January 1998
Carole Crabbé
In March '97, two women from Thailand came to Europe to give evidence about their working conditions. Taweesap and Yaowapa, used to work in one of the largest clothing factories in Bangkok belonging to the transnational group Eden. At its height, Eden had a workforce of over 4,000. Since 1991, when a union was set up within the company, the Eden management has progressively intensified a shift of production to small scale subcontracting workshops. These are often of an informal character, and may even be in different countries where labour is cheaper. In 1996, Eden closed its Bangkok factory completely and dismissed all the workers without compensation. Taweesap and Yaowapa were in Europe both to publicise their situation, and to call to account, both Eden's Head office (in Austria) and several large distribution chains which were its customers.
Taweesap and Yaowapa's experience illustrates prevailing tendencies in the clothing industry. These involve waves of successive relocations and the transformation of production channels with an increasing reliance on subcontractors. These changes are accompanied by a concentration of power in the hands of labels and distributors.
This change, which began in the nineteen sixties, has been intensifying since 1975. Since the sixties, the clothing sector has witnessed a slowdown, principally as a result of decreased demand and cut-throat competition between industrialised countries. The search for cheaper production leads to restructuring, automation, and subsequent relocation of those activities which require little capital investment and a large low-skilled labourforce. In European countries this has meant the closure of those factories which are unable to adapt to new market demands, with accompanying massive job losses. According to Laurent Carrou, 1.4 million jobs in the textile and clothing sectors have been lost in fifteen years. Asia has benefitted from the decline of the European garment industry. By 1994, it accounted for 50% of the world's clothing exports.
Measures intended to protect the European industry have had little effect. The Multi Fibre Arrangement (see box on pevious page) was signed within GATT (General Agreement on Tariffs and Trade) in 1974. It aimed to limit competition between low-salary countries and industrialised countries. It has not, however, managed to stem the rising tide of relocation to countries with lower labour costs. Despite the fact that the Multi Fibre Arrangement has entailed an annual loss of earnings of several billion dollars to developing countries, the restrictive regime has not prevented a number of them from capturing substantial parts of the global market. This system has also contributed to a serious falsification of exchange conditions; and exercised pressure on costs and prices for producers. In many countries, this downward pressure on costs has precluded any improvement in working conditions".
In most developing countries, the production of clothes destined for the local market is clearly differentiated from that destined for export. The latter may be in the hands of local entrepreneurs, (as is the case, for example, with most Bangladeshi clothing manufacturers).
More often, however, manufacture for export is directed by foreign entrepreneurs. In Cambodia, for example, many of the garment factories belong to South Korean entrepreneurs.
The production of clothing which is destined for export often benefits from important fiscal advantages and from its location in Export Processing Zones.
In Europe, despite the recent collapse, large garment corporations have generally consolidated their market position. The corporations which have survived are those which have fundamentally transformed their business. They have changed their focus from production to design, and are selling a brand image rather than commodity clothing. They provoke consumer behaviour by constantly creating new styles and by investing in advertising and promotion, increasing the drive to new fashions. They have created an ever-changing demand and a corporate capacity to respond it.
This increased flexibility results from lightweight production structures using several subcontractors who can quickly produce a specific design, or carry out one part of the production (cutting, sewing, styling etc.). The speed of transport and communication enables them to use subcontractors anywhere in the world. Quite a number of clothing businesses therefore locate their production sites where social, fiscal and environmental legislation are the most lax or where the labour force is most easily exploited.
Brands and retailers are winners across the board. Having recourse to subcontractors enables them to produce garments rapidly and in small quantities at low cost. This relieves the distributors or the brandowners of their responsibilities as employers while giving them all the advantages of being buyers. It also gives them great flexibility in their choice of supplier and therefore an extraordinary power to put pressure on price, quality and delivery dates.
At one end of the chain, profits are concentrated in the hands of a few, whereas at the other there is a system of exploitation of the thousands of men, women and children who actually produce the goods. Instead of being a source of development in poorer countries, this industrial policy is often responsible for bad working conditions and it exercises pressure on jobs, on social benefits and on fundamental workers' rights.
Quality Garments is a clothing manufacturer based in the industrial zone of Sonapi, Port au Prince, in Haiti. The workshops are hot, crowded and badly lit. The air is extremely dusty. There is no ventilation and piles of material clutter up the production area. The workers look sad and tired. They do their best to work on old sewing machines, some of which are over twenty years old. They are sewing clothes for K-Mart, an American retailer, and making Mickey Mouse and Pocahontas pyjamas for the Walt Disney company.
