PB The Mekong Club Bangladesh Private Sector Assessment 1The Mekong Club Bangladesh Private Sector Assessment

BangladeshPrivate Sector Assessment

A Preliminary Scoping Study

The primary objective of the study is to provide a broad-based overview of the private sector in Bangladesh as a stakeholder

in combating modern slavery in the country

The Mekong Club

The Mekong Club is a catalyst for change – engaging, inspiring and supporting the private sector to eradicate slavery from their business. Given that the majority of modern-day slavery exists in the private sector, these companies are ideally placed to help turn the tide of this global epidemic.

The only organisation of its kind, The Mekong Club steers away from the approach taken by other players in this space, which is to ‘name and shame’ companies – ousting bad behaviour or issues related to this subject. Instead, we believe in starting and ending with collaboration.

In fact, The Mekong Club originally formed as a direct response to the growing number of companies looking to develop strategies to address forced labour risk through a professional forum. Divided into industry-specific working groups, these networks meet regularly to learn, share best practices, and network with other like-minded professionals. Member companies also work together to achieve an annual deliverable which will work towards producing tangible results in the fight against forced labour.

1. Contents

2. Objectives of the Study 4

3. Definition of Terms 5

4. Demographic Overview & Key Social Trends 6

4.1. Population Distribution 6

4.2. Social Indicators 8

4.2.1. Human Development Index (HDI) 8

4.2.2. GINI Coefficient 9 4.2.3. Poverty Rate 9

5. The Labour force 10 5.1. Employment and Income 10 5.1.1. Employment Distribution 10 5.1.2. Informal employment 13 5.1.3. Unemployment 13 5.1.4. Income 14 5.2. Gender Gap 15 5.3. Comparative Minimum Wage 15 5.4. Migrant Labour 16

6. Political Risk Assessment 17

7. The Private Sector 18

7.1. Overview 18

7.2. Top 10 Conglomerates in the Private Sector 18

7.2.1. PRAN-RFL Group 18

7.2.2. ACI Group 19

7.2.3. Navana Group 19

7.2.4. Abul Khair Group 19

7.2.5. Bashundhara Group 19

7.2.6. Beximco Group 19

7.2.7. Square Group 20

7.2.8. City Group 20

7.2.9. Partex Group 20

7.2.10. Ananda Group 20

7.3. Top 200 Companies 20

7.4. Transparency 21

8. The Mekong Club Target Sectors 22

8.1. Agriculture 22

8.1.1. General 22

8.1.2. The Shrimp and Fishing Industries 24

8.2. FMCG Retail 24

8.3. Manufacturing 25

8.3.1. General 25 8.3.2. Garment and Textile Industry 28 8.3.3. Major Players 28

8.4. Banking Industry 31

9. Modern Slavery in Bangladesh 33

9.1. Overview 33

9.2. Highlights from US Trafficking Report 2017 34

9.2.1. General 34

9.2.2. Migrant Labour 34

9.2.3. Rohingya Crises 35

9.3. Child Labour 35

2 The Mekong Club Bangladesh Private Sector Assessment 3The Mekong Club Bangladesh Private Sector Assessment

2. Objectives of the Study

The primary objective of the study is to provide a broad-based overview of the private sector as a stakeholder in combating modern slavery in the country. More specifically the study aims to generate a knowledge base from which The Mekong Club can approach the private sector in order to create awareness and offer cooperative solutions for the eradication of modern slavery in corporate supply chains; the core focus of the Mekong Club’s mission.

The following secondary objectives specify the details of the data that need to be gathered in order to fulfil the scope of the study:

• Give an overview of the demographic landscape and economic conditions in Bangladesh

• Detail the characteristics of the labour force in Bangladesh by looking at factors such as size, average income, distribution, key issues

• Provide a detailed analysis of the private sector in terms of size of industries, number of workers and key players

• Provide in-depth reports on the Banking/finance, Manufacturing, Agriculture and Retail

• Identify the current state of modern slavery in Bangladesh

3. Definition of Terms

Throughout the report the following definitions will apply to the use of the terms human trafficking, forced labour, bonded labour and contract slavery, as specified by The Mekong Club.

HUMAN TRAFFICKING FORCED LABOUR

BONDED LABOUR AND CONTRACT SLAVERY

An act (1) carried out by athird party, through differentmeans (2), for the purpose ofexploitation (3).

For children under age 18 it is sufficient to demonstratethe act of moving a child for the purpose of exploitation.

HUMAN TRAFFICKING emphasizes the movement of victims

FORCED LABOURis often a consequence of human trafficking and emphasizesthe exploitative condition the victim suffers

BONDED LABOUR

CONTRACT SLAVERYare two forms of forced labour

All work or service which isextracted from any person underthe menace of anypenalty and for which the person has not offered themselves voluntarily.

Bonded labour begins when a worker borrows money froman employer and commits themselves to work for the employer in return.

Contract slavery involves deceiving or illegal contracts signed by victims who cannot understand them,and used to justify forced labour.

1. Act of:• Recruitment• Transportation• Transfer• Harbouring• Receipt

2. By means of:• Threat• Force or coercion• Abduction• Fraud• Deception• Abuse of power• Abuse of vulnerability

3. For the purpose of:• Exploitation• Slavery or similar practices• Servitude• Prostitution• Removal of organs• Forced labour and service

Threat of penalty• Physical and/or sexual violence.• Imprisonment or physical confinement.• Withholding of wages, unreasonable fees or financial penalties.• Withholding of identity documents.• Unfair dismissal or exclusion from future employment.• Deprivation of food or shelter.• Exclusion from community, social life or denunciation to community/family.• Intimidation and other threats.

Lack of Valid Consent• Worker deceived about the wages they would receive.• Worker cannot leave employment as they must remain for an undefined period to repay debts to employer.• Worker made to work by family.• Deception or fraud during recruitment stages.

Common features of Bonded Labour

• The employer manipulates interest rates or charges excessive rates.• The employer imposes high charges for food, accommodation, transportation, or tools. • The employer charges workers for shortfalls in business output or days missed due to worker sickness.

Common features of Contract Slavery• Contracts are in a language the victim does not understand.• Contracts are presented to victims who cannot read.• Victim is told fines and penalties will follow if he breaks the contract.

4 The Mekong Club Bangladesh Private Sector Assessment 5The Mekong Club Bangladesh Private Sector Assessment

4. Demographic Overview & Key Social Trends

4.1 Population DistributionThe last official census in Bangladesh was conducted in 2011 and according to the Statistical Yearbook 2016 the total population of the country was estimated at 144,043,6971 in that year. The World Bank estimated the population at 162,95 million in 20162. The population is evenly split between males and females. The rural population constituted 64.95% of the total population in 2016, down from 76.41% in 20003

At 1237 people per sq. Km (in 2015)4 Bangladesh is one of the most densely populated countries in the world. The population is distributed regionally as follows:

Barisal Division

Total Population

Chittagong Division

Dhaka City

Sherpur

Khulna Division

Rajshahi Division

Rangpur Division

Sylhet Division

Dhaka Division

8,325.666

144,043,697

28,423,019

47.424,418

(12,043,977)

(13,583,225)

18,484,858

15,787,758

9,910,219

15,687,759

Total

2016

Male

Female

Rural

162,951,560

50.06%

49.94%

64.95%

Population Distribution by Gender and location in 2016

Population Distribution by Province in 20115

1. http://bbs.portal.gov.bd/sites/default/files/files/bbs.portal.gov.bd/page/b2db8758_8497_412c_a9ec_6bb299f8b3ab/StatisticalYearBookFinal2016.pdf2. https://data.worldbank.org/country/bangladesh?view=chart3. https://data.worldbank.org/indicator/SP.RUR.TOTL.ZS?locations=BD

4. https://tradingeconomics.com/bangladesh/population-density-people-per-sq-km-wb-data.html5. http://bbs.portal.gov.bd/sites/default/files/files/bbs.portal.gov.bd/page/b2db8758_8497_412c_a9ec_6bb299f8b3ab/StatisticalYearBookFinal2016.pdf6. https://www.populationpyramid.net/bangladesh/2017/

The age distribution of the Bangladeshi population is skewed to the youth, with more than 50% of the population being under the age of 30 years6

Population Pyramid 2016

FemaleMale

10%

0.0%0.0%

0.1%

0.1%

0.3%

0.5%

0.7%

0.9%

1.1%

1.8%

2.4%

2.8%

3.2%

3.7%

4.1%

4.4%

4.8%

5.0%

5.0%

4.8%

4.7%

0.0%0.0%

0.1%

0.2%0.3%

0.5%

0.7%

0.8%

1.1%

1.7%

2.4%

2.8%

3.2%

3.9%

4.3%

4.5%

4.6%

4.8%

4.8%

4.6%

4.5%0-45-9

10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-7980-8485-8990-9495-99100+

8% 6% 4% 2% 0% 2% 4% 6% 8% 10%

6 The Mekong Club Bangladesh Private Sector Assessment 7The Mekong Club Bangladesh Private Sector Assessment

4.2. Social Indicators

4.2.1. Human Development Index (HDI)

Bangladesh Human Development Index (HDI)

Bangladesh’s HDI Value and component measures compared to countries in the SEA region 11

According to the UNDP Human Development Report of 20167, “Bangladesh’s HDI value for 2015 is 0.579— which put the country in the medium human development category—positioning it at 139 out of 188 countries and territories.”The Human Development Index (HDI) is a statistic measuring human development based on life expectancy, education, and per capita income indicators8.

