The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has called on all readymade factory (RMG) owners to implement the newly declared minimum wage for the sector from 1 December.

BGMEA President Faruque Hassan made the call in a letter addressed to the association’s members on Wednesday (22 November).

He wrote that “I have informed you my views about the wage issues in my earlier letter, while the minimum wage board was in negotiation. You are aware that the negotiation process is completed, and the government has declared the minimum wage for garment workers on 7 November which was published in an official gazette dated 11 November 2023.

“The minimum monthly wage for an unskilled / entry level worker is set at Tk12,500 taka, increased by 56.25% at gross.

“As per the formal procedure, the Minimum Wage Board keeps a window open for public comments for 14 days after it publishes the draft gazette. I would encourage you to submit your concerns, comments or suggestions on this declared wage, if any, to the Chairman of the minimum wage board. After the next meeting of the Minimum Wage Board, with the comments and necessary amendments, the final wage will be declared.”

He also said, “Minimum wage is being reviewed every 5 years following a proper consultation procedure. It was no different this time. But the three weeks long anarchy and violent protest we have seen does not have any logic and is quite unfortunate. This has not only caused financial damages to the industry and unfortunate loss of lives, but questioned our stability and reputation again.

“We took all-out efforts from BGMEA to contain the situation with support from the government and from workers’ representatives, and we are now engaged with wider stakeholders including local and international media to counter the disinformation and propaganda against the industry.

“As soon as the illegal strikes and violent protests started, once again we saw anti-industry bias in media reports as some global media agencies published reports with wrong information and misrepresentation of the facts. I have immediately issued a clarification statement to all pressmedia outlets and copied all of our embassies abroad, sharing what actually happened during those three weeks.

“Since our valued buyers and brands were worried about the shocking uprising of violence around the industry amid the declaration of a new minimum wage structure, we invited the representatives of all the brands and retailers’ liaison offices in Dhaka to the BGMEA office on 15 November.”

He continued, “Before this meeting, I also wrote a letter on 8 November to all the brands and retailers worldwide, who are sourcing from Bangladesh, informing them about the new wage structure and urging for reasonable price upcharge. There was a significant turnout of almost all the brands operating in Bangladesh with the country heads being present, and we had a cordial and open discussions over wage, competitiveness and sustainability issues. At the meeting we apprised them once again about the increase in minimum wages and its impact on gross wage payment, payment of overtime and other allowances.” 

Earlier this month the government set the minimum wage for RMG workers at Tk12,500, in alignment with the proposal put forth by factory owners ignoring workers’ demand of a Tk20000 minimum wage.

After the sixth meeting of the Minimum Wage Board for the ready-made garment sector on Tuesday, State Minister for Labour and Employment Begum Monnujan Sufian said the wage has been hiked by 56% from Tk8,000 following the instructions of Prime Minister Sheikh Hasina.

Amid disruptions to foreign trade by delays in issuing waiver certificates to feeder vessels, the country’s apparel makers have urged the authorities concerned to resolve the complexities in greater good of businesses.

Foreign feeder vessels carry over 90 per cent of seaborne trade to and from Chittagong port, as well as regional transhipment ports.

However, the Bangladesh Flag Vessel (Protection) Act 2019 and subsequent rules mandate that foreign feeder vessels obtain a waiver certificate from the Mercantile Marine Department (MMD) before loading cargo at any port where a Bangladeshi flag vessel is present.

This provision of the act has allegedly created severe uncertainty for foreign feeder vessels, who claim that the MMD makes excessive delays in issuing waiver certificates, putting their businesses in a quandary.

Local agents of the feeder vessels must submit an online application for a waiver certificate 15 days before a scheduled trip. Despite submitting the application well in advance, they reportedly do not receive the waiver certificate on time, leading to constant uncertainty about their next trip.

Last week, the MMD penalised two foreign feeder vessels — each with a fine of Tk 500,000 — for allegedly loading containers without obtaining a waiver certificate and completing voyages. The punishment was strongly protested by the local shipping agents.

The row over waiver certificates between the MMD and foreign feeder vessels has also created difficulties for the garment industry in importing raw materials and making outbound shipments.

