By Roberto Savio
ROME, Mar 12 2015 (IPS)

The world is clearly splitting into two parallel worlds, with each going their own way, in what we could call the ‘Acapulco paradox’.

Take the official version of the image of Acapulco – a splendid Mexican resort, with horse riding on the beaches, a place blessed by nature and enriched by beautiful villas, gourmet restaurants, a place of bliss and relaxation.

Roberto Savio

Now take the version of the people living there – a place torn by criminal gangs with several deaths every day, where locals live in fear and total insecurity.

In the same way, there are now two ways to look at global reality.

One is the macroeconomic approach based on global data and, according to which, Greece has been doing better along with Italy, Portugal and Spain. In those countries, macroeconomic data are improving. Spain is even being touted as the example of how a country, which went through the bitter pill of austerity, now has growth at the same level as Germany.

Then, speak with young people, among whom unemployment is close to 40 percent, or with pensioners, or with those working in the hospital and education sectors, and you get a totally different picture. According to Caritas, the number of people living in misery has doubled in the last seven years.

The alternative model is the United States, which invested in growth and not in austerity like Europe. Its growth is running at 2.4 percent against an anaemic 0.1 percent for Europe. Again, the positive macro data do not coincide with the people’s data.

“Take the official version of the image of Acapulco, a place of bliss and relaxation. Now take the version of the people living there, a place torn by criminal gangs, where locals live in fear and total insecurity. In the same way, there are now two ways to look at global reality”
Let us take the latest example of economic recovery: the decision of the Walmart retail chain, one of the largest employers in the United States to increase the hourly wage from 8.9 to 10 dollars. This looks like very positive news, but the fact is that 60 percent of Walmart staff do not work sufficient hours to make a living – some work just two days a week, and with 640 dollars a month you are still into poverty.

Maybe it is just a coincidence, but the suicide rate rose from 11 per 100,000 people in 2005 to 13 seven years later. In the time it takes to read this article, six Americans will have tried to kill themselves and in another ten minutes one will have succeeded. More than 40,000 Americans took their own lives in 2012, more than died in car crashes, says the American Association of Suicidology.

If you start looking into the macro data, things become clearer. Profits from the financial sector are now over 20 percent of the total, double the level from the Second World War to the 1970s, and since 1970 productivity has grown by less than half. What this means is that the real economy has grown by half that of finance.

It is now clear that it is growth of the finance industry which is really holding back the rest of the economy, and far fewer people are employed in the financial sectors than in production and services.

These data come from nothing less than the Bank of International Settlements, the Gotha of the banking world, which also reports that brilliant people are trying to move into the financial sector, to the detriment of other sectors of the economy.

Looking into the figures opens up fascinating analyses. One of them from Hong Kong, published in the New York Times in the first week of March, deals with the personal wealth of lawmakers from China and the United States.

The NYT reported that according to the Shanghai-based Hurun Report, of the 1,271 richest people in China – a record 203 – nearly 16 percent are in the Parliament or its advisory body. Their combined net worth is 463.8 billion dollars, which is more than the annual economic output of Austria.

By comparison, American lawmakers are poorer. Eighteen of the Chinese lawmakers have a net worth greater than the 535 members of the U.S. Congress, the nine members of the U.S. Supreme Court and U.S. President Barack Obama’s cabinet.

We should pity the U.S. lawmakers, the 22 richest members of whom have only an average of 124 million dollars (70 percent of the senators are millionaires anyhow) and make up only four percent of the Senate, while four percent of the richest Chinese lawmakers are the country’s 203 billionaires.

Statistics in Europe also open the way to illuminating reflections. Take Spain, for example, where billionaires are in decline. In the Forbes list of the richest men in the world, Spain now has 21, five less than last year. Their combined wealth is 116,300 million dollars, and they increased their wealth in a year by only 500 million dollars, against the 3,200 million dollars of the richest man in the world, Bill Gates.

Yet, 500 million dollars is the equivalent of 35,714 average yearly  salaries, close to the population of the sunny town of Teruel in eastern Spain (around 36,000), and 116,300 million dollars is the equivalent of 8.3 million yearly salaries, equal to the combined population of Andalusia, the largest Spanish region, and the Balearic Islands.

The problem is that those two worlds are supposed to meet and relate through political institutions: Parliament, which represents everybody, and Government, which is supposed to regulate society for the good of every citizen.

Well, a good case study comes again from Spain, where it is possible to become a Spanish resident without going to Spain. It is sufficient to buy two millions euros’ worth of the country’s public debt, or buy one million euros’ worth of shares, or buy a house that costs at least 500,000 euros plus taxes, to become a Spanish resident. Since September 2013, 530 foreigners have obtained that right.

It is probable that the experience of obtaining a Spanish residence permit of the tens of thousands who crossed the Mediterranean at risk of their lives (it is estimated that over 20,000 have died up to now) looks very different. And many European countries have taken a similar path, including the United Kingdom, Cyprus and Portugal

In the United Kingdom, there is now a debate on a law from 1914 which excludes “non-domiciled” residents (‘non-doms’) from paying taxes on their foreign income or assets. It is enough to have a domicile abroad, usually by declaring permanent home in a tax haven. The number of ‘non-doms’ surged by 22 percent between 2000 and 2008 (year of the last available date), to reach 130,000 people.

This is part of an effort to reduce taxation on rich people, by creating loopholes and new regulations, to attract as many rich people as possible. President François Hollande in France has learnt at his expense what it means to speak of taxing the rich and had to make a quick turnaround. Obama is doing the same, and the only ‘leader’ who is speaking about taxing the rich is now Pope Francis.

However, one of the best examples of the ‘Acapulco paradox’ comes from the City in London.

