US embassy cable - 04AMMAN4250

UNCLAS SECTION 01 OF 04 AMMAN 004250 
 
SIPDIS 
 
SENSITIVE 
 
STATE PASS USTR FOR NED SAUMS 
DOL FOR ILAB 
 
E.O. 12958: N/A 
TAGS: ELAB, JO 
SUBJECT: QIZ LABOR UPDATE 
 
REF: A. A) AMMAN 686 
     B. B) 03 AMMAN 7292 
 
1. (SBU) SUMMARY: Employing more than 30,000 workers, more 
than half of whom are Jordanians, Qualifying Industrial Zones 
(QIZs), are an important part of the Jordanian economy, 
especially the textile and apparel sector. Though working 
conditions are generally good, including for foreign workers, 
low starting wages, demographics, and the lack of a skilled 
workforce have limited the ability of the GOJ to increase the 
percentage of Jordanian workers. The GOJ has instituted two 
training programs to address these problems. The textile 
workers, union sees most of their concerns being resolved, 
but would like to see some improvements, including higher 
wages. END SUMMARY. 
 
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The Workers: Foreign vs. Domestic 
-------------------------------------------- 
 
2. (U) QIZs now employ between 30,000 and 38,000 workers, 
depending on the source. The vast majority of these are 
employed in textiles and apparel, Jordan,s leading export 
manufactured goods and the primary QIZ export. Each QIZ and 
firm within the QIZs offers slightly different working 
conditions and wages, but as reported in ref B, most textile 
and garment workers have a 48-hour week and can clock up to 
12 hours of overtime, which provides 1.25 times regular pay 
and 1.5 times on weekends and holidays.  Most foreign workers 
contract to work 60-hour weeks and are compensated at a 
higher base ray rate than Jordanians.  Anecdotal information 
indicates a number of foreign workers are putting in more 
than 60-hour weeks, especially in the high-demand seasons. 
Many managers and union leaders report that Jordanians prefer 
not to work overtime. Foreign workers are reportedly earning 
USD 200 to 300 dollars on average a month, well above the 
minimum wage of 85 JD (120 USD).  (COMMENT:  This likely 
reflects the foreign workers' greater experience as 
industrial garment workers, since many are recruited out of 
native factories after at least five years of work.  END 
COMMENT.)  With bonuses, the best workers are reportedly 
making up to USD 350 to 400 per month. 
 
3. (SBU) The percentage of Jordanian workers in the QIZs has 
increased over recent years and as of one year ago reached a 
high of 65 per cent. However, this percentage has declined to 
56 per cent recently, due to at least three causes. First, as 
new factories have continued to open, investors need a base 
of experienced workers, which can thus far only be obtained 
among expatriates, to begin production. Second, the expansion 
and upgrading of product lines in established factories, some 
of which once had 100 per cent Jordanian workers, require 
similar inputs of experienced workers. Third, increases in 
the aggregate Jordanian QIZ workforce come slowly in the face 
of domestic demographics (see paragraphs 8 and 9). 
 
4. (SBU) QIZ workers can be generally confident the labor 
market favors them for the present. Judging from the 
complaints of factory managers who say their workers are not 
loyal, job-jumping to secure a better wage is a common 
practice. Because of foreign workers, contractual 
obligations, this is almost exclusively a practice among 
Jordanian workers. One American manager who took over in a 
QIZ firm planned on enhancing his bonus system to keep good 
workers. This same firm reportedly hired away an effective 
floor manager from a competitor by offering a substantially 
higher wage. 
 
----------------------------------- 
Foreign Workers, Conditions 
----------------------------------- 
 
5. (SBU) The bulk of foreign workers come from China, 
Pakistan, Sri Lanka, and Bangladesh, with smaller numbers 
coming from the Philippines and South Korea. Foreign workers 
usually live in dorms either on or near QIZ estates and many 
receive meals as part of their contracts. Tajamouat Estate 
near Amman built its dorms according to JC Penney standards 
and hired chefs from Sri Lanka and China to cook for the 
workers; the factories pay Tajamouat as part of its one-stop 
shopping service. The source country embassies regularly 
visit those QIZs with heavy foreign worker concentrations, 
according to workers and managers.  Consular officials from 
the Sri Lankan and Philippine Embassies have stated that 
their nationals working in the QIZs are the least of their 
concerns because of the confidence the officials have in 
their living and working conditions. 
 
