Trade Unions hold special meeting with EU delegation

                                                              Allege GSP benefits not trickling down to workers                                                

By Samantha Whybrow
Trade unions have told a visiting European Union (EU) delegation that the apparel industry is keeping garment workers in poverty by failing to ensure the industry’s significant profits benefited employees.
The accusation comes amidst growing concern that all important duty free concessions may not be renewed next year by the EU, hurting the garment industry deeply.

Union officials, who participated in a private meeting with the EU delegation that visited the island last week, revealed the serious concerns they have about the way the apparel industry is treating its employees.

“These companies are making huge profits but the benefits do not trickle down to the workers,” said Palitha Athukorale, Chairman of the Jathika Sevaka Sangamaya (JSS) explaining the nature of the meeting, in which he was present.
“We wanted to make them [the EU delegation] aware of this fact, and let them know that the poverty level of garment workers is substantial.”

Six members from trade unions along with six members of civil society organizations are reported to have held an unscheduled, meeting with the EU delegation that lasted one and a half hours on Monday (17) night.
The special meeting was granted following a request from the Sri Lankan unions and civil society organizations.

It is learned that representatives from the JSS, the FTZ Workers Union, the Port Workers Union, the All Ceylon Workers Union, the Foundation for Co-existence (FCE), the Organisation of Professional Associations (OPA), and the Centre for Policy Alternatives (CPA) attended the meeting.
The EU delegation was here on a three day visit to engage in bilateral discussions on a variety of matters.

Hoping to fuel their argument about the problems facing the garment industry workers, the trade unions also presented the delegation with a government report outlining malnutrition problems of the industry’s employees.

The unions also informed the delegation that if workers’ conditions were so good, there would not be such high vacancy rates in the export processing zones (EPZ).

“At any given time there is a 10-15 percent vacancy rate in the EPZs,” said Athukorale.
“We let it be known that this figure is indicative that the money the garment industry offers is not worth toiling for. If workers were given reasonable salaries they would work.”

Sri Lanka currently has preferential access to EU markets under the GSP Plus scheme, with the apparel industry benefiting significantly from the trade concessions granted.
However, the country’s GSP Plus status is up for review at the end of the year. Cessation could cause extensive damage to the island’s three billion dollar garment industry, which saw almost one and a half billion dollars in exports reach European markets in 2007.

Athukorale stressed that trade unions were united in emphasizing the benefits the GSP Plus status brings to the garment industry workers and the national economy during the meeting, pointing out they do not wish to lose it.
“However,” he said, “we wanted to convey the message that if they grant benefits to the businesses, they should ensure these benefits also trickle down to the workers.”

“They gave us a very patient hearing,” he added.
Meanwhile, civil society organizations present at the meeting were reported to have shared their information regarding the human rights situation in the country.

The matter of human rights is understood to be one of the key determinants of whether or not GSP Plus will be renewed, with the visiting delegation drawing attention to the issue in a wrap-up press conference with reporters.

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                                              New buses to strengthen transport system                                           

The last 214 buses among the 2000 new buses imported to Sri Lanka during 2005 were ceremonially handed over to the Sri Lanka Transport Board (SLTB) by the Transport Minister Dullas Alahapperuma at the premises of the BMICH on Friday. According to the SLTB and the Transport Ministry the new buses, each worth Rs.3 million, will be deployed to new 50 destinations selected mainly considering the complaints by the commuters. SLTB recently commemorated its 50th anniversary.

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MTNL likely to acquire 50% stake in Suntel

India’s state controlled telecom giant Mahanagar Telephone Nigam Ltd. (MTNL), which has been short listed as the preferred bidder to acquire Sri Lankan telco Suntel, is in talks with a clutch of companies to offload 50% in Suntel.

According to a report in The Economic Times of India the logic behind it seems to be that if Suntel were to be a 100% subsidiary, it will be subject to the policies and practices of MTNL. But, Suntel is a profit-making company and MTNL wants it to retain its existing structure with regard to all its policies. MTNL is of the view that this goal can be achieved if it limits its stake in the Sri Lankan telco to 50%.

“Suntel is a profit-making CDMA technology-based fixed-line telephony service provider in Sri Lanka, with highly skilled work force, having a subscriber base of around 3,00,000. Based on its final bid, MTNL has been selected as the preferred bidder by sellers, the news report said.

As the target company is being run by highly skilled professionals, to maintain its existing structure with regards to HR and other policies, MTNL has in-principle decided to limit its stake to 50% and is in talks to find suitable partners,” India’s department of telecom has said in its annual report for 2007-08.

The report said MTNL was acquiring Suntel “in its quest to expand business in the overseas market due to shrinking domestic opportunities.”

MTNL, which offers telecom, internet and IPTV services in the metros of Delhi and Mumbai, had been witnessing a fall in its revenues and profits over the past couple of quarters due to market saturation in these two cities. The state-run telcom service provider, which is a JV partner in Nepal’s United Telecom and also offers telecom services in Mauritius through its 100% subsidiary, has been scouting global markets for new licences. Sri Lanka is set to be the company’s third market outside India.

It must also be pointed out that over the last couple of years, MTNL has lost its bid to acquire Telekom Kenya in addition to failing to win mobile licences in Saudi Arabia, Qatar, Bhutan and several other countries.

However, despite losing its bid for licences in West Asian countries, MTNL will soon get another chance to have a crack at these markets — Qatar, Lebanon, Oman, Bahrain, Iran and Turkey are set to auction fresh mobile licences in the coming months.

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Bajaj emerges as leading motorbike in Sri Lanka

Indian auto giant Bajaj is emerging as the leading motorcycle player in Sri Lanka amidst fierce competition from other global players, according to auto experts, Economic Times of India has reported quoting a PTI report.

