Sactwu Deputy General Secretary and missing money

The credibility of Sactwu, who purports that its mission is to help the poor disenfranchised, exploited worker of the clothing industry, is seriously tarnished. On another matter, the union, continues to make unsubstantiated claims of wages being paid in Newcastle. Over, and ove, the union has been asked to provide wage slips and identify the factories where workers, according to the union are being paid R90.00 to R175.00 a week but they cannot. The ReDress Consultancy, understands that some factories in Newcastle who have signed the wage-phase in policy are the ones paying these wages.

Last month the M&G mentioned that the deputy general was involved in the in the pension fund debacle  but there has been absolute silence since this was exposed. In June, the M&G wrote: 

The spotlight has also fallen on Sactwu deputy general secretary Wayne van der Rheede. The M&G has established that he was the principal officer of the Textile and Allied Workers' Provident Fund, one of the affected provident funds. Sactwu staffers claimed Van der Rheede did not alert them to any problems or risky investments. Van der Rheede asked the M&G to send him questions but at the time of printing he had not answered them.

The General Secretary of Sactwu stated that the union could not be held responsible for the investments made with the retirement funds. "Sactwu has not taken any decisions on behalf of the respective retirement funds," said Kriel. "The investment decisions were taken by the funds' board of trustees; union structures were never party to the discussions on how they have reached these decisions." (“Fears that pension fund consultant pay flee,” M&G 24 June 2011.)

29 July 2011

SA clothing sector missing the gap

South Africa

The textile and clothing industry urgently needs "to get over this narrow-minded dispute around wages so that it can take advantage of what is taking place in China". So says Renato Palmi, [of The ReDress Consultancy] a Durban-based researcher and consultant to the industry.

He says foreign companies sourcing from China have to deal with labour shortages, power-supply problems, increasing wages and longer lead times.

"Internationally, many companies are now looking at alternative suppliers," Palmi says. "This offers some opportunity for South African suppliers to capture more of the local market, but to do so the industry must operate from a platform of stability in order for its customers to have confidence in the abilities of the local apparel sector. This is not currently the case.

"If we cannot create this space the market will seek to grow its supplier base in countries such as Bangladesh, Vietnam and Cambodia, where wages are 50% to 80% lower than in China.

"But relocation to these countries is fraught with difficulty. They do not have the logistical road systems and infrastructure to meet the delivery requirements demanded by international clients. These countries have seen a spate of labour unrest and demands for wage increases. We have an opportunity to grow local demand if the stakeholders within our sector are prepared to be visionaries and implement a new discourse," Palmi says. "Overseas, unions have moved on to a much less confrontational and more integrational model, which sustains rather than destroys industries."

Palmi says the focus on the Chinese-owned factories in Newcastle is unfair -- most of the other non-compliant factories in the industry are not Chinese owned but are standing on the sidelines, often intimidated but facing the same problems as the Newcastle companies.

Many of them are CMT (cut, make and trim) factories. This means they receive materials and specifications from retailers and operate on low margins. But many retailers are now placing fewer orders with these non-compliant factories because they believe the factories may close down and their consignment materials will be trapped in insolvency situations - they therefore prefer to import more.

Currently, says Alex Liu of Newcastle's Win-Cool clothing factory, South African retailers buy only 12% to 15% of their clothing requirements from South African factories.

In the short term, Liu and a fraction of the non-compliant clothing companies (most don't want to stick their heads above the parapets) are having one last crack at extending the survival of their factories by bringing a court case against the minister of labour and the bargaining council.

The case challenges the application of the 70% to 100% minimum wage "agreement" to non-parties. They say the minister acted unlawfully and unfairly in extending minimum wages to non-parties. The case challenges the minister on the reasonableness of requiring unsustainable wages in an industry that is in rapid decline. A court date has yet to be set.

Palmi says: "Even if the bargaining council wins, it will be a hollow victory. More factories will be closed and the industry will be more fractured. The irony is that if all the factories became compliant tomorrow, it wouldn't increase output or exports or help with skills development. The whole focus is on wages and not on the sustainability of the industry."

Even as the Southern African Clothing and Textile Workers' Union (Sactwu) continues to lose members because of closures, officials can be consoled by its huge investment fund, built up from compulsory contributions by employers such as Liu.

The investment fund, started in 1993 to create new funding for the union, has grown tremendously, though its success has recently been severely tainted by the disappearance of R100-million or more in alleged crony and dishonest transactions.

