Ethiopia's showcase textile project—Hawassa Industrial Park—is facing huge job losses in the wake of factory closures.
The backdrop: According to the Industrial Federation of Textile, Leather, and Garment Workers Trade Union (IFTLGWTU), the closures began after the announcement by the United States government that Ethiopia would no longer benefit from the African Growth and Opportunity Act's (AGOA) duty-free access to US markets from 1 January this year.
- The reasons given for the termination of the preferential trade benefits are “gross violations of internationally recognised human rights by the government of Ethiopia and other parties” in the war in the northern part of the country, according to IFTLGWTU, which is affiliated to IndustriALL Global Union.
The closures: Most factories in Hawassa that were exporting to the US had their orders cancelled, leaving them stranded. The Hawassa Industrial Park at its peak employed over 35,000 workers.
- Best International Garments, an Indian-owned company, with a factory in the park, has retrenched over 3000 workers.
- The closure of one of the largest factories in the park by Phillip Van Heusen (PVH) in November 2021, is having a ripple effect as 15 companies had received orders from PVH under third party manufacturing contracts.
- There are plans to scale down production by other garment factories that include Sumbiri Hela Intimates which has put 260 workers on a month paid leave. The factory is jointly owned by Sri Lanka-based Hela Indochine Apparel and Sumbiri Intimate Apparel.
- Quadrant Apparel Group has put 300 workers on paid leave while Epic Apparel Plc, a Hong Kong-based Epic Group subsidiary, has retrenched workers after paying six months’ wages.
- In June, Chargeurs Fashion Technologies, a French company, retrenched 22 workers.
The reactions:
In this job losses crisis, workers are anxious because job security is no longer guaranteed in the factories that are still operational. We are trying our best to ensure that workers are paid their terminal benefits according to the labour laws and hope that the end of the conflict will bring back AGOA benefits to ease the plight of the suffering workers.
— Angesome Gebre Yohannes
President
IFTLGWTU
The Ethiopian industrial parks industrialisation strategy remains one of the most effective models in creating jobs in the garment and textile sector in Africa. We were hoping for more jobs and not the retrenchments that we are witnessing. However, IndustriALL continues to support the IFTLGWTU in ensuring that employers respect workers’ rights and international labour standards during the retrenchments.
— Paule France Ndessomin
Regional Secretary for Sub Saharan Africa
IndustriALL
