The book ‘Readymade Garments Industries in Bangladesh: A Study in Social Compliance’, was written based on a study about ‘social compliance’ by Dr. Mohammad Hasan, ED of Babylon Group.
Social compliance
Social Compliance is a ‘must comply’ requirement for the labor-intensive export-oriented RMG industry. ‘Social compliance refers to ethical and legal compliance which upholds the freedom of association and effective recognition of the right to collective bargaining, the elimination of all forms of forced and compulsory labor, the effective abolition of child labor and the elimination of discrimination in respect of employment and occupation’ (ILO 2002).
Social compliance is a complex cycle; it depends on several crucial factors, which are linked together like a chain. A chain is as strong as all of its rings are. Similarly, a chain is as weak as one of its weak rings is; i.e.one single weak ring is more than enough to make the whole chain system dysfunctional.
It’s a business driven program applied in the whole supply chain. Social compliance is a matter, which is subject to certain given conditions, highly dependent on both internal and external factors. Any single violation can spoil the entire effort.
Generally, the practice of social compliance did not develop within the industry rather, the sector was compelled to comply with the practices of legal and ethical issues, for the sake of its business continuation. The buyers are in the driving forces in the present practices of social compliance.
Background
The RMG industry has been dominating Bangladesh economy for more than three decades in terms of employment (65% of total industrial employment and 11.3% of national GDP), especially for the females, and foreign currency earnings. Bangladesh stands 2nd in the world with 6.4% share RMG exporting while the shares of the global market of China 39.3%, Vietnam 5.5%, India 4.1%, Turkey 3.4, Cambodia 1.4%.
Apart from national policies/initiatives by the governments in times, the role of three Change Makers is historic. Mr. M. Noorul Quader Khan, the Managing Director of Desh Garments Ltd (DGL), the very first (the late seventies) 100% export oriented readymade garment factory of the country, the first member of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) was pivotal. While Mr. Lutfor Rahman Sarkar, the visionary banker well known for his innovative idea “BIKALPO” (Bishsho-biddalaya Karmasangsthan Prokolpo) supported young entrepreneurs in RMG sector by providing loans with no or minimum collateral. Establishing “Youngone Bangladesh” Mr. Kihak Sung, the South Korean businessman respected by the global apparel leaders initiated the first foreign direct investment (FDI) in the readymade garment (RMG) sector in Bangladesh.
With many other initiatives, organizing BATEXPO, one of the largest expositions in the Asia- Pacific region, the association of the owners BGMEA pushed it up.
The study reveals that among the issues of social compliance “working hours” is the most challenging area due to the weak supply chain, poor infrastructure, insufficient utility services, workers’ efficiency and high rate of migration, where most of the factors are beyond factory’s control. In addition, in the age of fast fashion shorter lead time is the key to excessive working and holiday work. Out of total respondents, 62% confirmed that they work for 12 hours a day.
The country’s largest industrial sector in all respect suffers from a core authority. Formation of a separate ministry with a Human Resources Planning for labor-intensive RMG sector is a must for sustainable development.
In the RMG sector span of service life in a particular factory is very short. The study reveals that from grade 3 – 6, operators’ retention in a particular factory is 2.04 years. On the other hand, the minimum wage gazette can’t be held as a complete guideline to determine sectors’ wage administration. It was clearly revealed that the gazette itself created confusions and accelerate deprivation. Workers are classified according to their grades and factory management has the liberty to define grades according to their wish. Moreover, the study finds that the grading system has many loopholes which are not based on well thought and planned.
There are so many posts and positions required to run an RMG factory that is not mentioned in the gazette. It seems that all focus of the gazette falls on the entry-level workers and their wages. There is no guideline on how to measure workers competency for a particular grade and for how long a worker will be retained in the same grade. These loopholes are helping employers to manipulate in determining workers’ grade. Moreover, workers of the same sector in EPZs are getting more wages and benefits for the same work (tannery 12800 BDT, shipbuilding 16000 BDT, public sector 14000 BDT, RMG 5300 BDT).
