The media circus continues…

If the stakes were lower, this could be hilarious; here are the newest twists in the story about the order to close spas

• The government asks for legal advice (closest translation) from supreme court on the legality of sale of alcohol and pork. This in itself is funny because supreme court is nobody’s lawyer!
• MATI, (resort workers arch enemy!) or the resort owner’s cartel is suing government for ordering closure of spas in resorts and seeking damages caused to the industry’s reputation. This in itself is funny if we consider that the secretary general of MATI is the husband of tourism minister! The dynamics of suing a person’s own wife as part of the job will no doubt be painful and we are sorry for the sorry couple. 🙂  However its very likely that they are more in the know with the specifics of the case against them both and hope they can amicably settle their difference in their own sweet private time.
• DQP (National Party) which has successfully sued government many times before and won cases against government possibly as a precursor to another court case has requested the police investigate tourism minister and the president for causing irrevocable harm to tourism industry saying that the rulings derived from the false-wedding-vow should be applied in this case. The gist of that ruling was that its a civil offense to cause any harm to the economy of the country either by deed or by action..

What is not funny in these political maneuvering is

• The negative publicity this generated across the media despite the high value tourism we have. The administration clearly needs to dismiss their spin doctors who didn’t warn them about this media storm.
• The judiciary is not yet famed for their impartiality and a slanted judgment will force the government to reinvent the wheel of tourism.

However it is our assessment that these suits and counter suits are just political equivalent of ruling MDP and opposition coalition pulling each others legs, because ultimately neither party will be able to take responsibility for destroying the tourism product.

The long overdue recognition of Worker’s Day

The government has added May 1 to the list of official public holidays after a cabinet meeting yesterday. Its an improvement from over the years where a day for workers rights was unheard of. Workers rights in the Maldives has largely been championed by the tourism sector workers who have put a lot of effort to raise the issues of workers and has suffered the most. The last workers rally conducted by the TEAM was attended by a few dedicated resort workers and was a novelty kind of approach to voice workers issues. The few attendees held placards displaying various issues faced by the workers. The issues included calls to implement the provisions of labour law as well as demands to review the labour laws! The situation is worse this year as recent patches to labour law crafted by MATI (resort owner’s cartel) has been added in to labour laws, which almost effectually bans workers protests in resorts.

The employers appears still firmly locked in medieval mindset when it comes to playing fair with the workers. What has to dawn on employers is the fact that a happy, loyal, motivated workforce will be more productive and more beneficial for the business they are employed in. It doesn’t make anybody a genius to know that and to apply these. It would also be universally acknowledged that employers in this day and time couldn’t be that daft not to know such a basic truth. However it should be beneficial to be reminded that we are dealing with the same employers who raised fears that resorts would have to hire double the amount of staff they were currently employing just to comply with the 8 hour work rule when the labour law was enacted. Its a sign of how low the employer class been and how much catching up there is.

the livable wage

Despite our country swiftly becoming a recognized brand name in leisure tourism around the world, there is a lot we have to catch up with other countries in terms of how they treat their very own kind. Resorts or islands are not a new phenomenon. Some other countries also have white sands and small islands where tourists come. However ours and theirs difference seems to be how ‘they’ treat their own people. The employees who do all the hard work need a fairer deal then what they get now. In most other countries they have moved beyond the minimum wage, tackled the liveable-wage whilst we are still stuck at the minimum wage. There was one piece of small legislation timidly sent to Citizens’ Majlis which tried to figure out what the minimum wage should be for Maldives, which was duly killed by a Majlis member for apparently no reason (other than the fact that these concepts simply doesn’t register in their hollow shells…{forgive sentiment, we workers are entitled to be a little bit angry when our issues are trampled most unceremoniously by these MPs}). What is absurd about this situation is that our employers not at risk of imminent danger to their business by being mandated to follow or do better than a minimum wage. Nor is there a healthy business lobby in Majlis to kill workers interest except from MATI which is kind of a think-tank for the business folks. Even the situation being as it is, and the country enjoying a healthy unemployment rate, nobody seems to be worried about this. And there are reasons for their short-sightedness.
Reasons:
1.The govt. is too fond of playing PR for the whole world, their theme is environmental protectionism. The current government as well as the former government did the same. They all are good for PR and environmental protectionism is easy to play act. Confronting real life issues is tough and thankless and they are aware of it.
2.The parliament recently (about 2 years ago) got the freedom to set their own wages and leaves and other perks, so from then on its like the boy who got locked in a sweet shop! Why should they care when they are so much relieved from reality of life?
3.The civil service is too polarized and undecided as to where their ultimate faith shall be. For the past 30 years, they played poodles to a dictatorial regime doing only its bidding like faithful robots. They have yet to realize that they are also workers and are not any better than the rest of the crowd.