The fund today controls (with a 42% share) the listed investment company HCI -- a share worth more than R450-million.

The portfolio managers of HCI have avoided investment in unionised, labour-intensive manufacturing industries in South Africa. HCI's portfolio is weighted towards media and entertainment, gaming, financial services and liquor.

It has one big investment in a South African clothing maker -- a 70% share in Seardel, the subsidiaries of which are among the "compliant companies" that earn big government subsidies. Seardel also has production facilities in Lesotho, where minimum wages are far below those Sactwu demands in South Africa.

A recent report by the Centre for Development and Enterprise states that "events in the Newcastle clothing industry should be seen as a model for a new industrial structure rather an affront to South Africa's self-image as a producer of high-value goods". 

Reference: The Mail and Guardian

Written by TEAGUE PAYNE

22 July 2011

An entrepreneur's fight to survive

Alex Liu's parents came from Taiwan to Newcastle in 1989 and set up a toy factory. Ten years later they invested in the Win-Cool clothing factory.

 Liu himself came to South Africa in 1993. Today he speaks English fluently and fast, but with a strong Chinese accent. The factory his parents set up was a good idea for only a short time … in the past three months Liu has been involved in three court cases against the bargaining council and the union. Like other Chinese-origin factory owners in Newcastle, he has been under tremendous pressure to say he will at least comply with the "70% to 100%" minimum-wage regime. To read the entire article click here. 

Reference: The Mail and Guardian, 22 July 2011

The great carve-up

It is the deal on which South Africa’s peaceful transition to democracy was founded, but the pact among the ANC, big business and organised labour at the heart of the post-apartheid order now ranks with corruption and mismanagement as one of the main threats to economic and social progress … the petty bourgeois unions for teachers, nurses and clerks that now dominate Cosatu are capturing an ever-larger slice of national resources because of their power in the tripartite alliance and President Jacob Zuma’s insistence on playing political defence … nowhere is this dynamic more obvious than in Newcastle, where the Southern African Clothing and Textile Workers’ Union (Sactwu) is using government to force higher wages on small firms because of worker protests. Factories have already begun to close as a result.

That Sactwu’s investment arm has shares in a heavily subsidised and protected clothing company, Seardel, which could never compete on pure economic merit, illustrates with clarity the structural conflict of interest … linked political and policy failures allow this carve-up to continue.  To read the entire article click here.  Reference: The Mail and Guardian, 22 July 2011 

High wages unravel SA Clothing Sector

South Africa  

High wages unravel Newcastle's industry

The Newcastle clothing industry has become a metaphor [The ReDress Consultancy first made this argument-see link] for the crucial debate about jobs in South Africa: whether we will create many entry-level, low-wage industrial jobs or improve the lot of the holders of the declining number of existing ones.

A recent Centre for Development and Enterprise report on unemployment in South Africa says that the country needs to learn the lessons presented by Newcastle's clothing industry. In this town, which has an unemployment rate of 60%, workers are willing to accept wages below the ­minimum levels prescribed by the industry's bargaining council. As a result, the centre says, Newcastle is attracting more clothing factories.

South Africa has about 1 800 clothing factories -- many of them very small -- of which perhaps 300 are compliant with the bargaining council's minimum-wages requirement. The rest of the industry is hovering near closure, particularly because of competition from imports. This is being mirrored, more or less, in most manufacturing industries across the country.

Newcastle was the site of a unique event in September last year: an employers' strike. It occurred after a long and convoluted history of non-connection between a shrinking group of Chinese-origin factory owners (many of whom are now South Africans) in Newcastle and the South African Clothing and Textile Workers' Union, which dominates the industry's bargaining council.

The three-day employers' strike came about because a group of employers in the Newcastle Chinese Chamber of Commerce and Industry stood its ground in saying that it was impossible to pay the statutory minimum wages that the bargaining council had begun to enforce by closing down non-compliant factories. The minimum wage set by the council is R489 a week for the clothing industry outside metropolitan areas (it will rise to R569 next year).

When the town sheriff, executing an order from the bargaining council, shut down one Chinese-owned factory called Wingtong, other members of the community also closed their factories -- interestingly, with the support of their staff. Wingtong workers demonstrated on top of their worktables and threatened to burn down the sheriff's house and the office of the bargaining council.