After all the popular uprising about the disproportionate salaries of bankers, with public declarations from the U.K. government, the Church of England and the Bank of England, the announcement of an improvement in the U.K. economy by the European authorities has been taken at face value.

Barclays, for example, is increasing salaries by 40 percent, and an increase in salaries of 25 percent is expected all over the City this year. A young financial analyst, just out of university, at entrance salary could expect to take home the equivalent of 100,000 dollars per year.

While this will be good for statistics on average incomes, the yearly incomes of the 10 percent poorest British citizens will keep them at survival level. It is likely that their view of economic recovery will be different from those in the City. (END/IPS COLUMNIST SERVICE)

Edited by Phil Harris    

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

Agronomist Francisco Ramírez, a member of the Cuscatlán vegetable producers’ cooperative, and his family, in one of the greenhouses where they grow tomatoes. Credit: Tomás Andréu/IPS

By Edgardo Ayala and Tomás Andréu
EL CARMEN, El Salvador, Mar 3 2014 (IPS)

Vegetable growing is flourishing in Cuscatlán, the smallest department in the tiny country of El Salvador, with the help of a national programme to promote family agriculture and lift hundreds of thousands of people out of poverty.

On one and a half hectares of land, four of the Ramírez brothers used to grow only maize, without much expertise. Today they sell fruit and vegetables to the Walmart transnational chain.

They were determined to make the most of the Family Agriculture Plan (PAF), launched by the government in February 2011 to give support to more than 300,000 producers, improve their yields and incomes and fight hunger.

Government technicians trained the Ramírez brothers in horticulture and the creation and management of a cooperative. They learned to build greenhouses to control pests and rainfall, as well as dropwise irrigation techniques.

In the canton of Santa Lucía belonging to the municipality of El Carmen, the cooperative produces tomatoes, chili peppers, squash, pumpkin, sweet potato, bananas and guavas. Production gradually increased, and so did the families’ incomes.

“I like to work the land that belongs to us, instead of being in a ‘maquila’ (export assembly plant) earning next to nothing,” Andrea Beltrán, the wife of Francisco Ramírez, told IPS as she sorted foods before packaging them.

Her husband was walking along the rows of tomato plants, followed by his three children, checking the colour and ripeness of each fruit.

The cooperative makes three food deliveries a week to supermarkets in El Salvador owned by the U.S. corporation Walmart, generating monthly sales of 12,500 dollars.

Its members share the greenhouses and irrigation system, and each farmer grows their own produce, delivering what they harvest to a collection centre which handles sales and distribution to the markets.

The more a member produces, the more he or she earns, unlike traditional cooperatives in which all income goes into a central fund which is distributed equally between the members.

“The cooperative started with four brothers, and since then our family concern has grown,” said Francisco Ramírez, who has graduated as an agronomist.

The PAF is directed at two main sectors, very poor subsistence farmers and other farmers who, while still poor, have introduced some improvements and have some excess crops for sale, a group comprising some 60,000 producers.

The Ramírez brothers are among this group of poor rural people who nevertheless have a small plot of land that has allowed them to produce enough to pay for Francisco’s studies at the University of El Salvador, which is virtually free.

Another advantage the cooperative has is the Collection and Services Centre (CAS), which also handles produce from other cooperatives in the area, and carries out quality and hygiene monitoring before sending the products to their final sales points.

According to the Ministry of Agriculture, the country has 35 CASs funded by the International Fund for Agricultural Development (IFAD), which up until late 2013 benefited 45,000 producers.

Lorena Guadalupe Fabián joined the cooperative two years ago, at no cost. Previously her life consisted of buying products and re-selling them in street markets.

“I would leave for work at three in the morning and get back at seven at night, but the PAF changed my life,” she told IPS.

She has received training “that has been very useful.” And now she grows vegetables, but also takes part in quality control, and the reception and dispatch of produce. “I am not only a member, I also have a job,” she said.

“Only yesterday, we sold Walmart 2,000 chilis,” she said enthusiastically.

Another beneficiary is José Arnoldo. He looks after the planting and harvesting, has a steady job, and has become an expert on treating produce, especially in the use of agrochemicals.

The cooperative is a few steps away from becoming a supplier to Súper Selectos, the largest supermarket chain in El Salvador.

It is also negotiating with ALBA Alimentos (ALBA Foods), a subsidiary of ALBA Petróleos, an initiative born of an agreement between mayors’ offices in the hands of the governing (formerly insurgent) Farabundo Martí National Liberation Front (FMLN) and the Venezuelan state oil company PDVSA, and which is broadening its scope to other fields.

“Now we have to carry on growing a lot more,” said Francisco Ramírez.

Walmart has been criticised for years for paying its employees and suppliers notably low rates. Credit: Brent Hellickson/cc by 2.0

By Cydney Hargis
WASHINGTON, Jul 19 2013 (IPS)

Proponents of a proposed higher “living wage” requirement for workers at large retailers here in Washington are stepping up their campaign, urging the city’s mayor to sign pending legislation into law.

Dozens of other U.S. cities have enacted similar laws, which increase minimum wages at those businesses covered by the legislation by around 50 percent. Yet the legal battle here has garnered national attention because it appears to be aimed at one company in particular – Walmart.“We want him [Mayor Gray] to remember that he was elected by the citizens and not by Walmart." -- Reverend Graylan Hagler of Faith Strategies

“We will give the mayor our support if he has the backbone to sign the bill,” Reverend Graylan Hagler, president of Faith Strategies, a religious group here that has led demonstrations in support of the living wage bill this week, told IPS.

“To cave in to the threat of this corporation is to send a mixed message to the public that somehow corporations can come in and damage our sense of self-respect.”

