Bangladesh’s exploitation economy

Le Monde Diplomatique, June 2013

Wrecked lives for another ten cents’ profit
Bangladesh’s exploitation economy

Before the collapse of Rana Plaza, which killed over a thousand people, most of them textile workers, there was the fire that killed a hundred at the Tazreen factory. A major cause is western companies’ greed for profits.

by Olivier Cyran

A solitary glass tower stands on the banks of Lake Hatirjheel as though transplanted from the City of London to the middle of a vast shantytown. It is the headquarters of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). This sparkling tower is unlikely to crumble, unlike Rana Plaza, which collapsed on 24 April causing the death of 1,127 people, most of them textile workers. Yet on 19 March Bangladesh’s High Court ordered the demolition of the skyscraper within three months, on the grounds that it had been built illegally on public land (with the complicity of the trade minister). The BGMEA has appealed against the judgment. Whatever the outcome of this appeal, no one imagines that the “cancerous tumour†, as the magistrates called it, is in imminent danger of being reduced to rubble.

Visitors to the tower get a military salute from the security guards. Tourists are rare in Dhaka, so western visitors are often taken for buyers from clothing companies such as Mango, Benetton or H&M. The security guards and doormen show due deference.

When I visited the BGMEA on 9 April, Rana Plaza, 20km away, was still standing. The worst disaster in Bangladesh’s industrial history was still two weeks in the future, but the issues of worker safety and labour conditions in the textile industry were already pressing. On 7 January a fire had caused the death of eight workers at Smart Garment Export, a small factory with 300 employees in the centre of Dhaka. “They were all under 16,†said Saydia Gulrukh, an anthropologist who has helped textile workers set up a solidarity group. On 24 November 2012 a fire destroyed the Tazreen Fashions factory in Ashulia, a northern suburb, killing 112 and injuring about a thousand, according to official estimates.

Three thousand workers — mostly young women from the poorest rural regions trying to earn enough to support their families — were crammed into the nine-storey Tazreen factory. They worked 10-hour days, six days a week for 3,000 takas ($38) a month, making garments for well-known brands such as Disney, Walmart and the French company Teddy Smith. Highly flammable materials were stored on the ground floor, near the staircase, in breach of basic safety regulations. The emergency exits were locked to prevent theft — common practice in Bangladesh — so the victims were trapped or died jumping from the upper floors. The owner, Dolwar Hossain, has faced no charges and remains a free man. He is a member of the BGMEA.

I had arranged to meet the BGMEA’s president, Ariqul Islam, who had been in that post for just a month. The textile industry employs between four and five million Bangladeshis and accounts for 80% of exports, so he is an important figure in the economy. A few eyebrows were raised at the appointment of this young entrepreneur, little known in the industry. One insider told me: “He’s a small player who lacks experience and profile. He’s been catapulted into the presidency because he’s easy to manipulate. This way, the big shots can pull the strings and remain out of sight.â€

Incentives to invest

In December 2012 a rare BGMEA inspection identified four factories judged to be dangerous as they had been built in breach of construction regulations, including Rose Dresses Limited in Ashulia, owned by Ariqul Islam. Three months later, he was elected BGMEA president. Given that most of the 5,000 garment manufacturing businesses openly flout the law, there are suspicions that the sole aim of the inspection was to give the protectors of the future president leverage over him.

Anu Mohammed, economics professor at Jahangirnagar University, had summarised the history of the industry for me: “Bangladesh hasn’t always been under the thumb of the clothing industry. Until the mid-1980s, jute was the main earner. Then the IMF and the World Bank arrived. Under their aegis, privatisations and public spending cuts caused unemployment to rise and led to massive dependence on imports and the decline of local industries. Bureaucrats in the main parties, army officers, the upper echelons of the police and the sons of prominent families jumped at the opportunities.†The incentives to invest in textiles were irresistible: low labour costs, unions weakened by the privatisation of state enterprises, and the elimination of import duty on machinery for export industries.
Corruption did the rest.