Employers' strikes are virtually unheard of in South Africa, where employers seem to be congenitally timid in the face of aggressive union action. Alex Liu (42), a naturalised South African from Taiwan and chair of the Newcastle Chinese chamber, led the employers' strike. He admitted that the industry is probably doomed in South Africa. Theoretically, the bargaining council is a joint venture between employers and the union, but Liu believes the union has intimidated employers, who have submitted partly because they want to be sure of union support in getting government incentives.

He said that, increasingly, the "compliant employers", who belong to the bargaining council, believe that subsidies will save them. They may be right -- late last year the government, through the department of trade and industry, instituted a subsidy scheme of between R400-million and R600-million for the clothing industry.

Renato Palmi, a consultant to the industry, said: "Some compliant companies are in high-margin products and receive subsidies and soft loans. Also, many companies are paying lip service to compliance because there is huge intimidation throughout the industry. Many compliant factories allegedly subcontract to non-compliant factories, and even if a former non-compliant company commits to being compliant it can still renege, downsize or close, so compliance doesn't mean sustainability.

Funders of the industry
"The bargaining council is an old boys' club and the employers in it are as much at fault as the unions for the dire situation in the industry."

Liu does not believe it is unsustainable that taxpayers fund the industry. But he does not agree with the union view that import tariffs should be increased to save the industry. Already, tariffs for clothing imports are at 45%, resulting in growing illegal imports.

"How much higher can you make them?" Liu asked. "Higher import tariffs would just make it more expensive for the consumer. South Africa has to face the fact that it needs to be competitive."

The government reportedly earns between R200-million and R300-million a month from the high import tariff -- more than enough to continue subsidising the industry.

The situation for the clothing factories outside metropolitan areas has come to a head in the past three years. Of the estimated 1 800 clothing factories of all sizes in South Africa, perhaps half are not in these areas and almost all are non-compliant (although some have said they will be compliant in future).

In May 2010 the union embarked on a "clampdown campaign" to enforce adherence to the bargaining council's minimum wages. Liu canvassed his members on the size of a sustainable wage that would allow their factories to survive. Similar consultations took place elsewhere in South Africa.

Subsequently, in a rare show of unity, both the compliant and non-compliant companies proposed a minimum wage of R280 per week for qualified machinists in companies outside metropolitan areas and R300 for those inside, with productivity incentives. The momentarily united employers said that these levels would result in the creation of more jobs.

Thereafter, in a series of manoeuvres that involved Minister of Economic Development Ebrahim Patel, who is a former general secretary of the union, this proposal was effectively rejected. But the compliant companies, under the Apparel Manufacturers of South Africa, agreed to pay 70% of the minimum wage immediately, phasing in to 100% within 16 months (that is, by April 2012).

After Patel's intervention, the sheriff attempted to shut down the non-compliant Wingtong factory in Newcastle; the same was happening in many places elsewhere in the country. For a change the government -- in the person of the Free State minister for economic development -- took action, persuading the parties involved to observe a 30-day moratorium.

But thereafter the bargaining council juggernaut resumed, said Liu. There have been regular closures of non-compliant factories since then -- with no fanfare, but with escalating job losses. And that is where the industry is today.

Liu has told his chamber members that they have to comply with the new wage regime or be closed down. He said that some of them have signed, or will sign the 70% to 100% undertaking, but they will, in fact, not be able to pay it, especially when it rises to R569 in non-metropolitan areas next year.

It has been speculated that this group is playing for time to be able to relocate to neighbouring countries. Bargaining council officials have so far not tried to close any of them down. It has also been said that the final closure of the remaining clothing factories will prove politically unacceptable and something will be done, but this seems unlikely. It is more likely that the workers will not even demonstrate, as some did in September 2010, but will accept their fate.

A clothing worker, who did not want to be named because of intimidation threats, said: "The unions say they are going to represent us with our problems. Because of these promises people join the union. The unions go to the employers and complain about wages. The employers say they cannot pay that much and the unions lead the toyi-toying and striking.

"I came out of school and saw a lot of factories close because of higher wages. In the end [higher wages do not] happen, but the union goes on demanding their fees from the small amount that we earn. The union has never created one job."

Before all this happened, the total employment in the clothing industry in Newcastle was about 16 000 workers. By 2005 it had dropped to about 8 000; today it is down to between 6 000 and 7 000 and falling.


