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Bangladesh: "Our garment industry is one of the safest in the world today"

By Regina Henkel

3 Jun 2021

Business |INTERVIEW

Faruque Hassan is the new president of the Bangladesh Garment Manufacturers Association (BGMEA). The country has been hit hard by the Covid-19 pandemic, and with the looming expiration of the Bangladesh Accord, a new tug-of-war has begun between brands, factories, unions and NGOs over responsibilities and accountability for the health and safety of the garment industry, which is being watched with great interest internationally.

Bangladesh is the second largest garment producer in the world after China. The garment industry alone is responsible for about 85 percent of the country's total exports. Since April 2021, a new man has been at the helm of this powerful industry: Faruque Hassan. He was elected as the new president of the BGMEA, which organizes more than 2,300 garment manufacturers and exporters in the country.

Hassan, who is also the managing director of knitwear producer Giant Group, where he oversees several thousand employees, takes office in challenging times. It’s not just the pandemic that’s causing difficulties for the country's garment industry.

The so-called Bangladesh Accord is also set to expire in the coming months after being extended last week, posing new challenges to relations between producers, brands and unions, which were already strained in light of the Covid crisis.

The Accord is a legally binding international agreement on fire and building safety in Bangladesh concluded in 2013 between companies, trade unions, associations and NGOs in response to the devastating Rana Plaza disaster.

When the agreement expires, the monitoring of safety standards is to be transferred to the government agency RMG Sustainability Council (RSC), according to the Accord. However, this is subject to the condition that the approximately 200 brands and retailers that have since joined the Accord also sign a similarly binding agreement for the RSC. But so far that hasn’t happened.

As a result, the unions involved have threatened to leave, but have now extended their ultimatum by three months.

We spoke with Faruque Hassan about the current situation in Bangladesh.

Mr. Hassan, you took over the position of the President of the BGMEA at a difficult time. What are your current priorities?

The industry is unprecedentedly disrupted by Covid-19 as far as business operation and manufacturing processes are concerned.

We have lost 6 billion dollars in export in FY2019-20 compared to the preceding fiscal year, and during July-April of the current fiscal year 2020-21 exports declined by 8.72 percent compared to the same period in FY2018-19. So, right now, facing the pandemic and staying on course will be the first priority for us, and our strategy would be to enhance collaboration among the stakeholders. Considering the livelihoods of millions of workers and their dependents, ensuring continued uninterrupted operation of manufacturing of the RMG factories in a safe and hygienic working environment is the key priority.

Protecting the industry from further adverse consequences, supporting factories to recover and turnaround from the damages, and ensuring continued monitoring and enforcement of the health protocol at factories are some of the priorities we are working on. At the same time, we will endeavor to explore newer avenues of enhancing our competitiveness through efficiency improvement, automation, digitization and cost optimization.

How did the discussion about Rana Plaza and the Accord change the industry in your country?

The collapse of Rana Plaza was the most unfortunate industrial accident for us. But the incident marked the beginning of a new era for the industry through unprecedented steps including safety overhaul initiatives across the industry, legal reforms and administrative capacity building, and the collaboration we have witnessed among the supply chain partners and the development partners.

Today, Bangladesh's RMG sector is a front-runner in factory safety, responsible manufacturing and workers’ wellbeing. In the past eight years since the incident, a lot of changes have taken place in this sector. Today, 100 percent of our factories are checked for building, fire and electrical safety. The factory inspections reports are disclosed at public domain online which has set a unique example in the world on the issue of workplace safety and as a result, Bangladesh has emerged probably as the safest and most transparent readymade garment producing country.

In this journey the role of the Accord and other initiatives like Alliance, ILO BetterWorks that helped us to improve the overall situation cannot be overstated. From the very beginning, the challenge was to make the industry safer and compliant which is transparent. All of our factories extended the highest possible assistance to the Accord to carry out its operation in terms of safety audits, remediation and training. It was a challenging task indeed but we could make it possible since there was positive and honest intention by the factories to change, and they did it.

The Bangladesh Accord is set to expire in the coming months. What does that mean for you?

