{"id":964,"date":"2014-11-04T12:38:48","date_gmt":"2014-11-04T12:38:48","guid":{"rendered":"https:\/\/covcasbulletin.info\/?p=964"},"modified":"2014-11-06T12:56:51","modified_gmt":"2014-11-06T12:56:51","slug":"those-who-sew-do-not-reap-profit","status":"publish","type":"post","link":"https:\/\/covcasbulletin.info\/?p=964","title":{"rendered":"Those Who Sew Do Not Reap Profit"},"content":{"rendered":"

By NINO BAKRADZE
\nOrganized Crime and Corruption Reporting Project (OCCRP)<\/em><\/p>\n

You don\u2019t have to go to Southeast Asia to find sweatshops where workers toil under harsh conditions to make clothing for rich Western consumers. A reporter for the Organized Crime and Corruption Reporting Project (OCCRP) posing as a textile worker found such conditions in the Republic of Georgia.<\/p>\n

\"LC<\/a>
LC Waikiki, a fast-growing Turkish apparel company, opens another new store in Tbilisi. Poorly paid workers in the Georgian city of Kutaisi produce LC Waikiki clothing.<\/figcaption><\/figure>\n

Conditions are ripe for abuse in the country of 4-plus million which has no separate labor ministry, no labor inspectors, and an embarrassingly low minimum wage, yet OCCRP found two Kutaisi textile factories that manage to break what labor laws do exist.<\/p>\n

Meanwhile, Georgian officials point to the weak protection laws as evidence of their \u201cbusiness friendly environment.\u201d<\/p>\n

JSC Imeri is a Georgian-owned factory that produces high-end women\u2019s coats for major Italian and Germany clothing companies. LTD Georgian Textile is a Turkish-owned company that supplies the LC Waikiki clothing store chain.<\/p>\n

A reporter worked for two days in each factory in August. Hired on a trial basis, the reporter did not identify herself to managers as a journalist. The reporter learned that unpaid overtime work is routine and neither factory gives its workers the number of holidays required under Georgian law.<\/p>\n

The reporter also learned first-hand that conditions can be harsh in the summer heat, with dust-filled air, poor ventilation, few opportunities for water or toilet breaks and some supervisors who don\u2019t speak the Georgian language.<\/p>\n

According to the Georgian Labor Law passed in 2013, factory workers should receive overtime pay if they work more than 48 hours a week. Neither JSC Imeri, with a regular six-day work week, or LTD Georgian Textile which works five days, pay overtime for hours worked on regularly scheduled days, although the workers are required to stay extra hours on the job several nights a week until the daily production quota is met.<\/p>\n

The labor law requires that workers receive 17 holidays each year. At these two factories, workers receive only six holidays.<\/p>\n

At least JSC Imeri and LTD Georgian Textile don\u2019t violate Georgia\u2019s minimum wage law. That would be almost impossible. The minimum wage has been $11.50 a month since a 1999 decree by former president Eduard Shevardnadze.<\/p>\n

That\u2019s not to say wages are high at the two Kutaisi factories. At LTD Georgian Textile, the average wage is 66 cents per hour. At JSC Imeri, it\u2019s 86 cents per hour.<\/p>\n

The Clean Clothes Campaign, a European worker-advocacy project, in May released \u201cStitched Up,\u201d a survey of the textile industry. It included factories in Turkey, Bulgaria, Romania, Macedonia, Moldova, Ukraine, Bosnia and Herzegovina, Croatia, Slovakia and Georgia. Only Georgia had no realistic minimum wage.<\/p>\n

Ukraine\u2019s was the next lowest at \u20ac 80 per month (US$ 101); Croatia was highest at \u20ac 308 per month (US$ 390). The survey<\/a> singled out Georgia as a country where a \u201clegal rights protection system and institutional mechanisms such as labor inspection and labor court barely exist at all.\u201d<\/p>\n

What is the Georgian government \u2019s position on such labor issues?<\/p>\n

\"\"<\/a><\/p>\n

A 2012 letter<\/a> sent out to potential investors under the signature of former Prime Minister Nika Gilauri neatly summarizes the National Movement Party\u2019s business-friendly policies while they ruled the country from 2004-12: \u201cFavorable logistics, rather cheap labor, low and flat taxes, efficient export regimes and additional investment incentives initialed by the Georgian Government lead the country to be the hub of the apparel industry.\u201d<\/p>\n

Labor has fared no better since the Georgian Dream party came to power in 2012. Former Prime Minister Bidzina Ivanishvili held few significant meetings with labor representatives. Current Prime Minister Irakli Garibashvili is chairman of the Tripartite Commission, a mediation mechanism made up of representatives from government ministries, companies and labor. But the commission hasn\u2019t met for more than five months.<\/p>\n

Three labor bills are being prepared for discussion by Parliament. None of them include a new minimum wage, and they contain very few specifics on a Georgian government commitment to reinstate workplace inspections, which were halted by the government in 2005 as part of the campaign to make Georgia extremely business-friendly for outside investors. A five-year, US$ 2 million US Department of Labor grant<\/a> is designed to assist the Georgian government in setting up a system for inspections of workplace conditions. This initiative is opposed by pro-business advocates within the Georgian government.<\/p>\n

