BATAAN EXPORT PROCESSING ZONE
Theoretically, the Bataan Export Processing Zone (BEPZ) is the result of the Philippine government's decision to concentrate its development efforts in the field of foreign-owned, export-oriented industrialization.
This occurred in the mid-1960 as policies of "import substitution" (on the rise in the 1950's) were proven ineffective. This type of development claims that the benefits of foreign capital in the field of technology transfer, employment and industrial infrastructure will enable the nation to become
"competitive" in the global capitalist market.
The zone itself began as an idea of Congressman Pablo Roman, Sr., a representative from Bataan, who authored Republic Act 5490 which was passed by the Legislative Body (of the defunct House of Congress) on 21 June 1969 designating Mariveles, Bataan as the first free trade zone in the Philippines. Roman was also the owner of extensive landholdings in the vicinity of the BEPZ.
In early 1972, three congressmen — Roman, Roces and Sarmiento - sponsored the bill to convert the free trade zone authority into government corporation. This would grant the power of a corporation combined with the coercive strength of the Philippine Government to move the project ahead, especially regarding the relocation of residents. The bill stalled in Congress due to the opposition of many members to the vested interests involved. However, barely two months after the declaration of Martial Law on 21 September 1972, Presidential Decree 66 was promulgated creating the Export Processing Zone Authority (EPZA) and extending the credits and benefits to foreign enterprises while ordering the relocation of the residents living within the zone. The construction of the zone and its infrastructure could now proceed.
There is no room here for a discussion of the many factors involved in the process but it must be mentioned that many fortunes were made and enhanced during the creation of the zone. The proliferation of high income subdivision, highway projects and luxury hotels attest to this fact. Martial Law also stifled, through fear. The protest of the poor residents of the barrios which were dislocated by the zone.
The land for the zone, although settled by Barrio Nassco, was readily made available. This was formerly occupied by the military reservation of the USA and was given up in 1965 after 40 years of occupancy. The land which was promised to the residents was never delivered.
The following are official benefits to corporations in the zone:
1. No municipal tax
2. No duty on import of resources for construction or manufacturer.
3. No duty on exports
4. Carry over of net operating losses incurred in the first five years as deduction on income tax for the next five years
5. accelerated depreciation of fixed assets.
In addition, the following points were cited by Zone authorities in the process of attracting business:
1. The Philippines is the 'hub' of Southeast Asia — a central location
2. English is spoken
3. Highly trained and low-paid work force
4. Politically stable due to Martial Law
5. No strikes due to designation of the zone as "vital industry".
Structure of BEPZ
The zone is located on 1,600 hectares of land adjacent to Mariveles, Bataan. The land is divided into areas for heavy medium and light industry. The zone rents all land and provides the necessary infrastructures of electricity and water — the zone has its own water treatment facilities. The factories have the option to rent standard factory buildings (SFB) for light industries or construct their own buildings like the Ford Stamping Plant.
Other facilities in the zone:
1. New administration ration building
3. Worker housing
5. Manpower training center to provide vocational training for zone business
6. Sports facilities
7. Ecumenical chapel
We also visited the Bataan Hilltop Hotel, a luxury facility built for executives primarily — the rooms rent for US$ 30.00 per night. Nearby is the Landau Hotel owned by a
corporation headed by Pablo Roman, Jr. and others who have been instrumental in the construction of the zone.
The administration of the zone is in the hands of a Board of Directors headed by Teodoro Q. Pena of the Central Bank and includes government and private sector representatives. The zone manager is Dioscoro Manrique, a local politician whom we met. He sees his role as "making life in the zone quite enjoyable and meaningful". In addition, the EPZA has its autonomous police force and intelligence force, medical personnel and its own transportation system.
In short, the zone is a complete enclave whose only relationship to the province of Bataan is its use of the labor force. The city of Mariveles has no control over the zone; in fact, no group of Philippine citizens can have any say over the business activities within.
The Factories — physical conditions, the external appearance of the factories the group visited were quite similar. Most factories are set in well attended grounds and there is provision for workers to sit outside. The internal appearance of most factories was also similar. They are quite spacious. There was a distinct difference between the conditions in the offices, between the administrative and management areas and the factories themselves. In the offices, the furniture was very comfortable and the offices are all air-conditioned. By contrast, the factories are not air-conditioned, except at Sohron where the machinery necessitated it. At Mattel, Taiyo Giken, Interasia and Amco, the temperatures were very high.