In its overview of the country, the World Bank9 states that “Bangladesh has made substantial progress in reducing poverty, supported by sustained economic growth…However, sustained growth has rapidly increased the demand for energy, transport and urbanization.”

In South East Asia, Bangladesh ranks only higher than Cambodia on the HDI. It has the lowest expected years of schooling (10.2) and only marginally outranks Cambodia on life expectancy and GNI per capita.

Vietnam

Bangladesh

Philippines

Thailand

Indonesia

China

Malaysia

Cambodia

Myanmar

Medium HDI

East Asia & Pacific

HDIValue

HDIRank

LifeExpectancy

at birth

Expected years of

schooling

Mean Years of

Schooling

GNI Per Capita

(PPP USD)IHDI

Value

0.683

0.579

75.9

72.0

12.6

10.2

8 5,335

3,341

0.562

-

0.556

0.586

0.563

**

**

0.436

0.581

0.469

8,395

14,519

10,053

13,345

24,620

3,095

12,125

6,281

9.3

5.2

7.9

7.9

7.6

10.1

4.7

0.617

0.655

11.7

13.6

12.9

13.5

13.1

10.9

3,423

4,314

68.3

74.6

69

76

74.9

68

74.2

68.6

115

139

116

87

113

90

59

143

-

-

0.682

0.740

0.689

0.738

0.789

0.563

0.720

0.631

- - - - - - -

1990

Lifeexpectancy

at birth

Expectedyears of

schoolingMean yearsof schooling

GNI percapita

(2011 PPP$)HDI Value

1995

2000

2005

2010

2011

2012

2013

2014

2015

58.4

61.9

2.8 1,286

1,435

1,679

2,036

2,652

2,784

2,943

3,071

3,179

0.386

0.423

0.468

0.506

0.545

0.557

0.565

0.570

0.575

0.5793,341

3.3

4.1

4.5

4.9

5.1

5.2

5.2

5.2

5.2

7.5

6.6

5.7

8.4

9.4

9.9

10.0

10.0

10.2

10.2

65.3

68.0

70.1

70.5

70.8

71.2

71.6

72.0

7. UNDP: Human Development Reports – Bangladesh8. Wikipedia; see also UNDP9. http://www.worldbank.org/en/country/bangladesh/overview

11. UNDP: Human Development Report 2016: Human development for everyone12. UNDP: Human Development Reports13. http://www.worldbank.org/en/country/thailand/overview

4.2.2. GINI Coefficient

The distribution of inequality is further illustrated through the GINI coefficient, which is calculated at 32.1 for the year 201312. Bangladesh’s low GINI Coefficient (0 = equality) indicates that the low income that is generated (See GNI per capital above) is equally shared among the population.

4.2.3. Poverty Rate

According to the World Bank13 ,“based on the international poverty line of $1.90 per person per day, Bangladesh reduced poverty from 44.2 percent in 1991 to 18.5 percent in 2010, and is projected to decrease to 12.9 percent in 2016.”.

The World Bank further notes that “while the poverty reduction efforts to date have been extraordinary, Bangladesh faces daunting challenges with about 28 million people still living below the poverty line. The country is at an important juncture, when with the right policies and timely action, it can move up within the middle-income bracket.”

8 The Mekong Club Bangladesh Private Sector Assessment 9The Mekong Club Bangladesh Private Sector Assessment

5. The Labour force

5.1. Employment and Income

According to the Quarterly Labour Force Survey 2015- 201614,

“the country’s labour force (aged 15 or older) experienced dramatic changes over the past decade and increased at a per annum average of 3.3 per cent, to around 58.8 million workers in 2015. The youth labour force participation rate decreased slightly, reflecting a positive trend of youth staying longer in the education system.”

The agricultural sector provides employment to 42.7% of the economically active population. Women account for 29.8% of the total labour force and are still confined mainly to occupations in the agricultural sector. The majority of occupations (72.2%) are found in what is classified as rural areas.

Agriculture, manufacturing and retail are the biggest industries in Bangladesh. This report will prioritize these industries for further investigation. Women are proportionally equally represented in manufacturing when compared to men, but under represented in the service sector and over represented in agriculture.

5.1.1. Employment Distribution

Agriculture

Manager

Industry

Professionals

Elementary occupations

Clerical Support Workers

Service and Sales Workers

Craft and Related Trades

Service

Technicians and Associated Professionals

Technicians and Associated Professionals

Plant and Machine Operators and Assemblers

Total

Rural

Rural

Urban

Urban

Total

Total

M

M

M

M

M

M

F

F

F

F

F

F

Tot

Tot

Tot

Tot

Tot

Tot

21.9

1.1

17.2

0.3

39.1

0.8

2.0

5.4

1.6

2.1

3.6

4.5

23.8

2.3

18.8

0.7

42.7

1.8

9.9

3.8

1.3

17.4

15.2 10.8

32.5

8.3

18.6 18.3 18.5

41.6

13.8

12.7

1.0

11.9

7.4

20.5

28.6

3.1

11.6

14.7

9.9

22.3

22.9

2.7

10.7

16.7

25.2

16.7

20.6

1.8

19.3

50.8

14.9

3.7

0.7

17.4

32.8

16.2

15.6

1.5

2.3

3.3

0.4

2.5

12.3

3.7

5.7

6.9

2.5

12.3

22.3

16.9

27.5

7.3

1.6

8.2

8.3

15.7

4.7

4.8

5.6

20.5

4.9

18.0

1.7

2.9

0.6

62

1.9

20.9

1.3

6.3

12.6

4.1

3.3

1.8

8.2

16.0

3.5

30.7

2.4

9.3

6.2

0.9

3.5

36.9

1.9

7.5

49.8 22.4 72.2 20.3 7.4 27.8 70.2 29.8 100.0

Employed populations aged 15 or older, by economic sector, sex and area15

Distribution of employed population aged 15 or older, by occupation, sex and area16

16. Ibid14. http://bbs.portal.gov.bd/sites/default/files/files/bbs.portal.gov.bd/page/96220c5a_5763_4628_9494_950862accd8c/QLFS_2015.pdf15. Ibid

10 The Mekong Club Bangladesh Private Sector Assessment 11The Mekong Club Bangladesh Private Sector Assessment

5.1.2. Informal employment

5.1.3. Unemployment

A key characteristic of the Bangladesh labour market is the contribution of the informal sector. In total 86.2% of employment are classified as being informal. According to the Quarterly Labour Force Survey 2015- 2016 :

“The operational (statistical) definition for informal employment in Bangladesh was a combination of both the informal character of the individual job as well as employment in the informal sector:

1. All individual job-based informal employment – operationally comprises all employed persons in the non-agriculture sector, both wage and salaried workers (employees) with no pension or no contribution to a retirement fund;

2. All contributing family workers;

3. All employers and own-account workers in the informal sector enterprises (operationally defined in Bangladesh as all private unincorporated enterprises engaged in non-agriculture work that do not have any registration);

4. All own-account workers employed in a private household.”

This indicates that the majority of workers lack the basic social or legal protection afforded to jobs in the formal sector. This lack of access to a legislative framework exposes the majority of the labour force to risks such as exploitative working conditions, forced labour and trafficking.

