An all female, worker-owned cooperative in Nicaragua has done what up until now only multinational corporations have been able to pull off. Last December, Maggie's Organics announced that the Nicaraguan cooperative that cuts and sews all its organic cotton clothing became the first worker-owned business in the world to receive free trade zone status.
Its new status enables Cooperativa Maquiladores Mujeres (Women's Sewing Cooperative) to be price-competitive with "sweatshops." The cooperative is now exempt from a 30-percent Nicaraguan tax and it now has duty-free import status and reduced utility rates.
"Free trade status allows these women to compete on a level playing field with big companies," said Mike Woodard, director of Jubilee House, the Nicaragua-based NGO that helped the cooperative organize.
"This is a new model," said Woodard. "It's a recognition of, and response to the fact that we live in a global economy driven by neo-liberal market forces. This is one legitimate way for poor people to respond, by buying into a model that has traditionally left them out and using it to their advantage. Traditionally, free trade zones have been used to exploit cheap labor. In this model, the disenfranchised and exploited are making the system work for them."
When Hurricane Mitch hit Nicaragua in 1998, it displaced more than 14,000 people. Maquiladores Mujeres grew out of this poverty-stricken group.
"We didn't want to do disaster relief," said Woodard, "we wanted to develop a sustainable model, and many of the displaced women said that they could and wanted to sew."
In 1999, through Jubilee House, Maggie's committed all its cut and sew contracts to the co-op if it would agree to organize and build a factory. Maggie's had lost several of the company's U.S. contractors to bankruptcy, and it was having quality control and delivery issues with existing contractors.
"We teamed up with Jubilee House and Maquiladores Mujeres because I realized that Maggie's was about more than organic cotton," said Bena Burda, Maggie's Organic founder and president. "I needed to find sewers with a vested interest in us succeeding."
The cooperative started simply with 14 worker-owners sewing organic cotton hair scrunchies, T-shirts and camisoles.
"Though we were told over and over that the Nicaraguan women couldn't sew camisoles with the equipment they had, they learned quickly and after the initial 600 pieces on which they learned, their work has been beautiful," said Burda. Now the co-op has 47 worker-owners and there is a waiting list for deliveries.
Burda said that the road has been long and hard, but she'd walk it again.
"We put all our eggs in one basket, and it worked," said Burda. "We scaled back our product line. If the Nicaraguan women couldn't sew it, then we didn't make it. We should have gone out of business at least three times, but we didn't. We're still here and we're both making a profit. When you start with the basic premise that you're giving people the ability to determine their own future, it leads to incredible things. It's a model, not a lucky accident."
Maquiladores Mujeres is in Nueva Vida, just outside of Managua, Nicaragua's capital. It's an area with 80 percent unemployment. Maquiladores Mujeres worker-owners are not just empowered because they own their own business, they make almost four times the national per capita income. The co-op members are able to clothe and feed their families and to pay for school for their children. Woodard is working hard to create opportunities for more worker-owners.
"A big impediment to the cooperative's growth has been lack of consistent quality supply of raw materials," said Burda. Right now, fabric has to be knit in the United States and sent to Nicaragua. Last year, the co-op had $1.2 million in orders, but couldn't fulfill all of them for lack of organic cloth.
Woodard's vision is a worker-owned and controlled production chain that starts in the organic cotton fields and ends in the storefront. For Jubilee House, the next step is developing and building a spinning plant that will make yarn and cloth locally. Maquiladores Mujeres, in conjunction with Jubilee House, has applied for a $1.3 million loan from the Inter American Development Bank to build this factory in Nicaragua. If it gets the loan, Maggie's will commit all of its yarn orders to the cooperative, as well as all its fabric for the products the Maquiladores Mujeres is already cutting and sewing.
While Woodard is working in Nicaragua to increase productivity and create a supply chain, Jubilee House is looking for ways to share their experience and replicate this cooperative model.
"A lot of people think we were a flash in the pan," said Woodard. "We don't see it that way." Jubilee House has received a grant from the British government to tell the story of its experience and promote it as a replicable model. That report will be available online and in printed form by the end of this year. Maggie's is also assessing its role in promoting the co-op model.
Maggie's has seven full-time employees, and sells to more than 3,000 retailers, primarily through natural food distributors. Its sales grew 40 percent in 2004.
For more information, contact:
Nueva Vida Women's Sewing Cooperative: www.fairtradezone.jhc-cdca.org
Maggie's Functional Organics: www.organicclothes.com
Center for Development in Central America: www.jhc-cdca.org
Fair Trade Zone: www.fairtradezone.jhc-cdca.org