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RMG workers’ minimum wage likely to be fixed Tuesday

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The Minimum Wage Board for the RMG sector will hold its 6th meeting on Tuesday to finalise the minimum wage following continuous demands for raising wages by readymade garments workers.

The meeting will be held at the office of the board at Segunbagicha in the capital at 11:00 am, the board said in a press statement on Sunday.

Garments workers in the capital and adjoining areas have been protesting with the demand for a minimum wage of Tk 23,000 for a week, despite efforts by the government, workers’ leaders, and owners’ associations to normalise the situation, reports UNB.

On October 21, workers demanded that their minimum wage be increased from the existing Tk 8,000 to Tk 20,390 while the owners have proposed to increase it to Tk 10,400.

BANGLADESH WILL CONTINUE TO ENJOY DUTY-FREE ADVANTAGE IN EXPORT TO CANADA

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RMG factories to reopen today amid workers’ unrest

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The ready-made garment (RMG) owners will reopen their factories today after more than 500 factories in Dhaka, Gazipur, and Savar were shut down for a week due to ongoing worker protests demanding an increase in the minimum wage.

The garment workers protested in various locations yesterday, and there are fears that the protests will continue today. However, owners said that reopening factories is their only option.

The factories must be reopened to continue production and meet foreign orders on time, garment owners told the Business Standard. “We promised to raise their pay. Even so, if someone goes on strike without working, they will not be paid.”

A factory owner in Savar’s Ashulia said that the factory has been closed for more than a week due to the movement. If no one works, the factory will be closed down at the direction of the government under Section 13/A of the Labour Act.

According to the provision, the employer may, in the event of an illegal strike by any section or department of any establishment, close down either wholly or partly such section or department, and the workers who participated in the illegal strike shall not be paid any wages for such closure.

“We hope the workers will join work on Saturday (today). If not, we will be forced to permanently shut down our factories,” said Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Meanwhile, a group of factory workers started protesting in Ashulia’s Norosinhopur area yesterday and tried to block the adjacent roads. Later, industrial police dispersed them by firing tear shells.

Assistant Superintendent of Police (ASP) Rashedul Islam Biswas told The Business Standard (TBS) over the phone that some people caused trouble in the morning but now the situation is normal.

Garment workers have been protesting for a week demanding a minimum wage of Tk23,000, despite efforts by the government, workers’ leaders, and owners’ associations to normalise the situation.

On 21 October, readymade garments factory workers demanded that their minimum wage be increased from the existing Tk8,000 to Tk20,390 while the owners have proposed to increase it to Tk10,400.

On 30 October, at least two people were killed and about 40 injured in massive clashes between police and ready-made garment workers in several industrial areas in Ashulia, Savar, and Gazipur.

Following the weeklong clashes, the factory owners on Wednesday agreed to pay higher minimum wages to garment workers than Tk10,400, which they proposed earlier.

Acceptable wages to be determined after discussion: Monnujan

State Minister for Labour and Employment Begum Monnujan Sufian convened a meeting with labour leaders on Thursday.

“The minimum wage for ready-made garments workers proposed by factory owners is unreasonable. The Ministry of Labour will submit recommendations to the wage board for fixing acceptable wages in accordance with market rates,” she told reporters after the meeting.

A decision has been made to introduce a rationing system for garment workers, she said, adding that Prime Minister Sheikh Hasina has agreed to this decision.

Monnujan Sufian stated that the wage board could reach a decision in the upcoming meeting by engaging in discussions with both parties to determine the wages.

“If a consensus cannot be reached, the prime minister will make the final decision,” she added.

However, worker representatives say acceptable wages must be announced immediately to get workers back to work.

RMG sector plagued with multifaceted challenges: Report

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The readymade garments industry in Bangladesh is currently facing a number of challenges, said a report.

LightCastle Partners, a prominent national management consulting firm, in partnership with Policy Exchange Bangladesh, unveiled the report’s findings today (4 November). 

