04:04:12 local time PHILIPPINES
* Workers’ alliance picket Metro wage board, hit P10 wage hike:
More than a month after the Metro Manila regional wage board approved a P10 adjustment in the minimum wage, an alliance of labor centers and workers’ groups marched to the board’s office in Malate, Manila to condemn the adjustment and call for the abolition of the country’s wage boards.
Workers belonging to the Action against Contractualization and Towards a Significant Wage Increase Now or ACT2WIN! marched from the front of the De La Salle University along Taft Avenue to the office of the Regional Tripartite Wages and Productivity Board of Metro Manila, decrying the situation described by one of their placards: “P10 Bilyon kay Napoles, P10 sa Trabahadores.”
“This wage hike shows that the government wants to maintain a Cheap Labor Policy. It shows that the government has no concern with ordinary workers living in starvation wages despite the reported growth of the economy,” said Sonny Matula, Federation of Free Workers president and ACT2WIN! co-convenor.
03:04:12 local time VIET NAM
* ITG shut prominent textile plant amid dispute:
Leading US fabric maker International Textile Group (ITG) and Vietnam’s Phong Phu Corporation are seeking investors to take over their cotton manufacturing joint venture in Danang after the factory has been held in stasis for nearly two years by a dispute between the two partners.
An anonymous source from Danang’s Industrial and Export Processing Zones Management Authority who is familiar with the case confided in VIR, saying that the joint venture had no interest in reopening the factory named Burlington Phong Phu Supply Chain City and that both had plans to divest by transferring the project to other investors.
“Foreign investors from Singapore and Hong Kong have expressed interest,” revealed the source. However, no final decision has been made.
03:04:12 local time CAMBODIA
* Monitor, GMAC at odds over plan:
The head of the Better Factories Cambodia (BFC) program said yesterday that consultations on its new public-disclosure initiative have been going on for more than a year, contrary to claims by a garment factory representative who characterised the process as hasty.
Jill Tucker, chief technical adviser for the UN-backed BFC, which is part of the International Labour Organization, said an earlier version of the plan was discussed with the Garment Manufacturers Association in Cambodia’s secretary-general Ken Loo and government officials in September.
Subsequent meetings were then held with GMAC board members in February and July this year. During the latter, Tucker said, GMAC “clearly stated their opposition to transparency”.
“We are confused as to why they are saying they didn’t have sufficient consultation, unless of course Ken had not been speaking to his board,” she said, adding that BFC is gathering emails with GMAC to support its version of events.
* Levi Strauss Pulls Out From Embattled SL Garment Factory:
A Singaporean-owned garment factory whose workers have been on strike since early August is no longer producing clothes for American denim giant Levi Strauss, a brand representative and a factory worker said Monday.
The workers of SL Garment Factory in Meanchey district—which still makes clothes for the U.S. brand Gap—have been striking for almost two months to demand food stipends, the reinstatement of fired union leaders and the sacking of an adviser to the factory’s owners. Though a representative for Levi Strauss in the region would not say when the company had severed links with the factory, a union leader said Levi Strauss’ decision had come just after the protests had begun.
Though a representative for Levi Strauss in the region would not say when the company had severed links with the factory, a union leader said Levi Strauss’ decision had come just after the protests had begun.
