals Hyundai Heavy Industries Co.
and Daewoo Shipbuilding and Marine
Engineering Corporation which have
expanded operations to China and
Vietnam.
World's Fourth Largest
Hanjin Heavy Industries and
Construction-Philippines (HHIC-Phil),
the world's fourth largest shipbuilding
facility, is owned by South Korean's
shipbuilding company Hanjin Heavy
Industries and Construction Co. Ltd.
(HHIC Co. Ltd.). The facility is located
at Mt. Redondo Peninsula in Sitio
HHIC Co., Ltd. is a multinational
company which originated from the
Chosun Heavy Industries Co., Ltd. in
1937 and was incorporated into the
Hanjin Group conglomerate in 2005.
(www.subicbay.ph)
In February 2005, Hanjin and the
Philippine government signed a lease
agreement covering a 30-hectare land
(covering four towns of Zambales)
where Hanjin was to set up shipyard
facilities. Hanjin then became the
single biggest foreign investor to date
in the Philippines with a $1.6 billion
investment commitment for the next 10
years. The shipyard, scheduled to be
finished by 2016, will be leased by Hanjin
Organizing Experiences in Economic Zones
newscentralsite.com
110
Once a Paradise
Sitio Agusuhin in Barangay Cawag,
Subic, Zambales, was home to some 300
families of farmers and fishermen before
Hanjin Heavy Industries and Construction
Co., Ltd started operation in 2006. Some
of these families have already settled in the
area as early as 1950, even before the US
military forces stationed at Subic military
base came to this coastal area.
Through “bayanihan” or mutual
support, this small community was able
to build a school, health clinic, church and
recreational facilities. Even without the help
of the local government, the residents were
able to improve their community which to
them is a paradise.
Their simple lives were ruffled when
consultants of the Subic Bay Metropolitan
Authority (SBMA) came to Sitio Agusuhin
in 2005 to conduct ocular inspections.
Through their organization-- Samahan
ng Malaya at Nagkakaisang Residente ng
Agusuhin (SAMANRA), the residents
registered their protest against the
anticipated eviction. Shortly after the visit,
however, a rival organization was formed-Agusuhin Neighborhood Association
(ANA) which in November 2005 conducted
community consultations and presented the
Hanjin project.
SBMA forces started to harass residents
and threatened to bulldoze the houses of
those who refused the payments they were
offering. There was no clear relocation site
for the entire community. Residents were
only given P274,000 for their houses and
trees. Residents claimed that those who
failed to collect their cheque within seven
days had 30% deducted from the amount.
In the end, the residents were forced to
move out of their community, uncertain
that their lives will never be as it was in Sitio
Agusuhin.
111
Ripples and Rising TIdes
Table 16. Total Workforce in Hanjin
Year
Construction of
Port
Construction of
Ships
Workforc
2006
wd
wd
7000
2007
wd
wd
10000
June 2008
5000
8000
13000
Peb 2009
nd
nd
17000
Peb 2010
2000
15814
17814
Source: Workers Alliance in Region III (WAR3)
for 50 years, of which 8 years are free of
corporate taxes.
Hanjin Philippines builds liquefied
natural gas (LNG) carriers and very large
container carriers (VLCC) for different
customers around the world. In July
2008, two years after Hanjin Philippines
operated, it has built the MV Argolikos,
a $70- million worth 41,000-ton
container carrier. This was the first of the
six ships worth $1.2 billion ordered by
Dioryx Maritime, a Greek firm. (www.
timawa.net)
Hanjin Philippines reportedly has
orders from French-based global
container shipping company, Compagnie
Maritime d'Affrètement-Compagnie
Générale Maritime (CMA CGM), to
build 4 container ships of 4,300 TEU
(twenty foot equivalent units), with a
combined worth of $250 million. Thirty
other vessels including the world's wouldbe biggest ship worth $150 million are
expected to be manufactured by Hanjin
Philippines. (www.newscentralsite.com)
President Gloria Macapagal-Arroyo,
believed to be Hanjin's top endorser,
could only applaud the Filipino workers
whom she said are not only skilled but
also hardworking and caring. However,
she has not talked about workers issues
such as their meager wages, hazardous
workplaces and the inhuman treatment
they receive from the foreign managers.
(www.bulatlat.com)
Total Workforce
For former President Arroyo, the entry
of Hanjin in the Philippines fulfills her
administration's objective of creating
jobs for Filipinos as Hanjin envisioned
to create 40,000 jobs by 2016. (www.
subicbay.com)
In 2008, a 349-hectare skills
development and training center was
established at the Subic Freeport.
Through this training center, skills of
prospective workers in the province
and even from different provinces were
upgraded to meet the demands of Hanjin
Philippines.
At the start, Hanjin Philippines
employed no less than 7,000 workers
to construct the two dry-docks for
shipbuilding.
112
With the first dry-dock finished,
Hanjin Philippines commenced its
ship-building operation. The number of
workers grew throughout Hanjin’s fiveyear existence.
Hanjin Philippines now has a total
workforce of 17,000 of which 2,000
workers are in the construction of
the Hanjin shipyard while 15,000
are distributed among the different
departments such as fabrication, cutting,
assembly, blasting, painting and erection..
Almost 80% of Hanjin’s laborers are men
aged 18 to 50 years old, many of whom
are also fishermen and farmers.
The shipbuilding process goes
through several stages. First, metals
are fabricated to suit the forms required
for the ship. Parts of the carrier ship are
then asssembled in blocks, after which
different types of blasting techniques are
used to smoothen, shape and clean hard
metal surface. Blasted ship blocks and
hulls are then painted.
Then the final stage before the ship is
tested is the erection where ship blocks
and hulls are connected. Pipes and
equipment are also installed.
The workers in Hanjin come
from different provinces not only
in Luzon but also from the Visayas
and Mindanao. Most come from the
province of Pangasinan, however, while
Zambales, Tarlac and Pampanga also
have a significant share in the workforce
composition.
In the provinces, the Technical
Education and Skills Development
Organizing Experiences in Economic Zones
Authority (TESDA) offer trainings
to prospective workers. Qualified
workers then undergo training at the
Hanjin Training Center before they
are employed by one of the 100 plus
subcontractors that provide manpower to
Hanjin.
Pepe (not his real name), a painter
from Zambales who has been under
Hanjin’s employ for almost a year now,
directly applied at Hanjin's training
center where he underwent a one-week
training before being hired. He later
saw in his contract that his employer was
Green Beach, a Korean subcontractor of
Hanjin Philippines. He found out later
that most of Hanjin’s workers are listed
as employed, not by Hanjin but by its
labor contractors.
Dole Regional Director Nathaniel
Lacambra has disclosed that a big
number of Hanjin's subcontractors are
not registered with DOLE, however.
They found out that among the 101
firms, of which 17 are in shipbuilding
and 84 are in construction, only 21 are
registered with DOLE in 2008. (www.
inquirer.net)
Perilous Working Conditions
Ship construction usually takes six (6)
months. However, Hanjin management
accelerated the pace of production to just
three (3) months, requiring workers to
work from 12 hours to 48 hours to meet
the deadline.
Thus, while the shipyard was still
in construction, workers were already
building ship in the unfinished
113
Ripples and Rising TIdes
Highlights of Accidents and Health Risks in Hanjin
April 2007---Rotten pork with maggots
as big as rice grains in free lunches were
served to 300 workers of the assembly and
painting department of Hanjin. This was
only the first of several cases where workers
were served rotten food.
June 2007, HHIC shipyard and
surrounding areas--- 321 workers and
residents were afflicted with malaria causing
three deaths. According to the report
released by the Department of Health
Epidemiology Center on January 2008,
workers living just outside Hanjin do not
have decent shelter. Some workers have
no choice but to sleep on the road in the
construction area because they were not
provided even with temporary barracks. The
report stated that the contractors complied
poorly with ensuring workers’ welfare and
lacked a surveillance system which could
have prevented the outbreak of the disease.
Dec 24, 2007---The first death, which
happened on Dec. 24, 2006, involved a
worker who died after falling off a truck
driven by a Korean engineer.
January 18, 2008-- At 11am, in drydock
no. 5, Jeremias Adamos and Mario
Laxamana died while Jonathan Martinez,
dry-docks. The absence of safety nets
and other gears made the workplace
accident-prone, especially as shipbuilding
and shipyard construction are
simultaneously done in one area, with
some working on scaffoldings and others
working at the base.
Gilbert Suva and Donard Elija were injured
by a traumatizing explosion caused by
spills of a volatile liquid coming from
the cleaning operation being done on a
propeller. Adamos was scheduled to wed in
March while Laxaman was set to fly to the
Middle East in February 2008.
January 23, 2009-- 19 year old Raldon del
Rosario was crushed to death when an 800kilo metal door fell on him. His co-worker,
Camalio Bouchie, suffered serious injuries.
Korean foremen barred their co-workers
from helping the victims.
January 25, 2009—A Korean supervisor,
Choi Dond Baek, died instantly when he
was run over by a forklift truck.
February 2009-- A service bus full of
workers on their way to the workplace, fell
off a cliff near the shipyard. At least 51
workers suffered different injuries.
June 23, 2009--- Arceo Malit, a 26-year
old pipe welder and foreman, was attacked
by a Korean foreman, Lee Cheon Sik. Malit
suffered multiple lacerations and abrasions
as a result of the attack. Greenbeach,
subcontractor of HHIC Phils Inc suspended
Lee for 30 days.
The use of toxic and flammable
materials by those who work in confined
and closed spaces, as well as those
working on scaffoldings at the base and
decks of the ships, expose workers to
great health risks.
Organizing Experiences in Economic Zones
inquirer.net
114
According to Task Force Hanjin, a
joint NGO-local government initiative
to monitor workers' conditions, there
have been more than 5,000 work-related
injuries and 40 deaths from 2006-2009
due to different industrial accidents at
the Hanjin shipyard. However, Hanjin
management admits to only 19 deaths,
still a disastrous record considering it
only recently started operations.
According to Hanjin management,
they have six (6) nurses and a full-time
doctor at the shipyard. But workers
complain that the doctor is only available
from 7am to 5pm. Hanjin also has no
emergency hospital, workers claimed.
An investigation conducted by SBMA
after a tragic explosion in 2008 revealed
that Hanjin had inadequate safeguards
and that the company committed seven
(7) safety lapses that led to the explosion.
According to the SBMA report, Hanjin
lacked emergency response procedures,
safety officers to oversee operations and
proper inspection procedures to ensure
soundness of equipment and materials.
The report also noted that the degree
of burns on the victims indicated that
Hanjin had inadequate precautionary
measures in handling hazardous
materials and inadequate provision of
appropriate fire extinguishers. It also
stated that Hanjin lacked safety warning
signs and had no daily safety meetings
to help remind workers on the hazards
of their operations. Investigationst also
confirmed that no nurse attended to the
115
Ripples and Rising TIdes
Table 17. Average Wage and
Deductions in Hanjin
Item
Amount (PhP)
Average
Monthly Pay
8,000.00
Withholding tax
(616-650)
Death Insurance
600
Fortune Life Insurance 325
SSS
450
Philhealth
75
Pag-ibig
100
Total Deductions
2166-2200
victims immediately after the accident.
(www.inquirer.net)
After the labor inspections were done
at Hanjin Philippines in 2008, Lacambra
disclosed the occupational safety and
health violations committed by Hanjin
and its subcontractors : late issuance and
inappropriate use of personal protective
equipment ; absence of protective gears,
accredited safety practitioner, night
shift health physician, a drug-free
workplace policy; nonsubmission to the
DOLE of annual accident and illness
reports; absence of an organized Safety
Committee; non-registration under Rule
1020 and Department Order no. 1802; no
certificate of testing for newly acquired
heavy equipment; poor housekeeping;
lack of safety signages; and improperly
covered ditches.
The series of accidents in Hanjin
prompted not only local officials but
also members of the Senate and the
Commission on Human Rights (CHR) to
conduct investigations regarding Hanjin's
compliance in terms of safety measures,
environmental concerns and other labor
issues.
