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Prem Exports wins 2002 SA8000 Implementation award

First Indian textile company to certify to all 3 quality standards

The Switcher-Prem example has shown that buyers and suppliers working in partnership can meet high labour standards and offset increased costs by substantial gains in productivity, quality and employee satisfaction. Reena Mital reports.

Prem Durai Exports, manufacturers of the Switcher brand in India, has won the 2002 SA8000 Implementation award from Social Accountability International (SAI). In 2001, Prem Group, the main supplier of Switcher T-shirts in Switzerland, successfully qualified for the SA8000 certificate issued by SAI. Prem’s investments in workplace quality have shown significant positive returns, countering the concerns of numerous exporters around the world. The Switcher-Prem example has shown that buyers and suppliers working in partnership can meet high labour standards and offset increased costs by substantial gains in productivity, quality and employee satisfaction.

Stimulated by Switcher, and ready to respond in a systematic way to concerns about quality, environmental protection and social accountability, Prem Group decided to earn certification to the quality standard ISO9000, the environmental management standard ISO14000, and the workplace standard SA8000. Major investments, with Switcher’s assistance, were undertaken in equipment, technology upgrading and new management practices and social accountability procedures were implemented. Prem’s Vikram Knitwear Factory earned SA8000 certification in March 2001.

Speaking to Express Textile, Mr Prem Durai, managing director, Prem Exports, “With this we have got all the necessary certifications, and winning this award is proof that we have a serious commitment to corporate responsibility, and also to quality and environmental issues. Implementation and certification of SA8000 was completed within six months, and we have seen a perceptible improvement in labour relationship, and productivity levels.” The SA8000 Corrective Action Committee brings management and union representatives together to address problems in a cooperative mode. While implementing operational changes to meet international labour standards, production at Prem has increased 150 per cent, with higher capacity utilisation, a workforce of 1,250 and growing turnover. Higher productivity has been paired with significant improvements in quality - the average rework level fell from 20.4 per cent to 8.3 per cent, and average rejection level from 10.6 per cent to 4.8 per cent.

As planning, productivity and work organisation have improved, average monthly overtime has also been halved, falling from 46 hours to 22 hours; reduced work stress and fatigue have also been noted, according to the company.

Better working conditions and the Switcher/Prem policy of investing in social programmes and work related improvements benefitted workers as demonstrated by declines in absenteeism and workforce turnover. Absenteeism dropped from an average of 20 per cent in 2000 to nine per cent in 2001, turnover fell from 8.5 per cent to 4.7 per cent.

After more than 10 years, Switcher remains excited about the partnership. According to Mr Robin Cornelius, founder of Switcher, “It extends far beyond a typical business deal; we share the same values and we finance social and environmental projects together.” In 1981, Switcher started in business as an importer of casual clothes to Switzerland from Portugal, guided by a commitment to sustainable development. “Although economic pragmatism is a must, it should not prevent a company from being an active contributor to social development and environmental protection,” said Mr Cornelius. This meant developing non-polluting manufacturing processes, energy conservation measures, and social programmes for workers and their families.

In keeping with this philosophy, Prem Exports is planning to increase production of Switcher garments made from organic cotton. “Till now, we’ve had a separate range and collection of garments made from organic cotton, for special customers. The price structure in this case was different. Now, we plan to use organic cotton for say around 20 per cent of our production of the total production of apparel, while maintaining the price. This is a challenging proposition, as organic cotton is priced higher than inorganic cotton,” said Mr Durai.

According to Mr Durai, his company is the first in India to have all the three systems - ISO 9000, ISO 14000 and SA8000. The company worked closely with the Textiles Committee to get the certifications. “Looking at the benefits achieved, a number of companies in the south have evinced interest in these certifications. Prem Exports is today a role model for them,” he said.

SAI is an American human rights organisation founded in 1996 by the Council on Economic Priorities Accreditation Agency (CEPAA). SAI is dedicated to improving workplaces and communities around the world by developing and promoting voluntary standards combined with independent verification and public reporting. One of the main aims of SAI is to monitor the content of the codes of conduct with particular reference of minimum working conditions and to their application. According to Mr Durai, SA8000 finally entails 100 per cent implementation of the Factories Act, and other labour laws in the country.

Since 1986, the CEPAA has been awarding Corporate Conscience Award to companies that respect human rights and contribute to the improvement of the social conditions of all their stakeholders. The CCA rewards the best performance in the social and environmental fields (environmental management, exemplary workplaces, innovative partnership, application of standards SA8000) and helps to promote these achievements at world level to individuals, investors, trade unions, governments, NGOs and private companies.