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NEWSLETTER 19, July 2005

The Global Garment Industry and the Informal Economy

"Informal" work is nothing new in the garment industry. The informal economy however, does change its nature. What is more, latest research shows that, far from disappearing, it is actually growing. So what are the implications for campaigning for garment workers' rights?

Workers employed informally do not have access to the hard-won formal protection of labour laws, and social security provisions where they exist. Some of them are not even legally recognised as a worker. This is why the term used for their situation is "informal". The majority of informal garment workers are women.

In Sri Lanka, some garment workers are considered "self-employed", even though their pay and hours are regulated by the factory. Garment workers in many countries have been shifted out of the permanent workforce and onto temporary contracts. More and more workers on the production line are being hired in through subcontractors rather than directly employed by the factory owner. At the Nien Hsing factory in Lesotho, Southern Africa, more than half the workers were on "gate call", daily hire-and-fire basis.

In Central and Eastern Europe, it is estimated that 70% of factory workers are informal, though by its very nature the informal economy is difficult to measure. In the UK, where most large factories have closed or moved overseas, there has been an increase in small units that use immigrant labour. Such workers have limited choice because of language or legal status, and are paid low wages, and work long hours, seasonally.

Virtually everywhere, at the end of garment production chains are homeworkers, who are probably paid the worst and suffer the most abuse.

Such bad employment practices are the route many garment companies are choosing in order to stay competitive in the global market. This increase in "informalisation" of employment is linked to increasing decentralisation and a shift towards smaller production units globally. There are also fears that more downward pressure on standards, and therefore more informalisation, will be caused by the phase-out of the Multi-Fibre Arrangement.


What's being done

On 23-25 September 2004, the CCC and IRENE (International Restructuring Education Network Europe) held a seminar in Meissen, Germany, on the theme "Campaigning strategies on informal labour in the global garment industry". As the title suggests, the aim was not just to describe what is happening but to exchange ideas about what is being done, and could be done more/better, to help defend the rights of informal workers. Some 45 people from 20 countries took part, from NGOs and trade unions in both garment producing and consuming countries.

It is obviously much easier for trade unions to organise workers who are on permanent employment contracts with a clearly identified employer and in a large workplace. Millions of garment workers are simply not in this situation.

Nevertheless, as Jane Tate of HomeWorkers Worldwide (HWW) told the seminar, there has been a notable growth in informal economy workers' organisations, from the foundation of the Self-Employed Women's Association (SEWA) in India in the 1970s onwards. In a number of countries, including Canada, Australia, and in Europe, there have been good broad-based campaigns involving unions.

At an international level there are networks such as WIEGO (Women in the Informal Economy, Globalising and Organising), Streetnet for street vendors and Homenet for homeworkers. HWW is currently engaged in a mapping exercise involving many countries, and this is being used as a means to support organ-ising activities. Making the role of informal workers, especially homeworkers, not just legally recognised but simply more visible is, the seminar decided, a very important effort.

The adoption of the ILO Convention 177 on Homework in 1996 was a significant step forward, bringing recognition that homeworkers too are workers with rights. However, the Convention still needs more governments to ratify it, and this is one area of lobbying that supporters can undertake. The ILO is currently examining informal employment relation-ships of many types and their relationship to "decent work". It is also very important to influence the outcomes of these discussions through union and government representatives involved.

Also at an international level, the European Union issues directives which must be implemented in each member state. Many of these, if properly implemented, could improve informal workers' situations. Meanwhile, European Works Councils in particular companies could be more strongly moti-vated to take up issues of informal workers related to their production chains.

At a national level, the seminar came up with a long list of possible demands on governments. One area is to push harder to ensure that employment laws are widened in scope - to apply to small enterprises and to a wider definition of who is a "worker", for example. Other suggestions included improving labour inspectorates and better research methods to quantify and make the informal economy more visible.

However, as the seminar participants universally agreed, the key to seeing laws and conventions, whether national or interna- tional, implemented is organisation by the workers concerned. This would be assisted if governments were to recognise informal economy worker organisations as social partners for collective bargaining.

Perhaps the biggest obstacle to informal workers organising, however, is not having any proof of employment, as Rohini Hensman of the Union Research Group in Mumbai, India, pointed out. Many workers cannot even prove that they are workers, let alone who they have been working for. It should be compulsory that there is some system of registration where the employment relationship is recorded, she said, recommending that this requirement should be included in codes of conduct and the global framework agreements of the Global Unions.

The founding history of trade unionism in the industrialised countries and the more recent success of SEWA in India are, however, based on self-help and involve a wide range of activities not necessarily associated with how many trade unions oper-ate today.

"We need different types of organisations that are more flexible… cooperatives, workers' associations", said Jini Park from the Committee for Asian Women based in Bangkok.

The global trade union movement is well aware of the need to tackle the informalisation of employment. According to Sergejus Glovackas of the CEE Unit of the International Confederation of Free Trade Unions (ICFTU), "A political decision has been taken to focus on informal economy. Now it just remains to be seen how to implement this". He spoke about their organising efforts in his region, though this does not yet include garment workers. However, around the world there are some examples of garment workers' trade unions taking initiatives to bring in informal econ-omy workers, such as the Southern African Clothing and Textile Workers' Union (SACTWU).

