Compliance

The garment crisis: Who done it? Hameeda Hossain LABOUR protests that spread from a sweater factory in Ghazipur on 11 May to Savar EPZ, Ashulia and Dhaka on 22 May, erupted in state violence and vandalism by 23 and 24 May. Police action against workers resulted in three deaths, many injured and even more arrested; the vandalism led to breakages, looting, closures and possible lay offs. Violence is never a satisfactory method of dispute resolution nor indeed does it indicate healthy labour relations.The industrys immediate response was to allege instigation by political conspiracy or international competition. But to cry wolf evades an honest examination of industrial management in the knitwear and sweater components of the garment industry. Since the episode, many questions have been raised about the identity of the perpetrators of the carnage. The answer does not lie in merely apportioning blame to external actors or seeking hidden clues as in a thriller. The Home Minister has said that he had information, so he and his intelligence agencies should speak out and tell us who did what, and why the state agencies were not able to prevent the arson. It would be more credible, of course, to hold an open, public enquiry with representatives of the Labour Directorate, BGMEA and BKMEA, workers and even organisations who support workers rights. The report should be made public as soon as possible to put an end to unnecessary rumours and allegations. Understandably the factory management is shocked, because it is not used to seeing labour unrest turn so violent. It did not expect such an outburst from a docile, expendable labour force. Another reason given is that the factories where the trouble occurred were relatively well run, model factories where workers were fairly well paid. The comparative advantage of some factories is of course no guarantee that workers will not agitate against glowing disparities between management and labour. On the contrary increasing awareness of inequalities is a direct provocation. We should remember how a few years ago, well paid workers in South Korea launched a massive protest against their company bosses. For the industry it is more important to come to terms with its systemic problems of which there are many. For the moment it has weathered the international competition and in fact received a glut of knitwear and sweater orders which it finds difficult to deal with. Many of the problems such as delays caused by lead time delays, late deliveries of imported raw materials, licencing or production, due to outage failures, port obstruction, etc. are caused by government inefficiency and poor planning. These may appear intractable, but are not beyond solution. But what is of the industrys own making is its refusal to reconcile its commercial success with poor labour relations, and its tendency to dismiss labour demands with unkept promises. For several years now workers have repeated vital demands pertaining to their terms of work and their conditions of work. Their major points of discontent have included the lack of an employment letter or contractual agreements, a stagnant minimum wage set in 1994 at Tk 930.00, arbitrary fixing of overtime payments, delayed payments, absence of weekly holidays, and non-enforcement of safety and health protection. Conditions are even harder in the sweater and knitwear components because seasonal demand makes for insecurity of employment, to long hours of work without leave, which practically leads to compulsory overtime; piece rated work leads to uncertainties as to how much each worker will receive, since the rates are not fixed until the completion of the consignment. When the owners proudly say that piece rate payment brings in higher returns at an average of Tk 7,000.00, the highest range being Tk 18,000.00, this conceals considerable disparity in payments between one worker and another, with a few reaching the ceiling but many more falling way below a living wage. Workers earnings have failed to keep pace with the index of prices, and most live in a state of continuous debt, in order to support

their families. Media attention on the recent episode has led to much breast beating interspersed with some rational debate on the state of the industry. Newspaper reports and statements by business leaders suggest that they may now be willing to recognise genuine labour problems: for example at a sitting with the commerce ministry and workers representatives last week, BGMEA and BKMEA are reported to have conceded the need to revise pay scales, to issue employment letters, not to enforce overtime. The question of safety conditions was also raised. A few leaders have also admitted the logic of introducing negotiating mechanisms, whether through trade unions or some other arrangement is not clear. The absence of a grievance redress mechanism is precisely what allows the fuse to blow. If these concessions are to be more than a reflex to shock therapy, serious attention has to be paid right away to setting up a Wage Board to assess living wage in each sector, contractual terms for overtime, hours of work, maternity leave. Safety has become an important consideration particularly after the disasters of Spectrum and KTS, and it is no longer sufficient for BGMEA or BKMEA to make vague promises without introducing strict regulatory mechanisms. They must make their reports on defaulting industries public, for both the workers and the public have a right to know the risks they take. The government regulatory agencies have been even more culpable because time and again they have defaulted on their responsibilities to supervise and regulate violations of the laws. This has happened in spite of directions by the Appellate Division. Garment manufacturers claim they are now compliant with buyers conditions. This may go some way towards improving working conditions, but only to the extent that it satisfies buyers. Last year, at a UNDP sponsored meeting two task forces were set up by the government, the first to ensure proper labour conditions and the second to ensure safety conditions. What has become of the decisions taken by these task forces? Workers have a right to know the time line for their implementation. Rather than piece meal measures it is important at this stage to move towards a more effective industrial management based on progressive labour relations and labour participation in management. The culture of military management, where security guards have little hesitation at drawing their guns on workers (as happened in Chowdhury Garments, or in Opex Garments a year or two ago), or managers have no compunction at slapping their workers in full public view is now passe. It will not lead to a healthy industry, on the contrary it will provoke spontaneous, unorganised and, therefore, chaotic protests. Many experts suggest that the time is right for the garments to institutionalise a corporate structure with corporate social responsibility that can allow for a grievance redress mechanism. Suggestions have also been made for workers to be given a stake in the industry, in its management, through participation in trade unions. Perhaps this shock therapy will enable the garment owners to sit across with industrial economists, with lawyers, with workers and other experts to recommend reform of archaic laws or revise policies and practices that belong to a past world. It is time we stopped our detective search for who done it to a rational appraisal of how we can establish acceptable labour standards in the industry.

