Sri Lanka Textiles 2003 - Global Business Reports

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Social Compliance
Gives Sri Lanka an Edge
In a world of borderless trade, the
theory of comparative advantage
states that when country A is able
to produce and export a specific
product for less than country B, then
country A has a comparative
advantage in that product.
Nowhere has this theory been more
ruthlessly applied than in the world
of textiles, where buyers from
around the world continuously seek
to source increasingly cheaper
textiles from countries that have a
comparative advantage in producing
textiles.
Unfortunately, this theory contains
a major flaw. It does not allow for
equality in standards – not the
standards of the final product, but of
the environment and social welfare
in the place where the garments are
produced.
All over the world, garment
manufacturers are struggling to
provide the best quality products at
the lowest prices within the shortest
space of time. But is this enough to
get orders? The whole garmentmanufacturing
sector in Sri Lanka is
convinced that, to be successful, it
has to go further.
And the area where Sri Lanka is
proudly head-and-shoulders above its
competitors within the region is its
compliance with international
standards in terms of labour laws,
environment protection and respect
for human rights.
In recent years, mass retailers and
the biggest brands have been under
huge pressure from consumers
groups and the ever-vocal lobbies in
the Western countries, forcing them
to source from countries and
companies that comply with international
labour standards and human
‘Sri Lanka has a tremendous
advantage, especially in
comparison with its neighbours’
rights. Damning reports on such
high-profile retailers as Nike and
Reebok have forced both companies
to search for more ‘suitable’
suppliers, whilst also spending
millions on building their image as
caring employers.
And in terms of standards
compliance, Sri Lanka has a
tremendous advantage, especially in
comparison with its neighbours.
Firstly, owners throughout the
country proudly point out that there
is no child labour, nor sweatshops,
nor forced labour. Wage rates,
overtime and workers’ holidays are
strictly covered by law and, as
Channa Palansuriya, CEO of Orit,
confirms: “Big buyers actually refuse
to work with producers that are not
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