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News Clips 15 April, 2013


[ Factory registration moves at snail’s pace ]
[ Retail sales: China will overtake the United States in 2016 ]
[ India: RMG exports surge with US revival ]
[ Wal-Mart, Sears Refuse Compensation for Factory Victims ]
[ The Rise of the Muslim Fashion Industry ]

Factory registration moves at snail’s pace   [ top ]

DAWN, Mukhtar Alam, April 14, 2013
KARACHI, April 13: A critically slow pace of work at the Sindh labour department can be imagined from the fact that its inspectors and field officers could register, or detect, only 82 factories under The Factory Act, 1934 in the first two months of this year. The latest data acquired from the labour directorate suggests that 82 factories are registered and 99 others could be knocked at or inspected for “promotion and maintenance of the highest degree of physical, mental and social well being of people engaged in work or employment there”.

The data revealed something provoking for people at the helm of affairs and the caretaker government as well. The designated inspectors and other authorised officers were not allowed to enter 43 of the 99 factories to carry out the job enshrined in chapter 3 (health and safety) of the factory act, said an official, terming the denial obstructions in the working of the labour directorate.

Hearing a petition seeking a judicial inquiry into the Baldia Town factory fire of September, 2012, which claimed lives of 259 workers, the Sindh High Court in November had ordered the Sindh government to register all the unregistered industrial units and also report on fire and safety measures in place at the existing factories, according to a source in the provincial labour department.

It is learnt that during a special campaign launched before the court order, the Sindh labour department had registered 623 factories in September to December, 2012, taking the tally of factories registered across the province to 8,125 since the independence of the country.

Referring to the situation of registration, unearthing of illegally operating factories or detection of any short-comings in the operation of the registered ones, an insider said that it was a result of the lukewarm support from factory owners or managers and half-hearted efforts made by the government and its designated bureaucracy and field staff.

Under Section 9 of Rule 3 of the Factories Act, 1934, an occupier of a factory is required to send a written notice to the government inspector concerned before work is begun in his factory, informing him or her of the name of the factory and its situation, communication address, the nature of the manufacturing process to be carried out, the nature and amount of the power to be used, the name of the manager of the factory and other particulars as may be prescribed for the purpose of the act.

Manufacturing process means any process: i) for making, altering, repairing, ornamenting, finishing or packaging, or otherwise treating and article or substance with a view to its use, sale, transport, delivery or disposal, or ii) for pumping oil, water or sewage, or iii) for generating, transforming or transmitting power.

According to legal the definition, a factory “means any premises, including the precincts thereof, whereon 10 or more workers are working, or were working on any day of the preceding 12 months, and in any part of which manufacturing process is being carried on or is ordinarily carried on with or without the aid of power, but does not include a mine, subject to the operation of the Mine Act, 1923”.

The act also empowered a designated government inspector to enter with such assistant (if any), being persons in the service of the state or of any municipal or other public authority, as he thinks fit, any place which is or which he has reasons to believe to be, used as factory or capable of being declared to be a factory under the provisions of section 5 (power to apply provisions applicable to factories to certain other places).

Under section 11 (power of inspector), the inspector may make such examination of the premises and plant and of any prescribed registers, and take on the spot or otherwise such evidence of persons as he may deem necessary for carrying out the purposes of the factory act; may exercise such other powers as may be necessary for carrying the purposes of the act, provided that no one shall be required under the section to answer any question or give any evidence tending to criminate himself.

In the meantime, it was learnt that the provincial labour directorate had launched a special campaign in September last year for registration and inspection, setting targets for each division. The purpose was to have a concrete data of industrial units and also ensure implementation of labour laws, particularly from safety of employees’ point of view, said the source.

However, contrary to the expectations and estimates, the undermined or purposefully forgotten system of factory regulation through the inspectors once again failed to click due to off-the-record official restrictions that started coming down after a cabinet decision taken in 2001.

A source privy to the so-called inspections said that the element of surprise was almost nil, while field staff had also been told to take their superior into confidence before taking action against defaulting factories. Moreover, the indifferent attitude of the authorities concerned could be gauged from the fact that about 50 per cent of the field officers’ posts have been lying vacant for long, the source said.

Trade unionists generally claimed that the implementation of occupational health and safety laws in the case of factory workers had almost been negligible. The labour department’s inspectors are also accused of being inactive “in the interest of workers and protection of their rights”.

At a recent press conference, labour leader Rafiq Baloch said that the labour inspectors largely worked under the influence of their bosses in the bureaucracy or political quarters and groups of elite who sought protection of the factory owners’ interests, and rarely inspected the industries from workers point of views.

