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Dhaka Apparel Summit focuses on RMG industry's sustainable future

By Simone Preuss


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Business |IN-DEPTH

After much agitation in the forefield, starting with the Ashulia protests and a subsequent planned boycott by seven international buyers , the Dhaka Apparal Summit took place as planned on February 25 at the Pan Pacific Hotel in Sonargaon in the Bangladeshi capital.

Organised to aid in the development of the textile and apparel industry in Bangladesh and first held in 2014 , this year's edition again brought together hundreds of attendees and dozens of speakers, among them the world’s leading experts in their field. This year's topic was all about establishing a more sustainable apparel supply chain with the specific aim of creating a better future together. Thus, three panel discussions, titled "Business policy & environmen: towards a better Bangladesh", "Collaborative and responsible sourcing for sustainable growth" and "Bangladesh apparel industry: transformation and the road ahead" offered an inter-active approach and the opportunity for a valid exchange of ideas.

True partnership between byers and manufacturers needed

Speaking of a better Bangladesh, Shwapna Bhowmick, country head, Marks & Spencer Bangladesh & Myanmar, pointed to the importance of a true partnership between buyers and manufacturers and lauded the support Marks & Spencer has been getting from its suppliers in Bangladesh, its largest sourcing country, whenever the company has been wanting to push the boundaries. This has led to product diversification from swim shorts to denims, a capacity expansion and shorter lead times. Where M&S ordered simple products like basic polo shrts and denims in the beginning, it has now moved up to value-added products like dresses and tailored suit jackets.

Bhowmick also mentioned the true partnership with the workers who are very young, enthusiastic and keen to learn, which is why, in her opinion, business grew in Bangladesh. In summary, she asked: "How do you encourage the brands? How do we change the image and how do we work together and present the image of Bangladesh as half full rather than half empty?"

Christopher Woodruff, professor of development economics at the University of Oxford, brought up the interesting point that Bangladesh's main competition is not other RMG-producing countries like India and Vietnam but its own booming sector, which is competing for talent. "Workers have other opportunities now," Woodruff said, "the sector needs to compete for that talent." Among the solutions he gave were moving women into management roles, better training of the workforce and lower and mid-level managers and competitive wages.

Consumers care about what happens in sourcing countries

Speaking about Canada's involvement with Bangladesh's RMG sector and the fact that Bangladesh is the second largest source of Canadian merchandise imports in South Asia, Robert Mc Dougall, executive director for South Asia global affairs of the government of Canada, stressed the fact that buyers want assurances about issues such as environment, gender, labour rights and worker health. "Canadian buyers want products that meet the demands of their customers and do not tarnish their labels with bad publicity overseas. Buyers also want assurances that their markets and their major sources of goods are stable and dependable. What happens here in Bangladesh really does register in Canada," he emphasised.

Many speakers referred to the recent events in Ashulia and worker relations in Bangladesh. "In December, Bangladesh took a giant disappointing step back on labour rights. ... Ashulia has damaged Bangladesh's image and reputation as a reliable source for garments," said Marcia Bernicat, US ambassador to Bangladesh. "How will they sell garments in a country where a large numbers of workers and union leaders are suddenly arrested, fired or suspended simply because they or they fellow workers asked for a wage increase?", she asked.

Nazma Akter, executive director of the AWAJ Foundation, called the Ashulia issue "a wake-up call for everyone" and stressed that the workers' dialogue is very important and that constructive dialogue with the management is an absolute necessity, as well as the workers' respect and dignity. She also pointed to the fact that as the world's second largest exporter of ready-made garments, wages in Bangladesh are still only at 68 US dollars a month, among the lowest in the region.

"A response to [Ashulia] will determine how viable the Bangladesh RMG sector will be in the future," stated Bernicat and called for "significant changes in the future [in terms of] infrastructure, financing, and most importantly, a fundamental shift in how the industry relates to its workers." Bernicat also pointed to the fact that "remediation efforts have stalled, especially in factories outside the purview of the Alliance and the Accord".

Finishing remediation process is key

This point was also mentioned by Mahmud Hasan Khan Babu, vice president of the Bangladesh Garment Manufacturers & Exporters Association (BGMEA), the summit's organising body. He counts the completion of the remediation process as one of the sector's priorities and recalls that 68 percent of Alliance factories and 75 percent of Accord factories have done their remediation work and are expected to complete them by the end of this year. The BGMEA's duty is to convey this message to all factories, including those that are not covered by either agreement or are not BGMEA members and to change the prevailing mindset of those entrepreneurs that "they do not need to do anything".

For keynote speaker Srinivas Reddy, country director of the International Labor Organization (ILO) in Bangladesh, the solution for transformative change was simple: The mistrust between workers and employers needs to be changed into a high-quality partnership. "Sell that dream of 50 billion US dollars [export target by 2021 with the workers, then you will achieve your goal," he advised. "The respect for labour rights is a key factor; it needs to be embraced as an asset rather than a liability."

Thomas Klausen, CEO of Dansk Fashion & Textile, sees vocational and soft skill training as the need of the hour, together with trust and collaboration. He also cautioned against racing for cheap goods, which Bangladesh is currently doing, because of the risk of stagnation. "Suppliers and buyers need to change the race to the bottom," he said, adding: "We need to rethink what we mean by responsible business behaviour. Bangladesh should seize the opportunities from existing initiatives. It is already ahead in competing markets and can take a front row in sustainability." Klausen also pointed to the fact that working with busines-driven CSR will often lead to savings.

Speaking on how the value chain is going to support sustainability, Peter McAllister, executive director of the Ethical Trading Initiative (ETI), summed up the discussion by equally placing the responsibility on the buyers' and suppliers' shoulders: "I do not believe that the price is fixed on the high street. Therefore, it is not up to suppliers in Bangladesh to find that value," he said. "The business model ... [in production countries all over the world] is flawed. We need decent conditions in decent factories; it has to be a shared conversation along the value chain: that could be productivity, efficiency gains, taking the price back to the consumer. Brands and buyers own as much of that conversation as suppliers and manufacturers."

Photos: courtesy of Dhaka Apparel Summit
Dhaka Apparel Summit