Quality Garment workers, work between 8 and 10 hours a day six days a week. In a period of peak demand they also have to work on Sundays. Workers interviewed in August 1995 admitted having worked seven Sundays in a row. In other words, they had worked 50 days without a break, up to 70 hours a week, and during the hottest period of the year. In many cases, workers are paid 15 gourdes, or the equivalent of 1 US dollar a day. This is well below the legal minimum wage of 2.4 dollars a day. Workers are payed per item of clothing sewn. The production quota which would enable them to earn the equivalent of the minimum wage is beyond the capacity of most of them. An experienced seamstress, for example, is supposed to sew 204 pyjama bottoms per day, which would enable her to reach a salary of 40 gourdes or 2.67 US dollars a day. But in 8 hours she can make only 144 pieces, and is therefore paid only 28 gourdes or 1.87 US dollars. In these conditions, an average worker can only earn a quarter of what he or she needs to cover the basic needs of a family of five.
Before seven o'clock each morning, the footpaths of Dhaka are witness to an unprecedented fact in the social history of the country. Hundreds of thousands of women, who have long been confined to household chores, join the garment factory production lines. With some 1.5 million workers, the clothing sector supplies 70% of industrial jobs for women. Many of these are young women who have left rural areas under pressure from their impoverished families. Some of them hope to earn the dowry which will enable their fathers to have them married 'honourably'. Others, with no alternative, just work to survive.
Even if they work between 12 and 14 hours a day, seven days a week, their wage doesn't cover the costs of a dignified and thrifty life. At the same time they risk sexual harassment and even rape. (From the 1st of January to the 13th of April 1997, 22 cases of rape were reported, mostly concerning young female workers aged between 14 and 2212). They try their luck, staying a few months in the same factory, then leaving it for one of the 2,000 others in search of some extra takas. With each move, they hope for shorter working days and less humiliating working conditions, but they rarely find either. The precarious social and economic situation of these women, who are often separated from their families, is a godsend for employers searching for low production costs. It is vital that workers should be able to organise in order to defend their rights. But campaigning for workers rights is a risky business. Women who leave the union office at night, carrying posters demanding respect for their weekly day off, know that they risk instant dismissal if the management hears about their union activity.
In the absence of basic human rights in the workplace, globalisation has a negative effect on both working and living conditions. This is especially true in labour-intensive industries like the garment industry, where businesses are very mobile. Consequently, it is in relation to the textile and clothing sector that questions are being asked in an international context about the social dimensions of trade.
In 1947-48 the Havana Charter sought (in its seventh article) to reconcile the expansion of global trade with respect for human rights in the workplace. GATT included a very limited provision covering the production of goods in prisons.
Attempts by the United States government and subseqently by the European Parliament to expand GATT to cover other social issues, have resulted in successive failures. In 1994 the Marrakesh Declaration, blazing the trail for World Trade Organisation deliberations, made no specific reference to any social dimension of trade liberalisation. It merely set up the possibility of the inclusion of 'additional points' in the WTO programme of activities.
It should be remembered that, at Marrakesh, the issue under discussion was the insertion of a social clause in international trade contracts. This social clause aims to ensure respect for the fundamental conventions of the ILO. These are:
It foresees the exercise of sanctions on those states which fail to respect these fundamental rights.
After long and bitter debate, far exceeding the scope of GATT, ILO, or the WTO, the idea of a social clause and system of sanctions was finally abandoned by its spokesperson, the International Labour Office, in April 1995. During the WTO Conference in Singapore in 1996, the ILO proposed the creation of a specific social label which would be given to those countries which respected fundamental workers rights. The participants in the ILO conference in June 1997 failed to agree on this proposal.
Regional multilateral initiatives have, nevertheless, been taken. One example is within the framework of the Maastricht Treaty for the European Union. This latter introduced a new Generalised System of Preferences (GSP), to be effective from 1995 to 2004. This system allows preferential terms to be allocated to countries which respect certain internationally recognised criteria in the social and environmental domain. Explicit reference is made to the ILO conventions listed above.
Governments bear some responsibility for human rights in industry. However, powerful transnational corporations encroach upon the manoeuvrability of governments in this regard. Transnational corporations set prices, delivery dates, quality standards and put pressure on suppliers by using their capacity to dip into a reservoir of 'better offers'. In some situations, this pressure may be taken as an incentive for social dumping.
