American consumers are unlikely to have heard of the country, but the denim jeans and polo shirts they wear could well have been manufactured in the tiny mountain kingdom of Lesotho.
A dot on the map of Southern Africa, Lesotho is nonetheless an apparel export success story in a region starved of economic good news. It is the kind of private sector-led growth that US treasury secretary Paul O'Neill, on a four-country African tour, will point to as a direct benefit of investor-friendly reforms and the US Africa Growth and Recovery Act (AGOA).
But fair trade campaigners have pointed to the exploitation and rights abuses of workers in some of the clothing factories in Lesotho. A study published in March of three plants by the Canada-based Ethical Trading Action Group (ETAG), concluded that "violations of freedom of association and workers' right to organise and bargain collectively appear to be continuing in the factories" it visited, despite an audit by a leading Canadian purchasing company, Hudson Bay.
BENEFITS OF AGOA
However, a US government official told IRIN: "The reality is that AGOA is creating jobs for people who didn't have them previously. If they don't pay as well as expected, that's unfortunate ... Individual governments should act to correct these abuses."
AGOA, in operation since January 2001, is aimed at giving producers from 35 eligible African countries zero-tariff access to the American market on a huge range of export items.
On the face of it, AGOA has been to Lesotho's advantage. In 2000, Lesotho's export of apparel to the United States was worth US $140.3 million, but in 2001 rocketed to $215.3 million.
"That's a mighty large jump in percentage terms," US deputy head of mission in Maseru, Daniel Bellegarde, told IRIN. He pointed out that the export figures were achieved during a recession year in the United States, and at a time when global African sales to the United States were falling.
Under the Generalised System of Preferences (GSP), 4,500 goods can be allowed into the US market duty-free. But the GSP has to be negotiated annually with each country and does not include "sensitive" exports such as agricultural goods, clothing, textiles and steel. The advantage of AGOA for qualifying African producers was that it added more than 1,800 extra items and lasts for eight years (some tinned agricultural goods and a few steel and iron products remain excluded).
Clothing, which requires only limited skilled labour and is often a start-up industry for manufacturing growth, was omitted under GSP. Under AGOA, apparel exports only qualify if the materials used are from the exporting country or the United States. But a concession is provided to least developed countries such as Lesotho, which for four years can use yarn from third-party countries and still export duty-free.
The result has been a rash of investors from mainly Taiwan who have set up factories in Lesotho to take advantage of cheap labour and access to the US market. Some 20,000 extra jobs in the textile industry have been created as a result of AGOA, in a country with a population of 2.1 million.
"For the first time in Lesotho's history the private manufacturing sector has exceeded the number of people employed by the government," said Bellegarde.
UNIONS CONDEMN EXPLOITATION
But according to Macaefa Billy of the Lesotho Clothing and Allied Workers Union (LECAWU), the conditions workers are facing in some factories is akin to "slavery".
He told IRIN: "Firstly, people are forced to work overtime. The [production] targets are too high for workers to achieve. So immediately after knocking off at 5pm they are told to continue working to meet their targets and no overtime is paid ... Even when overtime is paid it's forced, there's no consultation.
"The record of exports looks good but it's through the sweat of people forced to work Monday to Sunday. Unemployment means people take all shifts that are available. As much as we are happy with Lesotho's exports, it must be known it is [achieved] through a system of slavery."
Billy, a former general secretary of LECAWU, said the exploitation of workers by some factories included mass dismissals to avoid payment of benefits, restrictions on union activity, at least one case of beatings of workers by factory officials, and exceptionally low wages.
A skilled textile worker earns just over $50 a month. "The only benefit we have under AGOA is the employment, it's just to remove people from the streets," he added.
Billy claimed that with the government desperate to attract investment through tax holidays, subsidised water and electricity rates, little of the profits made from textile exports actually stayed in the country. The authorities had also failed to protect workers from exploitation despite the regulatory frameworks in place.
"People are forced to work, they are not allowed to attend funerals, our culture is not respected. Maternity leave, even, is not paid," he added.
"People here don't like working weekends. They say Saturday is for burying relatives and Sunday is for church," said Bellegarde, who at one stage in his career worked in a textile factory in the United States. "These and other issues are the basis of on-going discussions between the companies and the unions."
The ETAG report listed further concerns among workers interviewed in three factories - Sun Textiles, C&Y Garments and Nien Hsing - that produce clothing for both United States and Canadian buyers, including K-Mart, Sears and Gap. The report alleged violations over safety and health conditions, harassment and abuse, and poor wages.
"The union says these things and in certain cases I'm sure they are true. But the distinction that has to be made is that [these factories] are not sweat shops," stressed Bellegarde. "I take [these complaints as part of] normal union-employer discussions. I don't take this as evidence that all companies are being abusive."
Billy said that although the government appeared uninterested in the plight of the textile workers, a dialogue had begun with the factory owners. By November that could lead to an agreement on job categories as a first step towards negotiations on salary scales. But his verdict was that progress was slow: "They are a little bit more cooperative, but still negative."