Legal reforms for the self-employed: three urban cases.
Chen, Martha Alter ; Madhav, Roopa ; Sankaran, Kamala 等
Introduction
The need to balance job creation with basic protection for
workers--to make economic growth inclusive--is a major challenge for the
early 21st century. In India, as in most countries, labor laws rest on
the assumption of a clear employer-employee relationship, and commercial
laws rest on the assumption of incorporated enterprises with documented
accounts. But eighty per cent of the urban workforce in India is
informal, and half of urban informal workers are self-employed (Chen
& Raveendran, 2011, updated 2014). The mismatch between the existing
legal frameworks around employment and the existing employment structure
creates a major challenge for policy makers and calls for significant
legal reform.
At the beginning of the 21st century, employment grew at a faster
rate per year in urban India than in rural India (Chandrasekhar &
Ghosh, 2007). As of 2004-05, over half (54%) of the urban working age
(15+) population was in the labor force, either actively working or
actively seeking work: 79 percent of men and 24 per cent of women
(ibid). But since 2004-05, there has been a marked slowdown in
employment growth in both rural and urban India. By 2011-12, just under
half (49%) of the urban working age population was in the labor force:
76 per cent of men and 21 per cent of women (Chen & Raveendran,
2011, updated 2014). This slowdown in employment growth was accompanied
by a decline in self-employment, which had been growing. By 2011-12, the
shares of self-employment and wage employment in total urban employment
had reverted to their 1999-00 levels: at 42 and 58 per cent,
respectively (ibid).
However, the urban informal workforce was almost evenly divided
between self-employment (51%) and wage employment (49%) in 2011-12.
There are three main categories of the self-employed: employers (who
hire others), own account workers (who run single person or family
enterprises without hired workers), and unpaid contributing family
workers. In 2011-12, 38 per cent of the urban informal workforce (39% of
men and 31 % of women) were own account workers; 11 per cent (8% of men
and 20% of women) were unpaid contributing family workers; and only 3
per cent of men and 0.5 per cent of women were employers (ibid).
This article examines what laws and regulations impinge on--and
what legal reforms are needed for--three groups of informal
self-employed in urban India: home-based workers, street vendors and
waste pickers. In 2011-12, these three groups combined represented
one-fifth of the total urban workforce in India: home-based workers
(15%), street vendors (4%) and waste pickers (1%). Home-based work was
particularly significant for women: representing almost a third (32%) of
the female urban workforce. The article describes the conditions of
employment and work processes of these three groups, and introduces key
organizations of these workers in India. It then examines the legal
demands of these organizations of workers. Finally it draws out some
lessons for legal reforms for the self-employed in India and elsewhere.
This article draws on findings and recommendations from three
multi-country initiatives led by the global network WIEGO (Women in
Informal Employment: Globalizing and Organizing): an on-going program to
improve official national statistics on informal employment around the
world; a 2012 study of urban informal workers in 10 cities/9 countries
(including waste pickers in Pune and home-based workers plus street
vendors in Ahmedabad); and a multi-year project on law and informality
in four countries (Ghana, India, Peru and Thailand). Many of the
sector-specific findings, as well as recommendations of the 10-city
study and the 4-country project, are common across the different cities
and countries. In other words, what is detailed below about legal
reforms for home-based workers, street vendors and waste pickers is not
unique to India.
Home-Based Workers
Home-based workers produce goods or services for the market from
their own homes or adjacent grounds and premises: stitching garments and
weaving textiles; making craft products; processing and preparing food
items; assembling or packaging electronics, automobile parts, and
pharmaceutical products; selling goods or providing services (laundry,
haircutting, beautician services); or doing clerical or professional
work, among other activities. Although they remain largely invisible,
home-based workers are engaged in many branches of industry and
represent a significant share (14%) of the urban workforce in India,
particularly among women workers (32%).
For home-based workers, whose home is also their workplace, housing
is an essential productive asset. Inadequate housing is a commonly cited
problem by home-based workers. A small house hampers productivity: as
the home-based worker cannot take bulk work orders because she cannot
store raw materials and her work is interrupted by competing needs for
the same space of other household members and activities. Poor quality
housing allows goods and raw materials to be damaged. Monsoon rains
force home-based workers to suspend or reduce production, as equipment,
raw materials or finished goods get damaged when roofs leak or houses
flood; products (e.g. incense sticks) cannot dry due to leaks and
humidity; and orders are reduced due to decreased demand and/or
difficulties associated with transport during the rains (Chen, 2014).
