Published in The Financial Express on Sunday, 28 September 2014.
Mandatory group insurance for workers
Many RMG factories found in default
Shah Alam Nur
More than one-third of the readymade garment (RMG) factories in the country are yet to give group insurance coverage (GIC) to their workers, in what amounts to noncompliance with the labour laws.
Industry-insiders fear such default issue on the part of the owners remains as one of the flashpoints for labour unrest in the sector.
Data available with the owners’ association shows that more than 1,300 RMG factories have no GIC for their workforce. The total number of export-oriented garment factories in the country is 3,400.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) data have it that, until September 2014, nearly 2,100 factories have introduced group insurance so far.
Industry sources say for direct or indirect business, it is mandatory for the factory owners to bring all their employees under GIC as per the law.
Group insurance is mandatory under ‘The Compensation Act 2005’, as the labour-welfare measure helps create friendly industrial relations.
“GIC is mandatory but still nearly 38 per cent of RMG factories could not implement the compulsory facility,” Shahidullah Azim, vice-president of BGMEA, told the FE.
He noted that the GIC works as a shield for the workers in any accident.
The industry association leader’s observation carries great significance when considered against the grim background of past tragedies in some factories — the catastrophic Rana Plaza collapse comes to crown it all.
Now about 3,400 RMG factories are in business directly or indirectly. But the association, which is the platform for the apparel exporters, has no ‘special power’ to compel the owners to bring their workers under insurance coverage.
He said several times they had pressured the factory owners to bring their workers under group-insurance facilities. But many have yet to comply.
He said the BGMEA can make it mandatory for the factory owners but cannot force them to implement it.
On account of insurance coverage for workers, every owner has to pay an amount between Tk 12,500 and Tk 0.1 million to the insurance companies as the annual premium, depending on the number of employees.
According to the group-insurance policy, each of the workers and his or her nominees in the apparel sector is entitled to receive Tk 0.2 million for death and Tk 0.125 million for any disability while at work.
“Until now, a third of RMG workers are out of the group-insurance coverage. This is one of the key reasons for labour unrest,” President of National Garment Workers-Employees League Sirajul Islam Rony told the FE correspondent.
He said in incidents like fire, building collapse, personal accident or sudden shutdown of a factory, workers are deprived of compensation for lack of GIC. And such deprivation prompts employees to resort to vandalism.
He said now the RMG industry is going through many challenges, so, to avoid worker unrest, the industry owners should fulfil the mandatory of insurance coverage for all the workers of the listed and non-listed factories across the country.
The unionist said getting GIC is right of the workers, but one-third of the industries are showing apathy about it.
Dr Khandker Golam Moazzem, an additional research director at the civil-society think-tank Centre for Policy Dialogue (CPD), suggests the government should take stern action to implement GIC in the garment factories.
“Image is now a major factor for Bangladeshi RMG sector after incidents like Rana Plaza collapse or Tazrin fire. We should redeem our image,” he said.
The policy analyst opines that implementation of GIC in cent percent of the factories not only will benefit the workers but also the owners.
“A positive image of the sector may help boost export,” he said.
He also pointed out that for a lack of awareness of the workers a large number of factories didn’t implement group insurance although the sector alone earns about 80 per cent out of the total export earnings.
“Lack of proper inspection and absence of punishment have been playing vital role in breaking the compensation rule by the RMG owners,” he noted.
Syed Ahmed, Inspector-General of the Department of Inspection for Factories and Establishments (DIFE), said still they could not visit any factories which are breaking the existing laws due to shortage of their manpower.
“We have only 250 inspectors against our requirement for over one thousand. How can we check whether the workers in all the factories have been covered under insurance and other related facilities?” he questioned.
Since independence, no single sector could accelerate the industrialization process in the country as the RMG sector could do but the workers are being dispossessed, observers said.
The RMG sector is playing a vital role in socioeconomic development of the country. It has created employment opportunities for about 3.5 million people, 80 per cent of them women.
shahalamnur@gmail.com