This is one version of events
Sustainability is a major concern of present textile world. Every country is emphasizing on sustainability. Indonesia is encouraging its textile industry to be environment-friendly, since it’s necessary for business sustainability. The United States and Europe have strict standards. Products containing hazardous chemicals are rejected. Environment-friendly industries fall into several categories. First, the industry does not pollute the environment of water, air, and soil. Second, the raw material can be recycled, re-used and is re-degradable. Third, the products used in production of finished products must be environmentally friendly. In addition, efficiency and effectiveness factor in energy use are also important factors.
The textile sector in Indonesia is expected to grow seven per cent this year. The country is trying to get the United States to reduce import duties on goods exported from Indonesia. In addition, rules for imports of textile and textile products have been tightened. And results are visible. Imports of fabrics as a raw material for garments fell by 33 per cent in the first quarter of 2017. The aim of discouraging fabric imports is to increase the utilization of national fabric production.
Boom and . . .
INDONESIA INVESTMENTS
Textile Industry Indonesia
Indonesia is ranked among the top ten largest textile producing countries. The textile and garment industry is one of Indonesia's oldest industries and - being labor intensive - a large source for jobs. However, the nation is far away from threatening China's dominant position. Whereas China controls about 35 percent of global textile markets, Indonesia controls only about 2 percent. The Indonesian government targets to increase the nation's value of exported textiles and garments to USD $75 billion by the year 2030, implying that this industry would contribute around 5 percent to global exports.
However, Indonesia is facing several challenges: the upstream sector is largely inadequate (causing a reliance on imports of raw materials) and requires an injection of investment, technology and expertise, while competition from other textile producing nations in Southeast Asia (Cambodia, Vietnam as well as Myanmar) is rising.
Although China is the clear world leader in terms of textile and garment production, rising minimum wages in the world's second-largest economy should give an opportunity to Indonesia to present itself as a more attractive production hub for global fashion brands. However, this is not that easy because the labor-intensive textile industry of Indonesia also has to cope with rising minimum wages, as well as higher electricity tariffs, and competition from cheap textile products imported from China (particularly after the implementation of the ASEAN China Free Trade Agreement [ACFTA] in January 2010).
Dependence on Imports of Raw Materials and the Threat of a Weak Rupiah
A weakening rupiah is a problem for Indonesia's textile industry because yarn, cotton, dyes and fabrics (both natural and man-made) are mostly imported from abroad in US dollars. A depreciating rupiah (against the US dollar) makes imports more expensive and therefore causes financial turmoil for local textile companies (particularly the smaller ones that have fewer cash reserves to rely on). In 2015 many smaller and mid-sized Indonesian textile companies were on the brink of collapse due to (rupiah-inflicted) higher production costs and weaker domestic textile demand amid weaker purchasing power.
An example of a raw material that is required for the manufacturing of textile products is cotton. Although Indonesia produces cotton, textile manufacturers prefer to import cotton from abroad - particularly the USA, Australia and India - because the quality of foreign cotton is much higher while the domestic cotton supply is highly volatile (there often occur supply shortages).
Presently, the movement of the Indonesian rupiah is highly vulnerable to changing perceptions of US monetary tightening. This causes volatile behavior. However, the longer-term trend is clear. Ever since the US Federal Reserve started to hint at monetary tightening in May 2013 the rupiah has shown a steady depreciating trend against the US dollar (starting from late-2015 the rupiah started to stabilize against the greenback but pressures will persist as long as the Federal Reserve intent to raise its Fed Funds Rate further).
Free Trade Deals Would Boost Indonesia's Textile Industry
Indonesia's textile businesses urge the central government to reach an agreement with the European Union (EU) for the establishment of the Indonesia-EU Comprehensive Economic Partnership Agreement (abbreviated: Indonesia-EU CEPA), a trade deal that is expected to improve the flow of goods between both regions as the deal involves the reduction of trade barriers and liberalization of government procurement. The textile industry is one of the industries in Indonesia that is expected to benefit from this trade deal as there exists significant demand for textiles in the EU. Negotiations about the Indonesia-EU CEPA, which started in 2011, were suspended in 2014 amid Indonesia's legislative and presidential elections. However, the government seems committed to reach an agreement before 2018.