According to the report, challenges confronting the RMG sector encompass rising labour costs, heightened competition from low-cost nations, and the imperative to improve working conditions and sustainability practices.

It also said the RMG industry will undergo significant transformation in trade benefit regime by 2029 as GSP moratorium ends, coinciding with Bangladesh’s LDC graduation in 2026.

The report suggested that the industry must enhance operational efficiency through automation while fostering an environment that facilitates the workforce’s transition in order to effectively align with global demand and mitigate risks.

Currently, less than 15% of its operations are mechanised, said the study.

LightCastle Partners in collaboration with The Policy Exchange of Bangladesh conducted an extensive research endeavor titled: “Threads of Progress: A Comprehensive Landscape Study of the Apparel Industry and the Future for Women Workers”.

The research findings were published at a discussion at a hotel in the capital on Saturday afternoon. 
More than 42 national and international industrialists, international buyers, innovators and other officials of garment industries in Dhaka, Savar, Gazipur, Chattogram along with over 50 women workers were interviewed as part of the research.     

The initiative—funded by the H&M Foundation with The Asia Foundation operating as the backbone organisation— is a part of the two-year-long ‘Oporajita: Collective Impact on the Future of Work in Bangladesh’ initiative, with a collective goal to future-proof livelihood of women garment workers in Bangladesh, equipping them for a future where the apparel sector is defined by automation and digitalization.

According to the report, about 84.5% of the country’s total export comes from the RMG sector where 40 lakh workers are engaged, most of whom are women. Hence, it is imperative to increase their skill along with ensuring fair wage.         

The report’s findings highlighted that the COVID-19 pandemic significantly impacted the industry, resulting in the cancellation of international orders and an estimated loss of USD 3.15 billion. In 2022, our efforts to bounce back from the impact of the COVID-19 pandemic were hampered by the emergence of additional challenges, including geopolitical conflicts, a weakening global economy, and concerns about another recession.

The apparel industry faced multifaceted challenges including electricity and gas shortages, coupled with exchange rate fluctuations and dollar crises, which disrupted apparel production by increasing costs for factory owners. Reduced demand from the United States and the European Union also triggered a crisis in the industry. These led to adverse effects on garment workers’ physical health and reduced employment opportunities.

Furthermore, trade tensions between the United States and China present opportunities for Bangladesh to expand its market presence. Sustainable sourcing of inputs is essential to reduce supply chain emissions and compete with other countries. 

Trade barriers may also intensify competition from other countries, necessitating improvements in logistics for reduced shipment time and costs.

Md Abdus Samad Al Azad, Joint Secretary (FTA-1), Ministry of Commerce, and Shahidullah Azim, Vice President of BGMEA, spoke at the discussion as special guests. 

Zahedul Amin, Co-founder & Director, Finance, Strategy & Consulting Services of LightCastle Partners, Samiha Anwar, Business Consultant of LightCastle Partners, were also present.

Dr M Masrur Reaz, Chairman and CEO of Policy Exchange Bangladesh, moderated the discussion, while Radi Shafiq, Portfolio Manager of LightCastle Partners; and Mrinmoy T Sobhan, Business Consultant of LightCastle Partners, highlighted the research findings.

Buyers less inclined to BD, more to China

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Global apparel sourcing landscape this year has been changing due to the sluggish demand as global brands and retailers are pushing for higher sourcing from China and lower from Bangladesh.

The inspection-and audit-demands by western apparel buyers in Bangladesh have witnessed a 10-percent decline year-on-year (YoY) during January to September period of 2023 while it increased by 14 per cent in case of China, first of its kind since 2019, according to a latest report.

“Bangladesh exports have been struggling this year, including its flagship textile and apparel sector, where QIMA data shows a 10-percent year-on-year dip in demand for inspections and audits during the first nine months of 2023.”

The US-based buyers in particular appear to be scaling back textile and clothing sourcing from Bangladesh, adds the report by QIMA, a quality control and supply chain audit company that operates in over 100 countries.

