Issue 328
June 12, 2015
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Welcome to the  WRAP Weekly Newsletter! Please enjoy it and thank you for being a loyal reader. 
The WRAP Up
Last week we certified 35 factories in 14 countries:
Bangladesh, Cambodia, China, Dominican Republic, Egypt, Honduras, India, Indonesia, Madagascar, Pakistan, Peru, Sri Lanka, USA, and Vietnam.


President & CEO Avedis Seferian recently presented at the 2015 Source Africa event in Cape Town, South Africa. Click here to read more.



Bangladesh 
The committee overseeing the compensation fund for those affected by the Rana Plaza disaster says it will complete all payments to victims within two weeks. This comes following a committee announcement earlier this week that the fund had reached its US$30 million funding goal. The committee says it has already disbursed over US$16 million to nearly 3,000 claimants. ( The Daily Star)

Hundreds of workers at a factory in Gazipur staged a demonstration on June 10 after discovering that their facility had abruptly closed without paying their due wages. Witnesses say that police were called to the scene after workers got agitated when they could not enter the premises to start their shifts. A factory manager unsuccessfully tried to reassure the crowd that their wages would be paid, but he was forced to be escorted away from the facility by police. ( News Bangladesh)

Leaders in Bangladesh's garment industry are praising the new national budget proposal as being "business friendly," but are demanding revision of tax policies they see as burdensome. Under the new proposal, a 1% tax on sources for exported garment products would be levied, up from the current 0.3% rate. Industry leaders have also praised the government for proposing measures that make importing of fire safety equipment easier as well. ( Fibre2Fashion)

Bangladesh's export-oriented readymade garment industry is facing increased competition in the U.S. market, according to recent U.S. trade data. While exports did grow by 7% in April to reach US$1.8 billion., industry leaders say that other countries like Myanmar and Vietnam are quickly gaining on Bangladesh in terms of U.S. exports. Local industry insiders in the country also point to rising costs, political unrest, and a high social inspection burden for hampering exports. ( Dhaka Tribune)

Cambodia

Phnom Penh police were called to a Chinese-owned factory on June 8 after receiving reports that the factory management had locked workers inside in order to force them to work through the night. Police say that a group of 30 workers had voluntarily agreed to work 3 extra hours following the end of their 5:00 pm shift, but when they attempted to leave at 8:00 pm, they found the gates had been locked. Authorities say that while forced detention is a crime, no charges will be filed because there was no violence used against the workers. (Cambodia Daily

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WRAP Blog 
Latest Entry:
By: Clay Hickson

Workers at a Phnom Penh factory that was the subject of a damming exposé published last month are expressing delight after learning that the factory's main customer, Italian fashion brand Armani, would help address some of the issues. Among these steps include installation of a system of water sprinklers to cool the building's roof down, which factory workers say is actively being constructed. While Armani has not commented on this specifically, the company has released a statement saying that they will act according to the law and the company's own code of conduct to ensure safe and ethical conditions at all of their suppliers. (Phnom Penh Post)

 

Global NGO Human Rights Watch (HRW) is urging Cambodian Prime Minister Hun Sen to revise and make public a proposed trade union law that they say violates international standards. HRW says that it obtained a copy of the bill late last year and found that it violated many conventions of the International Labor Organization (ILO), most notably the right to organize unions. Some even fear that the language of the bill would provide no accountability against courts to deny union licenses without just cause.

(Human Rights Watch / Cambodia Daily)

 

Union leaders in Cambodia say they have organized a meeting later this month to reach a consensus on the minimum wage rate they will push for in the upcoming national negotiations. They say that recent research has shown a viable living wage in Cambodia to be between US$157 and US$177 per month, even though the current wage is only set to US$128 per month. Following these internal meetings, union leaders will have a series of discussions with employers and government representatives through September when a final decision is expected to be reached. (Phnom Penh Post)

 

A week-long strike involving over 2,000 factory workers has come to an end after union leaders scaled back their demands. Earlier this week, police blocked a group of about 500 workers from marching to Prime Minister Hun Sen's residence demanding several improvements in working conditions as well as an increase in monthly transport allowances. Following negotiations on June 9 however, union leaders agreed to end the strike and accept a compromise on their demands. (Cambodia Daily)

 

International observers are speaking out about a proposed law in Cambodia that they say would hamper the ability of NGOs to operate in the country. The secretive legislation, which was reportedly last seen publicly in 2011, is rumored to contain a number of "vaguely worded" provisions and harsh restrictions that would make it challenging for such groups to operate in the country. Government officials refute these claims, saying that people would be surprised by the "friendliness and flexibility" of the bill. (Phnom Penh Post

 

