"Western buyers diverting RMG orders to Bangladesh’s competitors as unrest disrupts production", 6 October 2024

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Amid deteriorating law and order following the change in power, worker dissatisfaction, protests, strikes, and factory closures are raising serious concerns about the future of this sector...

With production plummeting, orders shifting to neighbouring countries, revenues shrinking, and dependence on bank loans increasing, many large companies in the garment sector are now facing the risk of permanent closure...

Amid worker unrest, approximately 15 to 20 percent of garment orders have been cancelled, Labour and Employment Advisor Asif Mahmud Shojib Bhuiyan said at a press conference on Sept 12....

Shovon further added, “For 10-20 percent of the orders, buyers have already said they don’t need them anymore. Buyers are no longer negotiating new deals.”..

BGMEA President Rafiqul Islam said that approximately 30 percent of garment orders have moved to other countries.

Sparrow Group’s Shovon echoed the same concern.

He explained, “When buyers say they don’t need the orders anymore, we understand that they’ve placed those orders in other countries.”

He shared that they lost an order for 17 million garments. “Even if each garment was priced at $4, just calculate the total value of all those garments. This order would have been split among 2-3 companies, but the entire order has already moved elsewhere.”

Discussions with industry leaders reveal that the cancelled orders are being redirected to Bangladesh’s competitor countries, including India, Vietnam, Sri Lanka, Indonesia, and Pakistan.

Advisor Asif Mahmud also mentioned this issue during the Sept 12 press conference. He said, “We have already received some information indicating this shift. This is a seasonal business. Products for the market need to be prepared three months in advance, and many of those orders are getting cancelled in various places. We are noticing that businesses from certain countries are actively lobbying and making efforts to secure these orders.”

A major garment exporter from Ashulia mentioned that a US company, which used to place orders for 10 million garments annually, is now moving its business to another country. US buyers have marked Ashulia as a “risky zone,” indicating their lack of confidence in the region...

Ananta Garments is also facing significant losses. Due to factory closures, they missed shipping deadlines, and around 1 million garments are now stuck in backlog. To meet deadlines, they will have to resort to expensive air shipments...

The peak time for the garment sector is from January to March when sales of Bangladeshi products increase due to holidays and travel seasons in the US, Europe, and other Western countries.

To secure orders for this period, samples need to be sent before the August holidays. However, the unrest that started in July led to factory closures, disruptions in import-export operations, and internet blackouts, delaying or halting many sample shipments.

Exporters explain that the initial “trust crisis” among foreign buyers due to the communication blackout would have already taken a toll. Now, the worker unrest has further immobilised the sector...

Amid the worker unrest in places like Gazipur and Ashulia, former BGMEA president Redwan Ahmed said during a "special general meeting" at BGMEA's Uttara office on the evening of Sept 23 that the issues initially stemmed from NASSA Group.

NASA Group's Chairman Nazrul Islam Mazumder is accused of embezzling "hundreds of billions of takas" during the Awami League government’s tenure.

Redwan said, "They are creating worker unrest by not paying wages. The problem could have been contained if addressed at the beginning. Now, Nazrul and others are spending millions to incite workers to vandalise and shut down factories, aiming to destroy both the government and the industry."..

BGMEA President Rafiqul Islam alleged that "various federations and international groups" have raised 18 demands in the name of workers.

At the meeting, members decided that there would be no discussions on increasing wages or offering a 10 percent annual increment at year-end...

Garment workers’ leader Nazma Akter refuted the claim that the demands are not from the workers, calling it "untrue”.

Speaking to bdnews24.com, she said: “What are the workers’ wages? How are they supposed to survive in the current high-cost market?”...

Jolly Talukder, general secretary of the Garment Workers Trade Union Centre, highlighted the “legitimacy” of some of the workers' demands. “Several factories weren’t paying outstanding wages. A part of their protest is genuine.”

She also suggested that the involvement of owners associated with the previous government could be a reason behind some of the unrest. “Protests are more intense in factories connected to those with ties to the former government. Corruption, bribery, and the jhoot business are escalating the unrest,” she said.

Jolly called on the government to take action for the workers who have been injured or killed while participating in the Anti-discrimination Student Movement. “The first shot fired by this government was at the workers. There must be an investigation, and those responsible should be punished. If this sector remains unstable, it will harm the country and exports...

WORKERS' DEMANDS

...a meeting was recently held at the Ministry of Labour and Employment, attended by worker and employer representatives....

During the meeting, the workers presented 18 key demands to the factory owners, which include:

>> Reconstitution of the Wage Board to reassess and adjust the minimum wage for workers

>> Immediate implementation of the 2023 government-declared minimum wage in factories where it has not yet been enforced

>> Reform of labour laws, including revisions to Section 27 and other provisions

>> Compensation equivalent to one month’s basic salary if a worker is released or terminated after completing five years of service

>> Payment of all outstanding wages immediately

>> Increased allowances for attendance bonuses (Tk 225), tiffin bills (Tk 50), and night shift bills (Tk 100) across all factories

>> Implementation of provident funds in all factories

>> Minimum 10 percent annual increment on salaries

>> Rationing system for workers

>> End the BGMEA-controlled biometric blacklisting and transfer control of the biometric list (fingerprint access system) to the government

>> Withdrawal of all politically motivated and harassment-related cases

>> Measures to stop monopolies in the jhoot business

>> Equal employment opportunities in factories, ensuring no discrimination between men and women.

>> Compensation and medical support for workers injured or killed during the “July Revolution”

>> Proper investigation and action for the welfare of those affected by the Rana Plaza and Tazreen Fashion disasters.

>> Establishment of day-care centres in all factories in accordance with labour laws.

>> End to unjust layoffs

>> Extension of maternity leave to 120 days for female workers.