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Rosita and Megatex Factories: significant improvements made while several serious violations continue

July, 20 2012 Share

Summary

Over the course of the last four-and-a-half months, significant improvements have been made in regard to respect for labor rights and working conditions at the Rosita and Megatex factories.  However, ongoing serious problems still need to be addressed.

First, a summary of the good news:  The Rosita and Megatex workers have received a modest wage increase, and all overtime work is more or less paid correctly.  For the majority of workers, excessive forced overtime is no longer the norm.  Benefits are now also paid correctly, including the annual wage increase, vacation pay and maternity leave.  South Ocean has made several positive managerial changes and new, transparent software has been installed to better track hours, wages and piece rates.  After four-and-a-half months, Rosita and Megatex management have finally dropped all charges that were filed against 30 workers during a protest on March 28, 2012.  The majority of workers now receive one day off a week.  Wages are paid on time.  And physical and verbal abuses have been greatly reduced.

Verité and Sheva have provided training for a number of workers as well as for line leaders and mid-level management.  Documents are being prepared that will help workers better calculate their piece rate earnings, overtime, annual wage increase and their earned leave, overtime and vacation pay.

On the downside, several serious violations continue.

Approximately 291 Rosita and Megatex workers have been fired and blacklisted on trumped up charges. 

The Workers Welfare Associations in both Rosita and Megatex have been destroyed and their offices seized.

It is possible that some of the blacklisted workers will go on hunger strike.  Moreover, rumors are spreading that senior workers may be terminated and that Rosita and Megatex may shut down during the slow season.  Some workers continue to face mandatory and excessive overtime-up to 130 to 140 hours of overtime in June 2012-and management continues to keep two sets of books for overtime.

 

I. U.S. Ambassador issues a warning:

The U.S. Ambassador to Bangladesh, Dan Mozena, stated on July 10 that, "U.S. companies want to buy products from Bangladesh, but they are very concerned about the labour issues, safety at the workplace and freedom of association in Bangladesh." 

In April, Mr. Aminul Islam, a labor union leader, was tortured to death.  The United States Government has broken off further negotiations regarding the Trade and Investment Cooperation Framework Agreement (TICFA).

Just today, July 19, 2012, Mr. William Hanna, Ambassador and leader of the European Union delegation to Bangladesh, is also expressing concern on the part of European garment buyers regarding fair wages and respect for fundamental worker rights. (Daily Star, July 19, 2012) 

 

II. Urgent Action Necessary

It is critical to immediately address the mass firing and blacklisting of over 290 workers at the Rosita and Megatex plants, and the destruction of the two popular and democratically elected Workers Welfare Association Boards, which gave the workers a voice.  The failure to address these issues could undermine the significant improvements that have been made at Rosita and Megatex.

There is currently no worker organization or voice at all in Rosita and Megatex.

It is no secret that South Ocean, the owner of the Rosita and Megatex plants, is one of the largest knitwear manufacturers in the world.  Many of Europe and Australia's most popular and storied labels have been produced by the Chinese-owned South Ocean for the last 20 years!

Surely the South Ocean conglomerate and the popular European and Australian labels made in Bangladesh have the power and influence to sit down together with the Bangladeshi Government to end the mass firing and blacklisting of over 290 workers at Rosita and Megatex.  Moreover, South Ocean and the labels, along with the workers, have the right to demand that their popularly elected Workers Welfare Associations are respected.  This is also the law in Bangladesh.

This is what should be done.  At least two senior-level officers of South Ocean, which is headquartered in Hong Kong, should travel to Bangladesh.  Simultaneously, senior representatives of the major European and Australian labels produced at the Rosita and Megatex factories should also travel to Bangladesh.  The South Ocean, European and Australian senior corporate representatives could surely arrange meetings with Bangladesh's Prime Minister, Minister of Labor and the Bangladesh Export Processing Zone Authority (BEPZA), which administers the Export Processing Zones.  The delegation could also meet with the U.S. Ambassador to Bangladesh, Mr. Dan Mozena, who has been a leading voice pressing for improved working conditions and the protection of rule of law for Bangladesh's apparel workers.  The Bangladeshi Government would have to take this delegation's advice very seriously, given that garment exports are by far the country's largest export and supplier of currency.

There is also a time urgency to this, as apparently Verité/Sheva's monitoring of the Rosita and Megatex plants will end on the first day of September.

The European and Australian labels sourcing production to South Ocean have every right to rely on their supplier, but they would be making a big mistake not to also verify working conditions on their own or through credible independent auditors.

