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Labor Unrest in the Rmg Sector of Bangladesh: a Public-private Cooperation Perspective

Mohammad Aminul Islam Khan
Student
Master in Public Policy and Governance Program, Department of General and Continuing Education, North South University, Dhaka, Bangladesh

Abstract/ Executive Summary:

In recent years, labor unrest in RMG sector of Bangladesh has been a matter of serious concern. The RMG industry of Bangladesh started its modest journey in late 1970s and within three decades, it has been a flourishing sector. The contribution of the RMG sector in the national economy is great. It is the highest foreign exchange earning sector. It has been able to create employment opportunities for about 3.5 million of people, most of whom are poor, uneducated and unskilled women from the rural area. Besides, it has been able to attract foreign direct investment, accelerate the industrialization process, alleviate poverty to a certain extent and create a good image of Bangladesh in the world. To a certain extent, it has been able to bring about a positive change to the socio-economic condition of the country. But this sector is infested with a number of problems which are threatening the very existence of this industry. Labor unrest is one of the serious problems. The present study is designed to unearth the causes of labor unrest in the RMG sector of Bangladesh. It also attempts to address the problem from a public-private cooperation perspective. The RMG sector of Bangladesh has emerged entirely through private entrepreneurship. But it is not beyond government or public concern. In all respect, it is a huge industry. Solving labor unrest in the RMG sector is not an easy task. It requires a collective effort. As the sector involves stakeholders from both public and private sector, cooperation between these two sectors can be a better option to solve the problem. Four areas regarding labor unrest in the RMG sector such as i) investigating the incidents of labor unrest, ii) maintaining law and order situation, iii) bridging gap between owners and workers and iv) representation of the workforce in the decision-making process are identified where public and private sector can work together to solve the problem. For collecting data the study has used questionnaires and interview methods. 30 workers from different garment factories of Dhaka, Savar and Gazipur have been brought under the questionnaire method while 20 respondents from both public and private sector (owners and managers of various garment factories, members of BGMEA, political leaders, members of civil society organizations, government high officials, member of law enforcing agency) have been interviewed. The major causes of labor unrest have been explored from the responses of the respondents. These are- irregularities in payment, low wage, mistreatment of the workers by managers/ officers, rumor, absence of trade unionism, conspiracy, non-execution of labor laws, unruly nature of the workers and political intervention. In key issues regarding labor unrest such as investigating the incidents of labor unrest, bridging the gap between the factory owners and workers, improving law and order situation, the majority of the respondents want the involvement of ‘tripartite committee’ (a committee formed by the representatives of Government, factory owners and workers) which indicates a bright prospect of public-private cooperation in addressing labor unrest in the RMG sector of Bangladesh. If private sectors with their first-hand knowledge and experience cooperate with public agencies having power and authority, labor unrest in the RMG sector of Bangladesh is supposed to be solved.

Keywords: Labor unrest, Public-Private partnerships, Problem, Wages, Unskilled Women, Workers

Location: In Bangladesh

Start Date:

End Date:

Program Area: Resource Development and Management

Commodity: Labor, Environment, Socio-economic status, Labour wages

Objectives:

To unearth the causes of labor unrest and search the areas where Public-Private partnerships can work to address the problem.

Methodology:

Till now Bangladesh is known as an agricultural country. Except, RMG sector, there is no other mention-worthy industrial establishment. It is the RMG sector which has accelerated the process of industrialization in the country. Bangladesh is one of the most densely populated countries of the world. With limited land area and natural resources, the increasing population is creating heavy burden on the unemployment problem. The RMG sector has been able, to a great extent, to relieve the country from the burden of unemployment by creating employment opportunities for more than three million people. Bangladesh is known as a poor and over-populated country stricken with a lot of problems. RMG carrying the label of “made in Bangladesh” is working to create a positive image of Bangladesh in the world. It has also proved that the heavy burden of the population can be turned into an asset by using them as the workforce. Garments Industry occupies a unique position in Bangladesh's economy. It is the largest exporting industry in Bangladesh, which experienced phenomenal growth during last three decades. The industry plays a key role in employment generation and in the provision of income to the poor. More than 3.5 million workers are directly and more than ten million people are indirectly associated with the industry. The sector has also played a significant role in the socio-economic development of the country. : On the supply side, several factors can be mentioned that have contributed to the growth of Bangladesh as an apparel exporter. First as the wages of the East Asian Countries rose and quota restrictions limited shipments from these countries to particularly the US markets, apparel firms from those countries established production operations in other countries with cheaper labor and with few or no quota restrictions. In the second half of 1970s, business houses from the Republic of Korea, Daewoo in particular, ventured into Bangladesh to transfer the technology of production and to provide marketing channels. The number of garment exports business from this arrangement remained small but awareness as regard the prospects developed within the garment industry. In 1978, fewer than a dozen companies were in operation. The number grew to 80 just in three years. Since then, the growth of the industry has been fabulous. The Korean investment provided the garment industry the decisive advantage without which a much longer time would have been taken by the Bangladesh garment industry to attain its present status.

