Since its introduction in the country three years ago, the International Labor Organization's (ILO) Better Work programme has been credited with helping elevate Nicaragua as an ethical sourcing location and a major player in the global apparel industry.

Launched with a donation of US$2m from the US in 2010, Nicaragua is one of only two countries in the region (the other being Haiti) to benefit from the ILO's Better Work programme. Its objective is to improve both compliance with labour standards and develop international trade and competitiveness in the global supply chain.

Although still in its initial phase, the voluntary programme has garnered support from both the national employers' organisation - the Nicaraguan Association of Textile Manufacturing - and the government, through the National Free Trade Zone Commission.

Textile and apparel companies dominate the free zones sector, accounting for almost 59% of total free trade zone exports worth US$1.4bn, and employing 69,000 people at the end of 2012.

Manufacturers based here produce for major international brands including Under Armour, Liz Claiborne, Wrangler, Gap, North Face, Lee Jeans, Patagonia and Levi's.

During the initial phase, Better Work stakeholders have evaluated its progress and areas for improvement.

"Better Work Nicaragua covers one-third of the companies on the apparel sector, and about half of the workforce. It stresses shared responsibility for ensuring good working conditions," explains Elena Arengo, Better Work Program Coordinator in Nicaragua.

"In that sense, the level of social dialogue in Nicaragua is a great strength. Sure, there are challenges. The apparel industry is a globalised industry that operates under fast and mobile conditions that put pressure on both factory managers and workers to be more productive.

"Better Work is working with all partners here - government, employers and workers - to ensure that the industry can be competitive and guarantee high standards and good working conditions."

Among its most recent moves was the signing of the 'Free Zones Minimum Wage Tripartite Agreement' earlier this year, which sets annual salary increases of 8% for the period from 2014 to 2017.

The agreement also calls for mechanisms to increase labour productivity within free zone companies, as well as the creation of social programmes to benefit workers, such as a fund for housing projects, the distribution of food packages and recreational and health schemes.