Labour unrest adds to garment sector’s woes

Kathmandu, October 6:

Business and labour are fighting to gain the upper hand during Nepal’s political transition, a process that has helped to sideline the unemployed workers and anxious factory owners of the troubled garment industry.

“It’s a little bit like in 1990. Everyone is putting forward their demands,” says Bishnu Rimal, general secretary of GEFONT, the General Federation of Nepali Trade Unions.

“If our government could negotiate with the US government there is a possibility of the garment industry surviving,” added Rimal, whose union represented more than half the roughly 50,000 people who laboured in the industry during its heyday. “Otherwise, no — China has captured the US and EU markets and we can’t sell anything to India because they have their own producers.”

Since April’s ‘people’s movement’, labour groups small and large have emerged insisting on better deals from a government preoccupied with peace talks with former Maoist rebels, who accelerated the uprising.

Added to that mix is the Maoist-affiliated trade union, which has used its links to the powerful, still armed insurgents to muscle in on traditional unions’ territory and raise temperature of industrial relations in this impoverished, mainly agrarian South Asian nation.

In the background, the garment industry continues to fade away.

That process began in 1995, when a quota system that guaranteed access to major markets like the US and EU for garments made in Nepal and other developing countries began to be phased out.

On January 1, 2005, the Agreement on Textiles and Clothing was eliminated. Today about a dozen of the less than 100 factories registered with the Garment Association of Nepal (GAN) are working.

During the boom years of 1999-2000, ready-made garments accounted for nearly 30 per cent of Nepal’s export. Today the number is about one-third of that.

Factory owner Kedar P Poudyal said the slump has a direct impact on the neighbourhood surrounding his small business, a mix of street-level shops with houses above, in a maze of narrow, winding roads in the capital.

“My simple company paid millions of rupees in wages every year. If my factory runs, the carton factory will also run, the poly-bag factory will run. But now local restaurants have closed because my workers no longer go there for tea.” “Only my long-term staff are working now,” added Poudyal, who for 20 years has made men’s and women’s clothing for mostly US buyers.

The owner of Binita Fashion Industries says that orders started to fall at the start of 2005, when well-prepared manufacturers in China and Bangladesh rushed to take advantage of the end of the quota system.

“Buyers are still interested in working with me,” said Poudyal. “Even today they have orders they want me to fill. But I refuse to take them: the risk factor is so high I might not be able to fill them. There are so many disturbances, so many demands.”

At the industry association, the response is measured. “I don’t blame only the unions; some businesses are overreacting to their demands,” says Garment Association of Nepal (GAN) general secretary Udaya Raj Pandey.