Indian garment industry receives human rights trial

Today marks the start of the third People’s Tribunal, a human rights trial held by garment workers’ unions and human rights groups to hear evidence of systematic human rights abuses in the Indian garment industry. The People’s Tribunal in India is the third of its kind to be held in Asia, the former being held in Sri Lanka and Cambodia.

Supplier factory owners, government and industry representatives, multinational brands including H&M, and over 100 factory workers will give evidence in front of a panel of judges from 3 continents on the topic poverty pay and poor working conditions. Wages below poverty levels are a ongoing problem in the Indian garment industry, which exports €7284 million of clothing for European consumers each year. The monthly minimum wage for garment workers in Bangalore is Rs 4472, (around €64), which is said to be only 43% of a living wage enough to support a family.

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Survival of the cheapest

Sale here, discounts there, consumers in developed countries plunge onto brands like Primark and Walmart in search of the cheapest garment clothes they can get. With a true ignorance for quality, it seems like the cheaper is always the better when it comes to their shopping options. Even worse, `shop till you drop´ attitudes have become the norm and now that less cash is in their pockets, bargains are the means to their consumptive gratification. Wrapped in this logic, they are unaware about how this consumer behavior undoubtedly maintains an exploitative industry.

It is vital for any objective that proposes to improve conditions of workers to attend matters of consumers. Without flourishing consumptive awareness, organizations and alliances can be organized but little actual change will be seen. In the same light, global labour `rights´ have existed since the ILO’s Philadelphia Declaration of 1944 and they are stated very clearly. However, the existence of rights does not directly imply that they will be enforced. This is where dealing with consumers consumption habits and awareness can have a powerful effect. More than ever is it effective to build an ideational front against exploitation, based on the will of the ethical consumer.

Why go ethical? Because competition should not be based upon low labour costs that have social repercussions. Put differently, one can come to grips with the global economy as following the competition of the most exploitative. The term competition is by its very name ambiguous and plays with the scientific logic of natural selection as if markets would work the same. Markets may be competitive indeed, but the logical competition that comes at the forefront of ones mind is based on quality, sustainability, or originality. This concrete understanding of competitiveness is what ultimately will need our global economy onto a sustainable route.

Orane Leathers’ Shocking Attack on Workers Rights

On the 7th of August, 2009 a protest demonstration was held in front of Orane Leathers Factory in New Delhi due to their abuses to simple workers rights and their opportunism with regards to working hours.

Facts.

Orane leathers has been violating labour laws for a long time. The management has been stating that normal working hours in the factory is 10 hours, when it should be a standard of 8 hours. Workers are not paid overtime for their extra hours, and the salary is always paid late to the point that they literally have to fight to get their already meager salaries. The leather producing factory does not accord any leave to the workers, even if need to go the hospital. There have been instances where the management has even humilated workers through physical punishment in public and threatened workers with private goons.

As a response, workers have started to form a union to collectively represent their rights in the factory. During this process, the management of the factory fired five workers on the 3rd and 4th without any reason, notice or pay.

Demands.

The retrenched workers should be reinstated immediately without any conditions, with back wages and other legal dues and continutity of service.

The factory should follow labour standards such as the 8-hour working day rule, double rate pay for over time, weekly off and holidays.

The management must respect the workers’ right to organize and form a union

Results

The Society of Labour and Development (SLD) succesfully was able to support the fired workers and together negotiate with the factory. The demonstration was a success, and was greatly supported by strong willed individuals and an atmosphere of solidarity. Since the peaceful protest, Orane Leathers has taken back the workers into employment, but besides the reinstatement there is still much room for improvement in their labour relations.

State of Pay

Labour Behind the Label in its report, Let’s Clean Up Fashion 2008, analyzed the state of pay of big brands in the UK:

THE STATE OF PAY

No brand or retailer is paying its workers a living wage, or has even put in place a systematic approach to do so. But over half the retailers that responded to our survey were able to cite specific actual or planned projects that were aimed at raising workers’ wages. Here is how the high street breaks down.

NOTHING TO SAY AT ALL

Alexon, Bhs, Ethel Austin, MK One, Peacocks, Stylo
These companies didn’t reply, and made no information on available on their websites.

