The Qualifying Industrial Zones (QIZ) are areas designated by the Jordanian and Israeli authorities and approved by the U.S. Government, where products can be exported duty free to the United States,
making use of the Israeli Free Trade Area Agreement with the U.S. The QIZs represent an unprecedented opportunity to gain duty and quota-free entry into the U.S market, with 100 % exemption of the export earning from income and social services taxes, and no customs duties payment on imported raw materials, fixed assets, and spare parts. QIZ products can include material content from any part of the world, but 35 % of the appraised value must be added in the QIZ.
The labour standards and working conditions in those zones started being highlighted, at the national and international levels, following the release of the first relevant report of the National Labour Committee (NLC), of the United States , in May 2006, which then described the U.S.-Jordan Free Trade Agreement, due to the deterioration of working conditions of migrant workers in those zones, as Descending into Human Trafficking & Involuntary Servitude. The Jordanian Government’s inspection and verification campaigns that followed the NLC report, showed that the labour and OSH standards in many QIZ enterprises, and even human standards in some cases, did not meet the minimum acceptable limits, as per both international and national standards. The Jordanian Government’s response was prompt and proved to be very effective. The most successful reform was the one of the labour inspection system, which was the tool by which the Government closely monitored and followed-up working conditions in the zones, and through which it imposed serious sanctions against violators, such as permanently closing down some of those enterprises, the employers and/or managements of which failed to abide by the law. Almost 5 years following the release of the NLC report, this study shows that nearly none of the past violations reported by the NLC still exist in the QIZs. Labour rights, in terms of wages, working hours and leaves are protected. Occupational safety, health standards and human rights have seen great improvement and are also fully respected. There are no more confiscated passports, no more reported cases of physical, sexual, or verbal abuse and no more cases of forced labour or discrimination of any form. The number of QIZ enterprises and the number of their workers, both local and migrant, reached their peaks in 2006. There was then a decline in numbers until 2009, as a double effect of the Government’s action to rectify the labour standards in those zones as well as the Global Economic Crisis. The crisis, besides affecting Jordan, also directly affected the U.S. importers and buyers, for whom all QIZs’ manufacturers produce. The numbers of workers in those zones showed some increase in 2010, which could be an indicator of a recovery from such effects. The exports of the QIZs have also reached their peak level in 2006, but since then showed progressive decline, due to the factors mentioned above. No adequate statistics could be gathered on the total exports from those zones for the whole year of 2010. However, if the monthly average of exports for the first seven months of 2010, which are included in this study, could be applied to the last five months of the same year, then 2010’s exports would exceed those of 2009 by about 22%. The QIZ sector can be presently considered as one of the most successful sectors concerning working conditions and OSH in Jordan, where most of national and international labour standards are observed. The findings of this report represent the general situation existing in the QIZs in Jordan, at the time of the study. There are off course possible exceptions to be found, but these are often on a small scale and in concealed or unreported cases.