North South University

Environmental Management Term Paper

Fall 2015
A Report on

Environmental Management of Garments

Industries in Bangladesh
Environmental Management of Garments Industries in Bangladesh
1
 ENV 214: Environmental Management
Submitted to:

Dr. Md. Nazrul Islam

Course Instructor
Env-214
Department of Environmental Science
North South University

Submitted by: LONDON

S.M. Sabbir 1430292030
Saidul Islam Adnan 1430447630
Golam Mohaimen Mamun 1430764630
Ishtiaque Ahmed Razi 1421161030
Md. Shakil Ahmed 1420079030
Md. Nure Alam Siddique 1421110030
Mehady Hasan 1321881030
SECTION: 06

Environmental Management of Garments Industries in Bangladesh

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Executive Summary

The tremendous success of readymade garment exports from Bangladesh over the last two decades has
surpassed the most optimistic expectations. Today the apparel export sector is a multi-billion-dollar
manufacturing and export industry in the country. The overall impact of the readymade garment exports
is certainly one of the most significant social and economic developments in contemporary
Bangladesh. With over one and a half million women workers employed in semi-skilled and skilled jobs
producing clothing for exports, the development of the apparel export industry has had far-reaching
implications for the society and economy of Bangladesh. Environmental Management of this sector is
much more important to keep this sector much more beneficial to us. It will be much more important to
establish Environmental Management in this industries to make the industry effective to all.

Since our study is based on both primary and secondary data, there is a possibility of getting fake
information. If the surveyed personnel provide us with any fabricated information about their opinion of
their organization, then the report findings may be erroneous. Above all, this study is weak in some
points. The notable ones are as under:

 The survey was conducted in a very short time so we were not able to collect more information.
 This survey made on crisis situation of Bangladesh, so it was difficult to collect more samples.
 Only the big and the reputed Garments Company consider here as sample.
 The questionnaire contains some questions that, if answered properly, might damage the company’s
image. In this type of questions, the respondents might provide socially acceptable answers. This
risk was unavoidable.
 Another limitation of this study is the person’s private information were not disclosing some, data
and information for obvious reasons, which could be very much useful.
 Lack of experience in this field.
 Lack of proper authority to conduct the interview program.

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Table of Contents

Introduction ………………………………………………………...05
Environmental Aspects of Garments Industry Sector………………….12
 Environment and Health Policy……………………………………………………12
 Security Policy………………………………………………………………………..13
 Buyers’ Code of Conduct…………………………………………………………...13
 Health & Safety Policy……………………………………………………………….13
 Environmentally Safety Canteen…………………………………………………..13

Prospects of the RMG sectors………………………………………………16

 Market Diversification……………………………………………………………….16
 Product Diversification………………………………………………………………16
 Backward Integration………………………………………………………………..17
 Labor Productivity……………………………………………………………………18
 Research and Training………………………………………………………………19
 Flow of investment…………………………………………………………………..19
 Infrastructural Impediments………………………………………………………..20

Recommendations………………………………………………....21
Conclusion…………………………………………………………..22
References…………………………………………………………..23

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Introduction:
The readymade garment (RMG) industry of Bangladesh commenced its journey in the late 1970s and
within a short period of time emerged as an important player in the economy in terms of export earnings,
employment generation, and poverty alleviation and empowering of women. Bangladesh exports its
RMG products mainly to the United States of America (USA) and the European Union (EU). Garments
exports from Bangladesh have been growing at an impressive rate in recent years. In 2007-08 alone, the
garment export earned, a record level of US$10.7 billion in 2007-08. Moreover, it accounts for over 75
percent of the country’s total export earnings, provides employment almost 5 million people, accounts
for over 10 percent of the country’s GDP, and contributes around 40% of its manufacturing output. The
prospects of RMG sector, however, in Bangladesh not only depends on availability of cheap labor and
government’s liberal policy but also depends on compliance with codes of conduct. Compliance means
to comply with something or 1 Senior Lecturer in Management, Department of Business Administration,
Northern University Bangladesh 2 Assistant Professor, Business Administration Discipline, Khulna
University, Khulna 72 Journal of Business and Technology (Dhaka) yield to the wishes of another. RMG
sector of Bangladesh needs to improve the factory working environment and various social issues related
to the industry. International buyers are very particular about compliance with codes of conduct before
placing any import order. Poor housekeeping, storage system, ineffective monitoring and controlling
system, disorganized production layout, lack of team– based work, rented factory premises, narrow
staircases, closed environment, insufficient light and air, clean drinking water, separate wash room for
male and female, etc. are common practices in most of the RMG factories in Bangladesh. Bangladesh
Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers
and Exporters Association (BKMEA) set standards for compliance like factories must have alternative
stairs, basic fire equipment, approved layout plan from concerned authority for ensuring safe building
construction, group insurance for workers, hygienic sanitation facility and first aid appliance, as well as
ensuring minimum wages and flexible jobs for the workers. There are many recognized compliance
bodies worldwide like ILO, ISO 14001, WRAP, BSCI, ETI, and SAI, FLA. Owners of RMG factories
and government can seek help from those bodies to improve the standard of environment as well as
products of their industries. In this paper, the existing compliance practices of RMG factories in

