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Bangladesh Unrest Costs Garment Sector $50 Million

Since garment workers went on strike in December demanding higher wages—some of them subsequently getting fired for failing to go through appropriate legal channels with their grievances—Bangladesh has been facing backlash both for its treatment of the situation and its lack of substantial progress in the realm of labor rights.

The unrest has already cost the sector $50 million, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Workers from as many as 59 factories protesting in Ashulia area were seeking a threefold increase to a 5,300 taka ($66) minimum wage that hasn’t risen since 2013, among other requests they felt would improve their living conditions. The strike forced factories to shutter for a week when workers walked out, but because the workers didn’t go through what the BGMEA calls “established enterprise grievance channels,” their acts were deemed illegal and many faced repercussions.

Hoping to clear the air on what has really transpired, the BGMEA issued a statement Sunday saying the aftermath of the Ashulia incidents hasn’t been kind to the country.

“These illegal acts by some employees and a minority of local union leaders is damaging to the reputation of Bangladesh and casts doubt on the great progress we have made in improving the occupational health and safety of our workers and communities,” the statement noted.

BGMEA said labor leaders did meet with workers to hear their demands on multiple occasions, but workers weren’t appeased and their absences ultimately led to the closures. During the closure period, however, the BGMEA said workers met with factory owners and expressed their desire to resume operations (despite a lack of progress toward their demands) and on the first day the factories were reopened, attendance was at 95 percent. By that time, however, damage had already been done.

“These incidents have resulted in severe economic and reputational damage for the sector,” BGMEA said. “We estimate that the affected units have lost over $50 million in production and will incur a similar amount in discounts, air freights and lost business. We cannot put a value on the reputational damage at the international level for our sector.”

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In examining Bangladesh’s handling of the protesting workers, global unions said the country wasn’t supporting workers’ right to unionize and be heard, and went as far as calling on the European Union to reconsider the country’s eligibility for trade benefits under the Generalized System of Preferences (GSP) program.

“We would like to reemphasize, that the BGMEA is dedicated to the principle that no worker should be deprived of his or her constitutional rights,” the statement noted. “At the same time, people have to respect the law of the land.”

According to the BGMEA, among the nearly 200,000 workers who participated in the protest, 1,420 were served with temporary suspension. The process for investigating their cases could take as much as eight weeks. Though the global unions said workers were fired from their posts, BGMEA says many of the workers “opted to resign” and most were given their full benefits based on salary and length of service.

“BGMEA has communicated with the factories that have filed criminal cases to request and ensure that no innocent bystanders are inadvertently included in the cases and to comply with the Bangladesh Labor Laws,” the BGMEA statement noted. “The law enforcement agencies have also arrested nine labor leaders allegedly involved in instigating the general workers toward violent & illegal protests and forcing/intimidating them to abstain from work.”

The BGMEA said it is dedicated to the dialogue about supporting workers while also ensuring there’s no misuse of law.

Though wages haven’t been raised since the 77 percent jump in 2013 that brought them to their current rate, BGMEA said minimum wages have increased 219 percent in the last six years, and that an annual wage increment of 5 percent was made also mandatory in 2013.

What the organization didn’t say, however, was why rages aren’t 15 percent higher than they were in 2013 if they are legally supposed to increase 5 percent each year. There was also no mention of further discussion on a wage increase for workers.