Growth of Ready Made Garments in Bangladesh

EXECUTIVE SUMMARY
The Readymade Garment (RMG) industry of Bangladesh tells an impressive story of
country successful transition towards a major export- oriented economy. Starting its
journey in the late 1970s with relatively small investment, the industry, the industry
flourished in 1980 and 1990 and has become the largest industry in Bangladesh. The
contributory factors of the RMG industry in Bangladesh are global trading agreement,
cheap labor cost, government policy support and dynamic private entrepreneurship. All
these things have helped Bangladesh to gain a handsome share in the global garment
business. From early 1990 onwards the RMG industry has become the largest foreign
exchange earning sector in the economy. In 2005-06, Bangladesh earned nearly $ 8 billion
by exporting garment products and RMG cover 75 percent of the total export of the
country, having the lions share of the countrys exchange. Contribution of RMG is very
positive in Bangladesh economy, sharing 13 percent of the total national GDP. Moreover
the industry has become a vehicle for further industrialization of the country.

The focal point of Adi Apparels Ltd has been formed in 1st of January 2002 and since
then accelerated to its journey with the commitment to the society to build prosperous
Industrial backbone for socio-economic development of the country. After almost ten
economic years, it has established a number of diversified and potential buyers throughout
the world for manufacturing and marketing of a wide variety of consumers and export
oriented products.

Presently, Adi Apparels Ltd is one of the leading Garments Buyer Agency Companies in
Bangladesh, which has been contributing buyer agency activities in a large extent of the
country by providing quality branded-generic Garments. The organization believes in
'Quality never ends' and refuses to settle for anything until it exceeds the existing
standard. The company has been awarded with the ISO-9001: 2000 Certificate in January
2003 for serving its valued customers with products of excellent quality.

As the principal aims and objectives of Adi Apparels Ltd Bangladesh, are to improve
professionalism in the contemporary garments ware business arena as well as to realize
the authentic demands of garment goods throughout the 3rd world countries. Thus AAL
Bangladesh organizes seminars, discussion forums, workshops, professional training
1

Growth of Ready Made Garments in Bangladesh

courses, continuing education programs, cultural events and publishes newsletters etc. as
parts of its professional activities. All this activities has been done to observe out the
actual current SWOT analysis circumstances of the organization. By which the executive
board gets some feasible idea of future strategic moves of the organization.

However, AAL BD always believes that a creative Human Recourse can build a modern
country. Because, fairly a well established human resource management can built a
constructive organization likewise some constructive organizations can build a modern
country. However, nowadays HR Department is considerate as the Mutual Bridge of
making evenly understandable decisions between all the departments among an
organization. How and why is that? The answer is Since each department is Human
Oriented and HRM deals with every individual human being or employee working in an
organization, this statement is true as well as valid one. So HRM decrease the distances
and conflicts between the employees of all the departments as well as enhance the work
efficiency of the workforce which eventually results a certain amount of profit
maximization for the companionship. Finally a profitable company must contribute to the
economy of the countrys development.

Growth of Ready Made Garments in Bangladesh

Chapter - 1
Introduction
1.0 Introduction
The RMG industry has been Bangladeshs key export industry and a main source of
foreign exchange for the last 25 years. As a result of an insulated market guaranteed by
Multi-Fibre Agreement (MFA)2 of General Agreement Tariff and Trade (GATT) and
supportive policies of the Government of Bangladesh (GoB), it attained a high profile in
terms of foreign exchange earnings, exports, industrialization and contribution to the GDP
within a short period. In less than a decade it increased its exports, foreign exchange
earnings, and contribution to the GDP by 4.39 %. RMG exports reached a steadfast figure
of USD 17.91 billion in fiscal year 2010-2011; accounting more than 78% of national
export earnings, which was about 4%-5% of the global total of such exports. It further
contributes 10% to the country's GDP(Mahmud R.B., 2012). RMG products are exported
mainly to the United States of America and the European Union.
Bangladesh's garment industry provides employment to about than 3.6 million workers
which 2.8 million are women (Mahmud R.B., 2012). Workers in these garment factories
are almost always illiterate. They have very limited knowledge of human rights, working
conditions and labour standards. Despite the phenomenal success of
the RMG sector, poor working conditions in the factories and a lack of Social
compliance3 are serious concerns which have, since 2006, led to labour unrest and
damage to institutions and property. As a result, there is a rising fear in Bangladesh that
the readymade garments sector may face a decline in demand. Social compliance in the
RMG industry is a key requirement for most of the worlds garments buyers. It ensures
labour rights, labour standards, fair labour practices and a Code of Conduct.
COMPANY PROFILE
Max Sweaters (BD) Ltd. is a 100% export oriented sweater factory. It was established in
2002 at its own multi-plan building with all modern facilities based on Buyers
requirements. The Companys mission is to manufacturer and export different types of
quality Sweaters as per Buyers requirements. Max Sweaters (BD) Ltd. has been set up
with a professional Merchandiser and Quality Assurance team. We are committed to
Buyers to maintain in time delivery with quality products. We are also committed to work
3

Growth of Ready Made Garments in Bangladesh

with group of selected customers providing standard services.
We should to for the details about the company in later parts, but now I will present a
basic summary.
TOTAL MACHINE
GAUGES
PRODUCTION CAPACITY

OTHERS

1645 PCS
MANUAL AND SEMI AUTO
3,5,7,12
AROUNT 3.5 MILLION PCS PER YEAR
OWN POWER GENERATION FACILITIES
WIDE CAMPUS AND SPACIOUS BUILDINGS
WITH ALL STANDARD FACILITIES
COMPETITIVE PRICE
SHORTEST LEAD TIME
SUPREME QUALITY SERVICE

Location of the Project:

Max Sweaters (BD) Ltd. is located approximately 10 km away from the Dhaka City.
Factory Address:
24-26, Deghi Borabo, Tarabo, Rupganj, Narayanganj
Head/Corporate Office:
Road # 36, House # 01 (Flat-C5), G ulshan-2, Dhaka-1212.
Telephone: 9893184, 9861913, 9861498 Fax: 880-2-9894449, kalam@max-bd.net

Company Status:
Private Limited Company
Total Space (3 Floors):
Max Sweater (BD) Ltd. is Located near Kanchpur Bridge at Narayanganj Industrial area
zone. We have covered factory space of approximately 1 ,00,000 sft (each Floor 25,000
sft)

Access & Exit Facility:

2 wide stairs, 1 Emergency stair & 2 Lift (provision)

Nature of Business:

Growth of Ready Made Garments in Bangladesh

We are manufacturing 100% export oriented all kind of sweaters as per Buyers
requirements.
Number of Employees:
General Manager-0l
Manager (Merchandising)-01
Merchandisers-05
Manager (Production)-02
Manager (Q.A.)-02
Manager (Commercial)-02
Commercial Executive-03
Chief Accountant-0l
Accounts Officer-03
Production Staff a Worker-1800
other office staffs-25.
Present Production Capacity per month:
Around 3,00,000 pcs per Month.
Working Hour:
48 hours per week including 8 hours per day with 2 hours overtime if require, 6 days in a
week.
Type of Products:
Fully fashioned, Semi-fashioned, Single Bed Machine Jersey, Rib, Shaker, Cardigan,
Millano, Pointle, Fisherman Stitches with Cable, Diamond Cable, and moreover the
design what is the requirements from Buyers covering Childrens wear, Ladies wear and
Mens wear department in 3, 5, 7 and 12 gauges.
Quality Control Team:
We have a strong QCs team under a QA Manager. QA Manager has four full time QCs
and the QCs do the in-Line inspections in each section. n a particular time of the day, our
QA Manager checks the 10% Garments those has been passed by our QCs in each
section. All the QCs submit their daily reports to QA Manager with highlighting the major
points and with the final comments. QA Manager submits the reports to the relevant
Merchandisers in addition to Managing Director. Relevant Merchandiser ensures the
correct QA packing to the Q4 Manager. After maintaining the above procedures, the QA
Manager carried out his own final inspection on the basis of AQL 2.5 Criteria before
5

Growth of Ready Made Garments in Bangladesh

Buyers approved final authority inspection. If goods seems to be standard to QA manager
for buyers authority inspection we invite the inspection authority for final inspection. The
inspection of the garments quantities depends on the order quantities as per B56001
guidelines.

