By Diana Karakos, Intern, International Labor Rights Forum
The garment industry is a major part of Sri Lanka’s economy, taking up 46% of its total exports and 67% of its total industrial production. Sri Lanka produces apparel such as bras and women’s underwear. For Sri Lanka, the United States and Europe are its most important markets, with big name buyers such as Victoria’s Secret and Vanity Fair purchasing a total of 95% of the garment industry’s exports. The garment industry employs 350,000 workers directly and another 750,000 indirectly.
The GSP and GSP+ (Generalized System of Preference) programs, provided to Sri Lanka by the United States and the European Union respectively, were put in place in order to give the country duty free access to these important consumer markets to aid Sri Lanka’s development process. This concession was conditional on Sri Lanka’s progress in meeting international labor, environmental, and human rights standards.
However, on August 15, 2010 the European Union removed its GSP+ concession from Sri Lanka due to human rights violations committed during the civil war which recently ended in May 2009. These violations include torture, abduction of journalists, and unexplained disappearances.
Additionally, Sri Lankan labor union leaders have lodged complaints that factory owners are violating internationally recognized labor rights standards. Because of this, in 2008 the AFL-CIO filed a petition with the U.S. government citing these violations as a reason to revoke Sri Lanka’s GSP concession. On December 30, 2009 an updated petition was resubmitted and on June 29, 2010 the United States accepted the petition to review workers rights in Sri Lanka. A hearing took place at the end of September 2010 to discuss the issues raised by the AFL-CIO.
The AFL-CIO’s petition argues that Sri Lanka is not enforcing internationally recognized worker rights including freedom of association, the right to organize and bargain collectively, freedom from compulsory labor, respect concerning the minimum age for employees, and providing acceptable work conditions in regard to minimum wage, work hours, and occupational safety and health.
For example, according to the AFL-CIO’s petition, the Factories Ordinance, which determines the “maximum hours of work and of overtime for women and children employed in all factories…provides that women and children over the age of 16 may be assigned overtime. The law used to provide that a worker could not be made to work more than 100 hours of overtime in one year. However, the ordinance was changed in 2002 to no more than 60 hours of overtime a month – an increase of 620 additional hours of overtime a year. The employer can, and often does, require factory workers to work up to 108 hours a month, and often well beyond this legal maximum – often without proper payment. Excessive overtime is having a serious impact on the health of Sri Lankan workers.”
The Sinotex Ltd. factory highlights the management’s abuse of the workers’ right to freedom of association. Sinotex Ltd. produces items such as socks, hats, T-shirts, and cloth bags. According to the AFL-CIO’s petition, “in January 2009, the Sinotex Company, without warning, closed its doors and terminated the employment of all of its workers. Many of those workers were members of the FTZGSEU. By letter, the workers were told to come to collect checks between the 20th and 23rd.”
“On January 19, the union and members sough a meeting with the Commissioner of Labor and a complaint was submitted challenging the termination. However, the government never scheduled an appointment with the worker representatives to consider the complaint. Given the failure of the government to respond, the workers had no choice but to collect the compensation offered by the employer. Workers were also required to sign a ‘conditions of settlement of dispute’ form under duress.”
The union’s lawyer filed a lawsuit on behalf of the 512 Sinotex workers with the Court of Appeals in order to ensure that the union’s side was heard. On March 13, 2009, the Court of Appeals decided to allow workers to proceed with their petition. However, the hearings were delayed until June 30, 2009 per the request of the Attorney General’s lawyer in order to give him more time to develop his case. This delay reflects the government’s unwillingness to adequately provide important legal binding decisions in favor of workers. Additionally, the sudden closure of the Sinotex Ltd. factory reveals factory management’s reluctance to employ union members.
Bratex (pvt) Ltd., an undergarment factory in Sri Lanka, also provides a good illustration of how these standards are not being met. In February 2010, Mr. Siripala Amarasingha, an advisor to the Sri Lankan President on labor matters, came to the factory several times with armed personnel, giving the workers the impression that he arrived in order to weaken the factory branch of the Free Trade Zone & General Services Employees Union (FTZGSEU). This initiated several work stoppage protests by the workers.
