RMG sector still in ferment

Four months later, it is clear that the problem has not been resolved.

For over six months, the RMG industry has been plagued by agitation by the workers for minimum wages, benefits and better working conditions. Their protests have been violent, both inside the factories and also in the streets. Such direct action has resulted in damage to factories and vehicles and also arson. Private, as well as public properties, have also suffered from their wrath. Uttara, Mirpur, Ashulia and several other areas in Dhaka city have witnessed total breakdown of law and order. It also involved the Dhaka Export Processing Zone (DEPZ) and several foreign industrial units.

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There have also been protests because of non-payment of arrear salaries and maltreatment of workers. Activists from civil society associated with human rights and labour rights also lent their support to workers of the RMG industry. Their participation in the movement demonstrated wide-ranging agreement for some of the workers' demands.

This severe labour unrest in the country's premier export earning sector was followed by the signing of an MOU on 12 June between the government, garment factory owners and workers' leaders. Representatives from the BGMEA, the BKMEA and 39 labour organisations took part in the discussions. It was hoped that this consensus would help in ensuring labour rights and peaceful atmosphere in the factories.

The MOU also endorsed the decision to constitute a Wage Board (taken earlier on 31 May) to examine the question of minimum wage for workers. This MOU also agreed on other significant areas -- no termination of any worker for having been involved in the latest agitation and the issuing of appointment letters and identity cards to workers. The government also formed 15 inspection teams for monitoring workers' condition in factories.

I thought that both the garment factory owners and the government had realised the need to resolve differences realistically and move forward. I felt this was encouraging. Unfortunately, my assumptions appear to have been hasty.

The Minimum Wage Board announced on 5 October the final pay structure for the workers in the RMG sector. They fixed Taka 1662.50 as the minimum monthly wage including basic salary, house rent and other allowances for the entry-level workers. It was also indicated that there would be seven grades for the workers and four grades for the employees (associated with the management of the factories). It was clarified that the minimum wage for Grade-1 workers would be a total of Taka 5,140 including basic salary, house rent and allowances. It would be Taka 3,840 for Grade-2, Taka 2,449 for Grade-3, Taka 2,250 for Grade-4, Taka 2,046 for Grade-5 and Taka 1,851 for Grade-6. It was also decided that apprentice workers would receive Taka 1,200. Similarly, it was fixed that the salary structure for employees would vary from Taka 3,580 to Taka 1,851 depending on their grades.

The board had earlier announced on 12 September a controversial three-tier draft proposal but had been forced to backtrack in the face of stiff opposition.

This time round, on 5 October, the Board Chairman claimed that the figures had been agreed to on the basis of consensus. He also pointed out that the agreed salary structure would create difficulties for the owners.

This latest salary package has however not really pacified a large section of the workers. Several representatives from the Garments Sramik Sangram Parishad, an alliance of 11 organisations of garments workers, have strongly opposed the final recommendations of the Wage Board. They have rejected it. They have also stated that the movement forward has been insufficient and negligible given the steep rise in the cost of living. They have also underlined that, in US dollar terms there has practically been only a minute increase. In this context, they have drawn attention to the fact that the minimum monthly wage for workers in the RMG sector was fixed at Taka 930, twelve years ago. At that time it was equivalent to about US dollar 20. After a gap of more than a decade, it would now be about US dollar 24 thanks to the depreciation of the Taka to the US dollar.

I fail to understand the sympathy of the Chairman of the Wage Board for the owners or their ability to bridge the gap between workers' demands and their available resources. The final recommendations appear to be unrealistic even by the poor salary standards fixed for government civil servants and industrial workers. One can only agree with the comments of the Jatiyo Sramik League that the new minimum wage in the proposed salary structure is a 'farce', given the fact that the minimum wage for workers of a state-owned enterprise is Taka 2,450, almost 50 per cent more than in the RMG private sector.

This short-sighted approach on the part of the BGMEA and the BKMEA has not led to any return of stability in this important sector. Instead, we have continuing turmoil, with three planned industrial strikes in this month. This includes a 24-hour strike in the garment industry on 16 October. It also means more violence on the streets, unrest in the factories and possible destruction of private property.

I feel that the workers have genuine reasons to feel cheated. My participation in several seminars has persuaded me to believe that the wage structure offered has not been enough. The minimum wages should be living wages. It should also reflect and satisfy, if possible, a minimum calorie indicator. Otherwise, the wage structure can only be considered as irrational.

There is also another aspect within the RMG sector that needs to be addressed. These are the associated benefits that are considered as obligatory in any civilised country. They include basic and universally accepted provisions like -- a weekly holiday, maternity leave, appointment letters without exception and as a matter of rule, overtime payment on time, observing an eight hour work day, payment of wages by the first week of each month, medical and earned leaves and festival allowances due to workers.

I have always taken interest in the RMG sector because I believe that it is contributing directly to our national development. The entrepreneurs associated with this industry also deserve support from all of us for their efforts to bring in women into mainstream industrial activity. This has indirectly reduced malnutrition, encouraged education among girl-children and also brought about a revolution in family planning and gender empowerment. These are the positives.

The present Administration would have completed its tenure within weeks, but the RMG sector and its problems will have to be dealt with -- sonner the better. Industry and banking sources have observed that there are around 1,900 sick RMG units, which are plagued with Taka 574 crore bad loans. The interests on these loans now stand at Taka 521 crore. These are worrying figures.

Whoever forms the next government has to attach priority to the resolving of the growing crisis in liquidity within the RMG sector. Initiatives have to be taken for rehabilitation of some of the RMG units which have a fair chance of survival. Decisions in this regard need to be taken urgently without political considerations. A leaner and more stream-lined RMG industry will then emerge. It will be that much more competitive. This will eventually also have a better fall-out effect for the workers.

In the meantime, the owners of RMG units need to display a little more of understanding and adaptability.

Muhammad Zamir is a former Secretary and Ambassador who can be reached at mzamr@dhaka.net