Broken Needle Record Procedure:

The broken needle records are being maintained by the store officer and he is the only
person who will issue the needles and receive the broken needles from the operators. We
are maintaining a register book section-wise for these broken needle.
Metal Detector Machine:
After strictly maintaining the above broken needle policy, we check alt the garments
through a Metal Detector. This procedure is done after Packing. If any garments is
contaminated with metal, we then find out the metal from the garment and maintain a
register for these metal.
Electricity Facility:
We have our own Power Unite. (Gas Generator for 24 hours)
Water Supply:
Company has made its own water supply facility.
Transport Facility:
For smooth production, Company has arranged sufficient transport facility for the workers
and staff.

Doctors Facility:
One Doctor & one Matron are always available for medical treatment: In addition to the
above we ensure the sufficient medicines for normal treatment in the factory.
No Child Labour :
All workers are working in the factory, above the age of 18 (eighteen) as per the
agreement signed between our Association and the International Labor Organization
(ILK). All workers give written declarations regarding their age. If any worker is in
doubtful category, are verified by the Civil Surgeons office of Bangladesh.

Growth of Ready Made Garments in Bangladesh

Health and Safety:

Health and safely is a major concern of our company. We are checking regular basis in
order to ensure that all electric lines and equipment are safe. Protective gloves and masks
are given to workers who are working with risk with regard to washing chemicals and
yarn fluff respectively. Our factory has fire evacuation plans in each floor and regular fire
drills are carried out and timed. Smoke detectors are in place in the different floors, and
the required numbers of fire extinguishers are in place in the factory. Fire alarm bells are
installed in different places of the building and the bells are regularly checked. Its our
policy to keep Fire Exits open even when there is one member of the staff in the factory
building. Dinning space is available for the workers a staff. Healthy bathroom in each
floor.
Lead time:
The normal lead time is for local yam a accessories sources from 64-90 days and for
imported yarn a accessories is from 90-124 days.
Gauge
1.
2.
3.
4.

3
5/7(Convertible)
12
12
Total

Machine
Quantity
250
450
1200
45
1645

Type

Machine
Brand

Manual
Flying Tiger
Semi Auto

Growth of Ready Made Garments in Bangladesh

List of Other Machinery:

Sl No.

Description

Machine Quantity

01

Winding Machine

35 sets

02

Linking M/C

250 sets

03

Metal Detector Machine

1 set

04

Over lock Machine JUKI Brand

10 sets

05

Sewing Machine- JUKI Brand

20 sets

06

Button Hole Machine JUKI Brand

4 sets

07

Button Switch Machine JUKI Brand

nil

08

Placket Machine TATSHING Brand

2 sets

09

Bar Tack Machine JUKI Brand

2 sets

10

Washing Machine (150 kgs. each set)

2 sets

11

Hydro Extractor 80 lbs &

2 sets

12

Steam Dryer (100 kgs)

2 sets

13

Steam Boiler 470 Ks. each set

2 sets

14

Steam Iron

60 sets

15

Weighing Machine 300 Ks.

2 sets

16

Weighing Machine 20 Kgs

2 sets

17

Wighing Scal, 1 lb/Doz

3 sets

18

Electric Balance, 2 Ks

2 sets

19

Auto Belt Packing Mahcine

2 sets

20

Heat Cutter (Label Cutter)

Growth of Ready Made Garments in Bangladesh

Presently we are working with the following Buyers:

Sl No.
01

Name of the Buyers

SNOWMASS INC

Country
CANADA

02

VETURA SA

FRANCE

03

STRADIVAARIUS

SPAIN

04

KIK TEXTILE

GERMANY

05

WESTERN STORE

GERMANY

06

TITANUS

ITALY

07

MILANO

SPAIN

08

TERENOVA

SPAIN

09

CARREFOUR SPAIN

SPAIN

10

MILANO

MAXICO

11

GESTION ACTIVA COMMERCIO INTERN SL

SPAIN

12

LAURA G. SL

SPAIN

13

KWINTEX CORPORATE WEAR AB

SWEDEN

Growth of Ready Made Garments in Bangladesh

Table num. 1- Total Investment

10

Growth of Ready Made Garments in Bangladesh

BGMEA THE BACKBONE OF THE RMG SECTOR
The Bangladesh Garment Manufacturers and Exporters Association (BGMA) is one of the
largest trade associations in the country representing the readymade garment industry,
particularly the woven garments, knitwear and sweater sub sectors with equal
importance. Starting its journey in 1983 today BGMEA takes care of an industry that is
the backbone of Bangladeshs economy .Since the inception, BGMEA is dedicated to
improve and facilitate the apparel industry through policy advocacy to the government,
services to members , ensuring workers rights and social compliance at factories.

MISSION AND VISIONBGMEA works with the vision to develop the RMG industry of Bangladesh and the
economy of the country. Having such vision BGMEA chalked out the following missions
and its strategic direction is paved accordingly.
Firstly to protect and promote the interests of the industry; thus ensuring a sustained
growth in the foreign exchange in the earnings of the country. Secondly, BGMEA is
committed to ensure all legitimate rights and privileges of the garment workers .The
association also strives towards the betterment of the society and environment.

MEMBERS AND HOW BGMEA RUNSBGMEA started with only 12 members in 1978 and presently has around 5150 member
factories. Around 40% of BGMEA member factories are knitwear and sweater
manufacturers, and the rest 60% are woven garment manufacturers. BGMEA member
factories account for 100 % woven garment exports of the country and more than 95%of
sweater exports, while around half of the light knitwear exports are made by them.
BGMEA is run by a 27 member elected Board of Directors and they are elected for a two
year term. Four vice presidents having important portfolios, along with a secretariat of
experienced officials, assist the president in formulating and executing vital policies and
programs of the organization. The President is the highest executive authority of the
association and the board of directors standing committees headed by a chairman and
composed of members having vast experience in the related fields.

11

Growth of Ready Made Garments in Bangladesh

Chapter - 2
Methodology
2.0 Methodology
Methodology Based on this literature review, working conditions in the RMG sector are
below standard according to the ILO, law enforcement is weak and HR and IR activities
are absent. Initially this research was designed on the basis of primary and secondary data
collection tools. While reviewing the literature and background history of the RMG
growth, it was found that the key focus group (the garments workers themselves) was
grossly illiterate and limited knowledge on human rights, working conditions and labour
standards. On the other hand, most of the garments factories owners maintain good links
with political parties and maintain a regimented environment in the factory through an
alliance between the police force and their own security personnel. As result of
researchers were prevented from visiting the factory. For this reason, we have ignored the
direct data collection and surveys. Consequently the research technique has relied on
secondary data, collected through Literature review, Case studies in other countries,
Journals, Research articles, Thesis papers, Newspapers, Online news and survey reports,
garments Manufacturing Industries Annual reports, BGMEA Yearly report and Files. The
data was collected through a number of techniques.

2.1 Literature Review

Many researchers have investigated working conditions in the Bangladesh garments
industry. In fact Working conditions in the RMG sector are below standard and do not
meet the ILO standards. Labour standards and rights are commonly ignored in the RMG
factories in Bangladesh: poor practices include the absence of trade unions, informal
recruitment, and irregular payment, sudden termination, wage discrimination, excessive
work, and abusing child labour. Moreover workers suffer various kinds of diseases due to
the unhygienic environment and a number of workers are killed in workplace accidents,
12

