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News Clips 16 August, 2013


[ Prgmea urges government to appoint commerce minister ]
[ Walt Disney cancels import orders worth $150 million ]
[ Bangladesh's exports go up ]
[ Bangladesh-India textile cooperation agreement on Monday ]
[ Bangladesh: Global recession eats into home textile exports ]
[ US federal agencies banned from buying Vietnamese garments ]
[ Obama Lifts Burmese Import Bans ]
[ Asia's largest retailer joins safety pact ]

Prgmea urges government to appoint commerce minister   [ top ]

BUSINESS RECORDER, Recorder Report, August 8, 2013
The value-added textile sector has shown its sheer concern over the indifferent attitude by the government for not appointing Commerce Minister even after the government is near to complete its 100 days.

Acting Chairman Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea) Irfan Ali said in a statement that it's relay surprising that the Prime Minister Nawaz Sharif has yet to name commerce minister or even decide the fate of textile ministry despite that fact that he is known as pro-business leader of PML-N and economic revival should be the first priority after law and order of any newly formed government but there is no commerce minister or textile minister has been appointed so far while the export sector particularly textile sector has been left to suffer and all the macro and micro issues of the trade and commerce are not being addressed.

Irfan further stated that the government has appointed staunch bureaucrats as secretary commerce and secretary of Trade Development Authority of Pakistan (TDAP) who are oblivious of the issues and problems being faced by the exports sector. "At this juncture when the country's exports are at the lowest ebb, industries are closing down, exports target has become impossible to achieve and rulers are negotiating with the IMF once again, the trade and industry has been left to suffer which was already battling for its survival", Irfan said adding that the priorities of the government which is not new anymore, are unknown. He said the pathetic attitude by the PML-N government also reflects from the sorry state of government's several organisations that are lying idle due to non-appointment of their heads. He demanded of the government to immediately name commerce and textile minister instead of abolishing the textile ministry.-PR

Walt Disney cancels import orders worth $150 million   [ top ]

THE NEWS, Khalid Mustafa, August 14, 2013
ISLAMABAD: In an alarming development, the Walt Disney Company has decided to cancel import orders worth $150 million after assessing that 16 textile companies handling their orders in Pakistan weren’t meeting international health and safety standards. Pakistan’s total exports to the US stand at $ 3.6 billion, of which textile exports account for $3.2 billion. To make matters worse for the textile industry, Pakistan has also failed to improve its position in the worldwide governance index (WGI), according to official documents available with The News.

Pakistan scored just 19 points in the WGI, six points below the baseline to avoid cancellation of orders. However, textile ministry officials are of the view that Pakistan has been subjected to sheer injustice during the point awarding process. “Pakistan has been given just 0.5 points in the head of political stability despite the fact that the recent smooth transition of power is simply the result of political stability,” said one official.

The 16 companies, which have been issued the letter of disconnection from Walt Disney, include Younas, Afroze, Lucky, Sadaqat, Kamal, Gohar, Satara and Crescent. However, official sources said textile industry officials fear that the move might have a cascading effect with other US companies importing from Pakistan, such as Wall Mart, Jones Apparel, Nike, Levis Strauss and GAP, also cancelling their import orders.

US companies – Wall Mart, Jones Apparel, Nike, Levis Strauss and GAP – annually import textile products worth $1.2 billion in total from Pakistani companies. In total 34 factories in Pakistan are exporting textile products to these US companies. These factories employ around 25,000 people, who are likely to become jobless in case the above mentioned US companies cancel their import orders. Sources said that US companies have also expressed concern over a factory fire in Karachi in which hundreds of men and women perished.

Meanwhile, Secretary Textile Industry Division, Rukhsana Shah, confirmed the development but said a strategy had been evolved with assistance from the Ministry of Commerce to tackle the issue. “We are on it and have mapped out a strategy to alleviate the concerns of US companies.”

However, official sources said that European companies TESCO and ESDA are also expected to cancel their orders due to poor adherence of labour laws in Pakistan. It is observed that Pakistan is not responding to the International Labour Organisation (ILO) on poor labour conditions and a weak monitoring and enforcement system.

The working conditions in Punjab have deteriorated ever since the abolition of labour inspections almost seven years ago. On the other hand, the presence of underage workers is increasing everyday at these industrial units.