NO WORK TO SPEAK OF ON LIVING WAGES

Burberry, Clarks, Debenhams, French Connection, House of Fraser, John Lewis, Laura Ashley, Levi Strauss & Co, Matalan, Mosaic Fashions, River Island While some of these retailers accept the idea that workers should earn living wages and that they currently do not, none of them had any concrete plans to do anything about this. This is symptomatic of the fact that they and all seem to be further behind in ethical trading more generally. Levi Strauss is the exception, having made a policy decision not to support work on living wages. Not surprisingly, only
two of these companies (Debenhams and River Island) are members of a multi-stakeholder initiative.

ONE CHEER: MENTION OF WORK ON LIVING WAGES, BUT
UNCONVINCING SO FAR

Sainsbury’s, Asda, Primark, Arcadia, Tesco
These retailers claim that they have plans for pilot projects, but do not give any substantial details. Asda has a clear plan for pilots in Bangladesh, but they will focus on productivity improvements only and do not appear very clearly developed. Primark only mentions plans for a “small project in India”, and Sainsbury’s says it is waiting for progress in the ETI wages group. Tesco only commits to research. All four of these are members of the ETI group, which after a year has yet to begin any on-the-ground work. Unlike other retailers in the same position, however, they did not describe any substantial projects of their own on living wages. Arcadia has two pilot projects, but in neither does it commit to raise wages.

TWO CHEERS: WORK TO INCREASE WAGES, BUT NOT
ENOUGH YET

M&S, Gap, Monsoon Accessorize, New Look, Next
Monsoon and Gap are the only retailers so far to have publicly committed to a project that contains all four of our pillars of a good project. Monsoon expects to wrap up the pilot and start rolling it out within a year, a much more ambitious target than many others have set. The caveat is these retailers are reaping the benefits of the ETI project, whose terms of reference they are using, without the hassle of needing to agree a collaborative approach with other retailers before it can start. And of course they sent us plans, which are yet to be put into practice.
The other retailers in this group have genuinely interesting initiatives, but they lack a plan to pay living wages. The focus is on productivity improvements, although each goes beyond that to meet some of our criteria for a good project. For example, Next is investigating wages of home and migrant workers, and New Look and M&S made clear mention of worker organising (though both were more ambiguous about trade unions). The projects vary in complexity, with the best appearing to be those at M&S and New Look, who also commit to roll out the learning from their projects to other suppliers within a specified timeframe.

Crisis in the Cambodian garment sector: workers torn between concern and pragmatism

Ka-set media 16th of March, 2009
Tuesday, March 10th. It’s pay day today at the back of the Canadia market, on the outskirts of Phnom Penh. Along this never-ending road lined with yellow factories, gathered in small groups, workers are waiting for the gates of their factory to open and for the guards to call them out. Tum, a 22 year-old worker, steps forward without any enthusiasm. She comes back twenty minutes later, her fist clenched over a few bills and her payslip. She is determined to take a bus the next day to go back to her village, in her native province of Kampong Thom. Waiting for some hypothetical job far away from her relatives does not make her happy and on top of that, it is costly. It is now a month since the 43 girls in her shoe manufacturing group started clocking in every day to receive 50% of their initial salary, i.e. US$25. Not even enough to pay for the rent and food.

They heard that their factory would close down after payday. The rumour reached stall-keepers from the nearby market, already disheartened by the significant drop in sales since the Water Festival last year. False alarm. But for these workers, left high and dry, the shutdown of a factory of the suspension of its activity is equally bad: they will not work in March. Many say they won’t last for another month and they will have to go back to “work the ricefield”, an expression which signifies, without considering the rainy season, a return to family activities, land, growing and raising or little country jobs. For some observers of Cambodia’s economy, employers obviously count on that type of defections to reduce their number of employees.

No extra hours any more
To avoid the shutting down of the factory, other strategies are being thought up. In Takhmao, Vy and Hoar are taking a forced holiday. In Chom Chao, Socheata says that his employer, at the factory, made redundant 5% of those employed on a fixed-contract basis and replaced them with workers on a try-out period and whose duration of employment does not exceed a month or two. In that neighbourhood, the most general trend seems to be the end of extra hours, which considerably undermines workers’ wages. The governor of the Dangkor section, Kroch Phan, claims that out of 150 big registered factories and some 50 subcontractors, only 4 closed down. “Subcontractors are the first ones to suffer from the early effects of the drop in orders”, he says.

