Tuesday 21 May 2013


H&M mulling production in South America and Africa.

A likely boost in the African Garment Industry?

STOCKHOLM - Swedish fashion giant H&M is considering starting production in South America and Africa, chief executive Karl-Johan Persson told the Financial Times in an interview published on Monday.

"When that part of the world is growing, which it is, it becomes even more interesting to look at production in South America or Central America. So, we are exploring that opportunity ... We're looking at (Africa) as well," he said.
His comments come almost one month after the collapse of a nine-storey garment factory complex in a suburb of Dhaka caved in and buried thousands of workers.
Persson, who last week called for a higher minimum wage in Bangladesh, had no suppliers in the building.
H&M announced on May 13 that it would sign an agreement drafted by global unions to improve safety in the Bangladeshi textile factories it uses.
The Swedish company plans to open its first store in Chile in 2013.

Bangladesh court orders action against factory owner in November fire.

I'm still very much interested in following this issue. And hope that my followers are reading with as much interest. Please do make comments of your views about this issue..well if you want...

DHAKA - A Bangladesh court on Sunday banned the owner of a garment factory that was destroyed in a fire in November from leaving the country as anger builds up over a string of deadly incidents in which thousands have died.
The high court in Dhaka also directed that Delwar Hossain, owner of Tazreen Fashion, appear before it on May 30 to explain the circumstances in which 112 workers, mostly women, died in the fire on the outskirts of the capital last year.
At the time, a Reuters photographer found in the charred remains at the site of the fire clothes that were labelled for - among other big-brand retailers - Wal-Mart, Sears Holdings Inc and Walt Disney Co.
undefined
Images of the fire that took place in November (photo: AFP)
The court action in response to a public interest petition comes after more than 1,100 people were killed in a building collapse in another suburb of Dhaka that housed garment workers, sparking a global outcry about safety standards in Bangladesh's booming $20 billion garment industry.
Nine people have been arrested including the owner of the building for that accident, the world's deadliest industrial disaster after the Bhopal gas leak accident in India in 1984.
Jyotirmoy Barua, a lawyer who appeared on behalf of the petitioners, said the court ordered the government to issue a red alert at all border crossings to ensure Hossain did not leave the country.
The court also asked the government to explain why it had not taken any action against the factory owner even after a committee set up to inquire the fire called for the arrest of the owner and his wife for negligence.
Hossain could not be immediately reached but he said at the time of the fire that it was a case of sabotage.
Bangladesh, which has emerged the world's second biggest exporter of clothing after China, has had on an average OF one accident each year since 2000 but there is a culture of impunity, activists say.
"Since 1990 such inhuman incidents become a normal thing in the garments sector and as the owners are the powerful and wealthy people in society, they do not face any punishment," petitioner Saydia Gulrukh Kamal.

Wednesday 15 May 2013

Will brands and governments take action on Bangladesh.




undefined
Photo: AFP
As the death toll climbed to 1,124 deaths on Monday, the collapse of Bangladeshi garment factory building is starting to illicit a response. After many brands admitted that some of their production was housed in the building, the current reaction is pressure and policies on a macro-economic level.

H&M just announced the signing of the Fire and Building Safety Agreement, a document initiated by NGOs IndustriAll and Uni Global Nation and which had only thus far received the signatures of the U.S. group PVH (Tommy Hilfiger, Calvin Klein) and the German retailer Tchibo. Global retailer Inditex is also in support of the aggreement. That is what Dorothée Kellou expects to happen, project manager of the NGO Peuples Solidares (People United) and a member of the international collection Ethique sur l’etiquette (Ethics in labeling).

“We need at least four [brands] for the agreement to become effective,” said Dorothée Kellou to the French daily newspaper Libération. In her interview, she also criticized minor isolated initiatives of some brands, such as Adidas’s anonymous hotline for employees or a video on fire prevention in factories that have no fire extinguishers.

Major brands might feel lackluster about the Fire and Building Safety Agreement because it entails the creation of a common fund financed by themselves — those companies outsourcing to Bangladesh — to pay for independent audits. Such a development would mean that participating companies could no longer rely on their own commissioned audits, the results of which consumers and NGOs rarely see.

International pressure 

But if brands are slow to react to recent events, European and American governments might be taking the lead. The EU trade commissioner Karel De Gucht and Catherine Ashton, head of EU foreign policy, are currently organizing a meeting of European retailers that source their production in Bangladesh. The European Union is also threatening the Bangladeshi government in Dhaka of revoking the country’s trade advantages with Europe.

