Collective Efforts with Responsible Business Conduct Ensure Inclusive Growth, Shaping the Future of RMG and Beyond
The ILO-IFC Better Work Bangladesh program, in collaboration with the Daily Samakal and the Business Standard, organized a roundtable titled " Responsible Business Conduct in the RMG Industry: Achievement and Way Forward " on 1 June 2024. The event marked a significant milestone, commemorating Better Work Bangladesh's 10-year journey in promoting decent work, empowering women, and driving inclusive economic growth in the country's vital RMG sector.
The roundtable, a platform for diverse voices, brought together various stakeholders, including government officials, industry leaders, worker representatives, researchers, and ILO officials. Participants engaged in insightful discussions, sharing achievements, best practices, and strategies to advance further Responsible Business Conduct (RBC) in Bangladesh's RMG industry and beyond. Over the past decade, Better Work Bangladesh has made remarkable strides, positively impacting 1.3 million workers, engaging 470 factories and 50 brands. The roundtable highlighted the program's key initiatives, focusing on advisory, assessment and training. As Bangladesh transitions from its Least Developed Country (LDC) status, participants emphasized the need for collective efforts, coherent policies, and stakeholder collaboration to drive sustainable and ethical business practices. The emphasis on the ILO's Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (MNE Declaration) has also been made as the ILO instrument that is founded substantially on principles contained in international labour standards, and provides direct guidance to enterprises (multinational and national) on social policy and inclusive, responsible and sustainable workplace practices.
The event, supported by the Ministry of Economy, Trade and Industry (METI) and the Government of Japan, underscored the significance of responsible business conduct as a catalyst for development and inclusive growth in Bangladesh's thriving RMG industry.
Faruque Wasif, Planning Editor, The Daily Samakal
Over the past decade, the RMG sector has significantly contributed to the socio-economic development of Bangladesh despite facing numerous challenges, including the Rana Plaza and Tazreen Fashions tragedies. As we discuss the RMG sector, it is essential to prioritize the rights and well-being of the workers who drive its success. At Samakal, we are committed to collaborating with the government, private sector, development partners, and worker representatives to uphold and protect labour rights. We hope this collaborative approach continues, ensuring a sustainable and ethical RMG industry that values its workforce.
Tuomo Poutiainen, Country Director, International Labour Organization (ILO) in Bangladesh
Today's discussion on Bangladesh's RMG sector is particularly timely as the country transitions from its LDC status. This transition, ongoing sector reforms, and environmental considerations underscore the need for responsible business practices. Continuous progress in all areas of responsible business conduct is essential for Bangladesh.
We believe that laws, industry standards, institutional quality, and worker safety are deeply interconnected and must be addressed collectively. The government, workers and private sector efforts are crucial in these areas. Ensuring that workers are represented, and their voices heard is also vital.
Investors, brands, and buyers must collaborate to ensure compliance with labour laws and support capacity building. Highlighting and replicating good practices within the RMG sector can set a benchmark for other industries. Additionally, we must learn from our experiences and leverage data to promote good governance and improve working conditions. The Better Work Bangladesh programme drives these improvements and fosters a culture of responsible business conduct.
Dr Khandarkar Golam Moazzem, Research Director, Centre for Policy Dialogue (CPD)
Responsible Business Conduct (RBC) is a relatively new concept, but its principles have now been integrated into legal frameworks globally. This keynote presentation will focus on the laws and frameworks governing responsible business practices and their significance.
RBC encompasses three key areas: policies, economics, and the environment. Ensuring environmental protection, ethical working conditions, and transparency and accountability within the sector is essential. These responsibilities extend beyond the government to businesses at the factory level. While we have made progress, much Work remains to be done.
The principles of RBC are derived from four international conventions comprising 16 criteria. Bangladesh should start by adhering to these guidelines as a signatory to all ILO conventions. The Better Work programme, which celebrates its 10th anniversary, exemplifies how these principles can be implemented effectively.
Over the past decade, it has covered 470 factories, including 50 brands and 1.3 million workers, representing one-third of all RMG workers, 51% of whom are female. The programme has significantly contributed to worker well-being, reduced non-compliance, and improved overall worker satisfaction and livelihood.
Better Work's focus on social dialogue and grievance mechanisms has led to a nearly 50% reduction in non-compliance rates in bipartite committees and factories between 2018 and 2022. Additionally, women's representation in these committees has increased by nearly 50% over the last five years. The programme has also addressed various non-compliance issues effectively, such as a 22% decrease in overtime limit violations, a 20% decrease in failures to provide overtime notice, a 56% decrease in failures to provide weekends, and a 21% decrease in failures to compensate for overtime. Factories engaged with Better Work have reported a 55% increase in export revenue and a 50% rise in export volume, demonstrating the benefits of ensuring labour rights.
This successful BWB model should be replicated in other export-oriented sectors. However, a national action plan with proper monitoring and evaluation mechanisms is necessary. Stakeholder consultation must be coherent, and a repository of significant changes should be maintained for future reference. The 9th five-year plan should include initiatives to meet RBC requirements.
