How RMG Sector is Coping with Compliance Issue?

Ready Made Garments (RMG) sector of Bangladesh accounts for more than 70 percent of overall exports. It enjoys special facilities in global clothing markets. However it has been facing challenges in compliance issues, especially when the competing countries would always try to bring the issue to their advantage. Therefore Bangladesh RMG industry must address the issue properly.

During mid-2006, RMG units surrounding Dhaka faced labor unrest demanding improved working conditions and higher wages. Labor unrest occurred mainly because a minority factory owner exploited poor workers with bad working conditions and unacceptable wages. Although BGMEA managed to solve this issue immediately, in the face of importers demand for better conditions for workers and eradication of child labor.

Labor organizations and media agencies of the U.S. and UK have been campaigning against RMG sector for a while. The U.S. Senate is considering a bill titled 'The Decent Working Conditions and Fair Competition Act', which when passed will allow any U.S. citizen or organization to file law suits against importers who deal with non-compliant apparel factories. If the compliance issue is not taken seriously, it will become a big obstacle to the RMG sector's progress.

To discuss the present state of the compliance of Bangladesh, Cotton Bangladesh team met S.M. Emdadul Islam, Marketing and Quality Assurance Director of Babylon Group. We are pleased to share our exchange of views with our valued readers.

Cotton Bangladesh [CB]: What are the major compliance issues of Bangladesh in the RMG sector?

S.M. Emdadul Islam [SMEI]: The major compliance challenge we are facing at this point is control of extra overtime hours within the legal limit. It is a two fold and conflicting issue for the factory owners where we find ourselves in a position of centre layer of a sandwich. When buyers are pushing us to be compliant and keep the overtime hours within the legal limit, workers are driving us mad to ensure sufficient amount of extra overtime for them, which is very much practical and understandable in the context of current cost of living.

The irony of the matter is that this very requirement for working beyond legal hours is often contributed by the buyers themselves, as they gradually are reducing lead-time (sometimes beyond reason), delaying decisions on styles etc. or bringing about changes in the last minute.

CB: To what extent RMG industries are meeting these issues?

SMEI: To speak the truth I don't think any of the otherwise compliant factories in the country can cope with this near-impossible task to any extent that can be worthy of a feat, as the ground realities are the same for all. As a result a few factories are forced to maintain double sets of payment records or hide the extra overtime which is another major violation of compliance in the context of maintaining transparency with the buyers and thus inviting troubles for the factories.

CB: Do you think that Skill Development Training for the Personnel of RMG Industry is necessary to meet compliance issues?

SMEI: Yes. Skill Development Training for the workers can always help improve productivity, reduce rework and thus ease pressure on the need for extra overtime hours. But in regard to meeting overall compliance issues, this has a limited role only in my opinion. Compliance awareness encompassing general CoC and ethical aspects is still rare amongst the workers and as well as the management. I think for the benefit of both a comprehensive training is needed. But let me touch one other fact that this kind of training often backfires! Workers having the knowledge of their rights tend to get violent and unruly on achieving them but they hardly display awareness toward rendering their duties for which they are being paid by the management. Now a day everyone talks about workers' rights, be it a buyer or a trade union or an NGO. I wonder why they miss the point at all or remain tight-lipped about the fact that workers are supposed to get their rights/demands met in exchange of fulfilling their part of the tasks!

CB: Many say that there are lacks of harmony in the code of conducts followed by different brands. Does it have impacts on overall industry?

SMEI: Well, it is an endless debate undoubtedly. Still 'Buyers Forum' (a common platform of all the leading brands like Nike, Levi's, GAP, Wal-Mart, H & M, KappAhl, Lindex etc. headed by SEDF) has taken a praiseworthy initiative to have a “Common Code of Conduct” for the industry. Pending a common conclusion, the factories are more or less struggling to meet the different points of views of different buyers on a single issue. This indeed is affecting our lives tremendously. It is adding on our cost, as we have to maintain a separate team of trained people busy ever putting things right and meeting/ facing external auditors who are visiting us in almost on a daily basis with different and endless issues.

CB: Other compliance issues like maternity leave, occupational health and safety, child labour, how Bangladesh is dealing with these issues?

SMEI: I think the industry has successfully graduated itself from the primary issues of CoC like elimination of child labour, ensuring enough clean toilets, safe drinking water, payment of right salary and wages, correct payment of overtime hours etc. Now we are working on the issues like occupational health and safety including building safety. Still we have enough scope to improve and we are trying wholeheartedly in this regard. I understand most factories are honoring the law regarding maternity leave and associated benefits to the incumbent workers and they are doing it at the cost of a fortune as their long since pricing of the products never had a room for this.

CB: There are major Structural weaknesses in some areas in the RMG industry. How Bangladesh can overcome this issue?

SMEI: I find the fact and continuation of 'unplanned growth' as one of the major structural weaknesses of this industry. Lack of well-groomed disciplined workforce, dearth of properly and adequately trained mid-level management force, lack of vision and strategy from the part of the entrepreneurs, lack of enough positive and constructive government interventions etc. could be named as some other major weaknesses of the industry. I think it is time that we started worrying and planning about the future of the industry. We have to prepare ourselves to gradually change our status of being cheap to medium priced RMG supplier to medium to high end supplier in the not so distant future. We have to ensure quickly enough adequate backward linkage industry to fight lead-time issue, devise shop floor strategies to cope with fancy styles with high value addition and orders involving smaller quantities than so called minimums. IPE department of BUET, BIFT and other institutes running courses toward aiding the industry can play a big and important role in this regard. Both BGMEA and BKMEA also have roles to play.

CB: According to the Environment Conservation Act 1995 every factory with toxic waste must have an effluent treatment plant installed to treat waste before they get dumped into rivers or water bodies. But most of the factories were found polluting air and water seriously as they did not have ETPs or other measures to mitigate pollution. Why the owners are ignoring this?

SMEI: Establishment of ETP involves huge expenditure and as such very difficult to afford. Even though ETP was compulsory always by the law, but lack of enforcement of the same made people remain less aware or unaware of this requirement resulting in all their investment plans without it. A positive change in the trend is clearly visible in the recent ventures, which is very assuring. I think Government can and should support this sector by setting up central ETP's in the industrial zones following the examples in our neighboring countries like India and China.

CB: Last year the government of Bangladesh and textile mill owners has agreed to set up cost-effective effluent treatment plants (ETP) in small and medium textile factories to prevent environmental pollution. What is the present position of your factory regarding this?

SMEI: We have our ETP functional since the beginning of our composite knit and washing units. Constant improvements are being made in our ETP functionaries. Although it adds substantially to the cost of production, yet we feel good about it as it surely minimizes pollution of the environment to a great extent. We treat this matter as one of our social commitments.

CB: Report in different newspaper says some industries are installing effluent treatment plants due to pressure from buyers but they seldom operate them because of the added cost. Is this due to lack of manpower to monitor from the government side or they are just ignoring their social responsibility?

SMEI: These reports, I am afraid, are true partially. I am sure there are many responsible companies who are sincere about this important social commitment and are doing accordingly. On the other hand there still exists a lack of awareness amongst many other manufacturers, which are being addressed from time to time by both BKMEA and BGMEA. More vigilance from concerned department of the Government would help.

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