A tale of weak enforcement

Abstract

This article firstappeared in the South AfricanLabour Bulletin www.salabourbulletin.org.za A tale of weak enforcement ANDRES BEZUIDENHOUT is aresearcher in the Sociology of Work Unit at the University of the Witwatersrand What motivates companies to relocate production across Southern Africanborders? South decentralised and industry Lesotho. African operate firms Andries zones in in former and the Bezuidenhout garment in apartheid Swaziland industry operate informer apartheid decentralised zones andinSwaziland andLesotho. Andries Bezuidenhout investigated labour lawenforcement inthese areas andwhy some South African employers don't escape stringent labour lawsandmove to lessregulated industrial areasacross the border. Inthe early 2000s, partly because of the Africa Growth andOpportunities Act (Agoa), the United States of America, Lesotho andSwaziland saw aninflux ofclothing manufacturers. Another reason for this wasthat the South African rand, towhich Lesotho andSwaziland's currencies aretied, wasfavourable tothe USdollar atthe time. InLesotho 50,000 new jobswere created, and inSwaziland 40,000. Mostly young women work inthese factories, producing merchandise such asjeansand T-shirts for the USmarket. These aremassive orders with lowmargins, but high profits because of the sizeof the orders. But the end of Agoa put these factories under pressure. Also, the rand nearly doubling in value tothe dollar since the early 2000scame asa shock toexporters. Lesotho andSwaziland lost around 20,000 jobseachas manufactures relocated toChina and Vietnam. This empty factory spaceisoften filled by relocated South African operations. Why doSouth African clothing manufacturers move toLesotho andSwaziland? For the past year, Ihave been visiting these two countries with Soeren Jeppesen, a colleague from the Copenhagen Business School, inanattempt to understand this. These areimpressions based onfactory visits andinterviews with managers, trade unions, workers andgovernment officials. The story ismore complex than just South African firms leaving because of'high wages' and'good labour laws', tocountries where labour canbe'exploited'. Before wegoto Lesotho andSwaziland, wehave tomake a detour. Westart inKwaZulu-Natal. Ezakheni, South Africa TheEzakheni industrial park near Ladysmith wassetupinthe1980s toattract manufacturing operations tothe area. Itisa prime example ofapartheid's 'industrial decentralisation' strategy. Firms received subsidies from the state, aswell astailor-made factory spaceatlow rents. Apart from relocations by clothing manufacturers from elsewhere inSouth Africa, Ezakheni attracted a considerable number of Taiwanese companies. For the apartheid state this wasintended tostem the flow of Africans tocities such as Durban andJohannesburg. For employers, itmeant lower wages than urban areas. Intraditional clothing manufacturing hubs, such as Durban andCape Town, the South African Clothing and Textiles Workers' Union, (Sactwu), waswinning recognition agreements tonegotiate better wages. But places like Ezakheni hadanother advantage for employers. Itwasinthe Bantustan of KwaZulu, where South African labour lawdid not apply. Workers were often forced tojoin the weak United Workers' Union ofSouth Africa, which wasaffiliated toInkatha. Soinaddition tolower wages, unions could not operate freely. So,inthe 1980sthere wasa shift ofgarment factories from urban torural areassuch as Ezakheni andPhuthadithjaba inthe Eastern Free State nearby. This trend continued into the 1990s, when industrial council agreements did not yet cover there areas. South Africa's transition todemocracy andnew labour statutes changed the situation. Bargaining council agreements now set minimum wages andconditions for formerly excluded areas, such as Ezakheni. Unions can operate freely andthe council opened anoffice innearby Ladysmith toassist employers and employees, and toinspect minimum conditions setby collective agreements. Could itbethe case,weasked ourselves, that these companies will now relocate toplaces like Lesotho andSwaziland? Inboth these countries, with many Asian firms departing, there aretrained andexperienced workers who arewilling towork for much lower wages than inSouth Africa. Maputsoe, Lesotho There aretwo unions organising inthe garment industry inLesotho, the Lesotho Clothing and Allied Workers' Union and the Factory and Allied Workers' Union. Wages inLesotho areregulated by a collective agreement ataround R700 (€61)a month. Conditions infactories alsomassively improved after GAP, a LosAngeles company that sources most ofitsproducts from Lesotho, implemented a codeofconduct towhich their suppliers have tosubscribe. This coderequires suppliers toenforce the labour laws of the country, aswell asother minimum standards. GAP appointed three fulltime inspectors toinspect factories inLesotho. Most companies feel positive about this code, and that inspectors aresupportive intheir approach, rather than punitive. TheLabour Commissioner alsoreported that shehada good relationship with GAP'S inspectors. TheDepartment ofLabour, however, isclearly under resourced. There areonly eight inspectors tocover the whole country, with not enough vehicles. Officials' low wages make the system vulnerable tobribery. Wealsosawthe extent...