Growth of Ready Made Garments in Bangladesh

fires and panic stampedes. Absence of an appropriate mechanism to ensure the
enforceability of the available laws for protecting workers rights and maintaining
workplace safety continues to be a concern in the RMG sector. As the sector is an
important foreign exchange earning component, some changes are required.
Working conditions in the RMG sector frequently violate international labour standards,
and Codes of Conduct (Qudus and Uddin S., 1993; Dasgupta S., 2002). Recruitment
policies are highly informal compared to western standards and there are no written
formal contracts and appointment letters. They are therefore vulnerable to losing their
jobs at any time. However, fear of losing their jobs and lack of alternative job
opportunities compel workers to continue in unsatisfactory employment (Bansari, 2010).
Kumar (2006) focuses; Garments workers are concerned with long working hours or
double consecutive shifts, personally unsafe work environment, poor working conditions,
wage and gender discrimination. Indeed, employers treat the RMG workers as slaves,
exploiting workers to increase their profit margins and keep their industry competitive in
the face of increasing international competition (Kumar A., 2006).
Continuous work schedule, wage penalties, physical and verbal abuse are common.
Women workers face physical abuse and sexual harassment inside as well as outside the
factories, but management does not ensure the security of women workers. Alam (2004)
suggested regulatory measures and its strict implementation and monitoring by the
government agency that could overcome work place in security problem of garments
workers in Bangladesh. Work areas are often overcrowded with limited workspaces,
causing occupational hazards such as musculoskeletal disorders and contagious diseases.
Injuries, fatalities, disablement and death from fire and building collapses are frequent in
the RMG sector (Majumder P, 1998). The absence of labour standards monitoring system
and ineffective building codes, poor enforcement and outdated labour laws, and a lack of
awareness of labour rights among workers.
Labour unrest4 is common in the RMG sector. In most cases, employers do not draw
attention to workers rights and ignore labour standards and discarding fair labour
practices. Formation of a trade union is often thwarted by severe repression, dismissal,
arrest, assault by hooligans hired by employers, and other practices which are in violation
of the international labour standards5 and Codes of Conduct (ILO, 2003). Morshed
advocates the key role of Cambodian labour unions in the clothing sector and as
mediators between workers and factory owners to settle disputes and discuss wages
(Morshed, 2007). To avoid unrest in the RMG sector, Khan (2006) argued for
13

Growth of Ready Made Garments in Bangladesh

strengthening Social compliance issues and labour standards to improve wages, working
hours, overtime, job security, the right to form trade unions, social security and also
occupational health and safety.
Bangladesh is considered to have the child labour problem especially in the RMG sector.
In most cases, children often commence work at a very young age; as a result, they are
suffering serious injuries and sometimes death in the workplace (Rahman, Khanam, and
Nur 1999).
Bangladeshi exporters have been under continuous pressure to comply with international
labour standards. Ensuring Social compliance is very important in the garments industries
to both maintain quality of products as well as meeting the expectations of the export
market. However, Bangladeshi exporters have been under continuous pressure to comply
with international labour standards. Therefore, an effective initiative by the Government
in this regard can provide a basis for negotiating with buyers for a unique set of Codes of
Conduct, based on national laws and core labour standards.
Khan (2006) suggested that NGOs, civil society, trade unions and other stakeholders
should work together to adopt the Code of Conduct for a viable and competitive RMG
industry. The government, NGOs, international agencies, buyers and other stakeholder
groups promote full compliance with mandatory requirements as specified in the law.
This literature review indicates that most garments factories in Bangladesh pay little
attention to labour standards and labour rights, disallow trade union activities, unsafe
working environment, and ineffective laws and discard fair labour practices, and
compliance enforcement is limited and limited role of stakeholders. This has led to the
labour unrest in the RMG sector. Consequently, many international buyers now demand
compliance with their own Codes of Conduct before placing import orders for
Bangladeshi garments. Therefore, an effective initiative by the Government in this regard
can provide a basis for negotiating with buyers for a unique set of Codes of Conduct,
based on national laws and core labour standards. At the same time, significant reform of
the relevant agencies along with sufficient strength and skills to perform their duties and
responsibilities is a prerequisite to monitor Social compliance. Therefore, research
question is set as:

a) Do the RMG employers or owners, including government, address HR and IR

issues in the industry, and does this result in an improvement of working
conditions?
14

Growth of Ready Made Garments in Bangladesh

The above research questions are generated from the literature review. These questions
are interrelated working conditions, HRM and IR activities, fair labour practices, health
and safety issues, labour disputes, effective law and resolutions, stakeholders role, the
ILO and the WTO Conventions, government process and arrangements which links to
Social compliance.

15

Growth of Ready Made Garments in Bangladesh

Chapter - 3
The Fastest Growing Export Sector of The Country

3.0 THE RISE OF READY MADE GARMENTS IN BANGLADESH.

Generally, an industry initially develops in response to domestic demand, and then
subsequently turns to export once it becomes mature .The evolution of the garments
industry in Bangladesh as in most CBI and SUB Saharan counties , has not followed this
pattern. Instead of growth being spurred by domestic demand, the rise of the RMG
industry in Bangladesh can be ascribed to growing demand in developed countries for
cheap apparel. Having said this, one should not forget that there was a small domestic
garments industry in the then East Pakistan (now Bangladesh) during the sixties which
catered to the demand for apparel in the then West Pakistan. The Mercury shirts,
accompany located in Karachi, sourced a few consignments of shirts during 1965-68
made by some tailoring outfits operating in Dhaka, and then exported these to some
European countries. There were a few tailoring groups in Dhaka who made a small
quantity of export-quantity shirts and childrens wear on specific orders. They received
orders from and supplied to Karachi-based firms 18. However, there was little investment
in this industry during those days because of the very limited size of the domestic market.
It was the global trend of relocation of production of garments from high-wage to lowwage countries, together with the bilateral MFA Quota system, that acted as the main
driving force for the emergence and subsequent growth of the RMG industry in
Bangladesh. Supportive government policies also played an important contributory role in
this regard.

It was the state trading agency, the TCB, that made the first export of RMG from
Bangladesh in the mid-seventies. The first consignment of private sector
export of garments from Bangladesh took place in 1977-78 when M/S. Reaz Garments
Ltd. exported mens shirts worth 13 million French Franc to a Paris-based firm. At that
time, there were only 9 export-oriented RMG units in Bangladesh. Along with Desh
Garments, some other apparel-producing enterprises were set up in 1979, bringing the
16

Growth of Ready Made Garments in Bangladesh

total number of firms in the industry to 22. By 1980, the number of firms in the industry
increased to 47, but total RMG export from Bangladesh was less than US $ 1 million.
Despite the small export volume in the initial years, by the early eighties, the exportoriented RMG industry was well on its way to a historic place in the chronicles of
industrial development in Bangladesh.

During the early eighties, the government issued licences to many entrepreneurs for
the duty-free importation of machinery to produce garments for export purposes.
Consequently, the number of firms in the garments industry increased rapidly and reached
632 in 1984-85. Export increased from US $ 1.3 million in 1980-81 to US $ 116.2
million. During the early eighties, the government issued licences to many entrepreneurs
for the duty-free importation of machinery to produce garments for export purposes.
Consequently, the number of firms in the garments industry increased rapidly and
reached632 in 1984-85. Export increased from US $ 1.3 million in 1980-81 to US $ 116.2
millionin 1984-85, a phenomenal growth indeed, as shown in Table 1. Bangladesh
exported its garments to the North American and European markets in the early eighties;
at that time, its exports were not subject to MFA Quotas in these markets, hence the
spectacular growth. However, the very rapid growth of imports of apparel from
Bangladesh prompted the US, Canada and the European countries to impose MFA Quotas
on Bangladeshs garments exports in 1985 . This had temporarily showed down growth of
the RMG industry in Bangladesh; there was a restrained increase in the number of firms
from 744 in1985-86 to 804 in 1989-90. Export growth had also slowed down somewhat
during 1985-90 period. However, the industry bounced back from 1990 onwards.
The number of garments factories shot up to some 3000 in 2002 and by 2005 it
reached3560 . By 2004-05, exports had reached US $ 6.4 billion. The average growth rate
of exports during 1990/91-1997/98 was almost 21 percent per year. However, the growth
rate of exports declined in the 1998/99-2004/05 period mainly due to exogenous factors
like flood in 1988, the global recession in 2000, and the 11 September incidents in the US
the following year. The share of garments export in total export earnings of Bangladesh
climbed from 3.89 percent in 1983-84 to 75.67 percent in 1998-99 and has stayed around
this level since then. It is important to note that the RMG entrepreneurs were not
experienced in the technical, supervisory or managerial aspects of garment
manufacturing. They were investors who were initially approached by an overseas
exporter or a commission agent who offered to sell the raw materials and arrange the sale
17

Growth of Ready Made Garments in Bangladesh

of the finished product to an overseas buyer. Thus, the profit was shared between the
foreign buying agent and the Bangladeshi manufacturer in the early days of the industry.
Subsequently, many of the large RMG units established direct links with foreign buyers
and the role of the buying agent became redundant in this case. Due to their low level of
skills and risk aversion, the Bangladeshi manufacturers initially concentrated production
on a limited number of easy to-make items with a minimum value-added.

