International pressure is mounting on Indian exporters as allegations of labour abuse is in its worst form – child labour and forced labour are increasingly a source of worry for retailers and brands working with India. Despite intense lobbying, the US Department of Labour (DOL) continues to feature the Indian garment industry on its Executive Order (EO) 13126 List that sets forth a list of products, by country of origin which US authorities believe might have been manufactured by forced or indentured child labour.
[bleft]The latest setback came on October 3, 2011 when the DOL published the second update of the list, which contained the Indian garment industry. The concern going into 2012 is whether the measures taken by India will be enough to change the perception or will the issues continue to hound the industry… [/bleft]
While the garment export industry may cry themselves hoarse that they do not employ child labour, as they must comply fully with the highest standards in accordance with the requirements of their buyers, they cannot say with confidence that the complete supply chain is clean. In fact, the DOL concern appears to be the “third or fourth tier” of producers, namely sub-sub-contractors and home workers. Many are of the opinion that these third or fourth tier producers are most likely entities serving the domestic Indian market and not the export market, but it cannot be ignored that a lot of handwork is being outsourced to agents who get the work done through their network over which the exporter has very little or no control.
In the meanwhile, industry watchers fear that the continued mention of Indian garment industry in the DOL list would throw challenges in the coming year, especially with the indications that going forward brands could be made accountable for their trade with India. Many experts feel that buyers would be given a cautious notice by the US specifying they must do ‘due-diligence’ before engaging in trade with India. In fact, the state of California has recently introduced the Transparency in Supply Chains Act (TSCA), which will go into effect from Jan. 1, 2012 requiring retailers and manufacturers to begin posting on their web sites disclosures of efforts they have taken to assess the risks of and eradicate human trafficking and slavery from their supply chains. Companies which do not have web sites will be required to send written disclosure statements to anyone that requests them within 30 days of receipt of a request. A similar federal law is under consideration and could impose disclosure requirements nationwide.
Adding fuel to the fire, ‘Sumangali’ a contractual arrangement that labour watchdogs say involves unfair practices and amounts to bonded labour, kept brands concerned throughout the year. Though the Sumangali practice is more than 10 years old and implemented in right spirit, keeping the social stigmas in mind, a report titled ‘Captured by Cotton: Exploited Dalit girls produce garments in India for European and US markets’, released in May 2011, highlighted the pathetic condition of Dalit girls and women, some even below 14 years, who are employed in the garment and textile industry of Tamil Nadu under the Government-promoted Sumangali Scheme to the limelight. The Southern India Mills Association (SIMA) now claims the term ‘Sumangali’ has been done away with, and that some 120 mills under it are offering an “apprentice scheme with hostel facility”. However, the Sumangali sword will continue to haunt the industry in 2012 as buyers are still unconvinced of ‘justifications’.
International compliance regulations encourage formation and freedom to labour unions, but the industry is concerned with the increasing influence of unions, activities of which were seen throughout the year resulting in many confrontations between workers and management across the country. From delayed payments, to sudden and unexplained termination of workers to unhealthy working conditions and high-handed attitude of management, the issues were varied and directly linked to workers’ benefits. While the management in all cases claimed that the unions were applying pressure tactics to get their demands met, however unreasonable, the unions were vocal on their demand to get what they call their rightful ‘dues’. From the growing number of such incidences it is obvious that the labour unions are spreading their sphere of influence, in many cases supported by NGOs and other civil society organizations. With business becoming more competitive and labour wages rising, the atmosphere is ripe for confrontation and 2012 may see many more tussles.
For international organizations it is difficult to fully understand the complexities of the garment manufacturing sector and the significant challenges in monitoring labour issues with heavy outsourcing activities, seasonal work, informal workshops, and limited state labour inspectorate capacities. Though social auditing schemes and programmes are growing at an exponential rate, civil society believes that it is vital that there is a much greater level of coherence applied to these schemes, ensuring fundamental linkages to state labour inspection programmes and activities. However, the lack of transparency and information sharing between and among the stakeholders will remain a reason for concern in 2012.
To address international concerns, AEPC has designed a compliance programme ‘Disha’ (Driving Industry Towards Sustainable Human Capital Advancement) to be implemented in 2012. ‘Disha’ will be coordinated and monitored in liaison with the Ministry of Textile. Global apparel buyers like H&M, Adidas, Next are part of the team that went behind consultations while drafting Disha, a faith-building exercise, which will bring in rigorous third party audit programmes involving international auditing agencies in the supply chain. The supply chain auditing will take into account the primary facility, sub-contractor, sub-sub-contractors, home-based work in villages and even slums. But again how it is any different from the existing third-party compliances through international testing agencies where the monitors or inspectors are novices and monitoring is sporadic, is to be seen…
Though not much is expected to change with the National Manufacturing Policy passed by parliament recently, there are some interesting aspects to support labour engagement that include a comprehensive exit policy for companies, which will promote productivity while providing flexibility by removing rigidity in the labour market and ensuring protection of workers’ rights as laid down in the statute. The thrust with regard to labour management will be to encourage unions and employers to develop better institutional arrangements in the states, and within production units, through dialogue and consultation. Wherein, the Government will conduct periodic audit of the enforcement mechanism put in place to ensure compliance of all labour welfare provisions.
In an effort to give sustainability a positive impetus, the Government of India has recently (July 2011) introduced a National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Business (NVG) that are a distinct improvement over the CSR voluntary guidelines of 2009. All stakeholders were involved in the process of formulating the guidelines that are designed to be used by all business irrespective of their size, sector or location of the enterprise.
