Good Governance Deficits and

Corruption in the Garment

Sector

Presentation at MUNOH 2014, 3rd Commission:

„Preventing Child Labour in the Textile Industry“

26 Sept. 2014 Hamburg, Germany

by Dr. Christa-M. Dürr

Transparency International Deutschland e.V.

Content

1) The Problem:

Child labour and human rights violations in the supply

chain

2) National Integrity Systems

3) Case Study Bangladesh:

Analysis and solutions

#c

Indian girl in a spinning factory

Child Labour - Facts

• 265m children worldwide are working (age 5-17)

• 168m children are child labourers (several hrs/day regularly)

• 73m child labourers are under 12 years

• 85m children are working in hazardous industries

Source: ILO Sept. 2013

Child Labour by Region

Child labour distribution by branch of

economic activity

(5-17 years old, percent)

Not defined

Not defined

Agriculture58.6

Services (other than domestic work)25.4

7.2

Industry

6.9

Domestic work

Not defined (1.9)

Child Labour Distribution by Branch

of Economic Activity (5-17 yrs)

Child Labour -

International Legal Frame Work

1973 ILO: Minimum Age Convention (C 138)

- Child labour refers to any work performed by children under 12 years

- non-light work done by children 12-14 years

- hazardous work done by children 15-17 years

>>> ratified by 166 countries (not yet by 19 countries: Australia, U.S., Canada,

Mexico, India, Bangladesh et.al.

1999 ILO: Worst Forms of Child Labour Convention (C 182)

>>> ratified by 177 countries (not yet by 8 countries: Cuba, Eritrea, India

Myanmar et.al.

1990 UN: Convention on the Rights of the Child

>>> ratified by 193 countries (NOT: Somalia, South Sudan, U.S.)

Definition Child: below 18 years

Reasons for Child Labour

Cheap labour

Lack of awareness

Reasons for Child Labour

No school, no teacher Lack of quality education

Bangladesh -

Rana Plaza Tragedy, April 24, 2013

Reasons for Accidents in RMG

in Bangladesh

• Corruption

CPI Bangladesh 2013:

ranked136 out of 177 countries

second worst performer in South Asia,

only better than Afghanistan

• Literacy rate: 55,9 %

• Freedom of press: ranked 129 out of 179

National Integrity Systems

NIS - Methodolgy

NIS measures the robustness of a countries institutions in

preventing and fighting corruption:

• 13 Integrity pillars:

legislature, executive, judiciary, law enforcement agencies,

supreme audit institutions,electoral management body,

ombudsman, anti-corruption agencies

public sector, business

political parties, media, civil society

• Each of the institutions analysed along:

- Capacity = resources, independence

- Governance = transparency, accountability, integrity

- Role = extent to which the institution fulfils its assigned role

NIS – Germany : Results

Out of 100 points :

94 Supreme audit institution

88 Judiciary

85 Electoral managment body

84 Media 73 Civil society

81 Legislature 72 Business

79 Law enforcement agencies 71 Public sector

75 Executive 70 Political parties

http://media.transparency.org/nis/cogs/index.html?Country=de

NIS - Bangladesh

NIS - Bangladesh: Results

Weak national integrity system:

• culture of non-compliance generally

• dysfunctional parliament

• dominant power exercising executive

• lack of oversight, transparency, accountability in police

and judiciary

http://www.ti-bangladesh.org/beta3/index.php/en/activities/4243-information-3-

column-2-nis-4

Study by TI-Bangladesh

„The Readymade Garment Sector: Governance

Problems and Way Forward“

• Analysis of the role of various stakeholders in garment sector Result:

- abuse of political and economic power

- governnance failure

- weaknesses and irregularities in all stakeholder groups

• Objective: promote good governance in RMG 25 recommendations:

- policy level

- stakeholder level

Ex.Summary:

https://blog.transparency.org/wp-

content/uploads/2014/04/2013_TIB_GarmentSectorExecSum_EN.pdf

Study:

https://blog.transparency.org/wp-

content/uploads/2014/04/2013_TIB_GarmentSector_EN.pdf

History of Textile Sector

in Bangladesh

• 1980: 50 garment factories

• 2014: 5400 or more garment production sites

• Biggest employer: 4m people , indirectly 10m

• RMG sector is the economic backbone of Bangladesh (10%

GNP)

• Political interference by factory owners:

- 1990: 10% MP´s are enterpreneurs

- 2013: 60 %MP´s are entrepreneurs

Stakeholder „Factory Owners“:

Irregularities

• Violation of building codes

• Violation of safety and fire codes

• Violation of labor laws (overtime, child labour)

„ 3 lakh taka had to be given to get a

`no objection´ certificate.“

Factory owner from Savar

Stage Amount of illegal money (taka)

Submitting application 3 000 to 5 000

Designer (authenticate the certificate

of land use)

3 000 to 5 000

Inspector (field level) 5 000 to 15 000

Chiefinspector 5 000 to 15 000

Approval Officer (Board of approving

plan – 4 members)

100 000 to 300 000

Issuer (Handover the approved plan)

Source: Key informants RMG factory

owners and managers

3 000 to 4 000

Illegal money received through eight stages of

approving construction plan by Rajuk

Stakeholder „ Supervisory Bodies“:

Irregularities

• 17 different government authorities responsible for RMG

• 11 different ministries concerned

• Insufficient number of inspectors

• Inadaquate administrative structures

„Due to social, economic and political connections of owners in many cases the

directorat cannot dare to take legal actions for any violation.“

Source: Ex.Sum. „The Readymade Garment Sector-

Governance Problems and Way Forward“

Stakeholder „Buyers“:

Irregularities

• Absence of internationally binding standards for supply chain

mangement in Bangladesh laws

• Foreign companies apply their own standards and supervisors

• Different CoCs from different buyers in a same factory

• Inspectors are bribed by buyers to fulfil urgency of production

• Collusion of buyer representative, auditor, factory owners to

conceal real scenario of facotories

Rana Plaza Tragedy - What changed?

• „Accord on Fire and Building Safety“ signed by over 150 European

textile companies (tripartite legally binding agreement)

• „Alliance“ established by 28 American and Canadian companies – similar

agreement, less stringent

• RMG-Study by TI-Bangladesh with 25 concrete recommendations

• Folllow-up report by TI-Bangladesh one year after Rana Plaza:

fulfilment of suggested measures

- 31 % done

- 60 % progress

- 9 % not tackled

• First NIS-study about governance deficits

Thank You

Transparency International : www.transparency.org

Transparency International Germany: www.transparency.de

Transparency International Bangladesh: www.ti-bangladesh.org