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Bangladesh, particularly factories located in Dhaka city, are examined. This paper also tries to reveal the
acceptability of compliance provisions to the employed workers.

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Export performance of Garment Accessories and Packaging industry

Garment Accessories and Packaging Industry plays vital role not only in improving the quality of products
to international level by adding modern design but also by ensuring appropriate wrapping to maintain
quality free from being stale of soiled or spoilt. In the transportation of exportable goods, the inevitability
of the role of packaging and accessories is beyond question. In Bangladesh, Ready Made Garments (RMG)
industry has emerged as the leading export-sector (contributing 79% of the country’s total annual export-
earnings) over a period of around over 25 years. This export-leader is followed by tea, frozen food, jute
and few other exportable products. To keep pace with the speedy growth of export-sector, the packaging
and accessories industry has also expanded very quickly. Bangladesh Packaging & Garment Accessories
Manufacturers & Exporters Association (BGAPMEA) has emerged as the trade body to represent the
packaging and accessories industries in Bangladesh. It is registered under the Trade Organization
Ordinance 1961 & Companies Act 1994. The association is affiliated with The Federation of Bangladesh
Chambers of Commerce & Industry (FBCCI). The association is also member of Asian Packaging
Federation (APF) & World Packaging Organization (WPO). Garments Packaging & Accessories sector
started its journey during early eighty with a few number of few industries to meet up the requirements of
pharmaceutical industry. But in late eighties when readymade garments (RMG) sector started export, its
demand increased tremendously. Now the total number of export oriented Packaging & accessories
industries rose to more than one thousand. This industry caters to the need of total garments & other export
oriented industries by producing more than thirty items like Carton, Poly Bag, Hanger, Elastic, Zipper,
Button, Label, Hang tag, Back Board, Neck Board, Sewing Thread etc. Previously these items were
imported from abroad by spending hard earned foreign exchange. Now entire demand for garments
accessories & packaging is met up by local industries. The Packaging & Accessories industry in
Bangladesh earn foreign exchange $ 4.10 billion annually. (Pls. see the data appended in Table-3 below):

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Graph-1: Showing Year-wise Backward linkage Export of Packaging & Accessories.

Export trend of Bangladesh Garments Accesories & Packaging

(in Mn. USS)

5000 4100
3075
4000 2751.13
1919.51
3000 1604.97 1852.17
1381.68
2000 1185.12

1000
0
1
Year
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Trend of Export Earnings of Bangladesh

The export performance of major sub-sectors shows vibrant growth during last 28 yrs. (1983-84 to 2011-
12) (Pls. see table below):

Table-1: Growth rate of total export earnings, RMG & Garments Accessories &
Packaging sector o Bangladesh.
(in million US$)

Total Export RMG Export Percentage & Backward/deemed

Fiscal Year growth rate of export of
Earning Earning
RMG, Packaging & packaging &
(in mn US$) (in mn US$) Accessories sector accessories
2005-06 10526.16 7900.80 75.06 1185.12
2006-07 12177.86 9211.23 75.64 1381.68
2007-08 14110.80 10699.80 75.83 1604.97
2008-09 15565.19 12347.77 79.33 1852.17
2009-10 16204.65 12796.72 77.12 1919.51
2010-11 20628.73 18340.89 78.10 2751.13
2011-12 23704.19 20360.05 78.80 3075.00
2012-13 27027.36 22432.11 83.00 4100.00

(Date source: Export Promotion Bureau)

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Export Performance of Packaging and Accessories Industry (Million US$)

The contribution of Garment Accessories & Packaging Industry to the export earnings has been estimated
from the export-earnings of RMG sector. It is revealed from the estimates of the RMG factories and
concerned Packaging and Accessories Industry that the share of the Packaging and Accessories Industry
in export-earning of RMG varies between 13% and 18%, the average being 15%. Based on this the
estimated export-earnings from Garment Accessories and Packaging Industry for last 7 yrs. have been
calculated and shown in Graph.

