G-Star International B.V.

Amsterdam, 14 July 2006,

By means of this letter the Clean Clothes Campaign (CCC) and the India Committee of the Netherlands (ICN) would like to share with you our view on the concerted efforts to improve the labour situation at G-Star’s suppliers in Bangalore Fibre & Fabrics International (FFI) and Jeans Knit Pvt. Ltd (JKPL).
To inform our respective constituencies, we will also publish this letter on our websites.

In this letter a number of issues is brought up that we have addressed before, particularly in our letter to G-Star dated 15 June 2006. We apologise for repeating ourselves, but unfortunately quite some issues still require our attention.

Here we would like to express our surprise that G-Star has not directly replied to the CCC/ICN letter of 15 June, while at the same time quotes from this letter have been used by G-Star in its public position paper. This we have understood as an agreement with our analysis, which is gratifying. However it would have been nicer if G-Star had informed us directly.

We will end this letter with some precise questions and demands to G-Star. To be able to keep track of our mutual exchanges, we would appreciate a written reply to this letter.

Labour situation at FFI/JKPL

The reason for CCC and ICN to address G-Star in the first place was the alarming information we received from our trusted partners in Bangalore about the labour conditions in the production units of G-Star’s suppliers FFI and JKPL. We were told outrageous stories about continuous physical and psychological intimidation of workers in the production units, workers that have no way to voice their concerns or defend their rights and interests.
We believe G-Star, as a major buyer, has a responsibility to clean up its supply chain and could play a role in taking FFI through this process.

Despite some changes brought about by the FFI management (such as re-issuing appointment letters, improved bus transport for workers, reduction of overwork, opening of a canteen in the finishing unit…) the situation has not improved substantially. Since the issue of the CCC/ICN protest letter in May 2006, we have received new reports on intimidation of workers, such as the one we referred to in our email dated 29 June. However, what is most worrying is that FFI is still not accepting unionisation in the factory. FFI insists that the existing grievance committee, set up by FFI itself, suffices in dealing with eventual complaints by workers. FFI even says that no person from outside or union representation to negotiate is necessary. FFI speaks of ‘trade union disturbance’ while referring to trade union activities. For the local trade union GATWU, CCC and ICN this is unacceptable. Moreover, on the basis of its own Code of conduct, G-Star should also not accept this. In all events, it should be understood that worker committees can not replace a proper trade union, since such committees are not legally entitled to engage in collective bargaining.

What G-Star has done so far?

G-Star has invited the FFI management for the 2 June meeting with CCC/ICN in Amsterdam. That was a constructive meeting: FFI promised to meet with GATWU in Bangalore. Since then, however, it is not clear how G-Star is pursuing the dialogue with FFI. Is G-Star putting pressure on FFI? What exactly is G-Star doing to get its supplier back on track?

Since 2 June, quite an intensive exchange of positions and information between G-Star and CCC/ICN has come about. However, where G-Star is mainly focusing on the excessive labour rights violations, CCC/ICN feel that the broader picture is being neglected. These incidents G-Star seems to be losing itself in are symptoms of more structural problems. For CCC/ICN, the issues that need to be addressed first and foremost are the complete lack of freedom of association of FFI and JKPL workers, as well as the absence of collective bargaining processes.

G-Star has demanded of the FFI management to state not to have observed ‘the violations and criminal acts mentioned in the Fact Finding Mission report and to commit itself to preventing such acts to happen in the future’, according to the letter by Marcel de Zwaan dated 30 June. What exactly did the FFI management state? What is this statement worth? CCC/ICN hope that G-Star could adopt a more pro-active approach, in stead of this rather passive way of dealing with the issue. What other requirements for improvement has G-Star formulated?

G-Star has published a position paper to share its position and thoughts with a wider public. The CCC/ICN appreciate this.
Publicly, in its position paper, G-Star mentions that independent research into the labour right violation should be undertaken, involving local organisations that are trusted by the FFI/JKPL workers. We have asked before, and now we are asking it again, has the research taken place? If not, when and how will it be done? Which local stakeholders are involved?

G-Star has a code of conduct. In its position paper, G-Star claims that all its suppliers including FFI are checked against this code.
We appreciate that G-Star has developed this code of conduct. However, a code in itself is not worth a thing. A code of conduct could easily just be a piece of paper when effective implementation mechanisms, including monitoring and verification, are not embedded in the policy and practices.

Without soliciting a detailed discussion on G-Star’s code of conduct, we would like to point out a number of its weak points compared to the CCC model code: the code does not refer to all relevant ILO conventions or the United Nations Universal Declaration of Human Rights. The code does not include reference to a living wage. Regarding overtime, the G-star code does not clearly limit the number of hours including overtime. The G-Star code does not speak of the need for legally-binding labour contracts.
Most important, the G-Star code is silent on the issue of verification.

G-Star urged FFI towards SA8000 certification. CCC/ICN deem this to be a good first good step. However, CCC/ICN have a critical analysis on the quality of commercial auditing systems such as SA8000. Generally, workers and their organisations are marginalised in these audits. Such audits are failing to deliver as a tool for assessing code compliance, particularly in determining freedom of association, excessive and forced overtime, abusive treatment and discrimination of workers1.These are precisely the issues at hand at FFI/JKPL!

G-Star has commissioned SGS to carry out an audit. Why SGS? G-Star has stated that audits looking into code compliance should be carried out by an independent third party. CCC/ICN do not think SGS is the best choice. SGS is a so-called quality control firm, not a specialised social auditor. SGS might have local offices all over the world, but that does not guarantee proper and sustained local stakeholder involvement.