In a senate hearing in January 2009,
officials from DOLE stated that they
themselves had difficulty entering the
shipyard to investigate conditions.
According to Brenda Villafuerte, director
of the Bureau of Working conditions of
DOLE, she has been sending her requests
for inspection to Hanjin Philippines since
2007, but her request was only heeded in
March 2008 after the accident came to
public attention.
According to Lacambra there had
been no labor inspection in Subic for
nine years before they had managed to
enter its premises in 2008. Even Task
Force Hanjin was unable to conduct
inspections.
When Senator Jinggoy Estrada,
chairperson of the Senate Committee
investigating Hanjin, made an on-site
inspection, he found out that workers
were afraid to talk about the unsafe
and unhealthy conditions in Hanjin.
He also saw Korean supervisors waving
at workers to stay away from the
investigating team.
While investigations were being
held in Senate, the South Korean
Ambassador Choi Joong Kyung wrote to
Senate President Juan Ponce Enrile and
threatened that the Philippines will face
dire consequences if the investigations
are pursued. The ambassador stated
in his letter that investigations could
lead to suspension or even termination
of Hanjin's operations which could
116
Organizing Experiences in Economic Zones
have “deep and far-reaching effects
within and beyond the boundaries of
the Philippines”. Labor groups such as
Kilusang Mayo Uno sees this as a clear
attempt to subvert Philippine sovereignty.
However, workers are only made to
sign forms but have never received any
allowance. Pepe has filled up his form
thrice but has not received his boarding
allowance to this day.
Meanwhile, instead of helping the
Senate resolve the issues confronted
by workers in Hanjin Philippines and
making sure the Korean company follows
the country's labor code, Arroyo asked
the legislators not to over-react to the
accidents because this might adversely
affect the country's economy. (Feb 28,
2009, www.bulatlat.com)
Workers do not receive holiday pay
and their employment records are not
shown to them. Workers also complain
of the huge amounts of deduction every
payday, leaving them with an amount
hardly enough for their monthly
expenses.
Other Violations of Labor
Standards
According to Hanjin management,
retirement pay for workers who have
served for a minimum of 10 years will
only amount to Php150,000.
Workers in Hanjin Philippines receive
a minimum daily wage of Php 306
, a few pesos higher than the region's
declared minimum wage. But this is
measly compared to industry standards
and compared to the cost of living for
a family of six which already reaches
Php900.
Hanjin has formed a cooperative
to provide loans to workers up
to Php10,000. But the company
immediately deducts an interest payment
of 15% from the released loan amount
leaving workers with only Php8,500.
Payments for the loan are deducted from
their wages.
Workers only take home an overtime
pay of Php47/hour.
Because of low pay and huge debts,
workers are forced to pawn their
automated teller machine (ATM) cards to
individuals willing to lend them money
so that they can feed their families.
Should they fail to pay back their loans,
the lenders will have full acess to the
worker’s regular wage as payment.
Workers who are on the lookout for
other high paying jobs cannot just resign
because they have to pay for their loans
in the cooperatives.
The mandatory 13th month pay is
only given to workers who have complete
attendance.
Allowable aanual leave with pay is
only for five (5) days. But the monthly
transportation allowance of P500 is
withheld by management once workers
avail of this leave.
In their contract, workers are
supposed to receive boarding allowance.
117
Ripples and Rising TIdes
Hanjin in Mindanao
Barely two years after HHIC started
construction in Subic Bay, another shipyard
project worth $2 billion with a project site
size of 441.8-hectares was on the way in
Misamis Oriental in Mindanao island.
A contract was signed on January 10,
2008 between HHIC South Korea and
the Phividec Industrial Authority which
manages a 3,000-hectare industrial estate.
This shipyard project extends from the
towns of Tagoloan to Villanueva.
Hanjin Korea decided to build the facility
in Misamis Oriental after the government
granted an ecozone status to Phividec
Industrial Estate, allowing Hanjin to import
duty-free equipment and enjoy tax holidays.
According to Hanjin General Manager
Jeong Sup Shim, at least P4.6 billion per
year in salaries and wages will be injected
into the local economy.
When completed in 2017, this shipyard
which has a capacity of 830,000 tons per
year will be the biggest in the country, even
Environmental Degradation
Reports that Hanjin Philippines
has caused serious damage to the
environment surfaced as early as 2007.
There were reports that mountains were
demolished and parts of the sea were
reclaimed. But even the governor of
Zambales who was supposed to conduct
an on-site inspection to verify reports
was not allowed to enter the company’s
premises.
larger than the Hanjin shipyard in Subic.
This is expected to employ about 40,000
workers. ( www.americanchronicle.com)
However, only after a few months of
operation, HHIC suspended its operations
in Misamis in April 2008. President Gloria
Arroyo who was reportedly furious at the
incident ordered an investigation of the
alleged extortion attempt on Hanjin Heavy
Industries Inc. (www.inquirer.net)
Tagoloan Mayor Paulino Emano denied
Hanjin's accusation that he attempted to
extort money from Hanjin. He clarified
that it was Hanjin that offered him a P400million bribe when Hanjin saw Emano's
reluctance to divert the Tagaloan river.
The mayors claimed that they ordered the
stoppage of Hanjin's bulldozing activities
because Hanjin still had no environmental
clearance certificate and a municipal
building permit. The Department of
Interior and Local Government announced
later, however, the lifting of the work
stoppage order.
In April 2008, environmental
groups registered their protest against
Hanjin Philippines’ plan to construct
a condominium project within the
Subic forest reserve area. While SBMA
Administrator Areza claimed that “there
are no grounds to stop the project”,
Kalikasan People's Network cited reasons
for scrapping the project.
The Subic Forest Reserve Area, one
of the few remaining forest reserves in
118
Organizing Experiences in Economic Zones
the country, will face serious ecological
destruction if the project pushes through,
according to Kalikasan. The area which
has a high level of biodiversity, contains
about 15 percent of the bird species in
Luzon, 10,000 fruit bat colonies and 27
endemic vertebrate species. Disturbances
to the Subic forest ecosystem will affect
157 hectares of mangrove areas (www.
bulatlat.com) located in the 9,800
hectare forest reserve. It also houses 745
different plant species of which seven (7)
are considered endangered or threatened.
It also serves as home to the country's
rarest hardwood trees and varieties
of bats, bugs, snakes, deer, lizards and
insects. (www.asiasentinel.com)
The Manggagawa para sa Kalayaan
ng Bayan (Makabayan) first organized
employees at the administrative level
while construction of the shipyard
was still going on in 2007. But Hanjin
management relieved the office-based
employees when it learned of these
efforts.
There have been no consultations with
members of the affected communities
in Subic especially the Aetas, a forestdwelling indigenous group who have
been living in the area since time
immemorial.
Prior to this, the workers have been
very active in meetings and educational
discussions. The retrenchment move,
however, discouraged them for fear of
losing their jobs.
In the midst of the forest reserve, two
$20 million condominiums comprised
by 22 and 12 stories, respectively, are
now housing Hanjin’s 182 Korean staff
members and their families.
Bonding Together
The frenzied pace of work combined
with the repressive atmosphere makes
organizing very difficult at Hanjin. The
rate of turnover is likewise high, as most
workers are usually employed only on a
project basis, ( which usually lasts from
six months to a year), and the unbearable
working conditions compel most workers
to search for other jobs.
The second wave of organizing efforts
came in June 2008. Makabayan was able
to gather hundreds of workers’ signatures
for a petition to form a union. However,
while still at the early stage of organizing,
Hanjin management retrenched almost
300 workers, including many of the
signatories.
The lack of a viable union or workers’
association at Hanjin has driven many to
form their own ethnocentric groupings
for mutual aid and self-help.
It is not uncommon, for instance, to
find workers from the same province
cramped into a small, rented room
or boarding house to save up on rent
money. Members of the group support
one another in case of sickness or other
emergencies.
It is these groupings that oganizers
from War3 (Workers Alliance in Region
III) are trying to reach. Organizers go
to nearby communities where they hold
small group discussions on trade union
119
Ripples and Rising TIdes
and national issues to raise the workers’
awareness.
On March 2010, Hanjin Philippines
filed a petition with DOLE for the
cancellation of the registration of the
Samahan ng mga Manggagawa sa Hanjin
Shipyard (Samahan) which obtained
their registration only in February 2010.
Composed only of 120 members, the
DOLE denied union status to Samahan
and was instead granted an association
status.
According to their president Alfie
Alipio, Samahan members experienced
harassment from the management such
as dismissal, suspension, reassignment
to harder tasks and charges of theft when
they were forming their organization.
Meanwhile workers are forced to sign
waivers stating that they are not members
of Samahan.
Outside the shipyard, protests have
been mounted against Hanjin. In 2008,
drivers and operators of 50 minibuses that provide services to Hanjin
Philippines staged a strike to protest
the company's decision to replace
members of the Zambales Operators
Drivers Cooperative Association
(ZAMODCA) with Korean-backed bus
firms. Thousands of Hanjin workers
were prevented from reaching their
work places causing disruption in the
shipyard's operations.
Hanjin management has not also
formed any Labor Management Council
(LMC) to address the workers’ plight.
Workers simply forward their complaints
to the Human Resources Department of
Hanjin or do not complain at all for fear
of losing their jobs.
Even the Task Force Hanjin formed in
2006 was dissolved in 2009 by the local
government.
If there are any gains in the struggle
of workers in Hanjin, these are the
reduction in cases of accidents due
to some improvements done by
management after the public outcry
over the series of deaths and accidents
at the workplace. Public attention and
mounting restlessness among the workers
also forced Korean supervisors to treat
the workers better.
As of today, workers are quietly
organizing themselves until such time
that they already have enough strength
to mount collective actions to be able to
assert their labor rights.■
120
Organizing Experiences in Economic Zones
AMADO KADENA WORKERS’ UNION:
sour taste of dole pineapples
Boasting a yearly production of no less than 25 million cases of processed
pineapples, Dole Philippines (Dolefil) claims to have the largest integrated pineapple
plantation, cannery and packaging complex in the world. (www.dole.cwww.dole.c om)
Almost all varieties of pineapples are produced by Dolefil.
Amado Kadena-NAFLU-KMU
Dolefil’s plantation is comprised by
24,000 hectares covering the provinces
of South Cotabato, North Cotabato,
Saranggani, Davao Del Norte, Bukidnon
and Compostela Valley in Southern
Mindanao. Around 22,000 has. or 90% is
devoted to pineapple production alone.
Its main plantations covering 12,000
hectares are located in Polomolok and
Tupi in South Cotabato. Dolefil also
produces bananas, asparagus and cut
flowers.
Dolefil's pineapple production is far
greater than the combined output of Dole
Foods subsidiaries in United States, Costa
Rica, Honduras and Ecuador. Its exports
reach the United States, North America,
Europe, Asia, Australia, New Zealand
and Middle East.
Undeniably, Dolefil is the centerpiece
of Dole Food Company, an Americanbased agricultural multinational
corporation owned by Murdock Holding
121
Ripples and Rising TIdes
From Hawaii to Philippines
Founded in 1901 by James Dole, the
Hawaiin Pineapple Company operated in
the central plateau of Oahu, an island in
Hawaii, immediately after the overthrow
of Hawaii's last Queen Liliuokalani, and
the rise of Sanford Dole as president of
the Republic of Hawii when the US gained
territory in 1893.
The Hawaiin Pineapple Company was
later acquired by Castle & Cooke. It was
renamed in 1991 as Dole Food Company,
Inc.
After World War I, millions of dollars
of pineapple plantations were destroyed
when a plant disease and insect infestation
outbreak occurred in Hawaii. Workers'
unrest started to brew, prompting a US
decision to transfer its operation elsewhere.
The Philippines, at that time also a US
colony, suited the needs of the company.
A series of tests were done on Philippine
soil by agriculture experts from 1921-1925
Company, the world's 23rd largest private
conglomerate. Dole Food Company is
the world's largest producer of fruits and
vegetables which account for over 200
fresh, frozen and ready- to-eat products
distributed in 90 countries. A total of
75,800 full-time and seasonal agricultural
workers are hired for production (3
Wikipedia). Its annual revenue reaches
US$6 billion. In 2008, it reached a total of
US$7.7324 billion worth of revenues. (4
Wikipedia)
which showed that the Mindanao region's
soil would be best for growing pineapples.