Based on the recent survey of raw materials consumption and other cost components, the average addition
of this sector has been estimated at 40%.

Social Compliance

Coverage of Social Compliance

One of the most widely discussed issues in industrial sector of Bangladesh is the question of social
compliance. A number of recent occurrences, such as collapse of Rana Plaza, Fire hazards of Spectrum
Garments etc. have attracted the attention of the media, global supply chain operators, international
agencies, trade bodies and Govt. Although thus far no serious incidence has taken place in any of the
member units of Garment Accessories and Packaging sector, it is essential to be aware about the criticality
of the issue and take necessary procedures to avoid any repetition of such incidence.

Compliance is defined as code of conduct, specification and or standard that must be followed by the
industrial units. Social compliance covers a wide range of social issues, namely, labor standards, fair labor
practices, working conditions, health and safety issues, child labor, forced labor, free association and
collective bargaining, management system etc. Absence, ignorance and violation of the standards and
norms of each of these areas invite hazardous consequences, such as labor unrest, destruction of factories,
loss of lives & properties, exploitation of labor unrest by vested interest groups and political opponents,
strikes & lockout and so on. Violation of social compliance of these has caused already enormous loss to
RMG Sector during last few years. The Garment Accessories & Packaging Sector also has suffered the ill
effects directly and indirectly. Cancellation of Orders of RMG Sector directly affects the market demand

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of the products of GAP Sector. Moreover, recently the buyers are also becoming cautious about the social
compliance of the GAP Sector also.

Important Issues of Social Compliance

Considering the serious importance of Social Compliance, United Nations and ILO have come forward
with a number of conventions to address the problems. These are as follows

a) United Nations:



Universal Declaration of Human Rights (UDHR).


U. N. Convention of the Right of the Child (CRC).
U.N. Convention on Elimination of All forms of Discrimination against Women
(CEDAW).
b) ILO Conventions:
- Freedom of Association and the Right to Collective Bargaining;
- A Ban on forced labor
- A Ban on child labor
- A Ban on discrimination in the work place and in professions.

Side by side the international bodies, a good number of international NGOs and Global Supply Chain
Operators have also identified a good number of social compliance issues for textile & RMG Sectors. A
list of such organizations is as follows:

(i) Social Accountability (SAI), a NGO, established in 1997, developed its standards for workplace.
(ii) Business Social Compliance Initiative (BSCI), established in 2003, based in Brussels, has its own
set of standards for social compliance and certification system.
(iii) Worldwide Responsible Apparel Production (WRAP), a US-based independent, non-profit
organization, with its own set of social compliance standards and certification system.
(iv) Fair Labor Association (FLA), is a US-based non-profit organization. It also has its own provisions
and certification system.
(v) Ethical Trading Initiative (ETI), is an U.K. based NGO, with its provisions for social compliance
and certification system.

Each of the above organizations has their own set of standards for social compliance. On analysis of all
these a list of standards, which are commonly followed by them are stated below:

i) Working conditions are safe and hygienic.

ii) Prohibition of Forced labor.
iii) Prohibition of Harassment or Abuse.
iv) Living-Wages are paid.
v) Child labor shall not be used.
vi) Working hours are not excessive.

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vii) No discrimination is practiced.
viii) Regular employment is provided.
x) No harsh or inhuman treatment is allowed.
xi) Freedom of Association and Collective bargaining.

Problems arising out of Non-Compliance Social Issues

Analysis of recent studies and media reports reveal that the RMG Sector has been suffering from the
undesirable results of non-compliance of social issues. To sum up, these are as follows:
i) Industrial Labor Unrest, looting and vandalism, strikes, road blocking, damage of vehicles, killing
and injuring people etc.
ii) Fire Accident, in few cases fire accidents in factories caused loss of lives hundreds of workers and
officers, burning out of huge quantities of finished goods, raw materials & factory sheds etc.
iii) Collapse of factory building due to faulty structural design.
iv) Child Labor, is an outcome of non-responsiveness to Social Compliance. This leads to poor
productivity, deteriorating quality of products, different types of accidents & hazards, health and
hygiene problems.
v) Discrimination of salary and benefits between male and female workers lead to high labor
turnover, frustration, crowdism, vandalism etc.
vi) Non-payment of wages in time, forced labor etc. are some of serious problems which arise from
non-compliance of social norms and labor laws.
vii) Longer Working hours, non-payment of compensation etc. are often used as a tool of labor
exploitation by the factory owners.

