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12. Due to the very high concentration of female employees (over 85%) in the TC industry, their role and place in this sector become important. Except for the 200 Garment Factory Programme (GFP) and Textile Mills the rest of the industry is concentrated in EPZs, in an around a few townships. This has led to an imbalance in the sex ratio of the communities around EPZs and townships. It is this fact, that has made female labour in the TC industry a special feature. This is a factor peculiar to the Clothing Sector. Most of the female employees are not from the area or from the vicinity of the factories. They come from far away places with a rural background living separated from their beloved ones and having to cope up with a new lifestyle, often alien to them, this creating problems and pressures. This has led to the creation of a sub-culture of 'Juki Kella'. (i.e. Juki Giri).
13. The female employees have to cope up with a multitude of problems at their work places and living places. Strict regimentation, unrealistic production targets, verbal abuse and in some cases assaults by supervisors, sexual harassment, poor working conditions, lack of rest times are a few of the problems they face at the work place. Transport, "subhuman" living conditions, sexual assault while travelling, lack of proper nutritional food, inadequate time for recreation, are a few of the problems these female employees undergo outside their working places.
14. The open economic policy in the post 77 era, in combination with tax incentives and liberalization of exchange control regulations, attracted large scale investments in the TC industry. From a meagre Rs. 205M in 1985 the investments increased up to a staggering Rs. 2632 M in 1993. It tapered off from ' 94 onwards. Privatization of the state owned National Textile Corporation's (NTC), large scale Textile Mills also attracted foreign investors. Some of these privatized ventures were subsequently converted to Board of Investment of Sri Lanka (BOI) Companies.
Table 4 - TC Sector Investment on Machinery
| Sub Sector | Year | ||||||
| 1985 | 1991 | 1992 | 1993 | 1994 | 1995 | 1996 | |
| Spinning Rs.Mn. | 1.687 | 139.383 | 446.597 | 300.064 | 346.81 | 474.838 | 323.375 |
| Fabric Manu. Rs. Mn. | 60.707 | 302.035 | 463.978 | 766.091 | 655.3 | 515.386 | 905.909 |
| Processing Rs.Mn. | 38.024 | 172.753 | 333.519 | 528.21 | 436.2 | 294.256 | 292.099 |
| Garments Rs. Mn. | 105.096 | 558.008 | 1226.587 | 1038.586 | 774.23 | 867.575 | 863.269 |
15. With the establishment of foreign owned companies and Joint venture companies, a new system of labour relations and work ethics were "imported" which was alien to the indigenous, industrial set up.
16. In order to attract Foreign Direct Investment, new fiscal incentives were offered, hitherto unknown to the Sri Lankan entrepreneurs. Labour rules more in line with investors' needs, were also introduced. These new investments, and employment generated thereby, were directed towards exports, and required different (i.e. higher) standards of quality specifications and rigid delivery schedules which were considered up to then as unimportant for an industry which was catering mainly to the local market.
17. The interests of New Foreign Direct Investors and Joint Venture Partners had to be safeguarded and this was done by employing Expatriate Management and Technical staff who were also familiar with the "new" labour relations and work ethics.
18. In "selling" Sri Lanka as an ideal land for investment, the availability of a cheap. trainable workforce was cited as a comparative advantage and an asset. However, the concept of productivity and work ethics were never touched.
Table 5 - Prevailing Wage Levels, Selected Asian Countries (1994)
| Total Labour Force (Million) | Unemployment Rate (%) | Min Wage for Unskilled Labour (US$/Day) | Average Wage for Unskilled Labour (US$/Day) | Average Wage for Skilled Labour (US$/DAY) | Average Wage for Technicians (US$/month) | Average Wage for middle Management/Engineers (US$/month) | ||
| Sri Lanka | 6.5 | 13 | 1.15 | 1.25 | 2.2 | 90-279 | 210-400 | |
| Bangladesh | 34 | 3.2 | 1.58 | 1.66 | 2033 | 63(min) | n/a | |
| China | 723 | 2.3 | n/a | 2.05-5.18 | 4.03-9.65 | n/a | n/a | |
| Indonesia | 84.3 | 8 | 0.60-2.62 | 2.00-21.87 | 5.98 | 215 | 359 | |
| India | 344.3 | 5.7 | 0.82-1.17 | 2.40-3.33 | 128-185 | 128-200 | 285-430 | |
| Malaysia | 7.4 | 2.8 | no min wage | 5.20-8.08 | 12.86 | 321 | ||
| Mauritius | 0.54 | n/a | n/a | n/a | n/a | n/a | n/a | |
| Pakistan | 37 | 6.2 | 1.44 | n/a | n/a | n/a | n/a | |
| Philippines | 26.8 | 9.7 | 4 | 4 | 7 | 237 | 625 | |
| Taiwan | n/a | 3.1 | 22.5 | 32.5 | 42.5 | 1300 | 1500 | |
| Thailand | 36.8 | 4.4 | 5.22 | 9.05 | 15.72 | 274-630 | 730-964 | |
| Vietnam | 34.4 | 10 | 0.7 | 1.15-1.22 | 1.75-1.90 | 55-150 | 152 |
Box No. 1
Strike Free Environment
Political and economic stability along with guarantees against nationalization and a work environment which facilitate uninterrupted production runs are considered to be prerequisite by investors~. It appears that some of competing countries are offering similar conditions. A recent report states that,
Quote,
"A strike free environment is often looked at by export oriented investors today, a a pre-condition for entry and competing sites in: the region are closer to this than Sri Lanka".
unquote.:
(draft report Building Sri Lankan Competitives-Saniaya Lal,Rao, Wignaraja, Addario, Akinici).
