• header_en
  • header_bn

Governance challenges still exist in Bangladesh RMG Sector: TIB


Although notable progress has been achieved, however, various deficits still exist indicating that a lot needs to be done to consolidate reforms gains in establishing good governance in the country’s Ready-made Garment Sector (RMG) sector, a TIB study revealed. The study Good Governance in the Ready Made Garment Sector: Review of Progress during Last One Year, released on 21 April 2015, assessed progress and implementation status of different initiatives and efforts undertaken to ensure good governance in RMG Sector in the last one year (April 2014 to March2014). It may be mentioned here that the nine-storey Rana Plaza that housed some readymade garment factories had collapsed on April 24, 2013, killing 1,138 people and injuring over 2,500, mostly garment workers. The Rana Plaza accident is now regarded as a stark example of lack of good governance and corruption in the RMG sector in Bangladesh.
In October 2013, TIB conducted a research that identified some causes of such accidents and lack of compliances in RMG sector that included coordination gaps among relevant stakeholders and their negligence of duties, political influence, and irregularities and collusive corruption between regulatory agencies and factory owners. TIB also conducted a follow-up study on the first anniversary of the accident in 2014 to assess progress of numerous initiatives undertaken by various stakeholders in the aftermath of Rana Plaza accident. As part of continued follow-up, TIB has undertaken the present research on the occasion of the second anniversary of the accident to assess progress of remaining and new initiatives during 2014 -2015.
According to the second follow-up study, 56 issues were considered for assessing progress and implementation status of various reforms initiatives. It discarded seven issues that were covered in 2014 study. Out of 56 issues, no initiatives were taken on 8 issues in the last one year, leaving 48 issues for assessment under current research.  It is observed that 80 initiatives covering those 48 issues were undertaken, of which 15% were implemented completely, 45% made considerable progress and 15% showed slow implementation and 25% made no notable progress.
The study highlighted major progress of the government-initiated projects, which included, among others, amendment of EPZ law, 2013; appointment of panel lawyers to help workers in the labor tribunal, finalization of labor rules and preparation of guideline for sub-contract factories, formation of two taskforces to monitor inspections carried out by Accord and Alliance. It also made progress in the anointments of staff to enhance the capacity of Director General of Factory and Establishment and Fire Service, including realization of decentralization process of Director General of Factory and Establishment and RAJUK.


Major initiatives taken by other stakeholders included providing salaries as per wage board in 95% factories, issuance of identity cards by compliant factories, and BGMEA’s “Center of Excellence” initiative with the help of Swedish brand H&M to enhance workers’ awareness on fire safety. European buyers’ forum ‘Accord on Fire Safety (Accord)’ and American buyers’ forum ‘Alliance for Bangladesh Workers Safety (Alliance)’ completed surveys on around 67% factories to ensure fire, electrical and structural safeties.
According to the study findings some 85% of the financial assistance deposited into the Prime Minister's Relief and Welfare Fund for the victims of the Rana Plaza is yet to be disbursed two years after the world's worst workplace disaster. The Fund received about $16 million or Tk 127 crore from local sources, mainly commercial banks, for the victims and their families since April 24, 2013. But about Tk 108 crore of the Fund remained unused, the study said. The report also questioned the transparency in disbursement of the fund.
This specific findings of the study was contradicted by Prime Minister’s office twice, first by it’s press wing, and later by one of it’s Director General saying there was no fund in the name of Rana Plaza at the Prime Minister's Office (PMO). 


The Rana Plaza accident is now regarded as a stark example of lack of good governance and corruption in the RMG sector in Bangladesh


TIB also clarified it’s position twice saying the study also did not mention that there was such a fund at the PMO. The figure of Tk 127 crore as mentioned in the study was in fact was disclosed in parliament on July 13, 2013 which was covered by the media the following day. TIB also clarified further saying only Tk 19 crore was spent for the victims and their families and all of Tk 127 crore deposited with the Prime Minister's Relief and Welfare Fund should go to the victims.
Highlighting some existing governance challenges, the study found that because of the delay in making labor rules, health safety committees in factories have not been formed. Moreover, non-submission of charged-sheet on Rana Plaza cases, inordinate delay in settling cases filed in Labor Courts and reluctance of regulatory agencies to take various administrative matters are posing barriers to establish rule of law in this sector. There have been allegations against before registration some officials of Department of Labor disclose workers’ identities to factory owners. Moreover, influence of vested-interest groups and receiving of bribe during their registration are still 


prevalent. Appointments of necessary manpower including design verification experts and magistrates in RAJUK are yet to be deployed. 90% subcontract factories are not paying wages according to the wage board. Female workers are staying away working at night because of lack of safety arrangements. The BGMEA has been enjoying leverage over the policy level because of their influence over the government. Because of this influence they have managed to prevent gazette notification on fire fighting and protection guideline, extend overtime hours to 4 and prevent provision of keeping 25% roof structure vacant. According to information from different sources so far 220 factories have been shut down due to cancellation of orders and closure of few small and medium sized factories mainly due to compliance gaps. For such closures approximately 100-150 thousand workers lost their jobs. On the other hand, although buyers, the government and BGMEA promised to conduct surveys on sub-contract factories and improve their compliances, they have been averting those promises. The safety surveys that the buyer forums conducted went well. However, there have been delays in the release of their findings. 
TIB put forward a set of recommendations which included, among others, creation of a separate lead ministry in the long run to  ensure centralized and coordinate approach to establish good governance in RMG sector , formation of a fund with the participation of various stakeholders for building compliance of subcontract and small factories and creation of a central Labour Welfare Fund by providing 1.0 to 1.5 cent from each of exported garment items where buyers and owners share in forming this fund would be 75:25. It also suggested releasing name of partnering factories in Bangladesh on website of every buyer and quick settlement legal cases relating to Rana Plaza collapse.