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News Clips 08 May, 2013


[ Textile exporters' claims: deadline extended ]
[ Bilal appointed as chairman FPCCI committee on export trade ]
[ KOICA establish a technical research centre at National Textile University ]
[ Apparel Retailers Confront Tough Options ]

Textile exporters' claims: deadline extended   [ top ]

BUSINESS RECORDER, Recorder Report, May 7, 2013
The State Bank of Pakistan (SBP) has extended the deadline for all banks/DFIs to submit claims of textile exporters against Payment of Export Finance Mark-Up Rate Facility and Mark up Rate Support for textile sector against long term loans from April 15 to May 20, according to a circular issued by SBP to all banks/DFIs on Monday. The Circular further noted that other instructions on the subject shall remain unchanged.

Bilal appointed as chairman FPCCI committee on export trade   [ top ]

BUSINESS RECORDER, Recorder Report, May 7, 2013
Zubair Ahmed Malik, President, FPCCI has appointed Bilal Mulla as Chairman of FPCCI Standing Committee on Export Trade for the year 2013. His nomination is reflective of the confidence reposed in him by the President of FPCCI mainly due to his long and outstanding services being rendered by him in the field with remarkable distinction.

Bilal Mulla represents Pakistan Readymade Garments Manufacturers and Exporters Association on the Executive Committee of FPCCI. Bilal Mulla is the Chief Executive of Mulla International, Karachi. He has served as Chairman of Pakistan Readymade Garments Manufacturers and Exporters Association for 3 tenures. He also remained Chairman of Pakistan Readymade Garments Technical Training Institute Karachi and Lahore. He has also served as Vice President of BFG Steering Committee, a Joint Venture of Government of Germany and 5 Textiles Associations in Pakistan who works for development of Small and Medium Enterprises in Pakistan. He was member of Export Development Fund Board and Textile Garments Skilled Development Board. He is a founder member of Pakistan Apparel Forum. Bilal Mulla has been actively involved in various social welfare and trade activities. He is also Chairman of KITCC, an NGO working for Thalassemia Carrier. It is the earnest desire of the Chairman to activate the Committee to the maximum extent so that it could serve as a useful platform for the business community at large, particularly for the businessmen of Apparel Sector.-PR

KOICA establish a technical research centre at National Textile University   [ top ]

PAKISTAN OBSERVER, Staff Reporter, May 7, 2013
Faisalabad—The Korean International Corporation Agency (KOICA) will establish a Technical Research Centre at National Textile University, Faisalabad, with the cost of 6.5 Million Dollars to conduct Research in 5 Textile Disciplines.

A Record of Documents (RD) was signed today between Director General KOICA in Pakistan, Mr. Sung Choonai and the Rector NTU Dr. Niaz Ahmed for the establishment of this Technical Research Centre. The 5 areas of Selection in which Technical Research will be conducted include: Protective Textiles, Medical Textiles, Geo Textile, Sports Textile and Agro Textile.

Rector NTU, Dr. Niaz Ahmed told that the Technical Research Centre would start functioning within a year. He said that a most suitable site has been earmarked at National Textile University for accomplishment of this Research Project.

Apparel Retailers Confront Tough Options   [ top ]

WALL STREET JOURNAL, Kathy Chu, May 7, 2013
The recent spate of garment-factory disasters in Bangladesh spotlights the poor working conditions in that country. But for big apparel retailers seeking better standards—without giving up low-wage workers—the prospects aren't much better in other parts of the developing world.

The deadly apparel-plant fires in Bangladesh last year and last month's building collapse, which killed more than 700 people, revealed safety hazards, labor-rights violations and unauthorized subcontracting of Western brands' orders. But labor activists say the same problems are rampant in low-cost Asian countries, which produce most of the world's clothing.

Concerns about such problems have intensified as retailers—increasingly nervous about relying on Bangladesh—are looking to countries including Cambodia, Indonesia and Vietnam, where wages are often cheaper than in China, to potentially pick up some of the slack.

Many of these Asian countries don't fare much better than Bangladesh in independent assessments of labor conditions. And critics worry that factory safety and worker protections won't improve as long as apparel companies chase the lowest manufacturing costs. For too many Western brands, "it's the ugliest race to the bottom because the financial crisis in America and Europe means that people are getting very scared of buying expensive things," says Sanjiv Pandita, executive director of the Hong Kong-based Asia Monitor Resource Center, which tracks labor conditions across the region.

The death toll continued to climb Tuesday from the April 24 collapse of the Bangladesh garment-factory building, rising to 705. Hundreds of survivors blocked a major highway in the country, demanding compensation.

Bangladeshi officials say they are working to make sure the employees get paid, the Associated Press reported, even as worries mount inside the country that garment buyers will take their business elsewhere, potentially imperiling an industry that has been the country's biggest source of job growth in recent years.

Apparel retailers, however, face potential threats to their reputation just about anywhere they turn for their wares. As retailing becomes more competitive, the demand for low costs, ultrafast turnarounds and zero mistakes in clothing production has put enormous pressure on factories throughout the developing world. Activists say that raises the risk of more disasters or labor unrest. "The manufacturing industry is running out of low-cost sourcing destinations, and it's time to invest in making factories safer and better, rather than searching for cheaper labor," says Auret van Heerden, chief executive of the Fair Labor Association, a monitoring group funded partly by Western companies.

