NAMIBIA: Textile industry faces multiple challenges

[ This report does not necessarily reflect the views of the United Nations]

WINDHOEK, 8 Feb 2005 (IRIN) - Namibia's fledgling textile industry is finding it difficult to balance workers' rights and environmental concerns with the realities of a global economy.

At its main plant in the Namibian capital, Windhoek, Malaysian textile giant Ramatex employs some 6,000 people, and a further 2,000 at its two adjacent subsidiary factories, Tai Wah Textiles and Rhino Garments.

Ramatex has recently been troubled by allegations of poor labour practices: protest marches over low wages, alleged forced overtime and unfair dismissals, as well as less leave time than is stipulated by Namibian labour law, have made headlines in the country.

The textile sector now also faces increased competition from Asian giants like China and India, after quota restrictions on clothing and textile exports from those countries to the important US market were scrapped.

"Ramatex will not close its doors, despite some rumours making the rounds," the company's human resources manager, David Yong, said at a joint press conference on Monday, following discussions with the Namibian government and organised labour.

The scrapping of quotas will result in stronger competition for the US market, although Namibia still enjoys preferential access to it under the African Growth and Opportunity Act (AGOA), launched in 2002.

Like several of its neighbours, the country used AGOA as a basis for expanding the textile manufacturing sector, creating much-needed local employment in the process.

The Namibian government promoted Ramatex as an important part of its export diversification strategy, with former trade and industry minister Hidipo Hamutenya playing an instrumental role in luring Ramatex to Namibia through incentives such as a 99-year tax exemption and subsidised water and electricity rates.

The company started operations in 2002, investing US $150 million in a factory on the outskirts of Windhoek. Another $20 million of public money was ploughed in to provide the necessary infrastructure and services for the plant.

"Our government brought this investment to the country to diversify our national economy and bring large-scale industry here," Minister of Trade and Industry Jesaya Nyamu told IRIN on Tuesday. "We want to move from a merely commodity-based economy to manufacturing."

According to Nyamu, the textile industry was the key factor leading to industrialisation in Europe around 170 years ago. "The textile industry is the starting point, leading to other industrialised sectors."

Vertical integration - the capacity to produce everything from the textile yarn to the finished garment inside Namibia - has been achieved. Raw cotton is procured from the US and West Africa.

Although textiles will cease to enjoy preferential access to the US through AGOA in 2007, analysts note that there is a strong possibility of extension.

Namibia's transport sector has been stimulated by the export of clothing and textiles, with 300 Ramatex containers per month being railed between Windhoek and the port of Walvis Bay, 370 km away. The state-owned transport company, TransNamib, constructed a container terminal outside Windhoek for this purpose, also benefiting other stakeholders in the freight industry.

According to finance permanent secretary Calle Schlettwein, Ramatex contributes 1.5 percent to the country's Gross Domestic Product (GDP) and earns 17.5 percent of Namibia's foreign currency per year, some Nam $60 million (US $9.9 million), up from a mere Nam $6 million (US $996,380) in 2002.

However, according to the company, the average monthly salary of a worker at Ramatex is just Nam $750 (about US $125).

The Brussels-based International Textile Garment and Leather Workers' Federation (ITGLWF) last month wrote to President Sam Nujoma and the leading US companies buying from Ramatex to complain about the Malaysian firm's treatment of its employees, reported The Namibian, a local newspaper.

Neil Kearny, secretary-general of the ITGLWF, acknowledged that Namibia needed the jobs created by the Malaysian textile investment, but told IRIN that adherence to international labour laws was important in the competitive global environment.

"To succeed in world markets you need the right product, at the right price, and the right conditions," Kearney pointed out. "If the Namibian government and international retailers put pressure on Ramatex for best labour practices, the company will have a good future - otherwise Ramatex puts itself in danger."

There is also concern regarding the operations of Ramatex that toxins from the dye used in the plants could reach the city's groundwater.

According to the environmental NGO, Earthlife Namibia, attempts to alert stakeholders to the possibility of groundwater pollution have met with resistance.

"Our request of November 2001 for an environmental assessment was met with defamatory hostility by ... government and Windhoek's municipal officials", alleged Earthlife Namibia chairperson Bertchen Kohrs.

"Earthlife repeatedly warned line ministries and the city of Windhoek of possible pollution and other environmental damages, and demanded responsible action in this regard," the organisation said in a letter to the trade ministry last month. Since no reply was received, Earthlife distributed its letter to the media on Tuesday.

Late last year Windhoek city councillors, led by Mayor Matheus Shikongo, visited Ramatex after municipal experts had compiled a confidential report about pollution from the factory seeping into the city's groundwater at a nearby water reclamation plant. The outcome of the visit by councilors was not made public.

[ENDS]