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Social Protection for RMG Workers in Bangladesh
Sakshi Chadha, Digital Expert, UN Capital Development Fund (UNCDF) Bangladesh
In 2023, the Oporajita - Collective Impact on the Future of Work in Bangladesh was launched as a collaborative effort involving multiple organizations, with funding from the H&M Foundation. UNCDF is one of the partners in this initiative, which also includes the Asia Foundation as part of the task team, facilitating the gathering of insights from various stakeholders, including government bodies and private sector associations.
Bangladesh’s Ready-Made Garment (RMG) sector employs over 4 million workers and contributes nearly 10.5 percent to the GDP, with an annual growth rate of 7 percent. Establishing effective social protection structures is essential to address welfare concerns in this vulnerable sector. Key areas of focus include income security, poverty alleviation, resilience to crises and disasters, and protection in health and safety.
Since last year, UNCDF has been working to analyse the current social protection landscape for garment sector workers in Bangladesh. By evaluating challenges, awareness levels, actions, and impacts, we aim to strengthen and amplify efforts already initiated by the government and relevant associations.
We conducted a study that identified key streams, policies, and operational aspects within Bangladesh. Our goal is to improve the overall ecosystem of the garment sector by highlighting challenges and opportunities. Ultimately, we seek to explore innovative strategies for collaboration, enabling all stakeholders to work together toward meaningful progress.
Fernanda Drumond, Strategy Lead, Inclusive Societies of H&M Foundation
As we enter the Fourth Industrial Revolution, digitalisation and automation are poised to redefine how garments are produced, shipped, and sold in Bangladesh. The H&M Foundation is dedicated to ensuring that female garment workers, who make up one of the largest workforce segments in this industry, are prepared for this transformation. It is projected that approximately 2.7 million workers in Bangladesh’s RMG sector will be significantly impacted, with many at risk of losing their livelihoods over the next 20 years. Women, in particular, face a greater risk of job loss, as they predominantly hold lower-skilled positions.
In response to this challenge, we have developed a collective impact initiative called ‘Oporajita.’ Its aim is to provide comprehensive support to female garment workers in areas such as technical skills, leadership development, health services, digital financial literacy, access to social protection, and addressing issues related to gender norms and circularity.
This initiative was co-designed by local experts, including non-profits, government agencies, private organisations, and knowledge partners. The approach follows a clear agenda set by local partners, with shared measurements in place to ensure transparency and mutual accountability. The actions of all partners are mutually reinforcing, amplifying each other’s efforts to maximise support for female garment workers.
We aim to enhance women’s agency and elevate their voices by creating an enabling environment where they can thrive. This includes providing parenting support, countering gender-based violence, promoting digital financial inclusion, and improving water and sanitation in their homes. We also work to foster stakeholder dialogues and offer the industry greater access to local and international innovations.
Shariful Islam Chowdhury , Project Analyst, UNCDF Bangladesh
Social protection is essential for RMG workers, as they face significant economic vulnerability. Other key factors that underscore the need for social protection include health and safety risks, lack of job security, limited family and social support, and poverty alleviation. In addition to maternity leave and sickness benefits, protection is required for injuries and occupational hazards. Old age and retirement provisions are also important, as are considerations of housing and living conditions to ensure workers have access to safe and hygienic environments.
The central fund scheme offers a sustainable approach to addressing the needs of the overall industry. Among existing social protection schemes, notable examples include Social Protection for Unemployed Workers (supported by the European Union (EU) and Germany), the National Social Insurance Scheme (NSIS), the Employment Injury Scheme (EIS), mental health initiatives for RMG workers, the Mother and Child Benefit Scheme, child day-care centres, and the Universal Pension Scheme. However, there are no significant schemes found which is addressing housing and living conditions.
The most pressing challenge is the awareness gap among workers regarding the schemes and how to access social protection schemes. The process of obtaining funds is complex, with obstacles such as the unavailability of National Identity Document (NID) cards, difficulties in opening bank accounts, limited financial access, and insufficient digital literacy.
