Blog: Michelle RussellBangladesh works to resolve labour activist issues

Michelle Russell | 2 March 2017

The Bangladesh government was forced to respond late last week to pressure over its crackdown on labour activists after a number of global brands and retailers, including H&M and Inditex announced plans to pull out of the Dhaka Apparel Summit, held at the weekend, in protest.

The crackdown on Bangladesh labour activists over the last two months has cost the country's garment industry around US$100m, its trade body has said, as well as growing international concern regarding the treatment of garment workers.

Bangladesh's State Minister for Labour and Employment, Mujibul Haque Chunnu, said the government would help the detainees get bail, while the government said it would also ensure the terminated or suspended workers return to their jobs, with arrears paid.

After a number of setbacks last year, including political upheaval, terrorist attacks and an influx of Syrian refugees, textile and clothing industry executives in Turkey are optimistic that better times lie ahead in 2017.

Among a succession of challenges facing firms in Turkey last year were the ongoing war in neighbouring Syria and Iraq, Russian sanctions, a crackdown following an attempted coup in July, a series of terrorist attacks, and a fall in clothing exports. However, despite ongoing uncertainties,Turkish textile and apparel industry associations and sector leaders stress that the sector remains structurally strong and still has substantial growth potential.

With pressure mounting on apparel brands and retailers to give more weight to sustainability and social responsibility in their sourcing decisions, Andreas Streubig, sustainability division manager at German mail order and e-commerce giant Otto Group, is convinced that collaboration and the "power of the many" is key to driving lasting change.

Meanwhile, top executives from 16 major US manufacturers have sent an open letter to Congress urging elected officials to pass tax reforms and the controversial border tax in order to boost growth for domestic companies and taxpayers.

The letter, from a group of companies including Caterpillar, Dow Chemical Co., and Oracle Group, endorses tax reforms proposed by President Donald Trump, and is in opposition to efforts by the Americans for Affordable Products group, which includes companies such as Gap Inc and Target Corp, lobbying against the proposed US tax on imports.

For all the claims that US apparel buyers are seeking alternative sources to China amid concerns it is losing its competitiveness, new data suggests otherwise, with the country's prices lower now than six years ago.

An analysis of the latest figures from the Department of Commerce's Office of Textiles and Apparel (OTEXA) shows China's apparel prices fell by 7.4% to an average of US$2.49 per square metre equivalent (SME) in 2016, compared to $2.69 per SME in 2010. This makes it the only country among the top ten apparel importers into the US to have seen an average drop in prices over the last six years.

The first multilateral trade agreement in the World Trade Organization's (WTO) 20-year history was passed last week. Chad, Jordan, Oman and Rwanda became the latest countries to ratify the Trade Facilitation Agreement (TFA), meaning it has now reached the pre-determined number of members required for it to come into immediate force. The TFA will reduce trade barriers and eliminate border transaction costs for companies around the world.

While, the American Apparel & Footwear Association (AAFA) entered into a partnership agreement with the East Africa Trade and Investment Hub to ensure best-in-class manufacturing of goods destined for the US market from East Africa.

The United States Agency for International Development (USAID) agreement launches the 'East Africa Cotton, Textile and Apparel Initiative' to establish sustainable workforce development programmes and institutionalise environmental, social, labour and worker safety best practices in the region. The aim is to work with East African governments to raise industry standards, promote job creation, and increase trade and investment.

Meanwhile, the US retail industry is once again facing supply chain disruption thanks to a planned one-day shutdown of East Coast and Gulf Coast ports in protest over the loss of longshoring jobs and its effect on the economy.

Retailers are calling on the International Longshoremen's Association (ILA) to halt the strike, which is aimed at highlighting hiring practices in some of the nation's ports that purposely reduce the numbers of dockworkers, causing "immeasurable damage to the nation's economy".

And, restructuring is being carried out by both US retailer JC Penney, and UK department store retailer John Lewis, that will lead to store closures and job losses, respectively.

JC Penney is to close two distribution facilities and around 130 to 140 stores over the next few months as part of plans to optimise its retail operations and drive profitability as it revealed a fall in fourth-quarter sales. While, John Lewis is reviewing more than 700 jobs as part of plans to restructure some of its in-store business.

Australian surfwear company Billabong International last week revealed plans to sell its Tigerlily swimwear brand for AUD60m (US$46.1m). The Queensland-based company has entered into a binding agreement with Sydney-based private equity firm Crescent Capital Partners for the business, which it acquired in December 2007 for AUD5.8m.

In other news, The Bangladesh Water PaCT (Partnership for Cleaner Textile) initiative is preparing to launch the second phase of the programme; Canada Goose has filed for an IPO; Thread has extended its partnership with Timberland with plans for new boots and bags made from its durable Ground to Good canvas; and Q4 results continue to pour in from US retailers and brands.


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