In 1963, Dole Foods started operations
in the Philippines and established Dolefil.
This was facilitated by government policies
allowing US companies to own and operate
businesses in the country even after the
1946 granting of Philippine independence
by the US.
Starting with a 500-hectare plantation,
Dolefil's plantations have grown after having
acquired 17,000 hectares of land from a
formerly government-owned corporation.
This caused the displacement of hundreds of
indigenous peoples and peasant families in
Mindanao.
Dolefil also offered farm management
contracts to landowners and farmers to
be able to increase its production output.
About 5,600 hectares of land are under farm
management contracts.
Meanwhile, Dolefil is the single
biggest contributor to Region XII's
Gross Domestic Product (GDP). Its
contribution reached 8 to 12 percent
from 2000-2005. In terms of total fruit
and vegetable exports, Dolefil contributed
30 to 40 percent of the country's exports.
For every hectare of Dolefil plantation,
there are about 72,600 plants of
pineapples which can produce up to three
ratoons in 18 months with the aid of
sprayed chemicals and fertilizers. Except
for its roots, all parts of the pineapple are
122
utilized to produce huge profits for the
company. Pineapple crowns are sold to
produce the elegant and expensive pinya
cloth while pineapple peels are used for
commercial cattle feeds.
Total Workforce
Dolefil has a total workforce of 22,000,
only 6,000 of which are on regular status.
Of the latter figure, 4,251 are rank and file
workers. The rest are workers from labor
cooperatives, fixed term/project based
workers and belong to the “reliever pool”
and are considered to be contractual
workers.
About 73 percent or 16,000 of the
total workforce are contractual workers.
Women workers comprise 60 percent of
the total workforce. Of the total regular
rank and file workers, 4039 are union
members. These workers work in 2
shifts generally, except during periods of
high density production (or high export
demands) which require 3 shifts.
There are about 8 major cooperatives
that supply workers for Dolefil. A total
of 8,000 or 40% of the total workforce
are from these cooperatives. These
cooperatives were established by former
officials and management employees of
the company.
Workers apply to become a member
of a cooperative. They are deployed to
work side by side with regular workers
and do the same jobs under the same
Dole supervisors, but are paid less than
the wages of the regular workers. They
do not enjoy any other benefits from the
Organizing Experiences in Economic Zones
company. They receive their work pay
through the cooperative managers.
Under Philippine labor laws, third
parties who merely supply labor are
considered illegitimate (labor-onlycontractors) while third parties who
supply services are considered legitimate
(job contractors).
According to a labor cooperative
member, they usually do the laborintensive and hazardous jobs. They
are exposed to chemicals and are not
provided free personal protective
equipment by the company.
In some departments, Dolefil imposes
quota in daily productions. For labor
cooperative workers, reaching the quota
is needed to receive the minimum wage.
Thus, workers need to work at an
accelerated pace, which causes overfatigue and increases the chances of
workplace accidents from the sharp tools
they use in skinning the pineapples.
Fixed term workers or project-based
workers are contractuals directly hired
by Dolefil. Fixed term contract lasts for 3
to 6 months while project-based contract
usually lasts for 1 year. Fixed term and
project-based workers are about 2,000
in number and comprise 10% of the
company's total workforce.
Relievers are workers hired from the
thousands of individuals waiting to be
hired by the company. They are hired
by the day to do work in the industrial
section and/or replace absent workers.
The local union estimates that there are
Ripples and Rising TIdes
Low Pay, Too Many Deductions
German, Ricardo and Arman are
members of CAMPCO and are working
as contractual workers in the canning
department of DoleFil. German has been
working under campco for the past nine
years while Ricardo and Arman for six
years. All have their own families.
They recalled how much they have
sacrificed just to enter CAMPCO as
members, queing in long lines for days
when they were applying for membership.
German has literally slept in front of
CAMPCO's office just to be the first in line
the following morning.
They were hired after eight months
of waiting. They paid P100 each for
membership fee, and were deployed to
the canning section. They soon found out
that their daily wage amounted to only
P245, which is P65 below the region's
minimum wage. During payday, they do
not take home all of the wages due to them
because the cooperative has to deduct P125
for healthcare, P100 for capital break-up
(CBU), and average of P100 for savings
and retirement and other deductions for
PhilHealth, SSS and Pag-Ibig.
Once, German had expected to take
home P2,900 for two weeks of work
but found out that only P700 was left
in his wage after all the deductions. He
complained to the manager and officials
of the cooperative. His complaint was not
entertained by the officials, however, who
stated that complaints can only be made
during the yearly general assembly.
123
Ricardo applied for a loan when he was
in dire need of money. According to the
cooperative's rules, he can only borrow
the amount equivalent to his total savings.
Since he had already been qorking for quite
a long time, he knew he had saved much.
But during payday, he had to pay the high
interest of his loan, which to begin with, was
in fact, his savings to the cooperative.
Arman, meanwhile was surprised when
his deductions doubled during payday. The
cooperative explained thay he has to pay
double since during the last payday, he only
had a small wage and was not able to pay for
health care, savings and CBU.
Meanwhile their cooperative's officials
who are former employees of DoleFil
get a monthly honorarium of P10,000 to
P15,000. They get their honorarium none
other than from the wages that the workers
have worked hard for. The utilities of their
cooperative's office and the salary of their
office staff are also paid for by the workers.
The three workers have realized how
much cooperative workers are exploited by
managers of cooperatives. They though that
they own and run the cooperatives but their
experiences have shown that this not truly
the case.
They only have one wish, and that is to
become regular workers whose conditions
are better than that of cooperative workers.
124
Continuing contractualization
Organizing Experiences in Economic Zones
Labor flexibization was first implemented
in Dolefil in 1986. This has reduced
the number of the regular workforce to
5,000 from 8,000 while correspondingly
increasing the number of temporary
emplotees from zero to more than 15,000
by 2001.
Dolefil has implemented
contractualization, contract growership and
labor outsourcing as flexible labor schemes.
Contractual workers in 1985 was 20% of
the total workforce. By 2001, contractual
workers reached 79% of the total workforce.
(EILER).
At first, management eliminated a bif
number of regular workers. The company
offered a 4-day special voluntary retirement
package which was availed by almost 4,000
workers. It was onlun in 1991 that the
management stopped this practice due to
protests from the union.
Labor contractualization increases profits
tremendously by intensifying the amount
of unpaid labor that the company extracts
from contractual workers. The company
forces contractual workers to perform
labor that is more intensive by imposing
production production quotas - popularly
called "pakyawan" - which are way above
the average capacity of a common worker
to perform in eight hours. The government
even bestowed dubious legality to this
oppresive scheme by issuing "Piece Rate
Determination Order No. XII-03 for DOLE
Philippines Inc.," that defined the high
volume of work and its corresponding
trifling amount of wage that the company
and its per "cooperatives" can impose on
their contractual workers. (EILER)
The company utilizes bothe external
and internal flexibization schemes.
External forms include direct-hiring of
workers without security of tenure for core
production such as casuals, trainees, parttimers, adn relievers, while outsourcing
labor from numerous labor and grower
cooperatives. Internal forms include flexible
work hours, multi-tasking, work sharing,
team work and flexible wages.
about 1,000 relievers daily working for
the company.
growers. One (1) worker usually works
on two (2) hectares of land.
Aside from the labor cooperative
members, fixed termers, project based
workers and relievers, Dolefil also benefit
from the workers hired by landowners
contracted by the company to produce
part of its production requirements. A
total of 5,200 hectares are covered by
contract growing. There are about 2,600
workers hired by landowners or contract
Workers hired by contract growers
do quota work and receive an average
daily wage of P40, far lower than the
wages received by agricultural workers
in Dolefil plantations. Contract grower
workers comprise 13 percent of the total
workforce.
125
Ripples and Rising TIdes
Working Conditions
Wages for regular workers is a little
higher (at Php310 per day) than the
minimum standard set by the Regional
Wage Board. Through the workers’
consistent struggle, regular workers enjoy
benefits such as a paid vacation leave of
26 days per year and an annual 20- day
sick leave.
Regular workers also have a monthly
rice subsidy of Php400 and receive a 13month pay together with a productivity
bonus. Around 60 days after, workers
receive a bottom-line bonus which
amounts to as much as Php20,000 per
year.
Regular workers also receive
hospitalization and social security system
benefits. They can also apply for housing
and loan programs. Workers also receive
yearly family education allowance for
their children and maternity assistance.
While regular workers enjoy these
benefits won through CBA negotiations,
contractual workers have to strive hard
to be able to feed their families. They
have to reach their quota to receive
the minimum wage. Other contractual
workers are given a substandard
minimum wage of Php245.
On the other hand, an average of
P500 (approx. US$ 10) is deducted
from the already meager wages of Labor
Cooperative members every payday. The
deduction becomes higher when workers
have loans to pay.
Workers handling chemicals usually
suffer from skin, heart and lung diseases.
Osang has been working for Tibud
Cooperative for nine years aready. She
has been a piece-rate worker who only
gets P0.22 for every pineapple plant
she works on. She works with a "gang,"
a team of about eight workers, who
have to fill-up for trucks with 16,000
plants or seedlings in a week. Each
of them would then receive a daily
pay of P440 for a week. After a week's
work, she and her gang were able to
fill in 10,000 seedlings in the truck.
However, when payday came, they
found out that only 1,000 seedlings
were paid. They complained about
this to their manager but were only
shrugged off. They also have to pay for
their safety equipment such as gloves
and masks.
The union secretary exposed the odorous
waste basin of Dolefil which does not
only harm the workers’ health but also
the nearby communities. This issue was
attended to by Dolefil management but
the worker was eventually dismissed by
the company from work.
Early Organizing Experiences
The first attempt at organizing in
Dolefil was by the Associated Labor
Union (ALU). They organized the
monthly-paid employees of Dolefil and
established the Dole Employees Union.
ALU believed that first organizing the
supervisors and other management
level employees would facilitate the
organizing of the whole workforce since
the supervisors are influential among the
workers. This wasn't the case, however.
126
Hermie started working at DOLEFIL
in 1997. He actively worked for her
co-workers’ rights and welfare since the
beginning. When a supervisor abuses
or chides a worker, Hermie intervenes
and defends the worker. Because of his
efforts, his supervisor transferred him
to more difficult work.
In August 2006, Hermie was
dismissed from work on charges that
he was “sabotaging” the company’s
operations. He was accused of urging
his co-workers not to swipe their ID’s
during lunch breaks.
In the past, agricultural workers
of DOLEFIL were required by the
company to swipe their ID cards only
when they report for, or leave, work
and not during lunch breaks. This was
Organizing Experiences in Economic Zones
due to the fact that there were only
1000 machines for the workers, which
then numbered by the thousands.
Those who swipe their cards last due
to the long queues at the swiping
machines experienced pay cuts as they
unavoidably came late for the afternoon
work. Thus, workers refused to swipe
their ID cards during lunch breaks.
Management used this against Hermie
since he was an active union officer.
Since he lost his job, Hermie has
found it difficult to sustain his family.
He became deeply indebted. His
children lost their scholarship, and thus
were forced to stop schooling. After
four years, his case remained pending
with the fifth division of the National
Labor Relations Commission (NLRC).
The General Santos Federation
(GESAFED) started organizing the
workers in the Engineering Department
in 1966. GESAFED campaigned for a
wage increase and payment of “standby
time”, the time workers usually do not
have work to do in their production
line. They staged a picket protest, but
the campaign was clipped short by a
return-to-work order issued by the then
Ministry of Labor.
Association of Federated Labor Unions
(PAFLU).
The first certification elections were
held in 1969. Three unions participated
– GESAFED, ALU, and the Philippine
Association of this became a strategic
factory for organizing for many labor
groups. Soon other labor groups were
formed in Dolefil such as the Philippine
In 1970, the number of workers at
DOLEFIL reached 8,000. It became a
strategic factory for organizing by many
labor groups.