Sustainability is another concern, as many schemes depend on donor funding or face changes within the industry. Long-term viability requires digitising and improving access to schemes, raising awareness, and developing specific retirement plans.
Syeda Shaila Ashraf, General Manager, HR Department, Renaissance Group
We are implementing several social protection schemes for our workers. These include health insurance that covers medical benefits and hospitalisation, participation in the Skills for Employment Investment Program (SEIP), timely salary payments with digitised options through banks and mobile financial services (MFS), and access to other banking facilities such as monthly Deposit Pension Schemes (DPS) and annual salary increments.But, I would like to emphasise that still many government-provided schemes remain unknown to us at the factory level.
Sharah Nafisa Kakoly, HR and Compliance Manager, Ananta Companies
To support financial inclusion of workers or help them access government social benefits, we usually grant them day offs to collect necessary documents and papers. However, workers face difficulties obtaining NID, and simplifying this process would ease their access to benefits.
Shamim Ara , President, Jatio Sramik Federatio n
Many RMG workers are from rural areas and highly mobile, making it difficult to secure permanent residency near factories. Eligibility for social protection programs could be verified using alternative documents like appointment letters.
Farzana Sharmin , Senior Joint Secretary, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA)
Factories use service books and payroll software to track worker data, and at the association level, we maintain a biometric database. However, many factories fail to update this data, complicating worker identification.
Furthermore, central fund assistance is disbursed through banks, but many workers face delays in receiving payments due to their inability to open bank accounts without an NID. Considering this, the fund disbursement process can be redesigned to make it more prompt and easy for RMG workers to apply.
Factory management must understand how central funds operate and the benefits they offer for the workers. Collaboration among all stakeholders is essential, as synchronisation within the industry is vital for achieving effective implementation of social protection systems.
Joly Talukder , Vice President, Bangladesh Garment Sramik Trade Union Kendra
Transparency is needed in the disbursement of social protection funds, and the scholarship process for RMG workers’ children requires improvement. Democratic trade unions are crucial for raising awareness and ensuring fair wages, as inadequate pay hampers social protection efforts. Factory owners’ lack of commitment leads to job insecurity for workers. Furthermore, bereaved families receive insufficient compensation, and there is a need for better provisions for housing, retirement benefits, and maternity leave.
Masing Newar , Senior Programme and Policy Officer Social Protection, World Food Programme
The Mother and Child Benefit Programme is not just maternity support but also an investment in nutrition, in addition to 800 taka cash assistance per month upto 48 months, the programme includes social behaviour change communication to promote early cognitive development and child nutrition. A key concern is the age requirement of 20 to 35, which includes 59% of women workers in Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and BKMEA factories, offering a significant opportunity to support the development of future generations.
To expand coverage, joint promotion of social protection programmes in collaboration with the government is crucial. Currently, the Mother and Child Benefit Programme supports approximately 11,000–12,000 workers in 136 BGMEA and BKMEA factories. Given the importance of this programme, especially for young mothers, scaling it up should be a priority.
Rawnak Jahan, Director, Women and Youth Empowerment, CARE Bangladesh
Women workers must actively participate in designing social protection schemes. Many are unaware of their rights, and better coordination is required between the government, factory owners, and development partners to bridge this gap.
Ainee Islam , Program Director, The Asia Foundation
At Oporajita, our work is divided into three thematic areas: enabling environment, skilling, and RMG competitiveness. The enabling environment extends beyond personal development to encompass family and community growth. While we cannot resolve every problem, we are creating women-friendly spaces. Currently, women constitute 54% of the workforce, a significant decline from the previous 80%. This drop is alarming, and we must take action to empower women whether by improving the enabling environment, advocating for supportive policies, or enhancing their skills to help them thrive.
Syed Moazzem Hussain , Senior Social Protection Advisor, GIZ
The government currently lacks a comprehensive worker database, and limited capacity to manage digital initiatives effectively. It is crucial to critically assess the capabilities of both the public and private sectors in adapting to these changes.
Noushin Safinaz Shah , National Programme Coordinator, International Labour Organization (ILO)
Bangladesh is still in the early stages of developing the social protection ecosystem. Currently, ILO and GIZ along with the Central Fund are implementing the employment injury component specifically within the RMG sector called EIS. While a universal scheme should ideally cover all workers, for which initiating a pilot project is essential.
