Made in Bangladesh
Export Powerhouse Feels Pangs of Labor Strife
Justin Mott for The New York
Times
Workers at a garment factory in Dhaka,
the capital of Bangladesh, which produces shirts and sweaters for global export.
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By JIM YARDLEY
Made in Bangladesh
This is the first of two articles examining the battle over
labor rights in a leading garment-exporting country.
Multimedia
Dozens of people were bloodied and hospitalized. The
officers were cracking down on protests at two garment factories inside this
industrial area in western Bangladesh. But they were also protecting two
ingredients of a manufacturing formula that has quietly made Bangladesh a
leading apparel exporter to the United States and Europe: cheap labor and
foreign investment.
Both were at stake on that March morning. Workers
earning as little as $50 a month, less than the cost of one of the knit sweaters
they stitched for European stores, were furious over a cut in wages. Their anger
was directed at the Hong Kong and Chinese bosses of the two factories, turning a
labor dispute into something potentially much larger.
“If any foreigner got injured or killed, it would
damage the country’s image around the globe,” said a police supervisor, Akbar
Hossein, who participated in the crackdown. “We all know the importance of these
factories and this industry for Bangladesh.”
Bangladesh, once poor and irrelevant to the global
economy, is now an export powerhouse, second only to China in global apparel
exports, as factories churn out clothing for brands like Tommy Hilfiger, Gap,
Calvin Klein and H&M. Global retailers like Target and Walmart now operate
sourcing offices in Dhaka, the capital. Garments are critical to Bangladesh’s
economy, accounting for 80 percent of manufacturing exports and more than three
million jobs.
But with “Made in Bangladesh” labels now commonplace
in American stores, Bangladesh’s manufacturing formula depends on its having the
lowest labor costs in the world, with the minimum wage for garment workers set
at roughly $37 a month. During the past two years, as workers have seen their
meager earnings eroded by double-digit inflation, protests and violent clashes
with the police have become increasingly common.
In response, Bangladeshi leaders have deployed the
security tools of the state to keep factories humming. A high-level government
committee monitors the garment sector and includes ranking officers from the
military, the police and intelligence agencies. A new special police force
patrols many industrial areas. Domestic intelligence agencies keep an eye on
some labor organizers. One organizer who had been closely watched, Aminul Islam,
was
found tortured and killed in April in a case that is unsolved.
“The garment industry is No. 1 for exports and dollars
for the country,” said Alonzo Suson, who runs the Solidarity Center in Dhaka, an
A.F.L.-C.I.O.-affiliated labor rights group. “Any slowdown of that development
is a national security issue.”
For the Obama administration, which has cultivated
Bangladesh as a regional ally in southern Asia, labor unrest has become a matter
of growing concern. In a May visit to Dhaka, Secretary of State Hillary Rodham
Clinton raised labor issues and the Islam murder case. In June, Ambassador Dan
W. Mozena warned Bangladeshi garment factory owners that any perception of a
rollback on labor rights could scare off multinational brands and damage the
garment industry. “These developments could coalesce into a perfect storm that
could threaten the Bangladesh brand in America,” he said.
For global brands, which are forever chasing the
cheapest labor costs from country to country, Bangladesh has been a hot spot,
especially as wages have risen in China. McKinsey, the consulting giant, has
called Bangladesh the “next China” and predicted that Bangladeshi garment
exports, now about $18 billion a year, could triple by 2020.
But in late July, representatives from 12 major brands
and retailers, alarmed by the rising labor unrest, prodded the Bangladeshi
government to address wage demands, a suggestion rejected by the labor minister.
“No reason to be worried,” Khandker Mosharraf Hossain, the minister, told
reporters, noting that brands were not canceling orders.
Bangladesh was born in bloodshed during a 1971 war of
independence from Pakistan and has since gyrated between military rule and
fragile democracy. It has about 150 million people and is one of the most
densely populated countries in the world. Derided by Henry A. Kissinger as the
world’s “basket case,” Bangladesh has since made considerable progress on fronts
like women’s literacy, juvenile and maternal mortality, per capita income, and
life expectancy.
Page 2 of 4)
This upward arc is often credited to Bangladesh’s
vibrant civil society, but the garment sector, in which about 80 percent of the
workers are women, has also played a critical role, providing socially
acceptable jobs to women in a conservative Muslim country. Prime Minister Sheikh
Hasina, in lobbying the United States for favorable trade preferences, has
argued that such policies would improve the lives of millions of poor women.
