Brazil hopes to legalize more than 10,000 small factories employing garment workers in allegedly “modern slavery” conditions as part of a partnership between top trade lobbies Abit and Abvtex, retailers Zara and C&A and the International Labour Organization.

Under the agreement, the parties will work with the country’s Labor and Public Ministries, as well as with nongovernmental organizations, to encourage the factories to join the formal market, improving labor standards for their workers, who often include Bolivian or other South American immigrants, said ILO Brazil director Peter Poschen.

“There is a complex production chain that uses thousands of these shops which are difficult to monitor and control,” said Poschen, estimating that more than 10,000 such firms, the bulk of which are family run, operate in São Paulo State.

Brazil’s industrial hub employs 300,000 apparel workers, of which a third are foreign, observers estimated. Overall the sector employs 1.7 million people in the country.

In a statement, the signatories said they will seek to “raise rights and risks awareness and empower vulnerable populations in sewing shops,” do management training and help federal, state and local institutions draft and implement policies to streamline conditions.

Poschen said the illicit shops are tiny, often employing two to three workers in sub-standard conditions. Workers toil and live in the same space and lack fluency in Portuguese fluency. Because of this and their clandestine and mobile nature, regularizing the factories has been difficult.

The partners are working to legalize the shops through information campaigns to help operators understand their labor rights and benefits under a new Brazilian law seeking to grant them legal status. Owners, too, will be informed of the benefits of joining the formal market.

The effort is seen as more effective than launching raids to shutter the shops or fine their owners, which could then reopen somewhere else in the state, Poschen said.

The new partnership comes on top of a similar venture between the same parties to create a so-called Sustainable Fashion Lab to boost the industry’s labor, social and environmental profile, among other things.

But Jana Silverman, director of the AFL-CIO’s Brazil chapter, contended the initiatives appear to be image-boosting strategies for Zara, C&A and Renner, which were slammed for promoting “modern slavery” conditions as early as two years ago. The retailers are concerned recession-stricken consumers will turn away from them, she claimed.

For it to truly benefit workers, the unions should join the agreements, she said.

“The fact that ILO is involved is a good thing because it won’t be unilateral but this should also involve Brazil’s unions. How better to monitor workers’ conditions than through their representatives?” Silverman asked.

She added the industry is suffering from plummeting sales amid the country’s long recession and fretting about the new government’s desire to open the market to competition by seeking free trade with Europe and expanding Brazil’s role in Mercosur, the zero-duty bloc comprising it, Argentina, Uruguay and Paraguay.

Silverman said Brazil’s formal workers enjoy adequate conditions although their collective bargaining power has diminished and salaries frozen amid the recession.

Paraguay, where many Brazilian clothing brands and retailers — notably department store Riachuelo — are shifting production to slash costs, is also a concern, Silverman said, adding that conditions and salaries are much lower across the border.

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