None of us ever expected such a catastrophe as Rana Plaza, however the industry took that incident to turn around and make the workplaces safer factory by factory. In that process of transformation, we have received assistance from all the stakeholders including buyers, development partners and from governments. With the collaborative spirit we have taken numerous initiatives that have crowned us the status of second highest ethical garment manufacturing country in the world.

The commitment the industry has demonstrated, the efforts and resources invested and the improvements we made in safety and empowerment of the workers are praised globally.

We have transformed our factories and become leaders in safety, sustainability and ethical manufacturing.

That is, the situation is different today and you prefer a new approach?

However, external assistance was required for a complete check of the safety status and for ensuring remediation in the quickest possible time, but such external and private regime cannot be a sustainable solution for an industry. Accord and Alliance played critical roles, yet the need for national capacity building cannot be set aside.

This has been endorsed in the Sustainability Compact that Bangladesh should have its own safety mechanism and authority. With the aim to build an independent national safety, compliance and sustainability monitoring regime for the ready-made garment industry, RSC (RMG Sustainability Council) was established. All policies and procedures were developed by the Accord, including consensus-based decision-making, and standards for all health-safety protocols have been carried over to the RSC. One of the main objectives of RSC is to ensure neutrality, transparency and credibility through a multi-stakeholder approach. RSC is operating under the legal framework of the Bangladesh Government and in close cooperation with the relevant ministries including Ministry of Commerce, Ministry of Labor & Employment and Department of Inspection for Factories and Establishment (DIFE). This initiative will strengthen our national capacity and will bring an end to the unilateral safety regimes and establish the route to national monitoring. So any attempt that may weaken the national capacity building initiative which has already started through the establishment of RSC will falter its sustainability.

The brands that have signed the Accord are currently trying to avoid responsibility by setting up an umbrella organization themselves. This would mean that the individual brands can no longer be legally prosecuted if their suppliers disregard safety rules. What do you think of this approach?

I want to mention and commit clearly and honestly that when it comes to safety it should be a change in the mindset. Safety and ethical manufacturing practices should be internalized in the business model, and create a difference between sustainability and vulnerability.

This cannot always be guaranteed by the enactment and enforcement of law, if there is no positive intent and commitment. It shouldn’t be only expected that legally binding commitments will only guarantee compliance, rather an enabling environment and culture should be developed. I am not able to comment on brands setting up umbrella organizations, but anything that has a core mandate to ensure due diligence in the supply chain and has the support / collaboration of the majority stakeholders should be appreciated.

There are also voices that do not appreciate this interference in the affairs of your country. They say it is a form of paternalism. How do you see this?

We have never been biased or had any pessimistic view about any external initiative to come and support us when we needed them, and in the past eight years we have worked with utmost sincerity and consideration for the wellbeing and safety of our workers and employees.

Our factories were always supportive to the private initiatives as well as to the national one. Even though we faced a lot of hiccups in this process of transformation, which is quite obvious, the entrepreneurs were patient, honest and positive. Thus we have carved a story of success and collaboration.

We have set an example for the whole world of how collaboration and partnership can turn things around. We continue to make great progress in our collaborative work with ILO BetterWorks, UN and many other NGO engaged in the area of workers safety, women’s empowerment and many more initiatives. If there were the mentality of paternalism, the story would have been different and we could not have come this far. Therefore, the notion of such mentioning of paternalism is not believed to have come from a positive intent.

Was the Accord a competitive disadvantage for Bangladesh? Has the Accord caused buyers to shift orders to other countries that do not have such requirements for brands and factories?

Since the emergence of the Accord our exports have grown from 21 billion dollars to 34 billion dollars, and global brands and retailers are showing their confidence in us as we continue to add value to their business. This is also true that the safety regime that is being enforced by the Accord has certain cost implications on the suppliers, which makes the field uneven for Bangladeshi manufacturers. So it’s really difficult to assess to what extent such an uneven playing field has distorted our trade and market.

We are committed to the positive move taken by the industry, and we believe sustainability itself ensures its pay off. So, even if buyers decide to place more orders to non-Accord countries (or countries where safety standards are not up to the level that we have achieved), that will cause a certain cost taking into account long term business viability. We will continue to lead in ethical manufacturing as it has now become part of our DNA.

Bangladesh
Bangladesh Accord
BGMEA
Faruque Hassan
Rana Plaza