RMG show in Denmark Oct 6-8
July 20, 2008
Garment workers’ wages
July 19, 2008
With the expiry of the deadline set by the government for implementing the tripartite agreement on the minimum monthly wage of Tk 1,662 for garment workers, it has been found by the BGMEA that 419 garment factories, out of 2420 across the country, have not introduced the new wages. Thus, a huge number of garment workers are yet to be benefited by the tripartite agreement signed following labour unrest in garment factories in May-June last year, which lead to deaths of workers and destruction of valuable assets of garment factories.
The owners’ failure is doubly unacceptable because even the new wage structure, that was agreed upon by the parties concerned, cannot be considered adequate, given the price hike of essentials. The owners agreed to introduce it, and it is not clear why more than 400 garment units have failed to implement the same. The BGMEA leaders have apparently taken the lenient view that the owners of the defaulting units have no dearth of sincerity; rather they are not financially strong enough to implement the agreement. We believe the workers’ cause will be badly compromised if the BGMEA fails to take a firm stand on the wage issue. One can hardly overlook the fact that the monthly wage was downscaled from the workers’ initial demand of Tk 3,000 per month, after the owners managed to prevail over the labour representatives. Now, there will be resentment among the workers if the same owners fail to go by their commitment.
Nobody wants the crucially important garment sector to be affected by any kind of disruption at a time when maximum productivity of the sector is needed to keep the national economy on the right track. The BGMEA leaders have promised negotiations with the defaulting units and adoption of follow-up measures in case of continuous non-compliance with the tripartite agreement. The BGMEA may have its own procedure of handling a situation, but it has to show due sensitivity to the workers grievances and act quickly, particularly when more than 2,000 units have already implemented the agreement.
The government, as a party to the tripartite deal, has a role to play here. Obviously, it must prevent any slide to chaos in the sector and the best way to keep things under control is to give the workers their due — the minimum wage.
Bangladesh to keep enjoying GSP facilities in USA
July 19, 2008
Foreign Affairs Adviser Dr Iftekhar Ahmed Chowdhury yesterday said Bangladesh would “continue to enjoy the GSP facilities as before” in the United States.
The adviser said the news came to him as the US authorities informed the Bangladesh mission in Washington about the latest decision.
“For now, I can say that the continuation of GSP facilities is a good news for Bangladesh,” the adviser told reporters at the ministry. “We will continue to work diplomatically with our American friends for further extension.”
“In the meantime, we should emphasised workers’ overall welfare, which will also improve our market access,” the adviser said.
At the same time, he said, a review process initiated by a petition from AFL-CIO (American Federation of Labour and Congress of Industrial Organisations) in the US would be extended by another year. The federation is responsible to oversee if Bangladesh ensures rights of the labourers, especially who work in the country’s specialised export processing zones.
The Generalised System of Preferences (GSP) is designed to promote economic growth in developing nations by giving preferential duty-free entry of their products to the US market.
Bangladesh gets duty-free access to the US market on certain export items, including garment products, under the facilities.
The US had earlier put conditions that Bangladesh would not get GSP facilities anymore if the government does not ensure workers’ freedom of association or the right to collective bargaining in its EPZs.
The government has responded positively and initiated welfare associations for the EPZ workers.
BGMEA, SEDF sign MoU to ensure compliance at RMG factories
July 19, 2008
Bangladesh Garments Manufacturers and Exporters Association (BGMEA) and International Finance Corporation-SouthAsia Enterprise Development Facility (IFC-SEDF) signed a memorandum of understanding (MoU) yesterday on social compliance monitoring to pursue the compliance issues at garment factories.
According to the MoU, BGMEA will technically and logistically help the readymade garment (RMG) units ensure social compliance.
Under the MoU, a BGMEA and IFC-SEDF project will develop a comprehensive questionnaire to monitor social compliance and create database to support the overall monitoring activities of the garment factories.
After signing the MoU, BGMEA President Anwar-Ul-Alam Chowdhury Parvez said the future business is largely dependent on diligently following the social compliance methods and ensuring an eco-friendly environment.
The project is scheduled to be complete by December this year. In preparation of the database software, the compliance officers of BGMEA will visit the factories to observe the condition of compliance.
They will prepare the software on the basis of answers to 129 compliance-related questions that will be gathered during the visit to the factories.