Since none of the three got the
majority vote, a run-off elections was
held between GESAFED and PAFLU.
The two unions however chose to simply
divide the union dues. GESAFED
represented the agricultural workers
while PAFLU represented the industrial
workers of the company.
The CE held in 1972-1974 was
participated in by several unions
Ripples and Rising TIdes
– GESAFED, PAFLU, ALU and new ones
like DPEA, DPEA, Saranggani Marine
General Workers Union (SAMAGEWU),
Polomolok Labor Union (PLU), Dole
Employee Labor Union (DELU), and
the Saranggani Federation of Labor
(SAFELA).
DPEA won in the said election but
ALU and PLU protested. Due to the
pending cases, no election was held from
1972-1974.
By 1974, another certification election
was held where DPEA won. DPEA was
able to negotiate a small wage increase.
They likewise successfully demanded for
the abolition of the company’s practice
of “rain out” for agricultural workers –
where workers are not paid when work
is halted by the rain. They were also
able to demand free safety devices and
equipment for workers.
In 1978, PLU won the certification
election and was able to demand
transportation allowance in the form of
coupons for workers in the industrial
department. Workers still enjoy this
benefit up to the present.
The workers' demands were however
not heard from 1980-1983 when ALU
filed a protest against DPEA which won
in the 1980 certification election.
From 1963 to 1980, systematic and
no consistent workers' education and
trainings were organized by the union.
During negotiations, only leaders of the
union who won the certification elections
participated. The workers therefore had
the tendency to be dependent on their
127
leaders. There may have been gains for
workers, but according to a worker who
has witnessed and joined the different
campaigns led by different labor groups,
the workers will have more to fight for
and gain if the members, and not only
their leaders, join the negotiations and
conduct collective actions.
Raising Workers' Consciousness and
Unity
IN 1980, the Polomolok Catholic
parish priests started organizing
workers through education and training
programs. The church established a labor
apostolate, which served as a labor center
which took up the workers’ plight and
guided them in their efforts. The labor
apostolate then formed the Alyansa ng
mga Mamumuo (AMADO KADENA),
an organization that gathered workers
and conducted education work. At the
same time, organizers of the National
Federation of Labor (NFL) started
organizing in DOLEFIL and formed
PAMAO.
In a certification election in the same
year, PAMAO-NFL joined forces with
Amado Kadena (AK) and won over
other seven labor groups. However, ALU
protested. Knowing that no negotiation
would take place if the issue is not
resolved, the workers who supported
PAMAO-NFL held mass actions. More
than 5,000 workers participated in the
mass actions in the form of pickets. The
management was forced to recognize
PAMAO-NFL and started to open
negotiations ignoring ALU's protest.
128
The workers, under PAMAO-NFL
leadership, scored these victories:
• 10% wage increase (compared
to previous increases of only 25-50
centavos)
• Reinstatement of 2 terminated
workers from the agricultural division
• Reinstatement of 27 terminated
workers in the cobox in Calumpang
through a boycott of overtime work
• Free meals for workers working
overtime through a dialogue with
management conducted by leaders
from the preparation and processing
department
• Release of three workers detained
by the 31st Infantry Batallion of the
Philippine army by pressuring the
management through work stoppage
in the preparation and processing
departments
• Support for the strike of workers in
Stanfilco, an affiliate company of Dolefil
and for the farm workers in Salkak
Maligo, Polomolok
It was also during this time that
workers were awakened to a militant and
systematic way of organizing. Workers
have realized not only their rights as
workers but also their role in the society
According to Boy, a former union
leader, the workers became actively
involved in discussions about their
working conditions. These discussions
gave them hope for their struggles. They
actively encouraged other workers to join
the study groups.
Workers have also helped in
organizing community groups in
Organizing Experiences in Economic Zones
Polomolok where barangays are generally
working class communities
Conflict of Ideas
The workers struggle was sustained
until 1988 when differences in ideas
started to divide the leaders of PAMAONFL and AK. The differences started
with the issue of disaffiliation from the
Kilusang Mayo Uno which leaders of
NFL demanded. Local union officials,
however, disagreed.
Other contentious issues arose with
the election of the union president as
vice-mayor of the town in 1986 and
president of the Board of Directors of the
workers’ cooperative. He refused to give
up any of his positions.
In 1990, AK decided to apply for a
separate registration. In 1991, AK won
majority of positions in the certification
election. NFL remained affiliated with
KMU.
In 1994, local elections were held
where AK won. They decided to resign
later, however, upon learning that NFL
officials were planning to impeach them
for refusing to disaffiliate from KMU.
In 1996, AK lost in the elections.
Nevertheless, AK continued with
its education program, raising its
membership to 1,300 by 1996. The
workers realized which union really gave
importance to their interests.
At this time, a former union president
fell ill and needed to be transferred
to better hospital facilities in Metro
Ripples and Rising TIdes
Manila. However, the hospital demanded
a Php100,000 down payment for
admission. Management was not inclined
to provide assistance despite a picket
staged by 300 workers in front of the
Human Resource Office.
AK leaders then solicited signatures
of workers willing to give Php1000 from
their salary to raise the needed amount.
Within just 2 hours, 1200 workers signed
to help their fellow worker. Leaders
took this to the management who was
embarrassed by the show of unity of the
workers. Management later decided to
provide the medical assistance without
deducting the amount from the workers’
wages. AK gained the respect of both
management and workers.
Recovering Workers’ Confidence
AK, which later affiliated with
NAFLU-KMU, won the 2001 certification
election. Protests were filed by ALU and
NFL. The workers, however, showed
their support for AK. More than 3500
workers came out and staged a picket.
The following day, the management
immediately called for the start of CBA
negotiations.
The workers wore ribbons and t-shirts
which expressed their demands that
including abolition of the lunchtime
swiping requirement. The workers
succeeded and won a monthly rice
subsidy of 30 kilos, a wage increase of
more than 10% and company recognition
for fulltime union officers. They also
succeeded in reinstating dismissed
workers.
129
Fight against Contractualization
In 2005, Amado Kadena successfully
campaigned for the regularization of
about 1600 contractual workers in 2005.
This accounts for about 10% of the total
contractual workers in Dolefil. Many of
these workers have worked for Dolefil for
10 years.
This was the result of a painstaking
study that AK leaders conducted from
March 2001-2004. They would daily
get the number of contractual workers
working in the day and night shifts
in four departments (preparation,
cookroom/processing, tfc, pcfp) of the
industrial section of Dolefil. Data showed
that the average number of contractual
workers needed daily is 1600.
Leaders brought this issue to the
negotiations in 2005. Management
officials argued that these workers were
just relievers who have to replace absent
regular workers. But AK’s records showed
that only 50 to 100 regular workers are
usually absent on any single day.
With sufficient data, union leaders
were able to justify that these contractual
workers are actually part of core
manpower in Dolefil and demanded
that they be regularized immediately.
Management was compelled to accede to
the workers’ demand.
Efforts to organize contractual workers
were also done by AK. Leaders organized
meetings of contractual workers and
conducted education sessions. Soon
enough, leaders were able to form groups
and build contacts in the different labor
cooperatives.
130
Organizing Experiences in Economic Zones
Amado Kadena-NAFLU-KMU
the local protest actions but those which
fought against corruption in national
government and those that called for
justice and social change.
Attacks on the Union
In 2005, management began to
pressure union officers into disaffiliating
from NAFLU-KMU.
The union built on the success of
this fight against contractualization to
strengthen its organization.
From 2001-2005, workers education
continued with an average of 18- 25
workers joining discussion groups.
Monthly meetings of board members
of the union were conducted. There
were also regular meetings for the 21
department level organizations and 400
shop stewards.
Department level organizations are
composed of officers similar to the
structure of the union, which helps the
union implement plans, gather ideas
from workers and provide immediate
support and help for workers in need.
The union also had functioning
committees for education, organizing,
health, women, finance, alliance work
and campaigns which help the union
officers in their different responsibilities.
With a systematic union organization,
active members reached 85% of the
total membership. Participants in
mobilizations outside the company
reached 3200. Workers joined not only
In 2006, workers again showed their
solid support for AK in the certification
elections, despite management’s attempts
to bribe workers by distributing t-shirts
and payment for not voting AK.
However, the new management of
Dolefil, which was more adversarial than
the former was not ready to negotiate
with AK.
The Labor Code of the Philippines
states that management has to implement
the previous CBA in the absence
of a new agreement. However, the
new management has been violating
provisions of the previous CBA and
continuously pressured union officers.
Two officers of the union were
terminated for being absent without
permission. They were the fulltime
union officers recognized in the
2001 CBA negotiations. This was
management’s first move in order to sow
fear among the workers.
Management began questioning all
union activities. Management started not
to honor union leaves, making education
sessions and meetings of workers more
131
Ripples and Rising TIdes
difficult. The management also filed
various cases against the union president.
In 2006, management officials
organized a demonstration against the
union, mobilizing labor contractors and
growers’ cooperatives. Management
also labeled the union as communist
terrorists.
Elements of the military conducted
surveillance of union activities and
movements by union leaders. They also
organized house-to-house campaigns
demonizing the union and its leaders in
nearby communities.
The union filed a complaint with
the Commission on Human Rights
but military officials asserted that they
have jurisdiction over terrorism and
insurgency, which they claim the union
leaders are guilty of.
The union president also claimed to
have knowledge of management’s plans
to abduct him. He learned this from an
operative that management was supposed
to hire who eventually backed out of the
operation.
Other active union members were
illegally terminated from work on
fabricated charges.
One case involved the planting of
knives in the lockers of about 20 active
union members from the preparation
department and charging them with
theft.
CBA negotiations failed in 2006 and
the workers planned to stage a strike
but had to withdraw upon learning that
Department of Labor and Employment
(DOLE) was issuing Assumption of
Jurisdiction and return-to-work orders
on the day of the strike.
The labor Secretary then brokered a
compromise for the two parties which
demanded the Dolefil management to
grant the workers the following: wage
increase of not more than 6%, increase in
the monthly rice subsidy to Php400 from
the previous amount of Php390.
But management’s continued with
its schemes. While recognizing AK as
the workers’ sole bargaining unit, it also
supported the setting up of another
union, by bribing some workers.
The company-sponsored union then
challenged AK and filed cases against AK
officers.
As early as 2007, the management
has been recruiting workers to URDole. At first, URDole virtually acted as
mouthpiece of management by staging
campaigns for the encashment of rice
subsidies and lowering union dues.
URDole also sent workers to seminars
conducted by elements of the military
where AK leaders were branded
“communists” and should therefore not
be trusted by the workers. Workers were
paid three-days’ worth of salary just to
attend the seminars. Workers who refuse
to attend these seminars were blacklisted.
In May 2009, workers voted on the
issue of encashment of rice subsidies.
With the help of management, URDOLE won in the referendum. While
132
DOLE ruled that AK oversee the cash
distribution, management forwarded the
checks to UR-DOLE.
Beginning January 2010, management
likewise forwarded union dues to URDOLE instead of AK.
In February 13, 2010, members of URDole conducted an assembly purportedly
to discuss the rice subsidy issue. But the
meeting was actually used to impeach the
union officers of AK and to elect a new
set of union officers under UR-Dole.
AK filed a case stating that the
assembly was patently illegal, has not
followed due process and is a clear
violation by UR-Dole of union rules on
impeachment and election of officers.
The DOLE consequently released a
status quo order, i.e., that management
should recognize and deal with AK while
the labor dispute is being settled. But
management refused to recognize AK.
Instead of filing an interpleader case,
management pressured the DOLE into
recognizing UR-Dole. This was a clear act
of interference by management in union
affairs which violates labor laws.
Union meetings have become
irregular since then. Department-level
organizations have also since become
inactive due to restrictions imposed by
management on the workers’ movements.
Management filed several cases against
the union leaders which prevented
them from effectively performing their
functions.
Organizing Experiences in Economic Zones
Due to the various management
attacks on their union, active members
has dropped to only 25% of the total
regular workforce.
Union officials realized their weakness
in propaganda as compared with the
propaganda done by management. With
a few active union members left, leaders
are continuing the fight against the
management's schemes of union busting.
