The emphasis on undue political activities prevent trade unions from focusing on their original objectives

There is no denying that trade unions have played and will play an important role in Nepal’s development. Few would deny that there is still a long way to go for all Nepali workers to enjoy the rights they are entitled to. Low salaries; lack of insurances and social security; inadequate health and safety standards; and in some cases even exploitation and abuse are issues that trade unions are entitled to address firmly.

While their genuine political engagement has promoted social change and progress in Nepal in the past, the major concern these days (and not only for employers) is excessive politicisation, partisanship, the increasing involvement of trade unions in party-politics and the instrumental use of trade unions by political parties. The misuse of trade unions and workers for political purposes hampers economic growth and inclusive economic development, putting the existing employment opportunities in peril.

Employees realise that attacks on businesses for party-politics force the closure of companies, reduce staff and production by switching from manufacturing to less labour-intensive trade. They will see declining investment in human resources, capacity building, social security programmes or other welfare benefits. Employees can also see their concerns being neglected due to the deviation of attention to political issues.

Employment seekers face further challenges to find jobs. As political and financial demands through trade unions increase, employers will hardly consider recruiting new staff. In practice, it is also noticeable that Indian citizens without trade union affiliation seem to have easier access to employment opportunities and that business people refrain from expanding operations in fear of attracting the attention of trade unions.

Business owners frequently mention difficult labour relations as the biggest challenge in doing business in Nepal. The activities of excessively politicised unions add further costs to doing business. Forced employment of party cadres is very unlikely to improve productivity and quality standards. Forced donations is an illegal tax which reflects in retail prices.

Consumers are unduly affected by excessively political union activism which often leads to reduced delivery of products or services and the negligence of product quality and safety. Particularly, poor people suffer from price increments due to the misalignment of resources for political activities.

Suppliers have to endure the decreasing demand and often delays in payments which can also threaten their businesses and jobs.

Investors face delays in loan repayments and a poorer return on investment. Society is also affected as contributions to the national budget in forms of taxes, fees or customs are reduced.

In the long run (and on an aggregated level) this leads to further reduced economic activities, competitiveness, investment, job opportunities, additional obstacles to the development of Nepal and an increasingly worrying balance of trade. These issues are not new but important aspects to consider when discussing CSR. If trade unions abuse their power (or let themselves be abused by political parties) they are responsible for the decline in economic and employment opportunities. From a CSR perspective, it is also alarming that unduly politicised union activities often do not encourage progressive or labour-friendly employers as businesses seem to be indiscriminately affected by merely political activities of unions and their members. This actually counters attempts to promote CSR because business people see little incentive to invest when most attempts are likely to be ignored by trade unions for the sake of increasing political clout. It is alarming because the emphasis on undue political activities prevent trade unions from focusing on their original objectives — the assurance of employees’ interests.

Published on: 19 June 2011 | The Himalayan Times