Walmart, which has been criticised for years for paying its employees and suppliers notably low rates, had previously announced plans to build six stores in the Washington area, its first stores in the city. But it also warned that it would halt those plans on at least three stores (three others are under construction) if the living wage legislation were passed.

“This is a difficult decision for us – and unfortunate now for most D.C. residents – but the council has forced our hand,” Walmart spokesperson Steve Restivo said in a statement.

Last week, the Washington city council passed the so-called Large Retailer Accountability Act, and sent it on to Mayor Vincent Gray. The bill requires all indoor stores of 75,000 square feet or larger, and with a parent company that has a gross revenue of at least one billion dollars, to pay their employees a minimum of 12.50 dollars an hour, minus benefits.

After the vote, Walmart made its threat to pull out of the area. 

“With the passage of the Large Retailer Accountability Act, any future plans for retail expansion in the city must be revisited,” stated a letter from the company.

“Arbitrary conditions that subject our stores to rules that other employers, including countless competitors, are not equally subjected to unfairly distort the marketplace and are cause of grave concern.”

Since the vote, several other large retail stores that may be affected by the law – including Autozone, Lowe’s, Home Depot, Macy’s, Target and Walgreens – joined Walmart in opposition to the act.

In 2012, Walmart was sued by three female workers in Tennessee on behalf of female employees in four other southern states, claiming that the company pays women less than men and blocks promotions for female workers. The case was eventually thrown out by the Supreme Court.

Citizen values

The wage fight in Washington is part of a longstanding, and still building, push-and-pull in the United States.

The city of Chicago approved a similar bill seven years ago, and the city alderman who sponsored the bill, Joe Moore, said Walmart made the same kinds of threats – refusing to open stores while the legislation was even being considered. Then-mayor Richard Daley ultimately vetoed the legislation and Walmart subsequently opened several stores in the city.

New York State, too, raised its minimum wage in March, but only after the state allowed tax subsidies to stores that hire seasonal employees, including Walmart.

Here in Washington, the fight now is to try to ascertain what the residents – and voters – of the city may want.

“We want him (Mayor Gray) to remember that he was elected by the citizens and not by Walmart,” Hagler told IPS. “I think the mayor is smart enough and analytical enough to come around and do the right thing.”

Yet according to a poll carried out by Walmart, some 73 percent of DC residents in areas supposedly getting a store said they were in favour of Walmart.

For his part, Mayor Gray has previously promised his home ward hundreds of new jobs, with a new Walmart store in that area offering an obvious anchor for this pledge. According to many analysts, including Hagler, the mayor is now hesitant to take those jobs away.

“I’ve got to look at the full impact of the (living wage) bill,” Gray told reporters recently. “Everybody has looked at it from the perspective of Walmart, but it’s bigger than Walmart.”

Corporate bullying

According to some analysts, the impacts of a living wage are less dramatic for either side of this equation than is currently being admitted.

A study done by the Labor Center at the University of California at Berkley, for instance, found that if Walmart raised its minimum wage to 12 dollars an hour, and wanted to retain its profit margin, retail prices would only rise by around 1.1 percent.

“The notion that this (living wage law) is going to undermine Walmart’s business is so dramatically absurd,” David Cooper, an economic analyst for the Economic Policy Institute, a liberal Washington think tank, told IPS.

Walmart has a history of driving out small regional competitors and undercutting their prices, while paying their workers so little that they can barely survive without public assistance, according to Cooper.

“DC has been a thriving and growing location for business, and Walmart would do great business even if they have to pay their workers more,” he says. “It would be a shame for the mayor to cave to what amounts to corporate bullying.”

Twenty-five-year-old Razia is one of 2,500 survivors of the factory collapse in Bangladesh. Credit: Naimul Haq/IPS

By Carey L. Biron
WASHINGTON, May 31 2013 (IPS)

Top U.S. companies are now in negotiations to agree on new safety standards for their clothing-producing contractors in Bangladesh, a month after a garment factory’s collapse in Dhaka killed more than 1,100 workers.

The move comes after these companies, most prominently including Walmart and Gap, refused to sign on to a fire and safety standards agreement, announced weeks ago, that has received wide backing among European companies. Yet labour advocates are disparaging the new talks, suggesting the results will likely not be binding and thus will not be able to ensure worker safety."They are still looking for political cover so they can preserve the very lucrative status quo.” -- Scott Nova of the Worker Rights Consortium

“Walmart is … undermining the constructive efforts of other companies,” Jyrki Raina, general-secretary for IndustriALL Global Union, an umbrella of unions with 50 million worldwide members that has led the European agreement process, said Friday. “The kind of voluntary initiative being put forward by Walmart and Gap has failed in the past and will again fail to protect Bangladeshi garment workers.”

The new discussions, announced Thursday, are being sponsored by the BipartisanPolicyCenter, a Washington think tank, and being co-chaired by two respected former U.S. senators, George Mitchell and Olympia Snowe. The negotiations also include several U.S. and Canadian trade associations.

“Over the next several weeks, we look forward to building on [past] efforts … and seeking input from key stakeholders to forge an effective response,” Jason Grumet, president of the Bipartisan Policy Center (BPC), said Thursday.

Currently, the process is aiming to come up with a final agreement on new standards for Bangladeshi contractor factories by July. (BPC did not respond to a request for comment for this story.)

“We are hopeful that … these discussions will result in a plan for long-lasting change for the garment industry in Bangladesh,” Bill Chandler, vice-president of global corporate affairs for Gap, Inc. told IPS. “We believe the American alliance can be a powerful path forward to achieve lasting change in Bangladesh, and will build upon the work that is already underway.”

A spokesperson for Target also confirmed the company’s involvement in the BPC-facilitated talks process.

Contacted by IPS, a Walmart spokesperson emphasised that the company has already taken “a number of actions that meet or exceed other factory safety proposals”. But he also noted Walmart’s belief that “there is a need to partner with other stakeholders to improve the standards for workers across the industry”.