Anwar-Ul-Alam Chowdhury and Mrinal Sircar, sector development coordinator of IFC-SEDF, signed the MoU.
Salary hike of RMG workers a must to boost economy
July 19, 2008
Call to increase monthly salary to Tk 4500
GSSRJM organised the press conference at Shaheed Asad auditorium at Topkhana Road in the city.
They will submit a memorandum to Bangladesh Garment Manufacturers and Exporters’ Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters’ Association (BKMEA) on July 30, to labour adviser on August 10 and observe a hunger strike on August 31 if their demands are not realised.
They threatened to wage agitation programmes if their demands are not met immediately.
The garment workers’ leaders demanded the authorities grant a monthly salary of Tk 4500 instead of the Tk 1662.50 they are getting now.
Speakers said hunger knows no law and hundreds of garment workers will take to the streets if government fails to take immediate steps to compel the garment owners to increase the salary of the workers.
They also demanded a new wage board with a new wage structure for garment workers and 50 per cent increase in their salary during the interim period.
While reading out a written statement, Coordinator of the platform Abul Hossain said, “Our economy largely depends on foreign remittance and garment sector is the largest remittance earning sector in the country.”
He called on the government to save over 25 lakh garment workers of about 4500 garment factories across the country to strengthen country’s economy by earning foreign remittance.
Citing article 41 and 42 of labour law, he added that their salary should be increased amid the price spiral of essential commodities and inflation the country is experiencing.
Criticising government’s April 4 gazette (Labour Law Amendment Ordinance 2008), the workers’ leaders said this ordinance offered garment owners immense scope to do injustice to the workers, as capital punishment for violating any labour law by owners is a fine of Tk 25000 only with no jail term which makes garment owners tyrannical on the workers.
Taking the benefit of emergency many garment owners keep workers unpaid for months and terminate labourers indiscriminately, said KM Ruhul Amin, secretary of Bangladesh Garment Sramik Trade Union Kendra.
Citing an example, he said SQ Sweater Garment at Shewrapara area in the city terminated 1200 workers of the garment without serving prior notice on them. Similarly, hundreds were sacked and false cases were filed against them when the terminated workers protested.
Their nine-point demand include slashing price of essentials, introduction of rationing system for the workers, forming a wage board without delay, holding dialogue with workers, withdrawing false cases against workers and stopping illegal termination, re-establishing the right for trade union activities and lifting emergency, demolishing illegally constructed BGMEA-building to develop Hatirjhil project and punishing government employees involved with approving the illegal plan of the building.
Infrastructure dev a big challenge to economic growth: Hua Du
July 19, 2008
Infrastructure development remains a huge challenge to Bangladesh’s economic growth, said outgoing Asian Development Bank country director Hua Du Wednesday.
“Despite the vast improvement in infrastructure supports like, power, energy, transport and communications, it is not matching the country’s demand,” Hua Du said in her speech to a farewell by Bangladesh Garment Manufacturers and Exporters Association.
Hua Du is expected to leave Dhaka Monday, ending her five-year stint in Bangladesh.
She has been serving as head of the mission since 2005 and will now join the bank’s head office in Manila.
Speaking on Bangladesh’s RMG sector, the outgoing country director said the sector sustained and grew successfully during the post-MFA (Multi-Fibre Arrangement) period despite predictions of a collapse in the industry by many quarters.
The MFA governed the world trade in textiles and garments from 1974 through 2004, imposing quotas on the amount developing countries could export to developed countries.
“Actually the ADB was the only development partner then who had confidence on the Bangladeshi RMG sector,” Hua Du added.
She also said the RMG sector has been able to witness higher growth year by year, which led Bangladesh to be the second largest garment exporter in the world.
Pointing to the need for huge investments in infrastructure development, Hua Du recommended a public-private partnership initiative in this regard.
“Since revenue earnings comprise a very little portion of the country’s GDP.”
Stressing human resource development, the ADB official said the bank had approved a support of $50 million for a skills development programme.
“At present, the project is awaiting ECNEC’s nod and we hope it would contribute to the training of workers and carve them in line with the market’s need,” said Hua Du.
Terming the current fiscal year’s budget as ‘pro-poor and business-friendly’ Hua Du said the present government’s measures would definitely contribute to the country’s economic growth.
