Challenges in Bangladesh's Garment Sector

This review seeks to dig into the critical issues underlying the Ready-Made Garments sector of Bangladesh, and identify what scholars have done before in the areas of this research’s objectives. The Ready-Made Garment sector of Bangladesh has been the lifelong backbone of the country’s economy but also is a sector which has been plunged into myriads of challenges which this literature review will disclose herein. The advent of Bangladesh’s Ready-Made Garment industry dates back in the 1970s and since then has significantly grown the country’s economy, arising as the country’s biggest export earner (Sobhan and Khundker (2001). Besides, the sector has had a thrilling touch on the country’s socioeconomic prospects, people’s gross domestic product, alongside providing employment opportunities to the plethora number of illiterate men and women in Bangladesh. The industry has thus contributed into the basketry of women empowerment, otherwise who would be languishing in untold miseries and poverty in Bangladesh.

Robban (2000) empirically reminisces and postulates that the RMG domain contributes a lion share to the country’s foreign exchange earnings. Rock (2001) traces the advent of RMG industry and maintains that the RMG industry began in the year 1976 with the first garment factory being the Desh Garment in conjunction with Daewoo, a South Korean Company. Rahman (2002) concurs with the premise that the RMG exports have positively reoriented the macroeconomic balances of the country since her conception in the 1970s.

The Bangladesh RMG domain as Chowdhury et al., (2005) reiterate has not been an evergreen subject, but rather an area which has been tested with myriad challenges alongside the spinning wheel of time. The scholars specifically pinpoint the problem of unskilled labor which renders less productivity and increased costs of production. Studies conducted by Berik and Rodgers (2008) portrayed that the RMG owners were reluctant to invest in the development of facilities and training of personnel. Rahman and Anwar (2007) postulated the challenge of poor energy supply, and poorly developed port facilities as typical impediments facing the industry.

Skilled labor force and with required expertise is essential in the development of the RMG industry. Since Bangladesh’s garment industry is mainly operated on open market competition, following the alleviation of the quota system in the year 2005; the RMG industry is in a dire need to upgrade the skills of her operatives and executives. The low presence of skilled personnel especially in middle management is a growth impediment. The industry is presently recruiting more than 4.2milllion, whereby women constitute 80% of this number characterized by illiteracy, and unskilled. In comparison with Bangladesh’s competitors including India, Pakistan, and Vietnam, unskilled labor force significantly hamper the expansion and development of the RMG industry. The inadequately trained personnel are construction of different reasons which the government of the day ought to look into. Some of the underlying causes for illiteracy levels include the inadequate presence of house training infrastructures and still the readily available ones are of degraded and lack professional trainers, weak training programs, inadequate teaching facilities unstructured training assessment and evaluation logistics and consequently poor evaluation and monitoring programs (Alam, Mamun, and Islam, 2004 pg. 195).

The challenges inscribing the quality of infrastructures have dramatically hampered the art of investing in the RMG industry. Poorly developed infrastructure has been a significant detractor for foreign investment, not only in Bangladesh but also another developing world. The Global Competitiveness Report of the year 2014 and 2015 illuminated the tragedy of poor infrastructure and submitted that an insufficient supply of infrastructural network is the main inhibitor of doing business in Bangladesh.

Islam (2013) curiously sought to provide for the actual state of affairs in Bangladesh RMG infrastructural network. He discovered that the settings of the tentative structures he explored were unplanned and lacked quality merits. These structures were subject to collapse; which has historically induced havoc to the dwellers of the arrangements. Remarkably, the concept of poorly designed and erected structures are probable contributors to the felonious disasters such as those at Rana Plaza and Tazrin garments which ended the many lives (approximately 2000) alongside injuring other thousands (Azim, 2013).

The element of human safety arouses indelible concerns to those of us who value life. It also knocks the epicenters of international communities, organizations, and consumers of the products who instigate the need for a quality environment for business thrives. Despite being the heartbeat of the Bangladesh economy concerning foreign exchange, infrastructure development has indeed posed a challenge especially considering the safety of the environment here the business operators and workers are housed.

