Foreign buyers resort to corruption and malpractice to reap undue advantage by pressuring Bangladeshi readymade garment suppliers, a global corruption watchdog has found in a landmark research. he qualitative study on ways to prevent corruption in the readymade garment (RMG) sector in Bangladesh is also the first of its kind that was jointly conducted by Transparency International’s Bangladesh and German chapters from November 2014 to April 2015. Starting from manipulating inspection and compliance reports, arbitrarily cancelling work orders, pressuring suppliers with unnecessary requirements, forcing factories to purchase materials from incompetent sources, and awarding work orders against bribes are some of the malpractices and corruption that foreign buyers and their local agents resort to. These eventually lead to factories having to make workers work inhuman hours and suffering severe losses and bankruptcy. The study report released yesterday by Transparency International Bangladesh (TIB) in Dhaka is based on interviews with buyers, buying house executives, garment factory owners, factory staff and workers, compliance auditors and inspectors, experts, merchandisers, shipping agents and bankers. One of the 15 case studies that the report cites describes how an American buyer manipulated a local inspector to find flaws in a shipment and cancel an order after realising that the products might not do well in their market. That eventually pushed the Bangladeshi supplier to the verge of bankruptcy. Another case study says: Recently, a local factory manufactured 20,000 sweaters for a German buyer. When the shipment reaches the Chittagong Port after successfully going to all compliance and quality tests, the buyer sends an inspector, who finds problems with the products. Based on this, the buyer threatens to cancel the order unless the supplier gave 20% discount on the contracted price. In scenario 5, the report describes how a merchandiser forced a factory to purchase accessories from certain suppliers instead of the best ones. It said that the merchandiser, appointed by local buying house, took bribe from those accessories suppliers. The study also pointed out buying house merchandisers receiving bribes or commissions from factories to award a work order as another prevalent corruption in the sector. The remaining case studies describe the corruptions and malpractices that local factories, auditors and inspectors resort. Some of these are: bribing compliance auditors and quality inspectors to ensure getting favourable reports for sub-standard products and using low quality materials, importing more raw materials than needed at low tax and then selling the surplus in the open market, producing duplicate or fake documents or tampered records in order to get work orders, and violating minimum wage, work hours and the standards of labour rights. At the report launching programme, TIB Executive Director Iftekharuzzaman said: “More or less everybody is involved with irregularities. It will be unwise to put the responsibilities on the government only. Buyers and agents are responsible too.” He also said that buyers “abuse their business power” to seek opportunities at the expense of the local suppliers. The report also laid out a 27-point recommendation on how to combat corruption and irregularities in the RMG sector, detailing the roles that stakeholders including buyers, BGMEA, the government and the civil society and media can play.
