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[๐Ÿ‡ง๐Ÿ‡ฉ] Textile & RMG Industry of Bangladesh
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When will the RMG industry owners change?

After the fall of the Sheikh Hasina government, unrest has emerged in the readymade garment sector again. The garment sector is one of the mainstays of the country's economic growth. Turmoil in the sector and labour unrest are nothing new. Analysing issues pertaining to the rights of workers in the garment industry, owner-worker relations, as well as the political clout and power of the owners, Shawkat Hossain writes about reforms in the sector.
Shawkat Hossain
Updated: 22 Sep 2024, 16: 44

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Reforms are needed in the management of the RMG sector. Most important are reforms in the mindset and behaviour of the owners.Prothom Alo

Bangladesh's readymade garment sector is 45 years old. This garment sector is the source of 80 per cent of the country's export revenue. It also generates employment. As a single country, Bangladesh now stands second in readymade garment (RMG) exports.

So much has happened over these 45 years, but only one thing hasn't changed. And that is the mindset and behaviour of the RMG industry management. The garment sector is still run on those old conventional lines. The only thing that the persons concerned in this sector have learnt, is to suppress any movements by means of coercion and fear. The garment owners are so politically powerful now, they have no problem whatsoever to ensure all decisions are taken in their favour.

On the other hand, with all regular means of protest shut down, the garment sector workers have no alternative but to take to the streets in order to voice their demands. They have learnt no other way.

Bangladesh will graduate from the Least Developed Country status in 2026. In order to meet the demands of the day then, it is imperative that the RMG sector also undergoes significant changes in its system of management. This requires reforms. And work on this must start now. After all, Bangladesh's economy cannot survive without the RMG sector.

Owners' reforms needed first

The RMG sector has two owners' organisations, BGMEA and BKMEA. Selim Osman, a member of the much touted Osman family of Narayanganj, had been the president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) for a stretch of 14 consecutive years. He first became the BKMEA president in 2010 after Awami League came to power. He was elected the association's president once in 2012 and then the rest of the time he became president through understanding and by force.

He had also been the member of parliament of Narayanganj-5. He would contest from Jatiya Party, while his brother Shamim Osman was the Narayanganj-4 member of parliament from Awami League. Selim Osman's main task was to hold onto the parliamentary seat. Under their dominance, BKMEA contributed nothing to the interests of the industry.

Meanwhile, with one or two exceptions, being the president of BGMEA meant entering the hallowed halls of becoming a member of parliament or being mayor of Dhaka City Corporation. So their main task was to extend support to the government. Only the interests of the government and the owners mattered.

In 2009, a total of 23 owners of garment factories were elected as members of parliament. BGMEA accorded a reception to the members who were elected in the national election. The former president of BGMEA Annisul Huq had been the FBCCI president. The late Annisul Huq later became the mayor of Dhaka City Corporation. Thus a new door opened for the top leaders of BGMEA. After Annisul Huq passed away, Atiqul Islam, another former BGMEA president, became the new mayor.

From 2009 to 2019, whoever had been the president of this organisation, all became either mayor or member of parliament or was placed in some top position. For example, Salam Murshedy who had been BGMEA president from 2009 to 2011, later became MP from Khulna. The next president of the association, Shafiul Islam Mohiuddin, became an MP from a seat in Dhaka. The next president was former mayor Atiqul Islam, now absconding. Then Siddiqur Rahman, Awami League's commerce and industries secretary, was president for four consecutive years. The BGMEA president of 2005-06 Tipu Munshi also became MP and later went on to becoming the commerce minister.

Much earlier, two presidents Mosharraf Hossain and Redwan Ahmed, became MPs from BNP. Redwan Ahmed went on to become a minister too. They were presidents of BGMEA from 1991 to 1996.

SM Mannan was the last elected president of BGMEA. He was the general secretary of Dhaka city (North) Awami League. Known as Mannan Kochi, this BGMEA leader was in the committee for around the last twelve years or so. Politically active Mannan Kochi was kept on the committee to keep political links with Awami League and to suppress any labour movement.
Over the last 45 years, BGMEA has learnt one thing very well and that is to use various agencies of the government to suppress movements, keep wage demands at a minimum and extract benefits and facilities from the government. Labour leaders were linked to them too. They would support the owners in exchange of money. This would happen more at the time of fixing the wage structure.