In Bangladesh, there is no shortage of frameworks and enactments motivating the labor docket. The essence of complying with the stipulate legislations has been echoed by the government and indeed has been a requirement to business operators. Compliance entails confirming with the laid standards. Contextually, the standards constitute of the related laws in Bangladesh spearheading the RMG business operation, alongside the International Labor Organization agreements concerning the labor rights and standards; fair labor practices; building standards, working conditions, health measures, workers’ safety, environmental protection parameters, and buyers’ code of conduct. The spectrum of compliance, at times, is perceived through the lenses of environmental compliance, social compliance, physical compliance, and occupational compliance (Hamid 2014). The following chart provides a digested overview of issues related to compliance in the RGM domain.

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Bangladesh’s RMG industry has been registering excellent returns over the past three decades. However, the situation f social compliance and in particular issues related to workplace security and safety have not reflected on the growth patterns. The industry has yet done well especially in the eradication of child labor, but still, the matter of employees’ personal and environmental safety lags. Plenty of employees are still working under poor physical and social compliance; which have exemplified the many loses of lives that have ensued over the past ten years. The European Union, together with the International Clothing Retailers that obtain clothing items from Bangladesh have all raised eyebrows and are indeed concerned with social compliance.

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Rahman and Hossain (2010) echo the vitality of the RMG industry in fetching the country foreign exchange, poverty eradication, employment generation, and women empowerment. The scholars expound on a need for concentration on the domain which impacts the health and safety of workers; including social issues, factory working situations, social compliance, and social relations. Morshed (2007) submits that despite the industry providing employment opportunities which improve the economic structures and livelihoods of the people; the aspect of working conditions constitutes the lifelong impact on people’s social wellbeing and health. The adverse working conditions are characterized with an ability to threaten the workers living standards, and Morshed was concerned that the aspect long working hours without a break and enforcement for overtime work are typical challenges characterizing Bangladesh’s RMG industry. The employers of the sector are less responsive to the workers' pertinent issues especially wages, benefits and working conditions and therefore are less committed to solving them. When these aspects are less attended, the employees are less motivated and dissatisfied. It is under this situation that Abraham Maslow and his theory of motion become relevant; that a worker whose fundamental (physiological) needs are not attended to become less productive and dissatisfied with the present job. Whereas low wages is a crucial source of employee dissatisfaction; delayed salaries and overtime payment have potentials to induce anxiety on the part of workers which consequently contributes to low productivity and high job dissatisfaction. Quddus and Uddin (1993) remarked that the working environment in the RMG sector below standards and do not conform to the Codes of Conduct of international buyers. Besides, Dasgupe (2002) takes cognizance of the premise that the RMG sector of Bangladesh lacks an official formality of recruiting her employees, and that in many cases, employers fails to provide official appointment letters or contracts to their employees. Kumar (2006) empirically established that the workers in the sector are afraid of losing their job without prior notifications. In some cases, the workers are demeaned based on gender, extractions and are subjected to long working hours, consecutive shifts, hazardous working environment, and poor working conditions. Ahamed (2014 pg. 7) confirmed that the concept of employee promotion in Bangladesh’s RMG sector is almost extinct. Mariani and Valeno (2014) concurred that the existing wage provisions could not averagely meet the decent living standards of the workers which consequently pushes them to operate under hazardous environment to attain little social security and production quota. The scholars also acknowledged that the workers' exploitation is rampant and the workplace conditions are not in conformity with the International Labor Standards.

