Labour Practices in the Footwear, Leather, Textiles and Clothing Industries

Report for discussion at the Tripartite Meeting on Labour Practices in the Footwear,
Leather, Textiles and Clothing Industries

Introduction

At its 273rd Session (November 1998), the Governing Body of the International Labour Office decided to organize a tripartite meeting on labour practices in the footwear, leather, textiles and clothing industries.

At its 274th Session, in March 1999, it decided to invite the Governments of the following 20 countries to appoint participants: Bangladesh, Brazil, China, Colombia, Czech Republic, India, Indonesia, Italy, Malaysia, Mauritius, Mexico, Morocco, Portugal, Romania, Sri Lanka, Thailand, Tunisia, Turkey, United Kingdom, United States. In the event that one or more of these Governments did not accept the invitation, a replacement representative from the same region was to be invited from the reserve list drawn up at the same time. That list comprised the following countries: Argentina, Belarus, Belgium, Canada, Costa Rica, Dominican Republic, Egypt, El Salvador, Germany, Honduras, Hungary, Pakistan, Philippines, Poland, Russian Federation, South Africa, Spain, Venezuela, Zimbabwe. The Governing Body also decided that 20 employer participants and 20 worker participants would be invited to the Meeting on the basis of nominations by the Employers’ and Workers’ groups of the Governing Body.

The Meeting is part of the ILO’s Sectoral Activities Programme, which is intended to facilitate exchanges of information between constituents on the changing social situation in the different economic sectors and on the results of practical research on specific sectoral issues. Tripartite sectoral meetings are traditionally organized with a view to promoting exchanges of opinion and experience. The objectives of this exercise are: to promote better understanding of sectoral issues, promote international tripartite consensus in this area and identify general principles concerning policies and measures at national and international levels; to encourage the harmonization of all the ILO’s sectoral activities and provide liaison between the ILO and its constituents; to provide technical advice and practical assistance and support to the constituents with a view to facilitating the implementation of international labour standards.

The purpose of this Meeting is to exchange views on labour practices in the footwear, leather, textiles and clothing industries, using a report prepared by the Office as the basis for its discussions. The Meeting will adopt conclusions that include proposals for action by governments, by employers’ and workers’ organizations at the national level, and by the ILO. It will adopt a report on its discussion and may also adopt resolutions.

The present report considers recent developments in labour practices in the TCF industries (textiles, clothing, leather and footwear). These developments reflect the increasing globalization of these sectors, in which international subcontracting is widely practised, both by the multinational enterprises and major distribution groups and by smaller enterprises. The statistical analysis of recent trends in production, trade and employment contained in the first chapter provides an overall picture of this phenomenon, even if official statistics are sometimes incomplete (particularly in Africa) and do not reflect the importance of the informal sector, which accounts for a significant proportion of production and employment. The importance of small enterprises and the informal sector in the subcontracting which characterizes the TCF industries also tends to prevent the social partners from organizing effectively and, consequently, hinders social dialogue.

The second chapter contains an analysis of labour practices in relation to the ILO Declaration on Fundamental Principles and Rights at Work. This part of the report in a sense constitutes the core of the analysis, in that it concerns the practical implementation in the TCF industries of the fundamental rights at work, highlighting the progress made in certain areas – for example, child labour – as well as the difficulties that remain in certain others. The chapter also contains a section dealing with the particular situation of export processing zones (EPZs) and a section on private voluntary initiatives, which highlights the growing importance of ethical practices in the TCF industries. The third chapter is devoted to changes in labour practices resulting from technological change and training requirements. The final chapter contains a summary and suggested points for discussion.

The report is published under the authority of the International Labour Office. It was prepared by Jean-Paul Sajhau of the Sectoral Activities Department. The information on which the report is based comes from a number of sources. In response to a questionnaire, the ILO received valuable information from a number of governments, employers’ and workers’ organizations. The Office would also like to thank the European Observatory for Textiles and Clothing in Brussels for its invaluable contribution to the statistical analysis contained in the first chapter. Mr. Auret van Heerden of the ILO contributed the section on export processing zones.

The textiles, clothing and footwear (TCF) industries are global; global inasmuch as production activities are worldwide and connected through various arrangements and strategic decisions to serve the world market; global in so far as as trade, which is expanding more rapidly than the average of the manufacturing sector, is highly influenced by the changing characteristics of international competitiveness and the relocation strategies implemented by global companies; and global because the geographical distribution of world employment is affected by the rapid changes in production and trade. TCF industries can be regarded, accordingly, as a “one-world employer”.

Before analysing the changing patterns of labour practices, it would, therefore, seem relevant to paint a broad picture of production, trade and employment changes that have occurred during the past two decades. Broadly speaking, this presentation may be divided into two major sets of data: a first set presenting the long-term trends over the period 1980-95; a second set providing up-to-date information on the most recent developments over the period 1995-98. These two sets are combined in the following analysis.^[1]

1.1.1. Production trends^[2]

World output of textiles has always been much greater in US dollar terms than world output of clothing – which in turn has been much greater than world output of footwear.

In 1995 world textile output amounted to US$517 billion; world clothing output to US$336 billion; and world footwear output to US$60 billion. The ratios were therefore respectively 8.6 to 5.6 to 1.^[3] World output of textiles in 1980 was US$418 billion. Output fell between 1980 and 1985, rose by 27 per cent between 1985 and 1990 and registered a slight rise between 1990 and 1995. In 1995 world textile output was 24 per cent higher, in US dollar terms, than in 1980.

Although world price rises for textile output over the period are not known, increases in general producer prices in a number of countries suggest that the volume of textile output over the period may have changed little, or may even have fallen, when allowance is made for price increases.

More significant than the change in total output over the 1980-95 period was the change in the distribution of output between regions. Between 1980 and 1995 the textile output of Asia rose by 97.7 per cent, and that of the Americas by 76.3 per cent. But European output fell by 32.4 per cent. Whereas in 1980 European output represented 53 per cent of world output and Asian output 27 per cent, by 1995 Europe’s share had fallen to 29 per cent and Asia’s share had risen to 44 per cent. The share of the Americas rose from 18 per cent to 25 per cent during that period.

World output of textiles continued to be dominant among the three sectors in the second part of the 1990s. In 1998, it accounted for 55.9 per cent of the total value of output of the three sectors, followed by clothing with 38.6 per cent and footwear with 5.5 per cent, estimated at some US$485 billion (no data were available for Africa and Oceania, which together account for about 2 per cent of world textile output). From 1995 to 1998, there was a fall in the value of production (in US dollar) of 6.2 per cent, following a slight increase of 1.3 per cent in the 1990-95 period. This decline was mainly due to a fall in the value of production in Asia of more than 10 per cent during the period in question.

This decline was one of the consequences of the Asian financial crisis, and of substantial falls in the value of a number of Asian currencies. Since China did not devaluate the yuan during the 1995-98 period – and China dominates the textile output of Asia – the fall in the value of Asian textile output was lower than it might have been.

Asia, which dominates the world production of textiles, saw its share in the world total decline from 43.6 per cent in 1995 to 41.6 per cent in 1998. During the same period Europe’s share remained unchanged (about 29 per cent), while the Americas increased its share, to reach some 29.5 per cent of the world output of textiles in 1998 (figure 1.2).

Between 1980 and 1995, clothing output rose more than that of textiles. In 1980 world output of clothing had accounted for some US$211 billion. It declined in the 1980-85 period but rose 38 per cent between 1985 and 1990 and 19 per cent between 1990 and 1995. Over the whole 1980-95 period world clothing output rose by 59 per cent.

The pattern of change in the regional distribution of clothing output was similar to that of textiles. Between 1980 and 1995 Asian output rose by 177 per cent, while that of the Americas rose by 67 per cent. European clothing output, on the other hand, fell by nearly 13 per cent in US dollar terms during this same period. Whereas Europe had 48 per cent of clothing output in 1980, its share had fallen to 26 per cent in 1995. The share of Asia rose from 27 per cent to 46 per cent over the period, but that of the Americas changed little.

World output of clothing was estimated to be some US$335 billion in 1998 (no data were available for Africa and Oceania which together account for just over 3 per cent of world clothing output). The value of world output of clothing remained virtually unchanged between 1995 and 1998. Increases in Asian and American output were offset by a 17 per cent decline in European output in the same period.

The effects of the financial crisis in Asia were less visible in clothing production than in textiles, partly due to the fact that China and India together account for more than two-thirds of Asia’s clothing output, and that there were no substantial changes in the value of their currencies vis-à-vis the US dollar in 1997 and 1998.

In 1998 Asia – for the first time – accounted for more than 50 per cent of the world output of clothing. The Americas also increased their share in the world total, after an increase of 14.3 per cent in their clothing production between 1995 and 1998. Developments in Latin American countries, such as Brazil, were responsible for this trend; in the United States or Canada, there was a fall in the production of clothing (figure 1.3).

During the period under review, world footwearoutput lagged considerably below that of either textiles or clothing in value terms. In 1980 world footwear output accounted for some US$42 billion. Output fell between 1980 and 1985, but rose during the 1985-90 and 1990-95 periods. In 1995 world footwear output was 44 per cent higher than in 1980.

Between 1980 and 1995, changes in the regional distribution of footwear output followed the same pattern as that of textiles and clothing. Asian output rose by 424 per cent and that of the Americas by 16 per cent. European output did not fall in this case, but rose only 10 per cent during this period. The share of Asia in total world output rose from 7.5 per cent to 27.5 per cent, but that of the Americas fell from 23 per cent to 18 per cent, and that of Europe from 67 per cent to 51 per cent. Europe still remained by far the largest producer – but with a diminished share. It therefore no longer totally dominated world production, as had been the case in 1980.

World output of footwearin 1997 was estimated to be US$48.2 billion (no data were available for Africa and Oceania which together account for 3 per cent of world footwear production). The value of world output of footwear fell by 19.5 per cent between 1995 and 1997. Output fell in all three regions for which data are available – in Asia by nearly 31 per cent, the Americas by nearly 17 per cent and Europe by nearly 10 per cent.

However, Europe continues to dominate the world production of footwear (in US dollar terms), with well over 50 per cent; this may be attributed to the production of products at the higher end of the market, in countries such as Italy and the United Kingdom. In 1997 the United Kingdom was among the top ten footwear producers in the world, due to a 17.5 per cent increase in its output between 1995 and 1997. Asia encountered a dramatic fall in the US dollar value of its footwear production during this same period, after an 80 per cent increase in production between 1990 and 1995. This fall can partly be explained by the fact that China does not statistically report footwear output separately from clothing, and therefore its impact on Asia, as a whole, is not identifiable. Furthermore, footwear production declined by 36 per cent in Japan and 34 per cent in the Republic of Korea between 1995 and 1997. These two countries are among the top ten world producers of footwear, and their trends strongly influenced developments in Asia as a whole.

Trade in textiles and clothing has expanded far more rapidly than has production. Between 1980 and 1997 world exports of textiles rose from US$55 billion to US$155 billion – an increase of 182 per cent. However, due to the financial crisis in Asia, they fell to US$151 billion in 1998.

Asia and Western Europe are the dominant regions for trade in both textiles and clothing. Until the mid-1990s, Western Europe was the largest exporter of textiles. In 1980 it accounted for some 53 per cent of world exports (including intra-trade), while Asia had some 27 per cent. In 1990 Western Europe’s share was the same, while Asia’s share had risen to 35 per cent. By 1997 Asia had become the leading region, with 44 per cent of world exports of textiles, as opposed to 41 per cent for Western Europe. Over the whole 1980-97 period, Asian exports rose by some four-and-a-half times, as compared with the 1980 level, while Western European exports more than doubled.

In 1998, the share of Asia declined to 40.2 per cent and Europe again became the largest exporter with 44 per cent of the world total.

Trade within Western Europe is very important – and included in the above calculations. In recent years trade within the EU 15 (intra-trade) has been growing, although more slowly than extra-EU 15 trade. In 1997 intra-EU 15 trade in textiles amounted to US$35.8 billion, as compared with extra-EU exports of US$22.7 billion.

World exports of clothing are now somewhat higher than world exports of textiles, and they have grown more rapidly. They accounted for US$41 billion in 1980 and rose to US$177 billion in 1997, an increase of 335 per cent (figure 1.5). By 1998, they had reached US$179.6 billion, an increase of 14 per cent over 1995.

In clothing, Western European exports were higher in 1980 than those of Asia. By 1990 Asia was ahead, with 44 per cent of the total, as compared with 42 per cent for Western Europe. Asia made further progress in the 1990s, and in 1997 had 45 per cent of world exports, while the share of Western Europe had dropped to 33 per cent. Over the whole 1980-97 period, Asian exports rose well over five times, compared with 1980, while Western European exports rose just over three times.

The relative importance of individual countries in world exports of textiles and clothing changed dramatically between 1980 and 1997.

As regards textiles, in 1980 the leading exporter was the Federal Republic of Germany, accounting for 11.4 per cent of world exports. It was followed by Japan (9.3 per cent), Italy (7.6 per cent), the United States, Belgium, France, China (including via Hong Kong, China) and the United Kingdom. By 1997 China had become by far the largest world exporter of textiles, followed by the Republic of Korea, Germany, Italy, and Taiwan, China. Japan had fallen to ninth place. China’s exports saw large increases, as did those of the Republic of Korea and Taiwan, China. Other large increases, from a low base in 1980, were recorded by Indonesia, Malaysia, Turkey and Mexico.

In clothing, Hong Kong, China, had been the main exporter in 1980, accounting for 11.5 per cent of the world total. It was followed by Italy (11.3 per cent), the Republic of Korea (7.3 per cent) and Germany (7.1 per cent). China had 4.8 per cent of world exports (including via Hong Kong, China) in 1980. By 1997 the position had been transformed, with China far outstripping Italy, Hong Kong (China), the United States, Germany and Turkey. In US dollar terms very large increases were recorded by China, and other large increases, from a low base in 1980, were recorded by Turkey, Mexico, Bangladesh, Indonesia, Thailand, Pakistan and Malaysia.

The very substantial increases in both textile and clothing exports by Asian countries over the period occurred in spite of the limitations imposed on the basis of the Multifibre Arrangement (MFA). In the case of Mexico the large increases in textile and clothing exports were clearly linked to the formation of the North American Free Trade Agreement (NAFTA).

Substantial increases in clothing exports, from a low base in 1980, were also recorded by countries, such as Tunisia, Poland, Romania and Hungary; these were linked to the outward processing trade activities of the EU industry.

Between 1980 and 1995 a number of countries, including several in Asia, registered substantial increases in both their textile production and their share of world textile output. During this period, the share of China in world output increased from 7.9 per cent to 10.7 per cent; that of India from 2.6 per cent to 3.1 per cent; that of the Republic of Korea from 1.8 per cent to 5 per cent; that of Taiwan, China, from 1.3 per cent to 2.6 per cent; that of Brazil from 1.2 per cent to 2.2 per cent; and that of Turkey from 0.8 per cent to 2.5 per cent. In addition, Indonesia, coming from a very low base, accounted for 2 per cent of world production in 1997. Apart from Indonesia, the increases in the 1980-95 period were particularly marked in Turkey (3.7 times) and in the Republic of Korea (3.4 times).

World export shares for textiles also rose significantly during the period in question for several Asian countries, plus Turkey. The share of China (including trade via Hong Kong, China) increased from 6.2 per cent to 17.3 per cent of the world total; that of the Republic of Korea from 4 per cent to 8.6 per cent; that of Taiwan, China, from 3.2 per cent to 8.2 per cent; that of India from 2.1 per cent to 3.2 per cent; that of Pakistan from 1.6 per cent to 3 per cent; and that of Turkey from 0.6 per cent to 2.2 per cent. The greatest increases among these countries were registered in Turkey (9.8 times the 1980 level), China (7.9 times), Taiwan, China (7.2 times) and the Republic of Korea (6 times). Pakistan and India also saw large increases – greater than for any Western European country.

But Indonesia accounted for the largest increase in trade. By 1997 it had achieved 1.5 per cent of world textile exports. From a very low base in 1980 its textile exports increased 49 times over the period under consideration. Other countries which had started from a very low base in 1980, but expanded their trade considerably by 1997, included Malaysia, Mexico and Thailand. It was therefore generally the Asian countries which either newly emerged over the period or greatly strengthened their previous positions.

By 1995 a number of Asian and other countries had achieved a larger share of the increased world output of clothing. The share of China went up from 15.2 per cent to 24.9 per cent;^[5] that of Brazil from 1.2 per cent to 4.2 per cent; and that of the Republic of Korea from 1.1 per cent to 4 per cent. Of these countries Brazil and the Republic of Korea had especially large increases in output – at 5.6 times the 1980 level in both cases. In addition, several countries who were not in the top 30 in 1980 had achieved this rank by 1995. These included Turkey with 1.9 per cent of the world total in 1995, Thailand also with 1.9 per cent, Indonesia with 0.9 per cent, and India with 0.8 per cent. In all these cases there were very large increases in clothing output.

The same pattern may be observed with regard to world trade in clothing; here again increases in Asian exports from 1980 to 1997 were especially marked, although all Asian countries did not share in the expansion that took place.

By 1997 the share in world clothing exports of China (including via Hong Kong, China) had risen from 4.8 per cent to 21.5 per cent; that of Turkey from 0.3 per cent to 3.8 per cent; that of India from 1.5 per cent to 2.4 per cent; that of Thailand from 0.7 per cent to 2.1 per cent; and that of Malaysia from 0.4 per cent to 1.3 per cent. In 1997 Indonesia also accounted for 1.6 per cent of the total. The largest increases in clothing exports in this group were in Turkey (51 times the level of 1980), China (20 times), Indonesia (30 times), and Malaysia (16 times). However, there were also large increases in exports among some countries which had been very small exporters in 1980, or had not exported at all. Among these were Bangladesh, Mexico, Tunisia and Pakistan.

A contrast with trade in textiles, however, occurred in the case of Hong Kong, China; the Republic of Korea; and Taiwan, China. All of these countries lost export shares in clothing between 1980 and 1997, although all increased their exports over the period in a generally expanding market – by 100 per cent in the case of Hong Kong, China, 42 per cent in the case of the Republic of Korea and 40 per cent in the case of Taiwan, China.

A number of countries similarly increased their share of footwear world output between 1980 and 1995. The share of Italy rose from 8.5 per cent to 18.8 per cent; that of Japan from 4.4 per cent to 12.6 per cent; that of Spain from 4.6 per cent to 7.9 per cent; that of Brazil from 2.7 per cent to 6.9 per cent; that of the Republic Korea from 0.7 per cent to 5.3 per cent; and that of Portugal from 0.6 per cent to 4.2 per cent. The largest increases among this group were registered in the Republic of Korea (10.7 times 1980 level), Portugal (10.6 times), Japan (4.1 times) and Brazil (3.7 times). But here again a number of countries not among the major producers in 1980 entered the top 30 in 1995. These included Indonesia, with 4.1 per cent of world output in 1995, Hong Kong, China, with 1.8 per cent, India with 1.3 per cent, and Thailand with 1 per cent.

Generally speaking, most of the countries which joined the ranks of the top 30 producers in textiles, clothing and footwear during the 1980-95 period were in Asia. Other Asian and South American countries, which had been in the top 30 in 1980, also succeeded in improving their position by 1995.

However, increases in output in the developed countries were also significant during the period under consideration. In textiles this was especially true of the United States and Japan; in clothing of the United States, Japan and Italy; and in footwear of Italy, Japan and Spain. In spite of the rise of developing countries in Asia, the United States and Japan were the world’s chief textile producers in 1995, while China and the United States were the principal clothing producers, and Italy and Japan the world’s chief footwear producers.

As regards newly emerging countries in world trade, increases over the period in the exports of textiles by Asian countries were particularly significant although other countries such as Turkey and Mexico registered large increases in textile trade. Asian countries were also important gainers in exports of clothing, but other countries which did well included Turkey, Mexico, the Philippines and Tunisia.

What seems clear is that the more prosperous Asian countries did much better as regards textile exports over the period than they did as regards exports of clothing. In the labour-intensive clothing sector their relatively high wages clearly had a depressing effect on their export growth. It is the low-wage Asian countries which have been the main winners in the export of clothing over recent decades.

Some of the main players in the production and trade of textiles, clothing and footwear are members of economic blocs, but others are not. China, in particular, does not belong to any bloc; neither do India, Pakistan, Taiwan, China, the Republic of Korea, Bangladesh or Japan. Movements in economic blocs, therefore, can give only a partial explanation for movements in world textiles, clothing and footwear.

As regards the output of textiles, the European Union was still, in 1995, the largest bloc – as it had been in 1980; its share of world textile output also remained much the same during this period at 23 per cent. It was closely followed by NAFTA, and then at a distance by the other blocs. If the Central and Eastern Europe candidate countries (CECCs) and the Mediterranean countries are added to the European Union, as representing a largely free trade area, this whole bloc accounted for 29 per cent of world textile output in 1995.

Looking at movements over the 1980-95 period, the increase in textile output of the ANDEAN bloc was 46 per cent; that of the ASEAN countries 208 per cent; that of MERCOSUR 108 per cent; that of NAFTA 76 per cent; that of the European Union 22 per cent; and that of the “greater European bloc” 25 per cent. The CECCs registered a fall in output of 58 per cent, but the Mediterranean countries had an increase of 175 per cent, in US dollar terms.

As regards the output of clothing, the European Union was the largest bloc producer in 1995, accounting for 22 per cent of world output. The “greater European bloc” had 26.5 per cent of world clothing output. Looking at movements over the period, the increase in clothing output of the ANDEAN bloc was 92 per cent; that of the ASEAN bloc 756 per cent; that of MERCOSUR 292 per cent; that of NAFTA 46 per cent; that of the European Union 55 per cent; and that of the “greater European bloc” 62 per cent. The CECCs had a fall in output of 47 per cent, but the Mediterranean countries registered an increase of 512 per cent.

In the output of footwear, the European Union far outstripped the other blocs in 1995, accounting for 47 per cent of world production. MERCOSUR, the next largest, had only 8 per cent of world output. Looking at movements over the 1980-95 period, the increase in footwear output was 107 per cent for the ANDEAN bloc; 1,610 per cent for ASEAN; 186 per cent for MERCOSUR; 74 per cent for the European Union; and 59 per cent for the “greater European bloc”. There were falls in output of 30 per cent for NAFTA and 48 per cent for the CECCs; but the Mediterranean countries saw a rise of 164 per cent.

In the output of each of the sectors – textiles, clothing and footwear – it is clear that over the 1980-95 period ASEAN was the fastest growing bloc. However, this excludes the three large producers, China, the Republic of Korea and Taiwan, China, whose growth was even higher in some sectors. Other blocs with substantial increases in output were: the Mediterranean countries and MERCOSUR in textiles; the Mediterranean countries, MERCOSUR and ANDEAN in clothing; and MERCOSUR, the Mediterranean countries and ANDEAN in footwear. In all sectors the output of the European Union, in US dollars terms, continued to grow over the period, and that of the CECCs to fall. NAFTA registered increases in textiles and clothing, but a fall in the output of footwear.

In textiles and clothing, the share in world exports of the various economic blocs is rather small. This reflects the omission of such giant exporters as China; the Republic of Korea; Taiwan, China; Hong Kong, China; and India.

In textiles, the extra-trade of the EU in 1997 represented 14.6 per cent of world textile exports; intra and extra exports of all Member States accounted for 38 per cent. The next largest bloc was NAFTA (8 per cent), followed by ASEAN (4.5 per cent) and the Mediterranean countries (3 per cent). Between 1990 and 1997 the ASEAN bloc saw the largest increase in textile exports (97 per cent), followed by NAFTA (92.5 per cent) and the Mediterranean countries (80 per cent). The EU registered an increase of 50 per cent for its extra-trade, just ahead of the average increase for the world as a whole. Smaller increases were registered for the ANDEAN and MERCOSUR blocs.

In clothing, the extra-trade of the EU represented 9 per cent of world clothing exports in 1997; intra and extra exports of all Member States accounted for 28 per cent. The NAFTA bloc followed, with 7.7 per cent, and then the ASEAN and the Mediterranean countries.

Between 1990 and 1997, NAFTA experienced by far the largest increase in clothing exports among the trading blocs. Its clothing exports rose by 292 per cent, followed by the Mediterranean countries (with an increase of 83 per cent), ASEAN (41 per cent) and the EU (39.5 per cent). Available information on changes in CEEC exports is not sufficient to make any comparisons.

In trade, therefore, ASEAN again did well, but only in exports of textiles. NAFTA progressed over the 1990-97 period in exports of both textiles and clothing, as did the Mediterranean countries. Exports from the EU increased just above the world average for textiles, but the increase was below this for exports of clothing. This held true for both the intra and extra clothing exports of the EU. The ANDEAN and MERCOSUR blocs did only moderately well.

The changing world distribution of employment

In 1995 world textile employment was 16.8 million, clothing employment 8.7 million, and footwear employment 1.8 million. The ratios were 9.3 to 4.8 to 1, respectively. These are comparable with the ratios of 8.6 to 5.6 to 1 for the value of world output in 1995.

In 1998 world textile employment was estimated to be 16.4 million, clothing employment 11.2 million and footwear employment 1.7 million, making a total of 29.3 million. This represented an increase of 7.3 per cent between 1995 and 1998, due to a dramatic increase in clothing employment during this period.

Between 1980 and 1995, total estimated world employment in textiles and clothing changed relatively little; however, the distribution of employment changed radically, with large losses in Europe and the Americas, and large gains in Asia. The same pattern was observed for footwear, although estimated world employment in this industry declined by 13.5 per cent during the 1980-97 period. Here again, employment fell sharply in Europe and rose in Asia. The increase in Asia was particularly marked.

In textiles, world employment in 1980 was some 16.4 million. Employment declined by 1985, but then rose by 3 per cent between 1985 and 1990, and by a further 1 per cent between 1990 and 1995; it subsequently fell by 2.5 per cent between 1995 and 1998. Figures therefore remained relatively unchanged throughout the 1990s. However, there were major changes in the share of different regions. Employment in Africa declined throughout the whole decade, especially in the 1995-98 period. Employment in the Americas also fell by about 8 per cent in both periods under consideration. Europe saw a large fall of 31 per cent between 1990 and 1995, and a further fall of 15 per cent between 1995 and 1998. Asia, on the other hand, registered increases in employment in both periods – especially in the earlier one (table 1.1).


Countries in:	(in ‘000)		% changes		% share in total
	1995	1998	1990-95	1995-98	1995	1998

Africa	595	478	–1.2	–19.7	3.5	2.9
America	1 355	1 247	–8.1	–8.0	8.0	7.6
Asia	11 627	11 914	17.2	2.5	69.0	72.5
Europe	3 207	2 733	–30.9	–14.8	19.0	16.6
Oceania	65	62	12.1	–4.6	0.4	0.4
Total	16 849	16 434	0.9	–2.5	100.0	100.0
Source : ILO/UNIDO, OETH estimates.

The effect of these movements was to cause considerable changes in the share of total world employment. Comparing 1995 and 1998, the major changes were in the share of Asia and Europe. Asia’s share in employment rose from 69 per cent to 72.5 per cent, while the share of Europe fell from 19 per cent to 16.6 per cent.

Among Asian countries, China is by far the largest employer, followed by India. China experienced an increase in employment between 1995 and 1998, but India registered a decline. Among the large European employers, only Turkey saw a substantial rise in employment in the 1995-98 period.

When employment figures are contrasted with those of output, it may be seen that the concentration of textile employment in Asia is far higher than that of textile output. This difference reflects the far lower productivity in Asia, as compared with that in Europe or the Americas.

World employment in clothing rose between 1980 and 1990, declined by 16 per cent between 1990 and 1995 and then increased by a substantial 29 per cent between 1995 and 1998. Employment fell in the 1990-95 and 1995-98 periods in both the Americas and Europe. However, it rose in these periods in Africa. In Asia, after little change between 1990 and 1995, employment rose significantly between 1995 and 1997 (1998 figures not available) (table 1.2). However, this was mainly due to more recent estimates of total clothing employment in China.


Countries in:	(in '000)		% changes		% shares in total
Countries in:	1995	1998	1990-95	1995-98	1995	1998

Africa	507	570	12.5	12.4	5.8	5.1
Americas	1 531	1 283	–11.1	–16.2	17.6	11.4
Asia*	3 895	6 976	–1.4	79.1*	44.7*	62.2*
Europe	2 724	2 393	–35.2	–12.2	31.3	21.3
Oceania	47	-	–18.8	-	0.5	-
Total	8 704	11 222	–16.2	28.9	100.0	100.0
* Data for Asia are for 1997; changes are mainly due to new estimates of total clothing employment in China. Source:ILO/UNIDO, OETH estimates.

Clothing employment in Asia rose considerably between 1980 and 1990, when it was nearly 35 per cent above its 1980 level; it subsequently slightly declined between 1990 and 1995 but increased again between 1995 and 1997. Clothing employment in the Americas fell steadily throughout the whole 1980-98 period. Europe saw a more dramatic fall in clothing employment – more than 50 per cent from 1980 to 1998 – but this was concentrated almost entirely in the 1990-98 period, when the fall was 47 per cent; this was partly due to a sharp decline in Central and Eastern European employment. However, European clothing output fell by only 10 per cent during the 1990s, suggesting a substantial rise in productivity during the period.

The shares in world employment were much affected by these changes. From 1995 to 1998, the share of the Americas in total world employment in clothing fell from 17.6 per cent to 11.4 per cent, while that of Europe dropped from 31.3 per cent to 21.3 per cent; meanwhile Asia’s share rose very substantially, from 45 per cent to 62 per cent (1997).

In the Americas, the largest employer, the United States, experienced a substantial fall in clothing employment during the 1995-98 period. In Europe, one of the largest employers, Italy, saw little change in this same period; however, there was a substantial rise in Turkey, and apparently a large fall in Russian employment. Among large employers in Asia, China stands out; its clothing employment (which also includes employment in footwear) appears to have risen greatly between 1995 and 1997 (1998 figures not available).

In footwear, world employment rose slightly between 1980 and 1985, declined by much the same amount between 1985 and 1990, and then fell even more steeply between 1990 and 1995 (–7.2 per cent), to give a fall in employment of 8.2 per cent over the whole 1980-95 period. World employment continued to drop (by 5.3 per cent) between 1995 and 1997 (table 1.3).


Countries in:	(in '000)		% changes		% shares in total
Countries in:	1995	1997	1995-90	1997-95	1995	1997

Africa	94	-	17.6	-	5.1	-
Americas	307	325	–22.4	5.9	16.8	18.8
Asia	557	623	124.2	11.8	30.5	36.0
Europe	861	783	–30.2	–9.1	47.1	45.2
Oceania	9	-	–21.0	-	0.5	-
Total	1 827	1 731	–7.2	–5.3	100.0	100.0
Note: Regions and total cover countries only for which information is available. Source: ILO/UNIDO, OETH estimates.

Asia saw an enormous rise of 124 per cent between 1990 and 1995, followed by a rise of 12 per cent in the 1995-97 period. The Americas experienced a decline in the first period and a small rise in the second, while Europe saw falls in both periods.

Employment in the Americas rose between 1980 and 1985, but then fell sharply in the next two five-year periods; in 1995, levels were some 31 per cent below those of 1980. Between 1995 and 1997, there was a slight employment recovery with a growth of 5.9 per cent over the period. Footwear employment in Europe followed the same pattern as that of clothing, with relatively small falls in employment in 1980-85 and 1985-90, but a large fall in 1990-95, predominantly on account of Central and Eastern Europe. In 1995 European employment in footwear was some 35 per cent below its 1980 level. But output of footwear was 10 per cent higher in Europe in 1995 than in 1980, suggesting a substantial rise in productivity.

Between 1980 and 1995, the situation in Europe was paralleled by the experience of the Americas, where a fall in employment of 31 per cent during the 1980-95 period was accompanied by a rise in output of 16 per cent, suggesting a substantial rise in productivity. No doubt this was linked to changes in the product; indeed, a higher proportion of footwear was made from fabric, synthetics and rubber rather than from leather. However, employment continued to decline by almost 10 per cent between 1995 and 1997.

In Asia there were considerable increases in footwear employment throughout the entire period under consideration, with an especially large rise in employment of 124 per cent between 1990 and 1995. Asian footwear employment in 1995 was four times its 1980 level. Asian footwear output, however, rose just over five times in dollar terms from 1980 to 1995, suggesting relatively little change in productivity – and possibly a decrease, when price changes are taken into account. Employment in footwear increased by almost 12 per cent between 1995 and 1997.

In spite of the substantial decrease in European footwear employment since 1980, Europe still remained the largest employer in 1997. In 1980 it had accounted for 67 per cent of world employment, while the Americas had had 22 per cent and Asia only 7 per cent. By 1995 the share of the Americas in world employment had fallen to 17 per cent, that of Europe to 47 per cent and that of Asia had risen to 31 per cent. Between 1995 and 1997, the Americas’ share rose to 19 per cent, but Europe’s share declined to 45 per cent, while Asia’s share rose to 36 per cent.

Long-term employment trends by country
(losers and gainers)

In 1980 the largest textile employer was China, accounting for total employment of 3.1 million, i.e. 19 per cent of the world total. It was followed by the former USSR, with 14 per cent of the world total; India, with 11 per cent; the United States, with 5 per cent; Japan, with under 5 per cent; and then Poland, Brazil, Romania, the Republic of Korea and the United Kingdom, in that order. Other sizeable textile employers were Germany, Spain, Taiwan (China) and Italy.


Ranking	Countries	Employees ('000)

1	China	7 672.4
2	India	1 470.5
3	Bangladesh	679.1
4	United States	588.0
5	Indonesia	515.4
6	Russian Federation	495.0
7	Japan	432.0
8	Italy	341.1
9	Pakistan	279.6
10	Thailand	257.5
11	Korea, Republic of	248.8
12	Mexico	240.0
13	Turkey	227.5
14	Egypt	223.0
15	Brazil	188.0
16	Taiwan, China	159.4
17	Romania	159.0
18	Spain	151.4
19	United Kingdom	146.9
20	Germany	141.2
Source: ILO, UNIDO, Eurostat, OETH estimations.

