The research objectives of this paper are to explore the intersection of labor relations and environmental sustainability in the
garment industry and to investigate labor unrest in the garment sector, but instead of simply cataloging the problems faced by workers, this paper chooses to focus on potential solutions. To do this, interviews were conducted with workers, factory owners, and labor advocates to understand the root causes of labor unrest and identify strategies that have been effective
in improving working conditions and labor-management relations
One of the global industries with the highest labor costs is clothing. Due to the industry's low adoption of technology, it is also the sector in Bangladesh with the highest manpower requirements. More than 4 million people are employed in this sector, which is the foundation of our export-driven economy, according to BSR. Being an integral part of the industry, laborers deserve to get higher consideration from the manufacturers. Unfortunately, the manufacturers can't take their matters into priority: resulting in present unrest.
In the RMG industry, labor unrest is the most often discussed topic. The recent confrontations between law enforcement and workers have brought about a significant problem and upset the tranquil environment in the sector. The regions with the biggest disturbances were Ashulia and Tejgaon. Conflicts erupted as a result of worker strikes, and they quickly spread to the other garment zones like an infection. The workers demonstrated on the streets, picketed, lay siege on either the officers or the factory managers of the factories to express their grievances and demand higher wages and better job facilities.
Manipulations and exploitations of all sorts must come to an end. Any action, which may disturb the working environment or by any chance should be settled fast by the authorities and parties concerned before transforming into violence.
Table of Contents
Acknowledgment
Executive Summary
Chapter
1. Introduction
The objective of Report
Methodology
2. History of Garments Sector
Factors Promoting the Growth
3.LaborUnrest
Causes of Labor Unrest
Recent Labor Unrest in RMG Sector
4. Expressed & Hidden Causes
Threats to the Development of Economy
Challenges to our Economy
5. Findings
Recommendations
Conclusion
References
Acknowledgment
Firstly, I must convey my sincere gratitude to my respected teacher Kamrun Nahar, who was my faculty adviser during the term paper program. Thanks to his comprehensive guidance, I was able to successfully prepare this paper. The invaluable advice provided by him has greatly enriched the content of this term paper. I am very grateful for her kind advice and instructions.
I also express all my thanks the core of my her to her for providing me with the scope and necessary support to undertake the study.
I would also like to thank my friends for their continuous support, and inspiration and for allowing me to use their information and analysis the data. Also allowing me to face practical situations.
Executive Summary
One of the global industries with the highest labor costs is clothing. Due to the industry's low adoption of technology, it is also the sector in Bangladesh with the highest manpower requirements. More than 4 million people are employed in this sector, which is the foundation of our export-driven economy, according to BSR. Being an integral part of the industry, laborers deserve to get higher consideration from the manufacturers. Unfortunately, the manufacturers can't take their matters into priority: resulting in present unrest.
In the RMG industry, labor unrest is the most often discussed topic. The recent confrontations between law enforcement and workers have brought about a significant problem and upset the tranquil environment in the sector. The regions with the biggest disturbances were Ashulia and Tejgaon. Conflicts erupted as a result of worker strikes, and they quickly spread to the other garment zones like an infection. The workers demonstrated on the streets, picketed, lay siege on either the officers or the factory managers of the factories to express their grievances and demand higher wages and better job facilities.
Manipulations and exploitations of all sorts must come to an end. Any action, which may disturb the working environment or by any chance should be settled fast by the authorities and parties concerned before transforming into violence.
Chapter One Introduction:
The Ready Made Garment Industry of Bangladesh has extended historically over the last three decades. Habitually, the jute industry controlled the rest of the industrial sectors of Bangladesh till the 1970s (Haider, 2007). Subsequently, in the early 1980s, the RMG industry developed as an important competitor in the economy of the country regarding other sectors and has progressively the jute industry or agricultural based country (Rahman & Chowdhury, 2020).
