‘Non-member RMG factories should become associate members’

Highlights

•   Non-member factories are not associated with BGMEA or BKMEA
•   They missed government stimulus package amid the pandemic
•   A factory must be 100% export oriented to become a member
•   Experts recommend making SME factories associate members
•   Those exporting more than 20% of capacity can become eligible
•   Institutional recognition can ensure proper regulation, better compliance

Non-member garment factories should become associate members of any association in the sector to ensure safety compliance and workers' rights, which in turn will help those factories get access to the government stimulus package.

Experts at a webinar on Wednesday suggested making such factories that export more than 20 percent of their capacity through the subcontracting process.

At the programme titled "MiB Webinar on the Impacts of Coronavirus on Non-Member RMG Factories in Bangladesh," they said if any accident similar to Rana Plaza occurs at a non-member factory, it will damage the industry's reputation.

Brac James P Grant School of Public Health, Brac University and Centre for Entrepreneurship Development (CED), and Brac University jointly organised the event on Wednesday.

Presenting the keynote paper, Dr Atonu Rabbani, Associate Professor of the Department of Economics at Dhaka University, said, "Non-member factories are defined as not being members of either the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) or Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

"However, sometimes they join groups of member factories to get orders through subcontracts."

For his part, Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue (CPD), said, "Non-member RMG factories are exporting up to 60 percent of their production capacity through the subcontracting process.

"I recommend making the factories – which are exporting more than 20 percent of their production capacity – associate members of any exporters' association. The move will help them become more compliant with international standards."

He added that as non-members, these factories missed the government stimulus package amid the pandemic.

It is to be noted that to become a member of the BGMEA or BKMEA, a factory has to be 100 percent export oriented. Meanwhile, to avail the government stimulus package, a factory has to be 80 percent export oriented.

Md Kamrul Hasan, assistant inspector general (AIG) of the Department of Inspection for Factories & Establishments (DIFE) under the Ministry of Labour & Employment, said, "If non-member factories become associate members of any association, they can be better regulated by the authorities.

"The DIFE is currently not able to hold those RMG factories accountable because they lack institutional recognition from associations."

Meanwhile, BGMEA's Director Sharif Zahir said, "Currently, we have a large number of compliant factories due to the intervention of Accord and Alliance, but some non-member factories are at risk.

"If a second incident similar to the Rana Plaza tragedy happens in Bangladesh, it will destroy the country's image. We have expectations that the DIFE will regulate non-member factories to make them compliant."

He further said, "We have the opportunity to make the small and medium RMG factories compliant with international standards by providing them with infrastructural facilities.

"The Bangladesh Economic Zones Authority (BEZA) has a large amount of land to develop some zones, and the government might relocate such factories to a zone to make them compliant."

Despite their contributions to the country's economy and employment, very little initiatives have been taken and very limited research activities have been carried out regarding the small and medium RMG factories.

To learn about the impacts of the Covid-19 pandemic on non-member ready-made garment factories of Bangladesh, the MiB project recently conducted a study, titled "Impact of Coronavirus on Non-Member RMG Factories in Bangladesh."

According to the study, April was the hardest month for those factories, and by May, production activities started to bounce back (even before the lifting of the official containment measures).

However, in June, capacity utilisation was about half. Continuous demand for services through new orders will be the key for optimal capacity utilisation and employment, the study found.

It also revealed that new orders can play an important role in creating more employment, as every new order is associated with 16.5 percent higher employment rate. One additional order for a factory can add about 32 workers per month, and 10 percent of additional orders can create employment for 2,624 workers.

Currently, 448 non-member factories employ 86,679 workers, about 55 percent of whom are women.

Jennifer Jabbar, ‎director of HRLS & Social Compliance - ‎Brac and Syed Hasibuddin Hussain, project manager for Mapped in Bangladesh, spoke at the event among many others.

Professor Dr Rahim B Talukdar, adviser to the CED, chaired the webinar.