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KNITTED TOGETHER Multistakeholder Perspectives on Economic, Social and Environmental Issues in the Tirupur Garment Cluster Latheef Kizhisseri â&#x20AC;˘ Pramod John
Knitted Together Multistakeholder Perspectives on Economic, Social and Ennvironmental Issues in the Tirupur Garment Cluster Latheef Kizhisseri Independent Research Consultant, Bangalore and Pramod John Senior Programme Manager – South, Partners in Change, Bangalore Research Coordinators: Janet Mensink Programme Manager – Fair Trade Cotton, Textiles and Garments, Solidaridad, Utrecht, The Netherlands (Holland) Dr. Shatadru Chattopadhayay Senior Programme Manager, Partners in Change, New Delhi, India
© 2006, Partners in Change ISBN: 81-903505-1-X Published by Partners in Change C-75, South Extension Part II, New Delhi 110 049 Tel: +11-5164 2348
www.picindia.org With the support of Solidaridad, Utrecht, The Netherlands (Holland) www.solidaridad.nl The authors assert moral and legal right to be identified as authors of this work. All rights reserved with the Publisher. Copying and use in any form without express permission of the publisher is prohibited. Photographs: Paul Barbara, Photographer, MADE-BY® Solidaridad, The Netherlands (Holland). Pramod John, Partners in Change, Bangalore, India.
Editing and Design: Koshy Mathew/Word Makers, Bangalore, India. Cover Design and Layout: Rajeev Govind/WordMakers, Bangalore, India. Printed and bound in India by National Printing Press, Bangalore, India.
1.Introduction – The Multicolour Reality of Tirupur Knitwear Cluster
2.Methodology of the Study and Methodological Constraints
3.The Global Garment Industry and India’s Position
4.Garment Production Clusters in India and Tirupur’s Position
5.Process of Knitwear Manufacturing and Tirupur Models of Organizing Production
6.Industrial Relations and Labour Conditions in the Garment Industry
7.Labour Regulations and Rights of Garment Workers in India
8.Labour Standards Compliance in Tirupur Knitwear Cluster
9.Environmental Standards Compliance in Tirupur Knitwear Cluster
10.Conclusions and Recommendations
I am happy to know that Partners in Change, New Delhi, India and Solidaridad, Utrecht, The Netherlands (Holland) have partnered to conduct this pioneering study on social, economic and environmental issues in Tirupur knitwear cluster and to publish the study report for wider dissemination. I hope that this would contribute in large measure for all round progress of Tirupur and to make it a sustainable industrial cluster of the future. I would like to place on record my sincere appreciation towards your pioneering venture to conduct a detailed study about Tirupur, and to publish this book with a view to encourage and enable garment export enterprises to have a positive and growing impact on quality of life of the stakeholders through adopting improved â&#x20AC;&#x2DC;complianceâ&#x20AC;&#x2122; systems, corporate social responsibility practices, fair trade principles and clean production systems and standards. Wishing you all the best in all your future ventures. K Subbarayan Member of Parliament (MP) (Coimbatore Lok Sabha Constituency) 72, South Avenue, New Delhi, India.
Communist Party of India (CPI) #502, P N Road, Tirupur 641 602.
Several million garments are daily produced in the Indian town, Tirupur, in the state of Tamil Nadu. Many of them are exported to Europe. I can be sure that in the shops in my home town in the Netherlands, I can easily find clothing made in Tirupur. Also, several MADE-BYR brands source from this Southern Indian town. MADE-BYR is a network of socially responsible fashion labels, founded by Solidaridad, the Netherlands. Corporate social responsibility is, in fact, a matter of internalization of the social and environmental costs of production into the price-making process. If no living wage can be paid, the working hours and the working conditions cannot be decent and environmental pollution cannot be prevented, the costs of sustainable production are not reflected in the prices. In a developed society the process of cost internalization is driven by a sound government policy â&#x20AC;&#x201C; social and environmental legislation â&#x20AC;&#x201C; and stimulated by social forces such as the trade unions, environmental organizations and human rights committees. This makes an open and democratic society a condition for a sustainable economy. In this report, the views on social, economic and environmental issues related to garment manufacturing in Tirupur expressed by suppliers, trade unions, workers, government bodies, consultants and civil society organizations are presented. We can see that on some subjects the views of the different stakeholders are in line while for others they seem to lie miles apart. Nevertheless, the report provides a good base to start dialogue and to build together the avenues for sustainable garment production in Tirupur. Nico Roozen Director, Solidaridad Utrecht, The Netherlands
The present study conducted by Partners in Change, India in collaboration with Solidaridad, The Netherlands is an in depth analysis of the social, economic and environmental issues and concerns in the knitwear cluster of Tirupur, India. It was made possible through the active participation of different stakeholders including the exporters, trade unions, garment workers, civil society organizations, consultants and government agencies. The textile and garment industry occupies a unique place in our country, being one of the earliest to come into existence in India. It accounts for 14% of the total industrial production and contributes nearly 30% of the total exports to European Union and the USA-the biggest export markets for Indian garments. It also ranked as the second largest employment generator after agriculture. With the complete phasing out of quota regime (under GATT system) of the Multifibre Agreement (MFA) on 1 January 2005 through introducing full operation of the Agreement on Textiles and Clothing (ATC) through WTO mechanisms, businesses are fired up to meet new trade and manufacturing challenges. The government has announced an investment of $31 billion in textiles by 2010 in order to double current exports and secure the second place (after China) in the list of exporters. At the same time there are important studies which have shown that in the post-MFA period Indian textile exporters are likely to face increased international competition. As a result, those units that are uncompetitive will be unable to survive and this would lead to huge hardships for the workers, majority of whom are migrant women.
Corporate Responsibility is increasingly seen as a vital ingredient of global as well as regional competitiveness. The improved social, environmental and economic practices of the businesses can lead to better access to markets, reputational benefits, increased workersâ&#x20AC;&#x2122; satisfaction and loyalty. This can lead to increased productivity, increased savings through better environmental management and reduction of cost of production. PiC remains committed to develop these capacities of businesses. I am confident that this study can contribute significant inputs to government, policymakers, business leaders, civil society organizations, trade unions and academicians to unleash the immense potential of the Indian garment industry. Viraf Mehta Chief Executive, Partners in Change New Delhi, India
Introduction The Multicolour Reality of Tirupur Knitwear Cluster
This study of economic, social and environmental realities of Tirupur knitwear cluster is a part of the multistakeholder initiative (Improvement/Network Programme for Suppliers and Stakeholders in the MADE-BY速 Supply Chain in Tirupur Knitwear Cluster) of Partners in Change (PiC), New Delhi, India (See Box: Partners in Change-Making Corporate Social Responsibility Your Business) and Solidaridad, Utrecht, The Netherlands (See Box: Solidaridad). The aim of the initiative is to support the activities in the MADE-BYR knitwear supply chain. (See Box: MADEBY速). The overall long term objective of PiC and Solidaridad is to build a flagship chain of suppliers from India for optimal achievement of fair trade principles in the MADE-BY速 supply chain, which could have a positive impact on the global garment sector for achieving economic, social and environmental standards and sustainable clean production systems. The location selected for the proposed improvement/network programme is the Tirupur knitwear cluster, a typical garment production region in Tamil Nadu state, in the southern part of India. Any attempt for launching an improvement/network programme for suppliers and stakeholders in MADE-BY速 supply chain needs to be prefaced by an in-depth study and analysis of the ground realities of locales that houses the suppliers and stakeholders, which should bring out the relevant compliance standards and situations existing at the locality of intervention. The study was intended to produce the required resource material that would help in strategizing the interventions geared to achieve fair trade principles with multistakeholder participation. As the prospective programme envisages the 3Fs (Fair Price, Fair Say and Fair Share) for all stakeholders, it is essential to understand the current levels of 3F at the selected region. The first phase of the initiative was restricted to cutting, making, and trimming (CMT) segment of the knitwear sector. Other stakeholders such as cotton farmers, ginning and spinning firms, dye houses, bleachers, accessory producers, service providers and allied firms were not included in the purview of the study but taken note of in a general manner for holistic analysis of the realities in Tirupur knitwear cluster.
Target beneficiaries of the project are various stakeholders in the textile (knitwear) industry of India who are producing MADE-BYR brands and those who wish to enter the MADE-BYR supply chain. The overall objective of the project is to encourage and enable textile (knitwear) enterprises in India to have a positive and growing impact on quality of life of the people involved by adoption of improved Corporate Social Responsibility (CSR) and fair trade practices. The study was intended to update available information on the Tirupur knitwear cluster with regard to CSR and fair trade practices, with focus on labour and environmental standards. It also aimed at building the necessary ground for improvement/networking actions for promoting fair trade principles in the MADE-BYR supply chain. It has been designed to map opinions of various stakeholders and also to identify suppliers in Tirupur who are already inside the “compliance regimes” as prescribed by various agencies and those who are willing to go for inclusion in the “compliance regimes”. The study also contain analysis of key issues and quantification of problems in Tirupur with the intention of launching dialogues with the stakeholders in order to prepare the ground for effecting improvement/network programme actions in future.
Sustainability of Tirupur: Divergence and Convergence of Views
There are interesting, strange, contradictory and confusing opinions among the stakeholders about the sustainability of Tirupur knitwear cluster and its future growth as a garment sourcing location. While trade unions, environmentalists and workers voice hopelessness, the entrepreneurs and government agencies are showing high hopes for Tirupur’s further growth into a world leader in knitwear production. Padmini Swaminathan and Jeyaranjan J (The Knitwear Cluster in Tirupur - An Indian Industrial District in the Making, 1994) concludes: The final question we would like to ponder over is: Is Tirupur replicable? The answer at this juncture is ‘No and Yes’. No, because we strongly believe that an artificially created cluster cannot by definition succeed. Individual units may prosper but not the cluster as a whole. Yes, because once a cluster has developed on its own through private initiative, there exist the potential and the possibility through appropriate institutions to make the cluster dynamic. Even then, intervention by and through an outside agency can only succeed if it has the active and continued support of the community of people making up the sector.
Suren Erkman and Ramesh Ramaswamy (Applied Industrial Ecolog y-A New Platform for Planning Sustainable Societies, 2003) provides another viewpoint, from an altogether different angle: High flows of materials passing rapidly through the system and absence of materials loops makes this industrial cluster a good example of a typical unsustainable ecosystem. Unfortunately, the proposed end of pipe (common effluent treatment plants) approach is not likely to improve the situation in the near future. On the other hand, the RFA (resource flow analysis) study of Tirupur quickly pointed to new, simple and effective solutions. (See Box: Resource-Material-Flows Analysis of Tirupur Cluster)
Erkman and Ramaswamy failed to mention what exactly would be the effective solutions specific to Tirupur situation. But, the general orientation of their study was towards a kind of clean production based on optimum use of all resources without resorting to end of pipe 14
PARTNERS IN CHANGE Making Corporate Social Responsibility Your Business The early 90s saw in India the launch of an era of economic reforms and globalization altering the roles, responsibilities and expectations of the state, corporate and government organizations. Responding early to the increasing debate on the role of business and concerned about the absence of any established mechanism to proactively engage with business to minimize its negative and maximize its positive impact on the lives of the most vulnerable and marginalized stakeholders, ActionAid International (India) established a “Corporate Partnership” unit in 1993. In order to better focus its resources in a dedicated manner, Partners in Change (PiC) was established as a separate not-for-profit organization in January 1995 under the Societies Registration Act, 1860. PiC was one of the first organizations in India exclusively dedicated to promoting corporate social responsibility. PiC operates through its head office located in New Delhi and regional offices located in Bangalore, Mumbai, Jamshedpur and a field office in Tirupur. PiC’s vision is of a world where improving the quality of life of disadvantaged people, communities and the environment is recognized and practised as an essential part of doing business. PiC’s mission is to increase the understanding and active participation of business in equitable social development as an integral part of good business practice by promoting partnerships between business, disadvantaged communities, development initiatives and government. Some of the focus areas of PiC are: Promoting responsible business practices across the value chains of select sectors of Indian business and SMEs Promote and support national, regional and global alliances to promote RB practices. Promoting responsible business practices by Indian companies in their overseas investments, particularly in other developing countries Building partnerships that benefit communities and involve business, civil society and the state. Disadvantaged communities are central to all partnerships that PiC gets involved in. Equitable social development is the purpose for which PiC engages with business. Though business may have various legitimate agendas, PiC would engage only if the involvement would better the lives of the disadvantaged people. The textile industry occupies a unique place in our country. It is one of the earliest industrial sectors of India. It accounts for 14% of the total Industrial production, contributes nearly 30% of the total exports and is the second largest employment generator after agriculture. Partners in Change has been working in the garment sector for mainstreaming responsible business practices with the aim of boosting the Indian garment industry’s competitiveness in the regional as well as global markets, and at the same time improving the living and working conditions of the most marginalized and vulnerable stakeholders in the supply chain. PiC particularly focus on efforts to improve employment conditions and industrial relations through a process of effective dialogue and networking between all the key stakeholders in the industry. For further information, visit: www.picindia.org
solutions. The obvious model for them is Kalundborg (Denmark), which is highly dissimilar to Tirupur cluster. How a resource optimization system can be put in place, given the multicolour, multistakeholder, multiple agency situation of Tirupur with a monoactivity oriented development, which is both vertically and horizontally integrated and functions almost like a complex web in terms of space, operations and hierarchies and linkages, and also characterized by high level of segmentation, disorganization and informalization, is not made clear by them. A major constraint in any direction of sustainability of Tirupur would be the high sense of alienation of its large majority of people, the workers, who are not regarded as equal partners in the high flying dreams of development, but bear the pressures emanating from the dreams and the high gear attempts to realize them. Technological solutions without giving sufficient space and emphasis to human element involved would lead to imperfect results and further problems.
The Coloured Reviewing the novel on Tirupur by eminent Tamil writer, Subrabharathi Manian (Chayathirai. Curtain of Tirupur Translation by P Raja: The Coloured Curtain) in India Today, eminent literary critic, Dr Prema Nandakumar, says: Tirupur, a part of India though, stands estranged like ‘Rappaccini’s Daughter’ (the celebrated novel by American writer, Nathaniel Hawthorne). Dr. Rappaccini has a garden of strange poisonous plants and shrubs for his experiments. His daughter Beatrice, who helps him in that garden, by nature, becomes the deadliest poison in existence. Now who will marry her? Only Giovanni, a student who was stung by the Eden of poisonous flowers, can. That was the upshot of the scientist’s experiment. Tirupur, a part of India, stands estranged like Rappaccini’s garden of deadly plants. And Subrabharathi Manian’s novel is about Tirupur with the game of chess and the sick dog symbolic of life led there. Caste war, dowry menace, river Noyyal turning into a gutter, and a deep well converted into a mammoth garbage dump come out with realistic portrayal.
Much muddy and multicoloured water flowed through the river Noyyal since the publication of Chayathirai in Tamil and later in English (The Coloured Curtain). Since then, many millions of tons of coloured clothes travelled from Tirupur to many corners of the Earth, bearing many brand names (and some of them leading knitwear brands of the world, adorning the shopping malls of the fashion capitals of the world). It provided high revenue (Knitwear export from Tirupur in 2005 crossed Rs. 5000 crores. 1 crore: 10 million) to the country and many millions in profit to people of Tirupur and assured survival of thousands of workers and their families. In a later novelette, Unwritten Letters (Translated by Dr Prema Nandakumar et.al), Subrabharathi Manian’s character, Shamim, a women migrant labourer of a garment factory in Tirupur and living in the ‘shed’ of the factory, writes to her sister, Nayamunnisa, another garment worker elsewhere:
When I joined, I received a daily wage of only Rs. 16. As I was drawing close to my third year, I crossed the Rs. 35 mark. When they give work at night, many girls accept to work late hours tempted by increased earning but become completely washed out… I am looking forward to the big sum I am promised at the end of three years under the ‘Marriage Scheme’ (Mangallyathittam: an offer to pay a large sum, usually Rs. 25,000-30,000, by employers to adolescent female workers, at the time of marriage). Quite a few are raising doubts whether the money is fully paid according to the ‘Marriage Scheme’. In the Dollar Mill, they seem to have given this money properly in the early days. But now
SOLIDARIDAD Solidaridad, established in 1969, was one of the first NGOs to become active in the Fair Trade movement. Solidaridad can be considered as an innovator among development organizations, having a track record in coffee, tropical fruits and garments. The garment program of Solidaridad has set up flagship chains in developing countries-from fibre to garments. The struggle against poverty is the most important starting point of Solidaridad’s policy. Injustice is done to people if the minimum conditions for a dignified existence are not met. Poverty is an offence against human dignity. Decisions about peoples’ chances in life are made in the economic field. Decisions are made in the economy on the question of whether there is work, whether there is a sufficient income and whether basic provisions such as education and health care are accessible. Participation in the economy will be the core of a strategy directed at the abolition of poverty and neglect. From this understanding Solidaridad has developed its programs for a sustainable economy and fair trade. The movement was strengthened by the arrival of the Max Havelaar quality marks, Solidaridad’s innovation initiative of 1986. This model brought renewal and strengthening of what gradually became known internationally as the fair trade movement. Market shares rose, more producers in developing countries became involved and social recognition increased. During the same period, the theme of corporate social responsibility gradually became a concern of regular businesses. Companies came under fire for their attitudes towards the environment and human rights and felt the need to draw up a social and environmental code of conduct for running their businesses. This marked the beginning of a new phase for the fair trade movement: the breakthrough to the mainstream of the economy. The emergence of the theme of corporate social responsibility offers fresh opportunities. Some companies have accepted responsibility for the social effects of their business operations. Responsibility for the environment and the social conditions of production chain liability is no longer pushed aside. This can be the beginning of a fundamental process of change. However, it is also possible that the concern for people and the environment will ebb away again under the pressure of the current economic recession and short-term business objectives will again determine the agenda. Or that preventing harm to its reputation proves to have been business’s only motive, in which case the change will remain on the surface and we run the risk that it is not the reality that changes, but only the story of the reality. Corporate social responsibility will then be mainly a new public relations strategy. Solidaridad’s partners in the Third World have taught us that the debate on corporate social responsibility is shaped by one core question. Are companies and consumers prepared to pay for the real costs of production? It is impossible for the producers whether they be coffee, cotton or banana growers or the seamstresses in the clothing workshops to banish child labour if there is no money for children to go to school. Corporate social responsibility is, in fact, a matter of the internalization of the social and environmental costs of production into the price-making process. In a developed society the process of cost internalization is driven by a sound government policy, social and environmental legislations and stimulated by social forces such as the trade unions, environmental and human rights organizations. In many developing countries the social framework for the market economy has been so preformed that workers may not organize to demand a living wage, democratic rights are trampled on and the government fails through corruption and ineffectiveness. The market prices then lie about the true costs. The economic relationships lead to exclusion, exploitation and destruction of the environment. For more information, visit: www.solidaridad.nl
they are giving less. When questioned, they are being warned. If it gets around that someone has raised such issues, they are kicked out of job before completion of three years. Whenever there is a problem, the easiest way they know is to threaten women-to throw suspicion on their character. They bring up this accusation easily and send her out. I hope I will complete my three years without any such problem. You too will breathe easy when you get the whole amount of the Marriage Scheme. You will find comfort that there will be no more hurdles for my getting married…There are two thousand workers in our mill. All of them have about ten toilets. During the interval the passages will be bursting with queues…I heard the awful ways in the North Mill. Each is given only three minutes in the toilet during interval. Those who take extra time have to pay fine. The fine will be deducted from the salary. Worried by this many do not even go near the toilets. Looks as though there has to be a Toilet Scheme like the Marriage Scheme. Recently they built a temple in front of our mill. There was a purification ceremony performed too. Each event showed that a lot of money flowed. It was then that some had set up posters saying ‘We do not need temples; We want toilets’. The owner was incensed and shouted a lot. Many commented that the sanctity of the purification ceremony was lost by his fury.
In the same novelette, another woman character, a migrant worker, Kannamma Akka writes to her young sibling Rohini, who is also a migrant labour in some other garment factory: In earlier days it was quite a novelty to hear music from any room. If that room jumps from radio to TV, everybody will start sniggering. How could she have bought a TV set? Can she do it if she were honest? It would take a long time for such sniggers to stop. Now there is not much of it. After FM radio, the rooms are now full of noise, in the name of music. They (the hawkers) have pushed one to each room at Rs 200 or 300. Since it can be paid in four installments, who can overcome the temptation? . . . They say because of this the desire to buy big radios and TV sets has gone down. It is good if this desire gets lessened somewhat. But I am not able to overcome the desire for a plastic basket to put my dirty clothes. I think the desire will pursue me till I gratify it. You must be filling up your house with plastic stuff you like. The latest is a plastic sticker, which has been put up on the doors of the rooms in the shed, which says: ‘Avoid using plastics!’
Dreams and In contrast to the realistic literary canvas, cautious academic observations and optimistic Nightmares technological views, the dreamy Tirupur Exporters Association (TEA) and other industry organizations and government agencies are beaming with full enthusiasm (TEA: Project Profile – Netaji Apparel Park, 2002): The growth in business and incentives offered by government in the form of duty drawback, income tax exemption and other schemes for export promotion enabled the Tirupur exporters to plough back their entire profits into expansion and modernization of production and processing capacities. A number of new and modern production facilities with latest machines for knitting, other dry processes and garment making were set up all over the town and adjacent areas. Processing facilities were also modernized with soft flow dyeing machines. Huge investments have also been made on introducing effluent treatment systems. As many as 8 Common Effluent Treatment Plants (CETPs) and more than 300 individual effluent treatment plants are working throughout the day and night to treat the effluents (sic). Quite a few of the dyeing factories have already achieved the distinction of ‘zero discharge’. Thus there has been an all round upgradation of technology and tremendous expansion of production capacities in all areas of knitwear manufacture. Tirupur Exporters Association has initiated a number of huge projects to improve infrastructure facilities with the participation of central and state
MADE-BY® MADE-BY® is a network of socially responsible fashion labels. What does MADE-BY® wish to achieve? MADE-BY® wants to expand the market for clothing manufactured in a sustainable manner. 1.
By helping fashion brands clean up their production process.
By developing socially responsible production chains worldwide.
By giving consumers a wide choice among fashion products produced in a sustainable manner.
How will MADE-BY® do that? Label. MADE-BY® is an umbrella label used by fashion brands to show consumers that their clothes are okay, i.e. that they are produced in a sustainable manner. The brands affiliated to MADE-BY® prefer using organic cotton and working together with sewing factories that have a social code of conduct. MADE-BY® is the first fashion initiative to focus on environmental and working conditions throughout the entire production chain. Global network. MADE-BY® helps brands clean up their manufacturing process. We give advice and develop, together with Solidaridad - the expert in the field of fair trade and the environment - production chains in which a garment can be manufactured in a sustainable manner from start to finish. In India, Peru and North Africa, we have set up biological cotton projects and helped sewing factories acquire Social Accountability (SA 8000) certification. Soon we will also start incorporating Eastern European, Chinese and Turkish producers within our network. Meet the producers. MADE-BY® advises brands and outlines strategies for the future, together with them. We also inform consumers about positive change processes that the brands have implemented. You can meet ‘the producers’ on our website. Only they can explain what it is like to grow cotton without pesticides or what it means to receive a decent wage. Transparency. The brands affiliated to MADE-BY® cannot guarantee yet that their collections are 100% clean and socially responsible. A garment completes numerous stages before it ends up in a store, and brands do not have the power or resources at their disposal to change all of these stages in one go. What they can do, though, is ensure that the door to the production process is wide open. They do so on this website, in the annual report of MADE-BY® and by linking their production data to our track & trace system. This system allows consumers to see where a garment was manufactured and the various stages it has completed. For more information, visit: www.made-by.org
governments, national and international financial and funding institutions. Soft skill development has also been taking place in tandem. A number of firms have implemented ISO standards for quality, environment management, occupational safety and health of workers besides social accountability standards (SA 8000). Tirupur thus carved out a prominent place in the international market place for knitwear and reputation as a reliable source of quality knitwear at competitive prices, manufactured by adopting best manufacturing practices and delivered in time (sic). Today, there is no big international brand that is not sourcing its requirements of knitwear from Tirupur. The sustainable development achieved by Tirupur knitwear industry has resulted in an incremental growth of exports…The redeeming feature of this all encompassing transformation is that it is ‘continuous’ (sic): the time lag in introducing new technologies from any part of the world is ‘zero’. Over the years, Tirupur has emerged as the leading knitwear production centre in the country. Due to hard work, dedication and tireless perseverance of the exporters to meet demands of buyers for quality, competitive pricing and adherence to delivery schedules, Tirupur is now in the league of top ranking producers of fashionable knitwear in the world. This reputation is reflected in the substantial interest shown by world leaders in apparel marketing, to name a few, C&A, Wal-Mart, J C Penny, GAP, Marks & Spencer’s, Sara Lee, Tommy Hilfiger, Karstadt Quell, H&M, Switcher and so on…The dream of an apparel park of international standards in India is taking shape in a remote place near Tirupur that is now named ‘New Tirupur’ heralding a new era of growth in the quota free regime that is unfolding in 2005.
But, the silence of TEA about labour roles in this dream and the high level of lethargy among some of the labour law enforcement agencies indicates the level of dispensability of labour aired in Tirupur despite the fact that labour is the backbone of the highly labour intensive garment sector. Perhaps the constant flow of migrants assures steady supply of cheap labour, which is apparently due to the poverty of rural regions caused by faulty development processes. The public demands for a separate, exclusive labour regulation for Apparel Parks (Exclusive export oriented apparel parks set up by the Government of India) made by industry leaders is indicative of the intention of a new type of ghettoization within the Apparel Parks, which are managed like any other Export Processing Zones characterized by a new kind of production prisons. The Tirupur reality can be best illustrated through the words of trade union leaders of Tirupur. Centwin Mani (ATP: Anna Thozhil Piravai: Anna Labour Federation, affiliated to the AIADMK, which now rules the state of Tamil Nadu): There are problems and difficulties in enforcing even the existing labour rules. Enforcement agencies are colluding with the factory owners to flout the norms and rules. Factory owners would even have labour records and statutory payments like PF made in their relatives names, while the actual labourer would be someone, perhaps a migrant worker. So, when inspections and Codes of Conduct audits are done, all records would be there. There would be some kind of ‘deals’ between the factory owners and the enforcement officials, and even auditors. There are much difference in the situation when there is serious partnership between buyer/brand owners and exporters who are willing to consider other stakeholder expectations and do not follow an antagonistic attitude towards trade unions. There is lack of realization of the major role of workers in production processes and there is no attempt to recognize it properly. Labour market conditions such as availability of cheap migrant labour facilitate such attitude.
While the exporters move forward with their dreams, there are many realistic nightmares that plague Tirupur and its people including the massive number of labourers (of which a major
chunk is women) with more than 50 per cent ‘development refugee’ migrants from other parts of Tamil Nadu and even from its ‘highly developed’ neighbour state, Kerala. There are sufficient realistic eye openers about the Tirupur situation already in circulation. The study done in 1995 by Suren Erkman and Ramesh Ramaswamy (Applied Industrial EcologyA New Platform for Planning Sustainable Societies, 2003) observes: The whole world appeared to have discovered Tirupur in the early 1990s. The success story of Tirupur, the new boomtown, had spread all over. Suddenly many international agencies began to take notice of this little town in the state of Tamil Nadu in the south of India...As it is today, the Tirupur industrial system is obviously not sustainable. It is characterized by heavy pollution, misuse and depletion of critical resources like land/soil, firewood and water.
Even after a decade since the above Industrial Ecology study, the Tirupur situation seems to have been moving only at a snail’s pace towards sustainable industrial practices. There were many efforts launched during the last decade through government, entrepreneurial and civil society initiatives. There are some visible positive efforts underway through the Tirupur Cluster Development Programme (TCDP) launched through collaboration of UNIDO, Government of India and the stakeholders. Various CSR initiatives undertaken due to buyer pressures and also through NGO and Trade Union pressures have gained at least a low momentum in Tirupur in the recent past. As labour is central to the success of Tirupur, the reality of labour in Tirupur too came under sufficient scrutiny over the last two decades of Tirupur’s transformation from an ordinary ‘banian’ town (the white under-shirt of men or basic T-shirt) to a central role in the knitwear export of the country.
Towards Multicolour Future of Tirupur
Neeta N (Flexible Production, Feminization and Disorganization-Evidence from Tirupur Knitwear Industry, 2002) observes: Development in the Tirupur knitwear industry has attracted much academic attention in the 1990s, beginning with the study of Krishnaswami (1989). The study through the analysis of the dynamics of the capitalist labour processes and the subsequent division of labour brought forth the changing production and labour relations in the industry. Cawthorne P. (1993; 1995) also brought out the central role of the labour process in the cheapening of labour. The industry is visualized as that of a classic sweating of labour with long hours of work and high work intensity, through the piece rate system and the use of children and female workers. The growth of Tirupur industrial cluster in relation to the accepted models of industrial districts also formed the subject of discussion in the late 1990s. The analysis of the working of the industrial cluster and the networking of the units led Padmini Swaminathan and Jeyaranjan J (1994) to conclude that Tirupur has the potential for an industrial district. However, the sustainability of the industry was open and this was attributed to the quality of operation and provision of real services. Bagchi (1999) seems optimistic about the development in the industry and concludes that Tirupur has a large potential for further growth as an industrial district and calls for judicious policy interventions for sustaining the industry.
The multicolour reality of Tirupur, often contradictory and confusing, presents various challenges. This is due to varied factors connected to the highly fragmented and peculiar forms
of production organization adopted (though efficient in terms of supplier needs). The complexity of challenges get enhanced by the complex web of dependence emanating from the global, national, regional and local politico-economic factors that have a bearing on the knitwear industrial cluster of Tirupur. There is no difference of opinion among various stakeholders regarding the future of Tirupur-Tirupur needs a lot more fine-tuning before going further on the dreams, though there have been many initiatives for changes in the past and some are underway. Yet there is much to be desired, especially due to the lionâ&#x20AC;&#x2122;s share of Tirupur to Indiaâ&#x20AC;&#x2122;s export earnings. Given the kind of enthusiasm shown by almost all stakeholders, though there are skeptics too, it may not be an unachievable dream but require highly coordinated and committed efforts by all stakeholders concerned. Resource (Materials) Flow Analysis of Tirupur Cluster The Industrial Ecology study done in 1995* revealed the following issues with regard to resource (material) flows in Tirupur. As the decadal growth of population and industrial growth is more than 50 %, the figures can be added up 50 % to have a realistic understanding of the situation. 1. Tirupur consumes 90,120 cubic metres of water every day (90.12 million liters/day) that equals the average water supply to an Indian town with a population of over 2 million population. (Compared to 1995, today the population of Tirupur is half a million). 2. Most of the ground water is polluted and unusable. 3. More than half of the total water consumed is brought to the town by trucks from distances of over 50 kms. at a total estimated cost of US $ 6 million per year. 4. The wastewater containing dyes and chemicals is discharged untreated into dry river. 5. The town consumes about 62.5 million kWh (62,530,000 kWh) of electrical energy per year, including power generated by diesel generators (Most units have generators to overcome erratic power supply). No estimates are available about the diesel consumed. 6. Nearly half a million tonnes (4,37,760 tonnes) of firewood, chopped from the nearby forests, are needed annually for the steam calendaring, bleaching and dyeing operations. 7. Almost 50,000 tonnes (49,862 tonnes) of chemicals other than dyes are consumed annually. The majority of the reacted chemicals are discharged through the untreated wastewater. 8. 1,470 tonnes of dyes are used annually, of which an estimated 292 tonnes find their way into the waste water (almost 1 tonne of dyes per day) 9. An estimated 3,171 tonnes of paper waste, 9,430 tonnes of textile waste (rags and threads) and 59.25 tonnes of plastic wastes are contributed annually by the industry to the municipal solid waste (MSW), In addition, over 40,000 tonnes of ash is also disposed. In total, the industry contributes 56,492 tonnes of MSW annually. 10. An estimated 91,250 tonnes of domestic solid wastes are generated annually. 11. An estimated 2,430 tonnes of plastics and 25,532 tonnes of waste rags and 20 tonnes of metals are collected annually, and taken out of the town for reuse or recycling. No information is available on the fate of these resources. *Suren Erkman & Ramesh Ramaswamy: Applied Industrial Ecology-A New Platform for Planning Sustainable Societies, 2003)
Methodology of the Study and Methodological Constraints
The study is limited to the knitwear cluster of Tirupur, Tamil Nadu State, India, with focus on the CMT units. But, the backward and forward linkages of the CMT process is taken into account to some extent with the intention to make the study as holistic as possible within the given constraints. The methodology adopted for the study is both descriptive and objective. Existing background materials are surveyed and data presented in such materials are updated with the help of recent data available from various secondary and primary sources. Primary sources are various stakeholders in Tirupur: trade unions, workers, industry associations, export promotion agencies, government agencies, social and environmental organizations (NGOs), consultants and local people. Unstructured, informal interviews and discussions were the methods adopted for eliciting required information from primary sources. These interviews and discussions (held during June-December 2005) were clearly focused on the compliance issues and related problems in Tirupur. Through a close scanning and analysis of the existing research and other literature on Tirupur knitwear cluster, the gaps and shortcomings, points of contradictions and consensus between various stakeholders in relation to various compliance issues are identified. The stakeholders are interviewed with focus on these gaps, shortcomings, contradictions and consensus. The data updated through various means and the information gathered from primary sources together generated this report. As part of the project, a constant interaction with various stakeholders was launched. Three consultation meetings were held to discuss various aspects of the project activities with the stakeholders. Trade unions, workers, NGOs, consultants and government agencies were invited to the first meeting . The idea of the MADE-BY速 label, Codes of Conduct, and CSR initiatives were debated by the participants. A Steering Group (SG) to carry forward the activities was
formed with participation of stakeholder groups present at the meeting. As the trade unions requested for more time to consult other trade unions, another round of consultation was held with trade unions in which all the seven major trade unions of Tirupur participated and agreed to work towards improvement programmes to be launched by the MADE-BY® label and its constituent organizations. Then a separate round of consultation was held for exporters (producers) in which consultants also participated. A number of exporters, mainly young generation entrepreneurs, who participated expressed their commitment and willingness to promote fair trade principles and standards, following the examples of those who are already within the compliance regime and align with the MADE-BY® label. Inputs from all the meetings are integrated into the report, which formed the basis of action programmes, under the project, now ongoing in Tirupur with the objective of promoting fair trade principles through sustained multistakeholder involvement in the MADE-BY® supply chain.
Methodological There are certain methodological constraints, which need to be mentioned, especially in the ® Constraints context of the overall objective of undertaking the project to improve/network MADE-BY supplier chain in Tirupur. As the ultimate aim of the project is to assure supply of clothes to customers with a “complete clean character” observing the 3F principle, the restricted study of the finishing end (the CMT) of the knitwear production may not bring out much in terms of contributing to make the clothes more clean. As the CMT process is a relatively nonhazardous activity and which requires relatively high skills provides easy orientation for observing standards. The study is not fully integrated backward and forward, from cotton cultivation to the customer-end, and allowed to hang in the finishing end of the supply chain process. It would not help to provide much benefit for promoting clean clothes unless detailed and consistent follow up studies and actions to cover the entire chain of production is undertaken in future. A limited analysis of forward and backward linkages was used to have a holistic understanding of the supply chain processes in Tirupur knitwear cluster. As the study is restricted to CMT process, the overall reality of Tirupur get into a back seat which will not be a proper approach while considering the objective of the project. The Tirupur knitwear cluster cannot remain aloof from the overall Tirupur situation, especially in terms of issues like resource utilization, material flows etc. Tirupur’s impact on the overall economy of Tamil Nadu and the country in relation to standards compliance requires attention. The impact of Tirupur knitwear boom on the life dynamics of the native place of migrant labourers also requires attention. This naturally get webbed up with the complex international and national economic, political, and social issues that resulted in impoverishment of the village communities, which push them into labour intensive production processes that provide comparatively better wages. But in reality the wage falls below the level which they could get under proper bargaining situation of a labour intensive sector. The complex web of relationships and issues too act as constraints in a restricted study. Therefore, a little bit of trespassing the boundaries of
the study has been adopted to have a holistic understanding of the webbed issues. Moreover, there is a problem of defining Tirupur for the purpose of investigation-
whether the Tirupur municipal region or the Tirupur Taluk or the Tirupur Development Block is the geographical reference point? Therefore, data is collected and presented with regard to the area covered by the Tirupur Cluster Development Programme, which goes beyond the limit of Tirupur municipal region and not including the full area of Tirupur Taluk but covers some part of Tirupur Development Block. Therefore, we donâ&#x20AC;&#x2122;t claim completeness of coverage of all the issues and realities of Tirupur knitwear cluster. But, we consider this a suitable and holistic launch pad for all concerned and interested to understand the growing importance and complexity of the global apparel fashion industry, in the context of globalization. It also invites attention to the nightmares associated with apparel fashion productions. It also opens new vistas and dreams about the possibilities of bettering the life of stakeholders involved in the production of apparels, in locations like Tirupur far removed from the fashion streets of the developed world. We also firmly believe that this effort and follow-up actions would lead to knitting together the future of apparel fashion consumer groups spread around the world with the future of the women and men toiling in the garment units, of Tirupur and similar localities around the world, to produce the colourful fashion knitwear as a means of survival. We also feel that this knitting together of our future as producers, workers, activists, consumers, regulators, investors, policy makers, agents, consultants, retailers and even mere witnesses would facilitate to reduce the social problems, and raping and reaping of the environment in which we are forced to engage as a means of survival as well as for advancing our craving for profit and fashion wears to cover our nakedness.
The Global Garment Industry and India’s Position
It was a pleasant coincidence that this study was conducted in the year 2005-2006 because 2005 was a major milestone in the history of the global garment industry. It marked the removal of various institutional constraints through the introduction of a non-quota based international trade system by the World Trade Organisation ( WTO) mechanisms, especially the full phasing out of quota regime of Multi Fibre Agreement (MFA-GATT) through the Agreement on Textiles and Clothing (ATC) with effect from Jan 1, 2005 (See Graph: ATC Integration Stages). The removal of quota system has provided a new wave of energy to the stakeholders involved in various stages of the supply chain, from cotton farmers to consumers. The general conditions of the global garment industry of the world prior to full phase out of the quota system was best illustrated by M. Vijayabaskar (in Gopal Joshi, ed.: Garment Industry in South Asia-Rags or Riches?-Competitiveness, productivity and job quality in the post-MFA environment, 2002): The world garment industry is on the threshold of far reaching institutional changes in the near future. Hitherto, despite being one of the most globalized industries in the world, it has also been an exemplar of how trade practices in a ‘globalizing’ world are still distorted in favour of advanced economies. Over the past three to four decades, trade restrictions, price and quantitative, have come to play a major role in conditioning patterns of the sector’s development. However, over the next few years, by 2005 to be specific, the existing institutional constraints on garment production and trade would be removed. The removal of institutional barriers to trade would have important implications for output markets, especially that catered to by low-income economies seeking to industrialize through promotion of the garment sector. In turn, changes in these characteristics, given the labour intensive nature of garment production, would have a serious bearing upon the labour market, especially in ‘laboursurplus’ economies like India that seek to strengthen/sustain their position in the global output market. The garment sector has been conventionally viewed as a major source of employment generation. Of late, in addition to this dimension, following the success of the East Asian Economies, it is also seen as
a lead sector in the industrialization process of low-income economies. Its low skill requirements and large labour absorption potential have made it an important source of non-agrarian employment for the rural populace of these regions. To add, the garment sector is also seen to offer tremendous prospects for employment of women, unlike other traditional manufacturing sectors. Given these factors, it is of great importance to understand the labour market implications of the changes in the international trade regime. ATC Integration Stages 1995-2005
Product quota phaseout through ATC in comparison to GATT-MFA
Source: www.wto.org After completion of the full integration as on Jan 1, 2005, actions with regard to international trade in textiles and clothing can be taken under the WTO Safeguard Agreement only.
It is clear that the global garment industry, like many other sectors, is on a course of change under the newly placed international trade regimes. It is specially interesting to note the changes due to the lifting of protectionist regimes at the consumers-end through the WTO mechanisms. While these changes would lead to increase in production and product diversity available to the consumers at competitive prices, the impacts of such non-barrier trade regimes on the actual locations of production in terms of achieving higher quality of life for the stakeholders would require some level of probing as such impacts remain either ambivalent or unclear due to deficiency of information. A normal hypothesis is that heightened competition, in the wake of quota-free regimes, between the various production locations (mostly less developed or developing nations) to gain the wide and high markets of the developed nations may lead to assuring cheaper, high quality products to the already well-off segments of humanity. Simultaneously, the mad race for markets at highly competitive prices (as competition too get intensified through non-quota trade regimes) would lead to neglect of the survival needs of the majority of humanity in the Less Developed or Developing (Non-Industrialized) producer countries. While this is also partly due to the current international monetary system, based on
‘artificial’ exchange values for various currencies, which is largely beneficial to the “developed” markets of the “developed nations”, seeking a non-barrier integration in the currency exchange system will be the last wild dream that can be achieved in the globalized economy. The global economic system is permanently geared towards the higher benefits of those who have the purchasing power to shake and shape the market. It has no time to hear the wails and weeps of the ones who produce for these markets as a means for daily survival. This is a fundamental character of the international economic development paradigms. Efforts by ethical trade groups, such as MADE-BYR label, are attempts to intervene in the negative skewing of this paradigm towards the less privileged stakeholders. Therefore, it is essential to note here some of the essential characteristics of the global garment industry, within the wide frame of the global economy, as a pre-note to understand the dynamics of garment production and exports. This is especially important because the present study is an attempt towards improving quality of life of stakeholders at the production-end of garment industry with the help of certain levels of buyer-pressures that has been emerging due to various factors at the buyers-end, in relation to consumption/product standards of the clothes. The new consciousness concerning 3Fs (Fair Price, Fair Say, Fair Share) and 4Cs (Produce clean, Eat clean, Wear clean, Live clean) that engendered in the ‘developed’ world, mainly after the publication of Silent Spring by Rachel Carson in 1962, has been spreading gradually into all regions and activities of the human world, including garment production and consumption. The consciousness concerning “unclean” products in relation to sweatshops and the violation of basic human rights of labour in such sweatshops, and the destruction of environment through such production processes (the products of which ultimately reach the high-end, elite consumers) has emerged very recently as a global social and political issue. While ethics and economics are strange bedfellows, the attempts to bring in rules of ethics to the world of economics (ruled mainly by theories of profit and value) is not a novel one. Perhaps, the best and well-known observation with regard to global economic integration came from eminent economist, John Maynard Keynes, the senior father of the present global institutions-the World Bank and IMF, and in some way that of the WTO too-that are in the forefront of global economic integration. Keynes observed: Let travel, hospitality, knowledge and information be international and let finance capital be predominantly national, and let all goods be home spun. But, the Brettonwoods twins ( World Bank and IMF) trashed their senior father Keynes to achieve global integration of all human economic functions, to serve their present masters. (Susan George and Fabrizio Sabelli: Faith and Credit-The World Bank’s Secular Empire, 1994) Within the existing integrated global economic order, it is natural that production functions get shifted from one locality to the other according to the demands of market and principles of profit maximization. Outsourcing has become the order of the day in most of the sectors, which facilitate cheap location options for production and thus assure higher rates of dividend to the investors. But, the location shifts leads to various socio-political controversies as it threaten the classical economics of full-employment based well being of the nation-states. The global garment industry had many centuries long history of outsourcing and it got intensified through the non-barrier regimes of globalization.
