JORDAN LAUNCHES MAJOR ENFORCEMENT CAMPAIGN IN

C O N F I D E N T I A L AMMAN 003257 SIPDIS SIPDIS STATE PASS TO USTR E.O. 12958: DECL: 05/08/2021 TAGS: ELAB ETRD KTEX ECON PGOV JO SUBJECT: JORDAN LAUNCHES MAJOR ENFORCEMENT CAMPAIGN IN RESPONSE TO ALLEGATIONS OF LABOR ABUSES IN THE GARMENT INDUSTRY REF: AMMAN 629 Classified By: AMBASSADOR DAVID HALE FOR REASONS 1.4 (B) AND (D). ¶1. (C) SUMMARY: In response to a highly-publicized report criticizing the labor conditions of foreign workers in Jordan's garment industry, the Government of Jordan (GOJ) and the association representing the sector are launching a swift campaign to strengthen the enforcement of Jordan's labor laws and to respond to the allegations. Ministry of Labor (MOL) inspection teams were fanning out to inspect factories throughout Jordan the day after the allegations broke. The Minister of Labor issued a message coordinated with other government ministries and the industry stating unequivocally that Jordan's government does not and will not condone "sweatshop" operations within its borders. According to the Minister of Industry and Trade, the most immediate next steps will be a complete report on the allegations by the Ministry of Labor, another report by the association, and a series of letters from the Minister of Industry and Trade to U.S. buyers of Jordan's garments highlighting that the GOJ's labor laws are up to international standards, that the government takes the allegations of abuse very seriously, and that it will close factories where abuse is proven. END SUMMARY. -------------- THE ALLEGATIONS -------------- ¶2. (U) On May 3, the New York Times published an article alleging abuse of foreign workers in Jordanian garment factories operating under the U.S.-Jordan Free Trade Agreement. The article drew heavily from a report issued later that day by the National Labor Committee (NLC),a U.S. non-governmental organization, entitled, "U.S.-Jordan Free Trade Agreement Descends into Human Trafficking and Involuntary Servitude." The report cites the NLC's partners in developing the report as the "Bangladesh Center for Workers' Solidarity" and the National Garment Workers Federation. ¶3. (U) The NLC report contains a range of allegations, including charges of human trafficking levied against labor contractors in Bangladesh supplying the sector. NOTE: Foreign workers in the factories also include large numbers of workers from China and Sri Lanka not highlighted in the NLC report. END NOTE. Other allegations include workers having their passports confiscated, working extremely long shifts, being cheated of wages, living in squalid dormitories provided by the factories, and, in some cases, being physically abused. In addition, the report alleged that workers were not allowed to leave the industrial estates where the factories are located. -------------- JORDAN'S PUBLIC REACTIONS -------------- ¶4. (U) Both the government and the industry have moved swiftly to address the allegations and to ensure that enforcement of Jordan's labor laws is improved. Within 48 hours of the story's emergence, the Ministry of Labor, the responsible agency for enforcement in this area, sent out inspection teams to the country's garment factories, most of them located in the Qualifying Industrial Zones (QIZs). NOTE: These QIZs were established in the wake of Jordan's peace treaty with Israel to manufacture goods for export to the U.S. tariff-free and quota-free. All goods must contain both Jordanian and Israeli content. There are 63 garment factories currently operating in 12 QIZs located throughout Jordan, although only six QIZs are active. END NOTE.) ¶5. (U) On May 3, Jordan's Minister of Labor Bassem Al-Salem issued a press release admitting that several companies operating in "free trade zones", (i.e., QIZs) had "huge violation files" in the ministry. The release stated that the ministry had closed down some violators, but had not "won the war as other companies will spring up continuously with new names." Al-Salem met with the King and Prime Minister Bakhit the same day to discuss the NLC report, and announced afterward that he was finishing "a binding code of conduct to ensure that employers maintain decent working standards and conditions." He added that new work permits for foreign employees will be granted only to factories meeting these new standards. ¶6. (U) On May 4, the GOJ issued a statement from the Minister of Labor which had been coordinated with the Ministry of Industry and Trade and with the Jordan Garments, Accessories and Textiles Exporters' Association (JGATE). The statement, issued in the form of a letter to the editor of the New York Times, said, "Jordan's government wishes to state unequivocally that it does not and will not condone 'sweatshop' operations within our borders." The letter went on to emphasize that the government takes the allegations very seriously, will launch an immediate investigation and will intensify its labor inspection and monitoring systems to ensure compliance with Jordanian and established international