Great nations of the world arose to prominence by being generous to their own kind. In the words of Henry Ford (1863-1947, Founder of Ford Motor Company) ‎”One’s own employees ought to be one’s own best customers… Paying high wages is behind the prosperity of this country.”

So we need to set a minimum wage to workers. The average pay of workers in resorts is still around 3000rf per month. Which is barely survivable if the worker has his family in the islands. However lack of medical and educational facilities in the islands forces the workers to emigrate to Male’ which wipes out 50 to 80% of the average income of the family for rent.

When they are right, even when wrong…

Maldives Association for Tourism Industry has an interesting Operating Guideline: It reads “The member is right, even when s/he is wrong!”. This is an interesting operating guideline which pretty well sums up MATI. The association also has a 5 point agenda the first one of which is resort lease period extension.. To all extents MATI seems to have achieved the first point in the agenda with the government agreeing to extend the existing lease period of the resorts to 50 years if the resort agrees to pay a sum of money. Currently all resorts has individual land lease agreements with government which were drawn up as was when needed, hence the conditions were favourable for the first batch of resorts and gradually got tougher for the latest batch of resorts.

The goods and services tax bill (3.5%) was heavily fought over in the parliament, by the opposition and the government and all sides made concessions to others. That much was apparent from the media. But what was not apparent was the involvement of MATI the resort owners club which cut a deal with the government to extend the existing resort leases. The government has agreed to the cartel’s demand upon the resorts paying a further 100000$ dollar per resort per year for the extension. Now the important question that comes to mind is what sort of leverage the cartel has over the political process? Other than pledges or promises of campaign funding what more leverage does the resort owner’s cartel have? What was the big need for the government to cut a deal with the resort owners over the tax bill in the first place? These are tough questions needing straight answers nobody seems to have.

The Goods and Services Tax is currently only a framework of laws which requires further regulations and by-laws for the process to work, which are still in the process of formation. GST law requires implementation by January 1st next year by which time the by-laws in and in-laws should in theory be in place.. MATI is sounding out the lack of these very regulations as an excuse to delay the process and asking to delay the GST implementation. The government expects the regulations to come through parliament by November.

The reasons MATI gives for delaying the GST implementations are many and they include the following:

1. that the resorts need time to upgrade theirs accounting softwares
2. that the existing bed tax  is still  to continue for further 3 years
3. that the resorts are obliged under the new pension laws to deposit 7% of staff salary for pensions, which will be required to be implemented on May the next year. MATI sees an issue with this saying that expatriate workers are short term employed and this requirement is unworkable. However labour law does not differentiate between local and  expatriate staff on the issue of worker contract, so MATI’s  concern over this issue is unfounded. I.e. both the local and expatriates are short term (1 or 2 year) employed in legal speak.
4. MATI reminds another bill income tax is also in the offing
5. The unavailability of English translations of the GST bill is also an issue with MATI which is in the process of being translated.

None of the points MATI raises seems to warrant delaying the implantation of GST (3.5%) for a whole one year which is one fifth of a presidential term in office. With MDP pressed to show success on election pledges, its unlikely that the government will want to add any further delays to the GST which in the first place was heavily delayed by the opposition dominated Majlis.

Given the fact that various forms of taxation is coming to the country with popular backing, to stay for good, MATI is clearly out of the line and its understandable. Its understandable since the cartel consists of roughly a handful of ‘resort-barons’ who owns the most expensive real estate properties in the country and who are in their own words “ right, even when they are wrong!” which brings to mind and important fact that democracy cannot be savoured while the economy is shackled.

Here are some points generally in the direction of why MATI is wrong..and why MATI should not be overly worried about their very own ‘concerns’.