When the home is also the workplace, basic infrastructure services
are essential for the productivity of work, especially electricity and
water. The accessibility and cost of public transport is also a key
factor for home-based workers who commute to markets on a regular, if
not daily, basis to buy raw materials and other supplies, to negotiate
orders, and to sell finished goods. A recent study of home-based workers
in Ahmedabad (India), Bangkok (Thailand) and Lahore (Pakistan) found
that transport accounted for 30 per cent of business expenses; and of
those who had to pay for transport, one quarter operated at a loss
(ibid). The distance between the home-based worker's home and the
market, contractor, or customers she deals with is critical, affecting
the cost of transport. When home-based workers are relocated to
peripheral areas they often have poor access to public transport and
their transport costs rise sharply.
There are two basic categories of home-based workers: independent
self-employed workers who take entrepreneurial risks; and sub-contracted
workers who depend on a firm or its contractors for work orders, supply
of raw materials and sale of finished goods. This second category of
home-based workers, the sub-contracted workers, is officially referred
to as "homeworkers". Since they are not directly supervised by
an employer, provide their own workspace and equipment, and cover many
of the non-wage costs of production including power and transport,
homeworkers are often classified as self-employed. However, because they
are dependent on a firm or its contractor for work orders, raw
materials, and sale of finished goods, they are sometimes classified as
wage workers. In reality, subcontracted home-based workers--or
homeworkers--occupy an intermediate status in employment between fully
independent self-employed and fully dependent employees (Raveendran et
al, 2013: 2). Also, many self-employed home-based workers are not fully
independent: as they have limited access to capital, knowledge of
markets, bargaining power, and control in commercial transactions.
Because they work at home, both groups of home-based workers tend
to remain isolated from other workers in their sector (apart from those
in their neighborhood) and to have limited knowledge of markets and
market prices. These factors limit their ability to bargain for more
favorable prices and piece rates or to negotiate with government for
basic infrastructure and transport services.
While home-based workers are present in most branches of economic
activity, they are concentrated in manufacturing, trade and repair
services: in India in 2011-12, 73 per cent of women home-based workers
were in manufacturing, 14 per cent in trade, 4 per cent offered
education services, and 3 per cent provided lodging or ran small
eateries (Raveendran et al, 2013). Among women home-based in the
manufacturing sector, 29 per cent produced hand-rolled cigarettes
(bidis), 26 per cent stitched or embellished garments, 22 per cent wove
textiles, 6 per cent produced food or beverages; 7 per cent produced
wood or cork products (mainly incense sticks), and 5 per cent made
furniture (ibid). Compared to women home-based workers, a lower percent
of men home-based workers were in manufacturing (41 %) and a higher
percent were in trade (35%) and other services, including repairs (6%)
(ibid).
Home-based workers and their activities are affected by government
policies and practices, notably land allocation, housing policies, basic
infrastructure services, and public transport. This is because their
homes are their workplaces; and they have to commute to markets and
transport supplies/goods to and from their homes. Legal reforms should
support policy interventions that upgrade settlements with large
concentrations of home-based workers to ensure they have adequate
shelter, water, sanitation and electricity. If and when home-based
workers and their families have to be relocated, efforts should be made
to ensure the relocation sites have, from the outset, adequate shelter,
basic infrastructure, transport services, and access to markets.
Home-based workers also need legal rights and protections against
unequal and, often, exploitative value chain practices and
relationships. Home-based workers have limited scope for negotiation or
leverage: due in large part to their isolation in their homes but also
to exclusionary urban policies or practices and to unequal or
exploitative value chain dynamics. To demand and secure their rights,
home-based workers need increased bargaining power, which comes with
being organized and being invited to have a seat at the policymaking,
rule-setting or negotiating table. Thus, for home-based workers,
belonging to their own organizations and having supportive
intermediaries are critically important.
There are many organizations of women home-based workers in India
and a South Asia regional network of home-based workers (Home Net South
Asia) headquartered in India (see www.homenetsouthasia.net). The
Self-Employed Women's Association (SEWA), a trade union of some 2
million informal women workers, has organized home-based workers in 11
states of India. It is the lead organization in the regional network.
SEWA has led the way in advocating for social protection and pension
coverage to home-based workers; negotiating welfare boards for different
categories of home-based workers; and negotiating higher piece rates for
sub-contracted home-based workers who manufacture incense sticks, bidis,
and garments.
Street Vendors
Street vendors offer a range of goods and services from streets and
other open public spaces. They represent 4 per cent of the urban
workforce across India (Chen & Raveendran, 2011, update 2014). In
large cities such as Mumbai and Delhi there are 250 thousand or more
street vendors (Bhowmik, 2014). Some street vendors come from castes or
communities for whom street vending is a hereditary occupation. Others
are migrants or laid-off workers for whom street vending affords low-end
but steady employment. Also, many home-based producers of garments,
textiles, crafts or cooked food sell their goods in street markets.
Street vendors offer working people, and even middle class consumers, a
convenient place to buy goods at low prices; serve as key links in the
wider urban distribution system; and enrich the cultural life of cities.