In light of these developments, Hasan Abdullah, chairman of the Standing Committee on Port and Shipping at the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), expressed strong disappointment in a letter addressed to the Department of Shipping on Sunday.

He said that the “procedural rigmarole” for issuing waiver certificates has had a serious impact on the garment trade.

“In no uncertain terms, we would like to state that this is apt to cause massive disruption and affect the export of readymade garments and the import of related raw materials, all the more so in view of the severe downturn in global markets,” he wrote.

Referring to a previous letter sent to the Ministry of Shipping, Mr Abdullah wrote that in the carriage of goods by sea, universally the freight component is far too insignificant compared to the value and trade implications of the cargo carried on board.

“Therefore, to ensure or secure freightage for Bangladesh flag vessels through the promulgation of an act/statute, it is of paramount importance that this is not done at the cost of trade and/or endangering the smooth flow of international trade with Bangladesh,” he noted.

“There will be severe impediments in the movement of our garment exports if foreign flag feeder operators are flushed out under this act or if they withdraw their coverage to Bangladesh,” he warned.

Mr Abdullah further said that keeping foreign flag ships waiting unnecessarily due to delays in issuing waiver certificates effectively prevents them from executing scheduled commercial ventures, leading to waiting costs, port charges and other daily operational costs.

“This is absolutely not commensurate with the core economics of the shipping industry. No ship-owner/operator can afford to oblige and as a result, our member industries will sustain serious difficulties and even order cancellations,” he noted.

The BGMEA believes that since no Bangladesh flag vessel operates to transport containerised cargoes directly between Bangladesh and its trading partner countries, the authority should permit the carriage of containerised cargoes to or from Bangladesh by a third-country flag vessel as per the provision of section 4 of the act on filing of an application.

Mr Abdullah called upon the Department of Shipping to review its submissions “to avert any interruption to the free flow of trade and supply chain issues”.

“Shipping thrives on trade and there is no scope for the reverse situation in Bangladesh,” he said, adding, “Creating any bottleneck/impediments to the garment industry’s interests, directly or indirectly, will affect the country’s major foreign exchange earnings…”

“…the responsibility for such an eventuality will fall on the shoulders of those who ignore this cautionary note from BGMEA,” he concluded.

The new policy of the United States, aimed at ensuring labour rights both domestically and internationally, has raised concerns among exporters in Bangladesh.  

Particularly, entrepreneurs in the clothing sector have expressed apprehension, stating that the implementation of the new US policy on labour rights in Bangladesh could impact the country’s export sector negatively.  

As a result, they are urging diplomatic discussions to understand what steps Bangladesh should take in response.

US President Joe Biden has signed a Presidential Memorandum with the goal of empowering workers and ensuring labour rights and an improved quality of life for workers. 

US Secretary of State Anthony Blinken announced last Thursday that the United States is committed to protecting the rights of workers in accordance with international labour laws.  

This commitment involves collaboration with governments, workers, labour organisations, trade unions, civil society, and the private sector.  

Blinken emphasised that those who violate workers’ rights, engage in threats, or intimidate workers may face sanctions if deemed necessary. 

The announcement by the US on labour rights comes at a time of unrest in Bangladesh regarding the minimum wage in the garment sector, leading to workers going on strike. Simultaneously, the United States has implemented visa policies aimed at ensuring free and fair elections. Given these developments, the new labour rights policy has heightened concerns among exporters in Bangladesh. 

Anthony Blinken referenced Kalpana Akhter, the leader of Bangladesh’s garment workers’ movement, when discussing the new US policy on labour rights.  

He mentioned that Kalpana acknowledged the support of the US Embassy in Dhaka, which acted as a consultant for her. According to Blinken, she had said that is why she is still alive today. Also

Kalpana Akhtar, the president of the Bangladesh Garments and Industrial Workers Federation, told Prothom Alo that the US policy in question applies not only to Bangladesh but to all countries worldwide. The manner of its implementation is left to the discretion of the United States.  

However, Kalpana Akter also highlighted significant shortcomings in labour rights within Bangladesh. She noted that despite legal provisions, workers encounter various obstacles when attempting to establish a labour union.  