Reference: The Mail and Guardian, 22 July 2011

The dirty truth about SA’s clothing bargaining council

South Africa

The dirty truth about SA’s clothing bargaining council

Comment by The ReDress Consultancy

We told you that the Phase-in Agreement would not work.

On the 25^th March 2011, The ReDress Consultancy wrote, “All non-compliant companies can undertake to meet the 70% compliance needed by the end of this month and follow the Phase-In Agreement. However, there is no guarantee that they would be able to sustain the Phase-in approach due to a fluctuating trading regime, further wage increases and input cost rising. There is a clause in the agreement stating if any company violates the agreement they are liable to face legal action.”

We again mentioned this in May.

Surely, by admitting that the bargaining council now has to take action against companies who cannot meet the Phase-In Agreement validates The ReDress Consultancy’s argument that the entire process is flawed and would not work.

It is imperative that both Sactwu and the bargaining council come to this realization and seek an alternative. The alternative was provided to them months ago but they refused to even contemplate it. Months of resources, energy and money has been spent on this worthless process and along the way hundreds of workers lives have been destroyed through factory closures. Sactwu and the bargaining council must admit defeat.

 The dirty truth about SA’s clothing bargaining council

 A sick, sick system that no one will fix.

JOHANNESBURG - While the clothing industry’s National Bargaining Council has assumed a moral high-ground and refuses to entertain a new wage structure for factory workers, some of the council’s own members are outsourcing their manufacturing to other factories that do not comply with minimum wages.

And when they are not outsourcing to non-compliant SA factories they are outsourcing to factories in Lesotho and Swaziland which pay lower wages than those in SA.

This is happening as the bargaining council has issued writs of execution – 15 in the last two weeks alone -  to 109 non compliant companies affecting roughly 6 400 employees. “That is the end of the line for those companies. At this point the assets of those companies are attached,” says Leon Deetlefs, compliance manager for the NBC. Another 252 companies are likely to meet the same fate. These factories signed a memorandum with the union and agreed to raise their wages in three steps until they are fully paid up and compliant by April next year. But these 252 have already fallen behind the 70% (of the minimum wage) due in April this year. “We will have to act against those companies,” he says.

The bargaining council is a 50/50 partnership between the trade union Sactwu and the formal manufacturing sector, represented by the Apparel Manufacturers of SA (Amsa), which collectively sets wages and other terms of employment which are then applied across the rest of the industry.

Johann Baard, executive director at Amsa says the problem is that as fast as the council acts against one factory, another springs up. “Non compliant companies are ‘mushrooming’ throughout SA. We have to act to protect our members. If you can’t be compliant you shouldn’t be in the industry.”

NBC members argue that non compliant companies are creating unfair competition by paying lower wages. The non compliant companies reply that the minimum wage – which has risen from R262 in 2003 to R516 in 2010, and is set to rise in September – is unsustainable in the face of pressure from retailers who squeeze them for every cent.  Labour accounts for 50% of a manufacturer’s costs.

No integrity

But the members themselves perpetuate the problem. As one manufacturer explained to Moneyweb: “The way it works is that factory A (which is registered with the bargaining council and which is compliant) will outsource some of its work to factory B, which is not registered with the bargaining council and pays lower wages and which operates under the radar of SA labour legislation.”

Another well established manufacturer, who won’t rock the boat for fear of losing government work added: “Yes some of the advocates pushing for the closure of companies have relocated their manufacture to Lesotho. There they are paying slave type wages. Where is the morality in that?” He says his company is not following suit. All manufacturers approached by Moneyweb denied they outsourced to non-compliant companies.

SA’s second largest clothing manufacturer, Durban-based Kingsgate Clothing is considering opening a factory in Swaziland. The company supplies retailers such as Jet Stores, Edgars, Sales House and Ackerman’s from 12 factories spread across SA. “We are not relocating,” says Yusuf Vahed, Kingsgate CEO. “The Swaziland Investment Promotion Authority and Industrial Development Corporation are promoting investment in their region. It is not only a wage issue. They are offering other benefits including company tax relief and the waiver of all withholding of taxes on dividends.”

He adds that there is no plan at this stage to reduce employment levels in SA.

Retailers cut orders to Newcastle

While these events take place, the beleaguered factories in Newcastle and Ladysmith face another threat – the loss of business. Retailers fearing the factories will be closed have started to place orders with other factories – often outside of SA– because their supply can be relied upon.