In India and elsewhere, there are three basic categories of street
vendors: those who buy goods, typically from wholesalers, and sell them
at a margin (e.g. those who sell fresh fruit and vegetables); those who
make, manufacture, or transform goods and sell them directly to
consumers (e.g. cooked food vendors); and those who provide or perform
services from a street or other open public space (e.g. barbers)
(Roever, 2014). Those who buy-and-sell "are challenged to find good
prices from suppliers; keep other costs, such as transport and storage,
to a minimum; and sell at volume to generate profit" (Roever, 2014:
10). Those who transform goods "must find a place to make their
goods, usually at home or in the street, but sometimes at a workshop or
other unused space; then they must find a place to sell them to
consumers. They must also find a place to store unsold goods, or to
store the equipment used to make the goods (such as portable stoves or
juice machines for cooked food or prepared drink vendors). The work of
these vendors entails value addition and is sometimes more dependent on
workplace infrastructure, such as electricity and running water, than
buy-sell traders" (ibid: 10). Service providers tend to "have
fewer challenges when it comes to transporting goods, although they may
need machinery or tools to be stored at or transported safely to their
vending post. However, they are often reliant, like manufacturers, on
electricity and/or need either specialized training or substantial
access to capital to purchase the necessary machinery, tools or
inputs" (ibid: 11).
Within these basic categories, street vendors can be further
differentiated by a) whether they sell perishable or durable goods; b)
whether they work on their own, with family workers, or with hired
workers; c) whether they are independent, tied through credit-purchases
to a wholesaler, or sell on commission for formal retailers; and d)
whether they sell in central business districts or more peripheral
areas, around wholesale markets, near transport nodes, religious
institutions or educational institutions, or near residential areas.
More so than home-based workers, street vendors are directly
affected by the regulations and policies of city governments and the
practices of city officials. Across most cities of India, and other
countries, government policies or practices undermine the ability of
street vendors to pursue their livelihoods. Abuse of authority by the
police and local officials is the most common complaint: this
"includes police harassment, demands for bribes, arbitrary
confiscations of merchandise, and physical abuse. These practices tend
to take place in urban policy environments that do not define a role for
street trade or offer a viable space to accommodate it. In that context,
street traders also rank the lack of a fixed and secure workplace and
evictions from (or demolitions of) existing workplaces among the most
significant negative drivers" (ibid: 25). A study of street vendors
and public space in Ahmedabad found that local leaders collect
"protection" money each day, week or month from street vendors
in their market areas which they hand over to the police after taking
their cuts: the amount paid differs by whether the street vendor sells
from the pavement or from a push cart (Brown et al, 2012).
Where cities attempt to regulate street vending, the licensing and
permitting practices and their associated taxes, fees, tolls and levies
have a significant impact on vendors. Most vendors "pay all manner
of tolls, levies, and fees--as well as bribes--to use public space"
(Roever, 2014: 26). But most street vendors lack urban infrastructure
services at their vending sites, including running water and toilets,
electricity, and waste removal. "Prepared food vendors must cook at
home or ferry water to their stalls, street tailors and hairdressers
stop working when the power goes out, and market vendors spend time and
money organizing ad-hoc waste removal systems where city services
fail" (Roever, 2014: 26). The fact that most cities do not consult
with street vendors around such practices only compounds the problem.
When they operate without a license, street vendors in India are
considered illegal under most municipal acts: leaving them subject to
treatment as criminals under the Indian Penal Code and to rent-seeking
in the granting of licenses. But the license regime for street vending
is opaque and repressive. Many cities have inappropriate license
ceilings: for instance, in Mumbai, where there are an estimated 250,000
street vendors, the municipal corporation arbitrarily fixed a ceiling of
only 14,000 licenses; and even these were not issued for many years
(Bhowmik, 2000). In Kolkata, street vending without a license is a
non-bailable offense (ibid.)
Estimates suggest that street vendors occupy only two percent of
urban land but are legally barred from doing so. A 2000 study of street
vending in seven cities of India found that only two cities, Bhubaneswar
and Imphal, made provisions for street vendors in their city plans
(ibid). The other five cities, Ahmedabad, Bangalore, Delhi, Kolkata,
Mumbai and Patna, earmarked spaces in their plans for hospitals, parks,
offices, residential colonies, and bus and rail terminals but excluded
the vendors who naturally congregate around these areas, providing
essential goods and services at low costs. Increasingly, cities around
India, and elsewhere, are allocating public space for large-scale modern
retail--malls and shopping arcades--while continuing to neglect
small-scale traditional retail.
Because they congregate in public spaces street vendors come to
know their common harsh treatment by local authorities. Because they
often are banned or evicted from their vending sites street vendors know
the value of collective action. As a result, more so than other groups,
street vendors have organized themselves into trade unions and
associations. The National Alliance of Street Vendors of India (NASVI)
based in Delhi, is a federation of 715 street vendor organizations,
trade unions and support organizations (NGOs). SEWA has large numbers of
street vendors among its members across in many cities across 11 states
of India. SEWA and NASVI led the long campaign for a national law of
street vending, passed in March 2014, and continue to advocate for the
law to be implemented.