The emerging characteristics of globalization-based growth in the garment industry needs to be mentioned here as a window to understand the global dynamics of the knitwear production and India’s position within this dynamics and how Tirupur knitwear cluster fits into this complex dynamics. Clothes travelled long distances from production centres to the consumers even before the advent of colonialism, through various trade routes. Clothes from India travelled, along with spices, to various parts of the world through Arab and Chinese trade networks, many centuries before the beginning of the colonial history. Colonial era brought in further intensity in the exchange of commodities between nations. It can be safely assumed that colonial invasions were mainly prompted initially by the need and greed to have control over commodities rather than the intention to have political control over the land mass called nations of the dark continents. Later, political control became a tool for maintaining the control over flow of commodities. Colonialism identified political control as a better and easy route for control over commodities as there was much wealth to be robbed from the colonies, which was not possible without political control. Garment was always among the top commodities that became a major factor in the shaping of human history. During the colonial era, there was intentional attempt to stifle and destroy the Indian cotton textile industry to facilitate the growth of Manchester. History has the tendency to take curious turns as happening now in the garment sector through non-protectionist regimes. While in the colonial and the immediate post-colonial periods, there was concerted effort to shift all kinds of value addition processes to western economies, based on the assumption of full employment as the only means to achieve the best well being. Now, it seems that the theories and actions are moving anti-clockwise, giving a jolt to classical economics, by shifting production back to the one-time colonies and other ‘primitive locations’. The only justification for this shifting seems to be the pure theory of profit and not the classical economic theories of good life based on full employment within nation-states. Within this scenario of global change in organization of global industrial production, the major features of the global garment industry are the following.
Salient Features The garment sector of advanced economies was always induced to shift labour intensive operations of the Global to peripheral economies because of the low sunk costs-relative low levels of technological and skill Garment Industry costs in the peripheries. M. Vijayabaskar (in Gopal Joshi, ed., 2002) observed: Studies supportive of the ‘New International Division of Labour’ hypothesis, in fact, view the process of globalization as movement from high wage cost regions to low wage cost ones (Frobel et.al, 1980). While in the case of garment manufacture in Europe, shifting of production to low wage regions initially took place mostly within the continent; apparel manufacturers from the USA largely initiated movement to other peripheral countries (Bonacich et.al, 1994). This process has its origins in the 1950s when manufacturers began to shift production to Japan to take advantage of the lower wages prevailing there. This sourcing of garments from Japan with still lower wages followed the earlier movement of US garment production from the northern part of the country to the less unionized and lower waged southern regions (Markusen, 1987). Around this period, manufacturers also contracted out orders to producers in Latin America and Caribbean countries as well (Bonacich et.al, 1994).
Subsequent to the economic boom in Japan during this period accompanied by rise in wage rates, manufacturers began to shift production to Hong Kong ( Jones, 1971). From Hong Kong, capital migrated to South Korea and Taiwan to benefit from the lower wages prevalent there (Bonacich et.al, 1994). The process of incorporation of other East Asian economies was also aided by the growing foreign direct investment by Japanese firms in neighbouring countries to take advantage of the prevailing low wage rates. The period thus witnessed a trend towards movement of Japanese apparel capital to offshore locations like neighbouring South Korea. The 1980s witnessed the incorporation of other Asian countries with relatively low wage levels like China, Thailand, Indonesia, Sri Lanka, Pakistan, India and Bangladesh into the world garment trade. While the Newly Industrialized Countries in East Asia and other regions are shifting to more advanced export industries, textiles and clothing became a key growth sector for countries at lower levels of development like Pakistan, Bangladesh and Indonesia. At present, China, India, Bangladesh, Sri Lanka and Pakistan, with their low wage advantage have begun to establish themselves as major players in world garment trade (Gereffi, 1994). In the most recent years apparel export industries in Thailand and Indonesia have exploded the 3 billion dollar mark, and India, Sri Lanka and Malaysia have topped one billion dollars in apparel export (Christerson and Appelbaum, 1995). Between 1975 and 1990, the share of the ‘Third World’ in the total output of global textiles has increased from 18.6 per cent to 26.1 percent, and that of clothing from 11.7 percent to 20.4 percent (Kiely, 1998). The share of developing countries in garment exports has more than doubled from 21 per cent in 1970 to 56 percent (Chatterji and Mohan, 1993). During this period, the share of apparel in the exports of the NICs in fact declined. On the other hand, garment sector has become a growth pole for economies at lower levels of development in Bangladesh, China, Sri Lanka, Indonesia, India and Thailand (Gereffi, 1994). World’s 15 Top Exporters of Apparel: 1980-95 (% share in world exports)
Countries 1. Hong Kong 2. China 3. Italy 4. Germany 5. South Korea 6. USA 7. France 8. Turkey 9. Thailand 10. Portugal 11. Taiwan 12. India 13. Indonesia 14. UK 15. Netherlands Totals
1980 11.5 4 11.3 7.1 7.3 3.1 5.7 0.3 0.7 1.6 6 1.5 0.2 4.6 2.2 67.1
1990 8.6 8.9 10.9 7.3 7.3 2.4 4.3 3.1 2.6 3.2 3.7 2.3 0.5 2.8 2 69.9
1995 6 15.2 8.9 4.7 3.1 4.2 3.6 3.9 2.9 2.3 2.1 2.6 2.1 2.9 1.8 66.3
Source: Ramaswamy K V and G. Gereffi, 1998/Vijayabaskar M, in Gopal Joshi, ed., 2002.
A comparative export share position table over a 15-year period by 15 leading apparel exporters of the world explains the shifting of apparel production between various countries (See Table: World’s 15 Top Exporters of Apparels 1980-95). These 15 exporting countries together holds nearly 70 percent of the total world exports in apparels. The gradual shift of production to less developed/developing countries is clearly visible over the 15 years period. The trend continued to 2000 and beyond, and shifting production of garments to LDCs is at a high pace after 2005, which is similar to the other industrial outsourcing systems around the world such as that happened in the IT sector. The low-wage pull may not be the only factor that leads to shifting locations of production. But, it is, no doubt, a major factor as there is an intense drive towards cost reduction and profit maximization in all sectors ever since the global improvements in transport and communications since 1970s. Global apparel industry also jumped in to cash on the opportunity. The domination of the garment industry by a few powerful retailers has engendered some serious concerns with regard to the existing and future wage structure in the apparel industry. At present, in the USA, top 10 retailers account for over two-thirds of imports into the US (www.sweatshopwatch.org). As a result of their increased bargaining strength vis-à-vis the suppliers/ manufacturers, they even demand a profit margin of nearly 50 per cent, further placing pressure on the supplier’s profit margins and hence the workers’ wages. With the dominance of the retailers, the distribution of costs or surplus along the garment commodity chain is heavily tilted in favour of the retailers (M. Vijayabaskar, in Gopal Joshi, ed., 2002.) (See Table: Cost Composition of Retail Price in the Apparel Industry). Cost composition data along with data concerning labour costs in various countries (See Table: Labour Costs in the World Apparel Industry 1991-1993) proves the reality of low-wage driven shifting of location of production in the global garment industry. Though shifting locations is equally applicable to other sectors including sunrise industries (Information Technology, Biotechnology, and even Service industries), the low skill orientations and the socio-economic background of labour drawn into sectors like garments are facilitating further reduction in wages to meet the retailer’s demands for higher profits. The wage advantage has been becoming a major motivator for outsourcing production in all the sectors, especially in the labour intensive sectors and garment industry is one such sector Cost Composition of Retail Price in the Apparel Industry (Approximate Percentages for One Piece) Cost Components 1. Retail Shop Profit and other Costs (Personnel, Rent, Administration, Advertising etc) 2 Brand Profit, Overheads and Promotion 3. Materials Costs and Factory Profit 4. Transportation, Taxes, Import Costs 5. Factory Workers’ Wages Retail Price Source: www.stanford.edu/Vijayabaskar M, in Gopal Joshi, ed., 2002.
50 % 25 % 13 % 11 % 1% 100
in which the jobs are monotonous and low skilled. The apparel export sectorâ&#x20AC;&#x2122;s leap towards the LDCs is essentially to reap the wage advantage and thus maximize profit. Market leaders have been using this opportunity even to eat into the already low wages of these locations to assure higher brand profits (www.sweatshopwatch.org). Labour costs data concerning different countries along with labour cost composition of retail price also indicates the comparative wage advantage that has been reaped by the apparel export sector by shifting production into developing countries including India, China, Bangladesh, Indonesia etc. As mentioned earlier, shifting production location may also be driven by other factors as the garment sector is not exclusively driven by price factors. Another development is the growth of global market access facilitated by globalization, which helped many developed nation retailers to enter into many hitherto protected markets. As their markets broadened to locations closer to cheap production venues, they decided to source from these areas to take advantage of all the savings in cost available through shifting production to LDCs. New market segments close to the cheap production locations now opened up for global players required yet another product line, which is easily provided by the cheap production locations of the LDCs close to the newly opened up markets.
Labour Costs in the World Apparel Industry (1991-1993) (in US $ per hour)
Europe & USA UK W.Germany France Netherlands Italy Ireland Belgium Denmark Greece Portugal Spain USA Asia Hong Kong South Korea Taiwan India
1991 1993 7.99 NA 14.81 NA 12.41 NA 14.95 NA 13.5 NA 7.5 NA 12.57 NA 15.91 NA 4.26 NA 2.65 NA 7.11 NA 6.77 NA 3.39 2.75 3.74 0.25
3.85 2.71 4.61 0.27
Indonesia Malaysia Pakistan Philippines Sri Lanka Thailand China Japan Singapore Bangladesh Mauritius South America Brazil Mexico Argentina Peru Uruguay Venezuela
0.18 0.62 0.24 0.46 0.39 0.59 0.24 7.44 NA NA NA
0.28 0.77 0.27 NA 0.35 0.71 0.25 10.64 3.06 0.16 1.04
0.76 1.17 1.81 0.88 1.59 1.38
NA NA NA NA NA NA
Source: Moore, 1997/Ramaswamy & Gereffi, 1998/Vijayabaskar M, in Gopal Joshi, ed., 2002.
Global Apparel Market: Fragmented by Fashions and MFA
Garment sector is an industry that tilts according to fashion trends, which is a non-price factor that affect the industry and its market. Frequent change in fashions is a major factor that necessitates sourcing from those locations, which can adjust easily according to the fashion trends. Flexibility in production and small quantity production within the specified fashion time lines are not within the ability of firms organized and geared towards large volume production. The highly disorganized but flexible, small-firm based production centres of developing countries have turned into niche-caterers to such production demands from the developed markets. These advantages are also available in most of the low-wage countries as major part of the garment production in countries like India are in the unorganized, small and medium sector, which is highly flexible with ability to adjust easily according to fashion changes. The clusterbased garment production of developing countries like India, where all the steps of the production chain are carried out by highly flexible small firms, has become perfect locations for sourcing high fashion garments in low quantities with all the other attendant advantages including low wages. The high level of instability of fashions has made the apparel market highly segmented and fragmented, in which a number of non-price factors play critical role in competitiveness of the players. The global apparel industry’s major segments are under the tilting thumbs of the fashion mania that spreads like wild fire and die down like fireflies within a short span and take new birth, sometimes within a few days ( Vijayabaskar M, in Gopal Joshi, ed., 2002) states: Fashions have always influenced creation of demand in this industry, especially after the rise of retailers’ control of the commodity chain. Given their closeness and greater understanding of the market than the manufacturers, these traders sought to compete through market innovations like new designs and fashion marketing rather than through cost reductions by innovations in production techniques. Here again there are differences across various segments. Women and children’s wear is subject to more fashion based design changes as compared to men’s wear (Fine and Leopold, 1993). Further, socio-economic and related cultural changes have created a general trend in clothing towards more informal and casual wear since the 1970s. Consumption based identities have begun to play a bigger role in making one’s position in the social hierarchy, thereby facilitating the creation of market niches (Underhill, 1998). All these factors have led to the rise of distinct segments in the apparel market. This trend has accentuated in recent years, when it is said that the recession in advanced economies has led to a more skewed distribution of income, creating two distinct market segments (Mody and Wheeler, 1987; Hoffman, 1985). Others point to the rise of post-Fordist life-styles, with consumption being an important marker of one’s identity, as responsible for this phenomenon (Underhill, 1998; Lash and Urry, 1987). The causes notwithstanding, the apparel industry has been divided into two key segments with different characteristics: i). A vibrant and growing up market fashion segment, and ii) a relatively stagnant, low priced and standardized segment.
The former market is highly volatile and is characterized by short production runs, fast changing fashions and designs, aggressive marketing and higher mark-ups. In response to market instability, firms target smaller, more rapidly changing market niches, which require quick alteration of product designs. Here, cost advantages do matter as much as in the mass-market segment. More important is the ‘quick response’ factor (QR), the ability to deliver in time and adjust production to changing designs and quantities. In other words, ‘flexibility’ becomes an essential characteristic of production for this
segment. Thus the cost advantage gained in dispersing production to low wage areas tends to be offset by slowness in supply response. Production in distant locations is not suited for such markets, where reorders (Fine and Leopold, 1993) and fashion obsolescence are common (Christerson and Appelbaum, 1995). Further, the quality requirements of the fabric meant for such up-market garment production necessitates confinement of production to countries with better processing technologies. Nevertheless, garments of certain segments that are relatively less intensely driven by fashion and requiring less quality may continue to be sourced from distant regions. In sum, despite dispersal to low wage economies, the fragmentation of the apparel market into fashion determined smaller niches has enabled the core economies to retain their competitive edge in these segments of the apparel industry. Another important explanation for the simultaneous dispersal and concentration of apparel production takes into consideration the social embeddedness of production processes and their part played in reducing transaction costs of firms in this sector.
While the speed of fashion change is unpredictable, apparel fashions are not changing overnight in a wide manner. Moreover, shifting production to low wage locations are more or less based on a fashion gestation of at least one year or at least season-based (www.aepcindia.org) which are comparatively in high quantities. The small, street-based fashion changes overnight are a negligible part of the world apparel market, and similarly the high-brow segment too is a very restricted niche, and therefore these would be constrained to be sourced from the next door rather than from far away locations with production advantages. In addition to fast changes in fashions, the quota-regimes imposed through the Multifibre Agreement (MFA) of the GATT system also induced fragmentation to some degree as the manufacturers in the quota-bound countries like India showed tendency to move more into more value added products, which can simultaneously escape some level of the quota-traps through quality and fashions. As the MFA has been phased out through the ATC integration process, now the deterrents based on quota-regimes are only of academic and historical relevance. But, the system has facilitated segmentation, fragmentation and disorganization of the producers market in the apparel sector. The high development in the global transport and communication systems also assisted the shifting of production locations. Fast movement of commodities over continents and instant communications and fast transfer of any kind of data and information facilitated much cost reduction in sourcing commodities like garments from cheap locations. The add-on profit advantages facilitated through these new technology systems, through cost reductions without passing on such reductions to the consumers and producers, motivated leading market players to look for cheaper products even at locations far away from the markets.
Global Apparel Sourcing: Dispersed Far and Wide
Despite globalization and economies of low-wage pulls and high technology in communication and transportation, production dispersion of various commodities are still constrained by various factors, and this is applicable to the garment industry too. M. Vijayabaskar (in Gopal Joshi, ed., 2002) observes: A key factor that works against greater dispersion of garment production globally is the amount of transaction costs involved in coordinating a global network of decentralized producers and traders. The high vertical and horizontal disintegration in this industry increases the volume and rapidity of
inter-firm transactions. The location of production will therefore be also influenced by geographical proximity to suppliers, contractors and final markets, particularly when transactions are small scale, irregular and involve production for quickly changing niche markets. (Storper and Scott, in Christerson and Appelbaum, 1995) Given the high transaction costs involved, it may not be too feasible for buyers to shift their point of sourcing too often taking into consideration only the labour cost advantage. In fact, studies point to the fact that buyers increasingly prefer to negotiate with more reliable but lesser number of importers rather than many importers (Egan and Mody, 1992). Further, the costs of finding and entering into a long-term relationship with new suppliers too would deter buyers from shifting points of sourcing. Retailer Types and Major Global Sourcing Areas [Ring 1: Italy, France, and UK & JAPAN] [Ring 2: Taiwan, Hong Kong, South Korea, & Singapore] [Ring 3: Indonesia, Philippines, China, India, Malaysia, Thailand, Brazil, Mexico, Egypt, & Turkey] [Ring 4: Sri Lanka, Pakistan, Bangladesh, China, Tunisia, Morocco, Gulf, Caribbean, E. Europe & Mauritius]. [Ring 5: Fiji, Maldives, Cambodia, Myanmar, N. Korea, Madagascar, Vietnam, Nicaragua, Bolivia, and Peru etc.]
Type of Retailers
Main Global Sourcing Area
Characteristics of Buyers Orders
Armani, Donna Karan, Polo, Ralph Lauren, Boss, Gucci
Ring 1 & Ring 2
Expensive designer products; High craftsmanship required; Small lot orders.
Bloomingdaleâ&#x20AC;&#x2122;s Saks Fifth Avenue, Neiman Marcus
Ring 2, Ring 3 & Ring 4
Top quality, high priced; Variety of national brands and Private Labels (store brands)
Speciality Stores brand named Companies
Macyâ&#x20AC;&#x2122;s, Norstorm, J C Penny, The Gap, The Limited, Liz Claiborne, Calvin Klein
Ring 2, Ring 3, & Ring 4
Medium/Large orders, often coordinated by department stores/buying groups (such as May DS Company & Federated Department Store
Sears Roebuck, Montgomery Ward, J C Penny,Woolworth
Ring 2, Ring 3 & Ring 4
Good quality, Medium Price; Mainly sold under private labels; Large Orders
Wal-Mart, Kmart Target
Ring 3, Ring 4, & Ring 5
Low Priced, Store brands,Giant orders.
Ring 4 & Ring 5
Pilot purchases & special items; Sourcing for retailers by small importers (industry scouts); relatively small first orders; potential to grow.
Source: Gereffi, G, 1994/Vijayabaskar M, in Gopal Joshi, ed., 2002.
Given these factors, established suppliers may continue to manufacture for importers even if they lose the labour cost advantage over time. This is likely to be true in mid-price segment for which production costs are a lesser source of competitiveness. Though there are many deterrents to dispersion of garment sourcing, there is still a hierarchy of producers. This hierarchy is defined and maintained by the level of development of the industry in the particular region or cluster, wage levels and quality of garments produced. Elson (1994) presents six tiers of garment producers, with each country trying to move into the tier above them. Gereffiâ&#x20AC;&#x2122;s (1994) description of sourcing different products from different regions by the American retailing firms (See Table: Retailer Types and Major Global Sourcing Areas) is illustrative of the dynamics of sourcing hierarchies in the global garment trade.
The dynamics of sourcing revealed by Gereffi is also indicative of the global interconnectedness of the garment industry with production locations spread out mainly in the developing/less developed countries. The large volume market leaders naturally want to cash on the low wage and other facilitating factors, if not deterred by the transaction costs. A normal hypothesis is that the very low production costs in these locations, including India, especially in case of large volume orders, is sufficient to get over the deterrent of high transaction costs.
Despite the wage-pull factor and other motivators that induce sourcing of garments from the developing/less developed countries, there is still some level of persistence of dominant core economies in the global share of apparel exports (See Table: Ranking of Leading Apparel
Global Garment Industry: Persistent Domination by Core Economies
Ranking of Leading Apparel Exporting Countries during 1980-1995 Ranking/1980
1. Hong Kong 2. Italy 3. South Korea 4. Germany 5. Taiwan
% share 11.5 11.3 7.3 7.1 6
6. France 7. UK
8. China 9. USA 10. Netherlands 11. Portugal 12. India
Ranking/1990 1. Italy 2. China 3. Hong Kong 4. Germany 5. South Korea
% share 10.9 8.9 8.6 7.3 7.3
Ranking/1995 1. China 2. Italy 3. Hong Kong 4. Germany 5. USA
% share 15.2 8.9 6 4.7 4.2
6. Turkey 7. France
4 3.1 2.2 1.6 1.5
6. France 7. Chinese Taipei (Taiwan) 8. Portugal 9. Turkey 10. UK 11. Thailand 12. USA
3.2 3.1 2.8 2.6 2.4
8. South Korea 9. Thailand 10. UK 11. India 12. Portugal
3.1 2.9 2.9 2.6 2.3
14. Turkey 15. Indonesia Total share of 15
0.3 0.2 67.1
14. Netherlands 15.Indonesia Total share of 15
2 0.5 69.9
14. Indonesia 15. Netherlands Total share of 15
2.1 1.8 66.3
Source: Ramaswamy K V & G. Gereffi, 1998.
Exporting Countries). But, the remarkable change over the 15 years, and continuing to some extent still is the rise of China to the status of world’s leading exporter in 1995 by cornering 15.2 per cent, from its 8th rank in 1980 with merely 4 percent share. Another observable change is increasing share of peripheral economies like India, Indonesia and Thailand, while the share of the semi-peripheral economies like South Korea, Hong Kong and Taiwan, which were major exporters in the 1970s, have declined. But, the persistent presence of core economies is evident. Despite decrease in shares, in 1995 seven European countries continue to be among the top 15 exporters of apparels, apart from USA’s 5th position achievement from its 12th position in 1990. Many of the core economies meet a substantial part of their internal demand for clothing from domestic production. For instance, USA still manufactures 50 percent of its requirements domestically in 1990 though it had shrunk from the 70 percent share it had in the domestic market in 1980 (Bonacich, et.al, 1994). While the liberalized regimes emerged out of the WTO system and relatively low labour and raw materials costs, and other structural advantages offer some leverage to India in the garment sector, the overall position of India to grow up to reap the benefits remains ambivalent. Vijayabaskar M (in Gopal Joshi, ed., 2002) observes: Indian garment exports do not compare well with many other peripheral economies. The growth in India’s share has been relatively slow, having moved from 1.5 per cent in the 1970s to around 2.4 percent in 1992 (Exim Bank of India, 1995), and then to 2.6 percent by 1994 (Ramaswamy and Gereffi, 1998). Even the latest figures for India’s exports place it only around 2 per cent (Tirupur Exporters Association 2000). Though the growth of its exports has moved in tandem with world garment trade, its performance does not compare too well with that of other peripheral economies. Economies like Thailand, Indonesia, Bangladesh, Mauritius, Pakistan and Sri Lanka have achieved higher growth rates during this period compared to that of India (Exim Bank of India, 1995; Ramaswamy and Gereffi, 1998). China, for instance has more than tripled its share from 4 per cent in 1980 to 15.2 percent in 1995 (Ramaswamy and Gereffi, 1998). Bangladesh has increased its share to 0.9 percent from near nil exports in the early 1980s. As a result India’s share in ‘developing countries’ exports has not improved beyond 4 per cent mark achieved in 1974 (Chatterji and Mohan, 1993). To add, India’s rank among ‘developing and NIE’ country exporters has fallen from 5 in 1980 to 8 in 1992 (Exim Bank of India, 1995). The relative stagnation assumes further significance in the context of India’s advantages in terms of cheap cotton production and availability of large pool of labour. In fact, substantial quantities of cotton fabric and yarn are exported from India to some of these economies and from there they are made up into garments and exported. Garment exports as a share of manufactured exports from India rose from 0.3 percent in 1960-61 to 17 percent in 1992-93. Chatterji and Mohan (1993) distinguish two phases of this growth based on composition of garments exported, their destination and demand vagaries. The first one, during the late 1960s and early 1970s, was led by a tremendous surge in demand for handloom garments due to fashion requirements in the USA and Europe. The second phase begins from 1983-84 and has been marked by a relatively more steady growth. From around Rs. 640 crores in 1983-84, it has increased to around Rs. 22,915 crores in 1999. (Exim Bank of India, 1999; www.aepcindia.com)
The story of Tirupur knitwear cluster is closely linked to the high growth of the cotton
Indian Garment Exports (Segments): 1983-91 (in Percent Value Share)
Source: Chatterji S and Mohan R, 1993.
India’s Garment Exports Segment-wise and Fibre-wise Composition:1991/92-1999 Knitted Garments
Mill Made Garments
Syn- Wool thetic
Source: Handbook of Apparel Export Statistics, AEPC, various issues. www.aepcindia.com
knitwear segment in the Indian garment export sector (See Table: Indian Garment ExportsSegments: 1983-91 and India’s Garment Exports-Segmentwise and Fibrewise Composition: 1991/92-1999). Tirupur’s transformation from the restricted domestic market of white banians (men’s undershirts) into the world of coloured T-shirts is bound together with the growth of India’s apparel export led by knitwear, which mainly got sourced from Tirupur. But, though Tirupur, with its facilitating factors including low wages, was able to capture a sizeable share of
India’s knitwear exports, it has not succeeded in making India more competitive in relation to other national players in the garment export sector. However, the relatively stable growth has been accompanied by changes in the relative shares of segments within the sector (See Tables: India’s Garment Exports-Segmentwise and Fibrewise Composition: 1991/92-1999 and Itemwise Composition of India’s Garment Exports). Of special significance has been the rise of the knitwear segment. From 16.9 percent in 1983, it has almost doubled to 33 percent by 1999. The cotton knitwear segment has led this growth as it alone constitutes 90 percent of this sector, pointing to the new role of Tirupur. Despite the impressive growth of garment exports compared to other export sectors of the country, India’s performance vis-à-vis its competing nations have not been too well. India falls under the ‘Ring 3’ sourcing points along with a few other Asian peripheral economies. With the withdrawal of quota and price restrictions from 2005, India, despite having unrestrained access to global markets may face tougher competition from other countries in Ring-3 and lower rings because they would try their best to expand their market shares.
Competitiveness Competitiveness is generally measured by comparison of market shares. It can also be measured of India’s Garment by labour costs (input measure) corrected for labour productivity. As the Indian garment Export Sector production is characterized by excessive presence of the informal sector, labour data remains largely incomplete. Input measure becomes also problematic due to the given impacts of exchange rates on wages. Given the importance of non-price factors in the garment sector, unit value realization may be a better parameter for measuring competitiveness. This also poses many problems due to the highly fragmented character of the apparel market. Higher unit value realizations may indicate a heavy hold in a different market segment rather than competitiveness in similar markets. However, higher unit value is a critical factor in sustaining and improving competitiveness over time. Due to the presence of many non-price factors such as quick response, fabric quality and processing quality etc., no single indicator can reflect competitiveness of Indian garment sector properly. A number of indicators are normally used to measure competitiveness of Indian apparel exports. Within the changing global garment scenario, in which growth of garment exports to leading markets are expected to increase considerably using the non-barrier channels, India would definitely try its hand to corner a good share through whatever means at its command. But, the ground on which India stands to stretch its hand to corner such a share also needs to be analyzed in order to understand the probable ability of India to succeed in this venture. Garment categories such as non-knit women’s outerwear, non-knit undergarments and knitted undergarments constitute the biggest shares and together account for more than 70 per cent of exports from India. When compared to the market shares of these and other product categories of Indian exports against a few of its competitors, India’s competitive edge is quite mixed. (See Table: Market Share in 17 Product Categories of MFA Imports of the USA). The comparison is restricted to apparel exports to the USA, the single largest market for Indian exports. China and Hong Kong pose the strongest competition to India in terms of market shares. They together have a higher market share in the USA than India in the case of 13 out of 17 product categories. Even countries like Indonesia, Pakistan, Sri Lanka and Bangladesh too have higher market shares
Item wise Composition of India’s Garment Exports
1991: $ Million
1994: $ Million
Clothing and Accessories
Under garments: non-knit
Outer Clothing accessories
Under garments: knitted
Textile Clothing accessories-nec
Headgear: non-textile clothing
Men’s Outer wear: non-knit Women’s Outer wear: non-knit Dresses Skirts
Of Synthetic fibres Out wear: knit non-elastic Jerseys, Pullovers etc
Source: Ramaswamy K V and G. Gereffi, 1998.
in the USA exports in the case of a few categories of products. China has penetrated in almost all product categories. This indicates that a region-based specialization in specific niches may be the best option to countries to expand their shares without undermining the shares of the other countries. As the market shares might have been influenced by the quota restrictions at that time, which prevented countries from expanding exports beyond a point, a unit value comparison of product values across countries would be relevant. (See Table. USA’s Garment Imports from Selected Countries by Categories-Unit Values) Data indicates that the unit values of garments exported from Hong Kong are higher than that of most other countries, which means that they compete in different, relatively up market segment as compared to other countries. Therefore, unit values may not indicate the level of competitiveness accurately. But, comparing India’s unit values with the average for all countries will help to understand India’ relative position. It is clear from the table that India has above average unit value in two of the six product categories though Indonesia has a higher unit value in both the categories and China in all of them. Thus China appears to be
Market share in 17 product categories of (MFA) Imports of the USA, 1996 (US imports: $US million for all countries) Category Description Cotton: Women’s non knit shirts
US India Imports
Indo- China Hong nesia Kong
Cotton: Men’s knit shirt
Cotton: Men’s non-knit shirt
Cotton: Other manufacturers
Manmade fibre (MMF):Dresses
Cotton: Other apparels
Cotton: Women’s knit shirts
MMF: Women’s non-knit shirts
Cotton: Women’s Coats
Cotton: Men’s Trousers
Cotton: Women’s Trousers
MMF: Women’s Coats
Source: Ramaswamy K V and G. Gereffi, 1998.
Bangla- PakiDesh stan
the biggest source of competition to India in the post MFA-era, which is also vouched by other evidences. The measure of competitiveness of India, based on the RCA (Revealed Comparative Advantage) illustrated by Vijayabaskar M (in Gopal Joshi, ed., 2002) is also indicative of China’s position vis-à-vis India in the garment export sector.(See Table: Rank Correlation Coefficients of RCA Indices) Vijayabaskar M (in Gopal Joshi, ed., 2002) opines: The small values of coefficients indicate that there are no similarities in the pattern of revealed comparative advantage between the pairs of the countries (See Table: Rank Correlation Coefficients of RCA Indices). It may, however, be noted that the similarity in patterns of comparative advantage is relatively higher for China vs. Indonesia as compared to the other two pairs. This exercise once again indicates that the line of specialization among the three countries may enable them to compete in the global apparel market without eating into the market shares of other countries.
But, the state’s role in economic ordering in China and India, and in Indonesia remains at different terrains, which gives different levels of leverage in advancing exports of the respective countries. In China, the state has been actively involved in economic ordering despite its move towards privatization and liberalization. It has prepared well to advance on the route of globalization, whereas India goes in leaps and bounds without any strategic plans to cash on the global opportunity due to lack of political will. Whatever happens in India is mainly due to the entrepreneurial skills of the people involved and supported by the lower rungs of the sectoral agencies of the government. In Indonesia, the situation seems to be worse than India with literal breakdown of administration and the country plagued by various political issues. USA’s Garment Imports from Selected Countries by Categories, 1996 (Unit Values Average for all countries)
Average India Bangla PakiDesh stan
Cotton Men’s Knit shirts
Cotton Men’s non-knit shirts
Cotton Women’s non-knit shirts
Cotton Other manufacturers
Cotton Men’s trousers
Cotton Women’s trousers
Source: Ramaswamy K V and G. Gereffi, 1998.
Rank Correlation Coefficients of RCA* Indices for pairs of countries in garment exports *RCA, a well known measure, is simply a ratio of the industry A’ exports share to total merchandise export from that country to the export share of the world exports of A to total world exports, expressed as follows:
RCA = (India’s export of product A/India’s total merchandise export) (World export of product A/world’s total merchandise exports)
Pairs of Countries
Karl Pearson Correlation
India and China
India and Indonesia
China and Indonesia
Source: Vijayabaskar M in Gopal Joshi, ed., 2002.
Another indicator of competitiveness is that of labour productivity, which is especially relevant to Tirupur cluster as it is characterized by highly labour intensive operations and results in many issues concerning labour standards compliance. Vijayabaskar M (in Gopal Joshi, ed., 2002) observes: The Global Competitiveness Report 1999 has provided a number of competitiveness indicators of countries in terms of labour. One such indicator is the wage adjusted for productivity differences. It is found that wage adjusted for productivity is one of the highest in India. While the rank of India is extremely low at 51 out of 59 countries, that of China and Indonesia is 5 and 45 respectively. In fact, wages are found to be very low for the country’s productivity in China. Further, China too ranks pretty favourably as compared to India in terms of flexible hiring and firing practices despite better educational levels. Though these indicators are only representative of the entire workforce and may not hold true for the garment sector, it is quite likely that some of the differences would favour China even within the garment sector. In fact, though the data on wage rates would indicate that Indian wage rates are not too different from other peripheral economies, it is found that the cost per standard minute in India is higher than that of Indonesia, Thailand and China (Majumdar, 1996).
All these lead to the dismal performance of Indian garment exports in comparison to other peripheral economies, despite the high boom witnessed in areas such as Tirupur knitwear cluster which remains as a drop in the ocean of global garment exports despite the fact that it provides local economic growth in relatively large measure. Various reasons have been cited for the relatively poor performance of the Indian garment sector in the world market: 1. Garment exports from India is largely confined to cotton garments and hence confined to only one segment of the apparel market. 2. Government policies have created distortions in the industrial sectors, which lead to failure in reaping the liberalized and globalized trade atmosphere.
Latest Trends in The latest data available from the AEPC (www.aepcindia.com) and other secondary sources (See Indian Garment Tables: Base Level and Quantities Passed for Shipment 2003, 2004), though deficient in many Exports macro and sectoral aspects, is also not much encouraging with regard to India’s position in the world garment market though it records remarkable growth compared to the last decade. The increased volume trade facilitated by phasing out of the barriers through the ATC integration
Base Level and Quantities Passed for Shipment 2003
Qty Passed for Shipment
Tot GR-A + 9 G.TOTAL Source: www.aepcindia.com
Base Level and Quantities Passed for Shipment 2004
Qty Passed for Shipment
Tot GR-A + 10 G.TOTAL Source: www.aepcindia.com
process need to be considered while analyzing the increased volume of India’s garment exports. As latest comparative data are not available, it would be premature to jump into conclusions. But, given the general trend in the global market and also considering the strengthened industrial activity of many of the peripheral economies, India’s position still remain almost stagnant in the ranking of apparel exporting countries. The export of readymade garments, which was to the tune of 253.6 million pieces, valued at US$ 826.5 million during January-February 2002 has increased in quantitative terms to 306.1 million pieces, valued at US$ 1137.9 million-up by 20.07% in quantity and by 37.68% in value terms, during January-February 2003, when compared with the same period last year. (www.aepcindia.com) Exports to USA have gone up significantly; by 41.15% in quantity terms and by 46.92% in value terms. EU has seen an increase of 41.17% in terms of value, and in quantitative terms there is an increase of 20.17% . Canada has registered an increase of 7.59% in terms of quantity and of 15.44% in terms of value. Non-Quota Countries have registered a decline of (-)30.46% in quantity terms and of (-)18.63% in value terms. (www.aepcindia.com) Exports during April ’02–February ’03 amounted to 1172 million pcs. valued at US$ 4346.3 million. This indicates an increase of 1.45% in terms of quantity and an increase of 7.47% in terms of value, when compared to April ’01–February ’02. The detailed export figures are as follows: In the case of U S A, the export figures reveal that there has been a significant increase of 32.07% in terms of quantity and in value terms an increase of 17.99% was registered. The quantity exported is 389.6 million pcs. valued at US$ 1933.8 million. Exports to E U during April ’02–February ’03 show an increase of 2.64%, in terms of quantity, and in value terms there is an
increase of 18.56%. The quantity exported is 645.1 million pcs valued at US$ 1967 million. In the case of Canada, the exports have amounted to 62.3 million pcs. valued at US$ 185.3, registering a decrease of (-)5.03% in terms of quantity, and of (-)10.31% in terms of value. (www.aepcindia.com) The percentage utilization in 2003 and 2004 fell short of the available quota base, which is indicative of the failure of the apparel export sector of India to grow up properly to capitalize the available market space. This also indicates continuing predominance of the USA as buyer of Indian garments, followed by EU and Canada. Though efforts are launched by India to tap other markets, and even those of Latin America, such efforts have not met with success. (www.aepcindia.com) The tough terms of trade imposed during the quota regime may continue through various other means of stifling Indian and other NIC exports to the USA and other developed country markets in the current post MFA era. USA and other developed countries are trying to improve their export earnings from all kinds of exports in the globalized condition and also due to the fact that there is certain level of panic among the developed countries regarding the market cornering done by China and other developing countries using the liberalized global trade atmosphere created by WTO.
Some Points Indian garment export comprises more than one hundred varieties of product categories to Ponder (published in Trade Classification of Product Categories Exported from India under the Harmonized System-SITC, Department of Foreign Trade , Ministry of Textiles, Govt. of India). Majority of these products are cotton-based semi-fashion, middle price segment of casual wear, which includes categories such as T-shirts, menâ&#x20AC;&#x2122;s shirts, ladies blouses, ladies dress and skirts. The major markets for Indian garment exports are the USA, EU countries, Canada, Arabian Gulf Countries, Japan, Switzerland and Australia. Textile and fabrics form nearly 15 percent of Indian garment exports, and 45 percent of this is knitwear, though the share of knitted garments in value terms is much less than in volume terms in Indiaâ&#x20AC;&#x2122;s total garment exports. As seen earlier, knitwear is emerging as the fastest growing segment of Indian garment exports compared to all other segments including woven garments and the mill made garments. Indian garment exports have surged forward both in quantity and value terms as seen in various data tables presented above. There is much gain both in terms of domestic currency (rupee) terms and hard currency (foreign exchange) terms. The average unit price realization has also moving further upward, as seen earlier. But, at the same time Indian garment sectorâ&#x20AC;&#x2122;s share in the total exports of India is coming down, which indicates different factors, which need not be elaborated here. A recent article in Express Textile (www.expresstextile.com) is indicative of the direction to which Indian garment exporters are moving in the non-quota global trade system:
There seems to be a trend to look toward the traditional safe markets rather than venturing to explore new markets. But, this may be a trend among the conservative big players in the garment export sector, who may prefer to hawk their wares in the familiar markets only. Those venturing into the market in the quota-free era, therefore, may be compelled to look for new markets.
Another aspect to be considered is the original sourcing from LDCs including India, which developed country merchandisers and retailers have been doing and mere brandsticking value addition and then re-exporting it to other high value markets. This means that NIC exporters including India are losing out on value realization, which in turn will reduce levels of trickle down of value to the actual factory-end of production, leading to further lowering of already low wages. In this connection, it should also be noted that despite efforts are on for achieving clean production processes, in terms of labour and environmental standards, in all segments of industrial production, the rate of change into clean production systems are very slow even in the developed countries. Meanwhile, there are attempts to shift both labour intensive and toxic manufacturing activities to the “poor world” so that the “rich world” can be saved from tedious work and from high pollution caused by the highly toxic industries, and still the “rich world” can be assured of a “better life.” This attempt at shifting started in 1970s, aided by international financial agencies like World Bank, and still continues under cover of various other schemes. Such outsourcing is also driven by the fact of exchange rate differences, which assures very high profits to investors if products and services are sourced from NIC countries compared to the low profits they gain through conducting the same activity in a developed country, which is characterized by high wage rates and other high costs of production. As the garment industry is labour intensive as well as highly polluting, the Lawrence Summers’ ‘toxic memo’ logic (Susan George and Fabrizio Sabelli, 1994) may be working underneath the attempts to promote garment production in NICs including India. But, the other reality of poverty, unemployment and destruction of primary sectors like agriculture through global economic arrangements has been facilitating the availability of cheap labour and also induce venturing into highly toxic productions aimed at the export markets as such engaging naturally assure a comparatively better profit for the local capitalists and a survival wage to the local labour. The Tirupur knitwear cluster is a classic example of the working of this complex system. Its success as a knitwear export location is also based on this complex global economic reality combined with life realities of Tirupur and surrounding areas. However, the changing orientation of a segment of global consumers towards ‘clean products’ has its impacts on every production sector including garments and the same is also reflected, though at a very minute level, in the garment sector of India including the Tirupur cluster.
Garment Production Clusters in India and Tirupur’s Position
India has been a cotton power for centuries and it started dwindling with the launch of political dominance during the colonial era, which was to a large extent induced by European craving for dominance over commodities. History has a tendency to move in certain cycles. During the colonial era, the colonial powers made sure that colonies would produce only the basic commodities and all kinds of value additions took place at ‘at home’. This was pushed by the full employment notions of economics as the basis for well-being. Through centuries of slave labour and domination over commodities, industrial revolution was made possible in Europe. This facilitated and induced control over value addition through industrial processes. Colonial history of India speaks volumes about garment industry links of India and Europe. In the earlier period of colonial rule, it was intentional destruction of Indian cotton textile industry to promote Manchester as the textile capital of the world. But, the British dream was stifled soon by the rise of unions and their firm position with regard to workers’ rights. The British rulers launched many spinning and weaving mills in Coimbatore, Ahmedabad, and Mumbai and even in places such as Kozhikode (Calicut) and Kannur (Cannanore) in Kerala (then part of Malabar) as a consequence of growing workers movement in Manchester. As India has its firm grounding in the textile world with large areas suitable for high quality cotton cultivation and areas with suitable climatic condition and water quality for processing cotton into cloth of varied variety, the British rulers decided to use these facilities to fight back the high rightscharged unionization of Manchester workers. Thus, Mumbai (then Bombay) was known as Manchester of North India and Coimbatore was known as Manchester of South India, during the later part of the colonial rule. Coimbatore district still claims the status of Manchester of South India, on the official web site of the District Administration (www. coimbatore.tn.nic.in). Tirupur is a regional town, as well as a Taluk (a revenue division of a district) within the Coimbatore District (the geographical and other vital information concerning Tamil Nadu, Coimbatore and Tirupur are available on www.coimbatore.tn.nic.in and www.tn.gov.in). When colonies like India became independent, colonial masters managed to shift many of the high value addition
processes back home, banking on their high bargaining power obtained through the postsecond world war global economic ordering and forcing former colonies to part with primary products at cheap price. The action was based on the prevailing economic belief concerning full employment as the only means for a ‘better life’ and it was possible only through increased value addition activities.