Another trade deal that would boost demand for Indonesian textile from the United States and Japan is the Trans-Pacific Partnership (TPP). The Indonesian government has expressed its intention to join this free trade deal. However, it can take years before Indonesia can become member of the Indonesia-EU CEPA and TPP as local regulations and standards need to be harmonized with international ones. If Indonesia will not become a member of such trade deals then the major markets can decide to import textile products from countries such as Vietnam (member of the TPP) as tariffs are lower. Indonesian textiles firms, on the other hand, will be liable to around 40 percent duties hence reducing Indonesia's competitiveness.
Batik Industry of Indonesia
Indonesia is famous for its batik, particularly batik from the island of Java. Batik - recognized as a World Cultural Heritage by the UNESCO in 2009 - is traditional textile produced by using a technique of wax-resist dyeing applied to cloth. Updated 6 June 2016
The photo that is used in the article shows Balinese textile workers using their highly developed traditional craft skills.
In 2011 the BBC Indonesian Service ran an item on how globalisation threatened Indonesia's textile industry, that gives a picture of the varied levels of impact through recounting the stories of individual designers and craftworkers.
Dewi Safitri
BBC Indonesian ServiceThe sleepy district of Majalaya in West Java was once known as 'dollar city' for its industrial might. But now it has a less flattering nickname - 'dokar city', after a local variety of horse-drawn cart. In its heyday, Majalaya was the major centre for Indonesian textile production. But now the industry is struggling to stay afloat.
Just getting to Majalaya is a challenge in itself. The poorly paved roads that lead there are littered with potholes, some as big as a car. It is only an hour drive away from Bandung, a bustling city known for its fashion and fine food, but poor infrastructure means that Majalaya feels much further from its affluent neighbour.
Driving there, our car shares the road with dozens of dokar. The road is dotted with manure, dried by the scorching sun. It wasn't always like this, I am told.Textile boom"It used to be vibrant [here]," says Epi Sopiyan, the owner of a weaving company. Epi is the son of one of Majalaya's richest mill owners and has run the business since his father's death.From the 1940s to the 1970s, business was booming. "We had orders from every corner of the country," as well as from Malaysia and Singapore, says Epi. In this period the textile industry in Majalaya employed thousands of workers but now only a handful of businesses remain.
The Indonesia Textile Association says that that small to medium-sized firms with outdated machinery are the most at risk. They are threatened by China, whose machine-equipped sector has 20 times Indonesia's production capacity."We make what we can," says Cucu Juariyah who, like Epi Sopiyan, inherited her textile business from her father. Production is still ticking along, she tells me, but the output is much smaller.
"Mostly now we take orders from places like Sumatra or Malaysia, and we still have some from the Middle East as well."Her specialty is to weave golden thread to produce a fabric used in traditional Malay ceremonies. "We got this order from a king in Malaysia," Cucu says, showing me a black silk woven through with intricate, shiny gold.Luckily for Cucu Juariyah, the fabrics she produces are not produced in China - at least not yet. She makes about IDR 100 million in a month (USD $1,1700), but this is still far from what the company brought in during its heyday.
Quality sells
Not far from Majalaya, I visit a shoe workshop in Bandung. This time the mood is jubilant. "We just got a call from Australia. They want hundreds of pairs and they're willing to pay in cash," says a beaming Agit Bambang Suswanto, the workshop owner and shoe designer.
Growing up, Agit had a penchant for fancy footwear he couldn't afford. He set up his business two years ago, making shoes from leather and lambskin.
"The shoes are quite rare in terms of quality," says Chris Kerrigan, the Business Development Manager of The Store Dept, an upscale shop in Jakarta that stocks Agit's products. "The only complaint we have is that [they] can't produce fast enough to keep up with demand," he added.
Quality is also the trump card for Nancy Go's premium Bagteria hand bags. Made from lace and silk and accessorised with glass beads and sequins, Bagteria products became a hit when celebrities like Paris Hilton and Princess Zara Phillips have been seen carrying them.
In Indonesia, Nancy's bags are priced from IDR 1.5 million (USD $176) but can fetch up to double that in one of her overseas outlets. Her success has triggered a wave of lesser-quality imitations, but none can match her intricate designs and craftsmanship, Nancy says.
"You know what Coco Chanel said: when your work is still being imitated, it means it's highly appreciated."