“We have to have stability in the supply chain,” says National Clothing Retailers Federation executive director Michael Lawrence. “Retailers are placing summer orders and right now there is a lot of uncertainty - if these compliance orders are enforced it will affect supply.”

This will ripple throughout the entire industry. “The local supply chain is complex and interwoven. Everyone outsources - the larger manufacturers outsource a lot of work. Ultimately both non compliant and compliant companies will be affected,” says Lawrence.

There is no solution it seems. The bargaining council maintains the status quo. To be fair it is simply enforcing the laws of the country. And there are unscrupulous factory owners in the mix. But this does not justify the intransigence of the bargaining council and the union in particular, on the subject of a new wage dispensation.

Baard rejects the idea that the manufacturers on the bargaining council are complicit in upholding a system that is out of touch with SA’s realities. “We are not the ones shutting those factories down. We have been arguing for 15 years for a new wage dispensation in the industry. We cannot force the unions to change. We have agreed to two moratoriums on these writs. Then we sit for six months and say to the union we need a solution, we need a new wage model.  It is my members who are suffering too. It is not that we are uncaring, we are left with no alternative. It would be different if the unions, Cosatu, the politicians and Luthuli House had the will – we need to re-invent the wage dispensation in the country.”

The tragedy is that sourcing merchandise out of China is an increasingly expensive option for SA retailers. Timeframes are long and reliability is deteriorating. If ever there was a time for a revival in SA’s clothing manufacturing industry – this is it.

Court action

Out of desperation The United Clothing Textile Association and a number of factories in Newcastle and Ladysmith – which are painted as the villains in the piece [see link for Palmi's article]– are taking the Bargaining Council and the Minister of Labour to court. Court papers have been filed by Webber Wentzel which is acting on behalf of the manufacturers.  “We are waiting for a response from the union and then a court date will be set,” says Alex Liu, chairman of the Newcastle Chinese Chamber of Commerce.

“Our fight is not about paying low wages,” says Liu. “It is about the legal status of non compliant companies. They should have the opportunity to legalise, but on realistic terms. We need to link wages to productivity of workers.”

However, this legal battle does not enjoy the support of the broader industry. “This is an industry that is operating in fear,” says Renato Palmi from the Redress Consultancy. “It is fear of intimidation, fear of what may happen to owners and their businesses if they speak to the media or show public support for the Newcastle clothing sector that is under siege.”

It is this fragmentation and lack of collaboration that is making the industry weak, he says. It gives the space for the clothing union and the bargaining council to exploit this vulnerability and in so doing create the impression that it is the Newcastle’s Chinese employers that are the villains, he says.

The non compliant manufacturers have attempted to negotiate with the bargaining council – they retained the services of Palmi’s Redress Consultancy to find a solution to the impasse. “We agreed a minimum wage with the employees and brought it to the union. We wanted to implement incentive schemes – so we can draw in the unskilled and teach them. As they start growing their skills their wages will increase. Further wage increases will be on productivity output,” Palmi says.

The answer was no.

Even compliant manufacturers, such as John Comley who runs Celrose (which produces for Edgars) and Eddles Footwear have found the bargaining council’s refusal to negotiate wages frustrating. “We do have an incentive scheme in place that is linked to productivity, but we wanted to bring in unskilled workers on a lower wage, and gradually bring their salary up to that of a skilled worker as their own skills increase,” Comley says.

The answer was no.

Eighteen months ago manufacturer Richard Garde closed down his factory, rather than have to negotiate with the union.

Today he is a middle man. “We buy materials and contract labour to cut-make-trim operations in SA and Lesotho.”

So what is the solution?

Government needs to decide how badly it wants to create jobs. And then it has to act with authority in an industry that has become expert at blaming someone else for their woes.

Of course that means that the departments of Economic Development, Labour, and Trade & Industry need to sing off the same hymn sheet. Until that happens factories will close and jobs will be lost.

The biggest loser is the country.

Sactwu comment for this story was requested.

Reference:

Moneyweb, Sasha Planting, 13 July 2011

The Power of the T-Shirt

Written by Renato Palmi

The ReDress Consultancy, South Africa

The Power of the T-Shirt

In various ways, the simple T-shirt has been used as a commercial medium or as a means of representing and articulating power through fashionable commodification of popular cultural and political symbolism. Rarely does the wearer understand the full extent of the intertextuality of the messages or signs portrayed on the T-shirt.