Currently, Bangladesh's only multibillion-dollar manufacturing and export sector is the RMG sector (Studymode.com, 2018). Although the industry-backed only 0.01 percent of the country's total export earnings in the year 1976, its portion enlarged by about 78 percent of total export earnings in 2022 as well as from July to December 2022, knitwear exports (Chapter 61) climbed by 13.42% to $12.659 billion. (Fibre2Fashion, 2023). The Exports Promotion Bureau of Bangladesh revealed that ready-made garment exports totaled US$27.42 billion from July to January 2022-2023 compared to $23.98 billion the year before. Bangladesh exceeded its $26.17 billion anticipated export goal for the period (Russell, 2023). The country's RMG industry developed by an additional 19 percent per annum on average during the last 25 years (Swazan & Das, 2022).
However, with the beginning and succeeding exponential growth of the RMG sector, the labor sector of Bangladesh has twisted that liability into an irreplaceable asset (Cookson, 2017). In the post-liberation economy of Bangladesh, the industrial sector has performed as an engine of growth for the rest of Bangladesh (Finance Division, Ministry of Finance Government of the People's Republic of Bangladesh, 2016). Even in the appearance of the current global economic recession, the economy of Bangladesh is not traumatized mostly because of the secure growth of the RMG sector and off-course of smooth flow of remittance (M. E. Islam et al., 2013). Quotabased entrée of the European Union and United State of America and other countries, local demand, cheap labor, low production cost, and private entrepreneurship have been the subsidizing factors for the progression of the RMG sector in Bangladesh (Sultana et al., 2011). Hastening industrialization procedures in the country, drawing foreign direct investment, reducing poverty through forming employment opportunities for millions, organizing business, empowering women, and creating a positive image of Bangladesh abroad are the foremost contributions of the RMG sector (World Bank Group, 2017).
Though, this sector is trapped with several problems and challenges such as the clash between factory owners and garment workers, labor unrest, the collusion of home and abroad, nonagreement, shortage of gas and electricity, poor infrastructure, political interface, regional and international advancing competitors, lack of effective government policies and lack of initiatives to search international markets, etc (S. Rahman, 2022). This chapter discussed the history of the growth of the RMG sector In Bangladesh, factors promoting the growth of the RMG industry in Bangladesh, the contribution of this sector to the national economy, and problems surroundings this sector (M. T. Rahman et al., 2017).
The Objective of the Report
The research objectives are -
- To fulfill the requirement of the course curriculum, I chose to write a term paper that explored the intersection of labor relations and environmental sustainability in the garment industry.
- My term paper investigated labor unrest in the garment sector, but instead of simply cataloging the problems faced by workers, I chose to focus on potential solutions. To do this, I conducted interviews with workers, factory owners, and labor advocates to understand the root causes of labor unrest and identify strategies that have been effective in improving working conditions and labor-management relations
The preparation of the report will enable us to learn about the labor unrest in the garments sector:
- To offer advice on the measures that should be followed in order to solve the issues.
- Will enhance overall knowledge about garments labor demands and necessities s well as their area of conflict
Methodology
In this study, we conducted extensive research on labor unrest in the garment sector. Our research involved a comprehensive analysis of various sources of information, including government reports, websites, newspapers, online blogs, journals, and research papers. We gathered and compiled relevant data, information, facts, and statistics from these sources, primarily via the Internet.
To organize the literature review, we consulted a range of textbooks and internet resources. The collected data and information were carefully analyzed to identify the key problems faced by workers in the garment sector. Using a systematic and rigorous approach, we then proposed solutions to these problems, based on our analysis of the available data and relevant literature.
The results of our research offer important insights into the labor unrest in the garment sector and provide valuable recommendations for addressing the challenges faced by workers in this industry. Overall, this study contributes to the ongoing discussion on labor relations and workers' rights in the garment sector and highlights the need for concerted efforts to promote fair and safe working conditions for all workers in this field.
Chapter Two History of Garments Sector
Western labor became more organized in the 1950s by creating trade unions (Nina-Hooper, 2022). This move, along with others, gave workers better rights, including greater compensation, which raised the cost of manufacturing. Retailers started looking for locations with lower production costs (Studymode.com, 2018a). Developing economies with open economic policies and highly disciplined, non-unionized labor forces that could create high-quality goods at lower costs, such as Hong Kong, Singapore, Taiwan, and South Korea, presented themselves as suitable locations for relocation (Nina-Hooper, 2022).