To date, despite many efforts, no legally binding measures have been put in place to significantly alter the behaviour of transnational companies. Worse still, the means of controlling their activities has caused the UN to break up its information centre on transnationals. Instead, it proposes optional directives which are not legally binding and which, even if they were to be observed, include neither complaint procedures nor legal sanctions. Should legal sanctions and company responsibility fail, there remains the sanction of public opinion.
Major brands and retailers are exceptionally sensitive to consumer opinion. This results from their dependence on a market sustained by dynamic advertising which is constantly renewing consumer identification with their products. During the past ten years, consumers have become much more aware of the social and ecological impact of their consumption. Campaigning organisations expose the practices of transnational companies, and hence may call into question their brand image. As a result, some transnationals are reacting positively. They have drawn up codes of behaviour designed to show their active respect for human values and ethical criteria. In the clothing sector, American companies have been among the first to adopt such codes. In 1995, among the 5% of companies who prescribed these codes, were some of the best-known brands. Europe is not far behind. Important brands and retail chains are also in the throes of adopting these kinds of codes.
Because it recognises the responsibility of brands and retailers for practices throughout their production channels, the code of conduct adopted by companies can constitute a valuable tool for consumer organisations, unions, fair-trade organisations, and social organisations. However, so long as transnational companies refuse to subject their codes of conduct to independent monitoring, such initiatives can only have limited scope. In the eyes of the consumer, they cannot, therefore, constitute a guarantee of human rights in the workplace.
Therefore, the independent control of codes of conduct and their application constitutes the principal consideration of initiatives such as the Clean Clothes Campaign.
The Clean Clothes Campaign aims to encourage brands and retailers to sign a code of conduct which makes reference to the basic ILO conventions mentioned earlier. There is also a clear requirement for minimum hygiene and security conditions, and for remuneration that takes into account the basic minimum wage of the country. The code of conduct requires a system of complaint and independent monitoring. Brand owners and retailers who signed such a code and put it into practice, would be granted a seal of approval which would constitute a guarantee that human rights were respected in the workplace.
The Clean Clothes Campaign is not a boycott initiative. Rather, it encourages brand owners and retailers to use their power to improve working conditions throughout the production channels of the garments they sell.
This international campaign is currently being conducted in Holland, Belgium, Sweden, Spain, Germany, Switzerland, and Italy. In each country, the campaign involves co-operative action between unions, consumers, fair trade organisations, human rights, youth and women's movements, as well as co-operation at a non-government level. Joint actions have been initiated to raise public awareness and to negotiate directly with companies in the garment sector itself. The Clean Clothes Campaign groups in each country exchange information and encourage the creation of networks of worker organisations and NGOs in the countries of production. In France and Belgium, fair trade organisations play a major role in these networks.
It is not the aim of the Clean Clothes Campaign to replace public sector initiatives. Rather, it wishes to make the best of both worlds. In fact, in May 1997, the European Parliament praised its work and invited the Commission to give the campaign its active support.
There may be an opportunity for it to do so in Spring 1998. Through the initiative of the Clean Clothes Campaign a session of the Permanent Peoples Tribunal, will be held in Brussels, to discuss human rights in labour, with specific reference to violations in the garment industry.
Fair trade garment production bears no resemblance to that described thus far. Most of the clothing items which a consumer can buy from fair trade organisations come directly from the group of artisans who made them. Production frequently takes place in a rural setting and is based upon an activity which is compatible with the family and agricultural commitments of the women. The criteria for selection and evaluation of these groups of artisans by organisations such as EFTA (European Fair Trade Association), make reference to a series of development criteria as well as the fundamental ILO conventions: These additional criteria include:
Quality improvement and the development of new marketable products are carried out against a background of respect for these development criteria.
For several years now, fair trade organisations have also initiated commercial relationships with private industrial companies. One example is Dezign Inc, (see Box) a company based in Harare in Zimbabwe, which uses silk-screen printing in the production of T-shirts, rucksacks and hand-made paper products. In this kind of partnership, the respect for ILO conventions and the development criteria which usually prevail in fair trade organsations, are supplemented by considerations of capital ownership and of revenue.
The Multi Fibre Arrangement (MFA) within GATT took effect in 1974.
The MFA limits textile and clothing imports from 'low salary' countries to the principal consumer countries. Each 'low salary' country is given an annual quota of authorised imports to the EU and the USA in each product group.
