Executive director of the International Labour Rights Forum (ILRF), Judy Gearthas, told the Dhaka Tribune in an exclusive interview Tuesday the government’s failure to invest in infrastructural development had led to the “under-cutting” of its garments industry.
She explained that the “penny-pinching” in the sector left the workers’ wages as the only field, where Bangladesh could compete with the rest of the market.
“They’ve been pinching pennies on workers’ salaries and the infrastructure and they’re potentially going to lose orders because of the lives lost and the continued poverty of garments workers.”
The ILRF official pointed out that the government should concentrate on investing in infrastructure and garment workers. “Then they can have continued success in the industry, and they’ve been exposed for having under cut their own industry.”
Following the Tazreen Fashions fire last year that claimed 111 lives and the Rana Plaza collapse that claimed 1129 last month, the ILRF is creating pressure on brands and retailers to support the victims. “We are actually working to ensure the safety of workers in garments factories.”
The ILRF executive director is in Bangladesh to go over the memorandum of understanding that was signed by over 40 brands so far, and hopes to meet with a few civil society groups to touch base about their work in garments as well as the MoU’s implementation process.
“We are creating pressure on the company and retailers to create compensation fund for the workers,” Judy said after observing that Bangladesh’s labour law does not stipulate the provision of an adequate compensation fund.
Judy Gearhart also trashed fears that raising workers wages and investing to ensure their safety would cut down Bangladesh’s edge in the international market.
“If wages of workers in garments factories are raised, Bangladesh will still remain competitive in the world market,” she said pointing out the workers wages in Bangladesh are one of the lowest in the world.
Bangladeshi garments bosses say the industry cannot sustain large wage rises and still compete with China, which pays around $100 more per worker in a month compared to Bangladesh’s monthly pay of Tk3,000 (roughly $38). The salary of Bangladeshi workers has not seen a rise over the last three years. “This is a real problem for Bangladesh,” Gearhart said.
When asked whether brands and retailers should increase their prices if production costs increases, Judy said, “Yes, if need be.”
“The companies should offer the price so that suppliers can ensure workers’ safety and proper wages.”
She asserted that if Bangladesh does not improve on workers’ wages and safety, it is likely to lose orders.
Bangladesh, “will have to become more competitive. But being competitive by continuously trying to be as cheap as possible never allows you to advance and become more competitive in terms of productivity and in terms of design and in terms of innovation; China’s been pursuing that and Bangladesh hasn’t.”
Many garments bosses have been complaining that without savings from reduced lead times, reduced energy costs or other costs associated with the country’s poor infrastructure, they will not be able to operate by acceding to the workers demand for higher wages.
Omar Chowdhury, owner of Syntex Knitwear, said some workers have been demanding wages of around Tk8,000 per month, an amount which will not be feasible if savings are not made anywhere else in the chain.
However, Reswan Selim, owner of Softex Cotton, points out that if Bangladesh loses its preferential access to the European Union, which is the market for 60% of the country’s RMG exports, prices would increase by 12.5%. The rise would make China cheaper and cause factories to “close over night.”