Europe and the US rewarded this policy by opening up to garments with the label “Made in Bangladesh†. Pascal Lamy, then EU trade commissioner, said in Dhaka in 2001: “The European Union is favourably disposed to support Bangladesh in its efforts to achieve ... greater integration into the global trade system by opening up new trade possibilities and encouraging greater market penetration.†Between 2000 and 2012, the turnover of Bangladesh’s textile industry more than quadrupled (from $4.8bn to $20bn). New York bank Goldman Sachs was delighted: last year it put the country, one of the poorest in the world, at the top of its list of the “Next Eleven†nations it thought likeliest to join the BRICS (Brazil, Russia, India, China and South Africa).

A new elite

A new elite was created, whose members drive 4x4s, eat at Pizza Hut (which has great cachet in Dhaka), play golf and send their children to study in the US. “The garment trade offers easy money, a lucrative means to invest in any other sector or a route into parliament,†said Anu Mohammed. “Officially, only 29 of the 300 members of parliament are textile factory owners. But in reality, if you include those whose interests are registered under another name, there are many more. In Bangladesh, it’s hard to find anyone with power who isn’t linked to the world of textiles. And the BGMEA is at the controls.â€

I’d been waiting quite a while for Islam when one of his colleagues came out to keep me company: Hassan Shahriar Chowdhury, who had just returned from the US, where he had been collaborating with a group of convention participants on “something to do with counter-terrorism†. Chowdhury, an officer in the air force and a “fan of Angela Merkel†, claimed he doesn’t own a textile factory. So what was he doing at BGMEA? He avoided my question but seemed delighted to chat with a French journalist: “I love France. Bangladesh is planning to buy two submarines. Usually our military equipment comes from China. I know the prime minister Sheikh Hasina well, so I had a quiet word with her and said she’d be better off buying French submarines. They cost more but there’s less corruption, don’t you think?†I was sceptical, so Chowdhury changed the subject and opened his address book: he asked if I would like to meet his cousin, who is minister for women’s affairs, and offered to introduce me to the editors of the main newspapers: “They’re all my friends.â€

Islam appeared, surrounded by five advisers, and told me that he had changed his mind: our meeting was cancelled. “You need an accreditation from the ministry of the interior. Otherwise it’s impossible for me to talk to you, especially about such sensitive subjects.†On the way back to the elevator, I noticed a sign on a glass partition behind which managers and secretaries bustled: “Talk less. Work more.â€

The Tazreen survivors provide the starkest evidence of the BGMEA’s power. Guided by Sherin, the kingpin of the National Garment Workers’ Federation, a union with links to the Communist Party, I set off for Ashulia. The urban chaos of Dhaka gradually gave way to a lunar landscape, with chimneys belching black smoke, where ragged youths bake mud bricks used to build the middle-class homes visible in the distance. They’re also used to construct the factories that became more numerous as we went north. At the end of a narrow dirt road was a burnt-out concrete shell clad in bamboo scaffolding, the ruins of Tazreen Fashions, until recently an official supplier of shirts to Disney.

Staying on

Nasreen is 25, but looks 40. Unlike others who escaped the fire and returned to their villages, she has stayed on in Nishchintapur, a quiet dormitory district near the factory. On 24 November at 6.50pm, Nasreen was at her sewing machine when she heard the alarm. “The foreman told us it was a drill and we should stay at our machines. Then the alarm went off again and people began panicking. We started to smell burning. The foreman still didn’t want us to move, but we ran anyway. There were two exits. One was unlocked, the other wasn’t. The staircase that led to the open door was already in flames. If we’d been able to get out of the door at the bottom of the other staircase, we’d all still be alive.†Some of the windows were also locked. Along with friends, Nasreen managed to get one open and jump out. She escaped with a broken leg. But she now has nightmares and a terror of factories.

The only aid she has received is “25kg of rice, 25kg of onions and a litre of oil†. Since her husband’s wages are not enough to support the family, she has no choice but to go back to her sewing machine. When a factory burns down or collapses in Bangladesh, the BGMEA is responsible for compensating the victims: 100,000 takas ($1,280) for the injured who have a medical certificate and 600,000 takas ($7,690) per victim for bereaved families. The employer doesn’t get involved, nor do the authorities. But only the most fortunate manage to collect the BGMEA’s meagre payments, since the association decides which names go on the list of victims. As most workers are taken on by verbal agreement and have no written contract, many survivors lack documentation to substantiate their claims. Their injuries can therefore be blamed on other causes than factory disasters.