Chanhan, 23, sews trousers and shirts for an initial salary of $60, knowing that with her extra hours, she used to round up her wages to $80 or $90 every month. “Since the Water Festival, I finish my day at 3pm. There’s work here, but there are no extra hours any more like there used to be before, until 5 or 7pm.” Socheata, 19, used to love working on Sundays as it was better-paid: $3.85 – but this era is over. Bunthon, 19 years-old, has been gluing up shoe soles with her machine for more than a year. It is two months since she too, has stopped working extra hours. Necessarily, there is growing concern as to shrinking salaries. And this is without mentioning all the signs of a collapsing economy…

In workers’ dormitories in Chom Chao, in those 9m2 rooms in which 3 to 10 people are crammed into, the sound of a television or of a radio is non-existent. The news is not translated into words but into actions: a factory closes, workers move out, and rooms are emptied of their residents. “In the space of three months, I lost half of my tenants”, an owner in Chom Chao explains. “For those who lived together with 5 or 10 other people in one room and found themselves living with just one roommate overnight, the whole moving out process meant a heavy increase of the rent for them – as a consequence, those who stay go and live together to share the monthly $25 rent. Let’s hope that the factories won’t close down, otherwise it’s the end! Without any tenant, I won’t be able to pay off my debt.”

At the village too, news travels fast. it is thanks to her neighbours, who are workers, that she heard during the weekend that some factories were about to shut down. Sinuon gives an approving nod: “In the village, almost everyone is related to someone who works in the factory, except for the wealthier families.” Sometimes, it happens that several children also become part of this working-class labour force. Chanhan only has two sisters, who work in different factories than the one she works at, but the three of them manage to send between 60 and $90 every month to their parents.

“Ricefields, not quite the season”
If activity is suspended, they will start looking for a job in another factory or very quickly, they will return to their home village. They laugh because there is not even an inch of doubt, They do not have a choice. “They didn’t wait for the declarations of the prime Minister in Kampong Speu on March 9th. “Living nearby a factory means paying for you own rent, food… If I go back, I will not have to pay for these costs. But there is no work for us in the ricefields at the moment, it is not the right season”, Socheata explains. “And the situation is difficult. With 2,500 m2 of ricefields, my parents get rice for 6 months, but the remaining 6 months, mine and my sister’s wages – she is also a garment worker – pay for the rice.” If anyone is made redundant, Socheata thought about all the possible solutions: if she has no other choice but to go back to her former job – she used to be a rice cake seller – she will. Lina, however, says that she will not be able to stay for long at her parents’. “I will come back to Phnom Penh and look for a job in another factory”, she says.

What about those without land?
This option might well turn out to be complicated considering the escalation of bad figures announced the past few days : garment exportations have plummeted by half compared with the first two months of 2008: one worker out of 7 has been made redundant over the past six months, according to Minister of Commerce Cham Prasidh. In addition, estimated figures for future economic growth keep being revised downwards. Interviewed about his own predictions, Roger Tan, secretary general of the Garment Manufacturers Association in Cambodia (GMAC) hesitated before eventually saying: “Orders keep going down. After April, nobody knows what is going to happen.”

At the beginning of this week, prime Minister Hun Sen urged the population to play things down, and explained in brief that the current situation was after all more enviable than the situation under the Khmer Rouge regime… “The fields are awaiting the return of workers. […] In foreign or industrial countries, workers find themselves in situations far more serious because they have no land any more”, he argued. That little sentence, Chan, now an old lady, contradicts it quite easily, while watching her two boisterous grandchildren playing around: “A month’s salary is spent straight away. If children get sick, we have nothing left to cure them. My son-in-law works on a building site, my daughter is at the factory and if the building site closes down, if the factory closes down, we have no land to go and cultivate…”

Going off the track and starting afresh
In the context of the economic crisis, Sina, 22, is not unhappy with the choice she made a few months earlier, to leave the factory and put an end to two years of tedious work. With her savings and the support of her parents and sister, who continues working at the factory, she is paying for a training course with a dressmaker at the nearby market. “Working at the factory only brought me illnesses. The best is to learn a job by yourself, a job you can do everywhere.” Sina has set herself the goal of being able to create the wedding dresses for her future customers, the garment workers. That dream will depend on the fate of these factories, of course. “If they stay there, I will stay. Otherwise, I will go back to Prey Veng.” Her words and her smile do not betray any concern but rather carry some infallible determination.

Importance of minimum wage raised by Bangladeshi Industry Minister

RMG workers lowest paid across sub-continent – Fibre2Fashion News, India
August 17, 2009 (Bangladesh)

The Industry Minister of Bangladesh issued a stern warning to vested interests who were trying to de-stabilise the ready-made garments sector in the country.

