"SELLING OUR PEOPLE":
SUMMARY REPORT ON GARMENT PRODUCTION IN LESOTHO

Executive summary

In January 2001 the Center for Research on Multinational Corporations (SOMO), located in the Netherlands, carried out research on Lesotho's fast-growing garment industry. Researchers visited 10 factories and interviewed management, trade union, and NGO representatives, as well as garment workers.

Lesotho is a poor country, with approximately half the population living below the poverty line. It is has been increasingly successful in attracting foreign investment, particularly as a result of its quota-free access to European and US markets. Garment investment has been one of the fastest growing areas.

In addition to export benefits, companies have also invested in Lesotho because of cheap labour, an investor friendly labour law, government incentives and weak trade unions. The government officials interviewed claimed that "we sell our people" to investors and that they are a major reason for growing foreign investment.

While trade is increasingly seen as a catalyst for development and improvement of the quality of life for citizens of developing countries, the research showed that this is not the case for Basotho workers. Instead they have been sold into a situation where

• seven day working weeks, without rest periods
• excessive, compulsory and often unpaid overtime
• repression of independent worker representation through trade unions
• unhealthy and unsafe workplaces
• environmental degradation
• unlawful dismissals, and
• low wages are the order of their lives.

Background to Lesotho's industrial development

Lesotho is a small landlocked country in Southern Africa, and has few natural resources other than water. Most of the country's estimated 2.1 million inhabitants are involved in subsistence agriculture. It is one of the poorest countries in Africa. The International Labour Organisation (ILO) estimates that half of the population lives below the poverty line.

In 1967, directly after gaining independence from the United Kingdom, the government established the Lesotho National Development Corporation (LNDC) to promote industrial investment, with the ultimate aim of raising the level of employment. The LNDC is the government's main parastatal agency for implementing the country's industrial policy. In practice, the LNDC provides factory buildings that are rented out to investors. The LNDC also provides infrastructure, services (for example serviced industrial lands for rent, so companies can build their own factories) and an incentive package for investors.

In recent years Lesotho has built up its manufacturing sector considerably. Major conflicts in 1998 regarding the election outcomes in 1998 which led to a SADC military intervention destroyed a large part of the infrastructure in the capital Maseru and caused a temporary disruption in the growth of the sector. However, it seems the manufacturing sector is not too discouraged and the garment sector continues to steadily expand.

Between 1973 and 1999 the LNDC has worked with 40 companies that have investments in Lesotho. In the 1970s and 1980s the LNDC facilitated investments by 18 companies, who produced a wide range of products including umbrellas, bricks, automotive components, pharmaceuticals and garments.

Most companies came from South Africa, circumventing the economic sanctions that existed during the apartheid years. In the 1990s investments in Lesotho shifted toward the garment industry: 15 of the 22 companies investing during this time did so in the garment industry. In addition, there was an increase in the number of Asian investments - 11 of the 22 companies were Taiwanese owned. Most of these garment companies are currently expanding their factories, mirroring faith in the future possibilities for producing garments in Lesotho.

The concentration into the garment industry by Taiwanese and South African companies is, of course, not coincidental. The garment industry is a fast moving, highly mobile, capital extensive industry, with the ability to relocate their production within the country, sometimes towards the informal industry or over borders and just as easily over regions. The companies are drawn mostly by cheaper labour costs and as in the case of Lesotho, trade opportunities. Since the 1970s the garment industry has thus moved around the globe, seeking ever better possibilities.

Most of the Asian companies profit from the export possibilities Lesotho offers in the form of favorable and quota-free entry to the United States and European markets. The Africa Growth and Opportunity Act, set up in 2000, allows for even more possibilities to utilise Lesotho's duty-free and quota-free garment access to the US market . Most companies come to Lesotho to bypass the quotas that are set in their home countries or the countries where they were previously operating.