"We act according to the belief that knowledge and information must come from the workers themselves, and that home-based workers must say their needs and priorities for themselves", said Dilek Hattatoglu of the Working Group on Home-based Workers in Turkey. In workshops they organised in 14 cities in Turkey, home-based workers came up with the same top priority: social protection. At first they did not see themselves as work-ers but through the workshops they started to, and began to organise themselves as workers. Better social protection be-came their aim, and self-organisation the means to achieve it. Unfortunately, with one exception, the Turkish trade unions, though invited, did not take part.

For the ICFTU's CEE Unit, Glovackas is keen to promote better relations between unions and NGOs. "Cooperation is important", he said, adding that unions need it to survive in the face of the growing informal economy.


Needs of informal, migrant workers

The low level of awareness among informal workers about their legal rights and their low level of organisation are a reflection of their vulnerability to losing their job at any time. If, in addition, they are migrant workers, their problems are compounded.

Yet the seminar heard many positive cases of organising among migrant workers. For example, the FNV in the Netherlands, and the GMB and T&G unions in the UK take on organisers from the same language group or culture as the workers in question, on the principle that "like organises like".

To meet the needs of migrant workers, there is a great need to internationalise organising and even union membership. In the Baltics, gas station workers have been able to have their union membership recognised while working abroad - a kind of "union passport". The British union centre TUC invited Solidarnosc, its counterpart in Poland, to send organisers to help organise Polish workers in the UK. The participants were keen to see the development of international union cards.

Unions were urged to take up a stronger advocacy role on behalf of migrant workers with the public authorities. No European country, for example, has yet ratified the United Nations Convention on the Rights of Migrants, noted Rita Vandeloo of Wereldsolidariteit in Belgium. There is more to be done too to raise public awareness about the value of migrant workers to the economy, and to encourage social contact between "home country" members and migrant workers to build mutual understand-ing and combat discrimination.


Push for corporate responsibility

How well are brands and retailers in the garment/sportswear industries responding to the idea that they are responsible for the working conditions of all workers in their supply chains, including informal workers?

Ensuring that proof of employment relationship is included in all codes is a long-standing demand made by CCC to companies, but it could be highlighted more, acknowledged CCC's Esther de Haan.

Company codes of conduct ought to cover entire supply chains and make specific reference to problems faced by informal workers, according to seminar participants. Getting companies to accept this is, however, another story. Camille Warren of Women Working Worldwide said her research had revealed "an unwill-ingness among large retailers to know their supply chains". Beyond the top tiers of suppliers (big manufacturers and fac-tories), they do not want to know and some have expressed the belief that it is unreasonable to expect them to know, she said.

It is important, participants decided, to continue putting pres-sure on brands and retailers to map their entire supply chains. These companies need to understand the link between their own purchasing policies and the informalisation of workers who are thereby pushed into even greater poverty. It is their responsibil-ity to ensure that the law is respected all the way down the chains, as far as and including homeworkers who are part of their production process. Suggestions included a campaign targeted in particular at cost-cutting retailers (sometimes referred to as "price-breakers"), and more pressure on companies who participate in multi-stakeholder initiatives.

It has become a widely accepted principle that monitoring and verifying activities must include consultation with the workers concerned. The seminar recognised that this ought to include much better efforts to reach out to informal workers. Yet many professional auditors already do not adequately consult workers who are clearly employed within identifiable workplaces. How much more difficult will it be to persuade them to cover the whole workforce, including the virtually hidden homeworkers or the temporary contract workers? There is no alternative, the seminar concluded, than to build capacity among local independent NGOs to do auditing that includes informal workers. Ultimately, of course, the goal is organisations of informal work-ers, or which include informal workers, that can represent their own voice.


Opportunities for solidarity action

In order to take up a representational role for informal economy workers, many trade unions may need to change their constitutions. However, there is much that trade unions can do before taking this step. In particular, they can be advocates for the rights of all workers, including informal workers, and encourage or stimulate the self-organisation of informal workers.

When it comes to consumer campaigns and public awareness-raising, the significant contribution of informal workers in the supply chains needs to be made more visible. Campaigners must be in touch with informal economy workers' organisations to ensure that their demands coincide with what informal economy workers want. An emphasis on the basic human and legal rights of informal workers - their right to organise and earn a living wage, for example - would be a key "hook" for campaigning. So would creating space for workers' voices to be heard through speaker tours and international exchanges.


This article is based on a discussion paper written for the Meissen seminar, and the seminar report. Both documents can be found at the CCC website:

"Meissen meeting brings together garment industry labor rights activists and informal economy experts", the full report of the CCC-IRENE seminar, "Campaigning Strategies on Informal Labour in the Global Garment Industry", held on 23-25 September 2004, in Meissen, Germany, can be found at:
www.cleanclothes.org/ftp/04-12-informal_labour_seminar_report.pdf

"The Global Garment Industry and the Informal Economy: Critical Issues for Labor Rights Advocates", a discussion paper written for the seminar, can be found at:
www.cleanclothes.org/ publications/04-09-informal_labour_seminar01.htm

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