Measures to ensure Social Compliance

A number of measures have been taken by the trade bodies and industrial units at the insistence of the
trade partners (i.e. branded buyers), trade bodies, international bodies (ILO), Government and other
regulatory bodies. To sum-up, most popular measures undertaken by different bodies to ensure Social
Compliance are stated below:

 Formation of a high level Social Compliance Forum under the chairmanship of the Hon’ble
Commerce Minister and representatives of M/O Labor, Board of Investment, M/O Commerce,
EPB, BEPZA, Depart of Fire Service, P.M Office, BGMEA, BKMEA, Workers, Business Social
Compliance Initiative (BSCI), Nari Uddog Kendra (NUK), UNDP, GTZ, ILO and LCG.

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 Task Force on Labor Welfare in RMG has been constituted to meet various requirements on social
compliance including occupational safety and security, labor welfare and improving working
conditions in RMG Sector. This Task Force is headed by Joint Secretary, M/o Labor and
Employment and includes representatives of M/o Commerce, M/o Women & Children Affairs,
Directorate of Textiles, EPB, BGMEA, BKMEA, BIGUF, Workers Union and Director of Labor.
 Task force on Occupational Safety in RMG has been constituted to monitor the occupational safety
aspects. This Task Force is headed by Joint Secretary, M/o Works and includes the representatives
of M/o Commerce, M/o Industries, EPB, Inspectorate of Factories & Established BGMEA,
BKMEA, BIGUF, Worker’s Union and Directorate of Fire Services.

Environmental Issues
Environmental Aspects of Garments Industry Sector
Environmental Compliance means conforming to environmental laws, regulations, standards and other
requirements. In recent years, environmental concerns have led to a significant increase in the number and
scope of compliance imperatives. Being closely related, environmental concerns and compliance activities
are increasingly being integrated and aligned to some extent in order to avoid conflicts, wasteful overlaps
and gaps. Like all other industrial enterprises every member units belonging to GAP Sector should
maintain a moderate working condition for their employees. Although most of the well-established units
try to comply with the environmental issues, but there are still cases of non-compliant units.
Here is the list of principal policy issues relating to ENVIRONMENTAL compliance, which are
maintained fully or partially by the industrial units which are especially relevant to garment accessories
and packaging industry:
1. Environment and Health Policy
2. Security Policy
3. Buyers’ Code of Conduct
4. Health & Safety Policy
5. Environmentally Safety Canteen
Environment and Health:
1. A safe and healthy workplace (ISO 14000)
2. Availability of drinking water at least 4.5 L/day/employee
3. Availability of clean glass/cup for drinking water
4. Pure drinking water supply
5. Availability of hot and cold water in the canteen
6. Drinking water signs in local language at working place.
7. Ensuring cleanliness of water vessel
8. Suggestion box register

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Environmentally Sound Sanitation:
1. Separate toilet for women & men with exhaust fan
2. Toilet with proper privacy and lock facility
3. Urinal accommodation with exhaust fan
4. Effective water sewage system
5. Soap toilet together with water tap & exhaust fan
6. Dust bins
7. Daily cleaning log sheet
8. No smoking signs
9. Ladies/ gents toilet signs both in local language
10. Disposal of wastes and effluent

Environmentally Sound Safety Guard:

1. Metal glows on good condition
2. Rubber mats for ironers
3. First aid box
4. Ironers wearing sleepers
5. Trained employees
6. Motor / needle guard
7. Eye guard
8. Doctor and Nurse
9. Medicine and Medicine issuing register
10. Welfare officer

Sustainable Physical Environment:

1. Standard room temperature
2. Standard level of sound
3. Standard lighting facilities

So, compliance of the above requirements ensures the working environment of the industry. To protect
the human rights every management should ensure the above compliance policy.