Actually, BGMEA or FBCCI are basically the business branches of the ruling party. This applies to the business chambers too. So these trade bodies need to undergo reforms. Only then will the use of politics in the interest of business be curtailed.

Demands vs. discussions

The owners complain that the movements in the garment sector do not follow any conventions or rules. On the other hand, the labour leaders say there is no system in the RMG sector for formal bargaining. That is why the movements are not carried out in any regulated manner.

Due to international pressure after the collapse of Rana Plaza in 2013, the registration process for labour unions in the garment sector was relaxed. So far there are 1300 labour unions registered in this industry. In the remaining 70 per cent of the factories there are committees. In most cases, persons with allegiance to the owners are in the leadership of these unions or committees. Those who are not of that camp, are harassed in all sorts of ways after every movement.

After Sheikh Hasina fled from the country and the interim government was formed, like many others, the RMG workers too took to the streets with their demands. While the others have all returned to work, the unrest prevails in the garment sector. The owners can no longer use the intelligence agencies or police to threaten and scare them. In such circumstances, a way for a regulated manner to voice the workers' demands must be formulated. Also, a way for discussions to meet their demands must be created. And whenever there is a movement, random accusations of outside conspiracies, foreign instigation, etc, must halt.

The demands this time

The workers have at least 20 types of demands this time. The written demands of several factories have been analysed. The demands include, increase of annual incentive from 50 per cent, introducing provident fund, 15 days paternal leave, increase of tiffin bill from 35 taka to 50 taka, increase of attendance bonus, increasing maternity leave to 6 months, providing Eid bonus equal to net wage, increasing lunch allowance if working on Fridays, 20 days festival leave, earned leave 30 days, medical leave 20 days and payment of wages within the last five working days of the months.

The other demands of the workers are arranging for one free ultra-sonogram, providing the women with sanitary pads, increasing daycare facilities, two days leave during mensuration, installing an ATM booth, providing Vitamin C during pregnancy and arranging for eye tests and sunglasses.

In 2023 the minimum wage in the garment sector proposed by the workers was Tk 20,393, while the management proposed Tk 10,400. The workers were enraged at the management's proposal and took to the streets, resulting in the death of a worker. When the situation went out of control, the management proposed a minimum wage of Tk 12,500 and that was finalised. But when the movement continued, 43 cases were filed and 114 were arrested. While there is dissatisfaction with that wage, the workers are not demanding for a wage now, after the fall of the government. They are wanting certain benefits and facilities.

If wages and allowances are not paid regularly, workers will invariably take to the streets. If the present or future movements are to be halted, it is the garment sector management that needs to be reformed

The owners get all

The first wage board for the garment sector was formed in 1994 and the minimum wage was Tk 930. Now 30 years hence, the wage has increased to Tk 12,500. In the 1994-95 fiscal, export revenue from the garment sector was USD 2.23 billion (USD 223 crore). That revenue has now increased to USD 40 billion (USD 4000 crore). Government and international policy support had a significant role to play in this revenue increase.

For example, before the formation of the World Trade Organisation (WTO), from the time of GATT negotiations, Bangladesh would receive quota facilities up till 2004 under the Multi Fibre Arrangement (MFA). Even though the quota system was lifted in 2005, Bangladesh did not fall back in competition. It is receiving Generalised System of Preference (GSP) facilities from the European Union. Several countries, on a bilateral basis, are still providing Bangladesh with tariff-free market access.

In the meantime, in 1982 changes were made to the industrial policy. There were duty drawback facilities in place for exports. By this, while entrepreneurs paid duty when importing raw materials, this would be reimbursed after export. However due to delays, corruption and procedural problems, the bond facilities were put in place instead. Under this, the garment industry owners could import all sorts of raw material for garment manufacture, free of duty.

In 1986-87 the government introduced back-to-back LC. Under this system, after the export revenue was received, only then would the bank have to be repaid. Researchers feel these two policies have played a vital role for the advancement of the garment sector. Even after that, the government has provided all sorts of concessions including cash incentives. And whenever the garment owners were in a crisis, they have reached out to the government, and the government has fulfilled all their demands.

