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News Clips 23 July, 2013


[ Export of textile, clothing rises ]
[ ‘Textile sector exports likely to grow in FY14’ ]
[ ILO Says Cambodia’s Factories Are ‘Chronically Non-Compliant’ ]
[ U.S. outlines steps for Bangladesh to restore trade benefits ]

Export of textile, clothing rises   [ top ]

DAWN, Mubarak Zeb Khan, July 20, 2013
ISLAMABAD: Pakistan’s export of textile and clothing witnessed a growth of over five per cent in the outgoing fiscal year (2012-13) from a year ago.

This marginal increase in exports is the outcome of temporary improvement in supply of gas to the sectors in the last quarter of the outgoing fiscal year.

A slight improvement in demand from Pakistan’s key markets of Europe and US also led to improvement in export proceeds from these sectors.

In absolute terms, export proceeds of textile and clothing reached $13.064 billion in 2012-13 from $12.336bn over the previous year, suggested data of Pakistan Bureau of Statistics issued on Friday.

In 2011-12, export of textile and clothing had witnessed a 10 per cent decline over the previous year. The export proceeds from the sectors were $13.788 billion during 2011-12, the second highest export figures in the country’s history.

In 2009-10, export of textile and clothing crossed the $14 billion mark. Since then a downward trend is being noticed.

Overall increase in exports was the outcome of continued rise in export of these products since September 2012 owing to a slight surge in demand from Europe and US.

The overall growth is also driven by increase in exports to European market following a preferential market on 75 products.

The products, which accelerated growth, are mainly driven by substantial increase in export proceeds of ready-made garments, towels and other low value products, such as cotton yarn and cotton cloth, but export of raw cotton witnessed a decline in the last few months over the previous year.

The increase in export of textile and clothing sectors resulted in overall growth of exports of the country by 3.77pc to $24.515bn in July-June period this year as against $23.624bn in the corresponding period of last year.

A sector-wise analysis showed that export of ready-made garments went up by 12.32pc, knitwear 2.51pc, bed wear 2.401pc and towels 13.02pc in 2012-13 over the corresponding period of last year.

Export of low value-added products, such as cotton yarn was up by 23.97pc, cotton cloth 10.17pc, yarn other than cotton yarn 10.84pc, made-up articles 0.05pc and other textile material 25.56pc in July-June 2013 over the last year.

Industry sources said that consistent supply of gas to textile sector during the period produced the desired results.

The production of textile industries also witnessed growth in the last quarters.

In 2012-13, no major expansion was carried out in the textile sector because more than 10 per cent negative growth was witnessed in import of textile machinery in the outgoing fiscal year 2012-13.

The growth in yarn and fabric exports was mainly because of improved energy supply.

The full capacity utilisation of production caused growth in export of home textile – towels and bed-wear as well.

Statistics show that exports of raw cotton declined by 66.71pc, cotton carded 46.75pc, art and silk 25.65pc, respectively during the July-June 2013 period this year over last year.

‘Textile sector exports likely to grow in FY14’   [ top ]

THE NEWS, Correspondent Report, July 23, 2013
KARACHI: Textile exports observed a significant surge of six percent in FY13 and the analysts expect the current momentum in textile exports to continue in FY14, mainly driven by exports of cotton yarn, cloth and selected value-added items.

Abdul Nabi, a textile exporter, said that the grant of GSP Plus status is expected to provide strong impetus to the value-added exports, which has a 50 to 55 percent share in the total value of textile exports.

Mohammad Affan Ismail at BMA Capital said that the benefits of all these duty advantage packages will remain heavily contingent upon adequate supply of gas and electricity to the manufacturers.

“We believe that spinning mills will continue to remain under limelight, owing to better export prospects and steady margins, weaving and composite mills will also reap the benefits of the ongoing and upcoming trade packages in FY14 through higher volumetric sales and weaker rupee.”

The newly-elected government has highlighted some bold initiatives to resolve the longstanding issue of the energy crisis, among which the upcoming energy policy and encouragement of private sector to invest in low-cost power generation are some key measures being proposed.

The expected improvement in the energy supply after implementation of the power sector reforms will not only lower the cost of production but will also allow timely processing and dispatch of export orders, thus, further strengthening the fundamentals, Ismail said.

Textile sector experts expect those companies that plan to convert their power engines to coal-fired or shift on the national grid to procure electricity from the Water and Power Development Authority (Wapda) (priced at 35 percent lower cost than the cost of generation from diesel / furnace oil) to largely benefit. Nishat Mills Limited (NML) and Nishat Chunian Limited (NCL) will continue to enjoy a key edge over their local peers, they said.

The Punjab government has started an aggressive campaign to reduce transmission / distribution line losses and curtail gas supply to a number of compressed natural gas (CNG) filling stations, which may lead to a significant improvement in the supply of natural gas in the system.

ILO Says Cambodia’s Factories Are ‘Chronically Non-Compliant’   [ top ]

CAMBODIA DAILY, Dene-Hern Chen and Kaing Menghun, July 19, 2013
Half of Cambodia’s garment factories monitored between November and April are “chronically non-compliant” with the Labor Law and the industry has experienced deteriorating working conditions and fire safety records in the past three years, ac¬cording to the latest report from the International Labor Organization’s (ILO) factory monitoring program.