However, some are fully aware of the constructed meaning and purposely created indexical imagery represented on this garment.  Wearing a slogan, symbolic image or logo on T-shirts within specific locations or at particular events makes a statement, rendering the wearer either as an agent provocateur or as one who identifies with a community or defined social context.

Garibaldi: The new Che Guevara. Design by The ReDress Consultancy

The Power and Influence of the Brand. Nazi symbols for prisoners

A T-shirt for girls aged 7 to 8

In Kenya, images of Mau Mau heroes emblazoned on T-shirts present the wearer as taking an anti-colonial and proudly nationalistic stand.  Yet, the ubiquitous fascination with “Communist chic”, such as T-Shirts bearing Chinese, Soviet or Cuban cultural revolutionary imagery, tends to proliferate with very little understanding of the historical meaning of these symbols.  A more prominent example of the mindlessness of mass fashion consumerism arises in the commercialisation of the iconic image of Che Guevara, who (ironically, in the contemporary context of rampant materialism) fought against capitalism.

Why is it that the majority of such consumers are oblivious to the contradictions they perpetuate in this fashion, so to speak? 

Wearing their highly styled “Che” T-shirts whilst driving luxury cars and frequenting expensive restaurants, are they consciously trying to signify that they are in solidarity with the marginalisation and hunger of the poor?  Have they any inkling at all that their garment was probably made under sweatshop conditions?  Do they realise that, as such, they are, in effect, participants in the global exploitation of millions of low-paid workers making up the complex value-chain of the worldwide apparel sector?  

Or do they merely wear the T-shirt because it is “on trend”?

21st century revolutionaries proudly wear the iconic Che portrait as a symbol of their ideological righteousness. However, the truth behind the distorted decorative application of this image is that Che-as-icon has become currency for trading to ignorant fashion zombies and so-called contemporary revolutionaries, whose understanding of Che’s power stems from scant biography and its associative meanings, purveyed under the influence of popular media.

The camouflage T-shirt, annotated with military symbols, is another example of the power of the fashion media and global marketing strategies. Camouflage fabric was first used by the French during World War I. In 1927, this aesthetic was used by Louis Weinberg in contemporary fashion to create the illusion of the wearer’s height.

However, it is incongruent that now, in a time when global peace and non-violence is promulgated by most governments and civil society, adults and children wear “camo-chic” T-shirts without any sensitivity to the violent origins of the fabric.  Moreover, this styling contradicts the fundamental purpose of wearing camouflage, which is to blend into the surrounding environment as a means of averting attention from the enemy; instead, the consumer’s sole intention for sporting this look is to be seen.

The T-shirt itself was used for the first time in 1939 for an advertising campaign by the film company Metro-Goldwyn-Meyer (MGM) to launch one of the first colour films, The Wizard of Oz. Since then, nearly every company, large or small the world over, has used the T-shirt as an affordable marketing and messaging platform.

The T-shirt has been interwoven with politics and social advocacy for decades, used by anti-apartheid activists, anti-war groups, environmental champions, charities and other civil society campaigns, to promote ideological and humanitarian agendas.

The T-shirt has enormous potential as an economic driver. For example, the 121 political parties and 748 independent candidates who took part in South Africa’s 2011 municipal elections could have achieved a massively positive economic impact on country’s beleaguered clothing and textile sector, had their campaign T-shirts been designed and made locally.  Sadly, one of the most prominent parties imported their T-shirts from India, and a few years ago, the dominant party imported their T-shirt stock from China.

Just two of these larger parties, each producing 25,000 T-shirts, could have covered the salary of one qualified clothing machine operator for 10 years, while over R2 million of much-needed revenue could have been injected into the clothing sector if each of the 121 parties produced only 2,000 T-shirts at a cost of R10 per shirt.

The T-shirt, imprinted with sexually suggestive imagery and messaging, has commodified children as a target market.  These products are blindly bought by parents who perceive such messages as cute and endearingly cheeky for kids as young as seven, with little conception or excavation of the harmful gender roles and behaviour promoted on this ostensibly “cool” garment.

The T-shirt is a powerful medium that literally provides a blank canvas to express, disseminate and mobilise highly visible constructed messages, cultural codes and political choices, by establishing a recognisable identity within the wearer’s social context.  How the T-shirt consumer consciously or unconsciously subscribes to becoming either a walking billboard or a heraldic figure can only be determined with profound perspicacity in relation to this garment as a social tool in the global economy.