Giving, not just taking

The readymade garment owners never want to admit that business is doing well. Speaking to any garment factory owner, they will invariably say that business is in a bad shape, orders are dwindling, buyers are purchasing garments at low prices, production costs have shot up and the productivity of the workers here is low.

Yet leaders who work with the workers of the garment sector say that the wealth and the lifestyles of the garment owners do not indicate that business is bad. Even in 2022 the dollars rate was Tk 86. That dollar now stands at Tk 120. So they are receiving Tk 36 more than before for every dollar of their export earnings. Also, if they want productivity to increase, they must give workers fair wages and other facilities and benefits. You can't expect highest productivity with lowest wages. There must be an adjustment between the two.

Another problem in the garment sector is the trade related to waste fabric scraps known locally as 'jhut'. Leaders and activists of the ruling party control this business. The garment factory owners are obliged to sell the fabric scraps or 'jhut' to the political goons. Whenever there is a change in the government, the control of this trade changes hands. So long the Awami League men had controlled this business, now the BNP men are trying to take over.

This too has provided instigation in the present movement. The garment factory owners say if they got fair price for the fabric scraps, they could use this for the workers' welfare. Whether they actually would or not, is another question. But this problem must be resolved. This requires political commitment and the rule of law, and that needs to be ensured by the government.

If wages and allowances are not paid regularly, workers will invariably take to the streets. If the present or future movements are to be halted, it is the garment sector management that needs to be reformed. Most important is the reforms of the owners' mindset and behaviour. The habit of giving, not just taking, must be formed.

* Shawkat Hossain is head of online, Prothom Alo​
 

British-Irish firm to invest $36m in Bepza EZ

British-Irish company Deltaport Ltd will invest $36 million to set up a garment factory in the economic zone of Bangladesh Export Processing Zones Authority (Bepza) at Mirsarai in Chattogram.

The company has set a target to annually produce 20 million pieces of protective clothes, workwear, various garments, PPE, hospital gowns, masks, bed sheets, curtains and other items.

The factory will create employment for 5,980 Bangladeshi nationals.

Deltaport Ltd is a sister concern of Eastport Ltd, a garment manufacturing company of the Cumilla EPZ that has been operating since 2013.

According to a press release, Md Ashraful Kabir, member (investment promotion) of Bepza and Junaid Iqbal Umerani, representing Deltaport, signed the agreement at the Bepza Complex in Dhaka recently.

Major General Abul Kalam Mohammad Ziaur Rahman, executive chairman of Bepza, Mohammad Faruque Alam, member (engineering), and ANM Foyzul Haque, member (finance), were also present.​
 

Fresh labour unrest shuts 70 apparel factories in Bangladesh
Staff Correspondent 23 September, 2024, 23:28

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Army personnel detain 24 people on charge of creating anarchy in the industrial area at Kaliakair in Gazipur on Monday. | New Age photo

The authorities of at least 70 industrial units, including 59 readymade garment factories in Savar, Ashulia, and Gazipur, were forced to suspend operations on Monday as fresh workersโ€™ protests broke out over several demands, including a wage hike.

According to the Industrial Police, out of 70 industrial units, 52 are located in Savar and Ashulia while the rest 18 factories are in Gazipur industrial area.

Law enforcers detained 21 individuals in Gazipur on the charges of instigating labour unrest in different factories.

Against the backdrop of fresh labour unrest, the Bangladesh Garment Manufacturers and Exporters Association convened an emergency general meeting on Monday night at its headquarters in Uttara in the capital.

During the meeting majority of the factory owners opposed to increase wage and raise the annual increment from the current 5โ€“10 per cent.

They argued that the new wage was set in December 2023 and the sector was currently grappling with several challenges stemming from both global and internal factors, including a decline in global demand and high production costs exacerbated by rising energy prices, and elevated bank interest rates.

Factory owners said that production had been suspended for over two weeks this month and that they had previously experienced closures during the Julyโ€“August anti-discrimination movement, which led to buyers shifting work orders to other countries.

The emergency general meeting was still in progress at the time of filing this report about 8:30pm.

Ashulia zone Industrial Police superintendent Mohammad Sarowar Alam told New Age that total 43 factories, mostly RMG units in Ashulia belt, were closed under the section 13(1) of the Bangladesh Labour Act, while eight others announced general holiday on Monday amid the labour unrest.

