US shocker for Kenyan firms with poor working conditions

US President Joe Biden.

Photo credit: File | AFP

What you need to know:

  • Kenya and the US are locked in negotiations under the US-Kenya Strategic Trade and Investment Partnership (STIP).
  • Kenya has long sought a full free trade agreement with the US to replace Agoa.

Companies in Kenya that breach international labour rights will face costly court cases and possible trade sanctions under the proposed trade and financing deal between Nairobi and Washington.

The American negotiators, led by the Assistant US Trade Representative for Africa Constance Hamilton, are pushing to have organisations in both countries adopt and maintain internationally recognised labour rights in their national laws.

“The text [proposed by the US] includes provisions aimed at promoting compliance with labour laws through commitments related to non-derogation from, and the effective enforcement of, labour laws,” the United States Trade Representative Office (USTR) wrote in the text released last Friday.

“Additionally, the proposed text includes a mechanism to help create corporate accountability in cases where an entity violates local labour laws.”

The two countries are locked in negotiations under the US-Kenya Strategic Trade and Investment Partnership (STIP) whose terms Nairobi and Washington started stitching together in July 2022 before the end of former President Uhuru Kenyatta’s term in office.

Internationally, companies require workers to have the freedom to associate and bargain for their pay through a collective bargaining agreement with employers, prohibit forced labour, bar child labour, and eliminate discrimination. The inclusion of a chapter compelling both parties to commit to international labour standards has come at a time when some of the world’s largest technology firms are battling court cases and allegations ranging from discrimination, poor pay, and inadequate psychological healthcare cover for workers.

For example, Facebook owner, Meta, and its local agents — SamaDource EPZ Kenya and Majorel Kenya — have been sued by former contracted content moderators for alleged poor working conditions, including irregular pay, inadequate mental health support, and violations of privacy and dignity. Multinationals that have faced allegations related to violations of labour laws include Lancet, James Finlay, TikTok owners, Nokia, and ChatGPT owners.

“The US text proposal also includes provisions establishing cooperative mechanisms to help the parties support each other in achieving ambitious labour goals and to collaborate constructively on labour issues, including through capacity building, and sharing information and best practices,” USTR says. “The parties would identify and collaborate on emerging labour issues, including related to promoting labour rights of workers in both the digital and informal economies, as well as inclusive and equitable workforce development.”

Analysts say while international labour laws are aimed at ensuring workers’ rights are protected, the inclusion of the provisions through the proposed trade deal may be aimed at enhancing US soft power in Kenya and sidelining China.

Uche Ewelukwa Ofodile, a professor of international law at the University of Arkansas in the US, says the clause on Workers’ Rights and Protections in the STIP “may have little to do” with protecting workers in Kenya but more on protecting American jobs.

In an opinion piece in The Conversation, reproduced in TheEastAfrican last August, Prof Ofodile wrote: “Including labour provisions in the STIP will have the effect of imposing additional commitments on Kenya beyond its current obligations as a member of the World Trade Organisation.”

She added: “The [US] deal with Mexico and Canada prohibits them from importing goods from countries that use forced or compulsory labour, including forced or compulsory child labour. It provides for mandatory inspection of facilities to be sure of compliance in those countries. Labour provisions in Kenya could therefore have a direct impact on its trade with China, member states of the East African Community, and other African states.”

Kenya has long sought a full free trade agreement with the US to replace the more-than-two-decades-old African Growth and Opportunity Act (Agoa), but progress was dragged by a change of administrations in both countries.

The Agoa pact, first enacted in 2000 before renewal for 10 years in June 2015, allows duty- and quota-free access to the US for thousands of products like food and beverages, wood, plastics, and rubber from sub-Saharan Africa, but Kenya has largely tapped the apparel line.

Ms Hamilton maintained last October that the STIP will not graduate Kenya out of Agoa, which the US Trade Representative is keen to renew upon expiry mid-2025 subject to approval by Congress.

David Monda, who teaches public policy at the City University of New York, is concerned that Kenya will struggle to negotiate anti-dumping measures in the STIP.

That has the potential risk of undermining Kenya’s broader trade interest in other regional blocs such as the 21-member Common Market for Eastern and Southern Africa (Comesa), the seven-nation East African Community, and the African Continental Free Trade Area.

“I'm also concerned about intellectual property. US companies come to invest in Kenya, but the government doesn't have patent and intellectual property laws in place to protect Kenyan intellectual innovation in IT [Information Technology] and AI [artificial intelligence] more broadly. There is a danger of the next M-Pesa being shipped off to Silicon Valley,” Prof Monda said via email.

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