Connect with us

Business

Sri Lanka’s apparel industry remains consistent in compliance and sustainability: WRAP Chief Avedis Seferian

Published

on

Given the economic challenges faced by Sri Lanka and the implementation of new EU sustainability laws, companies are realizing the importance of streamlined compliance processes. Certification processes including Worldwide Responsible Accreditation Production (WRAP) offers sustainable solutions, reduces audit fatigue and provides comprehensive audit reports highlighting areas for improvement. The focus is on adopting independent certification, as legislative requirements increasingly mandate such initiatives and Sri Lanka’s apparel sector has made significant strides in embracing responsible manufacturing practices, with a focus on social compliance and sustainability.

As the world’s largest factory-based certification process for clothing, footwear and other sewn products, WRAP certifies facilities for compliance with the 12 WRAP Principles, which address safe, legal and ethical manufacturing processes. Sri Lanka has taken significant strides in embracing responsible manufacturing practices, with an impressive 27 companies and 112 individual factory sites currently holding the Worldwide Responsible Accreditation Production Certification.

In a recent interview, President and CEO of WRAP Avedis Seferian commended the resilience of Sri Lanka’s apparel industry amid the pandemic and unprecedented economic crisis, highlighting that companies under the certification programme have demonstrated unwavering commitment to social compliance and sustainability.

Following are excerpts from the interview:

Q1. With Sri Lanka navigating its way through the economic crisis and new EU sustainability laws gradually coming into effect, why is it important for companies to be certified and why now?

Given the current global economic challenges, the need for a streamlined and efficient due diligence process is paramount. Certification programmes like WRAP offer a more valuable proposition compared to buyers doing their own duplicative audits, by reducing the unnecessary audit fatigue, a term I am only too familiar with, experienced in the industry,. A WRAP certification provides a comprehensive audit report and points to the successful resolution of any non-compliances, making it a powerful proof of commitment to responsible sourcing. Legislative requirements are increasingly mandating the use of independent programmes, reinforcing the significance of organizations like WRAP. The focus is on communicating the importance of adopting independent certification rather than insisting on proprietary audits, as it saves time and resources while enhancing credibility. By embracing independent certification, brands and retailers can meet both their own standards and regulatory mandates, leading to a more efficient and compliant industry.

Q2. What progress has Sri Lanka’s apparel industry made in approaching ESG criteria as per WRAP’s observations?

The industry has done a great job of making responsible manufacturing a key part of its identity. Sri Lankan factories take social compliance and sustainability very seriously and have invested in promoting best practices. You can see this reflected in a number of ways: first, being consistent – many of the facilities currently holding a WRAP certificate in Sri Lanka have been with us a long time. Second, being proactive – while most factories will typically seek WRAP certification once a buyer requests one, many factories in Sri Lanka have gone for WRAP certification without a buyer request, as they believe WRAP is a benchmark for social compliance and sustainability. And third, going above and beyond minimum compliance – we routinely see Sri Lankan facilities instil extra worker-benefit practices, including things like employee welfare measures and women empowerment programmes. It has been very gratifying to see this positive approach to social responsibility become the norm in Sri Lankan factories. We consider it a very significant factor in the success the industry has had over the years and JAAF has done a great job in promoting Sri Lanka as a sourcing destination of choice.

Q3. What do you think are some of the common challenges faced by apparel manufacturers in achieving and maintaining compliance with ESG standards?

In my nearly 20 years of experience in this field, the most significant challenge we face worldwide is the prevailing short-term thinking among buyers and manufacturers. This mentality hinders the true potential for long-term planning and investment in vital areas like social responsibility and sustainability. The key difference lies in viewing something as a mere cost or as a valuable investment. An investment mindset considers the long-term returns associated with cost, while a short-term approach focuses on minimizing expenses.

For lasting improvements in social compliance and sustainability, an investment perspective is crucial, and this requires thinking beyond quarterly or immediate gains. However, fast fashion and public reporting pressures often deter businesses from making such investments due to delayed returns. Despite these challenges, Sri Lanka has garnered an excellent reputation in social compliance and sustainability, thanks to the efforts of JAAF and major manufacturers. The country’s facilities have demonstrated an above-average commitment to long-term thinking and compliance, laying the foundation for a virtuous upward spiral.

The global industry must overcome the prevailing short-term mindset and embrace a longer-term horizon to justify the necessary investments for sustainable and socially responsible facilities. This shift towards long-term thinking remains a universal challenge and is vital for creating a more sustainable and responsible future.

Q4: Moving forward, what are the key trends that apparel companies need to consider for compliance?

It is essential to have a clear sense of direction in their journey towards responsible practices. One of the key aspects to focus on, especially in the social space, is addressing forced labour concerns. Legislation on mandatory human rights due diligence, particularly in Europe, is driving attention to this issue, especially in supply chains involving migrant labour. Manufacturers need to ensure that all workers in their facilities are working voluntarily and this validation process must be independent, transparent and verifiable.

