Ciara Nugent investigates the murky world of sweatshops and slave labour that lies behind Argentina’s fashion and textile industry.
On a busy Thursday afternoon on Av. Cabildo in Belgrano, passersby weave around makeshift stalls and carefully arranged mats, stopping to examine the abundance of knock-off Adidas t-shirts and Louis Vuitton handbags on offer. Dotted throughout the crowd, police officers remain glued to their usual street-corner positions, showing little concern for the scene before them.
For most of us, the presence of these illegal vendors means little more than an opportunity to score some cheap socks, and the police’s apparent disinterest just another bemusing example of the dysfunction of Argentina’s public bureaucracy.
Scenes like this, however, are the tip of an iceberg in the textile industry; the most visible face of a hidden black market not just for goods but for labour, consistently ignored by authorities and tacitly accepted by the state, accounting for almost four fifths of Argentina’s textile industry according to the Argentine Textile Industry Chamber.
In Buenos Aires city alone, it is estimated that over 3,000 clandestine sweatshops churn out cheap garments by employing on the black market and ignoring the workers’ rights enshrined in Argentine law. Garments produced in illegal factories don’t just end up on the stalls of obviously dodgy counterfeiters, but on the shelves of respected fashion brands.
The textile industry’s reliance on a clandestine work force is the ugliest extreme of Argentina’s unregistered labour problem, which affects around 33% of employees in the country across all sectors. Employing workers illicitly to avoid both labour regulations and taxes, bosses lower their costs at the expense of workers’ rights and safety.
An unregistered worker has no protection from labour legislation and safety regulations, no support from union wage agreements – they earn around 40% less than their registered counterparts– , and no access to pensions and social security plans. Unsurprisingly, it’s often the most vulnerable people in society who are forced to accept this situation, leading to some terrible abuses from employers in certain industries.
“Of the 78% of the textile industry that is unregistered, more than half is in conditions of slave labour,” explains Ezequiel Conde, who runs a cooperative clothing factory in Villa Urquiza. “What do I mean by slave labour? They take a neighbourhood house, turn it into a workshop, fill it with sewing machines and trick people, mostly from Bolivia, into coming to work there. They make them work 16-18 hour days in exchange for a miserable salary, around half of what you earn working for eight hours in a legal factory.”
The picture Conde paints is bleak and it’s tempting to imagine that it belongs in some separate, criminal world, where everything is an obvious fake with misspelt slogans and poor stitching. Something easily avoidable if you take a moment to consider what you’re buying. But a consistent stream of sweatshop-use allegations against mainstream businesses like Spanish brand Zara, and even the fashion lines run by Argentina’s new first lady, Juliana Awada, suggest that this kind of exploitation may also lie behind many of the businesses we trust.
“It’s the big brands that have built the slave labour system in Argentina,” claims Conde. “It’s hard to imagine how an individual sweatshop manager arrives from Bolivia and has enough cash to set up a sweatshop, buy 50 machines, and pay six or seven months of rent for a large house up front. Where does he get that money? A brand gives it to him. And what happens with the sweatshop manager and the brand later? They say, ‘We don’t know anything, we don’t know him!’”
In theory, the Law of Work at Home, establishes in clear and comprehensive terms that “business owners, intermediaries, and workshop coordinators who contract a job to private homes have a responsibility” for the payment and safety of workers, amongst a series of other obligations. In practice, however, the buck tends to stop with the workshop coordinators.
“No judge has pushed ahead on the penal responsibility that these brands have,” says Conde, “That’s why there are no brand-owners in prison, only workshop coordinators.”
Conde has first hand experience with this judicial hesitation to confront the big brands. His former employers, fashion brand SOHO, contracted out the sewing part of their production line to clandestine workshops with slave labour conditions. Conde worked in what he calls the “legal front” of the business, where workers were registered, although sanitation and safety laws were often violated.
In 2007, a number of the company’s employees, along with anti-slavery NGO La Alameda, began to denounce SOHO in the courts. Despite weighty evidence of illegal exploitation, federal judge Norberto Oyarbide dismissed the case, arguing that the work was done using the practices of the immigrants’ Ayllu Andean culture, which does not follow the same pattern as normal labour regulations. After public outrage at this verdict and several further complaints against its owners, involving contraband cars and prostitution, SOHO eventually went bankrupt in 2014. To prevent the loss of hundreds of jobs Conde and the rest of the workers reclaimed their factory, reopening it as a cooperative and cutting ties with clandestine workshops.
Nelson Sánchez Anterino, owner of the brand, never went to prison and remains active in business. Reports suggest he may even have returned to the textile industry.
Evidence of labour exploitation is frequently highlighted by tragic cases such as the six people (including four children) killed in a fire in Caballito in 2006. The story was repeated almost a decade later, as two more children died this April in a blaze at an illegal sweatshop in Flores.
Yet Javier Lindenboim, Director of UBA’s Centre for Studies on Population, Employment and Development (CEPED), is clear that “there is no political will to change this situation… There are strong signs that those responsible are operating very close to civil servants and officials, with impunity.”
Official complicity with the industry’s illegal practices goes beyond a failure to prosecute. Government contracts for the production of clothes for schools, health services and, most ironically, security forces, are sometimes given out to businesses that use sweatshops. In June this year, the Metropolitan Police burst into a sweatshop in Parque Patricios only to find piles of uniforms being sewn for the Buenos Aires provincial police, resulting in some particularly embarrassing images.
