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New Balance and Nike Call For Labor Reform, Peruvian Industry Calls Foul Play

In early March, six major U.S. apparel retailers and brands urged the Peruvian government to repeal legislation that–the companies believe–encourages worker rights violations. Over a month later, the six companies–New Balance, Nike, PVH, VF Corp, 47 Brand, and Life Is Good–have received no formal response to their letter, according to just-style.

The current legislation–officially Decree 22342–dictates that “non-traditional” exporters can hire workers on short-term contracts, guaranteeing them work for as little as one month. The law has been popular with Peruvian manufacturers, but the U.S. companies contend that temporary workers are easier to exploit, and produce lower-quality garments.

Jyrki Raina, General Secretary of IndustriAll Global Union, praised the letter, which “sends a clear message that in today’s global garment industry, decent work is an element of competitiveness alongside quality, price, and delivery on time.”

But Peru’s Exporters Association (ADEX) and National Federation of Private Business Institutions (CONFIEP) have made public their own letter, calling foul play on the six companies. According to these, and other business associations, the call for appeal is part of a plot to reduce Peru’s negotiating power. Annual garment and textile exports from Peru to the U.S. are upwards of $642 million.

A proposal to repeal Decree 22342 is currently “in committee,” which it must pass through before it can reach Peruvian Congress.