Bangladesh’s RMG sector yet to achieve basic corporate values, accountability: CPD

Corporate values and accountability in Bangladesh’s apparel sector is yet to reach the ‘basic’ level as most factories do not follow the principles for business operations let along publishing those, said the Centre for Policy Dialogue.

Corporate values, a set of guiding principles chalked out by the owners, assist a group in approaching a common business goal by working together.

The local think-tank came up with observation, while unveiling findings of a survey titled "Corporate Accountability of the RMG sector in view of Covid Pandemic: Challenges in Ensuring Workers' Well-being” through a virtual briefing on Saturday.

According to the survey, the corporate values maintained by RMG enterprises are yet to reach the ‘basic’ level as 82 per cent factories reported that they had some kinds of guiding principles for business operations but those were not made public.

However, about 72 per cent of Bangladeshi RMG employers claimed that they conduct their business following their guiding principles entirely.

About 77 per cent small factories and 60 per cent factories, who are not members of BGMEA and BKMEA, are behind in maintaining such principles.

“It is crucial for all the actors to assess the impact of their decision to all other stakeholders and play their role to uphold corporate accountability,” said Khondaker Golam Moazzem, research director at CPD.

Brands and buyers were largely unable to comply with their responsible business practices during the period of covid pandemic, said Moazzem.

These are reflected in terms of cancellation of orders, settled orders at reduced price and deferred payment, and employers accepted orders that did not cover the production cost, said the economist.

“Our corporate accountability is buyers and brands centric, which is a big problem for the sector,” said Kalpona Akter, executive director, Bangladesh Center for Workers’ Solidarity.

Corporate accountability and values should be aligned with the laws and it should be transparent. While buyers should bring under diligence so that they cannot cancel orders if they want, said Kalpona.  

She also asked the BGMEA to share more information on the arbitration settlement process.

Kalpona also claimed that the central data base was being used to black list workers who were raising voice against the malpractice and involved in trade unions.

“Workers do not feel free in speaking against any malpractices. They feel threatened to be ‘blacklisted’ in the database maintained by associations which would stop getting jobs in the RMG sector in the future, said Moazzem.

However, BGMEA president Faruque Hassan denied the allegation.

There are about 57 lakh workers in the central database and how it is possible to black list a worker among the big number, he said.    

Responding to the call on corporate accountability, commerce minister Tipu Munshi said, “We have to concentrate so that the corporate value does not affect.”   

“We have to think about the future of the workers and ensure their rights in line with the laws,” said Tipu. 

Brands and buyers were generally not responsive about supporting workers not to retrench and lay off from their partner factories.

Only 14.7 per cent factories received requests from brands not to lay off or retrench workers, on average in case of only 1 per cent orders of employers, brands agreed to accommodate related costs for not laying off, study findings showed.

As per the report, 14.4 per cent employers handled at least some orders where production cost was not covered during April-December, 2020 and this would account for 12.3 per cent of total orders.

“As there was lack of ethical practice by brands, they should not offer a price which could not even cover the costs,” said Moazzem.

Some brands support the employers through some other indirect measures as well although those were insignificant, he added.

In the case of 1 per cent surveyed employers, the brands agreed to accommodate the additional costs for not laying off workers through the orders cutting making charges.

On average, around 39 per cent of employers indicated that the brands provided a part of orders at higher or at least the same level during this period.

In the case of 1 per cent of orders, brands agreed to pay a higher price compared to the level of 2019.