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Last week, FWF”s international verification coordinator Ivo Spauwen was in Ukraine to work with the audit team and talk to stakeholders.
EU apparel companies traditionally look East for suppliers. As several production countries in Asia are coping with wildcat strikes and rising labour cost, Eastern Europe might present an attractive alternative closer to home. In Ukraine, Europe’s second largest country, the local sector hopes to benefit from recent developments in Asia.
Ukraine has more to offer the EU than just geographical proximity. The country already focused on light industry in the USSR era and the apparel sector has continued access to a well-skilled labour population. The state has elaborate labour legislation and most factories are unionized. Generally, collective bargaining agreements stipulate wages, maximum amounts of monthly overtime, and severance processes which apply in case of production downsizing. Strikes are rare in the apparel sector, and as a result of rigid governmental enforcement, laws on wages and overtime are rarely breached by local employers.
Ukraine, however, faces other challenges. As a result of limited means for investment, factories are often housed in dilapidated buildings and machinery maintenance is meager. Hazardous situations in factories are the norm rather than the exception. Corruption is widespread and cash is king. In this context, employment relationships are relatively often agreed upon by verbal agreement. This means that workers and their families are not entitled to social benefits in case of workplace injury.
Judging from my experiences from past week, the balance leans towards the positive side. During my recent meetings with them, representatives of trade unions and business associations in the local sector explained that the country has a relatively mature system of industrial relations. This provides a healthy basis for responsible business. Nonetheless, commitment from EU based buyers remains a necessity to strengthen the local sector.