standards. ¶7. (U) On May 7, the Ministry of Labor announced that it was inspecting all of the factories cited in the NLC report. In this on-going campaign, 18 warning notices had already been issued by the end of the day on the 7th. The Minister announced that all factories that did not pay workers the minimum wage would be required to pay back wages due the worker, dating back to when the worker entered into duty. The Minister also instructed managers of the QIZ factories to establish guidance boards which can explain the workers' rights under Jordanian law in the languages of the workers themselves. -------------- JORDAN'S NEXT STEPS -------------- ¶8. (C) In a meeting with textile industry association "JGATE" on May 6, Minister of Industry and Trade Sharif Zu'bi said Jordan must get out of the business of relying on foreign labor. If true, the allegations in the NLC report were "unacceptable." Referring to Ministry of Labor figures showing that the sector employs 40% Jordanian workers and 60% foreign workers, he said he wants that ratio reversed by the end of the year. NOTE: This ratio differs from figures compiled by the U.S. Embassy in 2005 from a survey of the QIZs showing that 55% of the workers in the sector were Jordanian. The discrepancy may in part be due to the fact that the MOL figures include sub-contractors not included on QIZ rolls. Post is repeating the survey to obtain the latest figures. END NOTE. ¶9. (C) Zu'bi stressed that Jordan would not respond to the inaccuracies in the NLC report -- e.g., companies cited which never existed in Jordan, or others which were closed two years ago. He said the Ministry of Labor had been aware of problems in the sector for some time, and that he is awaiting a full report from MOL on the violations lodged last year and the MOL responses to them. Jordan's labor laws are up to international standards, he emphasized, but "enforcement and monitoring has been lacking." Investors who do not meet those standards must have their factories shut down. There can be concessions on taxes and other issues, but not on labor and environmental standards, he said. ¶10. (C) Zu'bi then laid out the next steps for confronting the crisis. Both the Ministry of Labor and JGATE will carry out full investigations of the allegations and issue reports. JGATE noted that MOL teams were already fanning out throughout the country to carry out investigations. Next, Zu'bi would write a letter to each of the U.S. buyers of the garments produced in Jordan. The letters will stress that the Government of Jordan takes the NLC allegations very seriously, but that Jordan's labor laws are up to international and International Labor Organization (ILO) standards. There will be full disclosure of problems uncovered, and the public and private sectors will work together on enforcement. Zu'bi said some factories will face severe penalties including closure and this, too, will be stressed in his letter. -------------- -------------- THE PRIVATE SECTOR AND INTERNATIONAL ORGANIZATIONS REACT -------------- -------------- ¶11. (SBU) U.S. buyers are already reacting to the allegations. The acting CEO of JGATE reported that Levi Strauss is canceling orders. Other buyers are reported to be threatening to cancel large orders scheduled for summer 2006. WalMart representatives were in Jordan when the story broke, and the U.S. chain is now expanding its inspections; other buyers are sending out inspection teams as well. The ILO and the Fair Labor Organization are also sending teams to Jordan. -------------- COMMENT -------------- ¶12. (C) Managing this crisis will be a major test of the ability of the GOJ and the garment sector to respond to the allegations quickly and effectively. The sector generated $1.2 billion in exports to the U.S. in 2005, by far the largest export sector for Jordan. The bulk of these exports were under the QIZ agreement, but more and more production is shifting to qualifying under FTA rules. The U.S.-Jordan FTA was the first FTA to include labor standards, and was written in a way that requires Jordan to apply its own labor laws in order to meet its FTA commitments. The Ministry of Labor will be under great pressure to reinvigorate both its monitoring and enforcement regimes. The GOJ will need to close factories not meeting Jordanian and international labor standards, and ensure that they do not re-open under other names. ¶13. (C) That said, many Jordanian garment manufacturers are clean, well-run and compliant with labor laws. Jordan must work to ensure that those companies are not caught up in the wave which will take down the minority who engage in unacceptable practices. Pending the findings of the on-going investigations, there is consensus among government and industry officials that some of the allegations in the NLC report are likely true. Both the government and the industry must respond forcefully to these violations, a number of which seem to be sourced to sub-contracting firms. Regardless of the source of the problem, it must be dealt with forcefully. HALE