Bangladesh: Safety, compliance, welfare ruled RMG sector

29 Dec '17

6 min read

Decisions to amend relevant laws, restart 13 closed mills, cover garment manufacturing-exporting units under the labour ministry’s welfare fund, adopt standard operating procedures of the International Labour Organisation (ILO), map all garment factories and act on workplace safety and compliance marked the year in Bangladesh’s textile and garments sector. Dipesh Satapathy sums up the developments.

In November, Bangladesh decided to amend its labour law and the Bangladesh Export Processing Zones Authority Law to comply with the European Union (EU) recommendations. The EU had earlier called on Bangladesh to show tangible progress on labour rights to avoid temporarily losing the generalised system of preferences (GSP) benefit that allows the country duty-free export to the former.

In the same month, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) wrote a letter urging the labour ministry to form a minimum wage board to review the existing wages of the readymade garment (RMG) workers. Industry insiders, however, say, the move followed international pressure and is aimed at averting a likely labour unrest. The BGMEA urged the government early this year to establish two new industrial zones near Dhaka and Chittagong.

In June, the association requested that tax at source for the RMG sector, which was increased from 0.7 per cent to 1 per cent, should be withdrawn for the next two fiscals and corporate tax be reduced to 10 per cent from the proposed rate of 15 per cent for the next five years.

The cabinet committee on economic affairs in December approved a proposal from the Bangladesh Textile Mills Corporation (BTMC) to restart 13 textiles mills, shut down 25 years ago due to losses, and run them under a public-private partnership initiative. BDT 15,200 crore will be allocated to purchase new machinery to replace the existing ones and run these mills.

Digital RMG Factory Mapping in Bangladesh (DRFM-B), a major first-of-its-kind initiative to map all apparel factories and disclose location and data on garment factories, was launched in August. The project is being implemented by Dhaka-based BRAC University’s Centre for Entrepreneurship Development (CED), coordinated by BRAC USA, with the BGMEA as a strategic partner, along with lead funding from C&A Foundation.

Between May and July, the government adopted standard operating procedures (SOPs) relating to unfair labour practices and trade union registrations. Trade union representatives are now better aware of how these SOPs have to be implemented, according to the ILO office in Dhaka. ILO feels this will help facilitate freedom of association in the country and offer greater clarity and transparency in the process.

Prime Minister Sheikh Hasina announced in August that RMG manufacturing and exporting units will be covered under the labour ministry’s central fund from which a worker or his children can get BDT 3 lakhs in case of grave injuries or death at workplace. If the injury or death is outside the workplace, the compensation will be BDT 2 lakhs.

The labour ministry welfare fund, created with 0.03% of the export volume of the industries under BGMEA and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), is solely aimed at providing financial support to the workers’ families.

The Alliance for Bangladesh Worker Safety, a platform of North American retailers that sets timeframes and accountability for safety inspections and training and workers’ empowerment programmes, decided in August not to extend its tenure in the country after its expiry in mid-2018. This was in contrast to a June decision taken by another platform of European retailers, the Accord on Fire and Building Safety, to extend its tenure in Bangladesh for three more years until 2021.

Accord’s tenure will also expire in July 2018. In October, the Bangladesh high court halted Accord’s second term due to its tenure being extended without government approval.

According to Alliance’s latest findings, 85 per cent of all required factory repairs have been completed, 80 per cent of high-priority repairs done, while overall remediation has made 80 per cent progress at RMG factories under Accord inspection.

In September, garment makers in Bangladesh proposed forming a factory inspection and remediation agency, similar to Accord and Alliance, to operate under an ombudsman chosen by the prime minister's office. To be called 'Shonman' (respect), the platform will have a steering committee comprising representatives from the BGMEA, the BKMEA, the ILO, the commerce and labour ministries, various brands, and trade unions. Neither the government nor the BGMEA will have veto power.

It has been reportedly agreed that the Accord will be granted an extension to operate beyond its expiry date, if the proposed national regulatory body is not ready to take over its work.

There is a need for the Bangladesh apparel industry to continue to nurture the Centre of Excellence for Bangladesh Apparel Industry (CEBAI), launched in 2014 to address the skills gap in the sector, to support the industry move up the value chain and gain further share in the world market, CEBAI president Mohammad Atiqul Islam said in December. CEBAI is run by the BGMEA and was supported by the ILO, Sweden and leading international fashion retailer H&M until November 2017.

The ILO concluded a comprehensive labour inspection training programme in June, training 239 inspectors in boosting working conditions and worker safety.

The EU announced in May that the Sustainability Compact, a joint initiative of the Bangladesh Government, the EU, the United States, Canada, and the ILO that promotes improvements in factory safety and labour rights in Bangladesh's RMG manufacturing industry, has made fantastic progress.

HSBC Bangladesh in August arranged $46 million in low-cost foreign currency for apparel exporter Viyellatex for the purchase of goods, equipment and technology from suppliers in Switzerland, Japan, India, Germany and the United Kingdom for a new spinning mill.

Deshbandhu Textile Mills announced in July that it will set up a garment factory in Uttara Export Processing Zone in Nilphamari by investing $53.77 million.

The country’s first-ever garment factory to facilitate income of prisoners was inaugurated in December at the Narayanganj district jail. The BKMEA trained around 400 prisoners to run the factory in two shifts. (DS)

Fibre2Fashion News Desk – India

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