The importance of Social Compliance in Ethical Trading for Bangladeshi Apparel Sector

Guest authors of the feature are  R. Indrajith  and Dr Subrata Das, the later is Professor of Department of Fashion Technology, Bannari Amman  Institute of Technology, Sathyamangalam, Tamil Nadu, India. The two authors allow a deep and analysed context on violations in apparel production in Bangladesh, but at the same time they list also the corrective actions as remedy of social compliance and ethical trading. TextileFuture hopes that these corrective actions will take place in the immediate future. We congratulate the two authors for their excellent research work, and we are proud to publish their results.

Bangladesh has emerged as a key player in RMG (Ready Made Garment) sector since 1978. Textiles and clothing account for about 85 % of total export earnings of Bangladesh. Out of which, 78 % comes from the apparel sector which covers the major products of knit and woven shirts, blouses, trousers, skirts, shorts, jackets, sweaters, sports wears and many more casual and fashion items. Garments made up 11.9 billion pounds of Bangladesh’s total export of 15 billion in 2012. European companies account for over 60 % of clothing exports. The sector currently employs approximately 3.5 million workers in 4200 ready-made garment factories, 90 % of them are females from underprivileged social classes.

The pivotal factor in the apparel industry is the workforce i.e. the sewing operators, the helpers, cutting masters, pattern makers, finishers etc.. Bangladesh is endowed with abundant and cheap labour force that is easily trainable and convertible into semi-skilled and skilled workforce. Existence of such category is one of the advantages that Bangladesh will be enjoying over a considerable period in the context of international trade on clothing.

Quality of goods exported from Bangladesh has always been questioned by the foreign buyers due to lack of experience and awareness of Garment manufacturers associated in the trade. In order to export readymade garments, it is not only the quality parameters which are important towards acceptance of the product as per the intended end use, but also the working environment in which the garments are to be produced, is equally important so that sweatshop concept is totally taken care of and the code of conduct must be stretched towards achieving the objectives of social compliance issues. The core areas of social accountability are, basically, based on the principles of international human rights, local culture and tradition. The prime objective of the system is  to protect the human rights in ready-made garment industries. Thus, Bangladesh has a stiff challenge ahead to meet the demand of world market.

Social Accountability

In today’s fast changing global market, it is not only the quality of garments which cherished the retailers and manufacturers but also the working environments of the organization wherein the products were produced. Those are equally important to gain and strengthen consumer confidence and to build-up more reliable relationships with vendors.  In other words, specific code of conduct that protects the basic human rights of the workforce engaged in the trade is to be respected to satisfy consumers and to add social value to the product. Basic awareness of the social accountability helps to understand and monitor the compliance part of it in protecting the image of a particular brand of product.

In order to do so, the reputed and leading market players in the garment trade have imposed compulsion on the related factories to achieve those objectives as a condition of the export contract. Even the exports were either withheld or cancelled elsewhere in the event of non-compliance to such issues.

COC Code of Conduct

Social Accountability standards have been developed by the international organizations such as FLA Fair Labour Association, WRAP Worldwide Responsible Apparel Production, CEPAA Council on Economic Priorities Accreditation Agency, ETI The Ethical Trading Initiative and BSDR Business for Social Responsibility.

Reputed brand buyers in large supply chain have taken the guideline from those organizations and formulated their own standard of COC and also the acceptance criteria.

The basic principles of COC have been derived from the principles of international human rights norms as delineated in International Labour Organization Conventions, the United Nations Convention on the Rights of the Child and the Universal Declaration of Human Rights.

It has nine core areas to be addressed upon. These are as follows :

  1. Child labour
  2. Forced labour
  3. Health and safety
  4. Compensation
  5. Working hours
  6. Discrimination
  7. Discipline
  8. Free association and collective bargaining
  9. Management systems

While following the above criteria is compulsory for satisfying COC, local culture and regulation of Govt. cannot be overlooked. For instance, limit of working hours, and compensation for extra work may not be the same for all geographical zones in the globe. Minimum basic wage also depends on the economic situation of a particular country in question.  The introduction of rights of free association and collective bargaining is guided by the political environment, the maturity level of workforce and above all the basic training of the management of the organization.

By keeping in mind the complex scenario of the importance of social accountability, several case studies in Bangladesh have been made with respect to the information obtained through actual social compliance audits performed by leading auditors of internationally renowned consumer products service companies.