Furthermore, Mariani and Valeno studied the effects of compliance and social relations on the working conditions. The findings demonstrated little practice of dialogue amidst business associations, government, and workers. Elemental law enforcement level was equally found dismal. In his comparative studies of compliant and non-compliant garment industries, Baral (2010) established that the average yearly turnover of compliant firms was equivalent to almost two times higher than the typical annual turnover of con-compliant enterprises. Baral suggested that to have sustainable market competitiveness in global garment market, Bangladesh’s industry ought to deal with issues such as wage discrimination, informal recruitment, irregular wage payments, rented factory buildings, small sanitary structures, and drinking water; low roofs and closed working environment. Additionally, Mukul et al., (2013 pg. 188) unraveled the concept underlying employee motivation and realized that many workers tend to be satisfied upon the provision of job significance, identity, and feedback of their performance. He also concluded that employees are discontented in getting deprived off their freedom and autonomy to function as responsible people in their workplaces and the ability to autonomously apply their skills to perform their tasks. Concerning Mukul et al., (2013), autocratic sort of management negatively affects job satisfaction, loyalty, mental health, productivity and commitment to achieve set targets. Freedom of work concerning work scheduling job rotation, training for new skills is not eloquently present in Bangladesh’s RMG sector. This absence in impactful especially in the domain of skill development and optimal tapping of employees’ potentials. The shallow application of human resource practices deteriorates the opportunity not only for personal growth but also sublimation of morale to be of productive to the company. This consequently will breed a workplace environment characterized by boredom, job monotony, and less productivity. Morshed (2007) further explored on the labor rights implementation in the RMG enterprise and realized that labor rights contribute positively into the basketry of job satisfaction, labor productivity, and employee retention. Das (2008 pg.9) submitted that the majority of the garment industry owners are unwilling to integrate compliance standards and labor frameworks of the state for the betterment of the working environment and conditions. Chowdhury et al. (2013 pg.269) in their empirical studies concluded that there was a mutual correlation between economic sustainability and social compliance. Out of the fifteen respondents that were interviewed, fourteen support the relationship between compliance and job sustainability. This then gives a vivid impression that supposes the RMG suppliers and manufacturers fail to adhere to social sustainability parameters; they will fail to obtain sales orders from the market buyers who will consequently lower the returns volume. The research moreover, demonstrated that social compliance and operational compliance relationship intrigues are critical in employees’ retention in the workplaces. Employee retention, in the long run, is important because it reduces functional disturbances and guarantees timely delivery of quality products and ensures smooth production.

Many researchers who ventured into the RMG industry of Bangladesh discovered that the working conditions of the employees are below the International Labor Organization standards. Labor rights and standards were found ignored in the RMG firms, with absent eloquence of trade unions availability, informal recruitment, unexpected termination, irregular wage payments, excessive work, wage discrimination, and abusive child labor. Additionally, the workers were found susceptible to health issues due to exposure to unsanitary conditions. Furthermore, research has confirmed losses of lives due to workplace fires, panic stampedes, and accidents. The unavailability of strict frameworks to ensure compliance of laid legislations for workers protection is a huge concern. Considering the vitality and eminence of the RMG sector to the country’s economic wellbeing, there is a need for appropriate changes (Kumar, 2006). Samaddar (2016) studies are critical in providing an overview of relationships therein between occupational health and safety factors. In the 36 company samples which Samaddar (2016) uses; he observes a robust positive correlation between efficiency and standard working space. Additionally, a standard working measure which is a maximum of ten hours inclusive of two overtime hours in a day and other factors such as well ventilated working environment, clean working conditions, dust control system, use of hand gloves, face masks all constitutes a positive correlation. Relentless work schedule, verbal and physical confrontations, and wage penalties are common. The women employees in the sector experience physical abuse and sexual harassment within and without the firm; with the management having less to do to combat the vices. Alam 2004 recommended strict implementation and monitoring of legislative measures by relevant government agencies to contribute to overcoming the challenge. The work environment is prone to congestions with little space available which in turn compromises on the employees’ safety. The inadequate space has induced reported cases of occupational hazards including contraction of contagious diseases, musculoskeletal disorders, disablement, fatalities, and loss of lives from fire eruptions and building collapse in the RMG factories (Mondal, 2000). The unavailability of a monitoring system for implementation of labor standards, poor building codes, outdated labor law frameworks, and inadequate sensitizations on labor rights among workers are all eloquent in presence; which as well have contributed into the misfortunes the people are going through.