According to the Labour Act, obtaining permission from the Department of Labour is necessary to file a case related to unfair labour practices.  

She remarked, “If our employers and government become more conscious of establishing labour rights due to this new US policy, it would be beneficial for the country.” 

What exporters say 

Bangladesh’s garment exporters are expressing concern about the new US policy on labour rights, given that the United States is a major destination for the country’s garment exports. Bangladesh ranks as the third top country in apparel exports globally, exporting various products, including home textiles, frozen fish, leather products, and plastic items to the US market. 

According to data from the Export Promotion Bureau (EPB), during the last fiscal year 2022-23, the total exports of Bangladeshi products to the United States amounted to 9.7 billion US dollars, with readymade garments accounting for 8.51 billion dollars. 

AK Azad, the managing director of Ha-Meem Group, a leading exporter of readymade garments, expressed concerns, stating, “We are very worried about this new policy of the United States. From what we understand so far, it seems that there is scope for this policy to be imposed at the individual level as well as at the state level. So now the issue should be looked at diplomatically very seriously.” 

It is known that the matter was a focal point of discussion among garment industry owners throughout the day. They mention a certain tension between Bangladesh and the United States on political issues, particularly concerning the upcoming parliamentary elections. The addition of labour issues has heightened apprehensions about how the US will implement this new policy. 

A former leader of BGMEA, the apex organisation of garment industry owners, told Prothom Alo on condiiton of anonymity, “We are very concerned about this because there has been worker unrest in the country for quite some time.” 

Moreover, apparel exports to the US market this year are showing a somewhat negative trend. According to EPB data, readymade apparel exports to the US declined by more than three per cent in the four months from July to October compared to the same period a year earlier. 

Fazlul Haque, the former president of BKMEA, the apex body of knitwear exporters, shared with Prothom Alo, “Many people are worried about the issue due to the current situation. However, the US did not take this step for Bangladesh alone. We don’t have the kind of situation that the new policy mentions about forced labour. Nevertheless, communication with the US at all levels should be increased on the whole issue.” 

Must work on our weaknesses  

Leaders of the garment workers’ movement and labour rights activists argue that the reality is different from what the government or garment owners claim, asserting that workers in the country have the right to speak out and that labour conditions have improved. 

When questioned about this, Syed Sultan Uddin Ahmed, an expert on labour activities in South Asia currently working at the International Labor Organization (ILO) in Delhi, India, told Prothom Alo last night that when a country has weaknesses in terms of the working environment and labour rights, outsiders feel compelled to speak up. They get an opportunity to voice concerns. To avoid such a situation, he emphasised the need to address internal weaknesses. 

Syed Sultan Uddin Ahmed stated that genuine workers’ representatives should be given the opportunity to speak about workers’ rights, an area where Bangladesh faces significant shortcomings. He pointed out that the way the workers’ movement is handled, particularly concerning their wage demands, does not convey a positive message to the outside world. 

Global fashion brands are compounding sufferings of millions of garment workers through their tightfistedness in pricing, as a global report reveals major gaps in supply-chain needs and apparel-retailing companies’ commitments.

Such hiatus between what the fashion brands gain and what they hand down to suppliers result in insufficient wages to apparel workers and deficiency in labour rights, says a survey report presented Monday at a Dhaka meet jointly organised by the UNDP and the World Benchmarking Alliance (WBA).

A trade-union leader at the function noted that lack of bargaining capacity of workers exploded into recent street protests for pressing home wage-hike demand.

The apparel companies-94 per cent of surveyed ones–have high expectations for their suppliers regarding human rights and/or gender equality but these are not backed by their responsible purchasing practices or actions.

The survey report says avoiding short-notice requirements and delayed payments, and mapping supply chains or providing targeted support on gender equality could set suppliers up for success.

The industry still fails to fully protect workers’ rights as the report found over 60 per cent of surveyed global apparel brands, including Walmart, Target, Next and Nike, having scored less than 20 out of 100 on human-rights indicators.

