Business Times

End of the road for the apparel industry?


The apparel industry in Sri Lanka is one of the key export industries. Last year, the industry export earnings amounted to US$ 4 billion. It employs approximately one million workers.
Notwithstanding many challenges faced by the industry with the abolition of the Multi Fibre Agreement and the loss of EU GSP status, the industry has made positive inroads in making their presence felt in the global market.

However, unfortunately, it appears that this industry, which has been one of the principal sources of foreign exchange earnings to our country and has generated employment especially for women, is now facing a new challenge. Quite a few companies are being pressurized to recognize one single union, namely the Free Trade Zone and General Services Employees’ Union as the bargaining agent. This union is exerting international pressure through NGOs and other trade unions.

The Department of Labour and the Ministry appear to be helpless. Another company in the Free Trade Zone which has been supplying ladies outerwear to one of the top end buyers in the US during the last 15 years is now on the verge of closing down business on account of union pressure exerted on the buyer through international agencies. One of the demands made is to reinstate three workers who have already resigned from the service many months ago on the basis that they resigned on account of “Union victimization”.

The International Textile, Garments and Labour Workers Federation (ITGLWF), through this union, published a report highlighting and alleging that certain companies in Asia which are supplying readymade garments and footwear for the forthcoming Olympic Games are violating labour standards. Sri Lanka has been identified as one of the countries along with China and the Philippines. The information given in respect of four factories in Sri Lanka are not correct.

One of the allegations has been that none of these companies have trade unions. However, they do have a mechanism of bipartite consultation through Employee Councils. The report seems to state that this is in violation of the right to freedom of association. This position is totally incorrect and without any foundation. The ILO Convention No.87 which deals with the right to freedom of association, very clearly articulates that this gives the worker the right to select an organization of his own choosing. Therefore, such an organization need not only be a trade union.

One of the significant criticisms that have been made against companies in the apparel industry has been that these companies do not have collective bargaining and collective agreements. The report is factually incorrect in this regard as well. There are companies engaged in collective bargaining in the apparel industry which have Collective Agreements.

Sri Lanka is the only country which has introduced legislation to make collective bargaining mandatory.
This once again, is not consistent with the spirit of collective bargaining enshrined in the ILO Convention on Collective bargaining (Convention No 98). This legislation has proved to be a failure as it was brought at a time, with political motives, a week before the Presidential Elections of 1999.

Today, these very unions which wanted such legislation are criticizing this legislation and wishes to have amendments to same stating that it needs more teeth. Already there are big companies which have set up factories in India and Bangladesh and they openly concede that the rigid labour framework and the industrial relations culture are some of the key factors which have prompted their decision to move overseas.

The campaign that has been started by this union will soon see more employers looking outside than being within. Youth unemployment in Sri Lanka is around 19%. Closure of some of these factories would definitely contribute to increase this figure. Should we wait till this happens or should something be done about it? Can one organization which is more like an international NGO than a trade union, be allowed to destroy this valuable industry?

Suranga Senarath

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