RMG turmoil: Thoughts on solutions

Achievements
This sector earns more than 75% (about USD 6.4 billion in 2004-2005) of our foreign exchange. Because of the very low foreign exchange reserve, any interruption in this sector will seriously affect the country's financial health. The huge work force, above 2 million, is mostly women who would otherwise have to serve as domestic aids and low paid workers elsewhere in absence of the garments industries. The linkage industries employ similar number of people. Those dependent on the earnings of the work force would be another 2 to 3 million people.

Scenario of the incidents
Close analyses of the recent events of May 23 and 24 and the subsequent happenings tend to show as if an organised group masterminding these hooliganisms in the name of the workers' rights and grievances. Let's see what actually happened:

- utsiders brandishing sticks and wearing headbands attacked the factories.

- Some of the factories with regular payments of wages and other benefits, having excellent working conditions were attacked and damaged.

- The attackers reportedly threatened the workers to come out and join them and any defiance resulted in arson and destruction.

- The burning down of a razor blade factory, a ceramic industry and motorcycle assembling plant had nothing to do with the workers' unrest.

-The demonstrations and arson appeared well organised and spread like wild fire.

Trade unions in EPZs
Interestingly, these huge labour forces in the garments sector are not unified under the banner of any trade union. In the past, several attempts had been made by the international trade union lobbyists to allow trade unions in the Export Processing Zones (EPZ) in Bangladesh. In 2001, the US Ambassador in Bangladesh personally conveyed his government's displeasure in not allowing the trade union activities in the EPZs. I attended that meeting, and several others after that, and participated in the lively discussions that followed. EPZ authorities, to my knowledge, have undertaken specific actions in fixing the minimum wage, overtime, gratuity, yearly increments, medical facilities for the workers, maternity leave, allowance for working during holidays etc. They have formed “workers welfare committee” with elected representatives to interact with the management/investors on different issues pertaining to the welfare of the workers. The attempts were to avoid any political interference within the EPZs in the guise of trade unions in its conventional outfits. However, the government agreed to allow trade union activities within Export Processing Zones from November this year.

Are trade unions a panacea?
A coercive approach to press forth even the genuine grievances may weaken the institutional ability to sustain growth. This may even end up in killing the duck that laid the golden eggs. The history of politically profiled workers' unions was not at all conducive to the growth of industry in Bangladesh. The state owned enterprises were the victims of government bureaucracy and so called trade unions. Once profitable enterprises of the then erstwhile East Pakistan, the jute mills, sugar mills, textile factories were shut down one by one. Because of this historical background we should seriously find genuine formats through which workers' rights can be ensured without jeopardising industrial growth and productivity.

Foreign investors
The foreign investors came to Bangladesh to set up industries in the Export Processing Zone(s) for the following reasons:

- Absence of trade unions.

-Utility supports.

- Infrastructure support.

- Bonded warehouse facilities etc.

- Abundant work force.

With our chaotic and acrimonious political culture it will be suicidal to allow any politically biased workers' unions inside the factories. These will divide the workers, trigger conflicts among them, lower productivity, interrupt work and create a culture of hatred and continuous tension. No investor would be willing to stake his/her money and resource in an environment like this.

Congenial environment is a precondition
In absence of a congenial environment in the industries it would be impossible for this sector to grow and survive. One of my friends told me that upon hearing the news of arson and attacks on different factories by the mobs, his workers spontaneously organised themselves into battle arrays to protect the factories from the army of attackers. It's easy to incite hatred among the workers and embark on adventurism and destroy properties to coerce the industrialists to give in to the demands of the mobs. Any forced agreement is bound to dissipate in no time. Only mutual understanding and cooperation can lead to fruitful negotiation and a win-win situation.

Workers' welfare society
For enabling the workers to get their “rights to form association” it is important that viable alternative(s) may be worked out in which the basic tools for grievance mitigation should be consultation and cooperation.

One such alternative to the traditional workers' union or trade union may be “Workers Welfare Society” (WWS) registered with the appropriate authority, where the management and workers will represent the interests of their peers and meaningfully uphold the interests of the parties. Grameen Bank of Bangladesh, in face of workers' agitation in 1989-90 has formed such an association. The probable structure and composition of this organisation may be as under:

- Only the workers of the organisation will be the members of the association.

- The objective of the body will be to promote amity and understanding between the workers and the owners, take actions and incentives to increase productivity, ensure workers' safety, and help in implementing any programmes and decisions for the welfare of the workers.

- The workers will elect their representatives to sit with the management.

- The body will meet at regular intervals with the management on issues involving the workers' welfare.

- For conflict resolution at the highest level, a monitoring cell or an apex body comprising the representatives of workers and the owners may be formed whose decisions will be final.

-The presidents of WWS of the respective factories shall elect five persons to the apex WWS of BGMEA or BKMEA where owners shall have equal number of representations.

Industrial police force
The government may create an Industrial Police Force (IPF) who shall be equipped with the appropriate deterrents to disperse and dislodge any organised attempts to arson, destruction, obstruction and any interruptions to production in the industrial areas. IPF shall have its offices in and around the major industrial installations and locations and should be available immediately when called. Since, any destruction of industries and the damaging of assets amount to destabilising the country's economy, the government should have a “zero tolerance” policy for this sort of arson and destruction.

Compliance audit
The apex bodies like BGMEA or BKMEA or any other body or authorities of any other industrial sector may organise regular compliance audits of differential industrial units on a regular basis. The audits will basically cover the following areas:

- Safety compliance of the buildings and structures.

- Work environment in the factory premise.

Ø Payments of wages and overtime.

- Child labour issue.

Prospects for garments sector
The volume of garments export business during 2002 was about USD 200 billion worldwide. By 2012 this business will be about USD 700 billion meaning that there is tremendous scope for export to expand from Bangladesh even without an increase in its current market share. In an open regime, the quality, efficiency and the prices will be three dominant factors in determining the winners. The productivity of workers in China and Vietnam is about 25-30% higher than that of Bangladesh. The question of cheap labour in Bangladesh needs to be weighed against labour productivity to stay competitive. The cost of disruptions due to political activities, port congestions, load shedding etc. are some of the elements that are to be addressed for its future growth. In addition to the daily loss of Tk 20 crore due to production stoppage in Dhaka Export Processing Zone alone, it has raised questions about the security of investments, timely delivery of goods to the foreign buyers, safety of the workers and above all the fragility of the law and order in the country. The advantages that Bangladesh has and the experience that it has gained in the last three decades in garments manufacturing can be readily used to harness more than three times export growth in this sector alone in next five years and this projection is on the lower side of the curve.

M Masud Isa is former Managing Director of Grameen Telecom and Grameen Knitwear Ltd.