18. Ibid19. Ibid

17. Ibid

Agriculture, forestry andfishing

Mining and quarrying

Wholesale and retail trade, repair

Information and communication

Real estate activities

Transportation and storage

Financial and insurance activities

Professional, scientific and technical

Human health and social activities

Arta, entertainment and recreation

Other service activities

Activities of households as employer

Services Subtotal

Total

Public administration and defense

Education

Industry Subtotal

Manufacturing

Electricity, gas, steam and AC

Construction

Rural Urban Total

M M MF F FTot Tot Tot

0.3

12.3 9.2 11.3 19.0 32.1 22.5 14.2 14.9 14.4

0.2

7.1 1.1

15.0

0.1

1.4

3.1

0.1

0.6

36.2

9.5

0.4

2.8

0.3

0.4

0.1

100 100 100 100 100 100 100 100 100

19.9

1.8

0.1

0.3

4.0

0.0

0.5

12.9

0.5

0.1

3.0

2.1

0.1

0.1

10.3

10.9

0.1

1.1

3.4

0.1

0.5

29.0

6.7

0.3

2.8

0.9

0.3

0.1

17.0

5.2

0.1

25.2

0.9

3.8

3.8

0.5

1.3

62.2

13.6

2.0

4.0

1.2

1.1

0.2

28.1

8.5

0.4

19.7

0.8

3.2

4.6

0.4

1.7

57.5

10.3

1.8

5.6

4.2

0.9

0.2

29.5

6.5

0.3

18.0

0.4

2.1

3.3

0.2

0.8

43.7

10.3

0.8

3.1

0.6

0.6

0.1

22.3

7.5

0.2

34.09.743.9 63.122.176.7 42.713.054.1

2.5

0.1

0.6

4.9

0

1.0

20.8

0.7

0.4

4.8

4.7

0.2

0.1

16.1

1.1

0.1

13.4

0.3

1.7

3.8

0.2

0.9

36.9

7.7

0.7

3.6

1.8

0.4

0.1

20.5

5.6

0.2

0

0

0.2 0.1 0

4.5

0.4

1.6

7.9

0.1

2.6

44.5

1.2

1.3

10.1

12.3

0.5

0.1

33.4

1.1

0.1

0.1 0.2 0 0.2

Water Supply, sewerage, waste management

Accommodation and food service activities

Administrative and support service activities

0.1

1.8

0.5

0

0.3

0.1

0.1

1.4

0.4

0.2

3.0

1.5

0.1

1.4

0.5

0.2

2.6

1.2

0.1

2.1

0.8

0

0.6

0.2

0.1

1.7

0.5

Employed population aged 15 or above, by major industry, sex and area17

Employed population aged 15 or above, by formal/informal employment, sector and area19

Agriculture

Industry

Service

Total

Rural Urban Urban

Formal Formal FormalInFormal InFormal InFormalTotal Total Total

1.1 0.4 0.953.0 12.5 41.854.1 13.0 42.7

1.6 3.3 2.015.4 26.2 18.4

20.9 39.4 26

17.0 29.5 20.5

8.0 18.1 10.829.0 57.5 36.9

10.7 21.9 13.889.3 78.1 86.2100 100 100

The overall estimated unemployment rate (defined as the unemployed as a percentage of the labour force) was 4.2 per cent. The youth, aged 15-17 and 18-24 years (more than10.0 per cent), had the highest unemployment rate. This increases the risk of the young being exploited by traffickers. Family responsibilities and other pressures to get work may further increase the possibility of being trapped in slavery conditions.

12 The Mekong Club Bangladesh Private Sector Assessment 13The Mekong Club Bangladesh Private Sector Assessment

Unemployment rate20

Average monthly income from employment (wage/salary), by occupation,sex and area21

Comparative Minimum Wages in Selected Countries in Asia(As of 30 June 2017)23

5.3. Comparative Minimum WageCompared to the rest of Asia, Bangladesh’s current minimum wage structure is the lowest in Asia (excluding India).

Country/City

Bangladesh (Taka)

Mongolia (Tugrik)

Myannmar (Kyat)

Lao PDR (Kip)

Pakistan (Rupee)

Cambodia (Cambodia Riel)

Vietnam (Region I & II Dong)

Philippines/XI (Peso)

Philippines/VII (Peso)

Philippines/III (Peso)

Philippines/IV-A (Peso)

In CountryCurrency

In CountryCurrencyIn US$ In US$

Daily Minimum Wage Monthly Minimum Wage ExchangeRate

Per US$1*

176.67 b/ 2.23 66.88

81.95

80.32

111.39

96.62-115.95

140.00

138.07-155.89

202.20

183.17-217.66195.66-225.99174.25-225.10

2.73

2.68

3.71

3.22-3.86

4.67

4.60-5.20

6.74

6.11-7.26

6.52-7.53

5.81-7.50

6,400.00 a/

3,600.00 a/

30,000.00 a/

333.33-400.00 a/

5,300.00 1/ 79.2430

2,342.8400

1,344.6100

8,079.9800

103.4940

4,000.0000

22,452.4000

50.4451

50.4451

50.4451

50.4451

192,000.00 2/

108,000.00 3/

900,000.00 4/

10,000.00-12,000.00 5/

560,000.00 6/

3,100,000.00-3,500,000.00 7/

10,200.00 b/

9,240.00-10,980.00 b/

9,870.00-11,400.00 b/

8,790.00-11,355.00 b/

18,666.67 a/

103,333.33-116,666.67 a/

340.00 8/

308.00-366.00 9/

329.00-380.00 10/

293.00-378.50 11/

20.21. Ibid22. http://reports.weforum.org/global-gender-gap-report-2016/23. http://www.nwpc.dole.gov.ph/pages/statistics/stat_comparative.html

5.1.4. Income

According to a World Economic Forum report, Bangladesh ranked 72nd, out of 145 countries measured on its Gender Gap index22 with a score of 0.698. Although not reflected in the official income figures, the Gender Gap index estimate that females comparatively only earn 40% of wages that males earn.Overall, Bangladesh scored higher on gender equality than all the other countries in South Asia, indicating significant improvements despite consistent weaknesses.

The estimated average monthly income of paid employees in 2015-16 was Tk. 12897 or 156 USD. On average, females earn 1000-2000 Taka (12 USD) less than males across all industries. The gender gap is most pronounced in Skilled Agricultural, Forestry and Fisheries and Elementary Occupations. The average income in urban areas are significantly higher than in rural areas.

Managers (326 USD) and Professionals (256 USD) are paid the highest salaries, while agricultural workers are paid the lowest (119 USD).

15-17

18-24

30-64

25-29

65+

Total

Rural Urban Total

M M MF F FTot Tot Tot

10.1 14.1 10.9 9.7 9.0 9.5 10.0 2.0 10.5

8.9

0.9

12.2

4.0

10.0

1.9

9.1

1.1

12.8

10.7

4.8

10.4

2.0

8.9

1.0

12.4

4.2

10.1

1.9

4.8

0.6

9.8

2.5

6.5

0.8

5.6

0.7 2.2

7.3

0.9

4.9

0.6

10.0

2.4

6.7

0.9

2.9 6.5 4.1 3.2 7.7 4.4 3.0 6.8 4.2

Manager

Skilled Agric, For. & Fish.

Craft/Trade

Professionals

Technicians and other

Operators and Assembler

Clerical Support

Elementary occupations

Service and Sales

Other Occupations

Total

Rural

Male Male MaleTotal Total TotalFemale Female Female

Urban Total

18029 17102 17937 31128 29602 30907 26966 26714 26933

19402 18179 19056 24864 21355 23465 21803 19986 21187

15447 15209 15407 19427 17385 19070 17601 16411 17396

13036 11471 12863 17825 15237 17397 15534 13863 15300

12374 12742 12401 13548 12794 13454 12911 12773 12897

10054 8558 9825 10499 9267 10333 10096 8616 9872

11699 10432 11477 12630 11015 12098 12058 10777 11748

11838 11081 11712 13282 10971 12598 12517 11009 12166

9388 8324 9211 10316 8570 9535 9548 8436 9289

18236 17336 18194 20225 16506 20110 19058 17077 18978

11635 10988 11527 15945 13021 15066 13127 12072 12897

5.2. Gender Gap

14 The Mekong Club Bangladesh Private Sector Assessment 15The Mekong Club Bangladesh Private Sector Assessment14The Mekong Club Vietnam Private Sector Assessment

Indonesia(Jakarta-Jawa-Timur-Surabaya) (Rupiah)

Malaysia(Ringgit)

Thailand(Baht)

Philippines/NCR(Peso)

China(Yuan Renminbi)

Taiwan(Taiwan Dollar)

Hongkong($HK)

South Korea(Won)

Japan(Japan Yen)

New Zealand(New Zealand Dollar)

Australia(Australian Dollar)