The New Agreement on Textiles and Clothing signed within the WTO (World Trade Organiza-tion) came into effect on the first of January 1995. It forsees the progressive dismantling of the MFA quota system before the year 2005.
It is difficult to predict the consequences for producing countries, but it is certain that it's disappearance will lead to increased competition where success will depend on the following:
During the past thirty to forty years, the garment industry has been subject to large-scale movements from one country to another. At the same time there has been a move from formal work structures towards those of a more unconventional nature (such as ad hoc work-shops, working from home, and illegal work-shops). Thus, a piece of clothing which used to be made in northern Europe, is today often imported from small production units in southern Europe. Some of the production which is still done in northern Europe is completed by poorly paid female homeworkers or in illegal sweatshops.
The Mediterranean basin and the Middle-East were the first places to benefit from relocation of the European clothing industry in the fifties and sixties. It is from this time that we can date the emergence of clothing manufacture as the second ranking industrial sector in Morocco (with 180,000 jobs). In Tunisia, this sector employed half of the industrial labour force and constituted 35% of the total exports in 1993. In Turkey, two million people are employed in clothing and textiles, mainly in workshops in the informal sector.
There has been a similar and simultaneous rise in the Asian garment industry. This spectacular progess has happened in waves, depending upon the successive transfer of production from one country to the next, in search of ever cheaper production costs.
The so-called South East Asian Dragons of the first wave (Hong Kong, South Korea, Singapore, Taiwan ) have progressively reduced their own production while investing massively in other Asian countries. Thus, a second wave of the garment industry moved to Thailand, the Philippines, Indonesia, and Malaysia. In further search of comparitive advantage, the industry has again relocated to countries such as Bangladesh, Pakistan, Sri-Lanka and, more recently, Laos, Nepal, Cambodia and especially Vietnam.
In Bangladesh, the expansion of the export clothing industry dates from the early eighties. The number of garment factories has risen from some 300 in 1978 to 2,500 today, of which 1,900 are in Dhaka and 350 in Chittagong6. Most of these factories are owned by Bangladeshis. Many of them carry out subcontracting jobs like stitching and assembly, but increasing numbers now deal directly with buyers for American and European distributors and labels.
This spectacular growth of the clothing industry, has made it the country's most significant export (63% of the total value). Its growth from 31 million dollars in 1983, to 1.6 billion dollars in 1967 has meant that it has largely supplanted the traditional jute industry.
The phenomenal development of this sector of activity is directly linked to opportunities for clothing exports. From its status as a Less Advanced Country (LAC), Bangladesh has been partly able to get around the MFA. It has benefitted from free access to the European market. The United States has also granted Bangladesh large import quotas, thereby enabling it to become part of the United States' principal group of suppliers. This preferential treatment has attracted producers in neighbouring countries. By entrusting a part of their production to Bangladeshi businesses, they have benefitted from increased export outlets.
The Bangladeshi clothing industry looks healthy enough, but there are problems. One is that the clothing industry is almost totally dependent on the import of material and accessories. In 1994, only 4% of the 2.25 billion yards of necessary fabrics could be supplied locally.
Only about 30% of the value of clothing exports remains in the country. Of the remaining 70%, much of it is used to pay for the import of fabrics, thread and accessories from neighbouring countries9. Benefitting from tax exemptions for import of fabrics, accessories and equipment, and from special export facilities, the garment sector has made only a marginal contribution to the development of the country. The essential contribution lies with the employment it generates, (15% of industrial employment, or almost 1.5 million workers) and with the very meagre wages. Women earn between 400 and 1500 takas per month. Such a wage doesn't cover even essential expenses for a precarious existence in city slums (estimated to be around 1700 takas per person per month).
The lack of locally available material and accessories also causes long and inflexible production delays. It restricts Bangladesh to low-specification non-fashion mass-production, (T-shirts, classic shirts etc.)
It also means that the growth and survival of the Bangladeshi garment industry must depend on its single most important competitive advantage - it's cheap labour. It is a fragile equilibrium. Other countries, such as Cambodia and Laos, also sell their labour at the cheapest possible price to attract investment. Since the signing of NAFTA (North America Free Trade Agreement), the United States has reduced its imports from Bangladesh, preferring instead to deal with the Mexican Maquiladoras, whom they supply with fabric and accessories, while benefitting from both a cheaper labour force and market proximity. Whereas, in 1994, the United States accounted for 52% of clothing exports from Bangladesh, it now represents only 39%. Europe now absorbs 54%.10
In Bangladesh, more than 40 million children belong to families living below the poverty line. They cannot afford to meet the basic needs of food, clothing, shelter, education and healthcare. Many of these children are forced to go out to work because their families cannot take care of them. One worker in ten is less than fourteen years old.
