The Financial Express

RMG sector highly deficient in corporate accountability: Study

| Updated: May 09, 2021 15:42:02

RMG sector highly deficient in corporate accountability: Study

Around a quarter of readymade garment (RMG) factories had retrenched workers during the first wave of the Covid-19 pandemic despite receiving stimulus packages, according to a recent study that assessed the state of corporate accountability indicators in the country's apparel sector.

Most corporate accountability indicators in the sector are still at the very elementary level, the study has found.

The indicators include the adoption of corporate values, governance, transparency, and disclosure.

The livelihood conditions of the garment workers are still vulnerable with declining family income, said the study titled "Corporate Accountability of the RMG sector in view of Covid Pandemic: Challenges in Ensuring Workers' Wellbeing".

The study has also revealed the deteriorating service conditions that the RMG workers had to bear with during April-July period of last year.

The findings were disclosed at a virtual dialogue on Saturday, jointly organised by the Centre for Policy Dialogue, the country's oldest private think-tank, and the Shojag Coalition. Commerce Minister Tipu Munshi was the chief guest at the dialogue. CPD's distinguished fellow Professor Mustafizur Rahman chaired the dialogue.

CPD executive director Dr Fahmida Khatun, Shojag Coalition team leader Maheen Sultan and Christian Aid Bangladesh country director Pankaj Kumar, among others, also spoke.

CPD conducted the study on 102 factories and 400 workers, including 100 unemployed workers in Dhaka and Gazipur.

The study found that many of the workers had to reduce food intake, sell assets, use savings and make higher personal borrowings.

It suggested strengthening corporate accountability to ensure workers' well-being during the Covid-19 pandemic.

The joint study also revealed that some 25 per cent of the surveyed garment factories retrenched workers despite receiving government stimulus package to pay wages from April to July last year.

Around 30 per cent of workers complained about increased work- pressure and 22 per cent about rise in work-related harassment during the pandemic.

The study also revealed that 21 per cent of the workers, who were terminated during the Covid-19 pandemic, are yet to receive their lawful benefits while 9.0 per cent of workers' jobs transformed into contractual one.

The corporate values maintained by the RMG enterprises are yet to reach the 'basic' level as the majority of factories (82 per cent) indicated that they have some kind of guiding principles for business operations but those are not made public, CPD research director Dr Khondaker Golam Moazzem said while presenting the study findings.

Transparency and disclosure are the least developed areas, in terms of corporate accountability in RMG enterprises. Only 40 per cent disclosed their factory-related information, 21.6 per cent financial support from the government and 41 per cent published annual reports, he said.

Regarding the workload, he said that some of the sections of the Bangladesh Labour Act 2018 (section 324, 100, 102 and 105), which were withheld during the pandemic, are partly responsible for the higher pressure of work, and work-related harassment.

Workers do not feel free in speaking against any malpractices as they feel threatened to be 'blacklisted' which would stop getting job in the RMG sector in the future, he said, adding that in cases, the workers often could not challenge the decisions taken by the management.

A large section of enterprises, which are small and not members of BGMEA but engaged in the RMG value chain, needed to be brought on board to practice corporate accountability that included dimensions of governance, labour law compliance, freedom of expression and disclosure practices, he noted.

According to the study, about 67.6 per cent of the factories have applied for loans under the government's stimulus package and 62.7 per cent received subsidised credit for four months.

All RMG factories were not included and, therefore, all RMG workers were not supported.

Some 21.4 per cent of the surveyed factories could not pay anything to the retrenched workers.

The majority of workers were laid off during the first phase of Covid (April-May, 2020) when enterprises received government support to pay workers' wages with the condition that no workers would be laid-off of or retrenched.

Brands/buyers were generally not responsive to the issue of workers being retrenched/laid off from their partner factories.

Only 14.7 per cent factories received requests from brands not to lay off/retrench workers while only 1.0 per cent factories' brands agreed to accommodate related costs for not laying off the workers.

The study recommended making disclosure of factory-related corporate accountability practices through official websites, withdrawing the decision of withholding the provisions of BLA, extending membership to non-member factories, enhancing social dialogue through effective functioning of participation committees and trade unions, operationalisation of mobile financial services/bank accounts for workers' wages, using social insurance schemes for paying dues of unemployed workers and promoting gender-responsive social safety net schemes.

Speaking at the dialogue, the commerce minister said it is the duty of the owners to ensure that workers received their due.

Bangladesh Center for Workers' Solidarity (BCWS) executive director Kalpona Akter suggested Bangladesh Garment Manufacturers and Exporters Association (BGMEA) to publicly disclose information on the arbitration settlement process.

BGMEA president Faruque Hassan said its arbitration cell is very active and he will work towards ensuring the recommendations to share more information on arbitration settlement process.

He, however, said they were not aware of blacklisting workers using central data base.

Bangladesh Legal Aid and Services Trust (BLAST) honorary executive director Barrister Sara Hossain recommended virtual processes of Labour Courts and also allowing them to conduct alternative dispute resolution and give emergency orders.

Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) vice president Mohammad Hatem laid emphasis on responsible trade unionism and social dialogue.

He claimed that layoffs and non-payment of wages did not happen at a large scale, and BKMEA made alternative arrangements in some cases.

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