Re-shifting Production to Former Colonies
Now, by yet another somersault of global economic relations, value addition processes are again relocated to the former colonies, which still remain Non-industrialized according western standards. The craving of investors for higher profit, coupled with other inducing factors, are pushing many production activities to NICs. The high wages in the “rich” locations, the tendency to escape from toxic waste loads and the favourable global systems are the main inducing factors that push industrial production out of the geography of the rich nations. Garment is only one such ‘shifted product’. In most cases, production of garments still takes place in almost “slavelike” situation of sweatshops in the NICs where wage is low and other inhuman conditions exist. Of late there is some change towards humanizing the production locations through movements for assuring clean products to consumers. Tirupur is a garment production centre with a long history but emerged as a major location for exports along with the global push towards relocating production into the NICs, which started gaining momentum in the late 1980s and early 1990s. A lion’s share of Indian garment production happens in Tamil Nadu state. Tamil Nadu accounts for 37.3 percent of garment exports (in quantity) and 23.9 percent in value terms (See Table: Overview of Indian Garment Exports: Regionwise – 2000). While, Delhi and Mumbai also include exports from all the nearby areas spread over North India and West India respectively, the figures for Tamil Nadu clearly indicate to a large extent exclusive contribution of Tamil Nadu in which a major share comes from Tirupur. The low level of value-quantity ratio in the case of Tamil Nadu, and especially that of Tirupur, indicates the kind of garments sourced from Tamil Nadu, mainly from Tirupur. In addition to Tamil Nadu, Ahmedabad (in the State of Gujarat, West India, close to Mumbai) Overview of Indian Garment Exports: Region wise 2000 (in % shares)
Value (US $)
Delhi: State of Delhi & Indian Union Capital (North India)
Mumbai: State of Maharashtra ( West India)
Bangalore: State of Karnataka (South India)
Chennai: State of Tamil Nadu (South India)
Tirupur: State of Tamil Nadu (South India)
Rest of India Total Source: AEPC www.aepcindia.com
and various centres in the State of Maharashtra, surrounding Mumbai, are the other important garment manufacturing areas in Western India. The North Indian locations of garment productions are around New Delhi (National Capital). There is a limited concentration of garment production in Bangalore (Karnataka state, South India) and also in Kolkata (earlier Calcutta; in the State of West Bengal, East India). Of late, Bangalore is in a growth stride mainly due to relocation of garment factories from Mumbai and other Northern and Western States. Bangalore is also favoured because of its high development in infrastructure associated with the high booms in IT industry, making it the Silicon Valley of India. Bangalore is also favoured because of low labour costs and the almost complete absence of unionization in majority of private sector industries including the garment sector. Tirupur, with an area of 43.52 sq. kms., has been a centre of textile business, dominated by yarn trade and cotton pressing since 1870s, which catered the mills set up by colonial rulers to counter the high unionization and resulting high demands of rights by workers of European mills, especially of Manchester. Moffusil capitalists, germinated either from their close contacts with the colonial power centres or from the rich upper caste farm lords, were the first generation textile entrepreneurs in Tirupur. It was a natural extension for the big land lords engaged in cotton cultivation in the nearby localities. They found the value addition process of cotton pressing and converting the same into yarn as activities that bring in additional revenue without added costs as they had a strong bunch of captive labour with the agriculture-based rural bondage.
The Complex Multicolour Story of Tirupur
Then, it was the undated, unknown discovery of the high demand for knit â&#x20AC;&#x2DC;baniansâ&#x20AC;&#x2122; (the basic T-shirt: white undershirts used widely by men in India, especially during summer in the high temperature regions as a means to absorb sweat,) by some enterprising cotton businessmen of Tirupur, which was till then manufactured by the knitters of Coimbatore and other locations. Mathangini B (The History of Knitwear Industry at Tirupur, 1983) observes: The first knitwear unit in Tirupur was set up in 1925 and the growth of the industry has been slow till late 1930s. A series of strikes in late 1930s in knitting factories in the neighbouring towns of Salem and Madurai resulted in the opening of new firms in Tirupur. Subsequently, it emerged as the prominent centre for knitwear in South India by 1940s. There are no clear estimates of the number of units in this industry over this period. However the limited available information is used to portray broad trends. In 1942, 34 units were engaged in the production of knitwear. All these units were composite mills and the production was carried out in the same unit (sic). There are also references to some units performing specific tasks/operations like bleaching and dyeing, located in the larger units. By 1961, the number of units rose to 230 and till early 1970s, the industry catered only to the domestic market. These units were mostly composite mills without any subcontracting system of production. It was in the 1980s that the export market began to expand and subsequently Tirupur emerged as the largest exporter of cotton knitwear from the country, accounting for roughly 80 percent (sic) of the total cotton knitwear exports.
Along with the expansion of the export market the composite mill-based production structure of the industry also underwent tremendous changes (Neetha N, 2002). The transformation of Tirupur from its mainly agrarian and minimal cotton-based industrial activity of yarn and banian
production to the colourful world of T-shirts and other fashion knitwear and thus entering the world beyond the seas is a story with many hues and odds. By 1980 there were about 400 composite units, 200 knitting units and 250 finishing or making up units (Mathangini, 1983), and there has been a phenomenal growth in the number of small units during 1980s and 1990s. Padmini Swaminathan and Jeyaranjan J (1994) gives an estimate of 2,500 knitting and manufacturing units, 600 processing units and 100 embroidery units. Compared to this the present scenario in Tirupur indicates its quantum leap forward into the knitwear export, mainly driven by entrepreneurial networks of rich agrarian families and former workers of composite mills who gained experience over many decades. The predominance of the Gounder community among the entrepreneurs of Tirupur, who were formerly agriculturists and workers in the mills indicates a strong community network in the capturing of the entrepreneurial opportunity emerged from the global demand for knitwear. The peculiar entrepreneurial culture of Tamil Nadu, wherein family networks and satellites of friends emerge around a successful leader, also operated in the growth of Tirupur. The process of “amoebic capitalism” also played a crucial role in the growth of Tirupur. Former agriculturists ploughed their savings and invested it in the lucrative manufacturing and trade of knitwear. Workers with acquisition of skills started setting up one-man units. In addition, the government policy regarding small-scale industries, with large number of sops and subsidies and the special schemes for textile sector, assisted Tirupur in a big way. Venugopal G (Quality Assurance Officer and Cluster Development Agent, Textiles Committee, Govt of India, Tirupur) observes: ‘Over the last decade, Tirupur has doubled its engagement in knitwear production’ (See Table: Units in Various Operations). Considering the views expressed by various stakeholders during interviews, the total number of firms (including all operations, ancillary units and including those in the surrounding areas of Tirupur) would be in the range of 8000/10000. There is lack of consolidated and updated data, and there is a lot of difference of opinion among various enforcement agencies regarding the actual number of units working in Tirupur. In addition, a lot of split units by the same owners exist in reality, which are never been registered. The multicolour confusion of Tirupur starts from here. Units in Various Operations
Operations Knitting/Stitching Units
Dyeing and Bleaching
Other Ancillary Units
Compacting and Calendaring
Number of Units
Source: South Indian Hosiery Manufacturers Association (SIHMA), Bulletin, 1998
Moreover, there is a problem of defining Tirupur for the purpose of any study about garment production-whether the Tirupur municipal region or the Tirupur Taluk or the Tirupur Development Block is the reference point?. Therefore, data is collected and presented with regard to the area covered by the Tirupur Cluster Development Programme (TCDP), which goes beyond the limit of Tirupur municipal region and not including the full area of Tirupur Taluk and covers major areas of Tirupur Development Block. The confusion concerning number of units in Tirupur is writ large in the peculiar culture of Tirupur. A large section of units do not have name boards at the entrance. The only indication to make sure that a building is used for knitwear operation is the board announcing that “no child labour employed” or an announcement of some job vacancies. When asked about the tendency of avoiding name boards, there were opinions as different as the colours of T-shirts produced in Tirupur, from a wide variety of stakeholders-starting from astrological reasons to the tendency of the entrepreneurs not to show off as entrepreneurs. Starting from this attitude, there is a widespread deficiency of real professional management approach to running the business, which is natural as majority of entrepreneurs are farmers and without proper education. There are many cultural reasons for the peculiar situation of Tirupur. Local entrepreneurs who have direct interaction with the export market are into some form of professional management. All others run the show like some cottage/family business. The entrepreneurs with millions worth of turnover still don’t present as millionaires-they still appear to be the old, farmer folk in their appearance and practices. And, interestingly, majority of the export unit owners in Tirupur (and to a large extent, workers too) do not wear coloured T-shirts in public; they still wear the traditional white dhoti and cotton/handloom shirts. Despite these factors, Tirupur attained leadership position in knitwear exports. There is no doubt that Tirupur’s contribution to knitwear exports forms a major share of the total knitwear exports of India. But, as mentioned earlier, when compared to the total apparel exports of India, Tirupur’s share stands at 28.2 per cent in quantity terms, which is the highest among all the regions. But in terms of value Tirupur’s contribution is 13.8 percent, which is below Delhi (36.3 percent) and Mumbai (24.6 percent). But, considering the single, small location source of Tirupur, it stands out as a unique town that produces a large share of the knitwear exports of India (See Table: Overview of Indian Garment Exports: Regionwise– 2000).
Tirupur’s Share in India’s Garment Exports
The latest data indicates to a large extent a steady growth in exports from Tirupur in terms of value and quantity. It is quite intriguing that agencies which maintain updated data concerning trade activity and show willingness to share it do not find it necessary to maintain updated data on operational aspects, and if at all maintained, show unwillingness to share it for one or other reason. This points to the multicolour and often veiled underbelly of Tirupur. Apart from the boom in Tirupur, nearby areas are getting into the knitwear production network. Knitwear industry is spreading to nearby Erode and Salem districts in a fast pace. The Fair Wear Foundation’s (FWF) Background Study on Tirupur (2004) observes: The industry has its wing in Karur in the central parts of Tamil Nadu where interior garment furnishing, towels and allied products are made. A large number of garment industries are now established in Madras (Chennai) Export Processing Zone. Coimbatore, Dindigul, Madurai and Salem districts are the
areas where the yarn manufacturing process is taking place in the spinning mills feeding the garment industry’s need.
Although more than 50% of Tirupur’s exports reach the US market, it contributes only less than half of Tirupur’s total income, as the main export to the US is white underwear, which has very little value added. This may be one of the reasons for the low value-quantity ratio of Tirupur exports in comparison to Delhi and Mumbai. The EU on the other hand represents nearly 40% in volume, but more than 60% in value. The available data showed strong growth in textile exports from India during the past Export of selected textile items during 2002-03 (April-October)
Growth: Apr- Oct Apr–Oct 2002 (%) 2002 2.932.59 11.6
US $ million 2001-02 Apr-Oct 2001 4.599.09 2.627.26
Wool & woolens textiles Manmade textiles Silk Total
Source: Foreign Trade Statistics of India (Principal Commodities & Countries) DGCIS. Kolkata.
decade, though there was tough competition from other ‘poor’ countries, which were also bending all rules to get the maximum out of the quota-free global garment markets. As seen above, it is still boom time in Tirupur. In particular, ready made garments, which is the most important component, has exhibited strong exports growth of 11.6 percent in value terms, in 2003-2004. This is a highly positive sign because readymades are one of the high value-added end products among garment articles. The high composition of readymade garments and cotton textiles also indicate the predominant role of Tirupur in filling the garment export basket of India, as Tirupur concentrates on cotton wear, with deep focus on knitwear (See Table: Export of Selected Textiles Items during 2002-03). The Tirupur knitwear industry’s exports are directed to customers in the following percentages: 10 per cent to departmental stores, 60 percent to importers, 10 per cent to catalogue stores, 5 per cent to retailers and 5 per cent to established consumer brands. Among major customers of Tirupur’s exports are Kitaso, Savanbee, Texman, Marine Prod, Norwigs Clipper, Green Knitwear, Roy Atsan, Lotto, Arrow, Roytex, Wal-Mart, KDAB, Auchan, Primark, Ether Austin, Clothesline, Norpo-Tex, Dan-Do, V&D Alians Dominos, Oneil and Wibra (FWF: Bckaground Study-Tirupur, 2004).
The domestic market of garments in India, especially that of readymades, has tremendous potential to grow, according to many industry observers. After the emergence of intensified export based garment production, retailers all over India started marketing garments with small
faults, garments rejected by the foreign buyers, and excess quantity of garments. Interestingly, export surplus (small faults, rejects and excess quantity) made in countries like Bangladesh now find their way to Tirupurâ&#x20AC;&#x2122;s wholesalers of surplus quantity. Recently a number of leading international brands started marketing garments in major metropolitan cities in India and most of these garments are produced in locations such as Tirupur.
Process of Knitwear Manufacturing and Tirupur Models of Organizing Production
The process of garment production, starting from the basic raw material and ending by passing the finished product to the consumers, involves many stages, be it starting from cotton cultivation or from producing synthetic or man-made fabrics (see Figure: Garment Production Organisation in the Cluster Model with Horizontal and Vertical Integration). In the case of knitwear production at Tirupur, the main raw material is cotton yarn of different thickness. This is supplied by hundreds of spinning mills located in Coimbatore, Salem, Erode and also in other parts of India, through wholesale and retail outlets. Almost all the major raw material producers have their outlets in Tirupur. Shops and agencies selling accessories, such as buttons, zips, laces and sewing threads are enough in Tirupur. Similarly, the dyes and chemicals that are manufactured mainly in North India and West India are available through sales depots and dealers in Tirupur.
Raw Material and Production Problems in Tirupur
The circular knitting machines, dyeing, bleaching and other machines are mainly manufactured in Punjab, especially in Ludhiana and Amritsar, which reach Tirupur through sales networks. Imported, new technology machinery has been used widely in Tirupur. Many agents and dealers for both indigenous and imported machinery are based in Tirupur providing access to the latest models available worldwide. In addition, there are company showrooms of imported machineries in Coimbatore, Chennai, Bangalore etc. Private enterprises have set up service providing firms to cater to various requirements of garment exports. A recent phenomenon in Tirupur is the upcoming consultancy firms and buying agents, which provide services for quality and standards compliances, and also assist the firms in the process of procuring export orders. While there is sufficient supply of good quality yarn, including organic cotton yarn from mills specializing in organic yarn located in Hyderabad and Mumbai, there is still deficiency of capacity in Tirupur with regard to quality dyeing and finishing processes. This is a major constraint that limits the competitiveness of Indian knit garments. Though India has a very advanced
Wholesaler/Brand Owners (Domestic Markets)
Exporters/Brand Owners (Foreign Markets)
The CMT Process
Garment Production Organisation in the Cluster Model with Horizontal and Vertical Integration (Material and Information Flows)
spinning sector, the benefits of it are not carried up the production ladder with equal standards in dyeing and finishing. Production run are long in India, leading to high gestation and higher working process inventory. The average manufacturing and delivery lead time, from procurement of yarn to shipment (receipt by customer) of garments for Indian apparel exports is 140-180 days, which is often longer than an entire fashion season. But, India is still in the Ring-3 exporters which is not a main source point of the high-value, high fashion market with such limited season span. As India, and especially Tirupur, is a source point for large order brands and private labels, this lead time problem may not be a major constraint. But, change into high value, high fashion segment would require reduction in gestation period. In such a case, India and Tirupur should also get ready to meet strong competition from Ring-1 countries including Italy, UK, France and Japan, which control lionâ&#x20AC;&#x2122;s share of this market. The Tirupur cluster also requires better quality and more competitive pricing for yarn and other material inputs. In the knitting process, yarn has to be converted into loops. While a defect in woven fabric is rectifiable, it is not possible in knitted fabric and yarn cost contribute 60 per cent of product cost. Liberalisation of markets led to a shortage of yarn for Tirupur producers. Spinning mills now prefer to export yarn, taking advantage from the high prices in the world market. During the last decade, more than 500 units in Tirupur (mainly composite, vertically intergrated units of the 8000/10000 units existing now) have gone for modernization. Soft flow dyeing machines, compacting machines for minimizing residual shrinkage, computerised colour matching systems and stenter machines for removing deformity in knitwear are some of the many new technology introduced in Tirupur. There is short supply of skilled technicians and engineers to man the new technology equipments because Tirupur is not a favoured employment location by the educated unemployed of India. Tirupur is not stagnant in relation to innovations and finding solutions to problems, and it is trying to grow up and would go for any amount of efforts to maintain and improve its position as the main location in the Indian export map. The enthusiasm that can be seen among the manufacturers, exporters, traders and even among a segment of labourers-though some segment of workers, trade unions and NGOs are skeptical about Tirupurâ&#x20AC;&#x2122;s future-and the concerned government agencies is unusual, according to normal Indian attitudes concerning change. The level of coordination and cooperation for changes and improvements among the stakeholders in Tirupur is comparatively high though at times become strained due to conflicts of interests between employers and trade unions.
How Tirupur Negotiates Production Problems
Tirupur Exporters Association (TEA) observes in Project Profile-Netaji Apparel Park (2002): The arrival of international brands in Tirupur for sourcing knitwear has triggered a new dimension in the growth plans of Tirupur. They are looking for production facilities comparable to those in developed countries, not in terms of size but in terms of compliance with social accountability standards, quality and environmental management systems, working conditions and work environment. Even though individual exporters have already responded to the needs of international brands, the facilities have been spread out all over the place and hence not visible. TEA has, therefore, been dreaming of a huge industrial complex for manufacture of knitwear exclusively for exports with state of the art machinery
and comparable to any modern production set up in developed countries.
It is important to note that TEA has achieved its dream and the Netaji Apparel Park has come up at 5 km away from Tirupur (named as ‘New Tirupur’) on the side of the National Highway 47 though it is yet to become fully operational. Given the normal gestation of such projects in India, the achievement of TEA within a span of three years is remarkable, and it would not have been possible without extra effort and cooperation of all the stakeholders in the Apparel Park including various government agencies, which normally moves at snail’s pace. But, there is all round criticism regarding the Apparel Park, as it is merely focusing on CMT and without sufficient facilities for clean production in the back-end processes of bleaching and dyeing. Unions and NGOs also say that it is managed like a production-prison with no statutory compliance of labour laws and with no freedom of association and collective bargaining rights. They complain that union activity is not allowed inside the Apparel Park. How Tirupur and its stakeholders react to problems and how they go for innovative and prompt solutions is best illustrated by Unnikrishnan A (Deputy Director, Textiles Committee, Coimbatore. He was head of the TC office at Tirupur earlier. www.textilescommittee.nic.in): One day a knitwear exporter, along with a buyer from Australia, came to the office in a highly agitated condition to test a yarn lot purchased by them. There was some problem with the huge quantity of yarn purchased by the exporter for the order placed by the Australian buyer. It was natural to have problems during dyeing if the maturity of cotton was not proper. The buyer and the exporter were abusing the yarn trader and thinking of changing the yarn trader and buy from another person. Unnikrishnan asked them if problem happened with that trader too what would they do. He prevailed upon them to call up the yarn trader and discuss the matter, and finally they agreed. Then, it was a long process of correcting problems in all stages of the production chain, beginning with making the yarn trader aware about the yarn quality to be purchased for various jobs. Through the process, we were able to convince the exporter to comply all labour and environmental standards, including avoiding child labour. With some amount of pressure from the buyer, and by demonstrating to the exporter how productivity would improve through standards compliance and how it would help to procure more export orders, we were able to bring him to complete compliance. Now he go around and tell other exporters to go for standards compliance and to get assistance from the Textiles Committee. And, of course, we are actively campaigning for standards compliance, and offer assistance and consultancy. But, we deal toughly with those who try to merely ‘show’ compliance at documents level and not in reality.
At the overall level, the Tirupur Cluster Development Programme (TCDP) initiated by the Ministry of Textiles is going in full swing, which tries to sort out many of the macro level problems such as treatment of the high quantity of sewage coming out, mainly from dyeing and bleaching units, and the supply of high quantity of water. Massive infrastructure development activity is underway in Tirupur, including water supply, sanitation, waste disposal and pollution control, and road development, which is expected to change the face and underbelly of Tirupur within the next five years. Venugopal G (QAO, TC and Cluster Development Agent, Tirupur. www.textilescommittee. nic.in) says:
Eight common effluent treatment plants (CETPs) are already set up, which are shared by member units of each CETP. Infrastructure development activity is underway with water pipelines and drainage
systems being developed. That is why you find almost all the roads in Tirupur in dilapidated condition with many pot holes. They are dug up for laying pipelines. Some kind of pressure, best would be from the buyers and consumers, to force the exporters to standards compliance would be required because the general lethargy towards rules and regulations still exist among the exporters. If they find advantages coming their way through compliance, they would definitely seize the opportunity. There is ignorance and fears too, which is natural because a large number of Tirupur entrepreneurs are not well-educated and thus lack professional approach to management of the enterprise. But, there is remarkable change and improvement compared to the situation a few years ago. Now, at least everybody in Tirupur knows that employing child labour is illegal, and tries to avoid it as far as possible, and majority of the entrepreneurs knows well that there are standards to be complied. But, visible advantages in the form of assured increase in business is the best motivator for change into standards compliance.
Various institutions set up by Government agencies, TEA and other industry associations such as the Fashion Design Institute and training centres, professional services provided by government agencies and private consultants, services provided by various technology companies, along with buyer pressures, NGO and Trade union pressures have definitely contributed to a lot of change in Tirupur. Yet, Tirupur has to go a long way to become a standards compliant industrial cluster. Yarn manufacturing machines, winding machines, spinning machines, tailoring machines, embroidery machines, compacting machines, padlock stitching machines, cutting equipments, bleaching tanks, dyeing tanks, common effluent treatment plants, reverse osmosis plants, water tanks for washing, colouring plants, screen-printing boards, computers for designing fashion clothes and automatic printing machines etc. are the major technology products used in knitwear production. Around 500 units, most of them big composite factories, have modernized equipments including reverse osmosis plants to treat waste water from bleach and dye plants. The knitting machines are locally called a Ludhiana (an industrial town in Punjab, North India) machine based on its place of production. There is deficiency of trained personnel to manage the high technology equipments such as the Reverse Osmosis (RO) plants used for waste water treatment. This is compounded by the fact that technically qualified people from other regions show reluctance to work in Tirupur as it lack the convenience and facilities of metropolitan areas like Bangalore though it rides high in the export map of India. Modernization and development of civic facilities and availability of services equal to metropolitan areas is essential to promote balanced growth of Tirupur. Till early 1980s, Tirupur was, in every sense, a banian town, and remnants of this can be found everywhere. You can see even a board welcoming you to the Banian Town, and still most of the Trade unions in Tirupur refer to their garment section members as banian section members. Early 1980s, saw the export of knitwear, mainly basic T-shirts, in small quantities from Tirupur. Exports of other knitwear items gained momentum after 1985. In the late 1980s, the knitwear industry of Tirupur diversified very quickly, responding to the global demands (mainly facilitated through various international and national economic policy changes) and took up manufacture and export of other outer garments, viz., cardigans, jerseys, pullovers, ladies blouses, dresses and skirts, trousers, nightwear, sportswear, etc. Traditionally, Tirupur specialized in cotton garments. It continued and the knitwear cluster
Description of Garment Supply Chain
concentrated mainly on spring and summer garments. Of late, the industry has diversified its production to include winter garments, using polar fleece and blended fabrics. At present, winter garments have come to hold a share of 20 per cent in the total production of knitwear in Tirupur. As cotton garments are meant only for spring and summer seasons, which are shortlived in Western countries, the industry perforce has to take up production of winter garments, which have year-round demand in international markets. Garment production can be split up into the following steps (see Figure: Garment Production Organisation in the Cluster Model with Horizontal and Vertical Integration). 01. Cotton cultivation; From seed to plant, to flower and then cotton (and seed) 02. Ginning and Spinning Cotton/Yarn manufacturing: This is the process of converting cotton into threads/yarn. 03. Knitting process: Machines convert the threads into fabric rolls. 04. Dyeing and bleaching process: Clothes are bleached first as white garments and then coloured using dyeing process. 05. Compacting and calendaring process: Clothes are dried and straightened. 06. Cutting the cloth: By hand or machine, according to designs. 07. Stitching process: Clothes are stitched as garments, using machines. 08. Fabric printing: If required, logos and slogans are printed by screen printing or other printing process. 09. Embroidery process: Embroidery designs are made in clothes, if required. 10. Labelling process: Labels of each brand are stitched in the clothes. 11. Checking process: Garments are checked for any faults like small holes, scratches, imperfect colour, stitching errors etc. 12. Ironing process: Garments are ironed to give neatness. 13. Packing and shipment: Garments are uniformly arranged and each piece is packed in a polythene cover and then packed in cardboard boxes. Transported to ports, loaded in containers and shipment to buyer/consumer destination.
Successful One of the main reasons for Tirupurâ&#x20AC;&#x2122;s remarkable success is the congregation of hundreds of Production small (less than 30 employees) units performing different phases of the production chain, from Organisation spinning and knitting through bleaching and dyeing to embroidery and stitching. There are specialized units engaged in labelling, checking, ironing and packing in Tirupur, mainly oneman or household enterprises by workers who gained experience in the particular activity. The high degree of vertical and horizontal integration results in a highly flexible production system. There are many industry associations in Tirupur who look after their members and act as quasi-judicial institutions, which help to resolve inter-firm commercial disputes and provide managerial and technical services. While the observation in FWF Background study (2004) that Tirupurâ&#x20AC;&#x2122;s success was facilitated by industrial advantages of being in a vertically and horizontally integrated industrial cluster is true, there are certain cultural and social factors too, which contributed to the success. There are strong family and caste networks operating
in Tirupur, like almost all over India and especially in Tamil Nadu. A major segment of Tirupur industrialists belong to the Gounder community, which has majority membership in TEA. The horizontally and vertically integrated units under a production chain, in most cases, belong to a network of family members and/or caste members who maintain delivery schedules as if the work is a family/community duty. The interdependence practiced by farmers clearly got extended to garment production organisation because majority of entrepreneurs were farmers, and they are very conscious about maintaining dead lines in work undertaken. Apart from Gounders, other communities like Thevars too have their community networks within the production chain. It is a fact that these communities, regarded generally as backward, are well known for hard and committed work, with a tradition of hard labour in agriculture. They have carried the precision of work and timings from farming to the factory. A large number of Tirupur entrepreneurs are former workers in composite mills or segregated units. Therefore, they are well trained in terms of work to be performed. Their deficiency is mainly in the administration, which is normally filled up by educated and trained people including various consultants, government agencies and industry associations. Yet, there is much to be achieved in professionalizing management of units in Tirupur cluster and freeing it from petty trader mentality and low managerial and administrative efficiency. In the dawn of the Tirupur boom, most firms and new ones germinated overnight have taken a ‘cost minimization’ approach to their production facilities. In addition, there was not much long-term vision at that time among the exporters or by the government agencies because of their limited interaction with the world outside. They were simply looking at a lucrative business option only, organized with all benefits offered to small scale industries by government and the additional benefits for he textile sector. But, within no time, things changed and Tirupur found itself on the global knitwear map. The absence of a long-term vision began to show, although the industry and the government were eager to cash in on the new found opportunities. They face the problem of obsolete technology, poor pollution control and an unsafe working environment compared to the conditions in competing regions outside India and elsewhere in India. Tirupur also became a sprawling town with uncontrolled and unplanned growth in all directions with all attendant problems. Slowly, realization dawned about the problems and also changes at individual level with large orders coming from brand leaders in Europe and USA as buyers and customers demanded to maintain standards. Garment production in Tirupur is not a typical horizontal or vertical chain production. Many firms buy cloth themselves, organize dyeing and finishing or even do the knitting themselves. Apart from the high quality in commitment to work and facilitation by community networks, government promotional agencies and associations, Tirupur’s competitive position has been built on the back of labour-mainly migrants. The overarching characteristics of production in Tirupur is low wages, production flexibility, a strong customer-focus, entrepreneurial drive and availability of relatively cheap local cotton yarn. Tirupur’s greatest advantage over its competitors is the minimum order quantity. Small orders allow importers to develop large sample ranges in a cost-effective manner and Tirupur’s willingness to make very small sample runs is highly respected by the international buyers.
Prem Durai-Switcher Example A best example of change into standards compliance and clean production systems is the fully integrated, single ownership Prem Durai Exports, which produce exclusively for Switcher (Switzerland). It is one of the examples in Tirupur for the success of multi-stakeholder partnership in running a business successfully with responsibility and standards compliance at almost all levels. The importer-exporter/ brand owner-producer partnership with sufficient sense of responsibility with regard to compliance and social commitment was assisted in a good measure by the enforcement agencies too. While Prakash B K (General Manager, Exports, Prem Durai Group) proudly and pleasantly show the CTC phase out certificate from the Ozone Cell (Ministry of Environment and Forests, Government of India), the long way the Prem Durai-Switcher partnership traveled can be imagined, and the difficult ladders they climbed together too can be imagined, given the general conditions of Tirupur over the last two decades. The group runs seven free schools in Tirupur and a mobile school, mainly catering to the children of garment workers, which helped to reduce child labour in Tirupur. A visit to one of the schools, near the CMT unit of the Group, revealed the standards compliance and CSR routes any major exporter can take, if there is sufficient motivation, pressure and partnerships of other stake holders, especially the customers/brand owners. But, the transformation was not easy, as mentioned by Textiles Committee Deputy Director Unnikrishnan A (who was involved in the process). He said that it took more than a year to effect the changes, because there was a need of so much of awareness building, training and motivation to the management as well as the workers, apart from building up structures of delegation of authority and responsibility and legal compliances. Even after all the changes, there is a lot more to be achieved by Prem Durai-Switcher partnership towards making it a perfect model of responsible, high tech, clean, well-managed enterprise in which all stakeholders would be perfectly happy. Based on Interview with Prakash B K and Unnikrishnan A
Tirupurâ&#x20AC;&#x2122;s jump into growth and problems
Prakash B K (Formerly General Manager, Exports, Prem Durai Exports, of the Prem Durai-Switcher partnership and presently Consultant and Founder Director, Centre for Sustainable and Responsible Business Solutions, Bangalore (See Box: Prem Durai-Switcher Example; www.premgroups.com) observes: Tirupur has a significant role in the tail end of the global knitwear market. A major part of Tirupur entrepreneurs cater to the lower end of the global market on a contract-manufacturing basis. Every household in Tirupur has at least one person involved in garment production in one way or other, and in every building there is some space used for garment related work. A whole range of ancillary units engaged in manufacture of cartons, polythene bags, zips, buttons, tapes and packing materials have come up in Tirupur. Other support services like trading, transport and hotels too developed. A few high-class hotels such as Hotel Velan are almost always occupied by foreigners.
Large garment export units in Tirupur are owned by single family and in few cases by corporate bodies. Some are registered companies. But, most of the Tirupur firms are registered as small-scale industries to avail the subsidies and other benefits offered by government and financial institutions, and also to avoid labour and other statutory compliances. Apart from local
people, large number of North Indians and some foreigners too own production houses in Tirupur. Entrepreneurs from other states and regions including the nearby Kerala are also moving gradually to Tirupur, despite the fact that one of the Apparel Park proposed is at Thiruvananthapuram in Kerala, which also started functioning. (Compared to the Netaji Apparel Park, Tirupur, the public sector controlled KINFRA Apparel Park at Thiruvananthapuram is developing at remarkably low speed). Many units in Madras (Chennai) Export Processing Zone has established satellite units in Tirupur to utilize the facilities available and also to get the benefits of small scale industry and export zone simultaneously. The few vertically integrated production units in Tirupur undertake knitting to CMT under the same roof or under the same management with different functions in different locations. But, majority of units of Tirupur are involved in cutting, making and trimming (CMT) processconverting knitted fabric into garment according to orders placed by buyers. CMT units rely on the horizontally integrated but segregated units owned by others for yarn, bleaching, dyeing, compacting, calendaring etc. In Tirupur, specializations and segregation have reached extreme levels-there are specialized ironing, folding, labelling and even packing units. Tirupur cluster is mainly anchored on the cotton knitwear garment exporters. They would be either manufacturer-exporters or merchant exporters. The non-exporting manufacturers undertake sub-contracting work mainly for the merchant exporters. They also sell products in the domestic market. There are various types of agents as middlemen with specialization in different production related functions. In Tirupur, the marketing agents have developed specialization in different geographical market segments and in different product segments. Further specialization has developed to the extent that there are agents who market only the rejects and export surplus. A recent change in Tirupur is the increasing number of buying houses and buying agents of foreign organizations. The buying houses and agents interact with the manufacturers and help them decide on quality specifications, type of fabric to be used and the garment patterns, and styling. The agents also assist the exporters in logistics and documentation for exports. UNIDO study on integrated clusters of small firms in India (General Review Study of SME Clusters in India) is an exact description of the case of Tirupur (see Figure: Garment Production Organisation in the Cluster Model with Horizontal and Vertical Integration):
Characteristics of SME Cluster Model
:There is a high degree of inter-dependence among the small firms in the vertically integrated clusters. This is usually witnessed in the case of hosiery, textile processing and metal products, in all of which it is possible to split the production process and to separate firms due to non-perishable character of the products. This becomes feasible if it requires a degree of specialization for each of the processes involved. This phenomenon may also be witnessed due to splitting up of units to remain small for easy management, for escaping from labour regulations that come into force when the firm grows to become large and/or to enjoy the policy related advantages that the small firms are entitled to. The pattern of organization in Tamil Nadu garments industry show many satellites around large firms that have grown horizontally, by splitting of production into many units under a single firm. Each unit can be registered as a small-scale unit and get benefits of the SSI scheme of the government. Small firms with 100-200 machines are the most flexible.
Larger firms have more trouble adjusting to global market shifts, (at least in garments), according to Apparel Export Promotion Council (www.aepcindia.com). The same view was repeated by TEA in Project Profile of the Netaji Apparel Park (2002). Distinction of small and large is also difficult in Tirupur. Designation of the unit as small scale in many cases means that firms which are expanding do notional separation of new units and register them as separate units (despite common ownership). This gives the distorted impression of an industry composed solely of small and medium sized individual firms. But, in fact including many units owned by the same person or family or partnership firm, and some of them though small/medium in appearance have turnover above the million mark. The complex cluster structure, with many complex webs of ownership, family and caste relationships across various units, of Tirupur pose many problems and complications with regard to compliance audits. Single units often belong to larger groups under family or individual or partnerships. Plants to be audited may have other units of the same group next door that are not part of the audit. They would be involved in processes that do not belong to the specific definition of the garment industry in the guidelines or codes of conduct. Other CMT units may be part of the group, but they might not be doing the work for the buyer who ordered the audit. But, in majority of audits, firms often fail to provide a fully separate administration for the different units. Therefore, there is a need to lift many veils (not corporate veils, but organisation function veils) to understand the real nature and character of a unit in Tirupur. In addition, during peak seasons, other units completely separate from the one audited and holding the compliance certificate, would take over part of the work to meet delivery schedules.
Strengths and Tirupur has the ability to take up small orders at short notice. It is also able to produce the Weaknesses entire range of knitwear at low cost with reasonably good quality within specified schedules. However, Tirupur is constrained by occasional delays in delivery. It also suffers from failures to meet standards demanded by higher price niche markets and inability to compete with China, Bangladesh and Sri Lanka in the low price product segment. Non-tariff barriers emerged along with quota phase out (on account of environmental and social issues like child labour and personal safety norms) also affected Tirupurâ&#x20AC;&#x2122;s growth. Its inability to reap benefits of economies of scale due to fragmented holdings is yet another threat. At the same time, it also failed to reap the full benefits of a cluster model due to absence of professionalism and snail pace government systems. Tirupur specializes in fashion sensitive products with low and medium volume orders. This is in line with Indiaâ&#x20AC;&#x2122;s overall garment export profile, concentrated on cotton, semi-fashion, middle price segment. The minimum scale for efficient production in India is much lower than for example in China or Bangladesh, and the degree of subcontracting is much higher. Tirupurâ&#x20AC;&#x2122;s increasing dependence on agents and buying companies is a matter of serious concern. A part of value realization would be drained into the pockets of these agents. This part is lost from accumulating in the hands of the producers and thus leads to reduced trickle down to the lower ends of production-to the workers. Middlemen are classically inclined to create artificial and non-price factors that would influence production processes and costs. But, in the existing conditions of low professionalism and farmer-turned-entrepreneurs in Tirupur, buying agents
have become indispensable to some extent. But, there is a small section of second-generation, new, educated entrepreneurs, emerging slowly in Tirupur. The government-national, state and local municipal administration-have been very slow to cope with the sudden leap of Tirupur into the global garment market. The demand-supply duality even affected almost all the social inputs for life and resulted in high cost escalation. The present export-driven prosperity made Tirupur’s entrepreneurs to meet these costs, but deficient supply of infrastructure and other social inputs would prevent further growth. Water scarcity is the biggest problem in Tirupur. This is aggravated by a 50% growth in population in the past decade, presently estimated as 5,00,000. Pollution caused by the garment industry, especially bleaching and dyeing units, solid waste disposal, power supply, firewood supply and the high population of vehicles are causing blocks in Tirupur’s further attempt to leap up into higher rungs in the global garment market. These problems are also escalating local conflicts over rights and controls over resources that even reached explosive levels recently, and resulted in the Madras (Chennai) High Court order to close down a number of bleaching and dyeing houses. Now, under the direction of the court, a public-private partnership for setting up pollution control systems is in place, which facilitated opening of the closed units, and the court is directly monitoring the setting up of such systems through a monitoring agency specially set up. The bleachers and dyers have been forced to shell out a huge amount for setting up common effluent treatment plants. The general economic boom caused by knitwear export from Tirupur has resulted in overall increase in cost of living. Some observers opined that it would be higher than the cost of living in Bangalore, making it similar to the cost upshot in some tourist places like Kovalam (Kerala) and Goa, which made life of the majority a mad struggle for survival inside an ocean of wealth and plenty. One aspect to be considered here is that half of the total labour force of around 3,00,000 are migrants and do not have any permanent residence in Tirupur. Despite Tirupur’s achievement in knitwear exports over the last decades, there is still shortage of permanent skilled workers, which indicate on one side the lack of vision with regard to strengthening human resources, and on the other the high bargaining ability of skilled workers in the Tirupur cluster. A measure of Tirupur growth can be the fact that nearly 30% of India’s textile machinery orders last year came from Tirupur. There are nearly a dozen firms with a turnover of over Rs 1000 million. The biggest exporter in the cluster, Eastman Exports, had reported turnover of Rs 2500 million annually. Among the 7,500 firms registered with AEPC, nearly 5000 are in the Rs. 5 million turnover category, indicating the concentration of small units. But the fact is that these 5000 together make up nearly half (Rs. 25,000 million) of the total exports from Tirupur (Rs. 50,000 million). Garment making in Tirupur is still mostly a family / cottage industry, without much presence of professional organisation and management. But, the industry associations like TEA act as points of ‘collective management’ using experienced advisors. This is a form of ‘crude collective professionalism’, peculiar to Tirupur cluster, which helps to reduce cost. This is perhaps an offshoot of the collectivism in farming, further riveted by family and caste networks, and also necessitated by either lack or total absence of education and training in management of the farmer-turned entrepreneurs.
A number of mills in yarn and fabric production sector, are moving into own value addition processes by becoming more involved in downstream manufacturing operations such as CMT. Although most of these mills do not directly involve in finishing operations, they are adding value to their own products by coordinating operations with those in lower end of the production chain. This move is evident in the case of export and domestic market production chains. The Government of India and state governments have been actively involved in policy making for promotion of textile and garment sector of India, spear headed by the Textiles Committee, Ministry of Textiles, Government of India. Given the fact of high labour intensive character of the garment sector and the availability of cheap labour, India has been attempting to use the quota-free international trade regime for achieving its aim to jump into higher rungs of the development ladder. This also facilitated increase in employment opportunities, mainly for the low skilled and unskilled rural migrants. But, as usual, policy prescriptions were rather slow till recently. The recent change in attitude and roles of agencies such as the Textiles Committee (www.textilescommittee.nic.in) are remarkable as it successfully transformed from its policing role of many decades into the new promotional role, following the opportunities provided by quota-free trade regimes.
Apparel Parks In order to encourage garment exports, the Ministry of Textiles, Government of India proposed Scheme 2002 the Apparel Parks for Exports Scheme in 2002 with the objective of setting up apparel manufacturing units of international standards at potential growth centres. Under this scheme, nine Apparel Parks are envisaged: Bangalore (Karnataka), Ludhiana (Punjab), Kanchipuram (Tamil Nadu), Surat (Gujarat), Thiruvananthapuram (Kerala), Tirupur (Tamil Nadu), Kanpur (Uttar Pradesh) and Visakhapatnam (Andhra Pradesh). Amongst the important policy measures proposed by the Government of India in the decentralized/unorganized sector activities covering handloom, power loom, sericulture, handicrafts, knitwear and wool is the adoption of a cluster-based approach for implementing schemes/programmes for industrial development. Tirupur is also one of the areas under the Cluster Development Scheme. The NAP (Netaji Apparel Park) has already started functioning in Tirupur (New Tirupur). Under the Apparel Parks Scheme, NAP has got Rs. 100 million for common infrastructure, Rs 30 million for Effluent Treatment Plant, building creches etc. and Rs 20 million for setting up Training and R&D centres. TEA has invested Rs 40.05 million for land and would also invest for a Captive Power Plant. The proposed Apparel Park would house most modern production facilities comparable to those in the developed countries. Eight buildings of 40,000 sq. ft. and 45 buildings of 20,000 sq ft., with a provision for vertical expansion are proposed at the Park. The Park once it becomes fully operational would bring in a turnover of Rs 15000 million and additional employment to 21,000 persons (TEA: Project Profile of Netaji Apparel Park, 2002). International There are some international projects aimed at improving the Tirupur cluster. UNIDO has run Programmes a programme in the late 1990’s on SME clusters in India:
UNIDO, with the assistance of the Government of India, picked four pilot clusters—textile printing in Jaipur, food processing in Pune, knitwear in Ludhiana, and cotton knitwear in Tirupur— to build in
each region an institutional infrastructure to help small firms in the cluster to support themselves. UNIDO is now implementing the second stage of its Cluster Programme by building working relationships between small garment exporters from Tirupur, one of the chosen clusters, and cotton knitwear firms in Italy with funding from UNDP and the Italian government. Cluster development agents (Textiles Committee officers) in various cities are motivating manufacturers to form consortiums so that they can show a ‘respectable’ manufacturing scale to buyers, and strong buying power to purchase raw materials and solicit orders together.
