Contribution to central fund for garment workers falls 14.2pc

The contribution of garment factories to the fund set up to provide financial support to garment workers fell 14.20 per cent to Tk 55.83 crore last fiscal year due to the coronavirus pandemic and some banks' negligence.

The Central Fund for the Readymade Garment Sector received Tk 65.06 crore from apparel exporters in the fiscal year of 2018-19.

The government formed the Central Fund in 2016 and it is managed by the labour department. Since the inception, about Tk 238.99 crore has been deposited by the garment exporters, said Md Amir Hossain, the director-general of the Central Fund.

So far, about Tk 85.39 crore has been distributed among the eligible garment workers, their heirs or children in grants.

The beneficiaries include heirs of 3,988 deceased workers, who received a total of about Tk 79.41 crore.

Workers of seven member factories of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) which had closed down got about Tk 1.40 crore in compensation.

The workers of another factory belonging to the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) received Tk 51.56 lakh.

Some 1,006 workers who fell ill received Tk 2.85 crore. Besides, 602 meritorious students who are children of the workers were paid Tk 1.20 crore in stipends, Hossain said.

However, the parliamentary standing committee on the ministry of labour and employment has alleged recently that the volume of the fund has not increased in keeping with the country's export earnings due to the negligence of some lenders, according to a letter of the labour ministry to the BB.

Apparel exports stood at $28.14 billion in FY17, $30.61 billion in FY18, $34.13 billion in FY19, and $27.83 billion in FY20.

On October 5, Bangladesh Bank asked banks to deposit 0.03 per cent of the encashed export earnings at the central fund.

In June 2016, the central bank instructed lenders to deposit the money to the fund but there is an allegation that some banks have not followed the instruction properly.

The lenders have not deducted the amount of the export earnings as per the rules. Against the backdrop, the volume of the fund has not increased as expected, the BB said in a notice.

"We request the garment workers to apply to the central fund through the BGMEA and the BKMEA for the financial support," said Hossain.

There are 3,608 garment factories in Bangladesh that export products, he said, quoting data from the Export Promotion Bureau. But the central fund does not know how many are contributing to the fund, Hossain said.

About Tk 45.91 crore was deposited in the fund in the fiscal year of 2016-17. No money was distributed in grants in the first year of the fund.

A total of Tk 57.30 crore was deposited in the FY18 and Tk 36.69 crore was distributed among the heirs of 1,852 deceased garment workers.

Another Tk 21.51 crore was spent in the FY19 for the purpose of compensation, treatment expenditure and stipends. The fund spent Tk 24.69 crore in the FY20.

As of September in the current fiscal year, the fund received about Tk 9.78 crore. The grant stood at Tk 1.49 crore so far in the current fiscal year, Hossain said.

The account of the central fund for the garment sector is maintained at the Ramna Corporate Branch of Sonali Bank in the capital.

A garment worker or their heirs would get Tk 3 lakh from the fund in case of death or grave injuries at the workplace. In case of illness or injury that render them disable or death outside of workplaces, a worker or their beneficiaries would get Tk 2 lakh.

A worker will receive Tk 1 lakh if they face any workplace injury, which causes mutilation but not a permanent disability, according to the labour ministry.

Besides, the children of workers will get Tk 20,000 in stipend if they manage a cumulative grade point average of 4.5 and above in the secondary school certificate examination.

Female workers are entitled to Tk 25,000 as maternity benefit from the fund.