Nonbinding “not good enough”

This interest in entering into the new negotiations appears to be motivated particularly by public pressure following the companies’ refusal to sign on to the European Union accord, which now has more than 40 corporate backers, including three U.S. companies.

That agreement would include financing to upgrade factories as well as independent inspections. In addition to concerns over potential costs and the prospect of court litigation, a key sticking point for U.S. companies over the E.U. proposal has been that the agreement would be legally binding.

According to documents on Gap’s corporate website, for instance, in mid-May the company was “ready to sign on today with a modification to a single area – how disputes are resolved … With this single change, this global, historic agreement can move forward with a group of all retailers, not just those based in Europe.”

Yet it is because of this stance – reportedly repeated at a Gap shareholder meeting on May 21 – that observers are now sceptical that a company-led negotiations process will be able to result in strong, and legally enforceable, agreement.

“Forty retailers from all over the world … have agreed to a binding comprehensive safety plan for Bangladesh,” the AFL-CIO, one of the largest labour unions in the United States, said Friday, noting its “deep concern” about the new BPC-led talks.

“No amount of bipartisan window dressing can change the fact that Walmart and the Gap have refused to take this important step. This is a matter of life or death. Quite simply, nonbinding is just not good enough.”

Such concerns are heightened by the fact that, currently, no worker-rights organisation is included in the talks.

“This is the latest, and probably most sophisticated, in a series of industry public relations gambits designed to deflect attention from the real issue: the refusal of these companies to make a binding commitment to clean up their factories in Bangladesh,” Scott Nova, executive director of the Worker Rights Consortium, an advocacy group, told IPS in an e-mail.

“This shows the pressure these corporations are under and their recognition that the failed inspection schemes they have been touting no longer have any public credibility. Unfortunately, their goal has not changed: they are still looking for political cover so they can preserve the very lucrative status quo.”

Corporate-led process

Concerns over corporate-led international labour and safety programmes have received boosts from U.S. lawmakers in recent days, as well. Last week, Representative Sander Levin warned that the oversight process has “been left up to the retailers, suppliers and government all these years, and that hasn’t worked.”

On May 15, Levin and two dozen members of Congress wrote to Bangladeshi Prime Minister Sheikh Hasina, urging that her government put “the highest priority on aggressively enacting and enforcing comprehensive reforms … including the right to organize and form unions”. The lawmakers also noted, “it is critical that all key stakeholders take action”.

Reports in recent days have suggested that the U.S. State and Labour Departments are currently arguing over how hard to push the Bangladeshi government on these issues. Unions and some advocacy groups are pressuring the U.S. to revoke certain bilateral trade concessions given to Bangladesh, though critics say doing so would give up important leverage for change.

For now, Washington, seemingly led by the embassy in Dhaka, has chosen not to back the E.U. accord, although the U.S. State department says it is urging Bangladeshi officials to institute a suite of labour reforms.

“We need a lot more from the U.S. government – why the embassy has decided not to endorse the E.U. standards is beyond me,” Charles Kernaghan, executive director of the Institute for Global Labour and Human Rights, a watchdog group, told IPS.

“Of course, we have to remember that even the E.U. accord hasn’t put any emphasis on workers’ right to organise. It’s only workers themselves that can win their rights, and they can do so only once they have the right to organise and bargain collectively. The U.S. government needs to do far more on two issues: binding agreements on safety codes and the right to organise.”

Many of the workers who survived the factory collapse in Bangladesh have lost their limbs. Credit: Naimul Haq/IPS

By Naimul Haq
DHAKA, May 20 2013 (IPS)

“It was dark and hot with choking dust all around. The air was filled with the smell of decomposing corpses,” recalled Nasima, a 24-year-old factory worker who spent four days buried under the rubble of an eight-storey building that collapsed in a suburb of Bangladesh’s capital Dhaka last month.

The young woman recounted the terror that she and four fellow female workers experienced as they lay beneath glass and concrete, just “inches” from death. Rescue teams found them sandwiched between the fifth and sixth floors of the massive Rana Plaza that had housed five garment factories.

“I will resort to begging if I have to, but I’m not working in a garments factory ever again." - Mariam, a 25-year-old survivor of the Rana Plaza tragedy.
Nasima told IPS she was “too scared” to remember all the details of those 96 hours. “I saw my colleagues die, just a few yards from me, one after the other.” Her only indication that they were dead was when she could no longer hear their voices calling out to her in the dark.

Nasima had joined Ether Garments, one of the many companies housed in Rana Plaza, only 20 days before the tragedy, Bangladesh’s worst industrial accident, which killed 1,127 workers according to the latest count.

While families searched desperately for loved ones in the ruins in the town of Savar, 25 kilometres from Dhaka, reports of negligence and lack of workplace safety emerged. It became clear that factory owners had been warned of a possible collapse of the building that was only legally permitted to house five floors.

As survivors came to and began to speak out, they reported that management personnel had ignored recommendations by engineers to keep factories shut on Apr. 24, going so far as to threaten workers with dismissal if they failed to report for duty as usual.

The revelation sparked international outrage and shed light on the inner workings of Bangladesh’s garments sector, the country’s largest foreign exchange earner, which brings in about 20 billion dollars a year.

Multinational retailers like H&M, Gap, Walmart and Primark, which have outsourced most of their production to Bangladesh to take advantage of cheap, mostly female, labour, came under fire for failing to enforce safety standards.

While these accusations are not new, rights groups hope this latest tragedy will jolt the industry into implementing better labour laws and adhering to safety standards.

They say the roughly 2,500 rescued workers, many of them women, are living proof that Bangladesh must not repeat the mistakes that led to the Savar tragedy.