There were considerable changes in the importance of individual countries as textile employers throughout the 1980-95 period. For instance, the USSR disappeared from the list of top employers. Among the larger textile employers, Indonesian employment (1.4 per cent of the total in 1980) rose by a multiple of 2.7 times, while that of China rose by 2.2 times, and that of Bangladesh doubled. By 1995 textile employment in China had risen to as much as 41 per cent of the world total. India was the second largest textile employer, but its employment was some 10 per cent below its 1980 total, and its share of world textile employment had fallen to less than 10 per cent.

Countries with substantial increases in textile employment (measured in percentage terms) during the 1980-95 period included Lesotho, Botswana, Jordan, Kuwait, Tunisia and Mauritius, although they had all started from a very low base. Employment in textiles in Italy and Turkey, alone among European countries, also rose over the period.

Countries with the relatively highest losses in textile employment over the 1980-95 period included Poland, Hungary, the United Kingdom, Spain, France, Hong Kong (China), and Germany. Among the large employers, the United States, Japan and Brazil were also losers. In general, the less developed countries were the gainers in textile employment throughout the period under consideration, and the more developed countries the losers.

In clothing, the largest employers in 1980 were the former USSR, with 2.3 million persons (23 per cent of the world total); China with 1.6 million persons (17 per cent); and the United States with 1.3 million persons, (13 per cent). They were followed by Japan with 4.4 per cent, Brazil with 3.4 per cent, and the United Kingdom, Hong Kong (China), Germany, Poland, Romania, France, the Republic of Korea and Italy, in that order.

There were sweeping changes throughout the 1980-95 period. Among the larger employers of 1995, clothing employment in Indonesia had risen by more than 20 times during the period under review; Thailand had risen more than 10 times, the Philippines by 59 per cent, Portugal by 47 per cent, and Italy by 36 per cent. By 1995, China was already by far the largest world clothing employer, with 20 per cent of the world total (this covers, however, employment in state-owned enterprises only). It was followed by the United States, with 11 per cent of the total, and then some way behind by the Russian Federation, Japan, Indonesia, Brazil, Thailand, Italy, Bangladesh, and the United Kingdom. By 1998, Mexico had reached the third rank of major world employers in clothing, mainly as a result of the development of its trade with the United States within NAFTA.

Among the substantial gainers in clothing employment over the 1980-95 period were Indonesia, Bangladesh, Thailand, Turkey, Sri Lanka and Morocco, all of which had had very low employment in clothing in 1980. Nearly all the countries which gained clothing employment during this period were in the category of less developed countries. The only exceptions were Italy, Portugal and Turkey.

Among the main countries which lost clothing employment between 1980 and 1995 were the United States, Hong Kong (China), Germany, Brazil, Poland, the United Kingdom, France and Japan.

As may therefore be seen, low-wage countries generally increased their clothing employment over the period under consideration, while high-wage countries lost employment. This is scarcely surprising, given the high labour content in clothing production.


Ranking	Countries	Employees ('000)

1	China*	3 677.8
2	United States	793.0
3	Mexico	567.1
4	Russian Federation	392.8
5	Japan	319.0
6	Bangladesh	316.5
7	Indonesia	289.3
8	Poland**	250.0
9	Italy	213.5
10	United Kingdom	201.0
11	Brazil	185.9
12	Romania	180.0
13	Philippines	178.1
14	Korea, Republic of	177.6
15	Turkey	166.1
16	Thailand	160.0
17	South Africa	145.8
18	Portugal	136.7
19	India	133.2
20	Tunisia	125.4
* Data for China include clothing and footwear. **Based on nomenclature ISIC Rev.3-D. Source: ILO, UNIDO, Eurostat, OETH estimations.

In footwear (leaving aside China for which separate employment data are not available), the largest world employers in 1980 were the former USSR, with 494,000 persons, or 25 per cent of the total, and Brazil, with 163,000 persons, or just over 8 per cent of the world total. They were followed by the United States with 8 per cent, Romania with 6 per cent, Poland and Italy. The distribution of footwear employment among countries was a good deal less concentrated than that of either textiles or clothing.

As in the case of both textiles and clothing, there were substantial changes in footwear employment among countries during the 1980-95 period. Of all the countries that had been among the larger employers in 1980, only Brazil and Italy increased their employment during this period, accounting for just over 1 per cent and 5 per cent, respectively. On the other hand, there were very large increases in Indonesia and Thailand, which had become substantial employers by 1995, but which had started from a very low base in 1980. There were also large increases in employment in Portugal and Morocco.

Among the larger employers which lost employment over the period were the United States and Germany each (with a 66 per cent decline), Poland, Spain, the United Kingdom, France and Romania.

In 1995, Indonesia was the largest footwear employer after China – for which recent separate data are not available – and accounted for 16 per cent of the world total. It was followed by Brazil (with 9 per cent of the world total), the Russian Federation (6.5 per cent), Romania and Italy, It is relevant to note that Italy had half the employment of Brazil. Footwear employment remained in 1995 far less concentrated than was the case in either textiles or clothing. By 1998, India had become the fourth largest employer in footwear and the Russian Federation had declined in its share of world employment (see table 1.6).


Ranking	Countries	Employees ('000)

1	China*	923.0
2	Indonesia	273.1
3	Brazil	147.5
4	India	134.7
5	Romania	86.3
6	Italy	79.0
7	Poland	72.6
8	Thailand	58.2
9	Russian Federation	57.5
10	Portugal	54.9
11	Japan	51.2
12	Ukraine	50.8
13	France	50.2
14	Spain	47.6
15	United States	42.7
16	Morocco	40.7
17	United Kingdom	39.5
18	Korea, Republic of	33.2
19	South Africa	29.2
20	Hungary	26.7
* 1994 (latest available figure). Source: ILO, UNIDO, Eurostat, OETH estimations.

The major poles of employment creation over the 1980-95 period have already been analysed on a country basis; however, it is of interest to look at employment changes by economic blocs. But it should be borne in mind that these blocs do not contain such major employers as China, the Republic of Korea, Taiwan (China), Bangladesh, India, Pakistan and Japan.

As regards changes in textiles, employment between 1980 and 1995, by far the greatest increase in employment – 56 per cent – was registered in the ASEAN bloc. It was followed by the Mediterranean countries, with an increase in employment of 6 per cent. All other blocs experienced falls in employment over the period. The CECC countries registered a decline of 56 per cent, followed closely by MERCOSUR and the European Union. There was also a fall in employment in NAFTA (25 per cent).

The ASEAN bloc also did well in clothing. Indeed, employment in clothing rose 343 per cent between 1980 and 1995, and the Mediterranean countries increased their employment by 288 per cent over the period. Apart from a rise of 32 per cent in the ANDEAN bloc, however, there were falls in employment in the other blocs. NAFTA registered the biggest fall – 24.5 per cent – closely followed by MERCOSUR, with a 23 per cent decline, and the European Union. The CECCs saw a fall of 20 per cent.

Generally speaking, the same picture applied to changes in footwear employment during the 1980-95 period, although the increase in employment in the ASEAN bloc was dominant – 1,637 per cent. The only other increases were in the Mediterranean countries – of 148 per cent – and the ANDEAN bloc. Otherwise decreases in employment took place. Much the biggest fall, of 63 per cent, was in NAFTA, followed by the European Union and the CECC countries, with roughly equal falls.

As far as changes in employment in the economic blocs are concerned, ASEAN countries far outstripped the other group for the 1980-95 period. The only countries which did well were those of the Mediterranean. All other groups either lost employment or registered only modest gains. Once again, it was the low-wage countries whose employment benefited – a trend that applied both to their output and their trade. Similar gains occurred in the low-wage countries outside the economic blocs, and notably in China.

Over the last decade, the decline in employment has been particularly marked within the European Union (EU) which is, at the same time, one of the most important markets for TCF products. Between 1988 and 1998, almost 1 million jobs disappeared in the TCF industries of the EU. A closer view of the details of this general trend provides useful indications on the speed and cyclical nature of employment losses in this particular economic bloc.

Following a continuous decrease in employment during the 1980s, at an annual average rate of 1.5 per cent, the EU experienced a sharp decline between 1990 and 1994. During this period, employment in TCF industries dropped by about 4 per cent per year, as compared with a decline in employment of 0.5 per cent per year for the manufacturing sector as a whole. In 1992 and 1993 alone, 290,000 jobs disappeared – a figure comparable to the loss in employment throughout the whole 1982-88 period. After a slight recovery in 1994 and 1995, the employment level in TCF industries continued to drop dramatically.

In 1998, for example, about 2.2 million people were employed in enterprises of all sizes in the EU textile and clothing industry. This was 2.3 per cent below the number employed the previous year – equivalent to a loss of some 52,000 jobs. This reduction in employment compares favourably with the nearly 100,000 jobs lost in 1996, but was greater than the 30,000 lost in 1997. Between 1997 and 1998, falls in employment in the textile industry were not experienced by all Member States. In Spain and Austria, textile employment actually increased by of 7 per cent and 0.5 per cent, respectively; employment remained stable in Belgium, Denmark and the Netherlands. However, all the other countries experienced falls. Greece registered the biggest decline – nearly 10 per cent. During the same period, employment in the clothing industry increased in Greece (4.9 per cent) and Spain (1 per cent). All other Member States experienced a fall (except Denmark where there was no change). Significant drops in employment occurred in Belgium (7 per cent), Germany (6.5 per cent), the United Kingdom (6 per cent), Finland (5.1 per cent) and France (5 per cent). As may be seen, employment fluctuations within a given economic bloc vary from one country to another; these are contingent upon certain economic and social conditions but also upon the quality and degree of specialization in the production of different types of products – as well as upon changes in productivity levels.

1.2.2. Women workers in TCF industries

General observations

The TCF industries have, traditionally, been important employers for women. Employment opportunities have generally been concentrated in the lower range of qualifications and, very often, in countries with limited alternative job opportunities. These factors have contributed towards maintaining wages in these sectors at relatively low rates.

While these industries are an invaluable source of employment, particularly for women, they have mainly provided opportunities for unskilled workers. Tending to occupy positions in simple production, women have not, until recently, played a significant role in higher positions of responsibility.

At the world level, the distribution of female employment among the TCF industries was the following in 1995: 46 per cent in the textile, about 47 per cent in the clothing and 7 per cent in the footwear industries. As seen in figure 18, this distribution had changed only slightly since 1985, when the shares were 47.5 per cent, 46 per cent and 6.4 per cent, respectively.

In industrialized countries, and in particular in Western Europe, increasing competition from low labour cost countries prompted a change in employment patterns. In particular, the unskilled jobs typical of the clothing and textile industries were greatly affected by the need to reduce the importance of labour costs in production costs. Attempts to introduce new technologies and automated manufacturing methods, as well as relocation of production, resulted in a restructuring process leading to considerable job losses. Women were the first to be affected, as machines replaced the low-skilled jobs which they had traditionally filled and they were not always sufficiently trained to cope with the higher skills needed for operating these machines.

These developments have been more pronounced in the textile industry than in the clothing industry. From a technical standpoint, it has been more straightforward to mechanize and automatize production in spinning and weaving – and the high cost of modernization has been borne with more ease by the large textile companies than by the many small and medium-sized companies that characteristically make up most of the clothing industry. Modernization has also meant that new working patterns are developing, with extra hours, shift work and working weekends allowing the machines to run almost continuously, to compensate for the high investment costs of the machinery. This type of working hours has proved to be less acceptable for female workers than their male counterparts, thus reducing their job opportunities further.

The share of women in employment varies considerably between the individual TCF industries, and within regions and countries. It is difficult to generalize about the reasons for these differences – although the share of female employment seems to be highest in the richer countries. In the poorer regions, where work opportunities for men are likely to be less available than elsewhere, the share of female labour is lower. But there are some poorer countries where the share of female employment is also high. These trends are undoubtedly linked to the specific social, economic and historical factors in these countries.

Whatever the share of female employment in total employment in these industries, one thing seems universal: women’s wages in the TCF industries are lower than those of men. It seems rather surprising that even in Europe, where there has been much discussion in recent years of equal pay for equal work, men in the TCF industries receive wages which are 20-30 per cent higher than those for women.

Women receive their relatively highest wages in the textile industry, followed by the footwear and clothing industries. In textiles the ratio of men’s to women’s wages used to be the highest until 1990 – between 1.4 and 1.6 – but this dropped to the level of the ratio in clothing of 1.3 in 1995. The lowest ratio of men’s to women’s wages exists in the footwear industry.

Female employment in textiles

The textile industry has a lower ratio of female to male workers than the clothing and footwear industries, but it has still remained a vital sector for female employment. Women accounted for 35 per cent of total world textile employment in 1980, although this had fallen to 31 per cent by 1995.

At present, the women workers’ share in world textile employment is relatively stable at around 30 per cent.

The quantitative distribution of women textile workers among world regions shows a high concentration in Asian countries, with a share of almost 80 per cent in the total number of reported women employees in 1995. European countries followed with some 12 per cent, the Americas with 6.5 per cent, and Africa with 1.7 per cent.

Among individual countries for which data are available, the principal employers of women in textiles are China, Indonesia, the United States, Japan, Thailand and Italy. In 1995, these six countries employed almost 80 per cent of the reported total number of women working in the textile industries worldwide. Compared with 1985, female employment in these countries increased by almost 40 per cent, mainly due to the rise in China.

Europe – as a region with the second highest percentage of women in textile employment – presents an interesting picture of country variations, according to 1995 figures. Norway employed the highest percentage of women in textiles, with 84 per cent, although this accounted for only a relatively small share of European employment. These figures also showed that European countries with between 60 and 80 per cent of female workers on their staff were all from Central and Eastern Europe, with the exception of Portugal. These percentages, of course, translate into varying figures of women’s employment in the different industries. They included the highest numbers of female employees for Portugal, the Czech Republic, Bulgaria and Croatia. Among the countries with between 40 and 60 per cent of women workers were Italy, the United Kingdom, Spain, Austria and Greece. The countries with the smallest representation of women on their staff were the Netherlands (23 per cent) and Iceland (33 per cent).

In Africa, which had an overall average of 24 per cent female employment in 1995, considerable differences existed between countries due to varying attitudes towards women in the workplace and their participation in industrial activities. For instance, Botswana’s 83 per cent of women’s employment in textiles in 1995 may be contrasted with a mere 8 per cent in Kenya and Zimbabwe. However, the varying size of the industries in those countries means that variations in the numbers of women actually employed were not as dramatic.

Asia is also a region of contrasts, as shown by the fact that India’s comparatively large number of women workers is reflected in only a small percentage share of women workers in the textile sector – 10.7 per cent in 1995. Indeed, the textiles industry is still very much male-dominated. Other parts of the region revealed a significantly higher percentage of women workers, although the actual number of women employed remained lower than in India; examples were Taiwan, China, with 54 per cent of female employment, the Republic of Korea with 51 per cent, and Malaysia with 48 per cent, all in 1995.

In North America, Mexico had the highest share of women in textile employment during the period under consideration, with 60 per cent in 1990 and 77 per cent in 1995. The United States and Canada also had a relatively high percentage of female employment, with 47 per cent and 64 per cent in 1990, respectively. Again, in terms of actual numbers, however, this implied that the United States employed more than ten times as many women as Canada. Many of the other American countries were on a similar level; for example, Costa Rica had 55 per cent female employment in 1995 and Puerto Rico 54 per cent. But while the majority of the countries, for which data were available, had between 30-40 per cent women workers, Argentina’s female employment dropped from 35 per cent in 1985 to 23 per cent in 1995.

Female employment in clothing

The role of women workers has consistently been of more significance in the clothing industry than in textiles or footwear, with women taking up 79 per cent of the jobs in clothing in 1980 at a global level. Although the share had slightly fallen to 74 per cent by 1995, the clothing industry continued to be very much a female-dominated industry. Nevertheless, the textile industry was still more significant in terms of the total number of women employees.

Furthermore, the proportion of female employment was higher in all regions than in textiles. The countries of Oceania, for which data were available, again came top – although their share dropped from 87 per cent in 1980 to 82 per cent in 1995. Asia saw an increase in its female share from 65 per cent in 1980 to some 71 per cent in 1995. Africa saw the lowest female share, although there was an increase in their share from 51 per cent to 64 per cent over the 1980-95 period. There were falls in the female share in all other regions, but even in Europe in 1995, the Americas and Asia all had some 70 per cent female employment in clothing.

As in textiles, Asian countries also employed the larges share of women workers in clothing. Their share in the total number of women employees was nearly 55 per cent in 1995, followed by the Americas with 24 per cent, European countries with 18 per cent and African countries with 3 per cent.

Regarding individual countries, for which data were available, China was the principal employer of women in the clothing industry (including female employment in footwear) – with a share of 20 per cent in the reported world total for clothing in 1995. The United States, Japan, Mexico, Indonesia, Thailand and Italy followed. The principal six countries employed 56 per cent of the reported total number of women working in the clothing industry worldwide. Female employment increased most considerably in Thailand, Bangladesh and the other Asian countries during the 1985-95 period, while it decreased in the United States and Japan.

The clothing industry in Europe has traditionally been dominated by women and this remains very much the case. Between 1985 and 1995 the share of female employment dropped nevertheless from 81 per cent to 76 per cent. Although all countries witnessed a reduction in female employment, this decline was more visible in Western Europe than in Central and Eastern Europe. Ireland experienced one of the largest reductions; its percentage of women workers dropped from 94 per cent in 1985 to 70 per cent in 1995. Other countries experienced less dramatic drops in percentages, but far more significant losses of actual employment; in Austria, for example, where the percentage of women workers only feel from 83 per cent in 1985 to 78 per cent in1995, this was translated by a drop from 48,000 to 10,000 women employees. Italy saw a similar reduction in terms of percentage, which included actual employment losses of some 80,000 female employees. Central and Eastern Europe even experienced some slight increases in the share of female employment – 87 to 88 per cent between 19990 and 1995, although the number of women employees dropped. Despite these reductions in female employment, all European countries had more than 70 per cent female employment in 1995, with the exception of Albania (34 per cent).

In both Canada and the United States, the very high percentage of some 80 per cent women workers in 1980 dropped during the period in question; in Canada it declined to 65 per cent in 1990 and in the United States to 75 per cent in 1995. This was reflected cuts of altogether 320,000 women’s jobs in both countries. This fall of female employment, in terms of percentage and actual number, was mirrored – albeit less dramatically – throughout the region. In Puerto Rico the 89 per cent in 1990 fell to 86 per cent in 1995, and in Argentina the 74 per cent in 1985 fell to 66 per cent in 1995, representing an overall loss of 15,000 women’s jobs. On the contrary, Colombia experienced a fall in the percentage of women workers – from 83 to 81 per cent between 1985 and 1995 – but its female workforce in this sector increased by 16,000 employees. Chile was the exception where both the overall employment levels and female percentages rose.

In Africa the differences in female employment in clothing between countries were similar to those in textiles, although less marked. The low shares of female employment – below 31 per cent in 1995, in Ghana, Zimbabwe and Kenya – compared with 81 per cent in Morocco and 75 per cent in Mauritius.

The clothing sector in Asia, India and Bangladesh saw a rise both in total employment and in female employment. From 1980 to 1995, the share of female employment rose from 23 per cent to 49 per cent in India and from 17 per cent to 69 per cent in Bangladesh. Such increases in the share of women in total clothing employment were not reflected in other countries of the region. In 1985 the Republic of Korea had a share of 76 per cent women in clothing employment, which fell to 70 per cent in 1995. This reflected a drop of more than 50,000 female workers in real terms. Other countries experienced different developments. For example, while the female employment percentages in Sri Lanka fell from 89 per cent in 1985 to 87.5 per cent in1995, the number of female employees increased, as overall employment levels rose, by more than 50,000. A similar trend was visible in Malaysia where the percentages dropped from 89 per cent in 1985 to 82 per cent in 1995, with rising female employment in the sector. Even countries with low shares of female employment such as Nepal saw a significant rise in the number of women active in the industry, although the women’s share fell from 22 per cent to 17 per cent between 1985 and 1995.

Female employment in footwear

In 1985, women’s share of total world employment in footwear amounted to 43 per cent; in contrast to the movement in textiles and clothing – this had risen to 46 per cent by 1995.

Countries in Oceania had the highest share of female employment in the 1980-90 period, but by 1995 Europe was at the top of the list accounting for 55 per cent of female employment in footwear. This was ahead of Asia’s 47 per cent and of the Americas’ 39 per cent and far ahead of Africa’s 13 per cent.

In footwear production, the concentration of numbers of women employees in Asian countries is not so high as in textiles and clothing. Their share was 45 per cent in 1995, with European countries amounting to 35 per cent and the Americas to 19 per cent.

Among those countries for which data were available for the period under review, the principal employer countries of women in the footwear industry were Indonesia, Mexico, Italy, Portugal, the United States and the Republic of Korea. Again, China was probably the biggest employer, but here were no separate data for female employment in footwear. While Indonesia had a one-third share of world employment of women in the footwear industry in 1995, the other five had a combined share of nearly 30 per cent.

In Europe there was a slight overall increase in the percentage of female employment as part of total employment – from 54.5 to 55.1 per cent during the 1985-95 period. In most European countries women had a share of at least 50 per cent in total footwear employment in 1995. The exception were Ireland (31 per cent), the Netherlands (33 per cent), Albania (45 per cent) and the United Kingdom (46 per cent).

The share of women’s footwear employment in the Americas increased from 37 per cent in 1985 to 39 per cent in 1995, albeit with a decrease in 1990. Countries with a share above this average in 1995 were the United States with 61.5 per cent and Costa Rica with 45 per cent. Although, the United States figures only registered a slight decrease in its percentage of female workers, they did not reflect the loss of female employment in the footwear sector, which fell by 50 per cent. Between 1990 and 1995, some countries in the Americas registered increases in their female employment rates. Examples included Panama, from 22 to 36 per cent; Mexico, from 25 to 35 per cent; and Colombia, from 36 to 39 per cent, mostly linked with increases in the actual employment of women.

Asia’s female employment rates increased overall during the 1985-95 period, but closer inspection reveals differing trends. Several countries witnessed decreases in the percentage of female employees, among them Bangladesh, Hong Kong (China), Jordan, Malaysia and the Philippines. While in the Philippines, the decrease in the female share was accompanied by an increase in women’s employment in real terms, this was not the case in Hong Kong, China. However, there were significant increases in female employment levels in other countries – for example in India – which saw the most significant percentage increase from 4 per cent in 1985 to 28 per cent in 1995. Sri Lanka experienced a similar increase in its share of female employment rates; they rose from 27 per cent in 1985 to 63 per cent in 1995. While the rise in employment rates in the Republic of Korea was reflected in an increase in real employment, the same did not hold true for Taiwan, China.

In Africa female employment in the footwear sector was very low during the period under review, although the share increased in some countries. In Mauritius it rose from 34 per cent in 1985 to 45 per cent in 1995 and in Zimbabwe from 1.7 per cent to 3.5 per cent. On the other hand, however, Kenya saw its already low level of female employment in footwear decrease from 5 per cent to 0.8 per cent during the 1985-95 period.

1.2.3. Globalization and stability of employment

Net job creation and geographical instability

While it is difficult to quantify the impact of globalization in the TCF industries on net job creation, since there is no scenario to which it could be compared, one can say that relocations of labour-intensive activities to lower-wage countries have had the effect of increasing, or at least of stabilizing, net job creation at the global level.

Without relocation strategies, enterprises in the developed producer countries would have tended increasingly to replace their costly workforces with machinery. That is indeed what has happened in the production segments which have been retained in these countries. In order to improve productivity and reduce the total wage bill, major investments have been made and the total number of jobs has been reduced purely as a result of technological advances. In the developing countries, on the other hand, where labour costs were lower to begin with, it has not been necessary to introduce extensive technological innovations to reduce the workforce. Enterprises have remained competitive thanks to low wages and the use of tried and tested production machinery and methods.

What is true at global level does not apply to employment trends in individual countries. If the developing countries have generally experienced rising levels of employment in the TCF industries over the last 30 years while employment fell in the industrialized countries, the basic trend in employment within individual countries is characterized by extreme instability. In the clothing and footwear sectors, and to a lesser extent in the textiles sector, employment has fluctuated widely over the years in response to the changing comparative advantages of different countries and their relative international competitiveness. Investment, trade and, consequently, employment have moved in successive waves in response to relative changes in wages and other production costs. A country that was attractive to foreign investors and contractors in the clothing sector during the 1970s or 1980s is not necessarily attractive now. And even if it is still attractive in terms of production costs, it may have lost its advantage if it is unable to satisfy new requirements of quality and rapid response to changing market conditions. This constant challenge to international competitiveness, which is a permanent feature of the TCF sector, means that jobs created in any one country cannot be regarded as a long-term gain. All the developing countries, and in particular those that are heavily dependent on international trade in TCF products, are facing fierce competition in which each producer country endeavours to attract investors by proclaiming its comparative advantages and enhancing them, where necessary, through tax incentives. Competition is particularly intense in the labour-intensive activities where relative wage levels continue to play a significant role in determining relocation policies. As the previous statistical analysis showed, centres of development, production and trade are constantly shifting and taking jobs with them. The countries that suffer most as a result of this instability are those with limited development alternatives in the event of loss of competitiveness. They are generally the least developed countries which have made the TCF industries their preferred means of promoting industrialization. These countries have become particularly vulnerable as a result of the more stringent quality criteria that now apply in the trade of TCF products and they have often lost market shares and therefore jobs, because of their inability to adapt.

There are currently a number of countries in which employment appears to be stabilized or growing. This is the case with China, some of the Central and Eastern European Countries (CEEC), Tunisia and Morocco. Even among these countries, however, the apparent stability of the employment created by the TCF industries is partly the result of economic conditions that could change in the coming years. Mexico has benefited from the North American Free Trade Agreement (NAFTA), while Tunisia and Morocco benefit from trade agreements and their location which give them privileged access to European markets. Certain Central and Eastern European countries have also taken advantage of the transformation of their economies, their proximity to Western European and some of the new “rapid response” requirements, to take over the positions vacated by certain Asian producers that are too remote to supply the European market. However, there is nothing to say that ten years from now, other criteria of competitiveness will not replace the current ones and make other countries more “attractive”. Only China appears to escape this seemingly inevitable instability, if only because of the extraordinary potential of its home market which protects it from upheavals elsewhere.

Flexibility and contracts of employment

International competitiveness is contingent on a number of different factors whose relative importance depends on the type of production and the particular options chosen by enterprises for certain product ranges. In the case of more standardized products whose manufacture requires a large workforce, wage costs become crucial in determining competitiveness. But at any level in the production process, TCF enterprises must be sufficiently flexible to respond to a constantly changing market. This need for flexibility is invariable throughout both the textiles and the footwear sectors. Fashion changes rapidly and affects the entire production process. To respond to that need for flexibility, enterprises adapt their production methods and their systems of organizing work and managing stock. There is also a tendency among them to require labour flexibility by applying various strategies compatible with legislation.

The first strategy used by most enterprises in the industrialized countries and by a growing number of larger enterprises in developing countries lies in withdrawing from those activities that require the most flexibility and handing them over to subcontractors. Subcontracting may be national or international, direct or indirect in the form of a “pyramid” (in which one subcontractor entrusts all or part of an order to one or more subcontractors), but in all these cases the prime contractor (be it a TCF enterprise or a distribution chain) transfers the onus of ensuring flexibility to the subcontractors. Given the importance of international subcontracting, particularly in the clothing and footwear sectors, it is reasonable to conclude that over the last 20 or 30 years there has been a general redistribution of TCF activities which has put greater pressure on developing and transition countries to improve flexibility. It is in these countries that enterprises are under greatest pressure to adapt themselves and their labour practices to market requirements.

However, the need for greater flexibility is also felt in the industrialized countries and has an impact on practices relating to contracts of employment. In Europe, for example, the problem is well illustrated by information provided by the Textile Federation of Belgium (FEBELTEX). In its reply to the questionnaire sent by the ILO in preparation for this Meeting, FEBELTEX notes that, although full-time contracts of employment continue to be the rule in the textile industry, there has recently been a growing trend towards more part-time work. The Federation also notes that certain textiles enterprises resort to using temporary workers to cope with increased demand. A recent survey by the association representing temporary employment agencies in Belgium estimated that 1.6 per cent of manual workers and 1.24 per cent of white-collar workers in the textile sector were temporary, whereas previous studies had found that only service enterprises employed temporary workers. With regard to seasonal work in Belgium, there are no specific statistics on this, except for the short-time working rate, which is an indicator of seasonal or temporary unemployment in the textiles sector. That figure, which has always been higher during the third quarter of the year as a result of seasonal fluctuations in demand for textile products, was 14.9 per cent in 1995 and 8.3 per cent in 1997. Belgium is not the only example of this trend in the European Union. Trade union sources in the United Kingdom report that increasing use is being made of part-time workers, fixed-term contracts and temporary work arrangements. It is now a widespread practice for TCF enterprises to apply to agencies supplying temporary workers. In many enterprises, conditions of employment for temporary workers are inferior to those that apply to permanent workers. This recently prompted the United Kingdom Government to draw up new legislation in this area which, once adopted, should improve the legal status of these “agency workers”. In France, trade unions have complained of the growing tendency to impose part-time arrangements on workers in the TCF sectors, which increase their job insecurity, and have denounced contractual arrangements which emphasize labour flexibility.

In other industrialized countries, such as the United States, the proportion of permanent workers within the TCF industries is declining steadily, while temporary, part-time or fixed-term contracts of employment are becoming more widespread. This reflects a general trend throughout the economy, but is particularly marked in the TCF industries. Only Japan, where the law allows only contracts of unlimited duration (or, in the case of an employee’s first job, renewable one-year contracts) appears to buck this trend towards more flexible contracts of employment in the TCF industries.

In the Central and Eastern European Countries, the process of transition to a market economy has often taken place without any adequate social safety nets, and contracts of employment tend to be more precarious than elsewhere in Europe. In Bulgaria, for example, one trade union source has said that temporary contracts of employment are the rule within the TCF industries and that workers agree to such contracts for fear of losing their jobs. In Hungary, fixed-term contracts, which are permitted by law, are widespread in the TCF industries, despite trade union opposition. In Slovakia, the trade unions have indicated that the TCF enterprises, especially foreign enterprises, prefer contracts of limited duration which do not have to be renewed if the economic climate is not favourable or if workers fail to meet productivity targets. In Romania, the break-up of the major enterprises in the TCF sectors has led to the fragmentation of those sectors into small private enterprises employing fewer workers under precarious contracts of employment. In all these countries, the weakness of the trade unions and the near absence of any bodies representing the employers makes social dialogue difficult, and this allows individual enterprises to adopt whatever flexible labour practices meet their requirements, subject only to the provisions of law.

In the developing countries, temporary employment contracts are the rule. Even employment contracts of unlimited duration do not offer the same security as in the industrialized countries, since the procedures in force for terminating employment are generally more flexible.

In Africa, there are great differences between individual countries. In some countries that are little involved in the world trade in TCF products, such as Côte d’Ivoire or Senegal, the textiles and clothing industry employs many day labourers who are paid piece rates and have no job security. At the other extreme, in Mauritius, which has a tight labour market, any employee who has worked for the same employer for at least one year is regarded as a permanent worker and enjoys all the associated entitlements. The only exception concerns immigrant workers, who are employed increasingly often by the TCF industries in the absence of local workers. Immigrant workers generally have a renewable two-year work permit.

In the developing countries of the Americas, the situation depends largely on a country’s level of economic and social development. In the larger and more developed countries, such as Argentina, the TCF industries generally employ workers under employment contracts without limit of time. The most recent figures available show that the majority of contracts (78.6 per cent) in these industries are without limit of time, a minority (3 per cent) of workers are temporary, while fixed-term contracts represent 17.9 per cent of the total. Nevertheless, the trend is towards increased use of fixed-term contracts. At the other extreme are the smaller and less developed countries which are most dependent on the TCF industries and where employment is much more precarious.

In Honduras, for example, where many women are employed in export-oriented clothing enterprises (maquilas), the Minister of Labour and Social Security reports that, according to a survey on this category of workers, 44 per cent of women questioned said that they had not signed a contract of employment and had been hired on the basis of a verbal agreement with their employer. This is not an isolated incidence of such verbal agreement. Similar situations are found in export enterprises in El Salvador, Guatemala and other countries in Central America. Attempts by workers to organize in order to obtain greater job security sometimes meet with an extreme response. In early 1999, for example, there was a dispute between the largest American shirt manufacturer and the Union of Needle Trades, Industrial and Textile Employers (UNITE). The union accused the company of closing the only enterprise in Guatemala – out of 200 clothing export enterprises in the country – in which workers had established a union to improve their terms and conditions of employment. That example became well known, since there had been media coverage of the dispute commensurate with the size and importance of the union and the employer concerned. In many other enterprises, contracts of employment remain insecure because of the absence of any organized trade union representation and because of the threats to jobs which can be relocated to another country at a moment’s notice. There is, especially in the clothing sector, a fairly close correlation between the instability of employment resulting from the tendency of companies to relocate, and the growing insecurity of contracts of employment.

