When will the RMG industry owners change?

Bangladesh's readymade garment sector is 45 years old. This garment sector is the source of 80 per cent of the country's export revenue. It also generates employment. As a single country, Bangladesh now stands second in readymade garment (RMG) exports.

So much has happened over these 45 years, but only one thing hasn't changed. And that is the mindset and behaviour of the RMG industry management. The garment sector is still run on those old conventional lines. The only thing that the persons concerned in this sector have learnt, is to suppress any movements by means of coercion and fear. The garment owners are so politically powerful now, they have no problem whatsoever to ensure all decisions are taken in their favour.

On the other hand, with all regular means of protest shut down, the garment sector workers have no alternative but to take to the streets in order to voice their demands. They have learnt no other way.
Bangladesh will graduate from the Least Developed Country status in 2026. In order to meet the demands of the day then, it is imperative that the RMG sector also undergoes significant changes in its system of management. This requires reforms. And work on this must start now. After all, Bangladesh's economy cannot survive without the RMG sector.
Owners' reforms needed first

The RMG sector has two owners' organisations, BGMEA and BKMEA. Selim Osman, a member of the much touted Osman family of Narayanganj, had been the president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) for a stretch of 14 consecutive years. He first became the BKMEA president in 2010 after Awami League came to power. He was elected the association's president once in 2012 and then the rest of the time he became president through understanding and by force.
He had also been the member of parliament of Narayanganj-5. He would contest from Jatiya Party, while his brother Shamim Osman was the Narayanganj-4 member of parliament from Awami League. Selim Osman's main task was to hold onto the parliamentary seat. Under their dominance, BKMEA contributed nothing to the interests of the industry.

Meanwhile, with one or two exceptions, being the president of BGMEA meant entering the hallowed halls of becoming a member of parliament or being mayor of Dhaka City Corporation. So their main task was to extend support to the government. Only the interests of the government and the owners mattered.

In 2009, a total of 23 owners of garment factories were elected as members of parliament. BGMEA accorded a reception to the members who were elected in the national election. The former president of BGMEA Annisul Huq had been the FBCCI president. The late Annisul Huq later became the mayor of Dhaka City Corporation. Thus a new door opened for the top leaders of BGMEA. After Annisul Huq passed away, Atiqul Islam, another former BGMEA president, became the new mayor.

From 2009 to 2019, whoever had been the president of this organisation, all became either mayor or member of parliament or was placed in some top position. For example, Salam Murshedy who had been BGMEA president from 2009 to 2011, later became MP from Khulna. The next president of the association, Shafiul Islam Mohiuddin, became an MP from a seat in Dhaka. The next president was former mayor Atiqul Islam, now absconding. Then Siddiqur Rahman, Awami League's commerce and industries secretary, was president for four consecutive years. The BGMEA president of 2005-06 Tipu Munshi also became MP and later went on to becoming the commerce minister.

Much earlier, two presidents Mosharraf Hossain and Redwan Ahmed, became MPs from BNP. Redwan Ahmed went on to become a minister too. They were presidents of BGMEA from 1991 to 1996.

SM Mannan was the last elected president of BGMEA. He was the general secretary of Dhaka city (North) Awami League. Known as Mannan Kochi, this BGMEA leader was in the committee for around the last twelve years or so. Politically active Mannan Kochi was kept on the committee to keep political links with Awami League and to suppress any labour movement.
Over the last 45 years, BGMEA has learnt one thing very well and that is to use various agencies of the government to suppress movements, keep wage demands at a minimum and extract benefits and facilities from the government. Labour leaders were linked to them too. They would support the owners in exchange of money. This would happen more at the time of fixing the wage structure.

Actually, BGMEA or FBCCI are basically the business branches of the ruling party. This applies to the business chambers too. So these trade bodies need to undergo reforms. Only then will the use of politics in the interest of business be curtailed.

The owners complain that the movements in the garment sector do not follow any conventions or rules. On the other hand, the labour leaders say there is no system in the RMG sector for formal bargaining. That is why the movements are not carried out in any regulated manner.

Due to international pressure after the collapse of Rana Plaza in 2013, the registration process for labour unions in the garment sector was relaxed. So far there are 1300 labour unions registered in this industry. In the remaining 70 per cent of the factories there are committees. In most cases, persons with allegiance to the owners are in the leadership of these unions or committees. Those who are not of that camp, are harassed in all sorts of ways after every movement.

