Covid-19 impact and responses: Bangladesh

Updated on: 21 August, 2021

What is the current situation?

General information

  • According to the World Health Organization, Bangladesh has 1103,5989 confirmed infections to date and 17,894 people have died from the coronavirus.
  • In 2020 after a patient with COVID-19 was identified for the first time (8 March), the government introduced a 10-day shutdown, beginning on 26 March 2020. After that initial shutdown there were several extensions of restrictions made to contain the spread of the coronavirus in the country. The restrictions were included extend general holiday, closure of public and private offices and suspended public transport services, closure of educational institutions.
  • In 2021 till date, government issued 16 gazette notifications of restrictions to prevent the infection, the latest on 13 July where the government has decided to relax the ongoing strict Covid-19 lockdown from 15 to July 22, considering the upcoming Eid-ul-Azha. However, after the Eid holidays, the strict lockdown will be in place again for 14 more days from July 23. Eid will be celebrated on July 21.
  • The National Technical Advisory Committee has expressed deep concerns over the government lifting the nationwide lockdown from July 15 to July 22 despite the surge of deaths and Covid-19 infections in the country.
  • The government considers allowing garment factories to be open so that the biggest export-earning sector can continue production and keep their commitment with international buyers. Commerce Minister Tipu Munshi talked about the plan amid concerns among garment owners that shipment will suffer seriously if they have to suspend operations during the 14-day lockdown beginning from July 23.
  • However, there was request from business associations to open the factories during upcoming lockdown will be started from 23 July there is indecision on running RMG units, and its create uncertainty over workers Eid trips.
  • The country resumed the vaccine registration process from July 8. Bangladesh opened the registration process on January 26, 2021 but had to suspend the vaccine registration in early May due to vaccine shortages. Foreign minister reassures on adequate vaccine supply from multiple sources.
  • Without registration vaccination to RMG workers begin by vaccinating 12000 workers from four factories in Gazipur area, workers need to bring the copy of national ID to get the vaccine, gradually all RMG workers will be vaccinated in phase. BGMEA president, Gazipur city mayor, civil surgeon and other was present on inaugural session of this vaccination.

The situation with factory production

  • Readymade garment (RMG) exporters decided they will run factories at full capacity, maintaining health guidelines, despite the government’s directive to reduce the workforce in all organisations by half amid the surge in Covid-19 infections and deaths. Expressing concern over the government directive, they say full-fledged factory operations are needed to ship goods on time in order to avoid possible order cancellations or deferred payments. They also said that there was no alternative to keeping the sector operational amid the countrywide lockdown, to keep the economy alive.
  • More than 50% of Bangladeshi export-oriented readymade garment (RMG) manufacturers have had to take orders for products at much lower prices than before in case of emergency due to the ongoing Covid-19 pandemic, a study revealed recently.
  • Thousands of workers lost their jobs when 47 readymade garment (RMG) factories in Chattogram shut down last year due to the Covid-19 pandemic. From March to December in 2020, the factories were closed with many foreign buyers cancelling orders and cutting purchase prices on their clothes made in Bangladesh. According to BGMEA, the list of closed factories may grow longer with the second wave of Covid-19.
  • Apart from workers, scores of mid-level managers in the ready-made garment (RMG) sector have lost their jobs amid the ongoing Covid-19 pandemic. But most of these job losses went unreported and uncompensated, industry insiders have said. The sudden job losses have caused many of these professionals to undergo severe challenges. 
  • Apparel workers lost an estimated $502 million in wages during the March-May 2020 period, an aggregate drop of nearly 35%, with scores of workers, including pregnant and aged women, getting terminated or laid off without compensation. This was revealed during a virtual report launching, titled “The Weakest Link in the Global Supply Chain: How the Pandemic is Affecting Bangladesh’s Garment Workers.”
  • Apparel workers are getting rehired but a lower pay. The harsh reality is that many factories are opting for downsizing their operations due to the current business situation, putting workers in a dilemma. “Since there is enough supply of workers, the factory owners are taking the advantage by offering low wages,” said Nahidul Islam Noyon, secretary of Sommilito Garments Sramik Federation.
  • Most of the readymade garment (RMG) workers have to walk to reach their workplaces amid the strict lockdown, as many factory owners did not arrange any transportation for their workers. According to a recent survey conducted by the Asian Center for Development (ACD), 81.1% of workers of RMG sector have to walk to their workplaces where 5.6% go by non-motorized vehicles, 7.3% by buses, and the rest use other types of motorized vehicles.
  • The textile sector is breathing a sigh of relief with the rebound of apparel export orders, export reports show optimism for recovery of the RMG industry. They’re on the path to a quick recovery although prices remain below expectations, said millers. Both textile millers and garment exporters say more and more of the production capacity of their factories was coming to use for the higher inflow of work orders from retailers. On the other hand, normalcy has returned to the supply chain with China, the main sourcing destination for Bangladesh’s textile and garment-related raw materials. As a result, the business of textile production and garment exports is witnessing improvements fast, according to industry insiders.
  • In the export figures of July when Bangladesh earned $3.24 billion from apparel shipment though the amount is 1.98% lower than a year earlier. However, garment export receipts in July are 14.18% higher than the monthly target of $2.84 billion. Of the total garment shipment, knitwear exports grew 4.30% year-on-year to $1.75 billion while woven exports fell 8.43% to $1.49 billion, according to data from the Export Promotion Bureau. Earnings from apparel shipment in April, May and June stood at $0.37 billion, $1.23 billion and $2.28 billion respectively.
  • Moreover, in July the total export of the country was $3.91 billion, which is highest in a single month in the country’s history. As New Age reported on 4 August, this was due to the increased in shipment of RMG products. As stated by factory owners, buyers have started reviving most of the cancelled orders and now factories would be able to sustain themselves.