The first result of such efforts in Tirupur is the 8 CETPs established by collectives of firms in the bleaching and dyeing segment for pooled treatment of effluents. Continuing this trend, a consortium in Tirupur has bagged a large order from Sara Lee. Despite the fact that Tirupur has wide family and caste network of exporters, there is still lack of trust among the entrepreneurs beyond a family to effectively collaborate to achieve growth and gain economies of scale. Internal competition within Tirupur need to be controlled to achieve such collective actions, and through it Tirupur exporters can become globally competitive. But, this process is not easy and would require many changes in the attitude of the entrepreneurs. The Dutch Centre for Assistance to Importers from Developing Countries conducted a project with 20 firms in Tirupur to prepare them for the post-MFA market. It was called ‘Target 2005’ and aimed at improving their market position and management. The Chamber of Commerce of Treviso (Italy) and the Indo-Italian Chamber of Commerce and Industry (IICCI) has organized a visit of Treviso Tecnologia, which is an organisation representing a wide spectrum of textile industry firms of Treviso, to India and Tirupur. Various collaborative actions were undertaken under this programme. Treviso, the leading textile cluster of Italy, makes garments for leading names in the fashion world. The small companies of Treviso buy their raw materials together and gain economies of scale in purchases. Treviso firms share information and use their collective scale to market their weaves. Treviso’s small companies gained their international reputation by intense collaboration. These operational strategies were not known to Tirupur and the visit and collaboration was intended to make Tirupur aware about them and to explore possibilities for collaboration between Tirupur and Treviso. In addition, a programme of Asia Invest Aid Cooperation Office (European Union) called “Fashion Know-how and Business Development for Euro-Indian Partnerships” is launched by CITER (Centro d’Informazione Tessile dell’ Emilia Romanga, Italy) and IICCI, which is ongoing (April 2005-Sept 2006). (See, www.indiaitaly.com) The Textiles Committee (TC), established under the Textiles Development Act, is the programme coordinating body under the Ministry of Textiles, Government of India. (www.textilescommittee.nic.in). Its head office is in Mumabi and has offices and laboratories in Tirupur and Coimbatore. TC runs several campaigns and programmes for promotion of knitwear exports from Tirupur and also to achieve required standard compliance in the cluster to meet the demands of international markets. TC runs a star campaign called “National Campaign on Quality and Compliances in Textile and Clothing Industry”. This has three parts:
Textiles Committee Efforts
(a) To sensitize the industry, primarily the (SMEs) in the decentralized sector, to the impact of WTO agreements on Indian textiles and clothing industry.
(b) To convey an undiluted message that the Indian textile industry, particularly SMEs, should pay adequate attention to improve the quality of operational processes and products so as to sharpen their competitiveness. (c) To disseminate information on various compliances/standards/concepts such as ISO 9000 QMS, ISO 14000, EMS, Social Accountability (SA 8000) standards, eco-friendly textiles, technology upgradation, quality inspection and testing, cost reduction alternatives, product innovation and diversification, E-commerce, etc. which have a bearing on competitiveness and market access. The TC, which earlier regulated textile firms, has now taken up the duty to bring about harmony and growth. It has been trying to help SMEs to get over their weaknesses. The TC, through dedicated cluster development agents (CDA), who are senior staff at the TC offices, has been motivating firms to work collectively to solve their problems. For attaining adequate scale, it is inducing SMEs to go for the Treviso model-pool their manufacturing capacity, do collective soliciting. The TC has achieved some remarkable successes in steering Tirupur cluster towards standards compliance.
Looking Towards Future
The excessive reliance on government agencies to develop infrastructure and also to invest in market reach is, in reality, asking for more than their due from public money. This is contrary to the premises of globalization and liberalisation, which presume lesser roles for the government in business promotion. Travelling at the same time in two boats-that of the welfare state model and the laissez faire model-is an impossible proposition. Therefore, Tirupur cluster has to grow up to further its position in the garment market on its own instead of banking on public investment for business promotion. According to a recent article in the Business World, companies in Tirupur have started to prepare for the post-MFA period. They have been bringing in new machinery, engage consultants to raise quality standards, implement enterprise resource planning systems and training A Skeptical, Strange View Point* One educated migrant worker in Tirupur, who pleaded anonymity, hails from a village in the Kerala-Tamil Nadu border. He has been working in a Tirupur factory, catering the domestic market, during the last five years. He says: Societies or nations, which are unable to produce their cloth have to go naked. Let them go naked. As we were not able to produce enough food, we starved, and still starve. The rich nations never gave us enough food when we starved. They destroyed their excess food to increase price of food. Why should we give them cloth at cheaper rates? Just because we get an extra dollar. But, at what price we are giving this? We are going to starve further by converting more and more land to cotton and other such crops to cloth the rich with the best clothes. When we starve, we become cheap, migrant labour, as happened in Tirupur. Of course, it helps to ward off starvation. But, we are in a trap, a trap where still the ‘rich’ of the ‘rich countries’ are served with good garments and other good things, including good food, in the name of increased exports, by the rich of places like Tirupur. We get the crumbs, and we can go to sleep, feeling that we are not lying down on an empty belly. If that is what you and all of us want, let us hail Tirupur. If you are looking for something else in the name of development, you go and look elsewhere. * Based on Interview
employees to improve productivity. There is an intense move towards standards compliance with many firms going for compliance, apparently realizing that the international market is demanding. There are skeptics too in Tirupur, especially among the trade unions leaders, workers and NGOs, who think that all these high brow dialogues on standards compliance are mere attempts to make sure that the “rich world’ would get best and “clean” products at cheaper price and also saved from ill effects of production such as pollution, effluent and waste accumulation. Given the fact that industry leaders constantly demand ‘statute free’ atmosphere for the industry on the one hand and talk about standards on the other, such skepticism is not misplaced. Moreover, the universal dislike of trade unions, collective bargaining efforts and workers’ rights campaigns shown by industry associations is yet another reason for the skepticism of trade unions and NGOs.
Industrial Relations and Labour Conditions in the Garment Industry
Labour legislations of India are regarded as relatively strong. But, they failed miserably in actions and impacts. Labour rights were mainly achieved in India through strong collective bargaining measures by the strong unions during 1950-1970. These efforts received only marginal support from the pro-socialist governments, the fundamentally egalitarian constitutional framework and the responsible business practice notions of industry leaders. But, the route of collective bargaining in this phase, which was also the period of heavy industrialization and large scale state budge outlays for setting up large public sector undertaking in manufacturing and utilities, was marked by high wastage of man hours and other destructive consequences that result from a highly organized, highly rights charged labour situation. Majority of the benefits of such a situation went to the urban, educated middle class, which formed the large segment of work force. But, there was some beneficial crumbs that flowed to the lower ends of the manufacturing sector work force, mainly comprising migrant laborers. However, comparable changes in the massive agricultural and the unorganized sectors were either slow or remained in certain pockets with strong leftoriented governments such as Kerala. This resulted in wide gaps between the urban, middle class workforce and the rural poor work force, and also among various regions of India. Agarwala and Khan (in FWF Background Study â&#x20AC;&#x201C; Tirupur, 2004) observes: So, while the lofty principles of the political and economic establishment led them (the governing elite) to put in place a large body of socially oriented legislation, implementation was never been part of the scheme. The distance between noble principles and ignoble practices grew even wider in India since independence, leading to hypocrisy on the part of the powerful and cynicism on the part of the masses.
The highly powerful collective bargaining efforts in the Mumbai garment sector in 1970s marked the sliding of labour rights. When the labour force started articulating its collective bargaining power through strong actions, the ruling classes, industrial capitalists and criminal
gangs joined hands to stifle and physically control labour power through murders and threats. Judiciary maintained a silence that facilitated the growth of the ruling class-industrialists-criminal gang nexus. The murder of a major textile workers union leader of Mumbai, Dr Datta Samanth, became a point of disintegration of the once strong unions of Mumbai. Along with, the dark days of political emergency of 1975-77 marked an era of pushing the Indian people towards complacency regarding all kinds of human and fundamental rights violations, with slogans such as ‘talk less, work more’ became the commands of the nation-state and industrialists to the workers, which indicated the emergence of a new form of ‘democratized slavery’. With this background, the 1980s saw the slow dilution of the constitutional guarantees of freedom and rights, which finally wrapped up into the package of liberalization and globalization in the early 1990s, mainly under the dictates of international economic interests represented by the rich nations. This has finally reached a point of trashing the welfare ideology of the nation-state and transforming the state into a mere arbiter or agent in the process of promoting the global market ideology. In this process, social security too became a casualty as the moves from ‘democratized slavery’ to ‘open door economy and industrial reform’ agenda of 1980s smoothly culminated in the new legislations, which restrict unionization and collective bargaining. (See the amendments to the Indian Trade Union Act, introduced in 1999-2000). This appears to be strange as on the one side global moves are on to promote responsible and best practices in business and industry as part of globalization while on the other side there are statutory routes to restrict the necessary premises prescribed by the responsibility and best practice efforts.
The History of Even in the earlier periods of strong labour rights, legal regimes such as the Industrial Disputes Labour Rights Act were a compromise towards the needs of the industrialists, which either stifled or slowed in India the collective bargaining process. Now, with all round changes in the legal structure, labour rights and social security are left mostly to the realms of ‘soft pressures’ and ‘voluntary best practices’ that can be asserted by the labourers and other concerned stakeholders. But, this situation is precarious because of limits of such soft strategies and due to massive disorganization and informalization of production. Majority of the work force is in ‘a work for low wages or die’ situation in which bargaining power tilts in favour of the industrial capitalists. Meanwhile, the middle class, strengthened itself through the earlier phases of assured rights and better life, have moved into the sunrise sectors like IT with better scope for asset formation, and they have been distanced and distracted from the dark realities through the carnivals of better life, sometimes real and sometimes merely made ups. In their bubbling “better life”, the powerful middle class, which earlier stood with the underdogs, is no longer with them. The assetstrengthened middle class have found the means to rub shoulders with the industrialists and upper class (through becoming the new investors), and they do not like to be reminded of and disturbed by the wretched and the oppressed, toiling in farms and sweatshops to facilitate their carnivals of better life. But, the real and painful fact is that still there is so much of ignorance and refusal on the part of the investors and managers to realize that higher productivity can be achieved through investing in human capital. Of course, there are islands of difference, especially under pressures from sensible consumer groups as happened in the case of child labour in many sectors. All these strange and diverse dynamics of labour situation can be witnessed in the garment sector, which is highly disorganized and informalized.
The Tirupur reality can be best illustrated through the words of trade union leaders of Tirupur. Centwin Mani (ATP: Anna Thozhil Piravai: Anna Labour Federation, affiliated to the AIADMK-All India Anna Dravida Munnetra Kazhakam, a leading political party of Tamil Nadu, which now rules the state of Tamil Nadu) says: There are problems and difficulties in enforcing even the existing labour rules. Enforcement agencies are colluding with the factory owners to flout the norms and rules. Factory owners would even have labour records and statutory payments like PF made in their relatives names, while the actual labourer would be someone, perhaps a migrant worker. So, when inspections and Code of Conduct audits are done, all records would be there. There would be some kind of ‘deals’ between the factory owners and the enforcement officials, and even auditors. There are much difference in the situation when there is serious partnership between buyer/brand owners and exporters who are willing to consider other stakeholder expectations and do not follow an antagonistic attitude towards trade unions. There is lack of realization of the major role of workers in production processes and there is no attempt to recognize it properly. Labour market conditions such as availability of cheap migrant labour facilitate such attitude.
Similar views are expressed by other trade union leaders and other stakeholders like NGOs and environmental activists. There are reports indicating that 90% of the workforce in India is in the informal sector. This may be exaggerated to some level, but considering the level of informalization happened in late 1990s and the ‘hire and fire’ contract system introduced in almost all sectors including the government sector, there is possibility that informal sector account for more than 80%. In almost all establishments including the rights conscious media and government sectors, employees in the tenure system were forced to resign and rejoin next day under contract system with no tenure benefits but with a comparatively better take home pay cheque. As this being the reality in the sectors mainly employing a highly educated middle class, the situation in the other sectors with high employment of the low skilled and uneducated, the situation should be alarming. A large share of the workers in the garment sector form part of the informal sector. An example of the informal sector is the small units where people consider themselves as working for an owner but with no contractual relation with the employer. The labour brokers or labour contractors who supply migrant labourers is yet another feature of the emerging informalization, in which the owner of the firm takes no responsibility of the labour. In many cases, labourers don’t even know what is the rate of wages agreed between the labour broker and the owner of the firm as the payment would be routed through the broker. Such labourers can never prove an employer-employee relationship, which is the basic condition for seeking job security, social benefits, or other labour rights. If they try to organize or demand improvements in their working conditions they can easily be dismissed. In general, informal sector workers are in a highly vulnerable position. Due to the absence of employer-employee relationship, they would never come under the operation of the statutory rules concerning labour rights and benefits. For instance, Gupta (www.carleton.ca) observes: ...only 25 percent of the value of garment output is accounted for by firms registered under the Factories Act. Hence secondary data at the macro level too are hard to come by in this regard. Time and again, as in many other countries, we observe that labour in the garment industry is subject to
harsh working conditions and low wages. Further, given the predominance of â&#x20AC;&#x153;informal sectorâ&#x20AC;? activity, legislation with regard to labour markets is less likely to be enforced as compared to other economies.
The heterogeneity of the garment sector is also a point to be considered in relation to labour market regulations and compliance issues (see Table: Employment in the Textiles and Apparel Industry of India â&#x20AC;&#x201C; 2001). Vijayabaskar M (in Gopal Joshi, ed. 2002) observes: ....the share of the workforce employed in the export sector is still unclear. Employment in the readymade garments sector is around 3 million, which is only 8 percent of the total workforce in the garments industry, seen as a segment of the apparel commodity chain.
The employment data provided by Annual Survey of Industries (see Table: Distribution of the Workforce in the Garment Sector) regarding knitting and ready made garments sector is indicative of the general pattern of work force in the garment sector, though it would not be truly representative as it had not taken into account the large numbers of sub contracting and household enterprises in the informal sector. The large-scale feminization of labour force is evident from the data, which is also the case in Tirupur, though low compared to other garment production regions such as Bangalore. There is a close relationship between informalization, disorganization, non-unionisation and large scale female employment, and they are inversely related to liberalization and globalization. This dynamics is also linked to the increasing profit rates and the low wage rates in the labour intensive manufacturing sectors like garments. Despite the fact that wages are low and working hours long, many workers consider the garment sector job as a fortune because it assures at least survival, especially the migrant workers for whom the wages in the garment sector is something of a real manna compared to the Employment in the Textile and Apparel Industry of India (2001)
Employment (In Millions)
Employment (% of Total)
2 Sericulture (Silk Industry)
3 Readymade Garments
7 Man-made Fibre/Filament Yarn
8 Cotton/Man-made Fibre/Yarn Textile/Mills
6 Decentralised Power loom
9 Jute Total Source: Tait N, 2001.
extremity of poverty, unemployment and extreme low wages in their native localities. When many millions are out in the cold without even a roof over their head and go to sleep on empty stomach, Rs. 50-100 a day and some place to sleep itself is a manna. This mindset has its impact on the bargaining ability, as stated by a union leader of Tirupur. Selvaraj (LPF: Labour Progressive Front, affiliated to DMK, the main Opposition Party in Tamil Nadu) says: When a worker get only Rs. 20 at his/her native place (and that too occasionally as there would not be regular work available), he/she would get Rs.50-100 in Tirupur without any additional skill, and in most cases a place to stay also. Naturally, they don’t want to be in trouble with the factory owners and therefore don’t come near the union at all. Only when there would be some problems, they would come looking for us. Therefore, unionization of labour is very low in Tirupur compared to the number of workers here.
In India, only 6.7% of the working population comes under ‘salaried’, 37.3% is casual labour and 56% self employed (Frontline, December 9, 2003). Despite the high claims of economic growth through liberalization and globalization, unemployment is on the rise. Everyday, large number of people moves from the impoverished villages to crowded cities in search of some means for survival. Similar is the case of Tirupur, which has become a major point of inward migration of people under distress conditions and with no skills, mainly from villages of Tamil Nadu and from the ‘highly developed’ nearby state of Kerala, and also from North Indian locations. Distribution of Workforce in the Garment Sector (1997-98) Industry Code
260 Knitting Mills 265 Readymade Garments (Other than Knitting Mills where fabrics are cut and sewn into garments)
No. of factories 1,380
No. of Male workers 24,708
No. of Female Female Workers workers (% share) 7612 23.5
Source: Annual Survey of Industries 1997-98.
Though no perfect and complete data is available regarding the actual garment work force in Tirupur, almost all agree on a number around 3, 50,000. All of the nearly 5,00,000 people in Tirupur are in one way or other in work related to garment production. There is a lot of seasonal movement of workers between Tirupur cluster and various surrounding garment production points such as Coimbatore, Erode, Madurai, Karur, and other small towns nearby. Therefore the data at any point can at best be indicative and not fully reliable. This is part of the multi colour haze reality in the garment production chain in India and especially that of Tirupur cluster.
Labour Conditions in Tirupur Cluster
All the stakeholders are in agreement with regard to the fact that more than 50 percent of the total workforce in Tirupur is migrant. Nearly 85 percent of total work force is Tamil people, nearly 10 percent from the nearby Kerala state, and the remaining would be an assortment of
people from various other states. Most of the migrants are from nearby districts of Tamil Nadu who are in fact a kind of ‘development refugees’ due to famine and poverty. Majority of the migrant workers are from the socially and economically backward communities with a sizeable section from the most backward (scheduled caste and scheduled tribes, according to Constitution of India) communities. The migrant workers are mostly landless agricultural labourers or marginal farmers. On account of drought or faulty development paradigms imposed, they could no longer survive on their own lands and villages. Therefore, for them Tirupur came as the best option, given the fact that they also lack the skills to go in search of other employments.
Development There is an increasing presence of migrants from Kerala and from North Indian regions with Refugees some kind of background in garment production. The presence of migrants from Kerala need to be specially noted because Kerala was bandied around internationally (by agencies such as the UNO, UNDP, WHO, UNESCO, and by the Government of India as well as leading economists like Nobel Laureate Amartya Sen) during early 1990s by claiming that it had achieved standards of living and other economic indicators comparable to some of the advanced western countries. The migrants from Kerala is a self revealing proof regarding the underbelly of Kerala as it only increases the “money order syndrome” of Kerala through which a major part of Malayalee (people of Kerala, referring to their language, Malayalam) people are made into self-imposed development refugees seeking greener pastures all over the world. Non-resident (NRI) Malayalees have high concentration in the Arabian Gulf region, in the western countries and in all the major cities of India outside Kerala. The ‘development indicator achievements’ of Kerala (such as 100% literacy, low child mortality rates etc.) with low per capita income and without full employment baffled economists and development agencies in early 1990s. They bandied it as the “Kerala Model of Development”. But, they failed to see the real volume of ‘money orders’ (inward remittance from migrants), both ‘black and white’, from NRIs to Kerala. They also failed to note the effects of centuries of social reform movements and the close-knit nature of Kerala society with high demonstration effect in matters of change etc. as contributing factors to the development achievement of Kerala. Now the Kerala Model started crashing down, as Kerala tops in suicides (including families and farmers), criminality, oppression of women and the aged, and it is also top in general indebtedness including state’s foreign indebtedness. A major reason for Malayalee migration to Tirupur is the loss of tailoring employments in Kerala due to flood of readymade garments and the tailors who lost employment found Tirupur as an alternative, as the Arabian Gulf boom is already over for people from Kerala due to various reasons. Therefore, a major part of Kerala migrants are either in the skilled tailor category or in other skilled employments including many in the administration, management and technical sides of garment production such as textile engineering. The phenomenon of large number of unksilled or semi-skilled women migrants, mainly adolescents, from Kerala into the CMT units of Tirupur is also indicative of the high ill-health of the Kerala model of development and the downside of the general development theory based on macro economic achievements. The migrants from North India came along with the North Indian entrepreneurs, especially from Mumbai, who shifted production or set up new production facilities in Tirupur to take
advantage of the Tirupur cluster facilities. In addition, it is observed that North Indian labourers are increasing in number, especially people from Orissa, Bihar etc., are coming in large numbers recently. They are found to be much cheaper and there would no risk of unionisation and related problems as they could be held as captive labour without much difficulty because of the local Tamil peopleâ&#x20AC;&#x2122;s (including trade union peoplesâ&#x20AC;&#x2122;) cultural objection against Hindi and North Indian people. It is interesting to note that the North Indian entrepreneurs are considered as a threat by the Tirupur industry owners, who are mainly local or Tamil people from other regions of Tamil Nadu, though it is not yet shown openly. In addition, the ownership pattern in Tirupur also presents representation of the backward castes people, and the workers are predominantly backward and lower caste people. Compared to this fact, the North Indian entrepreneurs are mainly upper caste people and they were viewed with suspicion by majority of Tirupur entrepreneurs and workers, who are Dravidian in origin (anthropologically) and have some level of animosity towards upper caste/Aryan people. As there is no cultural space or language space for interaction between the people brought from North India as captive labour and the local people, workers and trade unions, the entrepreneurs get double advantage of keeping unions and officials away and paying lowest of wages to this captive labour. This engenders loss of employment to people in Tirupur and elsewhere in Tamil Nadu, and also the problem of intrusion of North Indian, Hindi-based upper caste culture to the mainly Dravidian region. This could lead to explosive ends because Tamil people are prone to violent reactions in such situations (see Box: Note on Dravidian Politics). The employment patterns in Tirupur indicates that of the nearly 3,50,000 workers in the garment sector, nearly half would be having some kind of skill levels and the remaining would be semi skilled or unskilled. The spread over in different stages of production indicates that the largest number would be in the CMT process, which is the highest labour intensive operation in the whole process of garment production. More than 1,00,000 workers would be involved in the backward and forward linked operations of the garment production such as cotton ginning, yarn spinning, dyeing, bleaching, calendaring, packaging and other related service activities. Feminization of labour force, as mentioned earlier with regard to the informal sector and garment sector of India in particular, is a predominant factor of Tirupur garment cluster (see Table: Proportion of Female Workers in Various Processes). But, compared to other garment locations such as Bangalore, Tirupur is less feminized.
Feminization of Labour Force
Neetha N (2002) observes: Feminization of the workforce which has been a central factor behind sweatshop model of development in the knitwear industry elsewhere, though was mentioned in some studies, did not receive much attention in the context of Tirupur knitwear cluster. In the literature, the process of feminization is analyzed in two ways. Firstly, female workers are said to replace male workers in jobs that were traditionally reserved for the latter category. It can also happen when additional jobs are created and women are chosen for these jobs. The present paper takes up the issue of feminization and changing production organization and argues that central to success of Tirupur is the feminization of and gendering of jobs brought out through split production and modernization. Feminization in Tirupur
is the result of the two processes, women replacing men and also the creation of jobs specifically for women. A strict division of labour along age groups follows sexual division of labour. Female workers in the age group 15-25 have entered the industry as child workers or adolescent workers, mostly as helpers to cutting and stitching masters or in the ancillary units. Gradually, these workers acquire skills of stitching and cutting. Checking, packing and folding are the categories of work available for adult women above the age of around 30. The age group of female workers engaged in cutting and stitching (the most skilled job for female workers) varied from 16 to maximum of 30 years and about 80 percent are in the age group of 18-25 who were unmarried. No female workers above 30 years are employed in the stitching and cutting units. Around the age of 30 years, these workers are found demoted to checking operations. Job mobility in the upward direction is practically absent in the case of female workers who have entered the industry in the checking process.
It is interesting to note that feminization of labour force in Tirupur and the almost total absence of women trade union leaders and women entrepreneurs lead to the fact of limited mobility to go for work and earn available to women, especially among backward castes. There is general absence of freedom or opportunity for women to move upwards in the social ladder. This is similar to the absence of upward mobility for women in the work place. But, in a tradition-bound society and with presence of practices like female foeticides, and with no education and skill development, the opportunity for work itself is regarded as a revolution by many observers.
Proportion of Female Workers in Various Processes [*Indicates labour intensive operation] No. Operations 01 Arranging* 02 Damage Checking* 03 Bleaching Dyeing 04 Cutting* 05 Flat Lock* 06 Folding/Trimming* 07 Ironing 08 Overlock* 09 Packing* 10 Printing 11 Helper* 12 Labelling 13. Others
Source: Neetha N, 2002.
Proportion of Female Workers (%) 58.65 96.31 34.05 14.07 52.77 76.47 0.69 68.75 24.86 32.86 59.51 25.00 22.13
LPF leader Selvaraj observes: In Tirupur, women can go around even at midnight, and they can go through the streets at any time at night without much fear. Compared to the high scale of violence against women in majority of Indian cities and even in places like Kerala, with high development and high education, Tirupur stands out in this aspect.
The observation needs further probing. The immediate inference is that there is a general freedom of work for women in Tamil Nadu, with a film actress-turned politician in power as Chief Minister, and many women wielding political positions under her. With regard to Tirupur the industry need the women as cheap labour. Therefore, providing minimum feeling of security is an essential aspect of facilitating cheap women labour availability in sufficient numbers. If there is absence of security feeling to women, there would be a definite negative impact on the supply of women hands available for cheap wage. One of the characteristics of the Tirupur garment industry, like any other informalized cluster, is the high volatility of the workforce. Workers also use their skills to achieve mobility, and use it as a kind of bargaining tool to get whatever increase in wages that another factory might offer. Majority of firms do not offer long term contracts and wages are paid on a weekly or daily basis. Generally, workers are never certain of their employment next day, except during peak seasons. During peak seasons and whenever work is available, workers show willingness to work long hours because they are never certain whether they would get work next day or next week. There is a marked difference between the position of skilled and unskilled workers. Skilled workers such as tailors and cutters often operate as semi self-employed, hiring one self out to the highest bidder. They prefer piece rates and less inclined towards permanent tenure/contract systems although one should be careful to generalize. Majority of tailors and cutters are male, compared to Bangalore where women tailors and cutters are large in number.
Volatility of Labour and Employee Accretion
But most of the major firms have some number of workers as permanent employees. Firms such as Prem Durai Exports, which have committed to certain standards, have maintained permanence of employees. Prakash B K (Former GM, Prem Durai Exports, Tirupur and presently Consultant and Founder Director, Centre for Sustainable and Responsible Business Solutions, Bangalore) says: Job security and permanence helps in increasing productivity, and we have invested a lot in keeping up the standards according to our partner (Switcher, Switzerland) requirements and workers are also actively involved in all these aspects.
Easwaramurthy N (Partner, Laurels Clothings, recently tied up with Kuyichi, of the MADEBYÂŽ label), who is very keen on upgrading and implementing labour and environmental standards as part of moving up in the export ladder, and dreaming to move into the organic market, says: We donâ&#x20AC;&#x2122;t have much of employee accretion problems because we provide employment round the year, almost 280 days in a year. Moreover, we have a salary system for almost all our workers, and we have already implemented Employees Provident Fund and ESI schemes. Of course, we may hire some workers on causal basis when there is some additional work or some sudden needs to meet delivery
schedules. The system followed is a production-linked daily wage and paid in the form of salary to permanent labourers.
Therefore, frequent complaints concerning employee accretions by TEA leaders require close probing. The fact is that the peculiar kind of production organization in Tirupur presupposes some level of disorganization at all levels and employee accretion problems are a part of the package of disorganization, which the producers introduced and maintained. The experience of Prem Durai Exports and Laurels Clothings, and many others who have moved into standards compliance, tells a different story. This indicates that a proper backward and forward linkage in terms of assured business could be much helpful in maintaining standards, which in turn enhance productivity and long-term returns. Perhaps, most industry leaders, including the garment leaders of Tirupur, are not ready to strain much in terms of investing in standards and through it increasing productivity. But, they are keen on productivity increase without much standards compliance, which is like asking the tree to give the fruit before the flower.
High Cost of The general observation that living and working conditions of garment workers in general are Living and bad needs some level of qualification with regard to Tirupur as there is a large group of skilled Low Wages workers in Tirupur with relatively high wages. In addition, the high cost of living observed in Tirupur is indicative of some level of prosperity of all, including workers when compared to the situation of the majority of migrant workers back in their native places. However, this area need to be tread with caution as there would be hidden factors that influence cost of living. It is true that wages are comparatively low and often based mainly on piece rate systems. But, it is also a fact that the skilled workers prefer piece-rates, as there is potential to earn more, compared to salary systems. Long hours of work in order to make a living due to low wages is a common factor of garment sector, and also of Tirupur. Here also, certain workers prefer to work more hours so that they can earn more in a season, especially during peak seasons. This has drastic effects on the workerâ&#x20AC;&#x2122;s health. But, most of them donâ&#x20AC;&#x2122;t bother much about it as they are aware that they can earn only when there is availability of work. The seasonality and unsure conditions about production orders have been affecting both workers and employers. Sandeep B N (Chief Consultant, Conquest, Tirupur) says: There are often a lot of add-ups to wages by way of various allowances during festivals Other benefits are also provided. Thus, the total wage often works out to much more than the statutory minimum wage. In some cases, we calculated the total earnings accrued to the workers as 40 per cent more than the agreed wages. In the case of skilled workers, the actual wages paid are much above the agreed wages.
There is truth in the statement of Sandeep, considering the fact of high cost of living in Tirupur along with the massive number of skilled workers in the town. There may be a correlation of these two factors as the number of entrepreneurs is limited to a few thousands and their prosperity alone would not have such a wider impact on cost of living. The complex chains of subcontracting present in the garment sector is a vital factor in Tirupur, characterized by large number of small units in various operations. The small units
facilitate evasion of legal compliances through many loopholes in the system. Enforcement agencies are also lenient towards small-scale industries (SSIs) apart from the official sops and subsidies offered to them. In Tirupur, there is a lot of segregation of ownership at the level of registration. But in reality they would be under the umbrella of a family or even actually owned by the same person. There is a strict hierarchy of jobs in Tirupur cluster. Knitting machine attendants (working the circular knitting machines), cutters, tailors and other machinists in the CMT units are all regarded as skilled workers and their rates of pay are relatively high. There are three different types of stitching or sewing machines: overlock, chainlock and flatlock. In addition there are separate machines for button holing, sewing on buttons and labels. There are also hydraulic presses for flattening the garments before packing. Workers engaged in these operations are regarded as skilled and in some cases as semi-skilled. Ironmasters and packers are also regarded as skilled workers. Unskilled helpers assist these workers. There are women tailors and women machinists. But they are not in majority in Tirupur compared to Bangalore where the number of women in these jobs is comparatively high. Trimmers and checkers, hand folders/bundlers and label putters are regarded as semi-skilled. This reflects the importance of these kinds of workers for export orders. Women are in majority in these jobs, which is also peculiar to Tirupur as the number of women in these jobs in regions such as Bangalore is low. All the processes are vertically and horizontally integrated in Tirupur, and any activity could be sub-contracted, as there are separate individual firms, which have developed specialist skills in these processes. There are ironing houses, packing houses and labelling houses in Tirupur. The job hierarchies and specializations are reflected in the tripartite wage agreement (TEA Agreement) and also in the State Government orders proclaiming minimum wages and other welfare measures for the garment industry. There is a relatively high level of disorganization and fragmentation of production process in Tirupur. Specialized firms have come up offering almost all operations in the supply chain. Workers who gain experience often launch a kind of self-employment enterprises with low capital investment. While they can offer competitive rates for the specialized services as individual entrepreneurs, they facilitate some level of weakening of collective bargaining power of workers because exporters are confident that they can rope in the specialist entrepreneurs if the workers launch collective actions like strikes for higher wages.
Disorganization and Fragmentation of Production
Mobility of labour also contributed to the successful disorganization model of Tirupur, as Neetha N (2002) concludes: Tirupur knitwear industry is a classic example of feminization and segmentation of the labour market brought out through the system of subcontracting. The changes in the organisation of production were in a way to contain labour through labour process in the volatile and seasonal export market. The fragmentation of and dispersion of production have brought in large-scale employment of female workers, which was hitherto absent in the industry. The informalization and feminization of the industry had much bearing on the labour relations reflecting in the disorganization and the marginalization of the workers. The industry shows how, casualization, feminization and disorganization of workers are brought in through redesigning and reorganization of work.
Though Neetha’s observation is true, it fails to account for certain other factors that might have played a role in the process of organizing production chains in Tirupur. The fact of ‘unsure’ export markets, its seasonality, the earlier domicile marginalization of the migrant workers, and various constraints to have composite units might also be factors leading to disorganization apart from the economies of feminization, especially considering the large segment of exporters in the less than Rs. 5 million turnover category. There are many operational constraints, such as the working capital and investment capital limitations of ‘amoebic capitalist entrepreneurs’ that lead to segmentation of production process. It is also quite common in Tirupur for skilled workers to become entrepreneurs overnight, specializing in the skill they acquired and offer it as a business rather than continuing as a worker for wages. This is indicative of the high level of entrepreneurial inclination in the Tirupur cluster though this is not tuned by normal standards of professionalism found in other sectors. Due to lack of professionalism, the only detail looked at in an entrepreneurial situation is knee-jerk attempts to reduce costs and make a gain out of it. This is not a typical industrial mindset but predominantly a trader mindset. Tirupur has to get out of this mindset if it wants to go a long way in the export route to become a successful and sustainable industrial cluster of the future. The general absence of professionalism in management and the cultural block towards becoming too large is also present in Tirupur. The low number of registered joint stock companies in the Tirupur cluster is indicative of the general tendency towards sole proprietorship and partnerships, which have many limitations concerning growth beyond a point. The administration and engineering segments too need to be taken note of. The main status division of labour is between office staff and workers in the factory. Salaries of office workers are often lower than the factory workers. The skill orientation of production process may be the reason for this kind of variation in salary. As mentioned earlier, the ‘crude collective administration’ conducted by the TEA as an experienced “administration point” seems to relegate the importance of administration and management within the units. This also indicates a crude form of ‘contracting out management and administrative functions’, which is very unique to Tirupur. Now, with increasing needs of various compliances in exports, the consultants chip in as the new points for ‘outsourcing administrative functions’, which is also an innovation of Tirupur. It is mutually rewarding for both the consultants and the exporters, especially in the current situation of high cost for hiring professional managers on a regular basis.
Labour Regulations and Rights of Garment Workers in India
Indian labour relations are organized through coercive government actions and judicial process rather than a suo motto human resource promotion approach. Therefore, rights are establsihed more through adjudication and forced settlements rather than sound labour management practices for promoting human capital. Even the collective bargaining process in India was based on a highly rights-charged judicial process instead of a sound and amicable labourmanagement relations, and often ended with violent consequences on both mangement and labour sides depsite the mediatory role played by the governments. A major part of the history of labor relations in India since independence has been characterized by mutual distrust between labour and management. The situation has not improved with the initiation of economic reforms in the 1990s: In fact, structural adjustments introduced since 1991 are seen by unionists as the greatest threat to unions in the coming years. It is widely believed that the reforms are strengthening the hands of the private sector and foreign investors and weakening the position of laborers. It is expected that a large share of new industrial employments will be of a flexible type , that is non-permanent, contractbased, and part-time. This will increasingly reduce the scope for trade union activities. What could have been an instrument for increasing the competitiveness of the Indian economy is proving both divisive and unproductive (Agarwala and Khan in FWF: Background Study â&#x20AC;&#x201C; Tirupur, 2002).
But, the view of Agarwala and Khan failed to take into account another dimension of the issue. A large segment of the workforce, especially the young, educated, new entrants to the work force, would like to have the flexible type of work. There is already a large part of the work force in this group, which bank on skills as the bargaining point instead of the already failed union route. Another aspect to be considered is that trade unionism in the past have gained a bad name both through irrational approaches and through becoming mere offshoots for implementing the hidden agendas of political parties, mainly lead by parochial leaders. Along with the fact that even many so-called leftist union leaders have either become capitalists
themselves or secretly side with the capitalists. All these had given certain level of illegitimacy to the kind of trade unionism of the past. Moreover, there is not much human resource approach in the case of trade unions as they are so much anchored on rights without much concern about obligations and productivity. Mistrust about unionization by the new labour force and their tendency towards flexibility, in fact, operates as leverage to the new labour market approaches coming in the wake of globalisation. The classical adversarial employer-employee relationship cultivated by the trade unions in the past seems to be disliked by the new labour force and they look more towards a human resource and productivity perspective in their relationship with the employer. How far this is going and how far this will go are matters to be decided in the future as this is a very recent phenomenon. Majority of garment workers in India is not organised in trade unions because the industry is organised along layers of middlemen and sub-contracting chains. It is often very difficult to establish the employer-employee relationship, which is fundamental to union interventions. Interventions by unions are met with opposition and even ‘cartelling’ by employers to impose a collective block to the ‘union people’ from getting in-other firms refusing to employ a unionized worker. Given the high level of internal (family, caste etc) networks within production chains in Tirupur, this is relatively easy to do. Most of the informal sectors are hampered by difficulties to form trade unions. Unionization in Tirupur: Comparative Perspective Stakeholders
No (1) Small (0%) Extent (2) (0-25%)
Medium Large Full Extent (3) Extent (4) Extent (5) (26-50%) (51-75%) 76-100%)
Exporters/Employers Trade Unions
Govt.: Enforcement Agencies
Govt: Promotion Agencies
The level of unionization in Tirupur is very low. Though some leading unions claimed that it would be 25 per cent, others differ on the point (See Tables: Unionization in TirupurComparative Perspective, and Differing Viewpoints of Unions Regarding Unionization in Tirupur). The Trade Unions Act is the legislation assuring protection to trade unions in India. But, the amendments introduced in 2000 have taken away a lot of the earlier pro-labour provisions and inserted more employer-friendly rules in tune with the liberalized and globalised economic architecture of the country. However, even during the period of earlier strong trade union movements supported by relatively pro-labour legislations there were intimidations and even
assassination of trade unionists by employers or their goons as happened in the case of Mumbai mill workers leader Dr Datta Samanth and Steel workers union leader Shankar Guha Niyogi in Bhilai. Datta Samanth’s murderers were arrested only recently, after nearly 30 years and that also through some freak events. Niyogi’s case dragged for more than a decade, upto the Supreme Court of India and only the ‘paid goon’ got a confirmed punishment while the industrialists who paid him were acquitted. Tamil Nadu (and Trupur) was a stronghold of the workers movement, with strong unions and a pro-left government occasionally, led by DMK-coalition. As happened elsewhere in India, the strength of the workers movement declined in the 1980’s. The prolonged strike of 1984 in Tirupur and the resultant reluctance of entrepreneurs to handle a large workforce are also cited as a reason for the large-scale introduction of subcontracting and fragmentation of production. In the out-contracting system, work is contracted Differing View Points of Unions Regarding Unionization in Tirupur Unions
Claims of Unionization (as % of total workers in Tirupur)
CITU: Centre of Indian Trade Unions (affiliated to CPI-Marxist) 20 to 25 % LPF: Labour Progressive Federation (affiliated to DMK)
5 to 10 %
ATP: Anna Labour Federation (affiliated to AIADMK)
15 to 20 %
out to another unit. In the in-contracting system, a parent firm use a labour contractor to produce a certain quantity order. The labour contractor hire the workers and take care of their supervision, though they would perform the work inside the factory of the parent firm. Out-contracting and in-contracting, also known as job working, are important characteristics not only of the labour processes in supply chains but also of the labour relations in the informalised sectors. A major characteristic of the knitting industry is its ‘split production process’ and ‘job working’ as a convenient form of organization. Tirupur entrepreneurs use the term ‘job working’ to describe interactive networks between and also within firms. These networks connect specialist firms engaged in various processes of the production chain. But ‘job working’ is also used in some cases to describe the divisions of labour, which exist within firms. In the ‘job working within’ an owner often employs a ‘job work’ contractor for each function. This person is a kind of production manager who is also responsible for employing labour for a particular job. This organization system within the firm is in tune with process divisions found in the industry as a whole. The factory organization sytem was gradually replaced by a system of in-contracting between smaller units, where the owners worked alongside the workers. Long-term workers were often turned into labour contractors or semi-independent subcontractors. This has accelerated the process of informalization of production and subsequent emergence of large-scale casual labour system. This is one of the main reasons behind the highly volatile labour market conditions in the garment sector, which in turn facilitate natural death of unions. The export boom of garment
clusters such as Tirupur in the 1980’s was mainly based on this system. The fluctuating labour market conditions also leads to high mobility of workers, which in turn affects the levels and permanence of employment status. This is also an impediment to attempt to unionize workers. Most of the workers avoid trade unions and they do not wish to be members of unions. They feel that membership in trade unions may hamper their employment and livelihood, and also their dreams to move up the job ladder.
