Both manufacturers and buyers should spend additional fund from their profit margin to ensure compliance and workers’ rights as well as increasing sustainability of the sector, experts said yesterday. They also viewed that strengthening government’s institutional mechanism and social audit system set up by the buyers and retailers would be essential to inspect factory-level compliance and maintain international standards. The observations emerged from a dialogue on “Bangladesh Apparels Sector: Does Margin Matter for Ensuring Compliance?” organised by Centre for Policy Dialogue (CPD) in partnership with Friedrich Ebert Stiftung (FES), Bangladesh in the capital. The apparel experts gave their views over a CPD study on Margin and Its Relation with Firm-level Compliance and Illustration on Bangladesh Apparel Value Chain, presented by CPD Additional Research Director Khondaker Golam Moazzem. The study said it would be very difficult for Bangladeshi manufacturers to increase spending for compliance under the existing level of margin. Economic and noneconomic factors, including higher labour efficiency, low interest rate, financial incentives, semi-automated production process and developed infrastructure force will enable domestic firms to compete with other countries that spent most on compliance than Bangladesh, it said. It said Bangladesh spent 15.1% for trimming or packaging, which is the highest than any other competitive countries. Bangladeshi manufacturers invariably spend less for selling, general and administrative cost and manufacturing overhead cost of manufacturing, according to the study. It revealed that a disjointed value chain is in operation in the apparels value chain of Bangladesh because existing structure and market forces put little emphasis on compliance. Expenditure on compliance is extremely low in comparison with other countries and in contrast with investments in industrial raw materials including fabric, it said. Chairing the event, CPD Chairman Professor Rehman Sobhan observed that increasing export competitiveness at the cost of workers’ wellbeing is socially unjust and politically unsustainable. He proposed making the workers into shareholders to positively include their contribution in the global value chain and thus make the industries sustainable. Highlighting initiatives so far taken by the government for ensuring compliance, labour and employment ministry secretary Mikail Shipar said the government is committed to expand RMG sector in the country in future and to keep sound relation between the workers and owners. Mohammadi Group Managing Director Rubana Huq said maintaining compliance standards pose challenging, especially without apparels industries regulating themselves by addressing real compliance issues instead of protecting reputation for business. She laid emphasis on necessary fund minting compliance saying so many assurances that we will be funding you. That’s fine, but my point is when. Assistant Executive Director of Bangladesh Institute of Labour Studies (BILS) Syed Sultan Uddin Ahmed said fundamental rights of workers are not dependent on maximum margin. He urged buyers to give support on ensuring compliance in Bangladesh apparel sector. Opex Group Chairman and former BGMEA President Anisur Rahman Sinha said: “We have to be practical that things are being built, but not destroyed.”