Living proof of negligence

Speaking to IPS from her hospital bed in the National Institute of Traumatology & Orthopaedic Rehabilitation (NITOR), 19-year-old Shapla, whose left arm was so badly injured that it had to be amputated on the site, recalled surviving for several hours squeezed between the second and third stories of the building, “with blood and corpses all around.”

Shapla’s husband, Mehedul, who worked as a sewing operator on the same floor, told IPS he survived by sheer luck, as he had been at the back of building at the moment the massive structure pitched forward.

Most of those working at the front of the building were crushed under the full weight of falling concrete slabs and crumbling walls.

Others, like 21-year-old Razia, say it is too painful to go on. “Someone give me poison. I want to die,” she cried out in the hospital ward where she and 121 other survivors are being treated free of cost.

She told IPS she and a few other girls had been “gossiping about the previous day’s decision to keep the factory open,” despite large cracks appearing on the pillars the day before. The next minute she heard what sounded like a huge explosion; then everything went dark.

For the next 14 hours, she struggled to breathe through the thick dust that hung around her.

In the hospital bed beside her lies Shamsul Alam, a 28-year-old quality inspector whose doctors say his spinal injuries are “too dangerous to operate on” and may end up being fatal.

Though he has not been informed of their bleak diagnosis, he told IPS he now “knows what its like to be in a coffin”, explaining the helplessness of being trapped and listening to people die around you.

Meanwhile, the trauma has wiped some survivors’ memories clean. An operator named Runu, unable to recall a single thing about that fateful day, stares vacantly into space while her sister tells IPS that Runu spent a full two days under the rubble before finally seeing daylight.

Those who can remember have vowed neither to forget nor to step foot into a factory again. “I will resort to begging if I have to, but I’m not working in a garments factory ever again,” 25-year-old Mariam, whose legs and arms were pulverised by concrete and iron rods, told IPS.

“My freedom means I was born again,” added a former worker named Shakhina. “I will not make the mistake of stepping back into that death trap.”

Meanwhile, major players in the industry are finally taking heed.

A.K.M Salim Osman, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), one of the industry’s apex bodies, told IPS that the incident in April was a “wake up call for us who depend on the labourers for business.”

“If we continue to ignore strict ethical standards (around) safety issues we will fail again,” he warned.

Osman said the recently ratified Bangladesh Building and Fire Safety Agreement is a step in the right direction. Under the accord, a tripartite committee comprised of company representatives, trade unions and a neutral inspector chosen by the International Labour Organisation (ILO) will monitor progress in implementation of safety standards as laid out in previous protocols such as the 2006 Occupational Safety and Health Convention.

Initiated by the IndustriALL and UNI Global Unions, the regulations insist that all buildings vulnerable to minor or major cracks be inspected and recommendations put forth by engineers adhered to immediately.

“If necessary we will force factories (with defects) to shut down until standards are met,” Mohammad Shafiqul Islam, former president of the Bangladesh Garments Manufacturers and Exporters Association (BGMEA), the largest body in the business, told IPS.

In a cabinet meeting on Apr. 29, the Bangladesh government decided to form a committee tasked with carrying out regular inspections of factories, installing fire safety devices and ensuring that companies conduct regular fire drills for the workers.

According to a statement by the American Apparel and Footwear Association, the agreement has also won support from all major locals unions, which represent the roughly 3.5 million workers employed in over 5,000 factories housed in and around Dhaka, and in the port city of Chittagong.

Labour groups here are stepping up pressure on U.S. firms to sign a binding building safety agreement for Bangladeshi factories after 10 major European garment companies signed onto the landmark agreement.

H&M, a major European apparel chain, signed the agreement Monday, and Benetton, which was under fire from activists after their clothing was found in the ruins of the Rana Plaza factory which collapsed in late April, signed on Tuesday.

The ruins of the eight-story Rana Plaza factory. Credit: Rijans/CC BY-SA 2.0

The nearly month-long search for victims in the wake of the Rana Plaza collapse ended Monday, after the death toll had reached 1,127.

“H&M’s decision to sign the accord is crucial,” Scott Nova, executive director of the Worker Rights Consortium (WRC), an independent labour rights watchdog group based in Washington, said in a press release.

“They are the single largest producer of apparel in Bangladesh, ahead even of Walmart. This accord now has tremendous momentum.”

Other European companies that signed the accord, known as the Bangladesh Building and Fire Safety Agreement, included Inditex, C&A, Primark and Tesco. By Tuesday evening, the only U.S. company to agree to the accord was PVH, the parent company of Tommy Hilfiger and Calvin Klein, which signed last year.

According to the International Labor Rights Forum (ILRF), an advocacy organisation, the new agreement covers all major areas needed to ensure its effectiveness: “independent safety inspections with public reports, mandatory factory building renovations, the obligation by brands and retailers to underwrite the cost of repairs, and a vital role for workers and their unions”.

The pact also calls for participating companies to pay up to 500,000 dollars a year toward building maintenance and safety in Bangladeshi factories, to bring them up to a specified standard. According to Liana Foxvog, ILRF communications director, the associated costs would translate into about ten cents per garment.

The agreement between several major European companies has also been significant in that it now focuses a spotlight on the relative inaction of their U.S. counterparts – and narrows and intensifies the pressure from labour groups on U.S. companies to sign the pact.

“The fact of European brands signing on is very important for the Bangladesh garment industry,” Foxvog told IPS. “It’s time for U.S. companies to sign on as well.”

Labour groups are particularly focused on Walmart and Gap, two of the largest and most influential companies that source from factories in Bangladesh. Foxvog said that “If Gap changes its mind, we expect that more U.S. companies will sign on.”