In the developing countries of Asia, growing disparities can be observed between the provisions of labour legislation – which is, more often than not, extremely detailed and provides good protection for workers – and actual labour practice. The smaller the enterprise, the greater those disparities tend to be. In the larger TCF enterprises, which are directly involved in the international market and deal directly with foreign buyers, contracts of employment in general conform to national laws. Here as elsewhere, there is a growing trend towards fixed-term contracts and part-time work, particularly for women workers. In Sri Lanka, large and medium-sized TCF enterprises generally offer employment contracts without limit of time. In China, workers hired by TCF enterprises are generally required to complete a probationary period. Once that probationary period has elapsed, employees whose performance is satisfactory are given a fixed-term contract (often for a period of two years, which can be extended). Similar practices are found in many Asian countries, which are among the principal TCF producers. Small enterprises and those in the informal sector do not offer anything like the same security to their employees. In those enterprises, temporary workers, seasonal workers or day labourers paid piece-rates constitute the bulk of the labour force. In the absence of any effective monitoring by labour inspectors, national legislation concerning employment contracts is often disregarded and the situation of workers is often highly insecure. Since the viability of these enterprises itself is precarious, workers often accept their situation in the absence of any alternative. Attempts by the trade unions and public authorities to take action come up against market forces which keep smaller TCF enterprises in a state of dependence on bigger contractors, which are concerned to obtain the products they need when they need them at the lowest possible price.

Homework: Maximum flexibility, minimum protection

For many enterprises in the clothing sector and, to a lesser extent, in the crafts textile and footwear sectors, the most effective means of ensuring optimal flexibility in their activities is to subcontract all or part of their production to homeworkers. Since there is a demand for this type of employment in many countries, particularly by women who have no other employment opportunities or who, for family reasons, prefer to work at home, this form of subcontracting has grown in importance over the last two decades.

This definition excludes workers who do not have a subordinae relationship with an employer and who establish a direct relationship with the consumer of the end-product. The concepts of dependence on an employer, absence of control on the part of the worker over the manner of production (he or she simply follows instructions) and of wage remuneration are defining differences between homeworkers and self-employed workers, who also often use their homes as a workplace but work autonomously.

The term “home work” in the TCF industries covers a range of employment relationships and conditions of employment, which all have in common the production of a product or services for remuneration at a workplace that does not belong to the employer and on the basis of wage remuneration. In general, a homeworker carries out work for a manufacturer, a trader or an intermediary on the basis of an agreement that is more often than not unwritten.

There are three major categories of home work within the TCF industries. First, there are the craft-based industries which are generally practised in rural areas and involve the entire family unit. In this form of craftwork, workers weave textiles on hand-operated looms or produce traditional articles of clothing. These workers have long been regarded as self-employed, but their position is becoming increasingly undistinguishable from that of homeworkers, since a growing number of traders and importers control production in these craft-based industries through subcontracting to meet a growing demand from tourists and foreign buyers. Manufacturing home work differs from craft-based home work in that workers receive raw material from a prime contractor or intermediary and have to follow very strict instructions in carrying out the work. Such homeworkers have an employment relationship with their contractors and form part of a national or international subcontracting network. The production of carpets is an example of the type of production which lends itself to this form of home subcontracting. Manufacturing home work retains a craft-based character and uses traditional skills. It is extremely widespread in the developing countries, but also in the industrialized countries. For example, in the United Kingdom, Ireland and Italy, knitwear manufacturers subcontract part of their production to home knitting workers. In Japan, the most expensive kimonos are produced at home by highly skilled women workers. Similarly, a large proportion of made-to-measure footwear in the United Kingdom, Italy and Spain is produced at home by experienced workers. Because of its craft-based character and the skills required, this form of home work is less susceptible to abuses. It also offers a way of preserving certain traditional skills in the TCF industries.

Industrial home work is the form of home work that is most fully involved in the process of globalization of the TCF industries and which presents the greatest social problems. Industrial homeworkers carry out assembly operations (sewing articles of clothing, mechanical stitching of footwear) which demand few skills and are more often than not paid on a piece-rate basis. In general, the production process is divided up at the national level, and enterprises employ homeworkers to assemble factory-produced components. However, the different stages in the production process may also take place in different countries. For example, in the footwear industry, certain European manufacturers order shoe uppers in India, where they are produced by homeworkers, but employ homeworkers in southern Europe to produce the finished shoes.

Although industrial home work involves mainly labour-intensive tasks, there are certain differences in the tasks undertaken by industrialized countries and developing countries. In the developing countries, most homeworkers carry out non-complex operations and are unskilled. In addition, they have generally never worked in a factory. In the industrialized countries, on the other hand, homeworkers often have prior work experience which is required as a condition of employment.

Home work has grown in the industrialized countries in recent years, since it permits “rapid response” to market requirements, while also providing a line of defence against mass imports of cheap products from the developing countries. Homeworkers provide the necessary flexibility at lower cost than industrial labour.

In the developing countries, there are both defensive and offensive strategies behind the increase in home work. In Latin America, manufacturers have made increasing use of home work largely in order to defend their own industries from Asian imports. In Asia, by contrast, the use of homeworkers tends to reflect aggressive policies of minimizing production costs and adapting to seasonal market fluctuations, and is part of an overall strategy of national and international subcontracting.

Recent trends in home work

In the industrialized countries, home work has grown rapidly in many sectors sectors (motor vehicles, chemicals, electronics, optics), but it is in the TCF industries that the phenomenon is most widespread. In the United Kingdom, for example, a survey undertaken in 1996 by the National Home Work Group (NGH),^[6] showed that, while home work had grown in other branches of industry, two-thirds of all homeworkers were employed by the TCF industries, the majority of those in textiles. In Portugal, home work plays an important role in the footwear industry. Many foreign enterprises subcontract directly to homeworkers who produce finished shoes for export. In Italy, home work is very widespread in knitwear production areas and in the south of the country, where a significant proportion of clothing assembly is done. In the United States, home work, which until 1989 was prohibited, is widespread in the major urban areas where clothing production is concentrated (New York, Los Angeles, San Francisco, New Orleans and Miami). In Canada, a growing number of clothing workers who have lost their jobs now produce clothes at home for major distributors which have established local subcontracting chains. In Australia, where the clothing industry has cut its workforce considerably over the past 20 years, the clothing trade union TCFUA estimates that more than three-quarters of the remaining enterprises currently subcontract the greater part of their production to homeworkers. These smaller enterprises (four to five employees) may employ up to 200 homeworkers as subcontractors. The TCFUA estimates that there are on average 14 homeworkers for every plant worker in the clothing industry in Australia. Japan is the only industrialized country where home work is declining in the TCF industries. This atypical situation may be due to the fact that home work in Japan is registered, regulated and unionized.

In Latin America, the growth in home work has resulted from the opening of domestic markets to international competition and the consequent restructuring of TCF enterprises. In Mexico, the clothing industry is extremely fragmented. It makes use of complex subcontracting systems in which the formal and informal sectors are closely interlinked. The proliferation of micro-workshops in private homes dates back to the late 1960s, but the process has accelerated since the beginning of the 1980s. The number of enterprises that are legally registered is currently declining, while the informal sector, including home work, is expanding. Home work is concentrated in working-class neighbourhoods and in the most disadvantaged rural areas in the western part of the country. Three main types of activity predominate: clothing production, knitwear and sports shoes. Articles produced in homes are intended both for the local market and for export, mainly to the United States. In Brazil, home work is widespread in the footwear sector. This generally comprises small family enterprises which act as subcontractors to large companies. The workers generally perform stitching or sewing operations, and either do the work themselves or pass it on to other homeworkers for a commission. It is interesting to note that in Brazil footwear production was originally intended mainly for the domestic market, but a large proportion of this production is now exported and quality has had to be improved. Despite this trend, it seems that, by contrast with other countries, where quality standards have limited the potential for using homeworkers in the footwear sector, homeworkers in Brazil have managed to adapt and improve their stitching techniques. In Venezuela, by contrast, homeworkers have been unable to meet the new criteria that have resulted from the opening of markets, and it is the small formal sector enterprises that have risen to the export challenge. In Panama, the clothing industry, which faced a crisis resulting from its loss of international competitiveness, undertook major restructuring which led to redundancies. Subsequently, the surviving enterprises subcontracted the production of finished garments to women who had recently been made redundant. Home work has thus developed as a key element in the segmented production chain in national enterprises. Enterprises in EPZs that are funded by investment make little use of home work since they prefer to retain direct control over export production. This attitude is also common in the majority of enterprises in EPZs in Central America.

In Asia, home work in the TCF industries is very widespread and, at least in its “craft-based” and “manufacturing” forms, has a long tradition. What is relatively new is industrial home work, which has grown as a result of the globalization of these industries and greater use of international subcontracting. In the majority of the Asian countries that are integrated in the global TCF trade, the great majority of enterprises in the formal sector subcontract a proportion of their production to homeworkers, either directly, or indirectly through the intermediary of small enterprises. There is unfortunately very little reliable statistical information on the scale of this phenomenon, but it is clear that globalization has led to a growth in industrial homeworking.

In Sri Lanka, an unpublished study produced in 1993 by an independent researcher estimated that there were about 80,000 homeworkers involved in the production of garments intended for export. In Bangladesh, different sources cited by the United Kingdom non-governmental organization OXFAM on its internet site show that there has been a growth in home work in the export-oriented clothing industry. In India, industrial home work has grown mainly in the larger cities, while other, more traditional, forms of home work have continued in rural areas. It is estimated that nearly 7 million people living in rural areas in these countries are involved in hand-weaving activities at home, often in addition to farming. A similar situation prevails in Indonesia, where formal sector textiles enterprises employ homeworkers in the towns and cities to produce articles for export, while many rural families continue to weave on hand looms. In the Philippines, home work in the TCF industries has a long tradition that goes back to the colonial era when the Spaniards introduced the art of embroidery. Since then, there has been a steady growth in the number of small dressmaking workshops. When the textiles industry turned to exports, the clothing sector quite naturally began to employ experienced dressmakers working at home. This practice is now widespread and some regions and villages specialize in particular operations or products.

Profitability and social problems

The examples cited above show that home work, far from being sidelined by globalization, is experiencing renewed growth with the spread of subcontracting. This growth is evident not only in the developing countries, but also in the industrialized countries, which may at first glance seem contradictory. As has already been indicated, this particular labour practice has come about partly in response to technological imperatives. Homeworkers provide the best means of matching production to market fluctuations; they do not constitute a permanent burden of costs for enterprises and require no capital investment. From the workers’ point of view, working at home may be a matter of choice and may provide a supplementary income without the constraints of working in a factory. Convergence between these different interests may lead to a situation of mutual benefit to both parties.

Unfortunately, the reality is generally somewhat different. While in the services sector, teleworking and other forms of home work are often a matter of conscious choice, in manufacturing industry, and especially in the TCF industries, workers often accept home work only for want of any alternative employment.

The piece-rate systems of pay that predominate in these industries do not always ensure a decent income for workers commensurate with the number of hours worked. Home work is generally less well paid than work in factories. Deadlines at peak periods may lead to much longer working hours. In order to meet these deadlines, homeworkers often enlist help from all members of the family, including the children. Safety and health aspects are not monitored. Employment is extremely precarious since there is more often than not no written employment contract and the worker depends on the goodwill of the prime contractor or intermediary. With a few exceptions, homeworkers have no social protection. In general they cannot join trade unions, and social dialogue between homeworkers and employers is reduced to its most rudimentary level. Labour inspection authorities pay no attention to this category of workers, who in general have no recognized legal status. All these factors contribute to making homeworkers, together with clandestine workers, one of the most vulnerable categories of workers in the TCF industries.

Given the importance of this labour practice, both in quantitative terms and as a key element in flexibility, it would appear to merit greater attention in the interests of improving protection for workers.

1.3.1. Importance of labour costs for the relocation
of TCF industries worldwide

Labour costs as a cost factor differ considerably between the various industries and lines of production. Their share in overall production costs is highly important in labour-intensive production processes, which cannot be replaced by machines or robots, either for technological or for economic reasons. Clothing and footwear are two cases in point. As experience shows, the accurate handling of flexible raw materials such as fabric and leather by machines poses difficult problems to the engineers of such machinery, and proves to be extremely expensive. It is therefore predicted that most of this production will tend to remain labour-intensive in the foreseeable future.

But even within clothing production itself there are important differences. For example, fully fashioned knitwear, such as most stockings, socks and certain types of pullovers, are produced almost completely by machines or by a highly capital-intensive production process. On the other hand, textile production, usually regarded as highly capital-intensive, particularly in spinning and weaving, has certain production processes where labour costs are of considerable importance in total production costs. This holds true for the printing and finishing of textile fabrics.

Despite these differences, labour costs generally tend to be more important in the production of clothing and footwear than in the production of textiles.

For the purposes of the following analysis, labour costs include social contributions paid for workers, and are expressed in current US dollars in order to facilitate international comparisons. Although a comparison of labour costs might have its shortcomings, it nevertheless provides useful information on the reasons for the concentration of textile, clothing and footwear production and employment in certain regions of the world, and for the ongoing shifts in the localization of factories in the framework of global production strategies.

Significant differences in labour costs not only exist between industrialized and developing countries, but also within these two categories of countries themselves. As a general rule, labour costs are contingent upon the wage levels in each country, include various social benefits and are determined by the importance of labour in the overall production process of a certain product.

Labour cost levels also evolve differently over a period of time, depending on the economic, technological and social development in the countries concerned, including inflation, and on the development of industry and competition between industries. At the international level, changes in exchange rates vis-à-vis the US dollar may influence labour cost comparisons (in terms of US dollars).

While the international comparative evolution of labour costs remains a determining factor in the geographical distribution of the production of clothing and footwear, it has to be borne in mind that, in recent years, a number of other factors have emerged as “critical” in the relocation decision-making process.

The capacity of a given enterprise in a particular country to produce “just-in-time” quality garments which satisfy the requirements of the final buyers and markets has became more important than the limited cost comparison criteria which prevailed in the mass production system of the 1970s. The world demand for garments has become highly diversified. The fashion is moving faster and the consumers are more demanding in terms of quality and changes in patterns and design. In such a demand-driven production process, the cost of production remains a critical issue but the capacity to react quickly to a changing demand in providing adequate quality products has progressively become more important.

This explains why some countries, with relatively high labour costs (in a worldwide comparison) have managed to maintain and even improve their international competitiveness. In some cases (Central and Eastern Europe, Tunisia, Morocco) the proximity of a major importing market – the European Union – has boosted competitiveness. In other cases, the abolition of trade barriers and the building of an economic bloc have attracted labour-intensive investments in a country in which labour costs, albeit relatively low, are higher than those of traditional competitors. The expansion of the TCF industries in Mexico just before (by anticipation) and after the signature of NAFTA is a prime example of this. Finally, some countries with relatively high labour costs have demonstrated their ability to produce good quality products in time and have maintained viable export-oriented garment and footwear industries (i.e. Malaysia, Mauritius, Hong Kong (China)).

Labour costs in the textile industry

Labour costs in the textile industry are generally higher than those in clothing and footwear production. Workers are paid higher wages, on account of the greater skills requested for the production of textiles and the higher value added of production per employee (higher labour productivity). On the other hand, in capital-intensive textile production, the proportion of labour costs in total manufacturing costs is lower than in clothing and footwear. In the European Union, for example, the estimated average proportion of labour costs in total production costs – excluding the value of raw materials – is about 60 per cent in the production of clothing and up to 40 per cent in textiles.

At the level of world regions, average hourly labour costs in the textile industry are substantially different. In 1998, the average hourly labour cost in European countries (around US$15) was more than double the level of countries in Asia and three times that of countries in America. Within the regions, labour costs are considerably higher in industrialized than in developing countries and countries in transition.

The contrast is particularly obvious between Japan (with a labour cost per hour of more than US$20) and the rest of Asia where the average labour cost is around US$3.5. It is also marked between Western European countries (with an average of US$17) and Central and Eastern European Countries (with an average of US$1.8). Even within developed countries belonging to the same economic bloc, the situation remains contrasted. European Union labour costs in the textile industry in 1998 were lowest in Portugal at US$4.51 per hour, after Spain and Greece. At the opposite end, Denmark with US$23.10 per hour recorded the highest labour cost.

The evolution of labour costs in textiles, in terms of US dollars, also varied from region to region and from country to country during the period under review. The highest increases in hourly labour costs over the 1980-98 period were registered in Asian countries, where labour costs in 1998 were almost four times as high as in 1980. European and African countries followed, with increases of 150 per cent and 120 per cent, respectively. It is interesting to note that labour costs in the United States did not increase by more than 25 per cent over the period. Europe experienced its highest labour cost increases between 1985 and 1990, while Asian labour costs increased most during the 1990-98. It is also interesting to note that some newly industrialized countries also entered the list of those within the highest labour costs (Taiwan, China; Republic of Korea).

Among those countries within the lowest labour costs, available data reveal that several were below the level of US$0.5 per hour (Trinidad and Tobago, Madagascar followed by Bangladesh, India, Kenya, Pakistan and Sri Lanka). A number of European industrialized countries were also among those with labour costs of between US$0.50 and US$1 per hour – for example, Bulgaria and the Russian Federation. A larger group of countries had hourly labour costs of between US$1 and US$2 – although the clear majority were developing countries from Latin America, Africa and Asia.

In spite of the relatively high labour costs in many industrialized countries, their products continue to be competitive on world markets – a result of permanent efforts to rationalize and modernize production processes, including the application of the newest technologies, to develop new and higher quality products and to apply more efficient marketing techniques.

Labour costs in the clothing industry

Average hourly labour costs in the clothing industries of the different world regions are generally lower than those in textiles, but they show the same structure. European countries had the highest average labour costs, followed by countries in Asia with about one-third – and the Americas with a quarter – of the European level. Again, a number of African countries had the lowest average hourly labour costs.

In the clothing industry, there were also marked differences in labour costs between industrialized and developing countries. In 1995, labour costs in the United States amounted to US$9.53, compared with an average of US$1.25 in countries in Latin America. Japanese costs of US$16.93 compared with an average of US$2.78 in other Asian countries, and the labour costs in Western European countries (US$16.45), contrasted with much lower levels in certain Central and Eastern European Countries.

The evolution of labour costs in clothing production (in terms of US dollars) in the different world regions followed the same pattern as that for textiles. The highest increases were experienced by countries in Asia, with a multiple of three-and-a-half times during the 1980-98 period, and by European countries, with a multiple of two-and-a-half times. For some African countries the rise of labour costs in clothing was lower than in textiles, while for countries in the Americas the opposite held true. During this period, hourly labour costs rose most between 1985 and 1990 in Europe and between 1990 and 1995 in Asia.

In 1998, some of the largest exporters of clothing to world markets were among those with the lowest labour costs: China, India, Indonesia, Pakistan and Viet Nam, with labour costs under US$0.45 per hour. That same year, however, a majority of European countries were among the clothing producers with the highest labour costs. Between 1990 and 1998, a group of six European Union Member States (Austria, Belgium, Denmark, France, Germany, Italy), headed by Germany, recorded increases of hourly labour costs of over US$2. In these countries, the labour costs gap with their principal competitors increased with the exception of the United States, whose hourly labour costs increased by US$3.56 over the period. The increase of labour costs in most Asian and North African countries were very small in absolute terms. China was the only major exception but, despite an increase of hourly labour costs by more than 60 per cent over the period 1990-98, the Chinese clothing industry, like the textile industry, remained one of the most competitive worldwide.

Variations of labour costs within one country and among countries are more important in the relatively labour-intensive production of clothing. The clothing industries in high labour cost countries are therefore very sensitive to any changes in relative labour costs, and adapt their global production strategies to the most favourable solutions – mainly including a change of production locations in the framework of subcontracting or outward processing.

Labour costs in the footwear industry

The structure of hourly labour costs in the footwear industry is very similar to that in textiles and clothing, although there are considerably fewer countries producing footwear than those manufacturing textiles and clothing. But with rising living standards in a growing number of countries, and with increasing demand for new standard types of shoes, many footwear items have developed as mass products and are produced, like textiles and clothing, in many countries – including those with very low labour costs.

Figure 1.11 provides available statistics for 20 footwear producers with the highest labour costs in 1995. It reveals that, as in the case of textiles and clothing, European countries have the highest labour costs in the world, followed by the United States and some of the newly industrialized countries of Asia.

On the other side of the spectrum, the countries with the lowest hourly labour costs in footwear production are mainly developing countries. Among reporting countries, Bangladesh, the Philippines and Trinidad and Tobago have labour costs below US$1 per hour. Some Central and Eastern European Countries (Romania and Lithuania) are also in the same low labour-cost category (with labour costs slightly under and above US$1, respectively), as is Turkey, an important producer of processed leather goods, including footwear. As a result of this large disparity between labour costs, the most labour-intensive part of footwear production has followed the same relocation process as clothing production, thus creating employment opportunities in developing countries and a number of Central and Eastern European Countries; however, it has caused instability in the employment creation process due to increased international competition.

In concluding, it may be noted that labour costs remain an important cost factor, particularly in labour-intensive production such as footwear and clothing. Nevertheless, as mentioned earlier, they are no longer a decisive factor in determining competitiveness on world markets. Indeed, the Western European countries with their very high labour costs, are amongst the most competitive partners on world markets. In 1998, for example, Germany was the leading exporter of textiles in value (with US$13.26 billion), although it ranked fourth among the countries with the highest hourly labour costs. Other major textiles exporters included countries with high labour costs (Italy was the third major exporter in 1998 followed by the United States, France, Belgium and Japan ranking from seventh to the tenth in the list of major textile exporters); newly industrialized countries (Hong Kong, China; Republic of Korea; Taiwan, China, respectively second, fifth and sixth in the list); and developing countries with low labour costs such as India and Pakistan.

The situation is similar in clothing where labour costs are expected to play a more important role. Admittedly, China, which is one of the countries with lower labour costs was by far the world’s largest exporter of clothing in 1998 (with US$30.05 billion); however, Italy (US$14.74 billion), the United States (US$8.79 billion), Germany (US$7.68 billion), France (US$5.75 billion) and the United Kingdom (US$4.92 billion) followed in the ranking of the ten leading exporters – and their labour costs are very much higher. Two countries – Turkey and Mexico – were also in this “top ten” list and they are in an intermediate position in terms of labour costs. It is necessary to go further down the list to find countries with lower labour costs like India (11th leading exporter of clothing) or Thailand (13th major exporter).

The picture does not seem to be very different in footwear, for which data are less complete. Countries with high labour costs are among the largest suppliers of footwear, while countries with lower labour costs are not necessarily in the group of top exporters.

The main reasons for this situation were summarized in the introductory part of this section: the differences in labour productivity in the various countries; major differences in the type, quality and fashion content of the goods manufactured; and the marketing efforts and services offered by the various supplier countries.

Low labour costs are a possible source of competitiveness, but they are not a guarantee of competitiveness, unless they are combined with other necessary production factors and product qualities.

1.3.2. Wages in TCF industries: A statistical analysis

As compared with labour costs – which have been analysed as an important, although not decisive, cost factor in textile, clothing and footwear production, and as an important asset in competitiveness on world markets – wages refer to the value of labour or the relation between specific productive work and the price paid for it to the worker.

Generally speaking, wages vary according to industrial sector in question, as different work is involved, but they are not fully based on the specific quality of work in a certain industry. They also take into account the general profitability of the sector – and very often that of the individual enterprise. Furthermore, wages paid to workers in the same kind of production, and maybe for the same work, vary considerably among the different countries and participate in the division between industrialized and developing countries. These variations in wages are only partly justified by differences in education and productivity of workers. They are also contingent upon the overall economic, political and social environment in a particular country.

Another reason for structural wage differences may be more intensive competition in the world context, which is reflected in higher internationalization of production and trade. The TCF industries are a good example of globalized industries, in which production and trade change their location or direction relatively easily. This internationalization has partly slowed down wage increases in these industries and kept wage levels below those of other industrial sectors.

Moreover, in most countries there is a difference in the remuneration of men and women workers. This may be on account of the different kinds of work involved – but very often there are also traditional social and political considerations contributing to this situation.

The following analysis sets out to compare wage levels in an international context, with a significant range of reporting countries; in order to do so, it has mainly used data on wages per hour for the 1980-95 period based on current US dollars.

As a general rule, wages in the textile industry tend to be higher than those in clothing and footwear. This is due mainly to the higher skills of textile workers in the capital-intensive process, where the responsibility – and the productivity – of the average worker managing technologically advanced machinery is higher than in the other sectors.

As far as average hourly wages on a world level are concerned, wages in the textile industry are generally the highest in European countries. In 1995, they accounted for two-thirds of the European level in the Americas, for 40 per cent of the European average in Asian countries, and for only about one-ninth of the European level in African countries.

During the 1980-95 period, the highest wage increases in textiles were recorded in Asian countries, where the rise was clearly more marked than in Europe. It is interesting to note that wages in European countries increased in spite of continuously shrinking employment, while in Asia the number of employees increased rapidly. During the same period, the lowest increase in hourly textile wages was reported for African countries and the countries of Central and Eastern Europe, the latter on account of their transition to market economies.

Comparing individual countries, the structure of labour costs is also reflected in hourly wages. The European countries were, in 1995, at the top of wage levels ranging from some US$8 to US$16 or more per hour, together with other industrialized countries such as Japan, the United States, Canada and New Zealand. The lowest hourly wages in the textile industry were paid mainly in Asian and Central and Eastern European Countries, with wage levels at US$0.50 or less per hour. Among the countries with the lowest hourly wages were Bangladesh, China, Egypt, India, Pakistan, some republics of the former USSR and Turkey. It has to be noted that, by 1995, wages in Central and Eastern European Countries such as Bulgaria and Romania had dropped from higher levels prevailing until 1990, due to their conversion into market economies and their confrontation with world competition. African and South and Latin American countries reported wages slightly higher than US$0.50 for 1995. Devaluation of currencies vis-à-vis the US dollar played a part in the changes over time in several countries.

Recent developments in textile wages show an upward trend in all countries for which data are available. Between 1995 and 1997, based on national currencies, hourly wages increased most in Central and Eastern European Countries such as the Czech Republic, Estonia, Hungary and Latvia – all by more than 30 per cent. Other countries which experienced such high wage increases included Israel, Mexico and Mauritius.

In 1995, the one factor that all countries in the world regions had in common was that women were paid a lower average wage per hour than men; however, in most countries the differences had tended to shrink over the years. The highest differences were recorded for some countries in Asia and in Mexico, where female wages per hour still accounted for only some 50 per cent of men’s wages in 1995. The difference was smaller in some other Asian countries and in African countries, and was lowest in European countries where women’s wages were at an average level of some 80 per cent of men’s wages.

In the clothing industries of the various world regions in 1995, the hourly wages differed widely between European countries, with an average of US$6.50, and African countries, with an average of only US$1.01. The Americas and the Asian countries were at 63 and 62 per cent of the European level, respectively.

Again, not surprisingly, industrialized countries within the regions had much higher wage levels in 1995 than developing countries. In Europe, Western European countries were at an average of US$9.85 against only US$0.64 in the Central and Eastern European Countries. In Asia, the hourly wage in Japan, at US$9.38, compared with an average of US$2.45 in the other countries for which data were available. The difference in the Americas was lower, with US$7.23 in North America and US$3.86 in Latin America.

From 1980 to 1995, the highest wage increases were experienced by Asian countries (some 160 per cent), Latin American countries, (165 per cent), and European countries (some 150 per cent), despite continuous losses in clothing employment over that period in the latter. However, the rise in wages was generally lower in clothing than in textiles, an exception being the United States where wage increases were higher in clothing (94 per cent) than in textiles (75 per cent). Only countries in Central and Eastern Europe registered a decline in wage levels, on account of substantial changes to their economic systems during this period.

Looking at individual countries, the highest wages were once again reported by Western European countries, with US$10 or more per hour in 1995. Japan followed with US$9.40, and only then the United States at US$7.64, and Canada (US$6.81). Hong Kong, China, reported the highest wage among Asian countries (US$3.50), which was higher than wages in European countries such as Latvia, Portugal and Slovenia.

At the other end of the scale, the lowest wages per hour in clothing production were recorded for Bangladesh, China, Egypt and some republics of the former USSR – all at US$0.30 or lower. But a number of countries neighbouring the European Union also showed relatively low hourly wages in 1995, for example Turkey (US$0.56), as well as Bulgaria, Lithuania and Romania, (some US$0.50 each). Latin American countries such as Chile, Ecuador, Mexico and Peru, and African countries such as Mauritius and Zimbabwe, and other Asian countries such as Thailand, all remained below an average hourly wage of US$1 in 1995.

Between 1995 and 1997, hourly wages in clothing, based on national currencies, increased for all countries, for which data are available. The rise was particularly high in some Central and Eastern European Countries like Estonia, Hungary, Latvia and the Republic of Moldova, all above 30 per cent. The same applied to Mexico (46 per cent), Cost Rica (35 per cent) and Israel (33 per cent).

In all the regions of the world for which statistics are available male workers in clothing production are better paid than their female colleagues, although the differences have become less marked over time. In most European and a number of Asian countries women’s wages reached around 80 per cent of men’s wages in 1995. In some countries, the percentage was even higher. There were also countries, such as Japan, where payment for female work was at a level of 50 and 60 per cent only of men’s wages in 1995. Although differences in wages have narrowed between 1990 and 1995, there are also, according to the available information, cases where differences have apparently widened.

In the footwear industry, hourly wages tended, in 1995, to be highest in Western Europe (an average of some US$11.26) and in the industrialized North American countries (US$7). Wages in other countries for which statistics were available were much lower. Asian countries were at an average of US$3.81, compared with some African (US$1.25), Central and Eastern European (US$0.88) and Latin American countries (US$0.58).

Between 1980 and 1995, hourly wages in footwear production increased particularly in Asia, but also in Europe, while in Africa and Latin America wage rises remained relatively modest. From 1990 to 1995, hourly wages (expressed in US$1) apparently fell in African, American and Central and Eastern European Countries, in particular due to changes in exchange rates.

Turning to individual countries, wages in the footwear industry were consistently highest in most countries of Western Europe, at levels above US$9 in 1995. In the list of reporting countries for 1995, Denmark and Switzerland ranked first, with hourly wages of US$20 or more. Western European countries were followed in wage levels by Canada, New Zealand (some US$7.40 each) and the United States (US$6.60); Japan was not among the reporting countries. Other non-European countries with relatively high wages were included Puerto Rico and Israel, as well as some South-East Asian countries, such as Hong Kong, China, and the Republic of Korea, with wages between US$4 and US$5.

Hourly wages in some republics of the former USSR, Egypt, Bangladesh and Ecuador were among the lowest in 1995, at levels below US$0.50. Furthermore, wages in the footwear industry in Bulgaria, Romania and The former Yugoslav Republic of Macedonia did not exceed much beyond US$0.50 per hour. Other countries in Africa, Latin America and Asia all had hourly wages of less than US$1.

Between 1995 and 1997, hourly wages in footwear production increased in all countries, for which data are available, with the exception of the United Kingdom and, to a greater extent, Peru. As in textiles and clothing, the highest increases were seen in Estonia, Hungary, Lithuania and Moldova, all amounting to more than 40 per cent. Similar increases were recorded for Costa Rica, Israel and Mexico.

In all the world regions,male wages remained higher than female wages, sometimes up to about 50 per cent, particularly in a number of developing countries. In 1995, the smallest differences were registered in Europe, with female wages reaching some 80 to 90 per cent of men’s hourly wages.

If average hourly wage levels are compared with each other within the TCF industries and with manufacturing as a whole, it appears that wages in textiles are lower than in manufacturing and that wages in clothing tend to be lower than those in textiles and footwear. This is a reality in most countries providing disaggregated statistical information on wages in the TCF industries, whether they are industrialized or developing countries. If part of the explanation of this wage differential relates to technological factors, as explained before, it is clear that the growing international competition in the clothing industry has maintained wages at a low level worldwide. Furthermore, the statistical analysis gives only a limited image of the reality. Available statistics only cover registered enterprises where working conditions in general – and wages in particular – are much better than those in small enterprises in the informal sector. It is well known that – especially in developing countries – an important part of the clothing assembly process is performed in very small entities and by homeworkers. If wages paid to homeworkers and to workers employed in the informal sector were integrated in official statistics, the wage gap between rich and poor countries would appear wider and there would be a better understanding of some outsourcing and relocation strategies based on the relative cost of labour.

There are two kinds of working time which may be examined in the TCF context: the statutory framework of regular working hours and the number of hours effectively worked per week.

Hours of work per day or per week for workers in general – for male and female workers or for shiftworkers – form part of the statutory or negotiated framework for employment. Such regular working hours have been gradually cut in most countries over recent decades as an expression of social progress and development. The advantages of reduced regular weekly working hours tend, however, to be undermined by a growing number of individual agreements on overtime. Furthermore, the shift of production from registered enterprises to small workshops and home work questions the credibility of official statistics on hours of work, in particular in the clothing and footwear industries. For homeworkers and workers employed in the informal sector, the failure to implement the statutory or negotiated framework is more the rule than the exception and the possibilities for protecting these categories of workers against abusive labour practices relating to working hours is very limited. In the vast majority of producing countries, there is no legal framework for homeworkers and the labour inspection system is unable to control the labour practices of small workshops. This explains why many trade unions, in particular in developing countries, complain that regular working hours are not respected. At the same time, the number of regular working hours per day or week is under discussion in several – mainly developed – countries which have seen their TCF employment levels affected by international competition. The discussion centres on the extent to which the number of employees may be increased by reducing regular weekly working hours. This subject is very much on the agenda of several European countries at present, in particular in France, which has introduced the 35-hour week.

Another element relating to working hours has to be noted. Because of the changing demand for TCF products, enterprises have to increase their flexibility. They have to be able to respond quickly to the market and to adapt their rhythm of production to cyclical seasonal variations. Consequently, a number of employers, in both developed and developing countries, have been demanding that the statutory framework be adapted to allow them more flexibility. Employers in the TCF industries are thus increasingly calling for an annualization of regular working hours, while the majority of trade unions are strongly opposed to such measures on the grounds that they undermine social progress.

More important for a better appreciation of labour practices in the TCF industries is the amount of hours effectively worked per day or per week; these are naturally linked to the economic situation of individual producers or subsectors in terms of competition, demand, technological progress, capacity utilization and work organization. In general, the shift of employment in TCF production from industrialized to developing countries has increased the number of working hours in the developing countries and their share of working hours at the world level. But this has not necessarily increased the amount of working hours per employee as long as a sufficiently high workforce has been available.

