RMG sector: Pro-active moves but problems persist

Controversy continues to stalk our ready-made garment (RMG) sector despite positive efforts undertaken by the relevant authorities in this regard. This issue has assumed importance because it is the source of livelihood not only for more than 3.6 million workers in Bangladesh but also the largest employer of women workforce in any formal sector of the economy. There has been much discussion in recent weeks about the pitiable living conditions of RMG workers and the need to find proper answers to the problem.

An analysis based on a survey carried out by the Centre for Policy Dialogue (CPD) in 3,856 factories says  the living conditions of most of the workers leave a lot to be desired-both in terms of private facilities and also in their efforts to lead a sustainable healthy life. Another survey carried out by Bangladesh Garment Sramik Sanghati (BGSS) between June and July, 2018 among nearly 200 workers in 31 RMG factories found that many of the workers have to take loans to survive and most have to work an average of 60 extra hours a month in addition to routine daily duty. This, in turn, deprives them adequate rest and affects their health.

It may be recalled that the Ministry of Labour and Employment formed a minimum wage board and examined carefully the different facets related to this sector as they have evolved since 2013, the last time when the RMG sector's salary structure was reviewed. At that time the minimum wage was a total of Tk 5,300 per month. It used to be Tk 3,000 in 2010, Tk 1,662.50 in 2006, Tk 940 in 1994 and Tk 627 right at the beginning in 1985.

This time, after discussion with the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) the salary structure has been revised once again. The starting salary has been raised to Tk 8,000 per month. This has a break-up of Tk 4,100 as basic wage, Tk 2,050 as house rent support, Tk 600 as medical allowance, Tk 350 as conveyance allowance and Tk 900 as food expenditure.

The garment industry owners had apparently tried to limit it to a total of Tk 7,000 but Prime Minister Sheikh Hasina intervened and asked the owners to agree to add another Tk 1,000 to the salary package.

This dynamics means that there has been some progress. However, certain sections of the civil society and some RMG workers' associations consider that this increase in financial facilities has not been enough. They have started lobbying once again with the buyers from abroad and also some civil society representatives from developed countries.

The President of the Sammillita Garment Sramik Federation, a worker's right group, has urged the government to slightly raise the basic wage from the announced Tk 4,100 per month as other benefits such as bonuses and compensation are determined based on the worker's basic pay. This group has also urged the government to provide higher subsidies for the worker's accommodation, food, health and education (for their children) so that the workers are not overburdened with extra work to meet the increasing cost of living and inflation. Some activists on the fringe appear to have indicated that the total salary benefit should be at least equivalent in Taka terms to the current Bangladesh per capita income of US$ 1,500.

All these aspects reveal the sensitivity of the paradigm and the differences in views that exist relating to this issue underneath the surface.

This equation also includes the debate over trade union rights enjoyed by workers in the RMG sector. Despite improvements in workers' rights since the terrible Rana Plaza collapse in 2013, the RMG sector still appears to be a long way away from having functioning trade unions in the factories. Absence of this element has been pointed out to the relevant authorities by several foreign governments during their discussion with Bangladeshi representatives over the question of providing better financial facilities to Bangladeshi manufacturers from the RMG sector when they export their products to those countries.

A survey carried in this regard by the CPD has indicated that the workers' organisations continue to remain either weak or non-functional in different factories. Most of the workers, according to this survey, also appear to be unaware of their rights. It has also been pointed out that lack of any universal insurance scheme is affecting workers who need medical treatment.

It may be mentioned that lack of necessary compliance in different areas have led to Accord and Alliance severing their ties with 195 factories. That has cast a shadow over this sector.

Criticism with regard to suitable formation of trade union facilities has however paid dividends. The Cabinet Secretary, media reports say, has announced that under the draft Bangladesh Labour Act (Amendment) Bill, 2018, the percentage of worker's participation required for forming trade unions in factories is being reduced to 20 per cent from the existing 30 per cent. Under this proposed law, no child will be allowed to work in factories. Section 47 of the draft amendment also mentions that any female worker, who gives birth to a baby, will be allowed an eight-week period of leave within three days of informing the relevant authorities. If the factory authorities do not allow her to go on leave, they will be fined Tk 25,000.

Some other worker-friendly factors have also been introduced. Any worker who reports for duty during a festival will be given one day of leave and wages for two days after the festival. In the case of natural death, the family of the worker concerned will get Tk 200,000 (two lakh) as compensation, up from Tk 100,000 (one lakh) in the previous law. In the case of injury, a worker will get Tk 250,000 (2.50 lakh), double the current rate of Tk 125,000 (1.25 lakh). The application, quite understandably will have to conform to legal ramifications. The support of only 51 per cent of the workers will also be needed now against the present provision of two-third of total workers having to agree in case they want to call a strike. However, any illegal enforcement of a strike will be considered as misconduct.

One can see that both the government and the RMG industry owners are being pro-active and are trying to facilitate remedial action through constructive engagement. This has to be understood by the activists who are presently associated with this process both at home and abroad.

There is, however, one particularly important factor which needs convergence from both sides. This has been referred to recently during the Trade and Investment Forum Agreement (Ticfa) talks held in Washington in the second week of September with the USTR. This was an important meeting as the US government, a significant trading partner for Bangladesh, has suspended since June 2013 Bangladesh's trading privilege - the Generalised System of Preferences - citing poor labour rights and lack of workplace safety. These trading privileges are yet to be reinstated.

Manufacturers from the RMG sector during their discussion with US retailers and brands during the fourth round of their talks underlined the need for better prices for their products. It was pointed out by the Bangladeshi representatives that remediating the factories consistent with the recommendations made by Accord and Alliance had cost them nearly US$ 3.0 billion. Attention was also drawn to the fact that implementing the higher financial rates of payment agreed to with the government will add to their expenditure and wipe out any possibility of any profit in some factories.  This, in turn, would affect sustainability. The Bangladeshi contingent also requested for more US investment in the RMG sector to diversify their products and also move to the production of top-of-the-line up-scale garments.

It is understood that the retailers and representatives from western companies reiterated their inability to play a positive role in this regard despite their continuous references to observing the human rights of the workers. They have continued to give their familiar excuse that they are unable to raise their price as they are facing a crisis because of fall in demand. There was also no emphasis on applying pressure on the middle-men who make a lot of money by arranging the sale of the product to large retail units.

One feels that the current asymmetry in pricing needs to be addressed - sooner, the better. If this is done carefully then additional funds will be available for facilitating better wages for the RMG workers. The middlemen and purchasers could set aside 1.0 per cent of their earnings to create a special fund for looking after the socio-economic, education, training and health needs of the workers. The use of this fund could be monitored through a registered Board constituted by representatives from the buyers, the middlemen, the owners and the workers of factories which have registered trade unions. That could be done through transparency and accountability. This dynamics would definitely help to improve the scenario. 

One has to remember that it always takes two to tango in any dynamics.

Muhammad Zamir, a former Ambassador, is an analyst specialised in foreign affairs, right to information and good governance. [email protected]