On the other hand, labour inspectors say that an effective system of inspection can be ensured only after the implementation of the basic laws in a transparent manner, otherwise elimination of the workplace chaos and restoration of the confidence of the workers in general will remain a far cry.

The present strength of the inspectors and other field officers is insufficient even to have a single regulatory inspection of all the registered factories in Sindh in a whole year. With the changes in the overall development pattern and keeping in view the trend of short-cuts in every walk of life, it has become difficult to enforce even the key or basic provisions of the factory act, particularly in the absence of a security system and transport needed for inspection, political will, periodic training and refreshers for inspectors, it is largely felt.

Talking to Dawn on behalf of the chief inspector and head of the provincial labour directorate, Abdul Aziz Memon, an assistant director, said the situation pertaining to inspection could not improve significantly until the employers realised their social responsibility.

He said the enforcement of labour laws or registration and regulation of factories was slow for various reasons, including a harsh attitude of employers and absence of capacity building steps. While the labour department is already trying to expedite the process of inspection, an adequate government funding, provision of security to inspectors, particularly in Karachi, will certainly help address factory related issues and meeting the targets such as elimination of child labour, health and safety, welfare of workers, restrictions on working hours of adults, weekly and compensatory holidays, payment of wages and prosecution of quarters contravening the factory act, Mr Memon added.

Retail sales: China will overtake the United States in 2016   [ top ]

FASHION MAG, April 11, 2013
China's consumer market is on track to earn 4,200 billion dollars in 2016, which will put it ahead of the United States for the first time ever.

The retail market in China is expected to grow 10.3% in 2013, after which it will increase on an average of 10.4% over the following three years, according to PwC. The growth will especially be sustained by the fashion and apparel markets, with which Asia has already surpassed markets in North America and Western Europe. In fact, this gap is even expected to widen significantly during the next several years according to PwC. Their forecast sees strong growth of fast fashion foreign brands, which will still have to contend with expanding local competition.

"It is important to note that international retailers will struggle to achieve major expansion plans, because their sluggish home markets may weigh on resources that they could have allocated to investments," said Sabine Durand-Hayes, head of PwC France's retail and consumption division. Additionally, many Asian countries are experiencing economic and social upheaval that will impact the retail sector. International retailers should also expect increased competition from local players and consumers who are increasingly demanding."

It is no surprise that luxury is expected to play an important role in the growth of Asian retail. Japan, South Korea and China are already the primary source of revenue for luxury brands, with China even representing 20% of global sales. The success of luxury should quickly benefit Chinese luxury brands and lead to partnerships between international and domestic brands.

A surge in online sales will also play an important role in the development of the Asian market. Approximately 41.4% of international B2C e-commerce is expected to come from Asia in 2016. China alone is predicted to represent 23.4% of global sales compared to its current 9.9%. The growth will be mostly facilitated by the build-out of broadband networks, increased use of smartphones and a major development of logistics facilities in the area.

India: RMG exports surge with US revival   [ top ]

FASHION UNITED, Friday, 12 April 2013
A fresh pick-up in supply orders from the US is helping reverse a 7.3 percent slide in India’s garment exports between April and December last year, the weakest performance since the 2008-09 global financial crisis, according to official and industry sources. Recently, India’s RMG exports to the US were witnessing downward trend owing to economic slowdown and Indian exporters were increasingly scouting for newer export destinations like South America, Japan to salvage the situation.

Though the US has been a key market for some time now, its role has significantly increased after Indian garment industry’s top market, Europe, faced a sovereign debt crisis, crimping demand. Now, apart from helping the country’s overall export figures demand will also aid in achieving the investment target of Rs 151,000 crores in the textile sector during the 12th Plan period through 2016-17, under the Technology Upgradation Fund Scheme (TUFS). The government plans to offer subsidy worth Rs 11,952 crores to meet the investment target under TUFS during the current Plan period.

Total textile and clothing exports dropped to 22 billion dollars (Rs 1,20,533 crores) between April and December, down 7.3 per cent from a year before, reveals the latest provisional data. However, a sharp depreciation of the domestic currency drove up export value in rupee term by 6.9 per cent to Rs 1,19,855crores. By contrast, the country’s overall exports dropped by 5.5 per cent during the April-December period, although in the rupee term, the shipments grew roughly 8.1 per cent.

Wal-Mart, Sears Refuse Compensation for Factory Victims   [ top ]

BLOOMBERG, Renee Dudley, April 14, 2013
Wal-Mart Stores Inc. and Sears Holdings Corp. have so far declined to join Li & Fung Ltd. and other companies in voluntarily compensating victims of a fire last year at a Bangladesh garment factory.