Labor unrest is a norm in the RMG sector. Many reported cases convey that employers do not adhere to the physiological needs of their employees, ignore their working rights and ignore the laid International Labor Organization standards (Newhall, 2017). The pursuits to enact trade unions are thwarted by repression. The continued blossoming of illegalities against human personnel working in the industry seems celebrated by employers to keep gaining while compromising on the employers (ILO, 2003). Morshed (2007) advocated the significance of Cambodian labor unions as a mediator between factory owners and workers in settling the elemental disputes surrounding wages and conflicts. Additionally to curb unrests in the sector, Mondal, (2000) supposed for a need to strengthen labor standards and social compliance issues for the betterment of working hours, wages, job security, overtime, social security, occupational health, and trade unions formation. Despite reductions in numbers over the recent past, past studies revealed Bangladesh constituted children labor challenges, especially in the RMG domain. In many cases, children start working in the factories at tender ages which consequently create chances for severe injuries and deaths in the workplaces (Rahman, Khanam, and Nur, 1999). Enforcing the minimum working age will motivate many children to attend schools and therefore keep off from being exploited by the factory owners. The beginning point should be emancipating parents about the rationales of education, and thus the significance of educating children, instead of exposing them to work at the tender age. The Bangladesh constitution guarantees compulsory school attendance to children aged six to ten years of age, and free for children within six to eighteen years (Rahman, and Hossain, 2010 pg. 75). The investment in education is a lifelong logistic for emancipating the young generation from oppressive work regimes into standing for the limelight of truth. Without quality education, it is hard for them to unchain from the wants of mediocrity; and might not be aware of the prevailing prejudices and oppressions bestowed upon them by the factory owners. Enforcement the present law on the minimum age for work alongside social audits to retain and maintain compliance and awareness sessions in the firms will significantly help the tragedy of child labor in Bangladesh (UNICEF, 2004). Alongside teaching parents and factory workers about the gratifications of children education, and sending them to class, factory workers will also accrue advantages especially on childcare and health services which are readily under the provision by the government. The industry owners can partner with the government agencies related to organizing for clinic visitations periodically to ensure parents have ample time to concentrate on the workplaces. This is the basic unit of motivation which will in long-run impact on productivity and employees’ motivation. Employees’ motivation is vital because it enhances stimulation, motivation, and productivity (Ramesh 2014).

Bangladesh exporters have been continually under pressure to conform and comply with the ILO standards. The exporters have been advocating for the strict implementation of social compliance logistics in the garment sector in the desire to ensure quality products which meet the market export demands. In view of this literature review, the government can contribute in the provision of an avenue for negotiations with buyers for unique Codes of Conduct; relative to national legislation and basic labor standards (Newhall, 2017). According to Kumar, (2006), the NGOs, trade unions, civil society, and other related stakeholders ought to partner together towards the adoption of a Code of Conduct to rekindle the spark of viable and competitive RMG sector. The governments of the day, international agencies, NGOs and buyers have therefore not been silent; but continually concerned with the workers' wellbeing and have contributed to the promotion of full compliance with mandatory provisions of law. This literature review maintains that majority of RMG firms in Bangladesh are characterized by less attention to employees’ labor standards and rights, discourage trade union processes, unsafe working conditions, and environment, discard equitable labor practices, ineffective laws, limited stakeholders ‘roles and limited compliance enforcement. The characteristics mentioned above have triggered unrest in the RMG sector. As a result, many international buyers have been re-awakened by the hues and cries of the workers and have demanded compliance with stipulated laws and Codes of Conduct before the placement of import orders for Bangladesh products. The government in this regard stands at the appropriate pedestal for spearheading the negotiation with buyers for an appropriate Codes of Conduct built on the threshold of fundamental labor standards and national laws. Additionally, there is a need for great reforms in the relevant agencies, such as the creation of awareness of employee’s labor rights, training for skills, in the journey to monitor social compliance (Sharif, Islam, and Kabir, 2015 pg. 214). In late 2012 and early 2013, two different garment firms catastrophes; both as a result of cramped and hazardous working conditions killed over 2100 workers in Bangladesh. These were but a part of similar reported cases in the RMG industry. The incidents aroused boycotts especially from Western brands and elevated pressure upon the RMG sector of Bangladesh from worker organizations, factory workers, human rights activists, global and local governments, ethical labor standards and civil society.

