merk presentation
TRANSCRIPT
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LARGE ASIAN
MANUFACTURERS IN THE
GARMENT INDUSTRY:NEW CHALLENGES FOR LABOUR RIGHTS
ADVOCATES
BY JEROEN MERK
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INTRODUCTION
• Background and status of the research
• Labour rights advocates
• Growing importance of large Asian garmentmanufacturers
• Field research by AFW alliance and CCC inCambodia, India, Indonesia, and Sri Lanka
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GLOBAL
OUTSOURCING
• Rising powers. Rising labour forces…?
• Labour geography (Herod, Wills, Cumbers) – the role of labour
• Global outsourcing, the transational
fragmentation of production,
• Consequences of labour (working conditions,
possibilities for reregulation, collective action)
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SUBCONTRACTED
CAPITALISM
Spatial fragmentation of production processes throughoutsourcing arrangements makes it possible for one type ofcompanies to escape direct control over mass labor processes.
The organising of labour-intensive processes becomes“somebody‟s else problem”
It has drastically transformed the relation between capital andlabor.
The outsourcing system creates a „social distance between the
worker –the actual producer – and „the entity for which theproductive activity is ultimately performed‟ (McIntyre, 2008: 34-5).
Subcontacted capitalism‟ (Wills, 2009).
challenge for labour (unions et al)
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FUNCTIONAL SPLIT
Global buyers (r etailers & brand-named
companies)
• Focus on end-consumer through
branding/retailing
• Outsource all (labour-intensive)
production
• Target of anti-sweatshop campaigns sinceearly 1990s - responded by adopting
ethical standards
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A BUYER DOMINATED
SUPPLY CHAIN?
Agent
Importer
Supplier
Supplier
Supplier
Supplier
Retailer
Source: Siegele 2003
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CAPTIVE SUPPLIERS…AND/ OR
EMERGING GIANTS?
Many argue that labour-intensive manufacturing represents a„lower order‟ or „dead end‟ factor in competitiveness.
Supplier remains subordinated to agents that control „higher -order‟ factors like proprietary technology, product differentiation,
brand reputation, consumer relations and constant industrialupgrading (see Raikes et al. 2000: 5-6).
Some manufacturers, however, are doing very
well… Definition: Tier1 companies are large producers who have direct
supply relations with major brands and retailers. Some areTNCs themselves - while productive operations are dispersedthrough Asia and beyond. Other represent large national firms
that produce large volumes for export.
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A FEW EXAMPLES
Dada Corporations: Korean cap manufacturer (25% of the world market), operatesfacilities in Bangladesh, China, Vietnam and Indonesia, from which it exports to theUnited States.
Esquel Group, which supplies companies like Tommy Hilfiger, Hugo Boss, Marks &
Spencer, Nordstrom, and Next. The company employs 47,000 employees dispersed over17 factories in nine countries.
Nien Hsing: The world‟s largest jean producer). While its plants in Taiwan only employs700 people, its facilities in Lesotho and Central America employ thousands of workers.
Ramatex: Malaysian manufacturing giant that operates plants in China, Namibia,Cambodia and Mauritius. The company employs 25,000 workers.
Similar trends in other labour-intensive sectors: athletic footwear (Yue Yuen),Electronics (Foxconn)
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TAIWANESE GARMENT
COMPANIES
Source: Deutsche Bank AG/Hong Kong,
29 September 2005
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HOW TO EXPLAIN
THEIR SUCCESS?
Centralisation/ consolidation tendencies
• Triangle manufacturing
MFA phase out (2005)
• Global buyers reduce number of suppliers to save costs,
reduce logistics issues, shortening lead times.
CSR…?
• Some indications that global buyers consolidate production at
larger suppliers to
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WHO IS THE LEAD
FIRM?
With the increase of Asian production MNCs the questionemerges: who is the “lead firm”?
Some Asian MNCs are highly profitable operations, whoseearnings sometimes outstrip those of their EU or US-basedclients.
The policies and practices of which company within thesupply network are actually the most influential when itcomes to shaping the working conditions where goods areproduced?
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HOW IMPORTANT ARE
LARGE GARMENT
MANUFACTURERS?
In Sri Lanka the four leading garment manufacturers account for24.34% of total Sri Lankan apparel export earnings. The industryprovides about 230,000 workers employment, about 70.000working these Tier 1 firms.
Majority of garment workers employed by smallcompanies:
• India’s apparel industry consists of an estimated 27,000
domestic manufacturers, 48,000 fabricators (jobcontractors) and about 1000 manufacturer exporters.
Only 6% of the overall garment industry is controlled by
large organized players.
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CHARACTERISTICS
• Find and train, and discipline large workforces
• Often operate production sites with thousands of
workers,
• Must organise labor-intensive labour processes
• maintaining a technical division of labour
• Impose discipline with regard to speed and quality
of work
• Deal with worker resistance
• Working conditions
• Generally poor working conditins, but better than
2nd, 3rd, 4rd tier factories
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CHARACTERISTICS
• Upgrading/vertical integration
• One-stop shop - They offer a full range of service to its customers,
spanning design, product development, sourcing, manufacturing and
delivery. Vertical reintegration
• No or little access to end-markets• These manufacturers produce garments that are distributed and sold
under the name of the contractor. Little control is exercised over
(retail) market outlets in Western countries.
• Relatively stable relations with global buyers
• These manufacturers have established long-term, relatively stable,
relationships with global buyers, often five years or longer.
• CSR programs
• These manufacturer have (much) experience with CSR programs driven by
global buyers, who have often prioritized implementation at core suppliers
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WORKER AGENCY AT
TIER 1 FACTORIES
Three day mass strike for a living wage of 93US$
Followed by mass dismissals
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BANGLADESH
Riots, violence at
Korean manufacturers
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CHALLENGES FOR LABOUR
RIGHTS ADVOCATES
These companies typically resist unionization drives
Their growing power might question to what degreecommercial purchasers are still able to control theirsuppliers.
Asian garment TNCs are more difficult to target as they arelargely invisible to end-consumers
OPPORTUNITIES FOR
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OPPORTUNITIES FOR
LABOUR RIGHTS
ADVOCATES
Consolidation, large workforces provides opportunities fororganising
Longer-term relations with brands/ retailers
Higher investment, make relocation-strategies moreexpensive
More profitable companies… make wage agreementspossible