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Steering Corporate Social Responsibility Making Social Audit Work in the Tirupur Garment Cluster

Documented by Koshy Mathew for Prakruthi and Solidaridad-South & SE Asia

Published for TSG and Solidaridad by Prakruthi #43, 2nd Cross, Ramaya Layout Kammanahalli, St.ThomasTown Post Bangalore 560 084 Tel: 080-25438935/36 :: Fax: 080-41732338 E-mail: director@prakruthi.org URL: www.prakruthi.org

Designed by MV Rajesh Printed at National Printing Press, Bangalore


What this little book is all about This little booklet is not a publicity brochure.This is an attempt to document the efforts that went into the process of setting up one of the most unique formations in the history of social intervention. What was thought to be unattainable at one point, when we commenced our innocuous research in Tirupur in 2004, became a reality two years later. Our major concern was, apart from the research findings, was to explore the possibility of bringing together all interested parties on to one table and see if a common agenda can be agreed upon to address the host of issues we were confronting then – child labour, pollution of the environment, fair wages, fair trade, women’s and children’s rights, schooling, migration and the like. The parallel process that we set in motion while carrying out the study fructified in quick time, in fact, within a few months after the study was published in April 2006. Political parties, trade unions and nongovernmental organisations saw the validity of the study and agreed rather tentatively they would converge into a Steering Group and take forward the agenda of encouraging and enabling textile enterprises in India to have a positive and growing impact on the quality of life of the people through adoption of improved CSR practices. What has transpired in the course of these few years is that TSG has become a major partner for ensuring social audit. Social Accountability International (SAI), the creators of the SA8000 standards, has formally endorsed Tirupur Steering Group and has strongly recommended that the SAI-accredited Certification bodies consult with the Steering Group throughout the SA 8000 certification process.This is the first time such formal endorsement from SAI has been given in India and even in the developing world. This booklet is only a small attempt to portray what multi-stakeholders cutting across political ideologies and social divisions can achieve.

Shatadru Chattopadhayay Director, South & SE Asia Solidaridad

Pramod John Executive Director Prakruthi

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Tirupur and the Garment Industry Tirupur is a district in Tamil Nadu in southern India. Tirupur is known by many names – dollar city, hosiery city and banian city are some of them. The names that Tirupur has earned is owed to the fact that it has gained international recognition as the leading source for hosiery, knitted garments, casual and sports wear. Some of the world’s largest brands source their products from Tirupur and the city provides employment to over 3,00,000 people. The annual export turnover of Tirupur is over Rs 12,000 crore. The origin of the hosiery industry in Tirupur goes back to the 1930s when it began as a cottage industry, supplying knitwear to domestic and local markets. This included the production of low value cotton hosiery, mainly undergarments. The knitting industry of Tirupur began when one Mr Gulam Kadar established the first baby knitting industry in the Kaderpet area of Tirupur. Tirupur, in many ways, was a place that was ideally suited to the setting up of weaving and knitting industries as the dry climate of this region was conducive for the growth of this industry. Textiles are not new to this region. Even before the knitting industry picked up, the locals were weaving textiles by hand. Graduating to the knitted process was logical. The textile industry is one of the main pillars of the Indian economy. It constitutes about 14 per cent of industrial production, 20 per cent of total export earnings, 4 percent of GDP and direct employment to an estimated 35 million people. By 1960, there were about 450 knitting units that serviced domestic demand. The shift from supplying local markets to export began in 1972 as a response to the shrinking domestic markets owing to fierce competition among the local manufacturers. The first export from Tirupur was made to the US and Ghana. By 1987, the export revenue of Tirupur had reached around Rs. 75 crore. Since then, exports from Tirupur have been growing steadily and, in 2004, the total exports touched a figure of more than Rs. 5,000 crore. Tirupur contributes 75 per cent of the total production of cotton knitwear, which is exported from India. 5


