Securing positive dynamics in RMG sector

STAR

READYMADE Garment (RMG) industry is one of the major contributors to Bangladesh economy in terms of employment, production, export and foreign exchange earnings. RMG contributes 13% of GDP, adds value to 78% of total exports and employs around 4 million workers, mostly women. Moreover, it has also created employment in related services. Bangladesh foreign currency earning has increased as a result.

Unfortunately, issues like poor working conditions in the workplace, lack of labour rights and worker unrest have left negative perceptions about the sector. Bangladesh is often criticised for its poor workplace standards in the factories and unfriendly conditions for the workers. The RMG sector came under national and international spotlight for its unsafe workplace after the Rana Plaza Building collapse at Savar on April 24, 2013. So far, the total number of deceased stands at 1,135.

In the last one and half years, the Rana Plaza incident has overshadowed discussions and deliberations related to the sector. It has also created scope for collaboration of the stakeholders and for undertaking various initiatives. Rehabilitation and reintegration of the workers are on-going. A number of positive changes can be seen in the RMG sector. The amendment of Labour Law 2006 was one such step. Bangladesh Parliament passed the Bangladesh Labour Law (Amendment) bill in 2013. Since the amendment, there has been a dramatic increase in new unions being formed and registered. In 2013, 96 new trade unions were registered with the Bangladesh Department of Labour (DoL) and, presently, 222 unions in the RMG sector are registered with DoL. Although there are debates regarding this sudden emergence of unions, the newly formed unions are challenged with establishing rights of the workers.

Increase in minimum wage was a significant change last year. RMG workers put forward their demand claiming that minimum wage should be $100 a month. After several meetings, the Official Wage Board proposed a 77% rise in the minimum wage for garment workers, which is equivalent to $66.25 per month. Pressure and movement of the workers led to the readymade garment factory owners agreeing on November 13, 2013 to pay Tk. 5,300 as minimum wage for entry-level workers.

In November 2013, three parallel safety pacts were tentatively agreed on common standards for plant inspections in the country. Experts from the three groups -- the Accord on Fire and Safety in Bangladesh, led by the European retailers; the Alliance for Bangladesh Worker Safety, led by American retailers; and the GoB led National Tripartite Action Plan—reached an agreement. Two big groups of retailers have already finished inspecting nearly 1,700 factories. The Alliance, representing 26 US-based garment retailers and brands, also completed initial inspection of 587 factories in July. The Accord, a platform of 189 European retailers and brands, recently completed inspection of 1,106 factories.

Representatives from the government, the garment industry—local and international—trade unions and non-governmental organisations came together in September 2013 to form a multi-stakeholder body named 'Rana Plaza Coordination Committee.' Between March 24 and September 15, 2014, a total of 2,832 claims were received from dependents of the deceased or missing workers, as well as from the injured workers. On April 22, 2,340 claimants were paid Tk. 50,000 through bKash. After a further 655 claims were received and verified, Tk. 50,000 was paid to the beneficiaries through the Dutch Bangla Bank. On October 1, 2014, 1,552 family members and dependants of the deceased workers and 35 injured workers were paid the 2nd installment through their bank accounts. All the payments have been funded through the 'Rana Plaza Donors Trust Fund,' which was set up to receive voluntary donations from donors from around the world.

RMG sector has the scope of expanding its business opportunity, increasing production and attracting more foreign investment. The manufacturers have taken various measures in an effort to tackle the negative situation in the industry post-Tazreen and Rana Plaza disasters. They are working on a roadmap to increase export and earn $50 billion by 2021 from garment export. The industry now requires long-term changes towards an accountable garment industry. Positive, relevant and responsible partnership of the stakeholders may be the key to restoring the image of RMG sector and building an image of a responsible sector.

Beside improvement of existing policy/legal environment, implementation of existing law and policy is crucial to bring the expected changes. Investment-friendly legal and policy environment in line with the international conventions, e.g. ILO C 121, and better institutional settings need to be ensured too. It's time for rethinking the compensation framework for workers and establishing a central RMG labour welfare fund.

Smart investment in infrastructure, development of communication and transportation, generation of power (to ensure constant power supply in the industry) are required for scaling-up productivity. Besides, use of new technology also needs to be encouraged to enable the industry to move towards modern environment of production.

Since a satisfied labour force is a prerequisite for sustainability and for increasing production, emphasis on trust building among the workers cannot be overstated. The practice of safety and security in the factories needs to be promoted by taking up extensive awareness campaigns. Moreover, capacity development initiative for the workers and factory management, and developing a comprehensive database of all the RMG workers, will bring greater returns.

The recent dynamics in garment industry have created a space for shifting responsibility of the stakeholders. Besides the traditional responsibility of the government, local manufacturers and the international buyers, the consumers should also come forward and play a new role in social responsibility. The representatives of workers and manufacturers should take initiative for effective negotiation with larger companies and investors for raising social commitment, perhaps revisiting the profit margin for the company and offering a portion of profit to workers as their contribution towards the welfare of the workers.

The RMG sector has evolved since the '70's even in the absence of legal and policy framework. More than 5,000 factories, representing the industry, have become an almost inseparable part of the global value chain. The trend of its stable growth indicates Bangladesh's potential to become the leading global player in readymade garments trade. It is important to seriously consider scope of development in all aspects. The risk of industrial disasters like fire and building collapse remains a common threat to the stakeholders. Issues like workplace safety, minimum wage and democratic participation of the workers require more attention and commitment. A responsible role of stakeholders is essential to address the existing challenges in the industry.

The writers are Country Director and Monitoring Expert -- LES (Rana Plaza) Project at  ActionAid Bangladesh,
respectively.