Govt to support ailing factories hit hard by labour unrest
The 10-member inter-ministerial committee has been tasked with profiling factories which are at risk of closure by examining their financial status, debts, and unpaid wages to workers, according to a 27 October office order from the Ministry of Labour and Employment
The government has formed a special committee to aid the struggling ready-made garment (RMG) and non-RMG factories, particularly those affected by recent labour unrest.
The 10-member inter-ministerial committee has been tasked with profiling factories which are at risk of closure by examining their financial status, debts, and unpaid wages to workers, according to a 27 October office order from the Ministry of Labour and Employment.
The committee has been asked to submit a report to the ministry within seven days, outlining potential solutions to address the issues faced by these factories.
Led by Arif Ahmed Khan, the additional inspector general of the Department of Inspection for Factories and Establishments (Dife), the committee includes representatives from the Finance Division, Bangladesh Army, Industrial Police, Bangladesh Garment Manufacturers and Exporters Association (BGMEA), as well as factory owners and workers.
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Arif Ahmed Khan told TBS that the committee, which has the power to include experts if necessary, has already begun its work.
Labour and Employment Secretary AHM Shafiquzzaman told TBS yesterday via WhatsApp from Geneva that the committee will identify the barriers preventing factories from providing service benefits to workers.
"Based on the committee's recommendations, the government will take necessary actions to help the factories overcome their challenges," he added.
After fall of Hasina, some owners fled, factories closed
Following the fall of the Hasina government on 5 August, many factory owners closed their businesses and fled while some were arrested.
Many factories have yet to pay workers' salaries for August and September, leading to labour unrest in the garment sector. Several factories in Ashulia, Savar, Tongi, and Gazipur remain closed.
According to BGMEA data as of 30 October, out of 2,119 factories, 2,107 are currently operational. Twelve factories are either temporarily closed or have workers on leave, while 21 factories have not yet paid salaries for September, and two for August.
In the Ashulia area, closed factories with unpaid wages include Anjuman Designers Ltd, DIPS Apparels Ltd, and Generation Next Fashion Ltd. In Savar, closed factories include Shams Styles Ltd, The Civil Engineering Ltd, Kazipur Fashion Ltd, and Standard Stitches Ltd.
Additionally, several factories in the Jirani, Chandra, Tongi, Bordbazar, and Kachukhet areas of Mirpur remained closed as of yesterday.
The situation was significantly worse last month as many factories were compelled to halt operations for several days due to widespread unrest.
Labour Adviser Asif Mahmud Sajib Bhuiyan last month said the unrest and factory shutdowns have resulted in the cancellation of 15% to 20% of export orders.
Square Group CEO Tapan Chowdhury informed reporters on October 9 that labour unrest has led to a decline in orders for the company, with foreign buyers redirecting some orders to other countries.
Asif Ashraf, a member of the BGMEA administrative support team, told TBS, "Currently, 99.91% of factories are operational, with only about 10 to 12 factories inactive. The purpose of the current committee is to determine why some factories are not operating or struggling."
"Issues are not permanent. We are hopeful of emerging from this situation soon," he added.
Evident challenges
While the challenges in the RMG sector are evident, the magnitude of labour unrest, wage arrears, or closure risks in the non-RMG sector remains unclear.
Incidents of arson and vandalism have affected both RMG and non-RMG factories over the past two months.
The Gazi Tyre factory of the Gazi Group, owned by former Textiles and Jute Minister Golam Dastgir Gazi, has suffered multiple incidents of arson and looting in August and September leading to its complete closure.
Workers at a clothing factory by Beximco Group, owned by Salman F Rahman, set the facility on fire while demanding unpaid wages on 11 September.
Hafizur Rahman, the administrator of the Federation of Bangladesh Chamber of Commerce and Industries (FBCCI), told TBS that several companies have approached the FBCCI citing financial losses due to factors such as labour unrest and vandalism. They are seeking financial aid from the government and requesting flexibility in repaying their bank loans.
He noted that the FBCCI has forwarded these applications along with recommendations to the Bangladesh Bank and the Ministry of Commerce for their consideration.
However, the FBCCI administrator could not provide an immediate count of the companies that have applied or the total financial losses reported.
Mohammad Ashrafuzzaman, deputy inspector general of Industrial Police, who is also a member of the committee, told TBS, "We do not yet know how many factories are struggling financially and unable to pay wages. We are collecting data from the field level."
However, he said, it is not easy to identify such factories. Because a factory that is in trouble today may not be in trouble two weeks from now. New factories may run into trouble.
"The committee held two meetings already. We have also spoken to two factories (which are in trouble)," Ashrafuzzaman added.
Officials from the Department of Inspection for Factories and Establishments told TBS that the committee is operating with strict confidentiality due to concerns that factory owners might overwhelm the process while seeking government assistance.
Business leaders welcome the move
Welcoming the move, business leaders said helping the struggling factory owners is essential but the government should also ensure that businesspeople do not face undue political harassment or legal challenges.
They also advocated for the inclusion of a representative from Bangladesh Bank on the committee.
Jasim Uddin, vice chairman of Bengal Group of Industries, told TBS, "Numerous factories have closed since 5 August for various reasons with many more facing potential closures. If the government can identify the challenges these factories are experiencing and offer financial assistance, it could help safeguard jobs, production, and exports."
He also raised several other issues faced by the country's industries. Factories are facing severe gas and electricity crises. These disruptions hinder production and lead to delays in loan repayments, causing defaults.