In the Tazreen fire, identifying the bodies was impossible since they were burnt beyond recognition or reduced to ashes. According to Gulrukh, who has been in close touch with the families affected, at least 27 workers who disappeared in the fire have been excluded from the list of victims. Others claim there were 100, or even 200. “The official death toll bears no relation to what actually happened. Every one of us knows of fellow workers who didn’t get out of that factory alive, but the BGMEA refuses to recognise them, because they say they left no traces,†said Shilpee, another survivor. “But what traces can you leave behind when you’re dead and your family back home in your village doesn’t even know?â€

Sabotage, or Islamists?

The ruins were still smouldering when the prime minister blamed the fire on “sabotage†, which Bangladeshis immediately interpreted as a charge of Islamist involvement. Was this astonishing accusation, not backed up by claims from any group, intended to protect the factory owner and the BGMEA? Anu Mohammed believes it was, and told me that the best proof was that “ultimately, nothing happened: there was no inquest to determine the cause of the fire, no arrest warrant for the owner and his foremen, no measures taken to protect workers against future fire risks. Apart from the victims themselves, no one thinks about demanding compensation from the employer, Dolwar Hossain. For months his name has completely disappeared from the newspapers. It’s as though he never existed.â€

His foreign clients have also wiped him from their memories. On 15 April, at the instigation of the international union IndustriALL and a network of NGOs, the brands that Tazreen supplied were invited to Geneva with the aim of setting up a compensation fund. Disney reportedly declined, saying it had switched to Vietnamese or Cambodian suppliers after the fire, and effectively washing its hands of the matter. Walmart also categorically refused, initially denying any connection with Tazreen, then blaming the auditors who had certified this model factory. Philippe Bouloux, CEO of Teddy Smith, could not be contacted by phone or email. I eventually managed to extract from one of his colleagues the explanation that “we are just a small company. We can’t afford to go to Geneva.†(Teddy Smith’s “rock’n’roll look†costs €163 ($210) in Paris.)

The Carrefour group claimed it knew nothing: it is France’s number one distribution company, and has its own office in Dhaka (registered as Carrefour Global Sourcing Bangladesh). It admits that it was a client of Hossain’s Tuba Group, but denies that any order went to Tazreen. Hossain has at least 10 factories, and T-shirts on sale in Carrefour do not necessarily come from Tazreen. But a source told me: “When it’s a big order — as it inevitably is with a customer like Carrefour — the supplier will spread the order across all the factories he owns. In this case, Tazreen operated as an overflow factory when the other Tuba Group facilities were overloaded. Carrefour couldn’t have been unaware of this. Why else would it have struck this factory off its list, if there was nothing to distinguish it from the others?â€

‘We are very vigilant’

Bertrand Swiderski, Carrefour’s director for sustainable development, said: “We have our own standards and audits, as a result of which we formally outlawed Tazreen as a production site. We are very vigilant.†Those factory audits are “confidential†.

Swiderski sent me the “social charter†which Carrefour prides itself on getting foreign suppliers to sign. In the chapter on “respect for the freedom of association†, the charter stipulates that “workers have the right to belong to the union of their choice or to create one, and to take part in collective bargaining without first having to obtain permission from the management.†In Hossain’s factories, as is common throughout Bangladesh, all union activity is strictly forbidden.

The experience of former Tazreen employee Faizul (not his real name) exemplifies this. We met in a bare room off an alley in Nishchintapur, the local headquarters of the National Garments Workers Federation. Faizul is — secretly — its secretary for the Ashulia area. His story is down to earth: “In the factory, as soon as you say the word ‘union’, you’re out and you won’t get another job. In Tazreen there were about a hundred of us secretly in the union. We never talked about it at work.â€

After the fire, his place was swamped with spontaneous meetings of survivors determined to fight but powerless to act. “All the workers who knew about us came to share their sorrow and their anger. Fifty-three of our comrades died in that fire. We were furious with the boss who led them to their deaths, and with the government and the BGMEA, which are protecting him. But we didn’t know what to do.†Could they hand out leaflets, organise meetings or call for strikes? “Nothing like that is possible here. As soon as you handed out a leaflet, you’d be arrested by the police. And you’d never work again.â€

He said he had “contacted workers in other factories and got them to check that the doors and emergency exits were unlocked, as the bosses have promised.†And what happens if they’re not? “Then our comrades tell us by SMS. Everyone has a mobile phone here. That’s how we communicate.†It was hard to tell whether he actually wanted to take more direct action: a union official from Dhaka was present at our meeting. As I left, Faizul showed me his wife’s identity photo. She worked at Tazreen and died jumping from the third floor.

