Bangladesh garment industry on dormant volcano
BY Sunita Paul
That the four days of violent agitations by garment workers near the capital has inflicted enormous amount of damage on the readymade garment industry on the one hand and the national economy as a whole on the other is not a matter in doubt.
The agitated workers had reportedly set 14 factories on fire and damaged some 70 others, including about 30 in the Export Processing Zone in Gazipur between May 20 and May 23. The labor unrest caused deaths to three workers, injuries to 150, arrest of another hundred, and a halt to production in several hundred factories in the area, burning down thousands of pieces of finished products along the way.
The whole episode will have, by all probabilities, far reaching adverse implications on the national economy in general and the garment industry in particular. If nothing else, the news of violent protests and destruction that spread across the world like wildfire would scare American and European buyers of readymade garments, marking a fall in exports. A New Age report on May 24 said, quoting commerce ministry officials, that a good number of buyers and market players in Europe and the United States have already contacted the ministry, over telephone or by email, enquiring about the state of agitations and expressing their concerns.
The biggest share of the countryâ€™s foreign exchange earnings comes from readymade garment exports, which was, according to the Bangladesh Bankâ€™s annual report (2004 -2005), $6,418 million in 2005 â€” some 76 per cent of the total foreign exchange earnings by the country. The commerce ministry officials reportedly claimed that â€˜even a 10 per cent fall in Readymade Garment (RMG) exports could mean a loss of $850 million in earning, much higher than the earning from any other sector, excepting remittance from Bangladeshi workers abroadâ€™.
Besides, the destruction of the factories may stand in the way of repayment of capital by the factory owners concerned to the banks, and rebuilding of the factories would result in extra pressure on the banks concerned, eventually affecting the banking system. In the meantime, several hundred workers may remain out of employment, creating extra burden on a society already suffering from lack of adequate employment opportunities. More than 2 million people, a majority of them women, work at some 4,000 garment factories in Bangladesh at the moment.
Moreover, one cannot rule out the possibility of capital flight by the factory owners, both local and foreign, suffering from a sense of insecurity. If it so happens, it would create a tremendous adverse impact in the economy.
In these circumstances, the good news is that all the parties involved â€” the government, the factory owners and the workers â€” have expressed grave concern over the violent developments in the garments sector. What is more important, all the parties have reportedly agreed, on May 24, to resolve the standoff in the sector through tripartite negations â€” a process of dispute resolution that has been absent for so many years now. The parties concerned have also formed a â€˜minimum wage boardâ€™, comprising representatives from all the three parties, to deal exclusively with the wages in the garment industry â€” a demand of the workers that has been gathering dust in the labor ministry since 2001.
Misleading conspiracy theories:
By way of agreeing to the process of tripartite negotiations and forming the â€˜minimum wage boardâ€™ comprising representatives from all the three parties involved, the government and the factory owners have eventually admitted that the absence of a negotiation process and the longstanding dispute over the wage structure have much to do with the present labor unrest in the garment sector.
But their public reactions to the labor unrest appear to be misleading â€” nothing more than political rhetoric that would hardly help solves the problem.
Local government and Rural Development Minister Abdul Mannan Bhuiyan, himself a former labor leader, claimed on May 23, before even initiating an investigation that â€˜local and foreignâ€™ conspiracy was behind the violent outbursts.
Some other ministers, including Finance and Planning Minister M Saifur Rahman also joined the conspiracy theorists. Earlier, on May 21, the Bangladesh Garment Manufacturers and Exporters Association, the apex body of garment factory owners, pointed its fingers at a â€˜blueprintâ€™ of a â€˜neighboring countryâ€™ to destroy the countryâ€™s booming garments sector, â€˜by keeping buyers off the Bangladesh apparel industryâ€™. Terming the â€˜outburstâ€™ a â€˜well designed conspiracyâ€™, Abdus Salam Murshedy, BGMEAâ€™s acting president, told the media on May 21, â€˜When the garment industry is posting a robust growth and orders keep flooding the factories, the agents of a neighboring country targeted Bangladeshâ€™s apparel industry â€¦ The agents of the neighboring country are out to destroy our factories by instigating some unruly workers.â€™ Some factory owners accused â€˜some NGOs receiving foreign fundsâ€™ of inciting the workers to impede the growth of the sector.