Facing the risk of losing out on a huge chunk of its textile exports to the US and other countries, Pakistan is now left with no option but to either improve the indicators or join the Better Work Programme (BWP).

If Pakistan joins the Better Work Programme then it will have to show adherence to three components that include i) Compliance Assessment Activities in factories: auditors evaluate if the factories are adhering to ILO’s core labour standards and national labour laws. 2) Continuous Improvement: Better Work staff facilitates dialogue between managers and workers to address their report’s findings and submits regular progress reports. 3) Stakeholder Engagement: buy-in for the programme and activities occurs at all levels, including government, employers, unions and workers, and international buyers.

Better Work is improving the lives of thousands of working people worldwide. For example, over 90% of garment factories in Cambodia now pay their workers appropriate wages, including overtime, and allow for maternity and annual leave. Also, Better Work’s goal is to improve the lives of 700,000 people in five years in Vietnam alone.

The programme’s sustainable design also sets it apart. While donor countries (including the US) contribute funds to develop and implement these programmes, international garment buyers pay for factory audits and related activities. These buyers include big names such as GAP, Levi Strauss, and Adidas. Better Work’s goal is to make each programme financially sustainable within five to seven years

This partnership programme has been jointly launched by the ILO and the International Finance Cooperation (IFC) launched in 2007 after the success of the ILO Better Factories Cambodia Project.

As far as the issuance of the letter of disconnection by Walt Disney is concerned, the official source said: “We have sensitised the economic minister in Pakistan’s embassy in Washington who is in contact with the top management of the Wart Disney in a bid to assure the US company that Pakistan will upgrade itself in WGI in 2014.”

The Ministry of Commerce and Textile is also going to discuss the issue with Prime Minister Nawaz Sharif soon as he is currently holding the slot of commerce minister, while Finance Minister Ishaq Dar has also been informed about the distressing development.

Bangladesh's exports go up   [ top ]

INDO ASIAN NEW SERVICE, August 13, 2013
Dhaka, Aug 12 (IANS) Driven by ready-made garments, Bangladesh's exports in the first month of the current 2012-13 fiscal surged 24 percent to over $3 billion, an official said Monday.

"Export performance for July was $3,024 million, around 24 percent higher than that in the same month a year ago," the Export Promotion Bureau (EPB) official told Xinhua.

Bangladesh's July export earnings were also 12.17 percent higher than the $2,696.2 million target set for last month.

Of the total earnings, the official said the country's income from ready-made garments stood at about $2.51 billion.

The EPB data showed export of knitwear garments grew 25.24 percent to $1.253 billion while woven garments increased 27.02 percent to $1.262 billion, compared with the same period of last fiscal year.

Bangladesh-India textile cooperation agreement on Monday    [ top ]

DHAKA TRIBUNE, Sheikh Shahariar Zaman, August 16, 2013
Bangladesh is set to sign a memorandum of understanding with India to cooperate on textiles sector through exchanging technologies. “We will sign the MoU on August 19,” Textiles and Jute Secretary Md Ashraful Moqbul told the Dhaka Tribune.

The MoU was supposed to be signed during the visit of Indian Prime Minister Manmohan Singh in 2011, but both the parties could not reach an agreement, he said.

Training institutes of the countries would also exchange faculty under the agreement, he added.

About the Saarc cumulation on textiles, he said Bangladesh did not agree with the proposal. Both the sides would discuss the future of International Jute Research Group as the tenure of the body is going to be expired in April next year.

“Bangladesh is in favour of continuing the operation of the group as it is the only organistaion having headquarters located in Dhaka,” Moqbul said.

Dhaka is also in touch with European Union for the continuation of the operation of the IJRG, but apparently they did not show enthusiasm, he added.

Bangladesh: Global recession eats into home textile exports   [ top ]

DHAKA TRIBUNE, Ibrahim Hossain Ovi, August 16, 2013
The country’s export earnings from home textile declined to US$791m in the last fiscal year, a 12.64% fall compared to the previous year’s (2011-12) value of $906m due to global economic slowdown.

Export Promotion Bureau data showed Bangladesh fetched $791.52m in the last fiscal year, which was 12.64% down from the previous year’s value. While the sector earned $68.15m, down by 16.76% compared to July 2012 of $81.87m.

