Buyers’ contribution was only 0.03% of the Tk63,000cr in total financial grants and stimulus packages allocated to the RMG sector by the govt, donor agencies and buyers
International buyers and retailers of the readymade garment sector in Bangladesh did not maintain ethical business practices amid the Covid-19 pandemic, because they showed a huge gap in their responsibility to the suppliers in terms of payment.
Transparency International Bangladesh (TIB) Executive Director Dr Iftekharuzzaman made the remark at an event on Thursday, adding that though some of the buyers have taken measures in name only to protect the RMG workers, those were nearly not enough.
The TIB's findings, published at the event titled "RMG sector in Covid-19 crisis: Governance Challenges & Way Forward," revealed that during the period of April to June this year, the suppliers needed Tk12,692 Crore to pay their 33 lakh workers.
The Bangladesh government had allocated Tk9,118 crore as a stimulus during that period to allow the payment of workers' salaries, but the buyers contributed only Tk19.71 crore as an overall financial aid.
The buyers' contribution was only 0.03% of the Tk63,000 crore in total financial grants and stimulus packages allocated to the RMG sector by the Bangladesh government, donor agencies and buyers.
Of this sum, the Bangladesh government allocated around Tk62,000 crore in the RMG sector. Around Tk52,800 crore from that amount remains earmarked as working capital for the sector.
So far, the government disbursed more than Tk9,000 crore as stimulus for paying salaries of the RMG workers, but it was 27.6% less than the total requirement. As a result, about 14 lakh or nearly 42% garment workers did not get their wages from this package, claimed TIB.
The TIB findings also mentions that during the period of February-April this year, international buyers cancelled or withheld orders worth $3.18 billion, causing 418 factories to shut their doors in Bangladesh.
At the TIB event, Dr Iftekharuzzaman said, "A number of buyers have been avoiding their responsibilities towards the suppliers and workers, and putting that burden on the shoulders of factory owners.
"As a result, the Bangladesh government had to shoulder the most responsibility."
What do industry insiders say?
When approached for comments on the TIB report, the Bangladesh Garment Manufacturers and Exporters Association's (BGMEA) PR and Media Standing Committee Chairman Khan Monirul Alam Shuvo declined to comment on the matter, adding that they need at least 24 hours to analyse the study.
However, several factory owners said TIB's research methodology and definition of garment factory is misleading. The civil society organisation has mixed up the definitions of export-oriented garment factories and local garment factories.
According to an industry insider, who wishes to be anonymous, an export-oriented factory has to install a minimum of 100 machines to become a member of the BGMEA and 80 machines for getting a BKMEA membership.
As a result, an export-oriented factory would have to employ a minimum of 200 to 250 workers.
However, the TIB in a query at the event mentioned that their survey included factories that have as low as 6 to 10 workers.