Sri Lankan apparel’s resilience is typified in its bounce back from the first wave of COVID-19 in the country – Pic by Shehan Gunasekara
- Sri Lanka is a world leader in ethical labour, environmental sustainability and responsible manufacturing standards
- Industry is the country’s largest employer, largest exporter, and largest industry empowering rural populations
Resilience is what defines industries that stand the test of time. Industries described as ‘relics of the past’ are in reality misunderstood entities that have adapted themselves to thrive in modern times due to its commitment towards change and adherence to the highest ethical standards. These remain the lifeblood of developing economies and present the best way for countries to grow and thrive. Unfortunately, those outside these industries tend to brand them as unethical, with very little understanding of the ground reality within. The apparel industry in Sri Lanka is no exception to these unwarranted assaults. Yet the industry continues to be the backbone of the Sri Lankan economy.
Contribution to Sri Lanka’s economy
The apparel industry’s contribution to Sri Lanka’s economy is unparalleled. The industry is the single largest contributor to Sri Lanka’s exports and represents just under 7% of the country’s GDP. The industry represented 59% of Sri Lanka’s $ 9,426 million industrial exports in 2019. (46.9% of the country’s total exports).
As with all industrial exports, the apparel industry imports raw material from overseas. These imports are often cited as the reason for the apparel industry’s high topline export numbers. However, focusing purely on value addition within the country, that is, the net of export value against import value, shows that over 52% ($ 2.4 billion) of apparel’s $ 5.6 billion in exports is value added within the country. This conservative estimate of value addition factors in raw materials imported to manufacture locally sourced fabric and trims as well.
Job creation and employment is vital to ensure a country is able to sustain its citizens and no industry in the country offers the sheer magnitude of jobs that apparel does. The industry directly employs 350,000 people with approximately twice the number of people employed indirectly to sustain the 350,000 strong workforce.
These direct employees represent 15% of the country’s total industrial workforce. In a country that struggles with female workforce participation, the apparel industry has leapt to the forefront of empowering women to be financially independent. Sri Lanka’s female workforce participation stands at approximately 34%. This female participation rate is largely the result of the apparel industry which represents 40% of all females in industrial employment.
Treatment of employees
The apparel industry has relentlessly received the short end of the stick in terms of employee treatment. However, these attacks are more often than not baseless and unwarranted. In January 2018, the industry commissioned KANTAR to conduct an independent study on the perceptions of the apparel industry as a potential industry for employment. The purpose of this study was for the industry itself to gain an unbiased external view and understanding of the ground realities of the industry. The study showed that “current employees within the industry are proud of their workplace, [and] they attribute the job with providing them opportunities to develop their lives.” However, the study did also reveal that the communities around apparel industry employees tend to perceive “factory girls” negatively. This negative perception often emerges from a lack of knowledge about the industry’s true nature.
The industry’s treatment of employees is best encapsulated in the words of Nelum, an employee cited in KANTAR’s research: “I know that some people do not have a good impression of my job. I sometimes hear what men say when I walk on the road. But my job has given me confidence and opportunity. I have been able to save money for my dowry, buy myself gold jewellery and electronics for my house.”
Sri Lanka is globally renowned as one of the most responsible apparel manufacturers in the world in terms of ethical labour practices. This belief is supported through the rigorous standards that a vast majority of Sri Lankan manufacturers adhere to. Under the Board of Investments (BOI) guidelines, all plants operate employee councils where employees and employers work together on resolving matters of mutual concern. Further, most plants are required to undergo independent third-party audits to ensure compliance to both local laws and buyer stipulated requirements that transcend local legal requirements, in addition to the mandatory audits and checks local authorities conduct. The Worldwide Responsible Accredited Production (WRAP) is one such organisation and as per its website, Sri Lanka has 112 facilities certified as either WRAP Gold or WRAP Platinum. This certification is a rigorous process and involves among many other checks and audits and closed door interviews with randomly selected employees devoid of any management presence.
The industry’s compensation structure is an aspect often questioned and misrepresented. These misrepresentations stem from reference to dated state documents that reflect the minimum payable compensation and not the standard wages being paid to employees. On average, a factory employee in Sri Lanka receives total compensation of Rs. 40,000 per month, which in most cases includes transport, meals, medical, insurance and several other benefits often unseen to naysayers outside of the industry.
The apparel industry is without a doubt a challenging industry to work in and is driven by high productivity expectations. The facts presented above do not attempt to discredit the hard work every associate in the industry contributes. Rather it aims to portray the reality of a misunderstood industry: an industry with high expectations that adheres to strict global compliance standards and does not exploit its employees.
A leader in sustainable manufacturing
Just as Sri Lanka’s apparel industry is a world leader in its adherence to ethical labour standards, the industry is also a world leader in environmental sustainability initiatives. In addition to countless sustainable products, the country had its first facility certified as carbon neutral in 2012 and since then, many facilities have followed suit, operating as net zero carbon emitters.
As per AIA New York, the country is host to South Asia’s first Passive House certified project and the world’s second Passive House certified factory building in the world. Passive House is the world’s leading standard in energy efficient construction based on stringent standards for quality, comfort, and energy efficiency. Additionally, Sri Lanka has several LEED (Leadership in Energy and Environmental Design) certified facilities; the world’s most widely used green building rating system.
Apparel manufacturing and Sri Lanka’s economic future
Despite the immense setbacks COVID-19 has cascaded within the apparel industry, it remains the lifeblood of Sri Lanka’s export economy. The industry employs the most people, is the largest contributor to Sri Lanka’s exports, and empowers rural populations more than any individual industry in the country. In this writer’s opinion, it is imperative that Sri Lanka’s path to economic development builds on this 30-year-old industry – it is an industry Sri Lanka should rightly be proud of. The industry accused of being a relic is, in fact, a modern-day behemoth that should be heralded for its resilience.
Sri Lankan apparel’s resilience is typified in its bounce back from the first wave of COVID-19 in the country. The industry was able to sustain the country’s economy through exports worth $ 1.85 billion in May to September of this year. These returns made it one of the country’s most significant earners of foreign exchange during a time when foreign currency reserves depleted with lower inward remittances. Sri Lanka’s ability to grow apparel exports year after year despite paying the highest wages in the region is astounding and tantamount to the industry’s desire to grow responsibly, accountably, and transparently.
Amidst COVID-19 the apparel industry in Sri Lanka is facing its biggest challenge to date. However, count this remarkable industry out at your own peril. Every few years, there is rhetoric about shifting Sri Lanka’s export economy from its dependence on apparel. These initiatives while important for the country should augment the apparel industry and not replace it. Now is the time for introspection; the time to understand our country’s true strength and also its resilience: it’s time to be proud of this nation that adorns the high streets of Paris, London, New York, and Milan and is doing it the right way.
(The writer is the Secretary General of the Joint Apparel Association Forum (JAAF). Established in 2002, JAAF is the apex body that represents the apparel industry and guides Sri Lankan Apparel towards the ultimate goal of being the number one apparel sourcing destination in the world.)