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GAP, Walmart, C&A, H&M warn their Indian suppliers against textile mills that involve child & bonded-labou

AHMEDABAD: An employment system for girls in Tamil Nadu is threatening to waylay the country’s $11-billion garment export industry, with several international retailers distancing themselves from supply chains that involve the allegedly exploitative scheme.

India has often drawn flak from welfare organisations for poor vigilance against child and forced labour. In the latest sign that the West is serious about labour issues, multinational retailers, such as GAP, Walmart, C&A, H&M, Primark, Mothercare and Tesco, have instructed their Indian suppliers to stop sourcing raw material from textile mills that employ girls under ‘Sumangali’, a contractual arrangement that labour watchdogs say involves unfair practices and amounts to bonded labour.

The development could have serious ramifications for the domestic apparel industry, which earns 80% of its business from Europe and the US.

“We are aware of a number of new sources that continue to show the existence of child labour and forced labour in Indian garment production. In some cases, labour schemes such as the ‘Sumangali’ are involved,” said Marcia Eugenio, director, office of child labour, forced labour and human trafficking in the US Labour Department’s Bureau of International Labour Affairs.

Thousands of rural and tribal girls in Tamil Nadu seek employment in the state’s textiles industry under ‘Sumangali’, a Tamil word for “bride”, drawing between 36,000 and 56,000 for a three-year work contract. Mill owners make a lump sum payment to the parents at the end of the term, purportedly to help with their marriage expenses.

The scheme, introduced in the state in the mid-1990s, became a big draw for an industry that often faces labour shortage.

The lump sum payment and free accommodation feature of the scheme is luring poor families, labour watchdogs allege that it results in girls being trapped for the contract period. This allegation is backed by Social Awareness and Voluntary Education (SAVE), a non-government organisation in the knitwear hub of Tirupur, 400 km from state capital Chennai.

“Girls are kept captive in hostels, not allowed to make phone calls and their salaries are withheld for three years. They are paid poorly – 40-60 a day, against the state’s minimum wage of 184,” SAVE director A Aloysius said. “They are made to work for 12 hours. In some cases, contracts have been illegally terminated and girls have left empty-handed,” he added.

But the industry body says the scheme gives dignity of labour to the otherwise illiterate and poor women.

The Southern India Mills Association (SIMA) says the term ‘Sumangali’ has been done away with, and that some 120 mills under it are offered an “apprentice scheme with hostel facility”. “It is misleading to label the scheme as bonded labour. German-firm TUV Rheinland audits our mills to certify women employment standards,” secretary general K Selvaraju said.

SV Arumugam, chairman of Confederation of Indian Textile Industry, said the system of onetime payment caters to parents’ demands that the salary be kept with employers as savings.

Armugam, who is also the director of Shiva Textiles, a mill employing 400 women under the scheme, said, “You cannot permit the employees to leave the dormitories at 1 am just because the western world perceives this as violation of human rights.” “But we have discontinued payment of lump sum and encourage parents to collect salaries every month,” he added.

Taking the cue, exporters in Tirupur have snapped links with mills that have the ‘Sumangali’ scheme. The town, which earns about 12,500 crore every year from European and US buyers, had faced allegations of child labour in 2008.

“Although we know it is not slavery, 27 of our clients including big buyers like Gap, Primark, Walmart, H&M, C&A and Tesco have asked us to discourage the ‘Sumangali’ scheme in the supply chain,” a Tirupur Exporters Association official said. “We have already asked SIMA and the Tamil Nadu Spinning Mills Association to abolish the scheme and encourge fair employment practices.”

Many say similar pre-marriage schemes prevail in China, Bangladesh, Vietnam, Indonesia and Thailand. “The scheme is extremely popular with the workers, but equally unpopular with trade union leaders because they do not get their pound of flesh,” a senior industry observer said.

Harsimrat Kaur Badal pitches for 100% FDI in food products retailing

NEW DELHI: Ministry of Food Processing Industries has urged Prime Minister Narendra Modi to consider 100 per cent foreign direct investment (FDI) in multi-brand retail of food products, saying it would benefit farmers as well as common man.

In a letter to the Prime Minister, Union Food Processing Industries Minister Harsimrat Kaur Badal suggested for a “relook” at the country’s FDI policy in multi-brand retail in food processing.

“The letter has been forwarded to the Department of Industrial Policy and Promotion (DIPP), which is looking at the issue,” sources told PTI.

India permits 51 per cent FDI in the multi-brand retail sector. The BJP-led NDA government is opposed to allowing FDI in multi-brand retailing, but it has not yet scrapped the policy approved by the previous UPA regime.

The “politically sensitive” multi-brand retail segment in India employees millions and is dominated by mom-and-pop stores.

Badal said permitting 100 per cent FDI in multi-brand retail of food products produced and manufactured in India would give the much needed fillip to the sector.

It would also help in development of infrastructure such as cold chains that are critical for the food processing sector.

The move would benefit farmers with increased price realisation, reduction in wastages, job creation, besides acting as an incentive for global players in the sector to start operations in India, she wrote.

The government is taking several steps to attract foreign investments in the country. It has relaxed norms in over a dozen sectors including defence, construction and single brand retailing.

So far, the government has cleared UK-based Tesco’s proposal in multi-brand retail sector.

During April-September, FDI in the country has increased by 13 per cent year-on-year to $16.63 billion.

UK’s Morrisons rejects $7.6 billion takeover offer

British supermarket group Morrisons has rejected a proposed £5.52 billion ($7.62 billion) cash offer from US private equity firm Clayton, Dubilier & Rice (CD&R), saying it is far too low. Britain’s fourth largest grocer by sales after Tesco, Sainsbury’s and Asda, said it received the “unsolicited, highly conditional non-binding” proposal of 230 pence a share on Monday.

The board of Bradford, northern England-based Morrisons rejected the proposal on Thursday.

“The board of Morrisons evaluated the conditional proposal together with its financial adviser, Rothschild & Co, and unanimously concluded that the conditional proposal significantly undervalued Morrisons and its future prospects,” the group said in a statement on Saturday. Shares in Morrisons, down 5.5% over the last year, closed on Friday at 182 pence, valuing the group at £4.33 billion.

Morrisons said CD&R’s proposal provided for Morrisons shareholders to also still receive a final ordinary pidend of 5.11 pence per share announced on March 11.

( Originally published on Jun 20, 2021 )