OECD Guidelines complaint by International Textile, Garment and Leather Workers’ Federation (ITGLWF) relating to GP Garments in Sri Lanka
Other materials about this issue (concerns raised by ITGLWF and a response by GP Garments) are available at:
Ref LC COR 1512
June 13 2005
Mme Collette Vanstraelen
Point de Contact National pour l’OCDE
Directeur général honoraire – Président
Ministère des affaires économiques
Administration des relations économiques
Rue Général Leman 60
1040 Bruxelles
E-mail :
Fax : 02.514.03.89
Dear Ms. Vanstraelen,
I am writing to you in your capacity as OECD National Contact Point to raise with you a case of violation of the OECD Guidelines for Multinational Enterprises by a Belgian-owned company, and to ask you to make full and timely use of the mechanisms available to you within OECD procedures to contribute to a solution to this matter.
The International Textile, Garment and Leather Workers’ Federation (ITGLWF) is a Global Union Federation bringing together 220 affiliated unions in 110 countries. We are raising this matter on behalf of our affiliate, the Free Trade Zone and General Services Workers’ Union of Sri Lanka.
The case concerns the behaviour of GP Garments in the Biyagama Free Trade Zone in Sri Lanka, a company whose actions are in breach of the Sections III (Disclosure) and Sections IV (Employment and Industrial Relations) of the OECD Guidelines.
GP Garments is a significant foreign undertaking which is controlled by a Board of Directors based in Belgium. However, precisely because of the company’s failure to uphold the standards contained in section III of the Guidelines regarding disclosure of corporate information, all we are able to give you is the name of the Chairman of the Board and his e-mail address. The Chairman of GP Garments is a Belgian citizen, Geert Derere, and is e-mail address is ''. Mr. Derere is also known to be the CEO of Dress-Confect, located at 23 Vullaerstaat, 8730 Oedelem, Beernem, Belgium, although GP Garments claims it is not owned by Dress-Confect.
I. BACKGROUND
The problems began in January, when Mr. Derere and one of his senior staff members, Stefan Van Ende told the union representing workers at the plant, which at the time was the Progress Union, that they would be reorganising the factory in order to enhance productivity. Of course, productivity is an issue of concern to workers as well as employers, given that both have a stake in ensuring that the company is internationally competitive and thus able to provide decent, stable employment. Accordingly, the union indicated its willingness to engage in such discussions and to contribute to finding solutions [see Annex I].
In early 2005, instead of embarking on a process of social dialogue with the workforce and their union as the best means of securing cooperation, local management immediately engaged in bribes and intimidation. Some workers were demoted in the process of re-organisation. Management was shifted from the Biyagama factory to the other GP-owned factory in Seethawaka.
In a letter dated May 25 (see Annex IX), Mr Van Ende, Director of GP Garments, made a series of allegations regarding the need for the reorganisation. He claims that because of the ‘thuggish’ and ‘uncooperative’ behaviour of the workers and their union, the company resembled a ‘chicken shed’ by early 2005. These allegations are false. We have responded to the allegations in detail in our response to GP Garments on June 8 (see Annex X).
On February 21, the Chairman of the company, Mr. Geert Derere, sent a letter to each employee. This letter contained a series of unfounded and very general allegations about workers’ behaviour, including the fact that workers were supposedly bathing and sleeping on factory time, and selling jewellery and clothing to other workers during working hours. Mr Van Ende repeated some of these allegations in his letter to us on May 25, and we have rebutted them in detail (see Annex X). It is worth noting that had these accusations been correct (which they are not), the proper way to deal with them would have been to address the problems with the workers concerned. Instead, the company sent out letters to each and every worker. This seems to indicate either very serious deficiencies on the part of management, or that management was trying to put undue pressure on the workers.
Management refused to address union demands for improvements in wages and working conditions, and instead threatened to close the company if it could not impose changes unilaterally. It then labelled as ‘terrorism’ the union’s warning that it would raise the problems with the international buyers unless a satisfactory solution could be found to the problems at the workplace.
When the General Secretary of the Progress Union refused to meet with management on his own as this was contrary to his union’s policy (a policy aimed at protecting trade union leaders from false allegations of bribe-taking), the recently-appointed local manager, Saman Wijesundara, said that no meeting would take place until the union –a legally-recognised organisation- had provided him with a copy of its Constitution and this had been translated.
The union agreed to provide a copy of its Constitution, and requested that the company provide a copy of its articles of association and the memorandum of association. The company did not do so.
The union opposed the nomination of Mr. Wijesundara because of reports of worker rights abuses at the Seethawaka plant (belonging to the same company) where he is also HR manager. At around this same time, Mr. Wijesundara also told the union that the company had set aside 10 million Rupees (100,000$) to put an end to the union.