To address challenges such as data management, complex claims processes, and uncertainties regarding the future, establishing a dedicated social protection institution with the support of the ILO could prove beneficial.
ANM Saif Uddin, Chairman, Standing Committee on ILO & Labour Affairs, BGMEA
Our focus lies in cultivating skilled labourers who remain with the company for extended periods, thereby benefiting both owners and employees. We also run two training schools equipped with instructors and machinery, where new workers can acquire essential skills. There is a significant shortage of skilled workers, and no responsible factory owner wants to lose their trained staff abruptly.
We are optimistic about the EIS associated with this pilot project, believing it will provide advantages for both owners and workers within the next three to five years.
Fazle Shamim Ehsan , Executive President, BKMEA
We must think beyond conventional approaches, taking global trends into account while also considering our socio-cultural context. Rather than focusing solely on unemployment schemes, we should prioritise retirement schemes. In reality, workers rarely remain at a single factory for 15 to 20 years. Therefore, it is crucial to explore centralised social protection systems that ensure workers receive sector-wide benefits upon retirement. This approach would create a win-win situation for both factory owners and workers.
Establishing a central retirement fund—independent of any specific factory’s status—would guarantee that workers receive the benefits they deserve for their dedication to the sector.
Md. Abdus Samad Al Azad, Director, Ministry of Labour and Employment, Central Fund
Workers in Bangladesh are the most affected by the digital divide, and we anticipate that this gap will widen in the coming days. The Fourth Industrial Revolution may lead to job losses, necessitating that our workers enhance their skills. To address this issue, we have initiated a project titled ‘The Export Competitiveness for Jobs (EC4J)’, which focuses on strengthening Bangladesh’s global export competitiveness and creating new job opportunities.
In the context of the Central Fund, additional documentation requirements should not impose further burdens on workers. Social safety net programmes necessitate refinement, particularly in components like unemployment insurance, which should be specifically tailored for workers rather than being excessively broad to improve their effectiveness. The Bangladesh Labour Information Management System (LIMS), funded by GIZ Bangladesh, has the potential to make a substantial contribution to data support.
The government cannot oversee the entire structure independently. However, with support from various stakeholders, the operation of the Central Fund is becoming more streamlined. Effective monitoring procedures are essential, and the Central Fund can serve as the final checkpoint. Additionally, incorporating MFS will facilitate the process, while a substitute for the NID system may be introduced to further simplify procedures.
The Grievance Redressal Mechanism (GMS) offers options for workers, but the information gathered from workers and associations must be structured properly to provide an accurate understanding of the actual situation.
Sadat Mainuddin , Country Lead, UNCDF Bangladesh
It’s evident that while commendable initiatives exist, significant gaps persist. One major concern is the lack of awareness among workers about available social protection schemes and the complicated processes to access these benefits. Additionally, the digital divide poses a significant challenge in ensuring that workers can fully utilize the benefits of digitalization efforts.
However, we can address these challenges through collaborative action. By simplifying application processes, raising awareness among workers, and promoting digital literacy, we can ensure that social protection schemes reach those who need them most. We must also prioritize the development of a comprehensive worker database and the establishment of a dedicated social protection institution to streamline data management and ensure transparency. From UNCDF, we expect to work with our stakeholders to address the issues and bring meaningful changes to the overall process.
I extend my gratitude to the H&M Foundation, the Asia Foundation, the Central Fund, and all participants for their commitment to improving the lives of RMG workers. Let’s continue working together to create a more inclusive and resilient social protection ecosystem for this vital workforce
Tanjim Ferdous , In-Charge, NGOs & Foreign Mission, Business Development Team, The Daily Star
During this roundtable, key stakeholders identified challenges, and developed recommendations to enhance the social protection ecosystem for RMG workers, particularly women. These include raising awareness, prioritizing mental health initiatives, integrating factories with the Universal Pension Scheme, digitizing the central fund system, and establishing a comprehensive worker database.