European and American consumers may have heard of the country, but it's a safe bet that most of them won't know where it is - but the denim jeans and polo shirts they wear could well have been manufactured in the tiny mountain kingdom of Lesotho.
A dot on the map of Southern Africa, Lesotho is nonetheless an apparel export success story in a region starved of economic good news. It is the kind of private sector-led growth that US treasury secretary Paul O'Neill, on a four-country African tour earlier this month, pointed to as a direct benefit of investor-friendly reforms and the US Africa Growth and Recovery Act (AGOA). (director-e News, Monday 13 May).
But fair trade campaigners have pointed to the exploitation and rights abuses of workers in some of the clothing factories in Lesotho. A study published in March of three plants by the Canada-based Ethical Trading Action Group (ETAG), concludes that "violations of freedom of association and workers' right to organise and bargain collectively appear to be continuing in the factories" it visited, despite an audit by a leading Canadian purchasing company, Hudson Bay.
However, a US government official says: "The reality is that AGOA is creating jobs for people who didn't have them previously. If they don't pay as well as expected, that's unfortunate . . . Individual governments should act to correct these abuses".
AGOA, in operation since January 2001, is aimed at giving producers from 35 eligible African countries zero-tariff access to the American market on a huge range of export items.
And on the face of it, AGOA has been to Lesotho's advantage. In 2000, Lesotho's export of apparel to the United States was worth US $140.3 million (£95.8 million), but in 2001 rocketed to $215.3 million (£147 million). "That's a mighty large jump in percentage terms", US deputy head of mission in Maseru, Daniel Bellegarde, says. He points out that the export figures were achieved during a recession year in the United States, and at a time when global African sales to the United States were falling.
Under the Generalised System of Preferences (GSP), 4,500 different products can be allowed into the US market duty-free. But the GSP has to be negotiated annually with each country and does not include "sensitive" exports such as clothing, textiles, agricultural goods and steel. The advantage of AGOA for qualifying African producers is that it adds more than 1,800 extra items and lasts for eight years.
Clothing, which requires only limited skilled labour and is often a start-up industry for manufacturing growth, is omitted under GSP. Under AGOA, apparel exports only qualify if the materials used are from the exporting country or the United States. But a concession is provided to least developed countries such as Lesotho, which for four years can use yarn from third-party countries and still export duty-free.
The result has been a rash of investors, mainly from Taiwan, who have set up factories in Lesotho to take advantage of cheap labour and access to the US market. Some 20,000 extra jobs in the textile industry have been created as a result of AGOA, in a country with a population of 2.1 million.
"For the first time in Lesotho's history the private manufacturing sector has exceeded the number of people employed by the government", says Bellegarde, who at one stage in his career worked in a textile factory in the United States.
But according to Macaefa Billy of the Lesotho Clothing and Allied Workers Union (LECAWU), the conditions workers face in some factories is akin to "slavery". He says: "Firstly, people are forced to work overtime. The (production) targets are too high for workers to achieve. So immediately after knocking off at 5pm they are told to continue working to meet their targets and no overtime is paid".
And he claims that even when overtime is paid, there's no consultation and the money is on a take it or leave it basis.
"The record of exports looks good, but it's through the sweat of people forced to work Monday to Sunday" argues Macaefa Billy. "Unemployment means people take all shifts that are available. As much as we are happy with Lesotho's exports, it must be known it is (achieved) through a system of slavery".
Billy, a former general secretary of LECAWU, says the exploitation of workers by some factories includes mass dismissals to avoid payment of benefits, restrictions on union activity, at least one case of beatings of workers by factory officials, and exceptionally low wages.
A skilled textile worker earns just over $50 a month (£34). "The only benefit we have under AGOA is the employment, and it's just to remove people from the streets," he adds.
Billy claims that with the government desperate to attract investment through tax holidays, subsidised water and electricity rates, little of the profit made from textile exports actually stays in the country. The authorities also fail to protect workers from exploitation, despite the regulatory frameworks in place.
"People are forced to work, they are not allowed to attend funerals, our culture is not respected. Even maternity leave is not paid," he says.
Bellegarde agrees. "People here don't like working weekends", he states. "They say Saturday is for burying relatives and Sunday is for church. These and other issues are the basis of on-going discussions between the companies and the unions".
The Canadian Ethical Trading Action Group report lists further concerns among workers interviewed in three factories - Sun Textiles, C&Y Garments and Nien Hsing - that produce clothing for both United States and Canadian buyers, including K-Mart, Sears and Gap. The report alleges violations over safety and health conditions, harassment and abuse, and poor wages.
"The union says these things and in certain cases I'm sure they are true", stresses Bellegarde. "But the distinction that has to be made is that these factories are not sweat shops. I take these complaints as part of normal union-employer discussions. I don't take this as evidence that all companies are being abusive".
Billy says that although the government appears uninterested in the plight of the textile workers, a dialogue has begun with the factory owners. By November this could lead to an agreement on job categories as a first step towards negotiations on salary scales.
But his verdict is that progress is slow: "They are a little bit more co-operative, but still negative", he concludes.