Figure 1.13 shows the evolution of average working hours in the TCF industries region by region in reporting countries during the 1985-95 period. Once again, it has to be borne in mind that the official statistics used relate to registered enterprises and therefore only reflect part of the reality of effective working hours performed by the workers involved in the production of TCF goods.

In the textile industry, the amount of hours actually worked per week by a worker (excluding overtime) tended to be higher in developing countries than in industrialized countries. In 1995, African and Asian countries had the highest number of average working hours per week in textile production, amounting to 50 and 44 hours, respectively. This was above the average level of 43.5 hours per week for all countries for which information was available. The reporting countries of the Americas, Australia and New Zealand had an average level of about 40 hours, while European countries experienced the lowest average weekly working time, at 38 hours.

During the 1985-95 period, the average number of working hours decreased in the observed African, Asian and American countries and increased in Oceania, while it remained almost unchanged in Europe. Data available for individual countries in 1995 showed the highest number of working hours per week in Egypt (58 hours per week) followed by the Republic of Korea (51 hours). Other countries reporting high levels of working hours were Singapore (49 hours), Costa Rica (48 hours), Peru and Argentina (46-47 hours).

Most of the countries for which data were available reported an average number of 37-42 working hours per week in textile production. The countries with the lowest average weekly working time were concentrated in Europe. Already during the 1980s, Denmark had an average weekly working time of around 31 hours. In 1995, Estonia reported the lowest number with 31.5 hours, followed by Slovakia (32.5 hours), Belgium and Austria (some 33 hours each).

Over the 1985-95 period, substantial changes in the average weekly working time occurred with major declines in a number of developing countries. More recently, the actual amount of weekly hours of work has decreased mainly in industrialized countries, including some Central and Eastern European and newly industrialized countries. Between 1995 and 1997, the reduction was largest in Canada, Finland, Greece and New Zealand.

In clothing production the average actual working time of exporting countries was surprisingly lower than in textiles, thus reflecting the limitations of a statistical analysis based on official figures. The average number of weekly working hours per worker varied between 36 hours in European countries and more than 48 hours in certain African countries. Between these two extremes were Oceania, with 38 hours, the Americas with some 40 hours, and Asia with some 42 hours. While the average number of working hours dropped in Asian countries and Europe during the 1985-95 period, it increased in the Americas, Africa and Oceania.

Turning to individual countries for which data were available, the highest number of working hours per week per worker in 1995 were reported by Egypt (55 hours), followed by Costa Rica and the Republic of Korea (48 hours), Argentina and Peru (46-47 hours) and some other Asian countries, such as the Philippines and Thailand (48-53 hours).

As in textiles, the majority of countries in clothing production had an average weekly working time of between 37 and 42 hours. The countries with the lowest amount of weekly working hours were concentrated in Europe. In all countries for which data were available, the average number of working hours per week fluctuated during the period under review The changes were, however, more marked in the Republic of Korea, where, during the last decade, the weekly working time decreased from about 56 to nearly 48 hours. During the same period, weekly working time decreased by six hours in the Netherlands and by four hours in Japan; the other side of the coin was Portugal, where working time rose from 36 hours during the 1980s to 41 hours during the 1990s.

Between 1995 and 1997, actual weekly hours of work continued to drop in numerous countries, mainly in Europe. However most reductions were below one hour, except for the Republic of Korea, Portugal and Slovenia, where they were somewhat higher.

The average number of actual weekly working hours in the footwear industry followed more or less the same pattern as that of the textiles and clothing industries. Regarding world regions, as represented by reporting countries in 1995, African countries again led with the highest weekly working time (48.5 hours), followed by the Asian countries (46.2 hours) and the Americas (39.8 hours). European countries recorded the lowest average number of working hours, with 37.1 hours. Africa and the Americas experienced a similar decrease in the number of weekly working hours of some 5 per cent between 1985 and 1995. At the same time the other three regions registered an increase.

Looking at individual countries, most of them had an average weekly working time of between 37 and 42 hours. Among the countries for which statistics were available, Egypt, with more than 50 hours of work per week, headed the list of countries with the highest number of weekly working hours in 1995. Costa Rica and Argentina followed in the Americas, and the Republic of Korea and Thailand in Asia. All these countries had an average of between 45 and 51 working hours per week.

The lowest number of working hours in footwear production was reported for Denmark, Slovakia and Estonia, all with 30-33 working hours per week. During the 1995-97 period, Austria, Belgium, Hungary and the Netherlands had the next lowest weekly working time. Substantial changes in working hours in footwear between 1985 and 1995 were experienced in terms of decreases by Canada, Egypt, the Republic of Korea and Mexico, and in terms of increases by Turkey and Portugal.

From 1995 to 1997, the actual number of weekly working hours increased in Costa Rica, Finland, Mexico and Puerto Rico. There was a fall in Israel, the Republic of Korea and Slovakia.

This analysis has presented some general trends and regional disparities on working hours in the TCF industries; however, it has also demonstrated the limitations of such an approach in reporting the reality. Over the years, the legislation and negotiated framework regulating working hours might well have improved in both developed and developing countries, but the actual implementation does not affect all categories of workers in the same manner. What the analysis shows is the persistent gap between developed and developing countries. What it does is the long working hours performed by the workers of the most labour-intensive segments of the TCF industries, in particular during the peak seasons. What it also fails to show is the reality of working hours of homeworkers, of those workers employed in non-registered enterprises and in sweatshops.

Another aspect which links wages and hours of work is the payment of overtime. Once again, the legislation and negotiated framework have improved over the years and it is nowadays normal to have provisions regulating the modalities and rates of overtime in the TCF industries. This notwithstanding, there is evidence from the complaints of many trade unions worldwide, and in particular from those in developing countries, that a number of enterprises, including in the formal sector, do not fully compensate overtime. These allegations are often difficult to prove as many workers concerned fear to lose their jobs and refrain from lodging official complaints. But this is, in some enterprises, a practice which must be banned – not only for the benefit of the workers but also for the benefit of enterprises which, in the context of harsh competition, need to mobilize the confidence of their labour force to improve productivity.

The improvement of labour practices relating to the payment of wages and working hours requires concerted local and national actions but also an increased international awareness of some unacceptable practices participating in the globalization process of the TCF industries.

At its 86th Session, in June 1998, the International Labour Conference adopted the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up. The Declaration intended as a response to the challenges of globalization by introducing a social dimension in the form of certain minimum social ground rules based on shared values.

The Declaration recalls that all Members of the ILO have an obligation, arising from the very fact of membership in the Organization, to respect, to promote and to realize, in good faith and in accordance with the Constitution, the principles concerning the fundamental rights which are the subject of the Conventions recognized as fundamental both inside and outside the Organization. Those fundamental rights are freedom of association and the effective recognition of the right to collective bargaining, the elimination of all forms of forced or compulsory labour, the effective abolition of child labour and the elimination of discrimination in respect of employment and occupation.^[7]

In the light of this decisive step towards international recognition of the need for greater social awareness in the face of globalization, we have thought it useful to give a general overview of the state of implementation of the fundamental principles and rights within the TCF industries that are extensively implicated in economic globalization.

Unless otherwise indicated in a footnote, the information contained in this chapter is derived from the replies provided by governments and social partners to a questionnaire sent out by the International Labour Office with a view to preparing this report. It should be noted that the first annual reports under the follow-up to the ILO Declaration on Fundamental Principles and Rights at Work contain little information on individual sectors. This report is based on various sources of information available to the Office, including the Committee of Experts on the Application of Conventions and Recommendations. These different sources should obviously not be misinterpreted, and it is important not to confuse the well-established mechanisms for monitoring the application of ILO standards with those that have been set up for the follow-up to the Declaration, which are different in nature and focus on promotion and development.

In 1996, the Tripartite Meeting on the Globalization of the Footwear, Textiles and Clothing Industries unanimously adopted a resolution concerning child labour in those industries. The resolution calls on the governments in all member States to continue to work to eliminate all child labour as early as possible, having as a target the year 2000, and calls on employers to take steps to eliminate all recourse to child labour. It also requests the Director-General to strengthen tripartite cooperation in this area, particularly within the framework of the International Programme on the Elimination of Child Labour (IPEC), and to promote the ratification and implementation of the relevant Conventions and Recommendations.

Since 1996, a number of initiatives have influenced international public opinion. These initiatives suggest that the abolition of child labour has not been achieved, despite the intentions expressed at the 1996 Meeting, but it is nevertheless a goal which can be attained. The participation of hundreds of thousands of children in the Global March against Child Labour mobilized the media and raised international awareness of the problem. In addition, the unanimous adoption by the International Labour Conference in 1999 of the Worst Forms of Child Labour Convention, 1999 (No. 182), and Recommendation (No. 190), also commits nations to dealing with the most intolerable forms of child labour without delay.

However, these advances, which have been crucial in raising collective awareness of the scale and importance of the problem, have not by any means solved the problem. According to the most recent information available to the ILO, 250 million children aged between 5 and 14 years are engaged in economic activity worldwide, 120 million of them are working full time while the rest work part time and manage to attend school. Although there are no detailed data by branch of industry, it is clear that a high proportion of these children work in the manufacturing sector, and in particular in the TCF industries. As many different surveys have shown, many children, especially in Asia, are employed to weave carpets, to stitch leather footballs or to sew garments for the home market or for export. The highest concentration of child workers is found in the informal sector, although many formal sector TCF enterprises in the developing countries continue to use child labour for labour-intensive operations that do not require particular skills. In home-working situations, too, children are not infrequently employed to assemble finished garments or shoes. The information provided at the request of the ILO by constituents for the present report highlights a number of recent trends in child labour in the TCF industries.

In Asia, where child labour is particularly widespread in the TCF industries, there is a growing awareness of the problem, both among the public authorities – which in many countries have improved implementation of relevant legislation and supervisory mechanisms – and among employers. Employers, especially those involved in world trade of TCF products, are beginning to gauge the impact of awareness-raising campaigns undertaken jointly by trade unions, NGOs, international organizations and governments of certain industrialized countries. Fearing sanctions against their products, or possibly because they are more aware of the negative aspects of child labour, a number of employers have reduced or even eliminated the use of child workers. National trade unions have also worked for an improvement in the situation by highlighting instances of non-compliance with labour legislation or the unfair competition that arises from employing children to the detriment of unemployed adults. These actions together have had the effect of reducing the employment of children in the TCF industries in certain countries that are particularly vulnerable to international competition. One particular case is Bangladesh where, before the signing in 1995 of an agreement between the Bangladesh Garment Manufacturers’ and Exporters’ Association (BGMEA), UNICEF and the ILO, children constituted about 30 per cent of the total workforce in this sector. Since the implementation of a programme under this agreement, the number of children employed in the clothing industry has fallen steadily to the current figure of less than 5 per cent of the total workforce. During this period, more than 12,000 children were removed from manufacturing employment and enrolled in school with the support of local industry, which has contributed financially to the progressive elimination of child labour. This example illustrates the progress that has been made in Asia in this area. For the first time, an entire industry has accepted an agreement the purpose of which is to emancipate children at all workplaces. The Government, trade unions and members of civil society (NGOs) have all collaborated in implementing this programme, which has freed jobs for adults, especially women.

In Pakistan, where the ILO in 1998 launched a major pilot programme to prevent and eliminate bonded child labour, children employed in the TCF sectors are involved principally in the production of carpets and footballs for export. Media attention to child labour in football factories, especially in Sialkot, during the run-up to the World Cup, led to an initiative on the part of the international industry aimed at convincing their local counterparts in the Sialkot Chamber of Commerce and Industry (SCCI) of the need for individual and collective action to eliminate child labour from this type of production. In February 1998, the SCCI, the ILO and UNICEF signed a partnership agreement which led to a local project involving the State, a local NGO and an NGO from the United Kingdom. More than 3,000 children have been enabled to stop working and attend school, while other measures have been taken to provide their families with financial support. Since the agreement was signed, the number of manufacturers participating in the programme has grown steadily and the programme has been extended to cover a wider region and include children who had been employed to produce footballs at home. There, too, local industry, with the assistance of international buyers, has contributed financially to programmes of prevention, removal and readaptation. The sectoral strategy that is being developed for prevention and monitoring, as well as social protection of children removed from work, has improved the image of the industry abroad. It has also strengthened the capacity of the Government, social partners and civil society to prevent child labour. The “formalization of the informal sector” by transferring production from village and family units to registered production centres has led to improved monitoring of the implementation of the programme. Only the social protection component has failed to yield the expected results, since some families have experienced a drop in income because available resources are inadequate. In addition, certain potential target groups have not yet benefited from the programme, again because of lack of resources. In the carpet industry, awareness-raising campaigns conducted jointly with trade unions and NGOs have led to a significant reduction in the number of child workers which, according to various estimates, has fallen from 500,000 to 80,000. Nevertheless, although child labour in this sector has virtually disappeared in the towns and cities, it remains widespread in the rural areas, and while the Government is particularly vigilant with regard to the application of legislation concerning child labour in carpet factories, in part because of the possible consequences at the international level, it is less vigilant in sectors that are less open to scrutiny. Consequently, some children who have been barred from this type of production have continued to work in less sensitive areas. Pressure by the TCF trade unions has also promoted the Government to open up subsidized schools where workers’ children receive lessons free of charge, while their families receive a monthly benefit to help them with their children’s education.

In Indonesia, the inclusion in 1997 of a child labour component in the national programme to combat poverty in remote villages has unquestionably improved information in this area. It has also made it possible to identify child workers likely to benefit from various types of educational support, whether public or private. There is, unfortunately, no reliable information on the impact of this programme on children working for TCF industries at home or in small workshops. In Nepal, joint initiatives have been launched by the Government, social partners and local NGOs to prevent and eliminate child labour, particularly in the production of carpets. These initiatives, which have been supported by the ILO and UNICEF, have been favourably received by manufacturers aware of international pressure, and this has led to a significant reduction in the use of child labour. In India, it is difficult to obtain accurate information on the extent of child labour in the TCF industries, since it is negligible in formal sector enterprises; children who work tend to do so at home or in small workshops, in most of which no inspections or trade union activities take place. It would therefore be rash, as regards the TCF sector, to draw conclusions about the results of awareness-raising campaigns and programmes to reintegrate child workers in the school system. The only thing that can be said with certainty, thanks to the experience of micro-projects set up as a part of the ILO’s national programme in India, is that, in order to be effective, such projects must be based on an integrated approach combining education, awareness-raising among all the protagonists and, above all, paid alternative work for the parents of the children concerned. In Sri Lanka, one of the other countries in Asia that participates in world garment trade, national legislation appears to be sufficiently well implemented in the TCF industries to ensure that child labour is virtually non-existent and presents no particular problem. In the Philippines where, according to NGOs, it is a widespread practice in the clothing industry to employ girls aged over 15 years on a contractual basis in accordance with national laws, child labour is a diffuse phenomenon that is more in evidence in some provinces (Laguna, Batangas, Rizal) than in others. Children work mainly at home and for small subcontractors to produce finished children’s garments. Despite the Government’s efforts to enforce the law, child labour, which according to official sources involves about 800,000 children between the ages of 10 and 14 years, remains a major problem. While the clothing sector is not the one that poses most problems, and other, more serious forms of child exploitation exist in the country, child labour is a persistent problem which government initiatives and the efforts of the social partners have not yet succeeded in eradicating. Information from China does not suggest that child labour is a particular problem in the TCF industries there. It would appear that national laws, which prohibit the recruitment of children aged below 15 years at any industrial establishment, are strictly applied. There is little information on the informal sector, where some exceptions may be made to allow the employment of children of 13 and 14 years of age, provided that they have had at least nine years of schooling.

The few examples concerning Asian countries only confirm what was already known, that many children are still employed in the TCF industries, especially under subcontracting arrangements in the informal sector and at home. This brief and selective survey also shows that there is a willingness on the part of governments and the social partners to promote the application of legislation in this area through awareness-raising and monitoring activities.

The same willingness is seen in many developing countries in the Americas. Many of them have signed an agreement with IPEC. The major TCF producers that have signed the agreement include Argentina, Brazil, Costa Rica, Dominican Republic, Honduras, Peru and Venezuela. Other major producers such as Colombia and Mexico, which have not signed the agreement, have the status of IPEC “associate” countries. In some countries, although child labour persists in small family workshops and in home-working situations, it is not in the TCF sector that it is most widespread. In Argentina, for example, a recent official study estimated that 150,000 children aged below 15 years are working (according to a UNICEF estimate the figure is 250,000); according to the country’s National Council for the Child and Family, two-thirds of these children are employed as agricultural workers with their parents, while most of the rest work as domestic servants in urban areas. In Brazil, where child labour is widespread (more than 3 million children aged between 10 and 14 years are obliged to work and unable to attend school), more child workers are found on plantations and in the mining industry than in the TCF industries, and it is only in the footwear sector that child labour remains a significant problem, despite the efforts of the Government and trade unions. In Costa Rica, where the minimum age for employment is 12 years, some estimates suggest that more than 20 per cent of children aged between 5 and 17 years are engaged in paid employment. There, too, it would appear that the number of children employed in the TCF sector has been reduced, although there are no precise estimates. In Honduras, where the new Children’s Code prohibits the employment of children aged 14 years or below, even with parental consent, violations of the Code are frequent in small enterprises, including some of those that produce garments. In the Dominican Republic, legislation prohibits the employment of children aged below 14 years and restricts the employment of children aged between 14 and 16 years. Despite this legislation and the Government’s willingness to combat child labour, a high unemployment rate forces parents to allow their children to work. In the TCF industries, it is once again in the small and medium-sized enterprises (SMEs) where the highest proportion of child workers is found, although some enterprises in EPZs also employ children below the statutory age, particularly girls, in garment production. In Venezuela, programmes to combat child labour have led to the implementation of legislation in the formal sector, but many abuses persist in the informal sector, including garment workshops. In Colombia, the number of children aged between 12 and 17 years obliged to work is not known with any certainty. Estimates range from 800,000 (government sources) to 4 million (according to an inquiry carried out by a national daily newspaper). In the TCF industries, a high concentration of child labour is found in informal sector clothing enterprises and even more so in the tanning industry, in which children are exposed to serious health and safety hazards. In Mexico, the law stipulates 14 years as the minimum age of employment. This is generally respected in TCF enterprises, especially those working for the export market. However, despite the Government’s efforts, many small enterprises and informal sector workshops which subcontract their production of garments continue to flout legislation in an effort to reduce their production costs. This situation poses particular problems for the authorities owing to the existence of the free trade area with the United States and the potential commercial impact of non-compliance with child labour laws.

There are no reliable data on the overall child labour situation in the TCF industries in Africa. Of the producer countries for which information is available, Mauritius has no significant child labour problem and the country has been able to develop its industry with due regard to existing laws. In South Africa, where the employment of young people below the age of 15 years is prohibited by law, the existence of a legal loophole concerning children aged between 15 and 18 years has given rise to discussions in Parliament. The labour inspection authorities estimate that there are 200,000 children at work, but the TCF sectors are not major employers of child workers, except in the informal sector. In Egypt, the law prohibits the employment of children aged below 14 years, but according to recent estimates, more than 10 per cent of children between the ages of 10 and 14 years are working. Despite the recent adoption of a new Children’s Act, the Government has not succeeded in significantly reducing child labour in the TCF industries. Children are employed above all in the production of carpets, in leather-treatment plants, and in certain textile enterprises. In Morocco, where formal sector TCF industries have made great efforts to combat child labour and thereby improve their image with European buyers, small clothing and leather-working workshops in the informal sector continue to employ children. Although apprenticeships are in theory prohibited for young people below the age of 12 years, craft workshops producing carpets quite commonly employ younger children. Enterprises producing carpets for export are more vigilant in this area owing to the constraints imposed by foreign buyers. In Tunisia, legislation is more stringent and stipulates 16 years as the minimum age for employment in the manufacturing sector. Consequently, child labour in the export-oriented TCF industries is almost non-existent, although it still exists in a “hidden” form as apprenticeships, especially in the craft-based sector. The export sector is subject to the same constraints from foreign buyers as in the case of Morocco.

It is difficult to estimate the extent of child labour in the TCF industries in many Central and Eastern European Countries, given the lack of up-to-date and reliable official information. The economic changes that have been taking place over the past decade have led to labour market deregulation which, in some cases, has encouraged abusive child labour practices. A number of unpublished studies undertaken in Eastern Europe by a research centre in the Netherlands^[8] provide some general information on child labour in the textiles-clothing sectors. According to the Centre, there is virtually no child labour in formal sector TCF enterprises in Poland and most of the enterprises in question are either private enterprises producing garments for export or large state-owned textile enterprises. Nevertheless, some children may be employed at the other end of the subcontracting chain in small workshops, which are not monitored by foreign buyers or quality controllers. Although the relevant legislation is very strict (the Labour Code prohibits the employment of children aged below 15 years, and young people between the ages of 15 and 18 years may work only if they have completed primary education and if the proposed employment includes an element of vocational training), the labour inspectorate in 1997 recorded a growing number of contraventions, particularly in small private sector enterprises.

In Romania, where the textile and clothing industry was shaken by the collapse of central planning, it was only in 1997 that the sector began to recover by creating a more favourable climate for foreign investment. This recovery was stimulated by exports mainly to the European Union, and here again, pressure from foreign buyers has had a positive effect in reducing child labour, which is almost non-existent in those enterprises in direct contact with buyers. There is no information on the employment of children in small informal sector enterprises. Information obtained from workers’ organizations for this report suggests that there is no particular child labour problem in the TCF industries in Croatia, Slovenia, Hungary or Bulgaria. In these countries, national legislation is very strict and TCF sector employers appear to comply with it. This is also the case in the Czech Republic. All this positive information obviously relates to the visible sector of the economy, but the existence of a parallel economy of clandestine workshops and unregistered employment, which is growing in the countries of Central and Eastern Europe and in most countries in the European Union, cannot be ignored. In this underground economy, which is not subject to any regulation, it is highly likely that children are employed, since the need to maximize profits tends to override considerations of social welfare.

Within the European Union, and indeed most industrialized countries, the problem of child labour is no more than a very marginal problem in the TCF industries. That being said, we should not forget that violations of national laws are sometimes found to occur. In the United States, for example, labour inspectors in the State of California in 1995 issued summonses to 41 employers for failure to comply with child labour legislation. In the factories of New York’s Chinatown, it is quite common for women employed in garment production to be “helped” with simpler tasks by their children who join them after finishing school. Nor should it be forgotten that the footwear industry continues to employ children in certain areas of southern Europe, and that the clandestine workshops which are proliferating at the edges of the major urban areas also sometimes employ children.

This brief survey of recent trends in child labour practices in the TCF industries suggest that greater media exposure of abuses has in all probability played a crucial role in bringing about action to combat them. The TCF industries have been particularly exposed in international campaigns to combat child labour, and this has facilitated the efforts of international organizations and NGOs in this area. Workers’ organizations have also become increasingly involved in these campaigns in recent years. Their activities to raise awareness, educate workers and promote solidarity in particular sectors (including the TCF industries) have played a crucial role at the national level. Since the establishment of IPEC, more than 140 programmes of action have been implemented by trade unions in more than 20 countries. In those industries that are open to world trade, such as the TCF industries, employers have become aware of the potential economic impact of their image on buyers and consumers abroad. Globalization has thus had a positive effect in the fight against child labour, particularly since it has also prompted governments to improve their monitoring mechanisms and thus convince the international community of their ability to tackle the problem. Several employers’ organizations throughout the world are actively involved in different initiatives aimed at removing children from work and reintegrating them, and in 1998, the ILO and the International Organisation of Employers (IOE) jointly published an Employer’s Handbook on Child Labour, which is intended to serve as a basis for employers’ activities at the national level.

Freedom of association is unquestionably the key element in ensuring respect for other fundamental rights at work. Only if workers have the right freely to establish and join trade union organizations of their own choosing are their other fundamental rights likely to be respected. In all the industrialized countries, and in the great majority of developing countries, national constitutions and law recognize the principle of freedom of association. In the European Union, where there is a long-established social tradition, freedom of association is an essential element in what is called the “European social model”, in which collective bargaining remains the basis of social dialogue.

At the European level, the European Apparel and Textile Organization (EURATEX), which includes a large number of employers’ federations, and the European Trade Union Federation for Textiles, Clothing and Leather (ETUF-TCL), in September 1977 signed a Charter for the social partners in the European textiles and clothing sectors. This Charter, which came about through European social dialogue, reaffirms the commitment of the signatories to respect the ILO’s fundamental standards, and in particular Conventions Nos. 87 and 98 concerning freedom of association and the right of collective bargaining. The Charter is a “first” in the sphere of voluntary social initiatives, in that it brings together trade unions and employers, and calls on enterprises in the textiles and clothing sectors to respect the ILO’s fundamental Conventions both directly, at their own workplaces, and indirectly, in any international subcontracting. National member organizations are invited to adopt this text and to promote its progressive implementation in enterprises. Since 1997, the Charter, also called “a code of conduct”, has been widely disseminated in enterprises with the assistance of national trade unions and employers’ organizations. In February 1998, an agreement was adopted by the Finnish social partners on the adoption of the Charter at national level. Belgium and Italy followed soon afterwards, and discussions on ratification have also taken place at national level in other European countries.

In terms of its effective implementation, the Charter should not pose any particular problem (particularly with regard to freedom of association and collective bargaining) to European enterprises in their national activities. On the other hand, it might be more difficult to ensure implementation by subcontractors throughout the world. It had been envisaged that in the initial phase implementation of the Charter should be monitored in European enterprises and their subsidiaries or subcontractors in the border areas of the European Union (the Mediterranean countries and the countries of Central and Eastern Europe). Monitoring would then be extended in a second phase throughout the world. However, the scale of the task, especially given the volume of trade union evidence of violations of trade union rights in certain Central and Eastern European Countries, prompted the signatories to consolidate the first phase before moving on to the second.

The very existence of the social Charter demonstrates the willingness of the European social partners in the textiles and clothing sectors to promote the effective implementation of the fundamental principles and rights at work embodied in the ILO Declaration. Nevertheless, the difficulties of implementation at the subcontractor level, even among those operating in the border areas of the European Union, show that much remains to be done before we achieve universal respect for trade union rights and other fundamental rights. Even within the European Union, TCF industries trade unions complain that attempts are being made within the overall context of globalization to restrict collective bargaining and trade union rights. In Belgium, for example, the ETUF-TCL complains that, for a number of years, it has been easier for senior managers to dismiss trade union delegates, and to apply to courts for sanctions against strikers during labour disputes. The Federation also observes that in Iceland, laws enacted by the Government in 1995 and 1996 restricted the right to strike and the right of collective bargaining, and that some 50,000 complaints of wrongful dismissal have been made over the past 12 months (in all the industrial sectors). In the United Kingdom, the textile section of the General, Municipal and Boilermakers’ Union (GMB) fought for more than a year, with the support of the ETUF-TCL, to obtain the right for their regional trade union delegate to enter the premises of a large multinational clothing enterprise, in order to give a presentation on the activities of the GMB. Some of the large multinationals in the clothing sector are unequivocally anti-union in their views and even go so far as to offer promotion to staff representatives on condition that they abandon their trade union activities. These problems have come to light at a time of European works councils meetings because intimidation by multinationals in some countries has made it impossible to appoint delegates. These examples, which come from trade union sources, contrast with the information provided by employers’ associations which generally speak of a positive climate for social dialogue, despite the international pressure on European TCF industries. Governments, for their part, emphasize the importance of the institutional framework established to guarantee freedom of association and promote collective bargaining.

The same dichotomy is highlighted by information from Central and Eastern Europe. While governments emphasize the importance of legislation and regulations adopted in recent years to safeguard freedom of association and promote collective bargaining, and employers’ associations highlight the progress that has been made in this area, the trade unions still complain of violations of freedom of association and of obstacles placed in the way of collective bargaining. A seminar on social dialogue, which was organized in Prague in November 1999 at the initiative of the ETUF-TCL, financed by the European Commission and involving tripartite representatives from the Central and Eastern European Countries and from EURATEX, highlighted a number of these problems. Most trade unionists present complained of the negative effects of globalization on wage levels in their respective countries, as well as increasingly frequent violations of trade union rights. While the strongest criticism from the unions was directed at small enterprises, a number of participants deplored the fact that the multinationals, even those with a reputation for a socially responsible attitude in their countries of origin, behaved quite differently in their subsidiaries in the countries of Central and Eastern Europe. Several large American multinationals, in particular, were cited for their anti-union attitude. For example, one large American clothing multinational was said to have refused to allow any unionization in its Polish subsidiary, while in Hungary, another American multinational was said to have denied trade unions access to its plant. This accusation is corroborated by the Union of Needle Trades, Industrial and Textile Employees (UNITE) which conducted talks at the headquarters of the multinational in question and eventually succeeded in persuading the company to allow one trade union at its Hungarian facility. Other information from trade union sources highlights the anti-union attitudes of certain European multinationals that have established branches in Central and Eastern European Countries (Hungary, Poland and the Czech Republic). According to these sources, employers who refuse to allow union representation often put psychological pressure on their employees by suggesting that they might be forced to close and relocate to another country if external trade union pressure became too great. Globalization, in the labour-intensive sectors such as clothing and footwear, is thus used as a pretext for undermining social dialogue. The spectre of global competition also affects unionization rates. Where workers fear that strong trade union action may prompt their employers to relocate their operations to other countries, their normal reaction is not to unionize in order to keep their jobs. This happens in many countries, in particular the Central and Eastern European Countries, owing to the competition that exists between these countries to entrench their respective positions as privileged suppliers to the European Union and, to a lesser extent, to the United States. In this particular instance, one cannot, strictly speaking, refer to violations of trade union rights, but rather to a form of “self-censorship” in the form of a decision not to unionize. In some of these countries, such as Romania, the slowness of the available administrative procedures deters workers from seeking compensation if they consider that their trade union rights have been infringed. Any such action by employees against wrongful dismissals or other violations of trade union rights may take between one and two years, without any guarantee that court rulings in their favour will be effectively implemented. At times, the weaknesses in the economic system have even more damaging consequences for employees. A constant problem in most of the Central and Eastern European Countries is the failure by many enterprises to pay wages on time. One trade union source reports the case of a Bulgarian footwear enterprise which, under the pretext of “misconduct”, dismissed workers who had demanded payment of wage arrears and attempted to set up a trade union in order to obtain compensation. A large multinational footwear enterprise established in Bulgaria also wrongfully dismissed trade union representatives. They won their appeal before a labour tribunal but chose not to go back to the enterprise for fear of reprisals. Studies by the Centre for Research on Multinational Corporations (SOMO) (cited previously) highlight certain deficiencies in the collective bargaining process. In Poland, for example, collective bargaining takes place at the national level, at branch level and at enterprise level, which can create problems if different representative organizations are involved at different levels of negotiation. Talks at branch level are also held with employers’ associations. In the clothing sector, the association representing garment producers represents only 7 per cent of employers, and agreements reached during collective talks do not apply to the other 93 per cent of employer enterprises. On the workers’ side, unionization in the TCF industries is low, despite the long trade union tradition in Poland, and there is generally no trade union representative in small enterprises, nor is there any trade union representation in the large foreign-owned clothing enterprises visited by SOMO. While freedom of association exists in theory, the employers’ attitude appears to be to discourage union membership, and employees consequently fear losing their jobs if they attempt to establish a trade union. Some employers state openly that they do not see the need for a trade union presence, given that there are already “workers’ councils” within the enterprises which operate more openly and in a less confrontational way. The President of the light industry secretariat of the Union SOLIDARNOSC also told SOMO researchers that his union had no access to small enterprises and that it was only in the event of major disputes that workers appealed to the union. It should, however, be noted that in Poland and in certain other countries, the dual role of certain dominant trade unions – of trade union action and political activity – may give rise to understandable reservations on the part of employers. It can be difficult to distinguish clearly between actions intended to defend workers’ interests and those that have more political goals in view. In Romania, SOMO investigators noted that, of the four major trade union associations represented in the clothing federation, it is the one that deals particularly with former state-owned enterprises that has the greatest influence on the process of collective bargaining. It is in this production segment that the highest proportion of unionized workers is found and workers are best informed of their trade union rights. In the “new” private sector, unionization is lower and violations of trade union law more frequent. Many private clothing enterprises oppose any trade union presence and workers dare not take action for fear of losing their jobs. Many employees also believe that the private sector offers better wages and that the requirement to refrain from trade union activity is a price worth paying for this. This is reinforced by persistent high unemployment which further weakens any resolve to put forward demands. In Bulgaria, the trade unions, particularly the biggest one, which has resisted economic liberalization, consider that their loss of influence is inevitable with economic privatization. In their view, national labour legislation does not contain explicit provisions making collective agreements obligatory. There is only an obligation to negotiate. Under the circumstances, it is not surprising that the TCF enterprises are not greatly concerned with respect for trade union rights and that many abuses are recorded. The trade unions’ current priority is to endeavour to mitigate employment instability, but given the low unionization rate, the influence which the unions can bring to bear is limited.

These few examples give an idea of the general situation with regard to freedom of association and collective bargaining in most Central and Eastern European Countries. Economic deregulation, which has certainly led to growth, has also led to the development of an extreme, even unbridled, form of liberal capitalism, which pays little attention to the social dimension of globalization. This reflects the widespread view in many SMEs in the TCF sector, where the sole objective is short-term profit and trade unions are regarded as major hindrances to attaining that goal. In large enterprises more directly integrated in the global market, freedom of association and the right of collective bargaining are more widely accepted, even if only as a “necessary evil”. Nevertheless, as we have seen, violations of trade union rights are also noted in the formal sector, including in subsidiaries of multinational companies.

In the United States, freedom of association and free collective bargaining have been legally recognized since the 1930s (under the National Labor Relations Act and the Fair Labor Standards Act). In the TCF industries, the trade union movement, one of the oldest in American industry, is currently finding it difficult to maintain its membership, despite sustained efforts to recruit new members, particularly among immigrant workers who form the majority of new arrivals in the clothing and footwear labour market. Globalization has led to numerous plant closures, and many workers who still have a job prefer to negotiate directly with their employers. The combination of these factors limits the capacity for action of the trade unions, which in addition are increasingly liable for costs arising from labour disputes.

