Garments Industry Unrest in Bangladesh

Garments Industry is the leading foreign currency earning sectors of Bangladesh. Now-a-days Bangladesh financial sector is very much dependent upon this sector. The annual export income of garments sector is driven from two sources one is woven garments and others is knit wear. Readymade garments are a 100% export oriented garments. Readymade garments exports various garments product in foreign market. The company makes shirts, ladies dress, shorts, trousers, and others for U.S.A, U.K, European countries. They use high tech machineries to produce a quality garments product. They also add new machineries to increase their production line. They have a mission and the vision is profit maximization.

Dark Side of the Garment Industry

This most flourishing industry of Bangladesh has its dark side. A large number of the units are located in dilapidated buildings. In April 2005, an entire building, housing hundreds of mainly female workers in the outskirts of Dhaka, collapsed. Sixty-four laborers, at work on their machines, were crushed to death, and 84 injured. What is worse, most of these buildings do not have adequate fire escapes. On February 24 this year, more than 50 people were killed and about 100 injured in a fire at a textile mill in Bangladesh.

The industry leaders unite together to get support and benefits from the government, but they are not equally willing to look after the welfare of workers. In the RMG industry in several places in Bangladesh workers are paid their salaries two moths late. Overtime is imposed and in some cases not rewarded. The rising inflation has reduced the value of wages. But the industrialists say that it’s the job of the government to control inflation.

a. Exploitation of Workers

Minimum Wage rose but not the Living Conditions: A government-appointed panel, the Minimum Wage Board, recommended raising the minimum wage in Bangladesh’s garment industry, which has struggled amid a string of fatal factory accidents and labour unrest, by 76.66%.

A six-member committee of government officials, garment manufacturers and union leaders agreed on an increase in the minimum pay in the South Asian country’s biggest industry to ৳5,300 taka (€53) a month, up from the current ৳ 3,000 taka. Unions had demanded the minimum wage, which was raised in 2010, be more than doubled to ৳8,000 taka a month.

In spite of increase of the total amount, the basic salary goes down to ৳3,000 from the previous recommendation of ৳3,200 on November 4.

An apprentice worker will receive ৳4,810 as the minimum gross salary. The working period for an apprentice worker will be three months which may be extended by another three month if owners fail to see an improvement in standards. After that period, apprentices will be appointed as permanent workers at Grade 7, the lowest rung.

According to the revised minimum wage system, a Grade 7 worker will receive ৳3,000 as basic salary that had previously been recommended at ৳3,200 on November 4.

In addition to the basic salary ৳1,200, ৳250, ৳200 and ৳650 will be paid as housing, medical, transport and food allowances respectively.

The Minimum Wage Board finalised a 5% increment on basic salary a year, which was absent in the previous system. Annual average inflation in Bangladesh is almost double to the proposed  annual increase, whereas housing and food price inflation is even higher.

After a field visit to the densely populated industrial hubs like Ashulia, Savar and Gazipur, it was found that most of the landlords have already increased house rents by nearly 50% on an average. At the same time transportation fares, prices of kitchen items and other things have also gone up by 30%-40% there immediately after the wages increase announcement.

A basic diet which meets the needs of a three-member family costs about ৳8,200 a month, according to a recent analysis by the Centre for Policy Dialogue, a respected research organisation in Dhaka. It further said that the Bangladeshi garment industry, second to China’s in exports, has grown at a stunning rate in recent years which can afford to pay workers more. Bangladesh exported $22 billion in clothes last year, up more than 50 percent from two years earlier.

b. Uncertain Future of the Industry

After the end of the Multi-Fiber Agreement at the beginning of 2005 and the changeover to the new World Trade Organization regime, it was feared that the Bangladesh’s booming textile industry would suffer as it would loose business to countries like China and India. But fortunately for Bangladesh, so far this prediction has been proved wrong. In fact, the industry has continued to grow at a healthy rate of 20 percent. However, this does not indicate that the Bangladesh garment industry has become more competitive. The reality is that this increase has been largely due to restrictions imposed on China by the Western nations than to the ingenuity in Dhaka or Chittagong. The Chinese cannot be held back after 2008, which means a completely different picture might emerge after that.

Industry also faces various infrastructural problems. Due to shortage of power and diesel industries are not able to work to their full capacity. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) fears that production in RMG industry might fall by 50 percent and production cost might go up by about 25 percent due to the crises. Due to power shortage shipments are sent through air, thereby increasing its cost. Unfortunately the government has not taken any step to improve the situation. On the other hand, people have been shot dead for demanding regular supply of electricity.

c. Worst Industrial Rioting in the RMG Industry

 The spiraling labour unrest in the Bangladesh RMG industry started on May 23 after a knitwear factory owner rejected an 11-point charter of demands. The factory was completely gutted in the blaze. Protesting workers forced their way into an exclusive industrial zone for foreign investors and damaged machinery. These workers demanding unpaid wages and a weekly holiday smashed scores of vehicles and burn down factories in Savar, an industrial town near Dhaka.

