Originally posted in The Business Standard on 11 September 2024
Why discontent persistently plagues Bangladesh’s RMG unlike other sectors
Labour unrest, driven by demands for better wages and benefits, continues to disrupt the industry, with solutions often being addressed on an ad hoc basis. Manufacturers frequently point fingers at international buyers, claiming they do not pay enough to facilitate increased worker benefits
Four decades ago, the garment industry accounted for less than 4% of Bangladesh’s total exports. Today, that figure has surged to nearly 85%, marking a remarkable transformation of the sector into an export powerhouse.
Despite this impressive growth, questions are being raised about its sustainability. Labour unrest, driven by demands for better wages and benefits, continues to disrupt the industry, with solutions often being addressed on an ad hoc basis. Manufacturers frequently point fingers at international buyers, claiming they do not pay enough to facilitate increased worker benefits.
However, many industry insiders and economists aren’t convinced. They argue that exporters are too focused on undercutting each other in price wars, neglecting innovation, product development, and professional standards.
They also question why labour unrest is so frequent in the garment sector, while other industries like jute, plastic, and pharmaceuticals – employing hundreds of thousands of workers – experience far fewer disruptions.
Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue, said unlike other sectors, the garment industry is highly labour-intensive and requires proper management – something that has been lacking in Bangladesh.
“In the past, when labour unrest occurred in a factory, owners often tried to manage the situation internally and, in many cases, relied on the industrial police, whose role was not that,” said Moazzem.
Additionally, owners used the police to identify and blacklist workers – particularly male workers – whom they accused of causing disturbances, he added.
“Once blacklisted, these workers were unable to find employment in any factory, creating a dire situation,” he told The Business Standard.
This approach, Moazzem explained, has discouraged owners from building healthy relationships with their workforce. He also pointed out that the government at the time largely sided with factory owners, further worsening tensions.
After the Rana Plaza collapse in 2013, there were some improvements in compliance and wages in the garment sector, and trade unions were allowed. Workers’ participatory committees were established in many factories, along with welfare committees in EPZ factories. However, these forums remain largely inactive, leaving the sector without effective solutions or improved relationships with workers, said Moazzem.
He also expressed surprise at the lack of active involvement from global brands in addressing these issues.
“As a result, workers feel no sense of ownership and believe they must push for their demands on their own,” he said.
There needs to be a “tripartite-plus” approach, involving trade unions, owners, the government, and civil society, to improve the situation, he said, adding that unfortunately, many owners resist the formation of strong trade unions.
Exporters also believe that they should shift focus from price competition to innovation and worker needs, stressing that meaningful change and thoughtful demand management are crucial for their sustainability.
“We’re competing with each other to offer buyers the lowest prices, but there’s no focus on innovation or diversification,” said Shams Mahmud, managing director of Shasha Denims and former president of the Dhaka Chamber of Commerce and Industry.
Shams emphasised the need for self-reflection within the industry to ensure its sustainability. “It’s time for some soul-searching on how we, as garment manufacturers, can bring about meaningful change.”
He also stressed the importance of addressing workers’ demands thoughtfully. “We need to carefully study what workers are asking for. If fulfilling their demands leads to losses, it won’t benefit anyone in the long run. These issues need to be part of the discussion,” he added.
Syed M Tanvir, managing director of Pacific Jeans, believed that owners should meet with workers regularly to improve the industry-worker relationship.
“Individually, every factory has to sit with their workers to solve the situation. If the association takes a collective approach, many factories would not be able to implement that decision,” said Tanvir.
If the Department of Labour operated neutrally and the Labour Court functioned effectively, many of the sector’s problems could be resolved, Moazzem noted.
However, KM Rezaul Hasanat, chairman and CEO of Viyellatex Group, argued that the challenges facing the garment sector are part of a broader issue within the country’s governance system.
“The entire system is rotten,” he said. “What can you expect from a BGMEA president who doesn’t even own a factory?”
Over the past 15 years of Sheikh Hasina’s regime, many garment exporters held significant influence, with around 30 lawmakers and several ministers coming from their ranks.
The last two mayors of Dhaka North City Corporation were also garment exporters. The current BGMEA president, who has gone into hiding after Hasina’s fall on 5 August, is the general secretary of the Awami League’s Dhaka North unit.