Bangladesh benefits from the European Generalised System of Preferences (GSP) regulations that allow them to export cheaply to Europe. The GSP is a real leveraging tool that Brussels intends to use rigorously to push local authorities into adopting an emergency policy for improving the working conditions of its garment industry.

The message is even stronger, given that Bangladesh could also lose its preferential access to the U.S. market. A review is currently underway and expected to last several months, following the assassination last year of a Bangladeshi labor activist who was working for the establishment of a safety policy in factories. The recent catastrophe and the images it has spread around the world could speed up Washington's decision, according to local media.

Who will pay? 


Bangladesh is the world’s second largest producer of clothing. The country must now do some soul searching about its involvement in the event in the weeks to come. The loss of international customers could indeed pose a serious problem to the national economy. The garment industry represents some 80% of exports, which totaled $29 billion last year.

In any case, the leaders of the Bangladeshi textile industry seem to be sizing up the issue. “It is a crucial time for us,” said Atiqul Islam, president of the Bangladesh Garment Manufacturers and Exporters Association, in comments to the AP. “We are doing our best to improve the safety measures in the factories. We expect our buyers to bear with us and help us to overcome the current crisis. It's not the time to turn away from us. That will hurt the industry and many of the workers will lose jobs.”

The call for clothing brands to support better working conditions raises the most problematic question about changing production conditions: who will foot the bill? The manufacturers, who are already forced to cut back costs to continue to attract orders? The international brands, already tempted by other more competitive countries with less negative publicity? U.S. and European consumers whose consumption level is already more than sluggish? As we wait for a response, the Bangladeshi working class has already paid a very high price: 1,124 lives
.

North American retailers devising own Bangladesh plan.


Aluta Continua!

North American retailers on Tuesday discussed forging their own Bangladesh safety agreement, an alternative to a legally binding accord that many European retailers have signed on to, though details of any alternative accord were still unclear.
The discussions on Tuesday were the latest in a series of talks convened by large retail trade organizations and including retailers such as Macy's Inc, JC Penney Co Inc, and Sears Holdings Corp, to develop a response to fatal fires and a factory collapse in Bangladesh last month that killed more than 1,000 people.
The National Retail Federation, one of the largest U.S. retail trade associations, spoke on Tuesday afternoon with other trade associations and with its member companies about a possible accord among North American retailers. Details from those calls are not yet available.
undefined
The trade associations collaborating on a possible North American plan also include the National Retail Federation, Retail Industry Leaders Association, American Apparel & Footwear Association, United States Association of Importers of Textiles and Apparel, Retail Council of Canada and Canadian Apparel Federation, according to people familiar with the talks.
Meetings among North American retailers are shaping up as an alternative approach to an accord that European-based retailers have reached. The pact, joined on Tuesday by Loblaw Cos Ltd of Canada, includes legally binding commitments to safety improvements, according to industry sources. A copy of the agreement has not yet been released.
Major European retailers such as Sweden's H & M Hennes & Mauritz AB and Spain's Inditex SA have signed on to the accord. Labour groups including Europe's IndustriALL and UNI Global Union, as well as non-governmental organizations, provided the initial draft of the agreement and have set a May 15 deadline for companies to commit to its terms.
Wal-Mart Stores Inc, the world's largest retailer, said on Tuesday that it is not in a position to sign the accord at this time.
"Walmart believes its safety plan meets or exceeds the IndustriALL proposal, and will get results more quickly," the company said in a statement.
Wal-Mart has expanded its own safety efforts in Bangladesh over the past several months after the deadly Tazreen factory fire in November.
Earlier on Tuesday, Wal-Mart laid out enhanced plans that include in-depth safety inspections at all Bangladesh factories that produce goods for it and increasing the pace and frequency of follow up inspections.
U.S.-based retailers have been reluctant to join any industry accord that creates legally binding objectives. Gap Inc said it would sign the accord only if changes are made to the way disputes are resolved in the courts. As of Tuesday, the only major U.S. company to announce its support was PVH Corp, whose brands include Calvin Klein.
Robert E. Scott, an expert on contracts and commercial transactions at Columbia Law School, said in an email that the U.S. retailers are balancing a desire to seek improvement in Bangladesh against concerns about exposing themselves to liability for safety issues.
"Perhaps American firms believe that the risk of collateral liability is too great to estimate," Scott said. "But that's not a contract law issue, that's simply a question of balancing corporate benefits of being seen as a good citizen trying to control these conditions on the one hand with the risk of a possible significant liability on the other."
Mike Posner, a professor of business and human rights at New York University's Stern School of Business, in an email said agreement to a legally binding accord by major European retailers has put U.S. retailers under pressure. "The onus is now on American brands to step up to the plate," he said.
Sears said in a statement that the company "is not prepared to sign the current proposal. We are engaged in preliminary discussions about the alternate proposal from the retail trade associations in North America."
A JC Penney spokeswoman told Reuters the company was actively engaged in the talks. "There has been some discussion of possibly melding the two proposals into one hybrid industry solution," she said.
Macy's, whose namesake stores are the largest U.S. department store chain, said it was working with the North American Bangladesh Worker Safety Working Group, which includes NRF, RILA and others.
Bob Kirke, executive director of the Canadian Apparel Federation, said that while his group did not have an announcement to make, "it's fair to say that we're working on different responses to the Bangladesh situation."

