Issue 323
May 7, 2015
logo

Welcome to the  WRAP Weekly Newsletter! Please enjoy it and thank you for being a loyal reader. 
The WRAP Up
Last week we certified 22 factories in 12 countries:
China, Dominican Republic, Egypt, El Salvador, Haiti, India, Lesotho, Mexico, Pakistan, Thailand, USA, and Vietnam.


WRAP recently presented a series of social compliance seminars to textile and apparel producers in Botswana and Lesotho. Click here to read more.



 

Bangladesh
The Accord on Fire and Building Safety in Bangladesh has recommended that two factories be closed after it was deemed that their structural integrity was compromised by the earthquake that struck Bangladesh late last month. The names of the two factories have also been submitted to the government-formed review committee, which will conduct another inspection of the factories after repairs have been finalized. Both the Accord and the Alliance for Bangladesh Worker Safety announced fresh rounds of inspections for factories identified to have been potentially affected by the quake. ( New Age BD)

Garment manufacturers in Bangladesh are urging the government to revise its tax policy so that source tax will only be collected on 10% of total export profits instead of the current rate of 100%. Currently, the National Board of Revenue (NBR) assesses a 0.3% source tax on a company's overall apparel export profits, a policy that was introduced in the current year's budget and replaced a previous provision of 0.8% tax on 10% of total export profits. Apparel manufacturers are also asking NBR to rescind a value-added tax on locally-sourced raw materials. ( Fibre2Fashion)

Bangladesh's Minister for Textiles and Jute says that the country's apparel industry needs to become more competitive if Bangladesh hopes to become a middle income nation by 2021. The statement was made at the recent Textile Engineers Convention in Dhaka, where the minister commended the government on its efforts to elevate the country's standing in the world, but noted that the textile and apparel sectors need to address efficiency and technology upgrades in order to meet this goal. The minister also noted that the government is working to set up more educational institutions around the country focused on textiles and apparel. ( Fibre2Fashion)

Cambodia

Retail giant M&S says that its 18-month program to improve the health of thousands of female garment workers in Cambodia has been a success and that it plans to roll out the program to other factories in Cambodia, Bangladesh, and India. The "Healthworks" initiative, initiated in response to a spell of mass faintings in the country, provided training and educational resources to workers to raise awareness about the importance of proper nutrition while at work. The company says that the program in a 60% reduction in anaemia among workers, a 40% increase in access to treatment, and a 15% increase in clinic referrals for workers who needed them. (The Guardian)

 

Canada

Canadian retailer Loblaw, parent company of fashion brand Joe Fresh, says that a US$2 billion lawsuit brought against them in connection with the 2013 collapse of the Rana Plaza building in Bangladesh is "without merit" and that they plan to defend themselves against it. The lawsuit was brought by Toronto law firm Rochon Genova on behalf of survivors of the disaster and the families of those who perished. It states that the company knew of dangers faced by those who worked in its factories and failed to address a "significant and specific" risk to them. The company says it has already spent millions in Bangladesh to improve worker conditions and hopes that this suit will not distract from this effort. (CBC)

 

China

Labor disputes among Chinese manufacturers have been on the rise lately as the country's economic growth stagnates and labor and raw material costs continue to creep upward. The China Labor Bulletin said that there have been over 800 labor disputes in the country so far this year, triple the amount during the same period in 2014. China's Purchasing Managers' Index (PMI), which measures the favorability of a country's manufacturing sector, came in at 48.9 in April (numbers below 50 indicate manufacturing contraction), mainly driven by low domestic demand and some scholars warn that the flow of exports could be significantly hampered if the disputes remain unresolved. (Women's Wear Daily)

*NOTICE: This article requires a paid subscription 

Like us on Facebook Follow us on Twitter View our profile on LinkedInView our videos on YouTube
 
 Upcoming Events   

May 19
Dongguan, China

May 19-21
Guatemala City, Guatemala

Various Dates in China

Upcoming Training

May 11-12 
Irbid, Jordan

May 14
Kannur, India

 

May 20-21
Shanghai, China

May 25-29
Delhi, India

 

Purchasing Managers Index (PMI)

April 2015 Readings
Brazil: 46.0
China: 48.9
India: 51.3
Indonesia: 46.7
Mexico: 53.8
South Korea: 48.8
Taiwan: 49.2
USA: 54.1
Vietnam: 53.5
Source: Markit Economics

The Purchasing Managers Index (PMI) measures growth in a country's manufacturing based on surveys of selected companies. Readings above 50 indicate growth while readings below 50 indicate contraction.