What are the government policies to support local businesses?

  • On 25 March, Prime Minister Sheikh Hasina announced a bailout/stimulus package of Tk 5,000 crore (equivalent of 530 million EUR) for export-oriented industries to mitigate the impact of the coronavirus on the country’s economy. The premier indicated that the money from the package could only be disbursed in the form of salaries and wages for employees and workers of those industries. The fund was extended, twice, with an addition of Tk2,500 crore and Tk3,000 crore. The size of the fund is now Tk10,500 crore.
  • On 1 April 2020, the finance ministry unveiled the guidelines for disbursement of the Tk 5,000 crore stimulus package. Businesses can avail of funds from the package at 2% interest to pay their workers’ salaries for up to three months. The salaries must be paid to either a bank or mobile financial service account. Management of export-oriented companies or factories have to provide salary sheets, workers’ lists and their mobile banking accounts to banks so that salaries for April can be directly disbursed. The banks, afterwards, will forward the same documents to Bangladesh Bank for reimbursement. The borrowers will get a six month grace period, meaning that they will start paying back the borrowed money in instalments to the government from the seventh month of receiving the money.
  • Garment workers’ salary disbursement from the stimulus package started as of 3 May. Salaries of affected workers of factories that applied and qualify for support under the Tk5,000 crore stimulus package will be disbursed directly to the workers’ accounts by the government.  Following a tripartite meeting between government, worker representatives and RMG industry owners, the state minister for labour said, ‘RMG workers who did not work in April will get 60 percent of their salary for this month before Eid. Those who worked in factories that remained open amid shutdown in April will get 100 percent salary. Besides that, those who resumed work from April 26 will get 60 percent of their wages for the previous 25 days, and full wages for the last five days of this month.’ The salaries for April will be sent through mobile financial services directly to the RMG workers’ accounts.
  • On 5 April, the Prime Minister announced four fresh financial stimulus packages of Tk 67,750 crore. The PM said the government simultaneously developed four programmes under the plan, to be implemented in phases categorised as Immediate, Short and Long. The four programmes are: increasing public expenditure, formulating a stimulus package, widening social safety net coverage and increasing monetary supply.
  • HSBC Bangladesh announced a set of measures to help its textile and garments clients tide over the economic fallout from the coronavirus pandemic. The bank will provide special short-term loans of up to one year, with principal moratorium for four months, which can be used for the purpose of supporting payroll bills and utility payments. The bank will also allow three months’ moratorium against the existing term loans enjoyed by businesses belonging to the textile and garments sector, according to a press release issued by HSBC Bangladesh. During the moratorium period, clients will not be required to pay any instalments, and the lender will also not seek any amount of repayment from them. The Bangladesh Bank has asked banks to extend similar support to businesses.
  • On 25 March the Bangladesh Government sought $1 billion in support from the International Monetary Fund and the World Bank as the country looks to support its people, businesses and industries reeling from the pandemic.