Gap, which was close to signing the agreement last year before starting its own non-binding, voluntary agreement with factories in Bangladesh in October 2012, said Monday that the company was concerned about possible “legal liability” issues that could arise.

The company said Tuesday that it was “six sentences away” from signing the accord and would accept if those proposed sentences, which lessen its liability concerns, were accepted.

But critics say such arguments have little substance behind them.

“They’re nonsense,” WRC’s Nova told IPS. “Ask Gap wherein the legal liability lies; ask them to point to the language in the agreement that creates legal liability for them – they can’t do it. What Gap wants is an agreement that can’t be enforced. The stuff about legal liabilities is a ruse.”

Foxvog expressed similar sentiments.

“Gap is saying it doesn’t want to be held accountable for the working conditions (in the factories) and other commitments of the safety agreement,” she said.

Company-led change

Still, labour rights groups are growing increasingly optimistic, as companies seem to be facing increasing pressure to conform to multi-stakeholder agreements, and the Bangladeshi government has shown signs of committing to stronger labour standards.

On Monday, Bangladesh’s cabinet lifted restrictions on forming unions, reversing a 2006 law that required employees to obtain permission from an employer before organising.

And the previous day, the government set up a new minimum wage board that will include factory owners and workers, and government officials, and will recommend pay raises. However, the decision to implement these new standards will still need to be approved by the cabinet.

But for broader change, advocates argue that the active participation of multinational companies is key to bringing about permanent change in the Bangladeshi garment industry. Proponents are now hoping that the announcement by the 10 European companies – with more, perhaps, to come – could now create a transatlantic ripple effect.

“This is a really tremendous advance to have … global brands and retailers make a binding commitment to worker safety,” Judy Gearhart, executive director of the ILRF, said in a statement. “Now we need major U.S. brands and retailers such as Walmart, Gap, and JC Penney to join in the same agreement.”

Walmart has said its own safety plan meets or exceeds the building and fire safety code’s standards, but added that it would continue to discuss the plan.

Howard Riefs, spokesman for Sears, also a large producer in Bangladesh, said late Tuesday that while the company is still in discussions over the plan, it is not yet ready to sign on. JCPenney and The Children’s Place are also reportedly still evaluating the plan.

Last week, the ILRF and United Students against Sweatshops, an advocacy group, launched a new website, designed to ramp up pressure on Gap to sign the Bangladesh Fire and Building Safety Agreement.

“I find it hard to believe that Gap is irresponsible enough to continue on this course of action (of avoidance) any longer,” Nova told IPS.

Eighteen-year-old Shapla, a garment worker who survived the Apr. 24 factory collapse, lies on a hospital bed in Dhaka. Credit: Nari Uddung Kendra (the Centre for Women’s Initiative)

By Suvendrini Kakuchi
DHAKA, May 10 2013 (IPS)

Last month, 18-year-old Shapla was just another one of thousands of garment workers employed in a factory in Savar, a suburb of Bangladesh’s capital Dhaka.

Today she is a handicapped survivor of one of the worst industrial accidents in history: the collapse on Apr. 24 of the massive Rana Plaza, a building housing five factories, that buried scores of workers under a wave of cement and glass.

The death toll reached 996 on Friday, though officials and families are still counting the bodies and searching for others beneath the rubble.

“I am desperate about the future,” Shapla said, echoing the sentiments of hundreds of female apparel workers like her who lost their limbs on that fateful day.

The young mother is now recovering in a hospital in Dhaka after her hand was amputated. Having survived the collapse, Shapla is considered one of “the lucky ones”, but she is loath to see the bright side, as her handicap will almost certainly prevent her from finding work.

Experts say that women, who make up 80 percent of the workforce in this country’s booming garments industry, have borne the brunt of this tragedy. According to initial reports, over 80 percent of those who lost lives and sustained injuries in the collapse were women.

“They are now socially and economically heavily disadvantaged,” said Mashud Khatun Shefali, founder and head of Nari Uddung Kendra (the Centre for Women’s Initiatives).

A leading advocate for female garment workers’ rights, Shefali says her organisation, which has lobbied for better conditions such as safe housing for workers, is now focusing on helping female survivors overcome the trauma of the accident.

Some of the workers are “so badly affected that they say they never want to work in factories again,” Shefali told IPS. “They need long-term physical and mental rehabilitation…and they need to be accepted as disabled persons by their families and society.”

A woman named Nazma Begum, whose legs have been amputated as a result of her injuries, told a local television station this week that she “worried incessantly” about how she would handle her disability, until her husband assured her of his continued support and love.

The dark side of manufacturing

Over the last decade, Bangladesh – a country of 150 million of which 49 percent live below the poverty line – has become a crucial player in the international apparel trade by providing a vast supply of cheap labour.

Bangladesh’s garment industry is now the third largest in the world after China and Vietnam, bringing in 20 billion dollars or roughly 80 percent of the country’s annual foreign exchange.

Major apparel companies based in the West and wealthy Asian countries like Japan and South Korea began shifting their production centres to Bangladesh when old manufacturing hubs like Thailand began to raise wages.

Mass-produced and bargain clothes that include such labels as Gap, Primark, HMV, Walmart, Sears and American Apparel are all manufactured here and then sold in the importing countries.

The biggest to the smallest of these factories are staffed by mostly young women hailing from rural areas, who come to the cities in the hopes of acquiring skills they have no access to in Bangladesh’s agricultural regions.

When they arrive in the city, they often live together in close quarters, sharing bathrooms and food.

Uneducated and illiterate, these women have few means by which to earn a steady income; their vulnerability makes them easy prey for manufacturers who claim that, in order to remain “competitive” on the world market, they must hire the cheapest possible workforce.

According to Shefali, young women often start off as interns, meaning they do not receive a wage but instead labour for a stipend that can be as low as a dollar per month.