38,333.33-103,333.33 a/

30.67-33.33 a/

300.00 14/

454.00-491.00 15/

33.33-73.00 a/

920.00 17/

260.00 18/

51,760.00 19/

5,424.00-7,280.00 20/

97.60-122.00 21/

141.60 22/

2.88-7.77 1,150,000.00-3,100,000.00 12/

86.52-233.23

214.23-232.86

13,291.8000

4.2944

33.9245265.29

920.00-1,000.00 13/

9,000.00 b/

7.14-7.76

8.84

9.00-9.73

4.90-10.73

30.25

33.32

45.37

48.36-64.9071.19-88.99

107.73

50.4451

6.8008

30.4120

7.8024

1,140.9300

112.1700

1.3710

1.3144

270.00-292.00147.04-322.02

907.54

999.70

1,360.99

1,450.66-1,947.042,135.67-2,669.58

3,231.97

13,620.00-14,730.00 b/

1,000.00-2,190.00 16/

27,600.00 b/

7,800.00 b/

1,552,800.00 b/

162,720.00-218,400.00 b/

2,928.00-3,660.00 b/

4,248.00 b/

*For more full details of how the wages are determined see: http://www.nwpc.dole.gov.ph/pages/statistics/stat_comparative.html

5.4. Migrant Labour

According to the ILO24 “each year, more than 400,000 workers leave Bangladesh for overseas employment. Problems faced by Bangladeshi migrants include: high fees for migration charged by recruitment agencies, especially for low skilled jobs; low wages, lack of information on migration opportunities and risks; discrimination, exploitation and abuse while overseas; and insufficient services to protect the rights of workers.”

Despite the problems migrants face, the importance of their contribution to the economy is evident in the fact that “remittances rose to over $15 billion in 2015 or about 8% of gross domesticproduct(GDP)—up from less than $2 billion in 2000—and have become a major sourceof foreign exchange earnings, second only to ready-made garments25.”

24. http://www.ilo.org/dhaka/Areasofwork/labour-migration/lang--en/index.htm25. https://www.adb.org/sites/default/files/publication/190600/overseas-employment-ban-workers.pdf

26. https://www.gov.uk/government/publications/overseas-business-risk-thailand/overseas-business-risk-thailand

6. Political Risk Assessment

Despite being a parliamentary democracy, political risk in Bangladesh remains noteworthy. According to the UK Department of Trade26, Bangladesh’s current political situation, can be summarized as follows:

Democratic institutions, including Parliament and local government, are weak. The current government is led by Prime Minister Sheikh Hasina. Her Awami League-led Grand Alliance won a landslide victory in the general election on 5 January 2014, after the BNP decided not to participate, leaving more than half the seats uncontested. Opposition parties had wanted elections under a neutral interim government. A controversial constitutional amendment, adopted in June 2011, had removed the provision for a temporary caretaker form of government during election periods. As a result of the boycott, Jatiya Party is now the official Opposition, though it also enjoys the unique position of forming part of the governing alliance, including holding ministerial portfolios. The opportunity for a renewed focus on democratic processes presented by the City Corporation elections in Dhaka and Chittagong in April 2015 was lost after the BNP withdrew part way through, citing widespread irregularities. The next general election must take place by January 2019 with the most likely timing being the last quarter of 2018.

16 The Mekong Club Bangladesh Private Sector Assessment 17The Mekong Club Bangladesh Private Sector Assessment16The Mekong Club Vietnam Private Sector Assessment

7. The Private Sector

7.1. OverviewBangladesh has managed to sustain significant improvements in the quality of life of its citizens. According to the World Bank Bangladesh Systematic Country Diagnostic27.

“Bangladesh is among a select group of countries worldwide where the pace of GDP growth accelerated, poverty dropped and inequality fell over 2000 to 2010, as the economy under went structural shifts accompanied by better job opportunities for men andwomen. Bangladesh made good use of the deep and elasticdemand offered by the global economy to expand job opportunities in manufacturing. Remittances from workers abroad also emerged as animportant source of income.

Growth in Bangladesh has been broad-based due to improved opportunities in the labor market coupled with a demographic dividend resulting from earlier successes in reducing population growth and improving human development, enabling millions to move out of poverty. The pace of poverty reduction has picked up considerably: the number of poor people fell 17m between 2000 and 2010, compared to less than 1m decline during 1990-2000.”

The report identifies five areas where “concerted efforts over the next 3-5 years could have a transformative impact on accelerating the creation of more and better jobs in Bangladesh: 1. Energy,2. Inland connectivity and logistics,3. Regional and global integration,4. Urbanization,5. Improved delta management.”

7.2. Top 10 Conglomerates in the Private Sector28

(The following section is quoted from http://www.businesshabit.com/2016/06/top-10-group-of-companies-in-bangladesh.html)

7.2.1. PRAN-RFL Group:

PRAN-RFL Group is basically a food-products Corporation in Bangladesh. It was founded by Late Amjad Khan Chowdhury. PRAN started in 1981 as a processor of fruits and vegetables in Bangladesh. RFL started its operation into the PVC category in 1996 and the plastic sector in 2015. Now it exports its products to more than hundred countries. It has almost 75,000 employees.

27. http://documents.worldbank.org/curated/en/158801468180258840/Bangladesh-More-and-better-jobs-to-accelerate-shared-growth-and-end-extreme-poverty-a-systematic-country-diagnostic28. http://www.businesshabit.com/2016/06/top-10-group-of-companies-in-bangladesh.html

7.2.1. ACI Group

7.2.3. Navana Group

7.2.4. Abul Khair Group

7.2.5. Bashundhara Group

7.2.6. Beximco Group

One of the largest Bangladeshi conglomerates. The company operates through three segments: Pharmaceuticals, Consumer Brands and Agribusiness. It was founded as the part of Imperial Chemical Industries (ICI) in East Pakistan in 1968. ACI had been integrated in Bangladesh in 1973. Mr. M Anis Ud Dowla is the founder of ACI. It has over 5,000 employees.

A Bangladeshi industrial conglomerate. It was founded in 1964. Navana Group under the leadership of Mr. Shafiul Islam Kamal as Chairman emerged into a separate physical entity from Islam Group after the death of its Chairman Mr. Jahurul Islam which was then the largest business group in Bangladesh. Navana Group comprises a number of companies, has diversified its activities in various areas like product and project marketing, construction and real estate business, international trading, distributions and production of various items and already attained significance in the business arena of Bangladesh.

Abul Khair Group is a one of the largest Bangladeshi industrial conglomerates. It started its journey as a tobacco marketing company back in 1953. With headquarter based in the commercial capital Chittagong, the group has now flourished into a multi-business portfolio of fast moving consumer goods, steel, cement, ceramics, marble, shipping and trading business.

One of the largest industrial conglomerates of Bangladesh. It was founded by Ahmed Akbar Sobhan. It started in 1987 as a real estate company venture under the name East West Property Development Limited (EWPD). The first project of EWPD turned out to be very successful. After then, the company grew very quickly. Bashundhara invested in new fields, including manufacturing, industry and trading. More enterprises were established in the early 1990s; these included cement, paper, pulp, tissue paper and steel production, as well as LP Gas bottling and distribution. It presently owns more than 20 major concerns located throughout Bangladesh. Now, it has over 15,000 employees.

It is one of the largest and most diversified industrial conglomerates of Bangladesh. It was founded by ASF Rahman. It was founded in 1972. It has almost 50,000 employees. The group’s key businessesinclude ceramics, pharmaceuticals, textiles, jute, information technology, aviation, media, finance, real estate, construction and energy. The group is listed on the Dhaka Stock Exchange and the Chittagong Stock Exchange, with a market capitalization of over US$ 300 million. Its pharmaceutical division, Beximco Pharma, is listed on the London Stock Exchange. Its chairman and vice-chairman both have a net worth of over US$ 2 Billion.

18 The Mekong Club Bangladesh Private Sector Assessment 19The Mekong Club Bangladesh Private Sector Assessment

7.2.7. Square Group

7.2.8. City Group

7.2.9. Partex group

7.2.10. Ananda Group

It is one of the largest industrial conglomerates of Bangladesh. It was founded in 1958 by Samson H. Chowdhury along with three of his friends as a private firm. It went public in 1991 and is currently listed on the Dhaka Stock Exchange. Square Group is holding the strong leadership position in the pharmaceutical industry of Bangladesh since 1985 and it has been continuously in the 1st position among all national and multinational companies since 1985. Square Group is now on its way to becoming a high performance global player. Square becomes more than just an organization, it is an institute. In a career spanning across four and half decades it has pioneered the development of the local business in fields as diverse as Pharmaceuticals, Toiletries, Garments, Textile, Information Technology, Health Products, Food Products, Hospital, etc

It is one of the largest industrial conglomerates of Bangladesh. City Group was founded by Mr. Fazlur Rahman, a business magnate in the private sector of Bangladesh. It began on 6 February 1972 as a mustard oil company venture under the name City Oil Mills. The first project of City Oil Mills turned out to be very successful. After then, the company grew very quickly. , City Group invested in new fields,including manufacturing, industry and trading. More enterprises were established in the early 1990s; these included consumer goods, foods, steel, printing & packaging, shipping, power and energy, shares and securities, insurance, media, and healthcare It presently owns more than 23 major concerns located throughout Bangladesh. Now City Group stands as one of top ten business houses in Bangladesh.