* BetterFactories Media updates 25 September – 1 October 2013, GMAC urges factories to resist new monitoring:
* To read in the printed edition of the Phnom Penh Post:
2013-09-25 Management agrees on pay advance
2013-09-25 Workers stay away in Bangladesh
2013-09-30 Union wary of possible crackdown
2013-09-20 For boycott, time is needed
2013-10-01 Home for the holidays
* To read in the printed edition of the Cambodia Daily:
2013-09-25 Bangladesh garment workers protest over pay factories shut
2013-09-25 ILO to publicly disclose identity of non-compliant factories
2013-09-26 Jubilation as pair acquitted of union leader’s association
2013-09-26 Opposition party threatens nationwide labour strikes
2013-09-27 Bangladesh police clash with protesting garment workers
2013-09-27 Investors play down impact of labour strikes
2013-09-28-29 Striking workers stopped by military police
2013-10-01 GMAC urges factories to resist new monitoring
2013-10-01 Levi Strauss pulls out from embattled SL Garment Factory
* To read in the printed edition of the Koh Santepheap Daily (Khmer):
2013-09-26 Sahan workers blocked Veng Sreng road and go on strike
2013-09-28-29 SL workers plan to march to send letter to Hun Sen
2013-09-28-29 Human Rights pushes buyers and GMAC to support transparency in garment sector
* To read in the printed edition of the Rasmei Kampuchea Daily (Khmer):
2013-09-25 SL shut down for 6 days after workers destroyed factory’s property
BetterFactories Media Updates Overview here.
04:04:12 local time MALAYSIA
* Minimum Wage: Action Against Errant Employers To Be Known Next Year:
Human Resources Minister Datuk Richard Riot has said that the action to be taken against employers who failed to implement the minimum wage policy will only be determined on Jan 1 next year.
“We will wait for the policy to be fully implemented before we decide the action to be taken against errant employers,” he told reporters after witnessing the signing of the 11th collective agreement between Genting Malaysia Berhad and Genting Malaysia Berhad Workers Union here on Tuesday.
Riot said the National Wage Consultative Council, together with the Consultative Technical Committee, were in the midst of studying the applications for postponement submitted by several employers.
“We will scrutinise the applications. If the reasons given can be accepted, we will allow the postponement, if not, we will reject the applications,” he said.
The minister said employers who had not made any application for postponement would be considered to have accepted and implemented the minimum wage policy.
02:04:12 local time BANGLADESH
* RMG sector: Leading in times of uncertainty:
The ongoing labour unrest is the latest in the series of setbacks hindering our RMG sector. With two large industrial accidents occurring in quick successions, the sector has been under pressure for quite some time. The current turmoil is further aggravating the already-precarious situation, which many feel has far reaching impacts.
We take a lot of pride in our RMG sector, with its record breaking export performance and its position as the second biggest RMG exporter after China. Sustained growth of RMG is seen as an integral part of our aspirations for achieving middle income status.
Renowned consulting firms like Mckinsey have already attested to the sector’s growth potential. However, amid prevailing optimism and fanfare, industry leaders have failed to gauge the structural changes looming large in the horizon.
Rising wages: The current turmoil is mainly centered on workers’ demand for a hike in wages. With rising food and non-food inflationary pressure, wage hike seems a reasonable demand. However, currently a huge gap exists between the workers’ demand for a minimum wage of Tk8,000 and BGMEA’s offered wage of Tk3,600. The negotiation may ultimately yield minimum wage between Tk4,500-5,500, which is set to result in a 60% increase from existing levels.
Currency depreciation for India: A depreciating Indian currency has once again boosted the price competitiveness for Indian exporters. As a result, RMG manufactured in India will become attractive to international buyers resulting in a possible loss of export orders from Bangladesh. The downward trend in Indian economy is set to persist for sometime which may lead to prolonged period of cheap Indian rupee and will not bode well for us.
Rise of Myanmar: Myanmar’s road to democracy has enabled them to move away from international isolation. The current government has repeatedly portrayed their pro-business credentials by devising policies encouraging international investors. With geographic location beside China and access to sea, Myanmar has strategic value. Availability of cheap labour and natural resources is an added sweetener. Alongside, the Myanmar government is heavily investing in infrastructure which may take a couple more years to take shape.
Industrial accidents and image issues: Recent spate of industrial accidents has seriously dented the image of RMG sector abroad. Some international buyers have already expressed their reservations about continuing breach in the sector’s compliance issues. USA has already suspended GSP facility for Bangladesh and EU is threatening to follow suit. Possible cancellation of GSP by EU may have devastating impact on Bangladesh.
