3. Sri Lanka

SRI LANKA

Chapter Highlights

• 96% of the workers experienced employment shocks either in the form of layoffs (76%) or termination (20%). 85% of the terminated workers did not receive full severance benefits.

• Though the levels of monthly debt per worker was relatively low at 6 USD in the pre-pandemic period, it had risen to around 15-17 USD per month from

April, with this level persisting throughout the rest of 2020.

• Garment workers, most of whom are migrants, cut down personal consumption and incurred debt to send remittances as it is the most important source of income for their families.

• There is a rise in distress-driven employment in families of garment workers, with 15% reporting that, after May 2020, at least one additional member of their immediate family — mostly young men aged between 17-22 years — had to abandon their formal education and enter low-wage informal employment to help their families repay existing debt and to ensure that household income meets at least basic needs of food and rent.

• 78% of the workers were pushed below the international poverty line of the World Bank (measured at 3.2 USD PPP) between March and May, 2020.

Section 1: Introduction

Sri Lanka is the only Asian garment producing country where a nationwide outbreak of Covid-19 was directly linked to the working and living conditions of garment workers producing for global apparel brands. Sri Lanka experienced two major waves of Covid-19 in 2020, first between March and October 2020, and then from October 2020.

While workers suffered layoffs and terminations in the first Covid-19 wave, the second wave started in Brandix Lanka Ltd at Minuwangoda, where more than 1000 workers tested positive for Covid19.1 Workers reported severe ostracisation, physical violence and mistreatment from the government and military, as they and their families, including pregnant women and children, were taken to quarantine centres late at night, in some cases against their will, and were treated as “criminals rather than as patients.”2

The Sri Lankan apparel industry is one of the most significant contributors to the country’s economy and the primary foreign exchange earner. The industry contributes around 7% of the GDP and 46% of the total exports. The apparel industry also directly employs more than 350,000 people, which is approximately 15% of the country’s total workforce.3

The Sri Lankan apparel industry grew steadily since the 1980s but rising competition from other Asian production countries after phasing out of the Multi-Fibre Agreement from 2005 and the temporary suspension of trade preferences by the EU had led to