Chowdhury Ashiqul Alam, Member Secretary, National Coordination Committee for Workers' Education (NCCWE)
Decent work and fair wages are integral to sustainability. The keynote presentation underscored the importance of participation committees in conflict resolution. While these committees have been influential, it is essential to examine whether they have inadvertently diminished workers' bargaining power and the role of trade unions, thereby reducing worker representation.
Ensuring due diligence and responsible business practices in our country requires a collective effort. It is not solely the responsibility of the government or businesses; every stakeholder must play an equal role. We can achieve meaningful progress in promoting responsible business conduct and safeguarding workers' rights through shared responsibility and collaboration.
HM Ibrahim, Chairman, Parliamentary Standing Committee on Ministry of Labour and Employment
The government is diligently working to implement the ILO guidelines across all sectors. We are addressing 46-48 recommendations, which have been thoroughly discussed within the ministry. We have requested additional time to implement these recommendations fully. As part of our latest measures, we will take state action against owners who violate workers' rights, and two such owners have already been banned from travelling abroad due to these violations.
We also focus on streamlining processes by establishing a one-stop service for all necessary licensing and paperwork, thereby reducing bureaucratic hurdles. Additionally, Bangladesh is on the verge of becoming an ILO board member, a significant milestone that underscores our commitment to labour rights and industry development.
The importance of Responsible Business Conduct (RBC) cannot be overstated. RBC ensures businesses operate ethically, respecting human rights and environmental standards, which is crucial for sustainable development. Achieving an inclusive industry requires a collective effort from all stakeholders—government, private sector, workers, and civil society. We can build a fair, safe, and sustainable industry that benefits everyone involved by working together.
Ashraf Ahmed, President, Dhaka Chamber of Commerce and Industry (DCCI)
The Better Work Bangladesh programme is exemplary, bringing significant quality improvements across all levels of the RMG sector. This model should be extended to other sectors, but its success hinges on the private sector's initiative. While the government is supportive, the primary drive must come from private enterprises. Factories are more likely to adopt these practices when buyers enforce strict requirements for compliance. This collaborative effort between buyers and the private sector is essential for the widespread implementation of the Better Work model, ensuring sustainable and ethical business practices across industries.
Mesbahuddin Ahmed, President, National Coordination Committee for Workers Education
Since the 2013 Rana Plaza incident, there has been notable progress in improving the safety and security of workers, which has reassured buyers. However, significant concerns remain regarding the overall rights of workers. In Bangladesh, wages in the RMG sector are comparatively lower than in other South Asian countries. With annual wage increments at 5% and inflation at 8%, real wages effectively decrease.
This underscores the importance of the Better Work programme, which has been extensively implemented in Bangladesh, covering over 470 RMG companies since its inception in 2014. Our experience with Better Work in the RMG sector should be a model for other countries aiming to implement similar initiatives. Focusing on worker rights and safety can ensure sustainable improvements and set a global standard for responsible business practices.
Md Amin Helaly, Senior Vice President, FBCCI
RBC is a relatively new concept in our country. We seek sustainable solutions as we strive to grow and expand our economy. Achieving sustainability necessitates compliance with ILO directives. Sustainable development must be inclusive, ensuring that responsibilities and benefits are shared equitably. Policies should be tailored to the specific needs of different industry types, considering the unique requirements of small, medium, and large sectors. By adopting this approach, we can foster a more balanced and sustainable economic growth that benefits all stakeholders.
Shah Mohammad Abu Zafar, President, Bangladesh Labour Federation (BLF)
In my opinion, national-level trade unions are more effective in safeguarding workers' interests than participation committees. The wage structure requires extra attention, considering competitive wages and the cost of living. It is crucial to rationalize wages based on inflation and current market prices to ensure workers' decent quality of life.
Wage determination should be based on the cost of living and market realities to provide workers with a decent standard of living. Ensuring fair wages that account for inflation and living costs is essential for improving the quality of life for workers and enhancing productivity. A well-paid workforce with a decent standard of living tends to be more motivated and productive, ultimately benefiting the organization's performance.
Mohammad Hatem, Executive President, BKMEA
One critical issue we should collectively overlook is the need for ethical pricing policies from brands. Over 80% of factory owners need help due to stringent loan conditions imposed by banks and unfair pricing from brands.
When discussing workers' rights, it's essential to recognize that these rights extend beyond merely forming unions. We must ensure that trade unions represent and advocate for workers' interests. Addressing these issues is essential for the sustainability and ethical operation of the RMG sector. Collective effort is required to have an inclusive RMG sector.
ZM Kamrul Anam, President, Bangladesh Textile & Garment Workers League
The RMG industry has undoubtedly made tremendous progress. However, it is perplexing how some factories are declared "green" or "compliant" without having trade unions to ensure proper compliance. Sustainable development can only be achieved with the active involvement of workers.
