RMG subcontracting policy likely to be finalised tomorrow

Jasim Uddin

The government is likely to finalise the guidelines for factories involved in subcontracting business in the readymade garment sector tomorrow with a provision of suspension and withdrawal of different facilities and services for exporters and subcontracting factories for violation of the guidelines, officials of the commerce ministry said.
They said that the government and apparel makers and exporters associations — BGMEA and BKMEA — would suspend or withdraw the facilities and services given at export and production stages to both the parties involved in subcontracting business.
The government provides many important services and facilities to the RMG factories for producing products and entering in export market including duty-free raw materials import and different kinds of certificates needed for maintaining safety and working standards in factories.
Apparel exporters’ associations such as Bangladesh Garment Manufacturers and Exporters Association, and Bangladesh Knitwear Manufacturers and Exporters Association also provide many services to the factories including membership, approval for setting units, utilisation declaration needed for getting bond facilities from the government.
The ministry had already finalised a draft of the guidelines for establishing a transparent and accountable subcontracting business in the RMG sector to ensure workers’ safety and improve working conditions in subcontracting factories.
‘An inter-ministerial meeting will be held at the commerce ministry on Tuesday to finalise the guidelines,’ a high official of the ministry told New Age on Sunday.
Representatives from labour and employment ministry, housing and public works ministry, BGMEA, BKMEA and other ministries and trade bodies will attend the meeting, he said adding that commerce ministry senior secretary Hedayetullah Al Mamoon would preside over the meeting.
He said that the guidelines would be applicable for the main factories or exporters and subcontracting factories involved in production of garment items for export.
The guidelines will be finalised in line with the National Tripartite Plan of Action on Fire Safety and Structural Integrity in the RMG Sector in Bangladesh signed in early 2013 among the government, factory owners and workers after the tragic Rana Plaza building collapse at Savar that killed at least 1,100 workers.
RMG sector insiders said that many big companies take huge volume of direct export orders from the international buyers and give sub-contract to different factories as they are not able to produce such huge clothing items and supply in time as required by the international buyers.
According to BGMEA and BKMEA, there are around 4,500 active factories listed with them. Of the factories, around 2,000 factories receive direct export orders from buyers and the remaining factories do subcontracting while there is another nearly 1,000 factories that work as third party manufacturers, mostly non-compliant.
According to the draft guidelines, subcontracting factories or third party manufacturers must have to be a member of any apparel makers and exporters associations such as BGMEA and BKMEA.
The draft also said that the sub-contacting factory should pay salaries to workers following the minimum wage board declared by the government and the workers of the subcontracting factories should be covered under group insurance and payment of premium should be updated.
Subcontracting factory will have to be a compliance factory otherwise they will not be eligible for getting any sub-contract for manufacturing garment products, it stated.
The draft said that the structural design or layout plan of subcontracting factories should be approved by the appropriate authorities and the factories would have to follow a checklist provided by the government to ensure workers’ safety, welfare and working environment in the factories.
Exporters and subcontracting factories must have to go to the arbitration committees of the BGMEA or BKMEA to settle any dispute between them.  The committee will settle the dispute within four weeks of getting the dispute.
BGMEA and BKMEA will monitor the compliance situation of the subcontracting factories and send a report on activities of subcontracting factories at every three months to the commerce ministry, the draft said.

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