Garment Sector Unrest Raises Supply Chain Risk as Workers Protest for Higher Minimum Wage
Unrest in the garment sector has escalated, with an increasing number of workers from various factories joining the protests. This surge in unrest has raised concerns about potential disruptions in the supply chain, according to insiders in the industry. There is also fear that if the unrest continues, buyers might decide to shift their orders to other countries.
Moreover, apparel exporters are worried about incurring high air freight expenses to meet delivery deadlines. The ongoing demonstration, which began eight days ago with demands to set the minimum wage at Tk23,000 per month, has now spread to several factories in different areas.
The Minimum Wage Board for the Ready-Made Garment (RMG) sector is scheduled to hold its fifth meeting today to determine a new wage structure for workers. The board has already received proposals from worker and entrepreneur representatives.
Prime Minister Sheikh Hasina acknowledged the workers’ demands and mentioned that discussions are currently underway. She assured that the minimum wage would be increased by December, urging workers not to resort to damaging factories, which are their source of livelihood. The Prime Minister expressed sadness over the news of deaths during the garment workers’ unrest.
Industry leaders have provided their perspectives on the situation. Former BGMEA President Siddiqur Rahman believes that a vested group is influencing more workers to vandalize factories. He explained that this unrest coincided with the ongoing discussions to establish a minimum wage.
Managing Director of Ha-Meem Group, AK Azad, expressed concern about the impact of political unrest on buyers’ delivery schedules, particularly in the seasonal business where even minor delays can lead to discounts. He emphasized that the combination of worker unrest and political uncertainty may push buyers to consider shifting their orders to other countries, exacerbating the existing dollar crisis. Azad urged the wage board to expedite the declaration of the minimum wage, preferably before the first half of November. He also highlighted discussions held with the home and commerce ministers to ensure factory security, including the deployment of Border Guard Bangladesh personnel.
Former BTMA President Matin Chowdhury pointed out the severe disruption in the total supply chain, with delays in receiving packaging materials and accessories leading to shipment delays. He also mentioned that buyers are pressuring them to ship goods on time or face the need to send goods via air freight to meet delivery deadlines.
BGMEA Vice President Md Nasir Uddin highlighted that due to the ongoing unrest, some factories had to resort to air freight to send goods that were originally scheduled for shipment a week ago.
Tapan Chowdhury, Managing Director of Square Group, expressed concern about negative messages reaching brand buyers, which can further impact the supply chain. He emphasized the need for dialogue to resolve these issues and acknowledged the challenges the industry is facing in the current global climate.
Meanwhile, clashes between protesting RMG workers, Awami League activists, and police broke out in Dhaka’s Mirpur area. According to Dhaka Metropolitan Police Pallabi Zone Additional Deputy Commissioner Nazmul Hasan Feroz, workers started their protest in the morning, but clashes occurred when AL activists organized a rally in response to the BNP and its allies’ blockade. Several buses, markets, a bank branch, and two garment factories were vandalized during the clashes.
Similar unrest and clashes were reported in Gazipur, where tear gas shells, rubber bullets, and sound grenades were used by the police to disperse protesters. BGMEA Vice President Md Nasir Uddin stated that about 250 factories had to halt production due to worker unrest in various areas.
The situation remains critical, with ongoing labor demands and potential consequences for the garment industry’s supply chain. The government and industry stakeholders continue to work towards resolving the unrest and establishing an agreeable minimum wage structure for the workers.