Evolution of the Tirupur Steering Group Trade Unions and NGOs have been active in Tirupur for several decades. While the former address issues related to workers such as wages and working conditions, the latter’s intervention is centred around social issues of child labour, women’s rights, environmental pollution and the like. Seldom did the two share a common platform to address issues that cut across the entire garment sector and the populace. In 2004, Solidaridad, the Netherlands-based NGO, having its focus on bringing industry and social action on a single platform to address business and human-related issues, initiated a study of the Tirupur garment industry through its local partner, Partners in Change (PiC). Mr. Pramod John, Programme Manager of PiC and Mr. Latheef, journalist and social science researcher, jointly conducted the study, the outcome of which was a substantial publication titled, Knitted Together. The research was coordinated by Dr. Shatadru Chattopadhayay and M. Janet Menslink. Knitted Together raised a host of serious intertwining issues and made a set of recommendations, one of which was the need for a unified working group composed of all stakeholders in the garment industry to evolve a mechanism to audit the social practices of manufacturers. Mr. Pramod John took it upon himself as a personal mission to make this possible and called for several consultations among political parties, trade unions, NGOs, suppliers, manufacturers and buyers to arrive at a consensus for social audit. That consensus was reached in October 2006 and the Tirupur Steering Group (TSG) was given shape to on 19 November 2006. In the latter half of 2008, PiC formally requested Mr. Pramod John, by then executive head of Prakruthi, to take over the work in Tirupur and nurture the TSG under the umbrella of Prakruthi. Beginning 01 September 2008, Prakruthi assumed the responsibilities of the Tirupur programme with the support of Solidaridad. The target group of the Tirupur programme are medium, micro- and small enterprises in the knitware industry who are producing for brands overseas. Another target group is workers in the garment clusters whose living and working conditions will improve as suppliers undertake improvement programmes based on their enhanced understanding and use of the Code of Conduct that governs the supply chain. 7


Knitted Together Prior to the publication of the book, Knitted Together, in April 2006, efforts were devoted primarily for identification of existing standards, prescription of continuous improvements in social and environmental standards and regular monitoring of such standards in Tirupur in collaboration with different stakeholders. Termed as the First Phase, this gave way to the Second Phase, which commenced in June 2006. In the Second Phase (June to September 2006), the project sought to build capacity of all stakeholders in the Tirupur garment cluster on sustainable garment production and on codes of conduct. The second phase also concentrated on developing a common position of the different stakeholders in the Tirupur garment cluster on sustainable garment production. The next was from October 2006 to February 2007 and this period saw heightened activity in training of almost all stakeholders in Tirupur garment cluster and to bring them together under one umbrella so that they may have a collective and coherent approach towards key aspects of social, economic and environmental standards in the garment industry in India. The efforts paid of in knitting together a steering group, officially called the Tirupur Steering Group (TSG) at a consultation organized on 19 November 2006 at Connoor, Tamil Nadu. The Tirupur Steering Group consists of seven trade unions – the Indian National Trade Union Congress (INTUC), trade union wing of the Congress Party; Centre for Indian Trade Unions (CITU), trade union wing of the Communist Party of India (Marxist); All India Trade Union Congress (AITUC), trade union wing of the Communist Party of India; Hind Mazdoor Sabha (HMS), an independent trade union started in the wake of Emergency in India during the 1970s; Labour Progressive Federation, affiliated to the Dravida Munnetra Kazhagam (DMK); – and four NGOs – Partners in Change (PiC), SAVE, CSED, and CARE. Prakruthi took the place of PiC in the TSG in 2008. TSG decided to work together in making social audits in the garment sector more effective in addressing labour and environmental issues. It also decided to work with SA 8000 codes in the beginning as majority of the garment companies in Tirupur are adopting SA 8000 standards. Subsequently, it was agreed to engage with various other multi-stakeholder code-setting bodies. 9