To control the quantity of RMG products imported from emerging countries to established developed countries, the Multi Fibre Agreement (MFA) was founded in 1974 (Hasan, 2013). The MFA agreement stipulated a 6% export rate that increases yearly for developing and developed countries (WTO | Understanding the WTO - Textiles: Back in the Mainstream, n.d.). Additionally, it enabled industrialized nations to impose export limitations on those who exported more frequently than permitted by bilateral accords (Studymode.com, 2018b). They discovered Bangladesh to be one of the most acceptable nations in the face of such limitations (Rana, 2016). According to the information that is currently available, Reza and Jwel Garment shipped the first shipment of clothing from the nation in 1977 (S. Rahman, 2021). The earliest and largest joint venture clothing factory in Bangladesh was called Desh Garment (HMS, 2015). After that, many businesspeople developed an interest in the Desh garment and began to build garment factories after understanding the potential for future growth internationally (Hooper, 2013). The partnership between a local private garment business, Desh Garment, and a Korean corporation, Daewoo, is one of the factors contributing to the rise of the garment industry in Bangladesh, according to data that are now available (Alam & Natsuda, 2016). When the chairman, Kim Wo-Choong, proposed an ambitious joint venture with the Government of Bangladesh that entailed, the Daewoo Corporation of South Korea got interested in Bangladesh as part of its worldwide plans (Rock, 2001). Following the signing of MFA in 1974, South Korean company Daewoo, a significant exporter of clothing, was seeking possibilities in nations to use their quotas (How Bangladesh Stitched a Key Sector With a Ready-made Solution, 2023).
RMG investments began to come to Bangladesh at this time (Hossain, n.d.). After MFA, the export of Daewoo was prohibited due to the quota restriction for Korea (International Trade Administration, 2022). Due to Bangladesh's possibility to export without any limitations as an LDC, Daewoo is keen to leverage Bangladesh as a market (M. A. Hossain, 2023). This aim was motivated by the fact that Bangladesh would rely on Daewoo to import raw materials while also giving Daewoo access to the Bangladeshi market (Kiron, 2021). Daewoo and Desh Garment inked a five-year collaborative agreement to fulfill this aim (Ahad, 2015). It involved working together on technical training, purchasing equipment, and fabric, setting up a plant, and marketing in exchange for a particular marketing commission on all of Desh's exports (Morshed, 2012). The partnership with Desh-Daewoo had a notable result. Desh export value increased at an average annual rate of 90% over the first six years of business, reaching more than $5 million in 1986-1987 (Fibre2Fashion, 2005b). Rahman stated that the Desh-Daewoo partnership is crucial to the growth and development of Bangladesh's whole garment export business (S. Rahman, 2014).
Factors Promoting the Growth
RMG industry growth-promoting factors There are two types of factors that helped the RMG sector in Bangladesh flourish (S. Islam, 2020). These are given below :
1. Domestic Factors
2. External Factors
1.Domestic Factors
a) Cheap labor:The Ready Made Garments (RMG) sector relies heavily on labor-intensive operations. Bangladesh is an overpopulated nation with a severe unemployment issue. In the late 1970s and early 1980s, private business owners had the chance to quickly become successful in this industry by utilizing inexpensive labor (Chowdhury, 2014). There are 4.22 million workers in the RMG industry, according to estimates (Haque & Bari, 2021). Currently, there are 41:59 more men than women employed (Safety First: Bangladesh Garment Industry Rebounds, n.d.). Foreign employees work mostly in management and marketing positions in nearly 15% of factories (Paton, 2021). The typical age of employees is 25.9 (A. Haque, 2022). 74% or so are married (Haque & Bari, 2021). Working in the garment factories, contributed to the industry's rise, giving women an opportunity to change their futures (Textileblog, 2021). Bangladesh has the cheapest labor costs in the whole globe (Nowshin, 2015). The following table shows a comparative study of monthly labor wages in major RMG exporting countries (in USD).
illustration not visible in this excerpt
Source: Lu, V. a. P. B. S. (2022, May 8). Minimum Wage Level for Garment Workers in the World (Updated in
December 2020). FASH455 Global Apparel & Textile Trade and Sourcing.
