MoC issues guidelines on RMG subcontracting

Subcontracting readymade garment (RMG) factories, under an official guideline issued recently, are now required to take mandatory membership of their respective apex trade bodies for doing business, officials have said.
Besides, they are also required to put in place safety measures required for the workers and for other purposes, they have added.
The Ministry of Commerce (MoC) finalised its set of guidelines for the subcontracting units after more than six years.
The MoC issued a circular in this connection on May 27 last mainly to implement the National Tripartite Plan of Action (NTP) on Fire Safety and Structural Integrity in the RMG sector in Bangladesh and to ensure transparency in the subcontracting system and accountability.
Following a fire incident at a subcontracting factory, namely Tazreen Fashion Limited, killing more than 112 garment workers, pressure built on bringing the subcontracting activities under a legal cover by formulating guidelines to protect the interest of workers.
Against the backdrop of the fire incident, the government adopted the NTP and promised to devise subcontracting guidelines.
"Subcontracting factories have to be members of the associations concerned and renew their licences regularly," said the circular of the commerce ministry.
It also asked the subcontracting factories to comply with the related law and rules and the government-approved checklist, the guidelines read.
Factories affiliated with the trade bodies, namely Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), can do the job as subcontractors.
According to the guidelines, only the compliant factories will be eligible for doing the job of subcontractors and there must be an agreement, the copy of which must be given to the BGMEA and the BKMEA.
The guidelines say the government-set minimum wages be ensured for the workers in the subcontracting factories and the structural designs of the factories be approved by the authorities concerned.
Workers of the subcontracting factories must get group insurance coverage and the factory authorities will pay the premiums on a regular basis, the guidelines read.
Exporters will have to monitor the compliance status of the subcontracting factories and take remedial measures in the event of deviations, if any, and inform their respective trade bodies of it.
The guidelines also require BGMEA and BKMEA to submit a report on the activities of subcontracting factories to the commerce ministry and the National Board of Revenue in every six months.
The government and trade bodies will suspend their services relating to production and export temporarily or permanently to any party involved in the subcontracting process, if it violates the guidelines.
When asked, BKMEA vice president Fazlee Shamim Ehsan welcomed the move, saying that once the subcontracting factories register with the associations, the latter will be able to monitor their activities.
According to the BGMEA official website, presently it has around 4,500 member factories. Forty per cent of them are knitwear and sweater manufacturers and the remaining 60 per cent are woven garment makers.
But about 2,000 to 2,200 of its member factories get utilisation declaration (UD) certificates from the BGMEA, according to the officials concerned.
On the other hand, more than 1,300 factories are registered with the BKMEA while about 800-900 receive UD certificates regularly.
According to the Department of Inspection for Factories and Establishments, about 800 to 1,000 garment factories operating in the country are not affiliated with any of the trade bodies.

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