It is one of the largest Bangladeshi industrial conglomerates. The industries under this conglomerate include foods and beverages, steel, real estate, furniture, agribusiness, plastics, etc. It started in 1959, by industrialist M A Hashem with tobacco trading. It owns over 40 subsidiaries from tobacco to consumer goods, furniture, textile and the IT sector. It has split into two groups to improve management of its subsidiaries.

It is a Bangladeshi business conglomerate. The first Ananda company was established in 1983 as the Ananda Builders. It was established by Abdullahel Bari Farina. The diverse business areas of the group include ship building, heavy engineering, textiles, real estate and shipping. The most well-known concern under the group is Ananda Shipyard and Shipways Ltd. It is the largest of the private ship yards in Bangladesh.

For a more comprehensive list see: https://en.wikipedia.org/wiki/List_of_companies_of_Bangladesh

7.3. Top 200 Companies

7.4. TransparencyTransparency International ranks Bangladesh 145th out of 175 countries on its Corruption Perceptions Index of 201629, an index based on expert opinion from around the world that measures the perceived levels of public sector corruption worldwide. This illustrates the lack of transparency of public institutions and the high incidence of corruption.

Country

New Zealand 90

84

79

77

72

65

61

58

53

49

42

40

40

38

37

36

36

35

35

35

33

32

30

29

28

28

26

21

15

12 174

169

156

145

136

136

131

123

116

113

101

101

101

95

95

90

87

79

79

72

55

52

41

31

27

20

15

13

7

1

Singapore

Australia

Hongkong

Japan

Bhutan

Taiwan

Brunei

Korea (South)

Malaysia

Solomon Islands

China

India

Mongolia

Indonesia

Maldives

Sri Lanka

Philippines

Thailand

Timor-Leste

Vietnam

Pakistan

Laos

Nepal

Myanmar

Papua New Guinea

Korea (North)

Bangladesh

Cambodia

Afghanistan

CPI2016 Rank

29. https://www.transparency.org/news/feature/corruption_perceptions_index_2016#regional

20 The Mekong Club Bangladesh Private Sector Assessment 21The Mekong Club Bangladesh Private Sector Assessment

8. The Mekong Club Target Sectors

For the purpose of this study, which aims to generate a knowledge base from which The Mekong Club can approach the private sector in order to create awareness and offer cooperative solutions for the eradication of modern slavery in corporate supply chains, attention will be given to the following core target sectors:

• Agricultural (42.7% of the economically active population)• Manufacturing (14.4%)• Retail (13.4%)• Construction (5.6%) - TBC

8.1. The Agriculture Sector

Agriculture in Bangladesh is of significant importance to the economy with value added to GDP estimated at 14.8% in 201630. As indicated earlier the agricultural sector employs 42.7% of the labour force and harbours the highest percentage of female workers.

Although rice is the primary agricultural crop produced in Bangladesh, with approximately 75% of all areas under cultivation being planted with rice31, other commodities dominate agricultural exports.According to the Bangladesh Yearbook of Agricultural Statistics 201632, rice production totalled 34.7 millionmetric tons in 2014-2015. Comparatively, Bangladesh was the world fourth biggest producer of rice in 2009, but is only just self-sustainable.

30. https://data.worldbank.org/indicator/NV.AGR.TOTL.ZS31. Bangladesh Yearbook of Agricultural Statistics32. http://bbs.portal.gov.bd/sites/default/files/files/bbs.portal.gov.bd/page/1b1eb817_9325_4354_a756_3d18412203e2/Yearbook-2016-Final-19-06-2017.pdf

8.1.1. General

2012-2013 2013-2014 2014-2015

2 158 2 326 2 328

12 897 13 023 13 190

18 778 19 007 19 192

33 833 34 356 34710

5 008 5 064 4 988

1 649 1 953 2 192

2 931 3 365 3 729

Winter Vegetables

Sugar

Total Rice

Boro

Aman

AusRice

Summer Vegetables

Production of Major Crops (in ‘000 metric tons)

33. https://www.dhakachamber.com/home/Major_Export_Items34. https://www.dhakachamber.com/home/Major_Export_Items

Frozen shrimps, vegetables and tobacco are important export commodities based on their value contribution. In addition, although not classified under agricultural, Jute and Jute products contribute significantly to export value33.

687.53

445.18

89.12

348.28

7.78

5.65

46.84

52.26

39.84

17.37

196.27

20.95

136.79

6.94

397.69

52.50

57.24

242.35

787.99

1001.12

598.42

108.05

471.67

18.70

3.38

77.43

68.74

50.46

57.16

266.28

37.19

185.26

13.68

468.15

94.66

47.69

402.70

967.38

958.98

625.04

133.53

477.83

13.68

3.20

71.73

70.88

42.89

37.68

357.28

29.37

167.47

9.24

500.66

68.95

50.27

333.94

1114.93

1079.58

543.84

57.99

454.93

30.92

2.44

110.34

60.18

41.43

71.89

229.92

45.24

237.42

21.13

506.74

183.09

56.53

535.74

1030.61

554.29

324.81

17.63

289.15

18.03

1.00

58.24

32.32

19.10

8.32

49.47

19.66

55.14

7.79

208.38

83.05

19.41

229.48

332.40

A. Primary Commodities (Chapter 1-24)

(1) Frozen Food (Chapter 02-03)

a) Frozen Fish (0300, 0302, 0303, 0307)

b) Shrimps (0306)

c) Others

a) Tea (0902)

d) Cut Flower & Foliage (06)

e) Fruits (08)

f) Spices (0910)

g) Dry Food (19)

a) Raw Jute (5303)

b) Jute Yarn & Twine (5307)

c) Jute Sacks & Bags (630510)

d) Others

h) Others

c) Tobacco (24) )

b) Vegetables (07) )

(2) Agricultural Products (Chapter 04-24)

(17) Jute & Jute goods (Chapter 53, 630510)

Export Commodities-Primary and Agriculture (Value in Million USD)34

22 The Mekong Club Bangladesh Private Sector Assessment 23The Mekong Club Bangladesh Private Sector Assessment

Bangladesh’s Fishing Industry is estimated to contribute 3.69% to National GDP and 23.12% to Agricultural GDP35. This vast industry is “considered one of the most suitable regions for fisheries in the world, with the world’s largest flooded wetland and the third largest aquatic biodiversity in Asia after China and India”36.

It is well-known internationally that shrimp producers in Bangladesh employ slavery tactics in an effort to increase profits. As far back as 2011, a Verite research report entitled “Research On Indicators Of Forced Labor in the Supply Chain of Shrimp in Bangladesh”37 has detailed indices of induced or inflated indebtedness, sexual violence, abuse and harassment, overtime infringement, engagement in illegal activities, low earnings, health hazards and child labour in shrimp fry collecting, shrimp farming and shrimp processing. Siddharth Kara gives an extensive account of the use of bonded labour in the Bangladesh shrimp and fishing industry in his book Bonded Labor: Tackling the System of Slavery in South Asia (2012).(References:in fishing industry, 121; in shrimp distribution, 117–18; in shrimp industry, 117–22; in shrimp processing, 118–20).

Child labour is especially prevalent in the Fish Drying and Processing sectors according to the US Department of Labour’s Findings on the Worst Forms of Child Labour38. First hand experiences of forced and child labour have also been documented. See for example Jensen’s account of child slavery in the dry-fish industry on Dublar Char; a large, remote, silt island in the Sundarbans forest area39.

For more detail see Section 9: Modern Slavery and Human Trafficking in Bangladesh.

8.1.2. The Shrimp & Fishing Industries

8.2. FMCG RetailBangladesh’s retail market continues to be traditionally structured as small, roadside grocery shops (mom and pop stores) constitutes around 75 percent of the retail sector. Municipal corporation markets hosting various smaller shops based on the kind of commodity they carry represent about 20 percent of the food retail sector. The rest of the 5% market share is occupied by Convenience Stores and Supermarkets (less than 1%).

