It has also exposed major shortcomings in the Swazi media and the way they are unable (or unwilling) to explain to people in Swaziland what is going on around them.
The reports concern a company called Procan, which operates in the industrial town of Matsapha. According to the Swazi Observer (19 February and 20 February 2008), the company sacked all of its more than 600 workers after they went on strike to protest against not being paid their wages on time and not being paid for leave.
Procan then arranged for new people to be engaged to take on the jobs of the sacked workers.
As a result of all this, Swaziland’s Minister of Employment met with management, the Swaziland Manufacturing and Allied Worker’s Union, and the Swaziland Investment Promotion Agency, to try to solve the dispute. At the time of writing discussions were still going on.
The Swazi Observer in particular devoted pages to the dispute, but readers would come away believing that the Procan dispute was an isolated incident. In fact, the textile industry in Swaziland is hugely controversial for a number of reasons: there are worries about how much the Swazi taxpayer is subsidising the textile industry, as well as concerns that the companies pay very little back into the Swazi economy whilst exploiting their workers.
None of this is new. Newspapers such as the Swazi Observer have reported these things in the past, but, as with this week’s latest round of reports, the Swazi media rarely connect the reports together to give Swazi people a full picture of what is going on.
This lack of endeavour on the part of the Swazi media shows them in a very poor light. For someone looking in on the Swazi media, it is difficult to tell whether this is because the journalists are incapable of seeing what is going on around them or whether they are deliberately withholding information from the public.
One must suspect that they are deliberately withholding information, because the appalling state of the Swaziland textile industry is well documented outside of the kingdom.
Only as recently as August 2007, a major damning report on Swaziland’s textile industry called Footloose Investors, Investing in the Garment Industry in Africa, was published by SOMO – Centre for Research on Multinational Corporations, in Amsterdam, The Netherlands.
The report states, in July 2007 there were around 17 or 18 garment companies in Swaziland (down from more than 30), all of these are foreign owned companies and 11 are thought to be Taiwanese owned. Generally, Swazis are not employed in management positions in these companies and there is little or no opportunity for local people to progress beyond the lowest ranks of employment.
The garment industry took off in Swaziland in 2001 when world trade agreements made it attractive for foreign-based companies to set up in the kingdom. At its height the textile industry had about 30 companies working in Swaziland which employed about 30,000 workers – mostly in the industrial town of Matsapha. There is very little work in the textile industry available in rural areas.
In 2007, the textile industry employed about 16,000 workers – a fall of 50 percent since 2004.
The reasons for the rise and fall of the textile industry in such a short space of time can be attributed in large part to world economy. The SOMO report states that the government policy of providing ‘factory shells’ for incoming companies at little or no cost to the company showed that Swaziland was desperate to attract investment.
As a result the Government gave companies a large number of incentives such as tax exemptions and duty free importation of raw materials. The Government also allowed companies to take all profits and dividends outside of Swaziland, which in effect meant that there was little or no investment within Swaziland from the companies.
With a change of world trading conditions, Swaziland became less attractive to foreign companies. In order to maintain profits the companies began to lobby the Government for changes in the law. The companies especially wanted laws and regulations regarding labour loosened.
SOMO concludes, ‘It seems that the public spending on building shells and infrastructure aimed at attracting foreign investment in the garment industry has not brought about much economic benefit so far.’
The report states,
‘Companies have been asking for certain “incentives” in exchange for their continued production in the country, implying that the country owes them something for their presence.
‘One of the companies in Swaziland, for example, Tex Ray, announced tits willingness to set up a textile mill but asked in return for less stringent labour laws and laws on the environment, and for the prices of electricity and water to be halved. They also felt that government should subsidise the wages.’
Some companies simply shut down and moved on, leaving workers in the lurch.
The SOMO report gives two examples,
‘Sheung Lee was a company that suddenly closed down from one day to the next, and the 400 workers employed there were not paid their terminal benefits. The owner fled the country and, according to the Taiwanese embassy, has disappeared without a trace.
‘Workers at Suntay Lon were not paid for a fortnight, and were told to come back another day to get their payment. They were never paid and the management left, stripping the factory and leaving the supervisors from China behind, without money or plane tickets. The Taiwanese embassy arranged for their employment agency to get them tickets, and gave them money for food.’
This led SOMO to conclude, ‘The companies that are departing from Swaziland are not leaving anything behind. Most of the companies can leave without the government being able to take any action. They take everything with them on departure; they do not pay their workers, they take everything that has been built into the factory, they even take the keys.’
SOMO also reports that employers in the textile industry complained about high labour costs, ‘that the workers do not work hard enough and absenteeism is high’.
The textile industry is notorious for exploiting its workers. Wages are low with the minimum wage about E200 (28 US dollars) per week, with an average income of between E800-1,000 per month (in 2006). Overtime is compulsory when the orders are high. Most workers work overtime because they desperately need the money.
The report states, ‘Trade unions have researched the income needed for a family, concluding that 2,000 emalangeni per month is an absolute minimum. Workers interviewed in 2006 said that they would need about 3,000 emalangei to support an adequate standard of living. On average, a garment worker supports a family of five to ten people.’
The Swaziland Manufacturing and Allied Workers Union (SMAWU) was reported saying that workers in the textile industry are more afraid now. ‘They are scared of losing their jobs, and are unwilling to organise as they fear that every factory that organises will close. Indeed, some of the factories that were on the verge of a recognition agreement with the trade union, closed down in 2005 and 2006.’
When companies closed the workers who were made redundant often found themselves in very difficult situations, SOMO reports.
‘They were forced out of their homes, and often had to work in the informal economy, with very little income.’
In its conclusion to the report SOMO quoted the Swaziland Investment Promotion Agency (SIPA) saying that the garment industry could not be successful in Swaziland as the raw materials needed had to be imported from Asia which doubled the time it took to make garments.
A representative of the European Commission in Swaziland is quoted saying that there is clear dissatisfaction with the return on all the investments. It has cost Swaziland a great deal of money and effort to attract the industry to Swaziland, and it will cost the country even more to retain it.
So there you have it. The textile industry in Swaziland is a huge drain on the kingdom’s economy. It provides next to no income for Swaziland. Profits and dividends are sent abroad so do not benefit the local economy. Swazi workers are exploited and paid low wages with few benefits.
These are important things for the people of Swaziland to know.
The Swaziland media must explain to us all why it is that we have to read a report published in Europe to find this out. What has the Swazi media been doing all this time?
1 comment:
probably the only one who can save the employees from continuous exploitation is the government..the policy doesn't seemed to benefit Swaziland at all.why cant the union do something for the employees?
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