Analysis

White-lipped, blue-collared and invisible

By Sarah Eleazar and Zoon Ahmed Khan

31 January 2018

Privatisation in Pakistan and the erosion of a once-strong workers’ movement.
Zulfikar Ali Bhutto, the one-time hero of Pakistan’s working class.   Photo: Flickr / Doc Kazi

Zulfikar Ali Bhutto, the one-time hero of Pakistan’s working class.
Photo: Flickr / Doc Kazi

In September 2012, Ali Enterprises, a textile factory complex in Karachi, was burnt to the ground. The factory employed 1500 men, women and children. At least 258 workers, many of whom were in the factory to collect their wages, were incinerated. Though labour accidents in Pakistan scarcely make the news, the worst industrial disaster in the country’s history did breach the silence. Politicians appeared on television to shed tears for the fallen, newspapers ran heart-rending accounts of the tragedy, and the government announced millions of rupees worth of compensation for the victims’ families. The only voice missing in this clamour was that of the worker. No trade union took to the streets; no worker turned on their master. Workers’ dissent had long ago been choked into silence.

Years of suppression and a changed political milieu have altered Pakistan’s labour dynamic. Organised labour is in decay as most unions have failed to evolve and provide a contemporary voice to workers. Veteran unionists say it was the state’s collusion with the industrialist class that crushed them, and even now, the few remaining unions face questions regarding their relevance and ability to survive. The ongoing story of WAPDA, Pakistan’s once powerful Water and Power Development Authority, is instructive. WAPDA’s dismemberment and large-scale retrenchment of workers coincided with a larger pattern of state coffers being used to benefit private companies. The result is the steady erosion of labour rights in Pakistan.

Modernisation, in theory
By the mid-1960s, Pakistan’s industrial sector accounted for 20 percent of the country’s GDP and employed about 18 percent of its workforce. The state’s numerous enterprises, including WAPDA, meant that it emerged as one of the country’s biggest employers. Enamoured by modernisation theories gaining traction in newly decolonised states, General Ayub Khan realised his development fantasies in WAPDA’s expansion. As electrification became the poster child for Khan’s state-led march to modernity, thousands of settlements were connected to the national grid and WAPDA became the biggest state-owned enterprise in the country. The employees of WAPDA benefited from the mushrooming of trade unions that bargained for improved wages and better working conditions.

National Trade Union Federation (NTUF) General Secretary Nasir Mansoor says that this period of the workers’ struggle needs to be understood in the context of the Cold War. The Cold War years were the heyday of trade unions in Pakistan, when the labourer had the support of the Eastern Bloc in opposition to industrialists being aided by the West. The slogans of solidarity, mobilisation and democratic reform resounded throughout Pakistan, from the railways to the nascent telecommunications network, all the way to WAPDA.

However, contradictory forces were being unleashed. In 1952, the Pakistan Industrial Development Corporation (PIDC) was set up, and the government began fostering an industrial class. This was done through the financing of private industrial projects and the passing of laws that allowed private enterprises to expand while keeping wages down and workers silenced. In 1959, the Industrial Disputes Ordinance curtailed the power of labour unions by restricting their right to strike and making the registration of unions difficult. While the anti-labour ordinance was marginally modified by Ayub Khan’s successor, General Yahya Khan, its continued existence was a major reason for industrial labour flocking to the support of Zulfiqar Ali Bhutto and the socialist image he cultivated via fiery pro-labour speeches. As the military dictator’s patronage of industrialists deepened class fissures, hundreds of thousands of workers and activists took to the streets to demand democratic reform, economic redistribution and social justice.

On 1 May 1970, thousands of WAPDA employees and trade-union members gathered at The Mall in Lahore to mark Labour Day and to press the government for improved working conditions and better wages. Bhutto was staying at the Pearl Continental that day. “We suspended electricity on The Mall for two hours and Bhutto left his hotel and came to our rally,” says All Pakistan Workers’ Confederation (APWC) and WAPDA Hydroelectric Workers Union General Secretary Khursheed Ahmed. “We told him, ‘Sir, today is the workers’ day. You will have to take a backseat.’” The working and peasant classes embraced the promise of roti, kapda and makaan (bread, cloth and shelter) and rallied behind Bhutto, a leader who at least spoke the language of organised labour. The years leading up to 1972 saw some of the biggest demonstrations of solidarity in the history of Pakistan’s working-class movement.

In 1973, Bhutto assumed the prime ministership. At one level, Bhutto’s nationalisation project gave more power to trade unions in Pakistan. Bhutto enhanced popular consciousness of the working-class movement, and his stirring speeches created awareness about issues of inequality, workers’ rights and democracy. Ironically, the popularity and strength gained by these trade unions during Bhutto’s rule led to deteriorating relations between the unions and Bhutto’s administration. Despite his rhetoric, Bhutto was not shy about using force against workers. In 1972, when Bhutto was president, the police opened fire on workers as they marched in protest at the killing of three of their comrades. At least ten were killed. The impact of the Pakistan People’s Party (PPP) on the labour movement has since been criticised by traditional trade unionists who believe it created divisions among the workers. “The military dictator had given way to a false messiah in Zulfiqar Bhutto,” veteran trade unionist and Pakistan Telecommunications Company (PTCL) Joint Action Committee Spokesperson Rana Hassan says. The events that followed left workers disenchanted with the very leader for whom hundreds had gone to prison while protesting against Ayub Khan.

As Pakistan once again slipped into military rule in 1977, this time under General Zia ul-Haq, labour suffered a further setback. Under Zia’s wider clampdown on democratic rights, strikes were banned and workers lost the right of association. Zia neutralised labour and students organisations in order to keep them away from mainstream politics – a strategy that not only weakened the movement but also alienated an entire generation of students from political activism. According to journalist Hussain Naqi, since the alliance between journalists, trade unions and the student union was pivotal in humbling the Ayub dictatorship, the Zia dictatorship wanted to prevent any such challenge to its power.

Public risk, private gain
Between 1952 and 1988, the state set up 94 industrial units only to later sell them off for a fraction of their value to private investors. This initiative ‘trickled down’ to 22 of the country’s most affluent families. It was after Pakistan became party to the General Agreement on Trade in Services in 1995, however, that the privatisation drive burst into full bloom. WAPDA was cleaved along the lines of production and distribution, and nine distribution companies were created to be sold off to private investors one by one.

According to Aasim Sajjad Akhtar, an academic at Quaid-i-Azam University in Islamabad, 160-odd state enterprises were privatised between 1990 and 2005. The performance of these enterprises has been abysmal. In 2005, Akhtar wrote, “An astounding 130 such enterprises have since collapsed, leaving hundreds of thousands of workers in the lurch. Even government economists acknowledge that only a handful of privatized enterprises have actually improved their economic performance.” By 2009, the number of privatised enterprises had risen to 167. Even where the privatised enterprises have started making ‘profits’, the gains are made with the help of state subsidies, as in the case of the Karachi Electric Supply Company (KESC).

In 2005, a deal was finalised to sell 73 percent of KESC to a Saudi-based consortium at the cost of PKR 20.24 billion (USD 198.8 million). A stake in the company was then sold on to Dubai-based Abraaj in 2008. Since then, KESC, now known as K-Electric, has been reaping benefits characteristic of state-owned enterprises, without the responsibilities that come with it. In 2012, K-Electric’s first year as a profit-making enterprise, the company received a state subsidy worth PKR 70 billion (USD 884.2 million). Even after declaring itself a profit-making enterprise, the company continues to have access to the national power grid. State enterprises which are actually competitive are also being privatised.

In January 2015, hundreds of workers employed at the Faisalabad Electric Supply Company (FESCO) took to the streets demanding to know why the government was trying to privatise a distribution company that had posted the highest rate of bill recovery in the country. According to Khalid Mehmood, the director of the Labour Education Foundation, an NGO working on labour rights, the logic is simple – it is being privatised because it is profitable. If FESCO workers thought that they could secure their jobs by working hard, they were clearly mistaken.

Throughout the privatisation process, private players have reneged on their commitments to retain or compensate labourers employed in these industries. When the government decided to privatise the PTCL, officials of the nine trade unions representing around 72,000 employees were brought to the negotiating table, even as coercive tactics were used by the state to suppress their protest. A senior leader representing the unions in the meeting recalls how shortly after it ended, thousands of troops were deployed to telephone exchanges nationwide under the direct orders of President General Pervez Musharraf.

Since PTCL’s sale in 2007 to Etisalat, 55,000 of its employees have been laid off, or have asked to leave through a Voluntary Separation Scheme (VSS). Of those that voluntarily left, approximately 40,000 did not receive their pension for five years. According to union leaders, the judiciary and security sector side with the powerful, either out of sympathy or fear. “We were duped,” laments a union leader. The veteran leader requested anonymity because the last time he spoke to journalists he was slapped with a defamation suit and heavily fined. He explains that the government had promised one thing but delivered another, making it appear as if the joint action committee was lying to the thousands of workers on tenterhooks over their jobs. “The PTCL has spent more than PKR 500 million [USD 4.9 million] on lawsuits against workers since 2007… Paying the workers compensation would have cost less,” he says. “It doesn’t make sense.”