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Following the pressures induced by group areas, human rights activists and governments; the sector have recently realized improvements concerning improved building safety, especially following the Accord on Fire and Building Safety in the country; and the Alliance for Bangladesh Worker Safety (Alam, Azim, and Alias, 2017). The Accord is a construction of 200 legally binding consensuses between the Bangladesh garment worker unions and more than 200 apparel brands; whereas the alliance functions differently and was created by various apparel and retail companies including Wal-Mart and Gap but does not offer a role for unions or workers. The fundamental function of the accord and alliance was to inspect RMG factories and hold them accountable towards the creation of the structurally safer working environment. Whereas the Accord obligated firms to contribute towards infrastructural upgrades, Alliance was to help in the provision of low-cost loans to assist in monitoring retail members accountable for not buying from firms which have failed to meet membership standards concerning safe and secure working places. Alvins and Bain (2015) maintain it is ironical that the aspects of low wages and tax regulations which have contributed vastly towards the successfulness of RMG sector are also the factors which have made the industry unstable. Low wages have significantly raised the RMG industry to the year 2013; and so were the lax regulations revolving the workers’ safety. The definition of minimum wage characterizing the sector, the workers have ironically been motivated into venturing into the business to increase their salaries and profit margins. Lack of adequate ethical factory working conditions continues to increase among consumers who have become more demanding and vocal in the rectification of working environment conditions (Absar, 2001). Many clothing retailers have opted into acquiring new skills and knowledge about the issues affecting them, and this has significantly rekindled emancipation of employees’ needs and rights as provided by the International Labor Organization enactments and domestic legislative models. With the expansion of the market, more employees and retailers, in particular, will shift towards partnering with firms which have guaranteed fair labor practices, and general social compliance provisions (Newhall, 2017). Besides, the looming challenge imposed by in-compliance to labor reforms; effective management of human resources can play a critical role in ensuring social compliance in the RGM industry of Bangladesh. Currently, the concept of human resource management in RGM is deemed counterproductive and limited. The RGM docket would significantly benefit amid the introduction of contemporary industrial relations and human resources activities by the initiation of human resource management personnel in the industry. Additionally, the application of advanced human resource management will inspire re-addressing labor standards, worker discrimination and environmental safety alongside other challenges in the industry.

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Lack of awareness of employees’ rights and low levels of education are huge impediments for human resource personnel in the implementation of compliance issues in Bangladesh’s RMG industry. Based on the premise that 80% of employees in the sector are women, who are mostly illiterate with the poor background; the garment industry has greatly empowered them to earn a living. In comparison to their lives back in the village, the women find solace by working in the industry. The workers, therefore, tend to care not so much about their working environment and instead find opportunities amidst the suppressive working environment. Upon the face of social security provisions, job security is the women’s primary concerns. The workers thus tend to remain within the bounds of moderation to impress their masters with intents to keep their jobs. In contrast, Aziz et al., (2015) discovered that employee empowerment assists employees become more motivated towards their job and accrue benefits of their satisfaction and performances. The absence of sound unionism equally facilitates dormancy in emancipating the workers of their rights. A general feeling of the people showcases less reception towards unionism, which offers a leeway for the factory owners to continue their operations with less attention to the workplace environment. Newhall, (2017 p. 3) maintains that Bangladesh’s RMG industry has many strong characterizations. Alam, (2015) notes that amidst the industry lies huge easily trainable labor personnel; and that the industry has had a lifelong relationship with external markets shipping companies which have continued to handle large volumes orders. Bangladesh is in position two after China as the biggest exporter of garments globally; with the minimum wage in Bangladesh being the lowest worldwide, as reflected in the product pricing. The industry according to Greenhouse, (2013) is moving towards the right direction especially following the tightening of the labor laws in the year 2013when the United States threatened to suspend trade privileges for Bangladesh due to safety concerns in her RMG industry. According to Greenhouse, the intrigues of Alliance and Accord are anchored on the threats and have indeed been instrumental to the RMG sector. It is apparent that the is no shortage of literature digging into the Bangladeshi’s RMG industry concerning the matters of compliance challenges and what groups can do for the betterment of the industry. However, quite a large number reflects on the present working conditions and state of compliance in the domain, or rationales behind the agreement. There is a shortage of empirical provisions touching on the challenges the managers of RMG firms encounter with respective human resource managers especially in their pursuits to implement the compliance regimen in the work environment. This review excited a need to bridge the void.

