The Industrial Federation of Textile, Leather, and Garment Workers Trade Union (IFTLGWTU) at Ethiopia’s biggest industrial park, Hawassa, says garment worker job losses have continued since the US Government announced the end of Ethiopia’s duty-free access to US markets through the African Growth and Opportunity Act (AGOA).
The loss of AGOA benefits came into effect on 1 January 2022 and US Trade Representative Katherine Tai explained it was due to the fighting in northern Ethiopia and reports of deepening famine in Tigray, which she described as a “humanitarian crisis”.
Sandokan Debebe, the CEO of Ethiopia Industry Park Development Corporation (IPDC) shared his concerns about the loss of AGOA benefits in October last year and pointed out: “In our country’s statistics, every direct job creates 2.5 indirect job opportunities or it helps them support their families, so its effect is social and isn’t related to the government.
At its peak the Hawassa Park was employing 35,000 workers according to the IndustriALL Global Union, however it says most of the factories in Hawassa that were exporting to the US had their orders cancelled following the loss of AGOA, which has left them stranded.
In saying this, the union remains hopeful for a peaceful breakthrough that will bring back trade and a new lease of life to the Hawassa Industrial Park as ongoing peace talks continue.
Job losses for garment workers at the Ethiopia Hawassa Industrial Park
The IFTLGWTU claims Best International Garments, an Indian owned company, with a factory in the park, has cut the jobs of over 3,000 workers.
Plus, the union says there are plans to scale down production by other garment factories, including Sumbiri Hela Intimates which has put 260 workers on a month paid leave after which there is uncertainty. The factory is jointly owned by Sri Lanka based Hela Indochine Apparel and Sumbiri Intimate Apparel.
Quadrant Apparel Group is said to have put 300 workers on paid leave while Epic Apparel Plc, a Hong Kong-based Epic Group subsidiary, is said to have cut its workforce after paying six months’ wages.
Meanwhile, last month (June), french company Chargeurs Fashion Technologies, is said to have cut 22 workers’ jobs.
Gianluca Tanzi, CEO, Chargeurs PCC & Chargeurs Luxury Fiber told Just Style: “Chargeurs PCC set up a factory in Ethiopia specifically to support large customers who were producing there. When these customers pulled out of manufacturing in the area, we shifted production to our other global factories to support their business.”
The sale of PVH’s Heritage Brands in 2021 meant the company had to plan a smooth transition of its facility, which included the closure of its factory in Ethiopia’s Hawassa Industrial Park in November last year.
The company said at the time it had worked for over five years with the government, civil society, and business partners in Ethiopia to make the park a leader in inclusive development and was proud of the work it had done there.
PVH is said to be still operating in Ethiopia with multiple third party manufacturing partners in the Hawassa Industrial Park. However, the closure of PVH’s factory is said to be having a ripple effect in the park with the union explaining some companies in the park received orders from PVH under third party manufacturing contracts.
Angesome Gebre Yohannes, the president of the (IFTLGWTU) which is affiliated to IndustriALL Global Union explains: “In this job losses crisis, workers are anxious because job security is no longer guaranteed in the factories that are still operational. We are trying our best to ensure that workers are paid their terminal benefits according to the labour laws and hope that the end of the conflict will bring back AGOA benefits to ease the plight of the suffering workers.”
Paule France Ndessomin, IndustriALL regional secretary for Sub Saharan Africa adds: “The Ethiopian industrial parks’ industrialisation strategy remains one of the most effective models in creating jobs in the garment and textile sector in Africa. We were hoping for more jobs and not the retrenchments that we are witnessing. However, IndustriALL continues to support the IFTLGWTU in ensuring that employers respect workers’ rights and international labour standards during the retrenchments.”
Just Style contacted PVH, Epic Group, Best International Garments, Hela Indochine Apparel and Quadrant Apparel Group for comment but did not receive a response at the time of going to press.
Earlier this week the United States Fashion Industry Association (USFIA‘s 2022 Fashion Industry Benchmarking Study suggested that Ethiopia’s loss of AGOA benefits is negatively impacting sourcing not only in the country itself but also the entire AGOA region as the US companies leaving Ethiopia are not moving their sourcing orders to other AGOA nations.
This article was first published by IndustriAll.