Friday, June 25, 2010

[olympiaworkers] Sleepless nights for bosses in the Bangladeshi garment sector Jun 24 2010

A survey of recent unrest in the garment industry, as agitation for a
greatly increased minimum wage - as part of an improved wage structure -

In the past two weeks garment workers' agitations for a large increase in
the present monthly minimum wage of Tk 1,662 (£16/€19/$24) have spread and
intensified. A minimum wage of Tk 5,000 (£48/€58/$71) has long been
demanded - and more recent reports quote a figure of Tk 6,200
(£59/€72/$89). The Ready Made Garment (RMG) bosses have offered only Tk
1,887 (£18/€22/$27).

... the minimum wage for RMG workers of Tk 1,662 per month ... was
fixed in line with a tripartite agreement between the government, and
the representatives of workers and factory owners in November 2006 ...
it's been almost four years since the RMG workers' minimum wage was
revised, that too after a break 12 years and in the wake of persistent
labour unrest in factories in the capital. ... given the raging
inflation, induced by price spiral of food and other essential
commodities, it is virtually impossible for an individual, let alone
his or her family, to sustain on Tk 1,662 per month. ... the monthly
wage demanded by the RMG workers, while in itself not much if
inflation is factored, happens to be the lowest compared to the salary
demanded by workers in other sectors. (Editorial - New Age, 22 June

The wages of the 4 million RMG workers working in 4,500 factories - 85%
are women - were recently confirmed as remaining the lowest salaries in
the world. The factories employ about 40 per cent of the country's
industrial workforce.

The recent agitation began on Sunday 13th June in Ashulia, an industrial
suburb near Dhaka with a history of workers' rebellion. Wildcat strikes
began at factories of the Envoy Group, which is owned by the president of
the main employers' federation, the Bangladesh Garment Manufacturers and
Exporters Association. (In the prolonged tripartite negotiations between
workers' representatives, government and employers, the BGMEA has
consistently refused to budge on the wage demands, offering only minor
increases.) Eight and a half thousand workers struck to demonstrate for
wage increases and other benefits; RMG bosses responded by lockouts -
closing the factories. Workers barricaded main roads, fighting began when
cops arrived, workers lobbing bricks at them; workers then broke up into
several groups and began attacking various factory buildings. Other
factories then began to shut in an effort to avoid further trouble - but
their closure brought more workers onto the streets. Police eventually
cleared the area with teargas. Forty people were injured, including ten

BGMEA President Abdus Salam Murshedy, also managing director of the Envoy
Group, complained that, despite being laid off, for three days

"workers had been going to work ... and leaving after swiping their
punch cards".
'We held a meeting on Friday with the workers to restore work
environment but they have not been coming to work since the meeting,'
Murshedy said. 'They did not even submit any memorandum and held
protests.' (, 14 June 2010)

That the Envoy workers took strike action but didn't bother to send any
demands to the bosses of their own workplace suggests that the demand for
an RMG minimum wage is now seen as a industry-wide (or even class-wide)
movement. Some of the arrested rioters have not been garment workers, but
probably other workers from local neighbourhoods who are often drawn into
riots as they spill over into residential areas and police enter slum

In the following days the unrest continued in similar fashion;
on Tuesday 15th June at Tejgaon in central Dhaka, 25 were injured in
clashes. Police used teargas, baton charges and rubber bullets to disperse
protesting workers. 1,300 workers gathered outside their Shomahar Sweaters
Ltd factory, expecting it to reopen after its closure since June 10 due to
workers' unrest over pay demands. But instead they found a notice
informing them the factory was shutting for an indefinite period and that
47 workers have been suspended for "creating anarchy" in previous
protests. The workers began an angry demonstration and were joined by
fellow workers from nearby workplaces. Clashes with police followed.

Saturday June 19th, Savar, Dhaka; 7,000 Nasa Group workers began a
demonstration inside their factory demanding the new minimum wage of Tk
5,000. Then, leaving the factory, workers from 16 factories blocked a main
highway; eventually tens of thousands of workers poured onto the streets
and many clashes continued through the morning. Police used baton charges,
teargas, water cannon, rubber bullets and shotgun rounds against workers,
who replied with volleys of bricks and barricades; 100 were injured,
including 20 cops. Workers also damaged over 35 factories, and looted
goods worth Tk 12 lakh (£11,500/€14,000/$17,000).

Dhaka district additional police super Mozammel Haque told reporters
from the spot that it had become tough for the police to bring the
situation under control because the demonstrators outnumbered the law
enforcers. (The New Nation, 20 June 2010)

Over 75 factories were forced to close for the day. The BGMEA President

"There is no way we can operate in this violent environment. The
labour unrest is also creating panic among global buyers" (Financial
Express, 20th June 2010)

The unrest was by now seriously hitting profits; the global purchasers of
RMG stock - including leading US and European brands - demand fast
turnaround times with contractual financial penalties for late deliveries
of orders. The boat workers' strike last month(1) meant RMG companies were
forced to shift from cargo shipping to using far more costly air freight
services - now, the garment workers' unrest was having the same effect.
The BGMEA President claimed;

"Foreign buyers have lost confidence on our industry following the
vandalism. If such unrest continues they may find alternative
sources," he said.
The negative impact of the present situation will be visible in
November, he added.