Traceability is another critical element, as laws and business realities increasingly demand visibility throughout the supply chain, even down to raw materials. Although this industry has faced challenges due to its fragmented nature, companies must strive to map out their supply chains to meet the growing demand for transparency from a wide range of stakeholders.

Furthermore, supply chain mapping will become crucial for addressing issues beyond forced labour including carbon emissions measurements. A holistic understanding of the supply chain will be vital in tackling these environmental concerns.

In summary, the immediate focus areas for companies’ compliance efforts should revolve around addressing forced labour concerns, ensuring transparency and traceability in the supply chain and taking proactive steps towards sustainable practices.

Q5. A significant overhaul to the labour laws is anticipated in Sri Lanka – the first since independence. With this labour reform, will WRAP reassess its social accreditation process for factories?

Regarding Sri Lanka’s latest labour law reforms, WRAP follows a dynamic and adaptive approach. For instance, if there are changes in the labour laws that dictate minimum salaries, WRAP’s protocol automatically updates its directives to reflect these new requirements. This flexibility ensures that WRAP remains compliant with the latest regulations without the need for a complete overhaul of the programme.

The concept of social responsibility is universal, but the specific actions required to be responsible vary from one location to another. Different regions have distinct labour laws and regulations, resulting in varying payment standards. WRAP acknowledges this and mandates that all entities under its certification comply with the applicable laws and regulations of their respective locations. Therefore, as labour laws evolve or change in Sri Lanka, WRAP seamlessly adjusts its protocols accordingly, always adhering to the most up-to-date legal requirements.

Q6. How is WRAP working collaboratively with buyers and manufacturers to address ‘audit fatigue’?

We’ve been actively addressing audit fatigue from both ends of the supply chain – assisting manufacturers while engaging in a robust dialogue with buyers. Our efforts have focused on helping buyers understand that insisting on their own audits is not the most effective approach. With WRAP, they can receive independent, efficient and credible audits, saving valuable time and resources.

We also aim to explain the benefits of relying on the WRAP report and certification, streamlining data delivery according to the buyers’ preferences through technology.

Overall, we believe that things are progressing in the right direction, though it’s an ongoing journey. We are committed to fighting the scourge of audit fatigue to enable manufacturers and buyers alike to strive towards more efficient and sustainable practices under a new supply chain due diligence paradigm where brands and retailers utilize independent, credible social compliance certification programs like WRAP instead of forcing production facilities to undergo duplicative audits by insisting on their own proprietary code audits.



Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Norochocholai coal-fired power complex seen as facing staggering financial losses

Published

on

While the Parliamentary debates were purely focused on missing the calorific value benchmark, the excessive Ash content (21% in the samples tested) is also a reason to reject the shipment, as maximum allowed ash percentage in the tender is 16%. This means even if the tests clear the coal on calorific values, the shipments still must be rejected based on ash content as per tender terms. This fly ash and low moisture will create a massive ecological disaster to the communities in Norachcholai - Withanage

Sri Lanka’s first and largest coal-fired power complex at Norochcholai is staring at mounting financial losses running into millions of rupees as low-quality coal imports, rejected shipments and unusable stockpiles disrupt operations and expose deep flaws in coal procurement, power sector and environmental experts warned yesterday.

Energy sector sources told The Island Financial Review the economic damage has already begun, with rejected coal stocks, delayed payments and declining plant efficiency forcing the system to absorb losses from under-performance, additional handling costs and the risk of turning to more expensive backup generation.

Insiders estimate that continued reliance on sub-standard coal could result in tens of millions of rupees in losses per day, once reduced output, higher fuel burn and maintenance costs are factored in.

At the centre of the controversy is a recent coal shipment procured by the Lanka Coal Company (LCC), which has come under intense scrutiny after laboratory tests reportedly showed ash content of around 21%, far exceeding the 16% maximum allowed under tender conditions.

While parliamentary debate has focused narrowly on whether the coal meets the required calorific value, experts stress that excessive ash alone is sufficient grounds for outright rejection, regardless of calorific performance.

The situation worsened after coal stocks at the Norochcholai Coal-Fired Power Complex were recently rejected, leaving shipments in limbo and payments withheld. Power sector officials say this has resulted in logistical losses, demurrage risks and operational uncertainty, while existing low-quality coal stockpiles continue to deteriorate in storage.

“Coal that does not meet specifications is not just unusable — it becomes a financial liability, a senior electrical engineer said.

High-ash coal reduces boiler efficiency, increases fly ash generation and accelerates wear on ash handling systems, electrostatic precipitators and boilers — translating into higher maintenance costs and forced outages. Industry analysts warn that these hidden costs ultimately find their way into CEB losses or consumer tariffs.

Environmental Scientist Hemantha Withanage warned that accepting or burning such coal would push Norochcholai into a new environmental crisis, with serious consequences for communities in Norochcholai, Puttalam and surrounding areas.

“This is not just about calorific value. High ash coal means significantly more fly ash, Withanage told The Island Financial Review. “With low moisture and excessive ash, particulate matter spreads easily, contaminating air, soil and water. This is a massive ecological threat that will directly affect public health.”

