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RMG and frozen food exporters under threat
The late Seventies and the beginning of the Eighties saw the gradual emergence of the Ready Made Garment Industry in Bangladesh. To this was added frozen food export, particularly prawns, in the second half of the Nineties. Over the years these two commodities have grown in terms of potential and contributed not only to the economy in terms of hard cash (foreign exchange) but also in the creation of employment. Today, nearly two and half million workers are associated with these two industries. They have also helped to reduce poverty and remove gender discrimination throughout the country. I mention this because more than 83 percent of those associated with these two areas are women.
Indirectly, the bringing of women into mainstream of workforce has also helped to enhance calorie intake within their families, strengthened their decision making capacity, assisted in the education of girl children and in family planning. Contrary to assertions made by Dr H Kissinger, former US Secretary of State, Bangladesh, thanks to entrepreneurs in these two sectors, did not end up as a 'bottomless basket case.' These two areas of economic activity have also helped to attract foreign investors into our specially established Export Processing Zones. It has also stimulated economic growth in other areas like banking, transport and insurance. All this is reflected in the gradual and steady rise and diversification in the listings in our Stock Market.
It is the resilience and innovation of those associated with these sectors of industrial activity that permitted Bangladesh to weather the storm that blew across the trading landscape during the post-MFA era. It was not easy, but sheer hard work and patience that paid dividends.
All of these gains are, however, now under threat. It is a serious crisis that might affect and dismantle the various economic positives that we have been able to achieve over the last thirty years. Recovering, as we are, from two disastrous floods within the space of two and half months, millions are now confronted with a slow downturn of economic activity and consequential possibilities of higher unemployment.
This depressing prospect has dawned because of recent actions taken by the American Federation of Labour and Congress of Industrial Organizations (AFL-CIO). They have filed a petition in the office of the United States Trade Representative (USTR) alleging that Bangladesh ready-made garments (RMG) units and shrimp and frozen foods producing factories, both within and outside the Export Processing Zones (EPZs) have been violating both domestically and internationally recognised standards related to workers' rights, particularly those set by the International Labour Organization (ILO). The petition has sought from the USTR an Order that the Generalised System of Preferences (GSP) facility that Bangladesh exporters have so far enjoyed in the US market be withdrawn.
It would be worthwhile to note here that this particular American NGO has a large influence on the US Democratic Party that today dominates the US Congress. What is even more worrying is that the Annual GSP Review for 2007 has already accepted the petition lodged by the AFL-CIO and that the USTR has arranged a public hearing with regard to the allegations of workers' rights violations. This hearing is expected to take place towards the beginning of October. This is as serious as it gets.
Our government is preparing itself for a legal battle. It is understood that our Ministry of Commerce in consultation with BEPZA and other relevant authorities like the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Bangladesh Frozen Foods Exporters Association (BFFEA) have prepared position papers refuting the charges made against these industries. A strong delegation from Dhaka is going to Washington to try to refute these charges. They will be working very closely with the Bangladesh Embassy in Washington.
This is not the first time that the AFL-CIO has shown special interest with regard to Bangladesh and the labour practices within this country's industrial units. We are also not the only country exporting products to the USA that has come under their scrutiny. However, according to some, this time round, their attention appears to have been drawn to Bangladesh because of our continuing success in these two sectors despite great odds (political disruption, corruption and poor governance). Our competitors in this region, as well as in the neighbouring region have also, most probably, helped in the promotion of this latest examination.
I have been confronted in the recent past, with whispering campaigns, both in Dhaka and abroad, which have portrayed Bangladesh as a country where garment and frozen food workers are being unfairly treated and denied their rights. Demonstrations and unruly behaviour undertaken by some workers and political activists (mostly outsiders) in the recent past in and around Dhaka and Chittagong added fuel to the contention that there was seething discontent and possibility of large scale rioting at any time. It was also interesting to observe how garment factories mostly operated by foreigners were targeted for rioting and arson. This was obviously undertaken to persuade investors to shift direction. Damage to nearly 130-garment industrial units created the desired negative image. Such action was probably undertaken to create a meltdown within this important sector.
This rumour mongering has had its desired result. The importers have become wary and that has affected export orders. Continuous allegations of mal-treatment of workers by some domestic human rights activists have also drawn the attention of the AFL-CIO. Unfortunately, targeting of these industrial sectors might only exacerbate the situation further.
There are certain aspects of the AFL-CIO allegations that I really cannot understand. I have held discussions with relevant representatives from the BGMEA, the BKMEA, the BEPZA and important foreign investors who have grown stakes in such economic activity. I have also had discussions with representatives from important European countries.
The BEPZA as well as foreign stakeholders in the EPZ have strongly denied AFL-CIO's contention that Solidarity Centre officials representing this NGO were not allowed access to factories in the EPZ. It appears that officials from the American Centre for international labour solidarity have been regularly visiting the EPZs to discuss matters related to workers' rights in the EPZ areas. Concerned officials from the US Embassy in Dhaka including a former US Ambassador have also visited the EPZ many times during the last two years. They saw from themselves not only the existing situation regarding working conditions but also training procedures and did not make critical observations. They did make constructive suggestions and the government has over time tried to meet such observations as far as practicable despite resource constraint.
Similarly, contrary to allegations, representatives of the Solidarity Centre Bangladesh and the Labour Wing of the US Embassy in Dhaka monitored all the WRWC elections in the EPZ spread over two years between 2004 and 2006.
The BEPZA appear to be trying their best to act according to the existing provisions of 'The EPZ Workers' Association and Industrial Relations act, 2004' . As in any other country, including the USA, there has to be strict observance of regulations to ensure discipline and security. This, in a manner of speaking is required to ensure that grievances, both on the part of the workers as the employers, are addressed urgently with equity and fairness. It is true that some of the actions undertaken might have been viewed as being half-empty instead of half-full. That however should call for dialogue and resolution of remaining problem areas rather than withdrawal of GSP facilities.
The government has already extended the tenure of the EPZ Workers' Association and Industrial Relations Act, 2004 (Act No. 23 of 2004) up to 31 October 2010. Other necessary functional amendments are also underway including the establishment of the EPZ Labour Tribunal and the EPZ Labour Appellate Tribunal on a priority basis. Efforts have also been undertaken to ensure that all actions undertaken by the authorities and employers are consistent with the stipulations contained in the Bangladesh Labour Code, 2006 and in ILO Convention No. 182. Careful monitoring has also been introduced to ensure strict compliance.
Steps have also been taken to set up Workers' Associations within EPZs. Care is also apparently being taken to avoid any form of systematic intimidation of workers other than that required for safeguarding operating industrial units.
Yes, despite all that has been undertaken by the government authorities and the investors and employers, there might still be room for further improvement in both these economic sectors. The way out should be to constitute joint teams consisting of representatives from all the important stakeholders. Let them suggest improvements that might still be undertaken without our losing the important competitive edge.
AFL-CIO, the USTR and all others interested in democracy and human rights all over the world should remember that their interests are not served by killing the goose that lays the golden egg. Instead of just reiterating shortcomings within the system in developing countries, they should urge the middlemen in the USA and Europe, involved in trade in these two areas to reduce their profit margin, so that part of their profits can be given to the needy workers.
Trading is better than reliance on aid and grants. It helps a nation to stand on its own two feet. These two sectors have contributed immensely to the engine of growth in Bangladesh. It has helped to reduce poverty. The AFL-CIO and the USTR need to help, but there are other ways than through negative initiatives. Human rights and labour rights are not served through imposition of indirect sanctions.
Muhammad Zamir is a former Secretary and Ambassador who can be reached at mzamir@dhaka.net
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