BGMEA president Anwar-Ul-Alam Chowdhury Parvez thanked Hua Du for contributions to the power, infrastructure and human resources development sector during her stay in Bangladesh.
On the RMG industry he said, “The sector employs 40 percent of people in the total manufacturing field and it accounts 76 percent of our export earnings.”
In his speech, Parvez urged the government not to go for contractionary monetary policy. “It should have been more open which was needed for employment generation.”
On the ‘abnormally high’ 14 percent interest rate, the BGMEA chief said neighbouring countries such as India and China have a 3 percent interest rate on bank loans.
The business leader also focused on necessary steps by the government for the high commodity and fuel prices as ‘it creates big pressure on the livelihood of people’.
Representatives from World Bank, IMF, WHO, ILO also attended the ceremony.
Garment leaders demand lifting ban on trade union activities
July 19, 2008
Leaders of the National Garment Workers Federation (NGWF) yesterday demanded immediate lifting of all types of restrictions on trade union activities to protect the basic rights of the readymade garment workers.
“Though the government has relaxed the restrictions imposed on the political activities, but they are yet to withdraw or relax it on the trade union activities that seriously hampered the basic rights of the workers,” NGWF general secretary Amirul Haque Amin said at a press conference at Dhaka
Reporters Unity.
He warned the government that continuation of the restrictions on trade union activities for long would be counter-productive. He asked the government for immediate lifting of the ban.
Amin apprehended that Bangladesh would be seen as violator of workers’ rights by the international community, which would not be a good thing for the government.
Terming the trade union activities as basic human rights of workers, he said this was the only way by which all kinds of problems could be solved systematically.
NGWF president Shahida Sarkar and vice-presidents Nurun Nahar and
Faruk Khan were, among others, present at the press conference.
Entire 8m RMG pieces may not be exported to India
July 19, 2008
New Delhi’s offer to import eight million pieces of garments from Bangladesh, aimed at reducing the trade deficit, may not be completely executed as prices being offered by many Indian buyers are quite low, sector insiders said Saturday.
Their observation came after Bangladesh exported nearly one million pieces of garments for the first time to India in the past two months (May and June) enjoying the zero-tariff access facility.
Sector insiders said there is little or no possibility to export the entire 8.0 million pieces of Readymade garments (RMG) to India by this calendar year as New Delhi had initially delayed the process of export.
President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Fazlul Haque, said: “We may not fulfill the quota of 8.0 million pieces this year for various reasons despite getting duty-free quota facility.”
India signed a deal with Bangladesh in September last year for import of 8.0 million pieces of RMG in a calendar year (January-December) offering zero-tariff facility.
Under the deal, the Bangladeshi apparel owners were expected to ship the first consignment of RMG to India in January this year but it was not possible, as the Indian authorities could not complete the required import formalities after signing the deal.
A senior official of the Export Promotion Bureau (EPB) said: “Our manufacturers exported nearly a million pieces to India in the past two months.”
He added: “Our apparel owners are reluctant to accept export orders from Indian buyers as prices offered by them are not lucrative.”
Requesting for anonymity, a local manufacturer said: “I had an offer to export garments to India but the prices offered by the importers were not attractive.”
President of Bangladesh Garments Manufacturers and Exporters Association (BGMEA) Anwar Ul Alam Chowdhury Parvez said it is true that at this stage Indian market is not attractive for the manufacturers.
“We have the opportunity to boost export if the door remains open as India is an emerging market.”
Besides the price issue, BKMEA president said there is a need for development of market in India to boost export to reap optimum benefit of the deal signed between the nations.
The deal, signed under the purview of the South Asian Free Trade Area (SAFTA) agreement reached among the South Asian Association for Regional Cooperation (SAARC) member- countries, aimed at reducing trade gap between the two neighbouring country.
India, largest trade partner of the country, annually export products worth $ 2.0 billion to Bangladesh. Bangladesh’s exports to India accounts for about $300 million, the official said.
When asked, an official said the export of 8.0 million pieces of RMG to India will help Bangladesh fetch US$40 million yearly.
Regarding total quantity of RMG export, director General of the EPB Md Khalilur Rahman said in the just concluded fiscal 2007-08 year Bangladesh exported nearly 135 million pieces of garments against 123 millions in the last fiscal year to overseas markets.