Within a year, they move on to operating more sophisticated machinery and drawing a regular salary, she added.

Most women sew, wash and pack garments for roughly 30 to 40 dollars a month, working a daily average of 10 hours, seven days a week. In contrast, men tend to be hired for high-level positions, such as quality control and management.

The garment sector has been hailed as one of the country’s biggest employers, bringing a steady wage to thousands of women. But a string of tragedies has recently highlighted the hazardous nature of this work.

Last November, over 100 garment workers perished in a fire in the Tazreen Fashion Factory on the outskirts of Dhaka. Survivors of that tragedy claim they tried to escape, but were locked in by the factory managers.

Similarly, on Apr. 24, employees were threatened with dismissal if they failed to come to work, despite warnings that the eight-storey building, which only had a permit to house five floors, was unsafe. A week before the incident large cracks had begun to appear on the ceilings, prompting engineers to issue warnings that a collapse might be inevitable.

Negligence of workplace safety is just one of many labour violations women workers face. Sometimes they are forced to work 14-hour shifts in order to turn around a quick profit for the factory owners.

Still, activists point out that in a Muslim country with high poverty rates, the garment industry provided a rare opportunity for women to leave their homes and raise their status from housewives to breadwinners.

This increased economic independence enabled them to exercise more autonomy in their own lives, to choose their own husbands and enter into marriages on more equal terms.

But the Savar tragedy has dealt a hefty blow to this hard-earned status.

Sharmin Huq, a retired professor at the Dhaka University who specialises on the handicapped sector, fears that social discrimination will make life harder for women than ever before.

Those who survived the tragedy will likely lose their jobs, as their injuries will prevent them from performing at the level demanded by factory owners.

Huq told IPS that generous donations pouring in from countries like the United States and Germany to help the survivors must be channeled directly towards “the large number of (affected) female workers, to help them re-start their lives.”

This includes support for everything from acquiring artificial limbs to accessing regular counseling to deal with the trauma of the tragedy.

Walmart built a store less than two km from the ancient Teotihuacan pyramids of Mexico. Credit: Owen Prior/CC BY-SA 2.0

By Emilio Godoy
MEXICO CITY, Apr 24 2013 (IPS)

Trade unions in Canada, the United States and Mexico are preparing protests and legal action against the Mexican subsidiary of Walmart, the world’s largest retailer, which is accused of paying bribes and breaching labour rights.

Unions in the three North American countries want the company to be penalised by the Mexican authorities, and are calling for a ban on opening more stores on artistic or natural heritage sites.

“What is needed is action in Mexico. We are somewhat out of step with the investigations in the United States,” said Héctor de la Cueva, the coordinator of the Centro de Investigación Laboral y Asesoría Sindical (CILAS), a Mexican trade union research centre. “That’s why we’re going to explore avenues to initiate legal action against the company and then evaluate using international courts,” he told IPS.

The Walmart scandal erupted on Apr. 21, 2012 when the New York Times reported that the firm had paid 24 million dollars in bribes to Mexican officials between 2002 and 2005 to expedite the opening of new stores, a possible violation of the U.S. Foreign Corrupt Practices Act.

In the United States, Walmart has been under investigation since December 2011 by the Justice Department and the Securities and Exchange Commission in a process that has already cost the company millions of dollars and will cost it considerably more yet.

Walmart is now Mexico’s largest private employer, with over 240,000 workers, who are not allowed to form trade unions or demand labour rights on pain of dismissal. Nearly 20 percent of the over 10,000 Walmart stores worldwide are located in Mexico.

“We are deeply concerned about this scandal and aware that Walmart has not even applied its own code of ethics,” said Eduardo Pérez de San Román, the regional director for the Americas of UNI Global Union, based in the Swiss city of Nyon.

“We are experiencing great difficulties in promoting union freedoms and collective bargaining in the company,” the leader of the federation of trade unions representing some 20 million workers in 1,000 organisations in 150 countries, in the retail trade, finances, telecommunications and postal services, told IPS.

UNI Global Union is carrying out a campaign to denounce Walmart’s practices, and has formed a global network against the company. It has already presented a complaint with Walmart’s Global Ethics Office for breaches of its own code.

The Mexican investigation into the alleged payoffs has made slow progress and there are few results, even though over a year has passed since the scandal first broke.

The now defunct ministry of public administration announced on Nov. 21 that the early investigations found no irregularities requiring any penalties against senior Walmart executives in Mexico.

“Walmart should not be allowed to harm cultural heritage sites or labour rights,” Luis Gálvez, a leader of the workers’ union of the state National Institute of Anthropology and History, complained to IPS. “It should be regulated by the state, or expelled from the country,”

In 2003 and 2004, Gálvez took part in the failed struggle against the opening of a Walmart superstore on a plot next to the archaeological zone of Teotihuacán, one of the country’s emblematic pre-Columbian sites some 50 kilometres northeast of Mexico City, in Mexico state.

The store is one of those where bribes are alleged to have been paid to allow it to operate. At the time the governor of Mexico state was Enrique Peña Nieto, who became president of Mexico on Dec. 1.

Things turned out very differently in the small indigenous town of Cuetzalan in the southern state of Puebla, where protests managed to block construction of a Walmart branch in 2012, on the argument that it was a threat to local employment, organic agriculture, and local customs.

Encouraged by this precedent, activists are waging a similar battle in the cities of Xalapa and Orizaba, both in the southeastern state of Veracruz, where Walmart wants to build two stores. In Xalapa, the store would threaten a forested area rich in flora and fauna, and in Orizaba it would endanger a retirement home built in the 1930s that is listed as of special artistic interest.

In both cases, civil society organisations have asked the municipal authorities to deny permission for building and operating the stores.