* RMG workers demonstrate in Savar for arrears:
Workers of a garment factory at Arapara in Savar, on the outskirts of the capital, yesterday demonstrated at the factory demanding their arrears.
Ashulia Industrial Police said the workers of Fair Knitting Ltd sought their arrears of August and September.
The factory authorities earlier assured them of paying it within October 1, police added.
The factory Production Manager Badrul Alom said the management could not pay the arrears in time due to financial crisis.
He said the managing director yesterday reassured them that they would pay it on October 5.
The workers said they would go for tougher programmes if the management failed to pay them by that time.
Abdus Sattar, deputy assistant director of Ashulia Industrial Police, said additional police were deployed at the factory.
* Why the double standard for RMG wages?:
The big question is – can we still compete with China after the next wage increase?
The editor of a leading English daily wrote about minimum wages for the RMG sector in the Daily Star last Friday, stating that the garments industry pays 0.8% tax whereas corporate tax for other sectors is 40%. This is a blatant misrepresentation of facts and a clear example of negative media bias towards the garment owners.
The fact is, garments exporters pay 0.8% tax at source on gross export, regardless of profit or loss. With industry average profit margins of less than 5%, that translates to 20% tax on profit, even though the corporate tax rate for garments is 10%. The government does not refund this excess tax, even if we claim a loss.
Meanwhile, our competitors in China do not pay tax on exports, get preferential rates of exchange and other export incentives. Bangladeshi garment exporters have to import fabric from China, our main competitor, at additional cost and longer lead times, so the only competitive advantage we have is lower wages, which account for less than 20% of the cost of a garment. Dysfunctional politics, hostile unions, inadequate infrastructure and higher interest rates are challenges that our Chinese competitors do not have to deal with.
When the minimum wage was increased from Tk1,662 to Tk3,000 in 2010, buyers were compelled to pay higher prices, as long as we were still price competitive with China. The big question is – can we still compete with China after the next wage increase?
* No protest of workers’ in October:
The garment factory owners and worker leaders put on their legs on the same shoe to keep the agitated RMG workers calm declaring the wage board orally within November.
The workers are in stable position after getting this assurance and there is a hope for no more workers demonstration in the current month at least.
Textile Garments Workers Federation disclosed that keeping the Eid-ul-Azha and wage board assurance issues in mind, the owners and worker leaders together urged to be calm and patient to workers.
The General Secretary of the federation Tapan Saha said that factory leaders and workers are complementary to each other and we all should work for keeping this industry alive.
Wage Board officials said that they are trying their best to provide a wage structure within November though it is suppose to be in December.
Moreover the government set a minimum wage board structure in June with eight members including a neutral one.
* NBR chief suggests merger of small RMG units for survival:
National Board of Revenue chairman Ghulam Hussain suggested the small garment factories of the country Tuesday to go for merger for making big investment in compliance to safeguard their business.
“There is a tendency among our industrialists that they are the feudal lords who cannot leave their industries although those are incurring losses. One of the answers to their problems can be merger and acquisition,” said Ghulam Hussain.
He also noted that most of the Bangladeshi garment factories are small in size that cannot afford big investment in compliance issues when they are in a fear of losing orders for not having the right kind of factories. For that reason too, they should go for merger, he added.
* Plea to develop mid-level management in RMG sector:
German Ambassador in Dhaka Dr. Albrecht Conze Bangladesh laid emphasis on development of midlevel management and introduction of new technology in the export oriented garment industry, the main export earner of Bangladesh.
He was speaking as the special guest at the business networking lunch “SAP RMG Meet”, hosted by Bangladesh-German Chamber of Commerce and Industry (BGCCI) at a local hotel on Tuesday.
SAP is at the centre of today’s technology revolution, developing innovations that not only help businesses run, but also improve the lives of people everywhere.
Dr. Albrecht Conze said second generation of entrepreneurs are now involved in the RMG business and expressed his hope that sound working environment and safety of workers would be ensured.