Palmi is currently reading for a PhD at CCMS, University of KwaZulu-Natal, South Africa

July 2011

@ The ReDress Consultancy

Newcastle’s clothing sector has become an economic experiment

South Africa
The ReDress Consultancy

It seems that our change of focus on the current clothing industry dispute with the union and bargaining is beginning to create some currency.  Ever since I coined the term and argument that Newcastle’s clothing sector has become an economic experiment analysis, commentators and the media are beginning to pick up on this line of thinking.

The Sunday Times(3 July 2011), published my article under the heading, “Newcastle could become catalyst for labour changes.” An American website picked up on the story, and the Business Day commented that the actions of the bargaining council is alienating and marginalizing a particular group of individuals. 

The most recent is the article from the South African Institute of Race Relations, advocating for civil society to take action against the destructive trajectory of the bargaining council.

Hopefully this surge of new thinking initiated by The ReDress Consultancy may catalyze some active support and action from a very silent clothing and textile industry and from business in general. The only way the industry can assert pressure on the clothing union and the bargaining council is through collective civil action partnering with as many organisaitons and individuals as possible. What can you do right now? 

• 1.    Inundate the media with letters.
• 2.    Forward this article to as many people as possible and ask them to forward it to others.
• 3.    Refer people to our website.
• 4.    If you own a factory, speak to your workers about the actions of the bargaining council and union and get their views on the situation. Talk to them about the missing funds.
• 5.    Write to government, your councilor, your political party, community newspapers.
• 6.    Post our article on social media sites invite as many people to add their outcry at a system that is creating havoc in the industry and economy.

Newcastle’s clothing sector has become an economic experiment

Newcastle has become the local and global focus in regard to South Africa’s clothing sector, and unfortunately the small community of Chinese apparel owners have become both heroes and villains.

The Newcastle clothing uprising grabbed international attention late last year  when factory owners shifted the entire labour paradigm by going on strike with the support of their staff to highlight their frustrations in regard to communications with the clothing union, Sactwu, and the clothing bargaining council.

This small band of mavericks have become the vanguard to possible changes within South Africa’s beleaguered clothing sector and the wider predicament facing South Africa’s labour and the debate about job creation.

The ReDress Consultancy’s analysis and continual observation of the ever changing landscape in the clothing sector, highlights that the actions taken by the Chinese clothing community is creating an extremely strenuous environment for them.

The Chinese clothing community have become the targets of a very sophisticated, orchestrated and systematic attack by the clothing union and the bargaining council and this is fueled by the misrepresentation and the bias believe that it is only the Chinese who have decimated South Africa’s clothing industry, that it is only the Chinese who run sweatshops and only the Chinese clothing owners in Newcastle who wish to violate South Africa’s labour law and exploit workers.

This is not the full truth.  The challenges facing South Africa’s clothing sector is far more than just wages.  The ReDress Consultancy asks: if tomorrow every clothing company were to comply to the wages dictated by the bargaining council would it make the sector more productive, would exports increase, would retailers support more local suppliers and would the sector become more competitive? The answer is no.

What the Newcastle clothing sector is advocating is nothing unique. The vast majority of clothing companies in South Africa are experiencing the same difficulties and hurdles; however, instead of showing a collective public front in support of Newcastle the vast majority of clothing owners remain silent.

We have to ask why? Our research and enquiries reflect an industry that is operating in fear. Fear of intimidation, fear of what may happen to owners and their businesses if they speak to the media or show public support for the Newcastle clothing sector that is under siege. How can an industry sector become economically and globally competitive if it has to operate within such a strenuous environment?

It is this fragmentation and lack of collaboration that is making the industry weak, giving the space for the clothing union and the bargaining council to exploit this vulnerability within South Africa’s clothing industry and in so doing create the impression that it is the Newcastle’s Chinese clothing employers that are the villains.  The entire clothing industry should be hailing them as heroes.

Economists, labour specialists, commentators and the government in South Africa and even throughout the world are watching events closely in Newcastle, which has now become an economic experiment that will result in casualties.  Unfortunately the casualties could well be the workers and owners in Newcastle’s clothing sector and the consequence will reverberate through the entire clothing industry.