The woven RMG industry of Bangladesh has been heavily dependent on the use of
imported inputs, particularly fabric, because of the above-noted trend of foreign buying
houses and direct importers to specify the sourcing of fabric and also due to the
inability(during the early days of the RMG industry) of the local primary textile sector
(PTS) to supply fabrics of the required quality specifications. As a result, local valueaddition in the woven RMG sector ranged between 25-30 percent in the eighties but
subsequently rose to reach about 40-45 percent in more recent times 23. Thus, net foreign
exchange earning of the RMG industry during the eighties and early nineties was much
lower than the gross foreign exchange earnings.

An important development in the RMG industry of Bangladesh was the growth of

knitted garments export in the early 1990s. The garment industry was almost completely
dominated by woven garments during the 1980s. Export of knit wear to the tune of US
$131.20 million was the first major consignment of knit RMG export from Bangladesh.
After this, knitwear export from Bangladesh grew rapidly; during the ten year period
1993/94 2003/04, the annual growth rate of knitwear exports was about 23 percent,
which was higher than the annual growth rate of 10.6 percent achieved by woven
garments export during this period. The share of knit garments exports in total apparel
export from Bangladesh rose from 17 percent in 1993-94 to over 43 percent by 2004-05,
while the share of woven garments gradually declined. While woven garments exports of
Bangladesh are concentrated in the North American market, knitwear exports are mainly
sold in the EU market. Local value addition in the knit sector is about 70 percent.
According to the BGMEA, there were 4300 member firms in 2004-05 of which 2275
were woven garment units, 700 were knitting factories, and 525 were producing sweaters;
however, 1300 of these units were closed. In addition, there were 560 units which were
exclusive members of the Bangladesh Knitwear Exporters and Manufacturers
Association(BKMEA). Thus, the total number of active firms producing garments in
18

Growth of Ready Made Garments in Bangladesh

Bangladesh in2005 was 3560, of which 47 percent was woven units, 42 percent knit units,
and 11percent producing sweaters. Total employment generated by these enterprises is
estimated to be 1.9 million production workers, or 2 million if all employees are included
.Most of these workers (an estimated 80 percent) are women drawn from the rural areas .

Major apparel items exported from Bangladesh in million US $

YEAR
1995-96
1998-99
2001-2002
2004-2005
2007-2008
2008-2009
2009-2010
2010-2011

SHIRTS
807.66
1043.11
871.21
1053.34
915.6
1000.16
993.41
1566.42

TROUSERS
112.02
394.85
636.61
1667.72
2512.74
3007.29
3035.35
4164.16

JACKETS
171.73
393.44
412.34
430.28
1181.52
1229.74
1350.43
1887.5

T SHIRTS
366.36
471.88
546.28
1349.71
2765.56
3065.86
3145.52
4696.57

SWEATER
70.41
271.70
517.83
893.12
1474.09
1858.62
1795.39
2488.19

3.1 The Fastest Growing Export Sector of The Country

Starting in late seventies, the apparel industry of Bangladesh now accounts for over 64%
of the countrys total export earning. Countrys apparel export rose to US$2628 million in
1996 from a mere US$6 million in 1981. To about 30 countries around the world,
Bangladesh presently exports ready-made garments, with over 45% to USA, 50% to the
countries in EU and 3% to Canda and rest to the other countries of the world. Countrys
apparel export has been growing on an average at the rate of 25% for last several years.
The country, last year ranked 6th largest apparel exporter to the USA the EU.

19

Growth of Ready Made Garments in Bangladesh

Bangladesh Garment Export

There are about 2500 export oriented ready-made garment industry in Bangladesh those
are clustered over mainly Dhaka and Chittagong. Such distribution offers buyers
advantage to choose the right manufacturers and exporters, throughout the year, with
minimum effort.

Garment Factory in Bangladesh

20

Growth of Ready Made Garments in Bangladesh

.
Statement of the current Export data of Readymade Garments of Bangladesh.

21

Growth of Ready Made Garments in Bangladesh

22

Growth of Ready Made Garments in Bangladesh

23

Growth of Ready Made Garments in Bangladesh

Chapter - 4
Findings and Recommendations

4.0 Working conditions in Bangladesh's RMG sector

In Bangladesh, working conditions are often deplorable. Although the garments industry
belongs to the formal sector, the recruitment procedure is largely informal compared to
western practice. As there is no contract or appointment letter, millions of garments
workers are vulnerable to losing their jobs at a moments notice without benefits. The
termination of an employment relationship is likely to be a pathetic and miserable
experience for a worker and loss of income badly affects his or her family. Furthermore,
gender issues in majority garments factories are undermined causing job insecurity,
irregular wage payment, deprivation of minimum wage and promotion exposure. In fact
compared to other employment sector in Bangladesh, job insecurity is higher in the RMG
sector (Majumder and Anwara, 2000; Priyo, 2010). In order to protect workers rights and
job security, workers should be provided with appointment letters detailing the conditions
of employment. In contrast with Australia working conditions, the Workplace Relations
Act of Australia contains provisions protecting employees from losing their job unfairly
through unlawful termination (Source : Commonwealth of Australia, 2010).
Workers in the Bangladesh RMG sector often work long hours for unusually low pay,
regardless of laws mandating overtime pay or a minimum wage. The RMG wage level is
one of the lowest in the world. Even by South Asian Standards, it remains very low with
average hourly wage in Bangladesh being 42%, 50% and 33% at those in India, Nepal and
Sri Lanka (Ahamed F., 2011). In contrast with US apparel labour charge per hour (wage
and fringe benefits) of US$ 16.00, the RMG worker receives a minimum wage of US$
0.15 (Rahman, 2004; Chowdhury, 2006). Whereas unit labour cost of $0.22 per hour is
the lowest in Asia, behind Cambodia ($0.33), India ($0.51) and China ($0.55) (Stuart, and
Kirsten, 2010). See below the table

24

Growth of Ready Made Garments in Bangladesh

Table 2: Inter-country comparative average hourly wage in the RMG industry
No.
1.
2.
3.
4.
5.
6.
7.
8.

Country
Germany
USA
Mexico
Poland
Sri Lanka
China
India
Indonesia

Wage/hour (US$)
25.00
16.00
2.40
1.40
0.45
0.5
0.35
0.40

No.
Country
9.
Nepal
10. Bangladesh
11.
Vietnam
12.
Turkey
13.
Pakistan
14.
Cambodia
15.
Thailand
16. South Korea

Wage/hour(US$)
0.30
0.15
0.85
7.3
0.41
0.32
1.75
5.00

Source: The Financial Express, Dhaka, 15 June 1995 and VINATEX and TrkHarb-Sendikas, May 2005,
Cambodian Ministry of Commerce; USITC (2004) and Source : Islam S. (2001). The Textile and clothing Industry
of Bangladesh in a changing World Economy; Cambodian Ministry of Commerce, 2007.

Table 2 illustrates at the wage level in the RMG industry is low both for males and
females (Khandker, 2002).
The governments and entrepreneurs poor judgment has exacerbated this labour unrest in
the sector low paying and no wage structure. Many countries in the world have a
satisfactory system for fixing wages. For example, in Australia, a Minimum Wage Panel
in Fair Work Australia (FWA) is responsible for setting minimum wages for employees in
the national workplace relations system. Fair Work Australia performs its function by
reviewing modern award minimum wages as well as making a national minimum wage
order for award-free employees each year (FWO Factsheet-Australia, 2010; Maconachie,
Glenda J., Goodwin and Miles, 2009).Although the government, garments owners and
workers have decided on a salary structure, unfortunately the RMG sectors do not have a
minimum wage. The factory owners are required to abide by the laws that regulate
minimum wages, working conditions, eco-labeling, and the rest of the garments factory
workers.
Most of the garments factories do not have standard working hours. Forced labour6 is
common in Bangladesh especially in the RMG sector. Workers are often given a quota to
fulfill. In the case of workers unable to fulfill their quota during work hours, they have to
stay behind and work without pay. Regular two hours overtime is compulsory, and if any
one refuses to work him or she is dismissed, terminated, has wages deducted or receives
verbal harassment, sometimes escalating into physical punishment. Furthermore the
factory management rarely informs workers in advance if they have overtime; it is only
announced at the end of the working day (Priyo, 2010). Workers dont receive any notice
25