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SA8000 and Alliance with SAI SA8000 is a global social accountability standard for decent working conditions, developed and overseen by Social Accountability International (SAI). SAI offers training in SA8000 and other workplace standards to managers, workers and auditors. It contracts with a global accreditation agency, Social Accountability Accreditation Services (SAAS) that licences and oversees auditing organisations to award certification to employers that comply with SA8000. SA8000 is based on the UN Universal Declaration of Human Rights, Convention on the Rights of the Child and various International Labour Organization (ILO) conventions. SA8000 covers the following areas of accountability: Š Child labor: No workers under the age of 15; minimum lowered to 14 for countries operating under the ILO Convention 138 developing country exception; remediation of any child found to be working. Š Forced labor: No forced labor, including prison or debt bondage labor; no lodging of deposits or identity papers by employers or outside recruiters. Š Workplace safety and health: Provide a safe and healthy work environment; take steps to prevent injuries; regular health and safety worker training; system to detect threats to health and safety; access to bathrooms and potable water. Š Freedom of Association and Right to Collective Bargaining: Respect the right to form and join trade unions and bargain collectively. Š Discrimination: No discrimination based on race, caste, origin, religion, disability, gender, sexual orientation, union or political affiliation, or age; no sexual harassment. Š Discipline: No corporal punishment, mental or physical coercion or verbal abuse. Š Working hours: Comply with the applicable law but, in any event, no more than 48 hours per week with at least one day off for every seven day period; voluntary overtime paid at a premium rate and not to exceed 12 hours per week on a regular basis; overtime may be mandatory if part of a collective bargaining agreement. Š Remuneration: Wages paid for a standard work week must meet the legal and industry standards and be sufficient to meet the basic need of workers and their families; no disciplinary deductions Š Management system for Human Resources: Facilities seeking to gain and maintain certification must go beyond simple compliance to integrate the standard into their management systems and practices. 11


Major Stakeholders The major stakeholders that constitute the TSG are the Trade Unions and NGOs as at present. Suppliers, buyers, and women’s organisations have expressed interest in having a stake in TSG. The Trade Unions 1. Indian National Trade Union Congress (INTUC), the oldest of the trade unions, affiliated the Indian National Congress, is represented by Mr. P K N Dhandapani, its Secretary. Mr. Dhandapani is also Convener of the TSG. 2. Centre of Indian Trade Unions (CITU), affiliated to the Communist Party of India (Marxist), is represented by its Secretary Mr. Chandran. 3. All-India Trade Union Congress (AITUC), affiliated to the Communist Party of India (CPI), is represented by Mr. Balamani, its Secretary. 4. Hind Mazdoor Sabha (HMS), an independent trade union, is represented by its Secretary, Mr. Kaliappan. 5. Marumalarchi Labour Federation (MLF), affiliated to the Marumalarchi Dravida Munnetra Kazhagam (MDMK), is represented by Mr. Muthukumaraswamy, its Secretary. 6. Labour Progressive Federation (LPF), affiliated to Dravida Munnetra Kazhagam (DMK), is represented by its Secretary, Mr. Ramakrishnan. 7. Anna Thozhirsanga Peravai (ATP), affiliated to All India Dravida Munnetra Kazhagam (AIDMK), is represented by its Secretary, Mr. Centwin Mani. The NGOs 1. Social Awareness and Voluntary Education (SAVE), represented by its Director, Mr. Aloysius. 2. Centre for Social Education and Development (CSED), represented by its Director, Mr. C. Nambi. 3. Community Awareness Research Education Trust (CARE), represented by its Director, Mr. S.M. Prithiviraj. 4. Prakruthi, Bangalore based NGO and partner of Solidaridad, represented by its Executive Director, Mr. Pramod John. Prakruthi’s programme office in Tirupur hosts the TSG Secretariat. 13