(The monitors working for the Business and Social Compliance Initiative (BSCI), who were involved in auditing Rosita and Megatex, failed miserably in their audit.  BSCI must undergo a serious evaluation and remediation plan to restore its credibility.)

 

III. Significant Worker Rights Improvements at the Rosita and Megatex Plants in Bangladesh

1.) Modest wage increase:  Over the course of the last several months, the workers at the Rosita and Megatex factories have received a modest wage increase.  In February, the base wage was 3,853 taka ($47.13) a month.  As of July 2012, the base wage has been increased to 5,200 taka ($63.57) per month.  This is approximately a 35 percent increase.

Base Wage
(In U.S. Dollars. Exchange rate: 81.8 BDT = $1.00 USD)

February 2012

22.6 cents an hour
$  1.81 per day (8 hours)
$10.88 a week (48 hours)
$47.13 a month
$565.56 a year 

July 2012

30 cents an hour
$  2.44 a day (8 hours)
$14.67 a week (48 hours)
$63.57 a month
$762.84 a year

2.) During the peak season, and depending on how much overtime they work, Rosita and Megatex workers can earn between 7,500 and 11,000 taka a month.  At 7,500 taka a worker can earn $21.16 a week and $91.69 a month.  At 11,000 taka a worker can earn $31.03 a week and $134.47 a month.

3.) All overtime is also now more or less paid correctly, which is a major improvement.  However, management continues to keep two sets of books for recording overtime hours.  In June, workers in the ironing, sewing, mending, quality control and packing sections toiled 140 hours of overtime, which wildly exceeds Bangladesh's limit on permissible overtime hours.

The hours beyond Bangladesh's legal limit (of 2 hours a day) were recorded and paid separately, "more or less" correctly, according to the workers. 

4.) Rosita and Megatex workers are now compensated according to Bangladesh's wage laws, including proper payment for overtime, the 10 percent annual wage increase, earned leave (ie. vacation pay), maternity leave.   Wages are paid on time and calculated at the proper Taka/Dollar exchange rate, as per Bangladeshi law.

5.) Overtime Hours are Largely within the Legal Norm:  It is much more common now for the knitting and linking section workers-the majority of workers in the factory-to work eight regular hours and two hours of overtime, for a 10-hour shift.  This is within the legal framework of Bangladesh's permissible overtime.

However, the hand stitching, ironing, sewing, mending, quality control and packing sections routinely work a 14-hour shift, from 8:00 a.m. to 10:00 p.m., during peak season.  Before clothing shipments must leave for Europe and Australia, 250 or so Rosita factory workers are required to remain for a 19-hour shift, from 8:00 a.m. to 3:00 a.m. the following morning.  In June, many of these workers toiled 30 days straight.

 

Setting the record straight:

The goal of the Institute for Global Labour and Human Rights is to promote compliance with local labor laws and the ILO's internationally recognized worker rights standards-including no child labor, no forced labor, freedom of association and the right to organize an independent union, the right to collectively bargain and the right to decent working conditions.

We are aware that on June 8, 2012, South Ocean management and Verité made certain allegations, which were definitely inaccurate.  For example, the Institute never stated that children were employed at Rosita and Megatex.

South Ocean and Verité went on to make the following assertions, to which we respond: 

 

 

South Ocean/Verité Assertion

 

 

Fact

"No forced labor was identified."

Forced labor was the norm

"Overtime payments were made as required by local law."

Management kept two sets of books, and the workers were shortchanged of their legal overtime premium.  (While it appears that overtime is now paid for the most part correctly, the practice of keeping a second set of books continues.)

"All overtime is voluntary."

100% of the workers can verify that  all overtime was forced.

"No forced detention of workers was identified."

Forced overtime was the norm.

"No systemic or intentional denial/cheating of workers' wages was identified."

Workers were shortchanged in every way with regard to wages and benefits.  They were routinely cheated on their overtime, vacation pay, annual wage increase, maternity leave and on the taka/dollar exchange rate that should have been used to calculate their pay.

 

However, to the credit of South Ocean, Verité, the European and Australian labels and the workers themselves, the Rosita and Megatex factories have been brought largely into compliance with Bangladesh's labor laws.  This is a huge step forward.

We hope that South Ocean, Verité and the labels will now address and resolve the issue of the firing and blacklisting of 291 Rosita and Megatex workers, and restore the legal Worker Welfare Associations at the two plants.  This is urgent.

 

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