Accidents in the country's apparel sector have come as a severe blow when it is struggling hard to comply with global outcry for workplace safety. The fire at the Aswad Composite Mills in Gazipur may add to the concerns of global retailers. They may weigh the option of keeping outsourcing their products from Bangladesh apart from putting pressure on the sector to put a safety system in place. The fire caused deaths to nine workers and left as many injured. Reportedly the factory is one of the top safety compliant units. However, the factory authority will pay Tk 500,000 in compensation and another Tk 200,000 in insurance benefits to the family of each worker who died. The company will also bear all the costs of treatment of the injured workers. The buyers have expressed condolences but did not make any negative gesture.
True, the country's garment sector, which is the second biggest supplier to the global market next only to China, has equally become vulnerable to fire and such other accidents because of its very size. The inspection system of factories needs to be immediately upgraded. It is heartening to know that the global coalitions of the US and EU retailers have already developed their factory inspection and verification regimes to allow a factory to make clothes for them only if they fulfil their compliance requirements. Their presence on factory floors may help overcome many shortcomings.
Media reports say RMG export orders were being diverted to India and Vietnam in the recent past due to labour unrest and accidents in garment factories in Bangladesh and growing political tensions that worried buyers about timely shipment. The prospect of diversion of orders to India brightened in the wake of the fall in the value of Indian rupee in terms of dollar. This means India may be able now to supply more apparel items to US buyers at a lower cost.
The garment sector is the highest foreign exchange earner, but its export growth is coming down significantly from August due to impacts of multiple negative factors. In order to keep Bangladesh's lead in the global market, the industry leaders should immediately settle the wage issue and restore the order. The president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) was quoted as saying that a negative image, arising from the devastating fire in the Tazreen Fashions and the Rana Plaza collapse were increasingly driving buyers away from Bangladesh. As a result, he fears that the export target this year may not be achieved. He says the buyers are concerned about only business and profit and it is very natural that they will switch over to other destinations that offer the facility of quick shipments and also profit.
The apparel industry is the backbone of our national economy. It has potentials to establish Bangladesh as an economic power house in the world. Earlier, Bangladesh ranked ahead of Vietnam, Cambodia and Myamnar. But with suspension of the generalised system of preferences (GSP) by the US government, the country's image abroad has been tarnished. The US government suspended the GSP facilities following the loss of at least 112 lives in the Tazreen Fashions fire in November 2012 and more than 1,117 others in the Rana Plaza collapse a year ago. The European Union and other major buyers are now vigorously creating pressure on Bangladesh to improve health and occupational safety standards in the factories.
The ILO has signed an agreement with the garment units aiming to help nearly four million garment workers in Bangladesh. The ILO cooperation is aimed at extending essential support to improve working conditions, strengthening labour inspection and upgrading building and fire safety at workplaces. This will focus on supporting Bangladesh's National Action Plan for Fire and Building Safety developed in the wake of the Rana Plaza collapse.
Belying speculations about adverse response following the Tazreen Fashions fire and the Rana Plaza collapse, Bangladesh continues to be one of the top choices for garment buyers from developed countries' markets. In an article, the Wall Street Journal claimed that apparel exports from Bangladesh increased by 24 per cent in the first quarter of the current fiscal year. The journal quoting the findings of a survey said Bangladesh is likely to remain one of the top destinations for sourcing apparel items over the next five years. The WJS report highlighted some factors that could raise both hopes and concerns. There is hope that the buyers would continue to buy apparels from Bangladesh, at least, for the next five years. But there is a reason to be worried about other developments. Emerging markets like those in Ethiopia and Myanmar could come up as serious competitors of Bangladeshi garments since they would be offering apparels at low costs. This is the most important factor taken into cognisance by the international buyers, who do not have any special love for Bangladesh. Buyers value two factors-low cost and the capacity to deliver export orders on time.