Social compliance audits conducted as per the COC of different brand buyers of USA and Europe were basically based on the following steps :

  1. Opening meeting with the factory management (informed the scope of audit)
  2. Factory Tour (observed working condition)
  3. Document Review (payroll, time card, personal file, age documentation etc.)
  4. Employee’s Interview
  5. Closing meeting with factory management (discussed audit findings and recommended necessary improvements).

Highlights of typical findings in different aspects of social accountability are described below. Suggested corrective actions in typical cases are also indicated. This is to understand the actual scenario of social compliance in different RMG factories in Bangladesh.

Management Systems :

Violation : Factory paid wages in instalment throughout a month instead of disbursing the payment within particular period of the next month.

Corrective Action : This is considered as a delayed payment. To comply with The Payments of Wages Act of Bangladesh, 1937, wages shall be paid by 7th of the next month up to 1000 workers.

Violation : Employees punched their time cards two hours earlier (7 p.m.) than the actual time of departure (9 p.m.) from the factory. Factory management wanted to hide the actual working hours.

Corrective Action : To comply with The Payment of Wages Rules, 1936 of Bangladesh, all working hours shall be recorded in the time card.

Child Labour :

Violation : Child labour was found at the factory. It was confirmed from the verification of personal document and the appearance of the employee. From the workers interview, it was understood that one worker was about 13 years old.

Corrective Action : According to The Factory Act of 1968 in the Bangladesh Labour Code, any person who has not completed sixteen years of age is defined as a child. Article 66 prohibits the employment of any children under the age of fourteen. Factory management agreed to take care of this matter.

Most child labourers have been cleared out of Bangladesh’s RMG sector under international pressure, but sporadic cases still exist due to economic reason.

Forced Labour :

No such cases were found wherein there was use of forced labour in the factories. Direct evidence which indicates personnel shall require to lodge ‘deposits’ or identity papers upon commencing employment with the company was also not available.    .

Discrimination :

Violation : Factory management is reluctant to recruit employees from the area where the factory is situated. This is not only to avoid local protests against working condition, but also due to fear of post scenario of a disciplinary case. Thus, there is discrimination in hiring workforce.

Corrective Action : To comply with social accountability standard, recruitment shall not be biased towards avoiding local candidate at the time of recruitment.

Disciplinary Practices :

Violation : Overtime wages of the workers were deducted as a means of punishment if they could not achieve the daily production target.

Violation : Employees, if fail to attend weekend work, were deliberately made absent for 2 to 3 days from his working period.

Violation : In one of the factories in Chittagong, Bangladesh working for a reputed brand of USA, physical torture was reported for simple mistakes including no payment of wage.

Corrective Action : The factories shall not engage in or support the use of corporal punishment, mental or physical coercion, and verbal abuse. Wages shall not be deducted as a form of punishment.

Health & Safety :

Violation : Workers did not use gloves and/or masks while handling chemicals and dyes in chemical storage area of Dyeing Department.

Corrective Action : In order to comply with The Factories Act, 1965, Chapter – 3 and 4 of Bangladesh, management shall provide adequate gloves and/or masks to the appropriate workers. They must be motivated through training to use such protective equipment for safety.

Violation : Number of toilets in the production floor are not sufficient to cover all the employees.

Corrective Action : Factory shall construct sufficient number of toilets in accordance with The Factories Act, 1965, Chapter- 3 and 4.

Violation : No soap and towels  were there inside all the toilets in a factory.

Corrective Action : Soaps and towels are to be provided at all the toilets in the factory.

Violation : Fire extinguishers were found blocked in some areas of the factory and were not easily accessible.

Corrective Action : All fire extinguishers shall be cleared from obstruction at all time. Area in front of fire extinguishers shall be marked on the ground with yellow lines to indicate that the area must be kept clear at all times.

Violation : Aisles were not marked at different sections of the factory.

Corrective Action : Factory  shall put marking on the floor with yellow lines to indicate the evacuation paths.

Violation : No evacuation plan was observed throughout the factory.

Corrective Action : Factory shall prepare and post evacuation plan at different areas of  the factory to facilitate smooth evacuation in the case of emergency.

Violation : Drinking water closets were found very near (2-3 feet) to the toilets.

Corrective Action : As per The Factories Act, 1965 of Bangladesh, factory shall place drinking water closets at a minimum of 20 feet distance from the toilets.