Creativity is key
These stories show that Indonesia can stand a chance against the industrial behemoth of China - but only if its businesses are creative. A recent survey by the BBC World Service ranked Indonesia as the best country for innovation and entrepreneurship, ahead of top industrialised nations like the US and Canada.
"We just have to choose our battles. We will be crushed flat if we try to compete with [China] on mass production," said shoemaker Agit Bambang. "Creativity is a main point. Use the best material. Craftsmanship must be sharp," added Nancy Go.
But China is not just a competitor - it is also the source of many of the materials and machinery required for production. "Where do I get my silk cocoon from?" asks Epi Sopiyan rhetorically. "China. For what price? Whatever they say."
Epi claims the price of raw silk thread had almost doubled in a matter of months. "I can barely keep up with the price. What if they decide to stop supplying at all?"
Harsh consequences
In Majalaya, I also meet Ika Martikah, a traditional weaver who has been practising her skills for decades. She has worked in Epi's workshop for five years, and worked for his father for 15.
"This is the only work I know," said the 59-year-old Ika, smiling, her fingers moving robotically as they turn the wheel. Iwan, a young man seated on a wooden stool nearby, says he has only been working here for two months.
"I used to work with an electric weaving machine. This is harder to manoeuvre," he tells me, the clack-clacking noise of his loom filling the room. Aside from the rising price of raw materials, the fate of these traditional weavers also concerns Epi Sopiyan. "Business is awfully hard - but if I stop who will they turn to?" he says. It's a concern faced by all entrepreneurs in 'dokar city'. But as their peers elsewhere have proven, creative thinking can save even the most ailing business.
A boom for textiles . . .
. . . but bust for the environment!
Worse for Wear: Indonesia's Textile Boom
Dedi Rahmat, 65, remembers swimming in the Citarum River when he was a boy. Today, the river is considered one of the world’s most polluted waterways, contaminated by factory effluent, sewage and trash. Rahmat gathers cans and bottles to recycle for cash.
Wear and Tear
Worse for Wear: Indonesia’s Textile Boom
The rise of fabric and textile manufacturing brought jobs to Indonesia’s West Java province. It also brought abject pollution to the Citarum River.
02.23.2017
By Debbie M. Price
Visuals: Larry C. Price
With the first light, men in long boats are on the Upper Citarum River, filling their hulls with bottles, cans and bits of broken plastic — anything that can be recycled for a few rupiahs. Everything anyone might throw away is here.
Smashed Styrofoam coolers, broken toys, clothes, food containers, a deflated soccer ball, even car batteries and metal tools, buoyed by the bits of plastic below, float along on the current. At bends in the river, the detritus coalesces into mats of trash, tight and strong enough for a man to walk across. The water itself is as thick and dark as motor oil, coursing with sewage, agricultural runoff, and chemicals flushed into the river by the factories that line its banks.
It was not always this way on the Citarum — routinely named one of the world’s most polluted waterways. Old-timers tell of a healthy river full of fish until the late 1970s when Indonesia’s manufacturing sector — animated in large part by textile producers and other companies fleeing rising labor costs and environmental regulations in the West — began to grow and dump their effluent into the water. With the boom came a deluge of factory workers, which quickly overwhelmed municipal waste disposal systems, further stressing the river.
Today, Indonesia ranks among the top 10 textile and apparel producing countries in the world, with more than $12.7 billion in exports, including $3.96 billion to the United States in 2014, according to World Integrated Trade Solution, a trade database of the World Bank. Three million people work in the garment and textile industries, according to Indonesia Investments, an investors’ news service that covers the country’s economy.
For residents of the West Java province near Bandung, this economic growth has come at a steep price with the ruin of the Upper Citarum River and the destruction of rice fields contaminated with heavy metals in industrial effluent. Now, a recent Indonesian court ruling, if upheld, could give environmentalists a small victory in the fight to clean up the Citarum River — and at the same time, possibly imperil thousands of jobs. It is a story that has played out time and again around the world, from the Hazaribagh neighborhood of Dhaka, Bangladesh, to Gloversville, New York, as environmental regulations catch up with polluting industries.
