Abhimani alone will not suffice, improvements necessary - FTZ union

The Rs. 21 million social awareness campaign—Abhimani: Pride of the Nation—launched recently to uplift the image of the women workers of the apparel industry will not be successful unless the industry improves conditions for these women a unionist said. "The apparel industry is facing a labour shortage of about 30,000 workers and I don’t think a media campaign can do much to attract workers," said Anton Marcus, President, FTZ and General Services Workers Union. "If adequate wages were paid there would not be a need for TV commercials to say that the industry was the best place to work in, "Living conditions in the FTZ are pathetic and nothing has really been done by the industry to improve them, so how do they expect to attract young women into the industry, "A recent study by the Labour Department showed that 55 percent of married women in the FTZs suffer from anaemia while 44 percent of the unmarried women suffer from this disease because they cannot afford healthy meals, "The industry says that ethical working conditions are maintained at the garment factories but we know that buyers often outsource their audits and the factories are notified in advance so that a thorough cleanup can be done and a select group of workers groomed to answer any questions posed by the auditors." This makes sense because remunerations and working conditions attract labour. For an industry to see the need to advertise the fact that a job in the industry will indeed improve lives, goes to show that it has not proved to be the case. The Rs. 21 million social awareness campaign is commendable. But something is not right when an industry, who has always maintained that the sub-human living conditions of the FTZs was the government’s responsibility and not theirs as they were running a business, to come up with a quarter of the investment to uplift the image of these women does beg answer to the earlier raised question. There is no doubt that many factories do maintain ethical working conditions and have indeed improved the lives of the women working in them and that of their communities, but they seem to be the exceptions. Sri Lanka is losing its competitiveness because production costs are soaring and the industry has a legitimate reason for not conceding labour union demands for wage increments. And despite marginal returns some factories do provide their workers with free meals and even transport. The industry feels that the success stories are not told. But they cannot be told or even advertised. If the people are happy in the industry there will always be demand for jobs. These women are indeed the pride of our nation. The industry needs the social activists and unions to regulate it. "Out of the 400 odd garment factories in the country today only four of them have signed collective agreements with labour unions. So how can the industry say that they have ethical working conditions when the workers themselves don’t have the right to form associations and have a greater say in the way their organisations are run?" Marcus concluded.

Abhimani: Pride of the Nation Social awareness programme launched to recognise garment workers

A social awareness programme was launched last week to recognise the contribution of garment workers to the country’s economy and to encourage potential employees to join the sector. The Rs. 21 million (approximately) project of which the Board of Investments (BOI) is contributing 50 percent of the investment, with the joint Apparel Associations Forum (JAAF) and Ministry of Textile Industry Development taking up the balance, will include advertisements in the media and promotions in 150 villages island-wide. "Abhimani: the pride of the nation" is set to challenge and change the attitudes and perceptions - almost always negative- society has about the women who toil and sweat in factories of the apparel sector which accounts for 45 percent of total exports. Apparel exports amounted to Rs.3.2 billion in 2007. The garment industry employs around 300,000 people; 90 percent of whom are women. The industry is facing a shortage of labour because young women seem to be reluctant to take up jobs in factories because of negative perceptions and as a result several investors who had shown interest in setting up garment factories are holding back because they are sceptical about the availability of labour, S. Ravindran, Committee Member of the government’s 200 Garment Factories Project, told The Island Financial Review. The industry said that bad perceptions and attitudes have stuck despite the fact that things have changed for the better over the decades and that these women now enjoy dignity of labour. "They contribute to our country’s economy in an immense way and many of them are the bread winners of their families", said Ajith Dias, Chairman JAAF. "They are not only supporting their families as breadwinners, but they educate their children or younger siblings. Many have even been able to build their own homes and have directly contributed to developing their own villages. They are the pride of their families. "The industry not only does business the ethical way by maintaining ethical working conditions in factories that are constantly monitored by our clients but we also provide plenty of opportunities for the women to progress in their careers". This awareness campaign will be carried out by Ogilvy Action (OA), who conducted a study of their own to substantiate the claims made by the industry that the women are doing well with their lives, contrary to public perceptions. "We did not want to get into the campaign without convincing ourselves about what our client was saying," Sandya Salgado, Director/CEO, OA said. Teams were dispatched to areas where garment factories are located in clusters such as in Kurunegala, Polonnaruwa, Panadura, Ratmalana, Katunayake, Koggala, Sitavaka and Deraniyagala. They spoke to over 150 people including priests, principles, teachers, law enforcement officers, boarding-house tenants, grama sevekas, factory managers, parents, midwives, shop owners and even taxi drivers to get an insight as to what people thought of garment factory girls "Before we went out we thought we would get negative feed back. But that was not the case. Everyone we met had only positive things to say about the women who work in garment factories," said Lakmini, a member of one of the fact-finding teams dispatched from OA. OA discovered that rural communities showed a tendency to value the efforts made by these women who made tremendous contributions to their families’ wellbeing and that of the community as well. "Many of the women themselves, to whom we spoke to as well, said that they managed to build their own homes, find their own dowries or even educate their children," Lakmini said. For a woman working in a garment factory, finding a husband was next to impossible because of bad perceptions and the stigma attached to their profession. But this too has changed. OA found out that it is no longer an issue with many women married and sometimes playing the lead role in providing for their families. "We agreed to proceed with the campaign when we saw for ourselves that it was not all whitewash, but there was some truth to what the industry said," Ms Salgado said. Deepal Nelson, Chairman Sub-committee on Local Image Building, JAAF, said that the campaign will last 5 to 6 months and is the first of many programmes aimed at changing public perceptions and making people more aware of the good things in life these women have been able to get for themselves. "However there are many problems the women face in the free trade zones, particularly when it comes to accommodation and we are looking for investments to improve them", said Channa Palansuriya, a Board Member of the BOI. Ask anyone in the apparel industry and they will tell you everything is good and that social activists, labour unions and the media gave wings (and continue to do so) to isolated incidents and has resulted in the stigmatisation of these women. While the apparel sector as a whole has changed the lives of not only the women, but their dependants, and entire communities for that matter, this social awareness drive is long overdue. The women, and the few men, who have toiled deserve more than the wage they receive. They deserve our respect; our deepest respect.