This may seem shocking, but the line between state approval and condemnation of sweatshops has been blurred in even more public ways. For Lindenboim, the best example comes in the form of Jorge Castillo. In 2012 Castillo, director of Latin America’s largest black market, ‘La Salada’, was brought along on a presidential trip to Africa to encourage Argentine links with countries in the region.
“If you bring someone like Castillo to Africa, as part of an official delegation, and you offer him up as a paragon of Argentine entrepreneurs so that he can go and do business in another country too, it’s the best demonstration that not only is there no political will to deal with unregistered labour, but the state actually encourages it,” says Lindenboim.
As a result of the trip, Castillo and other representatives from La Salada signed contracts to export the market’s produce for sale in Angola.
The Argentine Confederation of Medium-size Companies (CAME) have for years been trying to shut down La Salada, blaming their unfair undercutting of prices – “by 40 or 50%” according to press secretary Vicente Lourenzo – for many “legitimate companies being forced to leave the country.”
CAME estimates the loss of tax revenue from off-the-books clothes production between $13bn and $15bn a year. It seems unlikely that such a dent in state spending powers would not bother government officials, unless those pesos are reaching them in another way.
While politicians and presidential candidates have tried to present the phenomenon under the umbrella of a “social crisis”, Lourenzo believes that “ the illegal textile industry is the result of big mafias who use the shield of a ‘social crisis’ to make themselves millionaires.”
Conde and Lindenboim agree that a mafia structure guarantees the survival of sweatshops and the indemnity of the brands which use them by incorporating officials and politicians who might otherwise be motivated to pursue change.
“There’s a lot of money in the textile industry – even more when you’re reducing your costs to nothing with slave labour,” says Conde. “So you can afford to go and give out gifts and bribes to everyone.”
The government has made nods towards addressing unregistered labour and the exploitation to which it can lead. Most recently, in June last year, Congress approved the Law for the Promotion of Registered Labour and Prevention of Labour Fraud, intended to make it more financially desirable for entrepreneurs to hire workers legally by reducing taxes and administration costs, stopping the drive towards unregistered labour at its source.
Lindenboim insists that, although “such laws are very nice”, they don’t do anything to alleviate the pressures on vulnerable workers who are driven towards illegal work. “The workers could already go and report their bosses’ activities as against the law, but they don’t. Why? Because, they’re scared of ending up with neither the good (jobs) nor the bad (exploitation). They need the good.”
The 2014 law can be added to a growing list of legislation to tackle the problem – including the Law of Work at Home, the Collective Labour Bargaining Agreement, the Labour Law, the Outsourcing Law, and more. Yet without proper enforcement and direct consequences for rule-breaking companies, little has changed.
La Alameda sees part of the solution in a more preventative focus and more public consequences. The proposed Law of Brand Audits – currently being presented in Buenos Aires city – says that any brand that wishes to operate commercially in the city has to allow their whole production line to be audited. If they refuse, their name goes up on a public list on the site of the Labour Ministry. Companies on that list would be denied tax breaks, the possibility of public contracts, and bank loans. The NGO currently publishes a list of brands denounced for slave labour on their website.
Most important for Conde is the “virtuous circle” that such a law could open, by shaming companies who are caught exploiting their workers and making the prospect of sanctions more daunting to those who haven’t been caught yet. They also demand the creation of ‘Polos textiles’- specialised zones which offer greater support both to bosses – in the form of eased bureaucracy and tax breaks – and to workers through guaranteed wage levels and important infrastructure like nurseries. After the creation of the first and only such area in Buenos Aires in 2008, the number of registered textile workers jumped by 20%.
With a corrupt network of politicians, police and judicial officials protecting the illicit industry, it won’t be easy to push through these changes. Conde works with the Anti-mafia network, an organisation which grew out of a congressional committee on organised crime and now has offices in five cities across the country dedicated to exposing the mafias’ businesses and dismantling their power. The organisation is not interested in party politics because the mafia and the exploitation they enable is a problem of the state.
“We need the entire community to put pressure on those who are directly or indirectly responsible [for the existence of sweatshops and slave labour], or those who hold in their hand the power to move forward on this issue. In the city it was Mauricio Macri [PRO], in the Province, Daniel Scioli [FpV], in Córdoba it was José De La Sota [PJ], in Rosario the socialists, and Mendoza the UCR. We’re not interested in political identity.”
The post-election reshuffle of powers in many cities and provinces may provide a jumping off point for renewed efforts to convince the government to tackle the issue. But the cynical benefits offered by a tragedy-fuelled media boost offer Conde even more hope, saying the April fire has reignited public outrage over the existence of slave labour in Argentina. “This will allow us to move forward. Because the question now is, how do you avoid another tragedy?”
While a heartbreaking story like this may galvanise the public into action against sweatshops, the tragedy of exploitation is not measured only in single, dramatic events. It’s a slow grinding away of someone’s power and control over their own lives, of their ability to participate in society or spend time with their family, and of their physical health and psychological well-being.
Efforts to eradicate exploitation, then, cannot rely on single dramatic events either. Passing laws means nothing if both police and judicial authorities are not forced, by public and political pressure, to apply them. And sporadic election season statements against the black labour market mean nothing if politicians continue to support the ‘industry’ over the people who make it up when it really counts – as Mauricio Macri did in response to sweatshop allegations against his wife’s business.