Bangladesh’s Home Ministry, in a written response to questions, said the government does not favor factory owners over workers but acts as a “referee/umpire” while maintaining an “investment friendly” environment for foreign and domestic investors.
Yet Ms. Hasina’s government has resisted expanding
labor rights in a country where the owners of about 5,000 garment factories
wield enormous influence. Factory owners are major political donors and have
moved into news media, buying newspapers and television stations. In Parliament,
roughly two-thirds of the members belong to the country’s three biggest business
associations. At least 30 factory owners or their family members hold seats in
Parliament, about 10 percent of the total.
“Politics and business is so enmeshed that one is kin
to the other,” said Iftekharuzzaman, director of Transparency International
Bangladesh.“There is a coalition between the sector and people in positions of
power. The negotiating position of the workers is very, very limited.”
A Country Within a Country
Mohammad Helal Uddin joined Rosita Knitwear in May
2010 and was thrilled to have the job. Rosita was inside the new Ishwardi Export
Processing Zone, not far from his home village, meaning he could live with his
wife and two young daughters and not have to toil in the fields. “I feel I have
a kind of dignity in this job,” he said.
Mr. Uddin, 28, worked in the knitting department and
after six months was promoted, with a base salary of $55 a month. He soon began
to notice irregularities. Workers were not getting promised annual raises,
monthly attendance bonuses or the 17 paid holidays a year, beyond their usual
one day off a week. Employees also said they worked four hours of overtime a day
but were paid for only two.
Three decades ago, Bangladesh created a network of
export zones to attract foreign investment with tax incentives and other
benefits. Today, a large majority of Bangladesh’s garment factories lie outside
these zones, but the zones are favored by foreign investors. Rosita and its
sister factory, Megatex, both owned by the Hong Kong conglomerate South Ocean,
were the first plants in the Ishwardi zone. Zones like Ishwardi operate like
countries within a country. They are governed by a separate agency, the
Bangladesh Export Processing Zones Authority, and by separate laws. By
tradition, the authority has been run by a military officer, active duty or
retired, and many factories have hired retired soldiers to oversee security.
For workers, wages were higher in the zones and
conditions were better. But unions were initially banned, and workers had no
right to organize until 2004 when Parliament, facing international pressure,
approved worker associations at individual factories.
At the Rosita factory, workers elected a 15-member
association last December, with Mr. Uddin as president. In January, a female
employee complained that a Bangladeshi middle manager was pressuring her to have
sex with one of the Chinese bosses. Enraged, workers demanded that the
management address her complaint as well as the discrepancies over annual raises
and earned leave. Six weeks of confrontation and chaos followed. In February,
equipment in the Rosita factory was damaged during a rampage. Nearly 300 workers
were accused of vandalism and fired, with their names posted on a blacklist at
the gate of the Ishwardi zone. Mr. Uddin, who denied any wrongdoing, was fired
and temporarily jailed.
(Page 3 of 4)
When he tried to return to work on Feb. 20, Mr. Uddin
said two black-clad officers hustled him into the tiny guardhouse. The officers
were members of the Rapid Action Battalion, a government paramilitary force
infamous for vigilante attacks known as “cross fire” killings. He said one of
the officers ordered him to sign a resignation letter.
“I didn’t do anything wrong,” Mr. Uddin said he told them.
He said one of the officers pushed a gun against his
shoulder. “If you don’t sign,” the officer told him, according to Mr. Uddin, “we
will take you in the car and you will have to face the cross-fire.”
Mr. Uddin signed. Inside the factories, according to
several workers, police and paramilitary officers walked through the workrooms,
holding termination letters. The message was clear: work or leave.
By March, an American labor rights group, the
Institute for Global Labor and Human Rights, was advocating for the workers. A
South Ocean executive arrived at Ishwardi and promised to address worker
complaints over wages and unpaid leave. Then on March 20, workers discovered
that managers had cut the piece rate, a type of production bonus, meaning a loss
of wages. Another standoff ensued as managers closed the factories. But when
workers returned March 25, the wage cut had not been fully restored.
Hundreds of workers gathered outside the front door of
the factory in an impromptu sit-down strike. Eight workers, interviewed in June,
said all the managers had left the factories. A small contingent of police
officers soon arrived and ordered everyone back to work. A seamstress said a
police officer knocked her to the ground, beating her unconscious with a stick
and shredding her clothes. “I kept asking them to stop,” said the seamstress,
who asked not to be identified, fearing reprisals. “But even after I fell to the
ground, they kept beating me and pulled my hair.”
