BANGLADESH’S WORKING ENVIRONMENT IS GAINING CONFIDENCE AROUND THE WORLD ESPECIALLY THE APPAREL INDUSTRY.
Karma Global is in the business of establishment and vendor compliance management. It has hundreds of elite domestic clients on its excellent service dispensing list. The expert staff on its roll deals with over thousands of regulatory compliance acts on a Pan India basis, some of the acts being state-specific while others are enacted by the Central Government.
Karma Management has now become Karma Management Global Consulting Solutions Pvt. Ltd. which was incorporated in the year 2004 and has now completed almost 18 years of its existence.
As late as April 2021, Karma Global took a very bold step of venturing into foreign shores in terms of shoving up its business in countries like the US, UK, UAE, Canada, Philippines, and Asia.
It has already made its mark in terms of providing excellent services in the areas of payroll, outsourcing, recruitment and talent acquisition, and regulatory compliance.
In fact, the CVO and MD, Pratik Vaidya of Karma Management were selected by SME Forum to lead a Select US Summit last month where he took along a delegation of over hundreds of SME Members for business discussions with the authorities in the States as well as with the entrepreneurs and Innovators of many countries who were present in this forum.
Karma Management thus entails the compliances of global clients in these countries as well, and in keeping with the global scenario, it does keep a very hard track of global compliances all around the world and especially so, it keeps an update on what is happening as far as people, work and benefits are concerned.
Bangladesh’s working environment is gaining confidence around the world especially the apparel industry – Social Compliance adherences In The Apparel Sector Of Bangladesh are of the highest order
Bangladesh has emerged as a key player in RMG (Ready Made Garment) sector since 1978. Textiles and clothing account for about 85% of the total export earnings of Bangladesh. Out of which, 76% comes from the apparel sector which covers the major products of knit and woven shirts, blouses, trousers, skirts, shorts, jackets, sweaters, sports wears, and many more casual and fashion items. The sector currently employs approximately 1.5 million workers, mostly females from underprivileged social classes.
The pivotal factor in the apparel industry is the workforce i.e. the sewing operators, the helpers, cutting masters, pattern makers, finishers, etc. Bangladesh is endowed with an abundant and cheap labour force that is easily trainable and convertible into a semi-skilled and skilled workforce. The existence of such a category is one of the advantages that Bangladesh will be enjoying over a considerable period in the context of international trade in clothing.
Quality of goods exported from Bangladesh has always been questioned by foreign buyers due to a lack of experience and awareness of Garment manufacturers associated in the trade which has now been improved over a period of time.
In order to export readymade garments, it is not only the quality parameters that are important towards acceptance of the product as per the intended end use, but also the working environment in which the garments are to be produced is equally important so the sweatshop concept is totally taken care of and the code of conduct must be stretched towards achieving the objectives of social compliance issues. The core areas of social accountability are, basically, based on the principles of international human rights, local culture, and tradition.
The prime objective of the system is to protect human rights in ready-made garment industries.
In this way, it can be said that Bangladesh has gained confidence worldwide, overcoming every challenge to meet the demands of the world market as per the desired standards and requirements.
Bangladesh’s working environment is gaining confidence around the world especially the apparel industry – Bangladesh’s improved Social Accountability Standards :
In today fast changing global market, it is not only the quality of garments which cherished the retailers and manufacturers but also the working environments of the organization wherein the products were produced. Those are equally important to gain and strengthen consumer confidence and to build up more reliable relationships with vendors.
In other words, a specific code of conduct that protects the basic human rights of the workforce engaged in the trade is to be respected to satisfy consumers and to add social value to the product. Basic awareness of social accountability helps to understand and monitor the compliance part of it in protecting the image of a particular brand of product.
In order to do so, the reputed and leading market players in the garment trade have imposed compulsion on the related factories to achieve those objectives as a condition of the export contract which Bangladesh has been able to achieve as per the various stipulations. It is the mandate that holds the fear of exports getting either withheld or canceled in the event of non-compliance to such issues, are enabled Bangladesh to take bolder steps to over the problems and challenges, leading to improvement and acceptance of their apparel worldwide.
Bangladesh’s working environment is gaining confidence around the world especially the apparel industry – Code of Conduct (COC) developed by International Organizations
Social Accountability standards have been developed by international organizations such as the Fair Labor Association (FLA), Worldwide Responsible Apparel Production (WRAP), Council on Economic Priorities Accreditation Agency (CEPAA), The Ethical Trading Initiative (ETI), and Business for Social Responsibility (BSR).
Reputed brand buyers in the large supply chains have taken the guideline from those organizations and formulated their own standard of COC and also the acceptance criteria.
The basic principles of COC have been derived from the principles of international human rights norms as delineated in the International Labour Organization Conventions, the United Nations Convention on the Rights of the Child, and the Universal Declaration of Human Rights.
It has nine core areas to be addressed upon. These are as follows:
1. Child labour
2. Forced labour
3. Health and safety
4. Compensation
5. Working hours
6. Discrimination
7. Discipline
8. Free association and collective bargaining
9. Management systems
While following the above criteria is compulsory for satisfying COC, local culture and regulation of Govt. cannot be overlooked. For instance, the limit on working hours and compensation for extra work may not be the same for all geographical zones around the globe. The minimum basic wage also depends on the economic situation of a particular country in question. The introduction of rights of free association and collective bargaining is guided by the political environment, the maturity level of the workforce, and above all the basic training of the management of the organization.
By keeping in mind the complex scenario, several case studies in Bangladesh have been made with respect to the information obtained through actual social compliance audits performed by leading auditors of internationally well-known consumer products service companies.