Growth of Ready Made Garments in Bangladesh

of overtime. In some of the factories, workers are forced to do night shift duty, up to 12 to
3am.and then start the next shift at 7am. In many factories, the factory gates are locked to
enforce overtime (Majumder P., 1998). Forced labour constitutes the antithesis to decent
work and violates all core labour standards. In Australia, the law does not explicitly
prohibit forced or compulsory labour, including by children. The Australian Council of
Trade Unions (ACTU) is monitoring the law (Case study 6). In consequence, the
government should take effective initiatives with assistance garments manufactures,
international agencies and other stakeholders work in synergy under the supervision of
effective and extensive monitoring system program.
Though most work until after dark, there are no safety measures for them and no
residential facilities or transportation facilities provided. As a result, they frequently feel
insecure, and for good reason many female garments workers are raped and abused
(Kabeer N., 2004; Shimu, 1999; Mondal, 2000). Sexual harassment as well askilling by
management is also found in the Lani Fashion Limited is an example of such violence
(Priyo, 2010). The liability for a safe life and safety environment in both cases is that of
the employer. The employers are allegedly not taking care of the workers but exploiting
them for their business interests. Australia provides a good example for managing flexible
working hours in workplace (Source: Safe WorkSA, 2010).
As they do not know the legal provisions on employment contracts an excessive working
hour is one of the most common labour standards problems in Bangladesh. Equally,
worker has no choice; they are compelled to take up the excessive workloads. According
to the Factory Act 1965, a worker being employed for 12 months is entitled to annual
leave, casual leave, sick and medical leave, festival leave and maternity leave with pay
(ILO and BGMEA, 2003; ILO, 2005). Women are entitled to leave during pregnancy
period. In reality Pregnant women are worried about loosing their jobs and hide their
pregnancy, as they do not know the legal provisions of their employment contract. The
factory owners dismiss a woman worker if they discover that she is pregnant or if she
applies for maternity leave (Majumder, 1997; Kabeer N., 2004). As a matter of fact
garments manufacturing factories in Bangladesh frequently violate the labour laws of
1965 by not providing an appointment letter, and in the areas of working hours and
breaks, leave, minimum wages and fringe benefits (Begum N., 2001).
Below the case in Bangladesh is compared with Thailand, which has codified
employment laws, regulated by the Department of Labour, Protection and Welfare,

26

Growth of Ready Made Garments in Bangladesh

stipulate working conditions such as maximum work hours, holidays, sick leave,
minimum wage and severance pay (Ahamed F., 2011, Case study 4). Employment letters
should include flexible working arrangements, maximum weekly hours, annual leave,
personal leave and parental leave, the required notice for termination and redundancy pay.
Then the government and Compliance Cell can monitor whether the RMG factory has
provided an appointment letter and whether it observes fair labour practices.
Late or irregular wage payments are common in the sector. Usually most of the factories
do not provide any pay slip. The factories, which provide pay slips, dont
have transparency (Priyo, 2010). It is not uncommon for garments workers to be
dismissed without payment following several months of devoted work (Absar, S.S. and
Kumar A., 2006). Moreover, if any workers leave the job he would have to lose the
overtime benefit and sometime wages of the last month (Priyo, 2010). In spite of the
circulation of laws by the Government, the majority of garments workers remain deprived
of any legal rights since the enforcement of these laws in small and medium enterprises is
poor. However, the government has the responsibility for implementing labour legislation
and regulation and for establishing effective monitoring mechanisms. In an example
Vietnam has in place an extremely progressive national Labour law and has adopted a
new labour code in 2002 which is designed to regulate working conditions and the
government is trying to enforce these laws effectively (Nelson, Justice and Skuba, 2006;
Ahamed F., 2011, Case study 5 ).
Most of the garments workers are not satisfied with their present job in the RMG sector.
The level of wages is the most significant source of dissatisfaction for workers in the
RMG industry. RMG owner often deny that they have the power to improve the wages or
conditions of workers. On the other hand, prospects of promotion in the RMG industry of
Bangladesh are uncommon. Without full payment or being paid on time, worker often
worry and are anxious about the future. This results in low work productivity and job
dissatisfaction (ILO, 2005; Morshed, 2007).

A satisfied worker is more likely to be creative, flexible, innovative and loyal. Unhappy
employees are motivate by a fear of job loss, and will not give 100% of their effort for
very long. Managers who are serious about the job satisfaction of workers can also take
other steps to create a stimulating work environment. An example is Robert Owen a
Scottish operational manger in Textile and clothing industry who was concerned about
27

Growth of Ready Made Garments in Bangladesh

the evils and inhumanity and the process of industrialisation, and advocated for Human
rights. In consequence Owen tried to win the confidence of workers by improving
working conditions and extending worker facilities. This led to increased productivity
(Rao and Rao, 1998). Thus modern HR practices can play a key role in improving
working conditions in the RMG sector.
There is also no mechanism for benefit sharing in RMG industry. They do not have a
bonus payment system for workers as provisioned in the labour laws nor do they have
provision to increase salaries for changing profitability and inflation. Employee benefit
plans or incentives are voluntary offerings by the firm. Expenditure on benefits
contributes to employee retention through increasing job satisfaction and improved
productivity. Many industries provide workers certain tangible benefits over and above
the basic pay. Some benefits help fulfill the social and recreational needs of workers, for
example, a festival bonus, a target bonus or a production bonus. They may provide extra
leisure, extra income and a better work environment. Such incentives enhance employees
loyalty and build a positive attitude towards the company and workers feel that they have
a role in the success of the organization. Thus incentives are important in reducing
dissatisfaction and unrest in an industry.
Gender discrimination is common. The majority of garment factory workers are young
women. In the RMG sector female workers are considered low-skill, low workers .
Mostly abundant cheap labour and its low opportunity cost lead to low wage levels,
providing a comparative advantage to female labour in particular operations in the RMG
production sector.

Table 3: Gender differentials in Wages in RMG industry

Categories of workers
Operator
Cutting Master
Ironer
Sewing helper
Cutting helper
Finishing helper
Folder

Male wages
Tk/pm
2,254
3,935
1,894
1,200
1,512
1,209
1,528

Female wages
Tk/pm
1,536
1,106
762
837
1,023
1,157

Source: Absar, S.S. (2001). Problems surrounding wages: the readymade garments sector in
Bangladesh, LMD, Volume2, No.7, pp-5

28

Growth of Ready Made Garments in Bangladesh

Table 3 shows the differential in wages between female workers and their male
counterparts.
Moreover, women are generally discriminated against in terms of access to higher-paid
white colour and management positions. They are generally considered only for helpers,
machinists, finishing helpers and sewing helpers frequently and as line supervisors and
quality controllers. It is rare to find women working as cutting masters, production
managers, supervisors, finishing and machine operators, or as in-charges who draw
salaries varying from 2-10 times that of the average operator (Absar S.S., 2001).
Although Table 3 is 10 years old, the situation has changed little in the intervening
period.
With respect to wages, gender discrimination is prohibited by Japanese law under the
LSL (Art. 4). Female and male employees are subject to the same regulations in terms of
overtime, night work and rest days (Ahamed F., 2011, Case study 6). The government of
Bangladesh must undertake an effective initiative to eliminate discrimination based on
gender, particularly in the RMG sector where 90% of the workers are women (EPB,
2008).
Although the RMG is a formal sector, there is no acceptance of the right to organise at the
factory level and owners fear trade union. As a result labour unrest is common in the
RMG sector. Since May 2006, large-scale vandalism of garments factories by the workers
had, at times, appeared to threaten the very existence of this industry (Muhammad A.,
2006). In June 24, 2010, some 250 garments industry in Bangladesh almost closed due to
strikes, demonstration and battles with government and entrepreneurs private security
forces (28 July, 2010, The Daily ProthomAlo Newspaper). Workers demonstrated in the
streets demanding payments of their wages but they brutally treated by the law enforcing
agencies, hundreds of workers were injured and one female worker killed. Moreover, the
police have lodged cases against hundreds of garments workers while the factory owners
remain untouched (The Daily ProthomAlo Newspaper, 20 June 2010). This leads to
hostility between employee and employer. In Cambodia, the government, factory
association, the labour unions and international institutions have all played an important
role in improving wage rates and labour conditions (Morshed, 2007).
The working environment in Bangladesh RMG sector is below standards. Health and
Safety regulations, as prescribed in Factory Rules 1979 (Absar S.S., 2001; Begum A.,
1995) are routinely ignored by management and are hardly enforced by government.
29