Critical Issues of Environmental Compliance in Garments Sector

A has been stated earlier, major portion of the units under GAP Sector are export-oriented, that means the
products of this sector are exported to different destinations of the world through different global supply

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chain operators. And each of these operators has their own environmental Code of Conducts, which they
impose on the manufacturers of garment as well as accessories & packaging materials. To clarify the issue,
we have summarized below a number of critical environmental issues suggested by the selected
certification agencies & global supply chain operators working in Bangladesh, namely, International
Standardization Organization (ISO) 14000 series, EU Eco-Label, Oeko-tex standard 100/1000, C&A,
Carre four, H&M, Levis etc. Knowledge about the environmental requirement of these organizations and
compliance of these standards are critically important for survival and expansion of the products of GAP
Sector in the international market.

a) The International Organization for Standardization (ISO):

The ISO has developed the ISO 14000 series. ISO 14000 is of ISO’s most widely known standards and
primarily concern with environmental management, which can be applied to any organization in any
sector. It will minimize harmful effects on the environment caused by the organization’s activities and
achieve continual improvement of the company’s environmental performance. ISO, a non-governmental
organization is a federation of the national standards bodies of 157 countries from all regions of the world
including developed, developing and transitional economies.

Safety Problems:
Safety need for the worker is mandatory to maintain in all the organization. But without the facility of
this necessary product a lot of accident is occur incurred every year in most of the company. Some
important cause of the accident are given below-
● Routes are blocked by storage materials
● Machine layout is often staggered
● Lack of signage for escape route
● No provision for emergency lighting
● Doors, opening along escape routes, are not fire resistant.
● Doors are not self-closing and often do not open along the direction of escape.
● Adequate doors as well as adequate staircases are not provided to aid quick exit
● Fire exit or emergency staircase lacks proper maintenance
● Lack of proper exit route to reach the place of safety
● Parked vehicles, goods and rubbish on the outside of the building obstruct exits to the open air
● Fire in a Bangladesh factory is likely to spread quickly because the principle of compartmentalization
is practiced
● Lack of awareness among the workers and the owners

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But now the situation is much improved and we found, all the surveyed garments are fulfilling the
requirement of emergency exit. It is provided in all the cases, signage is present and firefighting
equipment’s are up to date, a departure from the past. Even fire drill is held once in a month.
Bangladesh faces the challenge of achieving accelerated economic growth and alleviating the massive
poverty that afflicts nearly two-fifths of its 135 million people. To meet this challenge, market-oriented
liberalizing policy reforms were initiated in the mid-1980s and were pursued much more vigorously in
the 1990s. These reforms were particularly aimed at moving towards an open economic regime and
integrating with the global economy.
During the 1990s, notable progress was made in economic performance. Along with maintaining
economic stabilization with a significantly reduced and declining dependence on foreign aid, the
economy appeared to begin a transition from stabilization to growth. The average annual growth in per
capita income had steadily accelerated from about 1.6 per cent per annum in the first half of the 1980s
to 3.6 percent by the latter half of the 1990s. This improved performance owed itself both to a
slowdown in population growth and a sustained increase in the rate of GDP growth, which averaged
5.2 percent annually during the second half of the 1990s. During this time, progress in the human
development indicators was even more impressive. Bangladesh was in fact among the top performing
countries in the 1990s, when measured by its improvement in the Human Development Index (HDI)
as estimated by the United Nations Development Project (UNDP). In terms of the increase in the value
of HDI between 1990 and 2001, Bangladesh is surpassed only by China and Cape Verde.
While most low-income countries depend largely on the export of primary commodities, Bangladesh
has made the transition from being primarily a jute-exporting country to a garment-exporting one. This
transition has been dictated by the country’s resource endowment, characterized by extreme land
scarcity and a very high population density, making economic growth dependent on the export of labor-
intensive manufactures.
In the wake of the 2001 global recession, Bangladesh’s reliance on foreign countries as a market for
exports and as a source of remittances has become obvious. If Bangladesh is to become less vulnerable
to the economic fortunes of others, it will need to strengthen its domestic economy, creating jobs and
markets at home. A strong domestic sector and an improved overall investment environment will
provide a more stable source of income – like what the garment industry has provided so far – and will
rekindle and sustain Bangladesh’s economic growth.