• Taxes are nor borne out by resorts. Taxes are and they are meant to be passed on to customers. How resorts wants to deal with tax as a burden is another matter.
• Resorts were required by law to payout 99% of service charge to staff but few if any resort has implemented this requirement.
• The pitiful amounts of salaries most resorts pays to staff is not something to be gloated over. Much less is to be lamented over is the meagre 7% of staff salaries for the pension fund which compared to an average resort’s income scale is peanuts. And that is dried ones of course! A sample quick accurate approximation is like this: (100staff X 250$) X7%=1750$. Which is what?nothing right?
• Resort owners has been threatening with the demise of tourism in the country from day one. With these new tax issues the clamour for impending doom of tourism will grow louder. But what is certain is that no resort owner will ever let go of any of their islands because of these new latest requirement to spend, which just tell us that all this noise is just noise and not much else.
• The resorts having to re-negotiate on existing contracts between tour-operators maybe a problem in the short term. However most such contracts are short term based, specifying the rates the resort sells their rooms to the operator for one year or for one season. This maybe one issue the forth coming by-laws of the GST bill will iron out come November.
• Another place where ironing out will be needed is about the resort’s lease and rent law which seems to suggest that rates will only be applied in relation to land area, without taking to consideration the proximity of resort to airport or Male’. Also where there is great demand and limited supply, as in the case of our resort islands, the government shall not make it unduly easy for resort-barons to lengthen the lease life of the islands for no reason than their greed.
• Asking for extensions and exemptions for one year citing book keeping difficulties is excessive as the modest GST is not that complicated at all.
• The rate of GST or such finer details of technical issues shall ideally be not passed at parliament as law. It would have been better for the taxation authority to deal with the finer print and have the Majlis play a supervisory role in the matter.

GST tax in various countries are different and arrived at differently. Its complicated in most cases for reasons related to many factors of the country’s economy, politics as well the law.

Its 7% in Singapore as of 1 July 2007
its 10% in Australia on most goods and services
its > 5% in Canada
its 5% in Hong Kong
It will be 4% in Malaysia come 3rd quarter of 2011
its 15% in New Zealand on October 1, 2010.

Outlook for workers in Tourism

Tourism was like a new born baby in our country and was let grown with love and care. Much too love and care, cos tourism was like an only child so over time the baby grew up a little bit and is rightly a little spoiled…

At the early days neither the government, nor those who were involved in tourism knew what will come about of this new found use of otherwise useless islands. The government gave every leeway asked for by the industry bosses who at the time happened to be a few brand names like, The Koli, The Champas, The Orchids to do with the islands as they wished. The islands were developed in time and good money were made and overnight the early enterprenuers became millionaires. The government looked upon the resorts to provide the population with jobs and was quite content with what is earned through bed tax, airport tax and a few thousands of dollars as island rent. Next and subsequent waves of uninhabited islands were quickly written off as favors and gifts to the then government’s ministers and favorites. Still further waves of islands (the last batch) were dispersed in trickier circumstances to another lucky batch of jackpot winners and the then President Maumoon’s immediate family were also said to be benefit from this latest giveaways.

A few years later…
The situation in the country is not like what it was ever in the near past, with conditions rife for strife, with a high percentage of people out of work, a labor market totally distorted and out of shape thanks to things like employment agencies operating right inside the then Labor Ministry, political polarization which has created ways of earning income for gangsters etc. Gang warfare has claimed many young lives and the judiciary seems a little bit unsure about what constitutes a crime or how to define a gang. The government’s long dependence on tourism industry to provide jobs for the people effectively came to a still with labor and skills market flooded with expatriate labor brought in by greedy employment agents who got away basically with human trafficking and extortion in total immunity in broad day light.

Most resort owners or operators profess a desire to employ as many locals as possible with some owners explicitly dictating a percentage of which shall be employed from the country to the Human Resources Departments which rarely comes to anything. To curb the resorts from becoming fully expatriate operated and employed, the government set a 50/50 ratio which was wrongly understood by most employers as the ideal ratio to hire labor from abroad. Jobs are scarce everywhere and everybody knew somebody who needs a job back home, hence came a veritable flood of solicitations for jobs from overseas to all resorts with a sizable proportion of which being qualified simply because of internal connections. This in effect left the resort industry running but the country halting with a big unemployment percentage.