Growth of Ready Made Garments in Bangladesh

Most factories do not have adequate ventilation and exhaust fans that leave the garments
workers exposed to toxic substances and dust. Raw materials contain dust and fibre
particles that hang in the air. Dye, a toxic substance emitted from coloured cloth, spreads
in the workroom. As a result, many workers suffer from constant
fatigue, headaches, anaemia, fever, chest, stomach, eye and ear pain, cough and cold,
diarrhoea, dysentery, urinary tract infection and reproductive health problems due to
overwork, uncongenial working conditions, and wide-ranging labour law violations. In
fact the Factories Act of 1965 sets the occupational safety and health standards in
Bangladesh, but like every other aspect of the Labour Code, it is rarely enforced due to
the lack of resources and corrupt practices in the system (Doshi G., 2008).
Moreover, many of the factories do not meet the minimum standards prescribed in
building and construction legislation (Factory Rules 1979). As a result, fire is common,
buildings often collapse and faulty building design regularly results in the death of
workers. Compensation following an incident is rare. The Spectrum Factory building
collapse of April 2005 killed 54 workers, injured over 70 and left hundreds jobless.
Furthermore places of employment in the garments sector are notorious for fire, which are
said to have claimed over 350 lives in the past two years, though exact figures are difficult
to find (The ProthomAlo Newspaper, November 2012). In addition, as for working
conditions, they are one of the worst in the world frequent garments factory fires taking
many of lives due simply to lack of safe exits being the burning example. Moreover,
compensation following an incident is rare in this area (Muhammad A., 2008;
Meghbarta). The violations of the occupational safety and health codes are flagrant, as
evidenced by the types of tragic and preventable accidents that occur in Bangladesh
factories (Majumdar, 2002).
Bangladesh already has labour laws such as the Factory Rules 1979 that prescribe
minimum standards and health and safety regulations (Absar S.S., 2001; Begum A.,
1995). But the proper application of labour legislation depends on an effective labour
inspectorate. Bangladesh also needs a viable and active labour administration system
which is responsible for all aspects of national labour policy formulation and
implementation.
Bangladesh is committed to securing labour rights for the well-being of workers by virtue
of ILO membership. In response, the Bangladesh government formed a Social
Compliance Forum (SCF) and also constituted two task forces on a) labour welfare, and
30

Growth of Ready Made Garments in Bangladesh

b) occupational safety in the readymade garments (RMG) sector along with a Compliance
Monitoring Cell (CMC) to encourage compliance in the RMG sector. In
addition BGMEA has also formed a Safety Cell to protect fire-related emergency
problems. With respect to the tripartite MOU (Memorandum of Understanding) BGMEA
monitors started visiting factories to measure of Compliance and to ensure the
implementation of minimum wages and other basic labour rights and to monitor the
application of Labour Law in RMG factories (Choudhury R.S and Hussain G., 2005). But
the concern is that both agencies are failing to perform their activities due to a lack of
trained staff and labour inspectors, rigid structure and because they are overloaded by
other responsibilities.
There are many other labour sectors; unlikely child labour is a serious and growing
problem within this sector (Rashid M.A, 2006). Nevertheless Bangladesh was able to
solve the problem of child labour very successfully in the mid-1990s, it was not entirely
successful in preventing ex-working children from being dragged into hazardous
employment. In fact child worker removed from the workplace and placed schools, can
result in a significantly loss of income for their family. Most of the child workers parents
keep children out of school, preferring to have them working for money or helping with
household chores. However, the ILO adopted the International Programme for the
Elimination of Child Labour (IPEC) and the International Confederation of Free Trade
Unions (ICFTU) has played a major role in implementing this programme at the local
level. But the programme seeks to provide educational opportunities for children, while
reducing or, if feasible, eliminating the hours spent at work. It is limited to tracking the
process of removing child labours from work and placing them in schools. The ILO,
NGOs, government and other stakeholders should provide some incentive for those
children who have lost their jobs. Therefore the formulation of a National Plan of Action
for the elimination of child labours in the Bangladesh is urgent.

4.1 Recommendations
Despite the unique success of the RMG sector, the poor working conditions in the
factories and the lack of Social compliance are serious concerns. Most of the RMG
factories do not practice the HR and IR activities, and have no well-defined HR or
Personnel unit, ineffectively address labour rights and ignore labour standards, discarding
31

Growth of Ready Made Garments in Bangladesh

fair labour practices, overlook health and safety issues and disallow trade
unions. As a result, workers rights are grossly violated in the RMG sector which has led
to labour unrest.
To improve working conditions the Bangladesh Government needs to conduct a thorough
review of labour regulation. The working environment and working conditions need to be
brought into line with the countrys current realities and should be backed with the
resources necessary to ensure compliance. Furthermore, the government should protect
workers rights by creating a system for complaints concerning violations, adjudication,
remedies, and punishments. But there is reason to believe it can be achieved.
The reason is the pressure international buyers are already exerting on the Bangladesh
RMG industry and the success similar pressure has had in countries such as Cambodia.
Monitoring and surveillance of human resources and industrial relations activities are also
required.

4.2 International pressure

Many international buyers from the United States, European Union, Canada and
elsewhere, consider that Bangladesh garments are produced in abusive and exploitative
conditions which do not uphold labour rights and standards and acceptable working
conditions. The failure by Bangladesh's garment manufacturers and government to
observe its own national laws has prompted international buyers to insist on their own
Codes of Conduct7 with local employers. Since the expiry of the Multi Fibre Agreement
Quota system in 2005 they have demanded compliance with their own codes of conduct
before placing any garment import order (Rashid, 2006).
These buyers' codes of conduct rely heavily on the idea of social compliance. For example
Nike code of conduct mandates that social compliance audits be carried out with all their
suppliers (Ahamed F., 2011, Annexure -E). These audits check suppliers are complying
with social welfare practices such as allowing their employees one day of out of six give
concrete examples from a real company's real codes of conduct. Social compliance has
emerged as a major issue in the Bangladesh RMG sector. Despite the additional costs
these compliance demands place on the sector, there are sound economic reasons why the
Bangladesh garment industry should meet them. If the RMG Industry fails to implement
social compliance according to International Labour Standards, it may lose its global
32

Growth of Ready Made Garments in Bangladesh

markets. Ignoring social compliance could harm Bangladesh's competitiveness as a
supplier of ready-made garments. This could have dire results: the closure of most of the
garment industry with millions of employees losing their jobs; the decline of economic
growth, and social disorder such as snatching, kidnapping, robbery, street hustling and
prostitution. Alternatively ensuring social compliance is very important in Bangladesh's
garments industry to both maintain quality of products. In the RMG sector, a Social
compliance Certification System could be offered through buyers to promote and certify
lawful, humane and ethical working conditions in manufacturing processing, and the
working environment as well as meet international labour standards.
Pressures from the United Nations and other international agencies can improve human
rights and working conditions through formulating trade policy and other incentives. The
International Criminal Court, which came into existence, is empowered to prosecute
crimes against inhumanity, genocides, and war crimes. International criminal tribunals
were convened to prosecute serious human rights violations and other crimes in the
former Yugoslavia and Rwanda (Glendon, 2001). Recently in Myanmar, the eminent
democratic leader Aun Sung SuuKyi, Nobel Prize holder, was released from house arrest
as result of pressure from the Amnesty International Organization and the United Nations.
Pressure applied by the international community and buyers has had positive results
world-wide. A number of countries including Vietnam, Japan, Indonesia, El Salvador,
Thailand, Indonesia, and Zambia, are requiring social compliance and fair labour
practices and avoiding labour unrest in garment manufacturing factories by adopting best
practice (Ahamed F, 2011).Fearing sanctions against their products, aware of the negative
aspects of child labour, a number of employers have reduced or eliminated the use of
child workers. For example, a CBS television documentary badly publicised child labour
against a Nike and Adidas ball manufacturing company in Sialkot, Pakistan in 1995. As a
result, U.S Government officials and the industry agreed in 1997 to eliminate child labour
by moving production out of the households to soccer ball factories (Hyde, 2009). More
than 3,000 children have been enabled to stop working and attend school. In addition to
local industry, with the assistance of international buyers other measures have been taken
to provide their families with financial support (Hyde A., 2009).
Moreover conditional trade sanctions, or the threat thereof, will change the behaviour of a
foreign government when that governmental perceives that costs of the sanction will
greater than perceived cost of complying with the sanctions demand. The WTO is a
33

Growth of Ready Made Garments in Bangladesh

powerful agency that could enforce labour standards with the nightstick of sanctions.
Vietnam is the best example of improved workers rights through an agreement with U.S.
and Vietnam in November 2000 (Ahamed F., 2011, Case study 4).