What are the government policies and regulations to protect employees – the workers?

  • The aforementioned bailout/stimulus package of Tk 5,000 crore (equivalent of EUR 5.3 billion) for export-oriented industries is to be disbursed in the form of salaries and wages for employees and workers of the industries.
  • The bailout/stimulus package aside, when factories are forced to close for a certain period in the event of a catastrophe, below legal provisions, sections 12 and 16 of the Bangladesh Labour Act 2006 in particular may become of relevance.

Section 12: (Bangladesh Labor Act 2006) Stoppage of work

  1. The employer may, at any time, in the event of fire, catastrophe, breakdown of machinery, or stoppage of power supply, epidemics, civil commotion or any other cause beyond his control, stop any section or sections of the establishment, wholly or partly for such period as the cause for such stoppage continues to exist.
  2. In the event of such stoppage occurring at any time beyond working hours, the employer shall notify the workers affected, by notice posted on the notice board in the section or department concerned or at a conspicuous place in such establishment before the work is due to begin next.
  3. In the notice mentioned in sub-section (2) direction shall be given indication as to when the work will be resumed and whether such workers are to remain at their place of work at any time before the actual resumption.
  4. In the event of such stoppage occurring at any time during working hours, the workers affected shall be notified, as soon as practicable, in the manner specified in sub-section (2) indicating as to when the work will be resumed and whether such workers are to leave or remain at their place of work.
  5. In the case where workers have been directed to stay at their place of work following such stoppage, the workers so detained may not be paid for the period of such detention if it does not exceed one hour, and the workers so detained shall be paid wages for the whole period of such detention if it exceeds one hour.
  6. If the period of stoppage of work does not exceed one working day, a worker, unless entitled to wages under sub-section (5), may not be paid any wages.
  7. If the period of stoppage of work continues for more than a working day, a worker affected, other than a casual or badli worker, shall be paid wages for day or day by which it will exceed one working day.
  8. If the period of stoppage of work extends beyond three working days, the workers may be laid- off in accordance with the provisions of section 16.
  9. A lay-off mentioned in sub-section (8) shall be effective from the day of stoppage of work and any wage paid to a worker for the first three days may be adjusted against the compensation payable for such subsequent layoff.
  10. For the piece-rate workers affected, their average daily earning in the previous month shall be taken to be the daily wage for the purpose of the sub-section.

Definition: (Lviii) ‘lay-off means the failure, refusal or inability of an employer on account of shortage of coal, power or raw material or the accumulation of stock or the break-down of machinery to give employment to a worker;

Section 16: (Bangladesh Labor Act 2006) Right of laid-off workers to compensation

  1. Whenever a worker, other than a badli or casual worker, whose name is borne on the muster-rolls of an establishment and who has completed not less than one year of continuous service under the employer is laid-off, he shall be paid compensation by the employer for all days during which he is so laid-off, except for such weekly holidays as may intervene.
  2. The amount of compensation as mentioned in sub-section (1) shall be equal to half of the total of the basic wages and dearness allowance, and ad-hoc or interim pay, if any, and the full amount of housing allowance, if any, that would have been payable to him had he not been so laid-off.
  3. A badli worker whose name is borne on the muster-rolls of an establishment shall cease to be regarded as ‘badli’ for the purpose of this section, if he has completed one year of continuous service in the establishment.
  4. No worker shall, unless there is an agreement to the contrary between the worker and the employer, be entitled to the payment of compensation under this section for more than forty-five days during any calendar year.
  5. Notwithstanding anything contained in sub-section (4), if during a calendar year a worker is laid-off for more than forty-five days, whether continuously or intermittently, and the lay off after the expiry of the first forty-five days comprises period or periods of fifteen days or more, the  worker shall, unless there is an agreement to the contrary between the worker and the employer, be paid compensation for all the days comprised in every subsequent period of lay-off for fifteen days or more.
  6. The amount of compensation as mentioned in sub-section (5) shall be equal to one-fourth of the total of the basic wages and dearness allowance, and ad-hoc or interim pay, if any, and the full amount of housing allowance, if any.
  7. In any case where, during a calendar year, a worker is to be laid off after the first forty-five days as aforesaid, for any continuous period of fifteen days or more, the employer may, instead of laying- off such a worker, retrench him under section 20.