Lighting in most factories was adequate. It was poor in parts of Ford and Taiyo Giken. The noise level depended on the type of industry. It was high at Ford Stamping Plant and Taiyo Giken. At Ford several safety measures were taken to protect workers, e.g. safety glass and safety controls on presses. At Taiyo Giken girls use drills without their faces, hands and eyes protected. There were metal scraps flying around the air.
Ownership — Much of the capital invested the Zone is foreign — from countries like Japan, Hong Kong, USA and Australia Foreign investors cannot be expected in have the same concern and regard for the national interest as the indigenous investor would (Ohara Ken, Bataan Export Processing Zone, p. 99). The foreign investor is not concerned with the welfare of the worker He is concerned to get the highest possible profit on the capital invested.
Management — Approximately half of the managers interviewed were foreigners, e.g. Nam Yang Chinese from Hong Kong, Pasig-Japanese, Amco and Ford, Australian. Their understanding of the concern for problems faced by the workers was poor. This was also true of Filipino managers who appeared very Westernized. They questioned the need for workers to return home at times of illness and death. They were also very critical if a worker was absent or late. The only manager that the group interviewed that seemed aware of the problems faced by the workers was at Pasig Textiles.
Products — Items being made in BEPZ include clothing, shoes, watches, plastic flowers, dolls, car parts and woven plastic bags. It seems that even the management had little control over what was being manufactured. They seem to be dictated by Head Offices overseas and the orders of their customers.
Some items being made in BEPZ receive labels such as "Made in Hong Kong" or "Made in Korea" and therefore buyers overseas would have no knowledge that they were made in the Philippines. Workers questioned whether some items not marked "Made in the Philippines" get to the market in the Philippines without duty being period.
Many of the products made involved highly monotonous work e.g. spray painting eye color and eyebrows of Barbie dolls. It was so distressing that long-legged, blonde, big busted Barbie dolls were being produced. Is this really the epitome of beauty?
Products made at BEPZ sell in countries
such as Hong Kong, North and South Korea, Japan, Germany and other parts of Europe, North America and Australia.
Wages – The minimum salary of the workers is P8.00 per day including allowance and the maximum is P24.00 per day (in Ford) or P3.00 to P3.70 per hour without allowance for eight hours a day. If they work everyday, they will get allowance.
Cost of Living – Many workers come from outside Bataan and they live in boarding houses in Mariveles town. The very small space they rent is used for their cooking, sleeping and everything.
Here are some figures, which explain the minimum expenditure of a worker per month:
boarding P 25.00
Total P 162.00
It was observed that the above average is not enough for a single person to live decently. Let alone the constant threat to the worker's health due to the bad working conditions in the factories.
Labor Problems - As there are so many factories, so there are many workers. According to one of the employers in the Manpower Building, there are about 20,000 workers in BEPZ, comprising of 9,895 males and 11,105 females. And there still are another 11,000 registered who are waiting for jobs. College graduates have priority in landing a job, but they get the same salaries as the other laborers.
The workers before being accepted by the company have to join a training course first. In their first three months, the workers are called trainees. They get paid P6.75 a day for six month because they are considered unproductive as they are still learning. Therefore, the company invests in them instead of their contributing to the company’s income.
It was observed that many of the jobs are very simple and would not actually require or need any training. There is the story of Lita, a girl who works in Inter Asia (manufactures plastic woven bags). She was first asked to join the usual training for three months and after the period was finished, for no reason at all she was asked to have another three months training. Later she was transferred to another department and had to undergo another three months of training before getting a higher pay.
According to the workers, the management has used a number of tricks such as:
1. stating that low profit margins prevent management from paying higher wages and giving bonuses;
2. stating that the new workers require at least three months training before they are fully productive (as in the case of Lita); and
3. terminating employment because of alleged alteration to machinery.
In one company, the Lotus Export Company, they changed from leather to rubber (athletic) shoes, so workers, ceased working in August with the understanding that work would resume in about a week. In September, they were told, production would begin again in October and when October came, the resumption of work was postponed to November. Up to mid-December, no work has resumed. Coincidentally, the workers were trying to organize a labor union at the time work was stopped.
Not all workers have unions; very few factories have. Those who are not organized into a legal union (because they are not allowed) manage to organize underground. But this is to a great risk for immediate action is taken by the management against such activist workers. They either fire them or transfer them to other factories or in cases where such workers are valuable to the company, they are elevated to high position to isolate them from their fellow workers.