Waste Pickers
Roughly one per cent of the urban workforce in India is engaged in
waste collection and recycling (Chen & Raveendran, 2011, updated
2014). Waste pickers are those who do the primary collecting and sorting
of waste, reclaiming reusable and recyclable materials. Waste pickers
may collect household waste door-to-door or from the curbside;
commercial and industrial waste from dumpsters; or litter from streets
and urban waterways. Some work on municipal dumps.
Treated as nuisances by authorities and with disdain by the public,
waste pickers are usually ignored within public policy processes and
frequently suffer low social status and self-esteem. They are
particularly susceptible to violence by the police. They may face
exploitation and intimidation by middlemen, which can affect their
earnings. Most crucially, they are negatively impacted by the
privatization of municipal solid waste management services which
increases competition for waste and makes the recycling activities of
waste pickers illegal.
Handling waste poses many health risks to workers. These are even
greater for informal workers due to their unprotected exposure to
contaminants and hazardous materials on a day-to-day basis. Risks
include contact with fecal matter, paper saturated by toxic materials,
bottles and containers with chemical or health residues, contaminated
needles, and heavy metals from batteries (Cointreau, 2006). A lack of
worker protection and poor access to health care aggravate these risks.
Waste pickers face great risks of injury, especially those who work at
open dumps and may be run over by trucks or become the victims of
surface subsidence, slides and fires. They are also exposed to great
quantities of toxic fumes. Waste pickers also endure ergonomic hazards
such as heavy lifting, static posture and repetition, and may have high
incidences of low back and lower extremity pain (ibid.).
There are many organizations and a national alliance of waste
pickers in India. Many of these organizations are legally incorporated
and/or function as a trade union or cooperative, collectively bargaining
for access to waste and waste collection contracts. If they secure a
contract, these organizations then legally incorporate a cooperative
and/or function as a cooperative, collectively providing a service. What
is distinct about the organizations of waste pickers is that they have
to both collectively bargain for access to waste and waste collection
contracts and, if they receive a contract, collectively provide a
service. The organizations have to perform, that is, the functions of
both a trade union and a cooperative.
SEWA has been organizing waste pickers since the late 1970s,
beginning in Ahmedabad city but now covering cities across several
states: Bihar, Gujarat, Delhi, and more. SEWA has created nearly 90
waste pickers cooperatives to help its members negotiate collective work
contracts and access to credit, training, and markets. The Kagad Kach
Patra Kashtakari Panchayat (KKPKP) Union in Pune has also created a
waste picker cooperative which has secured a contract for collecting and
sorting waste from the Pune Municipality. Hasiru Dala, an organization
of waste pickers in Bangalore, has teamed up with the IT sector to
create a cloud-based technology whereby households and firms that
generate waste can procure waste management services directly from waste
pickers and their organizations. Safai Sena is an association of waste
pickers in Delhi supported by Chintan, an environmental research and
action group. The Alliance of Indian Waste Pickers (AIW), a national
network of 35 organizations in 22 cities, facilitates peer support,
learning and advocacy among waste picker organizations and support NGOs.
Individually and collectively, these organizations have made the
case--and generated credible evidence--that waste pickers collect,
recover and recycle a sizeable share of the waste generated by cities
and, thus, contribute to both cleaning the cities and reducing carbon
emissions. (1) But municipal governments across India continue to issue
solid waste management contracts to private companies who compete with
the waste pickers for waste and do not reclaim recyclables, thus
contributing to carbon emissions.
Legal Demands
The common legal rights that all three sectors demand and have
pursued include the right to identity and dignity as workers, the right
to work, the right to organize and to have their organizations
represented in relevant policy-making and rule-setting processes, and
the right to social protection coverage. There are ongoing legal
struggles--with some victories - to extend the right of identify as
workers to include own account workers and unpaid contributing family
workers and to expand the right to work to include the right to
livelihood. Organizations of informal workers are gaining increased
official recognition and, to a lesser extent, increased representation
in official policymaking and rule-setting processes.
In India, as elsewhere, there is greater reception to the demand
for social protection than to the other legal demands of informal
workers (Sankaran & Madhav, 2013). In India, several states have
been willing to set up welfare funds and to invite companies to
contribute to industry-specific welfare funds; to expand existing funds
and schemes; to set up new health and pension schemes for informal
workers. The national health insurance program, Rashtriya Swasthya Bima
Yojna, is being extended to cover informal workers, including
construction workers, domestic workers and street vendors. But the rules
and procedures of this program are not very favorable for these workers
or easy to navigate.