What are local stakeholders doing to lobby their government?

The Industriall website mentions the appeal of the IndustriALL Bangladesh Council (IBC) to the Government of Bangladesh:

  1. All the factories including the ready-made garments have to be closed down with due payments to the workers until the situation improves.
  2. No workers can be terminated or retrenched under this disastrous situation.
  3. Special measures and treatment have to be ensured if any workers fall ill or are attacked by the virus, including taking necessary steps to ensure good health and security for all workers.
  4. Rationing for the workers has to be ensured in this difficult time.
  5. No factories can be closed/laid off without paying the worker’s dues.
  6. In any emergency situation the government has to ensure cash money assistance to the workers.
  7. A tripartite (government, BGMEA employers’ group and IBC) monitoring taskforce has to be established under the leadership of the Labour Ministry.
  8. Brands and buyers are urged not to cancel their work orders.

The Centre for Policy Dialogue (CPD) in Bangladesh advocated for the following:

  • Suppliers should discuss with their brands/retailers about possible cooperation in order to share revenue losses incurred for cancellation/deferment/withdrawal of orders
  • Scope to share the losses of business enterprises (partially/fully) with buyers/brands/retailers
  • Minimum support to maintain day-to-day expenses; support for retaining the staffs and workers and rationing support facilities for contractual workers
  • Export-oriented sectors, such as the RMG sector, needs cash flow support to retain workers, deferment of LC payment, deferment of import LC receipt, interest payment support to banks, low cost credit support from development partners.
  • Reschedule loans on case by case basis for exporters: Bangladesh Bank can provide guidelines to commercial banks in view of this to address loan repayment difficulties.

What are local organisations doing to support and protect the workers?

  • The Daily Star in association with Manusher Jonno Foundation (MJF) organised an online discussion titled “COVID-19 Impact on selected RMG factories and way forward” on October 4, 2020. Here we publish a summary of the discussion. Speakers’ serial is maintained as per the flow of the discussion.
  • Awaj Foundation indicated that it is seeking donations for an emergency fund for workers who have lost their jobs. This will mainly be in the form of cash disbursements to make sure that their basic needs for food and shelter are met. Awaj Foundation indicated that it will also continue to provide some health services and will connect workers with other resources when they need more intensive help.
  • Workers continue protesting; trade unions have been leading protests in favour of several demands such as wages, health and safety, job security, stopping lay-offs, festival bonuses and vacation during the pandemic. They have gained international solidarity during this period. Such acts of solidarity provide support and hope for national organisations and unions to continue their struggle. The demands placed by trade unions and workers have been met to a large extent. The workers received wages and some factories are following health safety guidelines as a result of their activities. However, the print media did not highlight the success stories of the protests.
  • The COVID-19 pandemic has put women garment workers in a more vulnerable state than their male counterparts. SGSF reported a significant number of terminations of pregnant workers while others continue to work in fear of losing their jobs. The federation’s President Nazma Akhter told the Guardian on 9 July, ‘We are seeing a real increase in gender-based violence.’ In response to gender-based violence (GBV), SGSF and IndustriAll Global Union joined forces and are using social media to call out the Government for ratifying the ILO Convention C190 against sexual harassment in the workplace.
  • In a virtual roundtable organised by the SNV Netherlands Development Organisation in association with The Daily Star on 26 July, discussants spoke about the lack of access to sexual and reproductive healthcare during the pandemic and emphasised a holistic approach through multi-stakeholder collaborative initiative to ensure workers wellbeing.
  • Following concerns over shortage of personal protective equipment (PPE) for doctors and nurses, five organisations — Pay It Forward Bangladesh, Honest, Buet Alumni Association, Rotary Club Dhaka North-west and Manush Manusher Jonno Foundation approached Marks & Spencer with a request to produce 400,000 suits for doctors and nurses.

What have been the responses and requests of business associations to support the industry?

