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RMG sub-contracting—an \\\'overlooked\\\' risk factor

Shamsul Huq Zahid | April 30, 2014 00:00:00


The Bangladesh apparel industry has been at the centre of both national and international attention since the Rana Plaza collapse that had claimed an estimated 1135 lives on April 24 last year.

A flurry of activities involving both local and global stakeholders is now on to stop the recurrence of similar tragic accident in the future. Teams comprising local and foreign experts have been assessing safety standard of different apparel units. The issue of apparel workers' right to trade union (TU) has also got attention of major importing countries, including the USA.

The workplace safety is more of a compliance issue and the TU rights for the garment workers have always been a matter of government's policy decision, largely influenced by the owners of the apparel units.

Despite accidents that had taken place occasionally in a number of RMG units, the owners did never take the issue of work place safety that seriously. And the government, too, was not serious to compel the owners to strengthen their safety standards. Nor has it shown any genuine interest in granting the workers their right to be involved in TU activities.

But the deadly Tazreen Fashion fire and the Rana Plaza collapse have brought about a sea-change in the approach of two key players, the government and the owners. Both the parties, for the sake of survival of the country's RMG industry, are seriously trying to mend their lapses.

But the task of ensuring the safety standard, as suggested by the international buyers and the governments of the major importing countries, is proving to be a Herculean one, particularly for reasons of financial constraints. In the days following the Rana Plaza tragedy, the international buyers promised to make available a substantial amount of funds and logistics to help the Bangladesh RMG industry to improve its safety standard. But the assistance that has come by until now is very disappointing.

But the situation on the ground demands greater volume of assistance from the international buyers to help improve the safety standards of, at least, one-fifth of apparel units that are engaged in sub-contracting. The sub-contracting, an old practice of contracting out a part of the manufacturing job by the apparel units that receive export orders from international buyers, has been in vogue for long to help lower the cost of production on the part of actual exporters.

The apparel units that are engaged in sub-contracting have been non-compliant, particularly in matters of regular payment of wages and other benefits. Moreover, these units pay wages well below the rates fixed by the government. Since the sub-contracting units are not members either of the Bangladesh Readymade Garments Manufacturers and Exporters Association (BGMEA) or the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), they feel they do not have any obligation to pay wages at official rates. However, occasionally, some member units do sub-contracting when they fail to secure export orders.  

What has been more worrying is that the sub-contracting units give a damn to the need for maintaining the workplace safety standard. A recent study conducted by the New York University Stern Centre for Business and Human Rights has identified indirect sourcing, a non-transparent practice of sub-contracting, as the root cause of safety risk and poor working condition in Bangladesh's apparel sector.

What has been 'revealed' by the New York University is not anything unknown to, at least, three major stakeholders, the RMG unit owners, the government and the international buyers. All of them deliberately ignored the issues of safety-related risks and poor working condition at the sub-contracting units until the worst industrial accident at Rana Plaza.

The BGMEA and the BKMEA have not opposed sub-contracting, possibly, because they have found the practice rather helpful as far as their own cost of production is concerned. This has also been so, because the volume of work orders that otherwise compliant units receive from abroad, is at times found  to be beyond their own production capacity to ensure delivery on time. The government too did not bother to take up the issue of sub-contracting. But it should have prepared a guideline for these apparel units asking their owners to ensure minimum safety standard.

The two apex trade bodies in the apparel sector, naturally, would not take the responsibility of the non-member units engaged in sub-contracting. The buyers are not anyway involved in the issue. But the government can hardly disassociate itself. It has to ensure a minimum safety standard at the sub-contracting units which, in all probability, would continue their presence in the industry. In the first step, the government should formulate a guideline without any further delay, for the sub-contracting RMG units. At the same time, it should help these units financially in their task of improving safety standard. The government can also seek external assistance to this effect.

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