References

Absar, S.S., 2001. Problems surrounding wages: the ready-made garments sector in Bangladesh.

Ahamed, F., 2013. Could monitoring and surveillance be useful to establish social compliance in the ready-made garment (RMG) industry of Bangladesh. International Journal of Management and Business Studies, 3(3), pp.88-100.

Ahamed, F., 2014. Job Dissatisfaction in the Bangladesh Ready Made Garment Sector-To What Extend HR/IR Practices Can Grow Exhilaration of RMG Workers. International Journal of Business and Management Review, 2(1), pp.1-12.

Alam, M.J., Mamun, M.Z. and Islam, N., 2004. Workplace Security of Female Garments Workers in Bangladesh. Social Science Review, 21(2), pp.191-200.

Alam, M.N., Azim, M.T. and Alias, R.B., 2017. Social Compliance in Ready-Made Garment , M.T., 2011. Entrepreneurship development in Bangladesh. University Grants Commission of Bangladesh.

Aziz, K., Awais, M., Hasnain, S.S.U., Khalid, U. and Shahzadi, I., 2015 Do Good And Have Good: Does Servant Leadership Influence Organizational Citizenship Behavior?.

Bain, M. and Avins, J., 2015. The thing that makes Bangladesh’s garment industry such a huge success also makes it deadly. Quartz.

Baral, L.M., 2010. Comparative study of compliant & non-compliant RMG factories in Bangladesh. International Journal of Engineering & Technology, IJRT-IJENs, 10(2), pp.3-27.

Berg, A., Hedrich, S., Kempf, S. and Tochtermann, T., 2011. Bangladesh’s ready-made garments landscape: The challenge of growth. McKinsey & Company, Inc. Apparel, Fashion & Luxury Practice, pp.1-24.

Chowdhury, M.M.H., Dewan, M.N.A. and Quaddus, M.A., 2013, January. Sustainable Supply Chain Management through Compliance of Stakeholders' Requirements: A Study on Ready Made Garment (RMG) Industry of Bangladesh. In PACIS (p. 269).

Dasgupta, S., 2002. Attitudes towards trade unions in Bangladesh, Brazil, Hungary and Tanzania. Int'l Lab. Rev., 141, p.413.

Mondal, A.H., 2000. Globalization, industrial relations and labour policies: A renewed agenda for social dialogue in Bangladesh. Draft for Discussion prepared for ILO/UNDP Project on Social Impact of Globalization: The Role of Policy.

Morshed, M.M., 2007. A study on Labour rights implementing in Ready-made garments (RMG) industry in Bangladesh. Bridging the gap between theory and practice, Theses collection, Centre for Asia Pacific Social Transformation Studies,(CAPSTRANS), University of Wollongong.

Newhall, S., 2017. Ethical Reform in Bangladesh’s Ready Made Garment Industry: Building on the Alliance and the Accord. Siegel Institute Ethics Research Scholars, 1(1), p.5.

Rahman, N. and Anwar, J., 2007. The Sustainability of RMG as a Globally Competitive Industry: Porter Diamond Perspective. Journal of Business Studies, 28(2).

Robbani, M.G., 2000. World trade organization and the ready-made garment industry of Bangladesh: A critical Analysis. Journal of Business Studies, 2(2), pp.16-27.

Sharif, P.A., Islam, M.E. and Kabir, R.A., 2015. A Study on Occupational Health & Safety Practices in RMG Factories of Bangladesh in Accordance with Compliance after Rana Plaza Incident. The International Journal of Business & Management, 3(5), p.214.

UNICEF, I., 2004. Addressing Child Labour In The Bangladesh Garment Industry 1995-2001: A synthesis of UNICEF and ILO evaluation studies of the Bangladesh garment sector projects'. ILO and UNICEF, New York and Geneva.

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