Violation : Primary/secondary aisles were found blocked by fabric roll, cartons, garments etc. in different sections of the factory. Electrical control panel was also found blocked.

Corrective Action : Factory, in accordance with The Factories Act in Bangladesh,    shall make sure that all the passages and control panels remain unblocked at all times.

Violation : No protective hand gloves were in use by the fabric cutting knife operators which might cause serious accident at any time.

Corrective action : Factory management shall supply metal hand gloves to the operators and motivate them to use such protective equipment for safety.

Freedom of Association and Collective Bargaining :

Violation : Employees were not permitted to bargain collectively about their requirements.

Corrective Action : All employees shall be permitted to bargain collectively about their rights.

Compensation and Working Hours :

Violation : Weekend and overnight worked hours were not recorded in the time cards and payroll sheets and also not compensated properly.

Corrective Action : Factory shall record all worked hours in payroll sheets and time cards and shall compensate those correctly. This is to satisfy The Payment of Wage Rules, 1937 of Bangladesh.

Violation : Female workers were working from 8 a.m. to 12 a.m. as  overtime.

Corrective Action : Factory shall allow female workers to work between 7 a.m. to 8 p.m. only with a view to comply with The Factories Act, 1965, Chapter-6, Bangladesh.

Violation :  Overtime worked hours had exceeded the legal limits of stipulated hours per month with a large margin.

Corrective Action : Factory shall not allow anyone to work more than 10 hours per day and 60 hours per week. The duration of 60 hours per week shall be represented as 48 hours general duty plus 12 hours overtime as per the local law of Bangladesh.

Violation : Factory did not comply with the local law of Bangladesh in the payment of overtime wages for all the workers in the factory.

Corrective Action : Factory shall follow legal requirement for overtime compensation, which is double of the basic pay.

Current level of maintenance of compliance with hygiene and safety standards is not adequate and the reported tragedies like the incidence of fire in the garment industry support the fact to a certain degree. Such accidents seriously tarnish the image of Bangladesh and could cause buyers to turn to countries where tragedies of this type are less likely or are hidden from the international press.

In spite of the promulgation of laws by the Government, the majority of garment workers remain deprived of their legal rights. Laws are there in the papers but its implementation is not always felt while looking at it from the micro level right on the ground. Some of the issues which still remain neglected are :

  1. i) Minimum basic salary, ii) Working hours, iii) Overtime calculation, iv) Off day in a week and v) Yearly increment.

It is worthwhile to mention that the workers engaged in the factories inside Export Processing Zones in Bangladesh enjoy better working environment than the workers outside the Export Processing Zones. This has attracted many foreign investors in the zone wherein BEZPA Bangladesh Export Processing Zone Authority has recently adopted a policy to safeguard the legitimate rights of workers by the formation of WWC Workers Welfare Committee at each enterprise. In fact, in the context of prohibition of trade union as per BEPZA Act, it is regarded as a constructive effort to fulfil the requirement of freedom of association and collective bargaining.

Concluding Remarks

Economists identified high lead time, less productivity comparing to other competing nations despite relatively low wages and infrastructure bottleneck as the major impediments for garment industries in Bangladesh. In the absence of adequate number of backward linkage industries, duration of producing apparels take comparatively more time, as enterprises need to import raw materials and face an unnecessary delay due to bureaucratic ‘Red Tape’, sluggishness of customs formalities and the loading and unloading of ships. In order to shorten these periods, the garment manufacturers tend to force their workers into lengthy working hours when a large order comes in, but this arrangement, which ignores the workers’ basic right, is ineffective in both the short and long term in international business.

Brand buyers often argue that producing garments in countries which are just beginning to industrialize is “a painful process”, but in reality some re-adjustments are also to be required on the part of such buyers as well. It is desired that factories should pay higher wages and provide more welfare oriented services to the workers. But the abrupt reduction of CMT (cutting, making and trimming) charges in recent months by the buyers has resulted in additional expenditure towards overhead cost for the factory owners. Thus, the buyers also need to consider that the rate at which they place their orders should commensurate with the cost involvement to match with the desired compliance level.

Due to the increasing publicity of inadequate facilities and unsafe working conditions for workers, the Bangladesh garment industry is trying to begin a new era, one that is safe, socially accountable, environmentally responsible and much more transparent.