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Prospects of the RMG Industry:
Despite many difficulties faced by the RMG industry over the past years, it continued to show its robust
performance and competitive strength. The resilience and bold trend in this MFA phase-out period partly
reflects the imposition of ‘safeguard quotas’ by US and similar restrictions by EU administration on
China up to 2008, which has been the largest supplier of textiles and apparel to USA. Other factors like
price competitiveness, enhanced GSP facility, market and product diversification, cheap labor, increased
backward integration, high level of investment, and government support are among the key factors that
helped the country to continue the momentum in export earnings in the apparel sector. Some of these
elements are reviewed below.

Market Diversification:
Bangladeshi RMG products are mainly destined to the US and EU. Back in 1996-97, Bangladesh was
the 7th and 5th largest apparel exporter to the USA and European Union respectively. The industry was
successful in exploring the opportunities in markets away from EU and US. In FY07, a successful
turnaround was observed in exports to third countries, which having a negative growth in FY06 rose
three-fold in FY07, which helped to record 23.1 percent overall export growth in the RMG sector. It is
anticipated that the trend of market diversification will continue and this will help to maintain the growth
momentum of export earnings. At the same time a recent WTO review points out that Bangladesh has
not been able to exploit fully the duty free access to EU that it enjoys. While this is pointed out to be due
to stringent rules of origin (ROO) criteria, the relative stagnation in exports to EU requires further
analysis.

Product Diversification:
The growth pattern of RMG exports can be categorized into two distinct phases. During the initial phase
it was the woven category, which contributed the most. Second phase is the emergence of knitwear
products that powered the recent double digit (year-on-year) growth starting in FY04. In the globalized
economy and ever-changing fashion world, product diversification is the key to continuous business
success. Starting with a few items, the entrepreneurs of the RMG sector have also been able to diversify
the product base ranging from ordinary shirts, T-shirts, trousers, shorts, pajamas, ladies and children’s
wear to sophisticated high value items like quality suits, branded jeans, jackets, sweaters, embroidered

Environmental Management of Garments Industries in Bangladesh

16
wear etc. It is clear that value addition accrues mostly in the designer items, and the sooner local
entrepreneurs can catch on to this trend the brighter be the RMG future.

Backward Integration:
RMG industry in Bangladesh has already proved itself to be a resilient industry and can be a catalyst for
further industrialization in the country. However, this vital industry still depends heavily on imported
fabrics. After the liberalization of the quota regime some of the major textile suppliers Thailand, India,
China, Hong Kong, Indonesia and Taiwan increased their own RMG exports.
If Bangladesh wants to enjoy increased market access created by the global open market economy it has
no alternative but to produce textile items competitively at home through the establishment of backward
linkage with the RMG industry. To some extent the industry has foreseen the need and has embarked on
its own capacity building.

Flow of Investment:
It is plausible that domestic entrepreneurs alone may not be able to develop the textile industry by
establishing modern mills with adequate capacity to meet the growing RMG demand. It is important to
have significant flow of investment both in terms of finance and technology. Figure 3 indicates that the
investment outlook in this sector is encouraging, although the uncertainties before the MFA phase-out
period caused a sluggish investment scenario. In part the momentum in the post-MFA phase-out period
is indicative of the efforts underway towards capacity building through backward integration. This is
evident in the pace of lending to the RMG sector and in the rising import share of RMG related
machinery. However further progress would be necessary to improve and sustain competitiveness on a
global scale.

Policy Regime of Government:

Government of Bangladesh has played an active role in designing policy support to the RMG sector that
includes back-to-back L/C, bonded warehouse, cash incentives, export credit guarantee scheme, tax
holiday and related facilities. At present government operates a cash compensation scheme through
which domestic suppliers to export-oriented RMG units receive a cash payment equivalent to 5 percent
of the net FOB value of exported garments. At the same time, income tax rate for textile manufacturers

Environmental Management of Garments Industries in Bangladesh

17
were reduced to 15 percent from its earlier level for the period up to June 30, 2008. The reduced tax rates
and other facilities are likely to have a positive impact on the RMG sector.

Infrastructural Impediments:
The existence of sound infrastructural facilities is a prerequisite for economic development. In
Bangladesh, continuing growth of the RMG sector is dependent on the development of a strong
backward linkage in order to reduce the lead time. However, other factors constraining competitiveness
of Bangladesh’s RMG exports included the absence of adequate physical infrastructure and utilities.