Sources from the Industrial Police headquarters said that production in 18 industrial units was suspended in Gazipur area on the day.

Police sources said that workers from the Seasons Dress garment factory in Gazipur took to the streets on Monday morning, blocking the Dhaka-Mymensingh highway over unpaid wages for part of July and August.

Meanwhile, workers from Generation Next in Ashulia also gathered on the Bipail-Abdullahpur road, demanding wage payments and other issues.

Industrial Police and Army personnel were dispatched to both locations, where demonstrating workers were joined by workers from other factories, they added.

The police said that workers from many factories on Monday demanded a wage hike, which was a fresh demand since no such demands came earlier from the protests that began since the end of August to continue for over three weeks.

On September15, the unrest was brought under control as most factories reopened and workers returned to work, following a tripartite call from factory owners, labour leaders, and advisers of the industries, labour and employment, and fisheries and livestock.

The situation improved last week despite protests within some units over various demands continued.

But from Sunday the situation deteriorated again when workers blocked two major highways in Ashulia and Gazipur over issues, including unpaid dues, wages and tiffin bonuses.

Considering the situation, the labour ministry on Monday held a meeting with factory owners and labour leaders to find ways to calm the situation.

At the meeting labour leaders placed a 18-point demand compiling the demands of agitated workers in several garment factories in Ashulia and Gazipur.

The demands includeโ€”reconstitution of the wage board to set new minimum wages for workers; quick implementation of the 2023 minimum wage in factories; amendments to labour laws; immediate payment of all outstanding wages; and increase in attendance bonuses, tiffin bills and night allowances at the same rate across all factories.

The demands also include establishment of provident funds in all factories; 10 per cent yearly wage increase and food rations for workers; no blacklisting of workers following the biometric database; withdrawal of cases against those involved in the 2023 wage protests; enactment of guidelines to limit the dominance of jhut (garment factory waste materials) business; and establishment of non-discriminatory employment practices in factories.

The demands further include compensation and medical care for workers killed or injured during the July-August movement; initiatives to support the well-being of Rana Plaza survivors; mandatory establishment of day-care centres in all factories as required by labour laws; and stopping of unlawful terminations; and extension of maternity leave to 120 days.

Labour secretary AHM Shafiquzzaman at the meeting assured labour leaders that the government was addressing several of the workersโ€™ demands, including compensations for those killed in the July-August movement and the Rana Plaza building collapse.

Some issues, such as wage reviews, depended on policy decisions, and the ministry was committed to working on them, he said adding that factory owners agreed to meet some factory-level demands, including various bills, payment of dues, and the implementation of wages.

Regarding other matters, including the 10 per cent yearly increment, factory owners said that that they would announce their decision following discussions with fellow factory owners.

During the meeting, factory owners termed security as the prime concern for running factories at the moment.

Export orders were shifting to other countries due to the unrest forcing many factory owners to struggle to pay September wages in time, they said.

Hameem Group managing director AK Azad, former Bangladesh Textile Mills Association president Tapan Chowdhury, Bangladesh Garment Manufacturers and Exporters Association president Khandoker Rafiqul Islam, Garment Workers Trade Union Centre president Montu Gosh, Sammilita Garment Shramik Federetion president Nazma Akter, Bangladesh Garment and Industrial Workers Federation president Babul Akter, and Sramik Samhati president Taslima Akhter, among others, spoke at the meeting.​
 

Factory owners accept all 18 demands of RMG workers

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Army personnel are posted outside a shuttered garment unit in the Narasinghpur area of Savar. Industrial belts have been hit hard by unrest as garment workers agitated to have their demands met. The government and factory owners yesterday accepted all of their demands. Photo: Aklakur Rahman Akash

Garment factory owners in Bangladesh have accepted all 18 of the demands of the workers, such as ensuring provisions for tiffin and night allowances, to tame ongoing unrest in the sector.

Labour and Employment Secretary AHM Shafiquzzaman announced the decision at a press briefing at the labour ministry in Dhaka yesterday. He was joined by four advisers to the interim government, union leaders and leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

According to our Savar correspondent, around 55 garment factories in the Ashulia area remained closed yesterday.