RMG workers' minimum wage fixed at Tk 1,662 Staff Correspondent The Minimum Wage Board yesterday announced the final pay structure for the workers in the readymade garment (RMG) sector fixing Tk 1,662.50 as the minimum monthly wage including basic salary, house rent and other allowances for the entry-level workers. All the six members of the board signed the final recommendation, which will be sent to the government on the next working day. The board yesterday announced two separate pay structures for the garment workers and the employees. There are seven grades for the workers and four grades for the employees. Minimum wage for grade one workers will be a total of Tk 5,140 including basic salary, house rent and allowances, Tk 3,840 for grade two, Tk 2,449 for grade three and Tk 2,250 for grade four, Tk 2,046 for grade five and Tk 1,851 for grade six. Total monthly wage for apprentice workers will be Tk 1,200. Minimum wage for grade one employees will be Tk 3,580 including basic salary, house rent and allowances, Tk 2,800 for grade two, Tk 2,449 for grade three and Tk 1,851 for grade four. The board announced a three-tier draft proposal on September 12 but finally backtracked in the face of severe opposition from the garment owners. "This time we have reached a consensus for the minimum wages for the garment workers and employees. We considered the final pay structure as reasonable in view of the workers' demand and the owners' ability," said Anwarul Haque, chairman of the government-formed Minimum Wage Board, at the end of six-hour meeting at its office yesterday. After announcing the draft proposal, the board received more than 400 opinions and objections and prepared the final recommendation taking those into account, he added. "It will be very difficult for the owners to pay Tk 1,662.50 for the seventh grade and minimum wages in other grades for the workers. We have agreed despite all limitations," said Annisul Huq, representative of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on the board, after finalising the draft. Around 95 per cent leaders of different workers' organisations in the RMG sector expressed their opinions favouring a minimum wage that would range between Tk 1,650 and Tk 1,800 although they were demanding Tk 3,000 earlier, he said. Asked, whether BGMEA leaders managed the leaders of different organisations through bribing, Huq said it is just a rumour. "The final recommendation did not protect the interest of the workers. But as there would be

uncertainty about the wages for the workers, I accepted the final draft after a hard negotiation," Zafrul Hasan, permanent representative of the workers on the board, said. The owners are relatively in an advantageous position, he said, adding that if the board failed to make a final recommendation the workers' interest would have been seriously affected in the long run. Nazma Akhtar, representative of the garment workers on the board, who had earlier declined to sign the draft proposal on September 12, said around 40 organisations including several big ones supported the minimum salary ranging between Tk 1,650 and Tk 1,800 and that is why she did not have any option. Neutral member Iqbal Ahmed and permanent member of the employers on the board Kazi Saifuddin Ahmed also took part in yesterday's meeting. Following serious labour unrest in the country's premier export-earning garment sector, the government formed the wage board on May 31 and asked it to recommend a pay structure for the workers within three months. The minimum wage for workers in the RMG sector is now Tk 930, which was fixed about 12 years ago. Meanwhile, Garments Sramik Sangram Parishad, an alliance of 11 organisations of garment workers, strongly opposed the final recommendation immediately after its announcement. Terming the final recommendation 'unrealistic' and 'a betrayal' with the garment workers, Roy Ramesh Chandra, general secretary of Jatiya Sramik League, said it is a farce as the minimum wage for the workers of the state-owned enterprises is Tk 2,450 but export-oriented garment industry will give a basic salary of Tk 1,100 only.

Phase-wise RMG wage increase proposed Monjur Mahmud The National Wage Board at its 24th meeting yesterday failed to reach a consensus on minimum wages for garment workers despite a hectic seven-hour long negotiation. Failing to reach a consensus the board sent to the government, for its consideration, a three-tier proposal to be implemented in three years with Tk 1,604 as gross minimum salary in the first year. The board proposed Tk 1,604 as gross minimum wage for entry-level garment workers for the first year up to June 30, 2007. Minimum gross salary would be Tk 1,890 in the second year during July 1, 2007 to June 30, 2008 and it would be Tk 2,117.50 in the third year starting from July 1, 2008. Annisul Huq, representative of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on the board did not agree to the proposal, and Nazma Akhtar, representative of workers on the board did not sign the proposal, saying it did not match the expectation of the