Labor Productivity:
The productive efficiency of labor is more important determinant for gaining comparative advantage
than the physical abundance of labor. In Bangladesh, the garment workers are mostly women with little
education and training. The employment of an uneven number of unskilled labors by the garment
factories results in low productivity and comparatively more expensive apparels. Bangladesh labor
productivity is known to be lower when it compared with of Sri Lanka, South Korea and Hong Kong.
Bangladesh must look for ways to improve the productivity of its labor force if it wants to compete
regionally if not globally. Because of cheap labor if our country makes the labor productivity in the apex
position, then we think the future of this sector is highly optimistic.

Research and Training:

The country has no dedicated research institute related to the apparel sector. RMG is highly fashion
oriented and constant market research is necessary to become successful in the business. BGMEA has
already established an institute which offers bachelor’s degree in fashion designing and BKMEA is
planning on setting up a research and training institute. These and related initiatives need encouragement
possibly intermediated by donor-assisted technology and knowledge transfer. A facilitating public sector
role can be very relevant here.

Supportive Government Policy:

In contrast to the public sector-led import-substituting industrialization strategy pursued during the first
few years after independence, the industrialization philosophy of the government changed rather
Environmental Management of Garments Industries in Bangladesh
18
dramatically from the late 1970s when the emphasis was on export-oriented growth to be spearheaded
by the private sector. Towards this end, various policy reforms were implemented in the 1980s and
1990s. Some of these reformed policies contributed considerably to the growth of the RMG industry in
Bangladesh.
During the 1980s, a number of incentives were introduced to encourage export activities. Some of them
were new like the Bonded Warehouse Facility (BWF), while others like the Export Performance License
(XPL) Scheme 37 were already in operation and were improved upon. Also, rebates were given on
import duties and indirect taxes, there were tax reductions on export income, and export financing was
arranged. Under the XPL scheme, exporters of non-traditional products received import licenses for
specific products over and above their normal percentage allotment based on the f.o.b. value of their
exports. Under the Duty Drawback System, exporters of manufactured goods were entitled to get refund
of duties and taxes paid on imported inputs used in export production, and also all excise duties paid on
exported finished goods. For certain fast-moving items such as RMG, a notional system of duty
payments was adopted in 1982-83. Under this system, exporters were exempted from paying duties and
taxes on imports used in export production at the time of importation, but were required to keep records
of raw and 21packaging materials imported. The duties and taxes payable on the imports were kept in
a suspense account. Liabilities to pay the amounts in suspense were removed on proof of exports.

The discussion in this section clearly points to the positive contribution made by policy reforms to the
growth of the RMG industry in Bangladesh. In particular, two policies– the SBW facility and the back-
to-back L/C system- led to significant reduction in cost of producing garments and enhanced
competitiveness of Bangladesh’s garments exports. It also allowed garment manufacturers to earn more
profit which, when necessary, could be used to overcome difficulties arising from weak governance.
Furthermore, poor governance, reflected in the leakage of duty-free imported fabrics in the domestic
market, paradoxically enough also helped the garment manufacturers to earn extra ‘profit’ and thereby
enabled them to absorb the ‘high cost of doing businesses – a fall out of bad governance.

The ISO 14000 series is a typical management system and not really a code of conduct. Its generic
management system refers to the organization’s structure for managing its process or activities that
transfer inputs of resources into a product or service which meet the organization’s objectives, such as
satisfying the customers quality requirements, complying to regulations or meeting environmental
objectives. The ISO 14000 series help companies to set up an effective environmental management
system. It covers the following areas:
Environmental Management of Garments Industries in Bangladesh
19
* Environmental Management System: specifies a set of guidelines for staged implementation of an
environmental management system, including the use of environmental performance evaluation (14001
& 14004);

* Life cycle assessment: is a description of environmental performance of products and prioritizing

environmental aspects (14040);

* Environmental design: integrates environmental aspects into product design and improvement of
Environmental performance of products (14062);

Environmental Communication: refers to communicating environmental performance, information

about environmental labels, declarations and the environmental aspects of products (14020);

* Environmental Performance Evaluation: means Monitoring of the environmental performance and

evaluation (14030);

* Monitoring System Performance: information about the performance of the environmental

management system (14010).

