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A wake-up call for Bangladeshi manufacturing

A cloud hung over the second annual Dhaka Apparel Summit last month, after reports of police brutality against protesting garment workers in Bangladesh shocked the world. 

Bangladesh’s garment manufacturing industry is in crisis. Still in the shadow of the Rana Plaza disaster, the industry hit the headlines again in December after the authorities took a hard-line approach to workers and trade union officials who were protesting against low pay and poor working conditions. The arrests had a ripple effect, leading to a cacophony of complaints from around the world in the weeks that followed.

In the midst of all of this, the second annual Dhaka Apparel Summit took place at the end of February. Organised by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the summit aimed to tackle issues including responsible sourcing for sustainable growth and plan the road ahead for Bangladesh’s apparel industry.

Inevitably, the day was dominated by debate about the arrests, which were condemned by many of the speakers. 

“Any charges against [the workers and trade union leaders] should be dropped,” said Srinivas Reddy, country director of the International Labour Organization (ILO), in his keynote address.

The protests took place in the Ashulia manufacturing district, which is just outside Dhaka. Supported by trade unions, scores of factory workers downed tools and demanded better pay. Many factories closed for several days in the face of the mass unrest. Factory owners reacted harshly, firing more than 1,600 workers for making what they described as “illogical demands”. The BGMEA later claimed this cost the factories $50m (£40.1m) in lost production.

Then the police waded in and arrested workers and trade union leaders. At least 26 were jailed, prompting a further outcry at home and abroad.

Reddy pointed out that respecting labour rights is one of the key pillars of the Bangladesh “Sustainability Compact” – an agreement between the European Union and the Bangladeshi government with the support of the ILO, which aims to promote continuous improvements in labour rights and factory safety in the ready-made garment and knitwear industry in Bangladesh. 

“It is so important that workers are treated as partners for growth,” he added.

In a separate session, Nazma Akhter, the sole labour official out of 25 speakers at the Dhaka summit, said the arrests were a “wake-up call” for the garment industry. Over the past two years Bangladeshi garment workers have been paid on average US$68 (£55) for a month’s work, she said – which is “even lower” than neighbouring Myanmar. “Without thinking about workers [and their welfare] you can’t make the industry sustainable,” she argued.

She added that workers have a fundamental right to trade union representation: “This is an imbalanced world: workers need to be given [fair] share.”

Major UK and European retailers including Asos, H&M, Marks & Spencer, Boden and Fat Face, represented by the Ethical Trading Initiative (ETI), announced on 20 February that they would not attend the Dhaka Apparel Summit, triggering a swift response. The BGMEA held emergency talks with junior labour minister Mujibul Haque, and agreed that the government would withdraw the cases filed by the factory owners against their workers – although the BGMEA also reiterated its position that the protests were not legal, and the law should not be misused by any party.

At the eleventh hour, ETI executive director Peter McAllister, who is based in London, decided to attend the summit. In an interview with Drapers, he said it was the responsibility of both the global buyers and suppliers to help ensure decent working conditions. He pointed out that the low prices paid for products made in Bangladesh were a big factor. 

Bangladesh’s commerce minister, Tofail Ahmed, echoed this point, criticising buyers for failing to increase prices for products: “Rather, the prices have declined,” he said. 

However, he pointed out that progress has been made when it comes to working conditions in Bangladesh: “Out of 3,400 factories inspected after the Rana Plaza incident, only a few were found to be totally or partially vulnerable,” he said.

The Rana Plaza complex housed five factories supplying global brands at the time the building collapsed in April 2013, killing 1,135 workers. 

BGMEA vice-president Mahmud Hasan Khan Babu asserted that factory owners are no less keen to avoid another Rana Plaza incident than anyone else: “It’s a nightmare for us,” he said, adding that the sector’s main priority now is the completion of factory building remediation, scheduled for June next year.

Babu added that BGMEA is refusing membership to any factories that fail to meet complete compliance requirements. But he argued that apparel buyers must demand similar levels of compliance from countries that compete with Bangladesh in apparel production, to level the playing field.

Many of the sessions focused on how to improve the industry in Bangladesh. Thomas Klausen, chief executive of Danish trade association Dansk Fashion & Textile, underscored the need to upskill the garment workers. He argued that Bangladeshi factory owners should not race to find low-cost work orders, but rather should opt for manufacturing mid- and high-range products.

Shwapna Bhowmick, country head for Marks & Spencer in Bangladesh and Myanmar, agreed that the Bangladesh manufacturing industry needs to evolve. She showed delegates examples of some value-add products M&S is now sourcing from Dhaka, such as dresses and tailored suit jackets. 

“We started in Bangladesh in 2004 with basic products such as polo shirts, but see what we are now buying from here,” she said, to loud applause. She pointed out that product diversification and shorter lead times have helped to grow business in Bangladesh.

US ambassador to Bangladesh Marcia Bernicat said Bangladesh’s ready-made garment sector must plan for the future by making significant changes, including improvements to infrastructure, financing and, most urgently, a fundamental shift in how the industry treats its workers.

She praised the “significant progress” in building inspections and safety in the industry “thanks in part to the Alliance [for Bangladesh Worker Safety] and the Accord [on Fire and Building Safety in Bangladesh] and the largesse of buyers, who have invested in their efforts”.

But, like others before her, Bernicat criticised the government and factory owners over the way they handled the labour unrest: “In December, Bangladesh took a giant, disappointing step backwards on labour rights. The international community, including members of the US Congress and many international brands, wrote to you and expressed their deep concerns.

“Ashulia has damaged Bangladesh’s image and reputation as a reliable source for garments. Now, buyers have to ask themselves: how will they sell garments made in a country where large numbers of workers and union leaders are suddenly arrested, fired, or suspended simply because they or their fellow workers asked for a wage increase?”

Bangladesh is already the world’s second-largest exporter of clothing and has ambitious plans for further growth, but the long-term success of the industry hangs on gaining realistic prices for its goods and the fair treatment of its workers. While stakeholders clearly recognised the need for reform at the summit, only time will tell if those highly emotive pledges translate into lasting change.

Bangladesh’s ready-made garment industry by numbers:

  • $26.6bn (£21.3bn) in exports last year
  • Employs 4.4 million people
  • 70% are women
  • Contributes more than 13% to Bangladesh’s GDP
  • Exports 85% of its apparel production to the European Union and the US)

Source: Bangladesh Garment Manufacturers and Exporters Association (BGMEA)

 

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