4.3 Better human resource management as part of the solution

Working conditions in the RMG sector do not meet the ILO standards. In order to protect
labour rights, job security and other benefits, workers should be provided with
appointment letters detailing the conditions of employment. Fair labour, modern HRM
practice and IR activities are needed to improve working conditions in the RMG sector.
Better human resource management (HRM), it is proposed, could play a key role in
ensuring social compliance in Bangladesh's garment factories. Currently, human resource
management in the RMG sector is limited and often counter-productive. The RMG sector
would benefit by the introduction of modern human resources and industrial relations
activities through the establishment of human resource or personnel management units in
the industry. The introduction of modern human resource management would ensure that
labour standards are addressed, that workers rights are not violated, and that there is a
safe working environment. HRM can createa congenial work environment in the RMG
factories that enhances job satisfaction, through training, job security, introducing flexible
working times, encouraging new technology and introducing rewards, benefits and other
fringe paymentspage188.
In fact most of the garments factories have no well-defined HR or PM unit, as a result,
workers rights are minimal. Working conditions may improve with the establishment of
a HRM unit or Personnel Management unit in each industry and concludes that this is the
highest priority. It proposes setting up a standard through modern HR and IR practices
and fair labour practices in collaboration with employers, employees, TU representatives,
multilateral agencies and other stakeholder groups.

4.4 Monitoring labor standards

Social compliance of RMG factories is a key requirement for most of the worldwide
reputed garments buyers. It ensures all labour rights, labour standards, fair labour
practices and Code of Conduct according to the ILO and WTO conventions. A key aspect
34

Growth of Ready Made Garments in Bangladesh

of international buyers successfully applying pressure is monitoring. Monitoring is needed
to check that suppliers undertaking to adhere to codes of conduct are not empty promises.
But who should do the monitoring? In different countries different institutions, such as
trade unions, employer associations, industrial tribunals, state-sponsored regulatory
bodies or the civil courts, monitor and enforce labour standards (Gospel and Palmer,
1992). In Bangladesh two different institutions - - one government and one private -- were
set up to monitor labour conditions. However both of them have proven unsuccessful. In
2005 the Bangladesh government formed a Compliance Monitoring Cell to ensure
implementation of the compliance issues in the factories in the readymade garments
sector. But it is not working to ILO standard owing to a lack of skilled staff, logistic
support and rigid structure.
In the protection of labour rights and improvement of working conditions, international
standards have been developed and adopted by international communities. The ILO can
play a key role by allocating different roles to different stakeholder organisations and by
monitoring progress (ILO, 2004). The ILO core labor standards adopted from the HR and
IR philosophy guarantee an ethical standard. In addition, the Codes of Conduct upholds a
certification system and encourages its members to ratify and implement core labour
standards according to its Conventions (Moazzem, 2005). The ILO governing body has
developed eight fundamental conventions. These eight fundamental Conventions are:
(29)

Forced Labour (1930)

(87)

Freedom of Association and Protection of the Right to Organise (1948)

(98)

Right to Organise and Collective Bargaining (1949)

(100) Equal Remuneration (1951)

(105) Abolition of Forced Labour (1957)
(111) Discrimination (Employment and Occupation) (1958)
(138) Minimum Age Convention (1973)
(182) Elimination of the Worst Forms of Child Labour (1999)

The ILO is responsible for drawing up and overseeing international labour standards. It
performs an important role in ensuring that labour law is applied equally to all employers
and workers (ILO, 2005). Consequently, all ILO members countries are obliged to
respect labour standards and should include those labour standards in their national laws
and policy. Furthermore, it also provides the only functioning supervisory mechanism,
35

Growth of Ready Made Garments in Bangladesh

and is central to the international legal arrangements for labour standards.
The ILO supervisory system is that, rather than settling formal disputes, it uses regular
supervision to help avoid disputes altogether and to enhance overall compliance. It is
widely agreed that the resulting Labour monitoring, carried out by the International
Labour Organization (ILO), a United Nations agency, has created a number of beneficial
changes in Cambodias factories (Marston, 2007). The lessons from Cambodia and
similar countries would be useful in appreciating effective role of the stakeholders.
Therefore governments, the ILO and other stakeholders should adopt a Code of Conduct
to promote decent work in the RMG sector.
NGOs are well placed to monitor compliance with ILO standards in Bangladesh. In other
countries NGOs already play a crucial role in increasing transparency, putting pressure on
non-compliant governments and providing specialist knowledge and support. For
example, in the significant Nike case, a non-governmental monitoring system has
improved working conditions (Richard, Locke, Qin and Brause, 2007)
As consumers constantly, reject products produced in exploitative circumstances, workers
tights should be protected by effective law. The WTO and ILO must encourage its
members as well as Bangladesh to ratify and implement core labour standards. More and
better monitoring of corporate Codes of Conducts in collaboration with employers,
employee, multilateral agencies, NGOs, civil society, Trade unions and other stakeholder
groups should work together to adopt the Code of Conduct for a viable and competitive
RMG industry. In addition, monitoring are required in the RMG sector. Without
monitoring, efforts to improve the legislation will be ineffective. A modified Code of
Conduct and an effective Compliance Monitoring Cell (CMC) are also required. In line
with the Bangladesh Government, the ILO, international agencies and other stakeholders
should work in synergy under the supervision of an effective monitoring system.

36

Growth of Ready Made Garments in Bangladesh

4.5 Gallery

Garments Factory in Bangladesh

Knit Product made in Bangladesh, Factory Showroom

Different types of Wash done upon Denim, Factory Showroom

37

Growth of Ready Made Garments in Bangladesh

Automatic Printing Machine used in many Factory in Bangladesh

Fake Leather Jacket Production In Bangladesh

Modern Technology & Machinery are used in Bangladesh Washing Factory for
ready made garments.

38

Growth of Ready Made Garments in Bangladesh

Blazer production in Bangladesh.

Most of the ready made garments factory have ETP to save the environment.

Each & every Garments made with special care in Bangladesh ready made
garments factory

39

Growth of Ready Made Garments in Bangladesh

Many of garments Factory uses computerize automatic cutting machine in

Bangladesh

Lot of factory use automatic machine for trouser making

40

Growth of Ready Made Garments in Bangladesh

Chapter 5
Conclusion
5.0 Conclusion
Social compliance may be compromised by current HR and IR practices. An approach
that pays attention to labour rights, global labour standards, fair labour practices, safety
workplace as well as decent work in improving working conditions is needed. Further the
Fair Labour Act, the Factory Act, the Occupational Health and Safety Act, Core Labour
Standards, Code of Conduct, the ILO and the WTO Conventions are all contribute to a
better work environment.
This article has investigated working conditions in the Bangladesh ready-made garments
sector. It found the working conditions are poor and challenges facing Social compliance,
despite Bangladesh labour laws and the country's membership of the WTO and ILO.
These include an inadequate application of labour standards and labour rights, law and
enforcement, collective bargaining activities, fair labour practices as well as the
government of Bangladesh and entrepreneurs role in implementing the decent work in
the RMG sector. It suggested monitoring was needed to ensure compliance with these
laws. Lastly it suggested improved human resource management in RMG factories could
ensure social compliance.It looked at the inadequate implementation of existing labour
laws and standards. The Fair Labour Act, the Factory Act, the Occupational Health and
Safety Act and core Labour Standards in Bangladesh all need to be attended to. It found
that Codes of Conduct, bilateral agreements and treaties can ensure fair labour practices
and safety in the workplace.
The article looked at the roles of the main actors in HR and IR systems: non-government
and government and the roles of the international community, civic society and
stakeholder groups including the ILO and the WTO. Bangladesh government
infrastructure was found to be poor, due to limited financial resources. The government
also seems to lack the political commitment to improve working conditions in the RMG
sector. The Bangladesh government needs to pay more attention to monitoring
compliance. In addition a Code of Conduct and effective compliance monitoring cell are
also required
Monitoring was shown as an important element of enforcing social compliance. While it
41