They are renewing the education drives
among the workers, in an effort to raise
the workers’ confidence and militance
in opposing management attacks against
their right to free association.
It is clear in the experience of AK how
management used divide and rule tactics
in order to weaken the resolve of the
workers to fight.
Amado Kadena leaders have not
totally lost hope, knowing that they
are on the right side and are genuinely
fighting for workers’ rights. With
repressive conditions prevailing inside
the company, they have shifted their
work to the communities where they
hold discussions and education sessions
among workers.
Non-Conformity with SA 8000
At present, DOLEFIL risks losing its
Social Accountability (SA) certification
because of the company’s non-conformity
with SA requirements on freedom of
association and collective bargaining
rights of workers. This was revealed in
the recent audit report of the Societe
Generalle de Surveillance (SGS) from
March 23-27, 2010.
133
Ripples and Rising TIdes
SA8000 is an internationally-accepted
set of social standards developed by
SA International (SAI) to measure
the performance and responsibility
of multinational companies. SA8000
is based on the International Labour
Organization (ILO) and United Nations
Convention on human rights.
According to the International Labor
Rights Forum (ILRF), an international
non-government organization based
in Washington, Dolefil management
has violated the workers' rights to free
association.
SGS has issued Corrective Action
Requests (CARs), giving Dolefil
management 90 days to respond.
Otherwise, the company's SA8000
certification will be revoked, exposing
DOLEFIL as a human rights violator,
an image that will adversely affect
DOLEFIL’S international standing. ■
134
Organizing Experiences in Economic Zones
MACTAN EXPORT PROCESSING ZONE:
forging alliances, community organizing
Cebu is strategically located in the Visayas, and serves as a gateway for Central and
Southern Philippines.
Its ideal location has made it a center
for foreign direct investments in the
Visayas and serves as a base to over 80%
of the inter-island shipping capacity in
the country. It boasts of having more
air and sea linkages than the country’s
capital, Manila. It has a sheltered deepwater port and an international airport,
which provides easy access for the import
and export of goods.
To date, there are a total of 25
operating economic zones in the region,
the biggest of which are the seven (7)
manufacturing ecozones – the PEZAoperated Mactan Export Processing
Zone (MEPZ) I, and the privately
operated MEPZ II, Cebu Light Industrial
Park, New Cebu Township, West Cebu
Industrial Park, Cebu South Road
Properties (operated by the local City
Government) and the MRI Ecozone
which serve a total of 246 firms and
employ over 100,000 workers. MEPZ II
is reputed to be the second largest export
processing zone in terms of number
of locators, next to the Cavite Export
Processing Zone (CEPZ).
In the first half of 2009, these ecozones
have exported $1,777,921,000 and
imported $1,535,580,000 worth of goods.
These ecozones hosts some of the
world’s biggest corporations such
as TMX, which is engaged in watch
assembly, Lexmark, which manufactures
inkjets for laser printers, and Fairchild
Semi-Conductors Philippines.
Workers’ conditions
More than location however, a very
cheap and non-unionized labor force
serves as the primary magnets for foreign
capital.
These zones take advantage of the high
poverty incidence in neighboring regions
in the Philippines, with some of its
workers coming from as far as Mindanao
Table 18. Summary of SEZs
in Cebu
Classification of EPZ
Number
Manufacturing
7
Agro-Industrial
0
IT
17
Tourism
11
Medical
0
TOTAL
25
Source: PEZA, 2010
135
Ripples and Rising TIdes
Table 19. Number of
Manufacturing Companies
in Cebu
EPZ
Bilang
MEPZ I
146
MEPZ II
50
Cebu Light Industrial Park
22
New Cebu Township
7
West Cebu Industrial Park
3
MRI Ecozone
17
Cebu South Road Properties
1
Kabuuan
246
Source: PEZA, 2010
where employment opportunities are
rare. The Regional Wage Board of Cebu
has pegged the minimum wage at P267,
a far cry from the P725 Daily Cost of
Living, according to the National Wage
and Productivity Commission (NWPC).
Many of the companies inside these
ecozones employ a predominantly
women workforce. For instance, 75% of
the workforce at MEPZ I are women.
As in other economic zones, the
hiring of contractual workers is common,
whether direct-hired or through agency.
There are even cases of “open contracts”
or those that last for ten months to one
year.
As is common to export-oriented
companies, production is highly
dependent on market demand which
also determines the size of the workforce.
Forced overtime that sometimes even
extends to three days’ uninterrupted
work is common during peak periods.
Forced leaves, compressed workweeks,
temporary shutdowns or lay-offs are
common during lean periods.
Workers commonly reside in boarding
houses in barrios (villages) surrounding
these ecozones.
In communities surrounding MEPZ
I, rental varies according to the type of
housing and facilities available. Average
number of workers per boarding
house is anywhere between 10 and18.
Rent may range from 300 to1,500
per month, exclusive of payments for
water, electricity and use of household
appliances.
This sharply contrasts with the dirt
cheap rentals that locators inside the
ecozones enjoy. Locators paid a measly
monthly rental of only about $ 0.33-0.36
per square meter in 2005.
Companies operating within
MEPZ are organized into the
MEPZCEM (Mactan Export Processing
Zone-Chamber of Exporters and
Manufacturers).
There is also the MEPZ-HRA
(MEPZ Human Resource Association),
composed of human resource managers
from the different locators inside the
ecozone, and which has been very vocal
in supporting company moves against
workers’ demands.
In August 2007, for instance,
MEPZCEM and MEPZ HRA filed a joint
resolution with the Regional Tripartite
Wages and Productivity Board asking the
Board to deny two labor groups’ petition
136
for a wage increase. The management
groups cited economic difficulties. Yet, a
month prior to this, the same associations
held a sports fest aimed at “uniting
exporters and manufacturers” at MEPZ,
celebrating the ceremony with a “lavish
display of color and sportsmanship.”
(Aboitiz Land, 2007)
While industrialists and human
resource managers enjoy such perks
unhampered, conditions inside the
zones are not so favorable to the setting
up of workers’ organizations, much less
workers’ unions.
There have been many attempts
since the early 80’s to establish workers’
unions inside these ecozones, but none
have lasted as company managements
were quick to bust such efforts even
as workers’ rights are supposedly
guaranteed by the Philippine labor Code.
This, management is able to do with the
help of PEZA Security forces, the local
police and elements of the Armed Forces
of the Philippines from the two military
camps in Mactan Island – the Mactan
Benito Ebuen Air Base and Naval Forces
Central that operates in the Visayas and
Mindanao.
Early Attempts at Organizing
Workers’ organizing efforts started
way back in the early 80’s, only a year or
two after the establishment of MEPZ I in
1979.
This could be attributed to the fact
that Cebu has had a long history of
struggles against these economic zones
when entire urban poor communities
Organizing Experiences in Economic Zones
were demolished to pave the way for the
construction of these ecozones in various
parts of the island.
At MEPZ I, the Young Christian
Workers, a church-backed workers
organization that was very active in
the 80’s in several parts of the country,
started organizing work at Fairchild,
TMX and Mactan Apparel.
In 1985, NAMALAP (United Workers
of Lapu-lapu) was established. The first
strike inside the zone occurred. But
organizing took a downturn, and it was
only in 2000 when union organizing
efforts were revived by different labor
federations at Fairchild, Timex, Maitland,
Cebu Mitsumi and Fedder Apparels
and Mactan Apparel. These efforts were
always cut short, however, when worker
leaders were illegally dismissed by
company management.
Such was the case at Mactan Apparel.
The workers organized discussionmeetings in nearby communities.
Management however, soon learned
of these activities and launched a
retrenchment program that included all
who attended the activities. The workers
staged a picket but were dispersed by
company security forces.
In 2002, the LAWA (Lapu-lapu
Workers’ Alliance) was established as a
mutual aid organization of contractual
workers. It did not last long, however,
as the organizers’ attention was soon
diverted to the demolition campaigns
being launched by government against
urban poor communities.
137
CBBRC 2010
Ripples and Rising TIdes
Workers from PANWO who were illegally dsimissed from work because of forming an
organization.
As a means of circumventing the
prevailing, albeit unwritten, antiunion policy prevalent inside the zones
- workers have found other ways of
bonding together in order to fight for
their interests.
These centers on reaching and
organizing workers in the various
communities surrounding the
ecozones. These include communitybased contractual workers’ councils or
associations. It also includes the setting
up of U4WR or Unity for Workers’
Rights, a city-wide alliance of workers.
The PanPhil Workers
Organization (PANWO): A nonunion workers organization
PanPhil Sportwear Incorporated
is a garments factory owned by Larry
Chin from Taiwan. Its factory is
located at MEPZ 2 and employs 293
workers. Around 252 of these workers
are on regular status while the rest are
categorized by the company as “on call
contractual workers.”
The company manufactures
shorts, jackets and jogging pants for
international brands Tommy Hilfiger,
Callway, Missy and Alex Canon, among
others, which are exported to Europe and
the USA.
138
The company started operations on
January 6, 1999, with workers coming
from Jo & Larry Garments, which also
belonged to Larry Chin. The latter
company closed shop after workers
staged a picket rally in protest of the
company’s refusal to pay its workers the
minimum wage as set by the regional
wage board of Cebu.
Company shutdowns, retrenchment,
illegal and unjustified suspension and
forced overtime work are the primary
issues that the workers of PanPhil
contend with.
The shutdowns began as early as 2001,
two years after the company started
operations. Until 2005, it was no longer
uncommon for management to declare a
shutdown, which usually lasted for three
days. Workers are usually only given one
day’s notice for the shutdown, and are left
with but promises of re-hiring once the
company resumes operations.
Workers estimate that these shutdowns
occur at least thrice a year. The company
cites the lack of raw materials to be used
for production as the primary reason.
Beginning 2006 until 2008, the threeday shutdowns began to last a week.
Moreover, 16 regular employees were
retrenched in September 2008, weeks
before the global financial crisis reached
its peak.
On February 8, 2009, the company
declared a two-month shutdown
which lasted until April 3, 2009. This
alarmed the workers since it meant
that they would not receive their wages
Organizing Experiences in Economic Zones
for a month. The company had earlier
promised to pay the workers for one
(1) month and provide them with rice
subsidy.
The workers were then asked to sign
a piece of paper. According to company
representatives, they will be notified
by mail when the company resumes
operations. The workers even paid P21
each for postage. Workers found out
later that their signatures were used by
PanPhil as proof to the Department of
Labor and Industrial Relations that the
workers agreed to the shutdown.
In February 23, 2009, six workers from
PanPhil filed a complaint with PEZA,
asking them for details of the shutdowns
and if the latter has the authority to
reduce the length of the shutdowns. They
insisted that they should at least receive a
subsidy for the months that they do not
have work. The PEZA Administration
answered that the shutdowns and the
resumption of operations was company
prerogative and that subsidies were
privileges only the management has the
right to decide.
Company management responded by
giving the workers their due wage along
with a 15-kilo rice subsidy, except for the
six workers who filed the complaint. The
DOLE is yet to decide on the case.
Pan Phil resumed operations. The
company imposed forced overtime
among its workers beginning May 11
until June 29, 2009. The workers had
to work for an additional three hours
besides the regular eight. Permission to
be exempt from overtime was never given
Ripples and Rising TIdes
to the workers and those who disobeyed
were suspended for as many as five days.
After over a month of forced overtime
work, the workers were stunned when
management suddenly announced
another weeklong shutdown from July
1-8, 2009. Management reasoned out
that there was a shortage of orders from
the brands they supplied to. The workers
believed it was unfounded, considering
that the company was imposing forced
overtime only a few days before.
Based on interviews with the workers,
there were at least five instances of forced
shutdowns of varying lengths for 2009.
The company took advantage of DOLE
Advisory #2 which allows companies to
impose cost-reduction schemes.
But the worst was yet to come for the
workers. On 2010, PanPhil management
announced that, beginning January 4
until March 30, workers can only work
for three days a week as a result of
reduced orders. Management cited the
global financial crisis as the reason.
On February 2, 2010, 31 workers
received a retrenchment notice, effective
February 28. According to the notice, the
company had to reduce its workforce to
prevent bankruptcy.