To resolve the issues Mr. Amarasingha and Mr. Anton Marcus, the Secretary of the FTZGSEU, agreed to meet, along with Bratex management and the chairman. With this arrangement in place the workers resumed work.
However, Bratex refused to meet and a series of letters was sent between Bratex Managing Director Mr. Joseph Diestel and Mr. Marcus between March 22nd 2010 and June 8th 2010. Mr. Marcus requested a discussion regarding the labor dispute. Bratex at first denied the charges brought up by FTZGSEU and then refused to respond to follow up letters sent by FTZGSEU.
As a consequence of this, FTZGSEU has decided to take up the labor dispute with the buyers of the Bratex factory through organizations such as ILRF and Clean Clothes Campaign. The buyers in include Vanity Fair, Viania, RedcatsUSA, and Fruit of the Loom.
In addition, the Bratex (pvt) Ltd. Factory has refused to negotiate with their factory branch of the Free Trade Zone & General Services Employees Union over days workers were not able to report to work due to a flood on May 17th 2010. Bratex (pvt) Ltd. announced on June 2nd 2010 that workers were expected to work on Sunday in lieu of the dates in which they were not able to due to the flood, otherwise these days will not be paid and workers will run the risk of losing their attendance bonus.
This is a direct contradiction regarding the work Garments without Guilt (GWG) has initiated throughout Sri Lanka. This program advertises Sri Lanka as an ethical sourcing destination for big name buyers. However, trade union representatives and NGOs argue that the ethical initiatives touted by GWG are not accurate. They claim that Garments without Guilt does not take into account the workers’ voice, as well as restricts freedom of association and does not provide an adequate living wage to its workers. Other problems include reports of sexual harassment and union formation prevention.
The removal of the GSP+ program is not the only economic change occurring in Sri Lanka. Its Wages Board determined that minimum wage earned by workers in the garment industry would be raised by 20% beginning September 1, 2010. The removal of the GSP+ concession has caused the garment exporters to protest the raise because they now have to pay the duty owed on their exports. They claim they do not have the resources to increase the workers’ wages. However, it has been exposed that the garment factory owners make up some of the wealthiest people in Sri Lanka, while 66% of their women workers are suffering from the effects of malnutrition, such as anemia.
The Sri Lankan economy will improve only once the poverty level wages paid by the factories are increasedto a living wage. This will lead to sustainable change and progress, something the country should be striving for. Therefore, U.S. investment through tariff preferences and development assistance should only be directed at industries with a dedicated commitment to workers aiding the country’s long-term economic progress.
If Sri Lanka wants to regain its GSP+ concession from the European Union and ensure that the United States does not remove its GSP program as well, it is imperative that the factories provide the appropriate working and living conditions, as well as a living wage, expected from them. Until that happens, workers’ rights will continue to be violated throughout the country. In addition, in order to provide the garment industry of Sri Lanka with the necessary financial resources to implement strong labor standards and living wages, it is crucial that the buyers commit to paying the increased price of goods exported from Sri Lanka, including the cost of higher minimum wages.
Consequently, it is the buyers’, not the local community’s, preferences regarding factory and worker conditions that are important to the factory owners. The owners consider the employees temporary and therefore do not hold their requests in high regard. This temporary situation also makes it difficult for the workers to organize against unfair treatment by the owners. Therefore it is important for buyers to put pressure on their suppliers to comply with international labor rights standards. In order for buyers, such as Vanity Fair, Viania, RedcatsUSA, and Fruit of the Loom, to understand the importance of this enforcement, it is imperative that the consumers put pressure on the buyers to ensure that workers rights are implemented on the ground in the factories and at the housing locations where their garments are made. For more information regarding ILRF’s actions against sweatshop labor such as that occurring in Sri Lanka click here.