Monday 6 May 2013

How textile kings weave a hold on Bangladesh

http://uk.fashionmag.com/news/How-textile-kings-weave-a-hold-on-Bangladesh,328033.html#.UYhZHLXCaSo

DHAKA - Bangladesh's garment boom has made Mohammad Fazlul Azim a wealthy man. Over three decades his empire has grown from a single factory to a string of plants that employ 26,000 workers and clock up an annual turnover of about $200 million (128.7 million pounds).
Azim, who is also a member of parliament, has benefited from government policies to grow the industry into a global powerhouse. His elegant home here in Dhaka is a haven of luxury with an outdoor swimming pool, walled off from the chaos of the capital's streets.
But he has a complaint: His costs have almost doubled over the past several years. It's now time for the big Western brands he supplies to pay more for their clothes, and stop squeezing his margins, he declares.
"The buyers have not given anything. They just say 'increase your productivity'," Azim said in an interview.
In workshops across this South Asian country of 160 million people, however, few are sympathizing with the textile tycoons and their bottom lines. Western retailers are powerful, but so too are the garment moguls.
The rubble of a building that collapsed in a suburbs of Dhaka on 24th April, killing over 650 garment workers (photo: AFP)
Thanks to their political clout and now a new Industrial Police force that crushes dissension at their plants, labour activists say, it is the factory owners themselves who keep garment workers' wages lower than anywhere else in the world - and all too often get away with lax safety standards.
The collapse on April 24 of an eight-story building near Dhaka that housed several garment factories was a harrowing reminder of the collective failure - by the authorities, owners and buyers - to ensure that cheap doesn't mean dangerous. The Rana Plaza tower fell like a pack of cards. More than 430 workers were killed and scores remain missing. It was the third deadly incident in six months to raise questions about worker safety and labour conditions in the poor South Asian country, which relies on garments for 80 percent of its exports.
Until now, there has been little pressure here to improve safety conditions and wages for the 4.5 million Bangladeshis working in the industry. That inertia stems, in part, from how deeply the industry has woven itself into the power structure.
More than 30 garment industry bosses are members of parliament, accounting for about 10 percent of its lawmakers. Other owners, like Mohammed Sohel Rana, the owner of the building that collapsed, have strong political ties: He was a local leader of the youth wing of the ruling party, the Awami League.
Rana was arrested trying to escape across the border to India and faces charges of unlawful construction causing deaths. Bangladesh officials say his eight-storey complex was built on swampy ground without the correct permits.
"At least 50 percent of the members of parliament have business links of some sort," says Babul Akhter, a leader of the Bangladesh Centre for Workers Solidarity, an organization that works with labour unions. He alleges that many of these politically connected garment makers take advantage of their clout to disregard the minimum wage levels stipulated under the law.
Activists such as Akhter who campaign for safer factories and better wages are often treated as enemies of the state in a country whose economy would be devastated if Western brands pulled out.
One prominent campaigner, Aminul Islam, paid the price last year: Bearing signs of torture, his body was found one day many miles from where he was last seen. The government dismisses allegations it had a hand in the killing of Islam, but he had been detained and tortured by security forces in the past. His killing is still under investigation, and no arrests have been made in the case.
Akhter himself was arrested for inciting mob violence and beaten in jail three years ago after a bout of labour unrest; today, he says he still has charges pending against him from that time, and is followed by unknown men who, he suspects, are intelligence agents.
"There is no reason to follow him," said Mainuddin Khandaker, the second-ranking bureaucrat in the home ministry. "We don't have any such reports."
LAST OUTPOST OF CHEAP
As pay levels rise in traditional factory-floor nations, Bangladesh stands as a last outpost of cheap labour, an advantage that has helped lift it to number two in the global ranking of garment exporters, behind China.
Bangladesh ranked last in minimum wages for factory workers in 2010, according to World Bank data, behind Cambodia, the last country added to the global supply chain in 2000.
"It's the lowest of the low in terms of wages," says Malte Luebker, the International labour Organization's senior wage specialist for Asia-Pacific. "Wages are the key drawing point."