Increased power tariff will force Industries to close down – CNCI

Industrialists fear that they will have to be inanimate until 2012 when the Norochcholi coal-fired power plant is expected to start generating electricity. "If the new tariff structure of the Ceylon Electricity Board is implemented we will have to put up notices saying ‘thavakalikava wasa athe’ (temporarily closed) because authorities said that once Norochcholi is functional we will be given relief by way of reduced rates. But we cannot wait that long," said the Chairman of the Ceylon National Chamber of Industries (CNCI), A. K. Ratnarajah. He said that the new tariff structure will require industries to cough up almost Rs.9 billion by way of electricity charges to the CEB. "CEB’s problems are not our problems. Apart from their own lapses, the CEB is suffering today because of the lapses on the part of the policy makers and politicians," Ratnarajah added. Although he understood that the new tariff is designed to compel industries and others to use electricity more efficiently, Ratnarajah said that the CNCI is lobbying for the new tariff structure to be re-structured so that the industries can survive and be competitive in the region and the rest of the world. "There are other areas we could focus on like transmission loss which is at 16 percent of the electricity produced, but we do not want to do that. We want to push for more competitive rates," he said, adding that the CNCI had to remain focused so as not to lose track of the real issue affecting the industry sector.

Micro insurance, advertising meet regulator’s attention

The amendments to the Regulation of Insurance Industry Act No.43 of 2000 are expected to give a boost to the micro insurance industry of the country with the implementation of Bank Assurance. This will give banks direct involvement in selling insurance as institutional insurance agents and bank staff selling the covers will have to meet certain criteria that the Insurance Board of Sri Lanka (IBSL) will spell out. Bank Assurance will open a window of opportunities for micro insurance and finance. Local state and private banks with extensive island wide branch networks will be in an ideal position to take a packaged product of finance and insurance to the rural areas of the country. At present, according to the Act, only registered insurance companies and brokers, and their agents, can sell insurance policies to the public and the Act defines an agent to be an individual and so institutions cannot function as insurance agents. Therefore, IBSL warned, any person (or institution) carrying on business as an insurance agent without being duly registered as an agent with an insurer or broker will be committing an offence under the Act. "We are looking at promoting micro insurance and bringing the issuers to the main stream of regulation and this will be a priority for IBSL," Director General, Insurance Board of Sri Lanka (IBSL), Ms. Lasinee Seresinhe told the Island Financial Review. "Only few people can afford to pay the premiums and a majority believe that saving in a bank is the best investment. "Through micro insurance we hope to promote life insurance with relatively low premiums and high coverage," she said. The insurance industry is marketing its products heavily but people are still sceptical about insurance. While advertising may help attract more customers to insurance companies and thus increase the penetration levels of life and general insurance, IBSL feels it needs to keep an eye on advertisements. Commenting on the advertisement war between two leading insurance companies, Ms. Seresinhe said that IBSL has proposed new rules to have certain powers regarding insurance advertisements in the electronic media. "All the insurance companies operating in Sri Lanka are registered with the IBSL. But some of the advertisements are questionable on ethical grounds and in some instances we have discussed this with companies, which I should say that to some extent has addressed issues," she said. Despite extensive advertising, both the IBSL and the Insurance Ombudsman feel that there is a need for insurance companies to promote and increase public awareness on the benefits of insurance; especially life insurance. The IBSL annual report for 2006 showed that there was a marginal decrease in the insurance sector contribution to GDP from 1.58 pct in 2005 to 1.54 pct in 2006. The premium income of the insurance sector, the report shows, had a growth rate of 25.94 percent in 2005 but fell to 15.61 percent in 2006. "But in the year 2007 the premium income of the insurance industry witnessed higher growth than in 2006 which is around 20 percent," Ms. Seresinhe said. In 2006 the penetration rate for life insurance to the total population increased to 8.8 percent from 8.3 percent in 2005. The penetration rate to the labour force also increased to 24.3 percent from 22.8 percent in 2005.