Activities The Steering Group engages itself in the following activities: Š Pre-Audit and Post-Audit Consultations: Certifying bodies issuing SA8000 Certificates engage TSG in ascertaining the social and welfare reputation or standing, through its trade union channels, of factories seeking certification prior to the audit. Once the independent audit is complete, TSG is once again engaged to either validate or refute the findings of the auditing body. When a manufacturing unit expresses interest in being certified by SAI, the Steering Group is alerted to the same. The Group is then engaged in a confidential assessment of the said firm through its reliable channels, namely the trade unions and the NGOs. The process, called the pre-audit consultation between SAI/Certifying Body and the TSG, forms the base data/information for the actual audit by the CB. Following the audit by the accredited certifying body, the TSG is, once again, engaged in a consultative process to either validate or refute the findings of the CB. This three-pronged audit process - pre, actual, and post – ensures that the interests of all stakeholders are protected. Š Independent monitoring of the observance of the code of conduct: Following certification, the factory undertakes to observe the SA 8000 Code of Conduct. TSG, as an independent body, is empowered to make monitor the certified unit independently, and report any violation of the Code. Š Filing of complaints and reporting on serious violations of the codes: Any serious violation in the observance of the said Code of Conduct can be pursued by TSG and reported to the certifying body and/or the buyer(s). Š Verification of the remediation programmes initiated by the factory: When a factory has completed the remedial measures following a complaint, the TSG is empowered to ensure that such measures taken are in compliance with the desired codes. Š Training for the workers on codes of conduct at the factory level: In order to effectively addresses the concer ns of civil society organisations (CSOs) and trade unions about the ‘top-down’ approach of the code, workers at the certified factories are trained to monitor its implementation. Empowered workers in the SA 8000 certified factories with the knowledge of SA 8000 code ensures better checks and balances at the factory floor and better implementation of the standard. Š Training of young trade union activists on compliance: In order to push ahead with the agenda of social compliance, young trade union activists are constantly given training in various aspects of compliance. Every year, six such sessions are conducted and reaching out to over 150 activists. 14


Prakruthi’s Role Prakruthi’s experience in formation of TSG in India, in Tirupur has demonstrated the efficacy of such monitoring body with recommendatory powers. In this case, not only the mere TSG structure is important but also the processes adopted to setting-up the TSG and actors who eventually became part of TSG are also essential. The formation has done with extraordinary sensitivity, since each social geographical context may throw up different stakeholders who became integral part of the actor’s active in the TSG. For example in India, in Tirupur, Prakruthi learned that the farmers, in the surroundings of Tirupur are also important stakeholders as the militant industrial activities in Tirupur affect the livelihood of farmers, in the form of effluents destroying water bodies and land masses. Such learnings are important. Because in others countries different actors may came to play a crucial role. The learnings from the actual and potential roles of TSG are such that mere SA8000 certification process and the incentives it offers in the form of export opportunities can be a limited incentive for the companies to adopt sustainable business practices. Moreover, as its exists, the SA8000 certification involves actors who are external agents without local cultural sensitivity. Indeed Prakruthi’s experience has been such that SA8000 certification process cannot be visualized as a legal process, but as a social process. Though legal-rights framework of many varieties provide the backdrop and context for evolution of principles and requirements the process itself cannot be conceived merely as law-enforcing process. If anything the legal threat should remain largely in the background, with social pressures frontally playing up minds of those seek SA8000 certificates. In a nutshell, Prakruthi’s role may be identified as: • Hosting TSG’s Secretariat Office. • Strengthening the SA 8000 audit process. • Building capacity of TSG and its individual members. • Building the capacity of workers in SA 8000 certified factories. • Promoting corporate community investment programmes in association with the Tirupur Steering Group. 16


The Charter of the Steering Group We, a group of seven Trade unions and four NGOs, united in our concerns and committed to promoting better labour and environmental responsibilities in the Tirupur garment cluster have come together to establish the Garment Sector Steering Group of Tirupur - an informal assembly of trade unions and nongovernmental organizations. We seek to work together in making social audits in garment sector more effective in addressing labour and environmental issues. We Recognize Š In response to the demands by the stakeholder groups, increasing number of importing companies are asking their suppliers in Tirupur to adhere to one or other codes of conduct to check working conditions in production facilities. Š The trade unions and NGOs have often very limited or no role in the audit, verification, monitoring and remediation programmes initiated by the codesetting bodies.There is a need for comprehensive and accountable mechanism for the trade unions and NGOs to engage with the various codes-setting and code-implementing bodies. Š Due to lack of awareness about the codes of conduct the workers have limited faith in codes of conduct and have failed to fully participate in audits, and make the implementation of codes more sustainable. We Believe Š That active participation of the trade unions and NGOs in the entire social audit process could lead to good quality monitoring and credible verification. Š That implementing Codes of Conduct in partnership with trade unions and NGOs would lead to increased competitiveness of Tirupur garment cluster by the way of better access to markets, reputational benefits, increased workers satisfaction and loyalty leading to increased productivity, increased savings through better environmental management and reduction of cost of production. Š That issue-specific cooperation and coordination amongst trade unions and NGOs have a better chance of achieving their goals in far more effective manner than singular approaches. Š That we approach this agenda with different entry points and perspectives and this very diversity is the strength of the Steering Group rather than the distances that separates us. Our Approach Š To be a one point reference for Pre-Audit and Post-Audit consultations. Š Facilitate independent monitoring of the observation of the codes of conduct. Š To participate in verification of the remediation programmes initiated by the factory. 18


