DK Garment Factory Shuts Down After Strike and Financial

UNCLAS AMMAN 000856

SENSITIVE
SIPDIS

STATE FOR EEB/TPP/ABT, NEA/ELA, NEA/RA, DRL, G/TIP
STATE PASS TO USTR (SFRANCESKI, LKARESH, CROMERO)
COMMERCE FOR ITA/OTEXA MARIA D'ANDREA

E.O. 12958: N/A
TAGS: ELAB ECON ETRD EAID KTIP KTEX JO
SUBJECT: DK Garment Factory Shuts Down After Strike and Financial
Problems, Leaving Foreign Workers Due Back Wages

REFS: A) Amman 392
B) Amman 226
C) 07 Amman 4991

SENSITIVE BUT UNCLASSIFIED. CONTAINS PROPRIETARY INFORMATION. NOT
FOR DISTRIBUTION OUTSIDE USG.


1. (SBU) Summary: Approximately 93 Bangladeshi employees at DK
Textiles Company in Al Hassan Qualifying Industrial Zone (QIZ) went
on strike in January 2009 after an altercation between a Bangladeshi
supervisor and Bangladeshi employee. The strike led to financial
problems that caused DK to close down on February 16. Although the
National Labor Committee (NLC) did not publish any reports on the
situation on its website, it did contact the Ministry of Labor
(MOL),U.S. buyers, and other relevant parties with reports from
workers at the factory that MOL investigated and found to contain
inaccuracies. At the request of the workers, MOL repatriated 90
foreign workers at government expense and transferred 25 workers to
other factories in Jordan. MOL ensured provision of food, water,
and medical care. Workers are still owed about $40,000 in back
wages and annual leave benefits for January, but DK claims that it
cannot pay the outstanding dues to workers until the Israeli company
Tefron pays DK $120,000-$130,000 for final deliveries and promised
orders. MOL welcomed any information on Tefron's position regarding
DK that Embassy Tel Aviv may be able to provide. Having received
legal representation through the Bangladeshi Embassy in Amman, the
foreign workers have filed a court case in Jordan against DK, with a
verdict expected in April. The Bangladeshi Embassy expressed
satisfaction with the manner in which MOL handled the complex labor
situation. End Summary.

Altercation Leads to Strike
--------------


2. (SBU) The problems at DK Textiles Company in the northern Al
Hassan QIZ near Irbid began on January 21 when a Bangladeshi
supervisor and a Bangladeshi employee got into a physical
altercation. MOL interviews with Bangladeshi workers, Jordanian
workers, and management could not clarify who started the fight.
Apparently, the reason for the altercation related to a request by
the employee for leave abroad and a drop in production by the
employee when this leave was not immediately approved by the
supervisor because the owner/General Manager Sergio Domovisky was in
Israel at the time.


3. (SBU) According to MOL, both individuals went to the police
station and filed complaints against one another. They were
subsequently detained and requested to submit a medical report. The
supervisor submitted such a report but the employee did not. The
supervisor was released the same day because the complaint against
him was not supported by a medical report. MOL, the Bangladeshi
Embassy, and management undertook mediation efforts between the two,
which resulted in the supervisor withdrawing his complaint.
Consequently, the employee was released from detention on January

23.


4. (SBU) 93 Bangladeshi workers had gone on strike on January 21
demanding the release of the employee. The strike, however,
continued after the employee was released. Workers did not give the
legally required 14-day notice, rendering the strike illegal. On
January 21, MOL gave workers verbal warning of the illegality of the
strike, and on January 22, MOL issued a letter to the workers
informing them of the same. Workers did not return to work,
demanding at that time that the supervisor be dismissed. Management
suggested transferring the supervisor to a position where there was
no direct contact with the Bangladeshi workers, but workers refused.


Strike Leads to Factory Closure
--------------


5. (SBU) Domovisky, an Israeli-Argentine, told MOL, at the time of
the strike, that he could not return to Jordan due to events in Gaza
and threats against his life. He claimed that the ongoing strike
caused the company substantial financial losses which led to the
factory closing down on February 16. This decision left
approximately 93 foreign workers with back wages and other benefits

due for January. NOTE: Under local labor law, a worker can be
dismissed after 10 consecutive working days of absence without a
valid reason. Since DK workers were informed that the strike was
illegal, DK management had the legal right to consider their absence
from work as absence without a valid reason and after following the
required procedure, dismissed workers accordingly. MOL confirmed
that these 93 workers were entitled to their back wages and unused
annual leave to be paid by DK. Under the law, management could also
file a lawsuit against the workers for the remaining period of the
contract but has not indicated such intent to date. END NOTE.
Another 51 DK guest workers were working at another factory in Cyber
City where DK rented space under an agreement between the two
factories. MOL reported that those workers were paid their January
wages on February 15 in the presence of local labor inspectors.