The outspoken clothing owners in Newcastle are feeling extremely isolated, vulnerable and dismayed by the lack of tangible support in the public space by the wider clothing and textile sector.  As one owner said, “We are not just doing this for ourselves, what we are doing and the extreme pressure and feeling of isolation we are experiencing is for the entire industry and for the country. We need more active support.”  

Newcastle could be the catalyst for the much needed labour changes South Africa desperately needs. However, to achieve this the Newcastle clothing community requires collaborative support through intelligent crowd sourcing and mobilization using every means available to influence an outcome that would be palatable for the bargaining council, the clothing union, the workers and the clothing industry.

Written by: Renato Palmi

The ReDress consultancy

Email: redresssa@webstorm.co.za

Web: www.redressconsultancy.com  (entry to our blog)

© The ReDress Consultancy. June 30 2011

Clothing Industry Missing Funds-lawyers making money

Are workers having to pay the lawyer fees?

The various lawyers involved in this appalling saga are laughing all the way to the bank; whilst, workers are left to wonder if they will ever see their pensions.  It up to employers to inform their staff about what is taking place and it is up to the union members to demand answers. Talk about a bail out is well and good, however, this will not happen overnight and in the meantime what happens to those workers who intend to retire at the end of the year? What kind of pension payout will they receive?

According to a new report,  The Southern African Clothing and Textile Workers Union (SACTWU) is pushing for the removal of the Trilinear Empowerment Trust (TET) trustees and will meet with the beneficiaries of TET on Tuesday next week to formally adopt a resolution to appoint new trustees.

Mr Kriel (SACTWU General Secretary) has advised us that the relevant persons from SACTWU, having carefully considered what to do … recommend that steps be taken to remove the current trustees of TET and replace them with new trustees, as SACTWU is of the view that the current trustees are acting against the interests of members of SACTWU and the relevant beneficiary provident funds, and SACTWU sees no prospect of this changing,” a letter from SACTWU attorneys Eversheds read.

The putsch comes after disagreements by the union and TET trustees on whether to liquidate investment company Canyon Springs. Canyon Springs owes TET over R100m in pensioners’ money. 

The other fallout was that SACTWU wanted its president Themba Khumalo and Kriel, the general secretary to be appointed as additional trustees of TET. But TET lawyers were against the move, insisting on conditions which were un-acceptable to the union and the beneficiary provident funds, Kriel said.

SACTWU has also raised concern about the fees that were paid to TET’s trustees. Kriel notes that the trustees were allegedly paid “exorbitant meeting attendance fees of at least R63 000 per meeting, which the trustees appeared to have paid to each of themselves.”

A further report says, Embattled luxury property developers the Pinnacle Point Group hoped for a further injection of the clothing workers' pension money, after R260-million of their retirement funds had already been sunk into the listed company. This is revealed in the court application for the liquidation of Pinnacle by Atvantage, a company that claims it is owed about R1.2-million for project management work on Pinnacle's Lagos Keys golf-estate development in Nigeria.

Pinnacle is vigorously opposing the liquidation application. David Miller, the group's national sales manager, said this week that it supported the business rescue option, as it made "commercial sense to stop the attack on the group".

Kotze van Wyk, Atvantage's attorney, said his client was now considering whether to proceed with its liquidation application, or to allow the business-rescue to proceed. Barnabas Xulu, an attorney at Xulu Liversage, which is representing the trustees of the trust, said his clients also supported the business rescue application.

About R93-million of pension fund money was also invested in Canyon Springs Investment 12, a company co-owned by Enoch Godongwana, the deputy minister of economic development, which has now been placed under provisional liquidation.

With concerns growing about the pension-fund investments, the Mail & Guardian interviewed Sam Buthelezi, the owner of Trilinear Capital, at its Cape Town offices two weeks ago. Buthelezi said an empowerment fund trust was a typical investment vehicle, which also had attractive tax benefits.

"It is not something completely unique to Trilinear. It is a widely used instrument. Our clients, the provident fund trustees, were involved in a dying industry because of the flooding of imports in the clothing and textile space. In a situation like that, the members have only one way of ensuring their survival and that is to have a generous retirement kitty," Buthelezi said. "Our brief was to find them a strategy of high-risk, high-return, to make sure that the members have a bigger kitty upon retirement."

Reference:

Moneyweb, "SACTWU in putsch to oust trustees; seeks to recover Pinnacle Pt monies," 1 July 2011

Mail & Guardian, "Pinnacle was after more worker funds," 1 July 2011