With the significant majority, the females are not in supervisory and decision-making positions. Out of total respondent, 4.71% supervisors and only one manager out of total 98 managers are female. The study reveals that none of the complaint RMG factories recruit any workers below 18. But there was a total of 40% workers, male 13% and female %, in non-compliant sub-contract factories were below 18. The policy which is being applied in the developed countries is not applicable for the country like Bangladesh. Any generalization across the globe might affect the children of Bangladesh adversely. Child labor in the readymade garment industry and in a mine or an automobile workshop are not the same. When the minimum wages in different countries (Bangladesh $ 67, India $ 168, Pakistan $ 124, Vietnam $ 154, Cambodia $ 170, China $ 155, Myanmar $ 86) vary according to the countries socio-economic context, one single standard on child labor would not be justified.
Major findings and recommendations
- The study reveals that the RMG sector can hardly afford the traditional model of trade unions in its factories. Workers’ Participatory Committees (PC) can be the best substitute for traditional trade unions;
- The country’s largest industrial sector in all respect suffers from a core authority. Formation of a separate ministry with a Human Resources Planning for labor-intensive RMG sector is a must for sustainable development. Wage enhancement in the regular interval will not help if price inflation remains as usual;
- Job specification of overburdened and highly centralized DIFE and other service providers are necessary. Technical, fire, health and hygiene functions of DIFE can be delegated to the Power Development Board (PDB), Fire Services and Civil Defense (FSCD) and the National Institute of Preventive and Social Medicine (NIPSOM) respectively for effective monitoring and control;
- To provide immediate support the trade associations, BGMEA and BKMEA, need to be decentralized with the appropriate To protect the illegal migration of the workers, effective use of “Service Book” is utmost necessary. The apex body can introduce frequency modulation (FM) radio for the RMG sector as the source of entertainment, information, relationship building amongst the parties. The workers can participate in technical, legal or cultural programs. Factories can plug in this FM radio to the PA system as the medium of knowledge as well. The workers can learn about their rights, how to operate their machines more efficiently;
- Even after four decades, the sector could not develop management and technical experts locally. A large number of foreigners are working in Bangladesh RMG and its associated sectors like shipping lines, freight forwarding agents, garment inspection companies, buying offices etc. A functional, with well-defined responsibility and delegated authority, the management system has to be developed along with a “set of standard” need to be formulated considering the socio-economic context of Bangladesh;
- The buyers are in the driving forces in the existing system. They prefer short-term solutions, as long as their business is concerned. On the other hand, in the name of compliance unnecessary and irrelevant pressure and requirements are not expected. Implementation of labor rights and acceptable working conditions will not be possible until and unless the country adopts specific policies with the host country’s socioeconomic perspective;
- Relocation of factories in the districts where from most of the workers are migrated can be an effective way. If the wage enhancement continues Bangladesh will lose its price competitiveness to its competitors in near future.
This is the first attempt to introduce social compliance and its various standards to the academicians and other stakeholders. This study was a small, but startup endeavor to give a holistic view of social compliance. It demands further and intensive work on every single area like good governance, child labor, working hours, minimum wages, women empowerment, buyers’ codes of conduct etc. Hope this study will open up the opportunities for future researchers to explore those uncovered areas.
These findings are elaborately discussed in the book ‘Readymade Garments Industries in Bangladesh: A Study in Social Compliance’, written by Dr. Mohammad Hasan, ED of Babylon Group.
Recently Dr. Mohammad Hasan has unveiled his book at the University of Dhaka. Where Prof. Dr. Akhtar Hussain was the chief guest. The program was chaired by Dr. Mobasser Monem, Professor and Chairman, Dept. of Public Administration and Prof. Dr. Aka Firowz Ahmed was the discussant.