Unionization The unions and levels of unionisation in Tirupur is as follows: Note on Dravidian Politics DMK was the parent party, organized on strict Centre of Indian Trade Union (CITU) is pro-Dravidian attitudes, and even at point the main trade union in the garment sector in demanded cessation of Tamil Nadu, from Tirupur. It is affiliated to the Communist Party Indian union soon after Indian independence. of India (Marxist) (CPI-M), a national political The party was dominated at a later stage by party. It claims to have about 10,000 members a non-Tamil, popular Tamil film star, M G in the Tirupur garment industry, referred as Ramachandran (MGR), hailing from Kerala, ‘Banian section’ by the union. Besides them which resulted in a major split leading to the there are the following major unions. All India formation of AIADMK by MGR., and M Trade Union Congress (AITUC), affiliated to Karunanidhi, his arch rival dominating the the Communist Party of India (CPI) claiming DMK. The present chief minister, Jayalalithaa, 7000 members; Indian National Trade Union also a non-Tamil, hailing from Karnataka, was Congress (INTUC) – 6000 members, affiliated also a leading Tamil films star along with MGR, to the Indian National Congress; Labour took over leadership of AIADMK after MGR’s Progressive Front (LPF) – 4500 members, death. MDMK is a recent break-away faction affiliated to the Dravida Munnetra Kazhkam of both DMK and AIADMK. (Dravida Munnetra Kazhakam (in Tamil, means the party for progress of Dravidians), a major regional party of Tamil Nadu (see Box: Note on Dravidian Politics); Marumalarchi Labour Progressive Front (MLF) – 3100 members (Marumalarchi means ‘rejuvenation’ in Tamil), affiliated to the Marumalarchi Dravida Munnetra Kazhakam (MDMK), a relatively new regional party; Anna Labour Federation (ATP – Anna Thozhil Piravai) – 2000 members, affiliated to the AIADMK (All India Anna DMK; reference Anna is to one of the founder leaders of DMK), regional party now ruling Tamil Nadu state. In addition, Baratiya Mazdoor Sabha (BMS), affiliated to Bharatiya Janata Party (BJP – national-level political party), Hind Mazdoor Sabha (HMS), different factons affiliated to different factions of Janata Dal ( JD national level political party, different factions), small unions affiliated to ultra-left groups such as Communist Party of India-Marxist Leninist (CPI-ML), New Socialist Alternative (formerly Trotskyists) are also present in Tirupur. The labour relations between employers and workers in Tirupur is moderate because workers are not very assertive about their rights. They are under frequent survival threat too as there is no assurance of regular working hours in non-peak seasons (see Box: Negotiating Workers Rights in Tirupur). In extreme cases of fines, non-payment or deduction of wages or physical assault or dismissal, workers approach unions and demand their intervention. These issues are normally solved
through bipartite negotiations between the union and the employer.If such attempts fails, the issue would be raised as an industrial dispute (under the Industrial Disputes Act) in front of the Labour Commissioner. The Labour Commissioner initiates tripartite conciliation process under the Industrial Disputes Act, wherein the Labour Commissioner mediates the conciliation process between the unions and the employer. If the conciliation fails, it would be referred to adjudication under the Industrial Disputes Act by the Labour Commissioner (Government authority under the Act ). The dispute would then be transferred (technically, referring the dispute) to the Labour Court/Industrial Tribunal that would issue an award/order on the basis of trial and evidence. The tremendous growth of the garment industry in the wake of phasing out of quota system through ATC (see Graph: ATC Integration Stages) resulted in attempts to strengthen the position of labour to some extent. Though majaority of the unions are highly critical of globalization, they are aware of the new opportunities to strengthen labour power through various channels including internationalisation of labour issues in export production localities like Tirupur. Even with a steady supply of migrant labour, during peak seasons, there is shortage of labour in Tirupur. This also gives some strength to bargaining power of labour though seasonal. Managing Partner of Esvee Knittings, Shanmugasundaram T V (who recently tied up with MADE-BY® label) said in the course of field survey: “We need more than 120 women right now as workers in addition to the existing workers to finish the orders in hand.” There is a constant increase in demand for labourers, especially as the quota system is completely taken out as on 1 Janaury 2005, which means that there would be more quntity supply from Tirupur in the future. The perceptible shift in outsourcing of ready-made garments by the European retailers from FarEastern production centres towards India of late and the louder perception that the cotton knitwear
Negotiating Workers Rights in Tirupur
Our union has an all India strength of 56,00,000. Through our union branch in Tirupur 24 companies have been brought to the discussion table to resolve disputes with workers. Only one dispute remained intractable and had to be taken to the court in the recent past. About 500 manufacturing companies in Tirupur have direct contractual relationship with buying companies and most of them pay wages prevalent in the market. However, 2,500 manufacturing units, who are sub-contractors do not even pay the minimum wages. We have seen that direct negotiation with the management helps in reaching agreements faster. We have to note that such negotiation is possible only in the case of few factories where unions are active. The managements are wary of trade unions and do their best to discourage unionization within their premises. This is the most important reason for low labour standards within the sector. Kaliraj T, Hind Mazdoor Sabha (HMS) HMS is a trade union affiliated to Janata Dal, a pro-socialist national party, with a number of different factions now. Source: Programme Report: National Workers Exchange Programme-India; South India Coalition for Rights of Garment Workers; Cividep-India; Bangalore (Report of the Sub-event of the ‘Play Fair at Olympics Campaign’; 27-29 August, 2004, Bangalore: A National Gathering of Garments and Sportswear Workers to Highlight Working Conditions in the Sector and Discuss Organizing Strategies)
capital of India, Tirupur, will be the major beneficiary of such a shift, in view of the increasing share of knitwear in the overall garment export basket, have proved too strong pointers for the workmen’s unions to miss. The leaders of the workmen unions say that the survival of the Tirupur industry is as important as the welfare of the workers. Contrary to the exporting units, the knitwear producers manufacturing the basic knitted goods catering to the local market, who are not bound by strict delivery schedule as exporters, feel confident that some solution could be found for the labour wrangle sooner. (Business Line; June 03 2003)
The 2003 A recent stalemate regarding industrial relations in Tirupur happened in April 2003 when six Strike trade unions, CITU, AITUC, INTUC, LPF, ATP and MLF threatened a strike after talks on the renewal of the 3 year agreement with the knitwear industry associations ( the main four are SIHMA, TEA, TEKMA and KnitMA) failed. The Deputy Commissioner of Labour, the prescribed authority under the Industrial Disputes Act, invited both sides for conciliation talks. The ruling party’s member in the state assembly (Member of Legislative Assembly: MLA) and the Member of Parliament (MP) representing the region also intervened. But, in May, a two-day strike took place, which resulted in the industry associations coming to conciliation table. Even then, the position of industry associations led the unions to threaten indefinite strike. The issue was resolved with putting into place a long term wage agreement for the next 3 years (till 2006), which is presently in place. But, unions claim that many of the industry association members are not implementing the wage agreement, whereas industry association representatives claim that all their members and even non-members accept the wage agreements and implement it. (See Chapter 8 for further discussion of this point.) Employers’ One unique aspect of Tirupur cluster is its particular level of organization by the employers. It Unity seems they believe and accept the rule ‘organization is strength’ but reluctant to allow the same to workers. Even typical subcontractors like bleachers and power table owners have their own associations. There are as many as 20 sub-sectoral industry associations in Tirupur. The importance of these associations can be measured from the fact that all these organisations not only act as mediators to resolve inter-firm and within firm disputes but also act as ‘collective management’ points offering management solutions for day to day affairs, through experienced advisors. There is some level of ‘mentoring’ offered to new entrants by experienced members through these organisations. The system can be referred as the ‘Anna factor’. The ‘Anna’ effect is peculiar to Tamil Nadu. It is present in politics, business and social affairs. Anna means elder brother. An elder, experienced businessman can be found with many younger, satellite-like persons around him, learning the business while getting the mentoring from him. This is especially notable in Tirupur, with its widespread family and caste-based business networks. Industry associations also assist its members to source investment capital, especially working capital. There is huge investment in working capital at the beginning of each season, which the relatively small firms would not be able to raise on their own. Among the associations, the most active is the Tirupur Exporters Association or TEA. Caste-
wise, this is dominated by Gounders, who dominate the knitwear export business in Tirupur. It has strong relation with political power centres and also at the level of international apparel markets. Unlike other Associations, due to some visionary leadership, TEA has been spearheading investment in infrastructure projects, which directly act as a catalyst to aid and promote exports. Other major associations are South Indian Hosiery Manufacturers Association (SIHMA), Tirupur Export Knit Manufacturers Association (TEKMA) and Knitwear Manufacturers Assocation (KnitMA). In addition, there are sectoral associations such as the Bleachers Association, Dyers Association, Power Table Owners Association, Screen Printers Association etc. Industry associations offer consultancy services and assistance for all procedural matters including all kinds of registrations such as Reserve Bank of India code, Export-Import License, and of late even quality and standards certifications. TEA has put up a board in its reception announcing its offer of services for various international quality certifications such as ISO, SA etc. Associations also intervene in all kinds of disputes, legal matters and represent industry owners in courts and in front of government and other national and international agencies.
Labour Inspection System in India Indiaâ&#x20AC;&#x2122;s labour inspection system is based on a number of complex legislations, with strong roles for the Commissioner of Labour and the Inspectorate of Factories. The Commissioner of Labour is responsible for: Registering Standing orders; Conciliation in disputes (But, most disputes are set between management and workers without the involvement of the labour officers, mainly negotiated by unions and industry associations, either with or without involvement of local political party bosses; Checking compliance with regard to child labour, getting service cards, minimum wages, maternity, Provident Fund, ESI and other benefits under various labour laws. The Factory Inspectors are responsible for technical issues in factories like safety and health and also for registration and compliance with regard to Factories Act and Rules. However implementation of the legislation is often weak because of under staffing and alleged corruption. In Tirupur, there are Assistant Inspectors of Factories, Inspectors of Factories and one Deputy Chief Inspector of Factories. These Inspectors oversee compliance of Factories Act and rules, and labour standards such as health and safety measures. Even in those firms in Tirupur which are, in theory, regulated (for example, where they are registered with the Factories Inspectorate), the labour force is substantially unaffected, certainly as regards wage rates, and often as regards overall conditions of work. The degree of coordination necessary to achieve any measure of success in attempting to pressure enterprises to conform totally undermines the task in hand. There is not only the Factories Inspectorate, but also other agencies for Employeesâ&#x20AC;&#x2122; State Insurance and Provident Fund, and the Labour department. In addition, the Tirupur Municipality has to grant a health and safety license to which the Electricity Board has to agree and there are agencies such as TNPCB to grant pollutiionrelated certification.
Other Key Apart from Industry associations, the key agencies in the garment sector are the South Indian Agencies Textiles Research Association (SITRA), Apparel Export Promotion Council (AEPC), Textiles Committee, Tirupur Industries Federation, National Small Industries Corporation, etc. The observation in the FWF Background Study (2004) that â&#x20AC;&#x153;in Tirupur companies normally have no HR or social departments. The accounts department takes cares of all thisâ&#x20AC;? needs qualification. As majority of units in Tirupur are small, they are not organized along professional management lines, as mentioned earlier. Almost all of the nearly 500 firms with direct contractual relationship with foreign brands have some level of managerial organization. In the top rung companies with turnover exceeding Rs.1000 million, there is clear professional managerial organization. There is a remarkable level of professional organization in horizontally and vertically integrated companies like Prem Durai Exports, Tubeknit Fashions, Eastman Exports etc due to their long and successful relationship with international brand owners. Majroty of the nearly 500 units in the upper segment with hgih volume of turnover, most of them with some level of standard compliance, are organized like any other professionally managed organizations, with all required standards monitoring processes in place. They have the required social departments. (See Box: Prem Durai-Switcher Example) Labour Laws The Indian labour legislation is very complicated with multiple legislations and multiple Applicable enforcement agencies, which is the result of the constitutionally proclaimed orientation towards socialism. There are 200 odd central and state labour laws, applicable in Tamil Nadu. But, as a large majority of the countryâ&#x20AC;&#x2122;s workforce remains in the unorganised sector, these laws remains to a large extent on paper with only limited implementation though enforcement agencies exist all over the country. A major overhaul of labor legislation is underway in the wake of globalisation and liberalization of the economy since early 1990s. Some of the labour legislations are already scrapped or amended to suit the needs of the globalised economy. FWF Background Study-Tirupur (2004) observes: The long-awaited report of the Second National Labour Commission had recommended, among other things, steps to check the multiplicity of trade unions, reduction in the number of holidays and empowering employers to lay off and retrench without prior permission. The commission also sought a comprehensive legislation relating to working conditions at workplaces and another for the unorganised sector, besides asking the Central government to notify a national floor level minimum wage, giving the states necessary powers to fix the minimum wage which should not be below the national level.
Large number of these recommendations is already implemented through major changes in the Trade Unions Act and other labour legislations. The new recognition requirements of trade unions has curtailed unionization as there is a requirement of prior consent of at least 10% of the total workforce in a firm (previously it was a minimum number of 7 persons to subscribe the memorandum of the union) to apply for registration of a union. Trade Union registration fee has gone up from Rs. 500 to Rs. 25,000. All these acts as blocks to unionisation and smooth functioning of unions though intended to reduce multiplicity of unions in an establishment.
In India, the general labour laws are applicable to all industries including garments. In addition, there are certain specific legislations with regard to certain specific industries. For instance, in the case of garments, the Textiles Development Act of the Central government is directly related to the garment sector. In the Indian federal administration system, powers are earmarked for the Union (Central) government, State governments and the elected local bodies (called panchayats or muniicipalities or corporations as the case may be). The Central government has exclusive authority over subjects stated in the Union List of the Constitution, State governments have power over subjects specified in the State List, and the subjects mentioned in the Concurrent List are matters in which concurrence of Central and state governments are required. The local bodies hold authority over matters delegated to them through the 73rd and 74th Amendment of the Indian Constitution (implemented through the Panchayat Raj Acts by the State governments), referred as the decentralised system of administration through Panchayats-local bodies including Gram (village) panchyats, Nagar (city/municipality) panchayats, Mahangar Palike (municipal corporation) and/or Zilla (District)/Block panchayats. There would be a parent enactment by the Parliament (called Central Acts/Central laws) and appended Rules made by the Central (Union) government in matters related to Union List or Concurrent List. On the basis of this, there would be state legislations or rules also. In addition, there would be separate state legislations by the State Assemblies and appended Rules made by the State governments in matters specified in the State List. For instance, Factories Act is by the Parliament but the duty to implement it is on the State government. Provident Fund law is also by the Parliament and it is directly enforced and administered by the Central government through the Provident Fund Commissioners. Majority of labour enactments passed by the Central and state governments for the welfare of workers relate to the workers in the ‘organized sector’ and does not touch the condition of workers in the unorganized sectors. However, a number of social security measures have been legislated for the workers in the unorganized sectors too. Factories Act The Act is to regulate working conditions in factories and ensures minimum standards of safety, health and welfare of factory workers. The Act also regulates working hours, leave, holiday, overtime and employment of children, women and young persons. It also provides for other amenities to be provided to workers by the employers, such as canteens, rest shelters, first-aid centres, crèches (day-care centres for female employees’ children), and educational and recreation centres. It applies to all manufacturing establishments defined as factory. The Act was amended in 1987 to set out safeguards regarding hazardous substances. Detailed rules appended, by each States according to their specific requirements, are the operational arms of the law. The Factories Inspectorate, under the State governments, is the agency responsible for implementing the Act and rules. Working Hours The Factories Act prescribes a 48-hour week for adult workers. In offices, a workweek is
generally considered to be 35 to 40 hours. Non-executive staff usually receives a shift allowance if they work in shifts that differ from the usual working hours. Paid Holidays These are generally 10 to 20 paid public holidays in a year, for factories and offices respectively, with their number varying from state to state. Provision is also made for annual earned leave and casual leave and/or such leave with full or half pay to the employees. [Public holidays are declared by the Negotiable Instruments Act and through notifications by the central and state governments. There are national public holidays and public holidays restricted to each state] Health and Safety The Factories Act ensures that measures for protection of health and safety of the workers is maintained in all factories. Both employers and employees are required to observe the safety and protection norms prescribed by the law. Non-compliance with these requirements is liable for punitive action by the Inspectorate of Factories. Shops and Establishments Act
The Act is a State-level legislation and there would be variation between States in some matters dealt in. This law is applicable only to establishments not covered by the Factories Act. It seeks to regulate the working conditions and other matters in the unorganized sector, including shops and establishments. Regulations for working hours, rest intervals, overtime, holidays, termination of service, maintenance of shops and establishments and other rights and obligations of the employer and employees are laid down. This is administered by an agency notified by the state government. (There is a very intriguing issue with regard to implementation of this Act in Tirupur, which is discussed in Chapter 8.) Equal Opportunity (The Equal Remuneration Act) Apart from the constitutionally guaranteed equality of opportunity, the Equal Remuneration Act prohibits discrimination between men and women, in either requirements for employment or payment of wages wherever their jobs are identical, except where employment of women in certain types of work is prohibited or restricted by law. Minimum Wages Act A minimum statutory wage has been established for all types of daily employment. It lays down the maximum number of working hours per employee mentioned in the schedule to the Act. The maximum daily hours, weekly rest days and overtime have been set out. Minimum wages can differ between states, calculated on the basis of consumer price index, and also varies from region to region on the basis of cost of living as reflected by the consumer price index.
Wages and Salaries
Wages vary from industry to industry and are determined mostly on the basis of collective bargaining in each industry or in each enterprise. The monthly starting salary of local unskilled labour, inclusive of basic salary or a wage and a â&#x20AC;&#x2DC;dearnessâ&#x20AC;&#x2122; allowance (cost of living allowance), but without medical leave or other benefits, ranges from Rs.1000 to Rs.2500 (approximately Euro 15-35). Monthly salaries for skilled labour/technicians may range from Rs.2500 to 6000 (approximately Euro 35-100) depending upon the skill-level and experience. The office/
clerical staff salary ranges approximately from Rs.2000 to Rs.5000 (approximately Euro 30-70) per month. Basic wages are fixed in accordance with the category of employee. This category depends on the nature of the work or skill required, besides the location. The wages are higher in cities. Payment of Bonus Act
All payments of bonuses are linked to profits or productivity. According to this Act the employer has a statutory liability to pay a bonus to employees in accordance to a prescribed formula, with statutory minimum of 8.33 percent. The Act also provides the machinery for the enforcement of the liability of payment of the bonus. The Act extends to any unit where more than 20 people are employed. Maternity Benefits Act This provides maternity benefits to women employees. It sets out that a woman may avail 3 months leave with full salary before or after the birth of her child. Trade Unions Act Registration of a Trade Union is permissible according to this Act. Registration provides certain protections and privileges, which safeguard the interest of the employee. This Act extends to the whole of India and is applicable to all the unions of workers and associations of employees. The Act is administered by the State government through Labour Departments headed by Commissioner/Secretary to Government. Industrial Disputes Act
This provides the machinery for the settlement of industrial disputes through negotiations. It applies to all industrial establishments all over India whatever the strength of its workers may be. Under the Industrial Disputes Act no employee in any industrial establishment who has worked more than one year may be retrenched without being given one month notice in writing indicating the reason for retrenchment. The employee is also entitled to compensation of 25 days salary for each year of service completed. The dismissal of workers may be contested through a petition to the Labour Commissioner/Government. A recent development with regard to retrenchment is that the Government of India has established the National Renewal Fund (for rehabilitation and retaining of workers displaced from sick units) on a non-statutory basis. Social Security Legislations Several legislative acts provide social security to workers in India. The most important are the following:
Employees Provident Fund and Miscellaneous Provisions Act This Act directs the employer to set up a compulsory contributory fund for the future of the employees following her/his retirement, or for his/her dependents in the case of premature death. This fund is administered by the Central government through the Provident Fund Commissioners under the Ministry of Labour. Monthly contribution to provident fund is at 8-10 per cent of basic salary and dearness (cost of living) allowance. This Act applies to all establishments in India employing 20 or more workers. There are some recent changes made through which the compulsory levels have gone down. A company newly set up is
exempt from the Employee’s Provident Fund and Miscellaneous Provisions Act for the first three years of operation. Some states require the setting up of a welfare funds (under specific enactments) with contributions payable by the employer, employees and the concerned government for promoting activities connected with the welfare of labour, especially for pensions. Payment of Gratuities Act This Act provides retirement benefits for employees who have worked for a minimum stipulated period with an employer (generally 5 years and more). It is considered as a reward for long and faithful service. Terminal gratuity works out to 15 days salary for each year of service. This Act applies to the whole of India and to all establishments with 10 or more employees. Workman’s Compensation Act This Act provides workers and/or their dependents with relief in the event of accidents arising out of or in the course of employment, causing death or disability. This Act extends to the whole of India. Employees State Insurance (ESI) Act This national legislation is administered by the States and deals with health and related aspects of specified class of employees. Employees in the lower scales of salary are the ones covered under this Act, and the ESI Corporation established under this Act has established hospitals and other health provisions for the exclusive use of employees covered under the ESI scheme. The employer with regard to each employee in this scheme should make a contribution. Textiles Committee Act The Textiles Committee, with headquarters in Mumbai, is a specialized agency of Government of India, Ministry of Textiles, established through the Textiles Committee Act. The Act provides for development of the textiles sector including human resources development. It has fullfledged offices in Tirupur and Coimbatore with highly committed professional staff, doing their best in terms of providing services. TC’s Quality Assurance Officer at Tirupur is also in charge of the Tirupur Cluster Development Programme. A textile cess is collected under this Act for financing development of the sector.
Labour Standards Compliance in Tirupur Knitwear Cluster
Eight labour standards to be followed in the knitwear sector are explained here. The compliance position in Tirupur with regard to statutory regulations and standards follows this section. An inventory of opinions with regard to standards compliance is also provided. Minimum social standards, which include the core labour standards are based on the two UN Human Rights Conventions (the International Pact on Civil and Political Rights and the International Pact on the Economic, Social and Cultural Rights). They are also based on the conventions and the Declaration on the Fundamental Principles and Rights at Work (1998) of the International Labour Organisation. The ILO conventions are legally binding only when they are ratified by the member states, whereas the 1998 ILO Declaration applies to all member nations. With this Declaration, the members committed themselves to observing, promoting and realizing core labour standards.
Core Content of Labour Standards
The minimum social standards include the effective abolition of exploitative child labour (ILO 1998 Declaration) the abolition of forced labour (ILO 1998 Declaration) the freedom of association and the right to collective bargaining ((ILO 1998 Declaration) the elimination of discrimination in employment and occupation on the basis of
nationality, skin colour, religion, ethnic origin, political beliefs or sex (ILO 1998 Declaration) the right of employees to good health (protection against accidents, protection in
handling hazardous substances) reasonable working hours a living wage
International Conventions related to forced labour (Convention 29 , 30/11/1954 and Convention 105, Labour Laws 18/05/2000). Applicable in The Bonded Labour System (Abolition) Act, 1976 was enacted by the Indian Parliament. The India Act seeks to prevent the economic and physical exploitation of the weaker sections and workmen who may accept any terms for pledging their labour in order to escape hunger and/or destitution. Convention on Discrimination (Convention 100 on 25/09/1958 and Convention 111, 03/ 06/1960). The Indian Parliament passed the Equal Remuneration Act, 1976. The Act provides for the payment of equal remuneration to men and women workers and for the prevention of discrimination, on the ground of sex, against women in the matter of employment. Hence it is the duty of the employer to pay equal remuneration to men and women workers for same work or work of similar nature and requires that no discrimination be made while recruiting women workers, except where the employment of women in such work is prohibited or restricted under any law for the time being in force. The Act applies to the establishments notified by the Central Government under the rules of the Act. The Act is now applicable to almost every kind of establishment including garment oriented units. There is no specific law in India against discrimination in employment, which could be said to be in accordance with ILO convention 111. India has not ratified conventions related to elimination of worst forms of child labour (ILO convention 182). The Child Labour (Prohibition and Regulation) Act, 1986 prohibits engagement of children in certain employment, which are considered unsafe and hazardous to child workers who are below the age of 14 years. It also aims at regulating the conditions of work of children in certain other employment and prescribes hours, health and safety measures, weekly holidays, inspections, etc. The following Acts and efforts collectively contribute to the ILO convention 138. The Factories Act, 1948 prohibits employment of children under 14 years of age. After attainment of 14 years of age a certifying surgeon has to certify the child to be fit to work. Working conditions for children are regulated as per provisions given in the Act. After attaining the age of 15 years the certifying surgeon has to certify the child as fit to work as an adult. Minimum Wages Act, 1948, also prescribes regulation for child labour in terms of hours and wages. Besides these Acts, the government has implemented the National Child Labour Projects (NCLPs). During 2000-2001, 96 NCLPs have been sanctioned for rehabilitation of about 2 lakh children removed from work. India has not ratified conventions related to freedom of association etc. (ILO conventions 87, 98, 135). India has ratified convention 26 related to minimum wage-fixing machinery but not 131. India has ratified convention 1 related to working time. India has not ratified convention 155 related to Health and Safety. India is bound to implement 1998 ILO declaration on fundamental directives and
principles at workplace like all other member countries of ILO. This declaration covers freedom of association, no discrimination, and no child labour and no forced labour. Employment Freely Chosen
Article 23 of Indian Constitution prohibits any form of forced labour and is in content similar to ILO convention on forced labour. Bonded Labour System (Abolition) Act 1976 prohibits bonded labour system and forced labour system and it can be used against forced overtime by defining it as a form of bonded/ forced labour system. Compliance situation More than 50% of the workers in Tirupur are migrants, including a large number of girls. Majority of them are ‘volunteering’ to work in Tirupur due to impoverishment of their native villages and also due to the very low wages (Rs. 20-40) they may get for agriculture work, and that too not available for all and it is highly seasonal. Compared to this pathetic condition that happened due to faulty development or no development at all, Tirupur offers a “dream” to many of the migrants. Nearly 85% of migrants are from surrounding areas of Tamil Nadu. The remaining 15% comprise nearly 10% from nearby state of Kerala, which claims high development and high standard of living. There is some level of ‘distress’ in the migration from Kerala too, as most of them are skilled tailors or educated/skilled technicians or administrative staff. Their migration was mainly caused by the high unemployment in Kerala despite high development achievements. Another group of migrants are adolescent girls from Kerala from poor families, who are forced to migrate due to poverty.
Some skilled workers take loans and it is not deducted from their salary and thereby creating an informal bonding. These skilled workers feel that this situation restricts their mobility. There is also a tendency among skilled workers to take huge amounts as advance and
Compliance: Employment Freely Chosen Stakeholders
No (1) Small (0%) Extent (2) (0-25%)
Medium Large Full Extent (3) Extent (4) Extent (5) (26-50%) (51-75%) 76-100%)
Exporters/Employers Trade Unions
Govt: Enforcement Agencies
Govt: Promotion Agencies
Sources: Interviews of the representatives of stakeholder groups.
leave the firm without repaying it and join another firm for better wages. Of course, this cannot be generalized because most of the labourers repay the advance amounts taken. Discrimination in Employment Article 14 of the Indian constitution guarantees equality before the law. The Equal Remuneration Act, 1976 is enacted to give effect to this Constitutional obligation.
Article 39 of the Indian constitution envisages giving an equal pay for equal work for both men and women. This is not a fundamental right but an unenforceable principle to be followed by the state in governance, which is in fact legislatively made into a right through the Equal Remuneration Act. The Equal Remuneration Act, 1976 Section 4: An employer must not discriminate on the basis of sex, while paying the workers for work of a similar nature that is done. Section 5 of the Act prohibits the employer to discriminate against women, while recruiting labourers for the same work or work of a similar nature. This Act does not affect those laws, which prohibit or restrict the employment of women in certain occupations or establishments of a hazardous nature. Provisions of this Act do not affect the reservations for Scheduled Castes or Scheduled Tribes (most backward communities as per the Constitution of India), retired military personnel and retired employees (retirement age is 55-58 years but mostly there are no workers found in garment industry above 40 years and women workers above 35 years). The Maternity Benefits Act, 1961 The Maternity Benefits Act, 1961 aims to provide women employees certain maternity and other benefits like medical aid, maternity bonus, provisions of crĂ¨ches, additional rest intervals, etc, before and after child birth. It is applicable to every factory in India, irrespective of the number of employees except those factories where provisions of Employees State Insurance Act are applicable because ESI Scheme also provides for maternity benefits. The maximum period for which any woman shall be entitled to maternity benefit shall
be twelve weeks of which not more than six weeks shall precede the date of her expected delivery (miscarriage or medical termination of pregnancy). No pregnant woman shall, on a request being made by her in this behalf, be required by
her employer to do any work of arduous nature or which involves long hours of standing, or in which in any way is likely to interfere with her pregnancy or the normal development of foetus, or is likely to cause her miscarriage or otherwise to adversely affect her health. This is applicable during the period of one month before the period of six weeks prior to the expected delivery and one month after the six weeks since the date of delivery. No woman shall be entitled to maternity benefits unless she has actually worked in
an establishment, from which she claims maternity benefits, for a period of not less than eighty days in the twelve months immediately preceding the date of her expected delivery.
Every woman entitled to the payment of maternity benefit under this Act, not
withstanding the application of Employees State Insurance Act, 1948, to the factory or other establishment in which she is employed, continue to be so entitled until she becomes qualified to claim under Section 50 of the ESI Act. If a woman dies during delivery, the maternity benefit shall be payable only for the days
up to and including the day of her death. Maternity benefits payments prescribed should be at the rate of the average daily wage.
Compliance Situation Discrimination in Tirupur as elsewhere in Tamil Nadu is based on class, religion, caste and gender, but as far as workplaces are concerned, such discrimination do not manifest. Wages are fixed by categories and not by sex or other social aspects. But, there is ongoing feminisation of the work force caused by other factors of organization of production. Therefore, it may appear to be a positive discrimination towards women. This needs to be understood along with the informalisation and disorganization of the Tirupur cluster. There is a lot of presence of backward and the lower caste women in the work force in Tirupur. This is mainly caused by the fact that there are a sizeable number of entrepreneurs who belong to backward castes, and also due to the fact that “distress migrants” are mostly from the backward and lower castes. Women are working mainly as unskilled workers and approximately only small numbers of women workers are skilled workers.
The most powerful workers are the tailors, predominantly men who work on piece rate. Women are demoted to checkers position, though they climbed the ladder from adolescence to the level of tailors, once they reach the age of 30 plus. Only a few women are found in power table machines and single needle machines as tailors. Checking is completely a woman’s job. In Bangalore, for instance, much more women do machine work and are also engaged in other highly paid category of jobs.
Compliance: No Discrimination in Employments Stakeholders
No (1) Small (0%) Extent (2) (0-25%)
Medium Large Full Extent (3) Extent (4) Extent (5) (26-50%) (51-75%) 76-100%)
Exporters/Employers Trade Unions
Source: Interviews of the representatives of stakeholder groups.
Compliance : Equal Remuneration Act Stakeholders
No (1) Small (0%) Extent (2) (0-25%)
Medium Large Full Extent (3) Extent (4) Extent (5) (26-50%) (51-75%) 76-100%)
Consultants Source: Interviews of the representatives of stakeholder groups.
Compliance: Maternity Benefits Act Stakeholders
No (1) Small (0%) Extent (2) (0-25%)
Medium Large Full Extent (3) Extent (4) Extent (5) (26-50%) (51-75%) 76-100%)
Exporters/Employers Trade Unions
Source: Interviews of the representatives of stakeholder groups.
Women are lesser among skilled, administrative, supervisory and specialist jobs. But, this seems to be a customary rather than a discriminatory feature. Unskilled women workers are not normally provided with training to become skilled workers and thereby denied equal opportunity to promotion.
Employers do not prefer married women and those above 30 years. This is a general trend in almost all the companies including those that have high levels of compliance. As there is preference toward unmarried women, the requirements of compliance with regard to maternity benefits are very low. Even then, most companies refuse maternity benefits during their pregnancy leave. Employers are not comfortable with married women with child as they are more likely to take leave on account of their childâ&#x20AC;&#x2122;s health.
Most of the workers in garment industry are less than 40 years of age irrespective of their gender. The linkages between the ‘marriage schemes’ mentioned earlier and the tendency towards not employing married women is interesting and needs further probing. No Exploitation of Child Labour
The Constitution of India Article 24 prohibits employment of children, which is to be enforced to wipe out child
labour. The Child labour (Prohibition and Regulation) Act, 1986 Prohibits employment of children below the age of 14 years in specified occupations
and processes. It lays down penalties for employment of children in violation of the provisions of this Act, and other Acts, which forbid the employment of children. It also intends to obtain uniformity in the definition of child in the related laws. In Part B of the schedule (Section 3) it explains such process where it mentions ‘cloth
printing, dyeing and weaving’. Section 7: The period of work of a child worker shall not be spread over 6 hours which
is inclusive of the interval period for rest, at least an hour, and the time spent by the child in waiting for work on any day. The period of work on each day shall not exceed 3 hours. After 3 hours of work the child worker should be provided rest for at least 1 hour. The child worker is not permitted to work between 7 p.m. and 8 a.m. The child is not permitted to work overtime. Section 8: Every child employed in any establishment is allowed weekly holiday of one
whole day. Section 11: Employer should maintain a register showing name, and date of birth,
hours and periods of work, interval of rest, nature of work of any such child. And such a register should be available for inspection at all times during working hours or when work is carried on in any such establishment. The Factories Act, 1948 Protects child workers from health and safety hazards at workplace. Provides for cleanliness
in the place of work and it should be made free from nuisance, and provides for ventilation, air, drinking water, lighting, latrine and urinals, spittoons, fencing of machinery. It also prevents employment of children on dangerous machines and work at or near machinery in motion, device for cutting off power, and self-acting machines. The Act orders protection of eyes from dust, explosive or inflammable dust, gas and fume etc. · Child or adolescent worker may be allowed to work in a factory, if a certificate of fitness
is issued to him by the certifying surgeon and is kept in the custody of manager or the factory owner and he should wear a token while at work giving reference to the certificate. The certifying surgeon issues the certificate of fitness after thorough check up ascertaining the fitness of the child or adolescent, to work in a factory. Application for such an examination is made either by the worker himself or guardian of the child/ adolescent. The application should be attached with a document signed by the factory manager stating that only a person certified fit by the surgeon would be employed. In
addition, the manager can apply for such an examination. The certificate proves that the certifying surgeon is satisfied that the young person has completed his/her 14th or 15th years, has attained the prescribed physical standard and is thus fit for such work. A certificate is valid for 12 months and can thereafter be renewed. If the holder is no longer fit to work then, it can be revoked at any time by the certifying surgeon. When a certifying surgeon refuses to grant or renew a certificate, he/she should, if requested, state reasons for refusal in writing. The employers should pay the fees for the certificate. · The Act defines child worker as one ‘who has completed 14 years of age’ and ‘adolescent’
is a worker who is ‘below 18 years of age and above 15 years of age’ The Factories (Amendment) Act 1954 This Act prohibits employment of person’s less than 17 years during night shifts. Night
is defined as a period of 12 consecutive hours and which included hours between 10 p.m and 7 a.m. The Apprentices Act 1961 Prohibits the apprenticeship/ training of a person less than 14 years. Compliance situation
In general there is no child labour in the registered export units in Tirupur. But child labour is prevalent in the unregistered garment units according to the factory officials. The Inspector of Factories has launched more than 100 cases under the Factories Act and prosecutions under the penal provisions of the Child Labour (Prohibition and Regulation) Act, 1986. The District Administration has initiated actions to eradicate child labour in the garment industry through the NCLP supported by ILO. Since the garment industry is not termed as hazardous in the Child Labour (Prohibition and Regulation) Act, 1986, it is hard to prosecute the managements that employ less than 20 workers, since that unit will not come under the definition of factory. Now most of the companies engage children only in peak season unlike few years ago but small and medium size companies employ them more frequently and in some cases as full time workers. Most of the child labour in the Indian garment industry is found in subcontracting shops or in homework situations. At least 5% of the Tirupur apparel production takes place in people’s homes, with families carrying out operations such as attaching buttons and other accessories or operating a knitting machine. Birth registers, may not be available in large number of cases which makes it extremely difficult to determine the exact age of a young worker. A medical doctor’s certificate or school records may be the only ways to determine a person’s age. Most observers still account 10-20 percent of Tirupur’s work force as child or adolescents. There is clear predominant presence of adolescents among the workers. But, interestingly, almost all units have put up boards announcing that there is no child labour employed, though they do not have a board stating that it is a garment unit, which is a strange reality of Tirupur. An interesting aspect is that Coimbatore District in which Tirupur is situated is declared as a district that had achieved full elimination of child labour. (www.coimbatore.tn.nic.in)
Compliance: No Child Labour Stakeholders
No (1) Small (0%) Extent (2) (0-25%)
Medium Large Full Extent (3) Extent (4) Extent (5) (26-50%) (51-75%) 76-100%)
Trade Unions Workers
Govt: Enforcement Agencies Govt: Promotion Agencies
Sources: Interviews of the representatives of stakeholder groups.
Freedom of Association and the Right to Collective Bargaining The Trade Unions Act, 1926 Each employee has to inform the management about his choice of a union. If this union
does not get recognition, he has to join another recognized union within three months. Any person above 15 years can become a member of a trade union. S/he cannot be an
office-bearer till he/she attains 18 years of age. A person convicted of certain offences will not be eligible to become an executive of the
union. In such cases, a person who has completed 5 years after the release from jail would be eligible to become an executive of the union. At least 50% of the office bearers of the registered trade union must be from workers of
a particular industry, to which the union is connected. The Trade Unions Act (Amendment) Act 2001 The union commanding the allegiance of at least 35% of the workers will be the chief
bargaining agent. Others will be assisting agents. All the unions will have representation in the Bargaining Council. A minimum subscription of Re. 1 should be deducted from the workerâ&#x20AC;&#x2122;s pay and passed
on to the union of his/her choice by the employer. A registered union should have at least 100 or 1/10 of the workers of the factory as
members. The Industrial Disputes Act, 1947 A workman whose money is due from the employer can himself or through any authorized
representative (in writing) recover the due money from the employer. If the employer fails to pay the money, the State Government should issue a certificate on whose basis the collector will recover the money as arrears of land revenue. Application for the recovery should be made within one year from the date of its becoming due. The
government can relax this period. His/her legal heir can recover money due to a deceased worker. Disputes not settled through direct negotiation between the workers and the
management or between the unions and management are raised as industrial disputes with the concerned labour officials, either the labour officers or the Labour Commissioners for conciliation. If the conciliation fails the matter would be referred as dispute to the Labour Court/Industrial Tribunal by the government/labour commissioner. Compliance situation
There are three categories of trade unions all over India. There are politically affiliated unions, which have established strength due to which the workers mostly get or have to get affiliated to these unions. Then there are non-political, independent unions. The third category are employer supported unions. In Tirupur cluster, there is no trade union or employeeâ&#x20AC;&#x2122;s association in more than 70 % of the factories. However some independent observers feel that this percentage is even higher. Major trade unions together claims that nearly 25% of the workers are enrolled. Again this figure is disputable. There is lack of agreement regarding this figure even among trade unions. But, almost all agree that only 20-30% of Tirupur garment workers are union members. Normally, workers are reluctant to join unions. This is particularly high in the case of migrant workers. But, when there is a problem, which they are unable to negotiate with the employer directly, workers go to the unions. Workers fear to make themselves known as union members. In majority of factories, workers are not allowed to form or organize union or associations inside the factory. In the past 20 years, many workers are victimized for taking part in trade union activities. Employers invariably treat badly those workers who are union members. But, majority of the large units recognize trade unions due to the compulsion of statutory regulations, social accountability standards or codes of conduct imposed by their buyers. A prominent trade union leader of Tirupur, Subbarayan K (AITUC), Member of Parliament (MP), representing the Coimbatore constituency in Parliament, recently said that trade union movement in Tirupur has come to a stand still. This is true to a large extent because unionisation in Tirupur is compartively low, when compared to Coimbatores. But, compared to other garment production locations such as Bangalore, Tirupur situation is far better. Even though, Tirupur is well-known for the left movements and trade union activities, many of the units have not implemented the last wage settlement (2003), which is due for renewal in 2006. The unions failed to pressurise managements to implement it. Only those managements who are willing to follow regulations and standards have implemented it. Some of them implemented it fully while others implemented it partially. Even many members of the employer associations which signed the settlement have not implemented the settlement. But, the workers are not ready to fight the case since they accept the present state of affairs without questioning. The peculiar character of the work force, especially majority distress migrants, prevents applying union strength to get the wage settlement implemented. When there is a general strike all the workers join the strike for a day or two. But they are not prepared to join strike indefinitely.
The Tirupur wage settlement, arrived at after severe threats of general strike by the unions is the only tripartite wage agreement in the garment sector of Tamil Nadu. Even this covers only some parts of Tirupur region and the region itself has been growing daily and covers the outskirts of Coimbatore city. The settlement is not applicable outside Tirupur town. This wage agreement do not cover the workers in dyeing and bleaching units, fabricprinting units, calendaring units and spinning mills. The agreement is mainly concerned with the CMT units. Union leaders accuse that even the TEA members who are the major party to the wage agreement are not implementing the agreement and making a mockery of collective bargaining process. Union and NGO leaders said that only 25% of association members (of TEA, SIHMA, TEKMA, KnitMA etc) have implemented the agreement. But, TEA office bearers claimed that all the 510 members and around 200 affiliate members implemented the agreement. There is clear lack of awareness among the workers about their rights, including the right to association and collective bargaining. A large section who are aware seem to have resigned to their fate as the garment job is a last straw for their survival. There are efforts by trade unions and NGOs to educate and organise workers, which meet with severe opposition from the employers. The unique factors of distress migrant status, lack of awareness, seasonality of work, lack of capacity of trade unions and NGOs, increasing feminization and disorganization of production togther compound the problems related to unionization and collective barganing. Unions and NGOs also feel that the statutory obligations under laws are thwarted through various means including corruption. According to them, the efforts through standards, compliance audits and codes of conduct are turning to be an eyewash. CITU leader Chandran M, with many years of experience in Tirupur as a trade union leader and always in the forefront of workerâ&#x20AC;&#x2122;s struggles, challenged to bring the exporters to the
Compliance: Freedom of Association and Collective Bargaining Stakeholders
No (1) Small (0%) Extent (2) (0-25%)
Medium Large Full Extent (3) Extent (4) Extent (5) (26-50%) (51-75%) 76-100%)
Exporters/Employers Trade Unions
Sources: Interviews of the representatives of stakeholder groups.
discussion table concerning corporate social responsibility, social and environmental standards, codes of conduct, compliance audits etc: Chandran says: We are ready for discussion. But can you make sure that the exporters/manufacturers would come? I would bet that they would not come for the discussion because they don’t want such things to happen. Some of them are following some standards, such as Prem Durai, because it is beneficial for them, as they have assured business. Otherwise, they are not interested in labor standards or other standards. Even TEA leaders publicly demand that they don’t want labor laws. Then what is the point of talking about corporate social responsibility? A lot of foreigners come here and talk to us about it. You should go and make the employers respect labor laws and standards.”
