May 2013 Source looks beyond Bangladesh

The volume of stories related to the Bangladesh and Cambodia tragedies during May was so immense, we decided to produce a special edition covering them. This made the May edition  rather feel as if the major even is missing, though we believe the sudden impetus the tragedies have given to the role social accountability plays in sourcing is so great that the issue takes up a considerable amount of May space

 

Social accountability pressure on garment makers intensify as governments and shareholder groups step up demands

Stories specifically concerned with the Bangladesh and Cambodia tragedies have been put into a special edition of The Source, which follows a few days later after this edition. But the tragedies have provoked unprecedented calls for more social accountability among Western garment brands and retailers from an extraordinary range of sources – from the Pope, shareholders representing $2.5 trillion of investor funds, and the UK and US governments.

 

The calls are not just about issues related to Cambodia and Bangladesh: the International Chamber of Commerce called for greater enforcement of national laws in Export Processing Zones throughout the world with an alarming list of Zone-based crimes. But activist studies of the Alta Gracia programme cast doubt on the viability of “living wage” programmes.

 

Developing country factory owners worry about governments’ labour policies

South African “Chinese” factory owners continue to fight minimum wage laws, as Kenyans blame new government-imposed minimum wages for garment industry collapse. Vietnamese businesses protest against “heavy burden” of new labour law. Philippine garment exporters welcome two-tier minimum

 

China’s competitiveness sharpens as wages continue growing

Chinese apparel exports to the EU and US were cheaper, relative to other garment exporting countries,  in the latest month for which there is data than at any time since 2009. The volume of apparel imported into both territories from China also grew year on year. Though Chinese wages in 2012 grew more slowly than in earlier years – but Standard and Chartered Bank predicts higher wage inflation in 2013. Businesses’ reaction implies lower prices owe more to falling manufacturer margins than to rising productivity

 

Countries unveil widening range of garment-making development plans

Morocco’s government and textile trade associations revealed a development programme that was long on ambitious targets, devoid of any detail and suspiciously cheap for its predicted benefits. Algeria’s plans depend on a Turkish partner with an established record of success in Egypt and Bangladesh.  Nigeria, Africa’s largest country, presented a programme for domestic textile manufacturers to move from 12% to 25% of the country’s market that included providing adequate energy supplies, had demonstrated a year of finding investment money and honestly admitted it would include robust protectionism. Iran thought it could attract European investors.  Mongolian government invests in greater share of cashmere. India seemed to be announcing new garment/textile parks it had already admitted were abandoned. North Korea sends Kaesong workers to courses intended to educate capitalism out of them. The previous Egyptian regime’s strategies for attracting foreign investment overturned as current Prime Minster threatened with jail if he doesn’t re-nationalise textile companies

 

Disputes in Cambodia and Bangladesh turn violent

Businesses in Ashulia, near Dhaka, are reportedly planning to move elsewhere in the conurbation to escape the area’s near-perpetual culture of violent labour disputes. In Phnom Penh, several thousand workers reportedly fought with each other as a straightforward wage dispute turned into a violent battle between rival unions

 

Europeans and Americans think hard about free trade with China

Pressure groups in the US proposed the beginning of free trade talks with China almost the same day an EU committee debated its strategy for closer trade ties. No real-world politician gave either set of ideas any public support

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