Growth of Ready Made Garments in Bangladesh

was acknowledged that many NGOs can help improve labour standards, the existing ILO
supervisory and monitoring system was considered best-placed to audit social compliance
in Bangladesh RMG factories. It was suggested that ILO monitoring be supplemented by
the establishment of a human resources or personal management unit in each RMG
factory. Labour standards could then be met through modern human resources
management and practices in collaboration with employers, employees, trade union
representatives, multilateral agencies and other stakeholder groups.
Probably the best NGO to monitor the implementation of labour standards in Bangladesh
RMG factories is the ILO itself. Usually international labour standards are applied
through national law and policy (ILO, 2005). However the ILO also uses monitoring to
ensure compliancepage219. The ILO uses a supervisory system that is unique at the
international level to ensure that countries implement the conventions they have ratified.
Research confirms the importance of these treaties or bilateral agreements
and the success of ILOs role in monitoring social compliance (Ahamed F., 2011). For
example the US-Cambodia trade agreement produced a labour standards compliance
program called Better Factories Cambodia. This unique bilateral trade agreement used
trade incentives for enforcing labour standards, and it relied on the ILO to serve as the
monitoring body.
This article suggests the ILO monitoring system be used to establish workers rights in the
RMG industry in Bangladesh. As in Cambodia, in Bangladesh monitoring with the
assistance of the ILO, social compliance compacts, government commitment and
improved HR practices could see the RMG sector transform to meet both the ILO's
minimum labour standards and best fair labour practices (Ahamed F., 2011).
Assuring job satisfaction, over the long-term, requires careful planning and effort both by
management and by workers. Therefore the government, international community and
stakeholder should work in synergy in improving working conditions in the RMG sector
with the establishment of a HRM unit or Personnel Management unit in each RMG
industry. In fact the infrastructure of Bangladesh RMG sector is poor due to a lack of
financial support as well as government and policymakers inadequate attention to this
sector. In consequence, the ILO along with other stakeholders and institutions will play an
important role in monitoring establishment of Social compliance. In an example, the ILO
supervisory and monitoring system and Better Factory Programme in Cambodia and its
success could be used as a role model.

42

Growth of Ready Made Garments in Bangladesh

References
Ahamed, F. (2011). Working conditions in the Bangladesh Readymade Garments
Industry: Is Social compliance making a difference? Ph.D Thesis, La Trobe University,
Australia.
Absar, S.S. (2001). Problems Surrounding Wages; The Readymade Garments Sectors in
Bangladesh, Journal LMD Labour and Management in Development, Volume 2, p. 7.
Alam M.J., Mamun, M.Z. and Islam, N. (2004). Workplace Security of Female
Garments Workers in Bangladesh, Social Science Review, Volume 21, No. 2, pp. 191200.
Bansari, N. (2010). Textile and Clothing Sector in Post MFA Regime: A Case from
Bangladesh,
Gender
and
Trade,
Commonwealth
Secretariat,
http://www.genderandtrade.org
Begum, A. (1995).Poor Rural Migrants to the City of Dhaka: A Study of Expectations,
RSP Documentation Centre,http://docs.google.com/viewer?
Chowdhury, Mannan M.A, Ali, Mahboob M., Rahman and Rubba (2006). WTO, PostMFA Era and the Bangladesh RMG Sector: An Assessment of Performance and
Challenges, South Asian Journal of Management, January, 2006,
http://www.allbusiness.com/legal/international-trade-law-treaties-agreements
Choudhury, R.S. and Hussain, G. (August, 2005). Post-MFA issues and challenges:Social
Dimension : Enhancing Employment and Global Competiveness through Decent Work,
DWPP Bangladesh,http://www.bgw-info.net/DMS/member/filesviewed on 31/4/2009
Dasgupta, S. (2002). Attitudes towards Trade Unions in Bangladesh, Brazil, Hungary
and Tanzania, Journal Article on International Labour Review, Vol. 14 (1), 2002.
Doshi, G. (2009). Textile and Apparel Industry in Turkey, http://ezinearticles.com; viewed
on 27/3/09
Glendon, M.A. (2001). A World Made New: Eleanor Roosevelt and the Universal
Declaration of Human Rights, The Columbia Electronic Encyclopedia, Columbia
University Press.
Gospel, H. and Palmer, G. (1992). British Industrial Relations, Second edition, Chapter
V, Volume 33 (1), pp. 69-91, British Journal of Industrial Relations,
Routledge, London.
Hyde, Alan ( 2009). The International Labour Organization in the Stag Hunt for Global
Labour Rights, Law & Ethics of Human Rights, Volume 3(2),
http://www.bepress.com/lehr/vol3/iss2/art2
ILO and BGMEA (2003). A Handbook on Relevant National Laws and Regulation of
43

Growth of Ready Made Garments in Bangladesh

Bangladesh, BGMEA, Dhaka, Bangladesh
ILO (2004).Addressing Child labour in the Bangladesh Garment Industry 1995-2001: A
synthesis of UNICEF and ILO evaluation studies of the Bangladesh Garment sector
projects, Dhaka, August 2004, ILO Publication, International Labour Office,CH-1211
Geneva 22, Switzerland.
ILO (2005a).Promoting fair globalization in textiles and clothing in a post-MFA
environment, ILO Publications, International Labour Office, CH-1211 Geneva 22,
Switzerland.
ILO (2005b). Guide to the Cambodian Labour Law for the Garments Industry, Phnom
Pehn, ILO Publications, International Labour Office, CH-1211 Geneva 22, Switzerland,
ISBN 92-2-116754-2, http://www.betterfactories.org.
Khan, F.R. (2006).Compliance: Need of the hour in the apparel industry; Law &
ourrights, Issue No. 249, August 05, 2006,http://www.thedailystar.net/law,viewed
on15/8/2009
KhondkerNasreen (2002). Garments Industry in Bangladesh, South Asia
Multidisciplinary Advisory Team (SAAT), International Labour Organization, New
Delhi, India.
Kumar, A. (2006). Bangladesh: Industrial Chaos Worsens Political Instability,
South Asia Analysis Group, Paper No.1852,http://www.southasiaanalysis.org,viewed on
05/09/2008.
Kumar, N. (2001). WTO Regime, Host Country Policies and Global Patterns of MNE
Activity: Recent Quantitative Studies and India's Strategic Response, Economic
andPolitical Weekly, Volume, 36, No. 1, pp. 39-50.
Maconachie, Glenda J., Goodwin and Miles (2009). Enforcing minimum labour
standards in Australia from 2010 : correcting or compounding problems, In:
Labour,Capital and Change - Proceedings of the 23rd Conference of the Association of
Industrial Relations Academics of Australia and New Zealand, 4-6 February, Newcastle,
Queensland University of Technology, Queensland.
Muhammad Anu (June-2006). Why the Workers became so Audacious? Megbarta, June,
2006.
Muhammad Anu (June-2008). Why the Workers became so Audacious? Megbarta, June,
2006.
Mahmud R.B (2012 ) Skills development in Bangladesh RMG sector, the News Today,
http://www.newstoday.com.bd
Majumder, P.P. (1998). Health status of the Garment workers in Bangladesh; Findings
from a survey of employer and employees, Bangladesh Institute of Development Studies
(BIDS), Dhaka, Bangladesh.

44

Growth of Ready Made Garments in Bangladesh

Majumder, P. P. and Begum, A. (1997 and 2000). The Gender Imbalances in the Export
Oriented Garments Industry in Bangladesh, Policy Research Report OnGender and
Development, Working Paper Series No. 12, The World BankDevelopment Research
Group/Poverty Reduction and Economic Management Network,
http://siteresources.worldbank.org, viewed on 22/08/208
Moazzem, G.K. (2005). State of Compliance of the RMG Sector of Bangladesh, Research
Fellow, Center for Policy Dialogue (CPD), http/cottonbangladesh.con/RMG.htm, viewed
on 22/12/08
Marston, C. and Polei, A. (2004).Corporate reporting on the Internet by German
companies, International Journal of Accounting Information Systems, Volume 5(3), pp.
285-311.
BGMEA- website.

45