* BGMEA seeks support to educate workers, owners on trade union:
Bangladesh Garment Manufacturers and Exporters Association yesterday sought support from development partners to educate workers, management and factory owners about the role of trade unions.
BGMEA President Atiqul Islam said: “We have to keep in mind that those who are forming trade unions are aged between 20 years and 30 years. They are new blood and don’t know what the definition of trade unions is.”
“It’s a very vulnerable situation,” he said at a seminar at the Westin Dhaka.
Bangladesh German Chamber of Commerce and Industry organised the event on SAP (Systems Applications and Products in Data Processing), a world leader in enterprise solution. SAP AG, a German company, has made the enterprise software to help manage business operations and customer relations.
* Ensuring strict enforcement of building code:
Alarming as it may sound, lax enforcement of the existing building code remains where it was when the eight-storey Rana Plaza building collapsed.
It seems nothing has been learnt from the terrible event although the collapse exposed to the world what really is going on in Bangladesh: non-compliance with rules and standards in almost all sectors of the national life.
As a sequel to the building collapse as well as deadly factory fires, the country lost the Generalised System of Preferences (GSP) facility in the US.
The Western buyers have mounted pressure on the authorities to allow RMG workers the right to form trade unions alongside promoting safety and minimum wage standards in factories.
* Re-fixing garments workers’ wages:
Month-long garments workers’ agitation has captured media attention but the solution continues to elude.
Each and every garments factory has the documents showing the cost of production, profit, wages and salaries paid and it is not difficult to dictate what should be the fair wages and salaries of workers and employees. Very often earnings of the workers of China, Vietnam, and Indonesia are mentioned and it is not difficult to compare the efficiency and wages of our workers against those countries.
In the event CPD formula is applied, what should be the impact on our market as millions of takas is likely to be flowing in the market in the form of wage hike. Cost of living against wages may be determined through a few experts as formation of wage board or pay commission is just a waste of time. Let us be pragmatic in finding out a rational solution to the problem.
* US Shutdown- Bad news for RMG makers:
The indefinite shutdown of government services in the US, the country’s largest export destination for garment products, is bad news for the sector.
Due to the failure to agree on a budget size for fiscal 2013-14 that began yesterday, the Obama administration has decided to shut its non-essential services, meaning up to 1 million federal employees face unpaid leave with guarantee of back pay once the deadlock is over.
Ahsan H Mansur, executive director of Policy Research Institute (PRI), said the shutdown would have a very real economic impact on a good number of people right away.
“Their purchasing capacity will also be squeezed, and this will be felt by the supplying countries like Bangladesh.”
But, if the problem is resolved in a short time, there will not be any impact, Mansur told The Daily Star.
THE RANA PLAZA BUILDING COLLAPSE
* IBC urges global brands to join compensation plan:
The IndustriALL Bangladesh Council (IBC) again urged global apparel brands Tuesday to participate in the compensation programme for the Rana Plaza collapse victims.
The IBC demanded $71 million for compensation and long-term rehabilitation of the victims, 45 per cent of which was demanded from global brands who resource garments products from Bangladesh, 28 per cent from factory owners, 18 per cent from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), and 9.0 per cent from the government.
“Six months have passed since the deadly incident. So far, only nine brands have made concrete commitment to join the compensation plan, though a total of 29 brands were invited to join it,” said IBC general secretary Romesh Chandra Roy at a press conference.
* IndustriAll demands $71m for Rana Plaza victims:
The Bangladesh chapter of IndustriAll Global Union yesterday demanded Tk 28.32 lakh in compensation for each of the apparel workers who died or went missing in the Rana Plaza collapse on April 24.
“Many victims are yet to be compensated properly though the factory collapse occurred around six months ago,” Roy Ramesh Chandra, general secretary of IndustriAll Bangladesh Council, said at a press briefing at the National Press Club.
IndustriAll estimated that $71 million or Tk 547 crore would be needed to compensate and rehabilitate the victims of Rana Plaza.
The collapse of the building which housed five garment factories has so far brought 1,135 deaths, according to IndustriAll. Another 318 went missing and 1,723 were injured.