The Charter of the Steering Group Š Š Š Š

Filing of complaints and reporting on serious violations of the codes. Training for the workers on codes of conduct at the factory floor. To collaborate on work towards issues of common priorities. To engage with various code-setting bodies.

Working of Garments Steering Group Š The Steering Group comprises seven trade unions - CITU, AITUC, LPF, ATP, INTUC, MLF and HMS and NGO members - Prakruthi, SAVE, CSED & CARE. Š The Steering Group has come together informally on specific issue of social audits in Tirupur and it will have no room with regard to independent activities of its members. Š The Steering Group would work with SA 8000 codes in the beginning as majority of the garment companies in Tirupur are adopting SA 8000 standards. Subsequently, the group will engage with various other multi-stakeholder code setting bodies. Š The Tirupur office of Prakruthi would host the secretariat of the Steering Group. Š Dr.T. Parthiban would act as a coordinator of the Steering group and would be responsible for facilitating various activities from time to time under the guidance of the Steering Group Members. Š The steering group would be meeting at least once in 2 months.This would not prohibit the steering group to conduct meetings or workshops on specific themes. Š A quorum of seven members would be necessary for conducting the Steering Group meeting. Out of the seven members a minimum of three trade union leaders and three NGOs need to be present in the meeting. Š The Steering Group Meetings would be given a top priority and the heads of the NGOs and the senior most trade union leaders would be participating in the deliberations. However, in case of extreme difficulties, a nominee of the Steering Group member could participate. Such nominees should be empowered to take decision on behalf of the organization he/she represents Š The Steering Group would have the right to invite observers or special invitees in its meetings from time to time. Š The group will decide by simple majority about the inclusion of new members in the Steering Group Signed by representatives of the seven trade unions – CITU, AITUC, LPF, ATP, INTUC, MLF and HMS and NGO members - Prakruthi, SAVE, CSED & CARE.

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What the Leaders say.... It gives me immense pleasure that Steering Group plays a major role in the development of Knitted wear at Tirupur. Their efficient steps in hand with the 7 Trade Unions and 5 NGO’s for the past 3 years is commendable. The Steering Group works for the welfare of laborers, to develop quality exports, and Social Auditing for the SA 8000 certified factories. The book is published to realize the above activities of TSG to the general public, Laborers and Industrialists. I extend my best compliments to Steering Group on behalf of me and also the residents of Tirupur Corporation. K. Selvaraj, Mayor,Tirupur Corporation

* * * I am extremely happy to know that “Tirupur Steering Group” has been assisting Social audit certificate SA8000. Besides, giving training to Garment Factory Labours it also gives important to welfare of the Labours. I am glad that the Garment Industry and the Labours are getting help and guidance by this group for continuous improvement. My best wishes for the betterment activities of the group. Further, also my wishes to the “Prakruthi Institution” for all their efforts and integration. Tirupur.C.Sivasami, Member of Loksabha, Tirupur Constituency

* * * I came to know that seven Trade Unions and five NGOs in Tirupur are jointly forming a Steering Group and act as a Consultative body to SA 8000. I hope that this intiative will facilitate to implement the systems in a better manner in the Kintwear Garment Units under the direct monitoring of steering Group. I wish this group will act as bridge between buyers and garment manufaactures and do help for the overall growth of knitwear sector A.Sakthivel, President Tirupur Exporters’s Association (TEA) 22