Although it seems that trade opportunities draw the garment industry to Lesotho, factory managements interviewed mentioned additional reasons for choosing this country. They mentioned

• Lesotho's low labour costs for a highly skilled, well educated labour force,
• the absence of powerful unions,
• a labour code that favors investors, and
• a reasonably stable social and political environment.

The race to attract foreign direct investment (FDI) is encouraging the governments in Southern Africa to offer large incentive packages to investors. These packages don't seem to attract foreign investors as much as do the absence of quotas and favorable trade agreements, instead they are perceived by the investors more as the "icing on the cake."

However, for the countries offering the incentives the consequences of these packages might make the difference between profiting from FDI or failing to gain any real benefits for the country, losing not only in economic terms but also in social terms. As history has proven in Asia, as soon as soon as workers begin to benefit from foreign investment, for example, by negotiating to receive higher wages, the industry will quite easily pack up and leave for a less-complicated or less-demanding environment.

The garment factories are not found in official export-processing zones (EPZs), but in reality the areas where they are located can be viewed in this way. Lesotho's garment factories are located in several industrial zones; there are two industrial estates in Maseru and two in Maputso (one of which is already 30 years old). The industrial zones have their own police station.

They are closed fortresses, secured by (sometimes armed) guards. Companies that set up shop in these zones enjoy incentives that include tax reductions and the lax implementation of labour law. "We sell our people", said one LNDC representative. "We sell them through their quality, availability, literacy, and competitive wage rate."

Working conditions

The buyers who contract with these garment factories are almost all from the United States. Among the largest buyers in Lesotho are The GAP, K-Mart, and Wal-Mart, companies that allegedly set labour standards for their production through codes of conduct . However, in most factories conditions were found that fall short of acceptable labour standards. Working conditions did not meet the standards included in Lesotho's national labour law or the standards found the codes of conduct of the foreign buyers.

In interviews with 30 garment workers in Lesotho, SOMO researchers learned that the norm in the industry was for

• long working weeks,
• forced and often unpaid overtime,
• repression of trade union rights,
• violations of health and safety standards,
• illegal dismissals, and
• low wages.

The following instances of working conditions are taken from discussions that researchers had with workers. The names of workers used below are fictious.

Workers often work seven days per week , with no rest periods. In an average week, for example, Ella reported that she has to put in 45 hours of regular work (9 hours per day), and most weeks around 27 hours of overtime (on average 2.5 hours of overtime every weekday and 7.5 on Saturday and 7.5 on Sunday). On weekdays she said that she does not get paid for the hours she works between 5 and 6 p.m. or for the hours she works later. Meanwhile, management says that if workers haven't finished their targets, then they have to work the extra evening hours on weekdays for free.

Workers are forced to work overtime , sometimes for which they are not paid for. Researchers learned that most overtime is compulsory, and that sometimes workers are not paid for these hours. This is in violation of Lesotho's labour code. Daily overtime to achieve production targets is often not paid at all. Muriel reported that workers at her company are required to work through their lunch breaks if they have not been able to make their targets. She said that a lot of the workers are unable to make their target within normal working hours. This means no food or rest until 5pm. The company sets production targets. If these are not reached, the workers are clocked out at 5pm but are required to keep working until reaching their target. A punishment for not achieving the target is being clocked out earlier the following day while having to remain at work for the full time.

Trade unions are shut out of the factories. The researchers were informed that workers are pressured not to join trade unions. In addition to the intimidation of workers, trade unions are denied access to many factories. Some examples of how workers in Lesotho's garment industry have been denied their rights to organise include:

• In 1999 when thousands of workers took part in a procession organised by the trade union, many were fired just for participating.
• On January 8, 2001 at the end of the day the management of one factory forbade workers to wear trade union caps at the factory. The following day, in the morning it extended its prohibition to all head wear. 11 workers, refused to take of their hats and were subsequently sent home.