Again, in his letter dated May 25 (Annex IX), Mr. Van Ende makes a series of unfounded allegations regarding the behaviour of the union during this conflict. These allegations are rebutted in detail our letter of June 8 (Annex X).
In February 25, the company posted the following notice: “The canteen is there for the employees to take their meals during the times they have been legally allowed to do so by the employer, according to the law it is prohibited to use this canteen for any other purpose or and external purposes. The management has come to know that a certain group of workers are planning to make use this canteen to hold a meeting or a trade union conference by enticing the majority of the workers. We here by state that if such an incident occur the management will not approve it, therefore, the management kindly request the workers to refrain from such action. If an attempt is made to hold such meeting or conference without heeding this warning, we here by inform that it would become necessary to take legal action against the workers engage in such enticement".
Naturally the union objected to the posting of such a notice, and the union President confronted Mr. Wijesundara about it when he next came to the factory on March 3. He responded that there was nothing he could do and in future there would be more problems. A heated argument broke out between the branch president and Mr. Wijesundara. It was tea break and there were around a a hundred workers surrounding them. One worker then picked up a piece of conduit pipe that was lying on the floor, and touched it to the wires, in order to make the dust fly and thus disperse the workers, an incident which the company then wrongly labelled as an act of ‘sabotage’.
As tensions escalated, the union leaders and officials were subjected to threats and intimidation. The President of the branch union, Upul Jayashantha, received a threatening telephone call, and made a complaint to the police implicating Mr. Wijesundara.
When Mr Wijesundara found out, he called the union President and said he not done such an ugly thing and that he would be coming to the factory to see him. About fifteen minutes after Mr Wijesundara arrived on March 23, Special Forces officers arrived at the factory.
According to GP Garments, the officers of the Special Forces officers said they had been deployed by Her Excellency the President of Sri Lanka to clean up and eliminate the underworld which had become a threat to the State and civil society. Following up on information provided by an employee regarding the hiding place of this ‘underworld kingpin’, had come to the factory to question the suspect, union organiser, Kirithiraja.
The Special Forces questioned Kirithiraja, threatened that he could go to jail for life, and photographed him.
If it were true that the Special Forces officers were pursuing their own investigation, such behaviour would represent a breach of civil and trade union rights on the part of the government.
However, there are indications that the Special Forces were called in by the company. Indeed, when the branch President then went to the Special Task Force unit to talk to the officer concerned, the officer told him, indirectly, that they came because they had received a complaint about trade union activities. Moreover, the timing of their arrival also seems somewhat suspicious.
Later that evening, thugs went to the home of the union branch President.
The union demanded protection from threats and intimidation and police interference in trade union affairs. When management refused, the workers held a work stoppage on March 24 in protest.
One of the allegations made by GP Garments in its letter of May 25 is that during the work stoppage, the union leaders and their supporters ‘manhandled’ some the other workers. Mr.
Van Ende accused the branch President of beating up a woman worker.
The workers have denied these allegations. According to the union, when the workers began to agitate inside the factory during the work stoppage, the non-union workers ran to the office. One worker may have fallen over at that point, but the union supporters certainly did not assault anybody. The branch President was in fact not even in the factory at the time. Nor did management make a formal complaint, which surely should have happened if a worker had been beaten up.
The company then closed the factory from 25 to 27 March, claiming it was ‘reorganising’. Workers wages were left unpaid. The company also took disciplinary action against thirteen workers, including President, Secretary, Assistant Secretary, Treasurer, Chief Organiser and three other organisers of the branch union.
The workers picketed outside the factory gates and protested outside the factory offices of the Board of Investment.
During this period, the ITGLWF made repeated approaches to the labour authorities and to the company. On March 30, we received an e-mail from a certain Duminda Senanayake, objecting to the statement on our website on GP Garments. In his e-mail (see Annex II) Mr. Senanayake said: ‘the so called union members are a bunch of dis-behaved thugs. I can show you footage of our secret cameras in GP garments, how they behaved. Innocent workers are threatened, assaulted and harassed. You are mis-informed. As a reputed organisation, Please look in to the facts before you open your mouth.”
When we wrote back to Mr. Senanayake asking on whose behalf he was writing to us, he claimed to be a freelance journalist. He went on to outline in some detail his view that the company was one of the best in the zone, and the union leaders were thugs (see Annex II).
In view of Mr. Senanayake’s claim regarding secret cameras (‘I can show you footage of our secret cameras’) as well as the details he provides in support of management and against the union, it is highly improbable that he is, as he claims, a freelance journalist. It would appear instead that he is either in the employ of the company or that he is part of the police special forces, which would then indicate complicity between management and the police.
