The Accord, which is made up of mainly European brands and retailers, has been operational in Bangladesh to ensure worker safety after the collapse of the eight-story Rana Plaza in April 2013.
The court’s decision, made after a memorandum of understanding was signed with the Bangladesh Garment Manufacturers and Exporters Association earlier this month, is a big move for the association’s newly elected management.
The team is led by Rubana Huq, who stands out in the history of the organization as its first woman president. Elected in April, she has completed less than a month in office, but has charted out the way ahead — faced with labor protests about the wage board that came into effect last November, issues related to the mass firing of labor and the changing situation with the two groups of international brands and retailers that have been working in Bangladesh for the last five years to improve factory conditions in its apparel industry.
Huq is also the managing director of the Mohammadi Group, whose garment production turnover exceeds $90 million. In an industry dominated by men, she is being watched carefully as she starts her two-year term, with issues related to factory safety still being spearheaded, but with an increasing focus on labor rights, freedom to organize for workers, and a growing number of green and compliant factories intent on securing better pricing from buyers.
Huq talked to WWD about her plans for the BGMEA and some of the issues that global retailers and brands might have to factor in.
WWD: How does the new memorandum of understanding signed between BGMEA and the Accord earlier this month pave the way forward for the Accord to transition and be phased out?
Rubana Huq: Given the importance of a full and independent national compliance monitoring system in Bangladesh, the BGMEA has planned the establishment of an RMG Sustainability Council. This will be governed by BGMEA/BKMEA (Bangladesh Knitwear Manufacturers Exporters Association), brands and workers’ representatives and will take over the structure, operation and resources of the Accord as it phases out from Bangladesh in the 281 days of signing of this agreement. The RSC is envisaged to take over all safety-related matters in the garment industry within the legal framework of the government of Bangladesh.
During the transition period, BGMEA will immediately establish an operating unit to ensure a smoother transition. This MOU marks a departure from the past unilateral framework and establishes the route to self-monitoring.
WWD: What are some of the agreements to this end?
R.H: There will be no termination or escalation of any factory from Accord’s end without the agreement of the BGMEA Unit. The Accord also agreed that there will be no group termination in case of the failure of one factory. There will be no duplication of inspection between the safety initiatives (Remediation Coordination Cell, Accord and Nirapon). This means that factories once inspected by Accord, Nirapon, RCC or any other inspecting authority will be considered as a common standard; in case of any dispute between BGMEA Unit and Accord, the matter will be referred to RCC for final settlement.
The parties have also agreed to work on developing modalities for listing new factories within the safety regimes.
WWD: The Alliance for Bangladesh Worker Safety, which represents many North American brands and retailers, completed its term in December. How are you handling the transition of its issues?
R.H.: The Alliance has transitioned to inspection and monitoring remediation through Nirapon. In Nirapon, they are charging us money so what we’re proposing is to set up a general council as a self-monitoring platform for Bangladesh where the manufacturer, the brand and the labor representatives can be involved and we can report to the government.
WWD: There is much criticism from the outside that the Department of Inspection for Factories and Establishments and the Remediation Coordination Cell are not yet ready for such responsibility?
R.H.: Even if RCC isn’t strong enough, it has the support of all the brands and the manufacturers, so we can easily report our cases to overview us. You know, the world is moving on with self-monitoring, for inspections and audits as well — at a time when it is all about monitoring yourself, external supervision may finally be redundant.
For us, that is an opportunity platform that we need to work on and at the same time we need to be very efficient with our present mode. So, we need to be very vigilant in the transition mode at the same time we need to be able to address the issues on a collaborative platform and take it to the next platform.
WWD: How long do you need for that strengthening?
R.H.: Six months to a year, max.
WWD: Issues of labor abuse at the factories have become a larger concern for global brands, retailers and nongovernment organizations. How will these be handled?
R.H: The Bangladesh image in the world has been coming up in terms of labor abuse very often, which is something we haven’t been addressing very well. We have been poor ambassadors of our sector if we haven’t been able to convey to the world properly that we have 3.5 million people [working in the industry], of which 8 percent are women. With so many female workers, one or two isolated stories don’t really represent reality well. So, it is important for us to tell our stories well. Being an aspiring academic, and as the BGMEA president, my approach is to focus on taking a close look at different points of view and being able to share and address them better.
WWD: Manufacturers in Bangladesh often speak about there being too many demands on them from global brands and retailers.
R.H: You see, they source from us. It’s a free world and business relationships are dynamic, and they have the choice of not sourcing from us. It is true that Bangladesh has the largest capacity in production, aside from China, so we have grown stronger in our own field and yes, most of the time I think brands should be more invested in worker welfare instead of just asking for compliance on structural and fire and electrical issues. If brands are genuinely interested they should come forward and actually actively take part in what are non-wage activities, truly CSR [corporate social responsibility]. Otherwise you know, it defeats the purpose.
WWD: Haven’t they been doing that in various forms over the last five years, particularly with the Accord and the Alliance? How are you going to change that?