Effects of the BEPZ on Mariveles
The foremost problem in Mariveles, which was aggravated by the presence of the BEPZ is housing. Since 1960, the devotion of the government to develop an industrial area in Mariveles has cost suffering among the people there. May be this is an inevitable part of the process of development to foster economic growth or this could be a consequence of government policies which did not look into the problem very well. But the development of Bataan Export Processing Zone is a typical example of dislocation and further suffering brought upon the poor. Even the Secretary to the Mayor of Mariveles admits that housing is one of the burning issues there due to poor government planning.
Background – In addition to the town proper at Mariveles, there was the NASSCO (National Shipyard and Steel Corporation) barrio. When NASSCO complex was set up in 1950, families of the Nassco workers began to inhabit a large piece of land which had been used by the US Navy as a base. NASSCO told the workers to stay where they like. Therefore the NASSCO community was formed.
When President Marcos declared the establishment of BEPZ in Mariveles in order to hasten the hope for an industrialized Philippines, NASSCO inhabitants were requested to move out from the zone where they had been living for over 20 years. But they were not given proper places nearby and they received no compensation. Housing in Mariveles thus became overcrowded.
The problem of housing can be classified in three aspects: 1) overcrowding, 2) relocation, and 3) squatters.
Overcrowding: Before the construction of the BEPZ, the population in the town was 3,000. After the Zone was established in 1975, there were over 25,000 inhabitants. In 1977, the population was increased to 42,000 including 22,000 BEPZ workers. This rapid increase of population exceeds the supply of accommodation in the small town. There are several causes contributing to the overcrowding situation in Mariveles:
1. Large scale of immigration: the development of BEPZ attracts and absorbs labor forces from the provinces and all over the country. Each house is inhabited by ten or more boarders. Usually the so-called "room" is only a place for a bed which is roughly 8 ft. X 10 ft. This bed space is rented out by the owner for at least P50 to P80 per month. Usually two boarders sleep on one bed. There are cases where a day-time worker uses the bed at night and a night-time worker uses it during the day time. In other cases, one can witness a boarding house whose normal capacity is less than ten is crowded in by 25 people. Owning a house in the area has meant a treasure of wealth for some.
2. Failure of family planning (natural increase): Children can be seen playing around in the town. Each couple raises from 6 to 10 children. Meanwhile a large number of young people are just approaching the age of marriage. They will also potentially raise a large number of children. Based on the birth rate, the increase of population shall be unabated.
3. Low wages: Except the workers of Ford Stamping Plant who get hourly pay, all the zone workers are paid daily. Their minimum and maximum daily wages are ranging from P6.75 to P14.00 with which they cannot afford to rent a house or even a room for themselves. The only way to get a shelter is to hire a bed or share a. room or a bed with their friends and co-workers.
4. Transportation: The low wages of the workers make it difficult to afford transport from BEPZ to their homes. Therefore the economic way for them to save money is try to live nearby their working place. Do the workers like to live in such over-crowded conditions in Mariveles? The answer is negative. But the majority of them are too poor to exercise effective choice in the housing market. They have to take whatever they can afford: a bed space, even a body space.
Relocation: NASSCO barrio was previously located in the center of BEPZ but this was all changed with the enactment of Republic Act No. 594 in 1969, which declared in part: "No person would be allowed to reside within the Zone". The inhabitants opposed the relocation. Protests and demonstrations were organized. They resisted government actions in clearing their resident premises. The period of resistance and struggle to keep their home and land was crushed when Martial Law was proclaimed. The active leaders of the community were arrested. Residents who had lived in the Zone area for over twenty years were forced to move to temporary sites at their own expense. No compensation was given by the government.
There are several temporary sites for the relocation of NASSCO inhabitants:
1. ALION (sunrise village, Batangas II)
2. Mountain view division
3. Baseco country
4. BEPZ dorms for single workers
NASSCO residents did not want to be relocated in the assigned residential areas mainly due to transportation and housing facilities. For instance, from BEPZ to ALION, the people have to pay P1.00 for the "baby bus" and then pay another 30c to take the jeepney for Sunrise Village, Batangas II. The whole trip would take more than half an hour. It is an economic burden for a low paid worker to travel from his home to the zone. Then in moving to Mountain View Division, BASECO country or BEPZ dorms, there are so many regulations. The Mountain View Division is for high income earners because the rent for each house costs more than P250.00 per month. The BASECO country was mainly built for BASECO (formerly NASSCO) employees. However, when they retire or are discharged, they have to move out. The BEPZ dorms are for single workers, but housing facilities are poor. Owing to the above limitations, most of the NASSCO inhabitants have to look for living space in the town proper by building a small house or renting a room there. Yet the problem of housing for them does not stop here; they still have to pay the rate to the landlord monthly and are limited by contract in addition to the lack of taps, toilet, drainage or even electricity. If the government confiscates their land for further development of BEPZ they have to seek another place. They are uncertain of their future residence. The living condition in Mariveles was a shock to our group.