He stressed that fly ash contains toxic heavy metals and fine particulates linked to respiratory illness and long-term environmental degradation. “If tender conditions are ignored, the cost will be paid by communities, not the suppliers, Withanage said.

Critics say the crisis exposes serious weaknesses in coal procurement oversight, with questions now being raised about supplier selection, quality verification and accountability. They argue that repeatedly importing low-quality coal — only to reject it or burn it at reduced efficiency — amounts to systemic mismanagement of public funds.

By Ifham Nizam

Continue Reading

Business

IRCSL launches ambitious mission to transform Sri Lanka’s insurance sector

Published

on

Dr. Ajith Raveendra De Mel

In a groundbreaking initiative, Insurance Regulatory Commission of Sri Lanka (IRCSL), announced an ambitious mission aimed at transforming the insurance industry into a cornerstone of national economic resilience and social stability.

To address this, the IRCSL will launch a nationwide education campaign titled “Insurance for All: For a Secure Future,” focusing on enhancing financial literacy across the country said Dr. Ajith Raveendra De Mel, the newly appointed Chairman IRCSL. Few sample events have already commenced last year in Matara, Jaffna and Kilinochchi that have set a strong precedent for future initiatives. “The positive response from participants highlighted the strong need for direct engagement and community-level awareness,” he said.

The IRCSL has also partnered with the Ministry of Education to integrate insurance literacy into the national curriculum, starting as early as Grade 5. This initiative aims to embed core concepts of risk management and financial protection, preparing students for future roles in the insurance industry. Complementing educational efforts, the IRCSL is also hosting an Inter-University Quiz Competition focused on insurance and financial literacy, aiming to engage university students and cultivate future thought leaders in the sector. Additionally, an e-Newsletter will keep stakeholders informed about industry updates and regulatory developments.

Dr. De Mel emphasized that this transformation it is not just about increasing insurance penetration, currently at a mere 1.1%, but about fostering a financially literate society where every citizen, family, and business is shielded from unforeseen risks. He said “Our mission is to cultivate a fully insured, financially literate, and future-ready society. The journey ahead involves profound regulatory, technological, and educational reform to create a modern, transparent, and robust regulatory environment that earns public trust while promoting innovation and sustainable growth in the industry.”

He pointed out the critical need for awareness, noting that many Sri Lankans perceive insurance as complex or exclusive to the wealthy. “We need to change how people think about insurance. Our goal is to make it simple, relatable, and accessible to everyone, particularly in rural and underserved communities,” he explained. The IRCSL will collaborate closely with the Insurance Association of Sri Lanka (IASL), the Sri Lanka Insurance Brokers Association (SLIBA), and the Sri Lanka Insurance Institute (SLII) to ensure that the message of financial preparedness reaches all corners of the nation. As Sri Lanka stands on the brink of an insurance transformation, Dr. De Mel’s vision promises a secure future driven by informed financial decisions and enhanced protection against life’s uncertainties.

The IRCSL is also focusing on digital transformation, enhancing operational excellence within the insurance sector. Key initiatives include establishing a Centralized Motor Insurance Database to improve transparency and efficiency in motor insurance, and advancing health insurance through digital integration, including standardized disease coding and electronic health records.

To ensure global competitiveness, the IRCSL is benchmarking against international best practices. A recent study tour to India has provided valuable insights into implementing risk-based supervision and capital frameworks, as well as developing accessible insurance products for underserved communities.

As the IRCSL approaches its 25th anniversary, it emphasizes the importance of staff development and alignment with other financial regulatory bodies to maintain high professional standards. The upcoming OECD/ADBI Roundtable on Insurance and Retirement Savings in Asia will further position Sri Lanka as a leader in insurance discussions, fostering regional collaboration and innovation.

by Claude Gunasekera

Continue Reading

Business

Sri Lanka’s first public allergy awareness wristbands

Published

on

LAUGFS Life Sciences, in collaboration with the Medical Research Institute (MRI), Colombo, has launched Sri Lanka’s first-ever publicly driven allergy awareness wristbands, a groundbreaking initiative aimed at improving patient safety and preparedness in medical emergencies. The wristbands provide essential information about drug sensitivities, allowing healthcare professionals to respond quickly and effectively when time is critical.

The official handover ceremony featured distinguished medical experts, including Dr. Dhanushka Dassanayake, Consultant Immunologist and Head of the Department of Immunology – MRI, Dr. Rajiva De Silva, Senior Consultant Immunologist – MRI and Dr. Prabath Amerasinghe, Deputy Director – MRI, marking a historic milestone in patient care in the country.

Commenting on the initiative, Dr. Rajiv Perera, CEO of LAUGFS Life Sciences, said, we are proud to partner with the Medical Research Institute to launch Sri Lanka’s first-ever publicly driven allergy awareness wristbands. This initiative underscores our commitment to patient-centric healthcare by providing critical information that can save lives during emergencies. We believe that thoughtful collaborations like this can have a meaningful impact on patient safety, and we look forward to expanding the program to cover additional drugs and allergens, further advancing healthcare standards across the country.

Continue Reading

Trending