This audit is going to take place this week. It is not clear what the terms of reference are of this audit and if and how local stakeholders will be involved. From the perspective of the CCC/ICN this is crucial, as we have repeatedly mentioned. Again, CCC/ICN insists to point out here that an isolated audit by an external body does not suffice. An audit should be part of an ongoing process involving local stakeholders, for it to be sustainable.

CCC research has shown that often factory managers are deceiving workers, for example by coaching workers, before they are interviewed by auditors, to convey false or incomplete information, and by falsifying records. There are no safeguards that such situations will not occur at FFI/JKPL since the FFI management is unfortunately not very pro-worker oriented.

Developments in Bangalore

On 9 June 2006, FFI management met with GATWU and NTUI. It is not clear what exactly both parties have agreed upon, the respective accounts of the meeting differ. However, it seems that at least the FFI management has promised to look into the accusations of mistreatment of workers by supervisors and deal with those responsible accordingly. The washing unit will be modernised and reorganised within a period of 35 days. FFI will delegate its legal advisor, Ms Naisargi, to meet with workers, in the presence of GATWU, to hear their stories directly. Also, duplicate appointment letters would be given to all workers within a month.

A delegation of the Fact Finding Mission has met with the FFI management to discuss the concept report of this mission, on 3 July 2006. CCC/ICN appreciate that the FFM has made a patient effort to hear what FFI has to say about this report. However, FFI has still not openly made its position clear, although specidifcally asked to so.

The Women Garment Workers front ‘Munnade’ is stepping up its activities towards women workers of FFI and JKPL, raising awareness and informing them about their rights through leaflets.

GATWU has filed a case with the labour court and labour department for non-payment of gratuity, non-payment of overtime wage dues and non-refund of 'security deposit'.

All parties involved request clarification of the murder case mentioned in the concept Fact Finding Mission report. However, it should be clear that only directly involved people (family of the deceased) have access to such information from the police. It is up to GATWU and FFI to see if this most alarming incident could be discussed among them in more detail, as part of a common agenda for further discussion and exchange that needs to be drawn up.

What have CCC/ICN done?

CCC and ICN are closely following the developments in Bangalore, keeping an open contact with GATWU, NTUI and other labour rights organisations.

CCC, also on behalf of ICN, has contacted other brands sourcing from FFI - Tommy Hilfiger, Ann Taylor en Guess - to inform them about ongoing labour issues at FFI and JKPL.

Also, CCC contacted SAI to share the information you have already received form us about the situation at FFI. SAI explicitly thanked CCC for sharing its concerns.

Concerning the murder case; CCC/ICN decided not to report on this incident as the only source was the concept report of the Fact Finding Mission. Clearly, CCC and ICN do not have a direct responsibility in investigating or ending such acts of violence. The CCC and the ICN are campaigning organisations, not monitoring bodies. We have no policing or judicial authority!

What CCC/ICN want G-Star to do now:

In general terms:
CCC/ICN repeat that the best option for G-Star would be to join a credible multi stakeholder initiative with an comprehensive code of conduct, including agreements on monitoring en verification processes. This is the best way to assure that workers throughout G-Star’s supply chain will be involved and to place workers at the centre of social auditing processes.

G-Star should chose for a system that stands for quality social audits, including unannounced visits, interviews of workers outside the workplace and involvement of skilled local experts and civil society organisations. This could in the longer run lead to partnerships with local organisations. Reliable grievance and complaint mechanisms should be set up to assure effective remediation of conflicts and problems between employer and employees.

The key to all this, we have said it maybe times before, is an active approach to freedom of association.

Concerning the current case with FFI/JKPL:
To solve exiting conflicts and tensions, a remediation plan should be drawn up. FFI should meet with its local stakeholders, including GATWU, NTUI and others such as the Women Garment Works Front ‘Munnade’ and organisations involved in the Fact Finding Mission. In this way, follow up could be given to the 9 June meeting between FFI and GATWU/NTUI. The GATWU demands and priorities are well known.

Also, to bring the current initiatives to a successful end, such as the announced independent research and the upcoming audit, local stakeholders should be involved. G-Star should impress upon FFI that this should be done in a proper way.

Setting up a complaints mechanism has priority. Complaint mechanisms are essential to ensure any violations that occur can be challenged. Setting up a system for workers to report non-compliance issues anonymously, with either direct GATWU representation, or an outside representative that all parties involved are comfortable with, is very important.

In the longer run, G-Star should increase its pressure on FFI to truly implement freedom of association, and set up mechanisms for collective bargaining agreements. A continuous dialogue with local stakeholders is the basis for this.

Conform its own code of conduct, G-Star should put pressure on FFI to take positive measures to ensure that freedom of association is respected by for example giving FFI clear guidance on what is expected from them concerning compliance with the standards on freedom of association and collective bargaining, and by supporting and facilitating training of management, workers and workers representatives in freedom of association, CBA and labour management relations.

Moreover, G-Star could get in touch with other brands sourcing from FFI/JKPL to see if a buyers' alliance could be formed, to jointly address FFI.

Hoping that this letter will contribute to a better understanding of our position and campaigning goals,

Clean Clothes Campaign (CCC) / India Committee of the Netherlands (ICN)

1 'Looking for a quick fix. How weak social auditing is keeping workers in sweatshops', 2005.

Landelijke India Werkgroep / India Committee of the Netherlands - July 17, 2006