How Bangladesh remains so competitive is, in part, the story of powerful First World retailers playing factory owners, such as Azim, off each other to secure the lowest price.
It is also the story of a government that stifles labour activism both to protect the country's economic lifeline and to please business magnates who have become part of the political and social establishment.
It's a set-up that suits everyone, including customers in the troubled economies of Europe and North America who want discounted T-shirts and trousers from big brands such as Wal-Mart, Target, H&M and Loblaw.
What makes it all possible is the Bangladeshis who make the clothes, many working in hazardous conditions and some earning less than $2 a day.
'NEXT ELEVEN' ECONOMY
The garment industry is emblematic of Bangladesh's rise as an emerging economy in recent years. Once the eastern wing of Pakistan, Bangladesh won independence after a bloody war in 1971 that left its economy shattered. The disaster-prone country became a byword for desperate poverty in the years that followed, dependent on foreign aid as it struggled with political instability, corruption and over-population.
Today, thanks in large part to the explosive growth of its garment industry, Bangladesh is included in the so-called "Next Eleven" economies, a term Goldman Sachs coined to describe countries such as Indonesia and Iran, Mexico and South Korea that have the potential to become some of the world's biggest emerging economies this century.
Until 2004, the Multi-Fibre Agreement (MFA) imposed quotas on developing nations' textile and garment exports to rich nations. It gave Dhaka and its rivals fixed market shares; when it expired at the end of 2004, Bangladesh braced for ruinous competition, particularly from China.
Instead, its apparel exports leapt, tripling after the expiry of the MFA to $19 billion in financial year 2011-12. That has narrowed the export gap with China. Labour shortages, wage inflation and a shift to higher-value manufactured products have made China less attractive as a source for garments.
The dismantling of quotas led to a "fast-money culture" that spawned a new class of garment moguls who found their way into politics and the media, said the representative of a big American retailer in Dhaka.
Western chains can retail clothes from Bangladesh for up to 10 times factory-gate prices. They began piling into the country in their never-ending quest for rock-bottom costs. Directly or indirectly, they have been sometimes doing business with Sohel Rana and the garment moguls.
WAGES BEGIN TO RISE
The big retail chains, offering big-volume orders, are spoiled for choice. Bangladesh has more than 3,500 garment factories. Trade pacts offering favourable access to Bangladeshi goods also help: Europe takes 60 percent of the country's apparel exports, the United States 23 percent.
Set against those advantages are the congested roads, the lack of a deep-sea harbour and crippling power shortages. Grinding political unrest regularly leads to general strikes that paralyze the economy and add pressure on factory owners. Weeks before the Rana Plaza collapse, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said strikes and unrest may have cost the country $3 billion worth of potential new business.
Garment workers won a victory of sorts in 2010 after months of violent protests over pay and conditions. The government raised the monthly minimum wage by 80 percent to 3,000 takas $38.50 (24.7 pounds). Only a small fraction of workers are actually paid the minimum, however: Several factory owners said the average wage in their factories is around 5,000 takas.
That's still much lower than in China, where the minimum wage for garment workers ranges from $154 to $230 per month, and in Cambodia, where the monthly base is $80, according to the International labour Organization.
Drawn by the lower costs, even Chinese garment businesses are moving to Bangladesh.
Cherry Body Fashions, a lingerie and swimwear factory in an export-processing zone outside Dhaka, is a stark illustration of the shift. General Manager Wallace Chu says 10 years ago, the company's owner, a Hong Kong firm, had 3,500 workers in China. Now it employs just 200 there - and 2,500 in Bangladesh.
"My boss will be moving more and more business here to survive," Chu said.
RACE TO BOTTOM
The Western brands regularly press the Bangladeshi government and the garment manufacturers association to ensure factories are safe and workers are paid decent wages. But, says Mikail Shipar, the top bureaucrat in the Ministry of Labour and Employment: "They say we should raise the minimum wage, but they are not very eager to raise their purchase rates."
