U.S. anti-Outsourcing bill: India’s worry?

By Prateek Bhandari (4^th year student at NUJS, Kolkata)

The U.S. Call Center and Consumer Protection Act bill (HR 3596) was introduced in the Congress on December 7, 2011. The aim of the bill is to “To require a publicly available list of all employers that relocate a call center overseas and to make such companies ineligible for federal grants or guaranteed loans and to require disclosure of the physical location of business agents engaging in customer service communications.” In a nutshell, it is a bill to address the hostility generated by off-shoring

The bill does the following:

• Requires the U.S. Department of Labor to catalogue firms moving call centre jobs overseas, thus making them ineligible for any direct or indirect federal loans or loan guarantees for five years.
• Requires the list of companies that off-shore call centre work to be made available to the public.
• Requires notification to Secretary of Labor 120 days in advance of a proposed move off-shore.
• Requires call centre employees to disclose their location to U.S. consumers
• Requires that call centres transfer consumers to a call centre in the U.S. upon request.

The bill is prospective as it does not apply to companies that have already well-established call centres outside the U.S. The bill also has a provision to charge US call centres a penalty of $10,000 per day for failing to report a relocation to an offshore location, within 60 days to the US Department of Labor.

The US rationale is that companies that ship jobs overseas should not be rewarded while millions of qualified Americans are looking for work. US taxpayers should not be financing those who send our jobs overseas.

The bill won’t stop companies from outsourcing call centres because that is compatible with free market philosophies. The bill would tell companies that if they choose to outsource their call centres, the taxpayers of the United States will not be handing them any grants or loans. NASSCOM and some other industry associations have expressed concern over the bill saying it would restrict free trade and establish discriminatory trade practices. The Indian Embassy is in the process of doing a detailed analysis of the bill on the scope of its business coverage and its impact on the Indian BPO industry.

An objection to the passage of the bill will likely be raised by India, Latin America, Ireland, Philippines and Canada.Nasscom President, Som Mittal said that if any bill like this is passed it will have a far more negative impact on the US because such trade barriers may lead to other countries imposing similar conditions.

Currently, the bill has been referred to four House Committees on Energy and Commerce, Oversight and Government Reform, Armed Services and Education and the Workforce. The legislation would be put to vote after the reports are submitted by the House Committees or “mini Congresses.” According to Nasscom the possibility for the bill to become a law is very low.