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Changing of the Guard Renews Hope in Bangladesh

With the appointment of Iqbal Hussain last week as the first managing director of the RMG Sustainability Council (RSC), many factory owners in Bangladesh feel a new era in sourcing in the region is about to begin.

As of June 1, the RSC has officially taken on the work of the Bangladesh Accord on Fire and Building Safety, comprising more than 200 brands, mostly European, including Spanish companies Mango and Inditex, Swedish firm Hennes & Mauritz AB (H&M), UK companies Tesco and Marks & Spencer, among many others.

The Alliance for Worker Safety in Bangladesh, which was made up of more than 29 brands, mostly North American, including Gap Inc., Target Corp., Walmart and others, ceased operations as planned on Dec. 31, 2018, handing the reins to Nirapon, a nonprofit organization based in the United States, which has also left the country as of June.

The $33 billion garment export industry in Bangladesh is the second largest in the world after China, with more than four million workers, 75 percent of whom are women. The pandemic has weighed heavily on the country, however, with many firms suspending or canceling orders altogether. This has led to a dearth of employment for many who depend on factory work for their survival.

The prior two global organizations built a structure, plans, processes and implementation for monitoring factory safety over the past seven years, shortly after the destruction and devastation caused by the collapse of the eight-story Rana Plaza, in Savar, a suburb of Dhaka, in which thousands of workers were killed and injured.

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After years of work, both organizations have left the country, with the Bangladesh Garment Manufacturers Association (BGMEA) now set to play a bigger role going forward, along with other local organizations like the Department of Inspection for Factories and Establishments (DIFE) and the International Labor Organization (ILO).

“The RSC is all set to launch its operation in full swing since the newly appointed managing director has joined this week and he has already completed his induction course in Amsterdam. So, he knows the business and particularly how the Accord operated. We are constantly in touch with him,” BGMEA president Rubana Huq told Sourcing Journal.

“RSC has already started inspections; we have completed 48 inspections and this week we are doing 50 more. We have scheduled 250 inspections per month,” she added. “Our major strength is that all three stakeholders, that is the industry, brands and trade unions, are acting together in this platform.

“This is the first time that all three parties have engaged in a collaborative effort,” Huq said.

The new reality of this transition is just beginning to sink in, colored by the haze of the pandemic and factory closures related to coronavirus safety issues and the complexity of an international handover.

Many players in the area are describing the change cynically as “more of the same in a new garb,” as the RSC has taken over. The ambition, that RSC will go on to encompass all the area factories, seems grandiose, given years of differences between the Accord and the Alliance–although both did represent many of the same factories.

While the Accord-associated factories continue to hover at around the 1,650 mark, with around 50 new entrants in 2020, the Alliance had approximately 700.

Some factories manufacture for both and have complained for years that they had to deal with two sets of parameters–though the goal of both has been the same, ensuring the safest working conditions.

The question of funding the RSC over the long term remains unclear. The Accord spent an average of $5 million to $6 million on oversight annually.

“The funding details (for RSC) are being sorted out; for the first year (through May 2021), the signatory brands of the Accord have indicated that they will fund the RSC operations,” said Rob Wayss, executive director, Accord Foundation, who has been working out of the office in the Netherlands since last September, while traveling back to Dhaka each month until the pandemic put a halt to travel in March.

As of now, the signatory brands of the Accord will remain united until next June when the three-year extension comes to a close. The initial mandate had been for a five-year period, which came to an end in 2018.

Joris Oldenziel, deputy Director, Bangladesh Accord Foundation, had been interim managing director of the RSC prior to Hussain’s appointment.

“RSC was incorporated on May 20, but started officially as of June 1, after having overcome the many challenges of the transition during the Covid-19 pandemic such as having remote negotiations between the Accord and the BGMEA, arranging meetings with the RSC board of directors, all the formalities of papers to be signed, for example the articles of association had to be signed in the embassies where the board members were living, a challenge due to the Covid-19 crisis,” he said.

The main task ahead for the RSC is to continue with remediation after five months of suspended inspections because of the pandemic, he noted.

As for how many other factories will be integrated into the RSC processes, Tuomo Poutiainen, country director, ILO Bangladesh, feels it is all part of the process ahead.

“That is ultimately the goal, for RSC to host the totality of the industry, slowly, and incrementally, but they are starting from the Accord factory base, and they are allowing factories to join them, regardless if they are part of Accord or not. But the key is to start operations of Accord factories and then start to look into the others,” he said.

“So the message should be that it is going in the right direction with the RSC, it is positive and very much needed towards building back the industry. Now is the time they need to reorganize, provide assurances to the industry and industry watchers and have the operational leadership and management and put the credibility out there,” he noted.

At the moment, setting aside Covid-19-related fears that are unpredictable in every part of the world, the industry has made some remarkable progress, and as Wayss said, “It is the safest garment industry in the developing world, that is irrefutable. That is a message I often convey to our colleagues in BGMEA and BKMEA (Bangladesh Knitwear Manufacturers and Exporters Association), they should know and share that fact clearly.”