  • Garments and textiles owners have requested the government to offer loans on similar terms as last year to help the export-oriented readymade garment (RMG) sector to pay wages, Eid bonuses, and other allowances to their workers for April, May, and June. BGMEA, BTMA, BKMEA jointly sent a letter to the finance minister in this regard.
  • Swisscontact and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) have signed an agreement for the economic rehabilitation of readymade garments (RMG) workers amid the pandemic, reports UNB.
  • Health Ministry assures vaccination for RMG workers on priority basis. Zahid Maleque, MP, Honorable Minister, Ministry of Health and Family Welfare, has assured BGMEA of bringing readymade garment workers under Covid vaccination on priority basis upon receipt of sufficient numbers vaccines in Bangladesh. http://www.bgmea.com.bd/page/Health_Ministry_assures_vaccination_for_RMG_workers_on_priority_basis The assurance came after a delegation of BGMEA led by President Faruque Hassan met with the health minister on 16 June and made the request to him for ensuring vaccines for the RMG workers on priority basis considering them as front liners as they have been doing their jobs amid the pandemic to protect the economy of the country.
  • The BGMEA is continuously monitoring the situation in garment factories. According to the BGMEA website. To date (13 April), 1136 factories reported that it has lost USD$3.15 billion in cancelled/postponed orders, equivalent to 976 million pieces. A staggering 2.26 million workers are affected thus far. 
  • BGMEA President Dr. Rubana Huq released a video message in which she urged international apparel buyers to come forward to support the apparel industry of Bangladesh during this hard time.
  • Reported in several media outlets, BGMEA President Dr. Rubana Huq has also written to the German Federal Minister for Economic Cooperation and Development Dr. Gerd Müller, urging him to kindly immediately call for all their brands sourcing from Bangladesh to not cancel or hold any shipments up.
  • BGMEA initiated the ‘Lactating mother aid fund‘, a project to provide financial aid for lactating mothers. In collaboration with the government, the project will safeguard health wellbeing for mothers and their infants. As they require better diets, more calories and sufficient nutrition, beneficiaries will get Tk. 800 for 36 months. Global Alliance for Improved Nutrition (GAIN), in partnership with Dhaka FM have designed a digital media-based campaign. With the use of radio dramas, Facebook campaigns, webinars, jingles and television programs, the campaign has been purposed to motivate all apparel industry related stakeholders, i.e. brands, employers, factory management, and policy makers to pay heed for the need of proper nutrition.
  • Initiatives are being taken to protect workers’ health, wellbeing and workplace safety. According to The Business Standard, the factories that have reopened after eid holidays will have to regularly practice health safety measures. These measures include: temperature checks at the entrance, wearing masks, washing hands, using hand sanitiser and maintaining social distancing when at work.
  • BGMEA requested for another stimulus package from the government to pay workers and Bangladesh Bank responded quickly. On 23 July, Bangladesh Bank confirmed that RMG sector will receive another stimulus package to pay wages for July, August and September. According to a letter sent to the finance minister by BGMEA, penned by the association’s President Dr Rubana Huq, it might take exporters eight to nine months to receive payments of previous shipments.

What are international brands doing to support suppliers and protect workers?

  • In response to urgent appeals, a number of brands including H&M, PVH, Inditex, Marks & Spencer came forward with assurances to help garment suppliers by taking the shipment of goods that have already been manufactured or ordered. However, media reports have also come out saying that brands have decided to temporarily suspend placing new orders.
  • A Research Brief from the Center for Global Workers’ Rights of Pennstate University in Association with the Worker Rights Consortium, drawing from responses from an online survey of Bangladesh employers, reported that more than half of Bangladesh suppliers have had the bulk of their in-process, or already completed, production cancelled. This was also reported in several media.

What other supports are available to protect the industry during the pandemic?

The European Union (EU) and Germany, transferred € 33 million, equivalent to around Tk 330 crore, to the Bangladesh government to support the Covid-19 pandemic-affected workers in export-oriented industries, said a news release.

Relevant links for more information

Bangladesh Labor Act 2006
BGMEA Factory Opening Guidelines
Ministry of Health and Family Welfare: Hygiene and safety guidelines to ensure hygiene of garment factories