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Social Dumping

Social dumping refers to situations where firms located in countries with lax labor standards produce and export goods using cheap labor in poor working conditions. This undercuts competition. Examples include apparel companies like Nike and GAP being accused of abusive practices by contractors in developing countries. Issues with social dumping include whether imposing labor standards helps workers in poor nations and if protections could help problems like child labor. Challenges include preventing a "race to the bottom" in deregulation to attract foreign investment and balancing labor standards with foreign direct investment. Solutions proposed include international forums setting global rules and consumers making moral purchasing decisions.

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Tapan Jain
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965 views15 pages

Social Dumping

Social dumping refers to situations where firms located in countries with lax labor standards produce and export goods using cheap labor in poor working conditions. This undercuts competition. Examples include apparel companies like Nike and GAP being accused of abusive practices by contractors in developing countries. Issues with social dumping include whether imposing labor standards helps workers in poor nations and if protections could help problems like child labor. Challenges include preventing a "race to the bottom" in deregulation to attract foreign investment and balancing labor standards with foreign direct investment. Solutions proposed include international forums setting global rules and consumers making moral purchasing decisions.

Uploaded by

Tapan Jain
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Prestige Institute of Management &

Research, Indore

Presentation
Social Dumping
Issues & Challenges
Guided By: Submitted By:
Prof. Pragya Keshari Dhara Jain
Madhuri Mundhra
Samar Ojha
Shikha Dugged
CONTENTS
•Introduction
•Types
•Social Dumping
•Source
•Examples
•Driving Force
•Issues & Challenges
•Fight Against Social Dumping
Introduction
Dumping is generally used in the context of
international trade law, where dumping is
defined as the act of a manufacturer in one
country exporting a product to another
country at a price which is either below the
price it charges in its home market or is
below its costs of production.
Types
Product Dumping

Social Dumping
Social dumping refers to a situation in which firms that are
located in countries where
labour standards are lax produce and export goods at
excessively low prices by using
unduly cheap labour under poor working conditions

when employers systematically


employ bad working environments as a means of
undercutting competition.

the term social dumping is normally applied to activities that


breach
the rules applying in the country where the work is carried
out.
Aspects of Social Dumping
• exploitation of workers in or from low wage countries
• discrimination based on ethnic or national origin, trade
union, or similar membership
• breaches of national or international standards and rules
• using wages and working conditions in a competitive way
• Export Processing Zones
Source

Monopsonistic labour
markets
In developing countries
transmission channels
through which social dumping might take
place.
international trade as a transmission
mechanism
the increased mobility of
Capital as the transmission mechanism
(relocation)

The third point focuses on politicians'


preferences and the role of the
government.
The driving force for social dumping Firstly when there are unacceptably large
differences in living and working condition
between
different nations: indeed sometimes withi
The simplest and truest answer is that the some nations. As long as these differences
exploitation of exist
human labour offers a way of making money. attempts to exploit them will continue.
Secondly because labour legislation is still
essentially
One vital condition for social dumping is the nationally based, and here too there are wi
existence of workers that are prepared to sell disparities between different countries.
their
labour cheaply.
it has been possible to counteract this
effectively by
strong trade union action, well-organised
unemployment benefit schemes and
energetic labour
market and employment policies.
EXAMPLES
Nike, a famous sportswear company, was
accused
of the abusive labour practices of its
contractors, such as low wages, long working
hours,
verbal abuse, and unsafe working
conditions, in Indonesia, China, Vietnam,
and other
developing countries.

GAP, a popular apparel company, was also


accused of low wages
and poor health and safety conditions in
factories of its contractors in several
countries,
including Bangladesh, Indonesia, Lesotho,
and Mexico.
ISSUES & challenges
Legal or illegal?
Is it dumping when low wages compensate low
productivity?
Does imposing labour standards help poor nation
workers?
Would social dumping protection help the child labour
problem?
Race to reach bottom!!--A situation in which competition
between governments leads to very excessive (harmful)
deregulation
2 maintain equilibrium between FDI & Labor standards
challenges
2 prevent Labour migration.
2 maintain equilibrium between FDI & Labor
standards.
2 encourage domestic market.
Prevent govt. of developing countries from setting lax
labour standards 2 create
ERADICATION
strong trade union action, well-organised
unemployment benefit schemes and energetic labor
market and employment policies.
One solution to this problem is to employ
international forums, such as the WTO, to set
satisfactory environmental and labor rules at a global
level
Another suggested method for avoiding races to the
bottom is moral purchasing on the part of consumers.
Strengthening the principle of “country
of work”

Common working conditions

International trade union solidarity

A principle of precedence in disputes of


jurisdiction

Developing and strengthening trade


unions

Financial equalisation

All should have the right to work

Collective bargaining agreements


Eradication Contd…
applying heavy tax, tariff and trade
sanctions to nations that permit the export
of offensive goods, re-directing revenues
raised from such tax or tariff to combating
abuses. While conventional tariffs are
designed to protect jobs in a particular
industry or sector of the economy,
standards-based tariffs are designed to
protect country-wide standards such as
labour standards and environmental
standards.
It simply is not possible to control current
transnational
problems with tools that largely only work
effectively within the borders of one nation
and
assume this national regulation controls
both organisational and legal conditions.

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