Amendments to insurance bill necessary to bolster public confidence

Legislation to split insurance companies (into separate entities handling general and life insurance) and to make mandatory the listing of insurance companies is to be passed in Parliament soon. This will further protect insurance policy holders and promote public confidence in insurance, Director General, Insurance Board of Sri Lanka (IBSL), Ms. Lasinee Seresinhe told the Island Financial Review. The amendments to the Regulation of Insurance Industry Act No.43 of 2000 (the Act) is expected to be ratified by Parliament this year and insurance companies will then have one year to get listed on the Colombo Stock Exchange. Six out of 15 insurance companies are already listed in the Colombo Stock Exchange. The insurance companies will get three years in which to separate the general and life insurance businesses into separate legal entities. "The insurance premiums collected for life and general insurance should be invested in assets as laid out by the Board and it is important for us to know the composition of these assets," Seresinhe said. "Life insurance is long term and therefore the assets are long term in nature while premiums collected from general insurance are invested in short term investments. "Most importantly, if a life insurer is experiencing difficulties to settle its claims, the IBSL, as the regulator, will have to know the exact composition of the investments that will match the long term liabilities so that life policy holders can be protected when it comes to settlements." IBSL also proposed the following regulations, which are imbedded in the amendment. Insurance companies will have to be rated by a recognised rating agency and published within a month. The ratings will indicate the financial strength and claim paying abilities of insurance companies. The Board will also expect insurance companies to increase their paid up share capital, which at present is Rs.100m for each class of insurance business, to Rs.250m by December 2008 and to Rs.500m by December 2010. In a step to further promote and consolidate the insurance industry in the country, IBSL is trying to move away from rules based supervision and is using a risk based supervisory system to regulate the industry. "We are focused on assessing the risks that the insurance companies face and how well management deals with them. To this end, IBSL will closely monitor the manner in which the board of directors and senior management are managing the risks their organisations may face," Seresinhe said.

Now, politicians can learn to walk on thin ice—Sarath Amunugama Ceylinco in US$ 3.3m ice skating building project

Receiving BOI approval: Lalith Kotelawala (left) receiving the certificate of approval from Minister of Enterprise Development and Investment Promotions Sarath Amunugama. BOI Chairman Dhammika Perera looks on. Pic by Nihal Chandrakumara. Minister of Enterprise Development and Investment Promotions Sarath Amunugama said that politicians can soon learn to walk on thin ice when Ceylinco Consolidated announced that it would invest US $3.3 million on an 18 floor shopping and apartment complex in Nawala which will the home to Sri Lanka’s first ever ice skating rink. A project of Ceylinco Commercial Property Developers Ltd (CCPD), in association with Ceylinco Seylan Developments Ltd and Ceylinco and Realty Ltd, the first phase of the project is expected to be completed in two years which is the construction of the basement and first six floors which will house a shopping complex with a capacity to house 230 shops. Apart from the ice skating rink (complete with skating instructors and equipment) which is billed to be the major attraction, the shopping complex will also have a food court, supermarket, a play area for kids and a 270 seat digital cinema. The construction of 60 luxurious apartments occupying ten floors will be the second phase of the project which is predicted to be completed one and half years after the completion of the shopping complex. The building will have a total elevation of 18 floors when completed. This 18 floor shopping cum apartment complex, known as ‘Realty Towers’, will also have a 225 vehicle-park in the basement. Speaking to the press at the occasion of signing the agreement with the Board of Investments of Sri Lanka, Deputy Chairman of Ceylinco International Realty Group, Sanka Wijesinghe said that small and medium entrepreneurs will be given credit facilities to purchase 180 of the available shopping space which has been allocated out of the total 230. "The aim is to promote the SME sector and we have a vision to construct more shopping complexes in rural areas," he said. He said that the Realty Towers shopping complex is expected to attract around five thousand visitors on a daily basis and the forecasted numbers over the weekend is set to quadruple. Lalith Kotelawala, Chairman Ceylinco Consolidated, said that the shopping complex will give SMEs big marketing opportunities by owning prime space in a shopping complex expected to be a crowd puller. "We will provide finance with easy payment terms where they can own the shops after twenty years," he said. Kotelawala said that the public will soon be able to become shareholders of this project hinting at a possible listing of the project as will be the case for similar real estate development projects to be undertaken in future. While 180 shops will be for the SMEs the balance 50 have already been grabbed by top retailers in the country. "We have already signed and completed contracts with some of the top retailers in the country," Executive Director of Ceylinco Investments and Realty Ltd, K. P. H. Priyankara said.