Export Promotion Bureau (EPB) data also revealed that Bangladesh garment exports in October witnessed about 14 per cent YoY decline to US$ 3.16 billion, monthly lowest since August 2021 when the sector earned only $2.73 billion.

Agreeing with the findings, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan said that work orders were lower for the last several months due to slow global demand fuelled by high rate of inflation and interest on bank loans in the importing countries caused by the Russian-Ukraine war.

Echoing Mr Hassan, Fazlul Hoque, former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said: “We are not in a good situation and there is less possibility of improving it in next few months.”

He, however, said QIMA’s stake in Bangladesh is not much as there are many other inspection organizations working here.

Regarding China, he said he is not sure about the findings but China is behaving desperately to grab orders.

During the past few years, in the wake of tariffs wars, Covid-induced lockdowns and geopolitical uncertainty, the Western buyers have shifted significant volumes of orders from China to other supplier markets, including China’s competitors in South- East and South Asia as well as near-shoring regions.

Interest in China sourcing may be picking up again among the US- and EU-based buyers – in the first nine months of 2023 – the relative share of China in their supplier portfolios has increased for the first time since 2019, according to the report.

As consumer spending in the West is slowing down due to fears of economic downturn, brands and retailers may be prioritizing China as a supplier again, to leverage the benefits of its well-established manufacturing infrastructure, the report noted.

“This trend is particularly apparent in the textile and apparel sector. QIMA data for the first nine months of 2023 shows demand for textile inspections and audits in China growing by 14 per cent YoY globally and by 17 per cent YoY among Western buyers.”

QIMA offers supplier audit, laboratory testing and product inspection services in Asia, Africa, Australia, Europe and North America and South America.

It helps more than 30,000 global brands, retailers, manufacturers, and food growers achieve quality excellence.

The QIMA report, however, suggested that Bangladesh should diversify its supplier offering to protect its exports from future shocks.

“The country’s apparel industry, which is currently heavily cotton-oriented, can benefit from branching out into manmade textiles,” it said.

Bangladesh holds 34.7 per cent share in the EU’s cotton imports, whereas its share for non-cotton garments is only 12 per cent.

Outside of the RMG sector, there is a lot of export potential in other consumer goods, such as footwear, leather, and home textiles, among others, it said.

It added that the electrical and electronic goods also offer valuable export opportunities, but to compete on the global stage in this field, Bangladesh needs to strengthen local institutions responsible for internationally recognized certifications.

“Additionally, ensuring that manufacturers have access to the necessary testing facilities is vital for success.”

Despite some challenges including infrastructure, power availability and security, Mexico, which has surpassed China as the US’s largest trading partner in 2023, saw demand for inspections and audit growth by 17 per cent YoY in the third quarter.

It is because Mexico offers many benefits to US-based buyers, such as geographic proximity, zero tariff, low labour costs and a relatively mature manufacturing base, it added.

The country has been attracting new business at an impressive pace (by some estimates, Mexico’s industrial space has grown 30 per cent since 2019).

Meanwhile, EU-based brands are still doing a lot of business with suppliers around the Mediterranean as QIMA data found double-digit expansion in demand for inspections and audits in Q3, 2023.

This YoY growth was observed in well-established supplier markets such as Turkey, as well as newer manufacturing partners that include Jordan, Tunisia and Egypt, according to the report.

Apparel makers to propose higher wages amid labour troubles

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Amid the ongoing labour troubles in different industrial zones, apparel makers said they will place a new wage proposal with a higher pay structure to the Minimum Wage Board next week.

“The factory owners’ representative has agreed to propose higher wages for the workers than were previously proposed,” Liaquat Ali Mollah, chairman of the board, told reporters after its fifth meeting on Wednesday.

To this effect, he said the apparel manufacturers will make a written proposal at the next meeting to be held in the second week of November.

In a separate development on Wednesday, top apparel makers and exporters warned of imposing “no work, no pay” if the labour tumult continues, leading to production disruption or factory closure.