From April 4 onwards, the company started taking back selected groups of workers.
On April 6, following the intervention of an official of the Ministry of Industries, an agreement was reached allowing for the payment of outstanding wages and bonuses, a return to work on April 18, a lifting of the suspension against the thirteen workers who had been banned from returning to work following the March 24 stoppage, and an inquiry regarding the company’s allegations against them.
In his letter dated May 25, Mr. Van Ende claims that the official in question was a Public Relations Officer who threatened Mr Wijesundara with violence unless he reinstated the thirteen workers. The company claims that this same official phoned Mr Derere, impersonating the Secretary of the Ministry of Industries and telling him to re-open the factory. Surprisingly, GP Garments appeared to accept such threats and lies without making any official complaint.
By the time the workers returned to work on April 18, their wages and bonuses still remained unpaid. Frustrated by the contempt shown by management and its repeated failure to keep its promises, the workers occupied the factory. On April 23, the company sent vehicles to remove items from the factory. The union leaders and some fifty other workers prevented the vehicles from entering. Two managers, Serge Watte and Stefan Van Ende, who had arrived on site, had to remain on site for several hours from leaving because the doors had been locked.
In a communication to us, Mr. Derere claimed the Progress Union ‘instructed its members to wrongfully confine the company managers’, behaviour it says should not be condoned ‘especially when the labour laws of Sri Lanka permit workers and trade unions to utilise the machinery available to ventilate their grievances’.
In his letter dated May 25, Mr. Van Ende claims that himself and another Belgian manager were ‘held hostage’ and threatened that they would not be allowed to leave until the union’s demands were met. They say they feared for their lives.
While it was true that the two were not able to leave because the doors had been barricaded, the union denies that they were ‘hostages’. Nor did the police take any action either then or later, as they surely would have done in a hostage-taking situation.
We have also pointed to Mr. Derere that where dialogue breaks down and management fails to honour its promises, situations such as factory occupations sometimes happen. We also pointed out that it is difficult for problems to be resolved through normal industrial relations if unions are not even allowed access to the FTZ in which their members are employed, as is the case in Sri Lanka. Therefore, not only did the Progress Union not ‘instruct’ its members to occupy the factory, it was in fact prevented access to the zone in order to resolve the situation.
The sit-in ended a couple of days later following a meeting between management, the Commissioner of Labour and the union with an agreement to pay the outstanding wages. At that meeting, the company claimed that the ITGLWF had funded the strike - yet another false allegation.
At a discussion before the Commissioner General of Labour with the company, the union and BOI on April 26, GP Garments requested to remove raw and half finished materials related to French army order to the Seethawakea factory. The company then requested from the BOI the authorisation to also remove 120 machinery to Seethawaka factory. As a sign of good will, the union was prepared to accept this, as long as the removal was temporary and was accompanied by a series of measures designed to ensure a resolution of the dispute.
However, when the parties met again at the BOI head office on April 28, management claimed that the agreement reached on April 26 had been to remove all the materials, not just those related to the French army order. Both the BOI and the union pointed out that that was not what had been previously agreed.
While the labour authorities were engaged in trying to resolve the dispute (see below), the company went ahead and sent out letters of termination to the workers.
The three-page letter of termination (see Annex IV) lists thirteen points as grounds for the dismissal of the union leaders. The allegations can perhaps be summarised as follows: The union leaders, along with some 480 workers, disrupted the production process in the factory, ignored orders given by management, forcibly detained two foreign managers for a long period against their will, resorted to ‘thuggery, immorality and barbarism’ and to ‘acts of terrorism’, used ‘indecent and obscene language’, conducted a ‘gherao’ ie a noisy protest in the factory. They obstructed the gate and prevented police officers from freeing the two who were inside, and acted to destroy and sabotage the aim and objective of the government of Sri Lanka and the Board of Investment which are to attract foreign investors.
The three-page letter is very repetitive and the charges are totally unsubstantiated. The letter includes references to the fact that the workers prevented police officers from carrying out their duties and have attempted to sabotage the aims of the government of Sri Lanka and the BOI. It is of course not up to the company to act on behalf of the police, the BOI and the government. In his response to the company, the Union President Upul Jayasantha denied the charges [see Annex V].
To dismiss workers for taking strike action is a breach of the right to strike. I would like to point out that various types of strike action, such as an occupation of the workplace, are recognised by the ILO as legitimate actions provided they are conducted in a peaceful manner. The company contends that the strike was not peaceful, but the workers deny this allegation, and have not been given the chance to defend themselves on this charge.