The World Wildlife Fund (WWF) has signed a joint statement with a textile park in Changzhou to implement a new water management program focused on industrial operations. The program, managed by the Jiangsu Development and Reform Commission and the WWF, will educate industrial facilities in the park on how to better manage their water consumption through efficiency upgrades and conservation initiatives and how ti implement robust resource management systems. The textile park is home to over 300 manufacturers producing over US$1.6 billion in annual output. (PR Newswire / Fibre2Fashion)

   

Denmark

The Nordic Ministers for the Environment have released a new plan aimed at making the Nordic fashion and textile industry the most sustainable in the world. Recently announced during a meeting of the ministers in Copenhagen, the plan would set textile and fashion companies on track to be part of a circular economy by 2050 and to make them leaders in sustainable design, production, and consumption. It's estimated that each inhabitant of the Nordic countries buys 28 to 35 pounds of apparel per year. (Norden.org / Fibre2Fashion)

   

Germany

Germany's newly-appointed ambassador to Bangladesh is urging consumers in his home country to consider paying more for garments made in Bangladesh in order to help producers there fund the safety and compliance requirements placed on them by Western buyers. Ambassador Thomas Prinz says he also plans to push the German government to implement policies that will encourage this practice rather than putting downward pressure on consumer apparel prices in Germany. Over 90% of Bangladesh's exports to Germany consist of apparel. (The Daily Star)

 
India

Business research firm Dun & Bradstreet says that India's textile sector could be on the verge of an unprecedented boom. A new report recently published by the firm says that investments in textile manufacturing infrastructure are poised to reap generous returns for the country, which will also benefit from growing demand both domestically and in export markets around the world, which are also diversifying. The report notes that while rising business costs in China have diminished that country's competitive edge, India will still face competition from the likes of Pakistan, Bangladesh, Vietnam, and Cambodia. (Fibre2Fashion)

 

Major Indian retailer Aditya Birla Group says it has merged all of its branded apparel businesses into one entity called Aditya Birla Fashion and Retail, Ltd. in an effort to help them take advantage of the company's large market presence. The new entity is expected to generate over US$830 million in revenue across over 1,869 stores and become the largest pure play fashion company in India. It is also expected to unlock greater value for shareholders by giving them a direct link to participate in India's burgeoning fashion retail industry. (The Hindu)

 

The government of India says that there are no plans to revise the provisions of the 1985 Handlooms Act. Rumors had recently sprung up that policymakers were considering amending the law to give an advantage to power looms, but the government released a statement saying that no such plans were in the works after they had received numerous inquiries about the issue. (Fibre2Fashion)

 

Myanmar

Labor groups in Myanmar are threatening nationwide strikes if minimum wage negotiations are not resolved by the end of the month. Workers are demanding that the country's minimum wage be increased to US$5 a day, a rate closer to what government and other private sector employees earn, but factory owners contend that implementing such an increase would hurt their businesses. Numerous demonstrations have been staged over the issue, including a recent one on May 1 where garment workers threatened to remove their support for the current ruling party if their demands are not met. (Fibre2Fashion)

 

Pakistan

At least 18 people including 12 garment workers and 2 firefighters were injured when a garment factory in Karachi caught fire on May 4. Over 20 firefighters were called to extinguish the blaze, which investigators say was exacerbated by chemicals stored inside of the facility. While officials also claim that an electrical short circuit caused the fire, some eyewitnesses say that the power was out in the area when the blaze erupted. (The News International)

 