To put it in a nutshell, the BGMEA believes, or wants others to believe, that the labor unrest in question was a result of â€˜anything but labor movementâ€™. â€˜It was no labor movement. The destruction of factories was done by conspirators and outsiders,â€™ said Shahadat Hossain Chowdhury, a vice-president of the BGMEA, on May 25. The Prime Minister asked the Home Ministry on May 22 to investigate the allegations of conspiracies. The probe is yet to be initiated.
One cannot rule out â€˜foreign conspiraciesâ€™ against a â€˜cheap marketâ€™ â€” be it of labor, commodity or capital â€” particularly when history records hundreds of wars to capture anotherâ€™s market. But before looking for conspirators outside the border, it is prudent to examine the reported grievances of the workforce within the national boundary. With the internal grievances addressed, the chances of external enemies, if there is any, to succeed diminish automatically.
Genesis of the labor outburst :
The labor unrest in the garment sector did not begin on May 20. The unrest, born out of years of genuine grievances of a large section of garment workers, rather took violent expression in the spontaneous, and therefore thoughtless, protests of a small group of workers who reportedly felt cheated by the management of FS Sweater Factory of the SQ Group. The management closed the factory on May 16, with the issue of paying dues, including salaries and overtime bills for three months, remaining unsettled. The management, however, assured the workers that it would settle the issue on May 20. When the workers came to the factory premises on the stipulated day, they were greeted by a group of musclemen allegedly hired by the management, and the management refused to talk about the dues â€” let alone settling them. The mercenary musclemen assaulted some of the workers as they wanted to know when the factory would open.
Humiliated and enraged, a group of workers of FS Sweater took their grievances out on several other factories in the areas, presumably to secure sympathy of fellow workers, and they got positive response. True that the workers of many a neighboring factory, who joined the agitations of the workers of FS Sweater, operate under better conditions; but it is not unusual, or unprecedented in the history of labor movements, that better paid workers show solidarity with their deprived colleagues belonging to different factories. This is equally true for factory owners as well: many a â€˜good pay masterâ€™ stands by the side of their worse counterparts, organized under the umbrella of BGMEA, when it comes to safeguarding the material interests of factory owners.
Things started taking a turn for the worse when the police fired on the agitating workers, killing one and injuring dozens. The killing actually added fuel to fire, eventually contributing to turn the spontaneously organized workers into a violent mob. A mob can do anything. A mob can also unwittingly play into the hands of vested quarters. In the present case, it ran amok at and around the Export Processing Zone in Gazipur.
But the factory owners, and the government, only found foreign conspiracy behind the â€˜sudden outburstsâ€™ of the workers, which means that they refuse to even recognize the grievances of the workers, and take into consideration the fact that the aggrieved workers can resort to agitation to realize their legitimate demands. The result was obvious: the workers continued to agitate the next day and the following day, until the government and the factory owners agreed to form a minimum wage board.
The longstanding deprivation:
There are, mainly, four parties involved in the apparel industry: the government, the factory owners, the western buyers of the finished garments, and the workers. Of the four parties involved, the first three are the immense beneficiaries, while the workers remain deprived â€” deprived of just wages, sound working conditions, the democratic right to trade unionism, etc.
The government, as said earlier, receives from the sector more than $6,000 million in foreign exchange to pay its import bill every year â€” not to mention the revenue collected internally. The western buyers, who get their garment products at the cheapest possible price, make huge profits in the European and American markets. Most of the local factory owners make adequate money out of the industry to build palatial houses in posh areas of the capital, have their childrenâ€™s education and treatment abroad, and ride luxury cars, holiday at tourist resorts across the world. But the garment workers, who make all these profits and benefits possible for the other three parties involved, are forced to live a miserable life in the city slums for years upon years. Lack of job security, lack of hygiene, lack of nutritious foods and health, lack of education for the children, lack of right to legitimate protest against ruthless exploitations, etc are their daily destiny, which is carefully crafted, and perpetually nurtured, by the three other parties. This is a situation that cannot help ensure a sound capitalistic development in the country.
If one simply takes a look at the pathetic wage structure for garments workers, study the factory ownersâ€™ inhuman active opposition to the workersâ€™ demand for negotiation over a legally fixed minimum wage structure, and the governmentâ€™s indulgence to the irrational whims of the owners for years in this regard, one would readily understand the level of exploitation the workers are victims of.