The country’s main textiles trade union UNITE also considers that the protection of workers was eroded by certain initiatives of the previous administration. The private sector now has more legal ways of dismissing trade union delegates than in the past, and the threat of relocation is widely used as a way of limiting trade union activity.

In Asia, the People’s Republic of China is easily the biggest TCF industries employer. The existence of a single trade union linked to the Communist Party in itself says much about freedom of association in the country. Even if this trade union has evolved as China has opened up to a market economy, the labour relations system remains under the control of the central authority, and workers merely implement decisions that are taken without any genuine participation on their part. Some years ago, the explicit acknowledgement by the single trade union that one of its objectives was to improve living and working conditions for its members was regarded as a major advance. Before this position was officially adopted, the trade union’s stated objective was to contribute to growth and the expansion of the Chinese economy. With the move towards a market economy, trade union representatives are apparently becoming more aware of their social role.

When China took over the Hong Kong Special Administrative Region in July 1997, it informed the ILO that it would continue to apply the Conventions ratified by the previous United Kingdom administration. Indeed, with the exception of certain minor amendments, labour legislation and the associated implementation mechanisms have remained unchanged. The law recognizes the right of association, and the right of workers to establish and join trade unions of their own choosing. On the other hand, not all trade union rights are adequately protected. The right of collective bargaining is not always officially recognized. Legislation intended to safeguard collective bargaining and other trade union rights, which was introduced just before the Territory was handed back to China, was immediately suspended by the new administration. In the TCF sectors and in other industrial sectors, workers frequently have to sign a contract of employment under the terms of which any stoppage (for example, a strike) is considered to be breach of contract which can lead to immediate dismissal.

In Bangladesh, unionization in the TCF industries is very low. Formal sector employers who recognize the right of collective bargaining are few in number and the presence of trade union representatives is tolerated, since the law allows it, but only reluctantly. Trade unions representing workers in the informal sector are virtually unknown.

In India, the Constitution guarantees freedom of association and workers are free to join trade unions of their own choosing. Various laws and regulations currently in force are very detailed and the labour relations system functions reasonably well in the formal sector TCF industries. In the informal sector and small workshops, the laws are rarely applied and, on the other hand, collective bargaining is non-existent. Collective bargaining is the normal means of fixing wages and settling disputes in the formal sector, where trade unions are represented. In the informal sector, employers set conditions unilaterally. Indonesia recently ratified all the ILO’s fundamental standards, including those concerning freedom of association and the right of collective bargaining. Since then, there have been signs of greater openness to trade unions, in contrast to the preceding period when military personnel were members of the executive bodies of the single trade union, which had close links with the Government.

In Sri Lanka, there is no legal restriction on freedom of association or the right of collective bargaining. Legislation is applied reasonably satisfactorily in the TCF enterprises, including small enterprises, that are not part of the system of EPZs. On the other hand, employers in the EPZs generally do not grant trade union delegates access to plants. Workers are represented through internal workers’ councils which, according to some of the employers questioned, help to preserve the social peace which is indispensable in maintaining the international competitiveness of Sri Lankan enterprises.

In Pakistan, the trade unions complain of failure to respect the principle of freedom of association which is guaranteed by law. The unions have stated that, in the carpet-making industry, employers are so powerful and represent such powerful vested interests that they can, without any great risk, deny workers the right to form unions and to be represented by their own trade union delegates. Whatever the case may be, the trade unions are weak. Unionization among industrial workers across all sectors does not exceed 10 per cent (3 per cent of the total economically active population). Collective bargaining, which exists only in very rudimentary form even in formal sector TCF enterprises, is non-existent in the informal sector which is expanding as a result of growing reliance on subcontracting. At the Government’s request, the ILO is providing technical assistance to Pakistan in improving its labour legislation and bringing it into line with the fundamental labour standards. The situation in Asia is similar to that found in certain Central and Eastern European Countries, in the sense that while legislation is moving towards better recognition of trade union rights, actual practice increasingly diverges from that legislation as one descends the scale of enterprises. The progress that has been made in the formal sector TCF industries should not blind us to the fact that, in many countries, the principle of freedom of association is flouted by small enterprises and those in the informal sector, and the right to collective bargaining is an abstract and meaningless concept. The increasing reliance on subcontracting and home work is increasingly eroding the trade union rights of workers employed in small TCF production units.

In Africa, the situation in the main TCF producer countries varies. In Madagascar, for example, the unionization is extremely low (around 3 per cent) and, for that reason, the industrial relations system relies more on direct negotiation between employers and individual workers. Given the prevailing economic situation and the limited opportunities for employment in industry, workers are reluctant to join unions for fear of possible sanctions and are consequently in a weak position. The main textiles trade unions, which represent about 7,000 workers, complain that dialogue with the employers is difficult.

In Mauritius, on the other hand, where the economy has been overheating for a number of years and the TCF industries suffer from a shortage of the skilled workers needed to raise the quality of production, the trade union movement is active. The Constitution explicitly protects the right of workers to join a trade union. The three trade union confederations in Mauritius have long experience of collective bargaining, and labour relations are generally marked by an ambiance of mutual tolerance. This is largely explained by the economic “miracle” that has resulted from economic diversification and has helped the country to escape from its dependency on sugar production. In most TCF enterprises managed by Mauritians, all employees are union members and the social climate is good. Nevertheless, the trade unions complain about the practices of certain Asian employers which reflect a clear anti-union attitude. These employers, which are in the minority in the TCF industries, issue directives to their managers to encourage workers not to join unions. In the event of labour disputes, the many settlement procedures available are long drawn out. An appeal to the Supreme Court can take five or six years before a ruling is given. The trade unions do not have adequate resources to allow them to follow such long and costly procedures, and the workers involved often abandon the proceedings. They are then disciplined or even dismissed.

In Morocco, workers are free to establish and join trade unions, but the trade unions themselves are not entirely protected against outside interference. The right to organize, bargain collectively and strike is limited for want of adequate protection. Given the importance of the TCF industries for the Moroccan economy, reforms are now under way to improve the working of the labour relations system and prevent major conflicts which might paralyse the sector. However, the practice of subcontracting to small informal sector enterprises, which can improve flexibility, prevents any real improvement in the protection of trade union rights of workers in the TCF sectors.

In Tunisia, the Constitution and the Labour Code expressly guarantee the right of workers to form trade unions. In the TCF industries, the trade unions, which have a strong presence in the formal sector, participate in collective bargaining to fix salaries and certain conditions of employment for a defined period. This bargaining framework safeguards some degree of social peace. It is currently helping the industry to restructure in accordance with the general principles advocated by the Government following a recent in-depth analysis of the strengths and weaknesses of the TCF industries in Tunisia. However, the trade unions complain of growing precariousness of employment and increasing demand by employers for greater productivity. The employers blame the foreign contractors, who demand greater flexibility, higher quality and lower prices from the Tunisian manufactuers. The employers would like to see greater flexibility in legislation, particularly in provisions relating to working time arrangements to permit the introduction of annualized hours. The trade unions oppose such an approach because they believe it would lead to further pressure on wages. Some employers also consider that home work should be encouraged because it allows greater flexibility; trade unions also oppose this, for understandable reasons.

These four examples chosen from the main TCF producer countries in Africa clearly show that the circumstances of different countries vary widely. The more developed a country is and the better integrated in world trade of TCF products, the more its national legislation tends to guarantee freedom of association and collective bargaining rights. The effective implementation of these legislative principles depends on a number of factors: the democratic tradition of the country concerned; the attitude of individual employers; and the international environment, which can create indirect pressure on trade union rights. From this point of view, the situation appears contradictory; an increasing number of foreign contractors are imposing codes of conduct and other social initiatives aimed at improving respect for human rights at work, but at the same time, they are imposing on their suppliers in the developing countries’ price, quality and flexibility constraints that are likely to compromise respect for those rights.

In Latin America, similar factors have had similar consequences. Many countries have constitutions and laws that guarantee freedom of association and the right of collective bargaining, but actual practice sometimes departs from legislation, and trade union rights cannot always be exercised in a satisfactory way.

In Costa Rica, for example, where the Labour Code was amended in 1993 to improve protection of trade union freedoms and prevent anti-union discrimination, changes in legislation have not led to real improvements in practice. It remains difficult to establish or join a trade union owing to the hostility of employers to any trade union opposition force. They prefer solidarity associations which they can better control. In the TCF sectors, including those in the EPZs, private sector trade unionists often risk losing their jobs because of their trade union membership and are among the supposedly unreliable workers whom enterprises avoid employing. As a result of this, collective bargaining is limited and unionization is low.

In Colombia, the 1991 Constitution recognizes the right to organize and protects the right of collective bargaining. Trade unions have been formed in the large TCF enterprises, but in the sector as a whole, unionization remains low. Some union leaders have suffered intimidation by drug traffickers, guerrilla and paramilitary groups. In this climate of insecurity, it is difficult for trade union leaders to enforce their rights and carry out normal collective bargaining.

In Honduras, in its reply to the ILO’s questionnaire for this report, the Government states that labour legislation recognizes freedom of association but that this right is often violated by certain TCF employers who refuse to recognize trade unions within their enterprises. The Government adds that this is one of the major problems in the maquilas sector (enterprises operating in EPZs), in which trade union representation exists in only 23 per cent of enterprises. The Government’s report emphasizes that the low trade union presence is also due to the fact that the TCF industries include many small enterprises which do not employ a sufficient number of workers to allow a trade union to be formed. As a result, collective bargaining is limited, except in the case of the footwear industry, where there is a sectoral collective agreement.

In Mexico, trade union rights and freedom of association are guaranteed by the country’s Constitution and laws. The large TCF enterprises which produce articles for export within NAFTA generally respect legislation in force, although trade union sources indicate that some trade union rights are violated. It is likely that membership of a free trade area with the United States has had a positive effect on the implementation of principles relating to human rights at work, given that the American trade union UNITE keeps a vigilant watch for any violations of those principles. The further down the subcontracting chain one goes, the more violations of legislation are found. Small enterprises are the most difficult to monitor and the workers concerned do not in practice enjoy all the trade union rights guaranteed by the law.

In Nicaragua, while workers have a legal right to establish and join trade unions of their own choosing, the TCF enterprises in the EPZs obstruct trade union activities and endeavour to establish in their place alternative workers’ representative structures with the aim of preventing conflict. The new Labour Code of 1986 reaffirms the constitutional right of collective bargaining but severely curtails the right to strike, which may be used only as a last resort when attempts to achieve conciliation have failed.

In Peru, structural adjustment reforms that were undertaken at the beginning of the 1980s have led to a weakening of trade union rights. The increasing use of fixed-term contracts and the employment of young “trainees” have reduced the proportion of workers in the TCF industries who are allowed to join unions. Amendments to labour legislation in 1995 and 1996 have not restored all trade union rights. In 1996, the ILO’s Committee on Freedom of Association noted that the amendments had not provided protection for workers and their organizations against anti-union discrimination and interference by employers. It also noted violations of the right of collective bargaining. Action has been taken since then, but it is difficult to believe that all trade union rights have been restored and can be exercised in a satisfactory manner.

In the Dominican Republic, freedom of association is recognized by law, and about 10 per cent of workers in the formal industrial sector are trade union members. However, trade union sources have drawn attention to pressure exerted by TCF employers to dissuade their employees from unionizing. Collective bargaining is legal, but only a minority of enterprises have negotiated collective agreements. The settlement of labour disputes by labour tribunals is hampered by slow procedures and, according to the trade unions, by grave problems connected with the prevailing climate of corruption. In other large producer countries in Latin America, such as Argentina and Brazil, unionization rates in the TCF industries are quite high and the right of association is better respected in the formal sector. However, the economic reforms of recent years have tended to limit the free exercise of trade union rights as a whole.

In Argentina, economic restructuring measures adopted under the President’s emergency powers have increased labour flexibility and accelerated the labour market deregulation. Successive executive orders have restricted collective bargaining, although it remains a statutory right.

In Brazil, the law also limits the range of issues that may be dealt with in collective bargaining. The Government can, in certain cases, cancel collective agreements which it considers to be incompatible with its wages policy. Trade unions are active in formal sector TCF enterprises, but they have to face increasing deregulation in the labour market which tends to favour greater flexibility. The growing reliance on subcontracting also means that a growing proportion of TCF products are manufactured by non-unionized workers.

In this large country, which has a long trade union tradition, workers’ rights are legally guaranteed and mechanisms for negotiation exist. Difficulties tend to arise as a result of economic restructuring, which emphasizes flexibility and weakens the bargaining power of workers and their representatives. It is clear once again that globalization can under certain conditions help to maintain or create jobs in the TCF industries, but those jobs are generally more precarious and more vulnerable to international economic trends, and this limits the scope of any action by workers in support of individual or collective claims.

The examples described briefly in this section are intended to show some of the problems that afflict labour relations in the TCF industries. However, it should not be forgotten that in many countries, freedom of association has made gains over the years through the action of public authorities, and that the collective bargaining framework has been improved. Although some practices are not compatible with that framework, it is still true that many TCF enterprises throughout the world respect the legislation in force and “play the game” of collective bargaining, even if the constraints imposed by the global market sometimes put intense pressure on their long-term viability. It is within the context of globalization that these problems must be assessed and, as far as possible, resolved.

In the manufacturing sector, the TCF industries are among those that generate the highest proportion of unskilled jobs. Their image with young people is poor and many enterprises throughout the world have difficulties in recruiting the workers they need to renew their workforces. The result of this is that, in the majority of industrialized countries and in a growing number of other countries that have attained a certain level of development, TCF enterprises have an ageing workforce with a high proportion of immigrants from the less developed countries. Another characteristic aspect of the structure of the workforce in the TCF industries is the large proportion of women, particularly in the clothing sector and in the less skilled jobs in the textiles and footwear sectors.

The combination of these elements, in an environment of greater international competition, tends to encourage discriminatory practices in the area of employment and occupation. With regard to the employment of women, the main source of discrimination lies in the inequalities in wages paid to men and women. These inequalities, referred to briefly in the previous chapter, are found in all producer countries.

In the industrialized countries, in which the promotion of equality between women and men has become a recurrent theme in the discourse of political and economic decision-makers, the example of the European Union is indicative of what remains to be done. In the European Union, the TCF industries as a whole have for a long time been at the bottom of the wage scale. As early as the 1980s, average earnings in the textile sector were estimated at only about 85 per cent of the average for manufacturing industry as a whole, 75 per cent in the clothing sector and 80 per cent in the footwear sector. The disparities tended to grow during the 1980s in most European countries, particularly in the clothing and footwear industries that were most exposed to the effects of globalization. International competition has tended to keep wages down, and this in turn has tended to aggravate the poor image of the TCF sector in the European Union. Discrepancies between wages paid to men and women have not been reduced. In these industries, with their predominantly female workforce (60 per cent in the textiles sector; 70 per cent on average in the clothing sector), women’s wages during the 1980s were 20 per cent lower than men’s wages in the textiles sector and 16-17 per cent lower in the clothing sector.^[9]

The voluntarist policy of the European Union in the area of non-discrimination and equality of treatment did not fundamentally change the situation during the 1980s. The wage gap between women and men is substantially the same, with a few exceptions, as it was during the previous decade. It is also significant that the TCF industries have invariably not figured at all in the European Commission’s equal opportunities campaigns. The request made by the ETUF-TCL during European-level sectoral talks for action to raise awareness on good practices in the area of non-discrimination was accepted only after long discussions in the textiles and clothing sectors, and has been rejected in the footwear sector. Far too many European employers still believe that employing cheap women workers is the best response to international competition, although many studies have shown that the competitiveness of the European Union depends on other factors not related to production costs (creativity, ability to adapt rapidly to the market, “niche” products, etc.). On the other hand, progress has been made in some EU Member States. In the United Kingdom, for example, the introduction of a minimum wage has led to higher wages for women employed in the TCF industries, which in turn has somewhat reduced the wage gap between women and men. In the Scandinavian countries, the wage gap between women and men is narrower, and awareness-raising campaigns have met with a more favourable response than in other EU countries. In Germany and France, new government guidelines have helped more than anything else to raise awareness of wage differences and to bring about the introduction of best practices in the TCF industries.

In the Central and Eastern European Countries, wages in the TCF industries are significantly lower than those in the rest of manufacturing industry. A survey conducted in 1996 by the Ministry of Employment of the Czech Republic showed that, in a list of 52 economic sectors, wages in the textiles, clothing, leather and footwear sectors were in 47th, 48th, 49th and 51st positions respectively. The highest wages and salaries (in banking and commerce) were three times higher than in the TCF industries. In Hungary, wages in the clothing and footwear sectors are only 35 per cent of average wages in the manufacturing sector as a whole. In Bulgaria, the level is 60 per cent, and there are also numerous cases of delays in the payment of wages. In all these countries, where wage levels throughout the TCF industries are low, women are the worst paid, and the wage gap between men and women is one of the widest in Europe (more than 20 per cent).^[10]

Similar situations are found in other industrialized countries except Japan, where the wage gap between men and women appears to be narrower. There are unfortunately no reliable statistics for the developing countries as a whole. However, available data highlight a number of trends referred to in the previous chapter. In the textiles industry in 1995, the greatest wage differentials between women and men (50 per cent) were found in certain Asian countries and in Mexico. While those differences have been reduced, particularly in Mexico since the signing of the NAFTA agreement, wage differences still exist. In the clothing sector, available statistics show a narrower wages gap between women and men of between 15 and 25 per cent, and in most countries that provide statistics on this subject, the gap appears to be narrowing. However, this information should be regarded with caution; it is important to bear in mind the importance in the developing countries of informal employment and home work, two types of activity that are not reflected in official statistics. If those two elements, which play a crucial role in the subcontracting chain, were taken into account, it is highly likely that the wage gap between women and men would be greater, particularly in the clothing industry.

With regard to access to employment, women have sometimes suffered non-explicit discrimination. Some employers’ associations, in their information to the ILO for the preparation of this report, indicate that enterprise managers are reluctant to employ women in key production posts, on the grounds that women who become pregnant may jeopardize the smooth operation of the enterprise. The cost of providing social protection was also cited as an additional problem which could adversely affect competitiveness in an intensely competitive environment. Another aspect that was cited, mainly in the textiles industry, was the difficulty of employing women in rotating shift systems (three times eight) because of national laws prohibiting night work by women. In some countries, employers’ associations and the TCF industries have stated that they would like to see more flexibility in the legislation in force which would allow them to employ women in night working teams, on a voluntary basis and with any particular arrangements that might be needed. With regard to types of employment, there has been a trend for a number of years for more women to enter skilled and supervisory posts, although the majority are still employed to do unskilled work. This improvement suggests that there is now less occupational discrimination and is the result both of a change in thinking and of a growing shortage of skilled labour in the TCF industries.

In Europe, where that shortage is felt especially acutely as a result of the technological transformations that have been necessary to maintain the competitiveness of the TCF industries, women have particularly benefited from the “skills improvement” programmes established in the industry. The European Commission’s analysis is of competitiveness in the European textiles and clothing industries identified certain strengths and weaknesses and drew some conclusions regarding training. With regard to operational staff, these industries increasingly need multiskilled workers capable of operating more complex machinery. The TCF industries have also succeeded in facilitating access for women to supervisory and managerial posts, which has significantly enhanced women’s socio-economic status. While it is true that the proportion of women occupying the most senior management posts is still too low, there is no doubt that progress has been made in this area in recent years. A similar situation is seen in most industrialized countries. In the United States, for example, where women make up the greater part of the labour force and where the proportion of immigrant workers is very high, the majority of production supervisory posts are occupied by women. Women are also present at all levels of management, although they occupy only a minority of the top management posts.

In Switzerland, where women represent two-thirds of the workforce and 60 per cent of those are foreigners, efforts have been made to help them to improve their skills and take up supervisory posts. In Japan, similar efforts have been made to improve women’s access to management posts and to improve their training. In sectors where 80 per cent of workers are women, the principal problem now is to recruit younger women to replace those who are retiring. Although career opportunities have significantly improved, the TCF industries still suffer from a chronic shortage of skilled labour. In 1996, a project to improve the image of these industries and to enhance their innovative capabilities was launched at national level. Many women participated in the project in their enterprises and have played a crucial role in implementing specific improvement measures.

In the developing countries, the situation is more varied. It is in the countries that are faced with the need for technological change and improved product quality to maintain their international competitiveness that women have the best opportunities for training and obtaining supervisory posts. It is also in these countries that wage levels are generally higher than the average for developing countries and where the TCF industries have the greatest difficulties in recruiting the skilled labour which they need.

In Malaysia, for example, the federation representing employers in the manufacturing sector notes with satisfaction that, in the TCF industries, all the senior and middle-management posts, as well as executive and supervisory level posts, have been opened up to women. In the clothing industry, in particular, there are now many women supervisors and team chiefs, and managerial posts in finance, marketing and sales are now open to them. Modernization of production facilities has also improved productive potential of shop-floor workers who are mainly women. The federation also states that opportunities for home work are provided in order to improve employment opportunities for women with family responsibilities. The latter point to some extent tends to detract from the positive developments, given that work done at home is normally unskilled and offers nothing like the guarantees associated with work in a plant. A similar situation is seen in Indonesia, a country in which women have always played an important role in the textiles and clothing sectors and have for several years been increasingly represented in supervisory and management posts. It goes without saying that in both these countries, the advances made by women in terms of occupation and employment have occurred in the formal sector. In the informal sector, the great majority of women are employed to do unskilled tasks, using machines based on a technology that has changed little in decades. In Thailand, women constitute the majority of the labour force in the formal sector clothing industry and are gradually taking over from men in shop-floor supervisory posts. They are also making significant breakthroughs in management posts, notably in product marketing. It is in the former “dragons” of Asia, such as Singapore and Hong Kong, that women occupy the most sensitive decision-making posts in the TCF remaining industries, and in the subcontracting activities in which these countries have increasingly specialized. The available information on China is incomplete, but suggests that the TCF industries are happy to entrust women with supervisory and management responsibilities, particularly production supervisory activities and middle-management posts.

In the developing countries of the Americas, the quality of the posts available to women has improved above all in the countries that are most advanced in qualitative terms in the globalization of TCF products. In Mexico, the modernization of production structures that was made necessary by NAFTA, together with the country’s privileged access to the United States market, have enabled women to improve their skills, to participate more actively in the trade union movement and to move into supervisory posts. The increasing participation by women in political and trade union bodies has in addition given them a greater presence in decision-making on improvements to labour legislation, and they have contributed considerably to advances in safety and health and in maternity protection. In Argentina, the footwear industry federation notes that 30 per cent of the labour force in the sector are women and that there is no discrimination in employment or occupation based on gender. Women are highly valued in the industry and enjoy the same opportunities as their male counterparts.

In Africa, where for cultural reasons women find it difficult to gain recognition for their skills, globalization of the economy, and of the TCF industries in particular, has led to certain changes in thinking in this area. In Maghreb countries such as Morocco and Tunisia, the strong integration of the TCF sectors in the global market has opened up new opportunities for women. The modernization now under way is leading to improved skills and women are progressively taking up supervisory and management posts in these industries, whose role as a motor of industrial development is recognized. The same situation is seen in Mauritius, where a structural adjustment programme has ended the country’s dependence on sugar and has enabled women to obtain more fulfilling employment in export industries, particularly in the clothing sector, where management posts are now open to them.

In other, less economically advanced developing countries, the TCF industries continue to specialize in labour-intensive operations and supply the world market with relatively standardized products of medium quality intended for mass consumption. In these countries, the employment situation of women has progressed least, and the majority of women there are still employed to do repetitive and unskilled cutting, assembly and packaging operations using traditional machinery. This situation is common in countries such as Bangladesh, Pakistan, Cambodia, Viet Nam, Madagascar and many countries of Central America, and it is in these countries that the lowest proportion of women in supervisory and management posts is found. In addition, throughout the developing countries, the small enterprises and informal sector workshops at the bottom end of the subcontracting chain offer women only unskilled jobs that satisfy the severe prevailing cost constraints and in which prospects for development and training are non-existent.

Extreme forms of discriminatory practices against women include corporal punishment and various forms of harassment, including sexual harassment. While corporal punishment is fortunately rare, women in many countries, including the industrialized countries, face various forms of harassment in the workplace.

One insidious form of harassment, which is also experienced by men, is linked to the globalization of the TCF industries. Invoking the argument of international competition, certain employers threaten to relocate their operations abroad. The fear of plant closure, which is easier in the clothing and footwear sectors where capital investment is often low, constitutes a particularly underhand form of harassment, since it does not involve any particular act that can be legally challenged. Only in the case of actual closure of an enterprise and collective lay-offs are employees likely to have means of redress, depending on legislation in force.

As we have seen, the TCF industries employ many women, most of whom are young. This situation by its very nature tends to encourage sexual harassment.

In some countries, many young single girls have left rural areas to seek work in EPZs. These young girls, who generally live on the outskirts of the enterprises in which they are employed, may experience sexual harassment at their workplace, but are also exposed to similar risks when they move about outside the enterprise. In some developing countries, employers aware of these problems have set up special reception programmes for young single women. In other countries, such as the China, the public authorities help with the construction of housing intended for workers in the TCF industries. If such measures are to be effective and socially acceptable, they must be no more than a first step towards the gradual integration of these women in the urban community in which they now live.

Sexual harassment at the workplace may take different forms, of different degrees of seriousness and causing different degrees of potential harm to the victims. Although sexual abuse still exists in the TCF industries, it is fortunately becoming less frequent and more often than not arises as a result of other employees having direct authority over young women whom they abuse or attempt to abuse. In recent years, with the encouragement of the authorities who have also strengthened sanctions in this area, and with the support of the trade unions and many employers’ associations, information and awareness-raising campaigns have been launched, both in the industrialized countries and in the developing world. These campaigns are beginning to have an effect on public opinion in general and on the people directly concerned. Once again, it is in the formal sector and in those enterprises where unions are represented that the most substantial progress appears to have been made, at least in terms of people’s perception of the problem.

Although sexual harassment, which remains something of a taboo subject, has not disappeared altogether, its most extreme forms are disappearing and its victims are less inclined than in the past to remain silent.^[11]

While women are the principal victims of discriminatory practices in the TCF industries, another form of discrimination has arisen as a result of the cosmopolitan nature of employment in those sectors. In all the industrialized countries and in a growing number of developing countries, the TCF industries employ many immigrant workers. The presence of a large number of immigrants in the most economically advanced countries and in countries that are making progress towards development reflects conditions in those industries and the difficult working conditions, low wages and poor economic prospects are all particular factors that tend to discourage young people from working in these occupations, which have a generally poor image. In order to cope with the resulting labour shortage, employers have to use labour from a less developed country. Just as the TCF industries have relocated their most labour-intensive operations in successive waves to countries with lower wages and lower production costs, immigration also occurs in waves, as countries develop and create new job opportunities for their own nationals. Thus, while only ten years ago the TCF industries in the industrialized countries and in the “dragon” economies of Asia employed mostly immigrant workers, the labour shortage now affects other countries in Asia, such as Thailand or Malaysia, as well as other producer countries that have successfully effected industrial transformation, such as Mauritius in Africa or Mexico in the Americas. These countries are now obliged to call on foreign labour to maintain TCF production.

The arrival of workers of different cultural backgrounds sometimes gives rise to discriminatory attitudes towards ethnic minorities which, apart from their cultural difficulties, very often face a language barrier. In the United States, for example, the majority of workers in textiles and clothing enterprises in urban areas are immigrants, and in the rural areas of the south, about half the labour force is made up of immigrants and African-Americans. In addition, considerable numbers of small enterprises are owned by immigrants, particularly in California, where there is a sizeable Asian community involved in clothing manufacture. The trade union UNITE is making considerable efforts to protect immigrant workers against discriminatory practices. It organizes language courses to break down the language barrier and a range of training programmes in the immigrants’ own languages to enable them to know their rights. Paradoxically – or perhaps it is less of a paradox than it seems – it is in enterprises managed by immigrants, especially those managed by Asian employers, that immigrants most often suffer discriminatory practices that violate legislation and infringe their fundamental rights. In enterprises where American workers and immigrants work side by side, solidarity in the matter of wages often wins out over any ethnic differences. Discrimination is more often based on vocational factors but also reflects relative skill levels, which are often fairly low among immigrants. In other industrialized countries, such as those in Europe, immigrants represent a substantial and growing proportion of total employment. The proportion of immigrants is particularly high in clothing assembly and sewing operations. In officially registered enterprises, there is no discrimination against foreigners who, like other workers, are protected by national labour laws. On the other hand, there are also many clandestine workshops producing clothing to tight deadlines and at very low prices to supply unscrupulous buyers. In these workshops, which flourish everywhere in the major European cities, many illegal immigrants suffer unacceptable discrimination as they work in conditions of virtual forced labour. The public authorities are increasingly aware of this phenomenon and carry out regular inspections which lead to workshop closures. Unfortunately, the resources made available do not match the scale of the phenomenon, whether it is in Paris, Rome, Brussels or Amsterdam. It is, after all, easier to monitor the application of laws in premises located in an industrial area than in a clandestine workshop in the Chinese quarter of Paris. Clandestine immigration from Asia is well organized in Europe, while the economic and political difficulties faced by certain Central and Eastern European Countries help to replenish sources of clandestine workers for those wishing to exploit them.

In the developing countries, the competent authorities also endeavour to control migrant flows, but the problem of clandestine workers is often more endemic. Where immigrant workers are employed legally by the TCF industries, discriminatory practices as such are rare. What happens is simply that the least skilled and worst paid workers agree to do work which locals refuse to do. An indirect form of discrimination arises from the fact that these workers are anxious to keep their jobs, which are often of vital importance for their families abroad, and are therefore reluctant to join a trade union for fear of possible reprisals. The language barrier is a further obstacle to participation in any trade union activity. As a result, these workers enjoy far less social protection.

Sometimes, reverse discrimination takes place. In one large African producer country (Mauritius), a trade union source regrets that some employers prefer to employ immigrant labour, rather than Mauritian workers. According to the source, this is because immigrants are more willing to work for low wages, and are more skilled and more productive than local workers. This example is indicative of a more generalized situation in most countries that succeed in achieving a higher level of development. In these countries, the TCF industries can choose either to relocate production or to improve product quality in the old plant and keep costs as low as possible. In over-heating economies, where wages tend to rise rapidly, the only means of obtaining productive labour for low-paid tasks is to employ immigrants. Where immigration is controlled by the authorities, national labour laws are usually respected. Clandestine immigration, on the other hand, opens the door to all manner of abuses and discrimination.

In 1929, the International Labour Conference held the first discussion on a proposed Convention on forced labour. In 1930, it adopted the Forced Labour Convention, 1930 (No. 29). Twenty-seven years later, in 1957, it adopted the Abolition of Forced Labour Convention, 1957 (No. 105), which complemented the 1930 instrument.

States which ratify the Forced Labour Convention, 1930 (No. 29), undertake to suppress the use of forced or compulsory labour in all its forms. For the purposes of the Convention, the term “forced or compulsory labour” means any work or service which is exacted from any person under the menace of any penalty and for which this person has not offered himself voluntarily. For the purposes of the Convention, and subject to certain conditions, the definition excludes five categories of work or services, including prison work. The 1957 Convention is not a revised version of the previous instrument and should instead be regarded as complementing it; while Convention No. 29 provides for the general abolition of compulsory labour with certain exceptions, the Abolition of Forced Labour Convention, 1957 (No. 105), requires the abolition of forced or compulsory labour in any form:

(a) as a means of political coercion or education or as a punishment for holding or expressing political views or views ideologically opposed to the established political, social or economic system;

(b) as a method of mobilizing and using labour for purposes of economic development;

In 1979, exactly 50 years after the first discussion of the proposed Convention No. 29, the ILO’s Committee of Experts on the Application of Conventions and Recommendations produced a General Survey on the subject (the third of its kind). At that time, the Committee had received 11 reports for Convention No. 29, and 22 for Convention No. 105 from countries that had not ratified those instruments.

In November 1995, the ILO’s Governing Body, during its discussion on strengthening the ILO’s supervisory system, decided that the special procedure under article 19 of the Constitution that had been established for the Discrimination (Employment and Occupation) Convention, 1958 (No. 111) would be extended to all seven Conventions concerning fundamental human rights. This procedure was used in this way for the first time in 1998. The Committee of Experts on the Application of Conventions and Recommendations presented its report on the subject to the 1998 session of the International Labour Conference.^[12]

In its report, the Committee noted that Conventions Nos. 29 and 105 were among the most widely ratified of all the ILO’s Conventions and indeed of all the human rights conventions adopted by the United Nations system.^[13] Under the special procedure, the Committee had received reports from 13 of the 31 countries that had not ratified Convention No. 29 and from 16 of the 46 countries that had not ratified Convention No. 105. The Committee noted that neither the employers’ organizations nor the workers’ organizations had provided any information under this procedure. Some countries that had supplied information, which included major TCF producers, had stated that the ratification procedure was under way and ratification could be expected soon. These countries included Uzbekistan, Turkey and Zimbabwe in the case of Convention No. 29, and Kyrgyzstan, the Lao People’s Democratic Republic and Romania in the case of Convention No. 105. Other TCF-producing countries such as Mongolia (for Conventions Nos. 29 and 105) and Chile (for Convention No. 105) stated that preparatory work was well advanced and ratification should follow fairly soon. A number of countries that had not yet ratified the two Conventions drew attention in their reports to serious obstacles to ratification. These included Canada, which considered that ratification of Convention No. 105 made ratification of Convention No. 29 unnecessary. In its report, the Committee pointed out that the two Conventions are complementary and that a country which had already ratified Convention No. 105 should have no particular problem ratifying Convention No. 29. As to whether a requirement that unemployed people perform some kind of work as a condition for receiving benefits might constitute forced labour (a question also raised by Canada), the Committee stated that, if the allowances paid were excessively low for the work involved, the scheme could be tantamount to forced labour. With regard to the use of compulsory labour for economic development purposes, a major textiles-producing country, Viet Nam, indicated in its report that the low level of social and economic development in the country made it necessary to mobilize the population and that there were therefore some forms of obligatory public work and service obligations in force. On this point, the Committee noted that Convention No. 105 prohibits recourse to forced and compulsory labour for development purposes and consequently urged the countries concerned to have resort to international assistance, should that prove necessary, to find alternatives to forced labour for development purposes. Two major TCF-producing countries, Malaysia and Singapore, indicated that they had denounced Convention No. 105 on the grounds that it hampered the fight against subversion and compromised national security. On this particular point, relating to the forced labour of prisoners, the Committee recalled that it was not necessary to use prison sentences involving compulsory labour to maintain public order.