Indeed, "a complex range of sector-specific regulatory laws
impact workers in the informal economy, especially own-account workers
and the self-employed more generally" (ibid: 5). For example, the
right to access public resources--whether waste, urban space, or urban
services (basic infrastructure and transport)--is fundamental to all
sectors: key legal battles pit the privatization of these public
resources against the demands for the right to livelihoods of informal
workers (ibid).
The laws and regulations that impinge on urban informal workers,
especially the self-employed, can be broadly categorized as follows: (2)
* municipal regulations that specify who can do what, where;
determine access to--and use of--public resources; and balance
conflicting needs and uses
* sector-specific regulations that govern specific sectors (e.g.
manufacturing, trade, waste)
* employment and commercial regulations that govern economic
transactions and relationships
* macro-economic regulations and policies that govern taxation,
expenditure and investment.
What follows is the specific legal demands of the three groups of
urban informal self-employed under each of these categories:
Municipal Regulations
Zoning, land allocation, and relocation policies: Overly strict
separation of land uses (such as single-use zones) can negatively impact
the livelihoods of urban informal workers. It is important to promote a
balanced mix of uses that fruitfully interact with each other. In regard
to home-based production and street trade, "it is important to
distinguish not only land uses but also the scale of the uses--because,
for example, a small tailor workshop may enrich a residential
neighborhood while a sewing factory may cause undue nuisance"
(Nohn, 2011:4). Distinguishing both land uses and the scale of uses
would allow policy makers to better address the needs of home-based
workers and street vendors. In the case of home-based work and street
vending, "it may be advisable to let neighbors decide whether or
not such activities are desirable in the neighborhood" (ibid). Most
critically, evictions and relocations of homes and other workplaces,
especially to the periphery of cities at a distance from markets,
contractors and customers, pose a direct threat to the livelihoods of
the urban self-employed.
Access to--and use of--public resources and services: most
self-employed informal workers in urban areas rely on access to public
resources for their livelihoods: for example,
* public land and housing for home-based workers
* public space for street vendors
* waste for waste pickers
* public space/warehouses for sorting and storage for street
vendors and waste pickers
* basic infrastructure services at their homes for home-based
workers and at their natural markets for street vendors
* public transport for all three groups
The policies and regulations that determine access to public
resources and services are often biased against the working poor in the
urban informal economy, who are not considered to be productive and are
not, therefore, included in most urban plans or local economic
development plans. Most critically, privatization of public resources
and services often poses a direct threat to the livelihoods of the urban
self-employed.
On the other hand, policies, legislation and regulations that seek
to protect the sustainable use of public resources and the environment
may contribute to protecting livelihoods of the urban informal
self-employed. For instance, policy or regulatory choices to protect the
environment through composting and recovery of recyclable s can protect
the livelihoods of a large number of waste pickers. Similarly, policy or
regulatory choices to protect public green spaces might also support the
livelihoods of street vendors by allowing them to vend around these
spaces as part of the cultural landscape. Also, policy or regulatory
choices to protect the environment might support home-based production,
which leaves less of a carbon footprint than production in workshops and
factories.
Balance of conflicting needs and users: Some legal and regulatory
frameworks seek to balance competing interests of different
groups--citizens, informal workers, other economic actors. Here are two
key examples that affect street vendors:
* use of public space, such as sidewalks--street vendors
* public health regulations--street food vendors
Citizens have the right to use sidewalks and to be assured that
street food is safe. In such cases when competing interests are
legitimate, the legal demands of street vendors need to be carefully
chosen and negotiated.
Sector-Specific Regulations
Informal workers and their activities are affected by laws,
regulations and policies that govern specific sectors of the economy:
some of these fall under the jurisdiction of municipal governments,
others under state or provincial governments, and still others under the
national government. Regulations that govern specific manufacturing
industries should in principle cover home-based workers in those
sectors: for example, home-based workers who produce hand-rolled
cigarettes (bidis) should be entitled to certain protections and
benefits mandated in two laws from the 1960s governing the bidi
industry. Also, welfare funds set up for workers in specific
manufacturing industries should cover home-based producers in those
industries. But in both cases, home-based producers need to be organized
and have supportive intermediaries to leverage these protections and
benefits.
Street vendors are impacted by the regulations governing the
location, management and fee structure of wholesale markets. Marketing
costs at the wholesale markets include market fees, commission fees,
loading and unloading charges. How much is incurred by sellers to or
buyers from these markets is determined by local multi-stakeholder
committees that manage wholesale markets and often differ for
sellers/buyers of different goods such as fruits versus vegetables. And,
as noted earlier, waste pickers are directly impacted by whether or not
municipal governments decide to privatize solid waste management or
retain public responsibility for social waste management.
Employment & Commercial Regulations
In the 10-city study of the urban informal economy, in addition to
hostile government policies and practices, unfair practices by
suppliers, buyers and competitors were identified as key negative
drivers in the urban informal economy (Chen, 2014; Roever, 2014). There
are few regulatory frameworks that address value chain dynamics and
relationships and those that exist typically address the concerns of
sub-contracted, not self-employed, informal workers. Yet the informal
self-employed are also often dependent on other actors in the value
chain and this dependence renders them vulnerable to exploitation.