Workers began throwing stones and chanting slogans
against the police, who fled. Hours later, after officials in Dhaka were
notified, officers from the Rapid Action Battalion as well as surrounding police
stations arrived. Officer Hossein, the police supervisor, denied that the police
were aggressors, saying officers were told that foreign managers were trapped
inside the factories and that angry workers were vandalizing equipment. “They
attacked the police,” Officer Hossein said. “They started the violence.”
Cellphone videos show police officers firing rubber
bullets and pummeling workers with cane poles. “They treated workers as if they
were not human beings,” one worker said.
The Power Equation
Bangladesh’s two major political parties, the
governing Awami League and the opposition Bangladesh Nationalist Party, often
seem engaged in a blood feud. Yet, many analysts say, the two parties agree on
one thing: safeguarding the garment industry.
Three months after the clash at Ishwardi, tens of
thousands of angry workers protested near Dhaka, demanding higher wages and
crippling one of the country’s most important industrial zones for more than a
week. Riot police officers dispersed the protesters with tear gas and rubber
bullets, as scores of people were injured.
Following huge protests in 2010, Ms. Hasina raised the
minimum wage for garment workers to $37 a month from about $20. But her
government has resisted the renewed worker demands, even as executives at some
leading brands have voiced support for adjusting wages and expressed concerns
about labor unrest.
In June, top executives at the Swedish retailer
H&M fretted that recurring labor protests were disrupting production and
called on Bangladeshi factories to rectify the situation.
Major brands have been stung by bad publicity. This
year, War on Want, a nonprofit group, found that workers in five factories
making products for Nike, Puma and Adidas were paid less than the minimum wage
and complained of workplace abuse and sexual harassment. In March, the parent
company of the Tommy Hilfiger brand, PVH Corp., hurriedly donated $1 million
toward a factory safety initiative as ABC News was preparing to broadcast a
report on a fire that killed 29 workers in a Bangladeshi factory making clothes
for Tommy Hilfiger
(Page 4 of 4)
“They want to see better standards and conditions in
factories in Bangladesh,” said Julia K. Hughes, president of the United States
Association of Importers of Textiles and Apparel, a trade group in Washington.
“No company is arguing that wages should not rise in Bangladesh. They are not
saying what the wage should be, but absolutely wages should go up.”
But many factory owners are skeptical that buyers are truly willing to pay higher prices. One owner, Shawkat Ali Bhuiyan, said he had stopped working with companies like Walmart and Target because his profit margin was almost nonexistent, while some Bangladeshi labor leaders blame the foreign brands for exploiting workers.
“We need to clean up the whole supply chain,” said Roy
Ramesh Chandra, a powerful public sector union leader. “The brands need to
fulfill their responsibility. The manufacturers need to fulfill their
responsibility. And the government should comply with international obligations
and respect international labor standards.”
Bangladesh has responded to international pressure in
the past, sharply curtailing child
labor and improving safety conditions in the 1990s. Now, though, the
pressure points are the rights of workers to organize and collectively bargain
for wages, issues that require action by a political system dominated by
business interests, including the garment sector.
A. K. Azad, president of the Federation of Bangladesh
Chambers of Commerce and Industry, played down the garment sector’s political
clout. “We are not powerful,” he said, adding: “Power lies with the politicians.
Power lies with the media.”
But many apparel tycoons have also gone into politics
or begun media careers, purchasing newspapers or starting independent news
channels. Mr. Azad, who owns one of the country’s biggest garment factories,
also owns a Bengali-language newspaper and a television station. Several Western
diplomats privately noted that news coverage often emphasizes the disruptions
caused by protests above the concerns of workers.
At the Rosita and Megatex factories, South Ocean
management hired a labor oversight firm, Verité, which detailed a host of
problems, including humiliation of workers, summary firings and deliberate
interference with the ability of workers to organize. New management teams are
now running the factories, and Verité is helping put in place changes to
increase wages and protect worker rights. “South Ocean have taken labor issues
at the two factories extremely seriously and have taken swift actions to address
those issues,” the company’s law firm, Winston & Strawn of Hong Kong, said
in a statement.
Many of the workers involved in the March 25 clash are
back on the job, despite their anger over how they have been treated. The
seamstress who was knocked unconscious, her clothes shredded, said she had
little choice, since she was the family’s sole breadwinner. “I am helpless,” she
said. “We have to get food.”
South Ocean dropped charges against Mr. Uddin but the
police are still pursuing separate charges. Meanwhile, officials at the export
zone authority have blacklisted him from being hired at factories inside the
zones. “We spoke up,” he said. “And we became criminals in the eyes of all
authorities.”
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