He said the government would not tolerate any attempts by these trouble makers to ruin the image of the garment manufacturing sector.

He called upon the workers and leaders to remain vigilant and said that he was very much sincere about raising the wages of the apparel sector workers.

But at the same time he said that all stake holders which include workers, leaders and the owners will need to be involved in the process.

Mr Barua was speaking a roundtable conference organised by the National Garments Labourers’ Federation (NGLF) on “Rightful wage and rightful trade (Price)”.

Dhaka University Professor, Mr Akash said that apart from providing a minimum wage, attention should be given to basic necessities of workers.

Delving out statistics, he said, the Bangladeshi garment industry workers were amongst the lowest paid in the Asian sub- continent countries.

He said, “Workers get up to $0.86 per hour in China, $0.51 in India, $0.43 in Sri Lanka, while the Bangladeshi workers get only $0.22.

The Financial Crisis and the Garment Industry

Based on news reports from across the globe, the current financial crisis has had a negative effect on the Asian garment industry.  Stories about falling exports and workers being laid off abound.  However, setting a floor wage in the garment industry, and paying workers fairly in other sectors, isn’t important only because it will raise the wages of those living on the smallest financial margins.  Paying a decent wage may actually help us out of the financial crisis.  A January 2009 Newsweek article makes the case that paying Asian workers better would increase Asian demand for goods and strengthen the global economy.  Richard Duncan calls this a “trickle up” strategy.

Garments around the Globe

The Maquila Solidarity Network, one of our Alliance members, recently published a short primer on how the global financial crisis might affect the garment industry and garment workers.  The report laid out six observable trends:

  1. US demand for apparel is declining
  2. Price is an increasingly important issue for consumers – Most retailers saw a large drop in sales, but low-end retailers like Wal-Mart and Target saw increases in sales at the end of 2008 and beginning of 2009.
  3. During pre-holiday sales, retailers had to slash prices considerably to attract consumers.  Consumers may expect huge markdowns to continue.
  4. Visible changes in import numbers have a lag time because apparel orders are placed months ahead of time.  However, December 2008 data appears to show decreased import volume.
  5. The trade patterns haven’t been consistent across the board.  For example, in 2008, Chinese exports to the US dropped by 3.05%, but Vietnam, Bangladesh, Honduras, Nicaragua, and Indonesia all increased their volume of exports to the US.
  6. The world supply of cotton is dropping, however demand for cotton is also declining.  Despite the decrease in supply, cotton prices are, in fact, declining.

The report identifies several trends to watch, but generally predicts downward pressures on the market.  Unfortunately for the Asia Floor Wage campaign, the report predicts that  increased wages or improvements that produce extra costs will be strongly resisted by manufacturers.  The industry will probably see an increase in the use of short-term contracting and flexibilization, not less.  On the other hand, in this time of economic crisis, the need for organized labor takes on even greater importance.   It is important to ensure that garment workers in the global south, already living on a precarious margin, are not forced to bear a disproportionate share of the burden inflicted by the financial crisis.  As the Maquila Solidarity Network report notes:

“The global financial crisis now underway is expected to have major impacts on North American and European workers and consumers, including massive job losses and reductions in spending power.  It will have even more serious consequences for works in the global South.”

While global economic indicators point generally downward, the extent of the economic effects on the garment industrygreatly depends on the country and region.  One country – Bangladesh – seems to be defying the downturn altogether and actually increasing exports.  Here is an overview of what the most recent news is saying from across Asia:

Bangladesh
Bangladesh looks like it might actually benefit from the global financial crisis.  Because of its comparatively low wages and high product reliability, Bangladeshi suppliers may actual see an increase in sales volume as consumers shift to lower-priced retailers like Walmart that supply from Bangladesh.  Khalil Rahman Chowdury, the chairman of the medium-sized Khalil Group garment company told Chinese news service Xinhua that his  company is getting more orders but at lower prices.

The Voice of America also aired a report noting a shift in manufacturing to Bangladesh:

Cambodia
Cambodia, which once received 70 percent of its total annual export volume from garment industry exports, is expected to experience a six to nine month crisis in 2009, according to Van Sou Ieng speaking at the annual Assocation of Southeast Asian Nations’ Federation of Textiles and Apparel (AFTEX) meeting in January.  Cambodia is heavily reliant on the US for garment exports.  The country exports about 70 percent of its garment products to the US, four percent to Canada, and most of the rest to European countries.  According to a January 2009 article by Asia Pulse, more than 20 of the 400 Cambodian garment factories has had to close, leading to the unemployment of 25,000 workers.