These few examples, based on the special reports presented to the Committee of Experts on the Application of Conventions and Recommendations by countries that have not ratified the two forced labour Conventions, highlight a number of difficulties of interpretation and application of those instruments which, nevertheless, have been widely ratified.

The great majority of the replies to the request for information sent out by the Office to the constituents with a view to producing this report indicate that there is no forced labour in the TCF industries.

Some trade union sources nevertheless complain of what they regard as a particular form of forced labour, namely the requirement for certain workers to work excessively long hours under the unspoken threat of losing their jobs should they refuse to do so. Excessively long working hours are a recurrent element in complaints made against employers in the TCF industries by many workers’ organizations, and by a considerable number of NGOs concerned with respect for human rights at work in these sectors. The problem boils down to defining what exactly is meant by “excessively long working hours” in the context of different labour legislations. On this particular point, the Committee of Experts expressed its opinion in 1998.

In reply to a question from Canada and Turkey as to whether a requirement to work overtime was an infringement of Convention No. 29, the Committee considered that the imposition of overtime did not affect the application of the Convention so long as it was within the limits permitted by national legislation or collective agreements. In its observations, the Committee was more concerned by the excessive nature of working hours in some cases in relation to national legislation than by the obligatory aspect which might make such provisions tantamount to forced labour. This interpretation should be borne in mind in any discussion on forced labour, but it does not diminish the importance of analysing the constraints imposed on workers in the TCF industries in a general climate of employment instability.

As indicated in the previous sections, it is in the clandestine workshops that violations of human rights at work are most common and most serious. The scale of the phenomenon of clandestine workshops, which are found mainly in the clothing sector, poses a sure threat to the viability of legal enterprises because of the unfair competition which they represent. In Europe, the concentration of clandestine workshops is such that the European Apparel and Textile Organization (EURATEX) advocates the adoption of European-level measures to combat the phenomenon. Some years ago, estimates from trade unions and NGOs suggested that more than 15,000 workers in the Netherlands were involved in clandestine work in the clothing sector a figure that exceeded the number of registered workers. Other concentrations of clandestine workshops are found in France (in the Chinese quarter of Paris), in Belgium (Brussels, in the “Triangle” quarter), in the United Kingdom (the Manchester area) and in the south of Italy. The workshops concerned, which employ large numbers of illegal immigrants, have specialized in copying and pirating well-established brand names, and in the rapid production of small runs of fashion items. They sometimes operate in a more professional way than the small legally operating workshops which respect labour laws and pay taxes. This commercial professionalism generally goes hand in hand with labour practices that are contrary to the most rudimentary principles of respect for human rights at work. Working hours for workers who are denied any protection come within the definition of forced labour given by the ILO’s Committee of Experts. Other practices involving the confiscation of immigrant workers’ identity papers have also been noted by the bodies responsible for combating clandestine labour. These and other practices, for example, housing illegal workers in hazardous and unhealthy dormitories (such as cellars) are all very much part of this practice of forced labour. Europe is not the only developed region with a growing number of clandestine workshops practising forced labour. In the United States, the problem of “sweatshops” has received much media attention and has mobilized public opinion. The trade unions, many NGOs and the federal authorities have all helped to bring this about. The main trade union in the TCF industries has managed to have laws introduced in a number of states which make all links in the subcontracting chain that make use of “sweatshops” legally liable (the principle of “joint liability”). The federal authorities have launched a number of initiatives during recent years aimed at combating “sweatshops” with the support of major enterprises in the textiles sector.

All these campaigns target clandestine workshops both in the United States and abroad, where American enterprises involved in the production and distribution of TCF products engage in subcontracting.

While particular pressure is being brought to bear on the developing countries to persuade them to take appropriate measures, in the United States, despite the efforts that have been made, many illegal immigrants continue to perform forced labour in the clothing and footwear sectors in order to repay the traffickers who bring them into the United States. The traffickers demand enormous sums (up to US$30,000) in repayment of the debts. Cases of beatings and even murders of illegal immigrant workers who try to break free have been reported to the police.^[14] In August 1995, the case of 72 young Thai women who had entered the country illegally and were being forced to work in conditions of near-slavery for a clothing enterprise in the Californian city of El Monte caused public outrage.^[15] More recently, the discovery of slavery-like conditions in “sweatshops” producing goods for major American distributors in Saipan (in the Commonwealth of the Northern Mariana Islands, administered by the United States) mobilized media attention and led to campaigns by NGOs to enforce respect for human rights; more than 50,000 young female immigrants from China, the Philippines, Bangladesh and Thailand were discovered working as virtual prisoners in workshops surrounded by barbed wire. These girls, who were sometimes required to work 15 hours a day, seven days a week, were housed in groups of 20 in insalubrious dormitories and forced to work to repay exorbitant “hiring fees”. The case had a particularly strong impact on American consumers since clothing manufactured in Saipan bears the label “Made in the United States”. As a result of this case, a number of American clothing distributors who had suddenly found themselves at the centre of public attention undertook to finance an independent monitoring system to ensure that in future their suppliers in Saipan would respect basic workers’ rights.

In the developing countries, many small enterprises, as well as informal sector micro-enterprises, employ clandestine labour. Although failure to register workers does not in itself amount to forced labour, clandestine labour provides opportunities for abuses that can give rise to forced labour. Certain trade union sources report the existence of forced labour in the TCF industries in their countries. In Pakistan, the principal TCF trade union states that, in the footwear sector, children are forced to work to repay loans paid to their families at the time they are hired. Another trade union source indicates that in the carpet-making sector, forced labour, which was widespread a few years ago, has virtually disappeared, except for a few rare cases. In its 1999 report, the Committee of Experts on the Application of Conventions and Recommendations noted with interest the commitment of the Pakistan Government, in an agreement with the ILO, to eliminating child labour in the carpet-making industry. With regard to bonded child labour, the Committee noted that a number of measures had been taken with the technical assistance of IPEC, to facilitate implementation of the Bonded Labour System (Abolition) Act, 1992, and requested the Government to provide information on the participation by workers’ and employers’ organizations in the application of the Act and of the Rules adopted in 1995. In Bangladesh, it is known that cases of forced labour still occur, especially in the carpet-making industry. Workers’ organizations also report numerous abuses in the clothing industry, in particular the requirement to work excessively long hours which is tantamount to forced labour. In its 1998 report, the Committee of Experts noted allegations presented by the World Confederation of Labour relating to abuses in the Bangladesh garment industry, particularly with regard to forced overtime, and asked the Government to provide detailed comments on these allegations. In India, local NGOs have been particularly active in drawing the attention of the media and the authorities to the exploitation of children in textiles and carpet-making workshops under conditions of debt bondage that are tantamount to forced labour. In response to the problem of child labour, the Government of India, which participates in the IPEC programme, has made resources available for a range of activities and, in the budget for its Ninth Five-Year Plan, it has earmarked 2.5 billion rupees for child labour projects. In Nepal, where forced child labour was widespread in the carpet-making industry only a few years ago, the Ministry of Agrarian Reform and Territorial Development has set up a national high-level team which has already succeeded in freeing a considerable number of children from the debt bondage system.

In South-East Asia, the Governments of Indonesia, the Philippines and Thailand have collaborated with IPEC in order to assess child labour in the footwear industry. That assessment has served as a basis for national programmes to eliminate child labour, especially its most coercive form, debt bondage. Other similar initiatives have been launched in Morocco (for girls employed in the informal sector carpet-making industry), in Cambodia, in the Lao People’s Democratic Republic and in Viet Nam (in the latter three countries, as part of a broader subregional programme to combat trafficking in children and women).

The problem of debt bondage does not affect only children. As we have seen from the examples taken from the United States, illegal immigrants in many countries are forced to work clandestinely for derisory wages in order to repay traffickers who bring them into the country and pay for their transport. Given the size of the debts in question, to which interest is then added, and the very low level of wages, a situation of forced labour may continue for a number of years. Even when the debt is paid off, the illegal situation of the workers concerned means that they have to go on working under conditions inferior to those of legally registered workers.

Another serious problem concerns prison labour. A number of NGOs and TCF trade unions have objected to the practice of certain public prison administrations of forcing prisoners to produce garments for private companies. This practice was noted by the Committee of Experts on the Application of Conventions and Recommendations in its 1998 report. In the report, the Committee recalled that, under the terms of Article 2 of Convention No. 29, any work or service exacted from any person as a consequence of a conviction in a court of law was excluded from the scope of the Convention, on two conditions: first, that the work or service in question is carried out under the supervision and control of a public authority; and secondly, that the person in question is not hired to or placed at the disposal of private individuals, companies or associations. The latter condition also applies to workshops operated by private companies within prisons. If a prisoner is hired by a private company, either directly or indirectly (under the terms of a contract between the prison administration and the enterprise concerned), and if the worker is obliged to work, the practice is tantamount to forced labour. The Committee recalled that only when work is performed in conditions approximating a free employment relationship can it be held compatible with Convention No. 29. The Committee also emphasized the fact that, whatever other conditions apply, the work or service concerned must be carried out under the supervision or control of a public authority, to ensure that the conditions imposed are acceptable.

These observations define the conditions in which prison labour can be compatible with international standards relating to forced labour and indicate the direction to take for those public administrations that are currently subject to criticism.

Export processing zones (EPZs) are industrial parks set up in certain countries to attract foreign and domestic investment in export industries. They use tax incentives and dedicated infrastructure to lower entry and operating costs for enterprises which would not otherwise have considered investing in that country. At last count there were some 86 countries with EPZs, and the number is growing, particularly as more countries are authorizing the development of private zones. They range from small Caribbean islands like Aruba to huge and populous countries like India and China. The phenomenon is not only limited to developing and newly industrialized countries. The United States has 150 foreign trade zones and countries like France and Canada are considering the possibilities of establishing zones in order to bring new investment into depressed areas. EPZs come in many different forms but the underlying strategy is always the same – namely to use incentives to attract investment for export. In order to understand all the forms – maquiladoras, free trade zones, free ports, bonded warehouses – it is useful to adopt a broad definition that includes any situation in which government incentives are designed to achieve investment in export industries.

EPZs, as the name suggests, were designed to support the processing of imported materials or components destined for re-export. The processing or assembly plants set up in zones mostly used labour-intensive, low-technology and low-skill methods well suited to the labour markets of the developing countries in which they were located. That description is no longer the only one however. Countries are trying to move beyond simple processing activities and to upgrade their processing zones by encouraging integrated manufacturing operations using domestic as well as foreign investment.

In China, EPZs account for over 20 million jobs and in Mexico for over 1 million. The percentage of women in the zone workforce is generally high and zones represent one of the most accessible sectors for women seeking to enter the formal economy. Notable in this regard are Honduras where 75 per cent of the maquila workforce is female and Mauritius where women comprise almost 70 per cent of the zone workforce. This expanded access to formal employment for women has been mitigated, however, by the fact that the quality of the jobs available is often lacking. Women suffer from a form of discrimination in which they are stereotyped into certain job and skill categories and find it almost impossible to break out of these – often the least-skilled and worst-paid categories with limited potential for advancement. In addition, women workers are often overlooked for training and thus find it difficult to acquire the formal skills required to advance in their careers. Many women workers also have substantial domestic responsibilities and it is often difficult to reconcile these with the demands of factory work. Finally, sexual harassment remains a serious but undisclosed problem in many factories.

The garment industry is the most prevalent sector in EPZs, mainly due to the fact that it is a labour-intensive industry in constant search of lower labour costs, and to the Multi-Fibre Arrangement which allocates quota for garment exports. Enterprises from countries with insufficient quota invest in EPZs in countries with available quota. The labour-intensive nature of the garment industry makes it the largest creator of employment in EPZs.

While EPZs have created many jobs in absolute terms there are concerns about the quality of these jobs and the social consequences of zone development. Because the jobs are often in assembly or simple processing industries, they are generally low-skill and hence low-wage jobs with little scope for career development. This has also limited the amount of skill transfer and human resource development flowing from foreign investment. In addition, zones dominated by one industrial sector are vulnerable to downturns in the market for the goods produced in this sector or to shifts in investment or trade patterns. Similarly, countries which draw the bulk of their investment from one country or region are vulnerable to sudden shifts in investment and trade. Free zones in the Dominican Republic, for example, have succeeded in their goal of attracting investment and generating employment. However, the United States accounts for 48 per cent of the total (in 1996) and the garment sector for 65 per cent of investment and 65 per cent of zone employment, 60 per cent of which is female.

The social consequences of zone development also need to be taken into account. Most zones are well planned and characterized by modern infrastructure, but the surrounding social infrastructure is often not and it cannot cope with the increase in demand for housing, transport and other social services.

The historical trend of enterprises in developed market economies, which moved production to lower cost sites with surplus labour and low labour costs, was reinforced by an enterprise strategy which relied on a chain of production stretching across regions. Knowledge and capital-intensive functions were situated in different sites to those of labour-intensive and assembly activities, depending on the relative advantages of each site. Clothing or footwear plants, where labour costs account for a high percentage of total costs, are more likely to choose a zone on the basis of hourly wage rates than a hard-disk manufacturer whose labour costs may only constitute 2 per cent of the total cost of production. Hence, many labour-intensive industries are attracted to the “dollar a day” labour rates that they can find in some EPZ-operating countries. When labour costs started to rise in Mauritius, many companies left that country and some went to neighbouring Madagascar where there was little investment and considerable surplus labour. A number of those that stayed in Mauritius have tried to limit labour cost increases by importing Chinese or Madagascan workers. Such immigrant workers are often housed on the factory premises and basically work as much as they can to maximize their earnings before returning home.

Labour costs, however, are only one of the factors taken into account by investors when choosing a production platform, and the distribution of zone investment does not match the list of low labour cost countries. As global competition places more and more emphasis on speed and quality, investors are looking less at nominal wage rates and more at unit labour costs. In other words, it is less a case of how much workers will be paid but how much and with which level of quality they will produce for that amount.

The Bangladesh export garment industry

Bangladesh has enclave-style EPZs which have generated significant numbers of jobs, and more are planned. In addition, the export garment industry, using a system of letters of credit and bonded warehouses, has proved to be particularly dynamic. The Bangladesh ready-made garment industry (RMG) has grown from nothing in the 1970s to become the country’s principal export earner in the 1990s. The first exports took place in the mid-1970s and have grown by 20 per cent per annum to earn US$3.4 billion from sales to 45 countries in the 1996-97 financial year. This accounts for almost 70 per cent of Bangladesh’s total exports. The United States is the main market with 50 per cent of exports by value, followed by the EU with 40 per cent. This dramatic growth is largely due to the quota-based trading system known as the Multi-Fibre Arrangement which obliged quota-poor East Asian exporters such as the Republic of Korea to find quota-rich production platforms from which to supply the United States and European markets. To cater to this need the Bangladesh Garment Manufacturers’ and Exporters’ Association (BGMEA) administers a bonded warehouse system whereby cloth is sent in duty free by customers for cutting and sewing before being exported directly to the distributor. Other incentives granted to the industry include duty-free import of capital goods and a tax at source of only 0.25 per cent.

Bangladeshi entrepreneurs found it relatively easy to enter the export garment sector since the technology was cheap, labour-intensive, and easy to operate. At the start of 1998 there were more than 2,600 garment factories employing mainly (90 per cent) young women. It was estimated that garment factories employed over 70 per cent of female formal sector employment in Bangladesh.

There are signs that the garment industry is upgrading from the simple assembly of shirts and the value added component is now estimated at 37-40 per cent. There has also been an increase in local sourcing and some 80 per cent of the accessories used are now sourced locally.* Conditions of work are improving as a result of external pressures exerted by major buyers, governments, international organizations, and NGOs, including trade unions and consumer groups. Many Bangladeshi garment factories are now bound to observe codes of conduct imposed by their large customers (such as the retail chain C&A). Those codes relate mainly to working conditions and health and safety provisions and rarely mention human or workers’ rights. The export garment sector has remained largely unorganized, although there are over 100 trade unions registered as operating in the sector. The Bangladesh Independent Garment Workers’ Union Federation, a grouping of women garment workers, has been launched with assistance from the Asia-American Free Labour Institute (AAFLI), but it remains to be seen whether it will be able to make inroads into the industry.

One initiative which did change the face of the industry concerned child labour. As a result of the combined action of the ILO, UNICEF and the United States Embassy in Dhaka, child labour has been all but eliminated from BGMEA factories. An audit was conducted to identify the number of children below the age of 14 who were working in export garment factories. They were then removed and placed in schools constructed and run by UNICEF with financial support from the United States Government. A replacement worker was found, often from the same family as the child who had been removed. There are now over 100 schools operating under this system, and the ILO runs a programme whereby factories are inspected to ensure that no children are working.

The future of the Bangladesh export garment industry is uncertain. Bangladesh is in danger of losing its GSP status in the vital United States market because of the fact that freedom of association is still not possible in the EPZs. This situation will most likely change in 2000 and workers’ organizations may spread rapidly throughout the sector, a development which could lead to dramatic improvements in wages and working conditions for garment workers. Secondly, garment producers are wondering what will happen to them as the Multi-Fibre Arrangement is phased out. Most garment factories are trying to move up the production chain to higher value added levels, but their ability to do so depends not only on their making the investments necessary to improve speed, cost and quality, but on the opportunities created by the lead firms who largely determine production roles in the chain. It is increasingly clear that low labour costs are not enough to retain a competitive position in the world market. The ability to respond quickly, at the appropriate cost and quality levels, is vital. Countries which are far from main markets, and do not have their own raw materials and textile base, will find it difficult to respond quickly enough to market demand and may be overlooked by lead firms. Distant production platforms like Bangladesh may still be able to supply certain commodity items (bulk, standard garments) which do not rely on rapid delivery and are less fashion sensitive, but in the higher value added, fashion-sensitive segments Bangladesh will face strong competition from export platforms closer to main markets. The immediate challenge facing Bangladesh is to improve the productivity and quality of its thousands of small, family-run factories through investments in new technology and training of both direct labour and management. They could then offer a wider range of services to their clients, enabling them to move from assembly towards full package production. Factory infrastructure and the organization of work would also need to be addressed.

Source: Statistics supplied by Bangladesh Garment Manufacturers’ and Exporters’ Association.

Workers’ rights and labour-management relations are probably the most disconcerting aspect of EPZs. Because EPZs are mostly set up in labour surplus economies they have seldom involved forced or child labour, although adolescents on the borderline may be found working in some zone enterprises. Zone-operating countries have tended to concentrate on the infrastructure, incentives and logistics of the zones rather than on the social and labour aspects. The result is that many zones do not have an appropriate system of labour relations and labour administration. Specifically, this means that there is often no provision for consultation and negotiation between labour and management, no mechanism to resolve disputes and no factory inspection. It is interesting to note that almost all countries formally include the zones in the scope of the national labour laws because one of the most popular assumptions about zones is that they are excluded from the coverage of labour legislation. Bangladesh is one of the only counties which still explicitly excludes the zones from its key industrial relations legislation, although it will almost certainly change that situation in 2000 in order to retain its GSP status in the United States. The situation in a number of other countries, however, is far from clear and workers have certainly found it difficult to exercise their right to organize and bargain collectively.

In attempting to categorize the state of labour-management relations in EPZs there are two factors which need to be borne in mind. The first is that there is always an official and an unofficial situation. It is easy to overlook the unofficial, de facto state of affairs precisely because it is not documented or evident – but it may in fact be the most influential (in a positive or negative sense). The second factor is the evolution of labour-management relations. They are not static and they do not evolve at a constant rate. This means that by the time they are written about they have already changed and might be different in very important ways. With those two factors in mind, it is nonetheless possible to distinguish four broad patterns of labour-management relations in zones, namely:

– zones where there are no credible, formal structures of labour-management consultation or negotiation, workers are not organized and trade unions are excluded, officially or unofficially;

– zones where partial restrictions on workers’ rights and trade union activity apply;

Zones without credible formal
labour-management structures

There are very few countries which openly and officially bar trade unions from organizing and bargaining in EPZs, and even those that do are constantly reviewing their situation. When Bangladesh adopted the Bangladesh Export Processing Zones Authority Act, 1980, the Authority had the power to exempt the zones from the scope of a number of laws and regulations, including the Employment of Labour (Standing Orders) Act, 1965, the Factories Act, 1965, and the Industrial Relations Ordinance, 1969, which provides for organizing and bargaining rights.^[16] The ILO Committee of Experts on the Application of Standards and Recommendations and the ILO Governing Body Committee on Freedom of Association have both found this provision to be incompatible with the terms of Convention No. 87 which recognizes the right of workers to form and join organizations of their own choosing.

This measure is sometimes defended by the Government of Bangladesh as an interim one designed to encourage investment, which, it suggests, will be lifted at an appropriate time when the trade union movement and foreign investors are ready to begin a sound bargaining relationship. In fact, in 1991 the Government committed itself to a timetable for introducing freedom of association and collective bargaining in the EPZs in order to qualify for GSP privileges granted by the United States. This timetable was clearly not adhered to and there is now considerable pressure building in the United States to force the administration to withdraw Bangladesh’s GSP status. The deadline is the year 2000 and the Government of Bangladesh is almost certainly going to move towards allowing freedom of association and collective bargaining.

The exclusion of the zones from the coverage of the labour laws does not, however, mean that the zones operate in a completely deregulated environment. The zones each have an Industrial Relations Department which issues “instructions” to set standards for, inter alia, wages, hours and leave. The Industrial Relations Department is also responsible for grievance handling, conciliation and inspection. Workers or employers who have a grievance are expected to take it up at the factory level first; but if, after seven days, it has not been dealt with they can report it to the Industrial Relations Department who will then take it up on their behalf. No legal representations are allowed and the Industrial Relations Officers’ decision is final. Pakistan has also excluded its zones from the scope of the Industrial Relations Ordinance and prohibited all forms of industrial action.^[17]

Zones in which workers’ rights are limited

Other countries have not gone as far as to exclude the right to organize and bargain collectively, but have limited it to a certain extent. In Namibia, for example, section 8 of the 1995 Export Processing Zones Act stated that the Labour Act of 1992 would not apply in the zones but that the Minister of Trade and Industry, in consultation with the Minister of Labour and Human Resources Development, could regulate issues such as minimum standards of employment, termination, health, safety and welfare. But freedom of association and collective bargaining were not covered. After negotiations with the labour movement, section 8 was subsequently amended to state that the Labour Act of 1992 would apply to the zones but that strikes and lockouts would be prohibited for five years. Labour conflicts were to be referred to compulsory arbitration instead. It should be noted that the mandatory arbitration of industrial disputes, which thus denies workers the right to strike, is incompatible with the principle of freedom of association. The ILO Committee of Experts has requested that the Government take appropriate steps to further amend the Export Processing Zones Act to ensure that workers in EPZs, like other workers in the country, are not denied the right to strike.

The Namibian arrangements, however, did not have the desired effect and the zones have been wracked by an escalating amount of industrial conflict. The trade unions have also alleged that investors exploited the situation to engage in unacceptable labour practices.

Panama is the only country in Central America to have adopted special labour legislation for the EPZs, replacing the Labour Code. An Executive Legislative Decree to facilitate the establishment of enterprises in EPZs was promulgated^[18] in 1996 which tried to limit the influence of trade unions in its EPZs by stipulating, inter alia, that zone enterprises were not obliged to negotiate or sign collective agreements during their first five years of operation. It also attempted to restrict the right to strike by providing for lengthy administrative, conciliation and arbitration processes before workers could declare a strike. Opposition to this Decree was pronounced and the Government was forced to amend it to restore the recognition of trade union freedoms.^[19] However, the controversy has not been fully resolved and freedom of association is not well established in Panama. Chapter VII of Act No. 25 of November 1992 provides, inter alia, for flexibility of contracts and functions in zone enterprises and permits retrenchment for economic reasons. Act No. 3 of January 1997 also established certain minima for zone workers, including a minimum wage, a weekly rest day and the payment of overtime.

Malaysia pursues a policy of imposing a five-year moratorium on collective bargaining in “pioneer industries”,^[20] and although trade unions may be formed in the electronics industry, they may not affiliate to national unions.

Zones which permit freedom of association
and collective bargaining

The Philippines provides an excellent example of a zone-operating country in which freedom of association and collective bargaining were not recognized in zones, but which, after years of industrial conflict, made the necessary reforms and established a stable system of labour-management relations. In 1986, the Philippines experienced over 580 strikes, the highest ever recorded, and zones started to lose investment and jobs as foreign enterprises pulled out. Employment in the Bataan zone, for example, fell from its peak of 21,729 in 1984 to 14,101 in 1993. This prompted the Department of Trade and Industry to set up a Centre for Labor Relations Assistance (DTI-CLARA) which promoted the concept of labor-management councils (LMCs) in zone enterprises. The DTI-CLARA existed in a “friendly rivalry” with the Department of Labor and Employment (DOLE) and many commentators feared that the LMCs might be an anti-union strategy. Over the years, however, the cooperation between the DTI-CLARA and the DOLE has grown and they now run joint promotional and training activities. The DTI-CLARA makes it explicit that an LMC is “... not a substitute for unionism ... not a substitute for collective bargaining ...”,^[21] and they will not cooperate with an enterprise if they have reason to believe that it intends to use the LMC to oppose the unionization of their plant. This initiative led to the establishment of the Philippine Association of Labor-Management Councils (PALMCO) which has more than 300 enterprises as members. Over 800 LMCs have been formed, many of them in unionized plants.

Trade unions have continued to organize in the Philippine EPZs although a number of private zones appear to have adopted a “trade union-free” policy which is in conflict with the labour laws. The Bataan zone, previously wracked by labour-management conflict, is now setting an example for labour-management cooperation and has established a Labor Union Presidents’ Association (LUPA) with representation from all the 24 unions organized in the zone. The LUPA and the Department of Labor and Employment have the use of office space in the central zone administration building. Enterprises are “voting with their feet” and returning to Bataan which now has 60 firms employing 24,381 people. Locators such as Paramount Footwear (producing for Reebok) have won awards for their labour-management relations in their Bataan plants.

Mauritius has a high degree of trade union activity in some sectors of the economy, but this has not been extended to the EPZ sector, although no legal barriers exist. In the key sugar industry 89 per cent of the 29,066 workers were organized in 1996, up from 71 per cent in 1992. In the public service, trade union membership stood at 63 per cent of the 56,828 employees, and in local authorities and parastatal bodies the rate was 51 per cent. In the EPZ sector, however, it was only 9 per cent of the 79,487 workers who belonged to trade unions. Trade union membership in the hotels and restaurant sector was also relatively weak at 15 per cent of 10,820 workers.^[22] There are only three collective agreements signed in Mauritius, largely because a variety of government bodies regulate labour matters, including wages and disputes. It is interesting to note, however, that the number of illegal work stoppages in EPZ enterprises has been increasing, indicating that the extensive system of regulation is not entirely effective.

Barbados, Jamaica and Trinidad and Tobago all ensure that rights provided to workers nationally apply in the zones as well. In Jamaica and Trinidad and Tobago the labour movement is represented on tripartite bodies overseeing zone operations and the zones are covered by the normal labour laws. This has certain advantages as described by the labour representative on the Board of Directors of the Trinidad and Tobago Free Zone Company: “… The key to allaying the concerns of the trade unions, NGOs and the business sector, lies in the Ministry of Labour playing a very vigilant role in monitoring the development of EPZs ... An effective monitoring role is dependent on the availability of reliable data on a regular and timely basis.”^[23] No trade union organization has established a presence in the zones in Trinidad and Tobago, however. This is attributed partly to the weakness of the labour movement and partly to the fact that many of the workers in the zone perform skill-intensive, well-remunerated functions and are not predisposed to joining a trade union.^[24] In Saint Kitts and Nevis a National Tripartite Committee on EPZs involves the Minister of Labour, Minister of Trade, officials from the Department of Labour, the Chamber of Industry and Commerce, the Saint Kitts and Nevis Trades and Labour Union and the Teachers’ Union. This has led to further tripartite initiatives including: a minimum wage committee which recommended a minimum wage subsequently adopted by the Government; a committee looking into a qualification and certification programme; and a committee to consider the potential for implementing international labour standards in the zones.

In the same way as the Philippines, the Dominican Republic went through a period of labour unrest before instituting reforms which have gone a long way towards enhancing respect for workers’ rights and improving conditions in the zones. The new Labour Code, adopted in 1992, provides trade union rights and collective bargaining in free zones. Section 41 of Act 8-90 states that all zone enterprises must observe the provisions of the Labour Code and other labour laws, including those concerning social security and training. Today, there are some 14 trade unions operating in the zones, but they still face considerable difficulties in negotiating collective agreements. The small number of collective agreements which have been signed to date are relatively limited in scope and content, and do not cover wages. An interesting example of labour-management cooperation was the signing in April 1994 of a tripartite accord to harmonize employment relations in the free zones and to resolve conflicts through mediation. The agreement was brokered by the Catholic Church and signed by the association of free zone employers (ADOZONAS), the trade unions and the Government.

Zones with other forms of labour-management relations

A number of countries in Central America have government-sponsored associations which cater for the social welfare of workers and serve as an impediment to the growth of trade unions. Trade union activity is not well developed in Costa Rica as a whole, and the free zones are no exception. This is due to a great extent to the existence of “solidarity associations” (solidarista in Spanish) which bring together workers at enterprise level in a mutual savings and assistance scheme based on a percentage of their wage supplemented by an employer contribution. These associations enjoy strong support from the employers who see them as a means of promoting harmonious relations and obviating the need for workers to form trade unions. Workers appreciate the practical support the associations offer, notably the interest-free credit and housing loans. In order to attenuate the anti-trade union aspect of the solidarity associations the Government adopted Act No. 7360 which prohibited anti-trade union practices and extended protection to persons forming or leading a trade union, or representing workers in the absence of a trade union. It also prevents the solidarity associations exercising the functions of a trade union such as collective bargaining. Despite this reform only ten trade unions have been registered in the free zones in Costa Rica and no collective agreements have been signed.

China is still in the process of opening up to the market economy and developing a labour relations system to go with it. The Labour Law of the People’s Republic of China was adopted in 1994 and entered into force in January 1995. It provides the framework for the promotion of employment, labour contracts and collective contracts, working hours, wages, special protections for female and juvenile workers, vocational training, social insurance and welfare, labour disputes, inspection and occupational health and safety issues. However, a number of issues, including collective bargaining and strikes, are not properly covered, and detailed provisions remain to be worked out. In this respect, the provincial and city authorities are free to develop, within the given guidelines, their own labour regulations and practices. Many of the provisions of the new law are yet to be fully implemented, and further legislation can be expected.

China has an official trade union movement closely linked to the Communist Party. The All-China Federation of Trade Unions (ACFTU) states that, in China, the trade union federation does not play an adversarial role, and the situation in the zones is no different. The ACFTU facilitates the formation of enterprise trade unions inside and outside zones. The emphasis is placed on the dual objectives of cooperating with investors and protecting workers. In this way the unions hope to create a stable industrial relations environment and promote economic development in the zones. Trade union services to the membership are provided at enterprise level. Zone-level trade unions deal with employment relations and human resource issues. Human resource development takes place through joint activities with city colleges and night schools. The unions run campaigns to promote employee loyalty to the enterprise and to encourage employers to treat workers well. Dispute resolution is also handled by zone-level unions, although the workers may form dispute resolution committees at enterprise level as well. In Shekou, for example, there is a 24-hour trade union dispute resolution service. Foreign-funded enterprises are obliged to allow the formation of a union during the start-up phase and the trade union must be registered at the time the business becomes operational.

Sri Lanka has a system of workers’ councils in its free zones which are meant to consist of five to ten members elected by workers in secret ballots. The guidelines published by the Board of Investment (BOI) state that the objective of the councils is to “… secure the mutual cooperation of the employees and the employer in achieving industrial peace and greater efficiency and productivity in the workplace”. A Joint Committee of Workers’ Councils coordinates the activities of councils, provides legal assistance where necessary and undertakes awareness-raising programmes aimed at informing workers of their rights and privileges. It has an organizing committee and an advisory committee. In 1995, the Joint Committee pointed out that zone enterprises were not keen to form workers’ councils and that the BOI did not intervene in such cases.^[25] It also stated that representations had been made to the Minister of Labour but no response had been forthcoming. Trade union representatives (interviewed by the Action Programme) noted that while freedom of association was recognized in Sri Lanka, and should apply to the free zones as well, it was impossible for trade union organizers to enter the zones as the security personnel would not grant them access. Under the circumstances the trade unions were sceptical of the ability of the workers’ councils to represent and defend workers’ interests.

The level of trade union organization in zones remains low. Even in China where the All-China Federation of Trade Unions enjoys a formal position in the zones the level of organization is only around 30 per cent in the foreign-funded firms; and even in countries which have never restricted unions – like Mauritius, with 10 per cent – union penetration in the zones is limited.