Provisions:

The EU Eco-label scheme has a set of environmental and performance criteria for judging products. Only
if products meet all the criteria they can be awarded the EU Eco-label. These environmental criteria will
take into account all aspects of a products life, from its production and use to its eventual disposal (cradle-
to-grave approach). The applicant shall supply detailed information as to the composition of the textile
product. The criteria are developed for:



Acrylic, Polyamide, Polyester, Polypropylene;


Elastase


Cotton and other cellulosic seed fibers;


Flax and other best fibers like hemp and jute;


Greasy wool from sheep, camel, alpaca, goat etc.


Biocidal or biostatic products;


Detergents, fabric softeners and complexion agents


Bleaching agents;


Dyes (metal complex, azo, chrome mordant, pigments and impurities);


Auxiliaries and finishing agents;


Flame retardants;


Filling, coatings, laminates and membranes;
Energy and water use;
Environmental Management of Garments Industries in Bangladesh
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Implementation and Verification

The Competent Bodies of Eco-label are independent and neutral organizations responsible for
implementing the Eco-label award scheme at national level, including drafting Eco-label criteria,
assessing applications and awarding the Eco-label to companies that apply. They play a central role in the
operation of the EU Eco-label award scheme and are the first point of contact for manufacturers, importers
or retailers who apply for certification.

The application must include all required certification and necessary documents. The component Body is
obliged to verify that the product complies with the criteria. The Component Body will also verify if the
application conforms to the assessment and verification requirements and consult the EUEB if necessary.
Generally, getting the Eco-label logo for each product group will be based on its own environmental
criteria.

Recommendation:
Bangladesh economy at present is more globally integrated than at any time in the past. The MFA phase-
out will lead to more efficient global realignments of the Garments and Clothing industry. The phase out
was expected to have negative impact on the economy of Bangladesh. Recent data reveals that
Bangladesh absorbed the shock successfully and indeed RMG exports grew significantly both in FY06
and (especially) in FY07. Due to a number of steps taken by the industry, Bangladesh still remains
competitive in RMG exports even in this post phase-out period.
Our Garments Industries can improve their position in the world map by reducing the overall problems.
Such as management labor conflict, proper management policy, efficiency of the manager, maintainable
time schedule for the product, proper strategic plan etc.
Government also have some responsibility to improve the situation by providing- proper policy to protect
the garments industries, solve the license problem, quickly loading facility in the port, providing proper
environment for the work, keep the industry free from all kind of political problem and the biasness.
Credit must be provided when the industry fall in need.

Environmental Management of Garments Industries in Bangladesh

21
To be an upper position holder in the world Garments Sector there is no way except follow the above
recommendations. We hope by maintaining proper management and policy strategies our country will
take the apex position in future.

Conclusion:
The Ready-Made Garments (RMG) industry occupies a unique position in the Bangladesh economy. It
is the largest exporting industry in Bangladesh, which experienced phenomenal growth during the last
25 years. By taking advantage of an insulated market under the provision of Multi Fiber Agreement
(MFA) of GATT, it attained a high profile in terms of foreign exchange earnings, exports,
industrialization and contribution to GDP within a short span of time. The industry plays a key role in
employment generation and in the provision of income to the poor. To remain competitive in the post-
MFA phase, Bangladesh needs to remove all the structural impediments in the transportation facilities,
telecommunication network, and power supply, management of seaport, utility services and in the law
and order situation. The government and the RMG sector would have to jointly work together to
maintain competitiveness in the global RMG market. Given the remarkable entrepreneurial initiatives
and the dedication of its workforce, Bangladesh can look forward to advancing its share of the global
RMG market

Picture: Bangladeshi Garments Industry Environment.

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References:

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ltd., He was a Professor of Management, Otago University, New Zealand 91980-83) and Textile
Advisor (1984-2000), The World Bank/Ministry of Textiles.
2. Dr. Shaibur Rahman Molla, M. Sc.(D.U.), Ph.D. (Japan) is an Assistant Professor, Department of
Environmental Science & Health. Jessore Science & Technology University.
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11. “Challenges Facing the Garments Industry.” The Financial Express. January 27. German Embassy
Dhaka. 2010. “Social and Environmental Standards in the Bangladesh Ready-Made Garment Sector”
Available from: www.dhaka.diplo.de/.../Bekleidungsindustrie__Seite.html. Accessed June 15, 2010.
12. People’s Daily Online. June 03, 2008. “Bangladesh Implementing Minimum Wage in Garment
Industry.” China. The Daily New Age. April 19, 2009. “Garment industry still flouting minimum
compliance. 2009.” Editorial.
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