The popular and much overused assertion that local skills are unavailable for this or that job in a resort is anything but true now. This is very much a fact as soon as a job is advertised a veritable queue of applications start pouring in sometimes reaching 1000s for a simple low skilled job in a resort. Also there are excellent Brands in resort industry who employ 100% locals and has no reason to complain because of the staff all being locals.

The new government has 5 short years to do a phenomenal job and it seems they are in a hurry and is looking at the situation from a fresh perspective which hopefully will remedy the many problems associated with tourism industry. For a start the HR Ministry is doing a count of the worker population and recently it was announced that the de facto illegal aliens will be deported once no employer came to claim them. Once all the workers are registered and seen to be doing work in recognizable fields of work, the ministry will apply a discriminatory fee from expatriate workers so that employing locals will be cheaper for the employer. The rates are said to vary between 2000rf to 6000rf per year and is said to come into effect in October this year. This is a necessary step now that the tourism industry seems to be unable to self regulate and resort owners being overly cautious are unwilling to move in line of government policy. The divisive politics of the parliament with resort owners mostly in the opposition camp and interest groups like MATI which has a bloated super power status in the industry seems to be little help the government would have to to forgo with, to kick start a stalled economy.

MATI scaremongering… again.

MATI the elitist business men’s club is again at it. Scaremongering which seems to be the best tool at its disposal right now. The issue is the global financial crisis and despite MATI’s own admission that the required research is still to be done, they are claiming that that recession has already come to Maldives. MATI has good reasons to do this. The most important reason being that at the time of transition of government from President Gayoom to President Nasheed MATI was found to have been pouring money into President Gayoom’s campaign and was on the loosing side of the issue. Now that President Nasheed is in office MATI is desperately trying to repair the political damage their old affiliation with the old regime has caused hence the scaremongering… Although the tactic might work with the ill informed public and to some extent the pliant media, such tactics would not go unnoticed by the new regime in Theemuge. Nor will the top echelons of MDP be likely to forget who backed them and who worked to undermine them.

To some extent the effects of global recession might be felt in tourism industry in Maldives but there is one small consistent advantage to Maldives because of the size of the country. Its only logical to assume that big countries with bigger industries will suffer most in the recession and smaller countries like Maldives could expect the few and chosen of the world’s rich. To complement this its a fact that most of the resorts in Maldives are designed and geared for the top to middle portions of client’s affluence. However the disadvantage of being small balances the little advantage of being small. That is while big countries might be affected more by the economic woes, so will they have more of absorbing capacity of the shock which smaller countries won’t have.

So overall there is lots of calculations to be done and appropriate fine tunings in the tourism industry will do lots of good to offset some of the woes. Basically what has to happen is that the marketing and reservations desks of the resorts has to come out of their collective day dreams and instead of warming comfortable big executive chairs, they have to do some actual marketing of suns and sands of Maldives. Years of economic growth has spoiled marketing departments boys and girls across the country and made them couch potatoes doing nothing except chatting and blogging in office time. The party has to end reality has to be faced. And the reality is grim. MATI is out there with a 1.6m$ budget to scare to new novice government and the outcome will be lesser rights for the workers and lesser privileges whilst greater say in everything for the few elite businessmen and zilch for the rest of us.

Now the govt. is also being accused of non-compliance to labor law

It’s the same picture that’s being seen in all resorts and now it’s spreading beyond resorts to other places of work. Now it’s Maldives Ports Authority staff who are getting ready to strike because their employer i.e. the government of this country (it’s a wholly owned government company) has refused to comply with the labor law. The staff of MPA has issued a deadline to the management and is awaiting their employer’s response.

In most developed countries worker issues and laws and regulations governing the issues are respected in minimal terms because issues like these are thorny issues which can be used to mobilize masses to achieve anything and there is history behind it. However in Maldives the situation is different. Years of lawlessness has created this mentality in the employers that somehow laws cannot apply to them and any law they do not feel sufficiently pliable accommodating their desires shall be revised and before that rejected. This is exactly what happened in the case of labor law and why MATI is discussing ways with the government to water down the labor law so that it become a useless article for lawyers to argue back and forth. Litigation is costly business and MATI is aware that employees or bodies representing employees (i.e. TEAM) cannot compete with them in money terms.