The average score is 18.2 and just one company, Puma, scored above 50 out of 100, according to the 2023 Corporate Human Rights Benchmark (CHRB) report launched on the day at the webinar.

The World Benchmarking Alliance or WBA assessed 55 of the world’s most influential apparel companies, including Puma, H&M, M&S, Hugo Boss, Ralf Lauren Corporation, Gap, Adidas, Fast Retailing, Kering, SHEIN, and VF Corporation, based on their governance and strategy, workplace, and supply-chain practices, and more than half of the surveyed buyers and retailers source apparel items from Bangladesh.

The webinar on ‘Addressing Power Imbalance in Global Supply Chain’, jointly organised by UNDP and WBA, also published another benchmark report on gender.

“Only 27-percent surveyed companies enable their suppliers to meet their expectations through responsible purchasing practices such as avoiding short-notice requirements and delayed payments,” Sofía del Valle, WBA engagement lead, said while sharing the findings at the virtual event.

Some 56 per cent of the surveyed fashion companies still aren’t identifying all of their direct and indirect suppliers, the CHRB found.

Without such mapping, companies have no way of protecting workers, as they do not know who or where their suppliers are, or what issues they face, the report notes.

However, the recent protests by garment workers in Bangladesh calling for increased wages are a stark reminder that actions on paying supply-chain workers a living wage are still too slow, the WBA said.

“Many companies are still passive and not transparent on the issue, leaving workers at risk of poverty,” it says.

Of all apparel companies assessed, only 12 companies (22 per cent) disclose evidence of activities that support their suppliers in the payment of living wage.

When it comes to corporate commitments, only 7 companies (13 per cent) disclose a time-bound target for the payment of living wages across their supply chains or include living-wage requirements in their contracts with suppliers.

“Companies that carry out rigorous supply-chain mapping perform better in all gender- equality indicators,” says the report.

High-performing companies across both benchmarks, including VF Corporation and Inditex, have fundamental corporate due diligence and sector-specific policies for their supply chain to protect workers against violence, harassment, and child and forced labour.

Others, including SHEIN, Prada, and Youngor Group, fail to meet key indicators across human rights and gender equality.

It also shows the sector has shown some progress compared to previous benchmarks, with 69 per cent having improved their score since 2018 on key human-rights indicators.

The WBA in its report recommends that apparel companies must better understand their supply chain to be able to support suppliers and called them to urgently step up to protect all workers, including the transparent disclosure of clear commitments, taking preventive and remediation measures, and supporting suppliers through responsible purchasing.

“Well-rounded gender-equality measures are essential to protect garment workers from violence and harassment, but many apparel companies don’t have this as a priority,” the survey report says.

Most companies (85 per cent) have a policy that protects women from violence and harassment in the workplace, but significantly fewer companies (66 per cent) require their suppliers to do the same. And 27 per cent do not require their suppliers to have an equal opportunity or non-discrimination policy that explicitly protects pregnant and/or married women workers.

Only 4.0 per cent of companies have publicly disclosed processes to remediate violence and harassment grievances which detail clear sanctions for perpetrators, including termination, it showed.

Namit Agarwal, WBA’s social transformation lead, said: “Fashion brands are still too slow to respect human rights and gender equality.”

“Companies are failing to support suppliers and workers putting at risk the apparel sector as a whole. Not a single company requires its suppliers to offer a minimum of 14 weeks of maternity leave, which is an internationally agreed standard,” she said.

Speaking at the webinar, Kalpona Akter, executive director at Bangladesh Center for Workers Solidarity, stressed allowing trade unions in local garment factories not in number but in real practices to enable workers to go for bargaining.

Terming recently set Tk 12,500 as minimum monthly wage ‘insufficient to afford necessities, she said, “Absence of bargaining capacity forced workers to come to the street to realise wage-hike demand.”

She also called on buyers not to put additional requirements in their code of conduct without value addition.

Explaining BGMEA’s (Bangladesh Garment Manufacturers and Exporters Association) 2030 vision, Sheikh H M Mustafiz, chairman at the standing committee on sustainability, said any initiative or measure engaged in cost and fair price is an issue in addressing all the required things.