In December 2015, two local community organizations, Pawapeling and WALHI (Indonesian Forum for the Environment), with the support of Greenpeace Southeast Asia Indonesia, sued the Sumedang Regency government and three factories permitted to dump into the Cikijing River, a tributary of the Citarum. The named plaintiffs alleged that the government had not monitored the factories’ discharge and had failed to conduct environmental impact studies before issuing the wastewater permits. Greenpeace and Padjadjaran University’s Institute of Ecology also released a report in April 2016, one month before the court ruling, in which they alleged that industrial wastewater used for irrigation had contaminated 2,300 acres of rice fields with heavy metals, and caused economic losses of about $866 million over two decades.
The Bandung court concurred with the plaintiffs’ arguments and ordered the Sumedang district government to “suspend, revoke and cancel” wastewater discharge permits for PT Kahatex, PT Five Star Textile and PT Insansandang Internusa, the three named textile factories. “It is clear that they violated the principles of good governance by granting those companies wastewater permits,” the plaintiffs’ attorney Agus Rasyid said of the Sumedang Regency’s failure to monitor wastewater permits.
In October, the Jakarta High Court upheld the lower court ruling. The defendants appealed that decision to the Indonesian Supreme Court in December. “This indicates that there are judges who still have a conscience,” said Anang Sudarna of the West Java Environmental Agency. “We all know that if they had to comply with standards of waste treatment,” he added, “we wouldn’t see today’s destruction to the rivers and fields.”
Dwi Widi Nugroho, the lead lawyer for Kahatex, said that his client, which manufactures polyester fibers, yarn, fabrics, and garments, spends $451,000 a month to successfully remove chemicals from its wastewater. The three companies, Nugroho said, feel that they have been unfairly singled out and penalized for the actions of dozens of other upstream factories, which pump untreated effluent into the river. Both lower courts rejected these arguments, Nugroho said.
Losing the wastewater permit, he said, would be a death sentence for Kahatex, which by his estimate employs 90,000 people and sources 60 to 70 percent of its raw materials from smaller factories in West Java. “If we lose, of course we will comply with the court decision and close down,” he said. “Then the government must think about this and take care of these tens of thousands of workers.”
Environmentalists dismiss talk of closure and mass firings as scare tactics. Ahmad Ashov Birry, a toxic campaigner with Greenpeace, said that their hope is that the court ruling, if upheld, will establish a precedent. “We could ask for the government to repeal all discharge permits,” Birry said. “That’s the idea actually. We start small.”
It’s true that the Indonesian court ruling could give environmentalists the ammunition they need to force government and industry to develop and enforce effective wastewater treatment standards for the textile and apparel industry throughout Indonesia. And this, in turn, could threaten the livelihoods of thousands of people who live along its banks — even as the Indonesian textile industry is facing increased competition from China and other emerging markets in Southeast Asia.
By some estimates, there are about 2,000 industrial and manufacturing facilities in the Citarum River basin, including at least 200 textile and apparel factories near Bandung. For decades, the government has permitted factories to flush wastewater into the river, provided the effluent does not contain any of about four dozen banned industrial chemicals. Stricter wastewater discharge standards and enforcement likely would force smaller companies to close.
A wall topped with shards of broken glass surrounds the PT Five Star Textile plant in Rancaekek, Indonesia. Five Star and two other textile companies are appealing an Indonesian court order that would revoke their permits to dump wastewater into the Cikijing River, a tributary of the Citarum River.
Factory effluent is not the only contaminant pouring into the Citarum, which irrigates crops and provides drinking water for more than 25 million people, including residents of the greater Jakarta region. A 2013 Asian Development Bank report found that most of the Upper Citarum River’s water quality parameters were far outside allowable limits. Fecal coliform bacteria — likely from manure fertilizer and sewage — was 5,000 times the mandatory limit in some locations. Municipal sewage systems and solid waste disposal in communities along the Citarum are woefully inadequate and funds to modernize are scarce.
The Asian Development Bank approved a $500 million, multi-year loan in 2008 as part of a long-term effort to restore the river. ADB funds have supported several river improvement projects, including a re-engineered canal in Bekasi to improve water quality for the greater Jakarta area. But in West Java, efforts to address the massive pollution have been sporadic at best. The Indonesian government has proposed filing civil suits against polluters, admitting that criminal prosecutions have been ineffective. Local officials have taken baby steps to curb trash.
