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April 2, 2014

Commerce Ministry clarifies Disney report

April 2, 2014

ISLAMABAD: The Ministry of Commerce has clarified certain contents mentioned in a news item in the opinion section “Disneyland” by Dr Farrukh Saleem published by “The News” daily on Sunday, March 30, 2014.
On March 4, 2013, Disney Consumer Products (DCP), subsidiary of The Walt Disney Company excluded Bangladesh, Belarus, Ecuador, Pakistan and Venezuela from the Permitted Sourcing Countries list and asked its licensors and vendors to transition the production of Disney branded goods, out of high-risk countries, to a country on its Permitted Sourcing Countries List by March 31, 2014.
Disney’s Permitted Sourcing Countries List comprises 71 countries, which have World Bank Governance Indicator (WGI) of 65% or more.Another 101 countries/territories having WGI of 31% or more are eligible to supply after International Labour Standards (ILS) audits.
The list also includes countries where the WGI is below the above-mentioned standard but where International Labor Organization (ILO) and the International Finance Corporation (IFC) operate a “Better Work Programme”. The Corporation has stated in their communication that a country may be added to the Permitted Sourcing Country List if either the country implements the Better Work Programme or improves its governance indicators as tabulated by the World Bank. Pakistan’s WGI score in 2012 World Bank Report was 21. The Better Work Programme is also not yet operative in Pakistan.
The Ministry of Commerce immediately took up the issue and engaged all stake holders as early as on 18th April, 2013 in a meeting which was attended, inter alia, by ILO and IFC representatives. All options to find solution to the issue were discussed and based on the recommendations of the stakeholders, DCP was approached both by the government of Pakistan and the ILO.
After a series of deliberations with ILO and IFC, it was decided that a Tripartite Conference would be held to discuss and recommend future plan to address

the issue. The tripartite conference was held on 25th July, 2013 at Islamabad. During the above-mentioned conference representative of ILO Better Work Programme from Geneva informed that the focus of BWP for next five years would be readymade garment sector only. In the new scenario, it was decided that Ministry of Textile Industry would act as focal point for the BWP and accordingly, a formal request to ILO to initiate BWP in Pakistan was made.
Meanwhile, on the recommendations of the stakeholders, ILO is in the process of initiating a Technical Cooperation/Assistance Project in collaboration with Ministry of Overseas Pakistanis and Human Resource Development & Ministry of Textiles Industry wherein the gap between the existing practices/facilities and the actual requirement for BWP would be analyzed. This would help in doing the groundwork for initiating the BWP.
As far as the World Governance Indicators (WGI) are concerned they are calculated for the preceding year and are published in September/October every year. Hence the current WGI indicators reflect the situation prevailing in 2012. These indicators are calculated by looking at six areas in every country. These areas include Voice and Accountability; Political Stability and Absence of Violence; Government Effectiveness; Regulatory Quality; Rule of Law & Control of Corruption.
Accordingly, the World Bank was approached by our Mission in Washington in order to present Pakistan’s improvement in all connected sectors in view of democratic transition. It is expected that the WGI Report for 2013 to be published in Sept/Oct 2014 could yield positive results with a view to attaining the required threshold of 31 percentile. Should this threshold be achieved, Pakistan would be eligible immediately for being put on the permitted sourcing countries list.
Our Ambassador and Trade minister in Washington DC are also constantly engaged with Walt Disney Company’s Global Sourcing Unit in order to persuade them to take account of the fact that Pakistan is already participating in another ILO sponsored initiative i.e. the “Decent Work Programme” since 1996. Furthermore the Ministry of Commerce in coordination with other ministries referred to above is engaged in a joint effort with the ILO and IFC in order to initiate the BWP as soon as possible so that this restriction is lifted speedily. It is also hoped that the WBGI September 2013 assessment report will take account of the improved indicators for Pakistan and this will also help in facilitating the restoration of sourcing by DCP from Pakistan.

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