ILO conventions and our Constitution mandate the right to form unions. An ideal trade union recognizes both its rights and responsibilities. Comparing the roles of trade unions and participation committees is essential to determining which model is more effective. ILO's core conventions 155, 187, and 190 should be ratified to strengthen workers' rights further and ensure comprehensive compliance.
Mohiuddin Rubel, Director, BGMEA
RBC involves workers, owners, buyers, and the state. Policies should be developed through thorough dialogue and careful consideration before implementation. After the transition from the least developed country (LDC) status, there might not be any more incentives. However, we still have some time left. Rushing to withdraw incentives might lead the RMG sector into crisis. If this is to be done, then the government needs to provide supportive alternative policies for this industry. A comprehensive policy, developed through discussions with all stakeholders, would benefit the garment industry.
Niaz Ali Chisty, President, Electronics Safety & Security Association of Bangladesh (ESSAB)
The RMG sector is the largest employer in the country and contributes approximately 84% of Bangladesh's total exports. Our focus now needs to shift towards efficiency and optimizing the workforce. This strategy would enhance our competitive edge in the international market through better pricing. Additionally, investing in workers' skill development is crucial to ensure they can adapt to new roles and contribute effectively to other industries. This holistic approach will strengthen the RMG sector and promote balanced economic growth across various sectors.
Laetitia Weibel Roberts, Deputy Programme Manager, ILO-IFC Better Work Bangladesh
BWB is a partnership that thrives on understanding the needs of all stakeholders. Over the past decade, the programme has ensured compliance with labour standards, enhanced workplace safety, and improved business practices. Its multifaceted approach includes rigorous assessments, advisory services, training, and facilitating stakeholder dialogues. The programme also pursues social dialogue, promotes respect, and realizes Work's fundamental principles and rights. This must be a continuously evolving initiative.
One notable area of progress is the increased ownership at the factory level. We are actively working to enhance factory engagement and have launched our Factory Ambassador programme to support this goal. We intensively work with the industry stakeholders. Our ultimate vision is a landscape where the Better Work programme is no longer needed, and we are making strides towards that objective.
It is crucial to continue setting positive examples, mainly through our initiatives focused on women's empowerment, maternity benefits, and other vital projects. We must also consider extending these programmes' benefits beyond the RMG sector. Building trust among all stakeholders is essential for effective collaboration and further development.
Jasim Uddin, Special Correspondent, The Business Standard
The benefits of the Better Work programme should be extended to other sectors. Factory owners must take responsibility for the sustainability of their businesses and workforce. Ensuring a living wage and providing rationing facilities at the factory level can significantly enhance worker well-being and productivity. We can create a more sustainable and efficient industry by addressing these issues.
Matiur Rahaman, Joint Inspector General, Department of Inspection for Factories and Establishments
The Department of Inspection for Factories and Establishments is committed to ensuring safety and security in garment factories. It focuses on building, electrical, and fire safety, among other security measures. Significant progress has been made over the past decade, particularly following the Rana Plaza tragedy. The RMG sector has also made commendable strides in environmental protection. Many factories have adopted solar panels and are increasingly harvesting and reusing rainwater and groundwater.
Our focus must now shift to improving the quality of life for workers and developing infrastructure in their communities. By continuing these efforts, we can ensure a safe, dignified, and respectful working environment across all sectors.
Mohamad Anis Agung Nugroho, Country Programme Manager, ILO-IFC Better Work Bangladesh
The impact of BWB goes beyond the individual factories and touches the lives of many in the surrounding areas. It fosters community development and social upliftment and contributes to Bangladesh's broader socio-economic development.
Through the programme, we collaborate with the government, workers and owners. Our efforts aim to make this partnership more dynamic and effective. Emphasizing the importance of partnership is crucial because responsible business conduct in the garment industry is a multi-stakeholder issue, not a unilateral one.
I appreciate your commitment to our Better Work programme. It is essential to remember that meaningful change will only occur when the government, owners, and workers join hands to make it happen. As the RMG industry continues to evolve, BWB's continued efforts will be vital in ensuring that this growth remains inclusive, sustainable, and beneficial to all stakeholders involved.
Zakir Hossain, Moderator and Associate Editor, The Daily Samakal
Today's discussion underscored the critical importance of the ready-made garments sector. As Bangladesh transitions from its status as a least developed country, it is crucial to implement prudent policy measures, especially regarding the cessation of export incentives. Such actions could significantly impact the sector's global competitiveness, with small and medium-sized factories being particularly affected.
Syed Niaz, Moderator and Team Leader of the ILO-IFC Better Work Bangladesh
RBC is essential for the sustainable development of Bangladesh's RMG sector. Our roundtable highlighted significant achievements, best practices, and the need for ongoing improvement and collective effort from all stakeholders.
Embracing RBC enhances global competitiveness, attracts quality investments, and contributes to broader value creation. The ILO-IFC Better, Work Bangladesh programme is dedicated to supporting the RMG sector in this journey. By fostering trust, transparency, and collaboration, we can address challenges, share best practices, and implement innovative solutions that prioritize worker well-being and sustainability.