The fallout of COVID-19 outbreak for a country like Bangladesh is devastating where the economy and employment generation principally depend on garment manufacturing and exports. BGMEA has taken all-out and multi-pronged efforts to save the industry when large-scale of order cancellations by the global buyers had wreaked havoc and number of garment makers shutting down their operations.
According to the experts, the production has started since 26 April in the country but factories have been running with a limited number of workers due to health concerns, decline of demand in all export markets, some temporarily and in want of new orders, while many others permanently and being unable to cope with the financial implications.
In the last couple of months around 419 garment manufacturing units to remain closed due to the large scale of order cancellations by the western buyers and lack of new work order. The more alarming is that 100 have now shut down operations permanently out of these 419 units.
In such a scenario, BGMEA under the leadership of Rubana Huq rose up to the challenge and took a multi-pronged approach to try bringing back some sanity in the industry.
Bangladeshi manufacturers started up threatening that they would blacklist Western fashion brands that ‘exploit’ them by failing to pay their bills due to the new coronavirus crisis and sued a major British retailer over its debts next day. The BGMEA issued an official letter to British billionaire Philip Day’s Edinburgh Woollen Mill (EWM) group, demanding to pay up for clothes shipped before 25 March.
“BGMEA has taken the stand of blacklisting specific buyers and has begun with EWM,” said Rubana Huq. “Severing business with them is not the ultimate means we should pursue; however, we will definitely take a position where we see buyers’ willful attempt to exploit the suppliers” she added.
According to the Bangladeshi factory owners, they had singled out Edinburgh Woollen Mill asking for large discounts which violated local laws, international standards and defied the principles of ethical sourcing.
“Certain buyers are taking undue advantage of the COVID-19 situation and demanding unreasonable discounts despite concluded contracts pre COVID-19 and despite continued business activity,” mentioned in the letter written by BGMEA to EWM, adding, “You, the notice recipients, are among those who are claiming such discounts.”
Such demands would be ‘financially catastrophic’ for manufacturers, the letter further added.
BGMEA has also started engaging different international rights groups to ensure that international retailers and brands pay local suppliers besides working closely with the Bangladesh Government and the country’s missions abroad to initiate parallel track of discussions with foreign buyers and Governments.
“BGMEA has taken all-out steps to re-engage the buyers in discussions. We are also working closely with social and international partners like International Labour Organisation (ILO), Human Rights Watch, Workers Rights Consortium and academia to build a global opinion to support our manufacturers and workers in this difficult time,” the BGMEA President explained the traders’ body efforts.
“We hope global brands and retailers will act on their conscience and respect the business deals, so that we can resolve the issues among us”, she added.
BGMEA is also seeking further support for innovative and inclusive solutions like credit guarantee scheme’ or similar sort from the Government to protect the industry from possible default and closure and so that factories can turn around and continue to operate, added by the President, BGMEA.
She also underlined that Bangladesh exporters must be more conservative while making a deal with the buyers, and also to follow a proper due diligence procedure regarding buyers solvency before any deal.
“Also we would need to formulate our own policies to suggest a standard operating procedure for the Bangladeshi exporters, probably by the central bank, in the event of being exposed to a bankrupt buyer”, she opined.
Experts believe that such all-out effort by the BGMEA are not just the need of the hour, but to survive and sustain such industry there were no other choices. They are also hoping that these efforts will definitely work out in the dire situation due to coronavirus pandemic.