But so far, through years of recurring unrest in the garment sector, the
foreign buyers have always quickly recovered their "confidence" in the
industry, encouraged by cheaper prices underpinned by the lowest labour
costs in the world. The RMG sector made up 80% of Bangladesh's 15.56
billion dollars export last year.

Monday 21st June, Ashulia; the unrest reached a new peak - after growing
clashes in the previous two days, over 50,000 striking garment workers
again fought with police and paramilitary security forces, forcing closure
of at least 100 factories. Around 85 factories were vandalised.

The trouble began at the Ananta Group factories, where 10,000 workers
staged demonstrations for the basic minimum monthly wage increase. The
unrest then spread to the Ha-Meem Group factory, where 26,000 workers held
protests and then walked off the job. Soon tens of thousands of other
workers joined the protesters after owners of 300 factories suspended
production and declared a holiday for the day, fearing large-scale

The workers then spilled onto the narrow highway linking the capital,
Dhaka, with the northern districts. This massive demonstration of more
than 50,000 was described as "turning the area into a "human sea"
stretching for miles". Fighting and road blocks continued throughout the
day, as intense battles with security forces spread across a wide area.
Factory property was also attacked, with windows and sewing machines
smashed. The protesters were finally dispersed in the afternoon.

Trouble was also reported in garment factory zones far from Ashulia. In
the face of the sheer scale and combativity of the movement, on Monday
night the BGMEA declared an indefinite closure of all RMG factories in
Ashulia. The area was swamped with a massive police presence.

The next day, Tuesday, the government Labour Minister announced that
workers would get a pay rise that took into account price inflation of
basic goods;

Labour minister Khandaker Mosharraf Hossain says readymade garment
workers will get their remuneration under new salary structure within
three months and asked them to calm down.
He said a new wage board will be formed with necessary reforms to the
salary structure. ...
The minister also admitted that the existing wage structure is not
compatible with the current situation. ...
Mosharraf was presiding over a meeting on 'Crisis Management Cell' -
formed to resolve complications and unrest in the RMG sector - at his
office on Wednesday. ...
"The minimum wage is in no way well-suited with the current
situation," the minister told reporters.
"It must be consistent with the price of daily essentials and
inflation rate."
... "The new wage board will finalise the salary structure by three
months. ... (, Dhaka, 23 June 2010)

The next day, Wednesday, with pressure from foreign clients (with their
stocks running low and expecting order deliveries) the BGMEA reopened the
Ahulia factories and workers returned under a heavy police presence;

Nearly a thousand riot police, armed with several water cannons, were
in the area where as many as 800,000 people are employed by
subcontractors working on behalf of global retailers such as Wal-Mart,
Tesco and H & M.
Factories reopened despite smashed windows and damaged sewing
machines, desperate to stop the protests affecting orders from Western
buyers, said garment manufacturer Envoy Group's director Sultan
"We are worried about late delivery - if you are late by one day,
international buyers cut five percent off the order price," he said,
adding that his factory was now late on an order of shorts for
"We will be forced to use air cargo to deliver things, which is
expensive. For the last week, we've had problems with this strike. We
plan to raise wages as soon as the government makes a decision, but
workers are impatient." (The Bangladesh Today, 24 June 2010)

RMG bosses claim that due to the recent unrest "exporters were forced to
spend 13.11 billion taka on air shipment between December and April to
meet buyers' deadline".

Negotiations continue on the wage issue. But the 'workers'
representatives' bodies in the garment industry function function more
like NGOs than Western-style unions. Factory owners have refused to allow
conventional union structures to mediate workplace disputes and
conditions. Consequently, the class struggle in and around the factories
is only loosely related to both negotiations and negotiators and acts
largely independently of them.

So far, there have been less than a dozen arrests of workers reported, and
a handful of sackings. Warrants have been issued against 180 named people;
while a blanket criminal charge has been brought by the police against
60,000 - sixty thousand - unnamed participants in the protests!

... But experts warn more violence is not far off.
"Unless the wages are increased, protests, riots and stoppages will
persist," said Ifty Islam, an investment banker at Dhaka-based Asian
Tiger Capital, advising factory owners and Western buyers to give
ground in the escalating dispute.
"It would be worth it for them in the long term," he said. "Bangladesh
has a huge opportunity to capitalise on rising costs in China but it
is difficult to get more foreign firms to come if we can't prevent
labour unrest."
The violent protests threaten to undo the benefits the global economic
recovery has brought Bangladesh -a 15 percent year-on-year increase in
exports for April and May 2010, said Dhaka-based economist Mustafizur
"The violence is a bad omen and we need to sort it out quickly - we've
just started to see signs of global recovery through new orders but
unrest threatens this," said Rahman, who heads the Center for Policy
Dialogue think-tank. (The Bangladesh Today, 25 June 2010)

With full shelves for Western retailers dependent on reliable fast
turnaround times for factory orders, strikes remain a potent tactic for
garment workers. With full order books for RMG bosses dependent on timely
delivery for the cheapest prices, low wages continue to be seen as a
necessity by many factory owners. An announcement on the new wage
structure has been promised for July 28th. The struggle continues.

1) See articles;

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