Bangladesh’s working environment is gaining confidence around the world especially the apparel industry – Social compliance audits conducted as per the COC of different brand buyers in the USA and Europe were basically based on the following steps:
1. Opening meeting with the factory management (informed the scope of audit)
2. Factory Tour (observed working condition)
3. Document Review (payroll, time card, personal file, age documentation, etc.)
4. Employees Interview
5. Closing meeting with factory management (discussed audit findings and recommended necessary improvements).
Study reveals Bangladesh as a popular destination as one of the best Asia-based suppliers of Apparel due to its higher level of social and compliance adherence as per law.
The study outlined that ‘In comparison, more than 70 percent of respondents say sourcing from China now involves “high” or “very high” labour and social compliance risks,’
The analysis contained in the report also found that the fashion brands and buyers in the US would increase their sourcing from Bangladesh, India, Indonesia, and Vietnam over the next two years.
This outstanding benchmarking study was based on a survey of 34 executives at the leading US fashion companies from April to June 2022.
Approximately 70 percent of respondents were self-identified retailers, followed by self-identified importers/wholesalers (67 percent) and self-identified brands (40 percent).
The USFIA report showed that ‘China plus Vietnam plus Many’ remained the respondents’ most popular sourcing model.
‘While China remains the most utilized apparel sourcing base, respondents have significantly reduced their “China exposure”.
This year, one-third of respondents report sourcing less than 10 percent of their apparel products from China, a significant decrease of 20% of respondents before the pandemic.
The USFIA said that China plus Vietnam typically accounted for 20-40 percent of respondents’ total sourcing value or volume in 2022, down from 40-60 percent in the past few years.
‘Regarding Asia-based suppliers, India, Bangladesh, Indonesia, and Vietnam are among the most popular destinations where respondents plan to increase sourcing over the next two years study showed.
It also said that these countries had relatively large-scale production capacity and stable economic and political situations.
Respondents said that China had lost its competitive advantage of ‘sourcing flexibility and agility in 2022.
They said that the supply chain disruptions caused by China’s frequent lockdown measures and its zero-Covid policy presented a significant concern for fashion companies in 2022.
Though US fashion companies are adopting a more diverse sourcing base in response to supply chain disruptions and the need to mitigate growing sourcing risks, eight of the top 10 most-utilized sourcing destinations for US companies are Asia-based, led by China, Vietnam, Bangladesh, and India, the study showed.
International Labour Standards in Bangladesh
ILO Conventions
Bangladesh has been an important and active member State of the ILO since 22 June 1972.
To date, Bangladesh has ratified 33 ILO Conventions including seven fundamental Conventions as enshrined in the ILO Declaration.
The ILO Office works in close collaboration with its tripartite constituents and social partners towards achieving Bangladesh’s decent work objectives.
Bangladesh Labour Act (2013)
The Bangladesh Government has made amendments to the 2006 Labour Act to make it more in line with International Labour Standards.
The government approved the new labour law in 2013 including 87 sections of amendments to boost workers’ rights, including better access to freedom of association (i.e., to form trade unions), and improving occupational health and safety conditions.
Bangladesh Labour Act Implementing Rules
On 16 September 2015, the Government of Bangladesh issued the implementation rules of the Bangladesh Labour Act. The ILO provided comments on the draft rules to the Ministry of Labour and Employment and actively encouraged that the rules were in line with international labour standards.
National Occupational Safety and Health (OSH) Policy (2013)
The ILO provided financial and technical support to the development of a National OSH Policy. As part of the process, the ILO worked closely with the government, employers, and workers’ representatives as well as civil society.
National Skills Development Policy
The development of a national policy for Technical and Vocational Education and Training (TVET) and skills development was a major outcome of the ILO implemented, European Commission-funded TVET Reform Project. Key activities within the project included the development of a national policy and a reform proposal for relevant laws and regulations and a proposal for improvements in tasks and mechanisms.
Migration
The ILO has worked to improve legal and policy frameworks, systems, and services relating to labour migration. Support has been provided to the formulation of the Overseas Employment and Migrants Act, 2013, and the revised Overseas Employment Policy (2013). Advocacy has also taken place with regard to ratification by Bangladesh of the Private Employment Agencies Convention, 1997 (No. 181).
Conclusion
Fashion brands and buyers in the United States see lower social and labour compliance risks in sourcing apparel from Bangladesh as the rating of the country in this particular area improved in 2022, according to a global study.
The ‘2022 Fashion Industry Benchmarking Study’ conducted by the United States Fashion Industry Association found that the movement from a rating of 2.0 in the past few years to 2.5 in 2022 reflected fashion companies’ acknowledgment of the continued efforts to improve social responsibility in the Bangladeshi garment industry.
However, despite the phenomenal success of the Apparel Industry’s growth in the International market, it can be said that Bangaldeshi’s exporters have been under continuous pressure to comply with international labour standards. Ensuring social compliance is very important in the garment industry to both maintain the quality of products as well as meet the expectations of the export market. Therefore, an effective initiative by the Government can provide a basis for negotiating with the buyers for a unique set of codes of conduct based on national laws and core labour standards, especially in relation to working conditions, gender issues, irregular wage payment, minimum wages, job security, etc. which are still issues that remain to be tackled by them as a whole.
Proprietory blog of Karma Management Global Tech Firm
This blog has been compiled by the internal staff of Karma Management with the knowledge and expertise that they possess, for its monthly newsletter Issue 03 of September 2022 in case of specific or general information or compliance updates for that matter, kindly reach out to the
Marketing Team – kush@karmamgmt.com / yashika@karmamgmt.com