Compliance Practices in Garment Industries in Dhaka City

[Shakib]

Compliance Practices in Garment Industries in Dhaka City


Abstract
The readymade garment RMG industry in Bangladesh has experienced an
unprecedented growth .over the last three decades and become a fast growing
industry in Bangladesh. This industry plays a vital role in the economy in terms
of export earnings, employment generation ,poverty alleviation and empowering
the woman. For development of this sector, Bangladesh needs to emphasize on
the factory working environment, social issues, labor relations and compliances
with codes of conduct. This paper is based on descriptive and inferential
research. The paper suggests the improvement of factory activities through
compliances and finds out a close relationship between compliance and
productivity.

INTRODUCTION
The readymade garment (RMG) industry of Bangladesh commenced its journey
in the late 1970s and within a short period of time emerged as an important player in
the economy in terms of export earnings, employment generation, poverty
alleviation and empowering of women. Bangladesh exports its RMG products
mainly to the United States of America (USA) and the European Union (EU).
Garments exports from Bangladesh have been growing at an impressive rate in
recent years. In 2007-08 alone, the garment export earned, a record level of
US$10.7 billion in 2007-08. Moreover, it accounts for over 75 percent of the
country's total export earnings, provides employment almost 5 million people,
accounts for over 10 percent of the country's GDP, and contributes around 40% of
its manufacturing output.
The prospects of RMG sector, however, in Bangladesh not only depends on
availability of cheap labor and government's liberal policy but also depends on
compliance with codes of conduct. Compliance means to comply with something wrong or yield to the wishes of another. RMG sector of Bangladesh needs to improve the
factory working environment and various social issues related to the industry.
International buyers are very particular about compliance with codes of conduct
before placing any import order. Poor housekeeping, storage system, ineffective
monitoring and controlling system, disorganized production layout, lack of team–
based work, rented factory premises, narrow staircases, closed environment,
insufficient light and air, clean drinking water, separate wash room for male and
female, etc. are common practices in most of the RMG factories in Bangladesh.
Bangladesh Garment Manufacturers and Exporters Association(BGMEA) and
Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) set
standards for compliance like factories must have alternative stairs, basic fire
equipment, approved layout plan from concerned authority for ensuring safe
building construction, group insurance for workers, hygienic sanitation facility and
first aid appliance, as well as ensuring minimum wages and flexible jobs for the
workers. There are many recognized compliance bodies worldwide like ILO, ISO
14001, WRAP, BSCI, ETI, SAI, FLA. Owners of RMG factories and government
can seek help from those bodies to improve the standard of environment as well as
products of theie industries. In this paper, the existing compliance practices of RMG
factories in Bangladesh, partcularly factories located in Dhaka city, are examined.
This paper also tries to reveal the acceptability of compliance provisions to the
employed workers.

Objectives of Study
The objectives of the study are as follows:
i. To provide an overview of the present compliance situation in the garment
factories in Dhaka city.
ii. To find out the acceptability of compliance provisions among the existing
employee group.
iii. To find out the problems and prospects of compliance in garment industry.

LITERATURE REVIEW
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA)
has formulated its own code of conduct for the industry, in collaboration with the
major trade unions, and has set up a compliance unit that monitors labor conditions
in its members' factories (UNIFEM 2008). In 2006, the Government passed a new
labor code, after 12 years of deliberation and activism. It applies to all workers, and
the new sections relevant to the garment industry include written contracts and
identity cards, timely payment of wages, revised minimum wage, paid maternity leave and explicit laws against sexual harassment. The export-quota system and the
availability of cheap labor are the two main reasons behind the success of the
industry (Haider 2007). But unfortunately in many RMG factories the labors are
often seen being deprived of their rights. According to Amin (2009), Coordinator of
the Bangladesh Garment Workers Unity Council (BGWUC), "The garment workers
of Bangladesh may be the most deprived labor force in the world. Most are paid
between US$14 and US$16 per month, the lowest salary in the world." He also
added "Only a few factories here maintain international standards, and many of
them do not implement any worker health and safety measures." The Financial
Express (2008), a daily English newspaper of Bangladesh, referred to a recent study
conducted by a local think tank that has revealed that investors in the RMG sector
have more than doubled their earnings in the past seven years. Despite this increase,
however, it is a remorse that many owners are not paying their laborers regularly
and all sorts of extraneous arguments are put forward for non-payment of their
salaries. New Age (2009), another prominent daily English newspaper, reported that
the majority of garment factories do not yet comply with many wage and workplace
standards specified in the tripartite agreement of 2006. At the global level,
campaigns have drawn attention to abuses of workers' rights in global supply chains
and put pressure on international corporations to take greater responsibility for
employees through corporate codes of conduct. Local employers in the Bangladesh
garment industry must now demonstrate compliance with these codes to win orders
from international buyers (UNIFEM 2008). According to International Labor
Organization (2010), buyers make sourcing decisions based on four factors: price,
quality, how long it takes to get produce to the marketplace and social compliance,
including compliance with labor standards.
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 that sweatshop concept is totally taken care of and the code of conduct
must be stretched towards achieving the objectives of social compliance issues (Das
2008). Research showed that when companies that dealt with foreign buyers
adhered to codes of conduct, conditions improved for the workers in the factories
stated by (Mahmud) in one of her articles. In some large factories, health and safety
standards improved and other benefits were introduced such as timely payment of
salaries, proper overtime rates and maternity leave. Haider (2007) in his study stated
that the social dimensions of the RMG industry are getting more attention from
consumers, social workers, welfare organizations and brand name international
buyers. International buyers are very particular about compliance with codes of
conduct. Currently, many international buyers demand compliance with their code "