The many or few privileges or perks the labor law is said to have given to the workers of Maldives is peanuts if compared with what is offered to workers elsewhere and MATI has failed to acknowledged that. For example the 48 hour week which is so resented by MATI and most employers is actually ancient if history is correct. It came only after the 84 hour week and is nothing to boast about. Same goes for public holidays and overtime. The only substantial benefit resort workers stand to gain from the labor law is the requirement that any service charge collected shall be distributed and this requirement has not been honored by >90% of the employers.

TEAM press release

Ref:T.E.A.M/005/2008

Tourism employees association of Maldives (T.E.A.M)

PRESS RELEASE

The constitution of the Republic of Maldives and the laws and regulations under it should be followed by all persons living in the Maldives. Therefore, not abiding by the Laws and regulations is perceived by this Association as a gross violation.

The Association strongly condemns all the activities by Maldives Association of Tourism Industry (MATI) to restrain and denigrate the efforts by the employees of resorts in Maldives to gain their rights due to their exclusion from the Employment Law. The employees of resorts are working for their rights with patience and responsibility, doing so within the limitations of the legal framework.

This Association sadly denotes that till present, MATI has not made any efforts for the rights of the thousands of Maldivian employees working in resorts. Whilst this has been the situation, the current policy of MATI is to restrain, in any way possible, the efforts by the employees of the tourism sector to obtain their rights. As MATI has not made any efforts towards creating qualified employees to work in resorts in its 25 years of existence, this is a clear indication of the lack of concern by MATI for the employees of resorts.

In relation to the allegations made against this Association by MATI on the 18th of November (Ref: MATI/RH/205/2008), we would like to point out that this Association was also established under the same laws and regulations as MATI. Therefore, MATI does not have any higher legal status than T.E.A.M, even though the actions of MATI give the impression that it has some special privileges.

Further, regarding the circular of MATI to its member’s dated the 2nd of December, 2008 (Ref: MATI/XX/246/2008), it is not a crime to stop work in peaceful protest when the employer at a work place does not follow the laws. Even if MATI views it as illegal, the laws of Maldives do not forbid the right to strike. And hence, T.E.A.M calls upon MATI to further review the laws and regulations thoroughly. Meanwhile, it is a right of every employee to do everything he could if and when he feels his rights stipulated under the Maldives Labour Law have been violated. However, MATI described the peaceful protests for employees’ rights by some resort employees as violence. Despite MATI’s view, T.E.A.M believes that the protests were in accordance with the right to strike stipulated within the threshold of the Maldivian laws.

T.E.A.M does not perceive that tourism sector employees are entitled to special immunities and privileges. However, following the initiatives of T.E.A.M, the Maldives government has acknowledged the need for further advancement of tourism sector employees.

TEAM notes that the Press Release issued by the Labour Relations Authority was issued without proper investigation and misleading. The reality is, during the past seven months, T.E.A.M has held several meetings with all relevant authorities, lobbying to amend the Employment Act, and urging resorts to comply with the Law. Furthermore, T.E.A.M has on several occasions appealed to resorts to comply with the Employment Act.

In addition to this, on 8th of October 2008, T.E.A.M filed complaints against the resorts that were not complying with the Law to the Labour Relations Authority. In response to this (NO: L-2008/4629), Labour Relations Authority ensured that it would take the necessary steps required to address this issue. However, T.E.A.M regrets that whilst different resorts interpret the Act differently and are not complying with it, the Labour Relations Authority did not make appropriate interventions. In this regard, some parties regard speed boat crew as seamen.

T.E.A.M notes that the formation of a Labour Tribunal is still pending, while the institution should have been formed months ago.

In the MDP’s News Conference following the Reethi Rah work stoppage, the address by three parliamentarians of the Party contradicted the viewpoints they expressed in the Parliament. These parliamentarians actively participated in protests, and spoke in favour of protests in the Majlis. While these parliamentarians have also described the current constitution as the “constitution of protest”, the comments made in the above mentioned Press Conference that the Reethi Rah work stoppage was politically motivated leaves their integrity in question. T.E.A.M perceives this comment as prioritising their own interest above that of ours. We deny this allegation by MDP.

On this occasion, T.E.A.M would like to assure that without standing back, we shall do whatever is required to achieve the rights of tourism sector employees.

