<nettime> Report on Eco/Labor Implications of IT in Asia

[Soenke Zehle <soenke.zehle@web.de>]

Dear all,

I'm putting a short piece together called "Just Say No to E-Waste: How
Electronics Production Aggravates Global Water Struggles." If you come
across relevant nmaterial within the next few days, please send it to me
off the list. Thanx. S/Z

A Study of the Performance of the Indian IT Sector Prepared for the
Nautilus Institute for Security and Sustainable Development California
Global Corporate Accountability Project

by Radha Gopalan, 
Environmental Management Centre

Full Report at http://www.nautilus.org/cap/reports/index.html (other
reports about Malaysia, Taiwan, Thailand)

Executive Summary

The Electronics industry has emerged as the fastest growing segment of the
Indian industry both in terms of production and exports. This growth has
had significant economic and social impacts. Today the local and global
impact of the electronics industry has been due to its modern incarnation
viz., the Information Technology (IT) Industry. By definition the IT
industry includes the hardware "backbone" from the electronics industry
and software.

The present study looks at the IT industry focussing on the environmental,
health and labor issues associated with its rapid growth.

Emerging from the study is this report which, has been developed based on
interviews with industry, industry associations, government officials,
academicians and civil society. The report also draws from a field visit
to Bangalore ­ the Silicon City ­ and review of literature and studies
carried out by other researchers in this sector.

The Indian IT industry has a prominent global presence today largely due
to the software sector. Promotion of the software industry and protection
of the hardware industry from external competition has resulted in this
skewed growth. More recently however, policy changes have led to a
tremendous influx of leading multinational companies into India to set up
manufacturing facilities, R&D Centres and offshore software development
facilities. The domestic market for both software and hardware is getting
revitalized. All these developments have had a significant impact not only
on the economy but also the environmental and social milieu.

A number of new policy initiatives are on the anvil to enhance and sustain
the growth of the IT industry ­ this time the focus being both on hardware
and software. Given these developments, some questions that emerge are:
What has been the environmental and social impact of this industry and how
has it been managed? What are the likely impacts due to the envisaged
growth? How can accountability and responsibility of this rapidly growing
industry be ensured?

The report tries to answer these questions through a situation analysis of
the IT industry in terms of its structure and evolution, the existing and
emerging environmental and social issues and the associated regulatory
framework. Drawing from the findings of the situation analysis, a set of
recommendations are provided on how policy and governance measures can
ensure accountability and environmental and social responsibility of the
IT industry.

The report is composed of five chapters with the opening chapter
presenting a preamble that positions the electronics industry and the IT
industry. This puts the focus of the study in perspective.

The structure and evolution of the IT industry presented in Chapter 2.0
indicates that policy has played a very crucial role in shaping the
industry. Protectionist policies for the hardware industry and support for
establishment of a strong technical and scientific educational system led
to software dominated IT industry. This also led to extensive export of
the skilled labor force to service the international market and the
presence of a grey market in hardware.

The hardware industry meanwhile was relegated to the background. Trends
changed with liberalization of the Indian economy. Markets opened and
policies supporting foreign investments led to an influx of multinational
companies (MNCs)­ hardware and software. More recently, the software
industry has begun slowly moving up the value chain from programming to
systems analysis and design. More offshore work is being carried out in
India. R&D Centres and manufacturing (albeit only assembling of
components) facilities are being set up in India by MNCs. New policies and
plans with fiscal incentives, modifications in export-import policies,
support for infrastructure are now promoting foreign investment and
focussing on providing impetus to software and hardware sectors of the IT
industry ­ both domestic and export. This is also creating changes in the
grey market.

Infrastructure and finance however appear to be the main deterrents to
growth. Given how the industry has evolved and the likely trend for future
growth, Chapter 3 identifies the significant environmental and labor
issues. While manufacturing in the Indian IT industry is primarily
assembling, some component manufacture does take place for non-IT
applications. Software development dominates the domestic IT industry with
increasing off shore work being carried out in India and the emergence of
IT enabled services.

As a result of these developments the main environmental and social issues
facing the existing and emerging IT industry are: (I) solid and hazardous
waste management both during manufacturing and at the end of the IT
productsı useful life; (II) phasing out ozone depleting substances from
the electronics sector; (III) implications of the increasing energy
demands given the power scarcity in the country and (IV) congestion and
pressure on local infrastructure such as land, roads, housing, water and
power. The magnitude of some of these issues like hazardous and solid
waste management in manufacturing are not as high as they would be in
countries where there are fabrication facilities but in India solid and
hazardous waste management at the end-of-life stage could very soon become
a significant issue.

The labor issues facing the industry are: (I) challenges of retaining the
intellectual property in the country; (II) prevailing and changing working
conditions, health and safety at the work place, wages and (III) the role
of collective bargaining in the Indian IT industry. The Indian IT industry
is unique in that there is almost no unionization. Industryıs response is
distinctly differentiated by whether they are MNCs or domestic players.
Corporate codes of conduct are largely adopted by the MNCs for
environmental management while for the domestic players environmental
issues are not a priority at present.

To understand how significant the environmental, social and labor issues
really are, the legal framework that regulates management of these issues
is discussed in Chapter 4.0. While comprehensive environmental laws exist,
enforcement is an issue. Moreover, till very recently the electronics
industry has been considered non-polluting. As a result regulatory
controls have been low. Emerging regulatory framework does address some of
the issues but also aims to simplify the laws for the IT industry.

The elaborate labor laws are undergoing reforms. For the IT industry
however a number of labor laws are being simplified to promote investments
in this sector and to enable the Indian IT industry to face competition
from the more relaxed labor markets of South East Asia.

Given this scenario, policy and governance related recommendations have
been developed to enhance accountability and environmental and social
responsibility of the industry. The report suggests that policies be
developed to: (I) strengthen enforcement through monitoring, measurement
and reporting thereby improving accountability; (II) ensure uniform zoning
country-wide of hardware and software facilities placing the onus of
operating and maintaining these zones on industry and industry
associations; (III) provide incentives for resource efficiency in the IT
industry; (IV) promote proactive and preventive approaches to
environmental management as well as product stewardship and asset
recovery; (V) ensure a balance between flexibility and worker rights while
carrying out labor reform; (VI) promote studies and R&D to provide
technology support to the industry; (VII) create awareness and strengthen
civil society to increase industry accountability and (VIII) increase
stakeholder engagement.




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