After the Minimum Wage Board meeting, the board chairman said the workers’ representative will consider their next course of action once the new proposal by the owners is submitted.

Until then, the stakeholders — owners, workers and officials from the government regulatory agency — called on workers to return to the production lines and refrain from vandalism or anarchy, saying that the new wage structure will come into effect on December 1.

The Minimum Wage Board chairman said that both the owners and workers have agreed to abolish the top two grades from the existing seven-grade wage structure.

Earlier on October 22, the owners’ representative at the board, Siddiqur Rahman, proposed a minimum monthly wage of Tk 10,400, while the workers’ representative, Sirajul Islam Rony, proposed Tk 20,393.

Differing from the proposals, labour rights groups demanded a minimum wage of between Tk 23,000 to Tk 25,000.

Ready-made garment workers have been protesting for the past nine days since October 23, rejecting the owners’ proposal.

The workers’ agitation continued in different industrial zones on Wednesday, with several hundreds of workers taking to the streets in Mirpur 1, 10 and 11, Gazipur and Ashulia to demand a wage of Tk 23,000.

As many as 50 garment factories were forced to shut their operations at Gazipur, Ashulia and Savar on Wednesday following labour unrest.

With these, more than 150 factories remained closed for the last couple of days due to the workers’ agitation, it was learnt.

At a separate meeting, apparel makers reiterated that they would accept the wages to be fixed by the wage board after negotiation.

Regarding the ongoing labour unrest, the apparel makers said that they would close factories in accordance with labour law provision 13 (1), which states “no work, no pay” if they cannot run factories due to labour unrest.

Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), raised questions about the ongoing labour unrest at a time when the wage hike process is ongoing.

“This is unacceptable,” he said at a meeting at the BGMEA headquarters in Dhaka. “Why is the unrest happening when workers are getting salaries and other benefits as per the existing wage board?”

Hassan said union leaders were not responsible for the chaotic situation. He said that the BGMEA had provided evidence and video footage to the government and law enforcers to identify the miscreants and take legal action.

“For the sake of the country and workers, if the workers quit their duties, the owners will be allowed to shut their factories as per section 13 (1) of the labour law,” Hassan said.

He requested the concerned agencies to ensure security at RMG as well as all other manufacturing industries for the sake of the country’s economy.

Former BGMEA president Shafiul Islam Mohiuddin said the country’s RMG sector is facing tough times due to a number of external and internal issues, including the burden of non-performing loans.

He also said that outsiders, such as some research organisations that underestimate RMG factory owners, do not understand the actual scenario of the sector.

Echoing the tone of most RMG factory owners present at the meeting, he said, “We have reached a consensus today that there will be no work, no pay.”

Mr Mohiuddin said the government must take all necessary steps, however harsh they may be, to ensure the safety of factories and people’s lives.

He also urged the labour ministry to play its due role in ensuring the safety and security of industrial units.

Referring to the labour minister, Mr Mohiuddin said, “This is your solemn duty. If you cannot discharge this duty accordingly, resign from your position.”

BGMEA Senior Vice President SM Mannan Kochi said outsiders and miscreants were responsible for the unrest and attacks on factories. “The attacks are a conspiracy against the country’s development.”

Other BGMEA members said they faced serious trouble operating their businesses due to prevailing corruption in different government agencies, including customs.

Meanwhile, the Bangladesh Garment Workers’ Solidarity, in a statement issued on the same day, said owners were playing an “irresponsible” role by not announcing the new wages at the fifth meeting of the wage board.

It also condemned the death of two workers and alleged that owners were ignoring the workers’ demands.

Workers are protesting because they are aggrieved by the owners’ proposal and cannot meet their daily needs due to the high prices of essentials, the statement said.

In a separate statement, the Clean Clothes Campaign strongly condemned the violent repression of garment workers demanding a wage increase to Tk 23,000. It called on the government to immediately ensure that workers’ right to protest is respected.

munni_fe@yahoo.com, saif.febd@gmail.com

FEAR OF POLITICAL CONFLICT WORRIES BUSINESSES The Apparel Digest Commentaries

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BGMEA for arresting those involved in RMG unrest

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Individuals involved in the ongoing unrest in the readymade garments (RMG) sector should be arrested immediately, said Faruque Hassan, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Wednesday.