What the Leaders say.... I am really happy to know that the organization [Prakruthi] was established in the year 1991 and continuously working for the welfare of farmers and supporting them with new techniques. Moreover, I really have to applaud them for educating children of these farmers, especially girl children. On behalf of our Association [TEKMA], I take this opportunity to wish Prakruthi and the TSG members grand success on launching the website. K.P. Govindaswamy, President,Tirupur Export Knit-wear Manufactures Association

* * * TSG plays major role in inculcating CSR values among exporters. TSG’s services of implementing the labour legislations so as to sustain the business, to ensure quality, to enhance labour life standard, protect their rights and responsibilities are remarkable. Subrabharathimanian, Writer, Kanavu Literary Organisation

* * * We are extremely pleased to note that Tirupur Steering Group is publishing a booklet on its activities. Having associated with the Tirupur Steering Group over 2 years, we are aware of their deep commitment towards social upliftment and supply chain development among industrial Workers. The services rendered by Tirupur Steering Group during pre and post audit consultation process of Social Accountability Certification, were focused, well meaning and contributed to the success of people and companies alike. A noteworthy aspect is the selfless service provided by them to meet the intent and spirit of social compliance standards including resolution to any prevailing issue, without any personal motive. We wish enduring success to Tirupur Steering Group. K.T. Ramakrishnan, Managing Director, RINA, India 23


What the Leaders say.... Nobody can deny that TSG is working for labour welfare and for environmental protection. TSG has created a platform for all NGOs and TradeUnions to address workers’ problems. SA 8000 paved the way for this. Social Auditing conducted by TSG in Tirupur is very successful. Recently we started a website. P.K.N. Dhandapani, General Secretary, INTUC

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The Way TSG works for the welfare of labour is remarkable. There is no second thought about the imperative services done by TSG. Hats off to them. R. Kalliappan, General Secretary, HMS

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TSG acts as a major organization in training employees, empowering Trade Unions and equipping Corporates to follow SA8000 norms in Tirupur garments factories. I wish them success in their efforts. K. Ramakrishnan, General Secretary, LPF

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What the Leaders say.... The benefits for employees being attained with help of TSG are significant. Social Auditing by TSG helps to ensure 8 hours works and to avail ESI, PF and others statutory and non-statutory benefits. I am very grateful for the services of TSG. Ceintwin A. Mani, President, ATP

* * * TSG gives us a greater opportunity to learn about each other and grow as one group all those who are interested in well being of garment workers of Tirupur. It has grown as an institution to influence and promote growth of the industry in a positive way and advocates labour rights. Certainly it has created a platform to debate on the issues to evolve common consensus among the various stake holders. A. Aloysius, Director, SAVE

* * * Tirupur Steering Group (TSG) is a unique effort in itself. Trade Union and Civil Society Organisations have come together to play the Monitoring role in the context of SA 8000 and thereby promote and protect the interest of workers in the Garment Industry. I wish them good luck. C.Nambi, Director, CSED

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What the Leaders say.... I have great pleasure in inviting the employees of garment export companies and International brand organizations to utilize the consultancy services of member organizations of Tirupur Steering Group are known for best promoters of social, labour and environmental standards. The need of the hour especially in the context of global economic recession is to work together for building a sustainable and equitable garment and textile industry with a global reputation for Corporate Social Accountability. S.M.Prithiviraj, Executive Director, CARE-T

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The Fact that Social Accountability International (SAI), the creators of the SA8000 standards, has formally endorsed Tirupur Steering Group and has strongly recommended that the SAIaccredited Certification bodies consult with the Steering Group throughout the SA 8000 certification process shows the importance of Tirupur Steering Group. We are happy to be a part of it to host the secretariat in Tirupur. Mr. Pramod John, Executive Director, Prakruthi

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Steering Corporate Socail Responsibility  

Designed by MV Rajesh Printed at National Printing Press, Bangalore Documented by Koshy Mathew for Prakruthi and Solidaridad-South & SE...

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