JSC Imeri<\/strong><\/p>\n

Gvantsa, 22, drew several patterns on cloth, and trainees had to follow those lines as they learned how to sew. One of about 350 workers, she quit school in the ninth grade and for the past seven years has worked at Imeri, starting her job six days a week at 8:30 am. On good days she finishes at 5:30 pm, but when the daily quota has not been met, she must stay until perhaps 7 pm or 7:30 pm with no extra pay.<\/p>\n

There\u2019s been a textile factory in this building for 85 years. After the collapse of the Soviet Union, Georgians took control. The current director is Giorgi Chikhladze. Chikhladze is on the floor every day, checking for speed and quality of the work. Employees say that if they complain, he tells them if they don\u2019t like it here, then quit.
\ngarment<\/p>\n

\"Workers<\/a>
Workers paid under a dollar an hour produced baby coats that Moncler sells for $325.<\/figcaption><\/figure>\n

Imeri has two major contracts \u2013 with the German company Barbara Lebek and the Italian company Moncler. While the reporter was working, Imeri was producing three styles of women\u2019s coats, and also blouses and trousers, for Barbara Lebek. Imeri was producing baby coats for Moncler that were priced at \u20ac257 (US$ 325) on the company\u2019s website<\/a>; the factory was producing more than 100 baby coats a day.<\/p>\n

The workers usually can make quota working six days a week, but occasionally must also work on Sunday, in which case they receive double pay ($1.72\/hour). Depending on the orders, they may get as much as four weeks paid vacation in August.<\/p>\n

The sewing machines are located in one huge hall, about 10 meters wide and more than 100 meters long. The ceiling is more than four meters high. Three walls are painted dull gray. The fourth wall has windows two meters high that are always open on hot summer days. There is one water tap in the room, where workers are allowed to fill bottles.<\/p>\n

Employees are divided into six work teams, each with a foreman who often yells at them to work faster. There are three break times: 10-10:15 am, 12:30-1 pm and 3:30-3:45 pm. The women\u2019s toilets are located so far from the work floor that it\u2019s impossible for 300 women to use them during these short breaks. There is a small caf\u00e9, but it is hot and noisy.<\/p>\n

\"\"<\/a>One group of workers does not sew, but is responsible for checking the finished products for pencil marks and loose threads before packaging. These workers have no chairs and must stand all day, and their salary is slightly lower than those who sew.<\/p>\n

LTD Georgian Textile<\/strong><\/p>\n

garment_infoLTD Georgian Textile has a Turkish manager, Adil Sari. His father, Nuri Sari, is the owner of LTD Georgian Textile and another factory in Batumi.<\/p>\n

About 250 workers start when a bell rings at 9 am. Until the workday ends, usually at 7 pm, workers are not supposed to use their phones or even speak, unless it is to ask a foreman or a fellow employee a work-related question.<\/p>\n

The workers are divided into two teams, each with a Georgian foreman who often yells at them to work faster. There is also a Turkish head foreman, but that person doesn\u2019t speak Georgian. While the OCCRP reporter was working there, his interpreter didn\u2019t show up; co-workers said that happens often.<\/p>\n

If the workers don\u2019t make quota, which happens several times a week, they must stay after 7 pm for no extra pay. There is no air conditioning, and temperatures in Kutaisi in August can reach 40 degrees Celsius (104 degrees Fahrenheit). The hot air is full of lint from the fabric. By the end of the day workers\u2019 arms were black with lint.<\/p>\n

The normal work week is five days. There is one break from 1-2 pm. There is no caf\u00e9, just a small, dirty room with three small tables. There is only one toilet apiece for men and women, with no soap or any way to dry hands.<\/p>\n

The work force is divided between two rooms, each about seven meters wide and 70 meters long with a four-meter high ceiling. There\u2019s one drinking water dispenser for all to share. The outside walls for both rooms are constructed of glass block; a few blocks have been removed, letting only a little bit of air into the room.<\/p>\n

The fixed salary works out to about $91 a month, or 56 cents per hour. Bonuses for perfect attendance, making quota, and quality of the product often bring that total up to about $125 a month. If Saturday work is required, workers get double pay ($1.32\/per hour). Depending on orders, workers might receive paid vacation in August.<\/p>\n

The company\u2019s main customer is LC Waikiki, a company founded in France in 1985. It\u2019s been based in Turkey since 1997 and is a division of LC Waikiki Ma\u011fazac\u0131l\u0131k Hizmetleri Ticaret A.\u015e.<\/p>\n

The company says it now has 475 retail stores in 22 countries. In August this factory was making women\u2019s jackets that sell for about US$ 17.<\/p>\n

Union Struggles<\/strong><\/p>\n

Garment workers in Georgia organized their first union in 1906 and succeeded in getting an increase in wages and a decrease in hours.<\/p>\n