He made the call during a general discussion at the BGMEA Bhaban in the capital’s Uttara, in the pretext of the ongoing workers’ protest in apparel industrial zones.

“We will not compromise. We have already provided some evidence to the NSI, the DGFI and other government agencies to take action against them,” he said.

RMG owners seek implementation of section 13/1 of labour law to tackle ongoing unrest
The BGMEA president said they will not backtrack from seeking implementation section 13 (1) of the labour law and employees of the factories under this rule will not get any salary while under this rule.

The section 13 (1) of the labour law entails that an employer may, in the event of an illegal strike in any section or department of any establishment, close down either wholly or partly such section or establishment.

Faruque also requested all law enforcement agencies to take appropriate measures to ensure the security of apparel factories and the employees.

RMG leaders meet home minister, request security for workers, factories

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The BGMEA has requested police protection to safeguard the lives of ready-made garment (RMG) sector employees and factories.

Bangladesh Garment Manufacturers and Exporters Association leaders had called upon Home Minister Asaduzzaman Khan Kamal at his office in Dhaka today (1 November) to inform him about the RMG situation and to seek safety and security of the workers from vandalism.

Speaking to The Business Standard, former president of the BGMEA Shafiul Islam Mohiuddin, MP, said, “We asked the government to protect the lives of our workers and our factories. This rampant destruction should not happen anymore.”

He said it was the government’s duty to take immediate steps to deal with this matter. 

During the ongoing protests by RMG workers seeking a hike in minimum wages, two workers lost their lives and many factories were damaged. 

The protest entered its ninth day today. 

Of the two dead, one died of smoke inhalation after the factory he was in was set on fire and the other is believed to have died of rubber bullet wounds, Shafiul said. 

“We don’t want anyone else to lose their lives.”

The BGMEA also said the new wage structure would be implemented from the first week of December and workers would receive their new wages from January. 

RMG workers demand that their minimum wage be increased from the existing Tk8,000 to Tk20,390 while the owners proposed to increase it to Tk10,400.

Police disperse agitating RMG workers using tear gas, sound grenades in Gazipur

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Workers from several garment factories in the Bhogra bypass area of Gazipur, on the Dhaka-Mymensingh highway, have been protesting for a few days, demanding an increase in wages.

When the workers attempted to block the highway on Thursday morning, the police responded by firing sound grenades and tear gas shells to disperse them.  

The protest initially started with workers from TM Fashion Limited in the Bypass area of Gazipur at around 8:30 am on Thursday. Subsequently, employees from other factories, including Belmond Garments, Brothers Fashion Limited, and Rua Fashion Limited, joined them, taking position in front of the factories to voice their wage increase demands.

Both police and factory workers have reported that over 150 factories in Gazipur were closed during the protests, although some factories remained operational today.

At around 8:30 in the morning, the workers from TM Fashion garment factory, situated in Jobaida Tower in the Chandana Chowrasta area of Gazipur city, initiated their protest on the Dhaka-Mymensingh highway.

When the workers tried to block the highway with a procession at around 9:00 am, Industrial Police and Basan station police fired sound grenades and tear gas shells, causing the workers to disperse. Subsequently, the agitated workers regrouped and took position along the highway.

Apart from this, the workers of Belmond Garments, Brothers Fashion Limited, Rua Fashion Limited in the Chowdhurybari area of the city protested to demand an increase in wages.

Abu Siddique, the Officer-in-Charge (OC) of Basan Police Station in Gazipur, stated that the majority of garment factories in Gazipur were closed, but a few remained open. Workers from those open factories gathered and staged protests on the highway.

During this time, the workers attempted to block the highway but were brought under control. There is a substantial police presence, with Border Guard Bangladesh (BGB) members also deployed in certain areas. 

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