6. (SBU)  The MOL Secretary General also confirmed that, in 
the early years of the QIZs, he &used to hear daily8 from 
the Sri Lankan, Indian, and Bangladeshi ambassadors. He hears 
from them much less frequently now, an indication that 
foreign workers currently experience fewer problems. An issue 
that the concerned ministries are just beginning to address 
in a systematic way is the behavior of home-country labor 
recruiting agencies, to ensure they are acting in accordance 
with international standards and Jordanian labor law. The GOJ 
requires the licensing of bonded labor agencies within Jordan. 
 
7. (U) The Embassy keeps a close eye on the QIZ conditions, 
as do many Jordanians.  When a brief press report mentioned 
food poisoning among foreign workers at the Al Hassan QIZ 
estate earlier this year, embassy followed up over the 
weekend with factory and industry consultant contacts to get 
a status report.  It turned out that a group of workers had 
gone to a low-grade restaurant in Irbid on their day off. 
Based on many months of visits to QIZs (sometimes without an 
appointment) we have seen first-hand that the Jordanian labor 
code applies equally to foreign workers. 
 
----------------------- 
Hiring Constraints 
----------------------- 
 
8. (U) The MOL,s goal remains 100 per cent domestic 
employees in QIZs, but employers face problems recruiting and 
retaining local employees. For example, most QIZ employers 
pay the minimum wage as starting pay, which the MOL admits 
does not meet Jordanians, needs. (Note: The GOJ is involved 
in an ongoing dialogue with the General Federation of 
Jordanian Trade Unions regarding raising the minimum wage. 
End note.)  In addition, the MOL reports that even workers 
from rural areas especially hard hit by poverty are often not 
willing to move to urban areas to earn the current minimum 
wage, though the &Village Program8 described below is a 
notable exception. At the same time, the MOL realizes that 
low production costs attract and retain investors and they 
recently reduced QIZ work permit fees for foreign workers in 
order to maintain investment growth. 
 
9. (U) Another key issue in recruiting Jordanians is 
demographics.  Garment factories are absorbing most of the 
young female work force eligible for such work.  Young males 
are not inclined to do this work, for social and cultural 
reasons.  The QIZ factories are still attracting some young 
men to sewing lines and more to the limited numbers of 
packing and shipping jobs.  The older generations of 
unemployed and underemployed are not attracted to this type 
of work.  At the same time, manufacturers -- including those 
who formerly had 100 percent Jordanian labor --  need 
productive, experienced workers, who can more easily be 
obtained from overseas. 
 
---------------------------------------- 
Training Jordanians to Do the Job 
---------------------------------------- 
 
10. (U) The other main obstacle to increasing the percentage 
of Jordanian QIZ employees is the lack of relevant skills. To 
address the deficiency of qualified textile and garment 
workers, the MOL has two training projects underway and also 
endeavors to negotiate individual training agreements with 
new investors. Last year the MOL through USAID contracted 
with the Jordanian firm Textile Technology Centers (TTC) to 
train 4,000 Jordanian garment workers by July to meet the 
increasing labor demand at QIZs.  However, MOL difficulties 
in securing financing for the current phase of this training 
program will delay completion of the program past July. 
Already 2,500 have been trained in paid five-week courses led 
by Tunisians experienced in modern garment factory production 
techniques.  TTC is training up to 120 Jordanian trainers who 
will need years of experience to reach the levels of TTC's 
current, effective trainers.  Preliminary assessments from 
the first phase show that most of the trainees are now 
working. 
 