Among the 250 damaged units, at least 30 were owned by foreign investors in the Savar Export Processing Zone. According to Bangladesh Garment Manufacturers and Exporters’ Association (BGMEA) vice-president (finance) Shahadat Hossain Chowdhury Arun nearly 300 factories, including 21 factories in the Savar Export Processing Zone (EPZ), were damaged during the three-day crisis. The total loss of the garment industry is around four billion taka (nearly $70 million). Many vehicles were also set on fire during the unrest, which left three workers dead and hundreds others wounded.

 This is reportedly the worst industrial rioting in Bangladesh in the ready-made garment industry which is the country’s biggest export earner. The violence also dealt a serious blow to the industry’s image apart from causing huge losses.

A Rights activist and trade union leader Shrin Akhter blamed the outbreak on accumulated anger of workers, who even do not have any weekend. She alleged that some garment owners even do not pay the worker their salaries and overtime regularly. And in some cases, the employees loyal to owners cut 2 percent from the salaries and overtime allowances.

d. Conspiracy Theories

 The violent outburst of the workers crippled the industry for many days. Several quarters saw sabotage behind this development. But interestingly all of them found the involvement of different actors according to their own convenience.  Government ministers and leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) alluded to an Indian role, alleging that the violence was the result of “conspiracy from across the border.”  Finance Minister M Saifur Rahman said the attack on the readymade garment sector was influenced from outside to hamper growth of the industry. He said, “What happened in the past few days is very frustrating, but I don’t believe that it can be carried out by workers.” Commerce Minister M Hafiz Uddin Ahmed, in a meeting with the Bangladesh Knitwear Manufacturers Association (BKMEA), also called the happenings “sabotage”.

e. Agreements with Garment Workers not honored

 A study by Bangladesh Institute of Labor Studies (BILS) has indicated that garment manufacturers and exporters in Bangladesh have yet to implement four agreements signed between 1997 and 2005 to defuse problems following labor unrests.  A number of labor leaders believe that owners reached accords with workers just to defuse troubles whenever there was unrest. Instead of implementing deals, the owners even filed a writ petition against the government notification about minimum wages for laborers circulated in 2001.

The factory owners also did not implement the 24-point suggestion offered by the Department of Inspection for Factories and Establishment in November 2000. The department pointed out 24 kinds of irregularities in the garment industry that went against labor laws. Inspection by the department also found that non-implementation of labor laws resulted in discontent and anger among the workers.

 f. Garment Workers’ Unrest Flares Up Again

 Protests over low wages and other exploitative conditions continued in the month of June too. The garment workers continued to hold rallies and clashed with law enforcers, leaving many people injured and few dead. Defying a ‘red alert’ imposed by law enforcers at the Dhaka Export Processing Zone (DEPZ) and its adjoining industrial areas, workers were involved in clashes in the Savar, Ashulia and Gazipur areas.

 The deepening unrest in the garment industry forced the foreign investors to announce on June 4 that they have shut their units as fresh violence flared up in the Export Processing Zone (EPZ). Investors of 92 units in the EPZ said that they will not reopen the units until the government gives guarantee of law and order in the area. They also requested the EPZ authority to declare the EPZ closed indefinitely to cool off the situation.

 Leaders of the garment factory owners’ also urged the government to form an industrial police force to ensure a secure working environment for the apparel industry. They felt that the overall security situations in different industrial hubs were not risk free despite the government’s deployment of huge security forces. Speaking to media on May 25 acting president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said, “We need permanent solution to overcome this situation.”

 The Bangladesh government on June 5 dismissed Mohammd Zakir Hossain, chairman of Bangladesh Export Processing Zones Authority (BEPZA), for failing to adequately respond to violent protests at clothing factories. The government also promised disciplinary action against several other executives.

g. Labors Unrest and Political Instability

Unfortunately for Bangladesh, this labor unrest has taken place at a time when the main opposition party is also leading a movement for political reforms in the country. The 14-party opposition alliance led by former Prime Minister Sheikh Hasina Wajed called a 36-hour shutdown on June 13 and 14 to press home its demands for electoral reforms, resignation of the chief election commissioner (CEC) and two ‘politically appointed’ election commissioners, and to protest ‘police atrocities’ on opposition leaders and workers during the Dhaka siege on June 11. The countrywide shutdown disrupted normal life, affecting communications and economic and other activities. Hundreds of people have been injured in clashes between protesters and the law enforcers.

Increased political activity in the form of political agitation was expected in the run-up to the upcoming elections in Bangladesh given its history of confrontational politics.  But the political instability has been made worse by the simultaneous labor unrest in the economic lifeline of Bangladesh that is its garment industry. 

Initially the government and the industry leaders underestimated the magnitude of the problem and tried to brush it aside by floating various conspiracy theories. But these theories were bound to fail as the problem lied in the exploitation of workers. It is preposterous to blame India for a labor unrest in Bangladesh. If the leading industry of Bangladesh collapses it would directly affect India as the economic chaos in its neighborhood will lead to large-scale exodus. This would create a bigger problem for India. Bangladeshi industrialists have been exploiting workers, sometimes to increase their profit margins and sometime to keep their industries competitive in the face of increasing international competition. 

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