Aloysius A, director, SAVE, with his long years involvement with labour and social movements in Tirupur, also felt that unionization of labour is constrained by all kinds of bottlenecks in Tirupur. He says: The large segment of migrant workers, and the fragmentation and disintegration of the production process are factors that affect unionization in addition to a lot of other peculiar characteristics of the labour force in Tirupur. Payment of a Living Wage
The Constitution of India Article 32: Any affected workmen can themselves directly move a representative petition
seeking immediate remedy on minimum wages. Article 23: The compulsion of economic circumstances, which leaves no choice of
alternatives to a person in want and compels him to provide labor or service even though the remuneration received is less than the minimum wages, such a circumstance of paying less than the minimum wage would be a violation of this Article. Payment of Wages Act, 1936 Payment of wages. Imposition of fines and deductions, and Eliminating all malpractice by laying down wage periods, time and mode of payment
of wages. So it ensures payment of wages in a particular structure at regular intervals and prevention of any unauthorized deductions. It covers establishments producing, adapting or manufacturing any article. The Minimum Wages Act, 1948 The Central Government or the State Government, as the case may be fixes the minimum
wages in specified employments. The schedule attached defines the type of employment that falls under the Act. This schedule does not include garment industries. But state governments can add industries to it and in Tamil Nadu ‘Hosiery’ (1953) ‘Knitting Industry’ (2000) and ‘Folding textile goods’ (1999) were added to the schedule (in the years mentioned in paranthesis, through Tamil Nadu government orders).
It is open to revision after every five years. In fixing the minimum wages, the appropriate
government would take into consideration the cost of living index of the particular state during the last five years for the purpose of revision. The minimum wage can be fixed either per hour or per day, or for specific employment
(apart from agriculture). The OT rate is double the ordinary rates of wages (Rule 26: Tamil Nadu Minimum Wages Rules 1953). The Act also provides for the maximum daily hours, weekly rests, day and overtime
shifts. It applies to all establishments employing one or more persons and engaged in any scheduled employment, which includes the garment industry. The Inspector of Factories has to verify whether minimum wages are provided for the
workers. Salary registers are to be maintained under the Minimum Wages Act. The Tamil Nadu Government, publish minimum rates of wages for the Tailoring industry (including cutters, trimmers, etc.), based on the Tamil Nadu Minimum Wages Rules, by differentiating for Tailoring Shops and Export Garment Manufacturing, for three different zones. The latest rates published (applicable to 2005) are given in Table: Minimum Monthly Wages in Tailoring Industry in Tamil Nadu. Wage Comparison of Garment Sector in Different Regions Region Mumbai Delhi Noida Chennai Bangalore Calcutta
Tailors, Skilled 2500-6000 2010-2200 2400-2600 1500 1600-2000 2000-3100
Tailors, unskilled 2000-2500 1780-1900 2100 1200 1250-1350 1200-1500
Pressmen 2500-4000 1780-1900 2100 1200 1300-1400 1200-1500
Helpers, unskilled 1000-2000 1555-1650 1950 650-950 650-1400 1000-1200
Source: FWF Background Study â&#x20AC;&#x201C; Tirupur (2004)
It would be important to compare the government rates applicable to Tirupur (Zone B) as adjusted on the basis of CPI point since 2000 till date and the regional rates in other localities with the Tripartite Wage Agreement negotiated by TEA, the Trade Unions and the Labour Commissioner during 2003, after a threat of general strike by the unions. The agreement is effective from 2003 to 2006 (See Table: Wages according to Tripartite Agreement entered into in 2003). Sandeep B N (Chief Consultant, Conquest, Tirupur), said that the actual monetary deliveries to the workers would be much higher than the wages agreed as per the tripartite agreement because the workers would be paid festival allowances and other incentives in the form of cash and kind. He said that in some cases it was as high as 40 % above the agreed wages. But, trade union leaders (CITU, LPF, ATP) interviewed (Chandran, Selvaraj and Centwin Mani respectively), NGO leaders and Environmentalists, Aloysius A (Director, SAVE), and Subrabharathi Manian ( Writer and Environmentalist), were united in their opinion that even the members of TEA, which was the main player in the wage negotiations, were not implementing the terms of
Minimum Monthly Wages in Tailoring Industry in Tamil Nadu (effective from 2003) – Based on 8 hour work day Categories
Zone A Rs. Ps
Zone B Rs. Ps
A. Tailoring Shops 1.Cutter 2306.00 2215.00 2.Machine Operator/Tailor 2215.00 2137.00 3.Khaja master 1981.00 1903.00 4.Ironing Master 1981.00 1903.00 B. Export Garments Manufacturing 1.Production manager 2410.00 2280.00 2.Supervisor 2306.00 2215.00 3.1.Cutter-cum-Marker – Grade I 2306.00 2215.00 3.2.Cutter-cum-Pattern maker – Grade II 2215.00 2137.00 4.1.Tailor/Machine Operator – Grade I 2215.00 2137.00 4.2.Tailor/Machine Operator – Grade II 2111.00 2033.00 5.Trimmer 1981.00 1903.00 6.Button & Khaja Operator 1981.00 1903.00 7.Checker – Grade I 2306.00 2215.00 8.Checker – Grade II 2215.00 2137.00 9.Washing Helper 1981.00 1903.00 10.Iron man/Presser Grade I 2046.00 1968.00 11. Iron man/PresserGrade II 1981.00 1903.00 12. Packer, 13.Layer (Helper)14.Helper (All Kinds)15.Trainee/Apprentice 16.Any Other Category not covered above. 1981.00 1903.00 C. AdministrativeStaff (For Tailoring shops and Export Manufacturing ) 1.Manager (Accounts/Shipping/ Purchase/Sales) 2410.00 2280.00 2.Accountant/Cashier/Clerk/Typist 2085.00 1994.00 3.Store Keeper 2046.00 1955.00 4.Driver 2150.00 2059.00 5.Time Keeper 2085.00 1994.00 6.Security/Watchman/Sweeper 1981.00 1903.00
Zone C Rs. Ps 2137.00 2059.00 1825.00 1825.00 2176.00 2137.00 2137.00 2059.00 2059.00 1955.00 1825.00 1825.00 2137.00 2059.00 1825.00 1890.00 1825.00
2176.00 1903.00 1890.00 1963.00 1903.00 1825.00
Source: Government Order. Notes: The wages notified are linked to the average Chennai City Consumer Price Index for the year 2000, that is 475 points with base 1982=100 and for every rise of one point over and above 475 points, an increase of Rs.3.80 per point per month shall be paid as Dearness Allowance. A monthly wage means wage of 30 working
the agreement. Considering the fact that TEA represent less than 1000 (actual membership is 510 and around 200 associates, which are other units owned by the primary members), and considering the total number of nearly 8000/10000 establishments in Tirupur, the situation calls for some serious concern. This is especially important due to the fact that TEA represents majority of the high end exporters with the maximum turnover compared to organizations like SIHMA with more than 1000 members but mainly comprises the middle and lower rung exporters with comparatively less turnover.. Most of the disputes concerning minimum wages are settled within the factory walls through negotiations and in some cases unions intervene. Very few cases are registered with the labour officers. In such cases, the conciliation mostly fails and a failure report is sent to the Government, which refer the matter to the Labour Court/Industrial Tribunal for adjudication. A comparison (See Table: Comparison of wages across various garment production localities and according to different views in Tirupur) reveals that though the wage according to the Tripartite Agreement (which is to be revised in 2006) (generally referred as the TEA Agreement) is relatively better when compared to the market wages of Bangalore but falls much below the rates of Mumbai. It is far below the general perception concerning living wage in Tirupur (as opined by SAVE and others). It is also falling below the minimum wage prescribed by the Second National Labour Commission, which is the bare minimum applicable to any category of industrial employment, without considering skill levels. But, it is to be noted that the TEA wage rate is above the minimum prescribed specifically by the Tamil Nadu government for the tailoring industry. The Deputy Commissioners of Labour are empowered to enquire and settle issues between the workers and the employers under the Minimum Wages Act. The workers can file claim petitions with the Deputy Commissioner of Labour, if minimum wages are not paid, which is relatively the easiest legal remedy under the Act. The schedule to the Minimum Wages Act, 1948 Act does not include garment industries. But tailoring is included in the schedule by the state government. The level of segmentation and splitting of processes as happening now in Tirupur and other places was never imagined at the time of enacting these legislations. Now, changes are being introduced. Export garment manufactory finds a place in G.O.(2D) No.40, Labour and Employment, dated.18.1.94 of the Government of Tamil Nadu. For the tailoring industry the state government has issued a preliminary notification through G.O. (2D) No.62 Labour and Employment Department, dated.22.12.03 regarding revision of minimum rates of wages. Regarding the employment in hosiery manufacturing, the revision of wages is through the committee method (Tripartite Committee of Unions, Employers and Government).. Action has already been taken to call for proposals for revision of wages from the
days with 8 hour work day (Factories Act). A weekly wage is of 7 days. Sundays are not working days and are considered paid weekly off days. Tirupur is included in Zone B. Zone A: Chennai, Coimbatore, Madurai, Tiruchirappali, Tirunelveli, Salem; Zone B: All other Municipalities, includes Tirupur Municipal region; Zone C: Townships, Town Panchayats, Contonments and Village Panchayats.
Chief Inspector of Factories, Chennai and major Trade Unions. However, every year there is an official government order to establish increase in the minimum wage with a dearness allowance (2004: Rs.1130,40 for all grades of jobs). The Deputy Commissioner of Labour, Coimbatore (in charge of Tirupur area) said that there was no claim petitions in the hosiery industry seeking minimum wages because the workers already receive more than minimum wages. One segment of the labour force in Tirupur is powered by their skills and they get a premium wage. The other segment, in fact majority, is disempowered by their lack of skills to bargain a high wage and other benefits. But, a large section of this majority, mainly migrants, seems to be content with what they get as it assures a somewhat decent survival compared to the extremity of poverty and low wage in their native places. Compliance Situation Calculating the actual living wage is a difficult task in areas like Tirupur, which have high cost of living but not coming under a metropolitan situation like Mumbai or Delhi.
Wages according to the Tripartite Agreement entered into in 2003 Category Export Division Jobs) Cutting, Tailoring, Ironing, Working Knitting machine
Month Wage 2002 30 days Rs.
2003 (+10%) Daily Rs.
Month 2004 Month 2005 Month Wage (+5%) Wage (+5%) Wage 2003 Daily 2004 Daily 2005 30 days 30 days 30 days Rs. Rs. Rs. Rs. Rs.
Assistants to labourers
Fabrication Division Knitting machine labour
Existing Basic Wage 8-hr day Rs.
Comparison of wages across various garment production localities and according to different views in Tirupur Background
Daily Month Wage salary Rs. Rs.
Month: family income (2 sals)
Collective agreement TEA
Food basket calculation
SAVE and N/A other NGOs
Official min. wage
Tamil Nadu/ Tirupur Zone B
Second National Labour Commission
India/ Tamil Nadu
Sources: TEA, SAVE, Conquest, FWF Background Study
Many of the job categories are with wages below living wages, but they may still be getting the statutory minimum wage. A staff of a compliant firm said that he get around Rs.3,500 per month, which would be a border case if the point based DA (adjusted till 2005 on the scales given for 2000 with points rise after 2000) is accounted in relation to the TEA Agreement. As most families in Tirupur have at least two earning members, the impacts of low wages are somehow getting adjusted at the level of the family through sharing/reduced expenses. There may be more wage earners in a family. This can explain to some extent the high cost of living in Tirupur. The study group of the Second National Labour Commission recommends Rs 4.500/- as minimum wages for one person. The TEA agreement is not implemented generally, according to unions and NGO leaders. It is not even implemented by all members of TEA though it should be binding on all members of TEA and other employer associations who are parties to the Tripartite Wage Agreement. Yet, the all round prosperity in Tirupur and the high cost of living indicate a comparatively good level of money trickling down to mass of people, mainly workers. Most of the workers who work for
Compliance: Minimum Wages Act Stakeholders
No (1) (0%)
Small Extent (2) (0-25%)
Medium Large Full Extent (3)Extent (4) Extent (5) (26-50%) (51-75%) 76-100%)
Exporters/Employers Trade Unions
Sources: Interviews of the representatives of stakeholder groups.
daily wages complain that they are paid less than the wages prescribed by the TEA Agreement. Some factories are paying wages as monthly wages while others are paying wages as daily wages. A large section of the workers in Tirupur are under piece rate system. Many of the workers prefer it too. And in certain cases, especially at the CMT level, skilled workers prefer piece rates as it offers opportunity for earning more than the daily wage rate. They follow an attitude of â&#x20AC;&#x2DC;drying the hay while the sun shinesâ&#x20AC;&#x2122; because only during peak season they would be able to earn and save, and piece rate is suitable for high earnings during peak seasons. The unions have opposed piecework without success. It is natural as the workers prefer piece rates. The main reasons for lack of success of union efforts to impose tenure is that majority of skilled workers are interested in piece rates. But unions are not interested in this because it undermines tenure. In a piece rate situation it is difficult to establish employeeemployer relationships which is essential for unionization. Piece rate system for workers are as follows, based on the nature of stitching and related work in the CMT process (2004-2005): 1. Ironing and cutting jobs: Rs 1/piece. 2. Stitching Sleeveless and Backside stitching: Rs 4/dozen. 3. Just sleeveless stitching: Rs 2/piece. 4. Sleeveless Ordinary T-shirts Rs 3/dozen. 5. Stitching ribs (T shirts) Rs 2.25/dozen. 6. Side stitching (T shirts) Rs 3/dozen. 7. T-shirt shoulder stitching Rs 2/dozen. Workers are not paid in a premium rate for every working hour that they work as overtime except in some factories which provides an additional Rs. 20 as refreshment allowance for workers who work in the night beyond 10 p.m.
No Excessive Working Hours
The Factories Act 1948 Every worker shall be allowed a day off every week. The first day of the week i.e., Sunday will
be given as a holiday. However with the permission of the Inspector the day off can be given on any other day of work. S/he shall be allowed a substitute holiday on any other day within that month or not later than two months that follow. Women are only allowed to work between 6 a.m. and 7 p.m. and not more than 9 hours a day. No woman shall be required to work or allowed to work in a factory after 7 p.m. and before 6 a.m. With special permission of the government, however, women workers can be permitted to work in a factory until 10 p.m. and after 5 a.m. No adult workers shall be required or allowed to work in a factory for more than 48 hours in a week, nor more than 9 hours a day. An interval for rest of at least for half an hour per every 5 hours of work in the factory should be allowed. Spread over of working hours: the period of work of adults shall be so arranged, that, including interval for rest, they should not be spread over more than 10 hours on any day. Shifts: for a worker engaged on night shift, weekly or compensatory holiday means consecutive 24 hours off. The shifts should not be arranged that more than one relay of workers engaged in work of the same kind at the same time. Overtime: if a worker works for more than 9 hours on any day or more than 48 hours in a week, the employer will pay him/her wages at double the rate of his/her normal wages. Limits to Overtime: the total number of hours of work shall not exceed 12 in any day, 60 in a week. OT shall not exceed 75 hours per quarter. The spread over of working hours should not exceed ten and a half hours. A register of overtime wages should be maintained by the Management. The Inspector of Factories has to verify whether overtime wages are paid to the workers. HRA (house rent allowance) can be paid as a percentage of salary but then the company can deduct for the numbers of days not worked. If they are paying fixed amounts such as Rs. 500, Rs. 300 etc they are unable to do it. Negotiable Instruments Act This Act defines national holidays and fixes the responsibility of employers to provide
holidays to their employee. Five National holidays and three Tamil Nadu State holidays are compulsory for workers and
they should be paid for these holidays. There are some gazetted, restricted holidays too, which are notified by the state government. The company must have a register for leave with wages. Workers have a right to 15 days of
paid leave in a year. Compliance Situation A typical working week (across all jobs in the industry) would be six days a week. The statutory maximum of 9 working hours a day, 48 hours a week and one-day holiday per week
(Factories Act) are not always followed. Official exemptions are very rarely requested. Women are not allowed to work more than 9 hours a day and should not work after 7 p.m. (or 10 p.m. if the State Government has made an exemption). This rule is generally flouted, except by those maintaining high standards in statutory compliance. OT is a major issue in Tirupur. The Factories Act dictates that a person should not work for more than 10.5 hours in a day. Although management will never admit it, it is normal in Tirupur that workers work 1.5 shifts a day, making 12 hours (including breaks). Moreover, workers are not paid overtime at OT bonus wage of 100% extra as provided by the Factories Act. The TEA Agreement allows 1.5 shift (12 hours, including breaks without the 100% bonus). Weekly wages are calculated for 12 hours/day. The TEA agreement implies that in case of overtime, a tea allowance should be paid. The agreement do not mention OT payments as prescribed by the law, which means that unions and even the government agencies are prevailed upon by the employers to have their ways with wages. There is no over-time pay recognizable as such - ‘tea money’ for the last half shift is the only additional payment. The TEA Agreement provides for a 20% ‘Tea BATA’ (allowance) and minimum Rs 5/- for half night shift (for those workers who work after 6.00 p.m) and food allowance of Rs 20 is paid for those workers who work after 9.00 p.m. This is an open violation of the provisions of legislations through tripartite agreement, for which unions might have agreed because of their limited bargaining power. But, government’s labour department is also a party to the agreement, which indicates the level of flouting of laws conducted at Tirupur in the name of increased exports. The statutory OT bonus of 100% extra is only paid for hours beyond this 1.5 shift, and that too by limited number of firms which follow standards. Others might make some payments, which would not be 100% extra. Many auditors seem to accept the 1.5 shift system and concentrate for example on checks to see if workers get their breaks and bonus. The general view of auditors with regard to this is that ‘otherwise you cannot get any company certified.’ Majority of the workers, who are contracted to work on a piece rate system, are forced to finish their targets on time so they engage their family members including children to accomplish the targets. Otherwise they will loose their job order. Workers, who work for daily wages, as a ‘regularly’ hired worker, complain that they are forced to work in extra overtime period and even during weekly day off in peak seasons. October, November, December, May, June and July are the peak season months in Tirupur. In Tirupur, regular and optimal working hours in line with the Factories Act are only to be found in firms catering to the domestic market. According to some sources most of the workers are working more than 90 hours per week in peak production season and some times peak production seasons may last even after December. Some times even weekly day off is denied to them. Moreover, when producing for foreign buyers who impose strict constraints on production schedules, working days of 20 hours are not infrequent towards the end of a contract period.
Compliance: Working Hours and Holidays Stakeholders
No (1) (0%)
Small Extent (2) (0-25%)
Medium Large Extent (3) Extent (4) (26-50%) (51-75%)
Full Extent (5) 76-100%)
Exporters/Employers Trade Unions
Sources: Interviews of the representatives of stakeholder groups.
On the other hand there is no permanent work, and periods with excessive overtime are followed with periods of no work and lay offs. OT is not recorded in majority of firms. Even where there are computer systems with swipe cards, they sometimes are programmed to stop recording after 16 hours OT, the rest is recorded by hand. The weekly wages that could be found in the books would be the wages for 12 hours, without mentioning this as OT. Attendance registers do exist but are often not signed. In most cases, the company owners or managers fill it in. Health and Safety
The Constitution of India Article 38. This article provides for protection of workers from health and safety hazards at
workplace. This is not a fundamental right but a non-justiciable directive principle of state policy (implemented through introduction of necessary legislations). The Factories Act 1948 The factory should have at least one well-stocked first aid kit on every floor and train specific
staff in basic first aid. The factory should have procedures for dealing with serious injuries that require medical treatment outside the factory. A register of accidents should be kept and available for inspection. The employer must provide and maintain first aid boxes or cupboards, filled with the prescribed contents. There should be at least one such box for every 150 workers, accessible to workers during all working hours. In a factory with 500 or more workers, the employer must provide and maintain an ambulance room in the charge of prescribed medical and nursing staff. It should contain the prescribed equipment and its facilities must always be readily available to the workers during working hours of the factory. If an accident occurs in any factory causing death or bodily injury or prevents a worker from
working for more than 48 hours, the manager must immediately send notice to the prescribed authorities (Labour Officer). Employer must pay sufficient compensation. There should be sufficient light, fresh air and dust removal systems.
The employer should make effective arrangements for the disposal of all-industrial wastes
and effluents. The employer must maintain effective and adequate measures to provide fresh air and reasonable conditions of comfort to prevent any injury to the workers. Walls and roofs should be made of such material and designed suitably to prevent high- rise of temperature. To prevent inhalation or accumulation of dust and fumes injurious or offensive to the
workers, the employer must take effective measures for their exhaust from the workrooms. If humidity in a factory is lessened due to its manufacturing process the employer must
make arrangements for artificial cooling of air in the workrooms, using clean and wholesome water. The employer must provide and maintain sufficient and suitable artificial lighting inside the
factory rooms. Reflection or shadow that can cause eyestrain or risk of accident to any worker should be avoided.. The employer must avoid overcrowding inside factory rooms.There should be at least 500
cubic feet of space for every worker. Clean, sufficient and hygienic toilets should be available. The employer should keep the factory clean and free from effluvia arising from any drain or
other nuisance. Dirt and refuse should be removed daily. Floors should be cleaned every week by washing with disinfectant. Wet floor should be dried up. Walls and ceilings should be painted, at least once in 5 years. At least once in 3 years, washable water-paint shall be used to repaint, and washed at least once in every 14 months. The employer must construct separate enclosed accommodation for latrines and urinals for male and female workers, conveniently situated and accessible. The employer should adequately provide light, ventilation and maintain a clean and sanitary condition by employing sweepers. In a factory with 250 or more workers, all latrines and urinals should be of prescribed sanitary type. In every factory, employer should maintain sufficient number of spittoons at convenient places. No person shall spit within the premises of the factory except in the spittoons. Offenders are liable for punishment with a fine not exceeding Rs 5. Every employer is required to provide adequate, suitable, separate and properly screened facilities for washing for the use of male and female workers. They should be conveniently accessible and kept clean. Fresh drinking water should be available. The employer must maintain sufficient supply of wholesome water. The container must be largely marked â&#x20AC;&#x2DC;Drinking Waterâ&#x20AC;&#x2122; and kept at a distance not less than 20 feet from any washing place, urinal or latrine. If a factory employs more than 250 workers, its employer must arrange cool drinking water during the hot season. Provisions for escape in case of fire and a warning system in case of fire, explosives, inflammable dust or gas should be arranged. Necessary precautions against fire, dangerous fumes, risks of injury to eyes, and excessive speed of revolving machinery should be made.
Fencing of all dangerous and moving parts of the machinery should be made while these are
in motion or in use Casing of new machinery Encasing and guarding of every set of screw, bolt, spindle, wheel or pinion Women and young persons should not clean or lubricate or adjust any part of the electric
motor or any transmission machinery when these are in motion. Young persons should not work on any dangerous machines without adequate training and
supervision. Supply of safety applications like goggles, safety boots, gloves and others should be made. The employer should provide a place suitable for keeping the clothes not worn during
working hours and for the drying of wet clothes by the workers. The employer should provide and maintain suitable sitting/resting facilities for all workers
who are required to work in a standing position continuously. During breaks, canteen facility should be available with sufficient tables and chairs. If a factory employs 250 or more workers, the employers shall provide and maintain canteen
facilities for workers. It should run in accordance with government rules regarding construction, furniture, other equipment, food served and constitution of managing committee. Every factory employing more than 150 workers should have the provision for rest rooms.
A room with drinking water facilities should be available for their lunch and rest. However, if the employer already maintains a canteen, then no such provision is necessary. CrĂ¨ches (Factories Act) In a factory where more than 30 women are working, the employer shall provide and
maintain a crĂ¨che for the use of their children below the age of 6 years. The rooms must be well maintained in a sanitary condition, adequately lighted and ventilated, and should be under the charge of a women trained in the care of children. The government can also make rules to provide for the washing and changing of clothes, supply of milk or refreshments or both by the employers to the children of workers attending the creche. The employer should allow the mothers to visit the children and feed them at necessary intervals. Compliance situation
Compared to the noisy power loom and silk weaving industry, the knitwear industry is pleasant and relatively less prone to accidents. Knitting machinery is quiet and revolves and it would not slam back and forward like the looms. The sewing machines are not very dangerous equipments. Health and safety of the workers in the composite units are comparatively better than the workers in small export units. Most of the workers who are piece rate workers in sub contracting firms have no provision for health and safety. Addressing health and safety issues of home-based or small unit workers is a complex and difficult issue. Majority of Tirupur workers are on a piece rate basis and they are mostly in small units or in home-based production processes. Main problems in the CMT units are dust, fire safety, hot pipes and fumes (ironing), electrical
appliances and wires, eye protection (buttoning), and jobs that require people to stand all day. Other issues are air ventilation, sufficient space for each workers, potable drinking water, sufficient toilets, emergency exits, medical expenses in case of accidents, first aid box and health check up. Services of doctors are available in some of the big factories. Medical services under the Employees State Insurance Scheme is deficient in Tirupur. During peak production season, there is severe congestion in many of the units when many workers used to work in a cramped condition because there would be no additional space available. Very few companies provide crĂ¨ches in Tirupur. Most children are in villages far away as the women workers are mostly migrants. There is a social system that the family takes care of the children. But if crĂ¨ches are made available workers would start to use it. Accident registers are maintained in some units but almost always show no entries. Companies want to keep themselves away from problems with the factory inspectors. Some auditors ask management to maintain an informal register at least to see what is happening or what prevention measures should be taken. Workers are affected by asthma and other respiratory ailments due to cotton dust. Information boards on health, occupational hazards etc are not exhibited in the work area and the rest rooms. Legally Binding Employment Relationship
The Contract Labour (Regulation and Abolition) Act, 1970 The contractor must pay wages to the workers every month on a fixed date. When a contractor
terminates the employment of any worker, his/her wages must be paid before the expiry of the second working day from the day on which his/her employment is terminated. Wages must be paid to the workers on working days at the work site on a fixed time. If the
work is completed before the expiry of the wage period, final payment shall be made within 48 hours of the last working day. Compliance: Health and Safety Stakeholders
No (1) (0%)
Small Medium Large Full Extent (2) Extent (3) Extent (4) Extent (5) (0-25%) (26-50%) (51-75%) 76-100%)
Exporters/Employers Trade Unions
Govt:Enforcement Agencies Govt: PromotionAgencies
Sources: Interviews of the representatives of stakeholder groups.
Compliance: Factories Act (all provisions) Stakeholders
No (1) Small (0%) Extent (2) (0-25%)
Medium Large Extent (3) Extent (4) (26-50%) (51-75%)
Full Extent (5) 76-100%)
Exporters/Employers Trade Unions
Govt:Enforcement Agencies Govt: PromotionAgencies
Sources: Interviews of the representatives of stakeholder groups. Wages must be given directly to the worker or to a person authorized by him/her. No deduction in the wages of a worker is permissible except that which is specified by the
order of the government. The Factories Act, 1948 Every employer should maintain proper records and registers containing the particulars of the employees, the work performed by them, and the receipt given by them for payment of wages. The employer should display in the factory abstracts of the Act containing the main points relating to workersâ&#x20AC;&#x2122; welfare in the factory. The Industrial Employment Standing Orders Act 1948 The factory management prepares a Standing Order (based on a model standing order issued by the government) and gets it certified before the Joint Commissioner of Labour who is authorized under the Industrial Employment (Standing Orders) Act. The standing order lays out the rules and regulations to be followed by the workers in the factory. The employer must exhibit notice explaining wage structure, working hours, overtime compensation and other benefits like Employees Provident Fund, Employees State Insurance etc. The employer can terminate the services of the employee only on account of the reasons stated in the standing order. Employer cannot terminate employment of a worker without issuing proper show cause notice and enquiry. The Payment of Gratuity Act, 1972 This Act envisages retirement benefits to an employee who has given his/her unblemished services for a long period. Every employee other than apprentices who has rendered continuous service for 5 years or more (or a specified period) is entitled for the payment of gratuity. Gratuity nomination form, received at the time of entering employment, is a proof of employee-employer relationship.
The Employees Provident Funds and Miscellaneous Provisions Act, 1952 This Act lays down for the factories having 20 or more persons employed, a compulsory
fund for the future of employees after retirement or for the employeesâ&#x20AC;&#x2122; dependents in case of his/her death in harness. It applies to regular and contract workers. EPF contribution payment records are proof for the fact of employment in an establishment
or factory. Some Other Legal Requirements The factory management should give an appointment order at the time of recruitment and
if the worker satisfactorily completes a period of six months (period of probation), then he is given an order confirming employment.. The worker should be provided with an identity card and service card under the provisions of the Factories Act. Wage slip showing details of wages paid, deductions etc should also be provoided to workers. If the worker has worked for than 240 days continously in a year, then his/her name should
be entered in the register as a permanent worker. Factories employing 10 or more employees, in case of work being carried out with the aid of
power, or with 20 or more employees in case of work being carried out without the aid of power, should have to be registered under the Factories Act, 1948. Factory records should show the workers working in the factory. Compliance Situation A large number of workers in the Tirupur CMT units are without proof of their employeeemployer relationship because of the very nature of disorganized and segmented production processes practiced. However, major firms and some small ones too have proper records of employees. Employers cite accretion problems as a reason for not maintaining records.
Most of the employers do not comply with the extensive laws protecting the workersâ&#x20AC;&#x2122; rights. The laws are to some extent archaic as well complicated, and requires a lot of time and dedicated staff to assure compliance. This is difficult in the case of small units and those without professional management. In most companies workers are sent home if the company has no work for them that day, without any payment, although they are entitled to have 50% of their wages paid. In most cases, they are not informed in advance about lack of work. In Tirupur CMT units, appointment records are maintained by the big firms and those following certain levels of standards. In other cases, if they are available they do not mention the wages. Workers seem to accept the absence of job security. Officially workers cannot be laid off because of lack of work without permission of the government. In case of lay offs, workers who have been working for more than a year for the same company have a right to get notice of one month and compensation of 15 days average pay for every completed year of service or any part thereof in excess of 6 months.
The Industrial Disputes Act has made layoff (Section 25 M), retrenchment (Section 25-N), and closure (Section 25-O) illegal except with prior permission of the government. The permission requirements cover all industrial establishments employing 100 or more workers. The penalty for layoff, retrenchment or closure without government permission includes both
Compliance: Legally-Binding Employment Relationships Stakeholders
No (1) (0%)
Small Extent (2) (0-25%)
Medium Extent (3) (26-50%)
Large Full Extent (4) Extent (5) (51-75%) 76-100%)
Exporters/Employers Trade Unions
Sources: Interviews of the representatives of stakeholder groups.
a prison sentence and a fine for the employer. If an employer closes down a unit even after refusal by the government, he or she can be imprisoned for up to one year or fined or both. The legislation does make an exception for retrenchment resulting from a power shortage or natural disaster. This clause is regualrly misued by the employers by manipulating power cut off by not paying power charges. The industry has always tackled the problem in its own way, by engineering a reason for lay off or retrenchment. If a company becomes sick, there is not even money to pay the electricity bills, so the power is shut off. Thus, Section 25 O of the ID Act is easily circumvented, and the fine imposed for this violation is a paltry sum of Rs. 500. When a unit is closed in this manner, workers do not get their statutory dues, such as provident fund, gratuity, current salary, leave salary, and so on. This was precisely what happened to the 50,000 workers of Ahmedabadâ&#x20AC;&#x2122;s textile industry, which was closed down because electricity was cut off for nonpayment, even though the government had not given permission to close the mills. The Factories Act and the TN Factories Rules gives clear indications regarding the kind of records that has to be kept. But many companies lack a lot of these records. Many firms in Tirupur started keeping records recently due to requirements of various certifications they need for exports. Even registered companies and sometimes well managed companies lack time cards and pay slips, officially registered Standing Orders, a full register of adult workers etc (as required by the Factories Act). In most of the cases, temporary and casual workers are never been seen in the records. Social Security Measures
The Employees Provident Funds and Miscellaneous Provisions Act, 1952 This Act is applicable to any establishment or factory in which twenty or more persons are
The employer should pay an amount to the central government established body (the EPF
Department) in a ratio specified by the Act corresponding to the employee’s salary or wages (Employer’s contribution). Along with an equal contribution from the salary of the worker, which should be deducted by the employer, should also be paid to the fund (Employee’s contribution). The employer should not deduct the employer’s contribution from employee’s salaray or
wages. The Employees’ State Insurance Act, 1948 This Act provides for the medical relief, sickness cash benefits, maternity benefits to women
workers, pension to the dependents of deceased workers and compensation for fatal and other employment injuries including occupational diseases, through a contributory fund. Regular, contract and casual workers are covered under this Act. As the ESI scheme is limited to employees below the prescribed salary limits, other workers
not covered by this can claim compensations under the Workmen’s Compensation Act from the employers for relief in case of accidents arising out of and in the course of employment and causing either death or disablement. Payment of Bonus Act, 1965 The Payment of Bonus Act, 1965 aims at providing for the payment of bonus (which is
connected with profits or productivity) to the employees of certain establishments. It is payable to regular, contract and casual labour. Every employee shall be eligible to receive bonus provided he/she has worked in that
establishment for not less than thirty working days in that accounting year. It is applicable for every factory in which twenty or more persons are employed on any day
during an accounting year. Every employer shall be bound to pay to every employee the minimum bonus at the rate of
8.33 percent of the wages or salary earned by the employee during that accounting year or one hundred rupees, which ever is higher, whether or not the employer has any allocable surpluses/profits for such payment. Salary and wages means all remuneration (other than in respect of overtime) capable or
being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment or of work done in such employment and includes dearness allowance, but does not include; 1. any other allowance, which the employee is entitled to; 2. the value of house accommodation or the supply of light, water, medical attendance, any concessional supply of food grains or other articles;. 3. any travelling concessions; 4. any bonus (including incentive, production and attendance bonus); 5. any contribution paid by the employer to the pension scheme, gratuity or any other retrenchment benefits; 6. any ex-gratia;
7. any commission paid or payable to the employee. The Payment of Gratuity Act, 1972 The worker is eligible for gratuity if he has put in 5 years (or a specified period) of service.
Workers have a right to 15 days’ wages for every completed year of service or part thereof in excess of six months, subject to a maximum of Rs. 1,00,000/-. The seasonal employees are entitled to gratuity at a rate of seven days’ wages for each season. Compliance Situation Provident Fund and Employees State Insurance are available only for a limited number of workers who have an experience of 5 years with the same factory. Many of the workers do not get these basic benefits according to the law of the land. Of the nearly 8000/10000 units in Tirupur, only around 1000 are registered with the PF authority.
An officer of the PF Enforcement department said that many entrepreneurs would be willing to contribute to PF but they were not inclined to keep the necessary records and documents. Some of them, even after registration, never pay the dues in time. Deficiency of staff make it difficult to have routine follow up. And when notified of default and fine, they would pay without any delay, which mean that somebody should be there to constantly remind them about these matters. These are happening on the one hand due to lack of professional management abilities and on the other due to traditional attitudes. Bonus has to be paid to all workers: regular, contract and casual labour. Every year, the bonus amount is calculated before Deepavali festival i.e in November. 8.33% is the minimum bonus, which has to be paid. Bonus may be as high as 20%. Workers may get a higher bonus if they don’t leave after a certain number of years. For those not eligible for bonus, an ex gratia payment is made which in most cases would be equal to bonus. Bonus is based on number of days worked. Different rates are applied for bonus to piece workers and salaried workers.
Compliance: Social Security Legislations (PF, ESI, Gratuity, Workmen’s Compensation) Stakeholders
No (1) (0%)
Small Extent (2) (0-25%)
Medium Extent (3) (26-50%)
Large Full Extent (4)Extent (5) (51-75%) 76-100%)
Exporters/Employers Trade Unions
Sources: Interviews of the representatives of stakeholder groups.
Compliance: Payment of Bonus Act Stakeholders
No (1) (0%)
Small Medium Extent (2) Extent (3) (0-25%) (26-50%)
Large Full Extent (4) Extent (5) (51-75%) 76-100%)
Exporters/Employers Trade Unions
Consultants Sources: Interviews of the representatives of stakeholder groups.
Miscellaneous issues concerning labour standards Shops and Establishments Act This state level enactment is applicable to shops and any kind of establishments, which are
not covered by the Factories Act. This provides for various rights of labourers in such establishments. Compliance Situation
A large number of units in Tirupur would fall under this category and would require registration and other statutory compliances, including the prescribed labour standards concerning wages, leave, holidays etc. Establishments, which evade or avoid compliance under the Factories Act, through any means, canâ&#x20AC;&#x2122;t escape attracting Shops Act as it applies to all shops and establishments in some or other commercial activity. It is really strange that for years the issue of jurisdiction over the employees of the shops and establishments is not settled in Tamil Nadu. There is a war over jurisdiction concerning workers of shops and establishments between the Labour Department and the Legal Metrology (weights and measures) department. As a result the workers remain in a no manâ&#x20AC;&#x2122;s land situation. One is naturally inclined to feel that there is an unholy alliance between the employers and the government functionaries. As the shops and establishments are so informalised and fragmented, and the employees normally are of varied assortment, there is no possibility of collectivity, and the trade unions also seem to have forgotten about these employees as it is easy to mobilize workers in places where they are large in numbers compared to the small numbers in establishments that fall under shops and establishments. If this Act is effectively implemented, some level of order can be brought in the highly fragmented and informalised garment sector of Tirupur because all establishments which are not coming under Factories Act (either legally or through manipulations) would come under it.
Motivations for maintaining the “no man’s land” The “no man’s land” situation in a sector with a larger concentration of establishments needs to be probed further. A possible hypothesis is that as Tirupur entrepreneurs are used to evade and avoid Factory laws by keeping the number of workers on the rolls below the levels prescribed by the Factories Act , they would naturally fall under the Shop Act and this situation they would be unable to evade or avoid. Therefore, there seems to be a smell of some secret pact between the power centres and the Tirupur entrepreneurs in keeping the issue of Government notification, giving charge of the shops and establishment labourers to the Labour department as is the case in almost all other states including the neighbouring Kerala, in abeyance for eternity so that units that fall below the minimum requirements of Factory Rules can have their “anarchical freedom” to run the show in whatever manner they prefer. The situation is extremely important as the number of labourers who will fall under this sector will be huge, as the number of units registered as factories is comparatively low. Though many more units have to come under the Factories Act as per existing conditions in the units, including number of labourers, it never happen because they keep the conditions in such a manner, especially the number of labourers on record below the Factory Rules level. Therefore, the only law and standard that can be imposed on such units is the Shop Act. And this is eternally under a “no man’s land dispute” between two government departments. Is this a real dispute or an artificial or a mere drama to maintain the anarchical freedom of disorgansiation, deregulation, informalisation, ‘hire and fire’ casualisation and convenient feminisation of the garment sector is an issue to be probed deeply.
Compliance: Shops and Establishments Act Stakeholders
No (1) (0%)
Small Extent (2) (0-25%)
Medium Extent (3) (26-50%)
Large Full Extent (4) Extent (5) (51-75%) 76-100%)
Exporters/Employers Trade Unions
Sources: Interviews of the representatives of stakeholder groups.
In most of the other states, these issues are settled and the Labour Department is in charge of labourers coming under Shops and Establishments Act. It is strange to note why the Tamil Nadu government has not issued the necessary orders so far despite the fact that it has introduced the Act decades ago.
Misuse of Apprentices System Many employers use apprenticeship schemes to keep workers under training and pay a lower rate of wages, in the form of stipend. In some companies, apprentices are working for 3 years as apprentices without receiving regular wages. This is an outright violation of the Apprenticeship Act and other labour regulations.
Environmental Standards Compliance in Tirupur Knitwear Cluster
The trade-offs between sustainability of nature and the varied human engagement with nature that results in both positive and negative impacts is a point of countless debates during the last many centuries. But, the acceleration of technologies driven from a point of profit, with much concern about the consumable end product and without similar concern about the waste and pollution such technologies produce, have become an arena of conflicting theorization during the past few centuries. Humanity is so enthusiastic and happy about the diversity and beauty of the things that come out from the front gates of factories. But, humanity is extremely careless or conveniently forget about the â&#x20AC;&#x2DC;shit-endsâ&#x20AC;&#x2122; of the processes that produce the beautiful and useful things. Now, there is extensive realization within large segments of humanity about the unsustainability of technologies that failed to see and manage the things coming out from the end of the pipes of the factories. The conflicting theorizations over the limits of resources and the unlimted human wants is also an issue of endless debates. Yet, the fact is that humans still exist and survive almost in the same patterns over centutries. But, the shapes, colours and uses of many things that nature bestowed had changed from the original through reshaping done by science and technology. Major part of product diversity existing today is only a diversity of reshaping and duplication with only marginal changes.
Environment and the Global Trade Systems
The human-nature interactions are very complex and confusing because they are neither linear nor cyclical; they present certain levels of chaos. These complex interactions have peculiar forms and manifestations in every activity of humans. The survival processes of breathing the air, drinking the water, eating the food and clothing the body and all the diverse engagements that engendered from the needs of these processes are part of the complex web of life. Our concern here-clothing-too has its own backward and forward webs and linkages with almost all human affairs as well as with its sources and varied forms of shaping it to fit the human
body. Humans have travelled a long way from Adam and Eve (if one believes the religious version) and from the Neanderthal man and their kins (if one wants to be more â&#x20AC;&#x2DC;scientificâ&#x20AC;&#x2122; in belief ) and their sense of nakedness that prompted them to cover their vital parts (as procreation is the most vital function any animal have to undertake, sexual organs are a vital biological equipment) with what was available to cover them, to reach the current age of catwalks and fabric malls that display the diversity of covering the human body or even projecting the beauty of nakedness to satiate the needs of voyeurism through artistically controlled clothing patterns called designs. The transformation of varied elements of nature, shaped and reshaped by humans over centuries, to produce the things to cover the body also relied on the vital elements that sustain the survival of humans and other beings. While humans boast about the success achived in accumulating the huge volume of knowledge concerning reshaping the elements of nature according to needs, human knowledge concerning nature, its diverse elements and their interactional dynamics is very limited. For instance, humans started studying and classifying other beings in the world (taxonomy) in the era of Aristotle (300-200 BC). After two millennia, humans reached only at the level of knowing only 1.7 % of the approximate 100 million species on the Earth, ranging from singlecell amoeba to the complex vertebrates including humans. Taxonomic knowledge (which is the basis for understanding the bountiness of diversity of nature and is the basis for all other human knowledges including knowledge concerning production of commodities) of humanity achieved remarkable strides concerning plants and vertebrates with basic knowledge concerning 2,50,000 species of plants out of the total 3,00,000 species on the Earth and with knowledge concerning 45,000 species out of the total 50,000 species of vertebrates in the world. But, humans still reached only at the level of detailed knowledge about less than 5000 plant species which are used as food, medicine and for other products including clothing. This puts a huge block on human knowledge concerning the round the clock dynamics of nature in which organic and inorganic matter plays vital roles and shapes and reshapes the world without any possibility of control by humans. A major share of clothing comes from plants, either as natural fibres or manmade fibres, and the rest comes from animals and other elements of nature. The process of transformation of these elements of nature into things to cover human bodies too uses a large measure of other elements vital for survival of humans such as water and firewood/fuel.