Marly reported her factory is not in favor of the union. The employers warn people not to join the union, because they will fire them for this. She also says people who join the union have a more difficult time at the factory. They are continuously shouted at, and if they are a shop steward they are not allowed to work overtime. This way they do not get a chance to make enough money. When LECAWU (the trade union) members have a meeting with management about problems in the factory, the time they spend with the management is deducted from their salary. In contrast, when the workers' committee (organisations set up by the management to represent factory workers) addresses problems, they are paid the hours they spend on negotiations.

Health and safety violations. Researchers heard about serious health and safety regulations violations. They learned that most of the factories keep emergency exits locked with padlocks, creating a grave threat to workers safety (for example, in the event of a fire). In one factory, workers said, they are locked in during nightshift. The main door is locked and they don't know who has the key. In another factory one of the floors where workers sew clothes is always kept padlocked.

None of the factories have temperature regulation and as a consequence all factories are very hot in summer and very cold in winter. Lesotho is a mountainous country and has a continental climate that is characterised by extreme temperatures. No factories provide canteen facilities leaving workers to eat their food outside the factory and on the ground with no shelter to protect them from the weather.

There is hardly any safety equipment in use in the factories. Sometimes cheap facemasks are provided but the workers perceive them as useless because "particles go right through them."

Some women reported that pregnant workers are treated badly in the factories. They have to work hard, standing the whole day and doing overtime, said one worker. Most of the women work until their pregnancies reach full term.

There were numerous other "incidents" reported to the researchers. For example, women workers have to walk home late at night, without the possibility of transport and as a consequence are raped. In another incident a women who sustained a headwound was forbidden to leave the facotry premises to see a doctor. Researchers saw workers being beaten and verbally abused by supervisors.

Environmental violations. The industrial water that is used to wash the jeans at certain factories is not filtered and the chemicals leave the factory straight into nearby rivers. These rivers run through nearby communities who make use of the water.

Unlawful dismissals. The workers interviewed claimed that often workers are dismissed without a hearing. There is no one to represent them. People are dismissed for "being slow," for not performing at high quality, but also "for no apparent reasons" sometimes.

Low salaries. The salaries paid to garment workers are less than a living wage, and far below a wage needed to provide for basic needs. Salaries are sometimes even below the minimum wage. Lina said that the wages she earns are not enough to cover her needs. She has to support two children, one husband, her parents, her husband's father. Her children do not go to school, because she cannot afford it. She explained that she would need at least 1000 Maluti to make ends meet - nearly double what she currently makes. Eight people live off Juliette's salary (her parents and five children). She is the sole provider for her family. She can only afford for two of her children to attend school. The family lives in one room that is divided by a curtain. What Juliette makes is simply not enough to meet her family's needs.

Strip searches of women workers. In most of the factories the workers are humiliated and treated badly by management and supervisors. When leaving the factory (at breaks and at the end of the working day), all workers are searched. Often these searches include workers pulling their pants down, shirt up, shoes off or even taking off all their clothes. Women search women, however, often supervisors walk past the line or male workers clock out in view of the searched women. The workers expressed that this caused them much humiliation.

Buyers show no interest in working conditions . Most of the workers reported that they have seen buyers in the factory but that these buyers never talk to the workers. The buyers check their production quality, but nothing else. None of the workers have ever heard about a code of conduct or other buyer's standards.

Job insecurity. Researchers found that some factories work with casual workers for years, without converting them to permanent contracts. The workers have to stand in front of the gate, waiting each day to find out if they are needed for work, and will be earning anything for that day.

Little support from the labour court. Cases of labour rights violations that were brought to Lesotho's labour court are not dealt with or are left pending for years.

Most who were interviewed mention that a positive part in all this is that the employment rate has risen, something to applaud in a country like Lesotho with a very high level of unemployment. It would be good however to have a look at the long term benefits of the actual investment in Lesotho. Although it is a familiar story it still seems scandalous that trade agreements, allegedly proposed to bring benefits to the world's least developed countries, are in fact resulting few benefits to them and bringing most of the profits to the multinational producing companies from all over the world.