Wal-Mart and Sears also didn’t respond to an invitation to attend a meeting today in Geneva, where companies whose clothing was manufactured at the Tazreen Design Ltd. factory are expected to discuss compensation payments, said Scott Nova, executive director of the Worker Rights Consortium, a Washington-based international labor-monitoring group.

The Nov. 24 blaze killed 112 workers and increased pressure on Wal-Mart and other Western retailers to help improve factory conditions and take more direct responsibility for their suppliers. Clothing bound for Wal-Mart and Sears was found in the charred ruins. Both companies have said suppliers used the Tazreen factory without their permission and were fired. Sears and Wal-Mart, which don’t directly employ workers in Bangladesh and are not legally obligated to compensate them, have instituted worker-safety programs there.

“It’s so important for Western retailers to be at this meeting,” said Kalpona Akter, executive director of the Bangladesh Center for Worker Solidarity, who was in the U.S. last week to ask Wal-Mart to do more to help make Bangladesh factories safe. “If they’re not there, they’re totally giving the message that they are supporting these death traps and they really don’t care how many lives go to make these clothes.”

Labor-rights groups say about 700 workers have died since 2005 at factories in Bangladesh, which the website of the Bangladesh Garment Manufacturers and Exporters Association says is the world’s second-largest apparel exporter after China. Textiles account for about 80 percent of Bangladesh’s exports.

Compensation Payments

The compensation payments would go to the families of the workers who died in the Tazreen fire and the more than 100 who were injured, Nova said. At least 1,100 workers were employed at the factory and about 600 were there at the time of the fire, said Nova, citing information provided by the Clean Clothes Campaign, an Amsterdam-based advocacy group.

Sears, which is based in Hoffman Estates, Illinois, has no plans “to attend the meeting in Geneva,” Howard Riefs, a company spokesman, said in an e-mailed statement. “As part of our ongoing efforts, we are continuing to actively train our suppliers on factory and fire safety as part of our Global Compliance Program.”

Kevin Gardner, a Wal-Mart spokesman, didn’t answer questions about plans for the meeting or victim compensation.

Wal-Mart Standards

“At Walmart, our goal is to positively impact global supply chain practices by raising our own standards and by partnering with other stakeholders to improve the standards for workers across the industry,” Gardner said in an e-mailed statement. “Walmart has been advocating for improved fire safety with the Bangladeshi government, with industry groups and with suppliers. We have been actively developing and implementing proactive programs to raise fire safety awareness and increase fire prevention.”

Wal-Mart on April 9 announced a $1.6 million donation to the Institute of Sustainable Communities, a U.S. non- governmental organization, to establish an entity called the Environment, Health and Safety Academy in Bangladesh. The school will offer fire safety training to Bangladesh apparel manufacturers, Wal-Mart said in a news release.

Nova said the donation was “of dubious value” because many factories lack such basic features as fire escapes and that “$1.6 million is a meaningless sum relative to what is actually needed to make the industry safe.”

Education Fund

Li & Fung, a Hong Kong-based exporter, has agreed to pay $1,280 to the family of each worker who died and to each injured worker via a fund set up by the Bangladesh Garment Manufacturers and Exporters Association. A separate foundation will fund the education of victims’ children, Katherine Wang, a company spokeswoman, said in an e-mailed statement.

“We’re continuing our dialogue with the industry in Bangladesh to determine what else we can do to help,” Wang said.

European retailer C&A has donated $1,200 per family via its foundation, according to the Worker Rights Consortium. C&A also committed to providing monthly payments of $50 to the children of the dead, the group said.

Italian retailer Piazza Italia agreed to “participate fully in whatever compensation plan is agreed at the meeting” but declined to attend, Nova said.

C&A and Piazza Italia couldn’t be reached for comment.

Head Injury

On April 12, Tazreen survivor Sumi Abedin and Akter visited Wal-Mart headquarters in Bentonville, Arkansas, to deliver a petition urging the company to attend the Geneva meeting and help improve worker safety. A survivor of a 1990 factory fire in Bangladesh, Akter appealed at the retailer’s 2011 annual shareholder meeting for Wal-Mart to publish its factory audit reports. Abedin broke an arm and leg and suffered a head injury in the Tazreen fire.

The petition has been signed by more than 112,000 consumers worldwide, according to the Corporate Action Network, a Washington-based watchdog group that has helped coordinate the trip.

The workers-rights advocates are petitioning companies to sign a contractually enforceable memorandum that would require them to pay Bangladesh factories enough to cover costs of safety improvements. So far, PVH Corp., owner of the Tommy Hilfiger brand, and German retailer Tchibo are the only ones to sign the agreement, which also would require companies to provide accurate and regularly updated lists of their approved suppliers and subcontractors in Bangladesh.

