Rubana Huq: The Challenges for an Employer

Huq is the managing director of apparel manufacturer the Mohammadi Group, which has more than 9,000 employees, and a reputation for compliance.

Rubana Huq is the managing director of apparel manufacturer the Mohammadi Group, which has more than 9,000 employees, and a reputation for compliance. She is one of the few female employers in Bangladesh’s apparel industry and is someone who speaks her mind often and does not hesitate to stand up for what she believes is right.

Here, Huq talks with WWD about some of the difficulties of being a factory owner as the Bangladesh industry struggles with international pressure and a string of industrial disasters.

WWD: How has the last year changed the mind-set and functioning of employers in the garment industry in Bangladesh?

Rubana Huq: April 2013 [when Rana Plaza collapsed] has been a game-changer. It has affected the industry in so many ways. Even as retailers and brands have mounted pressure on us to become more serious about compliance issues, we too have moved forward and have learned lessons from the Rana Plaza tragedy. The industry has matured to a great level in terms of compliance and I am hoping we won’t be regressing from this ever.

WWD: As an employer, what do you find are the greatest difficulties facing you at this time?
R.H.: Increasing productivity and the level of quality seem to be the biggest challenges of today. Besides, with the 77 percent increase in wages, our competitiveness has been affected. So the only way to deal with the current scenario is to produce more value-added items more efficiently.

WWD: Are these same factors in general a challenge to many other garment factory owners in Bangladesh?
R.H.: Yes, I would think so.

Western retailers have come together in support for the industry in Bangladesh. Does this give you the security and assurance you need?

Yes, it does. It is reassuring to know that the Alliance [for Bangladesh Worker Safety, the Accord [the Bangladesh Accord on Fire and Building Safety] and a few other pacts have been initiated and this does indicate the willingness on the part of the buyers to remain in Bangladesh. Not one customer has shied away from placements [of orders] and in spite of being conservative with volumes, Bangladesh has continued to receive business from all over the globe.

WWD: What more do international retailers need to understand — from a factory owner’s point of view?

R.H.: They need to understand that we face harder ground realities than they can ever know. The issues with workers that seem so easily addressable are, in reality, not that simple. There are many factors impacting the relationship between the owner and the worker. At the same time, the buyers also need to understand that complete compliance is an ongoing process and the buyers must incentivize compliance so that a healthy competition spreads through the sector.

WWD: Do you find that international retailers understand enough in terms of production schedules, orders made, colors of products and styles?

R.H.: They need to be more aware of our production capacities and what we are able to produce and in which factory. Our capacities are limited and we, from our end, need to be completely transparent with our buyers so that the buyer is informed about the production sites and so that they don’t oversource from Bangladesh. A transparent critical path update is required on a weekly basis which will indicate the unit name, the order statuses, etc., for the customers’ easy understanding.

WWD: How has the relationship with workers changed? Is this directly related to the changing laws?

The relationship between the workers and the owners has evolved and this is not because of the laws. Enforcement of laws ensures only a part of the implementation. The real change comes from within. Owners now are far more sincere about bridging gaps with the workers.

The question of facing difficulty with trade unions and the new law allowing these only arises when there is a workers protest in the factory. Trade unions or its implementation poses administrative challenges but should not negatively impact the relationship between owners and workers.

As an employer/factory owner what is your greatest fear?

R.H.: Keeping buyers interested in us is what worries me the most. In order to retain and also grow business, one would need to be the best with service, quality and ensure on-time delivery. With the political violence erupting on a regular basis, I am skeptical about how far we will be able to hold our position and make progress or rather, recover our advantage.

WWD: Do you find the active participation from international organizations, nongovernmental organizations and government representatives an interference or a help?

I wouldn’t call it interference. If we haven’t done enough ourselves, if we haven’t been proactive and have been only reactive, then it is natural for any party to prescribe changes. This is normal. Therefore I rather take it as a welcome support.

How did you react to the increase in workers minimum wage to 5,300 taka, or $68.04 at current exchange, in November?

After Rana Plaza, wage [increases] seemed to be the only quick fix. So that is how it is being implemented fast. I only hope that there is no increase in rent or any other prices of the essentials, which will again negatively impact a worker’s take home package.

Since the wage is increasing,  the worker should be the only one benefiting from it.

Out of the total package, 3,000 to 3,200 taka [$38.51 to $41.08] is proposed as basic, with 40 percent as house rent and the rest is split between transport, food and medical allowance.

It is a reasonable increase and the workers’ representative should be happy with this. The wage market is not standardized in Bangladesh and many sectors draw a lot less and many don’t even have a minimum wage ceiling.

But on the other hand, manufacturers are going to be burdened with the increase, especially with it becoming effective from December. Most buyers will not compensate retroactively and hence we will all have to bear the extra wage ourselves.

Besides, there are increasing pressures of compliance issues which of course costs money as well and the manufacturers have to bear the brunt of all these burdens.