6. (SBU) MOL Advisor Lejo Sibbel estimated to Emboffs that the
outstanding wages and annual leave benefits to the DK workers
totaled around $40,000. The MOL has been in contact with Domovisky,
who remains abroad, to try to secure payment of dues. Domovisky
reportedly explained to MOL that the factory received its contracts
through Al-Masera factory in Jordan, which gets orders from Tefron
in Israel (ref A). Domovisky claims that Tefron owes it
$120,000-$130,000 for final deliveries and promised orders. Once DK
receives its outstanding payments from Tefron, Domovisky said that
he would be able to pay the workers their final dues.

90 Workers Repatriated; 28 Transferred to Other Factory
-------------- --------------


7. (SBU) During the strike, 93 foreign workers at DK petitioned MOL
to return home. Following the closure of the factory, MOL said that
a large number of DK workers repeated the same request both verbally
and in writing on several occasions. Based on their request, MOL
arranged for these repatriations by facilitating their social
security refunds and providing them with the airplane tickets paid
for by the Government of Jordan. As a result, 26 workers returned
home on March 20; 39 on March 27; and a final 25 on March 29. MOL
arranged for the transfer to a different factory of another 28 DK
workers, who wished to remain in Jordan. Sibbel said that the fact
that workers were transferred demonstrates that workers were not
deported or forced to leave Jordan, contrary to some NLC
allegations. Twelve workers also ran away, according to MOL.

MOL Provided Food and Water
--------------


8. (SBU) MOL strove to ensure the well-being of the workers was
safeguarded. MOL inspectors frequently visited the dormitory during
the period of the strike. During most visits, the inspectors only
found 10-20 workers present in the dormitory. MOL provided and paid
for food and water. On February 16, MOL inspectors approached the
workers in the dormitories and asked them if any of them felt they
were in need of medical attention. Subsequently, 18 workers were
transported to the clinic of the Textile Union, though prior to this
no worker had indicated they were in need of medical attention. The
doctor examined all and prescribed medicine for some minor
complaints. At that time, the Union offered to pay for the
prescriptions but apparently only did so for one. MOL subsequently
agreed to pay for the prescriptions of the workers.

Legal Representation Provided by Bangladeshi Embassy
-------------- --------------


9. (SBU) MOL contacted the Bangladeshi Embassy to arrange for legal
representation for the DK workers. Toufiq Islam Shatil, Second
Secretary at the Embassy, confirmed to Econoff on April 7 that a
lawyer filed a legal case in Jordanian courts against the company on
behalf of 145 Bangladeshi workers. Shatil said legal fees will be
paid by the Bangladeshi Embassy, and a verdict is expected in April.



10. (SBU) In addition to several visits by Shatil to the factory,
he indicated that the Bangladeshi Ambassador to Jordan visited the
factory once to try to mitigate problems with the workers. Shatil
confirmed that there were issues on both sides, since the strike was
not "valid" and management "abandoned" the workers due to ensuing
financial problems. According to Shatil, the Bangladeshi Embassy


was happy, however, with the way that the Jordanian government
handled the situation and ensured the welfare of the Bangladeshi
workers.


11. (SBU) Comment: The GOJ has steadily improved its capacity to
respond to strikes in coordination with relevant stakeholders.
Still strikes in Jordan are complex and this particular case
illustrates some facets: absentee owner, worker-on-worker violence,
and the role of the market fluctuations. Regrettably, NLC reports
which in the past spurred the GOJ to act, have contained
inaccuracies and have had some severe repercussions on garment
factories in Jordan when recipients of the information take the
allegations at face value as true. This is the second time that a
complicated situation at DK became the subject of an NLC report with
inaccurate information, although this time the NLC only raised
allegations via email with MOL, U.S. buyers, and other relevant
parties. The first NLC report on DK in November 2007, which also
contained inaccuracies and was published on the NLC website,
reportedly led to Victoria Secret's withdrawing orders from DK (ref
C). On top of the difficulties in the garment sector due to the
global recession, the factory indicated to MOL that this second
strike was basically the nail in the coffin. MOL welcomed any
information on Tefron's position regarding DK that the U.S.
government may be able to provide, i.e., through Embassy Tel Aviv.
Additional closures of some of the smaller factories in Jordan are
expected as long as apparel orders from the U.S. continue to decline
(ref B). Post continues to encourage the Jordanian government's
ongoing efforts to ensure that QIZ workers are properly cared for in
such situations.

Visit Amman's Classified Website at:
http://www.state.sgov.gov/p/nea/amman

Beecroft