Cleaner Production in Jeans Laundries in Northeast Brazil - Implementing Environmental and Resource Management - page 81

Fig. 9.1. Typical scenery of a small laundry (source: photo taken by the author)
During the first half of the 1990s, more than 90% of firms in the sector were in-
formal (Meier and Wahl 2005). But for years the government of Pernambuco also
accepted the unspoken agreement in form of a 'devil's deal' (Tendler 2002). Gov-
ernment officials freed entrepreneurs from compliance with labour, environmental
and tax regulations in turn for votes at elections. Due to the absence of tax pay-
ments however, the government did not feel obliged to invest in improving the in-
frastructure. Another outcome of informality was the inability to access bank cred-
its and support from governmental agencies for vocational training, as well as
joining business associations. This situation started to change with the election of
a new board of the business association of textile industry, Sindivest, in 1997. The
new board of Sindivest started to take care of the interests of local businesses and
successfully lobbied for tax reductions (Almeida 2005). Regularization of enter-
prises enabled firms to obtain support in order to improve product quality and di-
versity. Clothes produced in the region were known to be cheap and of low qual-
ity. Only a few companies were able to sell their products in other important
markets in Brazil. This situation improved already, but urgently needs further ef-
forts to defend its market share in the face of the ongoing liberalization of the Bra-
zilian market and also to conquer other markets to ensure that this sector can sur-
vive.