Business integrity and ethical sourcing are the key to RMG sector sustainability: TIB

Dhaka, 25 April 2023: On the occasion of the 10th anniversary of the Rana Plaza tragedy, Transparency International Bangladesh (TIB) has called upon international brands and buyers of Bangladeshi readymade garments (RMG) to conduct business with integrity, especially ethical sourcing, which are the key to sustainability of the sector. “Exploitative practices of some brands and buyers motivated by short-term profitability at the expense of business integrity together with continued failure of relevant authorities to ensure accountable and workers’ rights-sensitive governance pose the most formidable challenges of sustainability of the industry,” TIB said in a statement issued on 25 April. 


TIB recalled that on April 24, 2013, the collapse of Rana Plaza in Bangladesh resulted in one of the deadliest industrial disasters in history, claiming the lives of over 1,100 workers and leaving more than 2,500 others injured. The tragedy exposed a range of governance deficiencies, including poor and non-compliant structural and working conditions, inadequate safety standards, denial of labour rights, deficits and violations of labour laws and regulations, and environmental sustainability standards in the country’s ready-made garment (RMG) industry. Following this devastating event, national and international stakeholders joined hands to contribute to improving governance and safety standards in Bangladesh’s RMG sector. 


The statement noted that significant progress has indeed been made in the industry over the past ten years, particularly in regard to structural and fire safety. Bangladesh now boasts hosting half of the world’s top 100 LEED-certified green industrial units, with 187 LEED-certified green factories in operation – all but four of which are in the garment sector. Another 500 RMG factories are in the process of obtaining LEED certification. Moreover, the reduction of workplace accidents in the export-oriented RMG units is considered to be the result of the targeted structural, fire and electrical safety inspection and follow-up remediation measures.   


However, despite such progresses the profit-obsessed RMG industry continues to face the main challenge of transitioning to a workers’ rights-sensitive business model, leaving the key concerns of the RMG workers who are the main factor of profitability and sustainability of the industry at bay. Practically nothing has happened in ten years to ensure accountability of those responsible for the tragedy and the facilitators and protectors of non-compliance. Victims of the Rana Plaza disaster and other tragic accidents and their families have been treated more with a charitable approach at best rather than the right to compensation principle. The new labour law, despite many credible provisions, is widely considered to have fallen short of being enough to ensure some key workers’ rights including prevention of harassment for exercising the right to decent work, freedom of association, and protection against discrimination. 


COVID-19-induced supply chain disruption shifted focus of stakeholders to protection of interests of brands and buyers on the one hand and producers and exporters on the other ignoring the fundamental rights of workers. Moreover, the package of Covid response for the sector represented a policy priority targeted to producers and exporters leaving the workers’ plight outside the mainstream strategic consideration.         


In the meantime, compliance with Accord-designed safety standards is now overseen by the Remediation Sustainability Council (RSC), which follows a problem-solving mechanism without much discretion.  On the other hand, the Remediation Coordination Council (RCC), has handed over all responsibilities to the Industrial Safety Unit (ISU) of the Department of Inspection for Factories and Establishments (DIFE), following which inspections have decreased by half in the last fiscal year, while the quality of inspections remains questionable due to alleged corruption. Bribing compliance auditors to overlook non-compliance issues and ignoring important concerns worsens the situation. 


Unreasonable price reductions, delaying deliveries, withholding payments, canceling bookings, and other unpredictabilities of international buyers have become normal in the sector since COVID-19. Referring to a recent study done by NYU Center for Business and Human Rights, the Executive Director of TIB says, “Such exploitative tools used by brands and buying houses are leading to unhealthy competition between producers, facilitating lowest possible pricing through non-compliant sourcing. The ultimate burden of such practices is shifted to the workers in the form of low and irregular salaries and benefits.” 


Despite the longstanding demand for a living wage for RMG workers, there has been no progress yet. Moreover, the minimum wage in Bangladesh remains lower than other RMG exporting countries in the region, for which the exploitative practices of brands and buying companies cannot escape responsibility, said Iftekharuzzaman, executive director of TIB.  He called upon international buyers to refrain from such practices. 


TIB has called upon the government to reform the labour law, review the minimum wage of workers to be consistent with the cost of living, push the agenda of a living wage, and remove barriers against the exercise of workers’ right to trade unions and collective bargaining. 


“It is in the interest of all stakeholders – brands and buying companies, producers and exporters, employees and workers as well as the Government to ensure a safe, workers’ rights-based, and sustainable RMG industry that adheres to business integrity and ethical practices. It is time for all stakeholders to work together to achieve this goal,” the TIB statement said.  

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