In March 1993, the United States Congress, published the 'Harkin Bill' which forbade the import of goods produced using child labour. Panic gripped employers in the Bangladeshi garment sector and, to avoid the loss of their principal market, they got rid of more than 40,000 child employees. In the absence of any palliative measures, a large number of these children have found themselves on the street, sometimes involved in prostitution. In response to this dramatic turn of events, the ILO, UNICEF, the U.S Embassy and the BGMEA (Bangladeshi Garment Manufacturers & Exporters Association) have put together a programme aimed at the eradication of child labour whilst, at the same time, ensuring safeguards for children who have been dismissed. (The programme involves the enrolment of children in specially created schools, the payment of a monthly allowance, and prioritised recruitment for their immediate family members in garment factories.)
In July 1995, in response to the slow progress of the programme, 40 American non governmental organizations belonging to the Child Labour Coalition (CLC) threatened a boycott. As a result, the programme finally got off the ground. Joint control teams from ILO, UNICEF, and Labour Inspection, carried out unannounced visits to factories in order to detect the presence of workers under 14 years of age. The childrens' identity was then given to UNICEF who, in turn, took it upon itself to ensure their further schooling, and to allocate allowances in cooperation with two Bangladeshi NGOs.
The entire programme is based upon a 1995 estimate of 10,000 child labourers. In April 1997, 8,000 children were receiving school education. The results, therefore, appear to be positive. However, during a second enquiry in 1996, the ILO identified some 6,000 children who had not been included in the 1995 survey.
The ILO considers this initiative to be a pilot project. Other similar projects are now underway in other countries. In Pakistan, for example, the exploitation of children in the manufacture of soccer balls is being investigated.
The Bangladeshi programme, however, has not received universal acclaim. It has been criticised by several worker organisations and NGOs who have kept a distance from its development and implementation. The main criticisms levelled against it are as follows:
In 1992 the American firm Levi was accused of selling jeans made by Chinese immigrant workers operating in slave-like conditions. Levi reacted by adopting a code of behaviour. With a lot of media hype, they promoted themselves as pioneers in this area. They committed themselves to choosing production sites on the basis of human social and environmental criteria. Levi undertook not to associate themselves with partners who did not respect their code. At present, Levi's code of behaviour is one of the most binding to which any company has voluntarily committed itself. Following its adoption, Levi suspended its business relations with Myanmar and Peru in 1992, and with China in 1993. It is currently carrying out an enquiry into 600 of its other Asian suppliers. According to the company, this enquiry has led to the complete cessation of business relations with 5% of its suppliers, and to the improvement of work conditions in 25% of those subjected to specific visits.
In its code of conduct, Reebok states that it 'will not work with economic partners who rely upon forced labour'. However, workers at the Yong Shing factory which is part of the industrial group Liang Shing (Reebok's partner) are not allowed outside the factory grounds at night during the weekend. During the day, workers are under constant surveillance by guards when they go to the canteen or to their dormitory. A female worker states: 'The factory is, de facto, a detention camp. We are prisoners without being criminals'.
Founded in 1989, AJ Quen (meaning 'weaving together') is an umbrella organisation for 2300 artisans in some 40 groups in Guatemala. A large majority of the artisans are women, often having lost their husbands during the civil war, or as a result of military repression. AJ Quen fosters exchange between artisans, takes care of their training, and develops outlets for their products. They make waistcoats, jackets, trousers and other garments using traditional techniques, patterns and colours.
Established in 1987, Dezign Inc believes in working according to fair trade practices, with meticulous respect for workers' cultural identity and for the environment.
Dezign Inc has developed a printing process using ink which is free of synthetic solvents. The company also involves itself in the everyday social realities of life in Zimbabwe. It makes significant contributions to AIDS prevention programmes, and helps those who suffer from the disease.
As well as paying a wage which is 50% higher than the legal minimum wage for the sector, Dezign Inc also makes a partial reimbursement of medical costs and contributions to a pension fund. The 130 workers also participate in decisions regarding organisation of the work, specific investments, and profit division at the year end.