Source of Information: Thises on labor unrest in the RMG sector of Bangladesh, June 2011

Article Link (Online Journal):

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

In respect of production, export, earning foreign exchange, contribution to GDP, employment, investment and business mobilization, RMG sector of Bangladesh has been a flourishing industry. Its importance has crossed the geographical boundary of the country. Garment business of many international markets in Europe and North America depends on production of garment factories of Bangladesh. It involves stakeholders from various corners covering public, private and international organizations. Given the fabulous volume of trade of the industry, the increasing trends of labor unrest in the RMG sector has been a matter of serious concern. Solving labor unrest in this sector is nearly impossible by a single agency like the government or BGMEA or a civil society organization. Findings from data analysis show that public-private cooperation is the most chosen way of addressing labor unrest in the RMG sector of Bangladesh. The objectives of this present study are to find out the causes of labor unrest and identify areas where public and private agencies can work to address the issue. The responses of the respondents unfold that irregularities in payment, low wage, mistreatment of the workers by managers/ officers, rumor, absence of trade unionism, conspiracy, non-execution of labor laws, unruly nature of the workers and political intervention are the major causes of labor unrest in the RMG sector of Bangladesh. The causes are to be diagnosed through investigation. Findings of the study suggest that investigating the incidents of labor unrest. For investigation, most of the respondents like to assign the task with the tripartite committee which emphasizes the need of cooperation between public and private organizations in this issue. For a flourishing industry like RMG, maintaining law and order situation in the industrial area is very important. During labor uprising, it was found that unidentified outsiders entered the factory area and participated in violence in the name of workers. To control the situation sometimes law enforcers use to rely on coercive measures and disperse the agitating workers. However, it often deteriorates the situation. There is another allegation maintained by the garment workers against the law enforcers that latter work in favor of the garment owners and against the workers. To ensure sound law and order situation, co-operation between the conflicting parties is a crying need. The law enforcers, with all impartially can help trace the culprits into book and award exemplary punishment. On the hand, the factory owners, managers and garment workers have to have full support to them, provide genuine information to them and help in time of the investigation. To avert further unrest, intelligence agency can work in the garment industry area. Factory owners and garment workers are two most vital actors in RMG sector. They are complementary to each other. The strength of the factory owners is that they are rich, organized and influential in the society. On the other hand, the huge number and unity of the garment workers are their power. Good relationship between the workers and owners is essential for the production as well as boost of the industry. Majority of the respondents (70%) perceive that there exists a communication gap between the owners and workers of garment factories. ‘Tripartite committee’ is preferred by 48% of respondents to bridge the gap between the owners and workers. Involving labor force in the decision-making process is important in addressing labor unrest in the readymade garment industry. It is perceived by 92% of the respondents. While exploring the causes of labor unrest, it is found that irregularities in payment and low wage rank top among the causes of labor unrest. When this thesis is taken in hand, it was time for declaring new wage scale for the garment workers. There was tough bargaining between the factory owners and labor-leaders for the fixation of minimum wage. Till now Bangladesh is known as an agricultural country. Except for, RMG sector, there is no other mention-worthy industrial establishment. It is the RMG sector which has accelerated the process of industrialization in the country.They are also to be included in various committees with the factory owners and managers. Finally, it can be concluded that public-private cooperation in addressing labor unrest in the RMG sector of Bangladesh can be a viable and effective measure. However, level of mutual trust, communication and co-operation between workers and management of a garment factory as well as public and private sector should be uplifted.

Knowledge Management: Thesis