WalMart leads call for higher pay
in Bangladesh By Syed Tashfin
Chowdhury
DHAKA - WalMart, Nike, Gap and
other international clothing brands whose
businesses have been hurt by worker unrest in
Bangladesh have taken the unprecedented step of
urging the government to mitigate "industry
disruptions and worker grievances" as these are
now impacting their ability to "direct businesses
to Bangladesh".
The warning by 19 big
brands, which also included JC Penney and Marks
& Spencer, came a month after violent clashes
over pay demands closed more than 300 factories
and an ominous caution by US Ambassador to
Bangladesh Dan W Mozena's that "a storm is coming
for Bangladesh".
Any move by international
buyers to source goods from elsewhere would
threaten a central pillar of the Bangladesh
economy at a
time when the garment
industry is enjoying a huge boom - growing 40% in
the 12 months to June 2011 - thanks to the
relocation of factories from China and elsewhere
under pressure of rising wages and other costs.
The industry contributed about 78% of the
country's US$22.9 billion total exports in that
year and 13% of the gross national product. The
big brands alone source around $3.8 billion
annually from Bangladesh.
Workers in
Bangladesh are demanding a bigger slice of the
sector's growth. The clashes in June between
thousands of workers from factories on the
outskirts of Dhaka and police left 500 people
injured, 300 vehicles damaged and 200 factories
vandalized. At least 350 factories were closed for
10 days. Even so, local industry leaders played
down the big brands' warning.
"The buyers'
concerns are not a big threat," Sulav Chowdhury,
secretary of the Bangladesh Knitwear Manufacturers
and Exporters Association (BKMEA), told Asia Times
Online. "However, it is a matter of image for
Bangladesh."
The buyers' representatives
met in a WalMart office
in Dhaka on July 18 to finalize a message to be
sent later to Prime Minister Sheikh Hasina, according to
a Daily Star report. The gathering, the first
of its kind, specifically called for an inflation
adjustment to workers' wages while also expressing
concern about the unsolved disappearance and death
of labor leader Aminul Islam in April.
In
response to the multinationals' concerns, the
Labour Ministry reassured Bangladesh's
industrialists a week later that there is no need
to be worried as the government had outlined plans
to tackle the problem. However, the possibility of
fresh unrest may aggravate the situation and
further damage garment exports.
The
apparel sector employs nearly four million workers
in 5,000 factories across Bangladesh. The
workforce, of whom about 85% are women, accounts
for 40% of the country's industrial workforce.
They earn around 3,000 takas (US$37) a month, and
labor organizations have long spoken out against
their cramped work conditions and long hours. They
are not allowed to unionize.
The buyers
identified wage issues as the prime reason behind
the unrest, the Daily Star reported, citing an
unnamed source who attended the two-hour
discussion.
In the context of high
inflation - which stood at 8.56% in June, with
food inflation at 7.08% and non-food inflation at
11.72% - the 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 intend to tell the prime minister.
The minimum wage of garment workers in
Bangladesh was last revised in November 2010, when
the monthly pay of an entry-level worker was fixed
at the present 3,000 takas, up from 1,662 takas
previously fixed in 2006.
Daily Star
reported that US buyers were particularly
concerned about the mysterious disappearance and
murder of labor leader Aminul Islam from Ashulia,
an area where the June unrest broke out, on April
4. Aminul's body was recovered on a highway
outside Dhaka on April 5. Law enforcement agencies
have yet to solve the murder although the US has
been pressing the Bangladesh government.
Ambassador Mozena in June said that "a
storm is coming for Bangladesh", hinting that
American buyers are likely to drift away from the
South Asian country if the crime is not solved and
the culprits brought to book.
In a recent
investigative piece, titled "Who is Mustafiz?" and
published in Xtra, the weekend magazine of New
Age, the investigating officer of the Aminul
murder case suspected involvement of intelligence
agency officials with the incident.
A copy
of the buyers' letter was provided to the
embassies of all countries represented by the
buyers, although a final version will not be sent
to the Sheikh Hasina before the middle of this
month. The buyers plan to hold meetings with
relevant ministries and the country's two leading
garments exporters associations.
Representatives of 12 buyers, including
Gap, H&M, Carrefour, Tesco and Marks &
Spencer, met Labour and Employment Minister
Khandker Mosharraf Hossain on July 25 to convey
their concerns.
Following the meeting,
Hossain said there is "no reason to be worried" as
the situation had not reached the stage where the
buyers would cancel orders and go for other
destinations. The buyers did not comment to the
media on the matter.
The minister said
there is no plan to review the wage structure at
the moment, but the government will offer some
basic food items at subsidized prices to the
garment workers.
He also said the
government will review the Rent Control Act and
implement it strictly so that house rents cannot
frequently be raised, as "house rents are eating
up" much of workers' incomes. Daily Star reported
later that the buyers are "far from happy" with
these proposals.
Already, there are signs
of further unrest as Garment Sramik Sangram
Parishad, a platform of garments workers'
associations, submitted a demand to the minimum
wage board on July 25 to more than double the
minimum basic pay to 7,000 takas.
At the
end of last month, Industrial Police, a special
force established in 2010 to provide security to
the apparel sector, shared with the two main
garment exports associations their concerns that
390 factories in Bangladesh are "vulnerable to
violence" if all payments of workers are not
cleared before Eid-ul Fitr, the largest festival
of Muslim community, marking the end of Ramadan
around the middle of this month.
Industry
leader Chowdhury said the buyers involved in last
month's meeting account for 15% to 20% of the
total apparel exports from Bangladesh. As
Bangladesh fetched $19.1 billion from woven and
knitwear exports in the 12 months through June,
the value at stake would be between $2.85 billion
and $3.8 billion.
Syed Tashfin
Chowdhury is the Editor of Xtra, the weekend
magazine of New Age, in Bangladesh.
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