Water and Water seems to be the most important element that assures human survival and also facilitate a Survival large segment of human activities on a daily basis.In the production of clothing too water is a major component, leading to conflict of interests-water as a natural means for basic survival of all beings of the Earth and water as an industrial raw material for production of goods including food, clothes and many others, and water as a packaged commodity. The political economy and the science of water, a common property freely available to quench oneâ&#x20AC;&#x2122;s thirst and for other needs, is an even more complex terrain that launched itself from the age of Roman Empire with its first water supply network using copper pipes. Roman engineering reshaped the systems of the ancient world through its water supply pipes. But,
tens of thousands of Romans died of poisoning caused by drinking water flowing through the ‘high technology’ of copper pipes of that day, as science of the day failed to understand the result of constant interaction of copper with water.
Water is the best of all things.” Pindar (c. 522 BC - c. 438 BC), Olympian Odes
Water is H2O, hydrogen two parts, oxygen one, but there is also a third thing, that makes it water and nobody knows what that is.” D.H. Lawrence, (1885-1930), Pansies, 1929
Industrial revolution and later strides in the science of production of commodities have contributed to high acceleration in reaping the fruits of nature’s labour by humans. As this process of acceleration, mainly guided by a craving to accumulate value, the possible negative fallouts were either denied or downplayed. But, a time has come that showed that nature could no longer suffer the massivenes of ‘factory shit’ as the volume became beyond its natural ability to clean up, and it naturally boomeranged on those responsible for the creation of it-the humans. Humans have the ability to intervene in many processes of nature and it is time for humanity to intervene more positively to reduce the massiveness of the ‘factory shit’ which is the byproduct of the beautiful, valuable and diverse things humans produce for their well being and happiness. Humans are in a mad race towards the ultimate contentment and joy, which existed naturally in primordiality, and lost through their own ideas of creating contentment and joy. Now, humans search for the elusive happiness through the myriad products they make, and by doing it they bring in more unhappiness. A time has come to look for ways of production that would not contribute to increasing unhappiness as all human efforts are geared towards making the world a more happy and better place. If we are filling our backyards with all kinds of nasty things and keep our front gates clean and beautiful, sooner or later the backyard heap will overflow into the front gates. In the production of clothing too, the same is a valid hypothesis as the backyards are overflowing with wastes and pollution which will overflow into the front yards soon. As there is a linearity in the supply chain of any product, including clothes, the methodology for reducing the massiveness of waste and pollution should begin from the first string in the supply chain. Interventions along the course of the chain could mitigate the impacts to some extent but it would not make the products completely free from negative impacts. Therefore, the end products of unclean technologies and production processes-both in terms of social and environmental implications-that humans use everyday carry an element of guilt and destruction merged in them that would not be visible. Another aspect to be considered in any production process is the ability of nature to provide free lunch. Humans have survived and achieved progress, mainly banking on the free lunch of resources provided by nature. Human activities evolved around the free lunch of resources that are required for survival and progress, defined according to self-evolved norms. But, free lunch never presupposes gluttony. During the course of the last two millenia, the Earth witnessed
Nature’s ‘Free Lunch’
“Nature provides a free lunch, but only if we control our appetites.” William Ruckelshaus, first US-EPA Adminstrator, (1970-1973 and 1983-1985)
extreme forms of exploitative gluttony of a small section of people, chasing the wild dream of contentment through high gear use of the free lunch of nature and through it depriving many others even the mere crumbs required for survival. The problem of uncontrolled appetite is applicable to almost all areas of human engagement including production of clothes. The problems do not arise from the aspiration of the naked to clad herself but from the limitless cravings of the well-clad for diverse and more of everything. As progress gets measured according to the volume and value of materials you possess as private property (even if it fails to give you even one minute of peaceful life), majority are driven into the dream of having more of anything, including designer clothes. The environmental dimesions of such craving for more and diverse clothing is not merely an environmental issue. It is intertwined with political, economic, socioloigical and even psychological factors related to day to day existence of humans. Therefore, we have attempted an anlysis of the environmental dimension of our focus area-Tirupur knitwear cluster-in this section. This is part of our efforts to understand the backward and forward environmental linkages of garment production. This is essential because we should understand the linkages before launching the improvement/network actions for making the supply chain soically and environmentally more clean.. Production of clothes, including knitwear, is a massive global business linking the high tech, modern malls of the metropolis and the impoverished villages spread far and wide with every day struggles for survival by millions who produce the cotton and clothes used even by the billionaires of the world. This links the life dynamics of the creamy economic layer and the destitutes vilalgers. Majority of the well-fed and well-clad people don’t produce their food or clothes today, nor they bother about or know who produced it and how it was produced. If we consider these two realities without getting into emotional and nationalist political traps, we could realise that this would be yet another paradox of the current paradigm of development. Nick Robins and Sarah Roberts (www.iied.org ) sums the issues concerning responses in the market place towards the emerging issues and trends in the interaction of trade and environmental concerns at a global level. These growing tensions between trade liberalisation and environmental protection are a reflection of the wider conflicts between the sustainability agenda and traditional ways of doing business. According to John Elkington, Chairman of SustainAbility, “increasingly, we think in terms of a `triple bottom’ line’, focusing on economic prosperity, environmental quality and — the element which business had tended to overlook — social justice.
These are not just issues for major transnational corporations. More and more, large corporations are being forced by market and stakeholder pressures to pass the pressure down to their supply chains, to smaller suppliers and contractors, at home and abroad. To refuse the challenge of the ‘triple bottom line’ is to ’risk extinction’. To accept the challenge is to embark on a process, which could be both “intensely taxing and — potentially — highly rewarding”.
Destructiveness The high fashion and change-oriented garment sector is always on a course of flux in terms of of Apparels and product diversity. This diversity seeking has its constructive and destructive impacts on the Flux Fashions society as well as the Earth. Whether we believe it or not, humans are still driven by the twin
The Environmental Costs of World Trade For world trade, three types of environmental costs need to be addressed: Environmental Costs of Consumption: Many trade products caused environmental problems during use and also generate waste at the end of their life-span. Governments have the right to regulate these impacts as long as they do not discriminate against imported products. Measures include fuel efficiency standards for cars, mandatory energy labelling for domestic appliances and take-back requirements for packaging. Nevertheless, these measures can still be problematic for foreign producers, particularly if there is inadequate information or transition times for adjustment. Environmental Costs of Freight Transport: Trade liberalisation encourages a distancing between production and consumption, unless measures are taken to tackle the environmental costs of freight. International trade is responsible for about one-eighth of world oil consumption, generating a range of environmental problems, notably emissions of greenhouse gases. The Uruguay Round could lead to a 70% increase in transport by 2004, 15 times the growth expected from trade liberalisation. As governments begin to get serious about climate change, so increased attention will be placed on the environmental costs of freight. Environmental Costs of Production: The life cycle impacts of products are also an increasing concern, with growing consumer demand for goods and services that minimize environmental impacts at the production stage as well as during use. Under WTO rules, governments are barred from specifying environmental standards for the production and process methods (PPMs) used to make imported products. Recent WTO cases have confirmed this legal principle against extra-territorial environmental regulation, ruling, for example, that a US ban on shrimps caught in countries, which had not installed turtle-excluding devices to their fishing boats was illegal. In the marketplace, however, corporations and consumers are free to integrate social and environmental standards into their purchasing decisions, and this is starting to have profound implications for trade, particularly in the environmentally-sensitive sectors of agriculture, forestry and textiles. Source: Nick Robins & Sarah Roberts (1998). www.iied.org
instincts to cover nakedness and to be naked. The drive to clad the body, and that too in a diverse manner, is an instinct that prompt humans to go for diverse clothes and fashions, and at the same time humans are driven by a competing instinct that pull them towards the ‘original position’ of ‘nothing to hide’. While the instinct towards the ‘original position’ would not result in value addition and there is no economics in the ‘original position’, we are constantly being preached to keep away from such instincts, mainly by terming it as sin, and drawn increasingly into the ‘non-original’ position of getting clothed up, at times barely, bordering on the ‘original position’ and at other times, head to toe as prescribed by the vagaries of nature or the society in which we survive. This diverse cladding has its downsides. As we run the human body factory by feeding it with diverse things of nature and return the effluents to the environment, our craving for clothing too is based on gathering a lot from the Earth, churning out a lot of wastes and delivering a lot of
problems to the Earth and its inhabitants including ourselves. It would be interesting to note how our instincts for diverse clothing based on the fashion fluxes interact and affect the elements and beings of the environment in diverse ways. While the human factory’s boiler (the stomach) is responsible for the extinction of Dodo, Passenger Pigeon, Himalayan Quail and Pink Headed Duck, the story of extinction of the New Zealand Huia and many other beautiful birds and animals of the world is directly connected to human instincts for diverse clothing and its fashion fluxes. Some great humans too lost their lives in the war of human fashions against the Earth and its beings. Beginning with the campaign against killing of hapless animals for fashion feathers and furs in late 19th century, the efforts to make clothes free from massive environmental damage has travelled a long way to the present campaigns for environmental standards. The massive and high profile campaigns with slogans such as “original people wear fake furs” in 1970s and 1980s in the United States and Europe were points of increasing awareness of environmental damage caused by clothing and fashions. Fashion-conscious and alert to consumer trends, the textiles industry has been sensitive to intensifying international scrutiny of the life cycle of clothes-social and environmental impacts of growing, processing and using clothes. All this has had implications for trade, where developing countries play a critical role. Key initiatives include efforts to shift cotton production onto a more sustainable basis using organic and integrated pest management techniques, bans on the use of potentially harmful dyes in the manufacturing stage and the introduction of codes of conduct by major retailer groups to assure integrity at each stage of the chain. (Nick Robins and Sarah Roberts. www.iied.org)
Raising Environmental Standards
Manufacturing of garments can cause diverse environmental damage. Consumption of large quantities of water and generation of huge volumes of effluents, right from the point of cultivation of cotton and the manufacturing of synthetic base of artificial fibres, is a major cause of worry. The widespread felling of forest trees for making the base for rayon and the high use of chemicals in cotton cultivation are also issues at the base level of our clothing culture. Apart from polluting the surrounding, mainly water sources, industrial production of clothes can lead to chemical effects on the health of the large number of workers involved in the process of “removing our nakedness”. The ingredients used in the process of making the cloth from cotton or artificial fibres could chemically affect even those who put on the clothes. From the point of cultivation of cotton and sourcing raw materials for artificial fibres, there is increasing concern about the potential environmental and health threats that would emerge from the processes of production. Growing awareness about the environmental impacts associated with intensive cotton production has led to a surge in demand for organic cotton.
Immediate responses to the realities of the demand-side are an essential ingredient to remain in business and necessary for becoming more competitive in the market. Of course, there is much opposition to change existing production processes that are dangerous because of the investment risks and associated issues. But, clean production mechanisms are put in place in a number of sectors, either through suo motto initiatives of the producers who are sensible or through statutory and/or public pressures. But, still there is a war like situation
between the old guards of end-of-pipe pollution control advocates and the advocates of clean development mechanisms(CDMs)/clean production mechanisms (CPMs). Despite the highly visible international campaigns for sustainable development and clean development mechanisms during the last decade beginning with the Earth Summit (1992), the general pace of change seems to be slow though there are some remarkable achievements in specific sectors. Moreover, the emergence of WTO in 1995 through the conclusion of GATT has resulted in international trade achieving much mileage compared to any other human engagement. The net impact of such precedence of trade over other human concerns is both positive and negative. For instance, the quota elimination achieved through WTO’s Agreement on Textiles and Clothing (ATC) as on January 1, 2005 naturally resulted in increase in trade and production of textiles, which provided a boom to the textile production economies such as India and China. Yet, there are concerns due to the general neglect of environmental dimension of trade within the WTO system. There is also increasing pressure applied by business groups for ‘freedom from environmental regulations’ along with the ‘free trade’ promoted by WTO. The conflict came out openly at the World Summit on Sustainable Development ( WSSD) held in 2002. There were widespread protests at the conference against the high intrusion of global business pressure groups in formulating policies and also against the attempt to delink trade from environmental concerns. The protests continued at global trade and economic summits held at Doha, Cancun and recently at Hong Kong. The argument for a free trade system fully free from environmental and social concerns was continously voiced by business leaders during the last decade. It was proved to be going a step backward compared to Earth Summit which introduced firm commitments to change into a path of sustainable development. Industry groups were using pressures to get a global trade terrain completely free from all kinds of social and environmental concerns and regulations. On the other hand, there are global moves by concerned groups to introduce more and more voluntary regulations, through various codes of conducts and stakeholder pressures, for assuring social and environmental cleanliness of the products. The efforts such as MDGs and Global Compact by the UNO, though obtained firm commitments from global industry and trade groups, remain on an unsure hook, given the fact of sustained opposition to social and environmental commitments voiced by industry leaders at various international fora recently. A balance need to be searched and located because the indsutry can locate its own self-interest in observing standards and the civil society and consumers too can locate their own self-interest in making the industry to do so.
For Optimum ‘Clean’ Levels
The efforts to achieve optimum ‘clean’ levels in the textile chain are mainly centered on the following key aspects: 1. Use of chemicals in cotton production and in the production of other fibres. 2. Use of chemicals in textile wet processing (dyeing, bleaching, printing, washing etc). 3. Use of high quantity of water both in textile wet processing and in the production of other fibres. 4. Use of high quantity of energy, from firewood and fossil fuels, in textile production processes..
It is a fact that large number of chemicals are used in the textile production chain, beginning with farming cotton and in the production of man made fibres such as rayon (made mainly from various softwoods). The processing of raw materials, mainly pulping, dyeing, bleaching, printing, washing, stain removal etc also use high quantity of various chemicals. Water, one of the basic elements for survival, is used in large quantities at various levels of the textile supply chain, beginning with high consumption of water for cotton cultivation and in pulping, bleaching, dyeing, stain removal, washing etc. A large quantity of chemicals and water flow into the natural systems such as rivers and ground water acquifers in the form of effluents with varied levels of toxicity achieved through chemical bondings happened at the time of processing. The huge volume of energy consumed, mainly non-renewable sources of energy, for textile processing also cause much worry. All along the supply chain, beginning from the farms and forests, there are widespread environmental and health impacts due to the huge quantity of chemicals and water consumed and converted into toxic effluents. The pollution load generated through textile processing has been a major cause of worry for both industrialized and non-industrialised societies. The acceleration of shifting of production to low cost economies facilitated by the new global systems increase urgency of the issue. At one level, it tends to increase socio-economic and political problems through promoting the sweatshop paradigm. At another level, it leads to further increase in the already dangerous toxic loads generated through obsolete production technologies in the developing countries. The only solace is that such production chains became the last straw for many millions to survive and jump into the development ladder, which we should not forget in the avalanche of problems the supply chain created. A silver line in the generally sorrowful scenario is the increasing market for socially and environmentally clean products, especially the increasing market component of organic and clean products in the US and EU markets. It is worthy to note that a number of international retail brands in the textile sector have come together to increase their intake of organic products, including organic textiles. Individual brand initiatives and efforts through codes of conducts and compliance certifications are on the foreward move to achieve certain levels of clean production in the textile sector. Initiatives following consumer pressures and those emanating from international commitments of national governments are emerging, though at a slow pace. Major brands of the developed markets are going out to launch partnerships with organisations and governments in production points to achieve certain levels of compliance with regard to social and environmental standards.
Environmental Reality: An Overview
The economic boom resulted from globalisation has been causing severe problems to many of the South Asian countries, including India. Rapid industiralisation of traditional, protective economies such as India and China, with a vigour unheard of till recently, has generated severe environmental problems. The sudden race to capture new markets with products made cheap through all kinds of violations of regulations or using loopholes or even utilizing the absence of regulations has led to many problems. The cluster model of industrial development seen in the case of textiles, leather, paper and
pulp manufacturing, sugar processing etc is particularly prone to cause severe environmental problems. The toxic load from these industrial clusters lead to serious contamination of surface and ground water sources and the surrounding soil, which in turn affect the livelihoods in the locality and downstream of the water course. Majority of the industrial clusters function in small or medium scales with different levels of flexibility and disorganization but generates high employment and foreign exchange. This is especially true with regard to garment and leather production clusters. But, similar to labour compliance situation seen earlier, environmental standards compliance in these clusters are even lower than labour standards compliance. It is true that environmental regulation dates back to early 1970s in India but enforcement agencies followed a lenient view towards industries due to the contributions they make to the nationâ&#x20AC;&#x2122;s employment and economic basket and also considering the low investment capacity of the entrepreneurs. The impoverisation of the village communities due to destruction of water sources and soil has a positive impact for the industries as the people have to go for distress migration to centres of employment opportunities. Thus, the availability of cheap, migrant labour is assured. Most of the industrial clusters have grown overnight and became boiling points with remarkably low infrastructure and with inability to provide basic services to growing numbers of workers. Tirupur is a classic case of this situation because civic authorities and government failed to foresee such development and they are very slow in addressing emerging issues. The snailpaced government and local administration machinery are not equipped enough to meet the problems head on when they realised the problems of such uncontrolled and chaotic growth. The lenient attitude of regulatory authorities and the snail-pace of government systems became backward pulling lever in the case of industries as they found it eminently convenient not to introduce environmental management technologies and continued with the old production process that are not clean. The economies of remaining at that level was an added motivator not to change.
The Story of Noyyal
The drainage that flows through the centre of Tirupur town can reveal the environmental colour of Tirupur, with a constant flow of effluents in multicolour, mainly coming out from the dyeing and bleaching units. The drainage has a history but it is not of carrying the multicolour wastewater but of a river with clean water-this was River Noyyal, a tributary of the legendary Cauvery river. Noyyal provided the basis for the growth of Tirupur town, from time immemorial. Now also it sustains Tirupur, giving its life, by carrying the coloured waste of Tirupur boom. The story of Noyyal River, its transformation from a river to a waste carrying drainage is the story of Tirupurâ&#x20AC;&#x2122;s knitwear clusterâ&#x20AC;&#x2122;s entry into the world of multi-colour T-shirts and into the global fashion map. River Noyyal disappeared from the map of Tirupur, and in its place there is the drainage, which would also be made into a better drainage under the Cluster Development Programme, the work for which are going on. Producing the clothes to cover our nakedness was never been a dangerous activity in the human story spread over many centuries, similar to the production of food. It was a clean
production system. The later developments after the industrial revolution, which paved the technological base for large scale production resulted in the introduction of dangerous processes of production of food, clothes and other commodities used by humans. We killed the clean production systems and accepted large-scale production system under various pressures. Within a few centuries, since 17-18th centuries, humans have destroyed the Earth and its natural elements at a high level through unclean production and life patterns. Unable to stand the pressures, nature started reacting violently. Now, we are trying to get back to yet another cycle of clean production and clean life patterns, though the route is different as there is enough knowledge gathered over centuries compared to the era of blissfully ignorant primordial existance.
Toxicity of Textiles
The garment production process, beginning with cotton cultivation and harvesting in remote villages, ends up with the customer buying the fashion wears in some upmarket malls of the metropolitan cities around the world. Like food, no urban population is directly involved in producing the basic stuff, cotton, for removing the nakedness of the large urban population. The farmer, normally half starving and half naked, produces the food and the cotton for the clothes. At this level too, the production process was clean earlier. Industrialized agriculture and demands of forward links of the production chain forced the farmer also into the trap of unclean production. Large quantities of chemical fertilizers and pesticides cause severe problems in the rural landscapes, as it impacts the basic survival resources like water, food and air. Now there is also a concerted move to get back to the old world agriculture, though the name given is a new one-organic farming, to assure clean raw material. But, at present lionâ&#x20AC;&#x2122;s share of the cotton that enters the market is chemically grown. This is the main raw material that enters the knitwear industry in the form of yarn. The raw material carry a definite load of toxic substances accumulated in it from the farm. This chemical build up in the cotton is furthered through further chemical processes used in the production chain. The major points of chemical add up are the bleaching and dyeing processes of the knitwear industry. Though major part of toxic chemicals get washed out into rivers like Noyyal and other drains and ultimately end up in the sea, a minor level of toxicity would remain in the fabric in residual forms in any existing systems of modern production. It would be interesting to note that residues of fertilizers used in a remote cotton farm in the interiors of Tamil Nadu by an illiterate farmer, the residues of bleaching and dyeing chemicals used by a job contractor in an unclean alley of Tirupur, and the sweat of many poorly paid labourers of Tirupur are carried through the flashy fashion wears into the shoulder and buttocks of the most rich and powerful of the world. Yes; we can rightly say that the world is one village in that sense.
Though this study focuses on the CMT processes, it would be interesting to note the backward linkages of the CMT process in terms of environmental issues as CMT by itself is a process that cause less environmental damage, except the chemical methods of stain removing using toxic substances such as CTC (carbon tetra chloride) and the wastes generated. As there is a global movement to phase out CTC, its effects can also be seen in Tirupur as a few companies observing high standards have already phased it out.
Venugopal G (Quality Assurance Officer, Textiles Committee and Cluster Development Agent, Tirupur) says: As part of the global campaign to phase out CTC, a number of units in Tirupur, especially those with constant production contracts with a number of foreign brands, have already phased it out. And we are taking forward the campaign to make others also follow the phasing out.
Easwaramurthy N (Partner, Laurels Clothings, Tirupur) and his Consultant, Muruganandan (Top-Notch Fashions Pvt Ltd, an international buying house based at Bangalore) says: We donâ&#x20AC;&#x2122;t use CTC, but not yet obtained the phase out certificate from the Ozone Cell, Ministry of Environment and Forest, and would apply for the certificate soon.
Prakash B K (GM, Prem Durai Exports) said that they have already phased out CTC and obtained the required certificate from the Ministry of Environment and Forests, Government of India. At present nearly 8000/10,000 knitwear related units are functioning in Tirupur. The textile wet processing units (bleaching, dyeing) are the major consumers of water as well as major contributors to pollution.
The resource flows in each of the most important processes reveals the environmental load of these processes, in terms of various resources consumed, wasted, and reused. According to the Resource Flow Analysis (RFA) conducted at Tirupur knitwear cluster in 1995 (Suren Erkman and Ramesh Ramaswamy, 2003) the following information is revealed. The present loads can be projected on the basis of the growth of the cluster. It has almost doubled in terms of industrial activity and population growth during the last decade (1995- 2005). The knitting section, which used 1,60,265 tons of yarn produced 1,45,920 tons of fabric by using 20,140,000 kWh of electricity. Through this process, the following wastes enter the Municipal solid waste heap: 730 tons of yarn sweepings, 2,430 tons of paper and 8,755 tons of jute bags. In addition, 2,430 tons of plastics (cones) coming out as waste might be reused, and needles measuring 20 tons coming out would be remelt and used. In the Bleaching section, the entry load (1995) was 72,960 tons of cloth/year, 43,750,000 liters of water/per day, 1.56,000 kWh/year, 1,45,920 tons of firewood/year, 2,188 tons of caustic soda/year, 3,648 tons of bleaching powder/year, 18,240 tons of sulphuric acid/year and 182 tons of whiteners/year. This process produced 72,960 tons of bleached cloth and produced the following wastes: 43,750,000 liters waste water/day, 24,076 tons of reacted chemicals/year, 2,918 tons of warping/year and 14,592 tons of ash/year. Of this the wastewater, reacted chemicals and warping move into the public drain and the ash go into the municipal solid waste heap. In the dyeing process at Tirupur, 1995 figures are as follows: 72,960 tons of cloth/year, 43,75,000 liter of water/day, 1,560,000 kWh electricity/year, 72,960 tons firewood/year, 1678 tons of bleaching powder/year, 7296 tons of soda ash/year, 5,102 tons of sodium chloride/year, 1459 tons/year, 2,188 tons/softener, 1,459 fixing oil/year and 7,296 tons/acid. This produced 72,960 tons of dyed cloth, and released the following wastes. Waste water: 43,75,000 liter/day, 2,918
tons warping, 12,509 tons reacted chemicals, 292 tons dyes, 437 tons softeners, 292 tons fixing oil, which moved into the drainage. In addition, 7,296 tons of ash moved into the Municipal solid waste heap. At the next stage of calendaring the flows are as follows: 1,45,920 tons of cloth/year entered the process along with 2,630,000 liters of water/day, 5,230,000 kWh electricity/year and 2,18,880 tons of firewood/year. This generated 1,45,920 tons of calendered fabric/year and released 2,18,880 tons of ash into the Municipal solid waste heap. It is common knowledge that compared to other processes in the birth of garments from cotton to T-shirts, CMT is relatively eco-friendly as it is a process of shaping up the cloth into apparel. Even then, there are certain hazardous aspects to CMT such as chemical-based removal of stains, using highly toxic chemicals such as CTC. A recent case study of Tirupur conducted by UNIDO observes: One of the most significant challenges for the Tirupur textile industry today is water. Textile production, particularly dyeing and bleaching, can be water intensive and can generate large quantities of effluent. Tirupur is in a dry, water-scarce region, and the rapid expansion of the textile industry has taken place in an unplanned manner, with no associated development of supporting infrastructure or institutional capacity. As a result, the growth has led to the depletion of groundwater reserves and a serious deterioration in environmental quality of both surface and ground water. Typical water consumption in Tirupur is around 200 to 400 litres/kg of finished product, compared with the international norm of 120 to 150 litres/kg. The city does not have a reliable piped water supply, and private water suppliers extract ground water and supply it to the textile industry using tankers. Ground water in neighbouring areas has been decreasing and becoming contaminated. This has forced the tankers to travel even further distances to draw water. Lack of adequate water supply have inhibited growth and slowed down the flow of new investments. Most of the bleaching and dyeing units in Tirupur are located in clusters along the banks of the River Noyyal and River Nallar, into which they were, until recently, discharging effluent. The two rivers are natural drainage courses that only carry water in the monsoon period. During the reminder of the year, they only carry industrial effluents that stagnate in the riverbeds and percolate into the groundwater. As a result, the groundwater around the cluster of bleaching and dyeing units is polluted to such a level that it is unfit for domestic, industrial and agricultural activities. Estimated wastewater generation from
Typical characteristics of wastewater from bleaching and dyeing units in Tirupur
Biological Oxygen Demand (mg/L)
Chemiocal Oxygen Demand (mg/L)
Total Suspended solids
Colour Source:Case Study of Tirupur, UNIDO.
Intense Colour Intense Colour
the nine industrial clusters in Tirupur is around 102 million litres per day. The bleaching and dyeing process are the main causes of pollutants which include caustic soda, hydrochloric acid, sodium hydro sulphate, hypochlorite and peroxides.
During 1981, there were only 68 textile processing units (bleaching, dyeing, calendaring) functioning in Tirupur. The number rapidly rose to 450 in 1991 and 866 in 1997. At present there around 800 dyeing units engaged in dyeing and/or bleaching processes. Majority of these units are small scale and most of them are job-workers. The annual rainfall in the area is low (~500 mm/year) and availability of surface water and ground water is very low. Textile processing industries purchase water from water supply contractors. Fuels cost of trucks for transporting water amounts to Rs. 520 million/year. The daily discharge of industrial effluents to the Noyyal river is estimated at 80 million litres. It has resulted in the loss of ecological and biowealth, estimated to be more than Rs.500 million/year with regard to all stakeholders(farmers, local administration, industries etc). In 2002, there were intense protests against commercial exploitation of ground water from farm Public Outrage wells by the dyeing units of Tirupur: Angry protests and road blocks put up last week by a section of residents and farmers against transport of ground water from agriculture wells in Mandapam area has unnerved the Tirupur deying houses, which rely on ground water supplies sourced from nearby villages for their textile processing..The current protests have been causing anxiety to the stand alone â&#x20AC;&#x2DC;job workingâ&#x20AC;&#x2122; processing units in Tirupur. They fear that if the problem persists their business would suffer, as export houses would seek the services of independent processing houses situated in Erode and other places. The Coimbatore district administration is also in a dilemma. They are duty bound to protect the drinking water needs of the villages and the public, but at the same time any action to prevent the dyeing units from using the ground water would harm the interests of the Tirupur knitwear industry (Business Line. www.blonnet.com)
The Orathupalayam Dam was constructed a decade ago for storage of rain water to improve agricultural production in the downstream areas of neighbouring districts. The dam reservoir has been totally contaminated due to effluents from the Tiirupur knitwear cluster, causing heavy damage to agriculture and other livelihoods of a large section of people in the neighbouring Erode and Karur districts. The High Court of Chennai has recently ( June 2005) ordered the dyeing industries to pay Rs. 60 million for the reclamation of Orathupalayam Dam, and also Rs.1400 million as compensation to the farmers in the downstream areas of Noyyal river. The court further ordered the government (Tamil Nadu Pollution Control Board:TNPCB) to take appropriate action to stop further pollution of the Noyyal river. The TNPCB, as a consequence, ordered the effluent discharging industries to immediately implement zero discharge effluent treatment systems. The closure was ordered following petitions filed by the Noyyal River Ayacut Protection Council, a local environment protection agency, and other NGOs seeking an end to discharge of effluents into the Noyyal river.The Court ordered reopening of 493 dyeing and bleaching units (of the 660 units ordered to be closed) after assurance concerning introduction of treatment systems.
The Court ordered reopening most of them after they furnished proof that they had paid 25 percent of the cost of the effluent treatment plants to the government. The court constituted a three-member committee, headed by environmentalist and lawyer Mohan R, to monitor the setting up of the plants on a regular basis. Annual utilization of water by the textile cluster of Tirupur is at present around 28.8 billion litres. This is around 0.1% of present total water potential and 1% of present water demand of Tamil Nadu state. Water is mainly sourced from open and borewells of surrounding areas, such as Avanashi, Palladam, Annur, Kangayam, and from many villages of the nearby Erode district. The exploitation of water from village open wells and through borewells has resulted in reduction in agriculture activities in these villages. As agriculture production provide only low income, the farmers stopped cultivation and started selling ground water from their wells, which, though provide a higher income at present, might lead to disastrous consequences in the near future.
Water Nearly 3000 trucks, each with approximate capacity of 10,000 litres/trip are in service in Tirupur. Consumption They undertake approximately 8/10 trips daily. Efforts to bring water from Upper Bhavani reservoir Levels to Tirupur as a measure to reduce the depletion of local water resources is ongoing. But, by the time the project reach completion, it would not be sufficient to meet the escalating demand for water, given the current rate of growth. The population of Tirupur too shoot up due to large scale inward-migration of labour to man the industrial positions. Water is a critical resource in bleaching and dyeing as the quality of water affects the quality of dyeing and bleaching. The chemicals used by bleachers and dyers such as wetting agents, soda ash, caustic soda, peroxides, sodium hypochlorite, bleaching powder, common salt, acids, dye stuffs, soap oil and, fixing and finishing agents make the water highly toxic. Nearly 1,00,000 tonnes of salt and 6,600 tonnes of bleaching powder is used every year in Tirupur. Nearly 80% of daily water consumption is met by water transported from outside. This was mixed with the locally available ground water to save water costs. As ground water has tendency to show higher TDS values (around 2500-3000 mg/L), using ground water for bleaching and dyeing process would lead to further increase of the TDS values of the effluent. It becomes difficult and costly to treat the effluent to attain the prescribed levels of TDS values for discharge, approved by the TNPCB. TNPCB records show that nearly 80 million litres (mld) of effluent water is discharged daily into the Noyyal River by the dyeing and bleaching units of Tirupur, and nearly 3 million litres (mld) of municipal waste water also enter the river. Out of the nearly 800 bleaching and dyeing units, 277 units have formed eight CETPs with a capacity of about 42.55 million litres per day. The CETPs are successful in reducing the colour of the waste water to the prescribed levels, but they fail to reduce the Total Dissolved Solids (TDS) concentration to the prescribed limit of 2100 mg/L. It also indicate that good dyeing demands higher concentration of salt, and the present treatment procedures used in the CETPs are incapable of reducing the high salt load of the effluent water. The high TDS discharge into the Noyyal River, and its seepage into the ground water system in the down stream areas of Tirupur, Avanashi, Kangayam, Perundurai, Erode and Karur have made the ground water sources contaminated and unsuitable both for drinking and irrigation. As Noyyal is not a perennial river
and fresh water flow is restricted to monsoon season, it also pollute river Cauvery at the point of their confluence in Kodumudy. The Orathupalayam dam was constructed in 1991 (cost: Rs.16.46 crores) with reservoir area of 1049 acres. The objective was to provide irrigation water to an ayacut of 500 acres in Erode district and 9875 acres in Karur district. The present condition of Orathupalaym Dam is that it has turned into a storage tank for industrial effluent. A major problem is that the contaminated water would not be allowed to be released into Cauvery river and its storage lead to seepage and contamination of ground water sources around. The economic loss and social impacts of such loss in the farming community are not yet quantified properly. It is essential that the knitwear cluster of Tirupur should grow to achieve the export target of US$ 50 billion by 2010. The potential for growth existing in terms of production facilities and labour is now let down by the environmental damage caused to the Noyyal river, ground water system, and agricultural production. The way out of the crisis is to effect facilities to clean up the effluent and promote reuse of treated waste water and also eliminate pollution through introduction of clean technologies that assure zero discharge. As environmental compliance has become a precondition for majority of export orders, adoption of clean production mechanisms is essential to assure sustainability of the Tirupur knitwear cluster. Environmental problems related to knitwear production are mainly from the wet processing activities while the other processes (CMT) results in low intensity environmental problems. A recent study by Prakash Nelliyat of Madras School of Economics observes: The continuous discharge of untreated effluents for more than a decade has accumulated in the soil, ground water, etc. at Tirupur and surroundings. During 1980 to 2000, the cumulated pollution load discharged by the Tirupur units, comes to 2.35 million tonnes (mt) of Total Dissolved SolidsTDS, 1.31 mt. of Chloride, 0.13 mt. of Sulphate, 0.098 mt. of Total Suspended Solids, 0.09mt. of Chemical Oxygen Demand, 0.03 mt. of Biological Oxygen Demand and 0.001 mt. of Oil and Grease. Rainfall (annual average of 617 mm) has only a marginal effect in reducing the severity of the impact in this region.
All ground water studies indicate that open wells and bore wells in and around Tirupur exhibit high levels of TDS (ranging 3000mg/l to 11,000 mg/l) and Chloride (ranging 2000 mg/l to 5000 mg/l) due to industrial pollution and these values are much higher than the prescribed levels for this region. The available groundwater in this region is not suitable for domestic, industrial or irrigation use. The surface water studies indicate that the Noyyal river, downstream reservoir (Orathupalayam) and irrigation tanks have been affected by industrial pollution and the surface water is unfit for domestic, irrigation or fisheries purpose. The soil quality study also indicated the pollution concentration and, in most of the areas, the soil is alkaline (pH >8.5) or tending to be alkaline (pH 8-8.5). The water is injurious (EC >3 mmhos/cm) to agriculture in an area of 146.3 sq.km. and critical (EC 1.1 to 3 mmhos/cm) in 218.3 sq.km. Hence crop productivity has declined substantially, which ultimately affects the welfare of farmers. The estimated overall damage cost in the agriculture sector is US $ 50 million. The municipality is bringing 32 mld of water from the neighboring (Bhavani) basin for drinking water supply . In affected villages the Water Board has introduced special water supply schemes. Besides villagers
Environmental Standards Compliance Levels
are spending a lot of time and effort for fetching fresh water from distant places. The total damage cost in the drinking water sector is about US $ 23.8 million. The fisheries activities in the Noyyal river, tanks and reservoir have been affected. The recent fish mortality at Orathupalayam reservoir compelled the Fisheries Department to stop fish culture. US $ 0.15 million is the loss of value in the fishery sector. Besides, possibilities of toxicity effect in the available fish are also high and its consumption may lead to severe health problems. The pollution problem in Tirupur has very much affected the textile processing units as well. Since the industrial wells are having only ‘coloured water’ they are transporting their major requirement of water (85%) through tankers from peripheral villages located 25-30 kms away from Tirupur. The overall cost incurred by the industry for purchasing the water is US$165 million. Besides the continuous functioning of “water market” leads to depletion of the water level in villages, which has affected the livelihood of the rural poor. On many occasions villagers have protested against the water transfer. Currently a mega water supply project is progressing under the Tirupur Area Development Corporation. The total cost of the project is estimated to be US $ 269 million and will be financed by both debt and equity from the consortium and government agencies. Through this scheme 185 mld of water is planned to be transferred to Tirupur (both industry and domestic) from River Cauvery, an inter state controversial river in India. (River Cauvery has been a point of conflict between Tamil Nadu, Karnataka and Kerala with regard to sharing of water, and even large scale violence and riots were witnessed in places like Bangalore a few years ago over the issue.) If this project succeeds, the industry needs to pay more than their current cost of water, which may lead to cost escalation of textile processing. Human health, bio-diversity (aquatic eco-system of rivers, tanks and reservoirs) and livestock are also affected by pollution to a great extent.
Environmental The environmental standards (derived from various internationmal agreements, national statutes Standards and international codes of conducts) to be followed in garment production may be summarised as follows: 1. The enterprise should comply with all applicable environmental rules, laws and regulations. 2. If there are no suitable domestic laws, the enterprise must meet the relevant international standards introduced by international laws or agreements. 3. The enterprise should have an Environment Management System (EMS) and a disastermanagement plan to deal with any environmental emergency. 4. The enterprise should dispose all wastes, by-products and hazardous wastes in an environmentally responsible manner. 5. The enterprise should minimize waste and maximize recycling to protect and conserve the natural environment and natural resources. 6. The enterprise should store all hazardous materials and chemicals in a well-ventilated safe place away from the work area with appropriate labeling. 7. The enterprise should put up notices containing a list of all hazardous substance used
in the enterprise/workplace mentioning first aid applicable in case of accidents/ emergencies for the information of workers. 8. The enterprise should have wastewater treatment plant with applicable national/ international standards, if the nature of processes in the enterprise so warrant. India has well ordered system of environmental protection and related activities implemented through various agencies set up under various environmental enactments of the Central and State governments.
Environmental Laws Applicable
01. The Water (Prevention and Control of Pollution) Act, 1974 and the Water (Prevention and Control of Pollution) Rules, 1975, a national level legislation, provides for protection of water resources and for control and regulation of water pollution and related matters. 02. The Central Pollution Control Board (CPCB) is established under this Act, and the States also set up State Pollution Control Boards (PCBs) according to state rules framed under this Act. The Tamil Nadu Pollution Control Board is the authority with jurisdiction over Tirupur. 03. The Air (Prevention and Control of Pollution) Act 1981, the Air (Prevention and Control of Pollution) Rules, 1982 and the National Ambient Air Quality Standards, 1994, all national legislations, together provides for standards of air quality, regulation and control of air pollution in India. The CPCB and the State PCBs are the authorities to implement the Act and related rules and standards. Particular areas can be declared as air pollution control areas under the Act. 04. The Environment (Protection) Act, 1986 and the Environment (Protection) Rules, 1986 and related rules and regulations are the major legislation in India dealing with all aspects of environmental protection and conservation. Various authorities are put in place including the National Environmental Tribunal. In addition, states have also introduced various rules and regulations concerning environmental protection. 05. The Scheme on Labeling of Environment Friendly Products (ECOMARK), 1991, introduced by the Central government specifically deals with ecomarking of products that are declared environment friendly. This is applicable to the garment industry, and garments produced from organic sources and through environment friendly processes can obtain the ecomarking. 06. The Municipal Solid Wastes (Management and Handling) Rules, 2000, introduced at the national level need to be followed by the municipal authorities while handling municipal solid waste (MSW ). As Tirupur is a municipality, this rule is applicable. 07. The Recycled Plastics (Manufacture and Usage) Rules, 1999, deals with recycling of plastics, its manufacturing and use. As a lot of plastics are used in the garment industry for various purposes associated with production and marketing, these rules are applicable. 08. Prohibition on the Handling of Azodyes, 1997 has been introduced after the international campaign against use of azodyes in the garment industry. This specifically concerns the garment industry.
09. The Hazardous Wastes (Management and Handling) Rules, 1989, deals with hazardous wastes including chemical wastes. 10. Noise Pollution (Regulation and Control) Rules, 2000, deals with noise pollution levels and its regulation and control, including noise pollution issues inside factories. 11. The Public Liability Insurance Act, 1991 deals with liabilities in case of emergencies including industrial emergencies. 12. The Indian Wildlife (Protection) Act, 1972 and the Wild Life (Protection) Amendment Act, 2002 deals with protection and conservation of wildlife of all forms, both flora and fauna. 13. Forest (Conservation) Act, 1980, is concerned with conservation of forests and all matters related to forests including flora and fauna and commercial use of forest resources. 14. The Biological Diversity Act, 2002 deals with protection and promotion of biological diversity in India and follows the principles of the Convention on Biological Diversity (CBD) forming part of the Agenda-21 (Earth Summit, 1992). Compliance Situation Eight common effluent treatment plants (CETPs) in Tirupur treat a part of the huge quantity of waste water from bleaching and dyeing units. In addition, the IETPs operated by individual units also take care of a part of the waste water. There are complaints that even after treatment the water contains heavy load of pollutants.