11. (U) The Village Program at Tajamouat Industrial City has 
grown to about 1000 mainly women from the south of Jordan, 
where jobs are scarce and unemployment is high.  These 
workers live in dorms and contract to work 60-hour weeks. 
Dormitories have inside supervisors, who act as chaperones. 
Every two weeks the company buses the workers back to their 
villages to see their families for two days.  A Ministry of 
Labor senior officer and two Social Welfare workers are 
assigned in an office at Tajamouat to pay special attention 
to the village group and to visit and coordinate with their 
families.  The MOL also sponsors special events for them. 
Other MOL officers at Tajamouat monitor the condition of the 
industrial park, as MOL officers do at all of the other QIZs. 
 Tajamouat management, which sees the village program as a 
way to provide factories with dedicated workers, has a 
cost-sharing program with the MOL for the first year.  After 
that, the factories will absorb all dorm and food costs. 
 
-------------------- 
The Union View 
-------------------- 
 
12. (SBU) According to union and Solidarity Center 
representatives, physical working conditions in the QIZs are 
generally good and the MOL helps maintain those conditions by 
inspecting sites, checking records, and interviewing workers. 
Fathallah Omrani, President of the General Trade Union of 
Workers in Textile, Garment and Clothing Industries, says 
labor difficulties at the QIZs have gone down by 80 per cent 
since the early days. Most problems the union confronts in 
QIZs are a result of Jordan-based foreign managers, and are 
often compounded by language barriers. These problems are 
usually amicably resolved with the MOL,s assistance, though 
some do end up in courts. The union,s major complaints 
remain delayed salary payments, which they list as the 
leading problem, and extremely long working hours for foreign 
workers, sometimes up to 14 hours per day, which is over the 
legal limit. Other complaints include the lack of raises, 
e.g. cost of living adjustments, and the need for better 
health care or insurance coverage. 
 
13. (SBU) Participation in most unions or professional 
associations is mandatory in Jordan, but this is not the case 
with garment workers in the QIZs. However, union officials 
note that, given the preponderance of small manufacturers 
outside the QIZs, it is actually easier to do union 
organizing in the QIZs. While foreign workers are difficult 
to organize given both language barriers and the closed 
&company town8 lifestyle they live, union leaders view 
their organization as representing all workers in this 
sector. In fact, though foreigners are legally barred from 
Jordanian union membership, these leaders have confirmed that 
they register foreign workers in the trade union, with 
Egyptians given as a specific example. 
 
 14. (SBU)  Despite his upbeat view of QIZs and their 
potential, Omrani says there has been little improvement for 
the average Jordanian as a result of the QIZs, pointing out 
that the primary benefit of QIZs is entry-level jobs. To help 
illustrate the point, he added that the lowest minimum wage 
his union has negotiated in a non-QIZ carpet factory is 130 
JD (183 USD) per month. When asked whether working conditions 
are better outside the QIZs, though, he said they were merely 
different. 
 
------------ 
Comment 
------------ 
 
15. (U) This report focuses on the typical QIZ factory 
worker.  In addition to as many as 38,000 garment workers in 
the peak season, QIZs account for thousands of jobs in 
backward linkage economic sectors, from trucking and 
transportation to food and services industries.  The QIZs, 
overall contribution to an improved employment picture has 
never been documented, however.  In addition, gains in QIZ 
employment were offset by job losses in factories formerly 
producing goods for what was a large monopoly market in Iraq 
until the war last year. 
 
16. (U) On worker wages, the longest-operating QIZ factory 
was six years old this past March.  Those Jordanians who have 
been employed from the beginning are seeing sizeable monthly 
paychecks, anecdotally placed at over 200 JD (282 USD) a 
month.  As more workers gain experience in mass production of 
garments, there is a reasonable expectation that the low 
entry-level wages paid to inexperienced Jordanians will 
increase over a relatively short time. 
 
17. (SBU) Finally, QIZ employment has an impact on rural 
development and women,s empowerment.  Under the Village 
Program, most of the employees are women from rural areas who 
have never before received an income.  Not only do the QIZs 
provide these and other women with salaries of their own, but 
they also generate a new source of revenue for their families 
and a boost to rural economies. Many female QIZ employees 
reported to us significantly increased social status in their 
families and communities, and more respectful treatment by 
male relatives as a direct result of their QIZ employment. 
 
GNEHM