I can’t remember a time when so much has been done to combat
the curse of garment factories going out of business, leaving debts to its workers.
But not all strategies have worked.
Those that have, or seem likely to:
-
The Supreme Court in China announced that quite
small amounts of wage arrears could mean up to seven years in jail for the offending
factory owner
-
The Vietnamese government has
announced a series of programmes for local authorities to help workers
stranded by factories going out of business
-
The Bangladesh
Export Processing Zones Authority has insisted the new tenant of a plant,
formerly run as a sweater factory till the owners went out of business, pay outstanding
debts – including to former workers – before taking over the factory as a new sportswear
plant
-
Its Pakistani equivalent has leaked to a
Pakistani newspaper that it
has ensured workers got practically all wages remaining unpaid in Pakistan after
the bankruptcy of Joe’s Fashion and J&N.
-
In Cambodia, the
Prime Minister has insisted public funds are used to pay the $7 mn or so in
wages and severance outstanding when Yung Wah Industrial went bust in December.
Reports are that this has all been paid.
Three other strategies seem to have been a lot less
successful:
-
A campaign by activists to get H&M and
Walmart to pay
whatever they believe was owed to workers when Kingsland Garment collapsed
about the same time as Yung Wah Industrial (the campaigners are somewhat vague
about what precisely Kingsland did owe, but
are very clear that Kingsland’s offer is unacceptable)
-
A campaign by a similar group to get Adidas to pay outstanding wages
at Indonesia’s PT Kizone
-
A campaign by almost the same group to get Li
& Fung (and/or Esprit) to fund outstanding wages at Hey Tekstil in Thailand and Turkey.
None of these three campaigns has
yet produced anything except a lot of spilt ink and a lot of self-righteous
venom from the same bunch of ineffectual Western ranters who are behind most of
the campaigns concerning the clothing industry that lead nowhere.
There’s no confirmation the first five apparently successful
strategies have all worked, or that all the money outstanding has in fact been
paid off. But there are a couple of common threads to the three campaigns that
seem to have achieved nothing: they all
involve pressurising businesses who’ve already paid all outstanding debts
concerned with the bankrupt company to pay out more, and none involve any
pressure on the host government to take any responsibility for what’s happened
in their country.
That second feature is the important thing. If the law in a
country put debts to workers way down the list of creditors of a bankrupt
business, campaigners really concerned with worker welfare will prioritise helping local
politicians campaign for worker-friendly bankruptcy and criminal laws, and fighting for better treatment of workers in the way existing laws are enforced. It's not clear that foreign activists are in any way responsible for what's happened in China, Vietnam, Cambodia, Pakistan and Bangladesh: the initiatives there came from politicians and government departments working for their people. But there certainly will be times a bit of outside support comes in useful
As the three so far abortive campaigns show, trying to get
businesses to pay again for garments they’ve already paid for almost invariably
gets nowhere with those businesses – for a very good reason. Once they signal
they’ll capitulate to moral blackmail, they invite similar campaigns from every
other group with a grievance the group can’t get settled through their own laws. Or
don’t want to bother trying to settle legally, since picketing a few Western
clothes shops is so much more fun than discussing the messy business of
unemployment insurance or factory bonding systems.
Occasionally, Western businesses will buy off moral
blackmail because resistance absorbs too much energy or risks alienating potential
customers. But such activity doesn’t help the next group of workers finding
their employer’s run out of cash: it submits their case to the arbitrary whims
of a distant business and the unpredictable judgements of foreign managers. And
if those managers do decide to pay out to allegedly destitute workers (all the current
cases are in cities with a chronic shortage of skilled garment workers), they
create an apparent precedent attracting future claimants.
The PT Kizone case seems to have started the current wave of
“abscondment” campaigns, largely because of an odd quirk in the particular
circumstances of the case. Indonesia has exceptionally worker-unfriendly bankruptcy
laws: the bankrupt company’s assets cannot be used to pay workers because the Indian
(yes: Indian) government has filed a court case claiming Kizone’s debts to the
State Bank of India rank higher than those
to the company’s staff, so cash is currently frozen. (The question of why campaigners
aren’t picketing every Indian Embassy and High Commission in the West is one
for those campaigners’ conscience)
Since a number of US colleges have purchase conditions
giving an absolute liability on businesses supplying college-branded clothing
to ensure factory workers are paid, some other sportswear suppliers (especially
Nike) have made ex-gratia payments to preserve their lucrative college
sportswear business. That line of business is less important to Adidas than to
Nike, but the Kizone campaign’s success with Nike has led activists to decide
it might be easier to extract cash from buyers than change the law, or
establish insurance programmes.
It looks though as if,
outside suppliers to the US collegiate market, big buyers are increasingly wary
of giving way to this kind of blackmail – though Walmart and H&M have now
agreed to meet the Cambodian Kingsland workers on March 1
There is no one answer to the problem of abscondment:
businesses go bust all the time, and it’s a fact of life that desperate
businesses take shortcuts on lots of things – including paying social insurance
premiums. If a country like Cambodia tried auditing factories’ financial
viability every week, it’s inevitable it would deter foreign investors and the
audit system would become corrupt. As with most emerging market worker
scandals, any solution has to involve some greater contribution from buyers,
sensible and honestly enforced local laws and strong encouragement for better
worker welfare.
And on the evidence of February 2013, those solutions owe
more to grown up politicians in developing countries than to Western petitions.
But who knows whether that’ll all change?
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