But if some other countries could meet their requirements including those concerning workers' safety and trade union rights, the buyers in all probability would abandon Bangladesh and rush to those destinations. China is a glaring example. Though China still holds the position of top apparel exporter, its business is declining at a fast pace. The buyers no more find China an attractive source of procuring low-cost apparels because of the rising cost of labour. Bangladesh, thus, has to work out a safe mechanism to keep her production cost low while offering 'respectable' wages to millions of workers engaged in the apparel sector. The gap between the wages given to Bangladeshi RMG workers and that given to workers in other exporting countries is quite wide and it leaves some room for a 'decent' hike.
Besides, neither the administration nor the apparel factory owners, despite all the global concerns about factory safety and workers' rights, seem to be serious enough to mend the lapses. Both have failed to make any major headway in addressing compliance issues, notwithstanding all the seriousness they show in public in this regard. The UN has also said Bangladesh has not done enough on the issue of factory safety. The government, the RMG unit owners and the workers would have to understand one fact that buyers would soon find alternatives to Bangladesh if it fails to meet their requirements.
However, a number of initiatives have been taken for retention of GSP facilities in the European Union and to reinstate the same in the US which remains suspended since June 27, 2013. These are:
(1) A delegation headed by the Foreign Minister visited Brussels and Paris. During the meetings organised by OECD, the Bangladesh delegation briefed the Trade Commissioner of European Union about the initiatives taken by Bangladesh on improving working environment in the RMG sector.
(2) Bangladesh, the EU and the ILO have adopted 'Sustainability Compact' with a view to taking joint initiatives to improve labour welfare and safety. The US endorsed the 'Sustainability Compact' in July last year.
(3) Regarding Bangladesh Action Plan 2013 proposed by the US to improve building and fire safety and working environment, the ILO, development partners and foreign buyers have jointly taken different initiatives. They include: (i) `Accord on Fire and Building Safety in Bangladesh signed by European buyers; (ii) `Bangladesh Safety Alliance signed by North American buyers; (iii) an ILO-proposed project involving $24.5 million undertaken for improving working conditions; (iv) Tk 1.0 billion JICA-assisted project for factory building inspection and relocation; (v) a $2.5 million project undertaken with US assistance to ensure workers' rights and improve fire safety; (vi) Germany-assisted project to rehabilitate workers rendered disabled by the Rana Plaza collapse.
(4) The parliament passed the Bangladesh Labour (Amendment) Act, 2013 which came into effect on July 22, 2013.
(5) The government has appointed 42 inspectors to fill the existing vacant posts while appointment of another 12 inspectors is in the process under the Public Service Commission. The government also approved upgradation of the Department of Inspection for Factories and Establishments with 679 new posts in the first phase. Of them, 392 posts are exclusively for inspectors. The appointment of 200 new inspectors is in the final stage. An additional secretary level officer has been appointed as Inspector General of the department.
(6) A proposal on increasing the number of inspectors from 50 to 310 at the Directorate of Fire Service and Civil Defence has been sent to the Ministry of Home Affairs.
(7) A proposal to increase the number of inspectors in the RAJUK has been approved while a similar proposal for the Chittagong Development Authority is awaiting approval.
(8) An inter-ministerial committee, headed by the senior secretary of the office of the Prime Minister, has been formed to monitor implementation of the labour law in export processing zones. The committee is preparing a report.
(9) The Department of Fire Service and Civil Defence has initiated a hotline. The Bangladesh Telecommunication Regulatory Commission has earmarked two 4-digit dedicated numbers for the hotlines for the Department of Labour and the Department of Inspection for Factories and Establishments. The installation process is in the final stage.
(10) As far as formation of trade unions, labour rights and building and fire safety inspection in the garment factories are concerned, the ILO has been requested to incorporate in their project development of a database open to all.
(11) The government has withdrawn the cases against Kalpona Akhter and Babul Akhter.
(12) Police have submitted a charge-sheet against accused Mustafiz in the Aminul murder case. The case is now under trial.
(13) The government has withdrawn the suspension orders against the Bangladesh Centre for Women's Solidarity and the Social Activities for the Environment. The two organisations are now continuing their activities.
(14) Trade union registration is being continued and 127 trade unions have been registered in the RMG sector since January 2013.
(15) Legal steps have been taken against the factory authorities who are involved in unfair labour practices.
Dr Anu Mahmud is a columnist. anumahmud@yahoo.com
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