The US government under its “Secretary of State’s Awards” category awarded PVH Corporation–a major multinational apparel company–for excellence in “sustainable operations” in Ethiopia while the conglomerate is facing disputes over trade union establishments and unfair wages.
During a teleconference on Thursday, Manisha Singh, assistant state secretary for economic and business affairs told reporters that PVH’s investment in the citizens and economy of Ethiopia will bolster Ethiopia’s fast paced growth.
“What distinguishes American investment from the rest of the world is that we prioritize viability and sustainability for years to come. We care about the companies in which we are investing,” the assistant secretary said.
When The Reporter asked about the labor disputes with regards to the concerns of local employees towards forming trade unions and improving wage rates; Singh said the award is focused on performances regarding sustainable operations in terms of renewable energy, environmentally friendly practices. “And for that, the government felt that PVH deserves to be recognized”.
However, she also mentioned that companies need to come to terms with “mutually agreeable resolutions with their employees”. The assistance secretary added that “we support good employment practices, good governance, and we would like to see all the winners of the Awards for Corporate Excellence (ACE) to take the time to review any of the problems that they are having, and hopefully come to successful resolutions”. Commenting on that, Ambassador Matthew T. Harrington, deputy assistance secretary with the bureau of African affairs, also said that the American consumer expects the companies they buy products from to obey the rules. “That’s an expectation that has grown and is significant now, and I think that’s an important guidepost for companies as they establish operations overseas”.
However, PVH and 18 leading global apparel brand companies have been accused of violating the rights of employees to form associations. It is to be recalled that the Confederation of Ethiopian Trade Unions openly denounced the act that its member associations which mobilized workers in the Hawassa Industrial Park–an eco-friendly and zero effluent discharge Park–have been barred.
Kassahun Follo, president of the confederation, told the press a few months ago that the only option trade unions have been left with is to form associations outside the industrial park’s compound. According to Sharon Burrow, secretary-general of World Federation of Trade Unions (WFTUs), the claims of “exploitative wages” at the industrial park is justifiable since these wage rates are “nowhere near to the livable minimum wage rate in Ethiopia”. Back in January, while launching a minimum wage rate campaign in Africa, in Addis Ababa, Sharon expressed alarm at the low-wages rate in the nascent manufacturing sector of Ethiopia. It also raised, as a case in point, the plight of workers who get paid 600 birr (almost USD 22) a month. Apart from that, the labor turnover rate in the Hawassa Industrial Park, where PVH and its network of companies say they have created 18,000 jobs, is also astonishingly high.
Aside from the blame game, PVH has generated USD nine billion in revenues in 2017, and has been instrumental to spearhead global players to come and invest in Ethiopia. During the event, Alaffia, a beauty and personal care products manufacturer in Togo, has been awarded for women’s economic empowerment role. According to the state secretary, Alaffia employs 700 women in rural Togo and pays wages four times higher than the average pay. Furthermore, it contracts 14,000 suppliers as well.
With regards to Chinese activities in Africa, assistance secretary Singh singled out China’s “uncaring” role in Africa. “The Chinese will come in and not necessarily take advantage of the local labor force. Environmental standards and human rights are not relevant for them,” she lambasted.