The minimum wage for private jute and textile sector workers was fixed in 1985, which was only Tk 560 per month. Later, in 1994, the minimum wage for a worker in the garments sector was fixed at Tk 930 per month. Meanwhile, in 1997, the minimum wage for a worker in the public sector was fixed at Tk 1,550 per month.
Subsequently, the private sector workers, including those in the garments sector, demanded re-fixation of their minimum wage, and the government eventually set up minimum wage board, but the private sector employers did not pay heed to the idea of readjusting the minimum wage structure with the rise in the cost of living and therefore refused to send any representative to board.
The government, following a protracted labor movement, announced in July 2001 the minimum wage structure for the private sector workers, fixing Tk 1,200 as minimum monthly salary for unskilled workers in small industries, Tk 1,250 in small and medium enterprises and Tk 1,350 in large industries.
But the Bangladesh Employersâ€™ Federation rejected outright the government proposal and a member of the federation, an owner of a garments factory, moved the High Court in November 2001, on the ground that the wage board which announced the minimum wages was not represented by the employers. The court found, on this technical ground, the government order illegal. Since then, the government and the employers have happily passed time until the private sector workers started agitating again in the first quarter of 2004. The government again sought official recommendation of the employers in April 2004 for â€˜national minimum wagesâ€™ for the private sector workers. The employers continued to oppose the idea of fixing minimum wage for the workers.
The government, which grants various kinds of â€˜incentivesâ€™ to the private sector employers from the public exchequer on a regular basis, did not play any pro-active role to make the employers respond to the legitimate demand of adjusting the minimum wage.
Sultan Ahmed, assistant executive director of the Bangladesh Institute of Labor Studies, rightly told New Age on April 29, â€˜The government has surrendered to the owners of the private sector industries.â€™
This burning issue of minimum wages apart, there are other inhuman exploitations that the garments workers have been vocal against for more than two decades, including the demand for paid maternity leave, safe working conditions, weekly holidays, an end to harassment including sexual harassment, the right to trade unionism, etc.
Garments workers in Chicago fought against the tradition of working 12 to 13 hours a day and seven days a week as many as 120 years ago this month, while the phenomenon still remains intact in Bangladesh. And as for working conditions, they are one of the worst in the world â€” frequent garment factory fires taking dozens of lives due simply to lack of safe exits being the burning example. In these circumstances, one wonders why the garments workers of the country would need instigation from abroad to burst into violent protests against decades of multifarious exploitation.
The Brussels-based International Textile, Garment and Leather Worker Federation, on May 24, termed the BGMEAâ€™s reaction to the labor unrest in question â€˜divorced from the reality of the industryâ€™ and observed that such reaction â€˜makes the employers of Bangladesh a laughing stock internationallyâ€™. In their estimation, in February 2005 a garment worker in Bangladesh received only 6 cents as wage per hour, when the figure is 20 cents in India and Pakistan, 30 cents in China, 40 cents in Sri Lanka and 78 cents in Thailand. The organization described the wages as â€˜truly scandalousâ€™.
What is to be done:
The labor unrest has initially contributed positively towards the restoration of the standard process of the tripartite negation for resolving the longstanding disputes prevalent in the apparel sector. The process should be taken forward through mutual respect between the employers and the workers. Although the employers have agreed to a tripartite negotiation on the wage issue, the have shown a tendency of containing future labor movements, if any, in a coercive manner. On top of saying an absolute â€˜noâ€™ to the workersâ€™ democratic right to sound trade unionism, they have demanded industrial police and a security monitoring and control cell at the BGMEA office stationing senior officials of different law enforcing agencies including the Rapid Action battalion and Bangladesh Rifles. Such â€˜war preparationâ€™ against possible labor unrest would help little to develop a sound industrial relation in the sector.
The workers, on the other hand, are keeping a watch on the developments as regards the possible outcome of the tripartite negotiations. But they do not seem optimistic about a positive solution to the longstanding problems, and therefore have called a strike in the garments sector for June 12. What the workers need to realize in this regard is that the mess created for decades cannot be cleaned over night. They would need some patience to consolidate the victory that they achieved in terms of making the employers come to the negotiation table. If the negotiations can begin a healthy process of industrial relation, all parties involved would eventually win. But an honest governmental role remains crucial in forging a constructive negation between the two conflicting forces of the industry â€“ the factory owners and the wage laborers, and the government should play honest, keeping in mind that the apparel industry remains the lifeline of the national economy.
- INS + Asian Tribune -