Germany

Leaders of the G7 countries have agreed to establish a new fund to help improve safety and ethics along the global supply chain in the wake of the 2013 Rana Plaza collapse. The fund would help provide compensation for those affected by any future disasters and help support fire and building safety improvement efforts. The G7 is also pushing to give Western consumers greater access to information about the social compliance of the products they are buying. (The Guardian)


India

The People's Union for Democratic Rights (PUDR), an activist group based in Delhi, has released a new report looking at what may have caused an episode of worker unrest earlier this year. Back on February 12, hundreds of workers in the Udyog Vihar region began a violent protest, which included pelting stones at some of the local buildings, after hearing that one worker had died after reportedly being assaulted by managers of the company where he worked. The report claims that a trend of abuse among workers in the region is nothing new and that many workers are even denied their full pay and are subject to sexual abuse. The report urges local stakeholders and community leaders to begin a collaboration to try and find a solution to the issue. (PUDR / The Hindu)

 

For the first time in history, India is leading the way in terms of global economic growth, even ahead of China, according to a new report published by the World Bank. In its latest "Global Economic Prospects" report, the group says that an economic recovery and rising disposable incomes in India will result in an estimated 7.5% growth rate this year, compared to China's estimated 7.1% growth. The report was not so confident about growth in developing countries, saying that they are facing a more challenging economic environment. (Fibre2Fashion)

 

Indian Prime Minister Narendra Modi has given his support to a Bangladeshi proposal to invest US$25 million to sell Bangladeshi-made garments in India. Following a meeting with the Prime Minister on June 7, Bangladeshi industry leaders say that they plan to acquire 50 acres of land in Gujarat to build warehouses and retail shops. Modi also committed to help even out India's enormous trade surplus with Bangladesh. (Fibre2Fashion

 

India's synthetic textile industry is appealing to the government to do away with excise duties in order to stay competitive with nearby China, Bangladesh, and Vietnam. Industry insiders say that the duties have weakened and fragmented the industry by making imported products cheaper than domestic products. They also say the duties imposed on synthetic products give them an unfair disadvantage with cotton products, which do not carry similar duties. (Fibre2Fasihon)

 

The Clothing Manufacturers Association of India (CMAI) says it has inaugurated its latest new training facility as part of a nationwide effort to train 35,000 youth, women, and disadvantaged persons for jobs in the textile industry. Last year, India's textile ministry charged the group with training thousands of new workers by March of 2017 as a way to increase efficiency and productivity in the industry. Currently, 35 centers have been set up across the country. (Fibre2Fashion)

 

Indonesia

Textile production companies in Indonesia are urging the government to take swift actions to help them prevent widespread closures and layoffs as sales continue to slump and production costs continue to rise. The Indonesian Textile Association says that at least 6,000 jobs have been lost so far this year thanks to sluggish revenue in the industry and rising costs of inputs, most notably energy and imported raw materials. Industry leaders are asking the government to execute a "bailout" for some struggling companies to ensure their survival. (The Jakarta Post

 

Italy

Global fashion retailer Benetton says it will no longer use angora wool in its products. In a statement on its website, the company noted that it its garments are made with the "utmost respect for the welfare of nature" and that they only use ethically-sourced materials. The company says that it does still have a stock of products that contain angora that they will make available in their stores, but no new products will be manufactured. The use of angora fur in apparel has come under fire after activist group PETA revealed the harsh measures that are used in the harvesting of the fur. (Benetton Group / Apparel Resources)

 

Nigeria

A new economic report says that small and medium enterprises in Nigeria face a plethora of business challenges, including scarce access to finance, inadequate infrastructure, lax national security, and an epidemic of illegally imported Chinese textile products. Economists say that Nigeria is now the leading economy in Africa, surpassing South Africa in terms of GDP, and that the country must now focus on translating that growth into income growth for the country's 173 million citizens. (Fibre2Fashion)

 

Pakistan

Authorities in Pakistan are speaking out against the sluggish progress of the investigation and trial of the deadly 2012 Ali Enterprises factory fire that claimed nearly 300 lives. At a court hearing on June 5, held after a 21-day gap, a judge criticized the government for failing to assign counsel to the case and said additional pressure would be levied on them if an attorney was not present at the next hearing. The most recent attorney appointed to the case resigned four months ago after a Joint Investigation Team (JIT) report unveiled stark new information about the case. (Express Tribune)

 

Government officials in Pakistan are pushing for sustained support and growth for the country's crucial garment industry in the new 2014-19 textiles policy. The government has allocated US$630,000 in an effort to double textile exports and create 3 million additional jobs by 2019. It has also announced a restructuring of the Federal Textile Board to make it a majority private sector body to better serve the industry. Pakistan's textile industry has struggled in recent years thanks to energy instability, government bureaucracy, and rising input costs. (Fibre2Fashion)