The 200 or so agencies that act as intermediaries between the foreign companies and local suppliers are known as “trading houses†. It’s a point of honour for trading house director Nizam Uddin that all his clients, most of whom are European, “come to Bangladesh to see for themselves how the factories work. We welcome them, pamper them, take good care of them.†Upstairs, telephone operators dealt with orders in hushed voices, while in the basement garment samples were being made up to clients’ specifications. “Our main client has just reduced his orders, which has forced us to look for new ones. It’s the first time this has happened to us in 13 years,†said Nizam Uddin. In a case in a corner of his office, Uddin displayed his golf trophies.

I was surprised that his business was working normally when the Islamist opposition Jamaat-e-Islami had called for a day’s strike (hartal), emptying the streets and strangling economic activity. “Oh, that doesn’t worry us. Whatever their affiliation, the demonstrators don’t attack our interests. They sometimes burn cars or shops, but they leave the factories alone. The BGMEA has members in all the main parties. Currently it supports Sheikh Hasina’s Awami League, but they also have an understanding with the BNP [Bangladesh Nationalist Party] and even the Islamists in Jamaat.â€

‘Just make it happen’

Uddin introduced me to a colleague, Georges Paquet, 67, an expatriate Frenchman who lives half the year in Dubai. He’s been in Bangladesh since 1994 and, being “near the end†of his career, was willing to speak openly: “They make everything here, including incontinence pants which are sold in big French supermarkets. The problem is that my clients are driving down prices more and more. Do they want people to work for nothing? European brands sell at a sevenfold mark-up — they multiply the price they get from us by seven, or even ten. There is no limit to their desire for profit. Longstanding clients can leave us overnight if a competitor undercuts us by 10 cents. The hypocrisy is breathtaking. At the same time as the management of H&M were meeting Sheikh Hasina to demand better working conditions in Bangladeshi factories, their subordinates were negotiating a 15% price reduction from suppliers. Their attitude is ‘We don’t care how you do it — just make it happen’.â€

About the Tazreen fire, Paquet said: “I have known Dolwar Hossain for 10 years. He’s a good man, a pious man. He paid for the local mosque out of his own pocket. At the start I was his second best client, but success went to his head. He kept buying factories until he had about a dozen and found himself with a business that had a turnover of $65m. Things got out of control. When Tazreen burned down, he hadn’t set foot in the place for a year ... You shouldn’t get the impression that he’s living it up — Tazreen cost him an arm and a leg. Dolwar is crippled with debt. He doesn’t have a single client left and everyone has turned their backs on him, even his friends in the BGMEA. What do you want? That he should go to prison?†Nobody asked the Tazreen survivor Rehanna this question: since escaping through a ventilation duct on the fourth floor and jumping, she has actually lost the use of her leg. She now gets around with a wooden wheelbarrow as a wheelchair.

The survivors of the Tazreen fire are not optimistic about the future of their fellow workers at neighbouring factories. “There will be other disasters, and they may be worse than this one,†said a man with an arm bandaged in dirty linen. Gulrukh said: “Tazreen hasn’t made the slightest difference to the poor working conditions in the textile industry, because the elite don’t care about the fate of the workers. So we can expect further horrors. There will be cosmetic measures so that the BGMEA can reassure its foreign clients, who will reassure their customers. But nothing will change until the system is dismantled, dissolved and rebuilt on completely new foundations.†Two weeks later, Rana Plaza killed ten times as many as the Tazreen fire. The Bangladeshi finance minister, Abul Maal Abdul Muhith said: “I don’t think this is very serious. It’s just an accident.â€

Translated by George Miller