TRALAC - Trade Law Centre

Swaziland: 800 could lose jobs at Leo Garments

Wednesday, 14 May 2014 Published: | Welcome Dlamini

Source: Swazi Observer

LEO Garments has confirmed that it will have to close down and render 800 people jobless in the process should Swaziland lose its AGOA eligibility status tomorrow, which is the deadline for government to avert the impending scenario.

Leo Garments is a textile company based in the industrial town of Matsapha and totally reliant on the African Growth and Opportunities Act (AGOA) programme for its operations.

There are at least 17 289 people employed by the textile companies and all these could lose their jobs should the kingdom lose its AGOA eligibility.

Amongst these companies, Texray has one of the highest number of employees with 6 000, Zheng Yong in Nhlangano has 2 000, FTM Garments employs 1 480, Leo Garments has 800, the Great Spring has 600 and HO’s Enterprise has 750.

The AGOA programme allows companies in eligible countries to export goods into America under duty-free conditions.

Leo Hsio, the managing director of Leo Garments, said it was not in question that they would have to close down if Swaziland’s AGOA eligibility was cancelled.

 

Buyers

“The American buyers won’t place their orders to Leo Garments should Swaziland lose its AGOA eligibility status. So Leo Garments will be affected because all our products are for export to the USA,” he said.

Hsio corroborated the US embassy’s statement made to the Sunday Observer that even though Swaziland will be ineligible to bring goods into America duty-free from January 2014, the effects would however be felt sooner than next year. “Leo Garments would feel the effects by the end of the year 2014,” he said.

Hsio further stated: “Leo Garments is doing 100% export to the USA through AGOA. Each year we export 2.6 million pieces of garments to the USA.”

 

Benchmarks

To save the AGOA jobs, government has to meet five benchmarks that have been put up by the USA and these include full implementation of amendments to the Industrial Relations Act to provide for the registration of federations; full passage of amendments to the Suppression of Terrorism Act; full passage of amendments to the Public Order Act; full passage of amendments to sections 40 and 97 of the Industrial Relations Act; and drafting of a code of conduct for police officers during public protest actions.

The US embassy says it has not received any feedback from government on action, if any, that has been taken to meet the benchmarks.  On Monday, workers from Taxray engaged in a mini picket outside their factories as it dawned on them that they are on the verge of joining the unemployment ranks.

Government has not been upfront with information on meeting the benchmarks and Press Secretary Percy Simelane has maintained that they were playing their cards close to the chest.

 

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