WINDHOEK, 27 October (IRIN) - The Malaysian textile company, Ramatex, has bowed to industrial action by Namibian workers demanding better wages and benefits, while its environmental practices again came under scrutiny after revelations that its multimillion dollar plant has polluted ground water.

The government has promoted Ramatex as an important part of its export diversification strategy after luring the company to set up shop in Namibia four years ago, with incentives such as a 99-year tax exemption and subsidised water and electricity rates.

However, Ramatex has been troubled by allegations of poor labour practices such as forced overtime, unfair dismissals and less leave time than is stipulated by Namibian labour law, and protest marches over low wages.

An original staff complement of 6,000 has been whittled down to 3,000 at its main factory in the capital, Windhoek, while two of its subsidiaries, Tai Wai and Rhino Garments, closed at a cost of a further 3,000 jobs.

Since 2002, Namibia's textile industry has had preferential access to the US market under the African Growth and Opportunity Act (AGOA), but quota restrictions for the US market on clothing and textile exports from Asian giants like China and India have been lifted, resulting in strong competition for Namibian manufacturers.

A 24-hour work stoppage and protest outside the factory gates earlier this month, led by high-ranking officials from Namibia Food and Allied Workers Union (NAFAU) and the National Union of Namibian Workers (NUNW), an umbrella organisation for labour unions, brought an offer for higher wages the next day.

Both unions agreed to a proposed N$1.10 (US$0.24) an hour increase, a housing allowance, a monthly transport allowance ranging from N$100 (US$13.30) to N$150 (US$20) and a year-end bonus, to be calculated at 60 percent of a month's wages.

"Workers earn an average of N$3 (US$0.40) per hour and take home about N$600 (US$80)," according to Ndeshi Shigweda, a seamstress at Ramatex. "The bosses only offered a 60 cents (US$0.08) increase at first," she told IRIN.

Another concession made by the company was the establishment of a staff medical aid fund, which workers have demanded since the company set up operations. "Our strike was quite successful," NAFAU secretary-general Kiros Zacharias told IRIN. "At last we forced the Ramatex bosses around the negotiating table to improve the plight of the workers."

Earlier this year Ramatex, the largest private-sector employer in Namibia, wanted to pull out of the country and proposed that the government pay N$490 million (US$65 million) for the factory and its equipment. Should the ruling South West African Peoples Organisation (SWAPO) government decline the offer, all workers would be laid off and machinery and equipment dismantled and shipped out, the owners said.

After a flurry of activity between a government technical committee and a Malaysian business delegation, an agreement was worked out between the two parties, but details of the deal have yet to be made public.

In February last year the finance permanent secretary, Calle Schlettwein, told IRIN that Ramatex contributed 1.5 percent to the country's gross domestic product (GDP) and earned 17.5 percent of Namibia's foreign currency. The company's initial US$150 million investment in the Windhoek plant was sweetened by government with an extra N$20 million (US$2.65 million) of public money to provide the necessary infrastructure and services.

Earlier this month it was revealed that Windhoek's municipality would assume the wastewater management of Ramatex, after polluted water from its dye plant seeped into the ground water, but it is not known who will pay for this service and whether the company is facing fines for polluting the ground water.

The state broadcaster, Namibia Broadcasting Corporation (NBC), reported in a radio bulletin that the affected groundwater was confined to the area near the textile plant.

"We have found that the seepage is only in the immediate vicinity," said Ndangi Katoma, the spokesperson for the city of Windhoek. "We will soon manage the waste management, such as sludge removal and the recycling plant there, as soon contract details are finalised," the NBC quoted Katoma as saying.

Bertchen Kohrs, spokesperson for the environmental organisation, Earthlife Namibia, a branch of Earthlife Africa, said that at last the authorities had taken note of their repeated warnings over the past four years. "Our worst fears have come true - the underground aquifer is now polluted," Kohrs told IRIN. The affected area is next to the capital's water reclamation plant and close to a major aquifer.

"The water contamination at Ramatex is quite serious," a hydrologist, who spoke on the condition of anonymity, told IRIN. "Not only chemicals leaked into the groundwater, but also a high concentration of salt used to dye fabrics."

The use of salt and dying with dark colours was scaled down two years ago, after a report by independent engineers was leaked to the press, revealing that Ramatex did not adhere to Windhoek's environmental regulations. After a public outcry city officials forced the company to reduce it's dying activities.

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