R.H: No, they have only been addressing the electrical, fire and structural safety issues. They haven’t been really addressing labor. They say it is for the welfare of the labor, but very honestly when we shifted our factories from small areas to big areas to bigger factories, the inconvenience that the workers suffered was hardly even probed by anyone. Nobody even bothered, nobody asked an extra question whether the workers were feeling good, whether they were having transition problems, nothing at all. Often I think that people are out here just to guard their reputational risks — that includes everyone, even ourselves. It is not only the brands, it is not only the trade unions, it is also us. It becomes more about these reputational risks than the real cause, so that’s where we can make a difference.
WWD: You mean to make that happen now?
R.H: I hope so. I intend to make a difference. I believe that a lot of transparency, a lot of honest discourse is going to help the sector.
WWD: What are the new initiatives you plan to introduce?
R.H: Well, we’re trying to change the discourse, the narrative around labor. Whenever there are reports against the sector, we are reacting immediately — I have been in this position for less than a month. We are hitting back hard, not by being defensive but by explaining our situation. For example, there are damage reports all over and we are saying, come in to a collaborative study with us, we will open our factories to you so you understand the realities. Unless we address human issues we won’t be able to recover the image deficit. By being defensive we spoil the scene. We need to be accurate with our stats, and we need to know exactly what we’re talking about so that we can tell people, and share with people the reality that we are going through, and that perhaps will change everything.
From now on, for the next two years, I am set on addressing the main issues facing the industry; I am set on addressing the pricing issue; on addressing the efficiency of production, on improving the economic diplomacy. I am going to be invested in sustainability and the positioning of the industry, with the fourth industrial revolution and the low-end manufacturing we need to think about how to be innovative and improvise.
Also, there is the separate sustainability wing altogether, which will not only have structural, fire and electrical safety, it will also have environment and labor as two critical components. We plan to do all that and I think that will change the game.
WWD: Recently, global NGOs have been citing a lot more on sexual harassment for women workers in the industry in Bangladesh.
R.H.: Sexual harassment happens in South Asia, or anywhere else in the world. Sexual harassment is a thing that happens every day, everywhere — it is an important issue where we should all come together to address and launch a #sheforshe campaign — and not a #heforshe campaign. Singling out one sector does not really help.
WWD: In recent months, there have been reports of more than 65 garment industry workers jailed, with more than 11,000 sacked. You have also inherited a scenario with wage board protests and mass firings by companies.
R.H.: You see, you will read that there are 5,000, 7,000, 10,000, 11,000 firings. Everyone has a different figure. My point is that if they have been terminated, they have been terminated with benefits. So, now whether the termination was justified or not is another issue altogether.
I am also going to promise that mass terminations are not acceptable. But then again the violence that spread pre-election and post-election was just unbelievable. The entire sector was collapsing, so there was no option but to go ahead with mass termination. But I don’t want any scene to flare up to the point that we have to do something as aggressive as that. I think things can be just set up with negotiation and collaboration, so that’s what I intend to do and be very vigilant about what factories and what areas are going to be more vulnerable. It is sad that right before festivals and right before events there are mass events as if they are almost orchestrated. We need to be very vigilant about this.
WWD: The garment industry in Bangladesh has shown a growth of 13.39 percent from July 2018 to January 2019, with the garment sector contributing $20.21 billion in this time. Still, are there issues that global brands don’t understand?
R.H.: Yes, like price. They just don’t understand that we need better prices. Many retailers are making 15 to 25 percent still, and yet they are paying us practically nothing. We have great green factories — but we don’t have green prices! So that’s something they need to work with us on. We are hoping that going forward we are able to set better base prices, and let’s see if we can negotiate our way forward.
WWD: It continues to be a challenging time for factories in Bangladesh. As the first woman president of BGMEA, is your role harder in a male-dominated industry?
R.H.: Somehow, you know, the constant reference to me being the first female president just does not sit well with me. Really, I’m just another person, not a woman by choice. I am much more an activist, looking for solutions, than just a woman. I would much rather people call me President, rather than Madame President. But what is also important for me, looking at the BGMEA presidents’ record, is that my husband’s name sits with mine — he was once president.
Yes, being the first woman president, it is good in many ways. Maybe there is more empathy as a woman. It is easier for me to understand how to run the sector with an extra dose of empathy.
WWD: Does your position as BGMEA president affect your business and position as managing director of the Mohammadi Group?
R.H.: My husband died one and a half years ago — he was the mayor of Dhaka North City, so he died a hero. When I stepped into business, he stepped out and did more business politics. Later on, he did national politics. His name was Annisul Huq. He was a champion of rural welfare — we both thought it was important to work for change and that’s what I want to do. We have three children, one of them is looking after the business.
WWD: All this experience with negotiating will work its way forward in terms of better business and academics for you?
R.H.: I was always a great student. I always wanted to be a journalist and an academic, never wanted to be a businesswoman. I aced all my exams, and did my master’s really late, and did my Ph.D. when I was 54 years old, last year, from Jadavpur University, India. It was all primary research, so I literally had to sit and go into dusty archives. But I’m glad I did it, it gave me another look at life and I think after two years I will pursue only my ambitions of being an academic.