workers. However, Board Chairman Anwarul Haque, independent member on the board Iqbal Ahmed, and permanent representative of the workers on the board Zafrul Hasan signed the proposal. Permanent member of the employers on the board Kazi Saifuddin Ahmed was absent in yesterday's marathon meeting held at the board office in Dhaka. "We could not reach a consensus but a majority of the members decided to send a proposal to the government for its consideration," said Zafrul Hasan after ending the meeting at 9:30pm. The proposal has to be kept in circulation for 15 days for opinions and objections, and the ministry concerned will take another month for its approval after which it will be put in a gazette. The board yesterday discussed three pay proposals -- one of them was proposed by the independent member and another was proposed by Zafrul Hasan but both of them faced strong oppositions from representatives of garment factory owners as they were much higher than the proposal sent to the government. According to sources, both the factory owners and workers were rigid on Tk 1,400 and Tk 1,800 respectively as a gross minimum wage. There are seven grades in the three-tier proposal. The gross minimum wage for the first year includes Tk 1,080 basic salary, 30 percent house rent and Tk 200 medical allowance totalling Tk 1,604. Gross minimum wage of Tk 1,890 for the second year includes Tk 1,300 basic salary, 30 percent house rent and Tk 200 medical allowance. Gross minimum wage of Tk 2,117.50 for the third year includes Tk 1,475 basic salary, 30 percent house rent and Tk 200 medical allowance. Annisul Huq said the proposal sent by the board to the government had been placed for discussion lately and it was not possible for him to go through it. "We don't know what would be the impact of this proposal on the industry. We sought three to four days time to study it but the time was not given. So, we did not agree to it. We will send our comments after going through it," he said. On the other hand, gross wages for Grade I workers in the first year would be Tk 5,400 including Tk 4,000 basic salary, 30 percent house rent and Tk 200 medical allowance. It would be Tk 5,725 including basic salary, house rent and medical allowance in the second year and Tk 6,050 in the third year and onward including 4,500 basic salary, 1,350 house rent and Tk 200 medical allowance. "The proposal sent to the government did not match the expectation of the workers. So, I did not sign it," explained Nazma. The board earlier held 23 meetings after it had been formed on May 31 but could not reach a consensus.

Following a severe labour unrest in the country's premier export-earning garment sector, the government formed the wage board and asked it to recommend a pay structure for the workers within three months. The minimum wage for workers in the RMG sector is now Tk 930 which was fixed about 12 years ago. The government, garment owners and workers' leaders at a meeting on June 12 inked a 10point memorandum of understanding (MoU) after a series of discussions on May 24, June 1 and June 4 among the stakeholders in the garment sector and decided to implement those in phases to address labour unrest, and to ensure labour rights and peaceful atmospheres in the factories.

Social compliance 'no threat to RMG export'

Mon, Apr 12th, 2010 1:50 pm BdST Dial 2000 from your GP mobile for latest news Dhaka, April 12 (bdnews24.com)Providing more wages and facilities to workers would not threaten growth in the export of ready-made garments from Bangladesh, a visiting German parliamentary team observed on Monday. This view contradicts the position widely held by local garment manufacturers. The two-member fact-finding mission from Germany, which came to Bangladesh on April 7, said that it was not acceptable that Bangladesh manufacturers spend only one percent of the the final purchase price of the garment on workers. Jurgen Klimke, an MP of the ruling Christain Democratic Union party and a member of the parliamentary standing committee on economic cooperation and development said the consumers in Germany, which imports garments from Bangladesh worth about Euros 1.9 billion every year, were ready to pay more if Bangladesh manufacturers increased their wages and facilities to the workers. Niema Movassat, a German opposition MP, also a member of the parliamentary committee, said only five percent of the garment manufacturers in Bangladesh are socially compliant. He said some German importers obtain garments from Bangladesh at cheap prices without taking any responsibility for the workers - but they would have to spend money on social compliance if they purchased these same products in Germany. "It is possible to develop exports and maintain social compliance at the same time," said the German legislator.

"It is not acceptable for companies to fail to maintain social compliance," he said, adding that most of the ready-made garment units in Bangladesh leave their workers poorly-paid and are unpaid for their over-time. Jurgen Klimke said the German authorities may introduce a system whereby garments that are produced in socially compliant factories are 'tagged'. "The tag could state that a certain portion of the price of the garment will be used for the social welfare of the garment workers who manufactured it" said Kilmke. The German MPs met with the political leaders, ready-made garment manufacturers, workers, and other stake holders to assess the situation. The German government will decide its agenda for development cooperation with Bangladesh in the next two years following a report from the fact finding team. It is standard practice for the German government to send a parliamentary teams to a country before it finalises its development cooperation programme. Germany provides development assistance worth Euros 55 million every year. Klimke said the German government was very happy with the development projects implemented in Bangladesh during the last two years. bdnews24.com/krc/db/1340h