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Wages come to fore in Bangaldesh supply chain

December 2013

A 77% increase in minimum salary for Bangladeshi garment workers has been proposed by the national wages board.

This would fix the monthly minimum at 5,300 takas ($68, £42, €51). The workers, who have been demonstrating and striking for wage rises in recent months, had demanded more than 8,000 takas.

However, the industry, worth $20bn (£12.4bn, €14.8bn) a year to Bangladesh, is urging caution as government ministers consider backing the proposals.

The factory owners are prepared to pay more but warn that a sharp rise would blunt their competitiveness.

The wage issue has become prominent again after the international shock over the Tazreen factory fire in November 2012 and the Rana Plaza collapse in April. The tragedies initially provoked calls for better conditions in Bangladesh’s garment factories, and in the workplaces of other Asian countries.

In the UK parliament the all-party group for Bangladesh recommended a study to decide on an ethical stamp similar to a Kitemark for garments made outside the country. In addition, the group asked all European nations to join the UK in pushing for employment reforms in Bangladesh.

The Ethical Trading Initiative (ETI), an alliance that champions workers’ rights worldwide and says its member companies have already delivered wage increases by raising productivity in factories, welcomed a long-term comprehensive plan for Bangladesh’s garment industry.

At the same time Peter McAllister, its director, emphasised the employees’ role in setting standards.
McAllister said: “At the heart of a healthy industry is the ability of workers to raise issues with management. A significant effort must be made to ensure that Bangladeshi garment workers are front and centre of industry change, and not just passive recipients of this change.”

On pay the ETI said: “This issue needs to remain in focus, so that in the immediate term the minimum wage for Bangladesh’s garment workers moves closer towards the living wage mark.

“It’s also important that all stakeholders work together to develop a credible mechanism through which successive wage increases can be agreed.”

Workplace safety, the sector’s other big issue, is the subject of pacts just produced by three industry groups.
Unified standards to simplify inspections and avoid duplication are central to the proposals from the Accord on Fire and Safety in Bangladesh, headed mainly by European traders, the Walmart-led Alliance for Bangladesh Worker Safety, and the Dhaka government’s National Tripartite Action Plan.

The proposals want factory inspections by qualified, experienced officials, state a maximum number of machines per floor area, require fire doors to exclude fire smoke from stair wells, and stipulate a maximum distance of 25 metres between exits.

Scott Nova, executive director of the Worker Rights Consortium, said previous inspections had failed because the engineers involved were not competent, independent or transparent.

The proposals are being fine-tuned and need approval from the groups’ steering committees.

Elsewhere, ETI companies are running supply chain programmes to improve pay and conditions.
In India it concentrates on the garment makers’ home-based network, the costume jewellery sector and the sandstone quarrying and manufacturing industry.

It is lobbying the footwear and plastic toy industries in China and the timber trade in Vietnam.

The World Banana Forum, which represents the banana supply chain, claims to be close to achieving living wages for plantation workers and packers in Latin America and Africa during the next few years.

The forum says leading brands, including Dole and Chiquita, and Fairtrade, which aims to help and empower farmers and producers, are “putting ideas and funding on the table”. It will report its progress to a trade conference in mid-2014.

Last month’s Living Wage Week offered an opportunity to highlight women’s pay. The humanitarian agency Care International emphasised that women workers are vital in manufacturers’ supply chains and deserve pay equality with men.

Pay campaigns have been conducted even in the West. Oxfam, which has just become a living wage employer, protested that the basic right to a decent income, enshrined in the International Labour Organisation charter, is still denied to millions worldwide, and that at least a million UK employees have zero contracts.

One in three workers in north-east England are paid less than the living wage, a gathering of the Northern Trades Union Conference was told last month.

By contrast, a report from the human rights consultancy Impactt showed that 80% of the UK employers that adopted the living wage believed it improved work quality and helped to cut absenteeism by 25%.

Meanwhile, the Birmingham-based Unity Trust Bank, the social economy specialist, became the first bank to receive accreditation from the Living Wage Foundation.

Global | Remuneration

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