Several plant owners, factory managers and representatives of retailers in Dhaka, none of whom would speak on record about the subject, said the brands are paying less and less. One said a buyer paid him $5.00 per piece for a particular make of shirt in 2011 and then offered $4.50 for the same thing a year later. Another estimated that overall prices have fallen by 40 percent over the past two years.
"They pay you like a beggar and take quality like a king," said Abdul Mannan, who helped open up the industry when he was textiles minister in the early 1990s and now owns more than two dozen factories at home and abroad.
Sometimes buyers refuse to negotiate because they know competition among factory owners for high-volume orders is intense.
"It's not so much the fault of the brands as the employers who are under-cutting each other," said a representative of a large American brand in Bangladesh. "If people are under-cutting each other, of course we take advantage of that - so prices are going down and down and down."
LABOR SUPPRESSION
Labour activists say that just as the brands squeeze their suppliers, factory owners scrimp on the wages they pay - and enjoy the political backing to get away with it.
A study by the Fair Wear Foundation, a non-profit lobby group, found that some workers were receiving less than the new minimum, nearly a quarter were reassigned to lower pay grades and bonuses were reduced.
Many factory workers live in the squalid back streets of the capital. Among them is Minara, who declined to give her full name. She is one of more than 3.5 million women who work in the apparel industry.
Home for her is a single windowless room she shares with her husband and a 15-year-old daughter. The girl, like her mother, is a helper in a factory measuring collar sizes and arranging bundles of cloth. Together, even with overtime, Minara and her daughter barely earn more than $90 a month, half of which pays for rent.
Standing in her doorway and looking out at a toilet and kitchen area that she shares with neighbours, Minara says that the price of a shirt in Europe or the United States is about what she earns in a month. "But if the government took the situation seriously, and gave orders to the owners, then it would all work better," she said.
The government has helped keep a cork on labour activism. In 2010, in the midst of the labour violence that year, it set up a 2,990-strong Industrial Police force to collect intelligence and prevent unrest in factory zones.
"If any unions demonstrate or raise their voice, the industrial police will come and tell them to stop protesting," said Akhter, the labour activist. "If they don't stop, they are attacked and beaten with sticks."
The government denies that unions are suppressed. It says many activists are politically motivated and, backed by non-governmental organizations in the West, deliberately stir up social unrest.
"We support the unions and want them to play a greater role," said H.T. Imam, a cabinet member and adviser to the prime minister, told Reuters. "We are quite pro-labour."
NO PROSECUTIONS
Azim, the factory owner and lone independent member of parliament, said garment business leaders are "socially connected," but he denied reports they grease the wheels through donations to the main political parties.
Said one industry official in defence of the owners who are members of parliament: "It's true that many of these people are really big and hold enough power to lobby the government, but I haven't seen them put up one bill or discussion (about the industry) in parliament."
The apparel industry body, the BGMEA, is routinely criticised in the media for protecting its members when accidents happen at factories. Human-rights groups say there has never been a case in which a factory owner was prosecuted over the deaths of workers.
The BGMEA said it discussed safety issues this week with representatives of more than 40 brands, including H&M, JC Penney, Gap Inc, Inditex, Levi's, Marks & Spencer, Tesco, Target, Nike Inc, and Primark. The group said in a statement on Thursday the buyers set up a committee "to look at all safety-related issues of apparel units, including their building structure."
In November, scores died in a garment-factory fire, many of them because supervisors ordered workers back to their stations even as an alarm rang and smoke rose through an internal staircase.
The owner of the plant was absolved of blame in the BGMEA's report on the incident. The government said it suspected the fire was an act of sabotage - though that was never proved. Calls for the factory owner to go on trial went unheeded.

Saturday 20 April 2013

KhuKhuZ Blog: 2012 REFLECTION - PART 3. LONDON GARMENT EXPO.

KhuKhuZ Blog: 2012 REFLECTION - PART 3. LONDON GARMENT EXPO.: KhuKhuZ Fashion  @ The London Garment Expo Held in August 2012. I worked with volunteers to market 4 Batswana fashion designers new colle...