Bandung Mayor Ridwan Kamil has imposed a ban on Styrofoam packaging for all food sold in the city. Berita, the official website of the West Java Province, announced in October that the government would form a task force to work with more than 300 known polluters in Bandung to help them remediate waste and implement water treatment facilities. At a 2015 festival highlighting a four-year cleanup of the Citarum, West Java Vice Gov. Deddy Mizwar admonished the crowd, “Perhaps we no longer need the Citarum, so we make it as a waste bin and toilet stool.”
Greenpeace, for its part, is keeping up its Detox campaign to pressure the fashion industry to stop using hazardous chemicals and sourcing from polluting factories. The group’s 2013 Toxic Threads report blasted some of fashion’s biggest names for buying clothing from a company that owns a factory it accused of pumping untreated effluent into the Citarum. The environmental group said that it found nonylphenol (NP), nonylphenol ethoxylates, (NPEs), which are used as detergents and surfactants, tributyl phosphate (TBP), antimony, which is a metalloid used in polyester manufacture, and wastewater with a pH of 14 — high enough to burn the skin — from the outflow spouts at the PT Gistex Textile Division factory on the Citarum near Bandung.
The report, which publicly detailed the textile chemicals in Citarum River factory effluent propelled Greenpeace to the forefront of the fight to clean up the river.
Several of the companies named in the organization’s report are members of Zero Discharge of Hazardous Chemicals, an international group of clothing and footwear brands that have pledged to eliminate hazardous chemicals from their products by 2020. And most have sustainability statements on their websites. A few of the companies named in the Greenpeace report also still source clothing from one of the Gistex Group’s Indonesian factories, according to Datamyne, a Miami-based firm that collects global trade data for market research records.
Gap Inc. and its brands, Old Navy and Banana Republic, received well over 100 shipments in 2016 at locations throughout the U.S. from a Gistex-owned facility, according to records compiled by Datamyne. In response to questions from Undark, a Gap spokeswoman provided a version of a statement that the company has issued on occasion since Greenpeace’s original 2013 report. The statement acknowledged that the company sources from PT Gistex Garmen, which is owned by the PT Gistex Group, but asserted that the company “does not source” from the Gistex facility near Bandung that was singled out by Greenpeace. Gap has also “reiterated to the Gistex Group the importance of adherence to our Code of Vendor Conduct, including provisions regarding environmental health and safety and chemical restrictions,” the statement said. The company did not respond to specific questions about how it ensures that its suppliers are adhering to its conduct codes.
Puma, another company named in the 2013 Greenpeace report, also confirmed that PT Gistex Garmen is an active supplier. Puma said its most recent audit of Gistex was in April 2016.
“All direct Puma suppliers are regularly audited for social and basic environmental compliance through the Puma Sustainability department. These audits contain checks on the relevant environmental permissions as well as proper treatment of wastewater and waste,” the company said. Puma also said that it regularly asks all its suppliers with wet processing facilities to perform wastewater tests and publish the results through the Institute of Public and Environmental Affairs, a Chinese non-governmental organization.
“We have just started expanding our audits into the core material and component suppliers as we recognize that improvements are necessary,” Puma said. “This expansion into the lower tiers of the supply chain is a long-term effort.”
On its website, Gistex promotes its “Go Green” program and says that the company built a water recycling program in 2012 and in 2015 received certifications and met standards established by the International Organization for Standardization for quality and environmental management. With the certifications as a foundation, PT Gistex said it hopes “to continue with improvements in all areas,” according to a statement on the company’s website.
Several American and European companies also source from PT Kahatex, according to Datamyne. None of those companies contacted by Undark responded to interview requests.
People’s health and lives depend on companies fulfilling their commitments and cleaning up their supply chains, Birry wrote in a blog post hailing the court ruling against the factories.
“Millions depend on the health of Indonesia’s rivers, water and land,” he added. “We won’t stop fighting.”
Funding for this project was provided in part by the Pulitzer Center on Crisis Reporting. Larry C. Price, along with Joseph Cochrane and Dewi Kurniawati in Jakarta, contributed reporting for this story.
So, let's have a conversation!
The World's Dirtiest River: Today we take you to the world’s most polluted river. 35 million people rely on the Citarum river on the island of Java, Indonesia, but it has become a toxic river of waste. Seyi Rhodes went to the island for this Unreported World classic in April 2014.
Unreported World
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