According to the USDA Gain Report of 201640:

“The modern retail sector, including supermarkets and convenience stores, is growing as consumers attach more importance to appearance, ambience, comfort, and the availability of a vast range of products. Modern retail outlets are rising in number, although contacts believe they likely only represent two to three percent of total urban retail market sales. About 22 companies with more than 131 outlet shave ventured into the modern food retail industry.”

The informal nature of the retail sector provides the ideal platform for agricultural enterprises engaged in modern slavery to offset their products.

35. http://www.fao.org/fileadmin/templates/ess/documents/apcas26/presentations/APCAS-16-6.3.2_-_Bangladesh_-_Fisheries_Statistics_in_Bangladesh.pdf36. http://www.sciencedirect.com/science/article/pii/S2468550X1630026037. http://verite.org/wp-content/uploads/2016/11/Research-on-Indicators-of-Forced-Labor-in-the-Bangladesh-Shrimp-Sector__9.16.pdf38. https://www.dol.gov/agencies/ilab/resources/reports/child-labor/bangladesh39. http://onlinelibrary.wiley.com/doi/10.1111/foge.12012/full40. https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Exporter%E2%80%99s%20Guide%20Bangladesh-2016_Dhaka_Bangladesh_6-7-2016.pdf

Manufactured Export Commodities by Value

8.3. Manufacturing

8.3.1. General

The table below clearly shows the prominence of the textile and garment industry in manufacturing exports in Bangladesh.

15517.12 21969.24 23300.78 25947.78 11405.32

19.52

11.47

301.15

102.87

50.63

29.06

2.18

40.97

27.96

38.55

15.69

0.28

6.98

23.07

9.69

226.10

2009-10 2010-11 2011-12 2012-13 2013-14 (July -Nov)

14.58

27.96

275.44

103.01

88.69

99.36

1.25

48.25

31.26

17.64

43.42

1.06

14.01

36.06

16.23

330.16

18.63

29.18

260.68

104.76

68.76

55.42

1.29

44.27

27.26

39.53

31.58

0.33

9.92

20.63

20.66

297.83

6.15

22.37

313.95

93.01

84.51

161.62

1.71

59.82

32.00

-

39.09

0.77

13.42

32.42

13.57

399.73

2.12

8.29

70.49

40.14

32.37

77.95

0.83

31.04

15.09

-

11.27

0.18

6.01

8.92

5.91

194.39

B. Manufactured Commodities (Chapter 25-97)

(1) Cement, Salt, Stone Etc (Chapter 25)

(2) Ores, Slag and Ash (Chapter 26)

(3) Petroleum bi Products (Chapter 27)

(4) Chemical Products (Chapter 28-38)

(5) Plastic Products (Chapter 39)

(8) Leather Product (Chapter 42-43)

(9) Wood & Wood Products (Chapter 44-45)

a) Pharmaceuticals (30)

a) PVC Bags (3923)

b) Chemical Fertilizer (31)

b) Plastic Waste (3915)

c) Cosmetics (33)

c) Others

d) Others

(6) Rubber (Chapter 40)

(7) Leather (Chapter 41)

24 The Mekong Club Bangladesh Private Sector Assessment 25The Mekong Club Bangladesh Private Sector Assessment

3.79

0.03

0.03

4.78

-

0.01

4.47

0.01

0.03

6.16

0.01

0.18

2.87

0.08

0.41

(10) Handicrafts (Chapter 46)

a) Raw Jute (5303)

c) Jute Sacks & Bags (630510)

(11) Pulp (Chapter 47)

b) Jute Yarn & Twine (5307)

(19) Carpet (Jute & Others -57)

a) Terry Towel (5802)

b) Special Woven Fabric (59)

(21) Knitwear (Chapter 61)

c) Knitted Fabrics (60)

d) Other

d) Others

(14) Silk (Chapter 50)

18.88

1.62

0.10

95.23

787.99

196.27

397.69

136.79

57.24

77.18

8.06

185.97

157.07

8.22

20.68

-

6483.29

6013.43

402.49

27.75

1.58

0.61

113.00

967.38

266.28

468.15

185.26

47.69

81.39

6.23

138.77

92.11

10.93

30.86

4.87

26.33

1.66

0.57

135.01

1114.93

357.28

500.66

167.47

50.27

95.75

7.50

164.55

120.13

11.75

26.16

6.51

9482.06 9486.39 10475.88

11039.85

791.52

4899.82

8432.40 9603.34 4753.53

788.76 906.07 297.78

33.73

1.39

0.16

124.96

1030.61

229.92

506.74

237.42

56.53

101.45

8.46

124.52

81.96

10.93

24.01

7.62

16.47

0.53

0.07

48.51

332.40

49.47

208.38

55.14

19.41

38.39

5.02

49.51

31.91

4.76

9.20

3.64

(12) Paper & Paper Products (chapter 48)

(13) Printed Materials (Chapter 49)

(15) Wool & Woolen Products (Chapter 51)

(17) Jute & Jute goods (Chapter 53, 630510)

(18) Man Made Filaments & Staple Fibres (54-56)

(20) Specialized Textiles (Chapter 58-60)

(22) Woven Garments (Chapter 62)

(23) Home Textile (Chapter 63 Excluding 630510)

(16) Cotton & Cotton Product (Yarn, Waste, Fabrics etc) (Chapter 52)

(24) Footwear (Chapter 64)

a) Iron Steel (72,73)

b) Copper Wire (74)

c) Stainless Steel ware (82)

e) Electric Products (85)

b) Furniture (94)

f) Bicycle (8712)

c) Golf Shaft (950639)

g) Others

d) Others

(34) Computer Services

(25) Headgear/Cap (Chapter 65)

(26) Umbrella Waking Sticks (66)

(27) Wigs & Human Hair (Chapter 67)

(28) Building Materials (Chapter 68)

(29) Ceramic Products (Chapter 69)

(30) Glass & Glass ware (Chapter 70)

(31) Engineering Products (Chapter 71-88)

d) Engineering Equipment (84)

(32) Ships, boats & floating structures (Chapter 89)

(33) Other mfd Products (Chapter 90-97)

a) Optical, Photographic, Medical Instruments etc (90)

204.09

36.63

-

1.03

0.30

30.78

5.94

311.09

60.42

110.86

26.11

23.20

49.23

2.67

38.60

9.34

54.57

14.86

19.26

11.18

9.27

35.36

297.80

54.10

0.03

2.12

0.21

37.58

1.44

309.55

69.79

65.04

2.43

36.03

26.07

99.83

10.36

40.44

69.42

28.40

21.38

8.71

10.93

45.31

335.51

53.23

-

6.76

0.32

33.75

0.37

375.49

59.73

50.93

3.20

49.54

88.53

105.59

17.97

45.95

84.61

34.64

27.14

9.79

13.04

70.81

419.32

47.69

0.01

9.14

1.91

37.69

0.16

367.47

56.81

66.38

1.58

48.73

63.09

105.08

25.80

5.73

121.53

50.33

31.41

15.15

24.64

101.63

238.18

22.32

0.19

4.73

-

19.20

0.12

153.17

22.04

21.02

3.50

37.85

23.20

37.81

7.75

0.06

52.79

25.88

11.28

4.80

10.83

36.68 (July-Oct)

26 The Mekong Club Bangladesh Private Sector Assessment 27The Mekong Club Bangladesh Private Sector Assessment

Bangladesh’s exceptional growth the past few years (GDP Growth Rate in Bangladesh averaged 5.69 percent from 1994 until 2016, reaching an all-time high of 7.11 percent in 201641) has primarily been driven by its growing apparel industry, which accounted for over 83 percent of export earnings in 201542.

According to World Finance43 “As global demand for cheap clothing rises rapidly, Bangladesh’s position as the second biggest exporter in the world continues to hold strong, which is mainly due to its large population and low labour costs.”

Furthermore, “As of 2016 Bangladesh held the 2nd place in producing garments just after China. Bangladesh is the world’s second-largest apparel exporter of western brands. Sixty percent of the export contracts of western brands are with European buyers and about forty percent with American buyers. Only 5% of textile factories are owned by foreign investors, with most of the production being controlled by local investors. In the financial year 2016-2017 the RMG industry generated US$28.14 billion, which was 80.7% of the total export earnings in exports and 12.36% of the GDP; the industry was also taking on green manufacturing practices44.

