After the recent Tazreen Fashions fire incident, which took away 111 lives, there seems to be a new awakening among all stakeholders in our apparel industry- be it the plant owners, exporters, government agencies, labour unions, development partners and most importantly the buyers as well as the official agencies in the buying countries. Many have started doubting the future of this industry segment as a whole. No, we don't want this thing to recur, we don't want any more unwanted deaths, unprepared deaths, uncared and unattended deaths in our manufacturing plants, especially in our most promising and competitive apparel sector. No matter, whether our labour is cheap or not, whether we do have 'proven calibre' or not, no civilized nation can afford to maintain its competitiveness on a sustainable basis in an irresponsible way. It does speak better neither for the industry nor for the country.
We got to fix our apparel sector. Be it a issue relating to human resources or industrial relations or labour standards or minimum wage or productivity or skill development or safety and security of workers Bangladesh got to address everyone in order to maintain the competitiveness of our apparel sector in the global apparel `supply chain'.
The country entered the apparel export market in 1978 with only 9 units and earned USD 0.069 million. During the last three decades this sector has achieved a phenomenal growth, due to policy support from the government and more importantly dynamism of the private sector entrepreneurs along with extremely hardworking but civic workers. Now the number of RMG units is around 5,000 and the export earnings have exceeded USD 19 billion with 145 countries using `made in Bangladesh' knit garments and 126 countries using Bangladesh woven products. Analysts are telling-the apparel export numbers can be more than doubled by 2020.
Recent statistics tells us, 3.6 million workers are working in the Readymade Garment (RMG) units, of whom around 80 per cent are women. RMG roughly covers 76 per cent of the total export of the country and is the highest earning industry in the economy. About 3.6 million men and women in more than 5000 factories, which is almost two-thirds of the number of employees engaged in the manufacturing sector, constitute the real backbone of the country's economy.
Against all these achievements, we just cannot also overlook the major issues and problems facing the industry, especially the RMG workers. The common problems being encountered by the RMG workers are low wage, irregular payment, forceful overtime, poor working environment, physical and sexual harassment, termination; more importantly accidents and deaths for safety and security failures.
Low wages have traditionally been a major strength of Bangladesh's labor-intensive apparel sector. The hourly wage rate in Bangladesh's apparel sector is lower than those in China, Vietnam and Sri Lanka. Besides, the low wage rate, other strengths of Bangladesh's RMG industry and RMG is highlighted below:
According to unofficial sources, only a few owners of garment factories pay the monthly wages and overtime bills to their workers in time and look after the welfare of the workers. In many factories, the owners deliberately keep at least two months' salary and overtime bills of the workers in arrears. The management does hiring and firing of workers randomly and retrenched workers, in most cases, are not paid their dues. Further in the absence of weekly holiday the workers; their families and their children are all being severely affected both mentally and physically. Subsequent accidents have proven that many garment factories in Bangladesh have no minimum safety measures, not even the required number of fire extinguishers. Some 227 garment factories in Dhaka alone do not have emergency exits. Most factories do not conduct the required monthly evacuation drills or even those who do, do not have identified fire warden in their plants or production floors, means there are work overlapping among production managers re: fire drills and fire safety assurance. According to unofficial sources, more than 300 workers were killed and 2500 others injured in fire incidents in garment factories across the country since 1990. Some of the victims were burnt alive and others died either from suffocation or in stampede. The recent incident in Ashulia has proven all these to be so ruthlessly true. Most of the RMG factories do not have any special reproductive health care for women workers to safeguard the motherhood. Due to absence of such healthcare along with congested and suffocating working environment, the trend of producing physically disabled babies is reportedly increasing.
One may raise a valid question: why should there be frequent fire incidents in garment factories alone when there are hundreds of other factories across the country? The answer is not that difficult to find. Most of the garment factories are housed in rented premises at commercial or residential areas. These buildings have not been built to accommodate factories having all the safety measures. According to national labour studies, there are only few inspectors for the entire industry -- almost the same number as in the 1970s, when the industry first sprouted. According to unofficial sources, 90 per cent of all garment factories in Bangladesh lacks proper industrial approval. Thousands of buildings escape scrutiny because the building inspection system is as old and decrepit as the buildings themselves.
Number of factories in different countries
Many issues concerning the Bangladesh RMG surfaced from time to time, the first being the child labour issue. An influential US labour organization forced the government and the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) to address the child labour issue. They had to phase-out child labour from RMG units and create facilities for their rehabilitation and schooling. Pleasing to note that child labour is a bygone history in Bangladesh apparel industry.
There is no denying that employers do enjoy upper hand in Bangladesh labour market where every third person is either unemployed or under-employed. But for the sake of better and quality output, the owners themselves need to be more aware of keeping their workforce satisfied by providing them with reasonable pay and ensuring other basic necessities. It goes below the dignity of any nation if the outsiders force its factory owners to comply with their own demand relating to better wages and freedom of associations for the workers and improved working conditions in the workplace.
Though the labour is readily available and cheap but comes at a cost. RMG sectors are facing the shortages of skilled workers and lack of mid managers. Though BGMEA along with H&M and SIDA, TESCO and DFID, and ministry of commerce, Bangladesh has taken the initiatives of skill development yet more such initiatives are required to meet the demand of the industry and to enhance the productivity of the industry; especially when the sector has started to feel the 'pinch' of labour shortage.
