India worried over linking of funding with labour standards

14 May 2016 | By Achin Garg
Labour standards linked to project funding

Developed countries are trying hard to link funding from multilateral development agencies to labour standards in order to allow companies from developed countries to bag contracts.

Such attempts by some members in the Asian Development Bank may hit the financing of key development projects in developing countries.

Indian companies which do not match stringent norms of developed countries may get hit by this move.

In context: Labour standards linked to project funding

About What are labour standards?

Labour standards are International Labour Organisation (ILO) conventions that govern workers rights.

They are aimed at protecting workers rights, enhancing job security and improving their employment on a global scale.

They cover basic human rights, safety and health issues at work and ensure that workers' wages are protected and paid timely.

They ensure good governance in terms of labour inspection, labour administration, etc.

India-ADB Even ADB funded projects face labour issues

India started borrowing from ADB in 1986. Since then, India has received around $37 billion of assistance from ADB in hundreds of projects.

ADB projects have helped secure the livelihood of thousands of workers in India.

However, many studies have reported that many of these workers are not only forced to work at meagre wages but also lack adequate health and safety measures.

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India among largest borrowers

India and China are among the largest recipients from multilateral development agencies such as Asian Development Bank.

Genesis Germany pushing for core labour standards

Germany's Federal Ministry for Economic Cooperation and Development during the annual meeting of the Asian Development Bank (ADB) had said it was trying to get the International Labour Organisation's (ILO) core labour standard linked to funding criteria of development banks.

The ministry added that Germany will try to push this in G20 meetings as well.

Germany is the largest European shareholder in ADB.

14 May 2016India worried over linking of funding with labour standards

India's concern

Indian officials are worried that the imposition of labour standards could impact Indian companies, especially the Small and Medium Enterprises. Further, they argue that this is a form of non-tariff barrier.