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Hanging by a thread: The unraveling of the garment industry in Bangladesh

By Mohammad Sahid Ullah

Around 4.1 million workers of the Bangladeshi apparel industry that exports ready-made garments to more than 165 countries across the world is facing a severe crisis amid the COVID19 epidemic. Many of them continue working in factories, to meet shipment deadlines, defying the government shut down order. Meanwhile, many factory owners are hard-pressed to provide salaries for their workers as their overseas buyers have either cancelled their work order or have neglected to pay for products that has already been exported. In such a context, the Bangladesh apparel industry is in dire straits.

Garment workers in Bangladesh (image credit: UNSGSA/Ismael Ferdous)

Industry insiders are concerned that without new orders and payments due for current orders, factories cannot pay their workers’ wages and cannot remain operational. The Government of Bangladesh has announced bailout packages to help factory owners overcome the crisis. However, most workers have yet to receive their month salary via Nagod (cash), an online-based wage payment system initiated last month. The World Justice Project, that works for the protection of fundamental labour rights expressed concern about the safety and non-payment of workers, mostly women working in more than 3,200 garments factories in two major hubs – Dhaka and Chittagong.

Even when workers are protected from physical risks, factory owners exploit lax labour regulation to skip paying benefits, design grueling production schedules with no rest days, and otherwise ignore the terms of employment contracts. The Sramik Karmachari Oikya Parishad (SKOP), a platform of 11 labour rights bodies, demanded that all industrial units in the country, including garment factories, ensure proper safety measures to protect workers from getting infected with COVID-19.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the apex body of this sector, could not take hardline decisions with regard to salary payments and the opening of the factories due to pressures from owners and overseas buyers. Amid the crisis, garment workers are protesting on the street in different industrial areas including Ashulia, Savar at Gazipur and Kalurghat and Nasirabad in Chittagong to press the government and authorities concerned to disburse their salaries before Eid ul Fitar, the biggest Muslim religious festival, scheduled to be celebrated in a few days (24th /25th May) via the online payment system. New technological platforms are coming to the aid of these protests such as blockchain technology to help in the monitoring of factory safety in global supply chains management.

Though layoffs had been approved under section-11 of the Bangladesh EPZ Labor Act, there continues to be serious tensions in this deployment of layoffs given that trade unions prevail in 90 percent of factories and the communications  between workers and industry management are currently fraught. Workers are thus seeking support from different stakeholders including the Ministry of Labour and Employment and BGMEA to pay dues from the Central Fund. The fund for the welfare of garment workers came into being in 2017 to which garment exporters have been contributing 0.03 percent of their export receipts.

This crisis in the garment sector has accelerated many disruptions: for instance, mobile payment platforms in Bangladesh are at last getting diversified, giving consumers choices. However, for this system to land on its feet, it needs to allow for fair competition. Nagad’s leveraging of the post-office makes sense and capitalizes on traditional and much used outlets, reducing costs in return; however, it also appears to bypass safeguards that other mobile payment systems are subjected to such as mandatory profiles of registrants to prevent money laundering. New technologies like blockchain are being repurposed to align with the self-organized labour protests and profile them and their interests within the larger global supply chain; however, it takes more than just digitization to encode the plight of the workers from “cogs in a broader supply chain” to ethical human-centered value chains. When it comes to the shameful abdication of responsibility of certain brands that can result in devastating disruption for the industry, there is hope that this can stir a global moral conscience and ride on a global outrage for redesigning of responsible business ecosystems that prioritize people over profit.