“We have estimated the compensation package for all these segments,” he said.
Of the amount, 45 percent will have to be paid by retailers, 28 percent by owners, 18 percent by BGMEA and the remainder by the government, he said.
01:34:12 local time INDIA
* Definition of ‘basic wages’ for calculation of PF contribution:
In a recent ruling that favours employees, the Delhi High Court has expanded the scope of basic wages to be included for Provident Fund (PF) contribution.
Under the PF rules, contribution towards PF is to be calculated on basic wages, dearness allowance, retaining allowance and cash value of any food concession.
Basic wages have been defined to mean all cash emoluments, except:
(a) Cash value of any food concession;
(b) Any dearness allowance;
(c) House rent allowance, overtime allowance, bonus, presents; and
(d) Commission or any other similar allowance.
The concept of ‘basic wages’ on which PF contribution is to be calculated has always been a debatable issue. The Supreme Court has laid down two tests to determine whether a component is included in the definition of ‘basic wages’ or not. These are ‘test of universality’ and ‘test of contingency’.
Applying the test of universality, if a component is paid universally, necessarily and ordinarily to all employees of a company, the same is included in the definition of basic wages. Applying the test of contingency, if a component is paid subject to uncertain events like overtime payment, the same is excluded from the definition of basic wages.
* New textiles policy in two months: Kavuri:
A new textile policy covering the whole gamut of issues relating to the industry and seeking to provide stability will be unveiled in a couple of months, Union Minister for Textiles K. Sambasiva Rao said here on Tuesday.
Talking to reporters after delivering the valedictory address at a seminar here, he said a meeting had been convened with senior officials of his Ministry to expedite the process. He also announced that a single window clearance division would be set up in his ministry to facilitate quick approvals for new textile units.
He said that currently, the entrepreneurs were required to seek 50 approvals from different authorities, including the Ministry of Environment and Forests. Under the proposed division, the officials from his Ministry would get the requisite clearances.
* Single window clearance soon for textiles industry:
Indian Textiles industry will soon get a special division that would act as single window for all the approvals, announced the union minister for textiles K.Sambasiva Rao.
Currently, the industry is facing troubles in getting almost 50 approvals from the various departments to get their business start, he said.
While talking to reporters on the sidelines of an event organized by FICCI here on Tuesday, he said, “A separate wing or division would be set up under the joint secretary level officer for single window clearance.
The ministry itself will pursue the matter and instead of the industry players the division will go to various departments for the approvals. It (setting up of the division) will take some time since it has to be approved by several ministries and the Planning Commission. But, I hope by end of this financial year, the division would come in to force.”
* Government to set up Rs 100 crore venture capital fund for textile start-ups:
Government will soon set up a Rs 100 crore venture capital fund to provide equity support to start-ups in the textile sector, hoping to encourage innovative ideas in this export intensive sector.
Proposed by the National Manufacturing Competitiveness Council and supported by textile ministry, the Textile Equity Fund would be jointly set up with the SIDBI Venture Capital and is expected to be in place by November this year.
According to a senior official in Planning Commission, Centre will put in Rs 35 crore while SIDBI VC will pump in Rs 15 crore to lend to entrepreneurs in the pilot phase.
* ‘Speculation plays big role in Indian raw cotton prices’ :
Indian raw cotton prices, particularly the Shanker-6 variety has increased from Rs. 39,000 to Rs. 55, 000 for candy (356 kg) in last two months.
According to industry representatives, the cotton prices in the country are driven by speculations rather than strong demand and fundamentals.
Mr. KK Agarwal, president of Northern India Textile Mills’ Association (NITMA), told fibre2fashion, “The main reason for increasing cotton price is hoarding of cotton by speculators.
Most of the spinning mills are having below one month stock and their panic buying is increasing cotton prices.”
“Stocks to use ratio of cotton in the country should be minimum 3 months. Otherwise, any delay in crops due to factors including rains will create an artificial scarcity and cotton prices would go up,” he opines.
