Massive job losses for garment workers in Ethiopia’s industrial park

The Industrial Federation of Textile, Leather and Garment Workers Unions (IFTLGWTU) in Ethiopia’s largest industrial park, Hawassa, says job losses among garment workers have continued since the US government announced the end of Ethiopia’s duty-free access to US markets via Africa. Growth and Opportunity Act (AGOA).

The loss of AGOA benefits came into effect on January 1, 2022, and U.S. Trade Representative Katherine Tai said it was due to fighting in northern Ethiopia and reports of worsening famine in Tigray, which she described as a “humanitarian crisis”.

Sandokan Debebe, the CEO of the Ethiopian Industry Park Development Corporation (IPDC) expressed his concerns over the loss of AGOA benefits in October last year and pointed out: “In our country’s statistics, each direct employment creates 2.5 indirect employment opportunities or helps them support their families, so its effect is social and not related to government.

At its peak, Hawassa Park employed 35,000 workers according to IndustriALL Global Union, but it says most Hawassa factories that exported to the United States had their orders canceled following the loss of AGOA, which left blocked.

In saying this, the union remains hopeful for a peaceful breakthrough that will bring trade and a new lease of life to the Hawassa Industrial Park as the ongoing peace talks continue.

Job losses for garment workers in Ethiopia’s Hawassa Industrial Park

The IFTLGWTU says Best International Garments, an Indian company, with a factory in the park, has cut the jobs of more than 3,000 workers.

Additionally, the union says there are plans to cut production at other garment factories, including Sumbari Hela Intimates, which put 260 workers on paid leave for a month, after which there is uncertainty. The factory is jointly owned by Sri Lanka-based Hela Indochine Apparel and Sumbari Intimate Apparel.

Quadrant Apparel Group reportedly put 300 workers on paid leave while Epic Apparel Plc, a Hong Kong-based subsidiary of Epic Group, reportedly reduced its workforce after paying six months’ wages.

Meanwhile, last month (June), French company Chargeurs Fashion Technologies reportedly cut 22 jobs.

Gianluca Tanzi, CEO of Chargeurs PCC & Chargeurs Luxury Fiber, told Just Style: “Chargers PCC set up a factory in Ethiopia specifically to support the large customers who were producing there. When these customers retired from manufacturing in the region, we moved production to our other global factories to support their business. »

The sale of PVH’s heritage brands in 2021 forced the company to plan for a smooth transition of its facilities, which included closing its factory in Ethiopia’s Hawassa Industrial Park in November last year.

The company said at the time that it had worked for more than five years with government, civil society and business partners in Ethiopia to make the park a leader in inclusive development and was proud of the work. what she had done there.

PVH is reportedly still operating in Ethiopia with several third-party manufacturing partners in the Hawassa Industrial Park. However, the closure of the PVH plant would have a ripple effect in the park, with the union explaining that some companies in the park have received orders from PVH under third-party manufacturing contracts.

Angesome Gebre Yohannes, President of the IndustriALL Global Union affiliate IFTLGWTU, explains: “In this crisis of job cuts, workers are worried because job security is no longer guaranteed in the factories that are still operational. We are doing our best to ensure that workers receive their severance payments in accordance with labor laws and hope that the end of the dispute will bring back AGOA benefits to alleviate the plight of suffering workers.

Paule France Ndessomin, IndustriALL regional secretary for sub-Saharan Africa adds: “Ethiopian industrial parks industrialization strategy remains one of the most effective models for creating jobs in the garment and textile sector in Africa. We were hoping for more jobs, not the cuts we are seeing. However, IndustriALL continues to support the IFTLGWTU in ensuring that employers respect workers’ rights and international labor standards during the cuts.

Just Style has contacted PVH, Epic Group, Best International Garments, Hela Indochine Apparel and Quadrant Apparel Group for comment, but has not received a response at press time.

Earlier this week, the United States Fashion Industry Association (USFIA2022 Fashion Industry Benchmarking Study suggested that Ethiopia’s loss of AGOA benefits is having a negative impact on procurement not only in the country itself, but across the entire AGOA region, as US companies leaving the Ethiopia do not transfer their supply orders to other AGOA countries.

This article was first published by IndustriAll.

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Michael O. Stutler