TRALAC - Trade Law Centre

Namibia: Clothing factory shuts doors according to reports

Friday, 07 March 2008

Source: The Namibian (Namibia)

Ramatex has shut down, leaving the Windhoek factory's approximately 3,000 workers jobless.

The controversial Malaysian textile company yesterday told the workforce at its only remaining division, Flamingo Garments, that they were now unemployed.

When workers arrived at the factory to report for duty at around 07h30, they found themselves barred from the premises and a heavy Police presence Workers remained in the dark until around lunchtime, when after negotiations between union leaders, Ramatex management and the Namibian Police, they were allowed inside and told their fate by Ramatex General Manager Boon Keon Ong.

The company apparently made the decision on Wednesday.

Workers spoken to said they were sent home early, at around 15h30, on Wednesday after management apparently shut off the electricity and told them that the power had been cut.

Union leaders were fuming yesterday.

They claim that they were only informed of the company's decision at the end of business on Wednesday, leaving them with no opportunity to negotiate.

When National Union of Namibian Workers (NUNW) Secretary General Evilastus Kaaronda asked Ong to explain to workers why they had not been informed of the closure earlier, the Malaysian said that Ramatex's financial troubles had been a known fact for years.

"We know it since 2006.

We spoke to your shop stewards to keep you informed, and we tried over the past two years to improve our financial status, but there was no magic that could save us," Ong said.

According to Ong, in the last financial year the company had lost approximately N$500 million, a fact he said could be verified with their accountants, PriceWaterhouseCoopers.

He said that workers would receive redundancy packages, although the amounts would have to be worked out in negotiation with the unions.

Workers were told that they were not expected to return to work today, and would be informed of the company's decision on these payments through the media.

Kaaronda disagreed with this suggestion, saying that workers were entitled to come to work every day while negotiations were on so as to stay up to date on where they stood.

Some workers The Namibian spoke to expressed concern that management might try to disappear back to Malaysia before they could make good on promises to pay them.

"If they could lock us up, and if they could get rid of the machinery so easily, then why wouldn't they just decide to run away," commented Simeon Nujoma, one of the factory workers who spoke to The Namibian.

Labour Commissioner Bro-Mathew Shinguadja told workers that he would ensure that Filipino and other Asian workers would also receive just payment and treatment during negotiations.

In the past, Asian workers at the company have allegedly been quietly deported when labour issues between them and the company became a problem.

The company is currently embroiled in a District Labour Court case with 19 such workers who, after questioning their conditions of employment, were informed that their contracts had expired and were not to be renewed.

These workers were set to be deported last year, but remain in the country as a result of that case.

Shinguadja, Kaaronda and Namibia Food and Allied Union (Nafau) General Secretary Kiros Sackarias expressed disappointment at the way Ramatex management had handled the closure, and how workers were treated.

"They should have psychologically prepared you.

It is unacceptable how they handled you irrespective of the fact that you have rendered your services to them, many since 2002," Sackarias said.

Great expectations

Ramatex started its operations in Namibia in 2001, after the Ministry of Trade and Industry announced that it had succeeded in snatching up a N$1 billion project ahead of South Africa and Madagascar.

The ministry drew in NamWater, NamPower and the Windhoek Municipality to put together an incentive package for the new textile factory which included subsidised water and electricity, a 99-year tax exemption on land use and over N$100 million to prepare the site, including the provision of electricity, water and sewage infrastructure.

The company's products were mainly exported to the USA, but its production and sales volumes were never made public, resulting in persistent questions about the company's claim that it was making a loss despite all the incentives dished out to it.

The first of the company's subsidiaries, Rhino Garments, closed shop in 2005.

Last year, following a year of speculation, Ramatex closed its main spinning, knitting and dyeing factories, with only Flamingo Garments remaining.

Critics have continually made reference to the fact that Ramatex came to Namibia with the intent to benefit from the Africa Growth and Opportunity Act (AGOA).

Agoa was passed in the US at the start of the millennium and gave preferential treatment to certain imports from developing countries.

Since Ramatex's establishment in Namibia, however, AGOA and other similar policies have been reviewed and some have even expired, meaning that developed countries were again left to fend for themselves against stiff competition from especially Asian companies. [Note from AGOA.info: AGOA's apparel provisions have in fact been extended to 2012, permitting beneficiary countries to continue utilising third country fabrics.]

It has been argued that Ramatex has, for the past few years at least, been trying to get out of Namibia as there was no further incentive for it to stay.

"Transnational corporations like Ramatex are highly mobile and exploit the opportunities created by neo-liberal globalisation.

There is thus a need to tackle such companies fundamentally by questioning the neo-liberal global order and by creating mechanisms of democratic control that will ensure an end to exploitative practices and the free reign of capital," Herbert Jauch, head researcher at the Labour Resource and Research Centre (LaRRI) stated last year in the book 'Textile and Clothing Industry in Sub-Saharan Africa'.



“ Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of Namibia’s bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.