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Garment Workers Win Back Wages in Laos and Thailand

Garment workers in some of the world’s most underserved locales are finally seeing some movement on wages lost during the pandemic.

Up to 17,000 garment workers in Laos will receive two months of emergency income, totaling about $100 each, under a newly announced program, the International Labour Organization (ILO) said. The country’s social security administration said Tuesday that it would disseminate one-time cash transfers worth a total of $1.8 million to help the struggling workforce—85 percent of whom are women—by the end of March.

Home to about 26,000 garment workers, Laos has seen many of its factories scale back production or shutter amid canceled orders from global brands and coronavirus outbreaks. “The Lao garment industry has been hit hard by COVID-19,” Graeme Buckley, director of ILO Country Office for Thailand, Cambodia and Laos, said in a statement. “Income support will help workers survive this difficult period, and businesses maintain their staff so they are in a better position to resume operations when the impact of the pandemic eases.”

The events of the past year have put unprecedented pressure on the country’s unemployment insurance programs, with the garment sector seeing a three-fold increase in payments to about $143,000 country-wide, ILO said. The newly implemented emergency program will ease the financial burden on the country’s national unemployment insurance scheme and augment the social security administration’s existing methods for dispersing funds using an electronic payment capability facilitated by a local mobile phone service. With many workers unbanked, the labor group said this method will make it easier for them to receive their payouts.

The program was developed with international social protection principles in mind, including joint oversight by the Laos government, employers and workers as well as transparent and accountable administration, the ILO said, adding that the Association of Lao Garment Industry (ALGI) and the Lao Federation of Trade Unions (LFT) took part in the development of the operation and will help support its rollout.

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ILO, which provided technical support for the new financial support operation, said the German Federal Ministry for Economic Cooperation and Development (BMZ) is funding the initiative. “A strong social protection system that is adaptive during a crisis and responds to chronic and emerging vulnerabilities is crucial,” said Jens Lütkenherm, German Ambassador to Laos.

“This support not only benefits workers and garment factories,” Padeumphone Sonthany, vice minister of Labour and Social Welfare added. “It also helps strengthen the administrative capacity and payment mechanism of the social security system, as well as enhancing social dialogue and tripartite collaboration in Lao PDR.”

Meanwhile, in Thailand, garment workers who were chronically and illegally underpaid by factories contracted by large corporate brands have received the wages they were owed, Reuters reported Wednesday.

Universal Studios, which produces entertainment and runs theme parks across the globe, agreed to shell out $20,000 in outstanding payments to Myanmar workers following settlements by three other companies amounting to $116,550. The payments will be facilitated by the MAP Foundation, a non-governmental organization that advocates on behalf of migrant communities from Myanmar who live and work in Thailand.

“Since the former licensee has failed to respond to multiple requests to pay the affected Thai factory workers, we are making a goodwill donation to MAP Foundation … to distribute funds directly to the workers,” an NBCUniversal spokeswoman told Reuters, adding, “We take this matter very seriously and this is not in line with our core values.”

However, the issue of wage theft throughout the region is nothing new. In September of 2019, the Thomson Reuters Foundation launched an investigation into factory operations in Myanmar, concluding that dozens of garment workers across facilities were being paid less than the daily minimum wage, which amounts to about $10.

According to Reuters, a group of 26 workers at a factory raided by officials in 2019 sued its owner for failing to pay them their allotted wages. The facility, owned by manufacturer Kanlayanee Ruengrit, was making goods for a number of large global companies, including Universal Studios and British supermarket chain Tesco. In that instance, workers eventually won a payment of $96,000 from the factory’s owner, and three brands—Starbucks, Tesco and Disney—claimed that work was being subcontracted to the factory without their permission.

Payouts like this aren’t the norm, said Clean Clothes Campaign coordinator Ilona Kelly, who told Reuters that the industry instead requires “binding agreements to hold brands to account”—a need that has become even more pronounced through the coronavirus crisis. Without clear-cut government legislation, she added, resolutions to wage theft issues will likely remain “as unobtainable as a fairytale ending for most workers.”