K-Electric also took recourse to retrenchment. On 31 December 2010, it introduced a VSS with an expiry date of 15 January 2011; the VSS was accepted by 384 employees. On 19 January 2011, however, K-Electric management announced that around 4000 permanent employees would be made redundant, bypassing the legal protection these employees were entitled to. Despite the PPP government’s direct orders to reverse this, K-Electric’s management refused to comply, without any apparent consequences. Private enterprises have likewise found imaginative ways of flouting labour laws. Some of the oblique policies adopted by these companies include registering two token unions to fulfil the base requirement on paper, or to register non-managerial staff as officers, since managers are barred from direct involvement in union activities. Regardless of whether they are registered with the government or not, factories do not issue employment letters to their workers, most of whom work on piecemeal rates. The limited jurisdiction of labour courts aside, workers cannot take complaints to the courts if they do not have proof of employment.

Even as the APWC launches a campaign to protest the privatisation of WAPDA, they admit that they are fighting a battle they lost years ago. Workers say that the system has left them powerless, and claim that they cannot move the courts against privatisation or push for the demand that the state reconsider its decision. The move to privatise is a philosophy the state has adopted verbatim from the 1989 Washington Consensus. Pakistan has made commitments to the International Monetary Fund to privatise various state-owned entities. This is especially concerning given the ‘giveaway’ prices they have asked for in the past.

Hard landings
Amid the changing structure of Pakistan’s economy and its impact on traditional community-based support systems, the state has failed to create a comprehensive social-protection system. According to the Pakistan Bureau of Statistics, in 2013, Pakistan’s labour force working on either a permanent or contractual basis stood at 59.74 million. Of this number, only a small fraction of permanent employees were registered with the Employee’s Old-Age Benefits Institution (EOBI) in 2011. After a nationwide media campaign, registration increased. At the Labour Tripartite Conference of 2010, the government had committed to regularising contractual labour employed in the public sector so they could be brought under the social security net, but gave no directions in this regard to the private sector. Labourers employed on contract or in the agricultural sector, for example, do not necessarily have to be registered with the EOBI, thus effectively excluding them from the social security bracket.

The concept of collective bargaining and a shared stake in enterprise is, for all practical purposes, close to nonexistent in the private sector. The lack of job security in the private sector serves the interests of the employers. Workers that muster the courage to organise themselves are met with the threat of getting laid off. In more severe cases, union activists have been arrested, tortured, and taken to courts for inciting public unrest. When dissent is expressed, it is often ignored. In 2009, workers in Nishat Factory, a textile unit, were fired for trying to start a union. The factory workers marched 334 kilometres from Faisalabad to the capital city and camped in front of the Supreme Court in an attempt to demand justice. According to Progressive Labour Federation General Secretary Niaz Khan, “No newspaper reported on them and once the hunger pangs set in, they packed up and left.” The apathy that Khan talks about is heightened by the lack of media coverage of labour rights in Pakistan. The ‘free’ media is still dependent on advertisements from large corporations.

This reflects a wider imbalance in the discourse. Khursheed Ahmed points out that though the theft of electricity has been used as a reason for the privatisation of WAPDA, no protection is provided to linesmen sent to remove illegal connections. According to union statistics, more than 100 linesmen die on the job each year because of the lack of safety gear. Their families are often hushed up with compensation cheques.

Labour Education Foundation (LEF), an NGO advocating workers’ rights since 1993, has helped to set up and register several unions over the years. LEF Director Khalid Mehmood explained that while the right of association was protected by law, the buying off of third-party auditors to register the factory as complying with international labour laws has become the norm. In an instance of tragic irony, Ali Enterprises received the Ethical Trading Initiative and Social Accountability International’s SA8000 certificate from RINA, an Italian certification company, just weeks before the whole building went up in flames.

“It is a shame that Pakistani workers are struggling for the same rights they demanded a century ago,” said Nasir Mansoor of the NTUF. The law, where it steps in, often does so in favour of owners, rather than workers. There is an increasing pattern of labourers being tried under the Anti-terrorism Act. According to the Pakistan Institute of Labour Education and Research, an NGO dedicated to promoting a democratic and effective labour movement, long working hours, low wages, poor health and safety conditions, contractual work, and increasing curbs on freedom of association and collective bargaining characterise the transforming nature of work relations in Pakistan in the past few decades.