Despite being a well-established industry benefiting from various agreements, working conditions in Bangladesh have been depicted as substandard and even inhuman45. Although major improvements have been made, dire conditions exist in different areas. Child labour is still a prominent feature of the labour landscape and modern slavery practices are widespread.

Rapid development has caused many a developer or entrepreneur to cut corners in capitalising on the surge in business. One report puts it as follows:

“In 2000 garment entrepreneurs had a reputation for shirking custom duties, evading corporate taxes, remaining absent in capital markets, avoiding social projects such as education, healthcare, and disaster relief but, as argued by authors Quddus and Salim, these entrepreneurs took the risks needed to build the industry46.”

The high-risk safety and labour standards workers were exposed to spilled out into the open as “Five deadly incidents from November 2012 through May 2013 brought worker safety and labor violations in Bangladesh to world attention”. The three most important were:

That’s It Sportswear Ltd fire 2010

“On 14 December 2010 thirty people died and another 200 were seriously injured in a fire at the garment factory, “That’s It Sportswear Ltd”, owned by Hameem Group. International buyers of this factories products included “American Eagle, GAP/Old Navy, JC Penney, Kohl’s, Squeeze, Sears, VF Asia, Target Store, Charming Shoppes, Wal-Mart in USA market and H & M, Carrefour, Zara, Hema, M & S Mode, ETAM, Western Store, Migros, Celio and PNC in Europe market47”.

8.3.2. Garment and Textile Industry

41. https://tradingeconomics.com/bangladesh/gdp-growth42. 43. https://www.worldfinance.com/markets/bangladesh-textiles-industry-set-global-export-record44. https://en.wikipedia.org/wiki/Textile_industry_in_Bangladesh45. http://whatshemakes.oxfam.org.au/wp-content/uploads/2017/10/Living-Wage-Media-Report_WEB.pdf46. 47. https://en.wikipedia.org/wiki/Textile_industry_in_Bangladesh

2012 Tazreen Fashion factory

“A fire broke out on 24 November 2012, in the Tazreen Fashion factory in Dhaka killing 117 people and injuring 200.[88] It was the deadliest factory fire in the history of Bangladesh48.

Collapsed Rana Plaza building near Dhaka, Bangladesh, in 2013

“On 24 April 2013 over 1045 textile workers factories making clothes for Western brands were killed when a garment factory collapsed. The 2013 Savar building collapse was in the Rana Plaza complex, in Savar, an industrial corner 20 miles northwest of Dhaka, the capital of Bangladesh. It was the “world’s deadliest industrial accident” since the Bhopal disaster in India in 1984.While some 2,500 were rescued from the rubble including many who were injured, the total number of those missing remained unknown weeks later. The building owner, Sohel Rana, built an additional two floors beyond his approved permit for a six-floor building.[94] Rana, associated with the ruling Awami League, used “shoddy building materials, including substandard rods, bricks and cement, and did not obtaining the necessary clearances” and constructed the building on a “pond filled with sand”.

Ha-meem Group Ha-Meem Group is a leading wholesale clothing manufacturer in Bangladesh and in the world. The company produces some of the most fashionable denim fabrics and garment products and owns one of the most comprehensive and resourceful manufacturing facilities in Bangladesh. Over the years, Ha-Meem has been working with some of the biggest fashion brands of the world. The company has a rich history of 30 years in the textile business, and employs around 50,000 workers; the company has 26 garment factories consisting of 300 production lines and 7 washing plants with the capability of producing 7 million pcs/month.

Beximco Fashions Ltd. Beximco Fashions Limited (BFSL), a member of Beximco Group, started its commercial production during July 1997. BFSL is a 100% export oriented garment industry, located at Dhaka Export Processing Zone at Savar, Dhaka. Beximco Fashions Limited produces over 6 million pcs of high quality dress/casual shirts for prominent brands and retails in USA, Canada & Europe.

Square Fashions Ltd. Founded in 1997, Square Fashions Limited is specialised in producing a wide range Readymade Knit Apparels & Circular Knit Fabrics. Now the company has two Garments Units and two Fabrics Units. Each unit is equipped with cutting, embroidery, printing, sewing and finishing materials and equipment. Square Fashions Limited is also providing free worker’s dormitories with pure drinking water, lighting and cooking facilities, transportation, meals at work, recreational facilities, and around-the-clock medical services.

The top textile manufacturers in Bangladesh are as follows49: (the following sections is quoted from https://www.bizvibe.com/blog/leading-garment-manufacturers-bangladesh/ )

8.3.3. Major players

48. https://en.wikipedia.org/wiki/Textile_industry_in_Bangladesh49. https://www.bizvibe.com/blog/leading-garment-manufacturers-bangladesh/

28 The Mekong Club Bangladesh Private Sector Assessment 29The Mekong Club Bangladesh Private Sector Assessment

Opex Sinha Group Opex & Sinha Textiles Group is one of the leading exporter of readymade garments in Bangladesh with an annual export in excess of US $ 300 million. In the apparels business segment, Sinha Group has two subsidiaries: Medlar Group and Opex Group. Sinha Group has established a strong backup linkage facility, the most modern and largest several projects of spinning, weaving, knitting, yarn dyeing, pc dyeing, denim, knit dyeing, printing, and finishing.

Fakir Group Fakir Group is a combination of composite knit garments, garment label designing and manufacturing, printing and packaging, paper and board manufacturing, and more. Its Fakir Garments Ltd is a 100% export oriented knit garment industry of 3.6 million pcs capacity per annum. FGL has already attained the reputation of being the most dependable garments industry for high quality knit garments products of multi-dimensional styles. Must Read: Bangladesh Emerges as Leading Denim Manufacturing Hub in the World

DBL Group

DBL Group is a diversified business entity which has vertically integrated textile and apparel manufacturing facilities. It is also one of the largest knit garment manufacturers and exporters of Bangladesh, with major markets include Europe, USA and Canada and is a platinum supplier of H&M for Knit Garments. H&M, Walmart-George, Puma, Esprit and G-Star are some of the major buyers.

Epyllion Group

Epyllion Group started its journey as a house of Readymade Garments (RMG) engaged in manufacturing and exporting of knit apparel since 1994. It has since become one of the biggest conglomerates with substantial establishment of its backward linkage of all kinds of knit garments, textile, wet processing, and garment accessories. The major exports for Epyllion Group’s readymade garments include Europe, USA, Asia, and Africa.

Standard Group

Established in 1984, Standard Group is one of the longest running garment manufacturing companies in Bangladesh. It has one of the largest woven garment manufacturing facilities in Bangladesh, including a sweater production facility. In addition, the company has its own in house garment washing, printing, embroidery, apparel design, garment testing, and various accessories production facilities.

Asian Apparels Ltd. Asian Apparels Ltd, founded in 1992, is now one of the leading garment manufacturers in Bangladesh with a special focus on garment exports. Over the recent years, Asian Apparels Ltd has been putting increasing attention on being compliant with all applicable social, ethical, environment and quality system to build a better sustainable health and safety environment in factories.

8.4. Banking Industry

51. http://fashion2apparel.blogspot.com/2016/12/top-10-textile-industry-bangladesh.html52. https://www.export.gov/article?id=Bangladesh-Banking-Systems

Givensee Group of Industries Ltd.

Givensee Group of Industries is one of the largest composite garments manufacturers in Bangladesh. Established in 1982, it has more than 17000 workers producing over 70000 pieces of garments per year, ranging from knitwear items to heavy denim wear. The group also has setup some of the largest vertical support units such as spinning, dyeing, washing, and garments accessories production facilities.

(see more at: https://www.bizvibe.com/blog/leading-garment-manufacturers-bangladesh/ )

Other important garment manufactures include50:

• Thermax Group • Noman Group • Viyellatex Group • Knit Concern Group • Sunman Group

Bangladesh’s financial services penetration is comparable with that of the Philippines and Vietnam, with only 30% of the population having a bank account51. The low level of financial formalisation inhibits transactional flow, but increases the possibility of cash exploitation.

According to export.gov the banks in Bangladesh are structured as follows52: • Scheduled Banks: the banks which operate under the Bank Company Act, 1991 (Amended in

2003);

• Non-Scheduled Banks: the banks that are established for special and definite objectives and operate under the acts for meeting those objectives. These banks cannot perform all of the functions of scheduled banks.

Furthermore:

“There are 56 scheduled banks in Bangladesh that operate under the full control and supervision of the Bangladesh Bank, which is empowered to do so through the Bangladesh Bank Order of 1972 and the Bank Company Act of 1991. Scheduled Banks are classified into following types:

• State-Owned Commercial Banks (SOCBs): There are five SOCBs that are fully or majority owned by the government of Bangladesh.