* Cotton crop may cross estmates, may touch historic 40-mn mark:
Observers say cotton prices may soften once arrival pick up in month of November
Contrary to the earlier expectations of fall in cotton productivity due to rains in September, the crop is likely to benefit immensely from rain and the cotton crop for kharif season 2013-14 may cross the initial estimate of 37 million vales. It may touch 40 million mark if the weather remains favourable.
The arrivals of cotton have been effected in most parts including Gujarat, Maharashtra and Southern states but the yield of cotton is going to be higher due to rain last month.
* Indian Textile Industry:
The textile industry is the largest industry of modern India. It accounts for over 20 percent of industrial production and is closely linked with the agricultural and rural economy.
It is the single largest employer in the industrial sector employing about 38 million people. If employment in allied sectors like ginning, agriculture, pressing, cotton trade, jute, etc. are added then the total employment is estimated at 93 million. The net foreign exchange earnings in this sector are one of the highest and, together with carpet and handicrafts, account for over 37 percent of total export earnings at over US $ 10 billion. Textiles,1 alone, account for about 25 percent of India’s total forex earnings.
India’s textile industry since its beginning continues to be predominantly cotton based with about 65 percent of fabric consumption in the country being accounted for by cotton. The industry is highly localised in Ahmedabad and Bombay in the western part of the country though other centres exist including Kanpur, Calcutta, Indore, Coimbatore, and Sholapur.
01:34:12 local time SRI LANKA
* ‘Japanese apparel market craving for more Lankan supplies’:
Japan, one of the three largest apparel markets in the world with $ 122 bn apparel market, is eagerly looking to source much higher volumes of Lankan made apparels.
“Lankan apparels are of high quality but unfortunately, not much of it is coming to the Japanese market. We are looking for more. Therefore I request you to expand your apparel exports to Japan” said Yamatani Eriko,Member of Japanese House of Councillors, on in Colombo last Friday.
01:04:12 local time PAKISTAN
* Textile exporters reject hike in power tariff:
Textile exporters have rejected the recent hike of Rs 5.89 per unit in power and Rs 4.12 per litre in petroleum prices as it would not only trigger the inflationary impact but would ultimately affect the already crisis-hit industry and also create multiple problems for masses, said Adil Tahir vice chairman, Pakistan Textile Exporters Association (PTEA) here Monday.
Criticising the price hike, in a statement, he said that businesses are already facing tough challenges and further increase in petroleum prices and power tariff will create enormous inflation and great pressure on the trade activities. Cost of production in Pakistan is already one of the highest in the region due to which Pakistani products are losing competitiveness in export markets.
* Aptma eyes $26bn textile exports:
The All-Pakistan Textile Mills Association (Aptma) will unveil Vision-2020 soon which targets textile exports to touch $26 billion in seven years from the current $13 billion.
This was stated by Yasin Siddik, the newly-elected chairman of Aptma while taking to newsmen here on Monday at Aptma House.|
“Despite all odds, textile exporters will march on crossing over barriers and obstacles,” he said.He further said that though exporters are not getting any relief, they would strive to achieve new goals.
Besides energy crises, he said the spinning industry was still vying for enhanced production in cotton crop as it remains stagnant for the last three years at around 12 to 13 million bales.
* Tanners in hardships due to water shortage:
Water shortage continues to pose serious problems for leather industry despite assurance by the governor sindh for completion of additional water supply project.
Chairman PTA (S.Z) Fawad Jawed has thanked Governor for his kindly assuring to help to complete the project of water restoration to Tannery Zone for which Governor sanctioned an amount of 44.225 millions from his Special Fund in April 2012 but the Chairman regretted that KW&SB failed to complete the project and to restore supply of water to Tannery Zone in last one and half year.
* Bargaining In Jordan’s Ready Made Garment Sector:
Earlier this year, garment sector employers and trade unions in Jordan signed a historic collective bargaining
see video report here.