While Bangladesh has become a poster child for what's wrong with Asia's factories, Myanmar, Pakistan, China, Indonesia and India are even riskier to brands for sourcing goods and investing, according to Maplecroft, a risk-analysis firm based in Bath, England. In September, more than 300 workers died as a result of two factory fires in Pakistan, with workers trapped behind locked doors in both cases. One of the fires, at a Karachi textile plant, ranked among the deadliest industrial factory fires in history, surpassing Thailand's Kader Toy fire, which killed nearly 200 more than 20 years ago. Factory fires also are a problem in China and India.

In Cambodia, mass-fainting incidents, in which large groups of workers faint within a short period, have raised concerns about worker malnutrition, excessive heat and poor ventilation of factories. As many as 2,000 factory workers passed out on the job in 2012, according to union and government statistics.

After 200 workers fainted there over a two-day period in 2011, German sportswear brand Puma SE asked the Fair Labor Association to investigate a Phnom Penh factory making its goods. The monitoring group found a "strong possibility" that the fainting was caused by chemical exposure and cited excessive overtime and insufficient drinking water as contributing factors.

Puma, which intends to stay in Cambodia, says it made changes recommended in the group's audits. Puma, a unit of PPR SA, says it "is committed to continuing to improve the working standards in its supplier factories."

At another apparel factory in Phnom Penh, workers staged a hunger strike and slept outside the facility this year to demand back wages and severance. Suppliers to Wal-Mart Stores Inc. and Hennes & Mauritz AB, which subcontracted orders to the factory, eventually agreed to pay back wages and severance to more than 150 workers.

A Wal-Mart spokeswoman says its supplier ended its business relationship with the factory in October 2012, and that Wal-Mart had paid in full for all the merchandise made by the plant.

An H&M spokeswoman says the factory wasn't authorized to produce its clothes, and that a supplier placed the production order there without the company's knowledge.

The factory was closed in late 2012.

Ken Loo, secretary-general of Cambodia's state-run Garment Manufacturers Association, says retailers increasingly demand higher operating standards for factories, but don't want to pay more. "In the grand scheme of things, if they could pay us 10% to 15% more, that is going to have a huge impact on what we can pay workers" and do to the factories, Mr. Loo said.

Concerns about subcontracting also are growing in countries such as Vietnam, Indonesia and Thailand, as manufacturers look for ways to offset rising wages in those countries. Some manufacturers regularly take on bigger orders than they can fill, and then subcontract part of the order to a third party at a profit, says Phil Robertson, Bangkok-based deputy director of Human Rights Watch's Asia division.

"I've talked to Thai workers who are three or four levels down from the original orders," says Mr. Robertson. "If the brands don't know, they should know. A lot of them are turning a blind eye to outsourcing."

Kevin Burke, CEO of the American Apparel & Footwear Association, says the deadly incidents in Bangladesh factories "remind our apparel and footwear industries that our corporate social-responsibility work is never done."

"To prevent further tragedies, long-term solutions must be developed to promote greater transparency along the supply chain, coupled with the need to ensure enforcement of the rule of law when it matters the most," he adds.

In Vietnam two years ago, Human Rights Watch found that factories had farmed out jobs ranging from cashew processing to apparel production for Columbia Sportswear Co. to drug users in government-run detention centers. Columbia Sportswear said it didn't authorize this production, and cut ties with the Vietnamese factory soon after it found out about the practice.

Columbia Sportswear considers Vietnam a "safer" place to manufacture than Bangladesh, a spokeswoman said, because Vietnam has been making apparel for longer than some other countries. Vietnam is Columbia Sportswear's largest manufacturing base, while about 5% of the company's apparel is made in Bangladesh.

In Indonesia, workers are increasingly staging strikes at shoe and apparel factories demanding higher wages and better working conditions. At a West Java factory that makes goods for Nike Inc., workers said in January that they were forced by military personnel allegedly hired by the manufacturer to sign a petition allowing them to be paid less than the minimum wage of $4 a day. The workers are now getting paid the minimum wage, according to Jim Keady, director of Educating for Justice, a New Jersey-based nonprofit group.

"Nike representatives neither gave permission to nor discouraged factories from seeking [minimum wage] waivers," says Nike spokeswoman Mary Remuzzi.

Still, an investigation found that the factory violated Nike's code of conduct, prompting the company to work with factory management on a "remediation plan to help avoid these issues from occurring again in the future," she says. "Indonesia remains an important sourcing country for us."

The Clean Clothes Campaign, a charity group lobbying to improve working conditions in the garment industry, on Monday condemned a recent move by the European Union to relax restrictions on Myanmar, a step that could open the way for more garment manufacturing in the formerly military-run country.

The CCC said workers in Myanmar are paid as little as 33 cents to $1.10 a day and sometimes are paid only if they have 100% attendance, which can mean seven days a week. According to the group, some workers are subject to verbal and physical abuse and low occupational health and safety standards.