Meanwhile, the exports grew 24% to $3bn in July as compared to $2.4bn of the same month previous fiscal (2011-12), according to EPB data. The government had set an export target of $30.5bn for the current financial year.

Though home textile marked decline in last month, the export of knitwear garments grew by over 25% to $1.25bn and woven garments by 27% to $1.26bn. Both the items also witnessed rise in exports in the last fiscal year with nearly 15% for woven totaling more than $11bn and 10% for knitwear amounting to $10.5bn.

According to Bangladesh Textile Mills Association, 40% industrial value addition comes from textile sector and the sector provide over 500,000 jobs, of them 80% are female.

“In the winter season, uses of home textile rises and it is a seasonal product. That’s why export earnings from home textiles saw a decline,” said Shahidullah Azim, vice president of the Federation of Bangladesh Chamber of Commerce and Industry (FBCCI). He said export of home textiles would rise in September.

“Perhaps, appreciation of Bangladeshi Taka against dollar and depreciation of Indian rupee against dollar cast an impact on home textiles export as the buyers are more interested to buy Indian home textile products taking the opportunity of devaluation of Indian Rupee,” said Dr Khondaker Golam Moazzem, an additional research director of Centre for Policy Dialogue (CPD).

He said the country’s readymade garments sector, however, witnessed less impact of depreciation of Indian Rupee, because the sector are more advanced than that of India due to bulk buy orders.

“Home textile exports declined as the demands of home textile fell in European Union countries.

The consumers of those countries might have cut uses of clothes due to economic recession,” said Md Monsoor Ahmed, secretary of Bangladesh Textile Mills Association (BTMA).

The buyers’ countries will come out of recession within two or three years and the demands of home textile will increase again, he added.

“We cannot reach the potential market of home textile due to lack of proper projection of our products, which may cause down trend in export of textile products,” said Shubhashish Bose, vice chairman of EPB.

If the textile exporters and producers take part in world exposition to display their products to world buyers, it would help knowing about fashion and trend of consumers, he added. Bose said if our products can ensure international standards, it will pave the way to grab the international market.

He also stressed on more participation in international expo in order to display our products as this sector des not participate in different trade shows in a large scale.

US federal agencies banned from buying Vietnamese garments   [ top ]

JUST-STYLE, Petah Marian, July 23, 2013
US federal agencies have been banned from purchasing garments from Vietnam after the US Department of Labor’s Bureau of International Labor Affairs said it believes clothing is being produced using forced or indentured child labor.

The Bureau of International Labor Affairs said based on the evidence it reviewed, there are more than isolated cases of forced child labor in garment production. It noted these cases predominantly occur in small unregistered workplaces.

“In many countries, laws, policies and programs that are effective for registered factories are less effective at reaching children and other exploited workers in unregistered, more hidden work settings, and this appears to be the case in Vietnam’s garment industry,” the ruling said.

It added that in January this year, two Department of Labor officials visited the country to assess the current situation of forced child labor in Vietnam, with a focus on the garment sector, to gather additional information about the efforts and systems in place to combat this problem. Following meetings, the officials confirmed that most, but not all, child labor in the garment sector occurs in small, unregistered workshops.

“The visit confirmed that systematic monitoring of forced or indentured child labor in the garment sector is limited and largely confined to the larger, registered factories. There is no evidence of systematic monitoring of child labor in smaller, unregistered workshops,” the ruling said.

Obama Lifts Burmese Import Bans   [ top ]

APPAREL NEWS, Deborah Belgum, August 15, 2013
The Obama administration made it official. Goods made in Burma, now called Myanmar, may be imported into the United States, except for rubies and jade, whose mining is controlled by the central government.

The executive order issued Aug. 7 by President Obama comes after the State Department waived the ban last November.

The bans had been part of the Burmese Freedom and Democracy Act, legislation enacted by Congress that expired July 28.

Republican Sen. Mitch McConnell was the original sponsor of the legislation. He announced in May he would not seek to extend the 2003 legislation because of Myanmar’s democratic progress. The legislation was renewed annually.

McConnell was, for years, one of the harshest critics in Congress of Myanmar’s military rulers and a fervent supporter of opposition leader Aung San Suu Kyi. The Burmese Freedom and Democracy Act he sponsored had imposed a broad ban on all imports from Myanmar.