After Sheikh Hasina fled from the country and the interim government was formed, like many others, the RMG workers too took to the streets with their demands. While the others have all returned to work, the unrest prevails in the garment sector. The owners can no longer use the intelligence agencies or police to threaten and scare them. In such circumstances, a way for a regulated manner to voice the workers' demands must be formulated. Also, a way for discussions to meet their demands must be created. And whenever there is a movement, random accusations of outside conspiracies, foreign instigation, etc, must halt.

The workers have at least 20 types of demands this time. The written demands of several factories have been analysed. The demands include, increase of annual incentive from 50 per cent, introducing provident fund, 15 days paternal leave, increase of tiffin bill from 35 taka to 50 taka, increase of attendance bonus, increasing maternity leave to 6 months, providing Eid bonus equal to net wage, increasing lunch allowance if working on Fridays, 20 days festival leave, earned leave 30 days, medical leave 20 days and payment of wages within the last five working days of the months.

The other demands of the workers are arranging for one free ultra-sonogram, providing the women with sanitary pads, increasing daycare facilities, two days leave during mensuration, installing an ATM booth, providing Vitamin C during pregnancy and arranging for eye tests and sunglasses.

In 2023 the minimum wage in the garment sector proposed by the workers was Tk 20,393, while the management proposed Tk 10,400. The workers were enraged at the management's proposal and took to the streets, resulting in the death of a worker. When the situation went out of control, the management proposed a minimum wage of Tk 12,500 and that was finalised. But when the movement continued, 43 cases were filed and 114 were arrested. While there is dissatisfaction with that wage, the workers are not demanding for a wage now, after the fall of the government. They are wanting certain benefits and facilities.

The first wage board for the garment sector was formed in 1994 and the minimum wage was Tk 930. Now 30 years hence, the wage has increased to Tk 12,500. In the 1994-95 fiscal, export revenue from the garment sector was USD 2.23 billion (USD 223 crore). That revenue has now increased to USD 40 billion (USD 4000 crore). Government and international policy support had a significant role to play in this revenue increase.

For example, before the formation of the World Trade Organisation (WTO), from the time of GATT negotiations, Bangladesh would receive quota facilities up till 2004 under the Multi Fibre Arrangement (MFA). Even though the quota system was lifted in 2005, Bangladesh did not fall back in competition. It is receiving Generalised System of Preference (GSP) facilities from the European Union. Several countries, on a bilateral basis, are still providing Bangladesh with tariff-free market access.

In the meantime, in 1982 changes were made to the industrial policy. There were duty drawback facilities in place for exports. By this, while entrepreneurs paid duty when importing raw materials, this would be reimbursed after export. However due to delays, corruption and procedural problems, the bond facilities were put in place instead. Under this, the garment industry owners could import all sorts of raw material for garment manufacture, free of duty.

In 1986-87 the government introduced back-to-back LC. Under this system, after the export revenue was received, only then would the bank have to be repaid. Researchers feel these two policies have played a vital role for the advancement of the garment sector. Even after that, the government has provided all sorts of concessions including cash incentives. And whenever the garment owners were in a crisis, they have reached out to the government, and the government has fulfilled all their demands.

The readymade garment owners never want to admit that business is doing well. Speaking to any garment factory owner, they will invariably say that business is in a bad shape, orders are dwindling, buyers are purchasing garments at low prices, production costs have shot up and the productivity of the workers here is low.

Yet leaders who work with the workers of the garment sector say that the wealth and the lifestyles of the garment owners do not indicate that business is bad. Even in 2022 the dollars rate was Tk 86. That dollar now stands at Tk 120. So they are receiving Tk 36 more than before for every dollar of their export earnings. Also, if they want productivity to increase, they must give workers fair wages and other facilities and benefits. You can't expect highest productivity with lowest wages. There must be an adjustment between the two.

Another problem in the garment sector is the trade related to waste fabric scraps known locally as 'jhut'. Leaders and activists of the ruling party control this business. The garment factory owners are obliged to sell the fabric scraps or 'jhut' to the political goons. Whenever there is a change in the government, the control of this trade changes hands. So long the Awami League men had controlled this business, now the BNP men are trying to take over.

This too has provided instigation in the present movement. The garment factory owners say if they got fair price for the fabric scraps, they could use this for the workers' welfare. Whether they actually would or not, is another question. But this problem must be resolved. This requires political commitment and the rule of law, and that needs to be ensured by the government.

If wages and allowances are not paid regularly, workers will invariably take to the streets. If the present or future movements are to be halted, it is the garment sector management that needs to be reformed. Most important is the reforms of the owners' mindset and behaviour. The habit of giving, not just taking, must be formed.                        

* Shawkat Hossain is head of online, Prothom Alo
* This column appeared in the print and online edition of Prothom Alo and has been rewritten for the English edition by Ayesha Kabir