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25 Mar 2021


Sri Lanka: Garment sector unions demand better protections for workers in post-COVID investments by World Bank group

"Sri Lankan Unions Demand Post COVID-19 World Bank Group Investment in Garment Sector Protect Workers", 25 March 2021

Six Sri Lankan unions and workers’ organizations are challenging the International Finance Corporation (IFC)’s existing due diligence and labor rights components of their economic and social action plan for a USD $50 million loan to Brandix Lanka LTD, which is proposed for approval this month. 

The IFC’s mandatory public disclosures published last month fail to address that Brandix Lanka LTD owns and operates a factory where a sweeping industrial COVID-19 outbreak occurred in October 2020. The COVID-19 outbreak at Brandix’s factory in Minuwangoda was detected on October 2. Within a week, 1000 out of 1400 factory workers tested positive for the virus.


The outbreak is still under investigation by Sri Lankan government authorities. Unions and workers’ organizations submitted worker accounts to the IFC reporting that in the weeks before the outbreak, Brandix failed to follow Sri Lanka’s Ministry of Health’s COVID guidelines and that management denied leave to workers who reported COVID symptoms.

The IFC announced the proposed loan to Brandix Lanka LTD on February 18, 2021 to support working capital and capital expenditure for Brandix’s existing Sri lanka operations, including production for major global brands such as Uniqlo, Calvin Klein, Marks & Spencer, Victoria’s Secret and PVH. Brandix Lanka LTD operates 21 factories in Sri Lanka, together employing over 33,000 workers. 


In addition to considering a USD $50 million investment in Brandix Lanka LTD, the IFC is concurrently considering another USD $50 million dollar loan to MAS Holdings, bringing the total proposed loans to the sector in Q12021 to USD $100 million.


Sri Lankan unions and workers’ organizations, whose memberships include Brandix workers, urge the IFC to delay its vote on the Brandix loan pending substantive consultation with key labor stakeholders and revision of the Environmental & Social Action Plan for the loan to include ensure workplace health and safety and freedom of association in compliance with the IFC’s Performance Standard 2