Shin Shin Apparels, a ready-made garment (RMG) factory located in Ashulia, Dhaka, while offering more facilities to its workers than many other manufacturers, has been forced to halt its production due to the ongoing workers' unrest.
Despite multiple meetings between the factory owner and the workers, no resolution could be reached, leading to the decision to shut down operations. The factory has officially announced its closure under Section 13(1) of the Labour Act, invoking the 'no work, no pay' policy.
Mohammad Sohel Sadat, managing director of Shin Shin Apparels, told The Business Post, "We've engaged with the government officials, law enforcement agencies, and workers' leaders multiple times, but there's still no resolution in sight. Even with the deployment of the army granted magistracy powers, the situation remains unchanged.
"I have managed to complete around 3,00,000 pieces of clothing through other factories, but I’m unsure if buyers will place further orders. I’m feeling hopeless at this point and genuinely uncertain about how we will sustain our business."
Like Sohel Sadat, many RMG factory owners are increasingly fearful for the future of their businesses as the industry faces a critical period due to the ongoing workers' unrest that began on August 31.
While the instability is currently concentrated in the Ashulia and Savar areas, its impact has been contagious, severely affecting the entire RMG sector.
Volatile still
Worsening the situation, industry insiders report that buyers have already shifted around 20 per cent of their orders to Bangladesh’s competitor countries, such as India, Pakistan, and Sri Lanka, and are now hesitant about placing new orders in Bangladesh.
This shift is expected to cause a severe order shortage for the country's RMG manufacturers in the upcoming season, compounding their current struggle with negative growth.
Mohiuddin Rubel, director of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), confirmed to The Business Post that on Saturday alone, at least nine factories invoked Section 13(1) of the Labour Act, while six others were forced to suspend production as workers refused to perform their duties.
Amid this crisis, RMG manufacturers are questioning the incumbent government's role and whether there is any effective intervention to address the escalating challenges in the industry.
A RMG exporter, wishing anonymity, expressed concern about the ongoing labour unrest saying, “Such disruptions are a recurring challenge. In the past, we've managed to deal with these situations through the government and labour leaders. However, the interim government's response to this crisis is questionable.
“The police are merely observing, while the army is making efforts to control the situation which remains volatile still,” he explained.
“Our business is already under immense pressure due to declining orders and exorbitant bank interest rates exceeding 15 per cent. If we are unable to maintain production, we risk losing a significant portion of our business. How will we survive?” he asked, adding, “we don’t know who can intervene to resolve this crisis. However, it's clear that our future is jeopardised if the situation doesn't improve within the week.”
Path to fire
According to the BGMEA, the labour protests began on August 19 at the Dhaka EPZ gate, where a vested group started demonstrations which later spread to nearby factories. Initially, the impact was minimal, but the situation has since escalated, the trade body claimed.
Industry insiders, workers and law enforcement sources reported that on August 31, some 10,000 workers from the Nassa Group began vandalising factories.
Nassa Group workers also vandalised several other factories after owners and workers refused to halt production. Since then, the affected areas have witnessed continued labour unrest and frequent factory closures.
It is notable that Nassa Group Chairman Nazrul Islam Mazumder was closely tied with former authoritarian prime minister Sheikh Hasina. Recently, Bangladesh Bank dissolved the board of EXIM Bank, where Mazumder also served as chairman, citing financial irregularities. Concerns have been raised regarding his alleged involvement in deliberate attempts to incite disorder.
BGMEA leaders, law enforcement agencies and government officials have accused followers of ousted Sheikh Hasina and Indian agencies of inciting the protests to create unrest.
To control the situation, the interim government has deployed the Bangladesh Army across the country, excluding metropolitan areas, with magistracy powers. All commissioned officers of the military have been authorised to exercise their magistracy powers to manage any form of disorder.