• Specialized Banks (SDBs): Three specialized banks are now operating which were established for specific objectives like agricultural or industrial development. These banks are also fully or majority owned by the government of Bangladesh.

30 The Mekong Club Bangladesh Private Sector Assessment 31The Mekong Club Bangladesh Private Sector Assessment

53. https://wpgroupbd.com/bangladesh-top-10-bank/

The top 10 banks in Bangladesh53

• Private Commercial Banks (PCBs): There are 39 private commercial banks that are majority owned by private entities. PCBs can be categorized into two groups: 1) Conventional PCBs: 31 conventional PCBs are now operating in the industry. They perform the banking functions in a conventional fashion, i.e. with interest-based operations; 2) Islami Shariah-based PCBs: There are eight Islami Sharia-based PCBs in Bangladesh, and they execute banking activities according to Islami Sharia-based principles, i.e., in a Profit-Loss Sharing (PLS) mode.

• Foreign Commercial Banks (FCBs): Nine FCBs are operating in Bangladesh as the branches of banks incorporated abroad.”

With regards to the performance of the banking sector, The Economist Intelligence Unit reports as follows:

“In June 2017 the government allocated Tk20bn (US$250m) to recapitalise Bangladesh’s state-owned banks. There are signs that the country’s banking sector is facing mounting problems, and regulators’

Efforts have so far been insufficient to tackle the issue. Only limited action has been taken to penalise defaulters, improve risk management and strengthen bank management. In its latest Article IV report, the IMF stated that there are some underlying risks to the banking sector owing to excess liquidity. However, an improvement in conditions within the state-owned banking sector will be dependent on the political will to address the problem, which has been limited so far.”

1. Islami Bank Bangladesh2. Dutch-Bangla Bank Limited3. Prime Bank4. HSBC Bank5. Standard Chartered Bankin 6. BRAC Bank Limited7. State Bank of India8. Bank Asia Limited9. Grameen Bank10. Janata Bank Limited

Number in slavery (GSI) % (GSI)

Global figures

Cambodia

China

Laos

Myanmar

Thailand

India

Vietnam

Pakistan

Bangladesh

Government response

rating

Mean vulnerability to

modern slavery score

45.8m

256,800 CCC

CCC

0.295

0.956

0.626

1.403

0.152

1.130

0.951

CCC

CCC

CCC

B

B

B

B

1.648 (ranked 3rd in prevalence not absolute number out of all countries by proportion of population)

0.247 (in Mekong then china has the highest absolute number by virtue of being biggest pop, 2nd in world after India)

3,388,400 44.66

36.45

56.36/100

47.54

51.35

29.34

62.47

44.12

41.51

20,000

515,100

425,500

139,300

1,531,300

2,134,900

18,354,700

Global Slavery Index

Although the lowest comparatively in South Asia, the amount of people in slavery in Bangladesh is staggering when compared to South East Asia. Despite the population being vulnerable to slavery practices, the government shows commitment to the fight against slavery.

In this section a broad outline of the problematic of human trafficking and modern slavery in Bangladesh will be given. The extent of the problem can be best be understood within the context of the broader region. Using the Global Slavery Index54, the estimated numbers of people in modern slavery, together with the government response for countries in the Mekong region and South Asia are shown below. Government response data is measured by the Global Slavery Index as an assessment of composite factors of the survivors supported, criminal justice, coordination & accountability, addressing risk and government & business. They also provide a measurement of vulnerability to modern slavery based on civil and political protections, social health and economic rights, personal security, refugees and conflict (higher scores mean greater vulnerability).

9. Modern Slavery and Human Trafficking in Bangladesh

9.1. Overview

54. https://www.globalslaveryindex.org/findings/

32 The Mekong Club Bangladesh Private Sector Assessment 33The Mekong Club Bangladesh Private Sector Assessment

According to the USA Trafficking in Persons report 201755, Bangladesh is “primarily a source and, to a lesser extent, a transit and destination country for men, women, and children subjected to forced labor and sex trafficking.”

Furthermore:

“Within the country, children and adults are subjected to sex trafficking, domestic servitude, and forced and bonded labor, in which traffickers exploit an initial debt assumed by a worker as part of the employment terms. Street children are sometimes coerced into criminality or forced to beg; begging ringmasters sometimes maim children to increase their earnings. In some instances, children are sold into a form of bondage by their parents, while others are induced into labor through fraud and physical coercion, including in the domestic fish drying industry, or exploited in sex trafficking. Bangladeshi children are vulnerable to forced labor in tanneries. According to an international expert on debt bondage, Bangladeshi families and Indian migrant workers are subjected to bonded labor in some of Bangladesh’s brick kilns; some kiln owners sell bonded females into prostitution purportedly to recoup the families’ debts and some Bangladeshi families are subjected to debt bondage in shrimp farming. Some ethnic Indian families are forced to work in the tea industry in the north-eastern part of the country. NGOs allege some officials allow human traffickers to operate at brothels, at India-Bangladesh border crossings, and at maritime embarkation points.”

Migrant labour recruited in Bangladeshi to work in the Middle East, Southern and East Africa, South and Southeast Asia, Europe, and the United States face conditions indicative of forced labor. These migrant labourers are exposed to the typical risks associated with modern slavery practices e.g. “before their departure, many migrant workers assume debt to pay high recruitment fees, imposed legally by recruitment agencies belonging to BAIRA and illegally by unlicensed sub-agents; this places migrant workers at risk of debt bondage. Some recruitment agencies and agents also commit recruitment fraud, including contract switching, in which they promise one type of job and conditions but then change the job, employer, conditions, or salary after arrival56.”

55. 56. https://www.state.gov/j/tip/rls/tiprpt/2017/

9.2. Highlights from US Trafficking in Persons Report 2017

9.2.1. General

9.2.2. Migrant Labour

34 The Mekong Club Bangladesh Private Sector Assessment 35The Mekong Club Bangladesh Private Sector Assessment

9.3. Child labour

With regards to the recent crises in Myanmar, the report records the following:

“Bangladesh is host to an estimated 32,000 registered Rohingya refugees and up to 500,000 undocumented Rohingya, whose stateless status and inability to receive aid and work legally increases their vulnerability to human trafficking. Though numbers of such migrants were significantly fewer than in previous years, some Rohingya and Bangladeshi migrants who travel by boat to Southeast Asian countries are subject to exploitation when they are unable to pay ransoms and are instead sold into forced labor. Women and girls who migrate for domestic work are particularly vulnerable to abuse. Some women who migrate through Bangladeshi recruitment agencies to Lebanon or Jordan for domestic work are subsequently sold and transported to Syria and subjected to forced labor and sex trafficking. Some women and children are subjected to sex trafficking and forced labor in India and Pakistan.”

The situation has since deteriorated. According to an article in the The Washington Post on the 25th of October:

“Some 604,000 people, mostly Rohingya, have fled to neighboring Bangladesh since Aug. 25, where they have joined more than 300,000 who fled in earlier waves of ethnic violence over the past three decades. With thousands still crossing the border each day, the total number of Rohingya refugees is expected to cross the 1 million mark in the coming days or weeks.”

9.2.3. Rohingya Crises

According to the 2016 Worst Forms of Child Labour Report from the USA International Bureau for Labour Affairs:

“Bangladesh made a minimal advancement in efforts to eliminate the worst forms of child labor. The Education Act of 2016, which makes education compulsory through eighth grade (age 14), was drafted and endorsed by the Prime Minister’s cabinet but has not yet been adopted by Parliament. However, children in Bangladesh perform dangerous tasks in garment production. Children also engage in the worst forms of child labor, including forced childlabor in the production of dried fish and bricks. The laborlaw does not prohibit children from working in informal economic sectors, including in domestic work, on the streets,and in small-scale agriculture. The law also does not specify the activities and number of hours per week of light work that are permitted for children ages 12 and 13. In addition,the number of labor inspectors is insufficient for the size of Bangladesh’s work force, and fines are inadequate to deter child labor law violations.”

Of all the working children ages 5-14, 39.7% are found in agriculture, 30.9% in the service sector and 29.4% in industry.

Childern

Working (% and population)

Attending School (%)

Combining work and School (%)

Primary completion rate (%) 98.5

1.9

89.4

4.3 (1,326,422)5 to 14

5 to 14

7 to 14

-

Age Percent

Child Labour in Bangladesh

36 The Mekong Club Bangladesh Private Sector Assessment PBThe Mekong Club Bangladesh Private Sector Assessment

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