“The expansion of Walmart has been at the expense of the most basic workers’ rights. Workers have been prevented from organising freely, and the Mexican authorities have permitted this to happen. If the labour ministry wants to act, it has every means at its disposal to do so,” said CILAS’s De la Cueva.

In Gálvez’s view, the Walmart store in Teotihuacán must be closed down. “It is one more reason in our argument that this store should not be in the archaeological zone. It must be removed, because it is an offence against Mexico,” he said.

Small retailers in Kolkata keep their shops closed in protest against FDI in retail. Credit: IPS

By Sujoy Dhar
KOLKATA/NEW DELHI, Oct 2 2012 (IPS)

Thousands of shopkeepers in Sir Stuart Hogg Market in Kolkata, the business hub of eastern India’s biggest city, are all talking about one thing: what they will do when multinational companies invade their ancient marketplace.

Also known as the New Market, this shopping centre was opened in 1874 when Kolkata was still the capital of British India, and has since been a haven for local vendors and traditional retailers.

Now its streets are abuzz with questions about the impact of Prime Minister Manmohan Singh’s recent decision to pass reforms that will allow 51 percent of foreign direct investment (FDI) in multi-brand retail, effectively opening India’s many doors to giant supermarket chains and other multinational retailers.

Singh’s government says its decision to allow investment in the country’s retail, aviation and broadcast sectors is a bid to revive growth and confidence in Asia’s third largest economy.

But local retailers feel it will pave the way for big brands like Walmart, Tesco and Carrefour to exploit the huge Indian consumer market, currently estimated at roughly 500 billion dollars.

“I am absolutely against it (the reforms) – it will kill us,” said Rajkumar, a retailer in south Kolkata’s Dhakuria whose cramped shop boasts every stationery product imaginable.

“When a Spencer’s supermarket (a leading retail chain in India) came up in our neighbourhood South City Mall some years ago it definitely hit our retail shops since we have no sprawling space to (allow customers to) cart purchases in trolleys and shop in style. Now FDI in retail will be a final blow,” he said.

Opposition

Besides opposition groups like the Communist Party or the Hindu nationalist Bharatiya Janata Party (BJP), the announcement last month also sparked a strong backlash from the ruling coalition’s second biggest constituent, the Trinamool Congress, which announced withdrawal of support for the Singh government over the issue and ordered all its central ministers to resign.

The Confederation of All India Traders (CAIT) are also extremely concerned.

According to Anil Sharma, CAIT’s FDI research committee convenor, a few retailers might prosper as result of the reforms but many others will perish.

“The government must clarify how (the reforms) will impact traders, farmers, small and medium enterprises (SMEs) and consumers,” Sharma told IPS. “There should be a regulatory authority with enough teeth to ensure that small traders do not suffer and that (adequate) cold storage facilities and warehouses are constructed to ramp up the infrastructure.”

According to Sharma, the government’s prediction that FDI in retail will create around 10 million jobs in three years, with four million jobs created directly and the rest in backend logistics, is “highly imaginative”.

“If four million jobs are to be created in India in three years, even Walmart, which has the largest average (number of) employees per store, will need to open over 18,600 supermarkets in India, which means 644 retail stores in each of the 53 metropolitan cities where they are permitted to operate.

“Global experiences of organised retail have clearly shown that instead of creating employment, mega retail corporations actually reduce employment,” he added.

One of India’s leading economists, Jayati Ghosh, agrees.

“Walmart’s global operation is capital intensive. They will completely transform the supply chain and it will be no good for jobs,” Ghosh, a professor at the New Delhi-based Jawaharlal Nehru University, told IPS.

“There will be a negative impact on the employment scene, since the majority of the 40 million people (currently) employed in retail trade in India are self-employed, and they will not be able to compete with large supermarkets.

“One Walmart can displace about 1,400 small shops that create 5000 jobs,” she added.

“What we can demand from the government now is the (creation) of infrastructure to store post-harvest produce. There should be more cold storage (facilities) and warehouses.”

Government defense and public support

Deputy Chairman of India’s Planning Commission, Montek Singh Ahluwalia, a strong advocate of the reforms, said in an interview with the CNN IBN channel on Sept. 24, “We are running a very inefficient retailing system in which the farmer gets very little and the consumer pays too much.

“If you want the modernisation of the retail sector, you want upward pressure in the quality of employment. Modern retail produces better quality jobs. If the labour growth is going down to one percent or so and GDP is growing at eight to nine percent, jobs will be created in many different sectors,” he argued.

Various big industrial players also support the move.

According to Rajkumar N Dhoot, president of the Associated Chamber of Commerce and Industry of India (ASSOCHAM), the decision to allow FDI in multi-brand retail will also improve India’s image in the eyes of foreign investors.

“Today, we live in a globalised environment. We all know how precarious the global economy is and how our own exports, both goods and services, are being hit in the western markets,” he said in reference to the need for increased FDI.

Even some local shopkeepers in New Market seem unfazed by the imminent arrival of massive competitors.

“I do not think a Walmart can completely kill us,” Subir Saha, who runs a crockery and utensil shop in New Market, told IPS. “When the shopping malls came up in the city (they) did affect our business, but we survived it and are still here.”

Farhad Ali, a garment-store owner, echoed his sentiment: “People come to us for many reasons, from low price tags to unique collections,” he told IPS.

But experts claim the belief that huge retailers will not destroy the local market is optimistic.

According to Ghosh, “In the beginning the situation will be better (for some job-seekers and consumers). But this will be part of a strategy by these companies to establish themselves in the market. Once it is done, they will start doing the unpleasant things,” she said, citing examples of Thailand and Malaysia, whose local retailers and farmers were hit hard by the entry of multinational retailers into the domestic market.

(END)