Pillars in Practice Program Spotlight: Bangladesh

The Bangladesh garment sector is one of the three countries and sectors that the PiP Program focuses on to implement the UN Guiding Principles

January 2013

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Over the past decade, trade policy liberalization has fueled Bangladesh’s economy, which grew at an average rate of nearly 6% per year. Between 2000 and 2011, the country’s GDP increased from $45 billion to $106 billion, and is set to continue growing very fast in the upcoming years. Exports are a major part of Bangladesh’s economy, for which the garment sector is of particular importance.

In 1995, garments formed 53% of total exports, but now account for more than 79%. Many companies, brands, and global retailers outsource their clothing and footwear production to the country, and Bangladesh’s garment sector now comprises over 5,000 factories and 3.5 million workers, 85% of whom are women. It is thus a major source of employment that spurs exports and economic growth. These economic opportunities allowed many advances in terms of human development and employment generation. However, because of low literacy rates of workers in Bangladesh’s garment sector and frequent antagonism between management and unions, there is concern over workers’ awareness of their rights.

Bangladesh sharply curtailed child labor in the 1990s in response to international pressure, and although it remains an issue in garment supply chains there, it is far less widespread than it used to be. Currently, occupational health and safety is a key focal point for the industry, as the horrific fires at Tazreen, and numerous others over the past 5 – 10 years have drawn national and international attention.

According to the ILO, work-related accidents and disease continue to be a serious problem in Bangladesh. These are caused by a wide range of endemic factors, including widespread lack of compliance with health and safety standards at factories, for example: old, low standard, electric wiring installations; lack of proper usage of fire extinguishers; non compliant emergency exits; lack of working smoke detectors; lack of unlockable fire escape exit doors; locked doors and windows closed by metal bars by factory floor supervisors; and, importantly, a disconnect and lack of communication channels between mid level managers, front line workers and top management. Corruption, close and mutually supportive interrelations between top government officials and factory owners, dangerous building practices such as the addition of production floors on existing structures without proper authorization from relevant authorities, building on unstable ground, and lax enforcement are also widely identified as key factors. These are examples of sub-standards practices that must be changed.

Price and the advantage of duty drawback for exports to Europe also plays a key role in influencing the change needed in factories. Bangladesh’s success in the garment sector is attributed to rock bottom labor costs – the minimum wage for garment workers is $36 per month since 2010 ($20 before). Blame is often placed on the international buyers who source their products from Bangladesh, as most quote extremely low buying prices which leave little room for manufacturers to cover overhead costs, infrastructure and preventative measures for safe working environments.

SAI Lead Trainer Sanjiv Singh just led several SA8000 training courses in Chittagong and Dhaka. He notes that another reason for the Bangladeshi garment sector low prices is low operating cost resulting from limited adherence to fire safety codes like the Electricity Act 1910, the Electricity Rules 1937 and the Bangladesh National Building Code 2006.

The PiP Program will roll out its programs in May, starting in Bangladesh, with informational and training sessions about the Ruggie Principles and workplace safety. The CSR Centre Bangladesh is the locally based partner who will oversee these activities, led by its CEO Shahamin S. Zaman. Other countries and NGOs involved in this project are Professionals for Corporate Social Auditing (PASE) in the Nicaraguan agriculture sector, and the Zimbabwe Environmental Law Association (ZELA) in the mining sector. The program is funded by the U.S. State Department Bureau of Democracy, Human Rights and Labor.

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This article was co-written by SAI Development Intern Tina Baboyan and CSR Centre CEO Shahamin S. Zaman. For inquiries about the PiP Project, please contact Tina at TBaboyan@sa-intl.org, and SAI Development Manager Eliza Wright - Ewright@sa-intl.org.

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