The retrenched workers did not
believe it; a week before their dismissal,
the company had re-hired “on-call
contractual workers.” At the same time,
the company hired new contractual
workers the day after their dismissal.
139
The workers, including those who
were not dismissed, believed that the
real reason behind the dismissal was to
eliminate the threat of union organizing
among the workers. The dismissed
workers included the six who earlier filed
a complaint regarding the rice subsidy.
They also feared that Panphil was
laying the grounds for becoming a
subcontractor for another garments
company. They fear that this will result in
more cases of retrenchments.
However, the workers of PanPhil
took these shutdowns as opportunities
to organize themselves. They attended
discussion fora sponsored by the Center
for Trade Union and Human Rights
(CTUHR), the Unity for Workers Rights
(U4WR) and the Missionaries of the
Sacred Heart – Center for Women,
Children and Labor (MSC-CWCL).
The six worker leaders invited friends
who then invited others; the invitations
snowballed into a recruitment drive that
led to the rapid formation of their own
organization.
Instead of immediately organizing
a union, however, the workers, in
consultation with members of the
CTUHR and U4WR, decided to form
an organization – the PanPhil Workers
Organization (PANWO) with the
objective of expanding their ranks first.
The workers believed that even if they
succeeded in establishing a union, it
would be short-lived considering their
current level of organizational strength
vis-à-vis PEZA’s and MEPZ locators’
history of union-busting.
140
Even birthday celebrations turned
into opportunities for inviting others to
join PANWO or to attend educational
discussions on union organizing. Later
on, it was the new members themselves
who recruited for PANWO.
The recruitment of new members
was done entirely in secret. Even their
activities were held in urban poor
communities, away from the factories,
and more accessible to the workers who
lived there.
Workers who were afraid to air their
grievances to company management
turned to PANWO.
Their actions inside the factory were
constantly monitored and they were
reprimanded whenever they are seen
talking to their fellow workers.
The managers branded the first
chairperson of PANWO as a “founder.”
Even her trips to the restroom was timed
and monitored.
There were even times when the
leaders and workers were followed home
and visited by managers who offered
them bribes if they would stop their
organizing work.
These moves by management however
proved futile as the workers were
determined to strengthen PANWO. They
explained that it was the issues they faced
– shutdowns, forced overtime and even
the harassment itself – that solidified
their bond.
CBBRC 2010
However, management eventually
noticed PANWO’s efforts, as the leaders
of the organization gained respect from
their fellow workers. Identified leaders
became the victim of harassment from
supervisors and managers.
Organizing Experiences in Economic Zones
Workers from PanPhil who are also members of PANWO and MSC-CWCL.
141
Ripples and Rising TIdes
Meanwhile, the workers also realized
that for them to advance their cause,
they must successfully gain the support
of their communities. To do this, they
petitioned the Missionaries of the Sacred
Heart at the Church of the Virgin of the
Rule to establish a labor desk in support
of the workers in Mactan. In response,
their letter was read by the priests during
Holy Mass to solicit public sympathy for
the workers’ plight. The missionaries later
established the Missionaries of the Sacred
Heart – Center for Women, Children and
Labor (MSC-CWCL).
The priest who administered the desk
also became an advocate of workers’
rights. He also recruited volunteers,
and solicited support, from among the
church’s parishioners, for the center.
The center served as a social center
for workers of Mactan Island, including
those from MEPZ I & II. Workers
with legal problems were referred to
allied labor institutions for legal advice.
Livelihood projects such as training in
candle-making and herbal medicines
were also provided. The parish priest
likewise held socio-religious teachings. In
all, the Center became a base for reaching
the broadest possible number of workers
and helped strengthen the U4WR, an
alliance of workers in the island where
PANWO had began to play an active role.
In a span of two years, PANWO’s
membership grew to over 70, over 20%
of the total number of rank and file
workers in PanPhil. They have already
successfully held an election of officers
twice.
Members were organized into
committees – education, organizing,
finance, services, and documentation.
They held a general assembly every
month.
Educational discussions on workers
rights and labor standards, as well as on
current local and national events, are
regularly held for old and new members.
Because of their growing strength,
management played their final card –
retrenchment, using the global financial
crisis as an excuse. Most of the 31
workers retrenched in February 2010
were members of PANWO, including all
of its officers.
The retrenched workers were called
one-by-one, according to their position
in the organization, to be informed of
their retrenchment.
Despite the retrenchment of their
officers however, the remaining PANWO
members have continued the task of
organizing. A new set of officers was
elected to take the place of those who
were retrenched.
Immediately, the MSC-CWCL
organized a livelihood project for the
displaced workers, especially for those
who did not accept the separation pay
offered by the company.
A campaign to protest their illegal
retrenchment is also being organized by
the workers, with security of tenure and
the right to free associate as their primary
demands.
142
The workers’ fervor spilled over to
a barrio (village) adjacent to MEPZ I
where workers from other companies
organized a community- based workers’
organization with the objective of
organizing their neighbors, who, like
them, worked inside the economic
enclave.
Takan Workers Association:
Organizing Workers in the
Communities
The Takan Workers Association
(TWA) was founded by workers who
were members of (NAKALAP), a
community organization in Brgy. Ibo,
Sitio Tacan beside MEPZ I.
Majority of the community’s residents
are workers from various companies
inside MEPZ I such as Mactan Apparel.
They came from different provinces
in the Philippines as far as Mindanao,
to Mactan Island for the employment
opportunities promised by the ecozones.
They live in Brgy. Ibo by renting rooms
from homeowners in the village.
NAKALAP is a community
organization of the residents of Brgy.
Ibo. It led a campaign in 2009 against the
threat of community demolition.
It also regularly holds educational
and political discussions for its members
and other residents of the village. Since
majority of the community residents are
workers, most of the discussions being
sponsored by NAKALAP focused on
labor rights and issues. These became the
venue for the workers to realize that the
Organizing Experiences in Economic Zones
companies where they work have been
denying them some of their basic rights.
Like the workers of PanPhil which is
located in MEPZ II, the worker-residents
of Tacan complain that they are being
forced to work overtime, under threat of
suspension if they refuse to do so. They
also complain that their benefits are
being denied them.
A worker interviewed confided that
her requests for leave, including those for
medical reasons, were disapproved by the
company she worked for.
The workers who joined NAKALAP’s
discussions realized the necessity of
advancing their rights collectively.
However, they feared that it would
be difficult and risky to immediately
organize their fellow workers inside
the factory. As stated, the repressive
management of the factories had instilled
fear of losing their jobs among the
workers should they decide to organize.
The members of NAKALAP decided
to build a community-based organization
of workers. It would be organizationally
independent of NAKALAP since the
latter was focused on community issues.
This became the start of Takan
Workers’ Association (TWA), which was
formally launched in September 2009. It
currently has 17 members, including a
full set of duly elected officers.
Since a workers’ organization was
virtually “new” to the officers and
members, they sought assistance from
labor institutions such as CTUHR,
Ripples and Rising TIdes
U4WR, and the church’s labor desk, the
MSC-CWCL. In a few months, however,
the organization now stands on its own
and has been planning and implementing
activities on its own.
The organization currently focuses
on expanding its current membership,
attempting to reach workers from a
bigger number of factories.
143
It remains to be seen whether the
organization will succeed. However, it
may be said that the very existence of
the organization is already a victory for
the workers in itself. It is proof that no
amount of repression can fully deny the
workers their rights to organize. ■
144
Organizing Experiences in Economic Zones
EXPERIENCES AT THE BAGUIO CITY
ECONOMIC ZONE:
the ebb and flow of worker organizing
The Baguio City Economic Zone (BCEZ) started operation in 1980 by virtue
of Presidential Decree 1825 (PD 1825) signed by then Pres. Ferdinand Marcos in
February 1979.
It was then called Baguio City Export
Processing Zone (BCEPZ), and came
eight years after the establishment of the
Bataan Export Processing Zone (BEPZ)
in 1972, the first export processing zone
in the Philippines,
BCEZ lies between Camp John
Hay, a former US military facility, and
the Philippine Military Academy. It is
surrounded by the barangays of Happy
Hallow, Kias, Loakan, Atok, Springhills,
Kadaclan and Fort del Pilar.
PD 1825 allotted a 56-hectare lot
adjacent to the 1,600-meter Loakan
Airport. Through Presidential Decree
1875 (PD 1875), the zone has expanded
to 113 hectares.
Among the 14 firms located today in
BCEZ, eight are foreign-owned, of which
three are American. The rest are owned
by Italian, German, Japanese, Korean,
and Norwegian investors.
In April 2007, President Gloria
Macapagal-Arroyo announced the
national government’s plan to close down
the Loakan Airport to give way to the
expansion of BCEZ. She later retracted
her statement when local officials raised
their objections.
Companies located within BCEZ
mostly produce and export knitted
clothing, electronics, transistors,
computer parts and high precision
components and systems for aerospace
and vehicles. Other companies are
engaged in business process outsourcing.
BCEZ is located in the southern
part of Baguio, a city also known as the
“summer capital of the Philippines”
where a huge number of tourists flock to
enjoy its cool climate. Baguio is situated
in the mountainous Cordillera region in
the North.
The largest of these firms is Texas
Instruments Philippines, Inc, a leading
exporter of semi-conductors in the
world market. One of the fast-growing
companies in BCEZ is Sitel Philippines.
145
Ripples and Rising TIdes
Juicy Incentives
Companies inside the zone enjoy
many incentives that include tax holidays;
corporate income tax exemption on
imported capital equipment, spare parts,
materials and supplies; full repatriation of
profits; free infrastructure, free housing
for the foreign investor and their families;
lower electricity rates and low rental fees
for the use of buildings or factories.
It has also been trouble-free for
investors to process different business
documents. Papers pertaining to
export and import transactions as well
as bank requirements can be processed
within the economic zone as branches
of the Philippine National Bank and
documentation offices of PEZA, the
Bureau of Customs and the Department
of Trade and Industry are already present
within the economic zone. Completing
the requirements of the Garments and
Textile Export Board and the Board of
Investments was also made easier within
the zone.
Production output in BCEZ accounts
for a big bulk not only of the city’s but
also of the Cordillera Administrative
Region’s total exports. According to Ms.
Teresa Panga, BCEZ Zone Administrator,
a total export of $3.373 billion was
reached by BCEZ with a total investment
inflow of P3.667 billion in 2007. Almost
98% of the region’s manufactured goods
come from BCEZ while electronics
output from BCEZ accounts for 39% of
the region’s total gross output. (www.
mb.com.ph, Bernie Cahiles-Magkilat)
With an average of P100 million per
year, BCEZ accounts for just 2% of the
city’s gross income tax remittances. In
2007, the city government was able to
collect P120 million from BCEZ.
However, City Mayor Reinaldo
Bautista Jr. stated that BCEZ’s tax share
was drastically reduced to P50 million in
2008. According to Bautista, this was due
to tax holidays and incentives granted to
the companies operating within BCEZ to
lure them to stay. (Sunstar Baguio)
Working Conditions
With a total workforce of not less
than 12,000, Sitel Philippines, Texas
Instruments and Moog Controls
Corporation account for the largest
employment within BCEZ.
According to the Cordillera Labor
Center (CLC), 70% of the workers at
BCEZ are contractual workers while
80% are women workers. There have
been reports of gender discrimination
and companies preferring single and
unwed women workers to avoid paying
maternity leave.
Wages given to workers usually
meet the region’s minimum rate of just
P260 (roughly $5) per day for regular
workers. Big companies such as Texas
Instruments, Sitel Philippines and Moog
Controls give higher basic pay averaging
from P12,000-P14,000 per month or
P460-P538 per day.
Piece-raters in garments factories
in the zone, however, receive below
minimum basic pay. Companies
generally give benefits required by the
146
Organizing Experiences in Economic Zones
Table 20. Nationality of
Firms
Number of
Companies
Nationality
Table 21. Number of Firms
According to Industry
Industry
Number of
Companies
Italian
1
Garments
3
American
3
4
German
1
Electronics and
Semi-conductors
Japanese
1
Call centers
4
Norwegian
1
2
Korean
1
Home Decors and
Security Alarms
Filipino
6
Liquid Gas
1
law to regular workers such as vacation
leave and sick leave.