China
China is the top apparel supplier for the US, but Chinese exports to the US dropped by 3.05 percent between 2008 and 2009.

India
The Indian garment industry is India’s second-largest industry, employing nearly 38 to 88 million workers (depending on whose figures you use) and accounting for 4 to 8 percent of India’s GDP.  India’s textile industry has a market size of $52 billion and accounts for 26 percent of the manufacturing sector, 20 percent of industrial production, and 18 percent of industrial employment.  More than 60 percent of India’s textile production is exported to the US, the EU, and Japan, all hit hard by the financial crisis.  The Confederation of Indian Textile Industry (CITI) claims that about 700,000 jobs had already been cut in the second-half of 2008 and the government estimates that the industry could lose another 500,000 jobs in the first five months of 2009.

A December 2008 article by the Asia Pulse noted:

“According to the CITI, global financial crisis has severely affected Indian garment exporters with 30-35 per cent dip in volumes in July-September quarter.

“[…]Observing the seriousness of the matter, the government has started a survey of about 800 companies to assess how many jobs would be lost in the industry due to the current crisis. The survey to ascertain the number of people who lost their jobs is crucial, as the textile industry is demanding sops from the government. A committee of union secretaries, set up by Prime Minister Manmohan Singh in the wake of the global financial crisis, is considering proposals to help the industry. As there is no authentic assessment about the extent of effect of global turmoil on the sector, the Textile Ministry has engaged a research firm – Technopak – to find medium and long term impact including job losses due to the current global economic slowdown, which will submit its report by end of January, 2009.”

Garment firms in Tamil Nadu have been particularly hard hit.  The decline in international demand combined with power shortages has cut Tamil Nadu’s textile industry’s capacity utilization by 72 percent.  According to an article from November 2008, about 50 percent of the Tamilian textile industry’s labour force had been cut.

Indonesia
The textile industry was “among the early victims of the global financial crisis in Indonesia,” according to an October 2008 article by Asia Pulse.   The article reported that six textile factories faced bankruptcy and were forced to suspend operations.  The factories were:  PT Inspirant Aditama, CV Ogivano Garment Industries, PT Indah Onindo Jaya Sepakat, PT Indothai Widya, PT Narida Utama, and PT Central Star Knitting.

Nepal
The US is Nepal’s main garment buyer, importing as much as 85 percent of Nepal’s garment exports.  The Garment Industries Association said that the export of ready-made clothing to the US had fallen by 47 percent by October 2008.

Sri Lanka
The apparel export industry is the largest contributor to the Sri Lankan economy and accounts for 10 percent of Sri Lanka’s GDP.  However, Sri Lanka’s expected loss of duty free access to Europe and the declining US market are expected to have a rough impact.

Thailand
Like Bangladesh, officials expected Thailand to be able to weather the financial crisis.  According to Dej Pathanasethpong, President of the Thai Garment Manufacturers Association, the Thai garment industry expects to be able to maintain its export growth momentum.  The October 2008 article by the Thai News Service noted:

“Growing exports in Asean and Japan are expected to help cushion [the impact from] lower exports in the giant markets like the United States and European Union where economies are expected to be hit by credit crunch.” The world’s garment industry is estimated to be worth about $700 billion this year, with the US and EU representing 55%. The global market has tended to drop by 10% when the two giant economies were weak, said Mr Dej.”

However, more recent articles paint a dimmer picture.  By late December, 2008, Nareerat Wiriyapong writing for the Bangkok Post reported that 10,000 workers had lost their jobs as 100 garment factories closed during the first 10 months of 2008.  The Executive Director of the Thailand Textile Institute, Virat Tandaechanurat was quoted in the article as saying:

“In 2009, more factories will be affected as major foreign trade partners have been facing financial problems. However, the number of job losses is unlikely to be so severe because there is still a demand for workers in some specific segments of the market,”

The article went on to note:

“According to the institute, the market share of Thai-made clothing in the US has been falling steadily and is now 3.4%, down from double digits several years ago, due to intensified price competition from products shipped from China, Vietnam, Cambodia and Bangladesh.”