There can be little doubt that the increased competition in investment and product markets as a result of globalization will put more strain on labour-management relations in EPZs. Enterprises are having constantly to improve their performance and this heightens their dependence on the human factor. Most enterprises are responding by intensifying work, and this clearly puts more pressure on workers, many of whom may have been less than satisfied to begin with. In instances where workers have a channel through which to express themselves, and to negotiate a working environment acceptable to all the stakeholders, the pressures building up in the workplace may be released. Too many zone enterprises, however, have no such pressure valve, and they could well see an increase in labour unrest in the years to come. Enterprises which have already switched to a consultative or participative approach through which they develop a consensus on the measures to be taken in response to increased global competition are more likely to remain stable. Those zones which have put in place a sound system of labour-management relations and provide labour relations services, such as dispute resolution, may find themselves gaining investment as enterprises come to place a premium on stability and efficacy.

Private voluntary initiatives are activities pursued to make business more socially responsible. They can relate to individual unilateral enterprise initiatives or concerted initiatives developed and implemented by coalitions that can group together enterprise associations, trade unions, NGOs and other stakeholders in civil society. An overview of global innovations in the area of voluntary initiatives was submitted by the Office to the Working Party on the Social Dimensions of the Liberalization of International Trade at the 273rd (November 1998) and 274th (March 1999) Sessions of the Governing Body.^[26]

The discussions held by the Working Party revealed that these initiatives are developing and have a social impact, the scale of which the Office should assess by setting up an appropriate research programme.

A common feature of voluntary initiatives is that they come from the private sector and not from the State. In our now globalized economy, the emergence of a social role for enterprises corresponds to a considerable shift in economic power – from the State to the enterprise. In this context, and in view of the progress seen in pluralism and the rapid development of the media, consumers are increasingly demanding that enterprises should be accountable for the social and environmental impact of their activities. In general these requests are expressed through NGOs which base themselves on reports prepared by local workers’ organizations and national and international secretariats. Enterprises, beginning with multinationals, react to these pressures either individually or in the framework of wider initiatives with their industry associations. Private sector initiatives generally derive from the notion of the enterprise’s social responsibility, which has taken a variety of forms in recent decades. The desire to add to the enterprise’s value is one of the main factors behind these initiatives. Maintaining or affirming a good image with consumers becomes an increasingly important element of competitiveness in consumer goods sectors, particularly if the enterprises concerned are globalized and use subcontractors in countries with different levels of development. Stating its wish to respect a certain number of ethical principles can constitute a not inconsiderable commercial advantage for an enterprise, as long as its business practices are in keeping with the principles it upholds.

The TCF industries, owing to their globalized nature, to the fact that they subcontract work out to a considerable extent, especially to the developing countries, and that they employ a large number of staff, are particularly exposed to pressures from civil society. Furthermore, TCF goods are extremely personalized, which makes consumers particularly attentive to the conditions in which they are manufactured. It is therefore not surprising that it is in these industries that over the past decade a proliferation of voluntary initiatives has been seen which puts this group of industries among the most advanced and most open to criticism in the area of social accountability.

From the point of view of the ILO, these voluntary initiatives are interesting in a number of ways. Many ILO Conventions and Recommendations, even if they do address States, concern actions that the private sector helped to achieve. Many aspects of international labour standards can be transposed to be applied in the daily running of enterprises. These standards can orient private voluntary initiatives when they target the same objectives. The ILO Declaration on Fundamental Principles and Rights at Work translates the commitment of member States to promote and comply with the principles relating to fundamental rights. In many cases, the actions undertaken by private enterprises in compliance with their business ethics contribute to the effective implementation of these principles. Conversely, achieving the principles set out in the Declaration in member States affects private initiatives by providing a guide for the establishment of a common threshold for decent work at the global level. As a result of this interaction, voluntary initiatives serve as a complementary element which will not replace, but which can strengthen, the application of national legislation and international labour standards.

Codes of conduct or codes of ethics adopted unilaterally by those in charge of individual enterprises include a variable number of declarations of principles that define the firm’s ethical standards. These can relate to general principles, such as the notion of non-discrimination, while in some cases, the enterprise gives a detailed description of the social practices that it wishes to ensure respect for in the production of the goods it is marketing. Some enterprises distinguish between the basic principles which govern their in-house activities and those which they wish to apply in the selection of their subcontractors and the follow-up to their activities. This application of the code to subcontracted business partners is virtually universal in voluntary initiatives by TCF enterprises, linked to the fact that production in these industries is dominated by a system of subcontracting all along the supply chain.

If the notion of ethics has made a remarkable breakthrough in recent years in the strategic approach taken by enterprises, it is without a doubt in the TCF sectors that the movement has been at its strongest. American enterprises have played a pioneering role in this respect.

Since 1992, when Levi Strauss adopted a code setting out selection criteria for trade partners and countries, many other enterprises producing textiles, clothing and footwear, as well as large distribution groups, have followed suit. In Europe, the movement was slower to take off, but a growing effervescence is now apparent at senior management level in the large European enterprises in the TCF sectors as regards the concrete implementation of the concepts of ethics and good conduct in business.

Furthermore, as far as the TCF industries are concerned, Europe has the only code of conduct developed and signed jointly by the employers (European Apparel and Textile Organization – EURATEX) and the trade unions (European Trade Union Federation of Textiles, Clothing and Leather – ETUF:TCL): a Charter by the social partners in the European textile and clothing sector.

In the developing countries there are practically no individual enterprise initiatives, but importers’ associations have developed codes, sometimes in the framework of marketing strategies. Moreover, a growing number of enterprises that produce goods on a subcontracting basis for distributors and producers in industrialized countries must apply the codes established by the prime contractors. These codes have a considerable influence on the activities of the enterprises concerned although the enterprises are not generally involved in either developing them or monitoring their implementation.

If one examines the content of the codes developed by individual enterprises, the most striking aspect is their diversity – taking all industries as a whole – and the presence of certain constants in the TCF industries. In this regard, a large number of codes developed by the TCF enterprises and the large distribution groups focus on social standards relating to fundamental rights at work in particular. This contrasts, for example, with certain codes of conduct developed by enterprises in the oil or chemicals sectors where it is issues relating to environmental protection that receive most attention. The content of the codes is in fact strongly influenced by pressures brought to bear by consumers and NGOs. While in the chemicals and oil sectors it is detrimental effects on the environment that most stir up public opinion, in the TCF industries it is the conditions in which workers manufacture the goods on which civil society focuses. The role played by the media as a mouthpiece of consumer expectations is also fundamental to understanding the content of the codes. It is not by coincidence that all TCF codes refer to child labour, a subject that has experienced wide media coverage in recent years. On the other hand, freedom of association and the right to collective bargaining are rarely mentioned, although they are an indispensable prerequisite for the respect of fundamental rights at work. It is true that some enterprises rightly consider that referring to freedom of association and the right to collective bargaining in a code could cause implementation problems, particularly with subcontractors based in various developing countries.

In addition to child labour, the social standards most often mentioned in TCF codes refer to commitments relating to non-discrimination and the struggle against harassment in the workplace; to respect for and the application of prevailing national legislation; and to the prohibition of forced labour. A growing number of codes also incorporate a “decent remuneration” component, the precise details of which remain somewhat uncertain, however, given the lack of a concrete definition. It appears that there is currently a type of tacit consensus among TCF industrialists and distributors as to what should constitute the operative part of the codes. This operative part is concentrated around a limited number of social standards which – either directly or indirectly – take up the ILO’s fundamental standards, often, however, omitting freedom of association and collective bargaining. These main operative clauses are often supplemented by references to a healthy working environment and also to remuneration, as mentioned above, the approach to which tends to mirror the notion of the “satisfaction of essential needs” developed by the ILO 20 years ago.

If the content of codes in TCF industries is gradually being harmonized, it is because in parallel to the individual initiatives a certain number of industry associations, trade unions, NGOs and hybrid coalitions have developed model codes over the last few years designed to be used as guidelines for enterprises wanting to implement an ethical strategy. The model codes established by industry associations focus mainly on ethics, with general references to labour practices. The model codes developed by workers’ organizations (such as the ICFTU Basic Code) have as their main objective to help trade unions to negotiate the adoption of codes in given sectors or in specific enterprises. The NGOs’ model codes aim to serve as a reference point by proposing a set of principles, minimum standards or practical instructions to follow during the adoption and implementation of codes. In the TCF sectors, mention should be made of the code of conduct developed in the framework of the Clean Clothes Campaign (CCC) in Europe. Hybrid codes are increasingly being seen, which involve enterprises, workers’ organizations and NGOs. These codes, which ar often initiated by NGOs, are becoming increasingly important. This is the case of the United States Apparel Industry Partnership, for example, which groups together American TCF multinationals and NGOs headquartered in the United States. It is also the case of the SA 8000 Initiative (Social Accountability) launched by the Council on Economic Priorities following consultations with a number of NGOs and multinational enterprises. Some governments also play a determining role in this area. The United States Government was behind the Apparel Industry Partnership and it also published standard principles for American enterprises operating overseas. In the United States, on the impetus of the Government, the American Apparel Manufacturers’ Association also developed a code, with a relatively detailed implementation structure. The British Government is participating actively in the development of the Ethical Trading Initiative. The Canadian Government submitted a guide for the elaboration of voluntary codes, which provides an eight-stage model, and which was prepared in conjunction with the social partners. The Governments of Australia and New Zealand have prepared similar guides, following consultations with the main parties concerned.

In January 1999, the European Parliament, on the basis of a report by the Committee on Development and Cooperation, adopted the Resolution on EU Standards for European Enterprises operating in developing countries: towards a European Code of Conduct.^[27] In this resolution the European Parliament, after referring to a number of instruments, including the ILO Declaration of 1998, approves and encourages voluntary initiatives aimed at promoting codes of conduct and recommends that a model code of conduct, taking up minimum international standards, should be developed for European businesses.

Most standard or model codes, which are increasingly influencing the adoption of operational codes at the level of individual enterprises, have a common feature: they make provision for the establishment of an independent monitoring system outside the enterprise. The first generation of codes was based on the establishment of internal monitoring within the enterprise. In order to be effective, this system presupposed that the enterprise would train a sufficient number of competent staff to assess the effective implementation of the code. In the globalized TCF sectors, only a few enterprises were in a position to implement such arrangements. In the majority of cases, it was the quality controllers of the goods who had the task of verifying the application by subcontractors of the principles contained in the codes.

The lack of sufficient training meant that this monitoring could not be carried out satisfactorily. Moreover, the credibility of the enterprises concerned was not assured as the process was an internal one and consequently to be viewed with caution. The numerous examples of enterprises criticized by the media and NGOs for not having applied the ethical rules they had established constitute the best possible illustration of the limits inherent in a system of internal self-certification. In the TCF enterprises the current trend is moving towards growing recourse to independent or external monitoring. An increasing number of enterprises observe structured initiatives which include arrangements for the external monitoring of the code of conduct or which stipulate that an auditing firm should carry out a social evaluation, in addition to the other services it provides to the enterprise. In some cases, enterprises conclude agreements with coalitions headed by NGOs, making them responsible for monitoring and producing social evaluation reports. Of course, these external procedures cannot entirely replace internal monitoring, which remains indispensable in order to integrate the ethical approach into the enterprise culture. External monitoring is an additional element, and one which is becoming increasingly necessary, which makes it possible to test the validity of this approach.

In the TCF industries, a number of multinational enterprises have developed various innovative approaches to supplement their codes of conduct or in the framework of procedures to implement those codes. Some large American multinationals have developed management systems applicable to the entire supply chain as a supplement to social standards. These systems, which apply to all subcontractors, particularly those in developing countries, focus on providing training for subcontractors in specific spheres such as safety and health. These initiatives go beyond the simple monitoring of the application of codes and therefore deserve to be mentioned. Other initiatives also aim to provide support to communities involved in the activities of the TCF enterprises. In this way some TCF enterprises provide support in the areas of education and training, in collaboration with local NGOs and trade unions, while others concentrate their community action on the health infrastructure (assistance in the construction of clinics and hospitals) and vaccination campaigns. Through such actions the TCF enterprises participate in improving the welfare of the communities within which they operate; they can also have a positive impact on employment, development and the reduction of poverty, and at the same time can hope to see a related improvement in productivity.

Further initiatives, targeting consumers more specifically, also deserve to be mentioned on account of their importance for certain TCF sectors. The first of these relates to social labelling programmes. A social label informs the consumer of the social conditions in which the good was manufactured or the service was provided. In the TCF industries, the main social labels that have appeared on the market relate to carpets (with labels such as RUGMARK, STEP, KALEEN) and footballs and are principally associated with the problem of child labour. At present, a number of campaigns are being conducted by NGOs to promote a wider social label applicable to all TCF goods. Nevertheless, for the moment no definite progress has been made in this area, essentially due to the complexity of subcontracting networks and the difficulties involved in integrating a credible and verifiable label into the entire supply chain. Some enterprises with a brand name label consider in fact that the best social label lies in the image that a brand has given its consumers over the years. Owing to a variety of factors, fair trade, which has had a significant impact on the markets of certain foodstuffs, has had trouble extending to TCF goods, with the exception of certain artisanal goods that remain marginalized with respect to the international trade in TCF goods.

Shareholder initiatives centred on labour practices are becoming increasingly numerous, particularly in the United States. More and more often, shareholders are taking a stand (by way of resolutions or questions raised during general assemblies) on labour-related issues and are seeking to direct managerial strategies towards greater respect for human rights at work. In the United States this trend is particularly apparent in enterprises producing clothing, leather goods and footwear. More often than not, the proposals come from influential groups such as pension funds and confessional funds, which lends them even more weight.

The movement is more restrained in Europe where, as in Japan, environmental concerns are still at the source of most shareholder initiatives. Lastly, it should be noted that advances are being seen in ethical investment. The move by investment funds to invest in socially responsible enterprises began in the United States and has now extended to a large part of Europe, gradually taking hold in all the industrialized countries.

All these initiatives have a certain influence on labour practices in the TCF industries. Nevertheless, with research as it stands, no more than assumptions can be made as to the true social impact of private voluntary initiatives. It is clear that awareness of the social dimensions of globalization has progressed and it is probable that respect for human rights at work has improved as a result of these initiatives. Nevertheless, little is known about the incidence of codes of conduct and other initiatives on the viability of enterprises in the developing countries and on employment creation. Neither is it known to what extent the SMES in the industrialized countries, as well as in the developing countries, can associate themselves with and benefit from the focus on ethics or whether, on the contrary, it constitutes a further marginalizing factor for them. These are some of the questions that remain to be answered and that should be addressed in order to fully assess the social repercussions of this approach. Activities under way at the ILO and in the wider framework of the United Nations Global Compact, launched at the behest of Kofi Annan on the occasion of the Davos Forum in 1999, and in which the ILO is involved, should contribute to a better understanding of the related social effects.

It is difficult for sectors as technologically diversified as the TCF industries to establish guidelines aimed at defining new training needs and their resulting effects on labour practices. However, one general observation can be made: globalization, and its corollary – the growth of international competition – have accelerated the process of the modernization of production and marketing techniques in most of the countries involved in the global trade of TCF products. Changes in demand towards greater diversification, higher quality and the integration of a “fashion” component at all stages of the process have also contributed to an adaptation of techniques and the gradual replacement of the whole range of machinery. Increased diversification has led to greater pressure on production flexibility. The TCF industries work to increasingly tight schedules, applying the “just in time” and “rapid response” approach that requires both new machines and methods of work organization to ensure greater flexibility. It is in these areas that labour practices have changed. The training of production and management staff must be adapted to take account of working methods that provide greater flexibility, allowing models and products to be changed quickly and restricting the percentage of defective goods. Quality constraints resulting from the changes occurring in the major markets of the industrialized countries require the producing countries – both industrialized and developing – to adapt the quality of their goods. More often than not this takes the form of replacing old machines with modern, more reliable equipment which in turn requires the operating staff to be more highly qualified. The growing importance of fashion also influences technology. In the textile industry new fibres have been developed; their manufacture often requires more high-performance machines than those used for traditional fibres. The techniques used for cloth printing must adapt to changing demand which also affects the way goods are finished. In the clothing industry, rapid changes in fashion mean models must constantly be adapted, with the quantities produced of the same item of clothing tending to diminish, in turn restricting the possibilities of mass producing standard goods. In many cases, team production of small batches is replacing traditional line production and machine operators must become more versatile to ensure its success. The design of models plays an increasingly important role in the viability of enterprises. Cutting and assembly operations are being rationalized through the introduction of new machines assisted by computers and microprocessors. In the footwear industry it is in the sports and leisure shoe segment that technological change has been most keenly felt. These goods use composite materials, sophisticated textile fibres which are combined with traditional products such as leather and rubber and assembled using modern techniques. This production segment is also very influenced by fashion and the design of models requires the latest technology and highly qualified staff. Of course, these few trends relate only to part of world production of TCF products. A major part of the global textile industry, particularly in developing countries, still operates according to classic, proven techniques. The manufacture of footwear is also artisanal or semi-industrial in many countries and a major portion of sewing assembly activities in the clothing industry has evolved very little during the past 20 years. Nevertheless, the new pressures outlined above are being felt by an increasing segment of production, the part relating to international trade and the one which most influences the economic climate in countries that are heavily dependent on the TCF industries.

It is in the industrialized countries that technological developments have been the most pronounced. In Europe, the TCF industries have, for a number of years, been modernizing themselves to address a fall in competitiveness related essentially to high production costs. This modernization process has gone hand in hand with extensive training and the adaptation of labour practices. In the United Kingdom, for example, the National Textile Training Organization’s Strategic Plan has been implemented which aims to ensure the survival and success of the textile industry by improving the profile, quality and effectiveness of education and training. It seeks to develop the industry by proposing innovative training methods elaborated in conjunction with training centres and manufacturers of textile machines and equipment. This plan also aims to redefine new qualification standards corresponding to the latest needs of enterprises which allow the employees concerned to have access to refresher courses throughout their working lives. In the footwear sector, which a number of years ago experienced the repercussions of the massive importation of cheap goods, the accent has been placed on quality, the search for “niche” markets and top-of-the-range goods. Despite the considerable efforts made in respect of training to achieve this objective, the British footwear industry is once again experiencing difficulties due to the low level of interest of young people in an industry that is gradually losing its most qualified staff through retirement. The leather industry has also suffered from massive importations of poor-quality goods. The alignment of training to improve quality came up against receding demand for top-of-the-range goods. In the clothing industry the Clothing Industry’s National Training Organization designed and developed training programmes on CD-ROM to supplement the training provided in specialized centres and enterprises. The Government encouraged the development in all TCF sectors of a partnership between the employers, the trade unions and the officials in charge of the training centres in order to establish a network of national training organizations (NTO). Each sector now has its own NTO (the National Textile Training Organization – NTTO – for textiles; the CAPITB for the clothing industry; and the FLNTO for the leather and footwear industry). The approach within each NTO is similar. The employers, following consultations with the trade unions and the specialized trainers, identify industry priorities on the basis of international needs and constraints. On the basis of these priorities each NTO draws up a strategic programme, the aim of which is to provide support to the existing training structures in a spirit of cooperation. Among other innovative approaches, mention should be made of the NTTO which, in collaboration with the employers and the textile universities, encourages the development of new centres of excellence specialized in specific textile-related activities. These centres are provided with the latest equipment, while employers provide the technical support. In the clothing sector, as mentioned earlier, it is through the provision of CD-ROMs that the CAPITB is endeavouring to make up for the decline in training provided in technical colleges. In the footwear industry, the FLNTO is currently conducting surveys with enterprises to identify current training practices and problems encountered. The most innovative approaches will be evaluated and promoted throughout the sector. The example of the United Kingdom demonstrates the importance of a concerted approach by enterprises, workers’ representatives and the officials in charge of institutional training, with the government playing the role of catalyst. Most European countries have realized the importance of partnership and consultation to put into place national training policies that will guarantee the long-term viability of the TCF industries in the face of international competition.

In France, where, as in most European countries, TCF training programmes are financed by enterprises, the State and also European funds, there is a framework agreement for the development of training in the textile, clothing, dressmaking, leather and textile maintenance sectors. This agreement, concluded in 1999 between the State and the employers’ associations following consultations with the social partners, establishes the scope of application and forms of support provided to enterprises involved in developing the necessary skills for the implementation of their economic and social strategy, particularly in the context of operating arrangements and the reduction of working time. The aim of the agreement is to target 500 enterprises representing a workforce of 25,000 employees. Priority is given to SMEs which constitute the majority of the industrial network in the TCF sectors in France and to employees with medium or low-skill levels (level V or below according to the classification used). Under the terms of this instrument the occupations and the State agree to boost, by providing aid, the development of skills and the organization of qualification procedures to lead to the certification of skills in the framework of enterprise training programmes. This type of agreement has been found to be indispensable in providing additional support to enterprises that wish to improve qualifications and develop their human resources in order to remain competitive. Several studies relating to skills needs in the TCF industries in fact revealed a certain number of structural shortcomings in the areas of access to basic training and continued training, particularly in SMEs. In particular, it was found that the higher the initial level of qualification was, the easier it was to have access to training, which led to an over-representation of less-qualified employees in enterprises, while training needs were increasing among the more highly qualified employees. Access to training is more straightforward in the textile industry, where enterprises are larger, than in the clothing industry where SMEs predominate. On-the-job training courses were found, on average, to be longer than in the other industries, but with the percentage of workers involved being on average lower than in the manufacturing sector. In the clothing industry, for example, the percentage of workers involved in on-the-job training is approximately one-third of the average seen in the manufacturing sector. Sandwich training is also insufficient. The use of apprenticeships is limited; it varies between 3 per cent of youth employment in the clothing-leather branch and 2.3 per cent in the textile branch, while the national average is 9.4 per cent. On the other hand, the level of retraining or skill acquisition contracts, typical of industries that employ fewer young people, is above the average seen in the manufacturing sector. It is therefore imperative for France, which thanks to improvements in its production apparatus has achieved competitive and viable TCF sectors, to also upgrade its training system in those areas where bottlenecks are beginning to be seen. Regarding high value-added “niche” goods, where quality must be combined with a rapid response to the market, training needs relate both to the continued improvement of qualifications and to the implementation of working arrangements that take into account the versatility of operators and increase their flexibility.

In many respects Belgium is in a similar situation to France. The traditionally important TCF industries have been affected by a certain slowing of demand, by growing competition from Asia and the Central and Eastern European Countries, as well as by shortcomings in the management of many SMEs which have been unable to adapt themselves to the new international climate. Enterprises wishing to modernize themselves encountered difficulties in finding qualified staff and were affected by weaknesses in existing training structures. In the textile industry, enterprises have increasingly focused on creativity, diversifying product ranges and creating new markets (such as agrotextiles and geotextiles). They must make innovations in the manufacturing process at both the quality and service levels. As a result, employees must be able to constantly adapt themselves to manufacturing new products, with new attributes, as well as to manufacturing small series of goods. They must also be versatile, able to operate various types of machine which require less and less manual handling as a result of automation. To meet these new needs, the two sectoral training centres for the textile industry and knitwear (COBOT and CEFRET) constantly evaluate developments in products and processes, and propose tailor-made training to enterprises in exchange for a symbolic contribution. While the enterprises are satisfied overall with the training courses proposed, they complain about certain shortcomings. In fact they consider that the public authorities should provide more financial encouragement for lifelong learning for workers, should improve training equipment and infrastructure and should better harmonize the supply of and demand for qualifications from both the quantitative and qualitative points of view. Enterprises would also like trade unions to encourage their members to commit themselves to lifelong learning and to participate more constructively in the development of training programmes in enterprises as well as in their implementation. Trade unions consider themselves to be insufficiently involved in decisions concerning technological choices and that their views about training programmes associated with these choices are only viewed in an advisory capacity. They also find employers responsible for the weakness of on-the-job training policies and the failure to anticipate future training needs. The trade unions would like to be more closely associated with the decision-making process involving technological choices, including in SMEs that do not always have access to the necessary information to make these choices. They would also like training centres financed by sectoral contributions to have more resources at their disposal (with assistance from the public authorities) and for workers’ representatives to be given greater access. As demonstrated once again by the example of Belgium, in order to counter competition the public authorities and the social partners have set up training structures at the national level to evaluate new needs and propose the appropriate training. Nevertheless, as in other European countries, there are weaknesses in methods of application, particularly as regards on-the-job training, and in the financial resources raised. Furthermore, there is a radical difference in points of view between employers, who consider the technological choices as being entirely their own prerogative, and workers’ representatives, who want to be involved in decisions relating to investment in new machinery. The desire for collaboration is even more apparent as regards the implementation of training programmes, with each of the social partners asking the other for greater involvement (financial by the trade unions vis-à-vis the enterprises; increased involvement of employees in training needs by employers). Innovative approaches have also been tested. These essentially concern the development of compact training courses or training modules; two-part training courses with one part being given by a trainer and the second part involving individual learning; the intensification of training for individual positions, or even individual employees if the duties involved are very complex. Similar approaches to better targeted training, combining theory and on-the-job practice are found in most of the industrialized countries that have extensively modernized their TCF industries.

Information from other industrialized countries seems to indicate that the participation of workers’ representatives in the implementation of training programmes in enterprises is generally the rule. Nevertheless, they are often only consulted in the development of these programmes and rarely participate in decisions concerning technological choices. The national sectoral training structures generally work on a tripartite basis. Further information highlights problems and solutions that are common to all these countries. The Confederation of Swiss Employers, for example, notes that the TCF industries need more apprentices, who could subsequently achieve higher qualifications through on-the-job training. However, it is difficult to recruit apprentices, and young people in general, despite efforts made at the national level to boost the prestige of apprenticeships as well as the image of the TCF industries. Furthermore, many SMEs do not have the appropriate structures to allow them to satisfactorily train multiskilled apprentices. The problem of lack of interest shown by young people in the TCF occupations is certainly one of the major constraints to the establishment of truly effective training policies to ensure the necessary upgrading of manpower. Among the innovative approaches listed in the replies from industrialized countries, there were many references to the development of teamwork in the clothing industry. This trend, which is not really new, but which seems to be experiencing a revival, involves the production of small series to respond to very strict quality criteria. Teamwork allows enterprises to make all the workers responsible for the quality of the products they manufacture as a team from the beginning to the end of the process. In order to be carried out effectively, teamwork requires special training for the staff involved in order to make them more multiskilled. It also involves a change in methods of supervision and making all staff aware of teamwork practices. Despite its definite advantages, particularly in terms of staff cohesion and product quality, teamwork does have its limits. At present only a tiny fraction of clothing manufacture is organized in this way in the industrialized countries.

Information from the United States reveals another trend: the shift in technical training needs away from industrialized countries towards developing ones. In the clothing sector, as in the footwear sector, a growing number of enterprises with a known brand name are specializing in the design and marketing of their products and are entrusting all their manufacturing to subcontractors working in developing countries. This trend is becoming more widespread with major distribution chains also having their clothing manufactured overseas under their own brand name. There has been a change in training needs as a result of the relocation of clothing production from the industrialized countries towards the developing ones. In the industrialized countries, new training needs are essentially concentrated on international level marketing, creative and quality control jobs. Purely technical training is therefore being transferred to developing countries, which must bear the associated costs which are increasingly high as the quality requirements of the foreign contractors continue to rise. The latest tendency is even to replace traditional subcontractors responsible for assembly operations by package suppliers who assume more responsibilities such as the purchase of fabrics and the financing of all manufacturing operations up until the moment the goods are dispatched.

If this trend became widespread, which is entirely conceivable for relatively standardized products, the whole approach to training would have to be reviewed. The part of the clothing and footwear industry that would remain located in the industrialized countries would only remain an industry by name and would be more of a service activity with a high marketing component requiring qualifications very far removed from traditional needs. It is only really in the sphere of the design of models and collections that the traditional occupations, also entirely overhauled by developments in computer-aided design (CAD), would continue to exist. All prospective studies show that occupations in the TCF industries are undergoing massive changes in the industrialized countries. It is therefore for all those participating in the training process to anticipate future needs, bearing in mind the fact that only open social dialogue on these issues will be able to ensure the harmonious development of these industries.

It is also increasingly clear that problems encountered and the appropriate solutions are of a regional or subregional nature. Within the same economic bloc there are common solutions and points of convergence that can be the focus of discussion and targeted support on the basis of contributions from all members of the community concerned. The evaluation of the competitiveness of the textile industry inside the European Union and of related training needs, instituted in the framework of sectoral social dialogue by the European Commission, clearly highlights the methods of consultation that should be used in the future. The European works councils that have been set up in most TCF multinationals also constitute another area where the social partners can work together on issues of training and related labour practices.

Just as in the case of the industrialized countries, it is somewhat risky to try to make any generalizations in an attempt to describe the situation of developing countries and countries in transition as far as technology and training is concerned. These countries have very modern enterprises which use up-to-date technology requiring highly skilled staff and which have developed innovative labour practices. Such enterprises generally produce goods for export and often belong to large multinational groups which established themselves in countries with low production costs following the introduction of a global strategy to optimize costs. Nevertheless, these “model” enterprises of technological development are the exception rather than the rule. The vast majority of TCF enterprises in both developing countries and countries in transition use tried and tested technology requiring extensive and little skilled manpower. Labour practices in such enterprises are relatively traditional and few notable improvements are generally made to working methods. What is important in most enterprises operating in these countries is not so much the fact of integrating the latest technological innovations, but rather of adapting traditional technology to new market needs, while making optimum use of the most plentiful factor of production – labour.

In the Central and Eastern European Countries, which are halfway between development and underdevelopment from the point of view of their TCF productive apparatus, the main concern lies in improving the quality of production in order to satisfy foreign buyers, the majority of which are European. Entrepreneurs in a number of these countries complain about the difficulties they encounter in gaining access to information relating to technological innovations. Thus, in the Ukraine the employers’ association indicates that it would like to see a national centre that would provide enterprises with relevant information about technological innovations, new equipment, new products and new methods of work organization.

A similar demand can also be seen in other Central and Eastern European Countries which are most integrated into the globalization process. In Slovakia, employers in the textile and clothing industries express their discontent with technical training centres and other training institutions which are unable satisfactorily to prepare workers to take up posts in enterprises owing to the lack of appropriate resources. They also regret that the legal status of apprentices has not been clarified, further restricting possibilities to recruit staff to be trained in the specific skills needed. In Lithuania, as in other Central and Eastern European Countries, clothing enterprises that produce goods for export are faced with the need to improve the quality of their goods. This constraint necessitates an all-round improvement in skills involving the reskilling of employees.

As it is necessary to act quickly, a large number of enterprises have set up in-house vocational training units for their employees. These units serve both to reskill existing staff and to train new employees. The technical training institutes also participate in this effort to upgrade skills, with the financial support of the Government and the technical support of employers. For higher skill levels there are a number of vocational schools, including the Higher Light Industry School, which also participate in the global training effort. In the Czech Republic, the Employers’ Association for the TCF Industries submitted a proposal to the Ministry of Education, Youth and Sport relating to training needs in those industries, the objective being to ensure that institutional training prepares future employees for the industries’ new needs. Furthermore, the enterprises appear to be ready to introduce lifelong learning techniques that should ensure the constant upgrading of professional and managerial staff. These developments are the result of general realization by enterprises in the formal sector of the need constantly to adapt skills to market trends. One of the major recruitment difficulties encountered by TCF industries is the fact that technical schools are abandoning some important areas of instruction for these industries due to the lack of student interest. The shortcomings in basic education must be compensated for and taken up by enterprises. Available information does not reveal the extent to which trade unions in the Czech Republic are involved in efforts to ensure that education, training and enterprise needs are better coordinated.

Trade union sources from other Central and Eastern European Countries are of the general opinion that trade unions have more difficulties than in the rest of Europe making their views heard in the training sphere both as regards the design of new programmes and their establishment. This is partly due to the fact that a greater portion of training is carried out at the enterprise level. This being the case, the employers’ main concern is to make the training that they provide pay by adapting it to the enterprise’s specific needs. This approach is not necessarily compatible with the trade unions’ more dynamic vision of the training process. Workers’ associations, on the other hand, seem to be more active in the areas of training in safety and health, areas in which the objectives of trade unions and employers tend to coincide more.

Information from the Ministry of Labour of Slovenia on the restructuring and reorganizing of jobs in the footwear industry provides an example of a coherent programme designed to coordinate education and training with the sector’s new needs. This programme, developed by the Ministry of Labour, Family and Social Affairs in June 1998, is based on an evaluation of the economic and social situation in the sector and its importance in the national economy, conducted in order to establish the main thrusts of restructuring and to develop an appropriate programme of human resource management. This component of the programme, which combines education and training, aims to ensure full-time work for a greater number of workers while also addressing the question of too many workers by using special funds. It also makes provision for the promotion of new jobs on the business side of the industry which has, for the moment, been marginalized. The programme contains legal and financial incentives to promote the employment of employees in the process of being trained, the employment of disabled persons and also home work and part-time work, under certain conditions. This programme, which was developed together with the social partners, is an attempt to make a coordinated response to a critical situation in a sector which offers further development opportunities. By taking this approach, which will shortly be repeated in the textile industry, Slovenia is illustrating that a global reflection on an industry or a group of industries can lead to the solution of general problems in which training and manpower development are determining factors for success.

Despite other recent attempts to address the problem of the upgrading of the training system at the national level, most Central and Eastern European Countries suffer from a chronic shortage of vocational training centres. When such centres exist they are often underequipped and the training they provide is not always up to date. Labour practices associated with in-house training correspond to the desire to address short-term needs and not generally to allow workers trained in this way to use their knowledge in other enterprises. This type of captive training stops the effective redeployment of TCF staff when restructuring becomes necessary, which is often the case, particularly as enterprise privatization increases pace. Methods of work organization often lack flexibility, and flexibility is provided by issuing more precarious employment contracts.

In the developing countries it is necessary, once again, to distinguish countries which concentrate on the top of the range and are considerably modernizing their production equipment from those whose principal activities remain linked to outward-processing trade arrangements. In the first category, which consists of countries where production costs no longer allow them to remain competitive for standardized goods, training needs correspond to the desire to improve quality and to introduce new machinery.