Off come the wheels
With the victory of the US in the Cold War, the ideological underpinnings of the workers’ movement began to wane, says trade union leader Nasir Mansoor. According to Railway Workers Union Chairman Manzoor Ahmed Razi, the trade union culture, which used to be led by leftwing political parties, sustained an irreparable loss after the fall of the Soviet Union. In many urban industrial cities, he says, trade unions are now being influenced by political elements driven along ethnic and religious lines.

Political parties committed to furthering the neoliberal agenda set up labour wings and worked actively to bring most trade unions under their protection by promising political muscle. “It is easy to join political parties, but difficult to confront them on matters central to labour struggles,” says Rana Hassan. “They promise the moon but deliver thin air.” The political divide in Karachi, for example, between the Muttahida Qaumi Movement, Pakistan People’s Party and the Awami National Party has impacted the struggle of the labour movement in K-Electric. As these party wings exercise their influence to secure the status of the Central Bargaining Agent (CBA), for K-Electric union leader Muhammad Akhlaq Khan, these competitors pose a grave threat to the movement as they have resorted to violence to suppress the leverage of other unions, thereby undermining labour solidarity.

According to Khursheed Ahmed, the trade union movement is a product of the socio-political environs it operates in. “The problem and solution lie within it,” says Ahmed. Decades of military rule has stripped the movement of the necessary democratic fibre that should have defined it. Instead, power struggles, intrigue and the commodification of leadership at all levels has been the norm. A general absence of good faith, and the neoliberal fascination with the individual rather than the collective, has created a working class that is disconnected, alienated and helpless in its struggle to pursue a dignified living, he explains.

Pakistan’s left has been steadily losing influence since privatisation began, and has never regained the level of power it had during the 1970s. Private-sector organising is almost nonexistent, reflecting the fragmentation of production processes that now characterises the manufacturing sector. Unions still exist in the public sector, which includes the railways and airlines, as well as public utilities such as water, electricity and gas, though most of these unions have been co-opted by the establishment, as a result of long-term efforts to dismember the collective power of Pakistan’s workers.

A dying breed
An atmosphere of gloom pervades the Bakhtiar Labour Hall in Lahore, where I meet Khursheed Ahmed. In the hall, which was built in the memory of one of the founding union leaders in Punjab, a few elderly men are spread out in various cliques, having cups of tea. Regardless of what the IMF and the Asian Development Bank demand of Pakistan, the state must not shut its eyes to the worker as a stakeholder in the process, says Ahmed. “They need to come to the negotiating table.”

Khalid Mehmood, however, believes that trade unions must also shoulder some of the blame for their decline. According to Mehmood, for the most part, unions have become undemocratic and do not represent changing labour demographics or structures. Women are under-represented, for example. Unions, including those that are independent, are most to blame for increasing gender inequity in labour struggles, he says. The International Trade Union Confederation’s 2008 Annual Survey of Violations of Trade Union Rights in Pakistan points at social strictures that inhibit the organisation of women workers. The report quotes Working Women’s Organisation President Rubina Jameel as saying that women trade union activists are often accused of “bringing dishonor” to their families. Jameel herself has been branded by religious groups as a corrupting influence on women and being ‘against Islam’. One of these religious groups is Jamaat-i-Islami, which claims to represent several trade unions across the country under its labour wing.

The lack of solidarity among trade unions has also been crippling. According to Nasir Mehmood, “There are no longer any ideological underpinnings to workers struggles… The idea of collective bargaining has been relegated to our distant past.” One of the more pertinent reasons behind this, according to Razi, is that labour unions are limited to their own industry or sector without any support from the labour movement as a whole. In the recent past, the efforts of K-Electric workers against privatisation failed because they had no support from other labour unions, including that of the WAPDA. Similarly, Khalid recalls that when the PTCL was undergoing privatisation, and its larger worker unions had announced a joint action plan, no other union joined their protests. The unions of other state-owned enterprises watched from afar as security forces clamped down on demonstrating PTCL workers, packed them in trucks and transported them to prison.

The worker is slowly becoming invisible, laments Khursheed Ahmed. The state, once seen as the protector of the blue-collar worker, has taken an autocratic stance in privatising key public sectors. Plagued with massive power outages, gas shortage, a mismanaged national flag carrier, and a political elite notorious for large-scale corruption, the notion of privatisation comes with the alluring promise of better accountability. The argument that privatisation is the key to economic efficiency has been utilised to justify the state’s gradually shrinking role. As the Pakistani state poises itself for a general rollback and fully embraces the neoliberal commitment to privatising key public utilities, the life of the blue-collar worker has never been more precarious.

~Sarah Eleazar is a Lahore-based journalist.

~Zoon Ahmed Khan is a Lahore-based researcher.

~This article was first published in March 2015.

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