https://shenglufashion.com/2020/12/04/minimum-wage-level-for-garment-workers-in-the-world-updated-in- december-2020/
b) Lowproduction cost:As labor cost is low, RMG factories in Bangladesh can produce quality garments at a lower cost which has attracted foreign buyers (M. Z. Hasan, 2020). Bangladesh has become a major source of bulk imports for various global retailers, including Walmart, JC Penney, H&M, Zara, Tesco, Carrefour, Gap, Metro, Marks & Spencer, Kohl's, Levi Strauss, and Tommy Hilfiger, highlighting its position as a key player in the global textile and apparel industry (Problems of Garments Industry in Bangladesh, n.d.). From $6.4 billion in FY 04-05 to $12.5 billion in FY 09-10, the sector's overall exports have increased by half (Studymode.com, 2018d). The comparative advantage of low production cost is also an attractive foreign direct investment (ResearchFDI, 2021). Consequently, the combined contribution of these backward industries enables the fulfillment of up to 85% of the demand for raw materials, thereby playing a pivotal role in the growth of the apparel and knitwear exports in the country. (M. A. I. K. Khan, 2012).
c) Local Demand:Clothing is a fundamental need (Rony, 2022). Bangladesh is one of the nations with the highest population densities in the world (Stuff, 2021). Every year Bangladesh needs a huge quantity of garments for its local needs. On the eve of many festivals like Eid, Puja, Pohela Baishakh, etc., Bangladeshi people traditionally enjoy dressing in new attire (Hooper, 2013b). The people of Bangladesh had to rely on tailors for their household apparel needs before the development of the RMG sector (Kiron, 2021c). Although tailoring is still practiced, Bangladesh has a booming ready-made clothing industry (Readymade Garments Industry of Bangladesh | RMG Sector, 2020b).
d) Government Support:The government assisted the apparel industry through measures such as duty drawbacks, tax holidays, cash assistance, income tax rebates, the establishment of export processing zones, zero tariffs on machinery inputs, freight and power rate rebates, bonded warehouse facilities, the provision of imports under back-to-back letters of credit, loans at concessional rates, export development funds, and so on.
e) Back Back Letter of Credit:Back to Back Letters of Credit is a crucial aspect of the sector's continuing prosperity (Kagan, 2020). It significantly reduces the financial requirements of local businesses for business apparel (Jaglan, 2021). Entrepreneurs can finish the complex process of producing and exporting while spending relatively little of their own money on working capital (Bellouma, 2011). Even if the turnover is Tk. 50 million and the profit is just 5%, the returns are still good because the money is mostly borrowed from banks (A. K. R. Islam, 2023). As a result, the rate of return does not have to be great (Kenton, 2022). It would have been extremely difficult for the new entrepreneurs to secure cash to build local financial institutions in the absence of back-to-back L/C (R. H. J. Uddin, 2021).
f) Private Entrepreneurship:The export-oriented RMG sector began largely through private ventures (Sarker, 2018). The trek was not easy. In terms of electricity and gas supply, the entrepreneurs faced enormous challenges (Ferdous, 2015). Political upheaval, regular hartals (strikes), inadequate port infrastructure, and labor unrest all contributed to lengthier lead times (Hossan et al., 2012). Despite these limits, the RMG entrepreneurs met the purchasers' expectations of lower pricing margins and higher compliance standard quality assurance. Backward integration was also heavily invested in (Habib, 2018).
2.External Factors
a) Quota Facility:The quota system under the Multi-Fiber Arrangement (MFA) was a major engine of expansion (Hayes, 2021). The industrialized nations' Generalized System of Preferences (GSP) and Rules of Origin (RoO) facilities also aided Bangladesh's exports (Report, 2023). In short, MFA provided Bangladesh with market protection, whereas GSP facilities provided developed nations with preferential treatment and market access prospects (Fahad, 2012).
b) Civil War in Sri Lanka:The civil war in Sri Lanka, which began in the late 1970s, was a boon for Bangladesh in terms of the RMG business, but a curse for Sri Lanka (Anandakugan, 2021). Among Asian countries, Sri Lanka was the leader in RMG exports (Bhuiyan, 2022). However, because of the civil strife, Western purchasers moved away from Sri Lanka and sought an alternative (Hossian et al., 2019). Finally, Bangladesh stepped up to replace Sri Lanka in the RMG industry, citing its large inexpensive labor force (Mohsin, 2017).