In Africa, the clothing industry in Mauritius, which relocated to Madagascar certain highly labour-intensive segments, is an example of the case in point. Up until recently, on-the-job training carried out by enterprises was enough to ensure the production apparatus ran smoothly. Some years ago, following changes in the market, it became increasingly necessary to establish an effective vocational training system. Relatively unskilled machine operators are unable to adapt themselves to new machinery that had been installed and have trouble meeting deadlines and quality standards. Those in charge of SMEs do not have the management skills to improve their efficiency, nor the marketing skills to promote their products. The creativity of designers is insufficient to respond to market trends and to offer attractive goods for foreign markets in the high value-added segment. These shortcomings reflect those of the training system. Basic training is still insufficient despite efforts undertaken in the framework of the Industrial Vocational Training Board. The IVTB, which is a government institution financed by the enterprises, manages the training system in Mauritius. The TCF enterprises submit their requests to this institution for specific training to be provided to the company or to its employees. Enterprises are partly reimbursed for requests accepted. There is a wide range of training, but it is still insufficiently adapted to new needs, particularly those associated with high value-added niche markets. Training provided to managerial staff is too general to respond to the specific needs of individuals responsible for SMEs in the clothing and footwear sectors. Training offered to production staff does not take sufficiently into consideration the new quality and deadline constraints and does not satisfactorily incorporate the technological innovations necessary to succeed at the top end of the market. It is therefore in-house training that makes up the difference, with a certain time lag, however, and which is helping to achieve the desired wish of putting a definitive end to middle of the range production which is not necessarily profitable. The trade unions do not consider themselves to be sufficiently involved in training and reproach the enterprises for preferring to use qualified immigrants rather than training or retraining local staff.

In Asia, many countries wanting to improve the quality of their production come up against similar difficulties which lead to shortages of qualified manpower. In Thailand, the TCF industries have been restructured to face up to foreign competition and to absorb the shock of the Asian crisis. At the institutional level, the Department of Skill Development at the Ministry of Labour and Social Affairs conducts specific training programmes for the TCF industries. These programmes encompass pre-placement training and proficiency courses that cover the most important occupations in these industries. New programmes are currently being developed, in collaboration with the private sector, to respond to new needs arising out of restructuring. The coordination of training policy is carried out by a national committee, the National Vocational Training Development and Coordination Committee, which has put into place provincial subcommittees whose role is to develop training programmes adapted to varying local conditions. The systems set up are based on tripartite collaboration, with the social partners cooperating in the implementation of training programmes. This type of system does not, however, allow all needs to be met. Small and medium-sized enterprises do not have sufficient access to the type of training that would allow them to improve their marketing and management skills. The institutional structures are insufficient to respond to growing training needs and across the board manpower remains underqualified while shortages are being seen in the key positions for the development of new technologies. In order to address this situation, the most successful enterprises train their most highly qualified staff overseas, sometimes with the help of producers of computer machinery and equipment. Those enterprises that cannot afford such in-house training costs must be content with external systems, access to which is not always easy, slowing their development possibilities all the more. Malaysia has experienced the same problems of access to training and a shortage of qualified manpower, particularly with respect to growing skill requirements dictated by computers and quality criteria in order to meet ISO standards. Furthermore, the employers deplore the fact that many enterprises which would like to modernize their plants in order better to compete at the international level are unable to do so due to a lack of financial resources.

Sri Lanka constitutes an interesting example in that it is halfway between the two categories of producers described above and that it has training needs linked to labour-intensive production and the desire to move towards more diversified and better quality goods. The Government assists the TCF sectors through its Industrial Training Authority. It also coordinates the apprenticeship system which comprises theoretical basic instruction and in-house training. The Government is also in the process of setting up a skills development fund. This fund should enable the private sector to obtain assistance, upon request, to improve the skills of its personnel and to organize retraining activities. This fund would also give valuable insight into the new developments in training and work organization needed for Sri Lanka to adapt itself to the current and future needs of the global market. Training has become a necessity for survival and development and is something to which enterprises are giving increasing priority. Most enterprises that produce goods for exportation have their own in-house training programmes, sometimes with the support of foreign contractors. The trade unions, which are concerned about the future of employment in these sectors, recognize the importance of appropriate training and wish to see the institutional training structures strengthened. On the other hand, they do not appear to be directly involved in the development of in-house training programmes which remain the exclusive domain of employers, particularly in EPZs where they have very little influence. The two largest training institutes, the Textile Training and Services Centre (TTSC) for textiles, and the Clothing Industry Training Institute (CITI) for clothing, provide both training services and tests for machinery and materials in order to improve product quality. These institutes often receive grants from countries which trade with Sri Lanka, and the training provided is addressed primarily at management, skilled technical staff, quality control and production staff. Nevertheless, the overall resources made available for training remain insufficient. Sri Lanka is experiencing a great deal of trouble in raising the quality of its production to any noticeable extent.

In Bangladesh, where mass production still predominates, it is the low level of initial education of employees in the TCF branches which is the main obstacle to improving skills. The in-house training programmes are often limited to on-the-job training that is specific to the position occupied by the individual employee. The institutional training structures are inadequate to satisfy demand. The trade unions feel completely marginalized in the training sphere, with the exception of training in safety and health in which they participate actively. The only progress seen in relation to greater participation by employees in training comes from the establishment of a number of workshops which operate on the basis of teamwork. In these workshops, employees have improved their skills by becoming more versatile, and the introduction of these new methods of work organization has paved the way for greater employee awareness of the importance of the quality of finished products. The main representative trade union in the clothing sector (BIGUF) says it is satisfied with developments of this kind which facilitate communication between management and workers, but it recalls that such initiatives are few and far between and that globalization has not significantly improved worker-employer relations.

The developing countries in the Americas are faced with the same need to improve techniques and the quality of goods, particularly in enterprises geared to exportation. In Guatemala, the Government works together with the social partners to improve training in the textile branch. A training centre managed by the State and partially financed by enterprises from within the branch (INTECAT) develops and provides training programmes designed to improve the productivity and quality of the national textile industry. Employers play an important role in establishing priorities relating to the various types of training. Among other achievements, the INTECAT technical training institute has established a technical branch for the training of supervisors, developed long-term programmes for machine mechanics and a postgraduate degree in industrial clothing manufacture. State participation aims at being as targeted as possible by giving priority to training programmes in areas where they are most needed by the textile industry.

In Argentina, the Government also participates in training efforts in the TCF sectors. It gives priority to support for the hiring of young people as well as for actions to promote private training initiatives that are granted tax incentives. In order to ensure better coordination between supply and demand, it has set up tripartite vocational training councils to promote better social dialogue in the establishment of priorities in the area of vocational training. In the TCF sectors, these councils have demonstrated the importance of continued training as a determining factor in the long-term viability of enterprises. In El Salvador, the training programmes set up – with state assistance – in the TCF sectors are designed to facilitate access to training and to make it more effective. The vocational training institute of El Salvador (INSAFORP), established in 1993, manages and coordinates training programmes set up for institutions belonging to the vocational training system. This institute, which operates on a tripartite basis, evaluates the most urgent training needs for enterprises as regards technological and business development and translates these needs into appropriate programmes. The institutional structures set up, in which the social partners participate, do not however satisfy all new training needs in the TCF industries, and SMEs in particular have trouble gaining access to these systems owing to their minor level of integration in the national economy. In Honduras, the weakness of the institutional training structures means that most training in the TCF sectors occurs in-house. Training is concentrated on the correct use of machinery, which restricts opportunities for workers to progress from a vocational point of view. The State supports vocational training through the National Institute for Vocational Training (INFOP), but despite this support both the textile branch and the footwear industry lack qualified staff for product finishing and quality control. In Costa Rica, the National Apprenticeship Institute (INA) is responsible for organizing courses that correspond to needs expressed by enterprises. These courses range from apprenticeship to supplementary training for employees who are already qualified. In the TCF industries, the larger enterprises have in-house training facilities and develop in-house training programmes to respond to their specific needs, generally through their production staff. Training at a higher level is generally provided by specialized institutions, either public or private, with which the enterprises conclude cooperation agreements. As in other countries mentioned earlier, in-house training or training under the supervision of the enterprise predominates. This is generally the result of a lack of planning for long-term needs which ends up by penalizing enterprises. Furthermore, the lack of dialogue with workers’ associations restricts the mobility of manpower and is a source of potential conflict.

The few countries mentioned above, by way of example, demonstrate that there is a need to coordinate training programmes in order to address the challenges arising from globalization. It is only by taking a global approach, involving the State and the social partners, that the TCF industries in developing countries and in countries in transition will be able to meet these challenges. Labour practices relating to training must focus more on the long-term and give greater importance to social dialogue, without which training concentrates on short-term needs which do not take into consideration the fundamental need to evolve with the market.

Despite a clear need to adapt to growing flexibility constraints, little change has been seen in work organization practices. In the clothing industry, in particular, where these constraints are most keenly felt, flexibility is achieved through recourse to more precarious employment contracts, to subcontracting and to home work rather than through better work organization. Innovative methods, such as teamwork, are not particularly widespread, often due to a lack of sufficient thought being given to available opportunities. Certainly, taking an innovative approach to work organization is not easy in sectors where traditional assembly lines have proven their value. Nevertheless, at a time when the question of manufacturing deadlines has become paramount, making sure employees participate and take responsibility in the smooth running of enterprises has also become a determining factor in industrial success and social peace. Giving employees greater responsibility through the adoption of innovative practices also helps to reduce absenteeism and ensures social cohesion within enterprises. This means changing mentalities and behaviour, establishing strategies to develop group work and a sense of belonging and it also means giving employees better working conditions, greater employment stability and opportunities to advance within these enterprises.

The TCF industries are established throughout the world and are interconnected by an extensive global subcontracting network involving enterprises of all sizes and all levels of development. Trade in the sectors of textiles and leather (which are often commonly grouped together under the heading “textiles”) is growing more rapidly than overall trade in manufactured products. Trends in trade, like those in production, are strongly influenced by the major distribution groups and multinationals which apply global supply strategies in which the international competitiveness of suppliers depends on traditional factors, such as production costs, but also on other factors arising from the demand for greater flexibility.

An analysis of trends in TCF production and trade over the last two decades and of more recent trends highlights a number of constant factors as well as certain new developments. The constants include the growing overall importance of the developing countries as suppliers for the world market of TCF products and, within that group, the steady rise of emerging countries.

Asia is the continent that has benefited most from successive waves of relocations, and it is to China that the greatest volume of production has been relocated to date. Despite the scale of changes linked to relocations of production centres at global level, some industrialized countries have managed to maintain production segments, often high value-added segments, which have remained viable despite greater international competition. The search for “niche” markets that are relatively sheltered from that competition has thus become a fundamental priority for manufacturers in the higher income countries, while in the labour-intensive operations, international competition has become intense. These labour-intensive activities are the most volatile and the most easily relocated within countries in response to comparative production costs.

Apart from these constants, the statistical analysis also sheds light on some relatively new trends. For example, some relocations have come about as a result of the desire of manufacturers to establish a presence within an EPZ in order to circumvent tariff barriers and quotas which still exist, given that the Multifibre Arrangement (MFA) has not been completely dismantled. Rising production and exports in certain countries close to the major centres of consumption of TCF products is also explained by the fact that the TCF industries are required to respond more and more rapidly and flexibly to changing demand. Certain countries of the Maghreb and Central and Eastern Europe have thus used their geographical position in relation to Western Europe to make significant breakthroughs in this market and bolster their position as privileged suppliers. Some countries in Asia, by contrast, have suffered as a result of their remoteness from the main world markets, particularly when they have been unable to meet new quality requirements which are becoming increasingly critical to overall competitiveness. Major macroeconomic trends have direct repercussions on employment. While the total number of jobs created in the textiles sector worldwide has changed little over the last 20 years, the geographical distribution of those jobs has fundamentally changed. Europe has been particularly affected by falling levels of employment, which by contrast has grown significantly in Asia. In recent years, there has been a marked growth in the number of jobs worldwide in the clothing sector (11.2 million workers in 1998, as opposed to 8.7 million in 1995), while employment in the textiles sector has remained relatively stable (around 16.5 million workers). Employment in the footwear industry has also remained stable (around 1.7 million workers). Asia’s share of the total number of jobs in the textiles sector grew steadily between 1995 and 1998 from 69 per cent to 72.5 per cent, and from 44.7 per cent to 66.2 per cent in the clothing sector between 1995 and 1997. This was partly due to the growing power of China. China is currently by far the biggest TCF industries employer. The principal textiles employer countries still include a number of industrialized countries: the United States, ranked fourth, Japan, ranked seventh, and Italy, ranked eighth; while Spain, the United Kingdom and Germany also still number among the top 20 employer countries. In the clothing sector, there are more developing countries among the top producers, although some countries, such as the United States, Japan, Italy and the United Kingdom, remain large employers in that sector despite numerous instances of downsizing over the last two decades. The same trends have been observed in the footwear and leather industries.

Obviously, available statistics refer only to formal sector employment. If they were also to include employment in the informal sector, it is clear that, in the clothing industry at least, all the principal employer countries would be developing countries, and any statistical analysis of the TCF industries has to be viewed in the light of that fact. Owing to the complex structure of the production networks and the fragmentation of production units in subcontracting arrangements, the TCF industries to some extent defy any quantified analysis based solely on official statistics. It is only when one seeks to understand how subcontracting operates at the national level, as a pyramid of increasingly small and less formal enterprises, that one becomes aware of the gulf that exists between reality and the impression conveyed by statistics. Consequently, the few figures presented in this report only indicate certain current trends and do not fully reflect the importance of the TCF industries for job creation in many developing countries.

Women account for a particularly high proportion of the workforce in the clothing industry. Although that proportion fell during the last decade (74 per cent in 1995, as opposed to 79 per cent in 1990), women still form three-quarters of the workforce in the clothing industry worldwide. The proportion is even higher in countries that specialize in labour-intensive offshore production activities. In the textiles sector, women make up the majority of workers in Asia (80 per cent of all jobs in 1995), but are in the minority elsewhere. The footwear industry occupies an intermediate position (women formed 46 per cent of the workforce in 1995).

As we have already seen, one of the main characteristics of the employment created by the TCF industries is its geographical instability. That instability is particularly marked in the labour-intensive segments of the production process in which many developing countries specialize. These are the countries most vulnerable to the relocation strategies of the international contractors. They are also the countries that are most dependent on the TCF industries for their economic development.

The need for greater flexibility which the TCF enterprises are facing as markets change is the root cause of the relocations, the increasing reliance on subcontracting and, consequently, the geographical instability of employment. It also affects contracts of employment which are tending towards greater flexibility, fewer permanent posts, more part-time working arrangements and greater use of temporary staff. In some cases, such practices are what workers themselves want, especially women with family responsibilities. More frequently, however, flexibility is imposed on workers, not chosen by them, and highlights the increasing vulnerability of the jobs created by the TCF industries.

Optimal flexibility is provided by homeworkers, who are growing in number in both the industrialized and the developing countries. Working at home may also be a matter of individual choice and respond to a need for an extra income and greater independence than is possible in a factory environment. Craft-based and manufacturing home work are best suited to meeting those needs. On the other hand, industrial home work, which is the TCF sector most fully integrated into the globalization process, is also the one that presents the most social problems and is least often an arrangement chosen by the worker. In the clothing industry, where industrial home work is widespread, the absence of any regulation leaves the door open to all manner of exploitation of workers. The piece-rate systems of pay that are prevalent in the industry do not always guarantee decent incomes commensurate with the time actually worked. In the great majority of countries, homeworkers employed in the TCF industries have no social protection and no recognized legal status. In the absence of any regulation, their bargaining power is non-existent and they have only the most basic wage entitlements.

Wage costs, while no longer the key element in global relocation strategies, continues to play a part in determining the location chosen by TCF enterprises for labour-intensive operations, particularly in the developing countries. Competition between certain countries to attract major manufacturers tends to push wages down. Official wages statistics show that workers in the TCF industries are among the worst paid of all workers in manufacturing industry. Moreover, in most countries, there are significant wage differences between men and women. Although wage discrimination between men and women is less marked in the industrialized countries, it still exists there, despite many initiatives and campaigns for equality. The lowest average hourly wages and the greatest differences between men’s and women’s wages are found in the clothing industry. The highest wages for the TCF industries overall are found in Europe.

Statistical analysis of practices relating to “regular” working hours within a statutory framework show a downward trend throughout the producer countries. The “normal” working week has decreased considerably, both in the industrialized countries and in the majority of developing countries, as a result of social advances. However, the transfer of certain activities from the formal to the informal sector through the mechanism of subcontracting, and the prevalence of home work, raises questions about the extent to which that trend truly reflects actual conditions. In addition, in a growing number of countries, employers are demanding greater flexibility and advocating the annualization of working time, which is generally opposed by the trade unions. Official statistics on hours actually worked highlight a number of significant differences between the industrialized and the developing countries. Even here, however, the official statistics are limited in scope, in that they do not take into consideration the informal sector, where working hours are the longest and conform least to national standards. Late or incomplete payment of overtime has also been criticized by many trade unions, particularly in certain developing countries and a number of Central and Eastern European Countries. The smaller the enterprise, the greater the likelihood that actual working hours and overtime payments will depart from established laws and regulations.

This report contains a detailed analysis of labour practices and in effect provides a survey of the implementation within the TCF industries of the ILO’s Declaration on Fundamental Principles and Rights at Work which all the member States have adopted. This fundamental part of the report for discussion also includes two sections devoted respectively to the particular situation of EPZs and private voluntary initiatives.

With regard to child labour, the importance of achieving progressive abolition is now widely understood at international level. That awareness is reflected in many countries by activities and programmes, often with ILO assistance, involving governments, the social partners and NGOs. These initiatives have reduced the employment of children in the TCF industries, particularly in certain countries involved in IPEC. In most cases, the programmes that have been implemented have been accompanied by specific measures intended to help children to pursue a normal education and to provide their families with financial compensation. Nevertheless, these advances should not blind us to the fact that many children still work in the TCF industries, particularly under subcontracting arrangements in the informal sector and in homes.

Freedom of association and the effective recognition of the right of collective bargaining are crucial to the observance of other fundamental rights at work. In the European Union, freedom of association is the key element of what is called the “European social model”, in which collective bargaining is the basis of social dialogue. The joint adoption by the European Apparel and Textile Organization (EURATEX), representing employers, and the European Trade Union Federation for Textiles, Clothing and Leather (ETUF-TCL) of a charter for the social partners in the textiles-clothing sectors is the clearest illustration of the progress that has been made in the area of social dialogue in the TCF industries. The very existence of this charter, which is based on the ILO’s fundamental standards, demonstrates the willingness of the European social partners to promote the effective application within the TCF industries of the principles embodied in the ILO’s Declaration. However, despite this progress and the statements made by employers’ associations welcoming the constructive advances in social dialogue, trade unions are concerned by certain moves, originating in some cases from non-European multinationals, to restrict collective bargaining and trade union rights and regret that the psychological “weapon” of relocation is in some cases used to undermine the workers’ legitimate aspirations.

Progress in social dialogue is very much less in evidence in the Central and Eastern European Couintries. In these countries, economic privatization has helped the TCF industries to become more or less successfully integrated in the process of globalization. However, that integration, which is often accompanied initially by job losses in the major state-owned enterprises, is also associated with increasing deregulation which has affected unionization rates and collective bargaining practices. Governments are now attempting to promote legislative and regulatory measures that will strengthen social dialogue, while a number of private employers are resisting anything that might limit their freedom of action. In addition, the trade unions, of which there are often many, are weakened by the process of transition to a market economy and by the absence of a common strategy. Lastly, the absence of representative employers’ associations in the TCF industries in many countries is another obstacle to the establishment of genuine social dialogue.

In the United States and in most other industrialized countries, globalization has led to the closure of many TCF enterprises. Workers who remain in the industry are afraid of losing their jobs and reluctant to join unions, preferring direct negotiations with their employers which, they believe, are less risky. This trend weakens the unions, which had already been affected by the worldwide reduction in the number of jobs, and impairs the ability of the union movement to take effective action.

Social dialogue exists, but the partners to that dialogue have been weakened by the economic crisis and are mindful of the potential effects of social action in the light of international competition. Social dialogue is easier during periods of expansion than during periods of contraction, which is the situation of the great majority of industrialized countries.

In the developing countries, freedom of association and the right of collective bargaining are generally guaranteed in theory under the Constitution and national laws. In practice, trade union rights cannot always be exercised fully. In some countries, the existence of a single trade union is a clear obstacle to freedom of association. Where pluralism does exist, a low unionization rate often undermines effective social dialogue. In addition, many workers are employed in the non-unionized informal sector or in SMEs in which few workers are union members. In some larger enterprises, employers, fearing for the viability of their enterprises, try to dissuade their employees from joining unions. Sometimes, it is the employees who effectively talk themselves out of joining for the reasons already indicated.

Obviously there are countries in which genuine social dialogue has become established over the years in the TCF industries and where collective bargaining works satisfactorily. However, international competition generally exercises a constant pressure which limits the potential for any significant progress in social dialogue. Economic instability inevitably has a social impact. It is thus necessary to assess and overcome these constraints on social dialogue within the context of globalization.

Of all the manufacturing industries, the TCF industries are among those that create the highest percentage of unskilled jobs. They have a poor image among young people and many enterprises throughout the world experience difficulties in hiring workers. As a result of this, in most industrialized countries and in a growing number of other countries that have attained a certain level of development, TCF enterprises operate with a workforce which includes a high proportion of immigrant workers. Another factor which characterizes the structure of the workforce in the TCF industries is the relatively high proportion of women workers, particularly in the clothing industry. These factors in combination create an environment that is conducive to discriminatory practices in matters of employment and occupation. As regards the employment of women, the main form of discrimination is the inequality in wages between men and women. In access to employment, women sometimes suffer non-explicit discrimination because of their sex. Nevertheless, things are changing, and in many countries women are increasingly taking up supervisory and managerial posts at all levels. Of the developing countries, it is those countries that need to raise the quality of their TCF production that are most open to the promotion of women. Women may also suffer various types of harassment, including sexual harassment, but fortunately this is disappearing and incidents tend to involve workers’ immediate supervisors rather than enterprise managers. This does not solve the problem in itself, but does suggest that there is now a greater awareness of the problem. Immigrant workers, with different cultural backgrounds and often confronted by a language barrier, may also suffer discriminatory practices. This is the case particularly where workers are not officially registered and work on a clandestine basis. It is also these workers who make up the majority of cases of forced labour in the TCF industries, or rather, in the parallel activities that take place in clandestine “sweatshops”. Sweatshop practices have not disappeared, even in the industrialized countries, despite many campaigns against them.

It is obviously in these sweatshops that violations of human rights at the workplace are most flagrant and most frequent. In addition, some workers, mostly children, are forced to work in order to repay loans made to them or to their families at the time of hiring. Debt bondage is a practice which many developing countries are endeavouring to eradicate, but it persists in certain segments of the TCF industries. In a few cases, prison work may involve forced labour practices, although most TCF manufacturers take care to avoid this practice which can harm their image.

Export processing zones, which were established in order to attract investors in export industries, have steadily grown in number over the last two decades. They have played an important role in creating jobs in the TCF industries, particularly in the clothing sector.

TCF enterprises established in EPZs employ mainly young women in posts that require relatively few skills. By their very nature and the way they operate as enclaves, these zones have little knock-on effect on the rest of the national economy, although they generate significant export revenue which is often of great importance to the balance of payments of the countries concerned. In some cases, they also stimulate recovery in economically depressed regions and attract foreign investors through often considerable investment in infrastructures. In these zones, child labour is rare, forced labour is non-existent, wages are generally higher than the national average for the industries concerned, and discriminatory practices, if they exist, are less flagrant than in smaller and less modern enterprises. The main weakness of the EPZs in terms of basic rights at work lies in their restrictions on social dialogue and free labour relations. In some of these zones, the existing labour relations systems lack credibility and the right of association and trade union rights in general are subject to considerable official or de facto restrictions. Such situations are fortunately in the minority and cannot persist in conditions of trade liberalization, given that workers’ fundamental rights are becoming an increasingly prominent element in the national strategies of the major TCF-importing countries. Other zones have developed innovative labour relations systems which safeguard social dialogue, and in a growing number of cases, freedom of association and collective bargaining rights are being gradually established. If unionization rates are low, this is often due more to psychological factors (fear of losing one’s job) than to any legal obstacles to the exercise of trade union rights. Furthermore, market forces increasingly oblige enterprises to take account of the need to develop their human resources, and this also has a positive effect on work practices in EPZs.

Private voluntary initiatives, which testify to the emergence among enterprises of a sense of social responsibility in a globalizing economy, have assumed considerable importance in the TCF industries in recent years. TCF enterprises have done pioneering work in the field of codes of conduct, under pressure from civil society and the media and also in an attempt to enhance their brand image. Codes of conduct have evolved over the years; standard codes have been developed and there is now a tacit consensus within the TCF industries as to what they should contain. Social criteria are the fundamental element in these codes, and the fundamental labour standards are often used as a direct or indirect reference. A growing number of enterprises are subscribing to such standard codes of conduct developed through joint initiatives involving NGOs and trade unions, sometimes with government support. These codes generally provide for external monitoring and certification procedures which complement existing monitoring mechanisms within enterprises. A new social auditing function is thus emerging and is likely to spread to a growing number of TCF enterprises in the coming years. For the time being, only larger enterprises are promoting such practices, which might pose problems for SMEs, especially in developing countries, where a growing number of subcontractors are required to implement codes which they have had no hand in developing. While these codes of conduct clearly encourage the implementation at enterprise level of the principles embodied in the ILO Declaration, little is known as yet of their social impact, particularly in the developing countries. As a complement to the codes of conduct, some TCF enterprises have launched training initiatives on good safety and health practices, as well as campaigns to promote literacy, school attendance, vaccinations, and other projects to help the communities within which they operate. These initiatives, which also help to improve productivity, are generally welcomed by civil society and the trade unions who are often directly concerned by them.

It is difficult, for sectors that are so dissimilar in technological terms, to identify general guidelines for defining new training requirements and their effects on labour practices. Nevertheless, one general observation can be made: that globalization and its corollary, increased international competition, have accelerated the modernization of production and marketing techniques in most of the countries involved in the world trade of TCF products. The demand for diversification, improved quality and the incorporation of a “fashion” component at all stages in production have also affected training requirements. The TCF industries increasingly operate without any “slack” by implementing “just in time” and “rapid response” production modes, which require more flexible labour practices. Training for production and supervisory staff has to be adapted to working methods which allow greater fluidity and rapid changes in models and products, as well as reducing the number of defective goods produced. The quality requirements resulting from changes in the major markets of the industrialized countries mean that the producer countries, whether industrialized or developing, must adapt their production systems, and production workers must acquire greater skills.

In the industrialized countries, workers’ representatives are more often than not involved in implementing training programmes, both at enterprise and national levels. On the other hand, they are rarely involved in decisions on the choice of the technologies which affect training needs. Problems common to many industrialized countries include the difficulty of recruiting young people, in particular in-house trainees. In addition, in-service training, which is increasingly important owing to changes in TCF technologies, are subject to financial constraints, particularly in SMEs, which find it difficult to develop their human resources and still remain competitive. “Teamworking” practices, which emphasize multiskilling of production workers and place greater responsibility for production quality on employees, are being developed, but this form of work organization is only suitable for certain types of products and is thus of limited potential. Lastly, it is important to note that the globalization of the TCF industries has had the effect of shifting certain technical training requirements to the developing countries, which increasingly specialize in the assembly, processing and finishing of products designed in the industrialized countries for international companies and distribution chains.

In the transition and developing countries, technological development is less marked, training requirements are considerable and available resources inadequate. Institutional training is very often inadequate to meet the needs of enterprises and, as a result of this, in-house training within enterprises is the cornerstone of the training system. By contrast with the industrialized countries, workers’ representatives are rarely involved in the development or implementation of training programmes. It is in the most advanced countries, whose success depends critically on the quality of their products, that mechanisms for consultation between the social partners in the area of training are most effective. It is also in these countries that the public authorities are most innovative in their approach to improving the institutional base in collaboration with the social partners.

In general, at a time when production deadlines have assumed critical importance, allowing employees to play a full and responsible role in the operation of enterprises is becoming crucial to industrial success and social peace. Giving employees greater responsibility by adopting innovative practices in training and work organization can also reduce absenteeism and create social cohesion within enterprises. This requires a change in thinking and behaviour, and the implementation of strategies that enhance employees’ feeling of belonging to an enterprise, but it also presupposes that workers will be offered better working conditions, greater employment security and opportunities for advancement within the enterprise.

Suggested points for discussion

1. Labour practices in the TCF industries are affected by the globalization of those industries and the increased international competition which results from it. What in general terms are the beneficial and adverse effects of that process in economic terms (long-term viability and productivity of enterprises) and in social terms?

2. To what extent do these sectors contribute to job creation and what sort of jobs are created? How should the regulation of homeworking be imposed so as to improve labour practices for this category of workers? How can the requirement for greater flexibility and productivity in the TCF industries, which is imposed by the market and global competition, be reconciled with the need to safeguard stable employment and decent labour practices?

3. How are we to ensure that the fundamental principles and rights at work are fully respected in the TCF industries? What should be the respective roles of governments and the social partners in this area?

4. What changes should be made to human resources development policies and programmes to ensure that working women and men are better equipped to cope with technological change? What should be the respective roles of the State and the social partners in the development and implementation of education, initial training and continuing training programmes? What specific assistance might be given to SMEs? What innovative work practices need to be developed to ensure a better match between the supply and demand of skills?

5. To what activities should the ILO give priority in order to help its constituents promote better labour practices in the TCF industries?

[1] The ILO would like to thank the OETH (European Observatory for Textiles and Clothing), in Brussels, for the assistance provided in the elaboration of the statistical analysis contained in this chapter.

[2] If reference is made, throughout this summary report, to “regions” or “world”, it has to be taken into account that the given values or averages are mostly based on a limited number of countries for which information was available representing such regions. In a number of cases, only very few countries represent a region; this will be specifically mentioned where necessary.

[3] All value figures in this report are in terms of US dollars. They are therefore affected by changes in exchange rates vis-à-vis the US dollar. Where such changes have been very great, this is mentioned in the report.

[4] Trade statistics are in general more reliable than statistics for production. They are more widely available, and they can be measured in specific cases both by exports and imports, thus revealing discrepancies which can be investigated. Trade figures in value terms are, however, subject to the same provisos that apply to production statistics, as regards changes in exchange rates and inflation.

[6] A. Felstead, N. Jewson and J. Goodwin (Department of Trade and Industry and Department for Education and Employment): Homeworkers in Britain (London, HMSO, 1996).

[7] The annex to the Declaration provides for annual reports to be requested every year, under article 19, paragraph 5(e), of the ILO Constitution, from member States that have not ratified one or more of the fundamental Conventions. The Office is responsible for producing a compilation of these reports. In May 2000, the Governing Body was asked for the first time to consider such a compilation, with its introduction by the expert advisers. See the Review of annual reports under the follow-up to the ILO Declaration on Fundamental Principles and Rights at Work, Parts I and II (docs. GB.277/3/1 and GB.277/3/2).

[8] The Centre for Research on Multinational Corporations (SOMO), which is based in Amsterdam and works in close collaboration with the Clean Clothes Campaign.

[9] According to information supplied by the European Trade Union Federation for Textiles, Clothing and Leather (ETUF-TCL).

[11] For a more general analysis of the problem of violence at work, see Duncan Chappell and Vittorio di Martino: Violence at Work (Geneva, ILO, 1998).

[12] ILO: Report of the Committee of Experts on the Application of Conventions and Recommendations, Report III (Part 1A), International Labour Conference, 86th Session, Geneva, 1998, paras. 94-125.

[13] By March 2000, Convention No. 29 had received 153 ratifications, while Convention No. 105 had received 146 ratifications.

[14] According to information provided by the Union of Needle Trades, Industrial and Textile Employers (UNITE).

[17] EPZ Authority Ordinance (1980), section 25, and EPZ (Control of Employment) Rules (1982).

[23] Mr. C. Jackson-Smith, speech to the ILO Consultation on EPZs, Belize City, 29-31 Oct. 1997.

Contents

Introduction

1.1.1. Production trends^[2]

The changing world distribution of employment

Long-term employment trends by country
(losers and gainers)

1.2.2. Women workers in TCF industries

General observations

Female employment in textiles

Female employment in clothing

Female employment in footwear

1.2.3. Globalization and stability of employment

Net job creation and geographical instability

Flexibility and contracts of employment

Homework: Maximum flexibility, minimum protection

Recent trends in home work

Profitability and social problems

1.3.1. Importance of labour costs for the relocation
of TCF industries worldwide

Labour costs in the textile industry

Labour costs in the clothing industry

Labour costs in the footwear industry

1.3.2. Wages in TCF industries: A statistical analysis

Zones without credible formal
labour-management structures

Zones in which workers’ rights are limited

Zones which permit freedom of association
and collective bargaining

Zones with other forms of labour-management relations

Suggested points for discussion

Contents

Introduction

1.1.1. Production trends[2]

The changing world distribution of employment

Long-term employment trends by country (losers and gainers)

1.2.2. Women workers in TCF industries

General observations

Female employment in textiles

Female employment in clothing

Female employment in footwear

1.2.3. Globalization and stability of employment

Net job creation and geographical instability

Flexibility and contracts of employment

Homework: Maximum flexibility, minimum protection

Recent trends in home work

Profitability and social problems

1.3.1. Importance of labour costs for the relocation of TCF industries worldwide

Labour costs in the textile industry

Labour costs in the clothing industry

Labour costs in the footwear industry

1.3.2. Wages in TCF industries: A statistical analysis

Zones without credible formal labour-management structures

Zones in which workers’ rights are limited

Zones which permit freedom of association and collective bargaining

Zones with other forms of labour-management relations

Suggested points for discussion

1.1.1. Production trends^[2]

Long-term employment trends by country
(losers and gainers)

1.3.1. Importance of labour costs for the relocation
of TCF industries worldwide

Zones without credible formal
labour-management structures

Zones which permit freedom of association
and collective bargaining