• A study published by Transparency International Bangladesh has found the country's RMG sector lacks good governance on a broad scale and needs a long-term single authority to monitor it.
  • The report sets out eight recommendations, including amendments to the Labour Law, improvements in the legal rights of workers, and the establishment of an authority to promote good governance.
A "mindset transformation" is needed to improve governance in Bangladeshs garment sector

A "mindset transformation" is needed to improve governance in Bangladesh's garment sector

A change of mindset and a genuine commitment from the Bangladesh Government, exporters and brands are "badly needed" if governance is to be improved in the country's readymade garment sector, a new study has found.

Published by civil society organisation Transparency International Bangladesh (TIB), the report titled 'Good Governance in the RMG Sector: Advances and Challenges,' claims the country's US$30bn garment manufacturing sector lacks good governance on a broad scale and needs a long-term single authority to monitor it.

The objective of the research for the study was to assess the current status of a range of governance initiatives undertaken by different stakeholders after the Rana Plaza accident. This has included an amendment of the Labour Law 2006 in 2013, measures taken to enhance institutional capacity, accountability, transparency and factory safety, and measures to ensure labour rights and social security.

However, despite these efforts, the study says there remains a lack of coordination among relevant stakeholders, negligence of the duties of duty bearers, political influence, and the collusive nature of corruption.

Notably, the report points to the disproportionate attention by factory owners on increasing exports, a lack of attention to the rights of workers and their social protection, legal limitations, and unconducive environments for ensuring workers' collective bargaining.

The study also found a lack of progress regarding compensation for the loss of jobs or accidents, maternity benefits, freedom of association, and social safety for severe injuries. Financial and technical constraints of the Remediation Coordination Cell (RCC) and delays in legal processing are contributing to this, the report suggests.

"What is required most of all is a genuine commitment on the part of the three key stakeholders – the Government of Bangladesh, exporters represented by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the buyers/brands – to rise above the current attitude of quick profiteering compromising worker safety and rights, and [ensure] long-term sustainability of this highly profitable sector," Iftekhar Zaman, executive director of TIB told just-style.

"It needs a mindset transformation, meaning a shift away from the current attitude that they have done enough by providing/facilitating jobs (some even consider it a charity!) for 4m workers, to one that recognises that these grossly underpaid, insecure and rights-violated workers are not only the indispensable factors of production of the industry but also the largest real value contributor to profits and revenues."

TIB has proposed eight recommendations it believes will uphold good governance in Bangladesh's RMG sector:

  • A single authority should be established to coordinate and supervise the sector.
  • Amendments to close loopholes in the Labour Law to include workers' compensation, maternity leave, freedom of association, rights to collective bargaining.
  • Tribunals to deal quickly with all litigations filed after accidents.
  • A coordinated effort of all stakeholders to enhance the legal rights of workers, especially in setting wages and overtime leave.
  • The creation of a fund to ensure the compliance of sub-contractors and small factories.
  • All buyers to disclose their business partners and set logical pricing for garment products.
  • With draw the provision of a group insurance premium from the Central Welfare Fund.
  • To make the Remediation Coordination Committee (RCC) effective: Its financial and technical capacity has to be enhanced through collective efforts of the government, buyers and ILO; neutral observers should be appointed to oversee operations; and buyers should be brought under legal obligation to make its operation sustainable.

Specifically on funding, Zaman says that a contribution of as little as 0.05% on each order value by a brand can make a "momentous" difference to exporters if they consider it "not as charity but as a strategic investment for sustainability."

"We are sure that implementation of the recommended measures can add great value to whatever little progress has been already made," he adds. "The main challenge is a very little possibility of the badly-needed change of mindset of the three key stakeholders."