Law Opinion
Compliance: Need of the hour in the apparel industry
Khan Ferdousour Rahman
The apparel industry is a multi-billion dollar global industry. It is number one for Bangladesh's export. Bangla-desh with almost 4200 garment factories is the 6th largest ready made garments (RMG) exporter to USA and EU. The size of the industry was more than 6.5 billion US dollars in 2005. This industry is the largest net foreign exchange earner for Bangladesh, i.e. 76 percent of the total earning. By 2010, the net exports of this industry are expected to grow to almost 10 billion US dollars. This industry is the largest employment provider with almost 25 lacs employees. The graph of employment opportunities continues to go up every year. But Bangladesh remains in a most vulnerable position following the removal of multi fibre arrangement (MFA) and now it must maintain quality in production to fight the potential competitors. So far only around 400-500 RMG units have attained international standards in ensuring comprehensive compliance issues, while most of the medium scale factories are yet to be fully compliant. This sector is already threatened by various international buyers by not outsourcing garments on ground of gross non-compliance in majority of factories.
Compliance means conformity that is acting according to certain accepted standards. Social compliance ensures working condition of the manufacturing unit from social, political and economic points of view. It is a code of conduct that includes minimum labour standards, occupational safety measures and environmental concerns. Minimum labour standards cover wages, working hours, over time, safety, job security, right to form trade union, and also social security. It also ensures non-violation of human rights. Social benefits are socially responsible management which includes production bonus, cash incentive, working condition , maternity leave, medical facilities, arrangement for food including safe drinking water, prayer place, transportation, festival bonus etc.
Compliance should be for both labour welfare and occupational safety. For safety use of aprons, gloves, dust masks, eye masks, ear protectors, gum boots, smoke detector and early rehearsed fire fighting arrangement is very important. Water treatment plant is a must to avoid pollution in the industry. Social environment related to labour rights, product safety and intellectual property rights are considered to be of increasing importance now-a-days. Ensuring social compliance is very important in the industries involved in production of RMG for maintaining quality of products as well as rules for export market. On protection of labour rights and improvement of working conditions, international standards have been developed and adopted by major markets. In contrast with labour rights, product safety issues are mostly mandatory requirements. Compliance issues like working environment, salary, maternal leave for female workers, safety and health conditions of apparel sector workers have come to the forefront of attention of the international buyers. There is no option other than ensuring social compliance to maintain quality of products. Because labour can never enhance their skill without having a minimum wage for living and favourable environment for work. The compliance issues have become more important after the expiry of the MFA. Though these issues are very fundamental as far as the workers' interest is concerned but at the same time these are very capital intensive for implementation.
It will be very sad for Bangladesh if it loses its share of apparel exports in the international markets due to failure on compliance issues (at its RMG factories). Bangladesh government should play a key role in implementing compliance issues at the apparel industry to maintain its competitiveness worldwide. Efforts are required to prevent any repetition of the incidents of fire or building collapse or labour unrest if the reputation and competitiveness of export are to be maintained. In a recent survey conducted by Nari Uddug Kedra (NUK) in association with Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), it is found that only 30 percent of knitwear factories ensure social compliance. Government should shoulder some of the obligations in meeting social compliance standards, whereas BGMEA, BKMEA and BTMA have also important roles to play.
With the pressure from global apparel buyers for factory compliances increasing, the government has finally formed a high powered committee with the Commerce Minister as chairman to recommend measures for improving the conditions of workplace and workers. The committee is to review the existing policies on social compliances, especially occupational safety and workforce welfare aspects and to prepare guidelines for necessary policy reforms. As per terms of reference, the committee is supposed to give necessary guideline to the government to implement the recommendations and follow up the implementation status at factory level at least once in every three months. A Compliance Monitoring Cell (CMC) has also been created headed by DG (Textile) in the Export Promotion Bureau (EPB) to keep international buyer groups aware of and do publicity abroad on measures taken for compliance. As part of crush programme regarding factory inspection by forming several inspection teams both BGMEA and BKMEA have already carried out some punitive measures against the few non-compliant factories. As per recent claim of BGMEA, only 53 out of approximately 4200 RMG units are not complying with safety measures in their respective premises.
It is very important to reach a consensus on the standards requested by the buyers, which need to be fulfilled by each and every supplier. There are complaint that some buying agents compromise or overlook the need for compliance or only consider certain standards during their contracts with the suppliers. There is a need for harmonising the demand for social compliance by international buyers in order to avoid unnecessary costs and confusion on the part of export industries in Bangladesh. A draft code of conduct on social compliance in RMG sector is developed by London based MFA Forum, a club/ conglomerate of international retail giants, trade unions, development partners and NGOs to put pressure on the authorities concerned to strengthen the monitoring mechanisms to ensure factory compliance with social and labour standards.
Being a signatory to the international conventions on labour standards and human rights, we cannot implement them half heartedly or not at all. But while implementing reasonable working conditions or a minimum wage should depend on a country's prevailing socio-economic conditions, it should not be judged by the standards of a rich country. NGOs, civil society, trade unions and other stakeholders should work together to adopt the code of conduct for a viable and competitive RMG industry. Non-compliance factories may be brought under temporary ban on issuance of generalised system of preference (GSP) by the authority concerned, so that they cannot enjoy tax exemption in exporting countries.
The RMG sector of Bangladesh is growing very fast, even with more speed in post MFA era than earlier as the production cost of apparel in Bangladesh is very cheap due to cheap labour cost. We need to utilise this advantage by readjusting our position through fulfilling the requirement of compliances. Being definitely optimist, Bangladesh should turn all challenges into opportunities.
The author is a human rights activists and freelance journalist.