Home-based workers often rely on specific suppliers or buyers as they
lack market knowledge; street vendors often rely on specific wholesalers
who sell them goods on credit; and waste pickers often sell to specific
waste traders as they too lack market knowledge: in all such cases, the
informal self-employed are not able to negotiate reasonable prices for
what they buy or sell or protect themselves when the goods they buy or
supplies they are given turn out to be of poor quality.
Macro-Economic Regulations
In addition to hostile government policies or practices and unfair
value chain dynamics, fluctuating demand and rising prices are key macro
factors that impact negatively on the urban informal economy (Chen,
2014; Roever, 2014). Therefore, ensuring steady markets and reasonable
prices for their inputs and products is of critical importance to the
informal self-employed. Whether or not prices should be set by
governments or markets is hotly debated. Other accepted domains of
macro-economic regulations and policies--taxation, expenditure and
investment are not particularly sensitive to the specific needs of the
informal self-employed (Sankaran & Madhav, 2013). The whole issue of
taxation and the informal economy needs to be better understood and
addressed: most informal workers pay taxes and operating fees of various
kinds but feel they get little in return from the government (Chen,
2014; Roever, 2014). The informal self-employed who pay value added tax
(VAT) on supplies cannot easily claim tax rebates to which they might be
entitled if their enterprises were legally incorporated (Valodia, 2014).
Further, one important means to increase and stabilize demand for the
goods and services of the informal self-employed is government
procurement, notably: contracts to supply goods and services to public
institutions such as schools or hospitals; and also contracts to provide
waste management services.
Legal Reform in Action
What does it take to bring about legal reforms in support of
informal workers? Consider the case of legal reforms for street vendors.
In the late 1990s, SEWA and the National Alliance of Street Vendors of
India (NASVI) conducted studies on street vending in seven major cities
of India (Bhowmik, 2000). The findings of this study were presented at a
large meeting of street vendors in Delhi in 2001, organized by SEWA and
NASVI in collaboration with the Ministry of Urban Development. At this
meeting, the government promised to set up a taskforce to draft a
national policy on street vending. This policy was approved by the
cabinet of India in 2004. The same year, the government set up a
National Commission on Enterprises in the Unorganized Sector (NCEUS),
which was mandated, among other tasks, to review the national policy on
street vendors. A new policy was approved in 2009.
While SEWA and NASVI had advocated for the national policy, they
felt that a national policy was not enough: that street vendors also
needed legal rights. They argued that street vending was not just an
issue of urban policy but rather an issue of the legal right to
livelihood (Bhowmik, 2014). They began organizing meetings and
demonstrations of street vendors in all their constituencies across
India to demand a uniform law to protect the livelihoods of street
vendors by regulating street vending in an appropriate and transparent
way.
The Street Vendors (Protection of Livelihoods and Regulation of
Vending) Act was passed by the Lok Sabha (Lower House of the Parliament
of India) in September 2013 and by the Rajya Sabha (Upper House) in
February 2014, and received the assent of the President of India in
March 2014. The Act aims to provide livelihood rights and social
protection to street vendors and to regulate and improve the prevailing
license system. "The Act states that no existing street vendor can
be displaced until the local authorities conduct a census of street
vendors in the concerned urban centre. All existing vendors have to be
provided with permits for conducting their business and a Town Vending
Committee (TVC) will supervise the activities of the vendors. This
committee, which will be the main policy making body on street vending,
comprises municipal authorities, policy, the health department and other
stakeholders. Representatives of street vendors will constitute 40% of
its membership and women will comprise 33% of the street vendors'
representatives" (Bhowmik, 2014:1).
The Act came into force on May 1, 2014. NAS VI, SEWA and street
vendors around the country welcomed this Act as a major victory as it
mandates that street vendors should be protected, not just regulated,
and specifies clear procedures for regulation and registration,
including the local vending committees with street vendor
representatives.
Legal Reforms for the Self Employed
Legal reforms in support of the informal workforce in general, and
the self-employed in particular, will require transforming the debates
and mindsets about the informal economy. So long as the informal economy
is viewed as illegal or even criminal and informal workers are blamed
for being illegal or criminal, they will continue to remain under the
punitive, rather than the protective, arm of the law. And yet most of
the working poor in India are engaged in the informal economy where they
are trying to earn an honest living in a hostile regulatory environment.
What is required is focused and sustained attention to determine which
policies, laws and regulations impinge--directly or indirectly,
negatively or positively--on workers in each sector of the informal
economy. This will require on-going efforts to ensure that informal
workers in all sectors are visible in labor force and other economic
statistics, that in-depth case studies of specific groups of informal
workers are prepared, and that organizations of informal workers have a
voice in relevant policy-making and rule-setting processes. It will also
require that informal workers and their activities are recognized and
valued as the broad base of the workforce and economy in India and are
incorporated into economic planning at all levels of government.
Legal reforms for the informal workforce in general, and the
self-employed in particular, will also require transforming existing
legal and regulatory frameworks. Here are some common issues or themes
for future legal reforms that have emerged from the legal struggles
summarized in this article:
Legal Recognition
Underpinning the many legal demands raised by different groups of
informal workers is a primary demand for legal recognition and status
(Sankaran & Madhav, 2013). This demand for legal recognition has
several inter-related dimensions. First, informal workers want to be
recognized as being legal, not illegal. Through their legal struggles,
they try to highlight that the existing regulatory frameworks force them
to operate illegally: if their residential area is zoned for single-use
(home-based workers), if not enough licenses are issued (street
vendors), or if waste is privatized (waste pickers), these informal
workers and their activities are considered illegal. Second, informal
workers want to be recognized as economic agents who contribute to the
economy, to the city, to society and want to be integrated into local
economic development and city plans. Third, they want legal recognition
of their organizations and the related right of representation. Fourth,
most informal workers, with the exception of employers who hire others,
want to be recognized as workers (3) and, more specifically, to have
their organizations recognized by the Workers Group in the tripartite
system of the International Labor Organization.
Access Rights
The livelihoods of informal workers, especially the self-employed,
depend on access to resources, especially to public resources and
services. As noted throughout this paper access to key public resources
are essential to the livelihoods of the three groups: for home-based
workers, housing in central locations; for street vendors, vending sites
in good locations, ideally in existing natural markets around transport
nodes, institutions, and residential areas; for waste pickers, access to
waste and also to solid waste management contracts; for home-based
workers and street vendors, basic infrastructure services at their
workplace; for street vendors and waste pickers, space to sort and store
goods. And for all three groups, accessible and affordable public
transport is essential. Evictions from established places of work as
well as privatization of public resources and services are major threats
to their livelihoods. For urban informal workers, most of these access
rights are governed by municipal regulations: a mix of the regulations
governing the resources themselves, including balancing competing users
and interests, as well as regulations governing who can do what, and
where.
Municipal Regulations
Urban informal workers demand more inclusive municipal laws,
policies and plans that take into account their contribution to the city
economy and integrate their needs. In addition to integration into city
plans and local economic development, each group of urban informal
worker needs municipal governments to guarantee certain specific rights:
home-based workers need housing rights and mixed-use zoning of the areas
where they live and work; street vendors need licenses (or permits) and
secure vending sites, ideally in the natural markets where they have
always vended; and waste pickers need access to waste and the right to
bid for solid waste management contracts. Underlying all of these
sector-specific demands is a common struggle against the tendency of
municipal governments to privilege formal commercial enterprises over
informal commercial enterprises and the leisure and consumption of the
rich over the work and production of the poor. What is needed is a
fundamental transformation of the vision of cities to embrace economic
diversity--the informal and traditional alongside the formal and modern
and a fundamental transformation of the political economy of cities to
reduce the disadvantage of the working poor in the urban informal
economy.
Employment & Commercial Rights
A key, but challenging, area of legal demands by informal workers
is for rights pertaining to their working conditions as well as their
economic relationships and transactions. Many informal workers do not
operate within the bounds of traditional labor jurisprudence, which is
premised on establishing an "employer-employee relationship",
notably the self-employed but also sub-contracted workers and even some
informal wage workers (such as domestic workers).
But the informal self-employed also do not operate within the
bounds of traditional commercial jurisprudence which is premised on
formal establishments of a certain size. Therefore, in their legal
struggles, many organizations of informal workers turn to the state to
be the arbiter and regulator of working conditions and relationships.
But governments and the organizations of informal workers have struggled
to formulate an effective response to this demand (Sankaran &
Madhav, 2013). More can, and should, be done to modify and extend
employment and commercial regulations to match and cover the various
types of informal workers.
Finally, legal reforms for the informal workforce in general, and
the self-employed in particular, will require fundamental rethinking
regarding regulations and the informal economy. To begin with, there is
a common assumption that the informal economy--and those who work in
it--are outside the reach of the state or its laws. But, as the evidence
presented in the article has illustrated, the informal workforce and
their activities are not outside the reach of the state or its laws.
Rather, often they are inside the punitive arm of the law but outside
the protective arm of the law.
Secondly, labor and employment laws have limited salience for the
informal self-employed. In urban India in 2011-12, only 3 per cent of
men informal workers and half a per cent of women informal workers hired
others. The vast majority of the informal self-employed are own account
workers or unpaid contributing family workers (Chen & Raveendran,
2011, updated 2014).
Thirdly, a wide range of policies, laws and regulations have
salience for the informal self-employed: from municipal to
sector-specific to commercial regulations to macro-economic. What is
required to reduce the legal risks and barriers faced by the working
poor in the informal economy--and thereby to increase their earnings and
productivity--is to assess and monitor the impact of all laws,
regulations and policies on their livelihoods and lives. At present,
most laws, regulations and policies relating to the functioning of
cities and the economy ignore the productive roles and contributions of
the working poor, relegating them to the domain of social policies. What
the working poor in the informal economy want and need is legal
recognition and legal protection as economic actors as well as
integration into economic planning at all levels.
References
Bhowmik, Sharit K. (2000), Hawkers and the Urban Informal Sector: A
Study of Street Vending in Seven Cities, Delhi: National Alliance of
Street Vendors of India (NASVI).
--. (2014), "Street Vendors in India get Legal
Protection". Global Labor University's Global Labor Column.
Number 174, June 2014.
Bhowmik, Sharit K. & Debdulal Shaha (2012), "Street
Vending in Ten Cities in India". Delhi: National Alliance of Street
Vendors of India.
Brown, Alison, Michal Lyons, & Darshini Mahadevia (2012),
"Claiming Urban Space: Street Vendors in Ahmedabad" Law,
Rights and Regulations in the Informal Economy ESRC-DFIC Research
Project. Cardiff University, London South Bank University, and Centre
for Urban Equity, CEPT University.
Chandrasekhar, C.P. & Jayati Ghosh. (2007), "Recent
Employment Trends in India and China: An Unfortunate Convergence?"
Paper presented at ICSSR-IHD-CASS seminar on "Labor Markets in
India and China: Experiences and Emerging Perspectives," 28-30
March 2007, New Delhi.
Chen, Martha Alter (2014), "Informal Economy Monitoring Study
Sector Report: Home-Based Workers." Cambridge, MA, USA: WIEGO.
Chen, Martha A. & G. Raveendran (2011 updated in 2014), Urban
Employment in India: Recent Trends and Patterns. WIEGO Working Paper
(Statistics) No. 7. Cambridge, MA, USA: WIEGO.
Chintan (2009), Cooling Agents: An Examination of the role of the
Informal RecyclingSector in Mitigating Climate Change, New Delhi, India:
Chintan.
Cointreau, Sandra (2006), Occupational and Environmental Health
Issues of Solid Waste Management--Special Emphasis on Middle- and
Lower-Income Countries, The World Bank Urban Papers, 2. Washington,
D.C., The World Bank.
International Labour Organization (2002), Resolution on Decent Work
& the Informal Economy, Geneva, Switzerland: ILO.
http://www.ilo.org/public/english/standards/relm/ilc/ilc90/pdf/pr-25res.pdf
Nohn, Matthias (2011), Mixed-Use Zoning and Home-Based Production
in India. WIEGO Technical Brief (Urban Policies) No. 3. Cambridge, MA,
USA: WIEGO
Raveendran, Govindan, Ratna M. Sudarshan & Joann Vanek (2013),
Home-Based Workers in India: Statistics and Trends. WIEGO Statistical
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Roever, Sally (2014), Informal Economy Monitoring Study Sector
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No. 1. Cambridge, MA, USA: WIEGO.
Valodia, Imraan (2014), Taxation in the Informal Economy, WIEGO
Working Paper, forthcoming. Cambridge, MA, USA: WIEGO.
Martha Alter Chen is Lecturer in Public Policy, Harvard Kennedy
School, Affiliated Professor, Harvard Graduate School of Design &
International Coordinator, WIEGO N etwork. E-Mail: martha_chen@harvard.
edu. Roopa Madhav is Associate Professor, School of Habitat Studies,
Tata Institute of Social Sciences. E-Mail: mroopam@gmail.com. Kamala
Sankaran is Professor, Faculty of Law, University of Delhi. E-Mail:
kamala.sankaran@gmail.com
(1) A 2009 report by Chintan estimates that informal recycling in
Delhi reduced carbon dioxide (C[O.sub.2]) emissions by 962,133 tons last
year--roughly equivalent to taking 175,000 vehicles off the road
(Chintan, 2009).
(2) This typology is an expanded version of a typology of
regulations developed by Kamala Sankaran and Roopa Madhav who directed
the 4-country project on Law and Informality of the WIEGO network and
its local partners in each country (Sankaran & Madhav, 2013).
(3) The right of own account workers to be recognized as workers,
belonging to the Working Group of the International Labor Organization,
was endorsed in Clause 4 of the ILO Resolution on Decent Work & the
Informal Economy, 2002 which reads: "Workers in the informal
economy include both wage workers and own-account workers. Most
own-account workers are as insecure and vulnerable as wage workers and
move from one situation to the other. Because they lack protection,
rights and representation, these workers often remain trapped in
poverty" (ILO, 2002).