Squatters: Squatters are the joint product of poverty and the shortage of permanent housing. In Mariveles, squatters can be found everywhere. People become squatters because of their low wages and crowded tenements.
The houses of squatters look insecure, dirty and dangerous. The open drains and lack of water supply make the preparation of food seem a risk to health. They have to walk a distance for water and toilet. At night the feeling of backwardness is obvious for many of the squatters do not have electricity because they cannot afford it; thus, candlelight is used.
The overall picture of squatters is disorder and improvisation. Squatters are a menace to private and public health and their settlements are a refuge for criminals and drug addicts.
The government does not take care of the squatters; rather government officials are hostile to them. In a conversation we had, the chief of police told us that one of his responsibilities is to demolish squatters’ shacks.
The general conclusion that one can draw is that to develop BEPZ, the government is only concerned with native capitalists and foreign investors. But the basic condition for the habitation of the people is ignored; since NASSCO had been cleared by force by the government, it is now lying idle awaiting development by foreign investors. But the basic condition for the habitation of the people is ignored; since NASSCO had been cleared by force by the government, it is now lying idle awaiting development by foreign investors.
Since the development of BEPZ, the farmers who had lost their land and the workers who had suffered dislocation have sunk further in hardship and poverty. On the other hand,
the setting up of BEPZ has made the rich richer.
Since the development of BEPZ, the farmers who had lost their land and the workers who had suffered dislocation have sunk further in hardship and poverty. On the other hand, the setting up of BEPZ has made the rich richer.
The second most important problem of the people of Mariveles is water availability. The water system, which was installed in 1947 after liberation, served a much smaller population. It is understandable that with the upsurge in population, the water system cannot cope with the present needs of the town. Many places have wells; other people draw water from a public faucet (a long walk) or buy water at P2.50 per container.
Poor living arrangements and the lack of water are reflected in the morbidity and mortality figures for the region especially in the prevalence of gastro-intestinal diseases which are the most common illnesses and also the largest significant cause of deaths. Also, since the zone was constructed there has been an increase in bronchial diseases; no special reason was given for this,
Other problems have arisen from the immigration of workers. For example, the area was previously malaria free but workers coming from other parts of the country have brought it to the region. It is not widespread but care will be necessary to keep in under control.
There are a great number of social problems which have arisen as a result of the dislocation of people. People who were removed from NASSCO are usually unhappy and resentful. Workers in Mariveles are torn away from their families. Many girls interviewed said they did not want to work and would rather be with their families; however, they are forced to work because they help support their families.
Concerning mental health, generally problems are caused by extreme poverty. This has been aggravated lately by "self – induced" problems for some particularly among the youth who are on drug addiction.
Some other aspects of the effect of the zone on the people of Mariveles are: 1) the cost of living has increased dramatically from 5% to 30% in comparison with the prices in Manila. 2) Increased wealth in the area which is reflected in the municipal budget: 1967 – P55.000 and 1977 – P1,000,000,000 and 3) the increased wealth in the municipality should mean more public services. Although there has been marked expenditure for health and agriculture, the rate is not equal to the rate of population growth. This is most evident in the lack of public service facilities such as schools. Speculations are high that sooner or later, Mariveles will be relocated as the zone keeps expanding, getting closer and closer to the town.
Interview with Religious Leaders
In spite of the enormity of the problems of the people brought about by the development of the zone, the group felt that it was no cause for despair. This was mainly because of our encounter with people who are doing work within the community. Some religious leaders in Mariveles held a discussion with us and through them we learned of their efforts to create awareness among the people regarding their conditions so they, themselves, can organize and act towards meaningful changes.
A concrete contrast of 'the conditions there pointed out were the church building in BEPZ with that in the town. The ecumenical chapel which cost P6 million is located on top of a hill inside the zone and has marble floor and very expensive fixtures. In contrast the Catholic churches are all under construction — just shell enough for people to worship in.
The people are quite aware that their problems, their lives, are interlinked with forces outside themselves - those of the government, those of the capitalists and companies outside and all the structures that have been built to keep this arrangement stable. But
the people are also aware that changes not only in their lives mean a change in the structures which govern their lives. And the members of the group felt that seeds in the people have begin to grow so such changes can be made possible.
Ricky Yick Tai, Janice Calvert, Linda Sumilat, Jennie Hurley and Lin Newman.