Normal operations in the industrial zones are expected to resume on Wednesday as demands have been addressed, Labour and Employment Adviser Asif Mahmud Sajib Bhuiyan said at the briefing.

The arrears in salary will also be cleared, he said, adding that normalcy would be restored to the sector from today.

Home Affairs Adviser Jahangir Alam Chowdhury echoed Bhuiyan's sentiments, urging workers to return to their workplaces.

"I want to see all industrial units operating from tomorrow [Wednesday]. Please do not take the law into your own hands," Chowdhury said at the meeting.

Speaking on behalf of union leaders, Kutub Uddin Ahmed, former secretary general of IndustriALL Bangladesh Council, also urged workers to return to work.

He added that different quarters outside the garment sector had been instigating the unrest.

The workers' key demands included implementing the existing minimum wage in all factories and settling all outstanding payments. Additionally, workers sought to raise attendance bonuses by Tk 225, night shift bonuses by Tk 10 and tiffin allowance by Tk 10.

Shafiquzzaman said around 1 to 2 percent of garment factories did not implement the latest wage structure that came into effect in December last year.

He added that the government would also provide support in dense industrial areas under the Trading Corporation of Bangladesh's open market sales programme, allowing workers to buy essentials at cheap rates.

The government will frame a policy to centrally control the jhut (waste fabric) business as control for the trade of scrapped clothes emerged as one of the main reasons for the unrest.

A separate review committee will submit a report on the industry's capacity to review the wage structure, the labour secretary said, adding that the government will also review police cases against workers to ensure they are not harassed.

Md Sarwar Alam, superintendent of Ashulia Industrial Police-1, said yesterday: "Of the closed factories, 46 were shut today due to workers' protests over demands for salary increases, increments and other benefits while nine had declared a general holiday."

Labour leaders reported that workers of several factories gathered in front of the premises in the morning but left when they were found to be closed.

According to the Industrial Police, the closed factories are primarily located along the Bypail-Abdullahpur road in the Jamgora, Narasinghpur, and Zirabo areas of Ashulia.​
 

A welcome decision to resolve RMG unrest
Cooperative efforts, sound leadership vital going ahead

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VISUAL: STAR

We welcome the decision of garment factory owners to accept all 18 demands of agitating workers, a much-needed development that will hopefully resolve the unrest that plagued the sector for weeks. According to a report by this daily, factory owners on Tuesday agreed to workers' demands including enforcing the minimum wage in all factories, clearing outstanding payments, provisions for tiffin and night allowances, etc. The government will also help workers in dense industrial areas buy subsidised essentials through its Open Market Sales (OMS) programme, regulate the scrapped clothes business (a key source of the unrest), and review police cases against workers to prevent harassment.

As expected, the decision has had an immediate impact as most factories in Savar and Ashulia reopened on Wednesday, with workers returning to their duties in a peaceful manner. Security has also been beefed up to prevent any untoward situation. However, some factories still remained closed, mainly owing to disruptions caused by financial constraints. This again highlights the urgency of addressing the losses suffered by factories not just during protests but also in the unprecedented mayhem that ravaged various industrial units since the regime change on August 5. The truth is, while we recognise the importance of Tuesday's decision to restore order, we cannot ignore the tremendous challenges that lie ahead for the industry.

The cumulative effect of frequent factory closures and suspensions of production and the vandalism witnessed over the past month and a half is that a number of international buyers have diverted their orders to competing nations. We have earlier commented on how this situation is affecting business, especially after many requests for value-added garments were cancelled or postponed because buyers had to cancel their trips. For a country heavily reliant on its garment exports, such shifts in buyer confidence and preferences do not bode well for both the sector and the country.

The diminished work flow will likely continue to haunt the industry, affecting not just workers and owners but also the scope of investment in modernisation, sustainability, and compliance with global standards. As highlighted by an industry insider, a consolidation phase appears imminent with smaller and financially weaker factories potentially closing. There are lessons for all stakeholders in this: the government, factory owners, and union leaders. Going ahead, they all must ensure collaborative efforts and sound leadership to prevent any further turmoil. The government, in particular, must undertake a comprehensive review of the health of the industry and provide necessary support to help it rise again.​
 

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