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DEVELOPMENT-SRI LANKA: Garment Woes Dampen Labour Day

Feizal Samath

COLOMBO, Apr 29 2010 (IPS) - Though the global economic crisis has eased in most of Asia, latest reports about falling demand for garments in markets like Europe and the United States have become a new source of concern to Sri Lanka’s troubled garment labour force.

Garments, the island state’s biggest industrial export, are suffering a double whammy: the economic recession and uncertainty over tax-free trade to Europe. The sector employs close to 300,000 people with another 200,000 dependent on it.

According to T.M.R. Raseedeen, general-secretary of the National Association for Trade Union Research and Education (NATURE), more than 50,000 workers lost their jobs in the 2008-09 period as some 50 mostly garment factories closed due to loss of orders.

“These are official figures. I think the situation is much worse,” he said, adding that the plight of the garment workers would be one of the many slogans of unions at May Day rallies across Sri Lanka.

Rohan Masakorala, secretary-general of the Joint Apparel Association Forum, an umbrella group representing associations involved in the garment industry, says that what is worrying is that garment exports fell by 20 percent in February 2010 and by a similar percentage in January.

“We are watching March figures and hope there is some pick-up, or we will have a crisis on our hands,” he said, adding that retail markets, particularly in Europe and the United States have not recovered from the crisis and consumer buying has not picked up as anticipated.

With a trade pact providing tax-free imports into the European Union (EU) suspended over the failure of Sri Lanka to adhere to the United Nations conventions on labour and human rights, buyers are putting pricing pressure on suppliers in Sri Lanka.

“Pressure is mounting on pricing (and for local companies to slash margins) as buyers are uncertain whether the tax breaks would continue,” Masakorala says, adding that if this continues, labour will face the brunt of the impact.

Sri Lanka has for many years enjoyed tax-free imports to the EU for a number of items, which are mostly garments. The EU and the United States account for the bulk of Sri Lanka’s garment exports.

Over the past year authorities from both sides have had disagreements over an EU regulation to implement a number of conventions ensuring adherence to labour and human rights, a condition that countries entitled to these benefited must observe. In December, the EU said it would withdraw the concessions from July 2010 if Sri Lanka failed to present a roadmap to implement these conventions.

Masakorala says it is mostly small and medium-scale factories that have suffered the brunt of the economic crisis. Last year the number of garment factories fell to 250 from 300 in 2008.

The crisis in the garment sector is one of the biggest labour issues today. A leading trade union on Thursday said the challenges faced by workers were enormous owing to the “ramifications of the global economic crisis and the anti-worker measures of the authorities to bail out capitalist employers”.

The leftist Ceylon Federation of Labour in a statement said Sri Lankan authorities were placating business interests and capitalist employers by implementing a series of measures to create a flexible labour market. “Labour flexibility in essence means turning workers into dispensable commodities,” it said.

Last year, the government said it planned to introduce a five-day week, nine- hour work day, with Saturday off, as employers said they were struggling to keep loss-making factories open due to falling orders. Unions protested over the move but had no objection if workers agreed to such a move.

Another step was to allow failed companies to close under an Unemployment Benefits Insurance Scheme. Yet both steps are yet to be enforced due to disagreements between unions, employers and government authorities.

In the bigger firms, though not as badly affected as the smaller factories, top-level staff have been offered voluntary retirement packages and in some cases workers have also been retrenched, says Ravi Peiris, secretary-general of the Employers Federation, which represents a number of employers.

NATURE’S Raseedeen says that while the May Day was born as a result of workers succeeding in demands for an eight-hour working day, which became the very first International Labour Organization convention adopted in 1919, Sri Lankan authorities are working against these fundamentals.

“The other danger is that if the nine-hour working day is enforced, it could be a permanent feature rather than a temporary measure to tide over a crisis,” he says.

Unions say if workers are to work an extra hour a day, they should be paid overtime or adequately compensated.

Workers are also furious with the government for failing to fulfill a promise made during the January 2010 presidential poll to increase wages.

“The cost of living is rising sharply and workers are struggling. We are yet to see this promise being implemented and we intend to raise this issue vociferously during May Day rallies,” said Anton Marcus, leader of another prominent union in the garment industry

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