“Bajaj may be competing more fiercely in maintaining its supremacy in the motorbike segments in India than in Sri Lanka, where it is selling like hot cakes due to fuel efficiency and other factors”, the experts said.

“Bajaj Motorcycles, which is catering to all segments of the Sri Lankan market is emerging as a favourite amongst buyers due to its powerful and stylist range of models vis--vis other global players”, they added.

Total exports of Bajaj two wheelers to various countries during the first nine months of 2007-08 financial year stood at 3,58,136 vehicles, Bajaj said in a statement.

Bajaj motorcycles are feature-driven to maximise on power and comfort and are specialising in fuel-efficient performance, the auto experts said.

Designed with state-of-the-art technology and manufactured to perfectly handle local conditions, Bajaj bikes are emerging as the natural choice of Sri Lankans for affordability, fuel-economy and performance and “have grown to become an integral part of Sri Lankan lifestyles”, they added.

The improved performance of the Indian auto giant has also been attributed to timely introduction of the latest models of Bajaj Motorcycles.

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Shipping community concerned over new port, equipment delays

(LBO) – Sri Lanka’s shipping community is getting increasingly concerned over delays in upgrading Colombo port equipment, building a new birth and the opening of another entrance for navigation.

Further delays could endanger Colombo’s status as south Asia’s transshipment hub especially with India expanding its own ports and building new ones to cater to the cargo boom, shipping industry officials said.

Port customers said the re-opening of the northern entrance channel, closed for years owing to security threats, remains their main and most critical concern.

The closure means that vessels calling Colombo can use only one channel to enter or leave the port, causing delays on days when the number of callers increase or tend to ‘bunch up’ as the trade calls it.

Sri Lanka Shippers’ Council officials and representatives of lines calling at Colombo said the port could face congestion with the number of ship calls increasing.

Ship traffic went up 2.8 percent or by 124 ships to 4,576 vessels in 2007.
“The north entrance is closed permanently so pilots can only bring one vessel at a time,” said a Shippers’ Council official who spoke on condition of anonymity. “With more vessels calling Colombo, congestion will increase. Some lines have already decided to bypass Colombo.”

Big lines like Maersk reduced calls at Colombo and began calling direct at Indian ports last year.
This was partly owing to congestion in Colombo and also because of the cargo boom in India.
Feeder vessel operators said that right now there are no delays but anticipate congestion will start when the south-west monsoon starts in April.

Rough seas brought on by the monsoon means traffic in and out of port will be restricted to periods of good weather.
Port users also note that only one vessel can navigate to berth at the docks at any given time because of the restricted space in the harbour basin and the large size of modern container vessels.

“When people talk of Colombo reaching a capacity crunch by 2012 they are only referring to the land capacity – the number of containers that can be handled within the existing yards in the port,” said an official from the Sri Lanka Shippers’ Council, which represents importers and exporters.

“But no one is talking of port basin capacity which can now handle only one ship at a time. The turning circle is not enough. So already that capacity is gone.”

Furthermore, he noted, the harbour basin can’t be dredged any deeper, which means Colombo cannot handle vessels with a capacity of over 8,000 containers with full load.

Modern cargo ships are getting even bigger with 10,000 – 12,000 container capacity ships now being built.
Industry officials said the planned new deep-water port next to Colombo has been delayed by several years and is now delayed even further.

This was after the government cancelled bids for the first container terminal in the new port because of disagreement over awarding the contract.

“The first container terminal of the new port was actually supposed to be operating by 2007 according to the original plan,” said a Shippers’ Council official. “The project is way behind time.”

Representatives of vessel operator also complain that much of the equipment in government terminals at the port is old, break down often and need replacement.
“We have been promised new equipment like cranes for the last 2-3 years but nothing has happened.”

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Ad industry to debate hot topics

Creativity, Cash or ‘Chillies’

The International Advertising Association (IAA) Sri Lanka Branch, one of the promoters of the Sri Lanka Ad Awards - Chillies has initiated what it has billed as a no-holds-barred discussion to explore the connection between creativity, awards and billings, a debate to which the ad industry pays greater obeisance. Aptly titled “Creativity, Cash or Chillies?” it is planned to debate these hot industry topics in a panel-cum-audience interactive session on April 1st at the Trans Asia Hotel.

Commenting on the proposed debate, IAA VP Renuka Marshall stated “There has been much debate about whether agencies should pursue high creativity for its own sake and to win awards or to solve clients’ marketing problems, and whether the kind of ads that solve problems are different from the ones that win awards. Equally, there have been diverse views and definitions about scam. And then there is the view that we should forget awards and concentrate on running our businesses and making money. Here too the acquisition and retention of clients becomes a highly competitive contest and agencies like to talk about their ranking over their competitors in awards and billings. All these aspects make for good debate and dissection and we want to encourage the industry to confront its views and search for its soul through this exercise.”

The panel includes some top ad professionals: Lilamani Dias Benson, Trevor Kennedy, Mike Masilamani and Dilith Jayaweera. Former adman, Trustee Chairman and client Deepal Sooriyaarchchi and young ad professional Brandon Ingram have been included to add diversity to the debate. The discussion will be led by an industry stalwart, Nimal Gunewardena.

The organizers believe that this new format interactive session with in-the-round seating where anyone in the audience can add their two cents worth will provide much debate as well as lighter vein entertainment. Behind this façade however is a serious soul-search as various industry players have hotly debated the various aspects relating to creativity and the acquisition of awards and billings.

It is expected that this session will be of significant interest to ad industry people, clients and media houses which are all represented in the IAA membership. It is open to all interested persons whether they are IAA members or not. Tickets are available at the IAA Secretariat at 181, Dharmapala Mawatha, Colombo 7.

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