The biannual report released Thursday by Better Factories Cambodia (BFC) comes after criticism was leveled at the ILO recently for not holding non-compliant factories responsible by naming them in its reports.

The first report since the roof of a Taiwanese-owned factory in Kom¬pong Speu province collapsed in May killing two people, the ILO this time around used unusually critical language regarding working conditions in the country’s factories.

“[I]mprovements are not being made in many areas including fire safety, child labor and worker safety and health,” the report says, adding that 51 percent of the 152 factories monitored between November to April showed no improvements despite five or more visits.

“The industry’s chronically non-compliant factories need to be held accountable, and non-compliance on critical cross-cutting issues highlighted in this report need to be addressed,” the report continues. “If this does not occur, Cambodia’s industry runs the risk of forfeiting the advantages that come from its reputation for decent working conditions.”

Fire safety remains a top concern, with 45 percent of factories failing to conduct fire drills every six months and 53 percent having obstructed paths, which could lead to difficulties escaping during an emergency.

Program monitors also suspected the employment of child laborers in 13 factories visited during this six-month period. BFC said the prevalence of child labor in the industry is “likely greater” than the 2 percent indicated by the report.

The change in tone in BFC’s report comes after it has come under fire in recent months for its ineffectual and non-transparent monitoring. Although the U.N.-affiliated program has been instated since 2001, a February report by Stanford University Law School researchers charged that the program had actually set back garment industry standards for Cambodian workers, compared to their counterparts in China, Indonesia and Vietnam—where no equivalent program existed until recently.

The researchers, along with labor activists and unions, called for the practice of naming-and-shaming non-compliant factories as a way to improve labor standards.

The ceiling collapse in May at Wing Star Shoes factory has also drawn renewed attention to the country’s lack of oversight in the industry for its structural and worker safety measures. As participation by factories in the ILO program is voluntary, Wing Star was not being monitored by BFC.

Maurizio Bussi, director of ILO’s Decent Work Team for Southeast Asia, said Thursday the program plans to release names of offending factories before September, but only if there is “full engagement” from the factories, the brands and the government. “[I]t should be reinstated during the third quarter of this year,” Mr. Bussi said in an email. “[T]he public disclosure initiative will be primarily based on the ILO’s principles and standards directed at protecting workers from unacceptable forms of work.” This includes conditions that deny fundamental rights, that put at risk the lives and security of workers, and that keep them in conditions of extreme poverty, he said.

Sat Samoth, undersecretary of state at the Ministry of Labor, seemed more unsure of the prospect of public disclosure. “I’m concerned that this could cause them to file lawsuits against each other,” Mr. Samoth said. “Only the court can say if [the factories] are abiding by the law or not.”

Van Sou Ieng, chairman of the Garment Manufacturers Association in Cambodia, remained steadfastly against this practice, and dismissed the latest synthesis report.

“It’s ridiculous because their monitoring is not totally transparent and it is not totally correct and we are challenging that,” Mr. Sou Ieng said. “It will only destroy the factories. Naming the factories is not helping at all, and this is against the spirit of helping factories.”

“No one will commit to this program anymore” if BFC publicly disclosed names of factories, Mr. Sou Ieng said.

U.S. outlines steps for Bangladesh to restore trade benefits   [ top ]

THE INDEPENDENT, July 20, 2013
WASHINGTON: The U.S. Trade Representative's Office on Friday outlined a series of steps that it urged Bangladesh to take to improve factory conditions and workers rights in order to have U.S. trade benefits restored.

President Barack Obama revoked longtime trade benefits for Bangladesh following a garment factory collapse in April and a factory fire in November that together killed more than 1,200 people.

The USTR plan urges Bangladesh to increase the number of labor, fire and building inspectors, improve their training and establish clear procedures for independent and credible inspections.

It also calls for increased fines and other sanctions, including loss of import and export licenses, for failure to comply with labor, fire, or building standards.

Bangladesh should enact and implement labor law reforms to address concerns related to freedom of association and collective bargaining, USTR said.

The U.S. trade office also endorsed a "compact" between the European Union, Bangladesh and the International Labor Organization to improve working conditions in the country.

"The United States looks forward to working as a full partner with the EU, Bangladesh, and the ILO to implement the goals of the Compact, many of which are broadly consistent with the GSP (Generalized System of Preferences) action plan we are releasing today," the USTR said.

It did not specifically mention a private sector plan to protect worker safety announced earlier this month by North American retailers, including Wal-Mart, Target and Gap. But it acknowledged "the importance of efforts by retailers and brands to ensure that the factories from which they source are compliant with all fire and safety standards in Bangladesh."

Some groups have criticized the North American retailers' plan as not being strong enough.

The United States privately gave Bangladesh its "action plan" last month.

"Today, the Administration is making this action plan public as a means to reinforce and support the efforts of all international stakeholders to promote improved worker rights and worker safety in Bangladesh," the trade office said.