More than a century later, there are 26 apparel factories in Georgia and only two of them belong to the Georgian Trade Unions Confederation (GTUC) garment division.<\/p>\n

JSC Imeri is one of the two companies with union workers. GTUC garment sector deputy director Klara Macharashvili said the union has failed in several attempts to unionize LTD Georgian Textile.<\/p>\n

\u201cWe negotiated with Georgian Textile\u2019s workers in 2011, and initially they accepted our offer,\u201d Macharashvili said. \u201cAfter several days, they decided against becoming members because their employers threatened them.\u201d<\/p>\n

Nona Kakabadze, the financial manager at Georgian Textile, says there are reasons why their workers do not want to become union members. \u201cWe have former teachers and policemen working here who were members of GTUC, but they didn\u2019t get any support from GTUC when they were fired from those jobs,\u201d Kakabdze said. \u201cThey do not want to pay over $1 a month now for a GTUC membership. People at GTUC think that we threaten those people, and that is why they reject membership. I cannot dictate to them what is wrong and what is right. They are adults and they can decide everything themselves.\u201d<\/p>\n

Macharashvili says Georgian Textile managers refused to let her enter the factory\u2019s main hall when she visited in July. She said she had received anonymous phone calls and decided to try to inspect the factory herself.<\/p>\n

\u201cThey do not get extra payment for extra hours,\u201d Macharashvili said. \u201cManagement tried to convince me there was a fair bonus system. But it was not clear how the bonus system worked. I sent an official letter about salaries and working conditions to Nuri Sari, the Turkish owner of the factory. But (I received) no reply.\u201d<\/p>\n

The union says it does what it can for its members at JSC Imeri. \u201cWe know that salaries at Imeri are not high, but we cannot demand more,\u201d she said. \u201cThe contract prices between Imeri and the European companies are low. The Europeans know we pay low wages, which is why they are here.<\/p>\n

\u201cPeople accept it because they have no choice. This money is probably very important to their family. But I think that when a new investor comes into the country, the government should make them put minimum rights in the contract.\u201d<\/p>\n

Macharashvili says nothing happens when the union reports wage and working condition complaints to the labor policy department of the Ministry of Health, Labor and Social Affairs. Ivanidze, acting director of the department, disagrees and says they have a close partnership with GTUC.<\/p>\n

The department was created in 2013, shortly before a new labor bill passed that did not mandate a higher minimum wage. Ivanidze says the government currently has no tools to control either local or foreign businesses operating in Georgia. He hopes the new legislation will at least lead to the formation of a Labor Inspection Department in 2015, with regional offices to follow, and create a system for fining companies that fail the inspections.<\/p>\n

\u201cThe minimum salary in our country is $11.50 a month,\u201d Ivanidze said. \u201cSo the salary in the factories you have mentioned seems to be quite good compared to the law now. I know the main attraction of our country is cheap labor and no labor legislation.\u201d<\/p>\n

Maia Simonidze, chairwoman of JSC Imeri\u2019s council board, has an office in the factory and comes to work every day. \u201cWhen we started negotiations with the Italian company Moncler, we tried to increase the contract price. Now we are waiting for a new partner to appear. Moncler\u2019s representative is aware that when a new company will appear, we will end our partnership with Moncler.<\/p>\n

\u201cBut thanks to Moncler, we kept two of our teams working. Nowadays we have this problem; we are looking for qualified staff so we can increase our productivity. Salaries make up 60-70 percent of our expenses. If we were more productive, we could increase salaries.<\/p>\n

\u201cOur labor market in Kutaisi is too small. A large number of women have left Kutaisi and gone to European countries to find jobs. They send money home. So their family members do not want to work at a factory from early morning to evening and get maybe $200 per month.\u201d<\/p>\n

Kakabadze says the minimum wage at Ltd Georgian Textile was defined by oral agreement with the previous (United National Movement) government. \u201cWhen Turkish owners launched the company in Adjara, they were not aware of the regulations in Georgia,\u201d claimed Kakabadze. \u201cThe government told us that $70 should be the minimum monthly salary.<\/p>\n

\u201cNowadays we know how to pay salaries and no one from the government intervenes in our business.\u201d Ivanidze confirms that the government does not negotiate with new businesses over minimum wages.<\/p>\n

Ivanidze says he hopes the 2014 signing of the Association Agreement with the European Union will lead to Georgia raising its labor standards. Kakabadze from LTD Georgian Textile says it\u2019s possible that if the standards are raised, the European companies will leave the market.<\/p>\n

\u201cIt will be harmful to our workers, who will lose their jobs,\u201d she said. \u201cI know a salary around $170 isn\u2019t great, but if I do not have any other income, it is not bad. I can cover at least some of my expenses with this money.\u201d<\/p>\n

Questions e-mailed twice to the home offices of Barbara Lebek, Moncler and LC Waikiki asking what they know about the wages and working conditions in their Kutaisi factories have yet to be answered.<\/p>\n