“Distressed” RMG Industries

The challenges our RMG industry faces as we approach 2018 when the current covenant expires are enormous, and the mood of the supportive, but fickle-minded buyers and multinational community might turn sour with another major industrial accident or disruptive labour unrest. As recent experience shows, time is not on our side and urgent and critical additional measures need to be carried through to reach the target of $50 billion export in the face of shifting alliances and global market forces. Others, including some of the international participants voiced their concern that Bangladesh appears to have got a bad press. Areas where further progress was needed are labour organisation in EPZ, negative publicity regarding harassment of NGOs and labour unions, and lack of data and transparency on factory inspections. 

This, in a nutshell, was the conclusion at the two-day international conference held at Harvard University on June 6-7, 2015 which was attended by over 200 participants from Bangladesh government, BGMEA and BKMEA, international organisations, and Bangladeshi experts from the US academic and private sector. For the second year, the Bangladesh Development Conference focused on the Bangladesh textiles industry and is a continuation of the efforts of the organisers to shed light on the progress of the Bangladesh garments industry and discuss the challenges it faces.  

The theme of this year's conference was "Transformation Challenges and Opportunities for Bangladesh Garment Industry" and was organised jointly by Harvard University South Asia Institute, Harvard University Center for the Environment, and International Sustainable Development Institute (ISDI), Inc. In his presentation on "Best Practices in Industrial Relations for Sustainable Growth", the Labour Secretary Mikail Shipar gave a quick overview of the progress made by Bangladesh in labour relations, workers' safety, and compensation to victims of Rana Plaza disaster. Nazma Akter, President of Sommilito Garments Shromik Federation strongly voiced her concern about some of the hurdles that labour leaders face as they attempt to increase the number of unions in the RMG sector. 

Some of the more interesting conversations during this conference occurred along the following threads:

1.    How to estimate the total number of factories that are operating in the shadow market unregulated by the government?

2.    After the year 2018, when the current agreements on safety and remediation run out, will the country be able to monitor the RMG sector and continue the progress towards safe workplace and fair wages?

3.    Can Bangladesh stay competitive as the cost of the reforms and retrofitting mount?

4.    Will the world be willing to support the Bangladesh garment industry if the price offered goes up with a surcharge for "Greener RMG"? 

The discussions on these questions were informative and led to some clear directions. John Smith, Adviser and International Coordinator Textiles and Garments, UNIDO, voiced the sentiment - which was supported by official, and garments industry, representatives - that Bangladesh must avoid another industrial accident similar to the Rana Plaza collapse since that might mortally wound the economy. There was also a consensus that the current practice of subcontracting must be better managed and the small and medium sized factories brought under regulatory supervision, particularly in view of the fact that there was currently a lack of data on many factories in the lowest tier out of 6,800 which are now operating under the radar. Various suggestions were also offered to better monitor the Utilisation Declaration to improve compliance of SME's.

Dr. David Weil, Professor of Boston University and Administrator of the Wage and Hour Division of the US Department of Labour in his keynote speech discussed the challenges he faces in his role as an enforcer of minimum wage laws in the USA. He stressed the need for unannounced audit visits and the obstacles that staff shortage pose in this task. 

Steven Greenhouse, a news correspondent for The New York Times, revealed that while he was doing a report on Bangladesh labour practices, he was threatened by some industrial leaders with lawsuits. He voiced the need for strong labour representation to keep workers safe, and declared that no amount of government inspection in isolation is sufficient to ensure compliance. He also voiced the need to protect workers and "whistle blowers" against retaliation.  

At the Conference, a document circulated by International Labour Rights Forum based on a report by a delegation visiting Dhaka on the second anniversary of the Rana Plaza disaster, identified some gaps in the administration of the Rana Plaza Trust Fund, support for surviving family members, and implementation of the various measures adopted in the wake of the disaster in 2013. In contrast, Sanchita Saxena, a researcher at University of California, Berkeley, and author of a comparative study on garment industries in Bangladesh, Sri Lanka, and Cambodia, offered a more optimistic point of view on Bangladesh RMG. Her optimistic outlook was based on the active role played by women in leading the change dynamics in Bangladesh.  Her book, Made in Bangladesh, Cambodia, and Sri Lanka, takes to task the misconceptions prevalent in the Western media on the practices and conditions prevalent in the Bangladesh garments sector.  Saxena is of the opinion that "it is important to recognise the improvements thus far" and to recognise that "manipulation of trading regime has created and continues to create both incentives and disincentives for the various stakeholders in this industry." 

The writer, an economist, writes regularly on policy issues. He recently participated and presented at the Harvard Bangladesh Conference 2015.