December 16, 2008

When all the resorts follow the labor law to the letter and spirit…

What would happen if the this were to happen? Would indeed this happen and who would benefit most? These are all important questions easier to be asked than to be answered as is the case with most questions that are answerable. As for the fact that the law is binding and compliance is required is a mere statement on paper. What is supposed to happen is for the employers to find fault with the law (as had already happened) and find ways to water down the law to suit them. This is nothing new. Rule of law is applicable to the masses. To the elites same law would have to be customized to suit their needs. Hence MATI with its loyal fat business clientèle has summoned their fat legal team and are said to be discussing changes to labor law. One should not be too much surprised if they have it their way because there is very little awareness in the public about how serious the implications of these issues will be.

In the short term all resort managements will do their part in conforming to labor law provisions some with obvious signs of feet dragging while others taking things in their stride. Those resorts who would not find much difficulty implementing the law requirements would mostly be the big already reputed to be good to staff resorts such as W, Four Seasons, Banyan Tree etc. What that is easier for these resorts to adjust is the portion of service charge to staff of which they were distributing a bigger percentage to staff than the other resorts which are renown for notoriety to staff such as Universal group resorts and Villa and Champa group resorts. These resorts would have to find ways to adjust their accounts to where service charge was involved as service charge is to be wholly distributed staff by law.

As for the other requirements such as the 48 hour week all the talk that was then prevalent is now reversed by a turn of 180 degrees. The industry bosses had predicted that the resorts would have to take on additional staff to comply with time restrictions of the law which at present seems not to be the case. In fact most Human Resources departments in resorts are now compiling lists of redundant staff citing compliance to labor law requires them to cut cost which means job cuts .

Whatever will be will be and the coming weeks and months will show where the industry heading. In the bigger picture the prospects doesn’t seem to be all sad and gloomy as compliance to labor laws will inevitably force some unwilling hands of the tourism industry from the economic slavery they have been subjecting our fellow resort workers for some long long time.

MATI trying to rewrite labour law.

Imagine the students of a particular school were given the opportunity to write the school rules for teachers! Imagine how much fun they will have doing that?
Quite similar is the case of MATI which is trying to rewrite the labour law according to their whims and wishes. And the saddest thing is there seems to be little public debate or awareness about this issue. So lets start from the beginning.

MATI or Maldives Association of Tourism Industry is a group of elitist business people in Maldives who to all known extents are known to serve their interests first second and even last. The former government had close contacts with these elitists and when the current government assumed power most of the elitists found themselves on the wrong side of the divide which is why the group seems to toothless at the moment.  However it will be only a matter of time before they regain their former positions thanks in large measures to the sorry state of the economy of the country.

Now where and when MATI started dabbling with labour law is quite known. The labour law was drawn and sent to Majlis and passed hastily by the then government controlled Majlis all inside a carefully orchestrated political drama a few known or cared about. But the implications of the law seems to be creeping up to places most people never thought about. Hence she was quite right when the newly appointed Attorney General said that although MATI has raised many objections to the labour law it has failed to name one offending clause of the law. MATI took hint from this and has started the arduous task of re-writing law to which they have no mandate! They are not writing law per se  but lobbying the Majlis members and the government to change the law to make it suits them. As they are organized unlike the resort workers are and they have well oiled machinery to carry out these sorts of undertakings those who shall be concerned shall be concerned. What is at stake is hard fought freedoms and liberties the labour law gave.

Some clowns who say they represent resort workers…

Who are these people who claim to represent resort workers? Who ever heard of them before and why are these people claiming to represent resort workers and where is the legitimacy in this? This self styled group of two lawyers nobody ever heard before held a press conference in “25” on 3^rd December and when the press asked these very same questions they evaded answers and refused even to provide the telephone number of their offices of this so called TUW or Tourism Workers Union. Its shameful how brazen people can be when they have their own interests at heart and how selfish men of letters can be!

Clearly these are people who have no notion of how things are going on in resorts and are representing god knows who. However there is something interesting in here. Of the lawyers depicted above one is a lawyer for MATI (the organization representing the interests of the business elite). The other is said to have said at the end of the press briefing in “25” “I have no idea what this is about … I only came here because Haseen told me to…”