19. The world today due essentially to the development of information technology has become so small that it is reduced to nothing more than a "village". Thus, with the "Global Village" vision, the market became homogeneous to the point where difference between local and export markets virtually disappeared. This factor, combined with the pride of being the leading foreign exchange earner and its desire to lead all the way to the 21st century, has put the Textile & Garment Industry into a highly stressful situation. As is always the case, "water flows at the lowest point"; and in this instance the lower level employees became the releasing valve for the pressure. This was mainly due to unpreparedness of the industry in human resource needs, particularly in management and technical skills at lower to middle management level.
20. With the integration of MFA into GATT/WTO rules by the year 2005, quota restrictions will be eliminated which will put extra pressure on the industry to become more competitive in order to successfully survive. This, in combination with the lack of a fabric
base, would increase the pressure in geometric progression. The garment industry depends entirely on imports for its raw material requirement of fabrics. Though various attempts were made to implement a backward linkage programme to produce fabric locally, it has not been very successful. In fact, almost 90% of the garment industry's fabric requirement is imported.
Table 6 - Fabric Imports
| 1986 | 1987 | 1988 | 1989 | 1990 | 1991 | 1992 | 1993 | 1994 | 1995 | |
| Value of Garment Gross Output | 9254 | 12383 | 12581 | 16893 | 14933 | 31627 | 49176 | 62349 | 68945 | 84829 |
| Value of Imported Fabric | 6251 | 7854 | 8544 | 9522 | 13675 | 20059 | 27349 | 33570 | 40527 | 45662 |
| Value of Imported Non Fabric Accessories | 1831 | 2424 | 2767 | 3266 | 1296 | 3646 | 4550 | 5754 | 7517 | 10072 |
| Share of Imported Inputs in Gross Output(%) | 87 | 83 | 83 | 76 | 60 | 75 | 65 | 63 | 70 | 66 |
22. The assumption is that the Government agencies should stand as guarantors of compliance. However, the present system is such, that the Government finds it difficult to be the guarantor unless a closer co-ordination is achieved among various Government agencies.
23. Child and Forced Labour has national and international legal imprecations and use of child and forced labour in the TC industry is a sensitive issue for the importing as well as exporting countries. At international level these issues are being considered at various forums. Powerful nations like US and China have different concepts on linking trade to Human Rights. However, the Sri Lankan record of non use of child and forced labour is excellent and infect there are no allegations whatsoever against Sri Lanka.
24. These can be termed as fundamental human rights. They are embodied in international conventions and more precisely guaranteed by national constitutions. In the 1978 constitution of Sri Lanka and subsequent amendments guarantee certain fundamental rights.
Box. No. 2
Article 1410 i of the '78 constitution of Sri Lanka stases that,
"(1) Every citizen is entitled to
(a) the freedom of speech and expression including publication:
(b) the:freedom of peaceful assembly:
(c) the freedom:of association
(d) the freedom to form and join a trade: union:
(c)the freedom, either by himself or in association with others, and either in public or in private to manifest his religion or belief ! in worship' observance, practice and teaching:
(f) t he freedom by himself or in association with others to enjoy and promote his own culture and to use his own I
(g) the freedom to engage by himself: or in association with others in occupation, profession trade business or enterprise:
(h) the freedom of movement and of choosing his residence within Sri Lanka: and
(i) the freedom to return to Sri Lanka."
25. While the 1978 constitution and subsequent amendments sets the national "mood", the Textile Magna Carta which was signed in 1994 by an influential group of developed nations sets the international "mood" for the Textile and Clothing (TC) trade. This Magna Carta specifically touches on issues of rights of the employees.
Box. No. 3 Textile Magna Carta
"Commitment by ali countries to accept and implement the following principles for all textile and clothing workers, including those employed in export-oriented free-zones: the freedom of association, freedom to organize and bargain collectively, prohibition of forced labor, a minimum age for the~ employment of children, minimum standards governing hours of work, wages and health and~ safety conditions, the: elimination of employment discrimination on the basis of race, colour, sex, religion, political opinion, national or social origin, prevention of occupational accidents and diseases, compensation in case of work accidents or occupational diseases".
26. Despite the fact that the "Textile Magna Carta" is not a mandatory requirement, it is worth looking at the vital issues like rights of the employees, not necessarily for economic reasons but also for human reasons. The important fact is that the "Export Promotion Zones" which generally lie outside the purview of common laws of a country are covered under this agreement. This has a special significance to a large number of TC related employees in Sri Lanka.
27. One of the fundamental rights guaranteed according to the constitution is the right of association.
28. The Primary Textile Sector is the oldest of the two sectors of the Textile and Clothing Industry. The textile sector has a long history and has always enjoyed the right of association in the form of Trade Unions and collective bargaining. The now defunct Wellawatta
Spinning and Weaving Mills Ltd and Ceylon Silks Ltd spearheaded the activities in this area. All textile mills under the former National Textile Corporation (NTC) and private sector textile mills too enjoyed this right. However, with the disintegration of the NTC and establishment of foreign owned mills under BOI regulations a different set of norms came into being. Though trade unions continue to function in some of these "new" enterprises their power for collective bargaining is diminished. In the case of some of the BOI textile companies trade unions were not encouraged.
29. A trade union of one of the former NTC mills which was privatized (Non BOI) had a collective agreement with the company. Yet the industrial harmony was at an low ebb and when the company suffered financial losses employee agitation led to trade union action and eventual closure. Subsequently, the enterprise was taken over by the Government. With the exception of some of the new BOI ventures workers in the Primary Textile Industry in general enjoy freedom of association.
