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‘Used clothes aid’ leads to bankruptcy in Malawi, Mozambique & Kenya

Trades Union Congress:

International development matters

Issue 25: January 2004

http://www.tuc.org.uk/international/tuc-7559-f0.cfm#tuc-7559-19

Used clothes, donated by European and American consumers for ‘a good cause’, are turning into a dubious industry that is believed to have cost more than 40,000 jobs in Africa’s emerging textile industry. In Malawi, the country’s leading textile company had to close down, and similar trends are seen in Mozambique and Kenya.

Around the Western world, Western consumers put used clothes into ‘charity’ drop-in boxes, believing these will aid the poor. One of this drop-in box operators is the controversial Danish organisation Tvind, which runs lucrative commercial operations under its cover name Development Aid from People to People (DAPP). Among Scandinavian trade unions, the operations of Tvind are increasingly criticised as more of its practises are uncovered.

Recently, Norway’s main trade union (LO) advised against donating used clothes to Tvind (locally known as UFF) because these clothes from Europe were ‘breaking the back of the textile and ready-made clothing industry in Africa’s poor countries.’ According to the Norwegian union, ‘the biggest textile company in Malawi had to close down because it could not compete with the used clothes from Scandinavia.’ Bankruptcies had also been observed in Mozambique and Uganda and in Zambia, textile workers have organised strikes to meet the threat.

In the Mozambican capital, Maputo, large quantities of used clothes from Europe are sold at very low prices in the middle of the town quarter where small and medium sized companies are running clothing workrooms, trying to establish a local textile industry. Competition is uneven. Tvind (locally known as ADPP) is reckoned to control more than half the used clothes business in the country.

In Kenya, used clothes of a total value of 60 euro million are imported each year, which, according to LO, makes it the country’s seventh largest import category. Kenya’s emerging textile industry subsequently faces serious backlashes.

Totally, the Scandinavian unions claim that more than 40,000 workers in Africa have lost their jobs due to the under-priced imports of clothes from the North. Only recently, seven big textile and ready-made clothing companies have had to close in the region, leading to the loss of 15,000 jobs.

NorWatch, a group mapping Norwegian business practices in low cost countries, expressed strong concern over Tvind’s (locally known as DAPP) operations in Malawi. NorWatch observers, visiting the country, had observed how Scandinavian used clothes companies ‘totally have monopolised the textile market’ in Malawi.

Business margins for Tvind/DAPP in Malawi are favourable, NorWatch found.DAPP allegedly had managed to convince Malawian authorities their operations had to be classified as development aid. Thus, the Danes had achieved a special treatment from customs authorities, paying less than half the import taxes paid by other textile importers.

Tvind however categorically rejects these critiques. The 30-year old Briton Ann Thompson, running DAPP’s used clothes operations in Malawi, says that her organisation’s aim is ‘to improve people’s living conditions by giving them the possibility to buy used clothes and shoes at affordable prices.’ - This strikes you as a strange motivation in Malawi, NorWatch researcher David Stenerud says.

‘People have clothes,’ he adds. ‘Indian businessmen have run used clothes sales for decades and UFF [DAPP] clothes aren’t even cheaper.’ The group also criticised the quality and hygiene of clothes exported to Malawi. Jesper Pedersen, heading UFF’s Norway offices, claims all these alleged problems are only constructed by journalists. ‘Mass produced cheap clothes from China and Turkey are a bigger threat’ to jobs in Africa’s textile industry, Mr Pedersen claims.

Although operating with large revenues, Tvind is still registered as a charity organisation in Norway. ‘We are constructing child care organisations and schools for this money,’ says Mr Pedersen. Tvind operates schools and childcare centres in several continents. However, these schools and centres are also the target of massive critiques.

In Europe and North America, Tvind often has been characterised as ‘a secular cult’, allegedly brainwashing children and youths to become willing disciples of the moneymaking organisation. Even in Africa and Latin America, DAPP’s schools and centres allegedly produce neat revenues for the Tvind executive. In Malawi, government is now probing activities of DAPP Malawi, following a call for help by students of its Mikolongwe Vocational School.

The Malawian students accuse DAPP of ‘forcing them to work like slaves with little time for learning,’ Bright Sonani from ‘Malawi News’ recently reported. Further, scholarships and other funds meant for Malawian students allegedly have been channelled to Denmark - something authorities are looking into.

As Tvind’s operations have become more known during the last years, it has been met with increased resistance. In Sweden, its charitable status has been withdrawn. In France, Tvind is officially classified as a cult and was pursued by the French tax authorities for tax evasion. In Britain, Tvind (here known as Humana) was closed following a fraud investigation.

Tvind founder and alleged leader Amdi Petersen in 2001 was found to be living in a multi-million dollar luxury apartment in Miami after having been on the run from Danish police for over two decades. He is now charged with fraud and tax evasion by Danish prosecution on account of euro 25 million involving Tvind’s Humanitarian Fund. A sentence is expected to be handed down late 2005.


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