 

Philippines

A major workers' rights group in the Philippines is worried that a new fire safety policy could lead to widespread unemployment in the country. The new policy requires enterprises to present a valid fire safety inspection certificate before they can be granted a business license, something that only about 15% of establishments currently possess according to the Bureau of Fire Protection. The new policy was implemented in the wake of the recent Kentex factory fire that claimed over 70 lives. (ABS-CBN)

 

South Africa

Thousands of apparel and textile industry leaders around the world gathered in Cape Town this week for the annual Source Africa conference. One of the main focuses at this year's show was the renewal of the U.S. African Growth and Opportunity Act (AGOA) and what impact it could have on the growth of apparel sourcing from the continent. The annual event provides a platform for African textile producers to connect with potential buyers and other service providers from around the world. (Fibre2Fashion)

 

United States

A measure designed to give U.S. President Barack Obama near unilateral authority to negotiate trade deals has died in the U.S. House of Representatives. The Trade Adjustment Assistance (TAA) measure, which would have provided retraining assistance for displaced workers, failed to get enough support to pass the House, which also killed the greater Trade Promotion Authority (TPA) bill by virtue of rules set up in the House that linked passage of the latter with approval of the former. Members of the House did perform a symbolic vote on the TPA measure, however, which narrowly passed. (CNBC)

 

The U.S. House of Representatives has passed a package of measures to renew the African Growth and Opportunity Act (AGOA) for an additional 10 years and extend the Haiti HELP/HOPE program. The Trade Preferences Extension Act was passed overwhelmingly on June 11. The act also renewed and updated the U.S. Generalized System of Preferences (GSP) program which expired in 2013. (Just Style)

*NOTICE: This article requires a paid subscription. 

 

U.S. President Barack Obama says that China may be exploring the possibility of joining the proposed Trans-Pacific Partnership (TPP). Mr. Obama said that Chinese officials have reached out to him and other high-level government officials to say that they may be interested in joining negotiations for the trade agreement, which already includes 11 of the leading economies in the Asia-Pacific region. He went on to express support for China joining the TPP because it would put pressure on them to adhere to stringent labor standards. (VOA News)

 

Growth in U.S. apparel imports was nearly stagnant in April after surging in March, according to the U.S. Office of Textile and Apparel (OTEXA). China lost some of the share it had regained from Vietnam, Bangladesh, and India, with Chinese apparel imports taking a 12% dip. Vietnam, however, posted a 16.5% growth rate, making it the second-largest supplier of apparel to the United States. (Sourcing Journal)

*NOTICE: This article requires a paid subscription.

 

Several major trade and business groups are praising the proposal of a new bill in the U.S. Senate that would give state governors the power to intervene in port labor disputes instead of passing the responsibility on to the federal government. The bill was introduced weeks after the conclusion of a lengthy stalemate between West Coast port operators and dockworkers that caused a major slowdown in the flow of goods from Asia. The new bill would give governors the power to petition federal courts to intervene in a strike, a power that is currently only reserved for the U.S. President. (Fibre2Fashion)

 

New polling data suggests that U.S. public opinion around international free trade agreements is improving. A poll conducted in late May by Reuters and Ipsos found that 56% of those surveyed supported new international trade agreements to promote the sale of American goods abroad. A similar result was found by a Pew Research Center poll conducted earlier in the month. In light of this however, over 40% of respondents say that Free Trade Agreements (FTAs) lower wages for U.S. workers and even put domestic jobs at risk. (Just Style*NOTICE: This article requires a paid subscription.


Vietnam

Trade officials in Vietnam have set their sights on Italy has a new source of foreign investment. This comes after the country announced plans to establish a joint chamber of commerce with Germany. Trade leaders from Vietnam recently hosted a workshop for Italian garment, leather, and footwear companies to showcase the plethora of investment opportunities present in their country and demonstrate the wide opportunities for economic cooperation. (Fibre2Fashion / Fibre2Fashion)


About WRAP
Headquartered in Arlington, Virginia, U.S.A., with regional offices in Dhaka, Bangladesh, Hong Kong S.A.R., and representatives in India and Southeast Asia (Thailand and Vietnam), WRAP is an independent, objective, non-profit team of global social compliance experts dedicated to promoting safe, lawful, humane, and ethical manufacturing around the world through certification and education.
To learn more about WRAP, please visit www.wrapcompliance.org.

Notice: The WRAP Weekly Newsletter is a collection of links to current news articles, relevant to social compliance. While most articles are freely available, some may require a paid subscription to access. WRAP is not responsible for the content of external internet sites.

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