The Tamil Nadu State Pollution Control Board has its offices in Coimbatore and Tirupur and it is duty bound to monitor water pollution, and there are complaints that the Board is not effective in implementing the regulations. Environmentalists feel that nearly 90 percent of the garment units flout one or other environmental regulation. Recently the Green Bench of the Madras High Court ordered closure of many units due to violation of environmental regulations. Environmentalist and Writer, Subrabharathi Manian said that not even 5% of Tirupur garment industries are complying environmental regulations. Tamil Nadu Green Movement (which also has some members from the garment sector) leaders says: It is true that a segment of the Tirupur entrepreneurs are not aware of such regulations but those who are aware are not interested or the enforcement agencies are not acting properly. Of course, there are a few units, with continued contracts with some foreign firms, which follow at least minimum level of environmental standards. It is the duty of the industry and the government to clean up the Noyyal River instead of using it as an open drain for the wastewater. The condition of the river is a shame for the exporters and the people of Tirupur,and also it is a shame for the worldâ&#x20AC;&#x2122;s leading brands who source from Tirupur and a big shame for the rich consumers who use the clothes made in Tirupur. The global garment giants who source products from Tirupur too are responsible for the pathetic condition of Noyyal River. They should be ready to use part of their huge profit to put the river back to its old status.
Monitoring with regard to environmental standards is very slow in Tirupur, compared to labour standards.
Compliance: Environmental standards and regulations Stakeholders
No (1) Small (0%) Extent (2) (0-25%)
Medium Extent (3) (26-50%)
Large Extent (4) (51-75%)
Full Extent (5) 76-100%)
Exporters/Employers Trade Unions
Sources: Interviews of the representatives of stakeholder groups.
Conclusions and Recommendations
The general perceptions that could be derived from the findings of the study indicate both negative and positive future for Tirupur garment cluster. The negative aspects can be averted through proper interventions by the stakeholders, especially by the concerned government agencies, buyer groups, brand owners, exporters, trade unions etc. The conclusions derived can be grouped under three categories as follows General 1. There is high hope about the future growth of the Tirupur industrial cluster because almost all stakeholders feel that Tirupur can bank on the quota free international trade regime. There are high hopes among all stakeholders regarding this opportunity. 2. The infrastructure development now ongoing under the Tirupur Cluster Development Programme provides high hopes to all stakeholders in terms of overall development of the region. 3. The road, water supply and drainage component of the cluster development programme with an outlay of around Rs. 10000 million is an ambitious one and it would definitely lift Tirupur to a better organised and managed city. But, the delay in implementing the programmes is eating into the resources of every stakeholder. 4. There is still deficiency of coordinated actions by various stakeholders with regard to improving general living conditions in Tirupur. The general snail-pace of governmental policy actions are the major reasons for delay in implementing development projects. But, now the authorities have woken up to the reality of Tirupur and moving at a better pace and there are efforts for improved coordination between different agencies and through private-public partnerships, mainly led by the Textiles Committee (TC), Governent of India and Tirupur Exporters Assocation (TEA). 5. There is widespread concern about the deficiency of international/buyer/consumer support for improving conditions in Tirupur. Issues of corporate citizenship, corporate respsonsibility
and global governance practices are debated in this context and the impacts of such international efforts for achieving clean production and clean development have not yet trickled properly down to Tirupur. 6. There is a lot to be desired about international cooperation with regard to development of clusters like Tirupur as the production is mainly oriented towards markets in the developed countries and the consumers are economically advanced. A minimum change from the extremity of sweatshop model alone would not make the products clean in terms of labour and environmental standards. 7. Opinions of stakeholders in Tiupur are generally geared towards a new global responsibility and benefit sharing model instead of the current buyer-driven codes of conducts, which are top-down and neither democratic in evolution nor really participatory in application. Distress compliance is not the model to be adopted if the aim is to make the industry and trade more fair and clean. In addition, standards and codes evolved in developed countries have a tendency to overlook ground realities in developing countries and they are evolved according to aspirations of interest groups in the developed countries, which tends to consider many issues with a ‘top-down’ paradigm and fail to really account the triple bottomline approach. Labour Standards 1. Labour standards compliance in Tirupur is still restricted to a minority of the industrial units. The overall compliance level is accepted as 30% by almost all the stakeholders. This means that of the nearly 3,50,000 workers, around 1,00,000 is benefited by the compliance drives and campaigns for achieving minimum labour standards. Interestingly, most of these are achieved through buyer-driven programmes.
2. Though child labour is ‘officially abolished’ and Coimbatore district (Tirupur is part of the district) is declared as a ‘child labour free district’, it is far from the truth. It is true that child labour is not a highly visible phenomena in Tirupur now as the efforts to eliminate child labour had achieved rich fruits. The all round consciousness concerning the need to eliminate child labour is reflcted in the notice boards in front of almost all units decalring that ‘no child labour employed’. Yet, there is still some level of hidden child labour in Tirupur, which need to be addressed. 3. Unionisation in Tirupur also remains around 30%, spread over 7 major unions and a few others..Though freedom of association legally exist and the employer groups like TEA vicariously accept unionization through the process of tripartite wage agreement, there is still large scale hidden fear on the part of workers as well as employers. Employers often publicly demand to lift labour regulations and seek more freedom to ‘hire and fire’, which prove that they don’t really accept freedom of association and collective bargaining. The vicarious acceptance of trade unions through tripartite wage agreemenmt is a kind of ‘distress acceptance’ and not because they want to accept unions and their demands. Trade union leaders feel that the large migrant labour force coming from impoverished villages are reluctant to join unions because of fear of falling into the bad books of the employers and losing employment.
4. Trade unions have not developed capacity to move into the new labour market strategies to address emerging problems in the context of global changes. While they are worried about losing employment due to closure of processing units on the ground of pollution and other issues, they still are not equipped to play their new roles in the emerging international systems of labour relations based on various interanational agreements. Though trade unions are marginally aware of codes of conducts and other buyer driven programmes for labour standards compliance, their capacity in relation to such new systems need to be developed. To some extent, they look toward new paradigms of responsibile business practices with an element of suspicion because they are unable to fathom the reasons for cut throat corporates and international brands to become labour-friendly, especially when employers demand more freedom to ‘hire and fire’. The logic and reason for business to become more labour-friendly is not effectively communicated to the workers and unions. 5. There is a general absence of programmes for enhancing worker productivity in Tirupur. The cluster largely relies on unskilled migrant labour. The long term sustainability of such a labour process is at doubt. A skilled work force is an essential element for growth of any specialized industrial cluster. The low levels of investment in human capital, both at the workers and middle management levels, appears to be very strange especially due to the fact that knitwear production is a highly labour intensive activity even with the state-of-the-art technologies available. While a lot of importance is accorded to technological and infrastructure aspects in Tirupur, no comparable efforts are undertaken in the human capital front. There is an urgency to introduce human capital development at all levels of jobs in Tirupur. 6. There is an urgent need to initiate multistakeholder programmes to assure sustainable growth. It should include improvement of labour standards compliance. Changes mainly happened due to buyer pressure also failed to consider workers from the perspective of a benefit sharing paradigm. Most of the buyer-driven changes are based on articulating certain positions espoused by the buyers. The other stakeholders in the supply chain are forced to fall in line rather than having a democratic participation in the process of making the products more clean. 7. The backward linkages of availability of cheap migrant labour are not addressed by any of the improvement programmes and campaigns. The destruction of village farming activities through wrong policies at the macro level and also through unlimited exploitation and pollution of survival resources such as water and soil through enhanced industrial activity are issues that need urgent attention. Restraining migration at a particular level through effective interventions coupled with development of human capital could go a long way in mitigating negative impacts of the cluster on the larger society. A regional holistic development perspective including the human capital dimension need to be evolved to correct the present chaotic and largely inhuman labour market conditions based on ‘development refugee’ migrants from impoverished regions. 8. The impacts of uncontrolled urbanization on labour and productivity is not properly addressed by any of the development programmes in Tirupur. The trade offs between resource depletion in the region and labour market conditions are not taken into account
in designing development programmes for the cluster. It is a fact that the cluster is not an island free from all kinds of external forces. The exclusive economic zone model promoted through cluster development schemes and apparel parks has its own lopsidedness that could boomerang if not corrected at the right time. Environmental Standards
1. It is clear that the economic strengths of Tirupur knitwear cluster by itself cannot continue as a launch pad for further growth in the context of emerging realities in the global garment market, especially the orientation of consumers towards clean products and the increasing competition from other players. The high magnitude of environmental damage and the inefficiency in existing pollution management efforts in Tirupur need immediate attention of all stakeholders so that the cluster can meet the emerging demands for environmental compliance and can achieve cost reduction through effective environmental and resource management practices. 2. Bleaching and dyeing are the major sources of enviroinmental problems in the garment supply chain. Environmental damage caused by CMT process is comparatively low and limited to fabric wastes and other minor problems. But, even the low instensity environmental damage of CMT process would become unmanageable when production volume go beyond the capacity of â&#x20AC;&#x2DC;natural sinkâ&#x20AC;&#x2122; of the region. Effective environmental management, especially waste management practices, are required to address the enormity of wastes generated by high volume CMT production. In addition, CMT is not a stand alone process because it is the tail end of the supply chain. Environmental damage build up all along the supply chain need to be taken note of as part of the efforts towards clean production. 3. Water is an unavoidable input for survival of all as well as for garment processing. Since water resources are extremely scarce in the region, extraction and transporting a large quantity of fresh water from distant sources and then discharging the entire waste water (treated or untreated) is not a sustainable resource management practice. Since industrial activities are the major source of employment and income, the possibilities of concerted public agitation against environmental damage is relatively low, esepcially because majority of people depend on garment sector employment for survival and they would not support a shut down of the industry due to pollution issues. But, recent civil society actions, mainly because of the damage caused in downstream areas of River Noyyal and Orathupalayam Dam, and also in the villages from which ground water is extracted, is a clear eye opener. The effective judicial intervention that followed have proved that civil society groups would not remain silent beyond a point. It also proved that the definition of stakeholder in the context of industrial clusters like Tirupur need further elaboration and should not be resticted to the groups directly involved in the production chain. 4. Environmental damage caused by the industry has been of concern to overseas buyers and consumers and their future reactions may be a big challenge too. The demands for environmental standards compliance in the global market is on the rise. But, how far the buyers and consumers would be ready to share the cost for making the supply chain more clean is an issue under debate.
5. It is normal to assume that effluent treatment plants would solve the problem of environmental damage caused by wet processing (bleaching. and dyeing). But this did not succeed fully in Tirupur because majority of the plants already in operation are not designed to remove the high concentration of TDS. There is an urgent need to come up with proper solutions to environmental problems caused by the garment industry, despite the fact that many efforts have been undertaken to reduce pollution load. 6. The high investments required for high technology solutions to environmental problems are beyond the means of majority of units, mainly small and medium, of Tirupur. Collective efforts with sufficient subsidizing by the government has been going on in Tirupur, and some of the efforts have been successful. In this context also, the range of responsibility of the buyers and consumers are being raised by workers, trade unions, civil society organisations and farmers in the downstream areas affected by effluent flows from Tirupur. They argue that benefits of cost minimization paradigms espoused by Tirupur cluster during the last decade has actually passed on to the rich buyers and consumers of the developed world through lower prices. Environmental responsibility paradigms in garment clusters like Tirupur should also seek a new kind of benefit sharing. The ‘polluter pay’ principle should be stretched to the buyers and consumers as they are the ultimate beneficiaries of cost cuts through low technology production. 7. The traditional notions of resource use is still the prime mover of Tirupur cluster. Majority of the garment industry owners are either blissfully ignorant or conveniently forgetful about the nastiness of their own city and its surroundings caused by their enterprises. The questions of intergenerational equity in resource use are yet to reach majority of the export houses of Tirupur. Now the industrial units in Tirupur have two options:1. Enhance the existing effluent treatment plants through Reverse Osmosis (RO) and other new technologies. 2. Switch over to Clean Production Mechanisms (CPM)/Clean Development Mechanisms (CDM) and make all the processes of the supply chain clean. Both these solutions are costly and require a lot of changes. Given the limitations concerning capital formation in production locations like Tirupur, involvement of consumers, buyers and brand owners to bring in investment for cleaner technologies is an urgent need. 9. Even using RO technology are faced with the massive problems of sludge that remain after salt recovery and water purification. The problem has escalated to explosive situations in Tirupur because local people prevent dumping of the sludge in de-commissioned granite quarries and other spaces as it started seeping into ground water sources nearby. Efficient technologies are required to come out of the end of pipe approaches, and such technologies, if at all available, would be costly for the small units of Tirupur. Multistakeholder involvement in addressing such problems is a need of the hour. Otherwise social responsibility, best practices and fair trade principles would become mere writing on water. Short-term solutions and restricted responsibility behaviour would not contribute much towards making businesses really responsible and products really clean. 10. The current technology employed by most of the units in Tirupur is traditional which require large volume of fresh water and chemicals. But the sophisticated processing technologies like “soft flow” machines can reduce the water and chemical requirements and thus the volume of effluents. The application of clean production technology in textile
industry would include a combination of soft flow machines, low salt dyes and membrane filtration. In soft flow, salt and water requirement per kg. of fabric processed can be reduced to 50%. But the soft flow is ten times costlier. With the combined use of low material-liquor ratio machines and low salt reactive dyes, the TDS level of the effluents can be reduced by about 40%. Dye bath segregation is another successful method for reducing TDS and requires only minor plant modifications. The cost analysis shows that the textile processing cost in soft flow dyeing is 22-29% less than the conventional winch. Soft flow offers excellent process/product quality, which is an additional benefit. Most of the small units in Tirupur are not even aware of these technologies. But a few big integrated units, who are also direct exporters, have either set up such currently available clean production processes or are in the implementation stage. Besides a few medium scale units are also considering it. Even these technologies are not free from the sludge problem. The membrane filtration technology is not exactly evolved from research in the textile industry and therefore it has some limitations when used for treatment of garment industry efflluents. 11. The observations of S.Eswaramoorthi, K.Dhanapal and J.Karpagam (www.epicin.org) regarding benefits of upgradation and modernization of all the existing effluent treatment facilities in Tirupur are noteworthy. But transformation to clean production and clean development mechanisms require further development because end of pipe solutions canâ&#x20AC;&#x2122;t make the process fully clean.
a) Around 100 million litres/day (mld) of fresh water is utilized by the bleaching and dyeing units in Tirupur. Around 80% of it is supplied through trcuks at a rate of around Rs.800/- for 10,000-12,000 litres. Thus, approximately, Rs.2000 million/year is spent for the purchase of fresh water supplied by trucks. If water is recycled through modernization and upgradation through reverse osmosis, this amount can be saved. The saving can be effectively utilized for industrial development purposes to meet the potential competitors in the emerging open market. In addition, ground water depletion and contamination can be reduced to a large extent. b) Water recycling greatly reduces dependency on trucks for fresh water. This cuts back spending of Rs.1280 million/year on fuel. Further, the pressure on traffic would be reduced and road damage and frequent repair can be avoided, which could result in reduction in maintenance costs, and improvement in the economy. c) Annual agricultural productivity loss in villages affected by the industrial activities in Tirupur amounts to Rs.180.14 million. Annual economic loss due to industrial pollution caused by Tirupur cluster is estimated to be Rs.510.34 million. By establishing zero discharge effluent treatment plants, both damages to the environment and economic loss could be averted. d) By implementing zero-discharge system, pollution of Noyyal River, Orathupalayam Dam, and the down stream areas in the districts of Erode, and Karur, mainly in the downtream localities of Cauvery river can be reduced. e) Electrical power requirement for the proposed modernized plants can be met by windmill. This will reduce costs of recovery of water and salt from the effluent, making it more viable. It will help the dyeing sector to offer competitive price for its products in the international market. In addition, this will reduce electrical power demand on the general electric power pool of the State Electricity Board. f ) By shifting to wind mills and other renewable sources of energy, demand on forests for firewood can be controlled, which would restore ecological balance of the region. Growth of forest in and
around Tirupur will promote rainfall, promote recharge of ground water acquifers, and dilute the high TDS in ground water to natural levels.
12. The environmental management history of Tirupur indicates the challenges and problems faced by the different stakeholders such as the Tamil Nadu Pollution Control Board (TNPCB), Industrial Organisations, NGOs, Local Government, Water Resources Organisations, Exporters, Dyers and Bleachers etc. in finding a solution. The investment bottleneck faced by the large number of small and medium units is a big challenge. Any investment in new technology increases the cost of production. But the introduction of cleaner production and advanced technology is the only long-term solution. Realizing the economic benefits, social costs, problems of effective pollution management in small scale units, and the need for a viable solution, an integrated pollution management attempt from all stakeholders is urgently required. The role of foreign buyers and consumers are very significant in such an effort. Collaborations across all stakeholders and knowledge centres is essential for achieving sustainability of Tirupur garment cluster. 13. Capacity building in the environmental management sector is an urgent need as the environmental consciousness in Tirupur is largely restricted to a minority which came under international scrutiny. There is an urgent need to develop environmental consciousness among industry owners, workers, trade unions and all others concerned with Tirupur garment cluster. Adopting clean production and clean development mechanisms should be the long term objective of all stakeholders. Depending on end of pipe solutions such as CETPs would not be sustainable in the long term and would not be the kind of clean levels demanded by an increasingly conscious and competitive global market. Cleaning up the entire supply chain, from cotton to garments, should be the aim of all multistakeholder initiatives. Stakeholder Roles
In the prevailing situation, it is essential to point out the role of all stakeholders in the process of making garment production chain more clean and fair. 01. As a natural result of segmentation of the production chain in Tirupur, there is an equal segmentation of the groupings of employers. There are more than a dozen sub-sectoral industry associations in Tirupur. For example, the dyeing, bleaching, calendaring, compacting units have their separate association. The importance of these organisations can be gauged from the fact that all these bodies not only act as quasi-judicial institutions, which help to resolve the inter-firm and intra-firm commercial disputes but also acts as advisors and â&#x20AC;&#x2DC;collective managementâ&#x20AC;&#x2122; points for solving management issues. The organisations also assists its members to get investment capital from banks and other financial institutions. On the procedural front, assistance is provided to get various registration certificates. Among the associations, the most dynamic is the Tirupur Exporters Association (TEA). Unlike other Associations, TEA has been spearheading investment in infrastructure projects, which directly act as a catalyst to aid and promote exports. Other key agencies are the South Indian Textiles Research Association (SITRA) and Apparel Export Promotion Council (AEPC). All the organisations have to play a positive and highly coordinated role to make Tirupur a sustainable industrial cluster.
02. At the union level, segmentation is at a very low level as the total unionization remains low, though some of the major unions such as CITU, AITUC and INTUC have unit committees in different job work sections. But, generally all these unions are referred as the ‘banian unions’ as the original garment production activity at Tirupur is merely making banians-the men’s undershirt, from which it progressed to current level of making global brand knitwears. The 7 major unions (CITU, AITUC, INTUC, LPF, ATP, MLF, HMS) of Tirupur have been actively involved in the initiatives undertaken in connection with this project, and there is a remarkable level of togetherness among them despite the differences of their parent political parties. This is rare and highly useful strategically as the unionds can have a better collective bargaining power as they remain knitted together to achieve worker’s rights. Yet, there is a long way to go in collective bargaining front because of the low level of unionization (20-25%) in Tirupur. Capacity building and new action strategies are required to achieve better levels of unionization for which unions definitely varied support from other stakeholders, including international buyers and consumers. 03. Government agencies have a major role in facilitating and promoting sustainability of Tirupur. The Textiles Committee (TC) has been successful in many fronts and its committed efforts in changing the realities of Tirupur are acclaimed by many observers. Yet, there is a long road to travel to make Tirupur a sustainable industrial cluster and it is worth mentioning that TC has grown to meet the challenges. 04. On the labour front, apart from trade unions and NGOs involved in labour issues, government agencies such as the Employees Provident Fund department, the ESI Corporation, the Factory Inspectorate, the Labour Department etc are important. They have to play a major role to assure complaince of labour laws applicable. This is particularly important because labour regulation compliance is around 30% in Tirupur compared to 90% in the nearby Coimbatore city. Labour law compliance is the first and best step towards making the products socially clean. 05. On the issues of environmental standards, agencies such as the Tamil Nadu Pollution Control Board TNPCB), the Forest Department etc need to be considered. Regarding the issues concerning power consumption, the Tamil Nadu State Electricity Board is the agency to be considered. All these agencies have to go for coordinated actions in the cluster as many actions by diverse agencies go without sufficient coordiantion. 06. With regard to development aspects, the Cluster Development Programme, administered by the Textiles Committee is important. The TC has so far been trying to have coordination and participation of all concerned. But, given the diversity of agnecies and interests, the achievements so far are appreciable. But, there is a need to bring in all concerned, including workers and the ordinary people of Tirupur, into a synchronised action for making Tirupur a model industrial cluster of the future. 07. Regarding issues of solid waste disposal and related aspects, the Tirupur Municipality, its Mayor, elected Municipal Council, Standing Committees, Health Department are to be considered as agencies to be involved. The municipal agencies inlduing elected represenatives in the council are key players to make sure participation of people in various development activities. If people are not at the centre of development processes, technological solutions
will end up creating further social problems. 08. On the political front, the Members of Legislative Assembly (MLAs) representing Tirupur and nearby constituencies are important as points for lobbying any measures for change. In addition, the Member of Parliament (MP) representing Coimbatore (including Tirupur region) in the national Parliament (Lok Sabha) is also a major point for lobbying for change. National and state level political decisions and policies have a major contribution to make to achieve true sustainability of Tirupur cluster. 09. At the level of local administration, apart from the Municipality, the Revenue Administration headed by the District Collector (Coimbatore), and Tirupur Tahsildar (Taluk Revenue head) and the village officers are important as points of general administration. The Tirupur Development Block administration also needs to be considered. As policy actions directed by the State and Central governments are generally administered by these agencies, they have definite role in achieving standards in the Tirupur area. 10. On the standards and rights front, NGOs in Tirupur such as SAVE, CSED, EPIC-IN and those in the nearby regions such as Coimbatore needs to be considered. NGOs active in different sectors (such as SAVE in the labour front and EPIC-IN in environmental issues) have to join hands with other stakeholders to make sure that fair trade principles and clean production mechanisms are introduced in a true manner in the industrial cluster. NGOs should also be willing to interact with industry owners so that they are also aware about the problems faced by the entrepreneurs. 11 At the level of the state government, the concerned department secretaries, ministers, (and especially any minister from Tirupur or nearby areas, and ministries dealing with various apsects concerning the industrial cluster) need to be involved. Multiplicity of agencies and duplication of efforts has been a problem in almost all sectors in India. The absence of coordination between diverse agencies can be witnessed win Tirupur cluster too. But, as the Textiles Committee, a Central government agency, take initiative and lead the programmes with a promotional approach, there is much relief. Yet, there are problems. For instance, the absence of a clear order by the state government has led to the â&#x20AC;&#x2DC;no manâ&#x20AC;&#x2122;s landâ&#x20AC;&#x2122; situation concerning labouers in the small establishments which would not come under the Factories Act but fall under the Shops and Establishments Act. 12. At the national level, apart from the local MP and the Ministry of Textiles, the Ministry of Commerce (Department of Foreign Trade) and other related ministries need to be evolved. For instance, there is an issue concerning energy and forests with regard to garment production, and there is a matter concerning agriculture too. Therefore, appropriate level of interaction and coordination between all these agencies is essential to achieve policy action for making the cluster sustainable. 13. At the level of transportation and infrastructure, agencies such as the Public Works department (PWD) of State and Central government (CPWD), National Highways Authority of India (NHAI), the Airports Authority of India (AAI), the Railway, the Port Authorities, State Transport Authorities, the national carriers such as Air India, Indian Airlines, Shipping Corporation of India, private air carriers and shipping agencies, etc need to be involved. Smooth and fast movement of man, machines and materials in the supply chain.
14. At the level of procedures, departments of central excise and customs etc need to be involved. 15. At the level of finance and taxes, agencies such as the Reserve Bank of India, Income Tax department, Sales Tax department, Customs and Central Excise department, Exim Bank, commercial and cooperative banks, NBFCs, rural creidt agencies and micro credit agencies need to be involved. 16. At the level of industrial promotion, department of industries, small-scale industries association, district industries centres etc need to be involved. 17. At the level of citizenâ&#x20AC;&#x2122;s initiatives, local citizens organizations including clubs, youth associations and womenâ&#x20AC;&#x2122;s organizations need to be involved. 18. A highly coordinated and multi-stakeholder driven programme with long range perspective regarding intergenerational resource equity and and social justice, and with firm footing on current needs of business is the strategy to be adopted for sustainable management of Tirupur cluster. Knee jerk solutions and emotional actions would not serve any purpose except diverting attention from the multicolour issues and realities. The efforts in this direction already ongoing under the guidance of agencies such as UNIDO, Textiles Committee, TEA etc are appreciable. But, they tocuh only the tip of the iceberg and there is a lot more to be done. All stakeholders should be willing to recognise the role of others and also develop the quality to have mutual respect and duely recognise otherâ&#x20AC;&#x2122;s role in the making of Tirupur in the past and in the future as well. No stakeholder is dispensable in the life cycle of an industrial cluster. This is emphasied due to the fact that exporters tend to discount the role of workers in making the boom possible. It should be remembered that highly productive soil and highly productive human capital are the two major resources that facilitate boom and development. In the absence of these, it is impossible to achieve growth and sustainability. In addition, it should be noted that garment production is a highly labour intensive and a skilled, committed work force is a prerequisite for maintaining growth and achieving sustainability. The employers should show willingness to invest in human capital which should be equal to the willingness to invest in new technology. Otherwise, the perpetual mismatch between various nerves of the supply chain would continue and it would soon lead to further problems, which might become unmanageable if allowed to go beyond certain limits. 19. The level of social investment required to reach a balance in sustainable resource use need to be looked at from a wider perspective instead of a narrowed vision concerning development. Individual or small efforts like the MADE-BY label are not to be discounted as such multistakeholder initiatives can go a long way in creating an environment and ambience for responsible and fair trade practices. It also helps to bring in the consumers and buyers to realise the vastness of the problems. Realization of all stakeholder that they are part of the problems is the beginning of collective search for solutions. Such collective involvement could lead to global initiatives to solve the problems through joint efforts. It would facilitate to make clothes more clean, the production more sustainable and the benefits shared among all stakeholders.
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made garment units in the free trade zones – a comparative study; 2004 Tirupur Exporter Association: Project Profile-Netaji Apparel Park Tirupur (NAPT); 2002 Tony Hines & Margaret Bruce (Ed.): Fashion Marketing; Butterworth-Heineman, London, 2001 UNIDO: List of 358 SSI clusters in India identified by UNIDO Focal Point in India; 2003 UNIDO: General review study of SME clusters in India; 2005 Vijay Rukmini & Sahba Husain: Invisible hands: The women behind India’s export earnings; in ‘Indian women in a changing industrial scenario’, Sage, New Delhi, 1991 Vinita Balekundari: Women workers in the garment industry - a rough draft; 1995 World Bank: Garment-Making and Urbanisation: An Introductory Study of Four Cases. Working Paper Series6, Urban Development Division, World Bank. Web Sites www.aepcindia.com www.apparelresources.com www.cleanclothes.org www.homeworkersww.org.uk www.labourbehindthelabel.org www.smallindustryindia.com www.ciionline.org www.csrworld.net www.indianet.nl www.somo.nl www.textilescommittee.nic.in www.tradeforum.org www.solidaridad.nl www.picindia.org
Government Agencies 01. Mr. A. Unnikrishnan, Deputy Director, Textiles Committee, Coimbatore 02. Mr. Periasamy, Deputy Director, Textiles Committee, Tirupur 03. Mr. G Venugopal, Quality Assurance Officer, Textiles Committee, Tirupur 04. Mr. P N S Shiva Kumar, Quality Assurance Officer, Textiles Committee, Tirupur 05. Mr. David Barman, Deputy Director, Textiles Committee, Bangalore 06. Mr. Brahmanayagam, Regional Provident Fund Commissioner, Coimbtaore 07. Mr. Murugesan, EPF Officer, Tirupur 08. Mr. S Natarajan, EPF Officer, Tirupur 09. Mr. K Varadaraj Perumal, EPF Officer, Tirupur 10. Mr. Jaiprakash, Joint Director, ESI Corporation, Regional Office, Coimbatore 11. Mr. P. Babu Verghese, Joint Director, ESI Corporation, Regional Office, Coimbatore 12. Mr. Mohan Kumar, Deputy Director, ESI Corporation, Regional Office, Coimbatore 13. Mr. Pappachan, Officer, ESI Corporation, Regional Office, Coimbatore 14. Mr. Mohan, ESI Officer, Tirupur 15. Mr. Sai Kumar IAS, Labour Commissioner, Chennai 16. Mr. R Ramesh, Joint Labour Commissioner, Coimbatore 17. Mr. Mahendra Verma, Deputy Inspector of Labour & Inspector of Weights Measures, Tirupur 18. Mr. K A Mohammed Aziz, Chief Inspector of Factories, Chennai 19. Mr. Ganeshan, Deputy Chief Inspector of Factories, Tirupur 20. Mr. Kaliannan, Inspector of Factories, Tirupur 21. Mr. M V Senthil Kumar, Inspector of Factories 22. Mr. Jayaraman, Commissioner, Tirupur Municipality 23. Mr. R Srinivasan, Assistant Executive Engineer, Tirupur Municipality 24. Mr. V. Ramchandran, Tamil Nadu Pollution Control Board (TNPCB), Tirupur 25. Ms V. Jisha, Project Director, ILO NCLP Project, Coimbatore Exporters/Producers/Suppliers and Managers/officers 26. Mr. R. Subramaniam, Advisor, Tirupur Exporters Association, Tirupur 27. Mr Parthasarathy, Tubeknit Fashions Ltd, Tirupur
28. Mr. Eswaramurthy, Laurels Clothings, Tirupur 29. Mr. T V R Shanmuga Sundaram, Esvee Knittings, Tirupur 30. Mr. Muthukumar, Tee Ess Garments, Tirupur 31. Mr. Vijayakumar, Tee Ess Garments, Tirupur 32. Mr Thirukumar, Telma Clothing Co Pvt Ltd, Tirupur 33. Mr. K Manickaraj, Sri Thangam Knitwear Exports, Tirupur 34. Ms.Lilam Reuben, Century Apparels Pvt Ltd, Tirupur 35. Mr. T. Reuben, Century Apparels Pvt Ltd, Tirupur 36. Mr.Girirajan, Siruvani Clothing (P) Ltd, Tirupur 37. Mr.S.C.Ravichandran, Fuchsia Garments, Tirupur 38. Mr.Masilamani, Golden Sun Industries, Vijayamangalam 39. Mr.Karthikeyan, S P Textile Processors Pvt. Ltd, Chithode 40. Mr.Anil Kumar, The Canary, Tirupur 41. Mr. Piyush Sanghai, R.J.Knitwears Ltd, Tirupur 42. Mr.Raman Rao, R.J.Knitwears Ltd, Tirupur 43. Mr.Shanmugam, RBR Garments, Tirupur 44. Mr.Dhandapani, RBR Garments, Tirupur Managers and Staff of Exporters 45. Mr. B K Prakash, GM-Exports, Prem Durai Group, Tirupur 46. Mr. Gopalan Kutty, GM ( Works), Arun Textiles, Bhavani, Erode 47. Mr. Rajan, Head. Social Section & Principal, Prem Durai-Switcher Schools, Tirupur 48. Mr. Naresh, Personnel Department, Prem Durai Exports, Tirupur 49. Mr. Ganesh, Apparel Export Promotion Council, Tirupur
Trade Unions Centre of Indian Trade Unions (CITU), affiliated to Communist Party of India-Marxist (CPI-M) 50. Mr. M Chandran, Tirupur 51. Mr K Ponnuswami, Tirupur 52. Mr P Balan, Tirupur 53. Mr. S Sivakumar, Tirupur 54. Mr G Sambath, Tirupur 55. Mr K S Krishnamoorthy, Tirupur All India Trade Union Congress (AITUC), affiliated to Communist Party of India (CPI) 56. Mr. K Subbarayan, MP (Coimbatore Lok Sabha Constituency) 57. Mr. K. Balamani, Tirupur 58. Mr.N Sekhar, Tirupur 59. Mr S S Mani, Tirupur 60. Mr T Satish Kumar, Tirupur Indian National Trade Union Congress (INTUC), affiliated to Indian National Congress (INC) 61. Mr. P K N Dandapani (Member, International Leather and Garment Workers Federation), Tirupur 62. Mr A Perumal, Tirupur 63. Mr Muruga Rajan, Tirupur 64. Mr Magudapathy, Tirupur 65. Mr. P. Kannan, Tirupur Anna Thozhil Piravai (ATP: Anna Labour Federation), affiliated to All India Anna Dravida Mennetra Kazhakam (AIADMK) 66.Mr Centwin Mani, Tirupur 67. Mr Duraisamy, Tirupur 68. Mr M Anandan, Tirupur
Labour Progressive Front (LPF), affiliated to Dravida Munnetra Kazhakam (DMK) 69. Mr K. Ramakrishnan, Tirupur 70. Mr. G. Balasubramanyam, Tirupur 71. Mr. Selvaraj, Tirupur 72. Mr R Kathiresan, Tirupur 73. Mr S Bhoopathi, Tirupur Marumalarchi Labour Federation (MLF), affiliated to Marumalarchi Dravida Munnetra Kazhakam (MDMK) 74. Mr. Muthukumaraswamy, Tirupur 75. Mr Ramaswamy, Tirupur 76. Mr Manoharan, Tirupur 77. Ms. E Jansi Rani, Tirupur Hind Mazdoor Sabha (HMS) affiliated to Janata Dal ( JD) [Different factions] 78. Mr. R Muthuswamy, Tirupur 79. Mr. K Thomas, Tirupur 80. Mr. R Senthil Kumar, Tirupur 81. Mr. S Rajamani, Tirupur 82. Mr. Kaliappan, Tirupur 83. Mr V Balaji, Tirupur Pattali Makkal Kakshi Union (PMKU), affiliated to Pattali Makkal Kakshi (PMK) 84. Mr. Shanmugan, Tirupur 85. Mr. J Radhakrishnan, Tirupur Tamil Nadu Construction Workers Union (TMKTS) 86. Mr. M Subbu, TMKTS, Chennai. Workers 87. Mr. Senthil Kumar, Tailor, Tirupur 88. Mr. Narayanan, Tailor, Tirupur 89. Ms. Sarada, Tailor, Tirupur 90. Mr. Mohammed Azaar, Tailor, Tirupur 91. Mr. Aramugam, Master Cutter, Tirupur 92. Mani, Cutter, Tirupur 93. Ms Salma,Checker, Tirupur 94. Mr. Tamil Selvam, Iron Master, Tirupur 95. Mr. Vinod, Screen Printer, Tirupur 96. Mr. Selva Kumar, Computer designer, Tirupur 97. Ms Nalini, Sweeper, Tirupur 98. Mr.Ramakrishnan, Clerk, Tirupur 99. Mr. Ramesh, Driver, Tirupur 100. Muhammed, Driver, Tirupur 101. Mr. Selvan, Watchman, Tirupur 102. A group of workers in CMT (50, nearly half of them women), Prem Durai Exports (Premdurai-Switcher partnership). 103. Technical and engineering staff and managers of Prem Durai bleaching and dyeing units (50) 104. Workers and staff of Laurel Clothings (20) 105. Workers and Staff of Tee Ess garments (20) 106. A group of migrant workers including some women and migrant tailors from Kerala (10) Consultants, Buying Agents and Service Providers 107. Mr. B N Sandeep, Chief Consultant, Conquest, Tirupur 108. Ms. Padmaja Pai, Link Ethical Trade Consulting Pvt Ltd, Bangalore
109. Ms. Rajeswari, Top Notch Fashions Pvt Ltd (Buying House), Bangalore 110. Mr. Muruganandan @ M. Nandan, Top Notch Fashions Pvt Ltd (Buying House), Tirupur 111. Mr. Prabhu, Manager, Hotel Velan, Tirupur. NGOs 112. Mr. Subrabharati Manian, Environmentalist and Writer, Tirupur 113. Mr. A Aloysius, Director, Social Awareness and Voluntary Education (SAVE), Tirupur 114. Mr. S Rajkumar, Social Awareness and Voluntary Education (SAVE), Tirupur 115. Mr. C Nambi, Director, Centre for Social Education and Development (CSED), Avanashi 116. Mr. S M Prithviraj, Community Awareness Research Education (CARE), Coimbatore 117. Mr. I. Mohandas, Community Awareness Research Education (CARE), Coimbatore 118. Mr. R Paul Raj. Child Labour Amelioration Project (CL AP), Tirupur 119. Mr. I Jayaseelan, Director, Rural Education and Environment Development Service (REEDS), Dharapuram 120. Mr. Narayanan, Solidarity, Wayanad, Kerala. 121. Dr. K Dhanapal, Managing Director, EPIC-IN, Tirupur 122. Dr Eswaramoorthy, EPIC-IN, Tirupur 123. Mr. P Parthibhan, EPIC-IN, Tirupur 124. Mr. R. Sridhar, SHELTER, Tirupur
We sincerely thank all the people who have given their valuable time and shared their experiences and insights with us, which made this study possible. As there are too many people involved in various stages of the project, we donâ&#x20AC;&#x2122;t want to take the long route of listing all the names and say thank you to every one. But, we gratefully remember all the people involved in one way or other. We will remember them always and it is a fact that many of them have become our good friends in the course of the study and follow up actions for improvement of the supply chain. We express our deep gratitude to K Subbarayan, Member of Parliament, for encourgement and for sparing time to write the exordium. We specially acknowledge the deep interest shown in the project by Nico Roozan, Director, Solidaridad, and Viraf Mehta, Chief Executive, Partners in Change. We also thank them for writing the Preface and Foreword respectively We sincerely thank the trade union leaders, workers, exporters, NGO leaders, consultants, government officers and all others who allowed us to enter their life and learn from their experiences. We thank Koshy Mathew, Word Makers, Bangalore for editorial and design support and Rajeev Govind for cover deisgn and illustrations.
Research Coordinators Dr. Shatadru Chattopadhayay (Senior Program Manager, Partners in Change, New Delhi, India. www.picindia.org ) is a political economist by training who has been working for past several years on Trade and Livelihood related issues in the Tea, Coffee and Garment industry. He also specializes in Corporate Responsibility, particularly its implementation across the value chain and has worked with/initiated many multi-stakeholder groups for improving social, environmental and economic practices of the businesses. Currently he is acting as the Secretary to an Indian NGO Forum for Responsible Business comprising 35 Indian NGOs and is also adviser to several Indian and International NGOs and Universities on sector specific Corporate Responsibility issues. Janet Mensink (Program Manager, Fair Trade Cotton, Textiles and Garments, Solidaridad, Utrecht, The Netherlands. www.solidaridad.nl). She is responsible for the producers’ development program in Africa and India. She has educational back ground in environmental technology. Earlier she worked for CREM consultancy as specialist-sustainable textiles. This included policy research for the Dutch government, criteria for eco-labels on textiles, tailor made advice for garment brands and retailers and execution of projects in textile sector in developing countries.
Researchers and Authors Latheef Kizhisseri (K. Abdul Latheef ), Independent Research Consultant, Bangalore email@example.com Latheef holds Bachelor and Master degrees in Commerce and Law, and PG Diplomas in Journalism, Public Relations and Advertising and has completed course work for M.Phil in Law, and Ph.D. in International Sustainable Development issues. He was also trained in human resources development and financial analysis. As a child he worked in village farms and started career as a teacher. He moved to legal practice, and later shifted to law research and teaching at the National Law School of India University, Bangalore. He moved to professional journalism in 1995 with the Indian Express newspapers. He left full-time journalism in 2001 and now works as an independent research consultant, based at Bangalore. He has more than two decades of involvement in action research and in social, environmental, educational, human rights, tribal rights and trade union movements. He is one of the founder directors of the newly established Centre for Sustainable and Responsible Business Solutions, Bangalore. Pramod John, Senior Programme Manager (South), Partners in Change firstname.lastname@example.org Pramod is a PG in English Literature with training in web designing, programming and systems development. He has had over a decade of rich experience across sectors, having worked in the corporate sector with organisations like NIIT and as a consultant to NGOs like SKIP– a network of Industrial Training Institutes, ActionAid India, Campaign Against Child Labour (CACL), South India Cell for Human Rights Education and Monitoring (SICHREM) and Child Rights Resource Centre (CRRC) where he was involved in digital documentation, training in leadership and community organisation and streamlining Management Information Systems. He has also founded Prakruthi – a voluntary and charitable trust engaged in computer literacy and livelihood skills enhancement for the underprivileged children in the slums of Bangalore. Pramod joined PiC in February 2004 and is located in Bangalore.
KNITTED TOGETHER A Study of Multistakeholder Perspectives on Economic Social and Environmental Issues in the Tirupur Garment Cluster New dimensions of responsibility are evolving in global business practices along with globalization. This has energized fair trade and clean production movements around the world. Partners in Change and Solidaridad have partnered to build a flagship chain of suppliers from India for optimal achievement of fair trade principles, aiming at achieving economic, social and environmental standards and sustainable clean production systems in the garment sector. Any attempt for launching an improvement programme for stakeholders needs to be prefaced by a study of the ground realities of locales that houses the stakeholders. This study brings out the relevant compliance standards in the garment sector of Tirupur.
Partners in Change is a not-for-profit organisation, established by ActionAid International-India in 1995 to proactively engage with businesses and to maximise their impact on the lives of the most vulnerable and marginalised stakeholders, in a positive manner. Partners in Change recognises that there are various stages of evolution towards the integration of Corporate Social Responsibility (CSR) as an essential business process and helps businesses at all stages â&#x20AC;&#x201C; identifying stakeholders, their relevant issues and managing these relationships, developing CSR policy and guidelines, training/sensitising company staff, benchmarking a companyâ&#x20AC;&#x2122;s social responsibility programme, establishing CSR management systems, social audit, keeping the company abreast of latest issues in development and social responsibility through publications, seminars, workshops and the website.
Solidaridad, established in 1969, was one of the first NGOs to become active in the Fair Trade movement. In 1986, Solidaridad founded the Max Havelaar mark for coffee. During the same period, the theme of corporate social responsibility gradually became a concern of regular businesses. This marked the beginning of a new phase for the Fair Trade movement: the breakthrough to the mainstream of the economy. Solidaridad aims to support producers in developing countries and link them up to sustainable markets. Solidaridad can be considered as an innovator among development organizations, having a strong track record in coffee, tropical fruits and garments. The garment program of Solidaridad has set up flag ship chains in developing countries-from fibre to garment.
IN CHANGE www.picindia.org