United Kingdom

Human rights consultancy Ergon Associates has published a new report looking at the state of living wages around the world and how companies affect the greater global wage landscape. Commissioned by the Ethical Trading Initiative (ETI) in Denmark, Norway, and the United Kingdom, the new report examines the drivers and influencing factors behind wages in various industries around the world and advocates for collaborative action among companies in those industries to help push wages upward. It also builds upon the conclusions of the 2013 European Conference on Living Wages Action Plan. (Ethical Trading Initiative / Just Style)

*NOTICE: Just Style article requires a paid subscription

 

United States

Fashion retailer J.C. Penny says it had no relationships with any production facilities in the Rana Plaza building that collapsed in 2013 and killed over 1,000 people. The statement comes after the company was named in a lawsuit that included 2 other retailers and the government of Bangladesh claiming that all of these parties either knew or should have known about the structural deficiencies in the Rana Plaza building before it collapsed. While the company has not commented on the lawsuit itself, it has noted that all of its suppliers are required to abide by a set of ethical principles and legal standards and that it upped its staff presence in Bangladesh prior to the disaster. (The Dallas Morning News)

 

Hundreds of truck drivers who work in the ports of Los Angeles and Long Beach have returned to work following a 4-day strike against their companies which they claim have committed wage theft. The drivers say that they make less than minimum wage after deductions for fuel, truck lease payments, and other expenses are deducted from their earnings and that they are improperly classified as "independent contractors" instead of regular employees, which leaves them with fewer workplace protections. The four companies in question account for roughly 3.5% of the trucks working in both ports. (Los Angeles Times)

 

Investment bank FBR & Co. says that several major U.S. apparel companies could stand to benefit from the pending Trans-Pacific Partnership (TPP) trade deal by early next year. In a statement, the company noted that the political climate was "favorable" for advancing trade legislation, including the pending Trade Promotion Authority measure which is expected to quicken TPP negotiations if passed, and that major apparel companies who source their products from countries like Vietnam would stand to reap great benefits if the TPP is approved. (Just Style*NOTICE: This article requires a paid subscription

 

Investment ratings company Moody's says that the outlook for the U.S. apparel and footwear industries remains strong. The company says that lower input costs and expanding direct-to-consumer businesses will continue to support growth in the industry, even with the prospect of a growing U.S. dollar value. Mergers and acquisitions will also continue to be prevalent according to Moody's, as companies continue to push into lifestyle brands. (Fibre2Fashion

 

Several major footwear brands have come out in support of the new Footwear Production Code of Conduct released by the Footwear Distributors and Retailers of America (FDRA). The code was released as a way to ensure continuous improvements in working conditions as well as safety and environmental impacts for factory workers around the world. U.S. footwear executives have praised the new code, saying that it will harmonize audit reports from across the industry which should lead to more accurate information gained through fewer audits. (VAMP Footwear)

 

The United States is hoping that a current visit by Pakistani textile companies will help to increase cotton exports to that country. The visit is being hosted by the Cotton Council International (CCI) and is intended to showcase the entire breadth of the U.S. cotton industry, from production to marketing and all business aspects of the industry. Pakistan is currently the 8th-largest importer of U.S. cotton at 335,000 bales. (Fibre2Fashion)

 

Vietnam

Vietnamese officials have rejected a request from South Korean business owners in the country to increase the maximum number of legal overtime hours, citing health concerns. Last April, the Labor Ministry was asked to increase the overtime maximum to between 360 and 400 hours a year, up from the current cap of 200 to 300. Business owners that the increase was necessary to make up for the lack of skill many of their workers possess. (Thanh Nien News)

 

Officials in  Vietnam's Binh Dong province recently met with counterparts from China's Fujian province to present potential investment opportunities in Vietnam. Local officials say that Binh Dong is one of the top foreign investment destinations in the country with over 2,400 projects worth over US$21 billion currently underway. China itself currently operates 204 projects in Binh Dong valued at over US$1.4 billion. (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.

Tel: 1.703.243.0970   Fax: 1.703.243.8247