Cancellation or deferment of orders under the “force majeure” clause put the apparel makers and workers, in the value chain, in serious trouble
Saving the apparel industries and workers' from Covid-19 backlash requires effective coordination among brands, buyers, manufacturers, workers, and the government.
Economists, manufacturers and labour leaders made this observation at a virtual discussion organised by the Centre for Policy Dialogue (CPD) on Thursday.
The think-tank organised the talk "Covid-19: Workers and Employers of the RMG Sector Facing Crises: Government Initiatives and Way Forward" just a day before the seventh anniversary of the Rana Plaza tragedy.
"The spirit of shared responsibilities among the brands, retailers and buyers came under question since the start of the Covid-19 outbreak," said CPD Research Director Dr Khondaker Golam Moazzem in his keynote presentation.
"The cancellation or deferment of orders under the "force majeure" clause put the apparel makers and workers, in the value chain, in serious trouble.
"So the buyers' application of "force majeure" clause needs to be cross-examined by the International Chamber of Commerce (ICC). And the International Chamber of Commerce, Bangladesh (ICC, B) could facilitate the process.
"The partnership of the market players in the apparel value chain is under threat now and there are strong indications of downgraded adjustments and risks.
"The apparel makers and the brands should step up to make sure that the workers have money or work for the next six months. Also, the government can introduce a ration card for apparel workers, enabling them to buy rice at Tk10 per kg.
"And the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association should enhance their cooperation with other regional trade bodies in building cooperation on ensuring responsible business practices in buyers' purchasing practices."
CPD Distinguished Fellow Professor Mustafizur Rahman said Covid-19 brought three types of disasters: health, economic and humanitarian. "Brands and buyers are not out of their consequences."
"Now is the time to start a dialogue to overcome this situation together. Earlier we had such a dialogue process after the Rana Plaza collapse."
"We need to find ways to bring brands, buyers and the government closer. Also, the government needs to provide Tk8,000 cash incentive to workers who fall below a certain income level, every two months, to cut the pressure on factory owners.
"Resuming factory operations is challenging during the lockdown. But in the recovery phase, the factories can run by shifting and reorganising the manufacturing lines. But when a factory reopens it should follow health experts' opinion."
The BGMEA Vice president Arshad Jamal Dipu said the manufacturers are facing a liquidity crisis now.
"There is a $5 billion gap between our payable account and receivable account due to order cancellation and delay of payment."
"The BGMEA has decided to pay the workers' 60 percent of their gross salaries during the lay-off period, which is about 5 percent higher than the legal obligation.
"After the Rana Plaza collapse, in the last seven years, the apparel industry's work environment improved through Accord-Alliance intervention, but it lost its business capacity."
Readymade garments (RMG) labour leader Nazma Akter said, "Everybody benefitted from this sector. Now all of them will have an equal responsibility to pay."
"Brands and buyers should come forward to take care of their workers during this disaster.
Nazma also called for a joint dialogue among government, factory owners and workers for making brands more responsible.