Deputy National Security Adviser Ben Rhodes said in a statement that it is part of the administration’s efforts “to promote responsible trade and investment in support of Burma’s reform process.”

Before the ban took place in 2003, about half of all the textiles and clothing made in that country, located northwest of Thailand, was exported to the United States. In recent years, Myanmar shipped as much as $409 million a year in apparel and textiles to the United States, according to the Department of Commerce.

There is still a small garment sector based around Yangon, the country’s capital, which employs about 20,000 people at 200 factories. Workers make about $80 a month.

Last year, Myanmar exported about $770 million in garments to primarily Japan, which received $243 million in apparel and textiles. That may increase. The Japanese fast-fashion retailer Uniqlo, whose shelves are stocked with casualwear, said it will start sourcing in Myanmar.

Other recipients of the bulk of Myanmar’s apparel production are South Korea and Europe.

Earlier this year, representatives from Li & Fung, which does some apparel production in that country, visited Myanmar to talk with top ministers about revving up the apparel industry.

Myanmar was ruled by a military dictatorship for nearly five decades and was quite repressive. A new government came to power in 2011, releasing many political prisoners, holding elections for a new Parliament and freeing democracy advocate Aung San Suu Kyi from nearly 20 years of house arrest.

Since her release from house arrest, the opposition leader has visited Norway to collect a Nobel Peace Prize she won in 1991 and gone to Washington, D.C., to be awarded the Congressional Gold Medal.

Asia's largest retailer joins safety pact   [ top ]

AL-JAZEERA, Dexter Mullins, August 8, 2013
Asia’s largest retailer has signed a global safety pact for Bangladesh garment factories in response to a factory-building collapse in April that killed more than 1,100 people.

A spokesman for the Fast Retailing, a Japanese firm that operates the Uniqlo clothing brand, said the company took several months to join the accord because it wanted to thoroughly consider the conditions of the pact.

"Our reason is quite simple - our priority is to work across the industry to improve conditions for the workers in Bangladesh, so we just wanted to join in," said Aldo Liquori, a Fast Retailing spokesman in Tokyo.

Fast Retailing did not have a presence in the manufacturing factory that collapsed on April 24, but the company said it has also completed an investigation of its subcontractors' factories in Bangladesh.

The collapse of Rana Plaza complex, located in the suburbs of the Bangladeshi capital, was the country's worst-ever industrial disaster.

It was the latest in a string of deadly accidents to hit the textile industry which forms 80 percent of the country's exports. In November 2012, a factory fire killed 111 garment workers.

A total of 86 companies from 20 countries have signed on to the Accord on Fire and Building Safety in Bangladesh, including US-based companies Abercrombie & Fitch, American Eagle, PV, Scoop NYC/Zac Posen and Sean Jean Apparel.

But several major US companies, such as Wal-Mart, Target and Gap, among others, have opted instead to form their own group, called The Alliance for Bangladesh Worker Safety.

Lacking teeth

Critics of the alternate plan say it lacks the teeth of the Accord pact, which makes the companies legally responsible in their home countries for financing factory upgrades to bring them up to code with safety regulations.

“We see this North American programme as being really just a facelift of voluntary corporate-controlled monitoring programmes that have, as we've seen, resulted in hundreds of workers dying in the Bangladesh industry," said Liana Foxvog, the director of organising and communications at the International Labor Rights Forum.

In an email, Wal-Mart spokesman Kevin Gardner said the company has taken "a number of actions that meet or exceed other factory safety proposals," and said Wal-Mart looks forward to working together with the Accord to make progress on worker safety. Target spokeswoman Jessica Deede said the retailer is "committed to this industry-wide solution to improve safety for workers in Bangladesh garment factories."

Requests for comment from Gap were not returned.

While all the focus is on worker safety in Bangladesh factories, neither the global Accord nor the alternate Alliance have focused on provisions for factories in other countries.

"The problem does extend beyond Bangladesh," Foxvog said, highlighting the importance of the consumer in making sure that all garment factories are safe.

"It's important for consumers to be aware of where their clothes are coming from and to be aware of the supply chain. We can't just change the world through our shopping habits, we have to get involved."