Rene E. Ofreneo
Manila Times

The nation was shocked to read the investigative report on Anvil Ensemble, a Taytay, Rizal-based garments subcontractor, which required its workers to work continuously –day and night–for 48 to 72 hours just to be able to meet its export targets. To fight drowsiness and sleepiness at work, the workers, according to the report, were given duromine, a drug that works like a viagra at work.

One of the unhappy readers of the story is Donald Dee, President of the Employers Confederation of the Philippines (ECOP) and the Confederation of Garments Exporters of the Philippines (Congep). Both ECOP and Congep have been waging a campaign for employers, especially exporters, to observe the minimum labor standards and to continuously upgrade their industrial relations practices.

As head of ECOP and Congep, Dee has good reasons to be unhappy. The news stories about Anvil and other garments sweatshops such as Karayom and Bylson, whose owners “disappeared” without paying the firms’ obligations to the workers, would force buyers of Philippine-sewn garments to scale down job orders and shift to other producers in the world market.

This is so because global buyers and retailers of labor-intensive products have become very sensitive to charges of promoting exploitation through labor sweatshops in Third World countries. Militant consumer groups such as the Clean Clothes Campaign in Europe and the No-Sweat movement in North America have forced a growing number of global buyers and retailers to source garments and light products only from socially-responsible contractors or sub-contractors who observe international labor conventions and comply with national labor standard laws on minimum wages, work hours, overtime pay and so on. These international buyers and retailers require their suppliers from developing countries to adopt a “zero tolerance” policy on any violation of the international labor conventions and the national labor laws.

Thus, when garments producers in Saipan were found to be using illegal migrant workers, mostly Chinese who were paid below the minimum and made to work under substandard working conditions, garments job orders for Saipan dried up. In Indonesia last year, Nike’s decision not to continue business with a contractor found violating Indonesia’s labor laws led to the closure of some factories producing Nike shoes.

To ensure labor standard compliance, global buyers and retailers such as Levi’s and Gap are requiring their partner subcontractors to adopt and adhere to “Codes of Conduct” containing pledges upholding labor rights. However, other global buyers and retailers simply ask their subcontractors to undergo a social and labor audit and get an SA 8000 certification. Like the ISO 9000 certification on quality assurance and the ISO 14000 certification on environmental friendliness, SA 8000 is given to companies which pass a social and labor audit conducted by the New York-based Social Accountability International (SAI). SA means “social accountability”.

In Asia, China has the most number of SA 8000 certifications. This means Chinese exporters of garments, toys and other light products are aware that preserving and expanding their share in the world market means compliance with the requirements of an increasingly discriminating consumer market.

So how should the Philippines adjust to these realities of the global market and to the investigative exposé on Anvil, Karayom and Bylson?

Anvil is a good opportunity for the Department of Trade and Industry (DTI), ECOP and Congep to intensify their campaign for local industries to modernize and become competitive.

Of course, part of the modernization program is the modernization of industrial relations and human resources management practices of companies. For example, workers’ skills must be upgraded to enable them to handle multiple and more complicated tasks. Skills and versatility are better and less conflict-prone forms of labor flexibility compared to massive casualization which is the norm in companies such as Anvil.

Productivity enhancement programs will not work without the cooperation and positive attitudes of the workers. So employers must by necessity invest on the development of sound labor relations practices such as the promotion of team work, open communication with employees, transparent system of discipline and grievance handling, employee empowerment through involvement in problem solving, and so on.

In short, there should be a conscious policy to promote the high road to industrial development and industrial relations practices, which is the only road to Philippine competitiveness. For the other road means maintaining low technology and poor working conditions, including casualization of labor en masse. As shown by Anvil, this road is a formula for low productivity, endless labor tensions and eventually, shrinking global market share.

For the high road to be taken by the local industry players, the government should take the lead. DTI and the Department of Labor and Employment should wage a campaign against sweatshops and should prod industries to keep on modernizing. The National Economic Development Authority, DTI and the Tariff Commission should use the tariff instrument to force industries to submit modernization programs with clear doables. The Comission on Higher Education and the Technical Education and Skills Development Authority should be able to anticipate the educational and skills development requirements of restructuring or modernizing industries.

As shown by the experience of our neighbors in East Asia, taking the high road means having an activist and forward-looking government.