Garment factory owners in Fiji are asking the government to exempt the sector from the new wage order. They are complaining that the recent government order to raise mininum wages for workers is making their business uncompetitive. They say brands are moving their orders elsewhere as revised wages have increased the cost of production in Fiji. This has forced factory owners to retrench workers. They are threatening more lay offs and shut downs if the government does not back track on wage hike.
Fiji's Reserve Bank also recently reported that the garment exports from the country slipped in the first quarter.
The new wage order, which came into force on the 1st July, was originally scheduled to be implemented from the 1st January. But the labour ministry agreed to six months extension under pressure from business lobbies. The wage hike covers nine industries that include garment, security, printing, building, road transport, saw milling and retail. Even after the raise, garment workers will remain the lowest paid in the country.
A large number of garment factories in Fiji are owned by suppliers from Australia and New Zeland who took advantage of massive tax incentives in the early 1990s offered by the local government to boost foreign investment.
Workers in the garment and security industries are the lowest paid in Fiji. Wages in Fiji's garment industry have comparatively remained low since early days. Currently, average wage of a garment worker in Fiji is below the national poverty line. The new wage rate of $1.38 per hour is significantly lower than other sectors. Compare this with the mining sector which will be paying $2.57 per hour for unskilled workers under new wage order.
Last month, the labour ministry launched an investigation into complaints that most garment factory owners were not complying with the new wage order.
The question is what should brands do in this situation? Should they leave the country and move orders to cheaper destinations? What stand should they take when their suppliers are lobbying with the government to keep the wages low? Suppliers cannot pay higher wages if brands are not willing to pay higher price. And why should brands pay a higher price when suppliers in Bangladesh, for example, are willing to offer much lower price for the same garment?
Friday, October 09, 2009
Friday, October 02, 2009
A new book containing a collection of 10 Corporate Social Responsibility case studies from Singapore - I am a co-author - will be launched by the Minister of Manpower Mr. Gan Kim Yong during the inaugural session of International Singapore Compact CSR Summit on the 6th Oct, 2009. The event is organized by Singapore Compact, a tri-partite national forum to promote Global Compact principles among Singapore businesses.
Published by Marshall Cavendish, CSR For Sustainability And Success is the first book on local CSR case studies in Asia. CSR initiatives of ten companies have been described in the book. Most of these companies are local and Singapore headquartered such as telecom firm Singtel, union-run co-operative retailer Fairprice, utility company Power Seraya, real estate developer City Developments Ltd, utilities and marine group Sembcorp Industries and food and health supplements manufacturer Cerebos. Among the multinational companies operating in Singapore and included in the book are the Swiss cement and building materials supplier Holcim, India's Tata Steel's local subsidiary NatSteel, US banking giant Citibank and energy major Shell.
The last session of the CSR conference on the 7th Oct is dedicated to a panel discussion about the lessons from the case studies.
After the launch, the book will be available in all book stores. CSR Summit delegates will receive the book during the conference.
Thursday, October 01, 2009
A common problem that companies face is that their corporate responsibility intentions do not trickle down the organization. Functional departments do not understand how their company's CR initiatives strengthen their own performance and how these contribute to overall business goals. As a result, even key managers perceive CR as a public relations exercise. Even worse, many employees may perceive CR programmes as wasteful if they do not understand how CR goals are aligned with their business goals.
CR professionals know this. But embedding CR across the organization is a complex and time consuming task. No wonder many either do not know how to go about it or simply do not have the resources and mandate to do it.
A new guide by Ethical Corporation on How to Embed Corporate Responsibility Across Different Parts of Your Company provides useful tools for those who wish to see CR truly embded across the organisation. Here is more..