It won’t take effect until four major retailers sign on.

The Rise of the Muslim Fashion Industry    [ top ]

HUFFINGTON POST, Romanna Bint-Abubaker, April 12, 2013
The most expensive dress in the world was released on March 19 and attracted worldwide media coverage. Debbie Wingham's diamond studded abbaya is the talk of Hollywood at $17m.

Designers such as Hermes, Aramis, Estée Lauder are the latest in-line of those to be inspired by Arabian inspiration and targeting Muslim markets. See Aramis - Calligraphy, or Christian Lacroix who have been integrating Arabic inspiration into the latest collections. We heard they are intrigued by the emphasis given to the design rather than the body of the woman. In many ways this isn't dissimilar to the fashion of the old traditional English days where the body of the dress played a more important role than the body of the woman.

We are also seeing a new generation of highly-talented designers such as Elie Saab, Robert Abi Nader Abed Mahfouz, Walid Attalah, Essa from the UAE and others who continue to impress the international fashion world with their fusion of modern and Muslim-inspired elements into their ensembles. They are now the pieces of choice for celebrities with virtually every celebrity now owning an 'Elie Saab', it's harder to think of one who doesn't have an 'Elie Saab'.

Each of the new creative works is reflective of the transition from plain and simple Arabic designs to more sophisticated creations that extensively use embroidered elements.

But it's not just great designers who are making it to market, it's the people and service industry behind this market that is going viral. Support services from Fashion incubators to Fashion Shows are going viral.

Haute Arabia, the fashion incubator, a membership based platform for promoting emerging designers and innovation in fashion with a social conscience may be the beginning but many incubation initiatives are commencing across the World - from Al Roudha Centre of Innovation and Entrepreneurship (Qatar) to the Hijab Fashion Week (October 22-27, 2013) (London) to Moscow Fashion Show (Islamic Style) (June 13-17, 2013).

To those who disregard this as a passing trend and who believe the couture houses who have shown an interest in this industry are just 'testing a new market' - the facts tell a different story. If you're wondering isn't this whole Islamic inspired, modest and conservative, Muslim consumer just some small niche market? Note - Major misconception. The Muslim consumer alone - taking out only the countries who might also have preferences for Arabian or Islamic inspired design is no-longer off the mainstream.

The Muslim fashion industry is estimated to be worth $96 billion and is rapidly growing. The fuel behind this growth is a generation of young, confident, tech-savvy-more importantly-product conscious Muslims, who are embracing their faith and confidence. This awakening by Muslim consumers has certainly lifted the markets as we have seen an increase in young entrepreneurs catering for this demand. This is not sector specific but the fashion industry is one major Muslim consumer market of many in which we are seeing high-innovation and exponential growth.

The surge in female designers and female entrepreneurship campaigns is testament to a community of Muslims who understand the power of women in business. Women are finding a way out to market and I don't think fashion will be where it will stop. Entrepreneurship and women entrepreneurship is the heart of Islamic heritage.

When we consider broader market interest from other countries including Israel and mainstream celebrities many of whom have been recently featured in many of the more modest trends from turbans to kaftans we can consider this market as much greater than figures suggest.

Fast Facts on the "Muslim Fashion Industry"

• The fastest growing population at 1.8% per annum, the Muslim world population is at 2.1billion today equating to 30% of the world population;

• The European Muslim population sits at approximately 53 million;

• World demand for Muslim fashion. If we only focus on women, we are talking about at least 800 million people. And 40% of that that, or 320 million, is 25 years-old and under "the spending group";

• World market of Islamic fashion - The world Muslim fashion industry is estimated to be worth US96 billion. This is based on the assumption that half of the 1.6 billion Muslims each spend US120 a year on modest clothing.

• It was estimated that in the UK with 3 million Muslims, Muslim fashion industry would be worth between US90 to 150 million a year. At that rate, the 16 million Muslims in the EU, a potential clothing market can be valued at US960 million to US1.5 billion a year.

• Some Arabian-style outfits can sell for as much as USD 10,000 and yet remain in high demand due to the robust economies of key markets such as the United Arab Emirates.

• A Dubai-based company in fact sells abbayas costing between USD 1,500 to 10,000.

• The most expensive dress in the world was released on March 19th by Debbie Wingham at17m and it was in fact - a diamond studded Abbaya.

• According to a recent study conducted by the French Fashion University Esmod- Dubia, the Middle East fashion sector is expected to post 15% growth in 2010.

• The study foresees numerous opportunities in the12bn Gulf clothing market, which is attracting more brands to the affluent and increasingly fashion-conscious region.