Forced overtime and quota system are
enforced by companies. Workers who
resist working beyond 8 hours are usually
issued memos by company management.
This usually affects their quarterly
performance evaluations and may even
cost them their jobs.
Due to harsh working conditions in
the zone, workers suffer from urinary
tract infection, asthma, migraine
and other respiratory infections, eye
problems. While the risk is high,
companies do not give enough protection
equipment and medical assistance
for workers. Workers also experience
different forms of verbal abuse and sexual
harassment.
Efforts to Organize
Among the earliest efforts to form
unions are those in Texas Instruments,
Adriste Philippines, CAFFCO and
Ampang from 1980-1984 with the help of
workers’ federations such as the National
Federation of Labor Unions (NAFLU)
and the Alliance of Labor Unions- Trade
Union Congress of the Philippines (ALUTUCP). These efforts were, however,
stifled by the repressive actions of the
companies aided by zone administrators.
In 1984, at the height of nationwide
protests against the dictatorship of Pres.
Ferdinand Marcos, workers from BCEZ
established chapters of WOMB (Women
for the Ouster of Marcos), a broad
network of anti-Marcos women activists.
After the ouster of the dictatorship, these
chapters, however, became inactive.
Workers from Commonwealth
Garments staged collective actions to
oppose company abuses in 1986. This
resulted to the formation of a union,
but it was soon busted by the company’s
management. Workers active in the
union were retrenched. Many were forced
to do overtime work and finish higher
quota. Their movements were closely
watched by security guards. The workers,
however, were not silenced. Instead they
147
Ripples and Rising TIdes
Table 22. Length of Company Operations
Name of Company
Length of
Operation
Adriste (Philippines), Inc
1980
Bay Sports Mfg., Inc.
1995
Sitel Philippines, Inc.
2007
Consolidated Industrial Gases, Inc.
1995
Dae Gu Apparel Corporation
1993
Tara Designs
1982
MOOG Controls Corporation (Phil. Branch)
1988
TI (Philippines), Inc.
1979
Transcripro Philippines, Inc.
2004
staged a strike to denounce the actions of
management.
Determined to demoralize the
workers, management fired the main
leaders of the union. Without their
leaders, the union started to weaken.
BCEPZ crumbled and many workers
died or were trapped in the ruins.
Workers’ protests continued despite the
crisis brought on by the natural disaster.
Workers from Adriste Garments staged
protest actions to resist working in
damaged buildings.
Efforts to organize women workers
were already present in 1986. At the same
time, members of the Young Christian
Workers (YCW) helped to organize
workers in BCEZ resulting in the
formation of a union at CAFFCO.
Workers from Commonwealth
Garments, Arax, BAC and Baguio
Precision demanded fair separation pays
and benefits after the companies filed
for closure after being tremendously
damaged by the earthquake.
In 1989, workers at BAC launched a
strike to demand fair wages and better
working conditions. Other protests also
occurred at Arax, Adriste and Baguio
Precision. On the same year, workers of
Ampang also staged a strike to demand
for a wage increase and other benefits but
the strike was short-lived due to disunity
among the workers.
From 1991-1997, organizing work
concentrated on educational discussions
to raise the workers’ consciousness and
build stronger unity not only of workers
in the factory level but more importantly
at the zone level.
In 1990, Baguio City was hard hit by
an earthquake. Most of the buildings at
In 2001, workers at Dong-in, a
garments firm, organized a union.
After the union’s recognition, Dong-in
management filed for company closure.
148
Organizing Experiences in Economic Zones
Talahanayan 23. Kabuuang Bilang ng Lakas-Paggawa*
Pangalan ng Kompanya
Bilang ng
Manggagawa
Adriste (Philippines), Inc
500
Sitel Philippines, Inc.
7,000
Consolidated Industrial Gases, Inc.
20
Dae Gu Apparel Corporation
350
Pycon Technology Philippines
300
Nam-Ay Ti Umili, Inc.
100
OMED Corporation
150
MOOG Controls Corporation (Phil. Branch)
1,300
The Norwegian Collection, Inc.
200
TI (Philippines), Inc.
2,000
Transcripro Philippines, Inc.
20
Pythos Technology Philippines, Inc.
150
Source: Cordillera Labor Center
The workers were blacklisted from the
zone.
From 2003-2006, due to repressive
conditions and the absence of fulltime
organizers, organizing work in the zone
became sluggish. In 2007, efforts to revive
the workers’ movement in BCEZ began.
Organizers from the Cordillera Labor
Center (CLC) and Kilusang Mayo Uno
(KMU)-Cordillera started conducting
social investigation of workers’
conditions in the zone, held seminars on
workers’ rights and gave legal advice to
workers.
The Adriste Experience
Adriste Philippines, Inc. (API) was
established in Baguio City in 1980. This
100% Italian company was established
by the owners of Portolano Products,
a major supplier of leather gloves and
knitted products for the European,
Japanese and US markets.
API produced leather products during
its first few years of operation, expanding
to knitted products in 1985. API supplies
products for popular labels such as Gap,
Globus, Coach, BP, Nostrome, AHL and
Tothe Trade.
API has two sections: the leather
and knitting section. Under the leather
section, different sorts of leather undergo
several operations such as: cutting,
smasso (stretching), assortment, sewing,
hemming, pressing or ironing before
the final product is packed. At least
three inspections at different stages of
production are done before packing.
149
Ripples and Rising TIdes
The knitting process, on the other
hand, involves: knitting, inspection,
closing of tips, washing, embroidery,
pressing, and repair until the knitted
product is inspected and packed.
Respondents
Interviewees included operators,
sewers, a production coordinator and
labor organizers.
According to them, there are currently
300 workers in API where more than
2/3 are women. There are 185 regular
workers while 115 are contractual
workers who are either classified as
floaters or piece-raters.
Floaters have no specific position in
production and instead are assigned to
different jobs as needed while pieceraters have specific positions in the
production but their wages depend on
the volume of their production output.
The youngest workers in the company are
20 years old.
Age qualification for employment is
anywhere between 18-50 years of age.
There was a time when the company
hired only lesbians because they are
perceived to be capable not only of doing
fine work but also heavy manual work
done usually by men, like lifting heavy
objects and stretching leathers.
Workers are hardly aware of the
Code of Conduct (CoC) and Corporate
Social Responsibility (CSR) of customer
companies since the company does not
hold discussions on these topics. Only
company rules and regulations (CRR) are
discussed by the company to newly-hired
workers.
Labor Conditions
Regular working hours is eight (8)
hours a day for six (6) days a week.
Depending on the product model,
volume of product orders and deadline of
product shipment, workers are required
to work overtime for more than 4 hours a
day and even during holidays.
There are times when workers have to
work for 36-48 hours straight. Overtime
work is supposedly voluntary, but
workers know that refusing to do so can
affect their performance evaluation or
could cost them their jobs.
The highest paid worker in the
company, the production coordinator,
receives an average of Php758.00 per day,
but does not receive overtime pay. She
has worked for the company for 27 years
and has never been allowed to be absent
from work even when she is sick when
the company is beating deadlines for
product shipment.
The lowest earners in the company
are the piece-raters who have an average
take home pay of Php245.00 or P9.40 per
pair of gloves for a quota of 26 pairs a day
regardless of the product model.
Based on the company’s handbook,
a worker’s wage increases depending on
the performance evaluation of the worker
and other factors such as volume of
company sales.
150
Regular workers are paid their 13th
month pay. There is also a Christmas
bonus although this has not been
consistent in the 30 years of API’s
operation. Paid leave benefits are vacation
leave for 15 days and sick leave for 15
days. Workers are given transportation
allowance of Php60.00 and meal
allowance during 4-hour overtime work.
The company provides other benefits
such as medical and dental health
care and maternity benefit for 45 days.
Contractual workers are not entitled
to any of these benefits. Since mid-‘80s
the company has stopped promoting
contractual workers to regular status.
The company collects 40% of the
worker’s salary for Social Security System
(SSS), Pag-ibig Fund and Philhealth
benefits. This applies to both regular
and contractual workers. But workers
complained that the company did not
remit these contributions for two years
in 2006. This was discovered by a worker
who tried to avail of her Philhealth
benefits. Tax is also deducted from the
worker’s salary. Piece-raters complain
that tax is still deducted from their salary
even if they have no personal income tax
identification numbers.
Workers are not allowed to leave their
work stations during working hours
except for emergency cases and only
after they have obtained permission from
their line leaders. Workers who are not
feeling well are allowed a one-day leave
or day-off if they can present a medical
certificate.
Organizing Experiences in Economic Zones
Lighting in the factory is adequate
for production while the temperature of
the working area is comfortable enough
because of the air conditioning units.
Health hazards come from the dust
from threads in the knitting section and
chemicals used to treat leathers. Sharp
objects are in the cutting section and
heavy machines are in the pressing/
ironing section. Workers are supplied
with little personal protective equipment.
Health problems acquired from the
workplace mentioned by the workers are
over fatigue, and weakening of eye sight.
Among the usual accidents that happen
at work are cuts and wounds from the
equipment used in production. In these
cases, the worker is advised to go to the
clinic for first aid treatment. There was an
instance when a worker’s hand got caught
in the pressing machine.
Respondents also mentioned that
they and their fellow workers have
experienced verbal harassment from
their managers.
Demands for a Wage Increase
There were only 30 workers when
Adriste workers first launched protest
actions. In 30 years of Adriste’s operation,
the workers fought for their rights for
decent working conditions and their
freedom to organize. Management on
the other hand has done many schemes
to discourage the workers from forming
their union or any worker’s organization.
In 1983, workers filed a petition for
a wage increase. Their petition, signed
by almost all of the workers, reached the
151
Ripples and Rising TIdes
then Ministry of Labor (now DOLE).
Management was not willing to give
them any increase for their hard work,
however.
During the dialogues, even if the
petition clearly states the significant
number of workers demanding a wage
increase, the representative from the
Ministry, upon management’s request,
asked those who wanted a wage increase
to stand up.
Many workers, afraid of losing their
jobs, didn’t stand up. The management
representative reasoned that there was
no demand for a wage increase from the
majority of workers. The representative of
the Labor Ministry agreed.
The workers who stood up in the
dialogue decided to form their union,
believing it was the only way that
management will listen. They started
convincing their fellow workers of the
need to organize themselves as one solid
bargaining unit.
They conducted gatherings to
reach out to their fellow workers. But
management got wind of the workers’
moves. It organized its own outings
and visited workers one-by-one in
their homes to conduct loyalty checks,
and threatened the workers with the
possibility of losing their jobs if they
supported the move to form a union.
Management conducted an election
to determine if the workers want a union
or not. On election day, a significant
number of workers were absent as
ordered by management. The votes tied,
with only one vote left. The last vote
which was actually in favor of a union
was read a No vote. The workers in favor
of a union lost by a single vote. A few
years later, the worker who read the
last ballot regretted that she followed
management’s orders.
Defending Workers’ interests
Amidst a Disaster Situation
A few months after the 1990
earthquake, the workers of API were
ordered to return to work even as the
building housing the factory was already
condemned by government authorities.
The workers refused to work in the
building, especially since there were still
aftershocks and the building was yet to be
rehabilitated.
Management insisted and tried to
sow fear among the workers. The latter
decided to hold a strike which lasted for
one month. This caused management
tremendous financial losses.
The Cordillera Labor Center (CLC)
provided education and trainings for
the striking workers. Through these
trainings, the workers became conscious
of their rights and welfare, of labor laws
and labor standards that should govern
the workplace.
The workers staged another strike
only a few months after returning to
work in makeshift tents. This time
they demanded the suspension of the
company’s technician who was ruthless
and forced the workers to do overtime.
They also conducted pickets at the
PEZA-Baguio office and talked on radio
152
programs to propagate their issue and
win public support.
Through their collective action, the
workers triumphed. The company was
forced to give the workers a three-year
back wage. They were able to assert that
overtime work must be voluntary.
