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Top RMG buyers worried at unrest in Bangladesh
Publication Date : 19-07-2012
The world's top buyers of Bangladeshi garment products yesterday gathered in Dhaka to share their concerns over persistent labour unrest in the industry and to finalise an SOS message to the country's Prime Minister Sheikh Hasina.
Buyers from about 19 leading brands, including Walmart and Gap, appear deeply troubled at the conditions of the garment and textile sectors and the prospects of their business in Bangladesh.
Industry disruptions and worker grievances are now impacting our ability to direct businesses to Bangladesh -- was the unanimous view of the representatives, who attended the unprecedented meeting at Walmart's office in Dhaka in the morning.
Never before have readymade garment buyers been so united in making their concerns known in the hope that they will be addressed by the Bangladesh government. They were compelled to take the initiative as labour unrest has recently gone from bad to worse and the world economy continues to dip.
The brand leaders decided to take a united step soon after the latest spat of violence in Ashulia last month, two and a half months after the forced disappearance of labour leader Aminul Islam, said a source close to the buyers.
The discussion lasted over two hours, a great deal of which was spent on workers' wages, an issue the buyers identified as the main reason behind the unrest, a meeting source told The Daily Star, wishing not to be named.
The buyers also finalised a letter to be sent to the PM, the draft of which The Daily Star has managed to obtain.
The letter, a copy of which will be given to the embassies of all countries represented by the buyers, is due to be sent to the prime minister by the middle of next month. Prior to that, the buyers plan to hold a series of meetings with the labour and commerce ministries as well as with two garment exporters associations.
Concerns as well as suggestions for an inflation adjustment to the wages were tabled in yesterday's rare meeting, in the hope that the highest office will act promptly to tackle the crisis methodically.
"As significant buyers of apparels and textile products from Bangladesh, our companies have been observing with great concern the current garment factory worker unrest," began the letter to the PM.
"Unrest among the workers in this sector is seen as risk among our companies and could cause damage to the reputation of Bangladesh as a reliable sourcing market."
Signatories of the letter also include H&M, Carrefour, Tesco, JC Penney, Nike, MARKS & SPENCER, mothercare and Levi's.
The brand companies, which are known to be socially responsible, were very critical of violent protests, acknowledging at the same time workers' frustrations, heightened by inflation.
Government statistics show that overall inflation stood at 8.56 per cent last month. Food inflation in June came down to 7.08 per cent from 7.46 per cent a month ago. It was 13.75 per cent in last September. Non-food inflation hit a record 13.96 per cent in March, but stood at 11.72 per cent last month.
Against this backdrop, the garment buyers urged the government to conduct at least one annual review of minimum wages in line with the inflation and consumer price index.
"Once this functional review system is created and enforced, these revisions will help address the basic needs of the workers," the buyers hope.
The minimum wage of garment workers was first set in 2006 and revised again in November 2010 when the monthly pay of an entry-level worker was increased from 1,662 taka (US$20.33) to 3,000 taka ($36.70).
The buyers pledge of long term business commitments in Bangladesh provided that the industry was in compliance with local and international labour and environmental laws.
Sources confided that American buyers are particularly concerned about the disappearance of Aminul.
The forty-year-old trade union leader disappeared on April 4 from Ashulia on the outskirts of the capital. Aminul's body was found the next day by the Tangail-Mymensingh highway.
The US has been pressing the government for quite some time to probe the matter and bring the culprits to book. Dan Mozena, the US envoy in Bangladesh, has gone on record to hint several times that any failure in this regard may drive American buyers away from Bangladesh.
The government is yet to wake up to the risk that looms large.
Garment factory owners are not as oblivious to the realities as the government, however. “Just read between the lines of Mozena's comments and the buyers' letter [read out to him], and you will get to see the veiled threat,” said Rezaul Ahsan, a top sweater exporter in Gazipur.
Buyers are united and backed by their countries, but the young entrepreneur takes it optimistically: “We must respond positively to the buyers' initiative. A socially compliant garment industry can only bring in more forex.”