Chinese competition? It's textile employers' main fear and the pretext for doing nothing to improve social conditions.
Brussels, 27 October, 2005 (ICFTU OnLine): In Bulgaria, the vast majority of employers in the key textile and garments sector, which employs a fifth of the active population, are closed to social dialogue. In many of the companies producing for major international labels, the management brandishes the threat of Chinese competition and takes refuge behind the codes of conduct to prevent any form of trade union activity. Meeting with Ivan Neykov, former trade unionist, former Labour Minister, and current director of the Balkan Institute of Employment and Social Policy.
During 2004, your institute steered a project on corporate social responsibility financed by the European Commission. What exactly did it cover?
The project was aimed at raising awareness about the issue of social dialogue (among management, supervisors, workers) in ten textile and clothing companies. Aside from the European Trade Union Federation for Textiles, Clothing and Leather (ETUF: TCL), which was the main partner, four major brands were also involved in the project: Adidas, H&M, Levis Strauss and Nike. Most of the ten companies work for these brands. Only one of them has a trade union. Most of the firms were set up recently. They each employ between 200 and 500 workers and are managed in a modern manner by well-trained executives. They have nothing in common with the fly-by-night workshops that have given Bulgaria's garment sector such a bad reputation. These are companies that were formed to last. The first phase of the project consisted in training around a hundred workers and a few dozen managers on the subject of corporate social responsibility. We had prepared a small brochure explaining the basic labour law regulations. The course participants were then given the task of disseminating this information among their colleagues. Quality circles were set up, in which discussions were held on work and production related issues.
How did the participants react? Has the project led to the formation of trade unions?
Workers in two of the companies have started to organise, but the process is very slow. The situation has to be seen in context. Less than 10% of the companies in the sector are unionised. Workers still haven't quite understood that they have the right to unite and create organisations. Another decisive factor is the overwhelming feminisation of the sector. Women find it more difficult to take on trade union activities. There is also a large number of ethnic minorities in the workforce. To come back to the project, most of the people involved were to discover for the first time what the Labour Code was, or a collective agreement, and so on. It was a pioneering project on fallow land. We have sown a seed and are waiting to see what will grow.
Is it not the role of the branch unions to support such initiatives?
Yes, if we do not want the process to go on for years, the workers are going to need some outside support. This is the case in the two companies where the workers are just starting to organise. Our mission was not to stir up a revolution during the seminars. The whole project was built on a compromise between ETUF: TCL and the four multinationals. These groups would never have agreed to take part in a project that was geared towards unionisation. This also perhaps explains the reservations of the branch organisations, which may have felt excluded during the project. Having said that, these same organisations need to be more active on the ground. The workers from several companies involved in the project had never met a trade unionist before. It is not like it was during the communist era, when the workers didn’t ask themselves why they should join a union, since membership was automatic. Nowadays, the unions have to motivate the workers, explain to them why it's so important to be unionised.
Tell us about the employers involved in the project
It didn’t take us long to realize their motives: “The project is being proposed by major brands. OK then, let's join in. It will lead to new orders.” That is not, of course, what happened. The orders even fell in some companies.
Because of Chinese competition?
It's hard to say. But that's the biggest fear of these ten employers. It's also the pretext they use for doing nothing to improve social conditions. During the seminars, they complained about the working hours being lost in discussion and asked us why they should invest in an air conditioning systems or better lighting for the sake of the workers whilst their Chinese counterparts are doing whatever they please. They saw us as unwelcome guests and were wary that it would all lead to widespread unionisation. Yet, when the project came to an end, several employers told me that it had drastically changed the company. When I asked them it if was for better or worse, they refused to say.
What were the views on codes of conduct?
The workers started to take an interest in their content during our seminars. But my feeling is that they are still a “plaything” for the brands, something they put in their window display to make things look nice. They are discussed outside the company, or between a brand and its subcontractors, but not with the workers. I have an anecdote on this subject. In accordance with the code of conduct recommending the implementation of measures promoting dialogue between the employer and the staff, one of the directors thought he had done what was necessary by placing a suggestion box in the middle of his factory. He didn’t know what else to do, as it was always empty. I suggested that he should place it in the toilets. Within a few days, it was overflowing with recommendations and complaints.
Do you not think that the companies see codes of conduct as little more than production constraints, an annex to the specifications?
Absolutely. Like having a metal detector to stop pins from being left in the finished product. To be honest, I’m even convinced that the management place more importance on the metal detector than the code of conduct. Yes, there are social audits, but they are very cursory. In the main, they check whether the codes of conduct are framed and displayed on the wall. They follow the logic that if it is visible and translated into Bulgarian, then it's accessible to all the workers. In practice, however, after a long day's work, reading a code of conduct is not the first thing that comes to mind. All the more so given that not just one but often several codes are displayed, since most companies work for several different brands. In some instances, the expediency of these companies is comical. Take fire extinguishers for example: each code of conduct stipulates that it has to be attached to the wall at a given height. In one company, the management had resolved this problem by placing hooks at different levels; each time there is an inspection, the extinguisher is carefully placed at the appropriate level.
So you see social dialogue as a priority?
Yes. But in nine out of the ten companies involved in the project there is no union, so the codes of conduct are the only instruments that can be used as a launching pad for social dialogue.
Aside from assessing the project, your address at the recent ETUF:TCL Congress mainly dealt with the factors changing the world of work. Could you recap on them?
I see four main factors: technological change, demographic change, globalisation and China.
As regards technological change, most of the unionists and employers at the Congress probably didn’t feel that this factor concerned them. They are mistaken. We are in the eye of the cyclone, in Bulgaria and everywhere else. The technology machine is turning over at such a rate that it's hard to imagine what awaits us in ten years time. Think back to the IBM study on the shelf life of knowledge. What is learnt at primary school is out of date within 25 years. The figure falls to 10 or 12 years in the case of secondary school and just four years for university education. Only recently, a company director who had just invested in IT equipment confided in me about his bewilderment. He had noticed several workers pretending to shoot at the computers each time they went past the office. Workers aged over 35 are afraid of new technology, and for the older staff it's a personal drama. In Bulgaria, the workers in the military-industrial complex considered themselves highly qualified. But within just a few years they had lost everything.
The demographic factor is making all this worse. During the communist era, the pension system compensated for the low wages. One out of five workers used to retire at 40, or even before. With the reform of the system, they now have to hold on for another 15 or 20 years. The problem is that they are not given the opportunity to train or retrain.
The third factor: globalisation. Fifteen years ago small traders were the most fervent supporters of the free market economy. Then the big distribution chains came along, such as Metro. The small traders didn’t understand what was happening to them. It was the first clash with globalisation here in Bulgaria. Before the project, the workers' vision was limited to what happened between the truck that brought the raw materials and the one that left with the finished goods. They now have a better grasp of the tentacular network. They understand that if their company isn’t capable of producing such and such a zipper, it could threaten their jobs.
As regards the China factor, we haven’t yet grasped the extent of the turmoil this is going to create. In Bulgaria, between 15,000 and 20,000 light industry jobs have already been destroyed, that is, 10% of the jobs in the sector. And the country is still relatively sheltered compared to others. I cannot imagine what will happen when the tidal wave hits us.