The diversity of apparel industry in US$500 billion's global market can be achieved with more process focus production system than the existing entrepreneur driven production system. Currently the main exports of apparel industry are in the "production of tangible activities". The export revenue can increase with pre-production of intangible activities such as R&D, Design, and post-production intangible activities such as marketing, service, etc. To achieve this diversity, the owners need to focus on the mid management with a sophisticated HR department specialized in apparel industry.
Infrastructural threats also need to be taken care of by government and stakeholders. Capacity of Chittagong Port, Dhaka-Chittagong four lane highways, and dedicated garments village may also help the overall industry. Dedicated basic study about apparel industry in the school, college, and university level may also create more awareness about this major foreign currency earning industry and also to prevent any future accidents.
The owners as well as buyers also need to take responsibilities for the existing and future production plants with proper safety and security. The new factories may also ensure the green production system to create a healthy environment for the workers, and the consumers. The buyers also need to
Contribute by taking the responsibilities of their consumers, producers, and labor. Buyers ethically cannot avoid the responsibilities of the workers life, simply by buying products at lower costs due to the extreme competition. The compliances, which ensure a healthy production system and no child labour, may also include the green production system contributed by stakeholders for a long term sustainability of the industry.
Bangladesh being the second largest apparel exporters is expected to play a major role in the global apparel market. With three decades of experiences, supply of cheap labors, huge number of entrepreneurs grown over the years Bangladesh has established a structural competitiveness in the apparel industry, which is likely to sustain for the years to come as the structure of most developed countries has declined in last 5 decades since the LTA (long term agreement regarding international trade in cotton textile) came into force in 1962, (Source: Discussion paper no 5, WTO). With the export doubling in a decade, Bangladesh apparel industry requires support from stakeholders. Entrepreneurs require investing more on the entrepreneurial skills development, improving the existing productivity, developing the living standard of workers and providing them a green healthy working environment. The stakeholders, policy makers, governments, buyers, donor and different development agency must cooperate with the entrepreneurs, policy makers, management and labors to achieve this.
In perspective of all this, we have to evaluate the situation with clear responsibility and judiciously. There is no way that the leaders of the RMG industry ignore the grievances of the workers. They can no longer afford to refrain from investing in the welfare of their workers and workplace. They would have to immediately look into some critical issues. A barrier to change in the Bangladesh RMG industry is the lack of understanding of global pressures to improve labour standards among middle-management. There is a need for rigorous training on industrial relations, human resource management, factory management, occupational hazard management, disaster management and continuity of business at the supervisory level to build more educated manpower instead of skilled one. More emphasis on gender issues is needed, as RMG sector middle management is predominantly female. The absence of hard evidence about the links between implementing core labour standards and increased profitability makes it difficult to establish the business case in support of improved labour standards. Most of the RMG units in Bangladesh are owner driven rather than process driven. This culture needs to be changed. There should be a listening culture in place, which will help to identify the opportunities as well as to foresee the imminent crisis.
Major global exporters in FY 2012 and Bangladesh exports
RMG sector in Bangladesh has come a long way in last three, especially two decades since 1990. The industry has crossed many hurdles to stay competitive. It has proved many predictions futile and wrong, and competed fiercely even after the abolition of quota. The credit for that achievement goes to both the entrepreneurs and the labourers; may be to the government too. Taking that fighting spirit ahead, the RMG sector must formulate an equitable solution for all the involved parties and ensure brighter future for the country as a whole. The near term reality for a country like Bangladesh remains to be competitive through only cheap labour, unless we can improve our infrastructure and fix the domestic economy dramatically as well as manage a shift to quality through better productivity and efficiency; more importantly by fixing the `managerial gap' in this sector. Some of the garments owners'(especially in the export processing zones) has recognized the hard realities and managing the transition well. The others have to take it or leave it. These `others' also include workers, policy planners, and citizenry and may be buyers too, as mentioned earlier.
Again coming back to the Tazreen incident, initially though the BGMEA leaders along with few `top brass' in the government smelt the same old `conspiracy' about the reason behind the factory fire, soon they came to realization that they have to `fasten their own seat belt'. This is obviously a `breathe of fresh air' for the stakeholders in the industry. BGMEA has been seen taking some proactive measures, to avoid `future surprises'. They must walk the talk now. Start working with the development partners, most importantly the large buyers and sourcing agencies to bring in `new standards' including the `green production environment' in this industry segment to avoid all possible surprises in future and ensure commitment to its' success.
Bangladesh apparel industry has come across a long way. As mentioned, it was not only for `cheap labour' or even `China plus one'. Entrepreneurship, work ethics, diversity, capacity and policy support also played a major role here. Buyers look for several types of garments from here in Bangladesh. It is one of the few countries among the peers who are producing for so many brands like- Target. Wal-Mart, Sears, K-Mart, TESCO, Sainsbury's, American Eagle, Abercrombie & Fitch, H& M, GAP, NEXT, Marks& Spenser, Aeropostale, Wrangler, Lee, Nike, PUMA, Adidas, PVH, Tommy Hilfiger, CK, Timberland, ZARA, ESPIRIT, Polo Ralph Lauren and may be what not. Despite lot of bottlenecks, Bangladesh has come up with the branding tag line of `yet, we deliver'. This is what will keep Bangladesh going. But we have to behave, we all have to behave including bit of more hand holding from the large buyers in order to pass on few extra bucks to the workers, who ultimately `call the shot'. I think, our future is good, provided we have a clear visibility about the destination.
Mamun Rashid is a banker and economic analyst: