Fresh Strategy Needed for the Bangladesh’s Readymade Garment Sector

Bangladesh’s readymade garment industry should drop its obsession with quota and duty free access to the US market and concentrate on building its competitiveness on improved productivity, quality, delivery and social reputation the Congress of the Bangladesh Independent Garment Workers’ Union Federation was told.

Addressing the Congress, Neil Kearney, General Secretary of the Brussels-based International Textile Garment and Leather Workers’ Federation, said Bangladesh’s readymade garment industry was at a crossroads. The US and European Union clamp-down on imports from China earlier this year had led to a short-term boom for Bangladesh, particularly in knitwear. But, under WTO rules measures against Chinese imports cannot continue past 2008. From 2009 onwards, there would be a free for all in textiles trade with countries like Bangladesh pitted against the might of China and with no prospect of protection. Competition would be fierce. Accordingly it was essential to use the breathing space of the next two years to strengthen the readymade garment industry by building its international competitiveness.

Said Mr. Kearney, “The readymade garment industry in Bangladesh has to get real. It must recognise that quota and duty free access to the US market is probably little more than a pipe dream, particularly in 2006,which sees mid-term elections and during the following two years in the lead-up to the next Presidential election. This is not about trade, it is about politicians responding to the demands of their electorates. It is simply a fact of political life.

“The Bangladesh industry needs to wake up to the real world, recognise what is, and what is not, attainable and concentrate on building its competitiveness not on concessions but on improved productivity, quality, delivery and social reputation – the four pillars for success in today’s global market.

“What do I mean by ‘social reputation’? Simply that production conditions don’t pose a threat to the image of the brands or the retailers sourcing and marketing the products in question. Such brands and retailers spend a fortune on burnishing their image. A thirty- second news clip in the US or Europe highlighting exploitative conditions in a retailer’s supply chain can undo years of costly advertising. One European retailer sourcing from the Spectrum Sweater factory in Savar which collapsed killing some sixty workers in April last received more than a million e-mails of protest from customers. No brand or retailer wants that fall-out from its supply chain conditions.

“Today’s readymade garment industry poses just that threat to the brands and retailers sourcing in Bangladesh. While there are many fairly good factories there are many that are little better than sweatshops. The recent boom in the knitwear sector has spawned many new factories, which breach nearly every labour standard.

‘Workers’ rights abuses are often the norm. Just travel from Savar to Dhaka any night of the week. Garment factories are lit like Christmas trees till late at night. Twelve-hour days, seven days a week are not unusual. Many of these factories are death traps, cramped and overcrowded. What would happen in the event of a fire?

“Throughout the industry workers are being cheated on wages. The knitwear industry appears to be particularly bad. Piece rates rob workers as they are rarely applied in a professional manner, are usually arbitrary, often not advised to workers and frequently a breakdown of wages is not given rendering it impossible to establish how wages are calculated. Any protest is met by dismissal. No wonder labour turnover is growing so rapidly in the industry.

“Such cheating has grown rapidly in the past year. Many factories are not paying wages on time. This week I saw one situation where the employer is a month behind on the payment of wages. And then the authorities and industry bosses express surprise when workers object. Witness the situation at Blossom Textiles in the Comilla EPZ.

“The surprising thing is that workers don’t object much more often. Unfortunately, in too many factories management by terror is the order of the day. Threats, intimidation, suspensions and firings substitute for effective management by dialogue and discussion.

“In spite of the law, freedom of workers to form unions and bargain collectively with their employer virtually doesn’t exist in the garment sector. The government seems powerless to act. The Labour Ministry is totally under-resourced and largely ignored when it tries to intervene. The legal system is totally bogged down and takes years to resolve matters. Justice delayed like this is justice denied.

“All this leaves a huge void in industrial relations resulting in chaos and anarchy when anger boils over. Witness events at Textown and Sinha Textile Mills earlier this year.

“It is incidents like these that really highlight the weakness of management at every level of the industry. Instead of looking at the real causes they look for scapegoats. At Textown and Sinha Textile Mills leaders of the industry, without a shred of evidence, blamed international trade union organisations and NGOs for fermenting the riots that followed the beating of a woman worker by a security guard and following a serious road accident.”

Such knee-jerk reactions reflects badly on the industry internationally and especially among buyers. This small brain approach, if continued, will drive away clients to the detriment of workers and of the national economy.

“Too often, it appears that some garment factory managements would be incapable of running a roadside stall let alone a factory employing thousands of workers. No wonder there is such a need to rely on concessions in world markets rather than securing a place through real competitiveness.

“Clearly, a fresh strategy is needed. Because of poor management and poor working conditions productivity levels in many factories are poor. Those with the worst labour conditions are also those who fail on quality and delivery on time. Without a doubt, poor labour conditions promote inefficiency and waste. Buyers increasingly recognise this, which is why they are now, in the main, the chief drivers of compliance with Labour law and international labour standards.

The National Forum on Social Compliance recently established needs urgently to get to work. It must include trade union and NGO representatives chosen by the unions and NGOs themselves and not by employers. The Forum needs to begin to act like a national economic and social development committee for the industry. It should produce a blueprint for the future of the industry, perhaps drawing on the experience of Cambodia, which is now promoting itself as a country where buyers can source without fear of damaging the reputation or image of their brand or label.

“Efforts are also needed to reduce labour turnover though improved labour conditions and to improve productivity through better training of managers and workers and through the establishment of mature systems of industrial relations.

“The message is simple, stop chasing rainbows and concentrate on cleaning up the readymade garment industry, introducing effective industrial relations systems involving dialogue between management and representative trade unions thus building global competitiveness rather than relying on concessions in key markets”.