C) Supply-Side Factors:On the supply side, various elements that have contributed to Bangladesh's success as a clothing exporter may be highlighted (Nuruzzaman & Haque, 2009). First, when East Asian costs climbed and quota constraints limited shipments from these nations to, notably, US markets, garment manufacturers from those countries created production facilities in other countries with lower labor and fewer or no quota restrictions (App, 2019). In the second half of the 1970s, corporate houses from the Republic of Korea, particularly Daewoo, came to Bangladesh to transfer industrial technology and create marketing outlets (Focus, 2023). Although the number of garment exports business from this arrangement remained limited, knowledge of the opportunities expanded in the garment industry (Rakib & Adnan, 2015). There were less than a dozen enterprises in existence in 1978. In just three years, the number climbed to 80 (The IMF and the Silent Revolution, 2000). The area has extended fundamentally from that point forward (Segal, 2023). The Korean investment gave the garment industry an edge that would have taken considerably longer for the Bangladesh sector to achieve its current level (T. Report, 2022). That's amazing development (Palma, 2022).
Chapter Three Labor Unrest
In Bangladesh's RMG sector, workplace conflicts are a typical occurrence, and workers routinely stage strikes to drive their demands home (M. H. a. S. a. N. Ferdous, 2016). The owners suffer large losses, the economy suffers, and the country's reputation is damaged overseas (Eccles, 2014). Additionally, it discourages international customers from placing new purchases. The industry also loses its competitive advantage as a result of this (Choudhury & Rahman, 2017b). A major garment factory, Hameem Group, suffered losses of around 100 core taka and two worker fatalities in July 2009 as a result of widespread labor unrest, which also led to the loss of 2000 jobs (K. Hasan et al., 2015). After protests shut down dozens of locations that supplied major American and European corporations for a week on December 23, 2016, 1,500 workers were put off from Bangladeshi garment manufacturers (Choudhury & Rahman, 2017). There are several reasons for labor unrest (Correspondent, 2022).
The works' long-standing complaint comes first and foremost. The growth of the RMG industry in Bangladesh depends on the hard work of the labor force (Choudhury & Rahman, 2017a). But regrettably, they lack even the most basic amenities (Ahmed, 2018). They are to live a substandard life in a city slum for years (Haque, 2023). They receive a little salary (Clark, 2023). They frequently fail to get their pay, overtime payments, and bonuses on schedule (Haque, 2023). Their employment contract is unknown to them (Haque, 2023). A right to legitimately protest against harsh exploitation, being mistreated by owners and mid-level officers, working long hours in a crowded atmosphere without enough relaxation, etc. are their daily destinies (Kiron, 2022). They are prohibited from taking part in decision-making (Personal Statement: My Personal Leadership Philosophy | ipl.org, n.d.). A factory building collapse, a fire, and a stampede resulted in several fatalities and injuries (The Rana Plaza Accident and Its Aftermath, 2017). However, any employee who protests against the owners or management faces numerous forms of harassment, including threats of termination, arrest, or even physical attack by the owners' hired thugs (“‘Whoever Raises Their Head Suffers the Most,'” 2023).
The majority of the workforce in this industry is illiterate, unskilled, and has simply migrated from rural areas in quest of a living. They put forth a lot of effort for a meager wage.
Table 3:The minimum wage structure for garment workers in Bangladesh is established.
illustration not visible in this excerpt
Source: Salam, M. A., & Mclean, G. N. (2014). Minimum Wage in Bangladesh's Ready-made Garment Sector: Impact of Imbalanced Rates on
Employee and. . . ResearchGate. https://doi.org/10.13140/RG.2.1.4839.3361
Table 4: Sector- Wise minimum wage for workers
illustration not visible in this excerpt
Source: Lekashvili, E. (2017). International Assessments Analyses of Systemic Transformation of Georgia's
Economy. ResearchGate. https://doi.org/10.13140/RG.2.2.10666.52163
[...]
- Quote paper
- Swaid Sameh (Author), 2019, Industrial Unrest in the Ready-Made-Garment Sector in Bangladesh, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/1353149