In 1995, the workers united to form
their union. More than 80% of the
workers signed the petition for union.
But having realized that they are the
only company forming a union, and
having witnessed how the police forces
concentrated and smashed past unions,
they decided to wait a little while for
workers in other companies to catch up
with their organizing work.
They concentrated on consolidating
their ranks by forming study circles and
discussion groups. Organizing in other
companies, however, didn’t progress fast.
This affected the morale of the Adriste
workers, causing their efforts to lose
steam.
It was not long after when organizing
work in the zone took a backseat to the
plight of workers in mining companies in
the region who were then facing intense
struggles and were planning to strike.
Organizing work in the zone was
revived only in January 2007. Ten
workers started to conduct meetings
and plan to form their union once more.
They launched a petition to remove
their Production Manager who always
harassed the workers.
Organizing Experiences in Economic Zones
But they were closely watched by
management. Before these workers
gained support, the management singledout the organizers. One was detained in
a room and was prohibited from making
contact with her fellow workers.
By March, management illegally
dismissed the workers. They were forced
to sign resignation papers.
The workers filed their case with the
National Labor Relations Commission
(NLRC) in Baguio but the case was
dismissed due to lack of merit. The
workers appealed with the NLRC in
Manila only to receive the same decision.
The case was then raised to the
Court of Appeals, but the CA denied
hearing their case. The workers were not
discouraged, however. They filed once
more their case with the Supreme Court
on January 2010. The workers are still
awaiting the highest court’s decision.
Meanwhile, the workers left behind at
Adriste are experiencing unfair working
conditions. Wages of piece-raters were
reduced to far below the minimum wage
while regular workers suffer from forced
overtime and harassments. They are
denied their benefits. Some workers are
planning to stage a mass leave to demand
for higher wages while some are planning
to expose corruption being done by their
managers on the company’s funds.
The management may have dismissed
them, according to one of the organizers,
but they cannot stop the workers from
organizing themselves. The collective
suffering the workers experience because
Ripples and Rising TIdes
of harsh working conditions will always
push them to fight for what is duly theirs.
Lessons
Almost 30 years of organizing where
unions formed one after the other were
busted by company managements with
the help of PEZA and local units of the
Philippine National Police, organizers
and workers have learned that to sustain
their efforts, organizing must transcend
the single factory approach; that workers
must build wider unities at the zone level.
The support of nearby communities
is also particularly important especially
when they decide to launch protest
actions. These areas will also serve as
153
a “melting pot” where workers from
various factories can gather and set up
organizations based on their shared
issues and concerns.
To this end, CLC and KMU-Cordillera
plan to initiate the formation of a BCEZwide alliance of workers which will
be closely linked to the communities
surrounding BCEZ.
A more comprehensive assessment of
their long years of work within the zone
is also in the offing for them to learn
from their past errors and weaknesses,
identify priorities, requirements and
focus factories for a more productive and
sustained organizing work.■
154
Organizing Experiences in Economic Zones
ACRONYMNS USED
CALABARZON Cavite-Laguna-Batangas-Rizal-Quezon Region
CBA
Collective Bargaining Agreement
CECertification Election
DOLE
Department of Labor and Employment
ILO
International Labour Organization
LMC
Labor Management Council
NCMB
National Conciliation and Mediation Board
NEDA
National Econimic and Development Agency
NLRC National Labor Relations Commission
NOS
Notice of Strike
NWRB National Water Regulatory Board
ODA
Offical Development Assistance
PEZA
Philippine Economic Zone Authority
SAP
Structural Adjustment Program
Ripples and Rising TIdes
155
BIBLIOGRAPHY
Aboitiz Land, 2007. MEZ II Sportsfest Unites Exporters and Manufacturers. [online]
12 September. Available at <http:/www.aboitizland.com/Newsroom/index.phpp=296&
type=2&sec=56&aid=377&pg=3>. [Accessed 13 December 2010].
Agcaoili L., 2011. Philippine External Debt Up by 9.3% to $59.8B, The Philippine
Star. Available at <www.philstar.com>. [Accessed 17 January 2011].
Alcantara, L., 2010, Roundtable Disucssion on FOA in Philippine SEZ. Insitute of
Labor Studies, Oct. 1, 2010 UP Balai Kalinaw
Bateman, B. 2003. Assessing the Water Management Practices of Philippine Economic
Zones. Ph. D. University of Maryland
Beja, E. , Jr., 2006. Capital Flight and the Hollowing Out of the Philippine Economy in
the Neoliberal Regime. In: Philippine Economics Society. Parallel Session on Investment
Issues, 44th PES Annual Meeting. Philippines, 21-22 November 2006.
Castell, M., n.d. Assessing the Role of Government Institutions Supporting Industrial
Adjustment in the Philippines: The Case of PEZA, CITEM and DBP. Available at
<http://www.dlsu.edu.ph/research/centers/aki/_pdf/_concludedProjects/_volumeII/
Castell.pdf>. [Accessed 10 November 2010].
Center for Trade Union and Human Rights(CTUHR), 2006. Labor Flexibilization:
A Dagger in the Hearts of Filipino Workers. Philippines: CTUHR.
Cervantes, D., 2004, Alvarez names five alleged logging financiers, The Philippine
Star [online] 7 December. Available at < http://www.newsflash.org/2004/02/hl/
hl101422.htm> [Accessed 11 June 2011]
Cling, P. and Letilly, G., 2001. Export Processsing Zones : A threatened instrument
for global economy insertion?. France: Development et Insertion Internationale (DIAL).
CTHUR, 2011. CTUHR 2010 Year-End Report. Annual Trade Union and Human
Rights Report 2010. [powerpoint].
156
Bibliography
CTUHR, 2008. Treacherous and Disquieting Industrial Peace. Annual Trade Union
and Human Rights Report 2007. Philippines: CTUHR.
Diaz, J., 2004, Angara denies family involvement in Illegal logging. The Philippine
Star [online]. 4 December. Available at <http://www.newsflash.org/2004/02/hl/
hl101402.htm> [Accessed 11 June 2011]
Fu, X. and Gao, Y., 2007. Export Processing Zones in China: A Survey Report
submitted to the International Labour Organization. Available at <http://ilo.org/public/
french/dialogue/download/epzchineenglish.pdf >. [Accessed 17 January 2011].
Garcia, L. and Lumilan, E. G., An Assessment of the ODA Policy in the Philippines,
ODA Watch. Available at <http://www.mode.org/oda/pdf/An%20assessment%20
of%20the%20ODA%20policy.pdf>. [Accessed 7 January 2011].
Gascon, M. 2009. Townsfolk Complain of Ecozone Pollution, Philippine Daily
Inquirer. [online] 1 February 2009. Available at <http://newsinfo.inquirer.net/
breakingnews/world/view/20090201-186730/Townsfolk_complain_of_ecozone_
pollution >. [Accessed 16 December 2010].
Geronimo, R., 2011 Palafox’s sturdy heart. Sunstar [online] 9 February. Available
at < http://www.sunstar.com.ph/manila/opinion/geronimo-palafox-s-sturdy-heart>.
[Accessed 11 June 2011]
Gomez, L., OFW remittances exceed 2010 forecast, The Manila Times [online].
Available at <www.manilatimes.net>. [Accessed 17 January 2011].
Hirose K. and Vitasa B., 2007. Implementation of the Labour Standards Enforcement
Framework in the Philippines: International Labour Organization
IBON Foundation Inc. (IBON), 2004. Export Processing Zones: A Path Towards
Industrialization?. Philippines: IBON Books.
IBON, 2008. The Rice Crisis. IBON Facts and Figures 2008. Philippines: IBON.
IBON, 2010. RP Jobs, Quality of Work Worst in 50 Years. IBON Education for
Development (EDM). [online] 16 March. Available at <http://edm.iboninternational.
org/2010/march-april-2010/306-rp-jobs-quality-of-work-in-2009-worst-in-50-years
>. [Accessed 2 February 2011].
International Labour Organization(ILO), 2008. Report of the InFocus Initiative
on export procesesing zones (EPZs): Latest Trends and Policy Developments in EPZs.
Geneva: International Labour Organization.
Ripples and Rising TIdes
157
Kelly, P., 1998. The Politics of Urban-Rural Relations: Land Use Conversion in the
Philippines, Enviroment and Urbanization, Environment and Urbanization, Vol. 10,
No. 1. Available at <http://eau.sagepub.com/content/10/1/35.full.pdf >. [Accessed 3
February 2011]
Kish Trade Promotion Center, n.d. Free Trade Zones. Available at <http://www.
kishtpc.com/Free-En/free_philippine.htm>. [Accessed 17 January 2011].
Landingin, R., 2006. Tax Incentives for the Rich Harm the Poor, Philippine Center
for Investigative Journalism, [online]. 14 August. Available at <http://pcij.org/stories/
incentives-for-the-rich-harm-the-poor/>. [Accessed 18 December 2010].
Landingin, R., 2008. ODA Surge Sparks Scandals for Arroyo, Debt Woes for RP,
Philippine Center for Investigative Journalism, [online]. 11 February. Available at
<http://www.pcij.org/stories/2008/oda.html>. [Accessed 18 December 2010].
Lim, J., 2010. The Impact of Global Financial and Economic Turmoil on the
Philippines: National Responses and Recommendations to Address the Crisis. Malaysia:
Third World Network.
Magkitak, B., Manila Bulletin, [online], available at <http://www.mb.com.ph>
Moris, F., 2004. Industrial R&D Employment in the United States and in U.S.
Multinational Corporations. Virginia: National Science Foundation.
National Economic and Development Authority (NEDA), 1996. Report on the
Outcome of the 5th Annual ODA Portfolio Review, [online]. Available at <http://www.
neda.gov.ph >. [Accessed 15 December 2010].
Orejas, T., 2008. Seed program in Aurora gives farmers hope. The Philippine
Daily Inquirer [online] 9 January. Available at < http://newsinfo.inquirer.net/
inquirerheadlines/regions/view/20080109-111401/Seed-program-in-Aurora-givesfarmers-hope> [Accessed 11 June 2011]
Pagkakaisa ng Manggagawa sa Timog Katagalugan(PAMANTIK), 2008. SWAT fired
a gunshot, guard aimed pistol at worker. Available at <http://pamantik-kmu.blogspot.
com/>. [Accessed 18 December 2010].
Peet, R., 2003. Unholy Trinity: The IMF, World Bank and WTO. London: Zed Books
Philippine Economic Zone Authority [online], Available at <http://www.peza.gov.
ph> [Accessed 12 January 2010].
158
Bibliography
Reeves, P., 2010. In Ireland, The Death Of ‘The Celtic Tiger’ Leads To Anger, Populist
Uproar. Available at <http://www.npr.org >. [Accessed 17 January 2011].
Sunstar Baguio
Senate Economic Planning Committee, 2006. 2nd Quarter Economic Report:
Infrastracture Spending and the Philippine Development. Philippines: Senate.
Silverio, I. A., 2011. Angara Ecozone Project a Massive Case of Landgrabbing, say
Aurora Folk. Available at < www.bulatlat.com>. [Accessed 17 January 2011].
Timawa.net
The Philippine Star, 2011. BOI, PEZA investments hit P503 billion in 2010. Available
at < www.philstar.com>. [Accessed 17 January 2011].
The Philippine Star, 2010. P434-million project seen to spur growth in northeastern
Luzon Available at < www.philstar.com>. [Accessed 17 January 2011].
Ripples and Rising TIdes
159
ACKNOWLEDGEMENT
We would like to express our gratitude to all those who have helped and have been
a part of this research:
To all organizers, union leaders, workers, church people, and the people of Aurora
who participated in the discussions and interviews. Thank you for sharing your
experiences, stories and lessons, for offering cups of coffee and opening the doors of
your offices.
Thanks to Lomel of IBON and Arman of CTUHR for some of the data that we used
in the research.
Crispin B. Beltran Resource Center, Inc.,
Workers Assistance Center
Ecumenical Institute for Labor Education and Research
with the support of Stichting Onderzoek Multinationale Ondernemingen (SOMO)
July 2011