He said the sector grew around 16 per cent to power the first 11 months exports past US$ 12.63 billion in the eleven-months of the just concluded fiscal over that in the same period of the fiscal 2006-07 year.
Middlemen in RMG sales abroad
July 19, 2008
Garment manufacturers have expressed their doubt about whether or not they will be able to maintain the current extraordinary export growth in the new fiscal in the face of external and domestic odds.
The sector grew around 16 per cent to power exports past $12.63 billion in 11 months of just concluded fiscal over that in the same period of fiscal 2006-07.
Leaders of the garment sector expressed their concern over the future growth saying the current pace in garment export can face a setback unless effective measures are taken to ensure uninterrupted supply of gas and power.
They were making observations on export data of first 11 months of last fiscal released by the Export Promotion Bureau (EPB) released Monday.
EPB data shows in the first 11 months of the last fiscal knitwear items such as T-shirts, pullovers, sweaters grew by 21.19 per cent to $4.929 billion while woven items such as denim and shirts recorded a 10.62 per cent growth to $4.627 billion.
“We will face a tough time unless urgent measures are taken to resolve power and gas crisis,” Fazlul Haque, chief of knitwear manufacturers’ association, told the FE Monday.
“Despite the satisfactory performance we are worried about the future of the sector,” he said.
Echoing similar sentiment, leader of woven garments manufacturers Anwar Ul Alam Chowdhury (Parvez) said: “We are not thinking about current growth. It is our headache now whether or not we could maintain the trend.”
He feared the price hike of petroleum products that pushed transport fare up will raise the cost of doing businesses by at least 35 per cent.
Under the circumstances, Mr. Parvez said, many factories might turn sick as they will not be able to compete in global market.
“We have already been affected by recession in developed economies,” he said, adding external and domestic odds might further affect the entire exports of the country.
Despite the odds, the country’s total export recorded a 21.59 per cent growth to hit $1.269 billion in May to power the first 11 months exports past US$ 12.63 billion, which was higher by 15.33 per cent over that of the same period last year, officials said Monday.
The country’s total export growth till April was only 14.66 per cent.
Garment exports will affect if investment in textile sector drops
July 19, 2008
The share of textiles in total private sector investment dropped to 53.63 per cent in nine months of fiscal 2007-08 from around 70 per cent during the same period a year ago.
According to the Board of Investment (BoI) provisional statistics, the total private investment was worth Tk 138.63 billion during July-March period in 2007-08 against more than Tk 160.0 billion in the corresponding period of the previous year. The investment was 196.58 billion in 2007-06.
Although the average monthly investment in all sectors dropped by only 6.0 percentage points in the concluding fiscal the decline of the same in the textile sector was higher, said the BoI statistics.
Experts said the country’s textile and garment sector witnessed poor investment during the year due to ‘anti-corruption drive’ and price hike of capital machinery and raw materials.
They said the ‘fear factor’ due to the anti-corruption has now almost gone, but a nagging gas crisis has become a big problem holding back the new investment.
The continuous fall in investment in the country’s textile and garment sector will dampen the country’s garment export growth, said Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) president Fazlur Rahman.
“Due to the drop in investment, export growth of the garment and textile sector will face stagnation,” he said.
However, the country’s textile and garment sector, accounting for more than 75 per cent of the annual export, staged a turnaround in second half of fiscal 2007-08 from a negative growth in the first half.
The export, however, grew 16 per cent in the first eleven months of the last fiscal.
The main reasons behind the surge in garment orders and export are the rising production and labour costs in the countries like China, India and Vietnam forcing the international buyers to turn to Bangladesh.
“Export orders are still increasing,” he said, adding that the local exporters would not be able to execute all the export orders properly due to less investment.
“The country must need new investment to sustain the growth rate,” he said.
Bangladesh Textile Mills Association (BTMA) president Abdul Hai Sarker said the gas crisis is now a big problem.
The problem is forcing the investors to shelve new investment plan although there is much improvement in services in Chittagong port and a peaceful atmosphere.
The turn around time in the country’s main sea port in Chittagong has reduced to two and half days from previous seven days.
“We fear the negative investment trend will continue in the new fiscal as the gas shortage is severely discouraging the new investments,” he said.