METHODOLOGY
Both descriptive and inferential research were conducted to identify different
dimensions of compliance of garment industry, such as housekeeping storage,
working environment, production layout and controlling system, and management
policies and practices in Bangladesh. The focus of the research is the lower level
male and female workers of the garment industries located in Dhaka. Both primary
and secondary sources were used in this study. Primary data was collected through a
structured questionnaire (with a likert type 5 point scale) from 150 operating level
employees of 10 garment industry located in Dhaka city. For primary data,
interview survey was carefully designed and conducted to evaluate the technical
compliance performance of garment industry. Secondary data were collected by
consulting official documents of garment industries, internet, industry manuals,
audit reports, annual reports, articles, etc. The data were collected during 2009.
Statistical Package of the Social Sciences (SPSS Software) was used for analyzing
data.

Hypotheses
H0: Garment industries in Dhaka city are practicing compliance policies and
procedures.
H1: Garment industries in Dhaka city are not practicing compliance policies and
procedures.

EMPIRICAL FINDINGS
This study has tried to measure the extent to which the garment industries are
following their compliance obligations or not. Collected data were analyzed and
interpreted in line with the objective of this study. From the analysis, the mean and
standard deviation of all variables have been calculated separately. Means are
indicative of the variables acceptability, on the basis of compliance standard,
whereas standard deviations are idicative of deviation among the respondents
response.
The respondents were asked about housekeeping storage facilities of the
organization. In responses to this question, 40 percent of the respondents strongly
agree that their organization has a good housekeeping facility while 21 percent of
the respondents are agree about this statement, with a mean of 3.93 which lies in
between Agree and Neutral of the scale and standard deviation 1.2. The respondents
were asked whether the storage facility is well organized or not. About 67 percent
replied that their organizations have a very well organized storage facility, with a
mean of 3.93 whice lies in between agree and neutral of the scale the and standard
deviation 1.2. From the analysis it is noted that 33.33 percent are strongly agree
with the statement that the operations are handled efficiently, whereas 13.33 percent
are strongly disagree with this statement, with a mean of 3.53 which lies in between
Agree and Neutral position and standard deviation 1.51. Although majority of the
respondents (63.34%) are either strongly agree or agree that the current compliance
systems have improved work posture for greater efficiency, 20 percent respondents
have given negative answer to this question. In this case the mean is 3.8 which lies
in between Agree and Neutral position and standard deviation is 1.62.

CONCLUSIONS AND RECOMMENDATIONS
The international textile business is tremendously competitive. In the context of
growing competition among RMG exporting countries and consumer preference for
products that meet internationally recognized standards, it is essential for
Bangladesh's RMG suppliers to improve compliance in their factories. RMG
authorities in Bangladesh should implement effective policies on housekeeping,
material storage and handling, work station design, fair wage, fair disciplinary
action, and workplace violence. RMG is, however, the most flourishing sector in
Bangladesh and it would be imperative that each and every issue related to
improvement of productivity as well as quality is strictly followed to survive in the
global market. Owners of RMG factories must emphasize on employment
conditions, working conditions and occupational safety and health management to
be more competitive in the international trade of textile and clothing business era.
Moreover, regular practice of compliance codes of conduct can bring higher price of
products, lower labor unrest, less worker turnover rate, highest worker morality,highest productivity and product quality, smooth industrial relation as well as global
image and reputation. So, Bangladesh RMG firms need to deal with above
mentioned compliance issues strictly in order to remain competitive in the global
market.

Recommendations
1. RMG factories should ensure proper production and official layout with
perfect place materials, tools. Organization should tape up unused machine
and keep it away from the manufacturing plant safely.
2. All of the employees related with this potential industry should be
enthusiastic to avoid the conflict of interests. This means that employees
and employers should not place themselves in situation that might face
them to choose between their own interest, business or financial interest and
the interests of readymade garment industries.
3. Workers should be properly seated for waist and foot rest. Workforce is the
heart of anyorganization. RMG factories should guarantee the workforce's
proper rest for the fix time which can easily be helpful for the productivity
of this industry.
4. Industries should provide chair with backrest. Fatigue will surely arise
during work in a place; to remove such type of tiredness garment factories
should make available place with suitable chair which can ensure backrest
of the workforce in the right time.
5. RMG industries should have adequate leg space to allow easy leg
movement of the workers. That means layout of the manufacturing plant
should be more spacious.
6. To be competitive, industries should comply with international standard
code, such as ISO or imported countries standard code.
7. Factories should have effective fire distinguisher and separate and adequate
space for entrance and exit of the workers. Every displays and control
systems should be clear to all employees and workers.
8. RMG industries should ensure health, safety and standard work
environment for the employees. In this case, organizations should provide
proper ventilation, sufficient light and air. For organizing such facilitiesm
owners should comply at a minimum with legal standards, minimize the use
and discharge of hazardous substances and promote recycling of resources.

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